KLONDEX MINES LTD.

NOTICE OF ANNUAL AND SPECIAL MEETING
OF SHAREHOLDERS

NOTICE is hereby given that the annual and special meeting (the " Meeting ") of the shareholders of Klondex Mines Ltd. (the " Company ") will be held at Toronto Region Board of Trade, Suite 350, 77 Adelaide St. West, Toronto, Ontario on June 15, 2016 at 10:30 a.m. (Eastern Daylight Time), for the following purposes:

An "ordinary resolution" is a resolution passed by at least a majority of the votes cast by the shareholders of the Company who voted in respect of that resolution at the Meeting.

A shareholder wishing to be represented by proxy at the Meeting or any adjournment thereof must deposit his or her duly executed form of proxy with the Company's transfer agent and registrar, Computershare Investor Services Inc., 2nd Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9, Attention: Proxy Department, or by facsimile to (416) 263-9524 or 1-866-249-7775 not later than 5:00 p.m. (Eastern Daylight Time) on June 13, 2016 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting. A shareholder may also vote by telephone or via the internet by following the instructions on the form of proxy. If a shareholder votes by telephone or via the internet, completion or return of the proxy form is not needed. The directors of the Company have fixed the close of business on May 9, 2016 as the record date for the determination of the shareholders of the Company entitled to receive notice of the Meeting.

This notice of meeting (the " Notice ") is accompanied by: (a) the Circular; and (b) either a form of proxy for registered shareholders or a voting instruction form for beneficial shareholders. The Circular accompanying this Notice is incorporated into and shall be deemed to form part of this Notice.

DATED the 13 ^th day of May, 2016.

NOTICE OF MEETING

and

MANAGEMENT INFORMATION CIRCULAR

for the

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

to be held on

JUNE 15, 2016

DATED AS OF MAY 13, 2016

TABLE OF CONTENTS

Schedule "A" KLONDEX MINES LTD. MANDATE OF THE BOARD OF DIRECTORS
Schedule "B" SHARE OPTION AND RESTRICTED SHARE UNIT PLAN
Schedule "C" MAJORITY VOTING POLICY

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KLONDEX MINES LTD.

NOTICE OF ANNUAL AND SPECIAL MEETING
OF SHAREHOLDERS

NOTICE is hereby given that the annual and special meeting (the " Meeting ") of the shareholders of Klondex Mines Ltd. (the " Company ") will be held at Toronto Region Board of Trade, Suite 350, 77 Adelaide St. West, Toronto, Ontario on June 15, 2016 at 10:30 a.m. (Eastern Daylight Time), for the following purposes:

An "ordinary resolution" is a resolution passed by at least a majority of the votes cast by the shareholders of the Company who voted in respect of that resolution at the Meeting.

A shareholder wishing to be represented by proxy at the Meeting or any adjournment thereof must deposit his or her duly executed form of proxy with the Company's transfer agent and registrar, Computershare Investor Services Inc., 2nd Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9, Attention: Proxy Department, or by facsimile to (416) 263-9524 or 1-866-249-7775 not later than 5:00 p.m. (Eastern Daylight Time) on June 13, 2016 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting. A shareholder may also vote by telephone or via the internet by following the instructions on the form of proxy. If a shareholder votes by telephone or via the internet, completion or return of the proxy form is not needed. The directors of the Company have fixed the close of business on May 9, 2016 as the record date for the determination of the shareholders of the Company entitled to receive notice of the Meeting.

This notice of meeting (the " Notice ") is accompanied by: (a) the Circular; and (b) either a form of proxy for registered shareholders or a voting instruction form for beneficial shareholders. The Circular accompanying this Notice is incorporated into and shall be deemed to form part of this Notice.

DATED the 13 ^th day of May, 2016.

KLONDEX MINES LTD.

MANAGEMENT INFORMATION CIRCULAR

PART ONE – VOTING INFORMATION

Solicitation of Proxies

This management information circular (this "Circular") is furnished in connection with the solicitation by management of Klondex Mines Ltd. (the "Company") of proxies to be used at the annual and special meeting (the "Meeting") of shareholders of the Company ("Shareholders") to be held on June 15, 2016, at the time and place and for the purposes set forth in the accompanying Notice of Meeting (the "Notice") . It is expected that the solicitation of proxies will be primarily made by mail and may be supplemented by telephone or other personal contact by the directors, officers and employees of the Company. Directors, officers and employees of the Company will not receive any extra compensation for such activities. The cost of solicitation by management will be borne by the Company.

Appointment and Revocation of Proxies

The persons named in the enclosed form of proxy are directors and officers of the Company. A Shareholder desiring to appoint some other person (who need not be a Shareholder) to represent the Shareholder at the Meeting and any adjournment thereof may do so either by inserting such person's name in the blank space provided in the applicable form of proxy or by completing another proper form of proxy and, in either case, depositing his or her duly executed form of proxy with the Company's transfer agent and registrar, Computershare Investor Services Inc., 2nd Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9, Attention: Proxy Department, or by facsimile to (416) 263-9524 or 1-866-249-7775 not later than 5:00 p.m. (Eastern Daylight Time) on June 13, 2016 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting. You may also vote by telephone or via the internet by following the instructions on the form of proxy. If you vote by telephone or via the internet, do not complete or return the proxy form.

In addition to revocation in any other manner permitted by law, a proxy may be revoked by an instrument in writing executed by the Shareholder or by his or her attorney authorized in writing deposited either at the registered office of the Company at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, at which the proxy is to be used or with the Chairman of the Meeting on the day of the Meeting, or adjournment thereof, and upon either of such deposits, the proxy is revoked.

Exercise of Discretion by Proxies

The person named in the enclosed form of proxy will vote or withhold from voting the common shares of the Company (" Common Shares ") in respect of which he is appointed in accordance with the direction of the Shareholder appointing him. If the Shareholder specifies a choice with respect to any matter to be acted upon, the Common Shares will be voted accordingly. In the absence of any direction to the contrary in respect of a matter to be voted on, all Common Shares represented by proxy will be voted FOR or IN FAVOUR of such matter.

The enclosed form of proxy confers discretionary authority upon the person named therein with respect to the matters identified in the Notice and with respect to other matters which may properly come before the Meeting. As of the date hereof, management of the Company knows of no such amendments, variations or other matters to come before the Meeting. However, if any such amendment, variation or other matter properly comes before the Meeting, it is the intention of the person named in the accompanying form of proxy to vote on such other business in accordance with his or her best judgment.

The form of proxy must be signed by the Shareholder or the duly appointed attorney thereof authorized in writing or, if the Shareholder is a corporation, by an authorized officer of such corporation. A form of proxy signed by the person acting as attorney of the Shareholder or in some other representative capacity, including an officer of a corporation which is a Shareholder, should indicate the capacity in which such person is signing. A Shareholder or his or her attorney may sign the form of proxy or a power of attorney authorizing the creation of a proxy by electronic signature provided that the means of electronic signature permits a reliable determination that the document was created or communicated by or on behalf of such Shareholder or by or on behalf of his or her attorney, as the case may be.

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Non-Registered Holders

Only registered Shareholders or the person they appoint as their proxy are entitled to attend and vote at the Meeting. The Common Shares beneficially owned by a person (a " Non-Registered Holder ") are registered either: (i) in the name of an intermediary (an " Intermediary ") with whom the Non-Registered Holder deals in respect of the Common Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a clearing agency (such as CDS Clearing Depositary Services Inc. (" CDS ") of which the Intermediary is a participant). In accordance with the requirements of National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer (" NI 54-101 ") of the Canadian Securities Administrators, the Company will have distributed copies of the Notice, this Circular and the form of proxy (collectively, the " meeting materials ") to the clearing agencies and Intermediaries for onward distribution to Non-Registered Holders. The Company does not intend to pay for intermediaries to forward objecting beneficial owners under NI 54-101 the proxy-related materials and Form 54-107 – Request for Voting Instructions Made by Intermediary . In the case of an objecting beneficial owner, the objecting beneficial owner will not receive the materials unless the objecting beneficial owner's intermediary assumes the cost of delivery.

Non-Registered Holders who have not waived the right to receive meeting materials will receive either a voting instruction form or, less frequently, a form of proxy. The purpose of these forms is to permit Non-Registered Holders to direct the voting of the Common Shares they beneficially own. Non-Registered Holders should follow the procedures set out below, depending on which type of form they receive.

Non-Registered Holders should follow the instructions on the forms they receive and contact their Intermediaries promptly if they need assistance.

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Record Date and Voting Securities

The record date for the determination of Shareholders entitled to receive notice of the Meeting has been fixed as May 9, 2016 (the " Record Date "). Only Shareholders of record at the close of business on the Record Date who either attend the Meeting in person or complete, sign and deliver a form of proxy in the manner and subject to the provisions described above will be entitled to vote or to have their Common Shares voted at the Meeting. A quorum for the transaction of business at the Meeting is the presence of one person who is, or who represents by proxy one or more Shareholders who, in the aggregate, hold at least 5% of the issued and outstanding Common Shares entitled to be voted at the Meeting.

The authorized capital of the Company consists of an unlimited number of Common Shares. As of the Record Date, the Company had outstanding an aggregate of 141,906,032 Common Shares, each carrying the right to one vote per share.

Principal Holders of Voting Securities

To the knowledge of the directors and senior officers of the Company as at the Record Date, no persons or companies beneficially own or exercise control or direction over 10% or more of the votes attached to the Common Shares, other than as set out below.

Notes:

PART TWO – BUSINESS OF THE MEETING

Annual Financial Statements

The audited consolidated financial statements of the Company for the year ended December 31, 2015 and the auditors' report thereon will be placed before the Shareholders at the Meeting.

Election of Directors

The Company has fixed the number of directors to be elected at the Meeting at eight. The directors of the Company are to be elected in accordance with the Company's majority voting policy (see " Part Six – Statement of Corporate Governance Practices – Majority Voting Policy "). Unless the director's office is vacated earlier in accordance with the articles of the Company or the Business Corporations Act (British Columbia) (the " BCBCA "), each director elected will hold office until the next annual meeting or until a successor is duly elected or appointed.

The following table sets out the names of management's nominees for election as directors, all major offices and positions with the Company and any of its significant affiliates each now holds, each nominee's principal occupation, business or employment, the period of time during which each has been a director of the Company and the number of Common Shares they beneficially owned, or controlled or directed, directly or indirectly, as at May 13, 2016.

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Notes:

Rodney Cooper, Director

Rodney Cooper has been involved in the mining industry for over 30 years, with broad experience in technical services, operations, project management, investment evaluation and finance. He is a mining engineer, having obtained the P.Eng. designation, and a past director of the Mining Association of Canada and the Alberta Chamber of Resources. Currently President and Chief Operating Officer of Labrador Iron Mines Holdings Limited, he previously served as Vice President and Senior Analyst at Dundee Securities, Chief Operating Officer at Baffinland Iron Mines Corporation and Vice President Technical Services at Kinross Gold Corporation. His experience in gold mining extends over twenty years, including extensive work in the western United States, including Nevada. Mr. Cooper's underground design, development and operations experience is directly applicable to the Company's projects. He graduated with Honours in Applied Science, Mining Engineering, from Queens University, in Kingston, Ontario and earned his MBA from the University of Toronto.

Mark Daniel, Director

Mark Daniel is currently a director of Alamos Gold Inc. Mr. Daniel was formerly Vice President, Human Resources for Vale Canada (formerly Inco Limited). Prior to that, he worked with the Bank of Canada and a number of other federal agencies before joining the Conference Board of Canada. During Mr. Daniel's 15 year career with the Conference Board, he benchmarked leadership and management practices in some of the most successful companies in North America, Europe and Japan. Mr. Daniel holds a PhD in Economics.

James Haggarty, Director

James Haggarty is a Chartered Professional Accountant (C.P.A. and C.A.) and holds an Honours Bachelor of Commerce degree from the University of Windsor. As a financial and operational executive with over 20 years of experience ranging from strategic planning to M&A transactions to managing diverse businesses day-to-day, Mr. Haggarty is highly experienced and adept at managing complex financial structures, partnership agreements/regulations/business technologies and systems. Mr. Haggarty's career has covered a range of industries from broadcasting, telecommunications, mining and public accounting. He has held senior executive positions as C.E.O., Executive VP Operations, VP Financial Operations, and VP Corporate Development with public and private companies like the SIM Group where he currently is President & Chief Executive Officer. He has extensive experience with audit committees and public company boards throughout his career, stemming back to 1993 with Inmet Mining (formerly Metall Mining). Mr. Haggarty is also on the board of directors of GreenSpace Brands Inc., Gibraltar Growth Corporation and the Toronto Blue Jays Care Foundation.

