INTERNATIONAL TOWER HILL MINES LTD (Form: 10-K, Received: 03/13/2013 14:45:57)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-33638

INTERNATIONAL TOWER HILL MINES LTD.

(Exact Name of Registrant as Specified in its Charter)

British Columbia, Canada		N/A
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2300-1177 West Hastings Street,
Vancouver, British Columbia, Canada, V6E 2K3		V6E 2K3
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (604) 683-6332

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:		Name of Each Exchange on Which Registered:
Common Shares, no par value		NYSE MKT

Securities registered pursuant to Section 12(g) of the Act: N/A

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

Based on the last sale price on the NYSE MKT of the registrant’s Common Shares on June 29, 2012 (the last business day of the registrant’s most recently completed second fiscal quarter) of $2.78 per share, the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $171,404,497.

As of March 11, 2013, the registrant had 98,068,638 Common Shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

To the extent specifically referenced in Part III, portions of the registrant’s definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission in connection with the registrant’s 2013 Annual Meeting of Shareholders are incorporated by reference into this report.

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		Page
Part I
Item 1	Business	8
Item 1A	Risk Factors	12
Item 1B	Unresolved Staff Comments	23
Item 2	Properties	23
Item 3	Legal Proceedings	34
Item 4	Mine Safety Disclosure	34

Part II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6	Selected Financial Data	40
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	53
Item 8	Financial Statements and Supplementary Data	55
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	78
Item 9A	Controls and Procedures	78
Item 9B	Other Information	78

Part III
Item 10	Directors, Executive Officers, and Corporate Governance	79
Item 11	Executive Compensation	79
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	79
Item 13	Certain Relationships and Related Transactions, and Director Independence	79
Item 14	Principal Accountant Fees and Services	79

Part IV
Item 15	Exhibits and Financial Statement Schedules	80

SIGNATURES

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CHANGE OF REPORTING STATUS

Effective January 1, 2013, International Tower Hill Mines Ltd. (“ITH” or the “Company”) ceased to be a “foreign private issuer” as defined in Rule 3b-4 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and became subject to the rules and regulations under the Exchange Act applicable to U.S. domestic issuers. As a result, the Company is filing an Annual Report on Form 10-K beginning with the fiscal year ended December 31, 2012. Prior to December 31, 2012, the Company’s annual reports were filed on Form 40-F.

CAUTIONARY NOTE TO U.S. INVESTORS REGARDING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES AND PROVEN AND PROBABLE RESERVES

The Company is a mineral exploration company engaged in the acquisition and exploration of mineral properties. As used in this Annual Report, the terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101—Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)—CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in the United States Securities and Exchange Commission (“SEC”) Industry Guide 7 (“SEC Industry Guide 7”) under the United States Securities Act of 1933, as amended (the “Securities Act”). Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves, and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into reserves.

“Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all, or any part, of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.

Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. Accordingly, information contained in this report and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

The term “mineralized material” as used in this Annual Report on Form 10-K, although permissible under SEC Industry Guide 7, does not indicate “reserves” by SEC Industry Guide 7 standards. We cannot be certain that any part of the mineralized material will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves”. Investors are cautioned not to assume that all or any part of the mineralized material will ever be confirmed or converted into reserves or that mineralized material can be economically or legally extracted.

CAUTIONARY NOTE TO ALL INVESTORS CONCERNING ECONOMIC ASSESSMENTS THAT INCLUDE INFERRED RESOURCES

Mineral resources that are not mineral reserves have no demonstrated economic viability. The preliminary assessments on the Company’s Livengood gold project are preliminary in nature and include “inferred mineral resources” that have a great amount of uncertainty as to their existence, and are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. It cannot be assumed that all, or any part, of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. There is no certainty that such inferred mineral resources at the Livengood

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gold project will ever be realized. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.

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FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 concerning anticipated results and developments in the operations of the Company in future periods, planned exploration activities, the adequacy of the Company’s financial resources and other events or conditions that may occur in the future. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” (or the negative and grammatical variations of any of these terms) occur or be achieved. These forward looking statements may include, but are not limited to, statements concerning:

· the Company’s strategies and objectives, both generally and specifically in respect of the Livengood Gold Project;

· the potential for the expansion of the estimated resources at Livengood;

· the potential for a production decision concerning, and any production at, the Livengood Gold Project;

· the completion of a feasibility study for the Livengood Gold Project or otherwise;

· the potential for cost savings due to the high gravity gold concentration component of some of the Livengood mineralization;

· the sequence of decisions regarding the timing and costs of development programs with respect to, and the issuance of the necessary permits and authorizations required for, the Livengood Gold Project;

· the Company’s estimates of the quality and quantity of the resources at Livengood;

· the timing and cost of the planned future exploration programs at Livengood, and the timing of the receipt of results therefrom;

· the Company’s future cash requirements;

· general business and economic conditions, including changes in the price of gold and the overall value of the markets for public equity;

· the Company’s ability to meet its financial obligations as they come due, and to be able to raise the necessary funds to continue operations on acceptable terms, if at all; and

· the ability of the Company to continue to refine the project economics for the Livengood Gold Project.

Such forward-looking statements reflect the Company’s current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others:

· the demand for, and level and volatility of the price of, gold;

· general business and economic conditions;

· government regulation and proposed legislation (and changes thereto or interpretations thereof);

· defects in title to other claims, or the ability to obtain surface rights, either of which could affect our property rights and claims;

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· the timing of the receipt of regulatory and governmental approvals, permits and authorizations necessary to implement and carry on the Company’s planned exploration and potential development program at Livengood;

· conditions in the financial markets generally, including changes in the price of gold, the overall value of the markets for public equity, interest rates and currency rates;

· the Company’s ability to secure the necessary consulting, drilling and related services and supplies on favorable terms in connection with not only its ongoing exploration program at Livengood but also in connection with the completion of its feasibility study;

· the Company’s ability to attract and retain key staff, particularly in connection with the carrying out of a feasibility study and the development of any mine at Livengood;

· the accuracy of the Company’s resource estimates (including with respect to size and grade) and the geological, operational and price assumptions on which these are based;

· the timing of the ability to commence and complete the planned work at Livengood;

· the anticipated terms of the consents, permits and authorizations necessary to carry out the planned exploration and development programs at Livengood and the Company’s ability to comply with such terms on a safe and cost-effective basis;

· the ongoing relations of the Company with the lessors of its property interests and applicable regulatory agencies;

· the metallurgy and recovery characteristics of samples from certain of the Company’s mineral properties and whether such characteristics are reflective of the deposit as a whole;

· the continued development of and potential construction of any mine at the Livengood property not requiring consents, approvals, authorizations or permits that are materially different from those identified by the Company; and

· the timetables for the completion of a feasibility study at Livengood.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including without limitation those discussed in Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K, which are incorporated herein by reference, as well as other factors described elsewhere in this report and the Company’s other reports filed with the SEC.

The Company’s forward-looking statements contained in this Annual Report on Form 10-K are based on the beliefs, expectations and opinions of management as of the date of this report. The Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

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GLOSSARY OF TERMS

The following is a glossary of certain terms used in this report.

“alteration”		Changes in the chemical or mineralogical composition of a rock, generally produced by weathering or hydrothermal solutions
“anomalous”		Departing from the expected or normal
“As”		Arsenic
“Au”		Gold
“basalt”		A dark coloured igneous rock, commonly extrusive — the fine grained equivalent of gabbro
“biotite”		A common rock forming mineral of the mica group
“Board”		The Board of Directors of ITH
“chert”		A hard, dense microcrystalline or cryptocrystalline sedimentary rock, consisting chiefly of interlocking crystals of quartz less than about 30 microns in diameter
“CIL”		Carbon in Leach
“clastic”		Pertaining to a rock or sediment composed principally of fragments derived from pre-existing rocks or minerals and transported some distance from their places of origin; also said of the texture of such a rock
“chip sample”		A series of small pieces of ore or rock taken at regular intervals across a vein or exposure
“cm”		Centimeters
“common shares”		The common shares without par value in the capital stock of ITH as the same are constituted on the date hereof
“conglomerate”		A coarse grained clastic sedimentary rock, composed of rounded to sub-angular fragments larger than 2mm in diameter set in a fine-grained matrix of sand or silt, and commonly cemented by calcium carbonate, iron oxide, silica or hardened clay
“Corvus”		Corvus Gold Inc., a company subsisting under the laws of British Columbia which was spun off from the Company in August, 2010
“cutoff grade”		The lowest grade of mineralized material that qualifies as ore in a given deposit, that is, material of the lowest assay value that is included in a resource/reserve estimate
“deformation”		A general term for the processes of folding, faulting, shearing, compression, or extension of rocks as a result of various earth forces
“deposit”		A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. Such a deposit does not qualify as a commercially mineable ore body or as containing reserves or ore, unless final legal, technical and economic factors are resolved
“diamond drill”		A type of rotary drill in which the cutting is done by abrasion rather than percussion. The cutting bit is set with diamonds and is attached to the end of the long hollow rods through which water is pumped to the cutting face. The drill cuts a core of rock which is recovered in long cylindrical sections, an inch or more in diameter
“dip”		The angle that a stratum or any planar feature makes with the horizontal, measured perpendicular to the strike and in the vertical plane
“dike”		A tabular body of igneous rock that cuts across the structure of adjacent rocks or cuts massive rocks
“director”		A member of the Board of Directors of ITH
“disseminated”		Fine particles of mineral dispersed throughout the enclosing rock
“epigenetic”		Of or relating to a mineral deposit of origin later than that of the enclosing rocks
“g/t”		Grams per metric tonne
“gabbro”		A group of dark coloured, basic intrusive igneous rocks — the approximate intrusive equivalent of basalt

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“grade”		To contain a particular quantity of ore or mineral, relative to other constituents, in a specified quantity of rock
“heap leaching”		A method of recovering minerals from ore whereby crushed rock is stacked on a non-porous liner and an appropriate chemical solution is sprayed on the top of the pile (the “heap”) and allowed to percolate down through the crushed rock, dissolving the desired minerals(s) as it does so. The chemical solution is then collected from the base of the heap and is treated to remove the dissolved mineral(s)
“host”		A rock or mineral that is older than rocks or minerals introduced into it or formed within it
“host rock”		A body of rock serving as a host for other rocks or for mineral deposits, or any rock in which ore deposits occur
“hydrothermal”		A term pertaining to hot aqueous solutions of magmatic origin which may transport metals and minerals in solution
“ITH ”		International Tower Hill Mines Ltd., a company subsisting under the laws of British Columbia
“intrusion”		The process of the emplacement of magma in pre-existing rock, magmatic activity. Also, the igneous rock mass so formed
“intrusive”		Of or pertaining to intrusion, both the process and the rock so formed
“km”		Kilometers
“lode”		A vein of metal ore in the earth.
“m”		Meters
“mm”		Millimeters
“mafic”		Said of an igneous rock composed chiefly of dark, ferromagnesian minerals, also, said of those minerals
“magma”		Naturally occurring molten rock material, generated within the earth and capable of intrusion and extrusion, from which igneous rocks have been derived through solidification and related processes
“magmatic”		Of, or pertaining to, or derived from, magma
“massive”		Said of a mineral deposit, especially of sulphides, characterized by a great concentration of ore in one place, as opposed to a disseminated or veinlike deposit
“mineral reserve”		The economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined and processed
“mineral resource”		Under NI 43-101, “mineral resource” means a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. The term “mineral resource” covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which mineral reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. The phrase “reasonable prospects for economic extraction” implies a judgement by a qualified person (as that term is defined in NI 43-101) in respect of the technical and economic factors likely to influence the prospect of economic extraction. A mineral resource is an inventory of mineralization that, under realistically assumed and justifiable technical and economic conditions, might become economically extractable
“mineralization”		The concentration of metals and their chemical compounds within a body of rock

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“NI 43-101”		National Instrument 43-101 of the Canadian Securities Administrators entitled “Standards of Disclosure for Mineral Projects”
“NSR”		Net smelter return
“NYSE MKT”		NYSE MKT (formerly, the American Stock Exchange)
“ophiolite”		An assemblage of mafic and ultramafic igneous rocks ranging from spilite and basalt to gabbro and peridotite, and always derived from them by later metamorphism, whose origin is associated with an early phase of the development of a geosyncline
“RC”		A method of drilling whereby rock cuttings generated by the drill bit are flushed up from the bit face to the surface through the drill rods by air or drilling fluids for collection and analysis
“Sb”		Antimony
“sedimentary”		Pertaining to or containing sediment (typically, solid fragmental material transported and deposited by wind, water or ice that forms in layers in loose unconsolidated form), or formed by its deposition
“sill”		A tabular igneous intrusion that parallels the planar structure of the surrounding rock
“strike”		The direction taken by a structural surface
“tabular”		Said of a feature having two dimensions that are much larger or longer than the third, or of a geomorphic feature having a flat surface, such as a plateau
“tectonic”		Pertaining to the forces involved in, or the resulting structures of, tectonics
“tectonics”		A branch of geology dealing with the broad architecture of the outer part of the earth, that is, the major structural or deformational features and their relations, origin and historical evolution
“TSX”		Toronto Stock Exchange
“ultramafic”		Said of an igneous rock composed chiefly of mafic minerals
“vein”		An epigenetic mineral filling of a fault or other fracture, in tabular or sheetlike form, often with the associated replacement of the host rock; also, a mineral deposit of this form and origin
“volcaniclastic”		Pertaining to a clastic rock containing volcanic material in whatever proportion, and without regard to its origin or environment

USE OF NAMES

In this Annual Report on Form 10-K, unless the context otherwise requires, the terms “we”, “us”, “our”, “ITH”, “International Tower Hill”, the “Company” or the “Corporation” refer to International Tower Hill Mines Ltd. and its subsidiaries.

CURRENCY

References to C$ refer to Canadian currency and $ or US$ to United States currency.

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PART I

ITEM 1. BUSINESS

Overview

ITH is a mineral exploration company engaged in the acquisition and exploration of mineral properties. The Company currently holds or has the right to acquire interests in an advanced stage exploration project in Alaska referred to as the “Livengood Gold Project”. The Company is in the exploration stage as its property has not yet began preparation for extraction of a deposit or reached commercial production. All work presently planned by the Company is directed at defining mineralization at the Livengood Gold Project and increasing understanding of the characteristics of, and economics of, that mineralization. While the Company has outlined estimated mineral resources at the Livengood Gold Project, there are no mineral reserves on the Livengood Gold Project. A more complete description of the Livengood Gold Project is set forth in Part I, Item 2, Properties, of this Annual Report on Form 10-K.

Since 2006, the Company has focused primarily on the acquisition and exploration of mineral properties in Alaska and Nevada by acquiring through staking, purchase, lease or option (primarily from AngloGold Ashanti (U.S.A.) Exploration Inc. (“AngloGold”) in a transaction which closed on August 4, 2006) interests in a number of mineral properties in Alaska (Livengood, Terra, LMS, BMP, Chisna, Coffee Dome, West Tanana, Gilles, West Pogo, Caribou, Blackshell and South Estelle) and Nevada (North Bullfrog and Painted Hills) that it believes have the potential to host large precious or base metal deposits. Some of these, such as the Painted Hills, Gilles, West Tanana, Caribou and Blackshell properties, were, in light of disappointing exploration results, dropped or returned to the respective optionors or lessors, and the associated costs written off while others, such as the South Estelle property, have been sold. Since early 2008, the Company’s primary focus has been the exploration and advancement of its Livengood Gold Project in Alaska and the majority of its resources have been directed to that end. To this end, in August 2010, ITH undertook a corporate spin-out arrangement transaction whereby all of its mineral property interests other than the Livengood property were transferred to Corvus and Corvus was spun out as an independent and separate public company. Following the completion of that transaction, the sole mineral property held by the Company is the Livengood Gold Project. Since the completion of such transaction, the Company has focused exclusively on the ongoing exploration and potential development of the Livengood Gold Project.

The head office and principal business address of ITH is located at Suite 2300 — 1177 West Hastings Street, Vancouver, British Columbia, Canada V6E 2K3, and its registered and records office is located at 1300 — 777 Dunsmuir Street, Vancouver, BC V6B 1N3.

Recent Developments

Livengood Gold Project Developments

During the year ended December 31, 2012 and to the date of this report, the Company advanced its Livengood Gold Project in Alaska with the continuation of activities in support of a feasibility study (“FS” or “Feasibility Study”). Completed FS work included advancement of metallurgical test programs; geotechnical, condemnation, infrastructure, hydraulic gradient, borrow source, and large diameter well drill programs; analyzing results thereof; and the advancement of engineering and environmental studies.

Highlights of activities during and subsequent to the year ended December 31, 2012 include:

· Environmental baseline data collection for the Livengood Gold Project permitting activities continued, including data collection for groundwater; rock characterization; geohydrology; surface water and hydrology; meteorology; wetlands and vegetation; aquatic studies; wildlife and habitat; cultural resources; and large-scale field testing of material geochemical characteristics.

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· In January 2012, two major contracts were awarded: process engineering services and geotechnical infrastructure engineering services for the FS. Feasibility level work commenced in February 2012.

· In March 2012, results of the 2011 drill program validated the resource estimate used in the August 25, 2011 NI43-101 technical report on the Livengood Gold Project.

· Between February 25 and April 15, 2012, completion of a 47-hole, 1,936-metre chilled brine geotechnical drilling program.

· In May 2012 the Company commenced multi-faceted field drill programs consisting of condemnation and geotechnical drilling at Livengood. These programs entail more than 70 holes and approximately 5,000 meters of drilling, utilizing core, sonic, and auger methods.

· Between May 1 and June 30, 2012, completion of a 4-hole, 1,378-metre pit slope stability geotechnical drilling program.

· In June 2012, the Company determined that the most efficient and cost-effective path to permitting the Livengood Gold Project is to incorporate results from current engineering and metallurgical test work directly into a definitive feasibility study.

· In June 2012, the Company implemented a cost rationalization program to focus on field work necessary to support the completion of a feasibility study and the environmental work needed to keep its permitting schedule on track. The Company postponed its district-wide exploration program and reduced its condemnation drill program.

· Between July 1, 2012 and October 21, 2012, 2,536 meters were drilled in 26 holes for hydraulic gradient and infrastructure; 1,292 meters were drilled in 7 holes for condemnation. In addition 2,695 meters were drilled in 73 holes for the geotechnical and borrow source program, and 1,031 meters were drilled in 7 holes for large diameter wells for pump tests.

· During the third quarter of 2012, the Company closed a two stage non-brokered private placement financing consisting of 11,384,719 common shares of the Company at an average price of $2.60 per common share for gross proceeds of approximately $29.8 million. The proceeds of the offering will be used to complete the feasibility study as well as general corporate purposes.

· On September 19, 2012, Donald C. Ewigleben was appointed President and Chief Executive Officer of the Company. Mr. Ewigleben has served as the Chairman of the Board since November 2011 and was involved during the early stages of Livengood’s exploration and development in the 1990’s. He also has extensive experience on various mining projects in Alaska over his 35 year career in the resource sector.

· The development team made significant advancements on project design which are being driven by an extensive metallurgical test program. Metallurgical studies have determined that the gold recovery for the four key rock types that comprise the majority of the Livengood Gold resource will range between 77% and 88%. Based on this successful test program and related engineering tradeoff studies, the Company has determined that a gravity circuit followed by a whole ore CIL circuit will be the mill flow sheet developed in the Feasibility Study.

Other Developments

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shares of Livengood Placers, Inc. (which corporation holds some of the subject placer mining claims). This land was previously vacant or used for placer gold mining. The acquisitions enable the Company to pursue additional site facility locations and to investigate other land use opportunities including the potential for placer gold extraction.

Regulatory, Environmental and Social Matters

All of the Company’s currently proposed exploration is under the jurisdiction of the State of Alaska. In Alaska, low impact, initial stage surface exploration such as stream sediment, soil and rock chip sampling do not require any permits. The State of Alaska requires an APMA (Alaska Placer Mining Application) exploration permit for all substantial surface disturbances such as trenching, road building and drilling. These permits are also reviewed by related state and federal agencies that can comment and require specific changes to the proposed work plans to minimize impacts on the environment. The permitting process for significant disturbances generally requires 30 days for processing and all work must be bonded. The Company currently has all necessary permits with respect to its exploration activities in Alaska. Although the Company has never had an issue with the timely processing of APMA permits there can be no assurances that delays in permit approval will not occur.

Currently, there are no federal or state environmental regulations that impact the Company because it is still in the exploration stage. Reclamation work, that is, work done to restore the property to its original state, is minimal because the Company’s current operations have virtually no environmental impact. The Company’s required remedial environmental reclamation work typically consists of slashing underbrush so that wildlife movement is not hampered and basic re-seeding operations.

ITH has created a Health, Occupational Safety & Environmental Committee, which has adopted a formal, written charter. As set out in its charter, the overall purpose of the Health, Occupational Safety & Environmental Committee is to assist the Board in fulfilling its oversight responsibilities with respect to the Company’s continuing commitment to improving the environment and ensuring that activities are carried out and facilities are operated and maintained in a safe and environmentally sound manner that reflects the ideals and principles of sustainable development. The primary function of the Health, Occupational Safety & Environmental Committee is to monitor, review and provide oversight with respect to the Company’s policies, standards, accountabilities and programs relative to health, safety, community relations and environmental-related matters. The Health, Occupational Safety & Environmental Committee also advises the Board and makes recommendations for the Board’s consideration regarding health, safety, community relations and environmental-related issues.

Although not set out in a specific policy, the Company strives to be a positive influence in the local communities where its mineral projects are located, not only by contributing to the welfare of such communities through donations of money and supplies, as appropriate, but also through hiring, when appropriate, local workers to assist in ongoing exploration programs. The Company considers that building and maintaining strong relationships with such communities is fundamental to its ability to continue to operate in such regions and to assist in the eventual development (if any) of mining operations in such regions, and it attaches considerable importance to commencing and fostering them from the beginning of its involvement in any particular area.

Corporate Structure

ITH was incorporated under the Company Act (British Columbia) under the name “Ashnola Mining Company Ltd.” on May 26, 1978. ITH’s name was changed to “Tower Hill Mines Ltd.” on June 1, 1988, and subsequently changed to “International Tower Hill Mines Ltd.” on March 15, 1991. ITH has been transitioned under, and is now governed by, the Business Corporations Act (British Columbia) (the “BCBCA”). On October 11, 2005, ITH filed a transition application under the BCBCA, reflecting the adoption by the shareholders, on October 29, 2004, of a new form of Articles to govern the affairs of ITH in substitution for the original articles adopted under the old Company Act (B.C.) and reflecting the increased flexibility available to companies under the BCBCA. On November 15, 2005, the shareholders resolved to amend the Articles to increase the authorized capital from 20,000,000 common shares without par value to 500,000,000 common shares without par value. A Notice of Articles in respect of such increase was filed on April 20, 2006, at which time such increase in authorized capital became effective.

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ITH has three material subsidiaries:

Tower Hill Mines, Inc. (“TH Alaska”), a corporation incorporated in Alaska on June 27, 2006, which holds most of the Company’s Alaskan properties and is 100% owned by ITH;

Tower Hill Mines (US) LLC, a limited liability company formed in Colorado on June 27, 2006, which carries on the Company’s administrative and personnel functions and is wholly owned by TH Alaska; and

Livengood Placers, Inc., a corporation incorporated in Nevada on June 11, 1998, which holds certain Alaskan properties and is 100% owned by TH Alaska.

The following corporate chart sets forth all of ITH’s material subsidiaries:

Segment and Geographical Information

The Company operates in a single reportable operating segment, being the exploration and development of mineral properties. The Company’s long-lived assets are geographically distributed as shown in the following table. The Company did not have revenues from external customers in any of the periods shown below.

	December 31, 2012		December 31, 2011		May 31, 2011		May 31, 2010
Canada:	$	14,317	$	22,880	$	21,961	$	12,787
United States:	55,248,961		53,147,972		5,457,840		4,986,622
Total:	$	55,263,278	$	53,170,852	$	5,479,801	$	4,999,409

Competition

ITH is an exploration stage company. The Company competes with other mineral resource exploration and development companies for financing, technical expertise and the acquisition of mineral properties. Many of the companies with whom the Company competes have greater financial and technical resources. Accordingly, these competitors may be able to spend greater amounts on the acquisition, exploration and development of mineral properties. This competition could adversely impact the Company’s ability to finance further exploration and to achieve the financing necessary for the Company to develop its mineral properties.

Availability of Raw Materials and Skilled Employees

All aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, drilling, logistical planning, preparation of feasibility studies, permitting, construction and operation of a mine, financing and accounting. Since commencing its current operations in mid-2006, the Company has found that it can locate and retain appropriate employees and consultants and believes it will continue to be able to do so.

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All of the raw materials the Company requires to carry on its business are readily available through normal supply or business contracting channels in Canada and the United States. Since commencing operations at the Livengood Gold Project in mid-2006, the Company has been able to secure the appropriate personnel, equipment and supplies required to conduct its contemplated programs. While it has experienced difficulty in procuring some equipment, such as drill equipment or services, experienced drillers and timely assay laboratory services in previous years, the recent overall slowdown in the mineral exploration business has resulted in more equipment and services being made available on a timely basis. As a result, the Company does not believe that it will experience any shortages of required personnel, equipment or supplies in the foreseeable future.

Employees

As of December 31, 2012, the Company had 18 full-time employees. The Company also uses consultants with specific skills to assist with various aspects of project evaluation, engineering and corporate governance.

Seasonality

As the Company’s mineral exploration activity takes place in Alaska, its business is seasonal. Due to the northern climate, exploration work on the Livengood Gold Project can be limited due to excessive snow cover and cold temperatures. In general, surface sampling work is limited to May through September and surface drilling from March through November, although some locations afford opportunities for year-round exploration operations and others, such as road-accessible wetland areas, may only be explored while frozen in the winter.

Available Information

ITH maintains an internet website at www.ithmines.com. The Company makes available, free of charge, through the Investor section of its website, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC and its Annual Information Form, press releases and material change reports and other reports filed on the System for Electronic Document Analysis and Retrieval (SEDAR). The Company’s SEC filings are available from the SEC’s internet website at www.sec.gov which contains reports, proxy and information statements and other information regarding issuers that file electronically. These reports, proxy statements and other information may also be inspected and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. The Company’s SEDAR filings are available from SEDAR’s internet website at www.sedar.com under the Company’s profile. The contents of these websites are not incorporated into this report and the references to the URLs for these websites are intended to be inactive textual references only.

ITEM 1A. RISK FACTORS

You should carefully consider the following risk factors in addition to the other information included in this Annual Report on Form 10-K. Each of these risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common shares. The risks described below are not the only ones facing the Company. Additional risks that we are not presently aware of, or that we currently believe are immaterial, may also adversely affect our business, operating results and financial condition. We cannot assure you that we will successfully address these risks or that other unknown risks exist that may affect our business.

Risks Related to Our Business

We have a history of losses and expect to continue to incur losses in the future.

We have incurred losses and have had no revenue from operations since inception, and we expect to continue to incur losses in the future. For the fiscal year ended December 31, 2012, our net loss was $ 56.6 million. Our accumulated deficit at December 31, 2012 was $ 208.6 million. At December 31 , 2012, we had $30.2 million in cash

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and cash equivalents . Our working capital position was $ 27.7 million. We have not commenced commercial production on our Livengood Gold Project and we have no other mineral properties. We have no revenues from operations, and we anticipate we will have no operating revenues and will continue to incur operating losses until such time as we place the Livengood Gold Project into production and such project generates sufficient revenues to fund continuing operations. Our Livengood Gold Project is currently in the exploration stage. Our activities may not result in profitable mining operations and we may not succeed in establishing mining operations or profitably producing metals at our Livengood Gold Project .

We are an exploration stage company and have no history producing metals from our properties. Any future revenues and profits are uncertain.

We have no history of mining or refining any mineral products or metals and our Livengood Gold Project is not currently producing. There can be no assurance that the Livengood Gold Project will be successfully placed into production, produce minerals in commercial quantities or otherwise generate operating earnings. Advancing properties from the exploration stage into development and commercial production requires significant capital and time and will be subject to further feasibility studies, permitting requirements and construction of the mine, processing plants, roads and related works and infrastructure. We will continue to incur losses until our mining activities successfully reach commercial production levels and generate sufficient revenue to fund continuing operations. There is no certainty that we will produce revenue from any source, operate profitably or provide a return on investment in the future. If we are unable to generate revenues or profits, our shareholders might not be able to realize returns on their investment in our common shares.

We will require additional financing to fund exploration and, if warranted, development and production. Failure to obtain additional financing could have a material adverse effect on our financial condition and results of operation and could cast uncertainty on our ability to continue as a going concern.

Advancing properties from exploration into the development stage requires significant capital and time, and successful commercial production from a property, if any, will be subject to completing feasibility studies, permitting and construction of the mine, processing plants, roads, and other related works and infrastructure. T he Company does not presently have sufficient financial resources or a source of operating cash flow to undertake by itself to complete the permitting process and, if a production decision is made, the construction of a mine at Livengood. T he completion of the permitting process, and any construction of a mine at Livengood following the making of a production decision, will therefore depend upon the Company’s ability to obtain financing through the sale of its equity securities, enter into a joint ventur e relationship, secur e significant debt financing or find alternative means of financing . There is no assurance that the Company will be successful in obtaining the required financing on favorable terms, or at all. Even if the results of exploration are encouraging, the Company may not be able to obtain sufficient financing to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists.

Our ability to obtain additional financing in the future will depend upon a number of factors, including prevailing capital market conditions , the status of the national and worldwide economy , our business performance and the price of gold and other precious metals. Capital markets worldwide have been adversely affected by substantial losses by financial institutions, caused by investments in asset-backed securities. At present, it is impossible to determine what amount of additional funds, if any, may be required. Failure to obtain such additional financing could result in delay or indefinite postponement of further mining operations or exploration and development and the possible partial or total loss of our interest s in the Livengood Gold Project.

Our growth depends on the exploration, permitting, development and operation of our Livengood Gold Project , which is our only project.

Our only property at this time is our Livengood Gold Project, which is in the exploration stage . Our continued viability is based on successfully implementing our strategy, including completion of a definitive feasibility study, permitting and construction of a mine and processing facilities in an expected timeframe. The deterioration or destruction of any part of our property may significantly hinder our ability to maintain a sustainable or profitable business.

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Our Livengood Gold Project is in the exploration stage and we have not yet identified, and may never identify, commercially viable reserves that would generate revenues.

We are considered an exploration stage company and will continue to be until we identify commercially viable reserves on our properties and develop our properties. We have no producing properties and have never generated any revenue from our operations. Our Livengood Gold Project is in the exploration stage and while it has identified estimated measured, inferred and indicated resources it does not contain any known reserves and we have not confirmed that a commercially viable mineral deposit exists on the project . The majority of exploration projects do not result in the discovery of commercially mineable deposits of ore. Further exploration and substantial expenditures are required to establish ore reserves through drilling and metallurgical and other testing techniques, determine metal content and metallurgical recovery processes to extract metal from the ore, and construct, renovate or expand mining and processing facilities. No assurance can be given that any level of recovery of ore reserves will be realized or that any identified mineral deposit will ever qualify as a commercial mineable ore body which can be legally and economically exploited. If we are not able to identify commercially viable mineral deposits or profitably extract minerals from such deposits, our business would be materially adversely affected and our investors could lose all or a substantial portion of their investment.