Richard J. Hall, Chairman of the Board and Director

Richard J. Hall is a seasoned mining executive, bringing over 40 years of building leading precious metals companies in the America's and Australia, to the Company. In addition to consulting to the mining industry, he presently serves on the Board of Directors for IAMGOLD Corporation, Kaminak Gold Corporation and Orla Mining Ltd. Previously, he was Chairman of Premier Gold Mines Limited, while Mr. Huet was Chief Operating Officer at Premier. Mr. Hall served as CEO of Northgate Minerals Corp. and Metallica Resources Inc., Chairman of Grayd Resource Corp. and as Chairman of the Special Committee for Creston Moly Corp. From 1998 to 2008, as President and CEO of Metallica, he was involved in all aspects of the company's development, including the financing, construction and commissioning of the Cerro San Pedro gold and silver mine in Mexico. While at Metallica, the El Morro deposit was discovered in Chile and was brought through to a final feasibility study in conjunction with Metallica's operating partner on the project, Xstrata. Metallica was part of a C$1.6 billion three-way merger with Peak Gold Ltd. into what is now New Gold Inc. Prior to his tenure at Metallica, Mr. Hall has held senior management positions with Dayton Mining Corp. and Pegasus Gold Corp.

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Mr. Hall holds a Bachelor's and a Master's degree in geology, and a Master of Business Administration from Eastern Washington University. He also completed an executive development program at the University of Minnesota. Mr. Hall is also a member of the National Association of Corporate Directors and member of both the Audit and Investment Committees of the Society of Economic Geologists.

Paul Huet, President, Chief Executive Officer and Director

Paul Huet brings over 28 years of experience in high-grade mining, with particular expertise in narrow vein gold mining and has supervised Mine Operations, Mine Engineering, Geology and Mine Safety in Nevada. Prior to joining the Company, Mr. Huet served as Chief Operating Officer of Premier Gold Mines Limited and oversaw its gold projects. Mr. Huet also previously served as General Manager at the Hollister mine for five years and was Mine Manager at the Midas Mine, prior to it being acquired by the Company and while operating under Newmont and Franco-Nevada ownership, serving in several roles during his seven-year tenure. Mr. Huet earned an Honours degree in Mining Engineering Technology from Haileybury School of Mines in Ontario and an Executive MBA from the Stanford University School of Business.

William Matlack, Director

William Matlack is an investment banker, private investor, and mineral explorer. He has 20 years of experience in the mining industry, primarily with major gold mining companies, followed by 19 years in mining finance in the securities industry, including positions in metals & mining equity research with major brokerage firms. He currently specializes in metals and mining investment banking with Scarsdale Equities LLC. His gold industry experience includes contributions to several world-class gold discoveries with Santa Fe Pacific Gold Corp. (now Newmont Mining Corporation) and Gold Fields. He served as Interim CEO of the Company in 2012. He has a B.A. in Geology from Carleton College and a M.S. in Geology from the University of Minnesota.

Charles Oliver, Director

Charles Oliver has been in the financial services industry since 1987. From 2008 to 2015 he was Lead Portfolio Manager for the Sprott Gold and Precious Minerals Fund. Prior to that, Mr. Oliver was a Senior Vice President and Lead Portfolio Manager at AGF Funds. During his 11 year tenure at AGF Funds, Mr. Oliver managed the Precious Metals Fund, a number of energy and resource funds, and some generalist funds. He is currently a director of Integra Gold Corp. He has an Honours BSc in Geology from the University of Western Ontario, and is a Chartered Financial Analyst.

Blair Schultz, Director

Blair Schultz, has 18 years of capital markets experience. He served as Chairman of the Company from 2012 to 2014, and as an Executive Director from September 2014 to June 2015. He currently sits on the Board of Directors of Eastmain Resources Inc. and previously sat on the Board of VMS Ventures Inc.and was Chair of the Special Committee overseeing the sale of VMS to Royal Nickel Corporation. Prior to his time at Klondex, Blair Schultz spent 13 years from 2001 to 2014 with K2 & Associates Investment Management Inc.. He was Vice President and held various positions most notably, Head of Special Situation, Portfolio Management and Trading. Before K2, Mr. Schultz worked for Canada Life, TD Securities, Trimark and Perigee Investment Counsel in debt private placements, interest rate derivatives and equity research. He is also a part owner and director of RYR Sports Inc., a hockey equipment manufacturer based in Toronto, Canada. Mr. Schultz holds an Honours Bachelor of Mathematics degree from the University of Waterloo with a Business Administration option from Wilfred Laurier University.

Cease Trade Orders, Bankruptcies, Penalties and Sanctions

None of the nominees for election as a director of the Company is, or was within the ten years prior to the date hereof, a director, chief executive officer or chief financial officer of any company that was subject to a cease trade order, an order similar to a cease trade order or an order that denied such company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days and that was issued while that person was acting in such capacity or that was issued after that person ceased to act in such capacity and which resulted from an event that occurred which that person was acting in such capacity.

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None of the nominees for election as a director of the Company is, or was within the ten years prior to the date hereof, a director or executive officer of any company that, while that person was acting in such capacity, or within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

None of the nominees for election as director of the Company has within the ten years prior to the date hereof become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

None of the nominees for election as a director of the Company has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable shareholder in deciding whether to vote for a proposed director.

Committees of the Board of Directors

The board of directors of the Company (the " Board ") has an audit committee (the " Audit Committee "), a compensation and governance committee (the " Compensation and Governance Committee "), a mine safety and health committee (the " Mine Safety and Health Committee ") and a legacy committee (the " Legacy Committee "). The current members of the Audit Committee include James Haggarty (Chair), Rodney Cooper and William Matlack (see " Part Five – Audit Committee Information "). The current members of the Compensation and Governance Committee include Mark Daniel (Chair), Richard J. Hall and Charles Oliver (see " Part Six – Statement of Corporate Governance Practices – Committees of the Board of Directors – Compensation and Governance Committee "). The current members of the Mine Safety and Health Committee include Rodney Cooper (Chair), Paul Huet, Charles Oliver and William Matlack (see " Part Six – Statement of Corporate Governance Practices – Committees of the Board of Directors – Mine Safety and Health Committee "). The current members of the Legacy Committee include William Matlack (Chair), Richard J. Hall, Paul Huet and Blair Schultz (see " Part Six – Statement of Corporate Governance Practices – Committees of the Board of Directors – Legacy Committee ").

The Board recommends a vote FOR the election of the above named nominees. The persons named in the form of proxy accompanying this Circular intend to vote FOR the election of the above named nominees, unless the Shareholder who has given such proxy has directed that the Common Shares represented by such proxy be withheld from voting in respect of the election of such nominee . Management of the Company does not contemplate that any nominees named above will be unable to serve as director; however, if that should occur for any reason prior to the Meeting or any adjournment thereof, the persons named in the enclosed form of proxy reserve the right to vote for another nominee in their discretion.

Appointment of Auditors

The Board recommends the adoption of a resolution appointing PricewaterhouseCoopers LLP, Chartered Accountants (" PWC ") as the auditors of the Company until the close of the next annual meeting of the shareholders of the Company and to authorize the directors to fix the auditors' remuneration. PWC was first appointed as auditors of the Company effective January 6, 2014. In order to be effective, the resolution must be approved by a majority of the votes cast by Shareholders present, or represented by proxy, at the Meeting.

The Board believes that the appointment of PWC as auditors is in the best interests of the Company and therefore unanimously recommends that the Shareholders vote in favour of this resolution. Unless instructed otherwise, the representatives of the Company named in the accompanying form of proxy intend to vote the Common Shares represented by proxies FOR the appointment of PricewaterhouseCoopers LLP, Chartered Professional Accountants, as auditors of the Company to hold office until the next annual meeting of shareholders and the authorization of the directors to fix their remuneration unless the Shareholder has specified in the proxy that his Common Shares are to be withheld from voting in respect thereof.

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Approval of the New Share Incentive Plan

Management proposes that long-term incentive compensation be provided through the granting of equity incentives under a share incentive plan for the benefit of full-time and part-time employees, directors and officers of the Company and affiliated corporations, as well as individuals or corporations engaged to provide ongoing management or consulting services to any of the foregoing, which may be designated from time to time.

On May 13, 2016, the Board approved the adoption of a new share incentive plan (the " New Share Incentive Plan "), which is comprised of a share option plan (the " Share Option Plan ") and a restricted share unit plan (the " RSU Plan ") allowing for the granting of Options and restricted share units (" RSUs "), respectively. The prior share incentive plan of the Company (the " Prior Share Incentive Plan ") was last approved by the shareholders of the Company on June 18, 2013, and consisted of a share option plan (the " Prior Share Option Plan ") providing for the granting of options and a share compensation plan (the " Prior Share Compensation Plan ") providing for the granting of Common Shares. With the implementation of the New Share Incentive Plan, no additional options, Common Shares or other equity awards will be granted under the Prior Share Incentive Plan, which will continue to govern all prior grants made thereunder.

Over the last four years, the Company has put in place a new management team and board of directors as a part of turn-around strategy to enhance shareholder value of the previously-struggling Company. Given the goal to enhance the Company's financial strength and maintain a strong cash position during a volatile period in the mining industry and the need to attract top industry talent at all levels within the Company to enhance the Fire Creek Project and complete and integrate the Midas Mine and Mill acquisition, the Company relied significantly on grants under the Prior Share Incentive Plan to attract and retain employees including its management team. This resulted in a higher than anticipated burn rate under the Prior Share Option Plan. The Company is now re-aligning its practices by adopting compensation-related policies and compensation plans in accordance with industry best practices and good governance standards, including the Clawback Policy, the Share Ownership Policy and the Say on Pay Policy (see "Part Three – Statement of Executive Compensation – Compensation Discussion and Analysis – Risk" and "Part Two – Business of the Meeting – Non-Binding Advisory Vote on the Company's Approach to Executive Compensation" ), as well as through the following changes to equity-based compensation: (i) no longer allowing for Option grants to non-employee directors, (ii) implementing the DSU Plan for directors (see "Part Four – Report on Director Compensation" ), and (iii) shifting the proportion of executive compensation made through security-based compensation to be primarily in the form of RSUs (with a majority of RSUs granted to contain performance-based vesting provisions), rather than in the form of Options. Going forward, the burn rate under the New Share Incentive Plan is expected to be at or below 2.5%, significantly lower than the historical average burn rate under the Prior Share Incentive Plan. While the Prior Share Incentive Plan also allowed for a rolling 15% limit on Option grants, no future grants will be made by the Company pursuant to such plan and future grants of security-based compensation will comply with the lower limits set forth in the New Share Incentive Plan, as summarized below. It is expected that such changes in the Company's approach to compensation will result in lower dilution to Shareholders in future periods.

Section 613(a) of the Company Manual of the Toronto Stock Exchange (the " TSX ") provides that every three years after the institution of a security-based compensation arrangement which does not have a fixed maximum number of securities issuable under it, all unallocated rights, options or other entitlements under such security-based compensation arrangement must be approved by a majority of the issuer's directors and by the issuer's security holders. The Prior Share Incentive Plan was a "rolling plan" which provided that the maximum number of Common Shares made available for issuance under the Prior Share Option Plan be determined from time to time by the Compensation and Governance Committee but, in any case, was not to exceed 15% of the total number of Common Shares then outstanding on a non-diluted basis immediately prior to the proposed grant of the applicable option under the Prior Share Option Plan. The Prior Share Compensation Plan had a fixed maximum number of securities issuable thereunder, being a maximum of 1,288,482 Common Shares. There are currently 150,580 unvested Common Shares that have been allocated for issuance under prior grants under the Prior Share Compensation Plan.

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The aggregate number of Common Shares issuable pursuant to the Share Option Plan will be determined from time to time by the Compensation and Governance Committee but, in any case, cannot exceed 8.9% of the aggregate number of Common Shares outstanding at the time of the grant of the applicable Option less the aggregate number of Common Shares reserved for issuance under all other security-based compensation arrangements (including Common Shares reserved for issue under options outstanding that were granted under the Prior Share Incentive Plan and unvested Common Shares allocated pursuant to prior grants under the Prior Share Compensation Plan, of which there were an aggregate of 7,611,838 and 664,117, respectively, as at May 13, 2016, and including any Common Shares issuable pursuant to RSUs granted under the RSU Plan). The maximum number of Common Shares available for issuance pursuant to grants of RSUs under the RSU Plan cannot exceed 4.0% of the total number of Common Shares outstanding at the time of grant of the applicable RSU. Both the Share Option Plan and the RSU Plan are "rolling plans", and any increase in the number of outstanding Common Shares will result in an increase in the number of Common Shares that may be made available to be issued under the Share Option Plan and the RSU Plan, subject to the limitations set out in the New Share Incentive Plan. Any exercise or termination of an Option previously issued under the Share Option Plan and any redemption or termination of an RSU previously issued under the RSU Plan will result in an additional grant being available under the Share Option Plan. Any redemption or termination of an RSU previously issued under the RSU Plan will also result in an additional grant being available under the RSU Plan.

As of May 13, 2016, there were 7,611,838 Options and 664,117 restricted Common Shares outstanding that were granted under the Prior Share Incentive Plan, representing approximately 5.4% and 0.47%, respectively, of the 142,009,365 issued and outstanding Common Shares as of such date. Based on the foregoing, as of May 13, 2016, (i) up to 4,362,878 Common Shares, representing approximately 3.1% of the outstanding Common Shares, remained available for issuance in connection with future grants of Options under the New Share Incentive Plan, and (ii) up to 5,680,374 Common Shares, representing 4.0% of the outstanding Common Shares, remained available for issuance in connection with future grants of RSUs under the New Share Incentive Plan (collectively, the " Unallocated Awards ").

At the Meeting, shareholders of the Company will be asked to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution (the " SIP Resolution ") ratifying and confirming the adoption of the New Share Incentive Plan which is comprised of the Share Option Plan and the RSU Plan, providing for grants of Options and RSUs, and approving all unallocated rights, options or other entitlements under the New Share Incentive Plan.

If the SIP Resolution is not approved, any Unallocated Awards under the New Share Incentive Plan will not be available for future grants, previously granted options will not be available for reallocation if they are cancelled prior to exercise, and the directors of the Company will have to consider alternative forms of long term, performance-based compensation in order to attract and retain qualified personnel. Whether or not the SIP Resolution is approved: (i) all options already granted and currently outstanding under the Prior Share Option Plan will remain in full force and effect and shall vest in accordance with their terms of grant, and (ii) all Common Shares allocated for issue pursuant to grants under the Prior Share Compensation Plan will remain in full force and effect and shall vest in accordance with their terms of grant.

The key terms of the New Share Incentive Plan are described in further detail below. The following information is intended as a brief description of the New Share Incentive Plan and is qualified in its entirety by the full text of the New Share Incentive Plan, a copy of which is attached to this Circular as Schedule "B".

Summary of the New Share Incentive Plan

Purpose of the New Share Incentive Plan

The New Share Incentive Plan provides for the acquisition of Common Shares by eligible participants and the payment of bonus compensation in the form of Common Shares or, at the option of the Company, cash for the purpose of advancing the interests of the Company and any affiliates of the Company through the motivation, attraction and retention of eligible employees, directors and contractors and to secure for the Company and the shareholders of the Company the benefits in the ownership of Common Shares by eligible participants, it being generally recognized that share option plans and restricted share unit plans aid in attracting, retaining and encouraging employees, directors and consultants due to the opportunity offered to them to acquire a proprietary interest in the Company.

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Administration of the New Share Incentive Plan

The New Share Incentive Plan shall be administered by the Compensation and Governance Committee and the Compensation and Governance Committee has full authority to administer the New Share Incentive Plan, including the authority to interpret and construe any provision of the New Share Incentive Plan and to adopt, amend and rescind such rules and regulations for administering the New Share Incentive Plan as the Compensation and Governance Committee may deem necessary in order to comply with the requirements of the New Share Incentive Plan, subject in all cases to compliance with regulatory requirements. The Compensation and Governance Committee has the authority, in its sole discretion, to accelerate the vesting of Options, and the authority to accelerate waive performance, service or other vesting conditions with respect to RSUs, or deem such conditions to be satisfied, provided however that with respect to U.S. Participants (as defined in the New Share Incentive Plan), no such acceleration or waiver of vesting conditions will change the time at which such RSUs will be settled/paid out, except to the extent permitted by applicable law.

Determination of Participants and Participation

The Compensation and Governance Committee shall from time to time determine the participants who may participate in the New Share Incentive Plan (" Participants ") and to whom Options and/or RSUs may be granted, including the number of Common Shares to be made subject to and the expiry date of each Option granted to a Participant, the other terms of each Option granted to a Participant, and the provisions and restrictions of each RSU granted to a Participant, all such determinations to be made in accordance with the terms and conditions of the New Share Incentive Plan, and the Compensation and Governance Committee may take into consideration the present and potential contributions of and the services rendered by the particular Participant to the success of the Company and the affiliates of the Company and any other factors which the Compensation and Governance Committee deems appropriate and relevant.

Limitations

The aggregate maximum number of Common Shares available for issuance from treasury under the New Share Incentive Plan, subject to adjustment in the event of a stock dividend, consolidation, subdivision or reclassification or otherwise, together with all of the Company's other previously established or proposed share compensation arrangements (including, for greater certainty, the Prior Share Incentive Plan) shall not exceed 8.9% of the total number of Common Shares then outstanding, provided that the maximum number Common Shares available for issuance in connection with RSU grants under the RSU Plan shall not exceed 4.0% of the total number of Common Shares then outstanding (subject to adjustment as provided for in the New Share Incentive Plan). Any Common Shares subject to an Option or RSU which has been granted under the New Share Incentive Plan or the Prior Share Option Plan and which has been cancelled or terminated in accordance with the terms of the New Share Incentive Plan prior to such Option or RSU being fully vested will again be available under the New Share Incentive Plan. In the event that the Company elects to satisfy its payment obligation with respect to RSUs in cash rather than delivering Common Shares, any Common Shares that otherwise would have been subject to such RSU will again be available under the New Share Incentive Plan.

The maximum number of Common Shares issuable to Insiders (within the meaning of the TSX Company Manual), at any time, pursuant to the New Share Incentive Plan and any other security-based compensation arrangements of the Company (including, for greater certainty, the Prior Share Incentive Plan) is 10% of the total number of Common Shares then outstanding. The maximum number of Common Shares issued to insiders, within any one (1) year period, pursuant to the New Share Incentive Plan and any other security-based compensation arrangements of the Company is 10% of the total number of Common Shares then outstanding.

The maximum number of Common Shares issuable to non-employee directors, at any time, pursuant to the New Share Incentive Plan and any other security-based compensation arrangements of the Company (including, for greater certainty, the Prior Share Incentive Plan) is 1% of the total number of Common Shares then outstanding. The total annual grant to any one non-employee director, within any one (1) year period, pursuant to the New Share Incentive Plan and any other security-based compensation arrangements of the Company (including, for greater certainty, the Prior Share Incentive Plan) shall not exceed a maximum grant value of C$150,000 worth of securities, of which the value of Options shall not exceed $100,000 per non-employee director. In determining the value of securities granted under all security-based compensation arrangements of the Company, the generally-accepted valuation model must be used.

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For the purpose of determining limitations, the number of Common Shares then outstanding shall mean the number of Common Shares outstanding on a non-diluted basis immediately prior to the proposed grant of the applicable Option or RSU.

For the purpose of determining limitations, the aggregate number of securities granted under all security-based compensation arrangements of the Company will be calculated without reference to the initial securities granted under such arrangements to a person (who was not previously an Insider of the Company or an affiliate of the Company) upon such person becoming a director of the Company or an affiliate of the Company; however, the aggregate number of securities granted under all security-based compensation arrangements of the Company in such initial grant may not exceed a maximum grant value of C$150,000 worth of securities, of which the value of Options shall not exceed $100,000 per non-employee director.

In order to comply with the provisions of Section 162(m) (as defined in the New Share Incentive Plan), no Participant may be granted RSUs, whether ultimately settled in Common Shares or cash, for more than 3,000,000 Common Shares (subject to adjustment related to a stock dividend, consolidation, subdivision or reclassification or as otherwise permitted) in the aggregate in any calendar year. No Participant will be granted Options for more than 3,000,000 Common Shares (subject to adjustment related to a stock dividend, consolidation, subdivision or reclassification or as otherwise permitted) in the aggregate in any calendar year. This limitation only applies with respect to the Options and RSUs granted under the New Share Incentive Plan, and limitations on awards granted under any other shareholder approved executive incentive plan maintained by the Company will be governed solely by the terms of such other plan.

Grant of Options

The Share Option Plan provides for the grant of Options for the purchase of Common Shares to eligible employees and eligible contractors. Each Option grant is to be evidenced by a stock option notice or stock option agreement setting out the terms and conditions consistent with the provisions of the New Share Incentive Plan, which terms and conditions need not be the same in each case and which terms and conditions may be changed from time to time. Directors are not eligible for grants of Options under the Share Option Plan.

The price per Common Share at which any Common Share which is the subject of an Option may be purchased is to be determined by the Compensation and Governance Committee at the time the Option is granted, provided that such price is not less than the greater of: (i) the Market Value (generally being the weighted average trading price of Common Shares on the TSX for the five (5) consecutive trading days immediately prior to the date as of which Market Value is determined) on the last trading day immediately preceding the date of the grant of such Option; and (ii) the closing price of the Common Shares on the TSX or any other stock exchange on which the Common Shares are listed on the last trading day immediately preceding the date of grant of such Option.

The Option period for each Option is the period of time as shall be determined by the Compensation and Governance Committee. Subject to certain exceptions, an Option period cannot exceed ten (10) years. However, if the expiration date falls within a blackout period or within ten (10) business days after a blackout period expiry date, then the expiration date of the Option will be the date which is ten (10) business days after the blackout period expiry date.

If Options granted under the Share Option Plan are surrendered, terminated or expire without being exercised in whole or in part, new Options may be granted covering the Common Shares not purchased under the lapsed Options.

Except as otherwise specifically provided by the New Share Incentive Plan in connection with a Change of Control (as defined in the New Share Incentive Plan) and subject to any additional limitations contained in any employment contract, an Option may be exercised during the term of the Option only in accordance with the vesting schedule, if any, determined by the Compensation and Governance Committee, in its sole and absolute discretion, at the time of the grant of the Option, which vesting schedule may include performance vesting or acceleration of vesting in certain circumstances and which may be amended or changed by the Compensation and Governance Committee from time to time with respect to a particular Option.

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Effect of Change of Control on Options

In the event of a Change of Control and if, within twelve (12) months of such Change of Control, the Company terminates the employment or services of said optionee/employee for any reason other than just cause or if the optionee is an eligible employee and terminates his or her employment with the Company for Good Reason (as defined in the New Share Incentive Plan) or as otherwise specified in the grant agreement, then, on such date, all of the optionee's Options will immediately fully vest, if not already vested. In the foregoing event, all Options so vested may be exercised in whole or in part by the optionee from such applicable date until their respective expiry dates.

If there is a take-over bid (within the meaning of the Securities Act (British Columbia)) made for all or a portion of the outstanding Common Shares, then the Compensation and Governance Committee may, by resolution, permit all Options outstanding to become immediately exercisable, in order to permit Common Shares issuable under such Options to be tendered to such bid. The Share Option Plan includes such a provision to allow the Compensation and Governance Committee and Board flexibility to act in the interests of all stakeholders in the event the Company is the target of a take-over bid.

Effect of Death on Options

If a Participant which is not an individual, the primary individual providing services to the Company or an affiliate of the Company, on behalf of the eligible contractor (in each case, the " deceased "), shall die, any Option held by the deceased at the date of such death shall become immediately exercisable notwithstanding any term or condition of such Option, and shall be exercisable in whole or in part only by the person or persons to whom the rights of the optionee under the Option shall pass by the will of the deceased or the laws of descent and distribution for a period of one (1) year following the date of death, but only to the extent that such optionee was entitled to exercise the Option at the date of the deceased's death in accordance with the New Share Incentive Plan.