Resource e xploration is a highly s peculative b usiness , and certain inherent exploration risks could have a negative effect on our business.

Our long-term success depends on our ability to identify mineral deposits on the Livengood Gold Project and other properties we may acquire, if any, that can then be developed into commercially viable mining operations. Resource exploration is a highly speculative business and involves a high degree of risk, including, among other things, unprofitable efforts resulting both from the failure to discover mineral deposits and from finding mineral deposits which, though present, are insufficient in size and grade at the then prevailing market conditions to return a profit from production. Substantial expenditures are required to establish proven and probable mineral reserves through drilling and analysis, to develop metallurgical processes to extract metal, and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis. The marketability of minerals which may be acquired or discovered by the Company will be affected by numerous factors beyond the control of the Company and which cannot be accurately predicted . These factors include market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.

Mineral r esource estimates are based on interpretation and assumptions and could be inaccurate or yield less mineral production under actual conditions than is currently estimated. A ny material changes in these estimates will affect the economic viability of placing a property into production.

The mineral resource estimates included in this report are estimates only and no assurance can be given that any particular level of recovery of minerals will in fact be realized or that an identified reserve or resource will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. The estimating of mineral resources and mineral reserves is a subjective process and the accuracy of mineral resource and mineral reserve estimates is a function of the quantity and quality of available data, the accuracy of statistical computations, and the assumptions used and judgments made in interpreting available engineering and geological information. There is significant uncertainty in any mineral resource or mineral reserve estimate and the actual deposits encountered and the economic viability of a deposit may differ materially from the Company’s estimates. In addition, the grade of mineralization ultimately mined may differ from that indicated by drilling results and such differences could be material. Because we have not completed a definitive feasibility study on the Livengood Gold Project and have not commenced actual production, mineralization estimates, including m ineral r esource estimates, for the Livengood Gold Project may require adjustments or downward revisions.

Until ore is actually mined and processed, m ineral resources, mineral r eserves and grades of mineralization must be considered as estimates only. T he grade of ore ultimately mined, if any, may differ from that indicated by any pre-

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feasibility or definitive feasibility studies and drill results. There can be no assurance that minerals recovered in small scale laboratory tests will be duplicated in large scale tests under on-site conditions or in production scale operations. Extended declines in market prices for gold may render portions of our m ineral r esources uneconomic and result in reduced reported mineralization or adversely affect the commercial viability determinations reached by us. Material changes in estimates of mineralization, grades, stripping ratios , recovery rates or of our ability to extract such mineralization may affect the economic viability of projects and the value of our Livengood Gold Project . The estimated resources described in this report should not be interpreted as assurances of mine life or of the profitability of future operations. Estimated mineral resources and mineral reserves may have to be re-estimated based on changes in applicable commodity prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence mineral resource or mineral reserve estimates. Market price fluctuations for gold, silver or base metals, increased production costs or reduced recovery rates or other factors may render any particular reserves uneconomical or unprofitable to develop at a particular site or sites. A reduction in estimated reserves could require material write downs in investment in the affected mining property and increased amortization, reclamation and closure charges. Mineral resources are not mineral reserves and there is no assurance that any mineral resources will ultimately be reclassified as proven or probable reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

There are differences in U.S. and Canadian practices for reporting reserves and resources.

Our reserve and resource estimates are not directly comparable to those made in filings subject to SEC reporting and disclosure requirements, as we generally report reserves and resources in accordance with Canadian practices. These practices are different from the practices used to report reserve and resource estimates in reports and other materials filed with the SEC. It is Canadian practice to report measured, indicated and inferred mineral resources, which are generally not permitted in disclosure filed with the SEC by U.S. issuers. In the United States, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U .S. investors are cautioned not to assume that all or any part of measured , indicated or inferred mineral resources will ever be converted into reserves.

Further, “inferred mineral resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Disclosure of “contained ounces” is permitted disclosure under Canadian regulations; however, the SEC only permits issuers to report “resources” as in place, tonnage and grade without reference to unit measures.

Accordingly, information concerning descriptions of mineralization, reserves and resources contained in this report, or in the documents incorporated herein by reference, may not be comparable to information made public by other U.S. companies subject to the reporting and disclosure requirements of the SEC.

Increased costs could affect our ability to bring our projects into production and once in production, our financial condition and ability to be profitable.

Management anticipates that costs at the Livengood Gold Project will frequently be subject to variation from one year to the next due to a number of factors, such as changing ore grade, metallurgy and revisions to mine plans, if any, in response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities such as fuel, rubber and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production less profitable or not profitable at all. A material increase in costs could also impact our ability to maintain operations and have a significant effect on the Company’s profitability .

The volatility of the price of gold and silver could adversely affect our future operations and, if warranted, our ability to develop our properties .

Even if commercial quantities of mineral deposits are discovered by the Company, there is no guarantee that a profitable market will exist for the sale of the metals produced, if any. The Company’s long-term viability and profitability , the value of the Company’s properties, the market price of its common shares and the Company’s ability to raise funding to conduct continued exploration and development, if warranted, depend, in large part, upon the market price of gold. The decision to put a mine into production and to commit the funds necessary for that purpose

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must be made long before the first revenue from production would be received. A decrease in the price of gold may prevent the Company’s property from being economically mined or result in the write-off of assets whose value is impaired as a result of lower gold prices.

The price of gold ha s experienced significant movement over short periods of time, and is affected by numerous factors beyond the control of the Company, including economic and political conditions , expectations of inflation, currency exchange fluctuations, interest rates , global or regional demand , sale or purchase of gold by various central banks and financial institutions , speculative activities and increased production due to improved mining and production methods. The volatility of mineral prices represents a substantial risk which no amount of planning or technical expertise can fully eliminate. There can be no assurance that the price of gold will be such that any such deposits can be mined at a profit.

The volatility in gold prices is illustrated by the following table, which presents the high, low and average fixed price in U.S. dollars for an ounce of gold, based on the London Bullion Market Association P.M. fix, over the past five years:

	High		Low		Average
2008	$	1,011	$	713	$	872
2009	$	1,213	$	810	$	972
2010	$	1,421	$	1,058	$	1,225
2011	$	1,895	$	1,319	$	1,572
2012	$	1,792	$	1,540	$	1,669
January 1, 2013 to March 11, 2013	$	1,694	$	1,574	$	1,640

Our results of operations could be affected by currency fluctuations.

The Livengood Gold Project is located in the United States with most costs associated with the project paid in U.S. dollars and the Company maintains its accounts in Canadian and U.S. dollars, making it subject to foreign currency fluctuations. There can be significant swings in the exchange rate between the U.S. and Canadian dollar. There are no plans at this time to hedge against any exchange rate fluctuations in currencies. Such fluctuations may cause losses due to adverse foreign currency fluctuations and materially affect the Company’s financial position and results.

Resource exploration, development and production involves a high degree of risk and w e do not maintain insurance with respect to certain of these risks , which exposes us to significant risk of loss .

Resource exploration, development and production involves a high degree of risk. Our operations are, and any future development or mining operations we may conduct will be, subject to all of the operating hazards and risks normally incident to exploring for and development of mineral properties, such as, but not limited to:

· economically insufficient mineralized material;

· fluctuation in exploration, development and production costs;

· labor disputes;

· unanticipated variations in grade and other geologic problems;

· water conditions;

· difficult surface or underground conditions;

· mechanical and equipment failure ;

· failure of pit walls or dams;

· environmental hazards;

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· industrial accidents;

· metallurgical and other processing problems;

· unusual or unexpected rock formations,

· personal injury, cave-ins , landslides , flooding, fire, explosions, and rock-bursts ;

· metal losses;

· power outages;

· periodic interruptions due to inclement or hazardous weather conditions; and

· decrease in the value of mineralized material due to lower gold prices.

These risks could result in damage to , or destruction of , mineral properties, facilities or other property, personal injury, environmental damage, delays in operations, increased cost of operations, monetary losses and possible legal liability. Although the Company maintains or can be expected to maintain insurance within ranges of coverage consistent with industry practice, no assurance can be given that the Company will be able to obtain insurance to cover all of these risks at economically feasible premiums or at all. The Company may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks. The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration and production activities, if warranted. Should events such as these that are not covered by insurance arise, they could reduce or eliminate our assets and shareholder equity as well as result in increased costs and a decline in the value of our assets or common shares.

We may not be able to obtain all required permits and licenses to place any of our properties into production.

The current and future operations of the Company require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and mining operations at its projects, on reasonable terms or at all. Costs related to applying for and obtaining permits and licenses may be prohibitive and could delay our planned exploration and development activities. Failure to comply with permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Delays in obtaining, or a failure to obtain, any such licenses and permits, or a failure to comply with the terms of any such licenses and permits that the Company does obtain, could delay or prevent production of the Livengood Gold Project and have a material adverse effect on the Company .

Title to our Livengood Gold Project may be subject to defects in title or other claims, which could affect our property rights and claims.

There are risks that title to our Livengood Gold Project may be challenged or impugned. Our Livengood Gold Project is located in the state of Alaska and may be subject to prior unrecorded agreements or transfers or native land claims, and title may be affected by undetected defects. There may be valid challenges to the title of our Livengood Gold Project which, if successful, could impair development and/or operations. This is particularly the case in respect of those portions of the our properties in which we hold our interest solely through a lease with the claim holders, as such interest is substantially based on contract and has been subject to a number of assignments (as opposed to a direct interest in the property).

Some of the mining claims at the Livengood Gold Project are federal or Alaska State “ unpatented ” mining claims. There is a risk that a portion of such unpatented mining claims could be determined to be invalid, in which case the Company could lose the right to mine any minerals contained within those mining claims. Unpatented mining claims are created and maintained in accordance with the applicable US federal and Alaska state mining laws. Unpatented mining claims are unique property interests, and are generally considered to be subject to greater title risk than other real property interests due to the validity of unpatented mining claims often being uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations under the provisions of the U.S. General Mining

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Law of 1872 (the “Mining Law”). Unpatented mining claims are always subject to possible challenges of third parties or validity contests by the United States federal government or the Alaska State government , as applicable . The validity of an unpatented mining claim, in terms of both its location and its maintenance, is dependent on strict compliance with a complex body of federal and state statutory and decisional law. Title to the unpatented mining claims may also be affected by undetected defects such as unregistered agreements or transfers and there are few public records that definitively determine the issues of validity and ownership of unpatented mining claims. The Company has not obtained full title opinions for the majority of its mineral properties. Not all the mineral properties in which the Company has an interest have been surveyed, and their actual extent and location may be in doubt. Should the federal government impose a royalty or additional tax burdens on the properties that lie within public lands, the resulting mining operations could be seriously impacted, depending upon the type and amount of the burden.

The leases and agreements pursuant to which the Company has interests, or the right to acquire interests , in a significant portion of the Livengood Gold Project provide that the Company must make a series of cash payments over certain time periods and/or expend certain minimum amounts on the exploration of the properties. Failure by the Company to make such payments or make such expenditures in a timely fashion may result in the Company losing its interest in such properties. There can be no assurance that the Company will have, or be able to obtain, the necessary financial resources to be able to maintain all of its property agreements in good standing, or to be able to comply with all of its obligations thereunder, which could result in the Company forfeit ing its interest in one or more of its mineral properties.

The Company may not have and may not be able to obtain surface or access rights to all or a portion of the Livengood Gold Project.

Although the Company acquires the rights to some or all of the minerals in the ground subject to the mineral tenures that it acquires, or has a right to acquire, in most cases it does not thereby acquire any rights to, or ownership of, the surface to the areas covered by its mineral tenures. In such cases, applicable mining laws usually provide for rights of access to the surface for the purpose of carrying on mining activities, however, the enforcement of such rights through the courts can be costly and time consuming. It is necessary to negotiate surface access or to purchase the surface rights if long-term access is required. There can be no guarantee that, despite having the right at law to access the surface and carry on mining activities, the Company will be able to negotiate satisfactory agreements with any such existing landowners/occupiers for such access or purchase such surface rights, and therefore it may be unable to carry out planned exploration or mining activities. In addition, in circumstances where such access is denied, or no agreement can be reached, the Company may need to rely on the assistance of local officials or the courts in such jurisdiction the outcomes of which cannot be predicted with any certainty. The inability of the Company to secure surface access or purchase required surface rights could materially and adversely affect the timing, cost or overall ability of the Company to develop any mineral deposits it may locate.

Our properties and operations may be subject to litigation or other claims.

From time to time our properties or operations may be subject to disputes which may result in litigation or other legal claims. We may be required to assert or defend against these claims which will divert resources and management time from operations. The costs of these claims or adverse filings may have a material effect on our business and results of operations.

We are subject to significant governmental regulations, which affect our operations and cost s of conducting our business.

Any exploration activities carried on by the Company are, and any future development or mining operations we may conduct will be, subject to extensive laws and regulations governing various matters, including:

· mineral concession acquisition, exploration, development, mining and production;

· management of natural resources;

· exports, price controls, taxes and fees;

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· labor standards on occupational health and safety, including mine safety;

· post-closure reclamation;

· environmental standards, waste disposal, toxic substances, explosives, land use and environmental protection;

· dealings with indigenous peoples and historic and cultural preservation; and

· other matters.

Companies engaged in exploration activities often experience increased costs and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. Failure to comply with applicable laws, regulations and permits may result in civil or criminal fines or penalties , enforcement actions thereunder, including the forfeiture of claims, orders issued by regulatory or judicial authorities requiring operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or costly remedial actions, any of which could result in the Company incurring significant expenditures. The Company may also be required to compensate those suffering loss or damage by reason of our mineral exploration activities and may have civil or criminal fines or penalties imposed for violations of such laws, regulations and permits.

It is also possible that future laws and regulations, or more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension of the Company’s operations and delays in the exploration and development of the Company’s property.

Legislation has been proposed that would significantly affect the mining industry and our business.

In recent years, m embers of the United States Congress have repeatedly introduced bills which would supplant or alter the provisions of the Mining Law. If adopted, such legislation, among other things, could eliminate or greatly limit the right to a mineral patent , impose federal royalties on mineral production from unpatented mining claims located on United States federal lands (which includes certain of the mining claims at Livengood), result in the denial of permits to mine after the expenditure of significant funds for exploration and development, reduce estimates of mineral reserves and reduce the amount of future exploration and development activity on United States federal lands, all of which could have a material and adverse effect on the Company’s ability to operate and its cash flow, results of operations and financial condition.

Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations .

The activities of the Company are subject to environmental regulations in the jurisdictions in which we operate. Environmental legislation generally provides for restrictions and prohibitions on spills, releases or emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. Compliance with environmental laws and regulations and future changes in these laws and regulations may require significant capital outlays , cause material changes or delays in our current and planned operations and future activities and reduce the profitability of operations . It is possible that future changes in these laws or regulations could have a significant adverse impact on our Livengood Gold Project or some portion of our business, causing us to re-evaluate those activities at that time.

Examples of current U.S. federal laws which may affect our current operations and may impact future business and operations include, but are not limited to, the following:

The Comprehensive Environmental, Response, Compensation, and Liability Act (CERCLA), and comparable state

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statutes, impose strict, joint and several liability on current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous substances found at such sites. It is not uncommon for the government to file claims requiring cleanup actions, demands for reimbursement for government-incurred cleanup costs, or natural resource damages, or for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. The Federal Resource Conservation and Recovery Act (RCRA), and comparable state statutes, govern the disposal of solid waste and hazardous waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. CERCLA, RCRA and comparable state statutes can impose liability for clean-up of sites and disposal of substances found on exploration, mining and processing sites long after activities on such sites have been completed.

The Clean Air Act, as amended, restricts the emission of air pollutants from many sources, including mining and processing activities. Our mining operations may produce air emissions, including fugitive dust and other air pollutants from stationary equipment, storage facilities and the use of mobile sources such as trucks and heavy construction equipment, which are subject to review, monitoring and/or control requirements under the Clean Air Act and state air quality laws. New facilities may be required to obtain permits before work can begin, and existing facilities may be required to incur capital costs in order to remain in compliance. In addition, permitting rules may impose limitations on our production levels or result in additional capital expenditures in order to comply with the regulations.

The National Environmental Policy Act (NEPA) requires federal agencies to integrate environmental considerations into their decision-making processes by evaluating the environmental impacts of their proposed actions, including issuance of permits to mining facilities, and assessing alternatives to those actions. If a proposed action could significantly affect the environment, the agency must prepare a detailed statement known as an Environmental Impact Statement (EIS). The U.S. Environmental Protection Agency (EPA) , other federal agencies, and any interested third parties will review and comment on the scoping of the EIS and the adequacy of and findings set forth in the draft and final EIS. We are required to undertake the NEPA process for the Livengood Gold Project permitting. The NEPA process can cause delays in issuance of required permits or result in changes to a project to mitigate its potential environmental impacts, which can in turn impact the economic feasibility of a proposed project or the ability to construct or operate the Livengood Gold Project or other properties entirely.

The Clean Water Act (CWA), and comparable state statutes, impose restrictions and controls on the discharge of pollutants into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA regulates storm water mining facilities and requires a storm water discharge permit for certain activities. Such a permit requires the regulated facility to monitor and sample storm water run-off from its operations. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill material in wetlands and other waters of the United States unless authorized by an appropriately issued permit. The CWA and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges of pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any environmental damage caused by the release and for natural resource damages resulting from the release.

The Safe Drinking Water Act (SDWA) and the Underground Injection Control (UIC) program promulgated thereunder, regulate the drilling and operation of subsurface injection wells. The EPA directly administers the UIC program in some states and in others the responsibility for the program has been delegated to the state. The program requires that a permit be obtained before drilling a disposal or injection well. Violation of these regulations and/or contamination of groundwater by mining related activities may result in fines, penalties, and remediation costs, among other sanctions and liabilities under the S DW A and state laws. In addition, third party claims may be filed by landowners and other parties claiming damages for alternative water supplies, property damages, and bodily injury.

Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on our business.

A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our venture partners and our

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suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations.

Land reclamation requirements for our properties may be burdensome and expensive.

L and reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations) in order to minimize long term effects of land disturbance.

Reclamation may include requirements to:

· control dispersion of potentially deleterious effluents;

· treat ground and surface water to drinking water standards; and

· reasonably re-establish pre-disturbance land forms and vegetation.

In order to carry out reclamation obligations imposed on us in connection with the potential development activities at the Livengood Gold Project , we must allocate financial resources that might otherwise be spent on further exploration and development programs. We plan to set up a provision for reclamation obligations on the Livengood Gold Project , as appropriate, but this provision may not be adequate. If we are required to carry out unanticipated reclamation work, our financial position could be adversely affected.

The m ining i ndustry is i ntensely competitive, and we have limited financial and personnel resources with which to compete .

The Company’s business of the acquisition, exploration and development, if warranted, of mineral properties is intensely competitive. The Company may be at a competitive disadvantage in acquiring additional mining properties because it must compete with other individuals and companies, many of which may have greater financial resources, operational experience and technical capabilities than the Company. The Company may also encounter increasing competition from other mining companies in efforts to hire experienced mining professionals. Increased competition could adversely affect the Company’s ability to attract necessary capital funding, acquire suitable producing properties or prospects for mineral exploration in the future, or attract or retain key personnel or outside technical resources.

A shortage of equipment and supplies could adversely affect our ability to operate our business .

We are dependent on various supplies and equipment to carry out our exploration and, if warranted, development and mining operations. The shortage of such supplies, equipment and parts could have a material adverse effect on our ability to carry out our operations and therefore limit or increase the cost of production.

We are dependent on key personnel and the absence of any of these individuals could adversely affect our business . We may experience difficulty attracting and retaining qualified personnel.

Our success is largely dependent on the performance and abilities of our directors, officers, employees and management and on our ability to attract and retain additional key personnel in exploration, mine development, sales, marketing, technical support and finance. In addition, t he Company has relied and may continue to rely upon consultants and others for operating expertise. There is no assurance that we can maintain the services of our

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directors, officers, employees or other qualified personnel required to operate our business. The loss of the services of these persons could have a material adverse effect on our business and prospects. Recruiting and retaining qualified personnel is critical to our success and there can be no assurance of such success. The number of persons skilled in the acquisition, exploration and development mineral properties is limited and competition for such persons is intense. If we are not successful in attracting and retaining qualified personnel, our ability to develop our properties could be affected, which could have a material adverse effect on our business, results of operations, cash flows and financial condition. We do not maintain “key man” life insurance policies on any of our officers or employees.

Canadian investors may not be able to enforce their civil liabilities against us.

It may be difficult to bring and enforce suits against us. As substantially all of the assets of the Company and its subsidiaries are located outside of Canada, and certain of the directors and officers of the Company are resident outside of Canada, it may be difficult or impossible to enforce judgments granted by a court in Canada against the assets of the Company or the directors and officers of the Company residing outside of Canada. A shareholder should not assume that the courts of the U.S. (i) would enforce judgments of Canadian courts obtained in actions against us or such persons predicated upon the civil liability provisions of the Canadian securities laws or other laws of Canada , or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon Canadian securities laws or other laws of Canada .

Risks Related to Our Common Shares

Our share price may be volatile and as a result you could lose all or part of your investment .

In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly those considered exploration or development stage companies, have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. It may be anticipated that any quoted market for the common shares will be subject to market trends and conditions generally, notwithstanding any potential success we have in creating revenues, cash flows or earnings. The price of our common shares has been subject to price and volume volatility in the past . In 2012 , the price of our common shares on the TSX ranged from a low of C $1. 85 to a high of C $ 5.61 , and on the NYSE MKT ranged from a low of $1. 91 to a high of $ 5.62 . T here can be no assurance that significant fluctuations in the trading price of the Company’s common shares will not continue to occur, or that such fluctuations will not materially adversely impact the Company’s ability to raise equity funding without significant dilution to its existing shareholders, or at all. As a result, you may be unable to resell your shares at a desired price.

Future sales of our securities in the public or private markets will dilute our current shareholders and could adversely affect the trading price of our common shares and our ability to continue to raise funds in new stock offerings.

It is likely that t he Company will sell common shares or securities exercisable or convertible into common shares in the future . The Company may issue securities on less than favorable terms to raise sufficient capital to fund its business plan. Any transaction involving the issuance of equity securities or securities convertible into common shares would result in dilution, possibly substantial, to present and prospective holders of common shares , could adversely affect the trading prices of our common shares, and could impair our ability to raise capital through future offerings of securities .

We have never paid dividends on our common shares .

We have not paid dividends on our common shares to date, and we may not be in a position to pay dividends for the foreseeable future. Our ability to pay dividends will depend on our ability to successfully develop the Livengood Gold Project and generate earnings from operations. Further, our initial earnings, if any, will likely be retained to finance our operations. Any future dividends will depend upon our earnings, our then-existing financial requirements and other factors, and will be at the discretion of our Board.

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Our business is subject to evolving corporate governance and public disclosure regulations that have increased both our compliance costs and the risk of noncompliance, which could have an adverse effect on our stock price.

We are subject to changing rules and regulations promulgated by a number of governmental and self-regulated organizations, including the SEC, the NYSE MKT , and the Financial Accounting Standards Board. These rules and regulations continue to evolve in scope and complexity and many new requirements have been created in response to laws enacted by Congress, making compliance more difficult and uncertain. For example, on July 21, 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) with increased disclosure obligations for public companies and mining companies in the United States. Our efforts to comply with the Dodd-Frank Act and other new regulations have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from operating activities to compliance activities.

We likely constituted a “passive foreign investment company” during the fiscal year ended December 31, 2012, which may result in adverse U.S. federal income tax consequences to U.S. Holders.

We believe that we were a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes during the fiscal year ended December 31, 2012, and we expect that we will be a PFIC in the current year and that we may be a PFIC in future years. The determination of whether or not the Company is a PFIC is a factual determination dependent on a number of factors that cannot be made until the close of the applicable tax year and accordingly no assurances can be given regarding the Company’s PFIC status for the current year or any future year. If ITH is a PFIC at any time during a U.S. Holder’s holding period, then certain potentially adverse tax consequences could apply to such U.S. Holder’s acquisition, ownership, and disposition of common shares. For more information, please see the discussion in “Certain U.S. Federal Income Tax Considerations for U.S. Holders” below.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

LIVENGOOD GOLD PROJECT, Alaska

The Company currently holds, or has rights to acquire, ownership or leasehold interests in a group of adjacent mineral properties in Alaska which are collectively referred to as the “Livengood Gold Project.” The Livengood Gold Project is located approximately 115 km (71 miles) by road northwest of Fairbanks, Alaska and approximately 65 km (40 miles) north of the boundary of the Fairbanks North Star Borough as shown in Figure 1 below. The project lies within the Tolovana Mining District in the northern part of the Tintina Gold Belt. The Company’s primary focus is to continue to advance the Livengood Gold Project with the objective of assessing its viability for commercial gold mining.

The Company is in the exploration stage and does not mine, produce or sell any mineral products at this time. While the Livengood Gold Project has estimated mineral resources, it does not at this time have any known or identified

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mineral reserves. There can be no assurance that a commercially viable mineral deposit, or reserve, exists on the project until appropriate exploratory and engineering work are done and a comprehensive evaluation based on such work concludes legal and economic feasibility.

In August, 2011, the Company reported an updated resource estimate for the Livengood Gold Project pursuant to its “August 2011 Summary Report on the Livengood Gold Project, Tolovana District, Alaska” dated August 25, 2011 (the “Livengood Report”), which updated its Preliminary Economic Assessment dated November 2010. The Livengood Report is preliminary in nature, and based on forward looking technical and economic assumptions which are being evaluated in the Feasibility Study, which is currently underway.

The Company relies upon consultants and contractors to carry on many of its activities and, in particular, to carry out drilling programs at the Livengood Gold Project and in connection with the preparation of its Feasibility Study on the project. However, as ITH expands its activities, it may choose to hire additional employees rather than relying on consultants.

Figure 1: Location of the Livengood Gold Project

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Livengood Gold Project is located approximately 115 km (71 miles) by road northwest of Fairbanks, Alaska in the Tolovana Mining District within the Tintina Gold Belt. The project area is centered on Money Knob, a local topographic high point. This feature and the adjoining ridgelines are the probable lode gold source for the Livengood placer deposits which lie in the adjacent valleys which have been actively mined since 1914 and have produced more than 500,000 ounces of gold.

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The Livengood Gold Project straddles and is accessed via the Elliot Highway, a paved, all weather road linking the north slope oil fields at Prudhoe Bay to central and southern Alaska through Fairbanks. At present there are no full time residents in the former mining town of Livengood. A number of unpaved roads have been developed in the area providing excellent access. A 427-meter (1400-foot) runway is located 6 km (3.7 miles) to the southwest near the former Alyeska Pipeline Company Livengood Camp and is suitable for light aircraft. The Livengood Gold Project is also adjacent to the Alyeska Pipeline corridor, which transports crude oil from Prudhoe Bay south. This corridor contains a fiber optic communications cable utilized at the Livengood Gold Project.

Topography at the site is eroded hills and valleys with a general elevation difference of 200m (656 feet). The valleys generally contain active streams draining into the Tolovana River system to the west.

The site is approximately 65 km (40 miles) south of the Arctic Circle, and has a subarctic climate with long, cold winters and short, warm summers. Annual precipitation is approximately 40 cm (16 inches). Average low temperatures in winter are -21° to -28° Celsius (-6° to -18° Fahrenheit), with records reaching as low as -55° Celsius (-67° Fahrenheit). Exploration work on the Livengood Gold Project can be limited due to excessive snow cover and cold temperatures. In general, surface sampling work is limited to May through September and surface drilling from March through November. Road-accessible wetland areas may only be explored while frozen in the winter. Work to date on the site has been limited to exploration and geotechnical drilling and environmental baseline activities. The company does not have any plant or equipment at the site, relying on contractors to perform the work.

The nearest community to Livengood Gold Project is the village of Minto, a town with a population of 200 located approximately 65 km (40 miles) southwest by road. The Fairbanks metropolitan area has a population of approximately 98,000 people, and comprises the regional center with hospitals, government offices, businesses and the University of Alaska, Fairbanks. The city is linked to southern Alaska along a north-south transportation and utility corridor that includes two paved highways, a railroad to tide water, an interlinked electrical grid, and communications infrastructure. Fairbanks has a regional airport serviced daily by up to three major airlines.

In preliminary, nonbinding discussions, the local utility in Fairbanks (Golden Valley Electrical Association) has indicated that 80-100 Megawatts of power could be available to the Livengood Gold Project. Livengood would be connected to the local grid by building a 82 km (50 miles) 230- kVA line along the pipeline corridor. Environmental baseline studies required for the electrical line construction started in 2011.

The Feasibility Study is currently developing site layout plans for the infrastructure required at the Livengood Gold Project. This includes evaluating mine shops; process, water and tailing management facilities; power; access roads; administration offices; and camp facilities.

Livengood Gold Project Lands

The Livengood Gold Project covers approximately 20,200 hectares (49,920 acres), all of which is controlled by the Company through its wholly-owned subsidiary, Tower Hill Mines, Inc. The Livengood Gold Project is comprised of multiple land parcels: 100% owned patented mining claims, 100% owned State of Alaska mining claims, 100% owned federal unpatented placer claims; land leased from the Alaska Mental Health Trust (“AMHT”); land leased from holders of state and federal patented and unpatented mining and placer claims, and undivided interests in patented mining claims. The property and claims controlled through ownership, leases or agreements are summarized below.

100% owned patented mining claims

· U.S Mineral Survey 2447, located on lower Livengood Creek, subject to the December 2011 land purchase agreement described below and further subject to an agreement to allow Larry Nelson as agent for Heflinger to operate a placer mine on MS 2477 through December 31, 2014.

· U.S. Mineral Survey 1956, located on lower Gertrude Creek, subject to a reserved royalty of 5% of gross value held by Key Trust Company on behalf of the Luther Hess Trust, and further subject to an agreement to allow Mammoth Mining LLC to operate a placer mine on MS 1956 and F61249, F61256, F61257, and F61259 on lower Livengood Creek through

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December 31, 2015.

· With respect to portions of U.S. Mineral Survey 1626, located on lower Amy Creek:

100% of No. 2 Above Discovery Any Creek,

100% of No. 3 Above Discovery Amy Creek, and

100% of Up Grade Association Bench

100% owned State of Alaska mining claims

· 169 state claims acquired by purchase.

· 157 state claims acquired by location.

100% owned federal unpatented placer claims

· 29 federal unpatented placer claims, subject to the December 2011 land purchase agreement described below.

100% owned Livengood Placers, Inc., a private Nevada corporation that is 100% owned by TH Alaska. Livengood Placers, Inc. is the record owner of the following:

· 29 patented claims, subject to the December 2011 land purchase agreement described below.

· 108 federal unpatented placer claims, subject to the December 2011 land purchase agreement described below.