Effect of Termination of Employment or Services on Options

If a Participant: (i) ceases to be a director of the Company or an affiliate of the Company (and is not or does not continue to be an employee thereof) for any reason (other than death); or (ii) ceases to be employed by, or provide services to, the Company or an affiliate of the Company (and is not or does not continue to be a director or officer thereof), or any corporation engaged to provide services to the Company or an affiliate of the Company, for any reason (other than death) or receives notice from the Company or an affiliate of the Company of the termination of his or her employment contract, except as otherwise provided in any applicable employment contract or applicable stock option notice or stock option agreement, in situations of termination not for cause, such Participant will have ninety (90) days (unless extended by the Board) following the termination to exercise his or her Options to the extent that such participant was entitled to exercise such Options at the date of termination and, in situations other than a termination not for cause, any Options held by such Participant on the date of termination shall be forfeited and cancelled as of that date. Notwithstanding the foregoing or any employment contract, in no event may such right extend beyond the original Option period.

Grant of RSUs

Subject to the limitations in the New Share Incentive Plan, the Company may from time to time grant RSUs to U.S. Participants and Canadian Participants (as defined in the New Share Incentive Plan) who are not eligible contractors in such numbers, at such times and on such terms and conditions, consistent with the New Share Incentive Plan, as the Compensation and Governance Committee may in its sole discretion determine.

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Vesting of RSUs

An RSU award granted to a Participant for services rendered will entitle the Participant, subject to the Participant's satisfaction of any conditions, restrictions or limitations imposed under the New Share Incentive Plan or RSU grant letter, to receive a payment in fully paid Common Shares or, at the option of the Company, in cash in an amount equal to the Market Value of the Common Shares issuable under the RSU award. The date on which an RSU award, or the relevant portion thereof, becomes fully vested (whether by virtue of the satisfaction of performance conditions or time-based continued service conditions, as a result of the Compensation and Governance Committee's action to waive vesting conditions and accelerate vesting, or any other reason under the terms of the New Share Incentive Plan and applicable RSU grant letter is the vesting date.

The RSU grant letter will specify the date(s) on which the RSUs will be settled/paid out, typically at the end of the performance period (for performance-based vesting conditions), or at the end of the required continued service period (for time-based service vesting conditions), which date(s) shall be no later than December 31st of the third calendar year following the service year applicable to the particular RSU award (each such date a " Scheduled Payment Date "). Except as otherwise provided in the New Share Incentive Plan, the redemption/payment with respect to RSUs will occur on the Scheduled Payment Date(s). Notwithstanding that the vesting date(s) for such RSUs may be earlier. For greater certainty and by way of example, if an RSU grant letter states that the RSUs become vested as to 1/3 of the units on the first anniversary of the grant date, 1/3 on the second anniversary and 1/3 on the third anniversary, the vesting dates will be the first, second and third anniversaries of the grant date, in each case as to 1/3 of the units awarded under the RSU grant letter. However, the RSU grant letter may specify that the Scheduled Payment Date with respect to all of the RSUs is the third anniversary of the grant date. Similarly, if a portion of a RSU award becomes fully vested upon achievement of stated performance goals (including vesting of a portion of the RSU award if stated goals have been achieved at specific intervals during the performance period), the date on which the portion of the RSU award becomes vested and non-forfeitable is the vesting date. The RSU grant letter may provide that the Scheduled Payment Date for all such RSUs under the RSU award is the last day of the performance period, notwithstanding that a portion of the Restricted Share Units may become vested earlier.

Subject to the foregoing, the Compensation and Governance Committee is to, in its sole discretion, determine any and all conditions that may be based on either or both of time and performance criteria. Except as otherwise determined by the Compensation and Governance Committee and as set forth in the applicable RSU grant letter or, as provided in an applicable employment contract (but, as to U.S. Participants, an employment contract will not alter or amend the terms of RSUs that are outstanding as of the effective date of the applicable provisions in the employment contract in a manner that will cause the outstanding RSUs to fail to comply with applicable US laws):

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Settlement of RSUs

Subject to the ability of the Company to choose to settle RSUs by way of a cash payment to the Participant, as described below, the payment obligation in respect of any vested RSUs, net of any applicable taxes and other source deductions required to be withheld, will be settled, on the redemption of the RSUs, with the issue of fully paid Common Shares from treasury or, in the event that the Company elects not to issue Common Shares from treasury, by having a broker acquire Common Shares in the open market (using funds paid to a broker by the Company of the Participant for such purpose) on behalf of the Participant.

In the event that the Company elects to satisfy its payment obligation in cash, the RSUs shall be redeemed and paid by the affiliate of the Company that is the employer of the Participant to the Participant subject to any withholding taxes and other source deductibles. The Market Value of the vested RSUs so redeemed shall, after deduction of any applicable taxes and other source deductions required to be withheld by the applicable affiliate of the Company, be paid in cash.

In the event that the payment obligation in respect of vested RSUs is settled in Common Shares, a Participant may direct to have a broker sell such Common Shares on behalf of the Participant.

Payment of Dividend Equivalents

Subject to the absolute discretion of the Compensation and Governance Committee and in accordance with the New Share Incentive Plan, the Compensation and Governance Committee may elect to credit, as a bonus for services rendered in the calendar year containing the payment date for cash dividends paid on Common Shares (the " Dividend Payment Date "), a Participant with additional RSUs. In such case, the number of additional RSUs so credited will be equal to the aggregate amount of dividends that would have been paid to the Participant if the RSUs in the Participant's account as of the record date for payment of such dividends (the " Dividend Record Date ") had been Common Shares divided by the Market Value of a Common Share on the Dividend Payment Date. The additional RSUs will vest on the vesting date of the particular RSU award to which the additional RSUs relate and settlement/payment in respect of such additional RSUs will occur at the same time as settlement/payment occurs with respect to the underlying RSUs to which they relate.

Effect of Change of Control on RSUs

With respect to RSUs other than RSUs with performance vesting provisions, in the event of a Change of Control and if, within twelve (12) months of such Change of Control, the Company terminates the employment or services of said Participant/eligible employee for any reason other than just Cause or the Participant is an eligible employee and terminates his or her employment with the Company for Good Reason or as otherwise specified in the grant agreement, then, on the date of such event of termination, all RSUs outstanding and held by the Participant shall immediately vest and shall be redeemed in accordance with the redemption provisions of the RSU Plan, notwithstanding any restricted period(s) or any applicable deferred payment date(s) that otherwise would apply.

With respect to RSUs with performance vesting provisions (" Performance RSUs "), in the event of a Change of Control and if, at the time of the Change of Control:

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Amendment of the New Share Incentive Plan

The Board or the Compensation and Governance Committee, as the case may be, may suspend or discontinue the New Share Incentive Plan, or any portion thereof, at any time without first obtaining shareholder approval and in its absolute discretion, provided that, without the consent of a Participant, such suspension or discontinuance may not in any manner adversely affect the Participant's rights under any Option or RSU granted under the New Share Incentive Plan. The Board or the Compensation and Governance Committee may not make the following amendments to the New Share Incentive Plan, without receiving shareholder approval and any required regulatory approval:

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The Board or the Compensation and Governance Committee may, subject to receipt of requisite regulatory approval, where required, in its sole discretion and without shareholder approval, make all other amendments to the New Share Incentive Plan that are not of the type contemplated above, including, without limitation:

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Non-Assignability

No Option or RSU and no other right or interest of a Participant is assignable or transferable, but shall thereafter enure to the benefit of and be binding upon the beneficiaries of the Participant.

Adjustments to the Number of Common Shares subject to the New Share Incentive Plan

In the event there is any change in the Common Shares, whether by reason of a stock dividend, consolidation, subdivision, reclassification or otherwise, an appropriate adjustment shall be made by the Compensation and Governance Committee in: (a) the number of Common Shares available under the New Share Incentive Plan; (b) the number of Common Shares subject to any Option or RSU; and (c) the exercise price of the Common Shares subject to Options. If the foregoing adjustment shall result in a fractional Common Share, the fraction shall be disregarded. All such adjustments shall be conclusive, final and binding for all purposes of the New Share Incentive Plan.

Securities Exchange Take-over Bid

In the event that the Company becomes the subject of a take-over bid (within the meaning of the Securities Act (British Columbia)) pursuant to which 100% of the issued and outstanding Common Shares are acquired by the offeror either directly or as a result of the compulsory acquisition provisions of the Securities Act (British Columbia) and where consideration is paid in whole or in part in equity securities of the offeror, the Compensation and Governance Committee may send notice to all optionees and all holders of RSUs requiring them to surrender their Options or RSUs, as applicable, within ten (10) days of the mailing of such notice, and the optionees and holders of RSUs shall be deemed to have surrendered such Options or RSUs, as applicable, on the tenth (10th) day after the mailing of such notice without further formality, provided that:

SIP Resolution

At the Meeting, Shareholders will be asked to consider and, if deemed appropriate, to pass, with or without variation, the SIP Resolution, in the form set out below, subject to such amendments, variations or additions as may be approved at the Meeting, approving the adoption of New Share Incentive Plan (including, for greater certainty, the Share Option Plan and the RSU Plan), and approving all unallocated options, rights and other entitlements under the New Share Incentive Plan. The TSX has conditionally approved the New Share Incentive Plan, subject to shareholder approval. To be effective, the SIP Resolution must be approved by not less than a majority of the votes cast by the holders of Common Shares present in person, or represented by proxy, at the Meeting.

The text of the SIP Resolution to be submitted to shareholders at the Meeting is set forth below, subject to such amendments, variations or additions as may be approved at the Meeting:

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" BE IT RESOLVED THAT :

The Board and management of the Company recommend that Shareholders vote in favour of the SIP Resolution, and the persons named in the enclosed form of proxy vote FOR the approval of the SIP Resolution at the Meeting unless otherwise directed by the shareholders appointing them.

Non-Binding Advisory Vote on the Company's Approach to Executive Compensation

The Board has adopted a policy that provides for an annual non-binding advisory shareholder vote on the Company's approach to executive compensation, known as "Say on Pay''. The Say on Pay policy is designed to enhance accountability for the compensation decisions made by the Board by giving shareholders a formal opportunity to provide their views on the Board's approach to executive compensation through an annual non-binding advisory vote. The Company will disclose the results of the vote as part of its report on voting results for each annual meeting. The results will not be binding; the Board will remain fully responsible for its compensation decisions and will not be relieved of these responsibilities by the advisory vote. However, the Board will take the results into account, as appropriate, when considering future compensation policies, procedures and decisions and in determining whether there is a need to modify the level and nature of their engagement with shareholders.

If the advisory resolution is not approved by a majority of the votes cast at an annual meeting, the Board will consult with shareholders (particularly those who are known to have voted against the resolution) in order to understand their concerns, and will review the Company's approach to compensation in the context of those concerns. Results from the Board's review will be discussed in the Company's management information circular for the following year. Shareholders are encouraged to review and consider the detailed information regarding the Company's approach to compensation under "Part Three — Statement of Executive Compensation' '.

At the Meeting, Shareholders of the Company will be asked to pass the following non-binding advisory resolution on the acceptance of the Company's approach to executive compensation, known as "Say on Pay". The resolution conforms to the form of resolution recommended by the Canadian Coalition for Good Governance. Shareholders may vote for or against the following resolution:

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" BE IT RESOLVED THAT on an advisory basis, and not to diminish the role and responsibilities of the Board, the shareholders accept the Board's approach to executive compensation disclosed under "Part Three — Statement of Executive Compensation' ' in the management information circular of the Company dated May 13, 2016 delivered in advance of the Meeting."

The Board and management of the Company recommend that Shareholders vote in favour of the foregoing resolution, and the persons named in the enclosed form of proxy intend to vote FOR the approval of the foregoing resolution at the Meeting unless otherwise directed by the shareholders appointing them.

Shareholders who vote against the resolution are encouraged to contact the Board by writing to the Corporate Secretary, Klondex Mines Ltd., 1055 West Hastings Street, Suite 2200, Vancouver, British Columbia, V6E 2E9.

Other Matters

Management knows of no other matters to come before the Meeting other than those referred to in the Notice of Meeting. Should any other matters properly come before the Meeting, the Common Shares represented by the form of proxy accompanying this Circular will be voted on such matters in accordance with the best judgment of the persons voting by proxy.

PART THREE – STATEMENT OF EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Compensation Governance

The Compensation and Governance Committee is currently composed of three members: Mark J. Daniel, Richard J. Hall and Charles Oliver, all of whom are independent directors, as determined under National Policy 58-201 – Corporate Governance Guidelines (see " Part Six – Statement of Corporate Governance Practices – Corporate Governance Guidelines "). Each member of the Compensation and Governance Committee draws upon their skills and experience as directors and compensation committee members of other similar companies in the mining industry in making decisions on the suitability of the Company's compensation policies and practices.

The Company's compensation policies and programs are designed to be competitive with similar mining companies and to recognize and reward executive performance consistent with the success of the Company's business. These policies and programs are intended to attract and retain capable and experienced people. The Compensation and Governance Committee's role and philosophy is to ensure that the Company's compensation goals and objectives, as applied to the actual compensation paid to the Company's executive officers, are aligned with the Company's overall business objectives and with Shareholder interests.

In addition to industry comparables, the Compensation and Governance Committee considers a variety of factors when determining both compensation policies and programs and individual compensation levels. These factors include the long-range interests of the Company and Shareholders, overall financial and operating performance of the Company and the Compensation and Governance Committee's assessment of each executive's individual performance and contribution toward meeting corporate objectives.

The function of the Compensation and Governance Committee is to assist the Board in fulfilling its responsibilities relating to the compensation practices of the executive officers of the Company. The Compensation and Governance Committee is empowered to review the compensation levels of the Company's executive officers and to report and make recommendations thereon to the Board; to review the strategic objectives of the Company's share option and other share-based compensation plans and to set share-based compensation; and to consider any other matters which, in the Compensation and Governance Committee's judgment, should be taken into account in reaching any recommendation to the Board concerning the compensation levels of the Company's executive officers.

The Board assumes responsibility for reviewing and monitoring the long-range compensation strategy for the Company's senior management, although the Compensation and Governance Committee guides it in this role. The Board determines the type and amount of compensation for the CEO. The Board also reviews the compensation of the Company's senior executives.

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The Compensation and Governance Committee engaged an independent consulting firm, Hugessen Consulting Inc. (" Hugessen "), to provide it with independent advice on executive compensation and related governance matters in connection with the approach of the Company towards executive and director compensation for 2015 and beyond. The nature and scope of services provided and to be provided by Hugessen to the Compensation and Governance Committee includes:

The Compensation and Governance Committee reviews and considers the information and advice provided by Hugessen, among other factors, when it makes its recommendations to the Board for approval. The Board, however, makes the ultimate decisions with respect to executive compensation after considering the Compensation and Governance Committee's recommendations.

Hugessen does not provide any services to management directly and work conducted by Hugessen raises no conflicts of interest. Any services provided by Hugessen require Compensation and Governance Committee pre-approval and the Chair of the Compensation and Governance Committee approves all invoices for work performed by Hugessen. The Compensation and Governance Committee has the authority to hire and fire its independent advisor.

Hugessen was initially retained by the Company in February 2015. The table below outlines the fees paid to Hugessen over the last two years for services related to determining the compensation of our directors and officers. Hugessen did not provide any other services in 2014.

Philosophy and Objectives

The compensation program for the Company's senior management is designed to ensure the level and form of compensation achieves certain objectives, including:

Peer Group

The Compensation and Governance Committee compares the Company's compensation structure and levels with a peer group of companies, including base salary, target compensation and actual compensation for each NEO (as defined below) according to position title, organizational role and overall scope of responsibility. The 2015 peer group used by the Compensation and Governance Committee in making its recommendations to the Board included the following 12 publicly traded mining companies with which the Company competes for executive talent and which the Company sees as its best comparables in order to ensure the Company remains competitive in attracting, motivating, and retaining highly qualified and experienced executives. Companies were selected for inclusion in the peer group after an in-depth review of many factors, including company size, geographic location, market capitalization, asset composition, degree of complexity and stage of operations.

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Named Executive Officers for the Fiscal Year Ended December 31, 2015

Securities legislation requires the disclosure of compensation received by each "Named Executive Officer" of the Company for the three most recently completed financial years. " Named Executive Officer " (or " NEO ") is defined by the legislation to mean (i) each of the Chief Executive Officer and the Chief Financial Officer of the Company, (ii) each of the Company's three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year and whose total compensation exceeds C$150,000, and (iii) any additional individual who would be an NEO under (ii) but for the fact that the individual was not serving as an executive officer of the Company or in a similar capacity at the end of the most recently completed financial year end of the Company. For the 2015 year, the NEOs of the Company were the following:

Elements of Compensation Program for the Fiscal Year Ended December 31, 2015

The compensation packages for the executive officers of the Company are based on a base salary, a bonus based on agreed objectives and the achievement of set milestones, and both incentive stock options and share-based awards, each granted under the Company's share incentive plan. The executive officers' compensation packages also include additional benefits, as more clearly set out under the heading " Termination and Change of Control Benefits ". The Compensation and Governance Committee annually reviews the total compensation package of each of the Company's executive officers on an individual basis, against the backdrop of the compensation goals and objectives described above, and makes recommendations to the Board concerning the individual components of their compensation.

Cash Salary

The Company provides executive officers with base salaries that represent a fixed element of compensation and their minimum compensation for services rendered, or expected to be rendered. Executive officers' base compensation depends on the scope of their experience, responsibilities, leadership skills, performance, length of service, general industry trends and practices, competitiveness, and the Company's existing financial resources. Base salaries are determined annually based on the Compensation and Governance Committee's recommendations to the Board.

The Compensation and Governance Committee annually reviews the base salaries of the executive officers of the Company against compensation packages and practices for executive officers in comparable positions of public companies in the mining industry (see "Peer Group" above). The Compensation and Governance Committee also reviews third party compensation reports in making its recommendations.

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Cash Bonus

Annual cash incentives are a variable component of compensation designed to reward the Company's executive officers for maximizing annual operating performance.

The Company's business plan requires that the focus of the Company be on exploration, project development milestones and safe, efficient and responsible (environmental and social) production growth. These measures are therefore regarded as the basis for the annual variable incentive scheme, linking management performance with the commitments made to the Company's shareholders. Bonus payments are awarded by the Compensation and Governance Committee, subject to Board approval, under the Company's short-term incentive plan (the " STIP ") to executives, after taking into account corporate performance and individual performance as an executive.

The Compensation and Governance Committee is responsible for setting the performance measures applicable to the annual awards and for determining the extent to which such performance measures are met. The formula set out below is used to determine actual cash bonus awards for participants under the STIP:

The amount of the awards may be varied from the amount calculated at the reasonable discretion of the Compensation and Governance Committee. Details relating to the determination of the NEOs' performance scores and the factors leading to the determination the actual cash bonuses paid to the NEOs for the 2015 year are set out below.

Performance Score

Individual performance is assessed on performance relative to goals and objectives determined at the beginning of the year, based on both corporate objectives and certain individualized objectives particular to each individual executive.

In assessing corporate performance, it is recognized that executive officers cannot control certain factors, such as interest rates and the international market prices for the gold and silver produced by the Company. When applying the corporate performance criteria, the Compensation and Governance Committee considers factors over which the executive officers can exercise control, such as meeting production budget targets established by the Board at the beginning of each year, controlling costs, safety performance, taking advantage of business opportunities and enhancing the competitive and business prospects of the Company. In determining payout amounts, the members of the Compensation and Governance Committee draw on their experience as directors and compensation committee members of other similar companies in the mining industry.

In assessing the 2015 personal performance score used for determining annual cash bonuses, the Compensation and Governance Committee evaluated progress against the Company's strategic plan and the written individual objectives established for each of the executive officers, which were reviewed and approved by the Compensation and Governance Committee in advance. The individual objectives used to evaluate the performance of the NEOs for the 2015 year varied as between each of the NEOs to account for the different roles served by each NEO within the Company and, as a consequence, the different goals of the Company believed by the Compensation and Governance Committee to most highly correlate with the performance of such NEO. Common corporate objectives were also set by the Compensation and Governance Committee to factor into each of the executives officers' annual incentive awards. Each of the executive officers' annual incentive awards were determined based on what the Compensation and Governance Committee determined to be weightings between corporate and individual objectives, based on the role of the particular executive officer.

For each of the corporate objectives, the Compensation and Governance Committee adopted a four-point graduated scale of payout percentages based on meeting or exceeding such targets, with payout percentages for each corporate objective being 0, 50%, 100% or 150%, based on the Company's performance against the specified target ranges. In all cases, the Compensation and Governance Committee retained the ability to make any discretionary adjustments it deemed to be appropriate, taking into account all factors and circumstances. As a result, when determining whether a goal was achieved, the Compensation and Governance Committee took a flexible approach and did not always keep exactly with such four payout percentages. In assessing the executive officers' level of achievement in respect of their individual objectives, the Compensation and Governance Committee took a flexible approach and assigned a score from 0% to 150% for each objective based on how well the executive officer was found to have performed in respect of the particular objective.

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The following sets out the established corporate performance objectives for the Company for 2015, along with the weighting given by the Compensation and Governance Committee to each objective, the score awarded by the Compensation and Governance Committee in respect of each objective and the resulting weighted scores.

The total weighted score, based on the Compensation and Governance Committee's assessment of the Company's performance in respect of all of the corporate objectives was 121% for 2015.

The following tables set out the established performance objectives for each of the NEOs for 2015, along with the weighting given by the Compensation and Governance Committee to each objective, the payout percentage awarded by the Compensation and Governance Committee in respect of each objective and the resulting performance scores, the total of which is applied as the "overall performance score" to the formula above.

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The Compensation and Governance Committee and the Board reviewed the President and Chief Executive Officer's progress against his objectives, and reviewed the President and Chief Executive Officer's assessment of the progress of each of the other executive officers against their respective objectives, and determined the level and quality of each executive officer's performance achievement, as shown above. Based on that assessment, the Compensation and Governance Committee recommended to the Board, and the Board approved, an appropriate individual performance score for the President and Chief Executive Officer. The Compensation and Governance Committee then reviewed and approved the individual performance scores that the President and Chief Executive Officer recommended for each of the other executive officers.

Target Bonus Rate and Bonus Payout Amounts

In 2015, the Board set the target bonus rates for each of the NEOs, representing the percentage of their base salary which their cash bonus would total assuming such NEO achieved all of such NEO's pre-determined corporate and individual objectives. Such target bonus rates, along with the calculated bonus amounts (based on the formula for calculating bonus payouts and the performance scores for 2015 explained above), are shown below.

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Mr. Kristof resigned as Chief Operating Officer of the Company on March 7, 2016 and, on the recommendation of the Compensation and Governance Committee, he was paid an annual cash bonus for the 2015 year based on an overall score of 75% of his target bonus.

See "Part Three – Statement of Executive Compensation – Summary Compensation Table" .

Equity Participation

The Company believes that encouraging its executives and employees to become shareholders is the best way to align their interests with those of Shareholders. Equity participation is accomplished through the Share Incentive Plan and the Share Ownership Policy (see "– Share Ownership Policy" belo w ).

The Share Incentive Plan is intended to emphasize management's commitment to the growth of the Company and the enhancements of shareholders' equity through, for example, improvements in its resource base and share price increases. After reviewing recommendations from the Compensation and Governance Committee, the Board approves base salaries and share and stock option grants at the same time to facilitate consideration of targeted direct compensation to executive officers. Generally, the Board grants options and share-based awards on an annual basis in order to minimize ad hoc option grant proposals and to normalize the compensation process. Previous grants of share-based and option-based awards are taken into account when considering new share-based and option-based grants. Share-based and option-based awards are granted at other times of the year to individuals commencing employment with the Company.

Stock options and restricted common shares were granted to senior executives during 2015. Options and such restricted common shares vest on terms established by the Board and exercise prices for the options are set in accordance with TSX policy. In future years, it is expected that the Company will develop more formal objectives governing security-based compensation of executive officers.

In 2015, the NEOs received the following equity grants:

Notes:

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The Options granted in 2015 vest in the following manner: 1/3 on the day that is one month after the grant date, 1/3 on the first anniversary of the grant date, and 1/3 on the second anniversary of the grant date. The restricted Common Shares granted in 2015 vest in the following manner: 20% on the first anniversary of the grant date, 20% on the second anniversary of the grant date, and 60% on the third anniversary of the grant date.