· 24 State of Alaska mining claims, subject to the December 2011 land purchase agreement described below.

Leased property

· Alaska Mental Health Trust Lease. A lease of the AMHT mineral rights having an initial term of three years commencing July l, 2004, subject to two extensions of three years each and subject to further extension beyond June 30, 2013 by payment of a flat annual fee of 125% of the last rate paid for advance minimum royalties and diligent pursuit of development. The lease requires work expenditures of $10/acre/year in years 1 to 3, $20/acre/year in years 4 to 6 and $30/acre/year in years 7 to 9 and advance minimum royalties of $5/acre/year in years 1 to 3, $15/acre/year in years 4 to 6, $25/acre/year in years 7 to 9, and 125% of the year 9 payment in subsequent years (all of which advance minimum royalties are recoverable from production royalties). An NSR production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to AMHT with respect to the lands subject to this lease. In addition, an NSR production royalty of l% is payable to AMHT with respect to the unpatented federal mining claims subject to the Hudson/Geraghty lease described below and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of gold) is payable to AMHT with respect to the lands acquired by the Company as a result of the purchase of Livengood Placers, Inc. pursuant to the December 2011 land purchase agreement described below. As of December 31, 2012, there were 9,970 acres included in the AMHT lease.

· Hudson/Geraghty Lease. A lease of 20 federal unpatented federal lode mining claims having an initial term of ten years commencing on April 21, 2003 and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date, (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3% (depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for $1,000,000.

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· Griffin Lease. A lease of one patented lode claim having an initial term of ten years commencing January 18, 2007, and continuing for so long thereafter as advance minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date through January 18, 2017 and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of 3% is payable to the lessors. The Company may purchase all interests of the lessors in the leased property (including the production royalty) for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which $500,000 is payable in cash over four years following the closing of the purchase and the balance of $500,000 is payable by way of the 3% NSR production royalty.

· Tucker Lease. A lease of two unpatented federal lode mining claims and four federal unpatented placer claims having an initial term of ten years commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $15,000 on or before each anniversary date, (all of which minimum royalties are recoverable from production royalties). The Company is required to pay the lessor the sum of $250,000 upon making a positive production decision, payable $125,000 within 120 days of the decision and $125,000 within a year of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the lessor. The Company may purchase all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000.

Patented claims (undivided interests less than 100%)

· An undivided 83.33% interest in that certain patented placer mining claim known as the “Kinney Bench” claim, included within U.S. Mineral Survey No. 1626 on lower Amy Creek.

· An undivided 2/9th interest in that certain patented placer mining claim known as the “Union Bench Association” claim, included within U.S. Mineral Survey No. 1626 on lower Amy Creek.

· An undivided 1/6th interest in that certain patented placer mining claim known as the “Bessie Bench” claim, included within U.S. Mineral Survey No. 1626 on lower Amy Creek.

· An undivided 1/3rd interest in those certain patented placer mining claims known as the “War Association” claim; the “Mutual Association” claim; and the “O.K. Fraction” claim, all included within U.S. Mineral Survey No. 2033 on lower Amy Creek.

On State of Alaska lands, the state holds both the surface and the subsurface rights. State of Alaska 40-acre mining claims require an annual rental payment of $35/claim to be paid to the state (by November 30 th of each year), for the first five years, $70 per year for the second five years, and $170 per year thereafter. These rental rates are multiplied by 4 for each 160 acre claim. As a consequence of the annual rentals due, all Alaska State Mining Claims have an expiry date of November 30th each year. In addition, there is a minimum annual work expenditure requirement of $100 per 40-acre claim (due on or before noon on September 1 in each year) or cash-in-lieu, and an affidavit evidencing that such work has been performed is required to be filed on or before November 30th in each year. Excess work can be carried forward for up to four years. If the rental is paid and the work requirements are met, the claims can be held indefinitely. The work completed by the Company during the 2012 field season was filed as assessment work, and the value of that work is sufficient to meet the assessment work requirements through

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September 1, 2016 on all State of Alaska mining claims.

Holders of State of Alaska mining claims are also required to pay a production royalty on all revenue received from minerals produced on state land during each calendar year. The production royalty rate is 3% of net income.

Holders of federal unpatented mining claims are required to pay an annual rental of $140 per 20 acres.

All of the foregoing agreements are in good standing and are transferable. The Company has taken reasonable steps to verify title to mineral properties in which it has an interest. Except for the patented claims, none of the properties have been surveyed.

Holders of Federal and Alaska State unpatented mining claims have the right to use the land or water included within mining claims only when necessary for mineral prospecting, development, extraction, or basic processing, or for storage of mining equipment. However, the exercise of such rights is subject to the appropriate permits being obtained.

December 2011 Land Purchase Agreement

In December 2011, the Company completed a transaction to acquire certain mining claims and related rights in the vicinity of the Livengood Gold Project. This acquisition included both mining claims and all of the shares of LPI. These assets were purchased for aggregate consideration of $36,600,000 allocated between cash consideration of $13,500,000 and a derivative liability of $23,100,000. The derivative liability is a contingent payment based on the five-year average daily gold price (“Average Gold Price”) from the date of the acquisition. The derivative liability (payable in December 2016) will equal $23,148 for every dollar that the Average Gold Price exceeds $720 per troy ounce. If the Average Gold Price is less than $720, there will be no additional contingent payment. The subject ground was previously vacant or was used for placer gold mining.

No placer mineral reserves or mineral resources have been established on the ground subject to this agreement. However, records exist for 2,370 placer drill holes that have been completed on the subject ground between 1933 and 2011. Of these, the 945 holes completed between 1933 and 1984 were primarily 6” churn drill holes. The 1,425 drill holes completed between 1984 and 2000 were 8” RC rotary drill holes utilizing a center return tri-cone bit. All lands controlled by the Company, including the lands acquired pursuant to this agreement, are being evaluated as appropriate for integration into the Feasibility Study for the Livengood Gold Project.

Geology and Mineralization

Rocks at the Livengood Gold Project are part of the Livengood Terrane, an east—west belt, approximately 240 km (149 miles) long, consisting of tectonically interleaved assemblages of various ages. These assemblages include the Amy Creek Assemblage, a sequence of latest Proterozoic and/or early Paleozoic basalt, mudstone, chert, dolomite, and limestone. An early Cambrian ophiolite sequence of mafic and ultramafic sea floor rocks was thrust over the Amy Creek Assemblage and was, in turn, overthrust by a sequence of Devonian shale, siltstone, conglomerate, volcanic, and volcaniclastic rocks, which are the dominant host to the mineralization currently under exploration at the Livengood Gold Project. The Devonian assemblage was overthrust by a second klippe of Cambrian ophiolite rocks. All of these rocks are intruded by Cretaceous multiphase monzonitic and syenitic dikes and sills. Gold mineralization is spatially and temporally associated with these intrusive rocks.

Gold mineralization occurs in association with disseminated arsenopyrite and pyrite in volcanic, sedimentary, and intrusive rocks, and in quartz veins cutting the more competent lithologies, primarily volcanic rocks, sandstones, and, to a lesser degree, ultramafic rocks. Three principal stages of alteration are currently recognized, an early biotite stage, followed by albite-quartz, and a late sericite-quartz assemblage. Carbonate appears to have been introduced with and subsequent to these stages. Arsenopyrite and pyrite were introduced primarily during the albite-quartz and sericite-quartz stages. Gold correlates strongly with arsenic and occurs primarily within and on the margins of arsenopyrite and pyrite.

Mineralization is interpreted as intrusion-related, consistent with other gold deposits of the Tintina Gold Belt, and has a similar As-Sb geochemical association. Mineralization is controlled partly by lithologic units, but thrust-fold

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architecture was key to providing pathways for intrusive and associated hydrothermal fluids.

Local fault and contact limits to mineralization have been identified, but overall the deposit has not been closed off in any direction. The current resource and area drilled covers the most significant portion of the area with anomalous gold in surface soil samples, but still represents only about 25% of the total gold-anomalous area.

Among deposits of the Tintina Gold Belt, mineralization at the Livengood Gold Project is most similar to the dike and sill-hosted mineralization at the Donlin Creek deposit, where gold occurs in narrow quartz veins associated with dikes and sills of similar composition. The age of the intrusions and the genetic link between the mineralization and intrusive rocks are typical of those of other nearby gold deposits of the Tintina Gold Belt, which have been characterized as intrusion-related gold systems and for these reasons the Livengood Gold Project is best classified with them.

History and Exploration

Gold was first discovered in the gravels of Livengood Creek in 1914. Subsequently, over 500,000 ounces of placer gold were produced and the small town of Livengood was established. From 1914 through the 1970’s, the primary focus of prospecting activity was placer deposits. Historically, prospectors considered Money Knob and the associated ridgeline the source of the placer gold. Prospecting, in the form of dozer trenches, was carried out for lode type mineralization in the vicinity of Money Knob primarily in the 1950’s. However, to date no significant production has been derived from lode gold sources.

The geology and mineral potential of the Livengood District have been investigated by state and federal agencies and explored by several companies over the past 40-plus years. Modern mapping and sampling investigations were initially carried out by the U.S. Geological Survey in 1967 as part of a heavy metal assessment program. Mapping completed in the course of this program recognized the essential rock relations, thrust faulting, and mineralization associated with Devonian clastic rocks, the thrust system and intrusive rocks. Since then, the Livengood placer deposits and the surrounding geology have featured in numerous investigations and mapping programs at various scales by the U.S. Geological Survey and the Alaska State Division of Geological and Geophysical Surveys.

In addition to individuals prospecting the area, since the 1970’s several mining companies, including Homestake, AMAX, Placer Dome, Cambior and AngloGold , have investigated the potential for lode gold mineralization beneath the Livengood placers and on the adjacent hillsides, including at Money Knob. Placer Dome’s work appears to have been the most extensive, but it was focused largely on the northern flank of Money Knob and the valley of Livengood Creek.

The most recent round of exploration of the Money Knob area began when AngloGold acquired the property in 2003 and undertook an 8-hole reverse circulation (RC) program on the Hudson-Geraghty lease. The results from this program were encouraging and were followed up with an expanded soil geochemical survey which identified gold-anomalous zones over Money Knob and to the east. Based on the results of this and prior (Cambior) soil surveys, 4 diamond core holes were drilled in late 2004. Results from these two AngloGold drill programs were deemed favorable but no further work was executed due to financial constraints and a shift in corporate strategy.

The Company acquired the Livengood Gold Project in 2006 from AngloGold and has advanced the soil sampling coverage, undertook to drill surface geochemical anomalies and conducted drilling campaigns on the Livengood Gold Project since that time.

In 2006, the Company conducted a 1227m, seven-hole program and continued to demonstrate the presence of mineralization over a broader area. The 2007 campaign consisted of 15 diamond drill holes for a total of 4,411m. These holes focused on extending and defining the volcanic-hosted mineralization first recognized by AngloGold in 2003. However, as drilling progressed, it became clear that although mineralization is strongest in the volcanic rocks, it occurs in all rock types at Money Knob.

Based on favorable results in 2007, the 2008 program consisted of 29,150m of RC and 2,187m core drilling in 109 and 9 holes, respectively. The drill program was designed to improve definition and expand the resource calculated early in 2008 based on 2007 drill data. The 2008 drill program did not identify limits to mineralization in any

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direction. Instead, a thicker mineralized zone (up to 200m) was identified. In addition, this campaign highlighted the fact that mineralization occurs in all rock types, not just in Devonian volcanic rocks, indicating potential more widespread mineralization than envisioned prior to the 2008 drill program.

In 2009, the Company completed 12 diamond drill holes totaling 4,572 meters and 195 RC holes totaling 59,757 meters. Six of the diamond drill holes were drilled across the NNW-trending Core Zone in order to better understand the structural controls and to test the depth continuity of the mineralization. This drilling confirmed that the Core Zone is the locus of a swarm of 0.2 - 1.0m thick southerly dipping dikes. In addition, a number of larger (+10m thick) steeply dipping NNW-trending dikes were observed suggesting that ENE extension may have occurred at about the time of dike magmatism. The RC holes were primarily targeted at grid infill drilling to improve resource estimation of the Core Zone and a step-out program that led to discovery and delineation of the Sunshine and Tower Zones.

In 2010, the Company completed 40 diamond drill holes totaling 13,631 meters and 198 RC holes totaling 56,550 meters. These holes filled in between the Core and Sunshine Zones, expanded the SW Zone and infilled to 50 meter spacing in the Core and Sunshine Zones.

Nearly all drill holes at Money Knob have been drilled in a northerly direction at an inclination of -50 degrees (RC) and -60 degrees (core) in order to best intercept the south dipping structures and mineralized zones as close to perpendicular as possible. A few holes have been drilled in other directions to test other features and aspects of mineralization. Most exploration holes have been spaced at 75m apart along lines 75m apart, subsequent infill drilling in the center of 75m squares brings the nominal drill spacing to 50m for a significant portion of the deposit. Core is recovered using triple tube techniques to ensure good recovery (>95%) and confidence in core orientation. RC holes are bored and cased for the upper 0-30m to prevent down hole contamination and to help keep the hole open for ease of drilling at greater depths.

In 2011, the Company continued with resource definition drilling, completing 26,163 meters of RC drilling and 11,468 meters of diamond drilling. Two areas of the deposit, the Core and Sunshine crosses, were selected for 15-meter-spaced reverse circulation (RC) in-fill drilling on crosses with north-south and east-west legs 150 meters in length. A third area, Area 50 in the Sunshine Zone, measuring 195 meters by 240 meters, was drilled on a 37.5-meter grid with alternating core and RC drilling. Two resources were generated for each volume using ordinary kriging on samples composited to 10-meter lengths: the first including those portions of the 50-meter grid drilling within the volume; and a second using both the grid and close-spaced drilling within the same volume. On average, the effect of the increased drilling density on tonnage, grade, and contained ounces of gold was less than 1% and confirmed the integrity of the resource estimate reported in the Livengood Report. In 2011, the Company broadened the scope of the field program to include 2,240 meters of exploration drilling outside the resource area, as well as 8,932 meters of geotechnical drilling and 1,192 meters of large diameter groundwater test wells.

In May 2012, the Company commenced an 18-hole program of condemnation drilling to either sterilize or establish the presence of significant mineralization in the area surrounding the Money Knob deposit. The purpose of the condemnation drilling program was to determine appropriate areas for infrastructure development. Additionally, four of these holes are also being used for hydrological studies. The program was completed in July with 3,065m in 19 holes.

Also in May 2012, the Company commenced multi-faceted drill programs consisting of hydraulic gradient, infrastructure, borrow source identification, and large-diameter wells for pump tests. The hydraulic gradient and infrastructure drilling consisted of 5,826m in 49 holes utilizing core drilling. The geotechnical and borrow source information was obtained from 2,695m drilled in 73 holes, utilizing core, sonic, and auger drilling methods. Seven large diameter wells have been drilled for a total of 1,031m.

The drill program from February through October 2012 totaled 15,731m in 199 holes.

Sample Preparation, Analyses and Security

The Company samples all holes from surface to total depth, using defined procedures. For RC samples, pulverized material is passed through a cyclone to separate solids from drilling fluids, then over a spinning conical splitter. The

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splitter is set to collect two identical splits of sample weighing 2-5 kg (4.4-11.0 pounds) each. Representative coarse material is collected and saved in chip trays for geological description. Samples are put in pre-numbered, bar-coded bags by the drill site crew. One sample is submitted for analysis, and one sample is kept for reference. Samples are secured on site, and transported to a sample preparation facility operated by ALS Chemex in Fa i rbanks.

Core materials are collected at the drill site and placed in core boxes. Run blocks, orientation blocks and depths are placed in the boxes at site. The core is transported to a sample management facility at Livengood, where it is described, then sawn in half. Half of the core is collected for assaying and half remains for reference. Core samples are weighed before shipping.

The geologic work program at Livengood was designed and is supervised by Chris Puchner, Chief Geologist of the Company , who is a qualified person as defined by NI 43-101. Mr. Puchner is responsible for all aspects of the work, including the quality control/quality assurance program. The q uality a ssurance /q uality c ontrol program implemented by the Company meets or exceeds industry standards. A q uality a ssurance/ q uality c ontrol program includes insertion of blanks and standards (1/10 samples) and duplicates (1/20 samples). Blanks help assess the presence of any contamination introduced during sample preparation and help calibrate the low end of the assay detection limits. Commercial standards are used to assess the accuracy of the analyses. Duplicates help assess the homogeneity of the sample material and the overall sample variance. The Company has undertaken rigorous protocols to assure accurate and precise results. Among other methods, weights are tracked throughout the various steps performed in the laboratory to minimize and track errors. A group of 2096 metallic screen fire assays performed in 2011 did not indicate any bias in the matching fire assays.

On-site project personnel photograph the core from each individual borehole prior to preparing the split core. Duplicate RC drill samples are collected with one split sent for analysis. Representative chips are retained for geological logging. On-site personnel at the project log and track all samples prior to sealing and shipping. All sample shipments are sealed and shipped to ALS Chemex in Fairbanks, Alaska, for preparation and then on to ALS Chemex in Reno, Nevada, or Vancouver, B.C., for assay. ALS Chemex’s quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control is further assured by the use of international and in-house standards. Finally, representative blind duplicate samples are forwarded to ALS Chemex and an ISO compliant third party laboratory for additional quality control.

Data entry and database validation procedures have been checked and found to conform to industry practices. Procedures are in place to minimize data entry errors. These include pre-numbered, pre-tagged, bar-coded bags, and bar-coded data entry methods which relate all information to sample and drill interval information. Likewise, data validation checks are run on all information used in the geologic modeling and resource estimation process. Database entries for a random sample (10%) of drill holes used for the resource estimate were checked against the original Assay Certificates by one of the independent authors of the Livengood Report described below and the error rate was found to be within acceptable limits.

Analysis of assay data from core and RC sampling has been performed to check for downhole contamination of RC and to compare the data distributions produced by the two methods. Analysis of RC data has not indicated cyclic down hole contamination. Decay analysis conducted on both core drilling and RC drilling indicates similar patterns of monotonic grade increase or decrease. Comparison of the grade distributions between core and RC data were conducted using Quantile-Quantile plots, and simulation of population means for different numbers of samples. The comparison indicated that the mean of all core data was 4% lower than RC data Comparison of core and RC data below the water table showed similar population means suggesting that down hole contamination was not occurring.

Core and RC check samples have been collected during each drilling campaign by independent third parties. Results from these samples, as well as blanks and standards included, are consistent with the Company’s initial results. This includes a similar increase in variance for samples at higher grades, a pattern consistent with nugget effect. No systematic high or low bias has been observed.

Mineral Processing and Metallurgical Testing

The Company has undertaken metallurgical and processing test work to determine optimal recoveries using

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numerous conventional flow sheets: including milling with gravity, flotation, and CIL or gravity and CIL of the gravity tails, and heap leaching. This test work focused on determining the best means of optimizing these combined recovery methods. This work involved studies that evaluate how gold mineralization occurs and how the mineralized materials vary in their physical and metallurgical response to process treatment parameters according to the various lithologic units that host mineralization. The characteristics reviewed include grindability, abrasiveness, optimal particle size for downstream treatment, and response to leach, flotation, or gravity unit operations as a function of oxidation and lithology.

In 2012, additional metallurgical studies have determined that the gold recovery for the four key rock types that comprise the majority of the Livengood Gold resource will range between 77% and 88%. A substantial portion of the early production at Livengood is expected from these rock types.

The study program included tests to first determine the gravity recoverable gold, and then evaluated two alternative mill flow sheets for processing of the gravity tailing. The tests showed a robust gravity recovery of between 43 and 55%. The gravity recovery, total gravity/flotation/concentrate CIL recovery, and the total gravity/whole ore CIL recovery by major rock type are outlined below:

Estimated Gold Recovery by Rock Type (%):

Rock Type:	Gravity:	Gravity/flotation concentrate CIL:	Gravity/whole ore CIL:
Cambrian	49.0	81 (est.)	84.2
Upper Seds, Sunshine	44.1	76.1	87.7
Upper Seds, Core Zone	43.5	67.4	76.7
Volcanics, Core Zone	55.3	74.4	84.8

Note: These four rock types comprised approximately 70% of the mineable resource described in the Livengood Report. The Feasibility Study will update and define the percentage of each rock type contained in the mineable resource.

These results are based upon test work completed on a large number of representative samples contained in the 10,800 kg of mineralized rock that was delivered to SGS Canada Inc. in February, 2012. This extensive program of optimization testing and analysis, overseen by Samuel Engineering, has defined the recovery for these rock types that will be used in the Feasibility Study.

Based on this successful test program and related engineering tradeoff studies, the Company has determined that a gravity circuit followed by a whole ore CIL circuit will be the mill flow sheet developed in the Feasibility Study.

Preliminary Economic Assessment

In August, 2011, the Company reported an updated resource estimate for the Livengood Gold Project pursuant to its Livengood Report. The Livengood Report estimates measured, indicated and inferred mineral resources as of August 22, 2011 based on borehole data up to May 31, 2011 and other technical information as of August 22, 2011 in accordance with the standards of NI 43-101. Readers are encouraged to review the entire Livengood Report, which is filed under the Company’s profile on SEDAR.

The Livengood Report is preliminary in nature, and based on forward looking technical and economic assumptions which are being evaluated in the Feasibility Study.

In June 2012, the Company determined the most efficient and cost effective path to permitting the Livengood Gold Project was to bypass the preparation of a pre-feasibility study and incorporate results from engineering and metallurgical test work directly to a definitive Feasibility Study, which is currently underway. The Company has engaged Samuel Engineering, Inc. of Greenwood Village, Colorado, to provide process engineering services for the Feasibility Study and AMEC Environment & Infrastructure, Inc. of Denver, Colorado, to provide geotechnical infrastructure engineering services. The Company does not propose any method of production at this time, and one of the objectives of the Feasibility Study is to determine the optimum economic method for any production at the Livengood Gold Project.

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Mineral Resource Estimation

No m ineral reserves have been estimated on the Livengood Gold Project. However, a summary of the estimated global (in-situ) mineral resource from the Livengood Report is presented below for cutoff grades of 0.2, 0.3, 0.5, and 0.7 g/t gold. Our Measured, Indicated and Inferred Mineral Resources have been estimated in compliance with definitions set out in NI 43-101. We have filed Technical Reports regarding the disclosure of Mineral Resources for the Livengood Gold Project on SEDAR as required by NI 43-101. The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not recognized by the SEC. Mineral resources that are not mineral reserves have no demonstrated economic viability. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves or that all or any part of an inferred mineral resource exists, will ever be upgraded to a higher category or is economically or legally mineable.

Measured, Indicated and Inferred Resource Estimate, Livengood Gold Project, Alaska

Classification	Cutoff (g/t)	Tonnes (millions)	Grade (g/t)	Gold Ounces (million)
Measured	0.20	742	0.54	12.8
Indicated	0.20	322	0.47	4.8
Inferred	0.20	447	0.42	6.1
Measured	0.30	562	0.63	11.4
Indicated	0.30	216	0.58	4.0
Inferred	0.30	279	0.53	4.8
Measured	0.50	298	0.84	8.0
Indicated	0.50	96	0.81	2.5
Inferred	0.50	102	0.79	2.6
Measured	0.70	149	1.09	5.2
Indicated	0.70	42	1.10	1.5
Inferred	0.70	39	1.10	1.4

Cautionary Note to U.S. Investors: see the section heading “Cautionary Note to United States Investors Regarding Estimates of Measured, Indicated and Inferred Resources and Proven and Probable Reserves” above.

Environmental Studies, Permitting and Social and Community Impacts

The Livengood Gold Project is currently operating within compliance of all environmental regulations that apply during the exploration stage of major mineral projects. The Company has received all necessary exploration permits for activities such as trenching, drill road building and drilling. These permits are also reviewed by related state and federal agencies that can comment and require specific changes to the proposed work plans to minimize impacts on the environment. The permitting process for major exploration projects generally requires 30-60 days for processing. The Company currently has all necessary permits with respect to its exploration activities in Alaska. Although the Company has never had an issue with the timely processing of exploration permits there can be no assurances that delays in permit approval will not occur. Reclamation of surface disturbance associated with exploration activities is conducted concurrently where required.

The Company has been conducting extensive, multi-disciplinary environmental baseline studies in and around the project area since 2008 in order to understand the current environmental conditions and to allow project design to be optimized to minimize potential environmental effects. The environmental baseline programs conducted or currently underway at Livengood include:

· surface water and hydrology;

· groundwater hydrogeology;

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· geohydrology;

· wetlands and vegetation;

· meteorology and air quality;

· aquatic life and resources;

· wildlife and habitat;

· cultural resources;

· rock characterization; and

· geochemical characteristics.

Based on review of the studies completed to date, there are no known environmental issues that are anticipated to materially impact the Livengood Gold Project’s ability to extract the gold resource.

Looking forward to potential project development, a site-specific monitoring plan and water management plan for both operations and post mine closure will be developed in conjunction with detailed engineering and project permit planning. Development of the Livengood Gold Project will require a number of state and federal permits. Federal permits will be issued pursuant to the National Environmental Policy Act (NEPA) and Council of Environmental Quality (CEQ). In fulfillment of the NEPA requirements, the Livengood Gold Project will be required to prepare an Environmental Impact Statement. Although at this time it is unknown which department will become the lead federal agency, the State of Alaska is expected to take a cooperating role to coordinate the NEPA review with the State permit process. Actual permitting timelines are controlled by the NEPA review and US Federal and State agency decisions. There are no municipal or community agreements required for the Livengood Gold Project.

ITEM 3. LEGAL PROCEEDINGS

We are periodically a party to or otherwise involved in legal proceedings arising in the normal course of business. Management does not believe that there is any pending or threatened proceeding against us which, if determined adversely, would have a material adverse effect on our financial position, liquidity or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”). During the fiscal year ended December 31, 2012, the Company and its subsidiaries were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Shares

The common shares of the Company are listed and posted for trading on the TSX under the symbol “ITH”, on the NYSE MKT under the symbol “THM”, and on the Frankfurt Stock Exchange under the symbol “IW9”. The following table sets forth the high and low market closing prices per common share as reported by the TSX and NYSE MKT for the periods indicated:

	Toronto Stock Exchange				NYSE MKT
	C$ High		C$ Low		$ High		$ Low
Year ended December 31, 2012
Fourth Quarter	$	2.77	$	1.85	$	2.81	$	1.98
Third Quarter	$	3.20	$	2.47	$	3.20	$	2.49
Second Quarter	$	4.28	$	2.65	$	4.20	$	2.63
First Quarter	$	5.61	$	4.03	$	5.62	$	4.08

Seven months ended December 31, 2011
Second Quarter (September 1 — December 31)	$	8.04	$	3.71	$	8.15	$	3.60
First Quarter (June 1 — August 31)	$	8.21	$	6.25	$	8.36	$	6.48

As at March 11, 2013, there were 98,068,638 common shares issued and outstanding, and the Company had approximately 85 shareholders of record. On March 11, 2013, the closing price of the common shares as reported by the TSX and NYSE MKT was C$1.50 and $1.42, respectively.

Dividends

Since its inception, ITH has not paid any dividends. ITH has no present intention of paying any dividends, as it anticipates that all available funds will be invested to finance the growth of its business. The Board will determine if and when dividends should be declared and paid in the future after taking into account many factors, including ITH’s financial condition, operating results and anticipated cash needs at the relevant time. There are no restrictions which prevent ITH from paying dividends.

Recent Sales of Unregistered Equity Securities

During the third quarter of 2012, the Company closed a non-brokered private placement financing through the issuance of 11,384,719 common shares in a transaction exempt from the requirements of the Securities Act pursuant to Rule 506 of Regulation D thereunder. The placement was partially subscribed to by Paulson & Co., Tocqueville Asset Management, LP, AngloGold, other institutional funds and ITH management and insiders. The financing consisted of two stages. The first stage closed on August 3, 2012 and consisted of 9,458,308 common shares issued at C$2.60 per share for gross proceeds of $24,626,029. The second stage of the offering closed on September 17, 2012 and consisted of 1,926,411 common shares issued at C$2.5955 per share for gross proceeds of $5,142,500. The Company paid a cash finder’s fee of 4% of gross proceeds in connection with C$10,000,000 of the total offering. Total share issuance costs for this non-brokered private placement financing amounted to $554,280.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Exchange Controls

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange

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restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company’s securities, except as discussed in “Certain Canadian Federal Income Tax Considerations” below.

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of “control” of the Company by a “non-Canadian.” The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. “Non-Canadian” generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

Certain Canadian Federal Income Tax Considerations

The following is a summary of the principal Canadian federal income tax considerations that apply to the holding and disposition of common shares. This summary only applies to a holder who is for Canadian income tax purposes not resident in Canada, is resident in the United States of America under the provisions of the Canada-United States Income Tax Convention (1980) (the “Treaty”) and holds our common shares as capital property. This summary is based on the current provisions of the Income Tax Act (Canada) and the regulations thereunder (the “Tax Act”) and all amendments to the Tax Act publicly proposed by the Government of Canada to the date hereof. This summary is also based on the current provisions of the Treaty and our understanding of the current publicly available administrative and assessing practices published in writing by the Canada Revenue Agency.

It is assumed that each proposed amendment will be enacted as proposed and there is no other relevant change in any governing law, although no assurance can be given in these respects. This summary does not otherwise take into account any change in law or administrative practice, whether by judicial, governmental, legislative or administrative action, nor does it take into account provincial, territorial or foreign income tax consequences, which may vary from the Canadian federal income tax considerations described herein.

A particular U.S. resident person may not be entitled to benefits under the Treaty if the “limitations of benefits” provisions of the Treaty apply to the particular U.S. resident person. The limitation of benefit provisions under the Treaty are complex and U.S. residents are advised to consult their own tax advisors in this regard.

Under the Treaty, members of a limited liability corporation created under the limited liability company legislation in the U.S. and treated as a partnership or disregarded entity under U.S. tax law (“LLC”) (and holders of interests in similarly fiscally transparent U.S. entities) may be entitled to benefits under the Treaty in certain circumstances provided that the members of the LLC are taxed in the United States on any income, profits or gains earned through the LLC in the same way they would be if they had earned it directly. Note, the recently concluded Fifth Protocol to the Treaty will affect those shareholders that hold their shares through an LLC or other fiscally transparent or “hybrid” entity. If you utilize such entities to hold your common shares, then you should consult your tax advisors about the impact of the Fifth Protocol on your holdings.

Special rules, which are not discussed in this summary, may apply if you are an insurer carrying on business in Canada and elsewhere, or a financial institution as defined by section 142.2 of the Tax Act. If you are in any doubt as to your tax position, you should consult with your tax advisor.

This summary is of a general nature only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder of the common shares and no representation with respect to Canadian federal income tax consequences to any holder of common shares is made herein. Shareholders are solely responsible for determining the tax consequences applicable to their particular circumstances and should consult their own tax advisors concerning an investment in the Company’s common shares.