On May 13, 2016, the Company adopted the New Share Incentive Plan to, among other things, also allow for grants of restricted share units. At the Meeting, Shareholders will be asked to consider and, if deemed appropriate, to pass, with or without variation, a resolution approving the New Share Incentive Plan, all as more particularly described below (see "Part Two – Business of the Meeting – Approval of the New Share Incentive Plan" ).

Over the last four years, the Company has put in place a new management team and board of directors as a part of turn-around strategy to enhance shareholder value of the previously-struggling Company. Given the goal to enhance the Company's financial strength and maintain a strong cash position during a volatile period in the mining industry and the need to attract top industry talent at all levels within the Company to enhance the Fire Creek Project and complete and integrate the Midas Mine and Mill acquisition, the Company relied significantly on grants under the Prior Share Incentive Plan to attract and retain employees including its management team. This resulted in a higher than anticipated burn rate under the Prior Share Option Plan. The Company is now re-aligning its practices by adopting compensation-related policies and compensation plans in accordance with industry best practices and good governance standards.

In particular, the following changes are expected to be made to equity-based compensation for executives beginning in 2016:

Perquisites and Other Personal Benefits

The executive officers of the Company are not generally entitled to significant perquisites or other personal benefits not offered to the Company's other employees; however certain of the executive officers have received certain perquisites as described further under "Part Three – Statement of Executive Compensation – Summary Compensation Table" and "Part Three – Statement of Executive Compensation – Termination and Change of Control Benefits" .

Hedging

To further align the interests of executives and directors with the creation and protection of short-term and long-term value for shareholders, the Company has adopted a policy prohibiting officers and directors from engaging in the short selling of, or trading in put options in respect of, the securities of the Company.

The Company has not established any policies related to the purchase by directors or NEOs of financial instruments (including prepaid variable financial contracts, equity swaps, collars, or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by any director or NEO.

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Risk

The Compensation and Governance Committee recognizes that certain elements of compensation could promote unintended inappropriate risk-taking behaviours; however, the Company seeks to ensure that executive compensation packages appropriately balance short term incentives (e.g., base salary and cash bonuses, if applicable) and long-term incentives (e.g., share-based awards and options). Base salaries and personal benefits are not subject to performance risk given the stage of the Company, as discussed above. To receive the benefit of long-term incentives (share-based awards and options), the executive officers must be employed by the Company (subject to limited exceptions), thereby better aligning executive performance with the interests of the Company and Shareholders. The Compensation and Governance Committee believes that executive compensation risk management is reinforced by ongoing Board oversight of, among other things, the Company's financial results, regulatory disclosure, strategic plans, fraud and error reporting, the Audit Committee's regular meetings with the external auditors (including without the presence of management), the Company's internal controls, management information systems and financial control systems.

As additional protection against risks associated with compensation, in May 2016, the Company adopted the Clawback Policy (see "– Clawback Policy" below) and the Share Ownership Policy (see "– Share Ownership Policy" belo w ). Additionally, the Company has adopted a policy that provides for an annual advisory shareholder vote on executive compensation designed to enhance accountability for the compensation decisions made by the Board by giving shareholders a formal opportunity to provide their views on the Board's approach to executive compensation through an annual non-binding advisory vote. See "Part Two – Business of the Meeting – Advisory Vote on the Company's Approach to Executive Compensation" .

As a result of the factors discussed above, the Compensation and Governance Committee does not believe that its compensation practices and policies are reasonably likely to have a material adverse effect on the Company.

Clawback Policy

On May 5, 2016, the Board adopted a formal written policy (the " Clawback Policy ") providing for the recoupment of certain incentive compensation paid to the executive officers and certain other members of management in cases of a material restatement of the Company's financial statements in certain circumstances as set out below.

The Compensation and Governance Committee will require executive officers and certain other members of management to reimburse, in all appropriate cases as determined by the Compensation and Governance Committee, any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the executive officer or member of management and any non-vested equity-based awards previously granted to the executive officer or member of management (collectively " Incentive Compensation ") if: (a) the amount of the Incentive Compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error, (b) the executive officer or member of management engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error, and (c) the amount of the Incentive Compensation that would have been awarded to the executive officer or member of management, had the financial results been properly reported would have been lower than the amount actually awarded.

Share Ownership Policy

On May 5, 2016, the Board adopted a share ownership policy (the " Share Ownership Policy ") to further align the interests of the executive officers of the Corporation and the other directors of the Company (the " non-management directors ") with those of the Shareholders by requiring such persons to own a significant number of Common Shares.

Pursuant to the Share Ownership Policy: (i) each non-management director is required to hold Common Shares having an aggregate value of at least three times the value of the annual base cash retainer or fee paid to the non-management director, (ii) the CEO is required to hold Common Shares having an aggregate value of at least three times his or her annual base salary, and (iii) each of the other executive officers is required to hold Common Shares having an aggregate value of at least one times his or her annual base salary. Non-management directors and executive officers are required to comply with the Share Ownership Policy by the later of (i) the fifth anniversary of such individual's date of hire, appointment or election, and (ii) May 6, 2021.

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For the purposes of the Share Ownership Policy, Common Shares issuable upon the vesting of RSUs are treated as Common Shares owned by a director or senior officer in connection with these guidelines. DSUs held by the directors count towards the share ownership requirements under the guidelines. Options held by the directors or senior officer do not count towards the share ownership requirements under the guidelines.

Performance Graph

The following graph compares, from December 31, 2010 to December 31, 2015, the total cumulative return on a C$100 investment in the Common Shares with the cumulative total return of the S&P/TSX Composite Index, the S&P/TSX Global Gold Index and the S&P/TSX SmallCap Index, to which index the Common Shares were added in 2014.

Stock Chart Comparison
KDX vs S&P/TSX Composite Index, S&P/TSX Global Gold Index and S&P/TSX
SmallCap Index
(assumes $100 invested)

The share price performance trend illustrated within this chart does not necessarily reflect the trend in the Company's compensation to executive officers over the same time period. The share price valuation of gold producers, as well as exploration and development companies, fluctuates with changes in the underlying commodity prices, and at no time during the period was compensation intended to reflect share price performance driven by externalities. Alignment with Shareholders is nonetheless achieved by awarding a significant portion of compensation in the form of long-term equity-based incentives.

Notes:

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Notes:

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth information in respect of all share-based awards and option-based awards vested as at December 31, 2015 in favor of the NEOs of the Company.

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Notes:

Notes:

Termination and Change of Control Benefits

Each of the NEOs has entered into an employment agreement with the Company. The following provides details on the status of agreements with each of the NEOs as at December 31, 2015. For the purposes of this section, references to the "Company" refer to the Company and its direct and indirect wholly-owned subsidiaries.

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NEO Employment Agreements

Entitlements

Each NEO has an employment agreement with the Company in respect of such NEO's duties with the Company. Each employment agreement provides for (i) an annual base salary, to be reviewed by the President from time to time (by the Board, in the case of Mr. Huet's employment agreement), (ii) a target annual bonus based on a percentage of the NEO's annual base salary (subject to achieving corporate and personal targets to be mutually agreed upon in writing at the beginning of each year), (iii) group benefits, including group insurance, supplemental health insurance, qualified pension, 401(k), hospitalization, medical health and accident, disability, life or similar plan of the Company or an affiliate (collectively, the " Group Benefits "), (iv) entitlement to paid vacation, and (v) eligibility to participate in any equity incentive plan made available to senior management of the Company. In addition, the employment agreements between the Company and each of the NEOs provides that the NEO will be reimbursed for all reasonable and documented travel and out-of-pocket expenses incurred by the NEO in connection with the performance of his duties.

The base annual salaries and target annual bonus percentages for each of the NEOs for 2015 are shown below.

Each of the NEOs' employment agreements also includes covenants relating to non-solicitation, non-competition and confidentiality.

Termination Without Cause

Paul Huet

Under the employment agreements for between the Company and Mr. Huet, if Mr. Huet experiences an involuntary termination of employment by the Company for any reason other than for just cause, then the Company shall pay Mr. Huet for all accrued but unpaid vacation entitlements (net of applicable withholdings). In addition, the Company shall provide to Mr. Huet a lump sum separation payment, net of applicable withholdings and less any amounts owing by the NEO to the Company, (the " Separation Payment ") equal to:

With respect to the calculation in paragraph (iii), the target annual bonus amount shall be used without regard to the achievement of any corporate and personal targets established in connection with such target bonus amount.

In the event the Company terminates the employment agreement and Mr. Huet's employment without cause, all outstanding equity awards granted under compensatory plans shall vest 100%, subject to applicable U.S. tax laws. In the event the Company terminates the employment agreement and Mr. Huet's employment without cause, Mr. Huet shall have ninety (90) days from the termination date to exercise any stock options to acquire Common Shares that he holds that have vested and are unexercised on or before the termination date. Mr. Huet shall not be entitled to be awarded or have any right to receive, after the termination date, any further stock options or damages in lieu of receipt of further stock options, which would have vested after the termination date.

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NEOs other than Paul Huet

Under the employment agreements for each of the NEOs other than Mr. Huet, if the NEO experiences an involuntary termination of employment by the Company for any reason other than for just cause, then the Company shall pay the NEO for all accrued but unpaid vacation entitlements (net of applicable withholdings). In addition, the Company shall provide to the NEO a lump sum separation payment, net of applicable withholdings and less any amounts owing by the NEO to the Company, (the " Separation Payment ") equal to:

For greater certainty, in no circumstances shall the Employee be entitled to a Separation Payment that is more than the equivalent of a total of 18 months of the payments in paragraphs (i),(ii),(iii) and (iv) above (i.e., 12 months plus an additional month for each of the first six years of completed of service from NEO's date of hire, up to a maximum of an additional 6 months). With respect to the calculation in paragraph (iii), the target annual bonus amount shall be used without regard to the achievement of any corporate and personal targets established in connection with such target bonus amount.

In the event the Company terminates the employment agreement and the NEO's employment without cause, all outstanding equity awards granted under compensatory plans shall vest 100%, subject to applicable U.S. tax laws. In the event the Company terminates the employment agreement and the NEO's employment without cause, the NEO shall have ninety (90) days from the termination date to exercise any stock options to acquire Common Shares that he holds that have vested and are unexercised on or before the termination date. The NEO shall not be entitled to be awarded or have any right to receive, after the termination date, any further stock options or damages in lieu of receipt of further stock options, which would have vested after the termination date.

Termination in the Event of a Change of Control

If, within one hundred and eighty (180) days following a Change of Control, the NEO experiences an involuntary termination of employment by the Company or any successor entity without just cause or if the NEO terminates employment for Good Reason, then: (i) all unvested stock options to acquire shares of the Company (or any successor) held by the NEO shall immediately vest on the termination date and the NEO shall have one (1) year after the date of the Change of Control to exercise the vested stock options; (ii) the Company shall provide the NEO with a lump-sum payment equal to the payment the NEO would have received in the event of a termination without cause; (iii) the NEO shall not be entitled to receive any further pay or compensation (except for base salary, if any, accrued and owing under the employment agreement up to the termination date), severance pay, notice, payment in lieu of notice, benefits or damages of any kind, and for clarity, without limiting the foregoing, the NEO shall not be entitled to any bonus or pro-rata bonus payment that has not already been paid to the NEO on or before the termination date.

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For the purposes of the employment agreements, a " Change of Control " means: (i) the direct or indirect sale, lease, exchange or other transfer of all or substantially all of the assets of the Company to any person or entity or group of persons or entities, but not including the entering into of an option, joint venture or other arrangement whereby the Company transfers, or has the right to transfer, an interest in its mineral properties yet maintains control, majority ownership or an operating interest in the mineral properties, resulting entity or new arrangement; (ii) the amalgamation, merger or arrangement of the Company with or into another entity where the shareholders of the Company immediately prior to the transaction will hold less than 50% of the voting securities of the resulting entity upon completion of the transaction; (iii) any person or combination of persons acting jointly or in concert, acquiring or becoming the beneficial owner of, directly or indirectly, of more than 50% of the voting securities of the Company whether through the acquisition of previously issued and outstanding voting securities of the Company or of voting securities of the Company that have not previously been issued or any combination thereof or any other transaction with similar effect; or (iv) the Board adopting a resolution to the effect that, for purposes of the Agreement, a Change of Control has occurred, or that such a Change of Control is imminent, in which case, the date of the Change of Control shall be deemed to be the date of such resolution.