Certain U.S. Federal Income Tax Considerations for U.S. Holders

The following is a discussion of certain material U.S. federal income tax consequences to U.S. Holders (as defined below) of acquiring, owning, and disposing of our common shares. This discussion does not purport to be a comprehensive description of all of the U.S. tax considerations that may be relevant to a particular person’s decision to acquire the common shares, including any state, local or non-U.S. tax consequences of the ownership of the common shares. This discussion applies to only to those investors that hold the common shares as capital assets for U.S. tax purposes (generally, for investment) and does not discuss all aspects of U.S. federal income taxation that may be relevant to investors subject to special treatment under U.S. federal income tax law (including, for example, a holder liable for the alternative minimum tax or a holder that actually or constructively owns 10% or more by voting power or value of our common stock). This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrative guidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or different interpretation by the IRS or a court, possibly on a retroactive basis. This discussion also assumes that the Company is not, and will not become, a controlled foreign corporation as determined for U.S. federal income tax purposes.

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As used herein, the term “U.S. Holder” means a beneficial owner of our common shares that is:

· an individual citizen or resident of the United States;

· a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state or political subdivision thereof, or the District of Columbia;

· an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

· a trust (i) if a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (ii) that has a valid election in effect to be treated as a U.S. person under applicable U.S. Treasury regulations.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of the common shares, the U.S. tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the common shares that is a partnership and partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of acquiring, owning, disposing of the common shares.

Distributions

Subject to different treatment under the passive foreign investment company rules discussed below, a U.S. Holder must include in gross income as dividend income the gross amount of any distribution paid on the common shares (including the amount of any non-U.S. taxes withheld from such amount), to the extent such distribution is paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Distributions in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will first be treated as a non-taxable return of capital to the extent of the U.S. Holder’s basis in the common shares and thereafter as gain from the sale or exchange of common shares. See “—Sale, Exchange, or Other Disposition of Common Shares” below.

Dividends received by U.S. Holders that are individuals, estates, or trusts will be taxed at preferential rates if such dividends meet the requirements of “qualified dividend income.” Dividends that fail to meet such requirements, and dividends received by corporate U.S. Holders, are taxed at ordinary income rates. In order for dividends to qualify as “qualified dividend income,” an entity must be considered a “qualified foreign corporation” and certain other requirements must be met. While we believe the Company is a qualified foreign corporation, a dividend received by a U.S. Holder will not be qualified dividend income if the Company is a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year. See the discussion below regarding our passive foreign investment company status under “—Passive Foreign Investment Company Rules.” In the case of a corporate U.S. Holder, dividends received generally will not be eligible for the dividends-received deduction.

Dividends paid on the common shares will generally be treated as foreign source income for U.S. foreign tax credit purposes under special U.S. federal income tax rules, subject to various classifications and other limitations. The rules relating to computing foreign tax credits are complex. U.S. Holders should consult their own tax advisors to determine the foreign tax credit implications of owning common shares.

The distribution rules are complex, and each U.S. Holder should consult its own tax advisors regarding the distribution rules.

Sale, Exchange, or Other Disposition of Common Shares

Subject to different treatment under the passive foreign investment company rules discussed below, a U.S. Holder that sells or otherwise disposes of our common shares will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between (i) the U.S. dollar value of the amount realized on the sale or disposition and (ii) the tax basis, determined in U.S. dollars, of such common shares. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period is greater than one year at the time of sale, exchange, or other disposition. Long-term capital gains of individuals are generally subject to preferential maximum U.S. federal income tax rates. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Rules

If the Company is considered a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes at any time during a U.S. Holder’s holding period, then certain different and potentially adverse tax consequences would apply to such U.S. Holder’s acquisition, ownership, and disposition of common shares. In general, a non-U.S. corporation will be a PFIC in any taxable year in which, after applying certain look-through rules, either (1) at least 75% of its gross income for the taxable year is passive income; or (2) at least 50% of the average value (determined on a quarterly basis) of its assets is attributable to assets that produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), the excess of gains over losses from the disposition of certain assets that produce passive income. If a foreign corporation owns at least 25% by value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, as receiving directly its proportionate share of the other corporation’s income.

We believe that we were a PFIC for U.S. federal income tax purposes during the fiscal year ended December 31, 2012, and we expect that we will be a PFIC in the current year and that we may be a PFIC in future years. The determination of whether or not the Company is a PFIC is a factual determination dependent on a number of factors that cannot be made until the close of the applicable tax year and accordingly no assurances can be given regarding the Company’s PFIC status for the current year or any future year. The Company’s status as a PFIC can have significant adverse tax consequences for a U.S. Holder if we are a PFIC for any year during such U.S. Holder’s holding period.

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A U.S. Holder that holds common shares while the Company is a PFIC may be subject to increased tax liability upon the sale, exchange, or other disposition of the common shares or upon the receipt of certain distributions, regardless of whether the Company is a PFIC in the year in which such disposition or distribution occurs. These adverse tax consequences will not apply, however, if (i) the U.S. Holder timely files and maintains a qualified electing fund (“QEF”) election to be taxed annually on the U.S. Holder’s pro rata portion of the Company’s earnings and profits; (ii) the U.S. Holder is eligible to make a “purging” election and timely does so, as described below; or (iii) the U.S. Holder timely makes a mark-to-market election, as described below.

The adverse tax consequences include:

(a) “Excess distributions” by the Company are subject to the following special rules. An excess distribution generally is the excess of the amount a PFIC distributes to a shareholder during a taxable year over 125% of the average amount it distributed to the shareholder during the three preceding taxable years or, if shorter, the part of the shareholder’s holding period before the taxable year. Distributions with respect to the common shares made by ITH during the taxable year to a U.S. Holder that are excess distributions must be allocated ratably to each day of the U.S. Holder’s holding period. The amounts allocated to the current taxable year and to taxable years prior to the first year in which ITH was classified as a PFIC are included as ordinary income in a U.S. Holder’s gross income for that year. The amount allocated to each other prior taxable year is taxed as ordinary income at the highest tax rate in effect for the U.S. Holder in that prior year (without offset by any net operating loss for such year) and the tax is subject to an interest charge at the rate applicable to deficiencies in income taxes (the “special interest charge”).

(b) The entire amount of any gain realized upon the sale or other disposition of the common shares will be treated as an excess distribution made in the year of sale or other disposition and as a consequence will be treated as ordinary income and, to the extent allocated to years prior to the year of sale or disposition, will be subject to the special interest charge described above.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.

While there are U.S. federal income tax elections that sometimes can be made to mitigate these adverse tax consequences (including, without limitation, the “QEF Election” and the “Mark-to-Market Election” discussed below), such elections are available in limited circumstances and must be made in a timely manner. U.S. Holders are urged to consult their own tax advisers regarding the potential application of the PFIC rules to the acquisition, ownership, and disposition of common shares.

QEF Election . A U.S. Holder of stock in a PFIC may make a QEF election with respect to such PFIC to elect out of the tax treatment discussed above. Generally, a QEF election should be made with the filing of a U.S. Holder’s U.S. federal income tax return for the first taxable year for which both (i) the U.S. Holder holds common shares of ITH, and (ii) the Company was a PFIC. A U.S. Holder that timely makes a valid QEF election with respect to a PFIC will generally include in gross income for a taxable year (i) as ordinary income, such holder’s pro rata share of the Company’s ordinary earnings for the taxable year, and (ii) as long-term capital gain, such holder’s pro rata share of the Company’s net capital gain for the taxable year. However, the QEF election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. U.S. Holders should be aware that there can be no assurance that ITH will satisfy record keeping requirements under the QEF rules or that ITH will supply U.S. Holders with required information under the QEF rules, in event that ITH is a PFIC and a U.S. Holder wishes to make a QEF election.

Deemed Sale Election. If the Company is a PFIC for any year during which a U.S. Holder holds common shares, but the Company ceases in a subsequent year to be a PFIC, then a U.S. Holder may make a deemed sale election for such subsequent year in order to avoid the adverse PFIC tax treatment described above that would otherwise continue to apply because of the Company’s having previously been a PFIC. If such election is timely made, the U.S. Holder would be deemed to have sold the common shares held by the holder at their fair market value, and any gain from such deemed sale would be taxed as an excess distribution (as described above). The basis of the common shares would be increased by the gain recognized, and a new holding period would begin for the common shares for purposes of the PFIC rules. The U.S. Holder would not recognize any loss incurred on the deemed sale, and such a loss would not result in a reduction in basis of the common shares. After the deemed sale election, the U.S. Holder’s common shares with respect to which the deemed sale election was made would not be treated as shares in a PFIC, unless the Company subsequently becomes a PFIC. The rules regarding deemed sale elections are very complex. U.S. Holders are strongly urged to consult their tax advisors about the deemed sale election.

Mark-to-Market Election. Alternatively, a U.S. Holder of “marketable stock” (as defined in the applicable Treasury regulations) in a PFIC may make a mark-to-market election for such stock to elect out of the adverse PFIC tax treatment discussed above. If a U.S. Holder makes a mark-to-market election for shares of marketable stock, the U.S. Holder will include in income each year an amount equal to the excess, if any, of the fair market value of the shares as of the close of the holder’s taxable year over the holder’s adjusted basis in such shares. A U.S. Holder is allowed a deduction for the excess, if any, of the adjusted basis of the shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the shares included in the holder’s income for prior taxable years. Amounts included in a U.S. Holder’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the shares, as well as to any loss realized on the actual sale or disposition of the shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such shares. A U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. However, the special interest charge and related adverse tax consequences described above for non-electing holders may continue to apply on a limited basis if the U.S. Holder makes the mark-to-market election after such holder’s holding period for the shares has begun.

Because our common shares are regularly traded on TSX, the NYSE MKT, and the Frankfurt Stock Exchange, we anticipate that our common shares will be “marketable stock.” However, we cannot assure that our common shares are or will be marketable stock, and U.S. Holders of common shares are urged to consult their tax advisors as to whether the common shares would qualify for the mark-to-market election.

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Form 8621. U.S. Holders who own common shares during any year in which the Company is a PFIC must file IRS Form 8621 with their U.S. federal income tax return for each year in which such holder owns common shares and either recognizes gain on a disposition of such common shares, receives certain distributions from the Company, or makes a “reportable election.” Pursuant to Code Section 1298(f), all U.S. Holders may be required to provide annual information regarding ownership of an interest in a PFIC. As of the date hereof, the IRS has suspended the reporting requirements imposed under Code Section 1298(f) for PFIC shareholders that are not otherwise required to file IRS Form 8621.

The PFIC rules are complex, and U.S. Holders should consult their own tax advisors regarding the PFIC rules and how they may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares in the event the Company is a PFIC at any time during such holding period for such common shares.

Medicare Tax on Unearned Income

For taxable years beginning after December 31, 2012, a U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the U.S. Holder’s “net investment income” for the relevant taxable year and (2) the excess of the U.S. Holder’s modified gross income for the taxable year over a certain threshold (which in the case of an individual will be between $125,000 and $250,000, depending on the individual’s circumstances). A holder’s net investment income will generally include its dividend income and its net gains from the disposition of common shares, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. Holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax on your income and gains in respect of your investment in the common shares.

Foreign Financial Assets

Owners of “specified foreign financial assets” with an aggregate value in excess of $50,000 (and in some circumstances, a higher threshold) may be required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” may include financial accounts maintained by foreign financial institutions, as well as the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties, and (iii) interests in foreign entities. U.S. Holders are urged to consult their tax advisors regarding the application of this reporting requirement to them.

Foreign Currency Transactions

Generally, amounts received by a U.S. Holder in foreign currency (including distributions paid in foreign currency to a U.S. Holder in connection with the ownership of common shares or on the sale, exchange, or other disposition of common shares) will be equal to the U.S. dollar value of such foreign currency based on the applicable exchange rate on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). The subsequent disposition of any foreign currency received (including an exchange for U.S. currency) will generally give rise to ordinary gain or loss. Each U.S. Holder should consult its own tax adviser regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Information Reporting and Backup Withholding

Payments made within the United States or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares will generally be subject to information reporting and backup withholding tax if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules.

Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

Purchasing, holding, or disposing of securities of the Company may have tax consequences under the laws of the United States and Canada that are not described in this Annual Report on Form 10-K. Shareholders are solely responsible for determining the tax consequences applicable to their particular circumstances and should consult their own tax advisors concerning an investment in the Company’s common shares.

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ITEM 6. SELECTED FINANCIAL DATA

The selected financial data set forth in the table below has been taken from the Company’s audited consolidated financial statements and should be read in conjunction with those financial statements and the notes thereto. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). Prior to 2012, the consolidated financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”) or Canadian GAAP. All prior periods presented below have been restated from IFRS and Canadian GAAP to US GAAP.

Description	Year Ended December 31, 2012			Seven Months Ended December 31, 2011			Year Ended May 31, 2011			Year Ended May 31, 2010			Year Ended May 31, 2009			Year Ended May 31, 2008
Net loss — continuing operations	$	(56,643,462	)	$	(43,309,957	)	$	(47,421,873	)	$	(32,232,664	)	$	(14,236,425	)	$	(5,646,590	)
Net loss — discontinued operations	—			—			(1,037,912		)	(3,452,307		)	(3,161,583		)	(6,154,650		)
Net loss	(56,643,462		)	(43,309,957		)	(48,459,785		)	(35,684,971		)	(17,398,008		)	(11,801,240		)
Basic and diluted loss per common share from continuing operations	$	(0.62	)	$	(0.50	)	$	(0.61	)	$	(0.54	)	$	(0.32	)	$	(0.14	)
Basic and diluted loss per common share from discontinued operations	$	—		$	—		$	(0.01	)	$	(0.06	)	$	(0.07	)	$	(0.16	)

Description	December 31, 2012		December 31, 2011		May 31, 2011		May 31, 2010		May 31, 2009		May 31, 2008

Working capital	$	27,676,797	$	45,813,618	$	112,150,621	$	41,154,660	$	29,732,733	$	10,674,606
Current assets	31,424,066		56,133,233		116,318,862		42,374,537		30,086,926		11,404,478
Total assets	86,687,344		109,304,085		121,798,663		50,134,706		37,158,577		18,893,365
Current liabilities	3,747,269		10,319,615		4,168,241		1,219,877		354,193		729,872
Total liabilities	26,147,269		31,119,615		4,168,241		1,219,877		354,193		729,872
Shareholders’ equity	$	60,540,075	$	78,184,470	$	117,630,422	$	48,914,829	$	36,804,384	$	18,163,493

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Current Business Activities

General

Livengood Gold Project Developments

During the year ended December 31, 2012 and to the date of this report, the Company advanced its Livengood Gold Project in Alaska with the continuation of activities in support of a Feasibility Study. Completed FS work included advancement of metallurgical test programs; geotechnical, condemnation, infrastructure, hydraulic gradient, borrow source, and large diameter well drill programs; analyzing results thereof; and the advancement of engineering and environmental studies.

Highlights of activities during and subsequent to the year ended December 31, 2012 include:

· Environmental baseline data collection for the Livengood Gold Project permitting activities continued, including data collection for groundwater hydrogeology; rock characterization; geohydrology; surface water and hydrology; meteorology and air quality; wetlands and vegetation; aquatic life and resources; wildlife and habitat; cultural resources; and large-scale field testing of material geochemical characteristics.

· In January 2012, two major contracts were awarded: process engineering services and geotechnical infrastructure engineering services for the FS. Feasibility level work commenced in February 2012.

· In March 2012, results of the 2011 drill program validated the resource estimate used in the August 25, 2011 NI43-101 technical report on the Livengood Gold Project.

· Between February 25 and April 15, 2012, completion of a 47-hole, 1,936-metre chilled brine geotechnical drilling program.

· Between May 1 and June 30, 2012, completion of a 4-hole, 1,378-metre pit slope stability geotechnical drilling program.

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Other Developments

In December 2011, the Company completed two acquisitions in connection with the Livengood Gold Project. The first acquisition consisted of the exercise of an existing lease buyout option with respect to certain mining claims leased by the Company, thereby giving the Company a 100% ownership interest. The second acquisition was of certain placer mining claims and related rights in the vicinity of the Livengood Gold Project, and included all of the shares of Livengood Placers, Inc. (which corporation holds some of the subject placer mining claims). This land was previously vacant or was used for placer gold mining. The acquisitions completed a planned lease buyout and also enables the Company to pursue additional site facility locations and to investigate other land use opportunities including the potential for placer gold extraction.

Livengood Gold Project — Feasibility Study

The FS for the Livengood Gold Project is currently underway. During the first quarter of 2012, the Company selected Samuel Engineering, Inc. of Greenwood Village, Colorado, to provide process engineering services for its FS. The Company has also engaged AMEC Environment & Infrastructure, Inc. of Denver, Colorado, to provide geotechnical infrastructure engineering services.

A number of trade-off studies and project design alternatives have been evaluated during 2012, including various grinding circuits, heap leaching and various reagent additions. At present, the large mill concept has generated results superior to all alternatives.

In May 2012, the Company commenced an 18-hole program of condemnation drilling to either sterilize or establish the presence of significant mineralization in the area surrounding the Money Knob deposit. The purpose of the condemnation drilling program was to determine appropriate areas for infrastructure development. Additionally, 4 of these holes are also being used for hydrological studies. The program was completed in July with 3,065 meters in 19 holes.

Also in May 2012, the Company commenced multi-faceted drill programs consisting of hydraulic gradient, infrastructure, borrow source identification, and large-diameter wells for pump tests. The hydraulic gradient and infrastructure drilling consisted of 5,826 meters in 49 holes utilizing core drilling. The geotechnical and borrow source information was obtained from 2,695 meters drilled in 73 holes, utilizing core, sonic, and auger drilling methods. Seven large diameter wells have been drilled for a total of 1,031 meters.

The drill program from February through October 2012 totaled 15,731 meters in 199 holes.

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Metallurgical studies were conducted throughout 2012 and results have determined that the gold recovery for the four key rock types that comprise the majority of the Livengood Gold resource will range between 77% and 88%. Based on this successful test program and related engineering tradeoff studies, the Company has determined that a gravity circuit followed by a whole ore CIL circuit will be the mill flow sheet developed in the Feasibility Study. Project cost estimates will be developed, mine design will re-examine cut-off grades and optimum grade to the mill, which will produce the most economically robust project.

Geotechnical work for surface facility sites has progressed significantly with a key focus on potential tailing and overburden locations and design.

Environmental baseline data collection for Livengood permitting activities continues for groundwater hydrogeology; rock characterization; geohydrology; surface water and hydrology; meteorology and air quality; wetlands and vegetation; aquatic life and resources; wildlife and habitat; cultural resources; and large-scale field testing of material geochemical characteristics. Testing included additional drilling and samples collected during the 2012 field season for geochemical testing.

The advanced level of on-going engineering work allowed the Company to bypass the preparation of a pre-feasibility study and move directly to completion of a definitive FS. The Livengood FS will provide an update of the anticipated project configuration and an overview of the geology, exploration, surface mine planning, metallurgical test work, process plant and infrastructure engineering, and environmental baseline studies that have been completed to date.

During 2012, the Company spent approximately $11,725,000 on drilling activity related to gathering geotechnical and geohydrological data for the feasibility study.

The Company is focusing on completing all the engineering and analysis to support the completion of its FS and the environmental work needed to maintain its current permitting schedule. In order to support the completion of these work programs, the Company anticipates spending approximately $24 million for the 2013 fiscal year ending December 31, 2013.

The Company will review its budgetary and financing options as the feasibility process advances including considering a future strategic alliance to assist in further development and future construction costs.

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Use of Financing Proceeds

The Company closed a bought deal short form prospectus and a private placement financing on November 10, 2010. The Company disclosed that it intended to use the net proceeds from the two financings for continued work on the Livengood Gold Project and for general working capital purposes. The “Use of Proceeds” plan contained in the Company’s short form prospectus dated November 5, 2010, projected total Livengood Gold Project expenditures dating from September 1, 2010 (beginning of Q2 for the Fiscal Year ending May 31, 2011) to May 31, 2014. The use of proceeds plan totaled $136.9 million for the period ending May 31, 2014. Table 1 shows the expenditures to August 31, 2012, the month in which the total budgeted spending was reached, compared with the intended use of proceeds.

Table 1: Comparison of Proposed Use of Proceeds with Actual Use of Proceeds to August 31, 2012

Project Cost Center	Total Budget Year ended May 2011 to Period ended May 2014(2)		Actual September 1, 2010 through August 31, 2012(1)		Variance (Total Budget - Actual through August 31, 2012(1)

Project administration	$	31,176,400	$	9,894,305	$	21,282,095
Geological and field operations	67,297,100		68,930,338		(1,633,238		)
Metallurgical studies	6,899,800		6,633,701		266,099
Infrastructure and engineering	8,908,700		15,048,563		(6,139,863		)
Environmental and community engagement	14,465,900		9,430,728		5,035,172
Mining studies	2,421,200		796,327		1,624,873
Project integration	1,886,800		811,315		1,075,485
Land purchases(3)	—		27,135,546		(27,135,546		)

Subtotal	133,055,900		138,680,823		(5,624,923		)
Offering costs	3,846,700		502,208		3,344,492
Total	$	136,902,600	$	139,183,031	$	(2,280,431	)

(1)Unaudited Livengood Gold Project Reporting

(2)US dollar amounts obtained using the amounts in Canadian dollars disclosed in the prospectus dated November 5, 2010 and translated at the Bank of Canada noon exchange rate on November 4, 2010 of $1.0024 US dollars to $1 Canadian dollar.

(3)The amount does not include the value of the Company’s derivative liability.

Table 1 shows a variance of approximately $2.3 million from the $136.9 million for the total budget period. During the month of August 2012, the Company had reached the total amount of budgeted spending outlined in the use of proceeds plan contained in the Company’s short form prospectus dated November 5, 2010.

The planned program included geological and field operations, metallurgical studies, engineering, and environmental baseline studies. The overall program was accelerated as drilling to define the resource advanced very well through to mid-2011 and the Company completed a preliminary economic assessment, the Livengood Report, in August of 2011, and is now advancing to complete the FS.

Project administration expenditures were below the plan rate but were adequate for the needs of the project. Geological and field programs were accelerated, including expenditures necessary to obtain all condemnation and geotechnical data required for engineering, geotechnical, and environmental evaluations to support completion of the FS. Metallurgical study scope and costs were expanded and accelerated to insure representative recoveries of the rock types are utilized in project mine planning and economics. These results will provide the necessary information to support the FS. Engineering expenditures were above plan to provide the detailed basis for FS completion. Environmental baseline studies were less than originally planned but additional drilling and environmental sampling was incurred for baseline data analysis providing the required level of data for the

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feasibility study. Additional costs will be incurred in future permitting activities. Expenditures for mining studies were below plan and additional mine planning work will be completed upon receipt of updated metallurgical recoveries. Project integration costs were below plan due to additional completion of the metallurgical results and the engineering drilling results which delayed anticipated spending. The land purchases were not originally budgeted for the period prior to May, 2014, but were accelerated to facilitate infrastructure engineering and permitting.

Much of the total budgeted spending from the above plan was accelerated in order to support the completion of the FS. The additional financing of $29.2 million completed by the Company during the quarter ended September 30, 2012 is expected to provide the Company with resources necessary to complete the FS as well as for general working capital requirements through 2013.

Results of Operations

Year ended December 31, 2012 compared to the Seven Months ended December 31, 2011

Due to the Company changing its fiscal year end to December 31 from May 31 during 2011, the Company’s results and activity may not be comparable between fiscal years ended December 31, 2012 and 2011. The following discussion highlights certain selected financial information and changes in operations between the year ended December 31, 2012 and the seven month period ended December 31, 2011.

The Company had cash and cash equivalents of $30,170,905 at December 31, 2012 compared to $54,712,073 at December 31, 2011. The Company incurred a net loss of $56,643,462 for the year ended December 31, 2012, compared to a net loss of $43,309,957 for the seven month period ended December 31, 2011. Share-based payment charges were $9,206,975 during the year ended December 31, 2012 compared to $7,645,269 for the seven month period ended December 31, 2011. The increase in share-based payment charges during the period was mainly the result of stock option grants to new employees and vesting of prior stock option grants. The Company granted 6,380,000 options during the year ended December 31, 2012 compared to 2,700,000 options during the seven months ended December 31, 2011.

Share based payment charges were allocated as follows:

Expense category:	Year ended December 31, 2012		Seven months ended December 31, 2011
Consulting	$	2,288,148	$	1,503,919
Investor relations	167,009		71,043
Professional fees	395		18,945
Wages and benefits	6,751,423		6,051,362
	$	9,206,975	$	7,645,269

Mineral property exploration expenses for the year ended December 31, 2012 totaled $36,253,519 while the company acquired $2,127,693 in mineral property assets. During the seven month period ended December 31, 2011 total mineral property exploration expenses were $32,550,518 and the company acquired mineral property assets of $47,708,647. Mineral property expenses during 2012 were comprised of costs related to drilling for geotechnical investigations, environmental baseline data gathering, field costs and engineering. Similar exploration activities took place in 2011.

In December 2011, the Company completed a transaction to acquire certain mining claims and related rights in the vicinity of the Livengood Gold Project. This acquisition included both mining claims and all of the shares of Livengood Placers, Inc. (a Nevada corporation). These assets were purchased for aggregate consideration of $36,600,000 allocated between cash consideration of $13,500,000 and a derivative liability with an estimated fair value of $23,100,000. The derivative liability is a contingent payment based on the Average Gold Price from the date of the acquisition. The derivative liability (payable in December 2016) will equal $23,148 for every dollar that the Average Gold Price exceeds $720 per troy ounce. If the Average Gold Price is less than $720, there will be no additional contingent payment. The subject ground was previously vacant or was used for placer gold mining.

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Also in December 2011, the Company exercised its option to acquire all the interests in the 169 State of Alaska claims previously held under a separate lease. The Company paid total cash consideration of $11,044,000 for the acquisition of these State of Alaska mining claims that had an original term of ten years, commencing on September 11, 2006.

Excluding share-based payment charges of $6,751,423 and $6,051,362 (December 31, 2011), wages and benefits for the period ended December 31, 2012 increased to $6,891,635 from $3,948,874 (December 31, 2011) as a result of certain severance payments along with increased personnel and hiring of new officers during the period.

Excluding share-based payment charges of $2,288,148 and $1,503,919 (December 31, 2011), consulting fees for the period ended December 31, 2012 increased to $1,022,277 from $307,085 (December 31, 2011) as a result of a consulting agreement with the former interim Chief Executive Officer and increased directors fees.

Insurance expense increased during 2012 as a result of additional Directors and Officers insurance with the hiring of new executives and appointment of new directors during 2011 and 2012. Aside from the impact of share-based payment charges, most other expense categories reflected only moderate change period over period.

Other items amounted to a loss of $1,058,082 during 2012 compared to a gain of $2,815,860 in period ended December 31, 2011. The loss in 2012 resulted from the unrealized loss on revaluation of the derivative liability of $1,600,000 at December 31, 2012. Offsetting the loss on derivative were interest income on cash and cash equivalents of $183,253 and income from mineral property facilitation agreements of $290,552. During the seven months ended 2011, the Company had an unrealized gain on derivative liability of $2,300,000. In addition, interest income totaled $592,038. Interest income during the seven months ended December 31, 2011 was higher than during the year ended December 31, 2012 due to higher interest rates and cash balances in 2011.

Seven Months ended December 31, 2011 compared to the year ended May 31, 2011

Due to the Company changing its fiscal year end to December 31 from May 31 during 2011, the Company’s results and activity may not be comparable between the seven month period ended December 31, 2011 and the fiscal year ended May 31, 2011. The following discussion highlights certain selected financial information and changes in operations between the seven month period ended December 31, 2011 and the year ended May 31, 2011.

The Company had cash and cash equivalents of $54,712,073 at December 31, 2011 compared to $114,766,876 at May 31, 2011. The Company incurred a net loss of $43,309,957 for the period ended December 31, 2011, compared to a net loss of $48,459,785 for the year ended May 31, 2011. Net loss for the year ended May 31, 2011 included loss from discontinued operations of $1,037,912 as discussed below. Share-based payment charges were $7,645,269 during the period ended December 31, 2011 compared to $3,450,477 for the year ended May 31, 2011. The increase in share-based payment charges during the period ended December 31, 2011 was mainly the result of increased stock option grants at a higher weighted average exercise price and vesting of prior stock option grants. The Company granted 2,700,000 options during the period ended December 31, 2011 compared to 1,760,000 options during the year ended May 31, 2011.

Share based payment charges were allocated as follows:

Expense category:	Seven months ended December 31, 2011		Year ended May 31, 2011
Consulting	$	1,503,919	$	975,460
Investor relations	71,043		441,479
Professional fees	18,945		72,921
Wages and benefits	6,051,362		1,960,617
	$	7,645,269	$	3,450,477

During the seven month period ended December 31, 2011 total mineral property exploration expenses were

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$32,550,518 and the company acquired mineral property assets of $47,708,647. Mineral property exploration expenses for the year ended May 31, 2011 totaled $37,749,156 while the company acquired approximately $30,000 in mineral property assets. Mineral property expenses during the period ended December 31, 2011 were comprised of costs related to drilling, environmental baseline data gathering, field costs and engineering. During the year ended May 31, 2011 mineral property expenses were comprised of drilling, field costs, geological/geophysical, assay work and land maintenance in preparation for an anticipated pre-feasibility study.

Excluding share-based payment charges of $6,051,362 during the period ended December 31, 2011 and $1,960,617 (May 31, 2011), wages and benefits for the period ended December 31, 2011 increased to $3,948,874 from $3,506,836 (May 31, 2011) as a result of certain severance payments along with increased personnel and hiring of new officers during the period.

Excluding share-based payments, investor relations expense decreased to $252,348 (May 31, 2011 - $789,145) during the period ended December 31, 2011 compared to the year ended May 31, 2011. Additional expense in the year ended May 31, 2011 was incurred related to increased travelling and marketing related to the Company’s spin-out of the Corvus properties as discussed below.

Aside from the impact of share-based payment charges, most other expense categories reflected only moderate change period over period.

Other items amounted to a gain of $2,815,860 during the period ended December 31, 2011 compared to a gain of $480,901 in year ended May 31, 2011. The increased gain in the period ended December 31, 2011 resulted from an unrealized gain of $2,300,000 on the revaluation of a derivative liability at December 31, 2011. There was no derivative liability during the year ended May 31, 2011.

Year ended May 31, 2011 compared to the year ended May 31, 2010

The following discussion highlights certain selected financial information and changes in operations between the year ended May 31, 2011 and the year ended May 31, 2010.

The Company had cash and cash equivalents of $114,766,876 at May 31, 2011 compared to $41,648,028 at May 31, 2010. The increase in cash and cash equivalents during the year ended May 31, 2011 was the result of two private placements of common shares, a bought deal short form prospectus financing, and the exercise of stock options for total gross proceeds of approximately $117.7 million.

The Company incurred a net loss of $48,459,785 for the year ended May 31, 2011, compared to a net loss of $35,684,971 for the year ended May 31, 2010. Included in net loss for the years ended May 31, 2011 and 2010 were losses from discontinued operations of $1,037,912 and $3,452,307, respectively, as discussed below. Share-based payment charges were $3,450,477 during the year ended May 31, 2011 compared to $7,190,152 for the year ended May 31, 2010. The decrease in share-based payment charges during the year ended May 31, 2011 was mainly the result of increased stock option grants at a higher weighted average exercise price during the year ended May 31, 2010. The Company granted 1,760,000 options during the year ended May 31, 2011 compared to 3,085,000 options during the year ended May 31, 2010.

Share based payment charges were allocated as follows:

Expense category:	Year ended May 31, 2011		Year ended May 31, 2010
Consulting	$	975,460	$	3,093,205
Investor relations	441,479		666,549
Professional fees	72,921		55,833
Wages and benefits	1,960,617		3,374,565
	$	3,450,477	$	7,190,152

During the year ended May 31, 2011 total mineral property exploration expenses were $37,749,156 while the company acquired approximately $30,000 in mineral property assets. Mineral property exploration expenses for the

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year ended May 31, 2010 totaled $20,518,379 while the company wrote off approximately $650,000 in mineral property assets. During the year ended May 31, 2011 mineral property expenses were comprised of drilling, field costs, geological/geophysical, assay work and land maintenance. Costs incurred during the years ended May 31, 2011 and 2010 were focused on preparation of the Livengood Report, as filed on SEDAR in August 2011.

Excluding share-based payment charges of $1,960,617 during the year ended May 31, 2011 and $3,374,565 (May 31, 2010), wages and benefits for the period ended December 31, 2011 increased to $3,506,836 from $2,143,446 (May 31, 2010) as a result of higher labor costs combined with increased personnel and hiring of officers during the year.

Excluding share-based payments, investor relations expense increased to $789,145 (May 31, 2010 - $382,744) during the year ended May 31, 2011 compared to the year ended May 31, 2010. Additional expense in the year ended May 31, 2011 was incurred related to increased travelling and marketing related to the Company’s spin-out of the Corvus properties as discussed below.

Aside from the impact of share-based payment charges, most other expense categories reflected only moderate change period over period.

Other items amounted to a gain of $480,901 during the year ended May 31, 2011 compared to a gain of $322,268 in year ended May 31, 2010. The increased gain in the year ended May 31, 2011 resulted from increased interest income on higher cash balances offset by additional costs related to the spin-out of Corvus properties.

Discontinued Operations and Transfer of the Nevada and Other Alaska Business under the Arrangement

On August 26, 2010, the Company completed an arrangement under a Plan of Arrangement (the “Arrangement”) pursuant to which it transferred its other existing Alaska (other than the Livengood Gold Project) and Nevada assets to a new public company, Corvus.

Under the Arrangement, each shareholder of the Company received one Corvus common share for every two ITH common shares held as at the effective date of the Arrangement as a return of capital and exchanged each existing common share of ITH for a new common share of ITH. The “new” ITH common shares are identical in every respect (other than CUSIP number) to the “old” ITH common shares. ITH has transferred its wholly-owned subsidiaries, Raven Gold Alaska Inc. (“Raven Gold”), incorporated in Alaska, and Corvus Gold Nevada Inc. (formerly “Talon Gold Nevada Inc.”), incorporated in Nevada to Corvus. As a result of the Arrangement, there was an effective spin-out by ITH of certain of its mineral properties, being Chisna, West Pogo, Terra and LMS in Alaska, and North Bullfrog in Nevada (together the “Nevada and Other Alaska Business”), to Corvus.

The Company did not realize any gain or loss on the transfer of the Nevada and Other Alaska Business, which was comprised of a working capital contribution of $3,168,825 and the Nevada and Other Alaska Business assets and liabilities as at the effective date of the Arrangement. Costs of the Arrangement, comprised principally of legal and regulatory expense, off-set by property facilitation payments and interest from payments made in connection with the Chisna spin-out property, amounted to a net expense of $148,940, $496,638 and $129,671 during the fiscal years ended December 31, 2011, May 31, 2011, and May 31, 2010, respectively.

The Arrangement was approved by a favorable vote of ITH’s shareholders at a special meeting held on August 12, 2010.

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The following table shows the results related to discontinued operations for the years ended May 31, 2011 and May 31, 2010.

	May 31, 2011			May 31, 2010
Consulting fees	255,159			1,022,483
Foreign exchange (gain) loss	(19,510		)	6,741
Insurance	9,698			35,325
Investor relations	125,540			307,036
Mineral property exploration	140,888			69,886
Office	6,927			27,798
Other	9,508			28,829
Professional fees	39,122			171,288
Regulatory	3,664			61,991
Rent	5,091			24,575
Travel	5,401			35,442
Wages and benefits	456,424			1,660,913

	$	1,037,912		$	3,452,307

The transfer of the assets is summarized in the table below:

	August 25, 2010
Cash and cash equivalents	$	1,128,158
Accounts receivable	187
Prepaid expenses	3,000
Mineral Properties	3,590,657
Accounts payable	(725,012		)

Net assets transferred to Corvus	$	3,996,990

Liquidity and Capital Resources

The Company has no revenue generating operations from which it can internally generate funds. To date, the Company’s ongoing operations have been predominantly financed through sale of its equity securities by way of private placements and the subsequent exercise of share purchase and broker warrants and options issued in connection with such private placements. However, the exercise of warrants/options is dependent primarily on the market price and overall market liquidity of the Company’s securities at or near the expiry date of such warrants/options (over which the Company has no control) and therefore there can be no guarantee that any existing warrants/options will be exercised.

As at December 31, 2012, the Company reported cash and cash equivalents of $30,170,905 compared to $54,712,073 at December 31, 2011. The decrease of approximately $24.5 million resulted mainly from expenditures on the Livengood Gold Project through the 2012 exploration season, advancing work towards the FS, as well as the acquisition of certain mining claims and related rights in the vicinity of the Livengood Gold Project. The Company continues to utilize its cash resources to fund the Livengood Gold Project exploration, permitting, feasibility study completion, including related metallurgical and geotechnical studies, and corporate administrative requirements.

Investing activities comprised primarily of mineral property acquisitions of $2,127,693 (December 31, 2011 - $25,317,690; May 31, 2011 — $30,215; May 31, 2010 - $0). Mineral property acquisitions during 2012 and 2011 related to certain mining claims and related rights in the vicinity of the Livengood Gold Project.

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Financing activities provided $29,214,249 during the year ended December 31, 2012 (December 31, 2011 - $221,119; May 31, 2011 - $109,545,546; May 31, 2010 — $39,196,727) on the issuance of common shares through a non-brokered private placement. During the third quarter of 2012, the Company closed a non-brokered private placement financing through the issuance of 11,384,719 common shares. The shares were issued in two stages. The first stage closed on August 3, 2012 and consisted of 9,458,308 common shares issued at C$2.60 per share for gross proceeds of $24,626,029. The second stage of the offering closed on September 17, 2012 and consisted of 1,926,411 common shares issued at C$2.5955 per share for gross proceeds of $5,142,500. The Company paid a cash finder’s fee of 4% of gross proceeds in connection with C$10,000,000 of the total offering. Total share issuance costs for this non-brokered private placement financing amounted to $554,280.

As at December 31, 2012, the Company had working capital of $27,676,797 compared to working capital of $45,813,618 at December 31, 2011. The Company expects that it will operate at a loss for the foreseeable future, but believes the current cash and cash equivalents will be sufficient for it to complete its planned activities for 2013. To advance the Livengood Gold Project towards permitting and development at its optimal timeline, the Company anticipates continuing its investigations, studies and drilling programs and anticipates spending approximately $24 million during the year ending December 31, 2013. The additional financing completed by the Company in the third quarter of 2012 will fund the continued operations for the 2013 fiscal year and the planned activities for completing the FS. The Company will require significant additional financing to continue its operations (including general and administrative expenses) beyond the anticipated completion of the FS, particularly in connection with any post FS activities at Livengood and the development of any mine that may be determined to be built at Livengood, and there is no assurance that the Company will be able to obtain the additional financing required on acceptable terms, if at all. In addition, any significant delays in the issuance of required permits for the ongoing work at Livengood, or unexpected results in connection with the ongoing work, could result in the Company being required to raise additional funds to advance permitting efforts.

Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able to secure any additional financing in the current or future equity markets. See “Risk Factors — We will require additional financing to fund exploration and, if warranted, development and production. Failure to obtain additional financing could have a material adverse effect on our financial condition and results of operation and could cast uncertainty on our ability to continue as a going concern.” The quantity of funds to be raised and the terms of any proposed equity financing that may be undertaken will be negotiated by management as opportunities to raise funds arise. Specific plans related to the use of proceeds will be devised once financing has been completed and management knows what funds will be available for these purposes. Due to this uncertainty, if the Company is unable to secure additional financing, it may be required to reduce all discretionary activities at Livengood to preserve its working capital to fund anticipated non-discretionary expenditures beyond the 2013 fiscal year.

Other than cash held by its subsidiaries for their immediate operating needs in Alaska and Colorado, all of the Company’s cash reserves are on deposit with a major Canadian chartered bank or invested in Government of Canada Treasury Bills or Banker’s Acceptances issued by major Canadian chartered banks. The Company does not believe that the credit, liquidity or market risks with respect thereto have increased as a result of the current market conditions. However, to achieve greater security for the preservation of its capital, the Company has, of necessity, been required to accept lower rates of interest which has also lowered its potential interest income.

Contractual Obligations

The following table discloses, as of December 31, 2012, the Company’s contractual obligations for optional mineral property payments and work commitments and committed office and equipment lease obligations. The table also includes amounts payable under the purchase agreement related to the acquisition of certain mining claims and related rights in the vicinity of the Livengood Gold Project (“Livengood Property Purchase”). The Company does not have any other long-term debt or loan obligations. Under the terms of the Company’s mineral property purchase agreements, mineral leases and the terms of the unpatented mineral claims held by it, the Company is required to make certain scheduled acquisition payments, incur certain levels of expenditures, make lease and/or advance royalty payments, make payments to government authorities and incur assessment work expenditures as summarized in the table below in order to maintain and preserve the Company’s interests in the related mineral properties. If the Company is unable or unwilling to make any such payments or incur any such expenditures, it is likely that the

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Company would lose or forfeit its rights to acquire or hold the related mineral properties. The following table assumes that the Company retains the rights to all of its current mineral properties, but no other lease purchase or royalty buyout options:

	Payments Due by Year
Contractual Obligations	Total		2013		2014		2015		2016		2017		2018 and beyond
Livengood Property Purchase(1)	$	22,400,000	$	—	$	—	$	—	$	22,400,000	$	—	$	—
Mineral Property Leases(2)(3)	2,384,378		396,563		396,563		396,563		396,563		396,563		401,563
Mining Claim Government Fees	534,660		89,110		89,110		89,110		89,110		89,110		89,110
Office and Equipment Lease Obligations	345,056		215,476		105,212		6,092		6,092		6,092		6,092
Total Contractual Obligations	$	25,664,094	$	701,149	$	590,885	$	491,765	$	22,891,765	$	491,765	$	496,765

Notes:

(1) The amount payable in December 2016 of $22,400,000 represents the fair value of the Company’s derivative liability as at December 31, 2012 and will be revalued at each subsequent reporting period.

(2) Does not include required work expenditures, as it is assumed that the required expenditure level is significantly below the work that will actually be carried out by the Company.

(3) Does not include potential royalties that may be payable (other than annual minimum royalty payments).

Summary of Quarterly Results

	December 31, 2012			September 30, 2012			June 30, 2012			March 31,2012
Net loss	$	(7,258,397	)	$	(25,033,780	)	$	(12,909,320	)	$	(11,441,965	)
Basic and diluted net loss per common share	$	(0.07	)	$	(0.27	)	$	(0.15	)	$	(0.13	)

Description	4 months December 31, 2011			August 31, 2011			May 31, 2011			February 28, 2011
Net loss	$	(16,727,561	)	$	(26,582,396	)	$	(12,980,035	)	$	(8,321,545	)
Basic and diluted net loss per common share	$	(0.19	)	$	(0.31	)	$	(0.15	)	$	(0.10	)

Off-Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements.

Critical Accounting Policies

Mineral properties and exploration and evaluation expenditures

The Company’s mineral project is currently in the exploration and evaluation phase. Mineral property acquisition costs are capitalized when incurred. Mineral property exploration costs are expensed as incurred. At such time that the Company determines that a mineral property can be economically developed, subsequent mineral property expenses will be capitalized during the development of such property.

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The Company assesses interests in exploration properties for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. Impairment analysis includes assessment of the following circumstances: a significant decrease in the market price of a long-lived asset or asset group; a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50%.

Derivative

Derivative financial liabilities include the Company’s future contingent payment valued using estimated future gold prices. Derivatives are initially recognized at their fair value on the date the derivative contract is entered into and are subsequently re-measured at their fair value at each reporting period with changes in the fair value recognized in profit and loss.

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion or the entire deferred tax asset will not be recognized.

Stock-based compensation

The Company follows the provisions of Financial Accounting Standards Board Accounting Standards Codification Section 718 “Compensation - Stock Compensation”, which establishes accounting for equity based compensation awards to be accounted for using the fair value method. The Company uses the Black-Scholes option pricing model to determine the grant date fair value of the awards. Compensation expense is measured at the grant date and recognized over the requisite service period, which is generally the vesting period.

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company has exposure to market risk in areas of interest rate risk, foreign currency exchange rate risk, and other price risk.

Interest Rate Risk

Interest rate risk consists of the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company’s cash and cash equivalents consists of cash and cash equivalents held in bank accounts and short term deposit certificates of Guaranteed Investment Certificates with two major Canadian financial institutions that earn interest at variable interest rates. Future cash flows from interest income on cash and cash equivalents will be affected by interest rate fluctuations. Due to the short-term nature of these financial instruments, fluctuations in market rates do not have a significant impact on estimated fair values.

At December 31, 2012, the Company held a total of $27,367,356 (December 31, 2011 - $44,314,644) cash equivalents which consist of interest saving accounts and Guaranteed Investment Certificates (“GICs”):

	Quantity		Maturity Date	Annual Yield

TD Mortgage Corporation (GIC)	$	4,522,950	April 16, 2013	1.45	%
Investment savings accounts	7,499,805
Cashable term deposit	15,344,601		February 6, 2013	0.29	%
	$	27,367,356

The Company manages interest rate risk by maintaining an investment policy that focuses primarily on preservation of capital and liquidity. The Company’s sensitivity analysis suggests that a 0.5% change in interest rates would affect interest income by approximately $100,000.

Foreign Currency Risk

The Company is exposed to foreign currency risk to the extent that certain monetary financial instruments and other assets are denominated in Canadian dollars. As the majority of the Company’s assets, aside from cash, are denominated in US dollars, currency risk is limited to those Canadian cash balances. The Company has not entered into any foreign currency contracts to mitigate this risk. The Company’s sensitivity analysis suggests that a consistent 5% change in the absolute rate of exchange for the Canadian dollar would affect net assets by approximately $100,000. Furthermore, depending on the amount of cash held by the Company in Canadian dollars at the end of each reporting period using the period end exchange rate, significant changes in the exchange rates could cause significant changes to the currency translation amounts recorded to accumulated other comprehensive income.

As at December 31, 2012, USD amounts were converted at a rate of C$1 to US $1.0051.

Credit Risk

Concentration of credit risk exists with respect to the Company’s Canadian cash and cash equivalents as all amounts are held at two major Canadian financial institutions. Credit risk with regard to cash held in the United States is mitigated as the amount held in the United States is only sufficient to cover short-term requirements. With respect to receivables at December 31, 2012, the Company is not exposed to significant credit risk as the receivables are principally interest accruals.

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Other Price Risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, other than those arising from interest rate risk or foreign exchange risk. The Company’s investment in marketable securities is exposed to such risk. The Company’s derivative liability, which consists of a future contingent payment valued using estimated future gold prices, is also exposed to other price risk. See Note 8 of the notes to consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The fair value of this liability will fluctuate with the average daily price of gold as well as with future projections for the average price of gold over the life of the obligation. For every dollar change in the average daily price of gold, the value of the derivative liability will change by $23,148.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registered Public Accounting Firm

To the Shareholders of International Tower Hill Mines Ltd.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity and cash flows present fairly, in all material respects, the financial position of International Tower Hill Mines Ltd. (the Company) at December 31, 2012 and the results of the Company’s operations and cash flows for the year then ended and cumulatively for the period from January 1, 2012 to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Item 9A of the Annual Report on Form 10-K. Our responsibility is to express opinions on these financial statements, and on the Company’s internal control over financial reporting based on our integrated audit. We did not audit the cumulative statements of operations and comprehensive loss, changes in shareholders’ equity and cash flows for the period from June 1, 1997 (date of inception) to December 31, 2011. These statements were audited by other auditors who expressed unqualified opinions on the cumulative amounts. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants
Vancouver, British Columbia
March 13, 2013

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Report of Independent Registered Public Accounting Firm

To the Shareholders of

International Tower Hill Mines Ltd.

We have audited the accompanying consolidated balance sheet of International Tower Hill Mines Ltd. (the “Company”), as of December 31, 2011 and the related consolidated statements of comprehensive loss, changes in shareholders’ equity, cash flows for the period ended December 31, 2011 and for the period June 1, 1997 (date of inception) to December 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (US). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of International Tower Hill Mines Ltd. as at December 31, 2011 and the results of their operations and their cash flows for the period ended December 31, 2011 and for the period June 1, 1997 (date of inception) to December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Without modifying our opinion, we draw attention to Note 1 that states the Company has no source of revenue, and has significant cash requirements that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MacKay LLP

Vancouver, Canada
March 16, 2012	Chartered Accountants

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INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

As at December 31, 2012 and December 31, 2011

(Expressed in US Dollars)

	Note	December 31, 2012			December 31, 2011
ASSETS

Current assets
Cash and cash equivalents		$	30,170,905		$	54,712,073
Marketable securities		180,415			297,443
Accounts receivable		262,516			460,970
Advance to contractors		582,009			480,000
Prepaid expenses		228,221			182,747
Total current assets		31,424,066			56,133,233

Property and equipment		89,714			124,981
Capitalized acquisition costs	7	55,173,564			53,045,871

Total assets		$	86,687,344		$	109,304,085

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Accounts payable		$	1,198,771		$	935,273
Accrued liabilities		2,548,498			884,342
Payable for mineral rights and claims	7	—			8,500,000
Total current liabilities		3,747,269			10,319,615

Non-current liabilities
Derivative liability	8	22,400,000			20,800,000

Total liabilities		26,147,269			31,119,615

Shareholders’ equity
Share capital, no par value; authorized 500,000,000 shares; 98,068,638 and 86,683,919 shares issued and outstanding at December 31, 2012 and 2011, respectively	10	236,401,096			207,186,847
Contributed surplus		28,589,591			19,382,616
Accumulated other comprehensive income		4,101,968			3,524,125
Deficit accumulated during the exploration stage		(208,552,580		)	(151,909,118		)

Total shareholders’ equity		60,540,075			78,184,470

Total liabilities and shareholders’ equity		$	86,687,344		$	109,304,085

Nature and continuance of operations (note 1)

Commitments (note 12)

The accompanying notes are an integral part of these consolidated financial statements.

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INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Year Ended December 31, 2012, the Seven Month Period Ended December 31, 2011, and

the Years Ended May 31, 2011 and 2010

(Expressed in US Dollars)

	Note	December 31, 2012			December 31, 2011			May 31, 2011			May 31, 2010			From Inception

Operating Expenses
Consulting fees		$	3,310,425		$	1,811,004		$	1,559,270		$	3,494,322		$	13,624,057
Depreciation		31,660			21,830			42,081			26,731			243,831
Insurance		310,549			129,600			213,737			120,721			916,177
Investor relations		479,836			323,391			1,230,624			1,049,293			4,400,704
Mineral property exploration	7	36,253,519			32,550,518			37,749,156			20,518,379			144,029,049
Office		160,047			133,431			279,888			93,046			897,257
Other		73,145			25,257			147,398			98,625			1,734,515
Professional fees		613,056			651,000			651,078			577,166			3,102,385
Regulatory		174,542			134,084			186,818			210,399			954,698
Rent		251,835			144,935			166,535			83,987			850,988
Travel		283,708			200,531			208,736			121,123			1,194,256
Wages and benefits		13,643,058			10,000,236			5,467,453			5,518,011			38,410,558
Write-down of mineral properties		—			—			—			643,129			1,605,522

Total operating expenses		(55,585,380		)	(46,125,817		)	(47,902,774		)	(32,554,932		)	(211,963,997		)

Other income (expense)
Gain on foreign exchange		68,113			72,762			90,918			188,133			322,625
Interest income		183,253			592,038			670,469			109,766			2,503,297
Income from mineral property earn-in		290,552			—			216,152			154,040			660,744
Spin-out cost	2	—			(148,940		)	(496,638		)	(129,671		)	(775,249		)
Unrealized (loss)/gain on derivative	8	(1,600,000		)	2,300,000			—			—			700,000

Total other income (expense)		(1,058,082		)	2,815,860			480,901			322,268			3,411,417

Loss from continuing operations		(56,643,462		)	(43,309,957		)	(47,421,873		)	(32,232,664		)	(208,552,580		)
Loss from discontinued operations		—			—			(1,037,912		)	(3,452,307		)	(19,630,113		)

Net loss for the period		(56,643,462		)	(43,309,957		)	(48,459,785		)	(35,684,971		)	(228,182,693		)

Other comprehensive income (loss)
Unrealized (loss)/gain on marketable securities		(163,176		)	(357,473		)	172,164			95,980			(368,699		)
Exchange difference on translating foreign operations		741,019			(3,644,910		)	6,481,530			(1,552,044		)	4,470,667
Total other comprehensive income (loss) for the period		577,843			(4,002,383		)	6,653,694			(1,456,064		)	4,101,968

Comprehensive loss for the period		$	(56,065,619	)	$	(47,312,340	)	$	(41,806,091	)	$	(37,141,035	)	$	(224,080,725	)

Basic and fully diluted net loss per share from continuing operations		$	(0.62	)	$	(0.50	)	$	(0.61	)	$	(0.54	)
Basic and fully diluted net loss per share from discontinued operations		$	—		$	—		$	(0.01	)	$	(0.06	)
Basic and fully diluted net loss per share		$	(0.62	)	$	(0.50	)	$	(0.62	)	$	(0.60	)

Weighted average number of shares outstanding		91,112,934			86,683,919			77,550,644			59,603,193

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Cumulative Period From Inception to December 31, 2012

(Expressed in US Dollars)

	Number of shares	Share capital		Contributed surplus		Accumulated other comprehensive income/(loss)			Deficit			Total
Balance, at June 1, 1997	6,693,432	$	2,141,309	$	—	$	—		$	(1,420,902	)	$	720,407
Exchange difference on translating foreign operations	—	—		—		(69,021		)	—			(69,021		)
Net loss	—	—		—		—			(607,831		)	(607,831		)
Balance, May 31, 1998	6,693,432		2,141,309	—		(69,021		)	(2,028,733		)	43,555
Shares issued for debt settlement	235,418	62,376							—			62,376
Private placement	300,000	79,488		—		—			—			79,488
Exercise of warrants	300,000	79,488		—		—			—			79,488
Exchange difference on translating foreign operations	—	—		—		2,930			—			2,930
Net loss	—	—		—		—			(75,739		)	(75,739		)
Balance, May 31, 1999	7,528,850	2,362,661		—		(66,091		)	(2,104,472		)	192,098
Private placement	750,000	152,843		—		—			—			152,843
Exercise of warrants	250,000	50,947		—		—			—			50,947
Exchange difference on translating foreign operations	—	—		—		(11,103		)	—			(11,103		)
Net income	—	—		—		—			115,174			115,174
Balance, May 31, 2000	8,528,850	2,566,451		—		(77,194		)	(1,989,298		)	499,959
Exercise of warrants	483,333	95,729		—		—			—			95,729
Exchange difference on translating foreign operations	—	—		—		(12,447		)	—			(12,447		)
Net loss	—	—							(124,066		)	(124,066		)
Balance, May 31, 2001	9,012,183	2,662,180		—		(89,641		)	(2,113,364		)	459,175
Exchange difference on translating foreign operations	—	—		—		1,490			—			1,490
Net loss	—	—		—					(83,882		)	(83,882		)
Balance, May 31, 2002	9,012,183	2,662,180		—		(88,151		)	(2,197,246		)	376,783
Exchange difference on translating foreign operations	—	—		—		40,884			—			40,884
Net loss	—	—		—		—			(51,193		)	(51,193		)
Balance, May 31, 2003	9,012,183	2,662,180		—		(47,267		)	(2,248,439		)	366,474
Exchange difference on translating foreign operations	—	—		—		2,517			—			2,517
Net loss	—	—		—		—			(126,247		)	(126,247		)
Balance, May 31, 2004	9,012,183	2,662,180		—		(44,750		)	(2,374,686		)	242,744
Exchange difference on translating foreign operations	—	—		—		20,667			—			20,667
Net loss	—	—		—		—			(159,000		)	(159,000		)
Balance, May 31, 2005	9,012,183	$	2,662,180	—		$	(24,083	)	$	(2,533,686	)	$	104,411

Table of Contents

INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (cont’d)

(Expressed in US Dollars)

	Number of shares	Share capital			Contributed surplus			Accumulated other comprehensive income/(loss)			Deficit			Total
Balance, May 31, 2005	9,012,183	$	2,662,180		$	—		$	(24,083	)	$	(2,533,686	)	$	104,411
Private placement	1,000,000	170,420			—			—			—			170,420
Exchange difference on translating foreign operations	—	—			—			17,977			—			17,977
Net loss	—	—			—			—			(108,900		)	(108,900		)
Balance, May 31, 2006	10,012,183	2,832,600			—			(6,106		)	(2,642,586		)	183,908
Private placement (brokered)	11,704,105	19,452,055			—			—			—			19,452,055
Private placement (non-brokered)	9,199,718	6,577,908			—			—			—			6,577,908
Agent’s commission	561,365	847,600			—			—			—			847,600
Agent’s compensation options	—	—			1,045,359			—			—			1,045,359
Shares issues for property acquisition	5,997,295	6,651,750			—			—			—			6,651,750
Exercise of warrants	420,751	456,460			—			—			—			456,460
Exercise of options	348,812	382,762			—									382,762
Stock based compensation	—	—			5,046,421			—			—			5,046,421
Reallocation from contributed surplus	—	217,813			(217,813		)	—			—			—
Share issuance costs	—	(2,718,443		)	—			—			—			(2,718,443		)
Exchange difference on translating foreign operations	—	—			—			946,575			—			946,575
Net loss	—	—			—			—			(12,242,684		)	(12,242,684		)
Balance, May 31, 2007	38,244,229	34,700,505			5,873,967			940,469			(14,885,270		)	26,629,671
Exercise of warrants	1,685,542	1,046,032			—			—			—			1,046,032
Exercise of options	14,121	15,495			—			—			—			15,495
Stock based compensation	—	—			367,957			—			—			367,957
Reallocation from contributed surplus	—	9,657			(9,657		)	—			—			—
Share issuance costs	—	15,710			—			—			—			15,710
Exchange difference on translating foreign operations	—	—			—			1,889,868			—			1,889,868
Net loss	—	—			—			—			(11,801,240		)	(11,801,240		)
Balance, May 31, 2008	39,943,892	$	35,787,399		$	6,232,267		$	2,830,337		$	(26,686,510	)	$	18,163,493

Table of Contents

INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (cont’d)

(Expressed in US Dollars)

	Number of shares	Share capital			Contributed surplus			Accumulated other comprehensive income/(loss)			Deficit			Total
Balance, May 31, 2008	39,943,892	$	35,787,399		$	6,232,267		$	2,830,337		$	(26,686,510	)	$	18,163,493
Private placement	4,200,000	8,225,700			—			—			—			8,225,700
Exercise of warrants	11,017,044	23,110,910			—			—			—			23,110,910
Exercise of options	792,037	1,715,816			—			—			—			1,715,816
Stock based compensation	—	—			3,576,425			—			—			3,576,425
Agents compensation warrants	—	—			250,092			—			—			250,092
Reallocation from contributed surplus	—	1,041,230			(1,041,230		)	—			—			—
Shares issues for property acquisition	505,000	679,054			—			—			—			679,054
Share issuance costs	—	(1,017,639		)	—			—			—			(1,017,639		)
Unrealized gain/(loss) on available-for-sale securities	—	—			—			(116,194		)	—			(116,194		)
Exchange difference on translating foreign operations	—	—			—			(385,265		)	—			(385,265		)
Net loss	—	—			—			—			(17,398,008		)	(17,398,008		)
Balance, May 31, 2009	56,457,973	69,542,470			9,017,554			2,328,878			(44,084,518		)	36,804,384
Private placement	6,286,248	33,175,762			—			—			—			33,175,762
Exercise of warrants	245,901	568,285			—			—			—			568,285
Exercise of options	2,907,800	6,708,853			—			—			—			6,708,853
Stock based compensation	—	—			9,294,081			—			—			9,294,081
Reallocation from contributed surplus	—	5,519,172			(5,519,172		)	—			—			—
Shares issued for property acquisition	220,000	760,672			—			—			—			760,672
Share issuance costs	—	(1,256,173		)	—			—			—			(1,256,173		)
Unrealized gain/(loss) on available-for-sale securities	—	—			—			95,980			—			95,980
Exchange difference on translating foreign operations	—	—			—			(1,552,044		)	—			(1,552,044		)
Net loss	—	—			—			—			(35,684,971		)	(35,684,971		)
Balance, May 31, 2010	66,117,922	$	115,019,041		$	12,792,463		$	872,814		$	(79,769,489	)	$	48,914,829

Table of Contents

INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (cont’d)

(Expressed in US Dollars)

	Number of shares (old)		Share capital (old)			Number of shares (new)		Share capital (new)			Contributed surplus			Accumulated other comprehensive income/(loss)		Deficit			Total
Balance, May 31, 2010	66,117,922		$	115,019,041		—		$	—		$	12,792,463		$	872,814	$	(79,769,489	)	$	48,914,829
Exercise of warrants	48,099		111,158			—		—			—			—		—			111,158
Exercise of options	1,062,200		2,584,246			—		—			—			—		—			2,584,246
Stock based compensation	—		—			—		—			3,730,684			—		—			3,730,684
Reallocation from contributed surplus	—		2,162,578			—		—			(2,162,578		)	—		—			—
Share issuance costs	—		(8,323		)	—		—			—			—		—			(8,323		)
Transfer of Nevada and Other Alaska Business to Corvus	—		—			—		—			(23,627,103		)	—		19,630,113			(3,996,990		)
Working capital contribution to Corvus	—		—			—		—			(3,168,825		)	—		—			(3,168,825		)
Distribution of the common shares of Corvus to ITH shareholders as a return of capital	—		(26,795,928		)	—		—			26,795,928			—		—			—
Exchange of old shares of ITH for new shares of ITH at a ratio of 1:1	(67,228,221	)	(93,072,772		)	67,228,221		93,072,772			—			—		—			—
Adjustment due to rounding	—		—			(107	)	—			—			—		—			—
Private placement	—		—			17,505,805		109,190,595			—			—		—			109,190,595
Exercise of options	—		—			1,915,000		5,808,797			—			—		—			5,808,797
Stock based compensation	—		—			—		—			508,322			—		—			508,322
Reallocation of contributed surplus	—		—			—		3,037,959			(3,037,959		)	—		—			—
Share issuance costs	—		—			—		(4,237,980		)	—			—		—			(4,237,980		)
Unrealized gain/(loss) on available-for-sale securities	—		—			—		—			—			172,164		—			172,164
Exchange difference on translating foreign operations	—		—			—		—			—			6,481,530		—			6,481,530
Net loss	—		—			—		—			—			—		(48,459,785		)	(48,459,785		)
Balance, May 31, 2011	—		$	—		86,648,919		$	206,872,143		$	11,830,932		$	7,526,508	$	(108,599,161	)	$	117,630,422

Table of Contents

INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (cont’d)

(Expressed in US Dollars)

	Number of shares	Share capital			Contributed surplus			Accumulated other comprehensive income/(loss)			Deficit			Total
Balance, May 31, 2011	86,648,919	$	206,872,143		$	11,830,932		$	7,526,508		$	(108,599,161	)	$	117,630,422
Exercise of options	35,000	221,119			—			—			—			221,119
Stock based compensation	—	—			7,645,269			—			—			7,645,269
Reallocation from contributed surplus	—	93,585			(93,585		)	—			—			—
Unrealized gain/(loss) on available-for-sale securities	—	—			—			(357,473		)	—			(357,473		)
Exchange difference on translating foreign operations	—	—			—			(3,644,910		)	—			(3,644,910		)
Net loss	—	—			—						(43,309,957		)	(43,309,957		)
Balance, December 31, 2011	86,683,919	$	207,186,847		$	19,382,616		$	3,524,125		$	(151,909,118	)	$	78,184,470
Private placement	11,384,719	29,768,529			—			—			—			29,768,529
Share issuance costs	—	(554,280		)	—			—			—			(554,280		)
Stock based compensation	—	—			9,206,975			—			—			9,206,975
Unrealized gain/(loss) on available-for-sale securities	—	—			—			(163,176		)	—			(163,176		)
Exchange difference on translating foreign operations	—	—			—			741,019			—			741,019
Net loss	—	—			—			—			(56,643,462		)	(56,643,462		)
Balance, December 31, 2012	98,068,638	$	236,401,096		$	28,589,591		$	4,101,968		$	(208,552,580	)	$	60,540,075

The accompanying notes are an integral part of these consolidated financial statements.