For the purposes of the employment agreements, " Good Reason " means the continued occurrence of any of the following conditions without the NEO's consent after the NEO has given the Company written notice of such condition within thirty days following the initial existence of the condition, and the Company has failed to cure such condition within 30 days of the date it received notice of the condition: (i) the Company assigning to the NEO duties materially inconsistent with the NEO's duties and responsibilities under this Agreement, including those management duties performed by the NEO, as an employee of the Company, for the Company or an affiliate of the Company; (ii) a unilateral reduction by the Company of the NEO's base salary, or any unilateral change in the basis upon which the NEO's base salary is determined or paid if the change is or will be materially adverse to the NEO, except where (x) such reduction or change is part of a general reduction in the base salary of all or substantially all of the members of management of the Company and which affects the NEO in substantially the same manner as the other members of the management of the Company who are also affected by such general reduction and (y) such change does not constitute more than ten percent (10%) of the NEO's base salary; (iii) the Company unilaterally relocating the NEO's principal location more than 100 miles from the NEO's current work location; or (iv) any material breach by the Company of any provision of the employment agreement, which is not cured by the Company within thirty (30) days following written notice from the NEO.

PART FOUR – REPORT ON DIRECTOR COMPENSATION

Director Compensation Table

Prior to 2016, the Company did not have any non-cash compensation plans for its directors other than the possible grant of incentive stock options and restricted common share grants under the share compensation plan.

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On May 13, 2016, the Company adopted a deferred share unit plan (the " DSU Plan ") providing for the granting of deferred share units (" DSUs ") to eligible directors of the Company. It is expected that DSUs will be granted to directors in future periods as part of directors' annual equity-based compensation. A summary of the key terms of the DSU Plan are provided below under the heading "Part Four – Report on Director Compensation – Summary of DSU Plan" . With the adoption of the DSU Plan, the Compensation and Governance Committee and Board have determined that Options will no longer be granted to non-employee directors in future periods.

For the 2015 financial year, the compensation for non-executive directors of the Company was set as follows: (i) an annual cash retainer of C$35,000 for each director of the Company; (ii) a cash fee of C$1,000 per Board meeting attended by conference call; (iii) a cash fee of C$1,000 to Toronto-based directors for the in-person Board meeting attended which is held following the annual meeting of shareholders of the Company in Toronto, Ontario; (iv) a cash fee of C$1,500 per Board meeting attended in person and requiring travel, subject to item (iii) above; (v) an annual cash retainer of C$10,000 for the chair of the Audit Committee; (vi) an annual cash retainer of C$5,000 for each member of the Audit Committee, other than the chair; (vii) an annual cash retainer of C$5,000 for the chair of the Compensation and Governance Committee; (viii) an annual cash retainer of C$2,500 for each member of the Compensation and Governance Committee, other than the chair; (ix) an annual cash retainer of C$3,000 for the chair of the Mine Safety and Health Committee; (x) an annual cash retainer of C$1,500 for each member of the Mine Safety and Health Committee, other than the chair; and (xi) a cash fee of C$750 per committee meeting attended. In addition, the chair of the Legacy Committee is entitled to a cash fee of C$70,000 on an annual basis, payable quarterly.

Mr. Richard J. Hall, the Chairman of the Board, entered into an agreement (the " Chairman Agreement ") with the Company on September 12, 2014 relating to his services to the Company as Chairman. Pursuant to the Chairman Agreement, as compensation for acting as non-executive Chairman of the Board, Mr. Hall is entitled to an annual cash director's fee of US$80,000. Under the Chairman Agreement, as additional compensation for acting as a part-time, non-executive Chairman of the Board, Mr. Hall was also entitled to receive such number of restricted common shares as is equal to 25% of the number of Common Shares purchased by Mr. Hall in the first financing (or purchase on the TSX or other secondary market on which the Common Shares trade) following September 9, 2014, up to a maximum of US$150,000 in Common Shares purchased by Mr. Hall. Pursuant to the Chairman Agreement, Mr. Hall was also entitled to receive 300,000 options to acquire Common Shares, which options were granted on September 12, 2014, with 1/3 vesting immediately, 1/3 vesting on the first anniversary and 1/3 vesting on the second anniversary.

Pursuant to an agreement between a subsidiary of the Company and Hall Mineral Services LLC (" HMS "), a company controlled by Mr. Hall, (as amended and restated on June 17, 2015, the " Hall Agreement "), the Company agreed to pay to HMS an amount equal to C$3,000 per month as remuneration for Mr. Hall's services as a director of the Company (C$6,000 per month prior to the amendment to the Hall Agreement effective June 17, 2015). The Hall Agreement can be terminated by either HMS or the Company upon 30 days' written notice to the other party.

The compensation provided to the directors, excluding directors who are included in disclosure for NEOs above, for the year ended December 31, 2015, is expressed in US dollars as follows.

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Notes:

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Notes:

Notes:

Indebtedness of Officers and Directors

No directors, proposed nominees for election as directors, executive officers or their respective associates or affiliates were indebted to the Company since the beginning of the most recently completed financial year. No executive officers, directors, employees and former executive officers, directors and employees of the Company or any of its subsidiaries are indebted to the Company or any of its subsidiaries as of the date hereof.

Directors' and Officers' Liability Insurance

The Company has purchased directors and officers liability insurance coverage for the directors and officers of the Company. The insurance coverage has an aggregate limit of C$55,000,000.

Summary of DSU Plan

Purpose of the DSU Plan

The purpose of the DSU Plan is to assist the Company in the recruitment and retention of qualified persons to serve as directors of the Company and to align the interests of eligible directors of the Company (the " Eligible Directors ") with the long-term interests of the shareholders of the Company.

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Administration of the DSU Plan

The DSU Plan is administered by the Compensation and Governance Committee and the Compensation and Governance Committee has full authority to administer the DSU Plan including the authority to interpret and construe any provision of the DSU Plan and to adopt, amend and rescind such rules and regulations for administering the DSU Plan as the Compensation and Governance Committee may deem necessary in order to comply with the requirements of the DSU Plan.

Determination of Eligible Directors and Participation

The Compensation and Governance Committee will, from time to time, determine the Eligible Directors who may participate in the DSU Plan, the Eligible Directors to whom DSUs will be granted, and the provisions and restrictions with respect to such grant. All such determinations are to be made in accordance with the terms and conditions of the DSU Plan. In making its determination, the Compensation and Governance Committee may take into consideration the present and potential contributions of and the services rendered by the particular Eligible Director to the success of the Company and any other factors which the Compensation and Governance Committee deems appropriate and relevant.

Grant of DSUs

The Compensation and Governance Committee may, from time to time, grant DSUs to an Eligible Director in such numbers, at such times and on such terms and conditions, consistent with the DSU Plan, as the Compensation and Governance Committee may, in its sole discretion, determine to be appropriate in respect of the services the Eligible Director renders as a member of the Board. For greater certainty, the Compensation and Governance Committee will, in its sole discretion, determine any and all conditions to the vesting of any DSUs granted to an Eligible Director, which conditions will be set out in the DSU grant letter. The Compensation and Governance Committee may in its sole and absolute discretion accelerate and/or waive any vesting or other conditions for all or any DSUs for any Eligible Director at any time and from time to time, subject to the requirements of applicable laws, and provided that any such acceleration of vesting or waiver of any vesting or other conditions will not accelerate the settlement/payment of such DSUs, which will occur upon the Eligible Director's separation from service. DSUs that are fully vested at the time of grant as set forth in the applicable DSU grant letter, or that become vested through the satisfaction of any applicable vesting or other conditions or the waiver of such vesting or other conditions by the Compensation and Governance Committee, are referred to as " Vested DSUs ".

Redemption of DSUs

Vested DSUs will be redeemed following the separation of service of a U.S. Eligible Director (as defined in the DSU Plan) or following the Termination Date (as defined below) of a Canadian Eligible Director (as defined in the DSU Plan), on a date selected by the Compensation and Governance Committee in its sole discretion, provided that such date will be on or before December 31 ^st of the calendar year in which the separation from service occurs, or, if later by the date that is 2 ½ months after the date of the separation from service and the Eligible Director will have no ability to influence, directly or indirectly, the calendar year in which payment is made (the " Redemption Date "). Vested DSUs credited to the Eligible Director's account will be redeemed and will be paid by the Company to the Eligible Director (or if the Eligible Director has died, to the Eligible Director's beneficiary) in the form of a lump sum cash payment, less applicable withholding taxes.

The Market Value of the DSUs for the purposes of determining the amount to be paid to the Eligible Director upon redemption of DSUs will be determined as of the Redemption Date. Each DSU so redeemed will entitle the Eligible Director to receive the Market Value in cash in an amount that is rounded down to the nearest cent, less any applicable withholding taxes as deducted, withheld and/or remitted. The date on which such cash payment is made to the Eligible Director is referred to as the " Payment Date ".

The Payment Date with respect to DSUs of U.S. Eligible Directors will in all cases be on or before December 31 ^st of the calendar year in which the separation from service occurs, or, if later by the date that is 2 ½ months after the date of the separation from service and the Eligible Director will have no ability to influence, directly or indirectly, the calendar year in which the Payment Date occurs. In selecting the Redemption Date, the Compensation and Governance Committee will give due consideration to the time required to process the redemption of DSUs in order to ensure that the Payment Date will occur within the requisite time limitations.

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In the event that any Redemption Date is after the date on which the Common Shares ceased to be traded on the TSX or any other exchange on which the Common Shares trade, provided such cessation in trading is not reasonably expected to be temporary (the " Cease Trade Date "), the Market Value of the DSUs redeemed by or in respect of the Eligible Director must be determined in accordance with the following: (i) where the Eligible Director's separation from service is before or not more than one (1) year after the last trading day before the Cease Trade Date, the value of each DSU credited to the Eligible Director's account at his or her Redemption Date will be equal to the Market Value on the last trading day before the Cease Trade Date; and (ii) where the Eligible Director's separation from service is after the date that is more than one (1) year after the last trading day before the Cease Trade Date, the value of each DSU credited to the Eligible Director's account at his or her Redemption Date will be based on the fair market value of a common share of the Company or of a corporation which is related to the Company for the purposes of the Income Tax Act (Canada) at his or her Redemption Date as determined on a reasonable and equitable basis by the Compensation and Governance Committee after receiving the advice of one or more independent firms of investment bankers of national repute.

Upon payment of a redemption amount in satisfaction of DSUs credited to the account of an Eligible Director, the particular DSUs in respect of which such payment was made will be cancelled and no further payments will be made from the DSU Plan in relation to such DSUs.

Notwithstanding any other provision of the DSU Plan, all amounts payable to, or in respect of, a Canadian Eligible Director hereunder must be paid on or before December 31 ^st of the first (1 ^st ) calendar year commencing immediately after the Canadian Eligible Director's termination date, and no amounts will be paid prior to the Canadian Eligible Director's termination date.

In the event that an Eligible Director's Redemption Date as determined would otherwise fall between the record date for payment of a dividend (the " Dividend Record Date ") and the related payment date for cash dividends paid on Common Shares (the " Dividend Payment Date "), the Redemption Date will be the day immediately following such Dividend Payment Date for purposes of recording in the account of the Eligible Director dividend equivalent amounts and making the calculation of the Market Value of the vested DSUs. In the event that the Company is unable, by an Eligible Director's Redemption Date, to compute the Market Value of the vested DSUs recorded in such Eligible Director's account by reason of the fact that any data required in order to compute the Market Value of a Common Share has not been made available to the Company, then the Redemption Date will be the next following trading day on which such data is made available to the Company.

In the event that an Eligible Director's Redemption Date as determined falls on or within ten (10) business days of the expiration of a blackout period applicable to such Eligible Director, then the Redemption Date will be extended to the close of business on the tenth (10 ^th ) business day following the expiration of the blackout period.

If the number of outstanding Common Shares is increased or decreased as a result of a subdivision, consolidation, reclassification or recapitalization and not as a result of the issuance of Common Shares for additional consideration or by way of a dividend in the ordinary course, the Compensation and Governance Committee will make appropriate adjustments to the number of DSUs outstanding under the DSU Plan provided that the dollar value of DSUs credited to an Eligible Director's account immediately after such an adjustment will not exceed the dollar value of the DSUs credited to such Eligible Director's account immediately prior thereto. Any determinations by the Compensation and Governance Committee as to the adjustments will be made in its sole discretion and all such adjustments will be conclusive and binding for all purposes under the DSU Plan.