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INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31, 2012, the Seven Month Period Ended December 31, 2011, and

the Years Ended May 31, 2011 and 2010

(Expressed in US Dollars)

	December 31, 2012			December 31, 2011			May 31, 2011			May 31, 2010			From Inception
Operating Activities
Loss for the period from continuing operations	$	(56,643,462	)	$	(43,309,957	)	$	(47,421,873	)	$	(32,232,664	)	$	(208,552,580	)
Add items not affecting cash:
Depreciation	31,660			21,830			42,081			26,731			243,831
Share-based payments	9,206,975			7,645,269			3,450,477			7,190,152			33,314,710
Unrealized gain (loss) on derivative liability	1,600,000			(2,300,000		)	—			—			(700,000		)
Spin-out recovery	—			—			(119,169		)	(135,170		)	(254,339		)
(Gain) loss on foreign exchange	—			(72,762		)	(90,918		)	(188,133		)	(254,512		)
Write-down of mineral properties	—			—			—			643,129			1,605,522
Other	(42,017		)	—			—			—			(285,323		)
Changes in non-cash items:
Accounts receivable	174,537			(283,612		)	(74,996		)	(31,521		)	(272,213		)
Prepaid expenses	(42,512		)	184,143			(108,188		)	(136,680		)	(364,488		)
Advance to contractors	(102,009		)	689,730			(274,639		)	—			313,082
Accounts payable and accrued liabilities	(6,582,823		)	6,801,773			2,254,754			664,542			3,739,083
Cash used in operating activities of continuing operations	(52,399,651		)	(30,623,586		)	(42,342,471		)	(24,199,614		)	(171,467,227		)
Cash provided by (used in) operating activities of discontinued operations	—			—			401,805			(1,426,422		)	(12,786,324		)

Financing Activities
Issuance of share capital	29,768,529			221,119			117,694,796			40,452,900			251,751,411
Share issuance costs	(554,280		)	—			(4,246,303		)	(1,256,173		)	(7,643,229		)
Cash provided by financing activities of continuing operations	29,214,249			221,119			113,448,493			39,196,727			244,108,182
Cash used in financing activities of discontinued operations	—			—			(3,902,947		)	—			(3,902,947		)

Investing Activities
Proceeds from sale of available-for-sale securities	—			—			—			—			172,734
Capitalized acquisition costs	(2,127,693		)	(25,317,690		)	(30,215		)	—			(27,781,245		)
Expenditures on property and equipment, net	3,635			(2,968		)	(105,172		)	(38,719		)	(332,415		)
Cash used in investing activities of continuing operations	(2,124,058		)	(25,320,658		)	(135,387		)	(38,719		)	(27,940,926		)
Cash used in investing activities of discontinued operations	—			—			—			(234,671		)	(312,593		)

Effect of foreign exchange on cash of continuing operations	768,292			(4,331,678		)	5,547,747			(1,428,316		)	3,007,616
Effect of foreign exchange on cash of discontinued operations	—			—			101,608			18,807			(534,876		)
(Decrease) increase in cash and cash equivalents	(24,541,168		)	(60,054,803		)	73,118,848			11,887,792			30,170,905
Cash and cash equivalents, beginning of period	54,712,073			114,766,876			41,648,028			29,760,236			—
Cash and cash equivalents, end of period	$	30,170,905		$	54,712,073		$	114,766,876		$	41,648,028		$	30,170,905

Supplemental cash flow information (note 13)

The accompanying notes are an integral part of these consolidated financial statements.

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INTERNATIONAL TOWER HILL MINES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

1. GENERAL INFORMATION, NATURE AND CONTINUANCE OF OPERATIONS

International Tower Hill Mines Ltd. (“ITH” or the “Company”) is incorporated under the laws of British Columbia, Canada. The Company’s head office address is 2300-1177 West Hastings Street, Vancouver, British Columbia, Canada. International Tower Hill Mines Ltd. consists of ITH and its wholly owned subsidiaries Tower Hill Mines, Inc. (formerly “Talon Gold Alaska, Inc.”) (“TH Alaska”) (an Alaska corporation), Tower Hill Mines (US) LLC (formerly “Talon Gold (US) LLC”) (“TH US”) (a Colorado limited liability company), Livengood Placers, Inc. (“LPI”) (a Nevada corporation), and 813034 Alberta Ltd. (an Alberta corporation). The Company is in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed. At December 31, 2012, the Company was in the exploration stage and controls a 100% interest in its Livengood Gold Project in Alaska, U.S.A.

These consolidated financial statements have been prepared on a going-concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The Company’s ability to continue as a going-concern is dependent upon achieving profitable operations and/or obtaining additional financing. During 2012, the Company raised $29,214,249 through the issuance of common shares and has working capital at December 31, 2012 of $27,676,797 which is considered sufficient to fund its operations and exploration program for the ensuing year.

The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company has no source of revenue, and has significant cash requirements to meet its administrative overhead and maintain its mineral property interests. The recoverability of amounts shown for capitalized acquisition costs is dependent on several factors. These include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of capitalized acquisition costs. The success of the above initiatives cannot be assured. In the event that the Company is unable to obtain the necessary financing in the short-term, it may be necessary to defer certain discretionary expenditures and other planned activities.

2. DISCONTINUED OPERATIONS AND TRANSFER OF EXPLORATION AND EVALUATION ASSETS

On August 26, 2010, the Company completed a Plan of Arrangement (the “Arrangement”) under the British Columbia Business Corporation Act pursuant to which it indirectly transferred all of its existing Alaska assets (other than the Livengood Gold Project and associated assets), being the Chisna, West Pogo, Terra and LMS properties and related assets, and its Nevada assets, being the North Bullfrog property and related assets, (collectively, the “Nevada and Other Alaska Business”) to a new public company, Corvus Gold Inc. (“Corvus”). Under the Arrangement, each shareholder of ITH received (as a return of capital) one Corvus common share for every two ITH common shares held as at the effective date of the Arrangement and exchanged each old common share of ITH for a new common share of ITH. As part of the Arrangement, ITH transferred its wholly-owned subsidiaries, Raven Gold Alaska Inc. (“Raven Gold”), incorporated in Alaska, United States, and Corvus Gold Nevada Inc. (formerly “Talon Gold Nevada Inc.”), incorporated in Nevada, United States, (which held the North Bullfrog property) to Corvus. As a consequence of the completion of the Arrangement, Corvus now holds the Terra, Chisna, LMS, West Pogo and North Bullfrog properties (the “Spin-out Properties”).

The Company did not realize any gain or loss on the transfer of the Nevada and Other Alaska Business, which was comprised of a working capital contribution of $3,168,825 and the other Nevada and Other Alaska Business assets and liabilities as at the effective date of the Arrangement. Costs of the Arrangement, comprised principally of tax, legal and regulatory expenses, amounted to $148,940, $496,638 and $129,671 during the fiscal years ended December 31, 2011, May 31, 2011, and May 31, 2010, respectively .

The Arrangement was approved by a favorable vote of ITH’s shareholders at a special meeting held on August 12, 2010.

The Company has accounted for the financial results associated with the Nevada and Other Alaska Business up to the date of the Arrangement as discontinued operations in these consolidated financial statements and has reclassified the related amounts for the prior years.

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The following table shows the results related to discontinued operations for the years ended May 31, 2011 and May 31, 2010.

	May 31, 2011			May 31, 2010
Consulting fees	255,159			1,022,483
Foreign exchange (gain) loss	(19,510		)	6,741
Insurance	9,698			35,325
Investor relations	125,540			307,036
Mineral property exploration	140,888			69,886
Office	6,927			27,798
Other	9,508			28,829
Professional fees	39,122			171,288
Regulatory	3,664			61,991
Rent	5,091			24,575
Travel	5,401			35,442
Wages and benefits	456,424			1,660,913

	$	1,037,912		$	3,452,307

The transfer of the assets is summarized in the table below:

	August 25, 2010

Cash and cash equivalents	$	1,128,158
Accounts receivable	187
Prepaid expenses	3,000
Capitalized acquisition costs	3,590,657
Accounts payable	(725,012		)

Net assets transferred to Corvus	$	3,996,990

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These consolidated financial statements are presented in United States dollars and have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). In prior years, the Company had prepared its financial statements under International Financial Reporting Standards (“IFRS”) for reporting as permitted by security regulators in Canada, as well as in the United States under the status of a foreign private issuer as defined by the US Securities and Exchange Commission (the “SEC”). In the third quarter of 2012, the Company determined that it no longer qualified as a foreign private issuer under the SEC rules. As a result, beginning January 1, 2013 the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to US GAAP was made retrospectively for all periods from the Company’s inception.

The Company changed its fiscal year end from May 31 to December 31 during 2011. This change was made to better align the Company’s financial reporting with its operational and budgeting cycle as well as align the financial reporting to those of other industry participants in the mineral resource exploration, development and production sectors.

Basis of consolidation

These consolidated financial statements include the accounts of ITH and its wholly owned subsidiaries TH Alaska, TH US, LPI and 813034 Alberta Ltd. All intercompany transactions and balances have been eliminated.

Significant judgments, estimates and assumptions

The preparation of financial statements in accordance with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. These judgments, estimates and assumptions are regularly evaluated and are based on management’s experience and knowledge of the relevant

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facts and circumstances. While management believes the estimates to be reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

The areas which require significant judgment and estimates that management has made at the financial reporting date, that could result in a material change to the carrying amounts of assets and liabilities, in the event actual results differ from the assumptions made, relate to, but are not limited to the following:

Significant estimates

a) the fair value determination and inputs used in the valuation of the derivative liability;

b) the inputs used in determining the fair value of share-based payments upon granting of stock options;

c) amounts of provisions, if any, for environmental rehabilitation and restoration.

Significant judgments

a) the determination of functional currencies; and

b) the analysis of resource calculations, drill results, labwork, etc. which can impact the Company’s assessment of impairments, and provisions, if any, for environmental rehabilitation and restoration.

Cash and cash equivalents

Cash equivalents include highly liquid investments with original maturities of three months or less, and which are subject to an insignificant risk of change in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Marketable securities

Marketable securities held in companies with an active market are classified as available-for-sale securities. Available-for-sale securities are recorded at fair value in the financial statements with unrealized gains and losses recorded in accumulated other comprehensive income. Accumulated unrealized gains and losses are recognized in the statement of operations upon the sale of the security or if the security is determined to be impaired.

Property and equipment

On initial recognition, property and equipment are valued at cost. Property and equipment is subsequently measured at cost less accumulated depreciation, less any accumulated impairment losses, with the exception of land which is not depreciated. Depreciation is recorded over the estimated useful life of the assets at the following annual rates:

Computer equipment - 30% declining balance;

Computer software - 3 years straight line;

Furniture and equipment - 20% declining balance; and

Leasehold improvements - straight-line over the lease term.

Additions during the year are depreciated at one-half the annual rates. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Mineral properties and exploration and evaluation expenditures

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Asset retirement obligations

The Company records a liability based on the best estimate of costs for site closure and reclamation activities that the Company is legally or contractually required to remediate and recorded at the time environmental disturbance occurs. The provision for closure and reclamation liabilities is estimated using expected cash flows based on engineering and environmental reports and accreted to full value over time through periodic charges to income. The Company does not have any material provisions for environmental rehabilitation as of December 31, 2012.

Derivatives

Derivative financial liabilities include the Company’s future contingent mineral property payment valued using estimated future gold prices. Derivatives are initially recognized at their fair value on the date the derivative contract is entered into and are subsequently re-measured at their fair value at each reporting period with changes in the fair value recognized in the statement of operations.

Income taxes

Net loss per share

Basic loss per share is calculated using the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or contracts that may require the issuance of common shares in the future were converted, unless the impact is anti-dilutive.

Stock-based compensation

Other comprehensive income

Components of other comprehensive income/loss consist of unrealized gains/losses on available-for-sale securities and cumulative translation adjustments on foreign subsidiaries. Unrealized gains/losses on available-for-sale securities are net of any realized gains or losses on the sale of securities or impairment losses.

Adoption of US GAAP

During 2012 the Company transitioned its accounting from IFRS to US GAAP. The transition was made retrospectively for all periods from the Company’s inception on May 26, 1978. The transition to US GAAP included adoption of any relevant accounting pronouncements effective for fiscal years ended prior to December 31, 2012.

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4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows:

· Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities

· Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and,

· Level 3 — Inputs that are not based on observable market data.

	Fair value as at December 31, 2012
	Level 1		Level 2
Financial assets:
Marketable securities (note 5)	$	180,415	$	—
	$	180,415	$	—
Financial liabilities:
Derivative liability (note 8)	$	—	$	22,400,000
	$	—	$	22,400,000

	Fair value as at December 31, 2011
	Level 1		Level 2
Financial assets:
Marketable securities (note 5)	$	297,443	$	—
	$	297,443	$	—
Financial liabilities:
Derivative liability (note 8)	$	—	$	20,800,000
	$	—	$	20,800,000

5. MARKETABLE SECURITIES

The following table presents the fair value of marketable securities at December 31, 2012 and 2011:

	December 31, 2012		December 31, 2011
Marketable securities:
Millrock Resources Inc.	$	150,262	$	210,914
Ocean Park Ventures Corp.	30,153		86,529

Total marketable securities	$	180,415	$	297,443

On April 4, 2008, the Company sold its South Estelle, Alaska property to Millrock Resources Inc. (“Millrock”) for 650,000 Millrock shares or C$247,000 based upon their market value on that date of C$0.38 per share.

On March 15, 2010, the Company received the initial 200,000 common shares of Ocean Park Ventures Corp. (“OPV”), valued on that date at C$0.72 per share or C$144,000, in consideration for providing the resources for Raven Gold to enter into a joint venture with an Alaskan subsidiary of OPV on the Chisna property, Alaska. The Company received an additional 200,000 common shares of OPV on March 15, 2011 and on March 14, 2012, valued on those dates at C$0.60 and C$0.21 per share, respectively, for a market value of C$120,000 and C$42,000, respectively.

The fair value adjustment for the year ended December 31, 2012 amounted to an unrealized loss of $163,176 (seven months ended December 31, 2011 - $357,473 loss).

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6. PROPERTY AND EQUIPMENT

The Company’s property and equipment balances are as follows at December 31, 2012 and 2011:

	December 31, 2012			December 31, 2011
Cost:	$	331,646		$	336,544
Accumulated depreciation:	(241,932		)	(211,563		)
Net book value	$	89,714		$	124,981

7. CAPITALIZED ACQUISITION COSTS

The Company had the following activity related to capitalized acquisition costs:

Capitalized acquisition costs	Amount

Balance, May 31, 2011	$	5,337,224
Acquisition costs during the seven month period	47,708,647
Balance, December 31, 2011	53,045,871
Acquisition costs during the year	2,127,693
Balance, December 31, 2012	$	55,173,564

The following table presents costs incurred for exploration and evaluation activities for the year ended December 31, 2012, the seven month period ended December 31, 2011 and for the year ended May 31, 2011:

	Year ended December 31, 2012		Seven months ended December 31, 2011		Year ended May 31, 2011
Exploration costs:
Aircraft services	$	1,841,674	$	2,227,652	$	344,192
Assay	1,015,387		1,772,624		3,475,984
Drilling	9,138,130		10,278,084		13,532,481
Environmental	4,241,728		2,843,474		—
Equipment rental	1,536,794		1,127,954		2,002,645
Field costs	6,626,782		7,474,844		5,244,787
Geological/geophysical	10,958,255		5,681,777		9,901,724
Land maintenance & tenure	426,914		566,876		2,639,726
Legal	250,234		164,801		57,583
Surveying and mapping	145,967		406,452		—
Transportation and travel	71,654		5,980		550,034
Total expenditures for the period	$	36,253,519	$	32,550,518	$	37,749,156

Properties acquired from AngloGold, Alaska

Pursuant to an Asset Purchase and Sale and Indemnity Agreement dated June 30, 2006, as amended on July 26, 2007, (the “AngloGold Agreement”) among the Company, AngloGold Ashanti (U.S.A.) Exploration Inc. (“AngloGold”) and TH Alaska, the Company acquired all of AngloGold’s interest in a portfolio of seven mineral exploration projects in Alaska and referred to as the Livengood, Chisna, Gilles, Coffee Dome, West Pogo, Blackshell, and Caribou properties (the “Sale Properties”) in exchange for a cash payment of $50,000 on August 4, 2006, and the issuance of 5,997,295 common shares, representing approximately 19.99% of the Company’s issued shares following the closing of the acquisition and two private placement financings raising an aggregate of C$11,479,348. AngloGold has the right to maintain its percentage equity interest in the Company, on an ongoing basis, provided that such right will terminate if AngloGold’s interest falls below 10% at any time after January 1, 2009.

As further consideration for the transfer of the Sale Properties, the Company granted to AngloGold a 90 day right of first offer with respect to the Sale Properties and any additional mineral properties in Alaska in which the Company acquires an interest and which interest the Company proposes to farm out or otherwise dispose of. If AngloGold’s equity interest in the Company is reduced to less than 10%, then this right of first offer will terminate. Details of the Livengood Property (being

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the only Sale Property still held by the Company — see Note 2) are as follows:

Livengood Property:

The Livengood property is located in the Tintina gold belt approximately 110 kilometers (68 miles) north of Fairbanks, Alaska. The property consists of land leased from the Alaska Mental Health Trust, a number of smaller private mineral leases, Alaska state mining claims purchased or located by the Company and patented ground held by the Company.

Details of the leases are as follows:

a) a lease of the Alaska Mental Health Trust mineral rights having an initial term of three years commencing July 1, 2004, subject to two extensions of three years each and subject to further extension beyond June 30, 2013 by payment of a flat annual fee of 125% of the last rate paid for advance minimum royalties and diligent pursuit of development. The lease requires work expenditures of $10/acre/year in years 1 - 3, $20/acre/year in years 4-6 and $30/acre/year in years 7- 9 and advance minimum royalties of $5/acre/year in years 1 - 3, $15/acre/year in years 4- 6, $25/acre/year in years 7-9, and 125% of the year 9 payment in subsequent years (all of which advance minimum royalties are recoverable from production royalties). An NSR production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to the lessor with respect to the lands subject to this lease. In addition, an NSR production royalty of l% is payable to the lessor with respect to the unpatented federal mining claims subject to lease 2) below and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of gold) is payable to the lessor with respect to the lands acquired by the Company as a result of the LPI share purchase transaction described below. As of December 31, 2012 the Company has paid $1,014,800 from the inception of this lease.

b) a lease of federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003 and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date, (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3% (depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for $1,000,000. As of December 31, 2012, the Company has paid $430,000 from the inception of this lease.

c) a lease of patented lode claims having an initial term of ten years commencing January 18, 2007, and continuing for so long thereafter as advance minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date through January 18, 2017 and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of 3% is payable to the lessors. The Company may purchase all interests of the lessors in the leased property (including the production royalty) for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which $500,000 is payable in cash over four years following the closing of the purchase and the balance of $500,000 is payable by way of the 3% NSR production royalty. As of December 31, 2012, the Company has paid $95,000 from the inception of this lease.

d) a lease of unpatented federal lode mining and federal unpatented placer claims having an initial term of ten years commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $15,000 on or before each anniversary date, (all of which minimum royalties are recoverable from production royalties). The Company is required to pay the lessor the sum of $250,000 upon making a positive production decision, payable $125,000 within 120 days of the decision and $125,000 within a year of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the lessor. The Company may purchase all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000. As of December 31, 2012, the Company has paid $53,000 from the inception of this lease.

Livengood acquisitions

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2012 and is included in “payable for mineral rights and claims “ on the consolidated balance sheets at December 31, 2011. The derivative liability is a contingent payment based on the five-year average daily gold price (“Average Gold Price”) from the date of the acquisition (see note 8). The derivative liability (payable in December 2016) will equal $23,148 for every dollar that the Average Gold Price exceeds $720 per troy ounce. If the Average Gold Price is less than $720, there will be no additional contingent payment. The subject ground was previously vacant or was used for placer gold mining.

Title to mineral properties

The acquisition of title to mineral properties is a detailed and time-consuming process. The Company has taken steps to verify title to mineral properties in which it has an interest. Although the Company has taken every reasonable precaution to ensure that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured.

8. DERIVATIVE LIABILITY

As discussed in note 7 above, the Company acquired certain mining claims and related rights in the vicinity of the Livengood Gold Project located near Fairbanks, Alaska. The aggregate consideration was $13,500,000 in cash plus an additional contingent payment based on the five-year average daily gold price (“Average Gold Price”) from the date of the acquisition. The contingent payment will equal $23,148 for every dollar that the Average Gold Price exceeds $720 per troy ounce. If the Average Gold Price is less than $720, there will be no additional contingent payment.

The key assumption used in the valuation of the derivative is the estimate of the future Average Gold Price. The estimate of the future Average Gold Price was determined using a forward curve on future gold prices as published by the CME Group. The CME Group represents the merger of the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the New York Mercantile Exchange (NYMEX) and its commodity exchange division, Commodity Exchange, Inc. (COMEX). Using this forward curve, the Company estimated an Average Gold Price five years from the date of acquisition of $1,720 per ounce of gold. Based on the inputs and assumptions used in valuing the derivative liability, it has been classified as a Level 2 financial instrument.

The fair value of the derivative liability and the estimated Average Gold Price are as follows:

	Fair value			Average Gold Price/oz.

Derivative value at December 13, 2011	$	23,100,000		$	1,720
Unrealized (gain) loss for the period	(2,300,000		)
Derivative value at December 31, 2011	20,800,000			$	1,619
Unrealized (gain) loss for the period	1,600,000
Derivative value at December 31, 2012	$	22,400,000		$	1,688

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9. INCOME TAXES

A reconciliation of income taxes at statutory rates with the reported taxes is as follows for the year ended December 31, 2012 and the seven month period ended December 31, 2011:

	December 31, 2012			December 31, 2011

Loss from continuing operations before income taxes	$	(56,643,462	)	$	(43,309,957	)
Statutory Canadian corporate tax rate	25.00		%	26.50		%

Income tax recovery at statutory rates	$	(14,160,866	)	$	(11,477,139	)
Share-based payments	2,301,744			2,025,996
Unrecognized items for tax purposes	(131,503		)	(305,948		)
Difference in tax rates in other jurisdictions	(8,473,936		)	(5,898,911		)
Unrecognized amounts	20,464,561			15,656,002

Income tax recovery	$	—		$	—

The significant components of the Company’s deferred income tax assets and liabilities are as follows:

	December 31, 2012			December 31, 2011
Deferred income tax assets (liabilities):
Mineral properties	$	56,693,975		$	44,860,309
Derivative liability	(151,900		)	(499,100		)
Other	51,515			121,436
Share issue costs	732,798			946,746
Non-capital losses available for future periods	22,597,296			13,967,149

	79,923,684			59,396,540
Valuation allowance	(79,923,684		)	(59,396,540		)

Deferred income tax asset	$	—		$	—

At December 31, 2012, the Company has available net operating losses for Canadian income tax purposes of approximately $14,015,000 and net operating losses for US income tax purposes of approximately $43,994,000 available for carry-forward to reduce future years’ taxable income, if not utilized, expiring as follows:

	Canada		United States

2025	$	65,000	$	—
2026	78,000		—
2027	907,000		1,252,000
2028	1,253,000		1,350,000
2029	2,074,000		2,600,000
2030	2,829,000		5,691,000
2031	4,180,000		14,730,000
2032	2,629,000		18,371,000

	$	14,015,000	$	43,994,000

In addition, the Company has available mineral resource related expenditure pools for Canadian income tax purposes totalling approximately $2,641,000 which may be deducted against future taxable income in Canada on a discretionary basis. The Company also has available mineral resource expenses that are related to the Company’s exploration activities in the United States of approximately $184,695,000 which may be deductible for US tax purposes. Future tax benefits, which may arise as a result of applying these deductions to taxable income, have not been recognized in these accounts due to the uncertainty of future taxable income.

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10. SHARE CAPITAL

Authorized

500,000,000 common shares without par value. At December 31, 2012 and 2011 there were 98,068,638 and 86,683,919 shares issued and outstanding, respectively.

Share issuances

During the third quarter of 2012, the Company closed a non-brokered private placement financing through the issuance of 11,384,719 common shares. The shares were issued in two stages. The first stage closed on August 3, 2012 and consisted of 9,458,308 common shares issued at C$2.60 per share for gross proceeds of $24,626,029. The second stage of the offering closed on September 17, 2012 and consisted of 1,926,411 common shares issued at C$2.5955 per share for gross proceeds of $5,142,500. The Company paid a cash finder’s fee of 4% of gross proceeds in connection with C$10,000,000 of the total offering. Total share issuance costs for this non-brokered private placement financing amounted to $554,280.

Stock options

The Company has adopted an incentive stock option plan (the “2006 Plan”). The essential elements of the 2006 Plan provide that the aggregate number of common shares of the Company’s capital stock that may be made issuable pursuant to options granted under the 2006 Plan may not exceed 10% of the number of issued shares of the Company at the time of the granting of the options. Options granted under the 2006 Plan will have a maximum term of ten years. The exercise price of options granted under the 2006 Plan will not be less than the discounted market price of the common shares (defined as the last closing market price of the Company’s common shares immediately preceding the issuance of a news release announcing the granting of the options, less the maximum discount permitted under applicable stock exchange policies), or such other price as may be agreed to by the Company and accepted by the Toronto Stock Exchange. Options granted under the 2006 Plan vest immediately, unless otherwise determined by the directors at the date of grant.

On September 19, 2012, the Company granted incentive stock options to an officer of the Company to purchase 1,000,000 common shares in the capital of the Company. The options are exercisable on or before September 19, 2017 at a price of C$2.91 and vest as to one-third on September 19, 2012, one-third on September 19, 2013 and the balance on September 19, 2014.

On August 24, 2012, the Company granted incentive stock options to directors, officers, employees and consultants of the Company to purchase 4,700,000 common shares in the capital of the Company. The options are exercisable on or before August 24, 2017 at a price of C$3.17 and vest as to one-third on August 24, 2012, one-third on August 24, 2013 and the balance on August 24, 2014.

On January 9, 2012, the Company granted incentive stock options to an employee of the Company to purchase 30,000 common shares in the capital of the Company. The options are exercisable on or before January 9, 2017 at a price of C$4.60 and vest as to 10,000 shares on January 9, 2012, 10,000 shares on January 9, 2013 and the balance on January 9, 2014.

On January 3, 2012, the Company granted incentive stock options to an officer of the Company to purchase 650,000 common shares in the capital stock of the Company. The options are exercisable on or before January 3, 2017 at a price of C$4.43 per share and vest as to 216,666 shares on January 3, 2012, 216,666 shares on January 3, 2013 and the balance on January 3, 2014.

On November 15, 2011, the Company granted incentive stock options to an employee to purchase 100,000 common shares in the capital of the Company. The options are exercisable on or before November 15, 2016 at a price of C$5.64 per share. The options vest as to one-third on November 15, 2011, one-third on November 15, 2012 and the balance on November 15, 2013.

On August 23, 2011, the Company granted incentive stock options to an officer and an employee of the Company to purchase 650,000 common shares in the capital of the Company. The options are exercisable on or before August 23, 2016 at a price of C$8.07 per share. The options vest as to one-third on August 23, 2011, one-third on August 23, 2012 and the balance on August 23, 2013.

On July 28, 2011, the Company granted incentive stock options to directors of the Company to purchase 950,000 common shares in the capital of the Company. The options were vested on grant and are exercisable on or before July 28, 2013 at a price of C$7.47 per share.

On June 1, 2011, the Company granted incentive stock options to an officer of the Company to purchase 1,000,000 common shares in the capital of the Company. The options are exercisable on or before May 9, 2016 at a price of C$8.35 per share.

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The options vest as to one-third on June 1, 2011, one-third on May 9, 2012 and the balance on May 9, 2013.

On January 10, 2011, the Company granted incentive stock options to officers, employees and consultants of the Company to purchase 265,000 common shares in the capital stock of the Company. The options are exercisable on or before January 10, 2013 at a price of C$9.15 per share. The options vest evenly over 12 months with the first vesting date being April 10, 2011.

A summary of the status of the stock option plan as of December 31, 2012 and 2011 and changes during the periods is presented below:

	Year Ended				Seven Months Ended
	December 31, 2012				December 31, 2011
	Number of Options		Weighted Average Exercise Price (C$)		Number of Options		Weighted Average Exercise Price (C$)

Balance, beginning of the period	7,215,000		$	7.48	4,600,000		$	7.24
Granted	6,380,000		$	3.26	2,700,000		$	7.87
Exercised	—		$	—	(35,000	)	$	(6.57	)
Expired	(4,050,000	)	$	7.16	—		$	—
Cancelled	(975,000	)	$	5.42	(50,000	)	$	(6.96	)
Balance, end of the period	8,570,000		$	4.73	7,215,000		$	7.48

The weighted average remaining life of options outstanding at December 31, 2012 was 3.87 years.

Stock options outstanding are as follows:

	December 31, 2012				December 31, 2011
Expiry Date	Exercise Price (C$)		Number of Options	Exercisable	Exercise Price (C$)		Number of Options	Exercisable
January 12, 2012	$	—	—	—	$	7.95	250,000	250,000
April 14, 2012	$	—	—	—	$	7.34	2,635,000	2,635,000
August 19, 2012	$	—	—	—	$	6.57	1,365,000	1,365,000
January 10, 2013	$	9.15	190,000	190,000	$	9.15	265,000	198,750
July 28, 2013	$	7.47	950,000	950,000	$	7.47	950,000	950,000
May 9, 2016	$	8.35	1,000,000	666,666	$	8.35	1,000,000	333,333
August 23, 2016	$	8.07	600,000	400,000	$	8.07	650,000	216,667
November 15, 2016	$	5.64	100,000	66,666	$	5.64	100,000	33,333
January 9, 2017	$	4.60	30,000	10,000	$	—	—	—
August 24, 2017	$	3.17	4,700,000	1,566,655	$	—	—	—
September 19, 2017	$	2.91	1,000,000	333,333	$	—	—	—
			8,570,000	4,183,320			7,215,000	5,982,083

A summary of the non-vested options as of December 31, 2012 and 2011 and changes during the fiscal years ended December 31, 2012 and 2011 is as follows:

Non-vested options:	Number of options		Weighted average grant- date fair value (C$)
Outstanding at May 31, 2011	198,750		$	2.88
Granted	2,700,000		$	4.04
Vested	(1,665,832	)	$	3.20
Outstanding at December 31, 2011	1,232,918		$	4.97
Granted	6,380,000		$	1.68
Vested	(3,226,238	)	$	2.43
Outstanding at December 31, 2012	4,386,680		$	2.05

At December 31, 2012 there was unrecognized compensation expense of C$5,163,111 related to non-vested options outstanding. The cost is expected to be recognized over a weighted-average remaining period of approximately 1.12 years.

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Share-based payments

During the year ended December 31, 2012, the Company granted 6,380,000 stock options with a fair value of C$10,718,400, calculated using the Black-Scholes option pricing model. The Company recognized share-based payment expense of $9,206,975 during the year ended December 31, 2012 (seven months ended December 31, 2011 - $7,645,269; year ended May 31, 2011 — $3,450,477; year ended May 31, 2010 — $7,190,152).

The following weighted average assumptions were used for the Black-Scholes option pricing model calculations:

	Year ended December 31, 2012			Seven month period ended December 31, 2011

Expected life of options	4 years			3.94 years
Risk-free interest rate	1.32		%	1.77		%
Expected volatility	67.68		%	71.80		%
Dividend rate	0.00		%	0.00		%
Exercise price (C$)	$	3.26		$	7.87

The expected volatility used in the Black-Scholes option pricing model is based on the historical volatility of the Company’s shares.

11. SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in a single reportable operating segment, being the exploration and development of mineral properties. The following tables present selected financial information by geographic location:

	Canada		United States		Total
December 31, 2012
Capitalized acquisition costs	$	—	$	55,173,564	$	55,173,564
Property and equipment	14,317		75,397		89,714
Current assets	29,046,485		2,377,581		31,424,066
Total assets	$	29,060,802	$	57,626,542	$	86,687,344

December 31, 2011
Capitalized acquisition costs	$	—	$	53,045,871	$	53,045,871
Property and equipment	22,880		102,101		124,981
Current assets	47,106,247		9,026,986		56,133,233
Total assets	$	47,129,127	$	62,174,958	$	109,304,085

	December 31, 2012			December 31, 2011			May 31, 2011			May 31, 2010

Net loss from continuing operations for the period — Canada	$	(10,589,464	)	$	(8,145,704	)	$	(4,682,363	)	$	(4,994,754	)
Net loss from continuing operations for the period - United States	(46,053,998		)	(35,164,253		)	(42,739,510		)	(27,237,910		)
Net loss from discontinued operations for the period — Canada	—			—			(811,232		)	(2,583,813		)
Net loss from discontinued operations for the period - United States	—			—			(226,680		)	(868,494		)
Net loss for the period	$	(56,643,462	)	$	(43,309,957	)	$	(48,459,785	)	$	(35,684,971	)

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12. COMMITMENTS

· Commitments for exploration and evaluation activities (note 7).

· Future minimum lease payments for the next five fiscal years and beyond are as follows:

2013	$	215,476
2014	105,212
2015	6,092
2016	6,092
2017	6,092
2018 and thereafter	6,092

	$	345,056

13. SUPPLEMENTAL CASH FLOW INFORMATION

	December 31, 2012		December 31, 2011		May 31, 2011		May 31, 2010

Income taxes paid	$	150,607	$	—	$	—	$	—

Non-cash investing and financing transactions — continuing operations:
Derivative liability included in capitalized acquisition costs	$	—	$	23,100,000	$	—	$	—

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2012, an evaluation was carried out under the supervision of and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of December 31, 2012, the Company’s disclosure controls and procedures were effective in ensuring that: (i) information required to be disclosed in reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, in a manner that allows for timely decisions regarding required disclosures.

The effectiveness of our or any system of disclosure controls and procedures, however well designed and operated, can provide only reasonable assurance that the objectives of the system will be met and is subject to certain limitations, including the exercise of judgement in designing, implementing and evaluating controls and procedures and the assumptions used in identifying the likelihood of future events.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of internal control over financial reporting as of December 31, 2012. In conducting this evaluation, management used the framework established by the Committee of Sponsoring Organizations of the Treadway Commission as set forth in Internal Control — Integrated Framework. Based on this evaluation under the framework in Internal Control — Integrated Framework, management concluded that internal control over financial reporting was effective as of December 31, 2012.

Because of its inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will achieve its stated objectives under all future conditions.

The effectiveness of our internal control over financial reporting as of December 31, 2012, has been audited by PricewaterhouseCoopers LLP, the independent registered public accounting firm who also audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K. PricewaterhouseCoopers LLP’s report on the Company’s internal control over financial reporting is included as part of Part II, Item 8, Financial Statements and Supplementary Data in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in internal controls over financial reporting during the fourth quarter ended December 31, 2012 that has materially, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by Items 401, 405, 406, 407(c)(3), (d)(4) and (d) of Regulation S-K will be included in the Company’s Proxy Statement for its 2013 Annual Meeting of Shareholders to be filed with the SEC within 120 days after December 31, 2012 (the “2013 Proxy Statement”), and is incorporated by reference in this Annual Report on Form 10-K.

The Company’s Code of Business Conduct and Ethics is available on the Company’s website at www.ithmines.com.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 402 and paragraph (e)(4) and (e)(5) of Item 407 of Regulation S-K will be contained in the Company’s 2013 Proxy Statement, and is incorporated by reference in this Annual Report on Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 201(d) and Item 403 of Regulation S-K will be contained in the Company’s 2013 Proxy Statement, and is incorporated by reference in this Annual Report on Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 404 and Item 407(a) of Regulation S-K will be contained in the Company’s 2013 Proxy Statement, and is incorporated by reference in this Annual Report on Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 9(e) of Schedule 14A will be filed in the Company’s 2013 Proxy Statement, and is incorporated by reference in this Annual Report on Form 10-K.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report

(1) All financial statements

The consolidated statements of operations and comprehensive loss, cash flows, and changes in shareholders’ equity, and the consolidated balance sheets are included as part of Part II, Item 8, Financial Statements and Supplementary Data.

(2) Financial statement schedules

All financial statement schedules have been omitted, since the information is either not applicable or required, or because the information required is included in the consolidated financial statements and notes thereto included in this Form 10-K.

(3) Exhibits required by Item 601 of Regulation S-K

The information required by Section (a)(3) of Item 15 is set forth on the Exhibit Index that follows the signatures page of this Form 10-K.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

International Tower Hill Mines Ltd.

By:	/s/ Donald C. Ewigleben

	Donald C. Ewigleben
	President and Chief Executive Officer

Date: March 13, 2013

Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Donald C. Ewigleben and Tom S. Q. Yip, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Donald C. Ewigleben	By:	/s/ Timothy J. Haddon

	Donald C. Ewigleben		Timothy J. Haddon
	President, Chief Executive Officer and Director		Director
	(Principal Executive Officer)
Date: March 13, 2013		Date: March 13, 2013


By:	/s/ Tom S. Q. Yip	By:	/s/ Mark R. Hamilton

	Tom S. Q. Yip		Mark R. Hamilton
	Chief Financial Officer (Principal Financial		Director
	Officer and Principal Accounting Officer)
Date: March 13, 2013		Date: March 13, 2013


By:	/s/ Daniel A. Carriere	By:	/s/ Jeffrey A. Pontius

	Daniel A. Carriere		Jeffrey A. Pontius
	Chairman of the Board of Directors		Director

Date: March 13, 2013		Date: March 13, 2013


By:	/s/ Anton J. Drescher	By:	/s/ Roger R. Taplin

	Anton J. Drescher		Roger R. Taplin
	Director		Director

Date: March 13, 2013		Date: March 13, 2013

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EXHIBIT INDEX

Exhibit Number		Description

3.1		Notice of Articles (filed as Exhibit 3 to the Company’s Form 20-F on October 20, 2005 and incorporated herein by reference)

3.2		Articles (filed as Exhibit 3 to the Company’s Form 20-F on October 20, 2005 and incorporated herein by reference)

3.3		Notice of Alteration of Articles, dated April 20, 2006

4.1		Form of Common Share Certificate (filed as Exhibit 1 to the Company’s Form 8-A on August 2, 2007 and incorporated herein by reference)

4.2		Amended and Restated Shareholder Rights Plan Agreement, dated September 19, 2012, between International Tower Hill Mines Ltd. and Computershare Investor Services Inc., as rights agent

10.1		Asset Purchase and Sale and Indemnity Agreement, dated June 30, 2006 among AngloGold Ashanti (U.S.A.) Exploration Inc., Talon Gold Alaska, Inc. and International Tower Hill Mines Ltd. (filed as Exhibit 2 to the Company’s Form 20-F on December 29, 2006 and incorporated herein by reference)

10.2		First Amending Agreement, dated July 26, 2006, among AngloGold Ashanti (U.S.A.) Exploration Inc., Talon Gold Alaska, Inc. and International Tower Hill Mines Ltd. (filed as Exhibit 3 to the Company’s Form 20-F on December 29, 2006 and incorporated herein by reference)

10.3		Indemnity and Pre-Emptive Rights Agreement, dated August 4, 2006, among AngloGold Ashanti (U.S.A.) Exploration Inc., Talon Gold Alaska, Inc., and International Tower Hill Mines Ltd. (filed as Exhibit 1 to the Company’s Form 20-F/A on December 29, 2006 and incorporated herein by reference)

10.4		Mining Lease with Option to Purchase, dated January 18, 2007, between Talon Gold Alaska Inc. and Bernard E. Griffin, Donna Griffin, Larry Kilgore, Sherry Gerbi, Jerry Griffin, Tim Miller, Lynne Miller, Robert and Marcia Miller (filed as Exhibit 11 to the Company’s Form 20-F on December 3, 2007 and incorporated herein by reference)

10.5		Mining Lease, dated March 28, 2007, between Ronald Tucker and Talon Gold Alaska, Inc. (filed as Exhibit 14 to the Company’s Form 20-F on December 3, 2007 and incorporated herein by reference)

10.6		Stock and Asset Purchase Agreement, dated December 13, 2011, among Tower Hill Mines, Inc., Alaska/Nevada Gold Mines, Ltd., Heflinger Mining & Equipment Company, and Carl Heflinger, and Fred Heflinger (filed as Exhibit 99.1 to the Company’s Form 6-K on March 26, 2012 and incorporated herein by reference)

10.7		Lease Amendment, Option Exercise, and Purchase and Sale Agreement, dated December 13, 2011, among Karl Hanneman, VMC Revocable Trust, and Tower Hill Mines, Inc. (filed as Exhibit 99.2 to the Company’s Form 6-K on March 26, 2012, and incorporated herein by reference)

10.8		Form of Subscription Agreement with attached Schedule of Subscribers Who Have Executed a Subscription Agreement.

10.9*		2006 Stock Option Plan, as amended September 19, 2012

10.10*		Form of Stock Option Agreement for use under the 2006 Stock Option Plan

10.11*		Employment Agreement, dated March 11, 2013, between Tom S.Q. Yip and the Company

10.12*		Employment Agreement, dated September 19, 2012, between Donald C. Ewigleben and the Company

10.13*		Employment Agreement, dated March 11, 2013, between Thomas E. Irwin and the Company.

21.1		Subsidiaries of the Company

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23.1		Consent of PricewaterhouseCoopers LLP

23.2		Consent of MacKay LLP

31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan or arrangement

Exhibit 3.3

SCHEDULE “A”

Incorporation number: BC0175795

INTERNATIONAL TOWER HILL MINES LTD.

(the “ Corporation ”)

ARTICLES

1. Interpretation

2. Shares and Share Certificates

3. Issue of Shares

4. Share Registers

5. Share Transfers

6. Transmission of Shares

7. Purchase of Shares

8. Borrowing Powers

9. Alterations

10. Meetings of Shareholders

11. Proceedings at Meetings of Shareholders

12. Votes of Shareholders

13. Directors

14. Election and Removal of Directors

15. Alternate Directors

16. Powers and Duties of Directors

17. Disclosure of Interest of Directors

18. Proceedings of Directors

19. Executive and Other Committees

20. Officers

21. Indemnification

22. Dividends and Reserves

23. Documents, Records and Reports

24. Notices

25. Seal

26. Prohibitions

1. Interpretation

1.1 Definitions

In these Articles, unless the context otherwise requires:

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

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

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

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

(5) “ seal ” means the seal of the Corporation, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable

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

2. Shares and Share Certificates

2.1 Authorized Share Structure

The authorized share structure of the Corporation consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Corporation.

2.2 Form of Share Certificate

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

2.3 Shareholder Entitled to Certificate or Acknowledgment

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

2.4 Delivery by Mail

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

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

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

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

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

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

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

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

(2) any indemnity the directors consider adequate.

2.7 Splitting Share Certificates

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

2.8 Certificate Fee

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

2.9 Recognition of Trusts

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

3. Issue of Shares

3.1 Directors Authorized

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

3.2 Commissions and Discounts

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

3.3 Brokerage

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

3.4 Conditions of Issue

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

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

(a) past services performed for the Corporation;

(b) property;

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

3.5 Share Purchase Warrants and Rights

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

4. Share Registers

4.1 Central Securities Register

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

4.2 Closing Register

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

5. Share Transfers

5.1 Registering Transfers

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

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

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

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

5.2 Form of Instrument of Transfer

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

5.3 Transferor Remains Shareholder

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

5.4 Signing of Instrument of Transfer

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

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

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

5.5 Enquiry as to Title Not Required

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

5.6 Transfer Fee

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

6. Transmission of Shares

6.1 Legal Personal Representative Recognized on Death

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

6.2 Rights of Legal Personal Representative

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

7. Purchase of Shares

7.1 Corporation Authorized to Purchase Shares

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

7.2 Purchase When Insolvent

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

(1) the Corporation is insolvent; or

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

7.3 Sale and Voting of Purchased Shares

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

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

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

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

8. Borrowing Powers

The Corporation, if authorized by the directors, may:

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

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

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

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

9. Alterations

9.1 Alteration of Authorized Share Structure

Subject to Article 9.2 and the Business Corporations Act , the Corporation may by special resolution:

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

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

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

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

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

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

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

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

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

9.2 Special Rights and Restrictions

Subject to the Business Corporations Act , the Corporation may by special resolution:

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

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

9.3 Change of Name

The Corporation may by special resolution authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

9.4 Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Corporation may by special resolution alter these Articles.

10. Meetings of Shareholders

10.1 Annual General Meetings

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

10.2 Resolution Instead of Annual General Meeting

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

10.3 Calling of Meetings of Shareholders

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

10.4 Notice for Meetings of Shareholders

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

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

(2) otherwise, 10 days.

10.5 Record Date for Notice

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

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

(2) otherwise, 10 days.

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

10.6 Record Date for Voting

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

10.7 Failure to Give Notice and Waiver of Notice

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

10.8 Notice of Special Business at Meetings of Shareholders

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

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

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

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

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

11. Proceedings at Meetings of Shareholders

11.1 Special Business

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

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

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

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

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

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

(e) the election or appointment of directors;

(f) the appointment of an auditor;

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

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

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

11.2 Special Majority

The majority of votes required for the Corporation to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

11.3 Quorum

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

11.4 One Shareholder May Constitute Quorum

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

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

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

11.5 Other Persons May Attend

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

11.6 Requirement of Quorum

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

11.7 Lack of Quorum

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

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

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

11.8 Lack of Quorum at Succeeding Meeting

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

11.9 Chair

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

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

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

11.10 Selection of Alternate Chair

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

11.11 Adjournments

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

11.12 Notice of Adjourned Meeting

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

11.13 Decisions by Show of Hands or Poll

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

11.14 Declaration of Result

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

11.15 Motion Need Not be Seconded

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

11.16 Casting Vote

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

11.17 Manner of Taking Poll

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

(1) the poll must be taken:

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

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

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

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

11.18 Demand for Poll on Adjournment

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

11.19 Chair Must Resolve Dispute

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

11.20 Casting of Votes

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

11.21 Demand for Poll

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

11.22 Demand for Poll Not to Prevent Continuance of Meeting

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

11.23 Retention of Ballots and Proxies

The Corporation must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal

business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Corporation may destroy such ballots and proxies.

12. Votes of Shareholders

12.1 Number of Votes by Shareholder or by Shares

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

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

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

12.2 Votes of Persons in Representative Capacity

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

12.3 Votes by Joint Holders

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

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

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

12.4 Legal Personal Representatives as Joint Shareholders

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

12.5 Representative of a Corporate Shareholder

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

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

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

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

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

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

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

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

12.6 Proxy Provisions Do Not Apply to All Companies

If and for so long as the Corporation is a public Corporation or a pre-existing reporting Corporation which has the Statutory Reporting Corporation Provisions as part of its Articles or to which the Statutory Reporting Corporation Provisions apply, Articles 12.7 to 12.15 apply only insofar as they are not inconsistent with any securities legislation in any province or territory of Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Corporation and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities commissions or similar authorities appointed under that legislation.

12.7 Appointment of Proxy Holders

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

12.8 Alternate Proxy Holders

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

12.9 When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1) the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

(2) the Corporation has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

(3) the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10 Deposit of Proxy

A proxy for a meeting of shareholders must:

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

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

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

12.11 Validity of Proxy Vote

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

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

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

12.12 Form of Proxy

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

[name of Corporation]

(the “Corporation”)

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

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


	Signed [month, day, year]


	[Signature of shareholder]


	[Name of shareholder—printed]

12.13 Revocation of Proxy

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

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

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

12.14 Revocation of Proxy Must Be Signed

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

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

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

12.15 Production of Evidence of Authority to Vote

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

13. Directors

13.1 First Directors; Number of Directors

The first directors are the persons designated as directors of the Corporation in the Notice of Articles that applies to the Corporation when it is recognized under the Business Corporations Act . The number of directors, excluding additional directors appointed under Article 14.8, is set at:

(1) subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Corporation’s first directors;

(2) if the Corporation is a public Corporation, the greater of three and the most recently set of:

(a) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b) the number of directors set under Article 14.4;

(3) if the Corporation is not a public Corporation, the most recently set of:

(a) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b) the number of directors set under Article 14.4.

13.2 Change in Number of Directors

If the number of directors is set under Articles 13.1 (2)(a) or 13.1(3)(a):

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

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

13.3 Directors’ Acts Valid Despite Vacancy

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

13.4 Qualifications of Directors

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

13.5 Remuneration of Directors

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

13.6 Reimbursement of Expenses of Directors

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

13.7 Special Remuneration for Directors

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

13.8 Gratuity, Pension or Allowance on Retirement of Director

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

14. Election and Removal of Directors

14.1 Election at Annual General Meeting

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

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

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

14.2 Consent to be a Director

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

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

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

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

14.3 Failure to Elect or Appoint Directors

If:

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

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

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

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

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

14.4 Places of Retiring Directors Not Filled

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

14.5 Directors May Fill Casual Vacancies

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

14.6 Remaining Directors Power to Act

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

14.7 Shareholders May Fill Vacancies

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

14.8 Additional Directors

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

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

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

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

14.9 Ceasing to be a Director

A director ceases to be a director when:

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

(2) the director dies;

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

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

14.10 Removal of Director by Shareholders

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

14.11 Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a Corporation and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

I5. Alternate Directors

15.1 Appointment of Alternate Director

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

15.2 Notice of Meetings

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

15.3 Alternate for More Than One Director Attending Meetings

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

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

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

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

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

15.4 Consent Resolutions

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

15.5 Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6 Revocation of Appointment of Alternate Director

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

15.7 Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

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

(2) the alternate director dies;

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

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

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

15.8 Remuneration and Expenses of Alternate Director

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

16. Powers and Duties of Directors

16.1 Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Corporation and have the authority to exercise all such powers of the Corporation as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Corporation.

16.2 Appointment of Attorney of Corporation

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

17. Disclosure of Interest of Directors

17.1 Obligation to Account for Profits

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

17.2 Restrictions on Voting by Reason of Interest

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

17.3 Interested Director Counted in Quorum

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

17.4 Disclosure of Conflict of Interest or Property

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

17.5 Director Holding Other Office in the Corporation

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

17.6 No Disqualification

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

17.7 Professional Services by Director or Officer

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

17.8 Director or Officer in Other Corporations

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

18. Proceedings of Directors

18.1 Meetings of Directors

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

18.2 Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3 Chair of Meetings

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

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

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

(3) any other director chosen by the directors if:

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

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

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

18.4 Meetings by Telephone or Other Communications Medium

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

18.5 Calling of Meetings

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

18.6 Notice of Meetings

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

18.7 When Notice Not Required

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

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

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

18.8 Meeting Valid Despite Failure to Give Notice

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

18.9 Waiver of Notice of Meetings

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

18.10 Quorum

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

18.11 Validity of Acts Where Appointment Defective

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

18.12 Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors may be passed without a meeting:

(1) in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

(2) in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing.

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

19. Executive and Other Committees

19.1 Appointment and Powers of Executive Committee

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

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

(2) the power to remove a director;

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

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

19.2 Appointment and Powers of Other Committees

The directors may, by resolution:

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

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

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

(b) the power to remove a director;

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

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

19.3 Obligations of Committees

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

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

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

19.4 Powers of Board

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

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

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

(3) fill vacancies in the committee.

19.5 Committee Meetings

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

(1) the committee may meet and adjourn as it thinks proper;

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

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

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

20. Officers

20.1 Directors May Appoint Officers

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

20.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

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

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

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

20.3 Qualifications

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

20.4 Remuneration and Terms of Appointment

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

21. Indemnification

21.1 Definitions

In this Article 21:

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

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

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

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

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

21.2 Mandatory Indemnification of Directors and Former Directors

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

21.3 Indemnification of Other Persons

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

21.4 Non-Compliance with Business Corporations Act

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

21.5 Corporation May Purchase Insurance

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

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

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

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

(4) at the request of the Corporation, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

22. Dividends

22.1 Payment of Dividends Subject to Special Rights

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

22.2 Declaration of Dividends

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

22.3 No Notice Required

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

22.4 Record Date

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

22.5 Manner of Paying Dividend

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

22.6 Settlement of Difficulties

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

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

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

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

22.7 When Dividend Payable

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

22.8 Dividends to be Paid in Accordance with Number of Shares

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

22.9 Receipt by Joint Shareholders

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

22.10 Dividend Bears No Interest

No dividend bears interest against the Corporation.

22.11 Fractional Dividends

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

22.12 Payment of Dividends

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

22.13 Capitalization of Surplus

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

23. Accounting Records

23.1 Recording of Financial Affairs

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

23.2 Inspection of Accounting Records

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

24. Notices

24.1 Method of Giving Notice

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

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

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

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

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

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

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

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

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

(5) physical delivery to the intended recipient.

24.2 Deemed Receipt of Mailing

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

24.3 Certificate of Sending

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

24.4 Notice to Joint Shareholders

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

24.5 Notice to Trustees

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

(1) mailing the record, addressed to them:

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

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

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

25. Seal

25.1 Who May Attest Seal

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

(1) any two directors;

(2) any officer, together with any director;

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

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

25.2 Sealing Copies

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

25.3 Mechanical Reproduction of Seal

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

treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies, Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

26. Prohibitions

26.1 Definitions

In this Article 26:

(1) “designated ssecurity” means:

(a) a voting security of the Corporation;

(b) a security of the Corporation that is not a debt security and that carries a residual right to participate in the earnings of the Corporation or, on the liquidation or winding up of the Corporation, in its assets; or

(c) a security of the Corporation convertible, directly or indirectly, into a security described in paragraph (a) or (b);

(2) “security” has the meaning assigned in the Securities Act (British Columbia);

(3) “voting security” means a security of the Corporation that:

(a) is not a debt security, and

(b) carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

26.2 Application

Article 26.3 does not apply to the Corporation if and for so long as it is a public Corporation or a pre-existing reporting Corporation which has the Statutory Reporting Corporation Provisions as part of its Articles or to which the Statutory Reporting Corporation Provisions apply.

26.3 Consent Required for Transfer of Shares or Designated Securities

No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

Exhibit 4.2

AMENDED & RESTATED
SHAREHOLDER RIGHTS PLAN AGREEMENT

Dated August 26, 2009

as amended and restated on September 19, 2012

Between

INTERNATIONAL TOWER HILL MINES LTD.

and

COMPUTERSHARE INVESTOR SERVICES INC.

as Rights Agent

TABLE OF CONTENTS

		Page

ARTICLE 1 INTERPRETATION		2
1.1	Certain Definitions	2
1.2	Currency	15
1.3	Headings	15
1.4	Number and Gender	15
1.5	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares	15
1.6	Acting Jointly or in Concert	16
1.7	Statutory References	16

ARTICLE 2 THE RIGHTS		16
2.1	Legend on Common Share Certificates	16
2.2	Initial Exercise Price, Exercise of Rights and Detachment of Rights	17
2.3	Adjustments to Exercise Price Number of Rights	20
2.4	Date on Which Exercise is Effective	24
2.5	Execution. Authentication, Delivery and Dating of Right Certificates	25
2.6	Registration, Registration of Transfer and Exchange	25
2.7	Mutilated. Destroyed, Lost and Stolen Rights Certificates	26
2.8	Persons Deemed Owners	26
2.9	Delivery and Cancellation of Certificates	27
2.10	Agreement of Rights Holders	27
2.11	Rights Certificate Holder not Deemed a Shareholder	28

ARTICLE 3 ADJUSTMENTS TO THE RIGHTS ON FLIP-IN EVENT		28
3.1	Flip-in Event	28

ARTICLE 4 THE RIGHTS AGENT		30
4.1	General	30
4.2	Merger or Amalgamation or Change of Name of Rights Agent	30
4.3	Duties of Rights Agent	31
4.4	Change of Rights Agent	33
4.5	Compliance with Money Laundering Legislation	33
4.6	Privacy Provision	34
4.7	Force Majeure	34

ARTICLE 5 MISCELLANEOUS		34
5.1	Redemption of Rights	34
5.2	Waiver of Flip-In Event	35
5.3	Expiration	37
5.4	Issuance of New Rights Certificates	37
5.5	Supplements and Amendments	37
5.6	Fractional Rights and Fractional Shares	39
5.7	Rights of Action	39
5.8	Notice of Proposed Actions	39
5.9	Notices	40
5.10	Costs of Enforcement	41
5.11	Benefits of this Agreement	41

5.12	Governing Law	41
5.13	Language	41
5.14	Severability	41
5.15	Effective Date	41
5.16	Determinations and Actions by the Board of Directors	42
5.17	Rights of Board of Directors and the Corporation	42
5.18	Regulatory Approvals	42
5.19	Declaration as to Non-Canadian Holders	42
5.20	Time of the Essence	42
5.21	Successors	42
5.22	Execution in Counterparts	43

EXHIBIT A [FORM OF RIGHTS CERTIFICATE] RIGHTS CERTIFICATE		A-1

SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS SHAREHOLDER RIGHTS PLAN AGREEMENT, as amended and restated on September 19, 2012, is dated as of the 26th day of August, 2009

BETWEEN:

INTERNATIONAL TOWER HILL MINES LTD. , a company incorporated under the Business Corporations Act (British Columbia)

(the “ Corporation ”)

AND:

COMPUTERSHARE INVESTOR SERVICES INC. , a company existing under the laws of Canada

(the “ Rights Agent ”)

WHEREAS the Board of Directors of the Corporation, in the exercise of their fiduciary duties to the Corporation, has determined that it is advisable and in the best interests of the Corporation to adopt a shareholder rights plan (the “ Rights Plan ”) to (a) ensure, to the extent possible, that all holders of the Common Shares (as hereinafter defined) of the Corporation and the Board of Directors have adequate time to consider and evaluate any unsolicited bid for the Common Shares, (b) provide the Board of Directors with adequate time to identify, develop and negotiate value-enhancing alternatives, if considered appropriate, to any such unsolicited bid, (c) encourage the fair treatment of the Corporation’s securityholders in connection with any Take-over Bid (as hereinafter defined) made for the Common Shares, and (d) generally to assist the Board of Directors in enhancing shareholder value;

AND WHEREAS the Board of Directors has determined that the Rights Plan should take effect immediately, but that its ongoing effectiveness should be subject to the approval of the “ Independent Shareholders ” (as hereinafter defined);

AND WHEREAS in order to implement the Rights Plan, the Board of Directors has authorized the issuance of:

(a) one right (a “ Right ”) effective at the Record Time (as hereinafter defined) in respect of each Common Share outstanding at the Record Time; and

(b) one Right in respect of each Common Share issued after the Record Time and prior to the earlier of the Separation Time (as hereinafter defined) and the Expiration Time (as hereinafter defined);

AND WHEREAS each Right entitles the Holder thereof, after the Separation Time, to purchase securities of the Corporation pursuant to the terms and subject to the conditions set forth herein;

AND WHEREAS the Corporation desires to appoint the Rights Agent to act on behalf of the Corporation and the holders of Rights, and the Rights Agent has agreed to act on behalf of the Corporation and the holders of Rights in connection with the issuance, transfer, exchange and replacement of Rights Certificates (as hereinafter defined), the exercise of Rights and other matters referred to herein;

NOW THEREFORE, in consideration of the foregoing premises and the respective covenants and agreements set forth herein, the parties hereby agree as follows:

ARTICLE 1
INTERPRETATION

1.1 Certain Definitions

For purposes of this Agreement, the following terms have the meanings indicated:

(a) “ 1933 Securities Act ” shall mean the United States Securities Act of 1933 , as amended, and the rules and regulations thereunder, and any successor laws or regulations thereto;