The following provisions are applicable to Eligible Directors who are both U.S. Eligible Directors and Canadian Eligible Directors (" Dual Participants "). For greater clarity, these forfeiture provisions are intended to avoid adverse tax consequences under applicable tax laws of the U.S. and Canada, that may result because of the different requirements as to the time of settlement of DSUs with respect to Dual Participant's separation from service and such Dual Participant's retirement or loss of office (under tax laws of Canada). Unless it is determined that no adverse tax consequences under either the U.S. tax regime or the Canadian tax regime would result, if a Dual Participant otherwise would be entitled to payment of DSUs in any of the following circumstances, such DSUs shall instead be immediately and irrevocably forfeited (for greater certainty, without any compensation therefor):

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Designation of Beneficiary

Subject to the requirements of applicable laws, an Eligible Director will designate in writing a person who is a dependant or relation of the Eligible Director as a beneficiary to receive any benefits that are payable under the DSU Plan upon the death of such Eligible Director. The Eligible Director may, subject to applicable law, change such designation from time to time. Such designation or change will be in such written form as may be determined by the Company from time to time. The initial designation of each Eligible Director will be executed and filed with the Compensation and Governance Committee: (a) in the case of an existing director, within thirty (30) days following the effective date of the DSU Plan; or (b) in the case of a new director, within thirty (30) days after the Eligible Director's appointment to the Board.

Effect of Death on DSUs

In the event of an Eligible Director's death prior to separation from service, any and all DSUs then credited to the Eligible Director's account will become payable to the Eligible Director's beneficiary and for greater certainty, the date of death will be deemed to be the date of the Eligible Director's separation from service.

DSU Grant Letter

Each grant of a DSU award under the DSU Plan will be evidenced by a DSU grant letter to the Eligible Director from the Company. DSU grant letters will be subject to all of the applicable terms and conditions of the DSU Plan and may be subject to any other terms and conditions which are not inconsistent with the DSU Plan and which the Compensation and Governance Committee deems appropriate for inclusion in a DSU grant letter. The provisions of the various DSU grant letters issued under the DSU Plan need not be identical.

Effect of Change of Controls on DSUs

If there is a Change of Control (as defined in the DSU Plan), all DSUs outstanding will immediately vest on the date of such Change of Control. In any event, upon a Change of Control, Eligible Directors will not be treated any more favourably than shareholders of the Company with respect to the consideration that the Eligible Directors would be entitled to receive for their Common Shares.

Termination of Unvested DSUs

All DSUs that have not vested prior to the Eligible Director's separation from service will terminate and be of no further force and effect.

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Amendment and Termination of the DSU Plan

The DSU Plan may be amended, suspended or terminated in whole or in part at any time by the Board or the Compensation and Governance Committee, as the case may be, provided that no amendment will be made which would cause the DSU Plan, or any DSUs granted hereunder, to cease to comply with applicable laws.

The Board or the Compensation and Governance Committee may, in its sole discretion, make the following amendments to the DSU Plan:

Effect of Assignment and Transfer

Rights and obligations under the DSU Plan may be assigned by the Company to a corporate successor in the business of the Company, any corporation resulting from any amalgamation, reorganization, combination, merger or arrangement of the Company, or any corporation acquiring all or substantially all of the assets or business of the Company. In no event may the rights or interests of an Eligible Director under the DSU Plan be assigned, encumbered, pledged, transferred or alienated in any way, except to the extent that certain rights may pass to a beneficiary upon death of an Eligible Director pursuant to the terms of the DSU Plan. DSUs are non-transferable.

No Contract of Employment

Nothing contained in the DSU Plan will confer or be deemed to confer upon any Eligible Director the right to continue in the employment of, or to provide services to, the Company or an affiliate of the Company nor interfere or be deemed to interfere in any way with any right of the Company or an affiliate of the Company to discharge any Eligible Director at any time for any reason whatsoever, with or without cause. Participation in the DSU Plan by an Eligible Director must be voluntary.

Adjustments and Reorganization

In the event of any subdivision, consolidation or distribution of Common Shares to the shareholders of the Company (excluding by way of dividend payment in the ordinary course or a distribution of Common Shares under any compensation arrangement of the Company or any of its subsidiaries or other affiliates controlled by the Company, that contemplates the issuance of Common Shares from treasury), or upon a capital reorganization, reclassification, exchange, or other change with respect to the Common Shares, or a consolidation, amalgamation, arrangement or other form of business combination of the Company with another person, or a sale, lease or exchange of all or substantially all of the property of the Company or other distribution of the Company's assets to shareholders (other than by way of dividend payment in the ordinary course), then the account of each Eligible Director and the DSUs outstanding under the DSU Plan will be adjusted in such manner, if any, as the Board or the Compensation and Governance Committee deems appropriate in order to preserve, proportionally, the interests of the Eligible Directors under the DSU Plan, provided that the dollar value of DSUs credited to an Eligible Director's account immediately after such an adjustment will not exceed the dollar value of the DSUs in such Eligible Director's account immediately prior thereto and provided further that the value of DSUs will always depend on the fair market value of Common Shares (or Common Shares of a corporation related to the Company for purposes of the Income Tax Act (Canada)). All adjustments must, at all times, be in compliance with applicable laws.

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Securities Exchange Take-over Bid

In the event that the Company becomes the subject of a take-over bid (within the meaning of the Securities Act (British Columbia)) pursuant to which 100% of the issued and outstanding Common Shares are acquired by the offeror either directly or as a result of the compulsory acquisition provisions of the incorporating statute and where consideration is paid in whole or in part in equity securities of the offeror, the Compensation and Governance Committee may send notice to all holders of DSUs requiring them to surrender their DSUs within ten (10) days of the mailing of such notice, and the holders of DSUs will be deemed to have surrendered such DSUs on the tenth (10th) day after the mailing of such notice without further formality, provided that:

For the purposes of the DSU Plan, "Market Value" means, with respect to any particular date, the greater of either: (a) the weighted average trading price of Common Shares on the TSX and any other exchange on which the Common Shares are listed; and (b) the average of daily high and low board lot trading prices of the Common Shares on the TSX and any such other exchange, in each case for the five (5) consecutive trading days immediately prior to the date as of which Market Value is determined, provided that (i) where the Market Value would be determined with reference to a period commencing after a fiscal quarter end of the Company and ending prior to the public disclosure of interim financial statements for such quarter (or annual financial statements in the case of the fourth quarter), the calculation of the Market Value will be made with reference to the fifth (5th) trading day immediately following the date of public disclosure of the financial statements for that quarter, and (ii) in the event of a Cease Trade Date (as defined below), Market Value shall be such other value as may be determined under the DSU Plan.

PART FIVE – AUDIT COMMITTEE INFORMATION

Audit Committee

The members of the Audit Committee are James Haggarty (Chair), Rodney Cooper and William Matlack. All of the members are deemed to be "independent" and "financially literate" as such terms are defined in National Instrument 52-110 – Audit Committees (" NI 52-110 ").

The Board has adopted a written mandate for the Audit Committee in accordance with NI 52-110 in carrying out its audit and financial review functions (the " Audit Committee Mandate "). The text of the Audit Committee Mandate is set out in Schedule "A" of the AIF which is available under the Company's issuer profile on SEDAR at www.sedar.com. Additional information regarding the Audit Committee is also available in the AIF under the heading " Audit Committee Disclosure ".

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The Audit Committee reviews all financial statements of the Company prior to their publication, reviews audits or communications, recommends the appointment of independent auditors, reviews and approves the professional services to be rendered by them and reviews fees for audit services. The Audit Committee typically meets quarterly. The Audit Committee meets both separately with auditors (without management present) as well as with management present. The Audit Committee and the auditors discuss the various aspects of the Company's financial presentation in the areas of audit risk and International Financial Reporting Standards.

Relevant Education and Experience

Each member of the Audit Committee has skills and experiences that provide the member with: an understanding of the accounting principles used by the issuer to prepare its financial statements; the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals and provisions; experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements, or experience actively supervising one or more individuals engaged in such activates; and an understanding of internal controls and procedures for financial reporting.

James Haggarty is a Chartered Professional Accountant (C.P.A. and C.A.) and holds an Honours Bachelor of Commerce degree from the University of Windsor. He has held senior executive positions as CEO, Executive VP Operations, VP Financial Operations, and VP Corporate Development with public and private companies like the SIM Group where he currently is President & Chief Executive Officer. He has extensive experience with audit committees and public company boards throughout his career, stemming back to 1993 with Metall Mining. Mr. Haggarty is also on the board of directors of Gibraltar Growth Corporation, GreenSpace Brands Inc., and the Toronto Blue Jays Care Foundation. Mr. Haggarty has been the chair of the audit committee at GreenSpace Brands Inc. since 2015.

Rodney Cooper has been involved in the mining industry for over 30 years, with broad experience in technical services, operations, project management, investment evaluation and finance. He is a mining engineer, having obtained the P.Eng. designation, and a past director of the Mining Association of Canada and the Alberta Chamber of Resources. Currently President and Chief Operating Officer of Labrador Iron Mines Holdings Limited, he previously served as Vice President and Senior Analyst at Dundee Securities, Chief Operating Officer at Baffinland Iron Mines Corporation and Vice President Technical Services at Kinross Gold Corporation.

William Matlack has a B.A. Geology, Carleton College and a M.S. Geology, University of Minnesota. He has 20 years' experience in the mining industry, primarily with major gold mining companies, followed by 19 years in mining finance in the securities industry, including metals & mining equity research with major brokerage firms.

For more information see " Part Two – Business of the Meeting – Election of Directors ".

PART SIX – STATEMENT OF CORPORATE GOVERNANCE PRACTICES

Canadian securities regulatory policy as reflected in National Instrument 58-101 – Disclosure of Corporate Governance Practices requires that TSX-listed companies disclose on an annual basis their approach to corporate governance. National Policy 58-201 – Corporate Governance Guidelines provides regulatory staff's guidance as to preferred governance practices, although such guidelines are not prescriptive (other than for audit committees). Disclosure of the Company's approach to corporate governance in the context of this instrument and policy (together, the " Policies ") is set out below.

Board Mandate

The Board has adopted a written mandate that acknowledges that it is responsible for the stewardship of the business and affairs of the Company. The Board seeks to perform such responsibility by reviewing, discussing and approving the Company's strategic planning and organizational structure and supervising management to ensure that the foregoing enhance and preserve the underlying value of the Company and that the Company operates with honesty and integrity in the conduct of its business. The Board reviews and assesses the adequacy of the Board mandate at least annually or otherwise, as it deems appropriate, and makes any necessary changes. A copy of this mandate is attached to this Circular as Schedule "A".

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Position Descriptions

The Board has adopted written position descriptions for the Chairman of the Board, the Chair of each Board committee and the Lead Director (in the absence of an independent Chairman of the Board). Currently, the position of Board Chair is occupied by Mr. Richard J. Hall, an independent director. The responsibilities of the Chairman are further outlined in the Chairman Agreement between the Company and Mr. Hall. Pursuant to the Chairman Agreement, Mr. Hall shall be primarily responsible for the management and effective performance of the Board and shall provide leadership to the Board and, in connection therewith shall:

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Mr. Hall agreed to provide the services on a part-time basis during the term of the Chairman Agreement or otherwise as may be agreed. Pursuant to the Chairman Agreement, Mr. Hall may perform services for and on behalf of third parties other than the Company, provided that: (i) Mr. Hall is available to perform in a timely manner the agreed upon services under the Chairman Agreement, and (ii) the performance of services by Mr. Hall for and on behalf of such third party does not create a material conflict of interest in respect of his obligations to the Company, whether under the Chairman Agreement or otherwise.

The Board also relies upon past practice to delineate the role and responsibilities of the Board Chair. The roles of the Chair of the Audit Committee, the Chair of the Compensation and Governance Committee and the Chair of the Mine Safety and Health Committee are described in the respective mandates for such committees. The role of the CEO is based upon the role of chief executive officers carried out at companies of similar size, scope and industry.