(b) “ 1934 Exchange Act ” shall mean the United States Securities Exchange Act of 1934 , as amended, and the rules and regulations thereunder, and any successor laws or regulations thereto;

(c) “ Acquiring Person ” shall mean any Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares; provided, however, that the term “Acquiring Person” shall not include:

(i) the Corporation or any Subsidiary of the Corporation;

(ii) any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of one or any combination of:

(A) a Corporate Acquisition which, by reducing the number of Voting Shares outstanding, increases the percentage of Voting Shares Beneficially Owned by such Person to or above 20% or more of the Voting Shares then outstanding;

(B) an Exempt Acquisition;

(D) a Pro Rata Acquisition; or

(E) a Convertible Security Acquisition;

provided, however, that if a Person becomes the Beneficial Owner of 20% or more of the Voting Shares then outstanding by reason of one or any combination of a Corporate Acquisition, an Exempt Acquisition, a Permitted Bid Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition, and thereafter becomes the Beneficial Owner of an additional 1% of Voting Shares then outstanding (other than pursuant to any one or a combination of a Corporate Acquisition, an Exempt Acquisition, a Permitted Bid Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition), then as of the date such Person becomes the Beneficial Owner of such additional Voting Shares, such Person shall become an Acquiring Person;

(iii) a Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares determined as at the Record Time (a “ Grandfathered Person ”);

provided, however, that this exemption shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the Record Time, become the Beneficial Owner of any Voting Shares not Beneficially Owned by such Person as at the Record Time (other than through any one or any combination of a Corporate Acquisition, an Exempt Acquisition, a Permitted Bid Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition);

(iv) for a period of ten days after the Disqualification Date (as hereinafter defined), any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on clause (vi) of the definition of Beneficial Owner solely because such Person makes or announces an intention to make a Take-over Bid in respect of Voting Shares and/or Convertible Securities either alone or by acting jointly or in concert with any other Person. For the purposes of this definition, “ Disqualification Date ” means the first date of a public announcement of facts indicating that any Person is making or intends to make a Take-over Bid, either alone, through such Person’s Affiliates or Associates or by acting jointly or in concert with any other Person; or

(v) an underwriter or member of a banking or selling group that acquires Voting Shares from the Corporation in connection with a distribution of securities of the Corporation pursuant to a prospectus or by way of private placement;

(d) “ Affiliate ” when used to indicate a relationship with a Person, shall mean a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person;

(e) “ Agreement ” means this agreement as amended, modified or supplemented from time to time; “ hereof ”, “ herein ”, “ hereto ” and similar expressions mean and refer to this shareholder rights plan agreement as a whole and not to any particular part of this Agreement;

(f) “ Associate ”, when used to indicate a relationship with a specified Person, shall mean (i) any relative of that Person who resides in the same home as that Person, (ii) any Person who resides in the same home as that Person and to whom that Person is married or with whom that Person is living in a conjugal relationship outside marriage, or (iii) any relative of a person mentioned in clause (ii) who has the same home as that Person;

(g) a Person shall be deemed the “ Beneficial Owner ” of, and to have “ Beneficial Ownership ” of, and to “ Beneficially Own ”:

(i) any securities as to which such Person or any of such Person’s Affiliates or Associates is the owner at law or in equity including, for greater certainty, pursuant to section 1.8 of MI 62-104;

(ii) any securities as to which such Person or any of such Person’s Affiliates or Associates has the right to acquire, where such right is exercisable immediately or within a period of 60 days, whether or not on condition or the happening of any contingency or the making of any payment, upon the exercise of any conversion right, exchange right or purchase right attaching to Convertible

Securities or pursuant to any agreement, arrangement, pledge or understanding whether or not in writing (other than (x) customary agreements with and between underwriters and/or banking group members and/or selling group members with respect to a distribution of securities pursuant to a prospectus or by way of private placement and (y) pledges of securities in the ordinary course of business of the lender granted as security for bona fide indebtedness) or otherwise and;

(iii) any securities which are subject to a lock-up or similar agreement to tender or deposit them into any Take-over Bid made by such Person or made by any Affiliate or Associate of such Person or made by any other person acting jointly or in concert with such Person; and

(iv) any securities which are Beneficially Owned within the meaning of clauses (i), (ii) and (iii) of this definition by any other Person with whom such Person is acting jointly or in concert with respect to the Corporation or any of its securities or assets;

provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to have “Beneficial Ownership” of, or to “Beneficially Own”, any security:

(v) by reason of (A) the holder of such security having agreed to deposit or tender such security to a Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person referred to in clause (iv) of this definition pursuant to a Permitted Lock-Up Agreement or (B) such security having been deposited or tendered pursuant to any Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person referred to in clause (iv) of this definition but only, in each case, until the earlier of such deposited or tendered security being taken up or paid for, whichever occurs first;

(vi) where such Person, any of such Person’s Affiliates or Associates or any other Person referred to in clause (iv) of this definition holds such security provided that:

(A) the ordinary business of any such Person (the “ Investment Manager ”) includes the management of investment funds for others (which others, for greater certainty, may include or be limited to one or more employee benefit plans or pension plans) and includes the acquisition or holding of securities for a non-discretionary account of a Client (as defined below) by a dealer or broker registered under applicable securities laws to the extent required and such security is held by the Investment Manager in the ordinary course of such business in the performance of such Investment Manager’s duties for the account of any other Person (a “ Client ”);

(B) such Person (the “ Trust Company ”) is licensed to carry on the business of a trust company under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each an “ Estate Account ”) or in relation to other accounts (each an “ Other Account ”) and holds such security in the

ordinary course of such duties for the estate of any such deceased or incompetent Person or for such other accounts;

(C) such Person (the “ Statutory Body ”) is established by statute for purposes that include, and the ordinary business or activity of such Person includes, the management of investment funds for employee benefit plans, pension plans, insurance plans or various public bodies and the Statutory Body holds such security in the ordinary course of and for the purposes of the management of such investment funds;

(D) such person (the “ Administrator ”) is the administrator or trustee of one or more pension funds or plans (a “ Plan ”) registered under the laws of Canada or any Province thereof or the corresponding laws of the jurisdiction by which such Plan is governed and the Administrator holds such security for the purposes of its activities as such; or

(E) such Person is a Crown agent or agency;

but only if the Investment Manager, the Trust Company, the Statutory Body, the Administrator or the Crown agent or agency, as the case may be, (a) did not acquire and does not Beneficially Own or hold such security for the purpose of or with the effect of changing or influencing the control of the issuer thereof, either alone or acting jointly or in concert with any other Person, or in connection with or as a participant in any transaction having that purpose or effect, (b) is not then making a Take-over Bid in respect of securities of the Corporation or has not then announced an intention to make a Take-over Bid in respect of securities of the Corporation and (c) is not then acting jointly or in concert with any other Person who is making a Take-over Bid or who has announced an intention to make a Take-over Bid, other than an Offer to Acquire Voting Shares or other securities of the Corporation (i) pursuant to a distribution by the Corporation or (2) by means of a Permitted Bid or a Competing Permitted Bid, or (3) by means of ordinary market transactions (including prearranged trades entered into in the ordinary course of the business of such Person) executed through the facilities of a stock exchange or organized over-the-counter market;

(vii) because such Person is

(A) a Client of or has an account with the same Investment Manager as another Person on whose account the Investment Manager holds such security,

(B) an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security; or

(viii) where such Person is

(A) a Client of an Investment Manager and such security is owned at law or in equity by the Investment Manager;

(B) an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company; or

(ix) where such Person is the registered holder of securities as a result of carrying on the business of or acting as a nominee of the securities depository;

(h) “ Board of Directors ” shall mean the board of directors of the Corporation, as constituted from time to time;

(i) “ Business Corporations Act ” shall mean the Business Corporations Act (British Columbia), S.B.C. 2002, c.27, as amended, and the regulations made thereunder and any comparable or successor laws or regulations thereto;

(j) “ Business Day ” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in Vancouver are authorized or obligated by law to close;

(k) “ Canadian Dollar Equivalent ” of any amount which is expressed in United States dollars shall mean, on any date, the Canadian dollar equivalent of such amount determined by multiplying such amount by the U.S.-Canadian Exchange Rate in effect on such date;

(l) “ close of business ” on any given date shall mean the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the office of the transfer agent for the Common Shares in Vancouver, British Columbia (or, after the Separation Time, the office of the Rights Agent in Vancouver, British Columbia) is closed to the public;

(m) “ Common Shares ” shall mean the common shares in the capital of the Corporation and any other share of the Corporation into which such shares may be sub-divided, consolidated, re-classified or changed;

(n) “ Competing Permitted Bid ” shall mean a Take-over Bid that:

(i) is made after a Permitted Bid has been made and prior to the expiry of that Permitted Bid (in this definition, the “ Prior Bid ”);

(ii) satisfies all the components of the definition of a Permitted Bid except the requirements set out in clause (ii) of that definition; and

(iii) contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified condition that no Voting Shares shall be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date that is no earlier than the later of: (i) 35 days (or such other minimum period of days as may be prescribed by MI 62-104) after the announcement of such Competing Permitted Bid; and (ii) the 60th date after the

date on which the earliest Permitted Bid which preceded the Competing Permitted Bid was made and then only if at that date more than 50% of the then outstanding Voting Shares held by Independent Shareholders have been deposited or tendered pursuant to such Take-over Bid and not withdrawn;

(o) “ controlled ”: a Person is considered to be “controlled” by another Person or two or more Persons if:

(i) in the case of a Person other than a partnership or a limited partnership, including, without limitation, a corporation or body corporate:

(A) securities entitled to vote in the election of directors or trustees carrying more than 50% of the votes for the election of directors or trustees of such Person are held, directly or indirectly, by or on behalf of the other Person or Persons; and

(B) the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors or trustees of such Person;

(ii) in the case of a partnership other than a limited partnership, more than 50% of the interests in such partnership are held by the other Person or Persons; and

(iii) in the case of a limited partnership, the other Person or each of the other Persons is a general partner of the limited partnership,

and unless the context otherwise requires “ controls ”, “ controlling ” and “ under common control with ” shall be interpreted accordingly;

(p) “ Convertible Securities ” shall mean at any time any securities issued by the Corporation (including rights, warrants and options but excluding the Rights) carrying any purchase, exercise, conversion or exchange rights, pursuant to which the holder thereof may acquire Voting Shares or other securities convertible into or exercisable or exchangeable for Voting Shares (in each case, whether such right is exercisable immediately or after a specified period and whether or not on conditions or the happening of any contingency or the making of any payment);

(q) “ Convertible Security Acquisition ” shall mean the acquisition of Voting Shares upon the exercise, conversion or exchange of Convertible Securities by a Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition;

(r) “ Co-Rights Agents ” shall have the meaning ascribed thereto in subsection 4.1(a);

(s) “ Corporate Acquisition ” shall mean an acquisition or a redemption of Voting Shares by the Corporation which by reducing the number of Voting Shares outstanding increases the proportionate number of Voting Shares Beneficially Owned by any Person;

(t) “ Election to Exercise ” shall have the meaning attributed thereto in subsection 2.2(d)(ii);

(u) “ Exempt Acquisition ” shall mean an acquisition of Voting Shares or Convertible Securities:

(i) in respect of which the Board of Directors has waived the application of section 3.1 pursuant to the provisions of section 5.2 or which was made on or prior to the Record Time;

(ii) pursuant to a distribution of Voting Shares or Convertible Securities made by the Corporation pursuant to a prospectus provided that the Person does not acquire a greater percentage of the Voting Shares or Convertible Securities offered in the distribution than the percentage of Voting Shares such Person Beneficially Owned immediately prior to such acquisition;

(iii) pursuant to an issuance and sale by the Corporation of Voting Shares or Convertible Securities by way of a private placement by the Corporation, provided that all necessary stock exchange approvals for such distribution have been obtained and such distribution complies with the terms and conditions of such approvals; or

(iv) pursuant to an amalgamation, merger or other statutory procedure requiring approval of the shareholders of the Corporation;

(v) “ Exercise Price ” shall mean, as of any date, the price at which a Holder may purchase the securities issuable upon exercise of one whole Right. Until adjustment thereof in accordance with the terms hereof, the Exercise Price shall be $64;

(w) “ Expiration Time ” shall mean the earlier of:

(i) the Termination Time;

(ii) the termination of the third annual meeting of the shareholders of the Corporation occurring after the date of ratification of this Agreement pursuant to section 5.15 hereof if the continuation of the Rights Plan is not submitted to holders of Voting Shares for their approval at such meeting or, if so submitted, is not approved by a majority of the votes cast by Independent Shareholders present or represented by proxy; and

(iii) the close of the third annual meeting of shareholders of the Corporation occurring after the date of approval of the continuation of the Rights Plan pursuant to paragraph (ii) above or this paragraph (iii) if the continuation of the Rights Plan is not submitted to holders of Voting Shares for their approval at such meeting or, if so submitted, is not approved by a majority of the votes cast by Independent Shareholders present or represented by proxy;

(x) “ Flip-in Event ” shall mean a transaction in or pursuant to which any Person becomes an Acquiring Person;

(y) “ Holder ” of any Rights, unless the context otherwise requires, shall mean the registered holder of such Rights (or, prior to the Separation Time, of the associated Common Shares);

(z) “ Independent Shareholders ” shall mean the holders of Voting Shares other than:

(i) any Acquiring Person;

(ii) any Grandfathered Person;

(iii) any Offeror;

(iv) any Associate or Affiliate of an Acquiring Person, a Grandfathered Person or an Offeror;

(v) any Person acting jointly or in concert with an Acquiring Person, a Grandfathered Person or an Offeror; and

(vi) any employee benefit plan, stock purchase plan, deferred profit sharing plan and any other similar plan or trust for the benefit of employees of the Corporation or a Subsidiary of the Corporation, unless the beneficiaries of the plan or trust direct the manner in which the Voting Shares are to be voted or direct whether the Voting Shares are to be tendered to a Take-over Bid;

(aa) “ Market Price ” per security of any securities on any date of determination shall mean the average of the daily closing prices per security of such securities (determined as described below) on each of the 20 consecutive Trading Days ending on the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in section 2.3 hereof shall have caused the closing prices used to determine the Market Price on any such Trading Day not to be fully comparable with the closing price on such date of determination (or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day), each such closing price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in section 2.3 hereof in order to make it fully comparable with the closing price on such date of determination (or, if the date of determination is not Trading Day, on the immediately preceding Trading Day), The closing price per security of any securities on any date shall be:

(i) the closing board lot sale price or, in case no such sale takes place on such date, the average of the closing bid and asked prices for each such security on such date, as reported by the principal stock exchange in Canada on which such securities are listed or admitted to trading;

(ii) if for any reason none of such prices described in (i) above is available for such day or the securities are not listed or admitted to trading on a Canadian stock exchange, the last sale price or, if such price is not available, the average of the closing bid and asked prices, for each such security on such date, as reported by such other securities exchange on which such securities are listed or admitted to trading;

(iii) if for any reason none of such prices described in (ii) above is available for such day or the securities are not listed or admitted to trading on a Canadian stock exchange or other securities exchange, the last sale price, or if no sale takes place, the average of the high bid and low asked prices for each such security on such date in the over-the-counter market, as quoted by any reporting system then in use (as determined by the Board of Directors); or

(iv) if for any such date none of such prices described in (iii) above is available or the securities are not listed or admitted to trading on a Canadian stock exchange or

any other securities exchange and are not quoted by any such reporting system, the average of the closing bid and asked prices for such date as furnished by a professional market maker making a market in the securities selected in good faith by the Board of Directors,

provided, however, that if on any such date none of such prices is available, the closing price per security of such securities on such date shall mean the fair value per security of such securities on such date as determined in good faith by a nationally or internationally recognized firm of investment dealers or investment bankers selected by the Board of Directors. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian dollars on such date at the Canadian Dollar Equivalent thereof

(bb) “ MI 62 104 ” shall mean Multilateral Instrument 62-104 Take-over Bids and Issuer Bids and any successor instruments thereto;

(cc) “ Nominee ” shall have the meaning ascribed thereto in subsection 2.2(c);

(dd) “ Offer to Acquire ” shall include:

(i) an offer to purchase, a public announcement of an intention to make an offer to purchase, or a solicitation of an offer to sell, Voting Shares; and

(ii) an acceptance of an offer to sell Voting Shares, whether or not such offer to sell has been solicited,

or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell;

(ee) “ Offerer ” shall mean a Person who has announced an intention to make or who has made a Take-over Bid;

(ff) “ Offeror’s Securities ” shall mean Voting Shares Beneficially Owned by an Offeror, on the date of an Offer to Acquire;

(gg) “ Permitted Bid ” shall mean a Take-over Bid made by an Offeror that is made by means of a take-over bid circular and which also complies with the following additional provisions:

(i) the Take-over Bid is made to all holders of Voting Shares as registered on the books of the Corporation, other than the Offeror;

(ii) the Take-over Bid contains, and the take-up and payment for securities tendered or deposited thereunder is subject to, an irrevocable and unqualified condition that no Voting Shares shall be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date which is not less than 60 days after the date of the Take-over Bid; and only if at such date more than 50% of the Voting Shares held by Independent Shareholders shall have been deposited or tendered pursuant to the Take-over Bid and not withdrawn;

(iii) the Take-over Bid contains an irrevocable and unqualified provision that, unless the Take-over Bid is withdrawn, Voting Shares may be deposited pursuant to such Take-over Bid at any time during the period of time between the date of the Take-over Bid and the date on which the Voting Shares subject to the Take-over Bid may be taken up and paid for and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn until taken up and paid for;

(iv) the Take-over Bid contains an irrevocable and unqualified provision that if, on the date on which Voting Shares may be taken up and paid for, more than 50% of the Voting Shares held by Independent Shareholders shall have been deposited or tendered pursuant to the Take-over Bid and not withdrawn, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Voting Shares for not less than 10 Business Days from the date of such public announcement; and

(v) if any holders of Voting Shares are registered on the records of the Company as residing in the United States or as a U.S. Person (as such terms are defined in Regulation S under the 1933 Securities Act ) or the Company has a class of securities registered under Sections 12(b) or 12(g) of the 1934 Exchange Act , then the Take-over Bid complies with all applicable requirements of the 1933 Securities Act and the 1934 Exchange Act ,

provided always that a Permitted Bid will cease to be a Permitted Bid at any time when such bid ceases to meet any of the provisions of this definition and provided that, at such time, any acquisition of Voting Shares made pursuant to such Permitted Bid, including any acquisitions of Voting Shares theretofore made, will cease to be a Permitted Bid Acquisition;

(hh) “ Permitted Bid Acquisitions ” shall mean acquisitions of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted Bid;

(ii) “ Permitted Lock-Up Agreement ” means an agreement between a Person and one or more holders of Voting Shares or Convertible Securities (each a “ Locked-up Person ”) (the terms of which are publicly disclosed and a copy of which is made available to the public (including the Corporation) not later than the date the Lock-up Bid (as defined below) is publicly announced or, if the agreement was entered into after the date of the Lock-up Bid, as soon as possible after it is entered into and in any event not later than the date following the date of such agreement), pursuant to which such Locked-up Persons agree to deposit or tender Voting Shares or Convertible Securities (or both) to a Take-over Bid (the “ Lock-up Bid ”) made by the Person or any of such Person’s Affiliates or Associates or any other Person referred to in Clause (iv) of the definition of Beneficial Owner, provided that the agreement:

(i) (A) permits the Locked-up Person to terminate its obligation to deposit or tender, and permits the Locked-Up Person to withdraw if already deposited or tendered, the Voting Shares or Convertible Securities (or both) to or from the Lock-Up Bid in order to tender or deposit such securities to another Take-over Bid or to support another transaction that provides consideration for each Voting Share or Convertible Security that exceeds the consideration for each Voting Share or Convertible Security contained in or proposed to be contained in the Lock-up Bid; or

(B) permits the Locked-up Person to terminate its obligation to deposit or tender, and permits the Locked-Up Person to withdraw if already deposited or tendered, the Voting Shares or Convertible Securities (or both) to or from the Lock-Up Bid in order to tender or deposit such securities to another Take-over Bid or to support another transaction that provides consideration for each Voting Share or Convertible Security that exceeds the consideration for each Voting Share or Convertible Security contained in or proposed to be contained in the Lock-up Bid by more than a specified amount (the “Specified Amount”) provided that the Specified Amount is not greater than 7% of the consideration contained in or proposed to be contained in Lock-Up Bid;

(ii) if applicable, permits the Locked-up Person to terminate its obligation to deposit or tender, and permits the Locked-Up Person to withdraw if already deposited or tendered, the Voting Shares or Convertible Securities (or both) to or from the Lock-Up Bid in order to tender or deposit such securities to another Take-over Bid or to support another transaction if the number of Voting Shares to be purchased under such other Take-over Bid or transaction exceeds the number of Voting Shares to be purchased or proposed to be purchased under the Lock-Up Bid by a specified percentage (the “ Specified Percentage ”), provided that the Specified Percentage is not greater than 7% per cent of the number of Voting Shares offered to be purchased under the Lock-Up Bid, and the consideration for each Voting Share or Convertible Security under such other Take-over Bid or transaction is equal to or greater than the consideration for each Voting Share or Convertible Security contained in or proposed to be contained in the Lock-up Bid; and

(iii) provides for no “break-up” fees, “top-up” fees, penalties, payments, expenses or other amounts that exceed in the aggregate the greater of: (A) the cash equivalent of 2.5% of the price or value payable under the Lock-up Bid to the Locked-up Person, and (B) 50% of the amount by which the price or value payable under another Take-over Bid or another transaction to a Locked-up Person exceeds the price or value of the consideration that such Locked-up Person would have received under the Lock-up Bid, to be payable, directly or indirectly, by such Locked-up Person pursuant to the agreement if any Locked-up Person fails to tender Voting Shares or Convertible Securities (or both) to the Lock-up Bid or withdraws Voting Shares or Convertible Securities (or both) previously tendered to the Lock-up Bid in order to tender such Voting Shares or Convertible Securities (or both) to another Take-over Bid or to support another transaction,

and, for greater certainty, the agreement may contain a right of first refusal or require a period of delay to give such Person an opportunity to at least match a higher consideration in another Take-over Bid or transaction or contain any other similar limitation on a Locked-up Person’s right to withdraw Voting Shares or Convertible Securities (or both) from the agreement, so long as any such limitation does not preclude the exercise by the Locked-up Person of the right to withdraw Voting Shares or Convertible Securities (or both) in sufficient time to tender to the other Take-over Bid or to support the other transaction;

(jj) “ Person ” shall include any individual, firm, partnership, association, trust, trustee, executor, administrator, legal personal representative, government, governmental entity

or authority, body corporate, corporation, incorporated or unincorporated organization, syndicate or other entity;

(kk) “ Pro Rata Acquisition ” shall mean an acquisition by a Person of Voting Shares or Convertible Securities:

(i) as a result of a stock dividend, a stock split or other event in respect of securities of the Corporation of one or more particular classes or series pursuant to which a Person becomes the Beneficial Owner of Voting Shares or Convertible Securities on the same pro rata basis as all other holders of securities of the particular class, classes or series;

(ii) pursuant to any regular dividend reinvestment plan or other plan made available by the Corporation to holders of its securities where such plan permits the holder to direct that some or all of (a) dividends paid in respect of shares of any class of the Corporation, (b) proceeds of redemption of shares of the Corporation, (c) interest paid on evidences of indebtedness of the Corporation, or (d) optional cash payments be applied to the purchase from the Corporation of further securities of the Corporation; or

(iii) pursuant to the receipt and/or exercise by the Person of rights (other than the Rights) issued by the Corporation to all of the holders of a series or class of Voting Shares on a pro-rata basis to subscribe for or purchase Voting Shares or Convertible Securities, provided that such rights are acquired directly from the Corporation and not from any other Person;

(ll) “ Record Time ” shall mean 12:01 a.m. (Vancouver time) on the date of this Agreement;

(mm) “ Redemption Price ” shall have the meaning attributed thereto in subsection 5.1(a);

(nn) “ regular periodic cash dividend ” shall mean cash dividends paid in any fiscal year of the Corporation to the extent that such cash dividends do not exceed, in the aggregate, the greatest of:

(i) 200% of the aggregate amount of cash dividends declared payable by the Corporation on its Common Shares in its immediately preceding fiscal year;

(ii) 300% of the arithmetic mean of the aggregate amounts of the annual cash dividends declared payable by the Corporation on its Common Shares in its three immediately preceding fiscal years; arid

(iii) 100% of the aggregate consolidated net income of the Corporation, before extraordinary items, for its immediately preceding fiscal year;

(oo) “ Rights ” shall mean the herein described rights to purchase securities pursuant to the terms and subject to the conditions set forth herein;

(pp) “ Rights Certificate ” shall have the meaning attributed thereto in clause 2.2(c)(i);

(qq) “ Rights Register ” shall have the meaning ascribed thereto in subsection 2.6(a);

(rr) “ Securities Act (British Columbia) ” shall mean the Securities Act , R.S.B.C. 1996, c. 418, and the rules and regulations thereunder, each as may be amended from time to time, and any comparable or successor laws, rules, instruments or regulations thereto;

(ss) “ Separation Time ” shall mean, subject to section 5.2, the close of business on the tenth Trading Day after the earliest of:

(i) the Stock Acquisition Date;

(ii) the date of the commencement of, or first public announcement of the intent of any Person (other than the Corporation or any Subsidiary of the Corporation) to commence, a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid);

(iii) the date upon which a Permitted Bid or a Competing Permitted Bid ceases to be such;

or, in the cases of clauses (ii) and (iii) of this definition, such later date as may be determined by the Board of Directors acting in good faith, including, if necessary under the 1933 Securities Act , such later date as may be necessary to ensure that a registration statement covering the Rights and the shares issuable upon exercise of the Rights under the 1933 Securities Act is effective; provided that if any Take-over Bid referred to in clause (ii) of this definition or any Permitted Bid or Competing Permitted referred to in clause (iii) of this definition expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the purposes of this definition, never to have been made;

(tt) “ Stock Acquisition Date ” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to section 7.1 of the Ontario Securities Commission Rule 62-504 Take-Over Bids and Issuer Bids, subsection 5.2(1) of MI 62-104 or section 13(d) under the 1934 Exchange Act ) by the Corporation or a Person of facts indicating that any Person has become an Acquiring Person;

(uu) “ Subsidiary ”: a body corporate is a Subsidiary of another body corporate if:

(i) it is controlled by (a) that other, or (b) that other and one or more bodies corporate, each of which is controlled by that other, or (c) two or more bodies corporate, each of which is controlled by that other, or

(ii) it is a Subsidiary of a body corporate that is that other’s Subsidiary;

(vv) “ Take-over Bid ” shall mean an Offer to Acquire Voting Shares or Convertible Securities (or both) if, assuming that the Voting Shares or Convertible Securities that are the subject of the Offer to Acquire are acquired at the date of such Offer to Acquire by the Person making such Offer to Acquire, the Voting Shares Beneficially Owned by the Person making the Offer to Acquire would constitute, in the aggregate, 20% or more of the outstanding Voting Shares;

(ww) “ Termination Time ” shall mean the time at which the right to exercise Rights shall terminate pursuant to subsection 5.1(d) or section 5.15 hereof;

(xx) “ Trading Day ”, when used with respect to any securities, shall mean a day on which the principal Canadian stock exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian stock exchange, a Business Day;

(yy) “ U.S.-Canadian Exchange Rate ” shall mean, on any date:

(i) if, on such date, the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into Canadian dollars, such rate; or

(ii) in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars calculated in such manner as may be determined by the Board of Directors from time to time acting in good faith; and

(zz) “ Voting Shares ” shall mean, collectively, the Common Shares of the Corporation and any other shares of capital stock or voting interests of the Corporation entitled to vote generally in the election of all directors.

1.2 Currency

All sums of money which are referred to in this Agreement are expressed in lawful money of Canada, unless otherwise specified.

1.3 Headings

The division of this Agreement into Articles, sections, subsections, clauses and subclauses and the insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

1.4 Number and Gender

Wherever the context so requires, terms used herein importing the singular number only shall include the plural and vice-versa and words importing only one gender shall include all others.

1.5 Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares

For purposes of this Agreement, the percentage of Voting Shares Beneficially Owned by any Person shall be and be deemed to be the product determined by the formula:

100 x A/B

Where:

A = the number of votes for the election of all directors generally attaching to the Voting Shares Beneficially Owned by such Person; and

B = the number of votes for the election of all directors generally attaching to all outstanding Voting Shares.

Where any Person is deemed to Beneficially Own unissued Voting Shares which may be acquired pursuant to Convertible Securities, such Voting Shares shall be deemed to be outstanding for the purpose

of calculating the percentage of Voting Shares Beneficially Owned by such Person in both the numerator and the denominator above, but no other unissued Voting Shares which may be acquired pursuant to any other outstanding Convertible Securities shall, for the purposes of that calculation, be deemed to be outstanding.

1.6 Acting Jointly or in Concert

For the purposes hereof, a Person is acting jointly or in concert with every Person who, is a party to any agreement, commitment or understanding (whether formal or informal and whether or not in writing) with the first Person or any Affiliate thereof, to acquire or offer to acquire Voting Shares (other than customary agreements with and between underwriters or banking group members or selling group members with respect to a public offering or private placement of securities or pledges of securities in the ordinary course of business).

1.7 Statutory References

Unless the context otherwise requires or except as expressly provided herein, any reference herein to a specific part, section, subsection, clause or rule of any Act or regulation shall refer to the same as it exists on the date hereof.

ARTICLE 2
THE RIGHTS

2.1 Legend on Common Share Certificates

(a) Certificates issued for Common Shares, including without limitation Common Shares issued upon the exercise, conversion or exchange of Convertible Securities, after the date hereof but prior to the close of business on the earlier of the Separation Time and the Expiration Time shall evidence one Right for each Common Share represented thereby and shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form:

Until the Separation Time (as defined in the Rights Agreement referred to below), this certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Shareholder Rights Plan Agreement, dated as of the 26th day of August, 2009, as amended from time to time (the ‘Rights Agreement”), between International Tower Hill Mines Ltd. (the “Corporation “) and Computershare Investor Services Inc., as Rights Agent, the terms of which are hereby incorporated herein by reference and a copy of which is on file and may be inspected during normal business hours at the principal executive offices of the Corporation. Under certain circumstances, as set forth in the Rights Agreement, such Rights may be amended, redeemed, may expire, may become null and void if in certain cases, they are “Beneficially Owned” by an “Acquiring Person”, as such terms are defined in the Rights Agreement, or a transferee thereof) or may be evidenced by separate certificates and may no longer be evidenced by this certificate. The Corporation will mail or arrange for the mailing of a copy of the Rights Agreement to the holder of this certificate without charge as soon as is reasonably practicable after the receipt of a written request therefor.

Certificates representing Common Shares that are issued and outstanding as at the date hereof shall evidence one Right for each Common Share evidenced thereby notwithstanding the absence of the foregoing legend until the earlier of the Separation Time and the Expiration Time.

(b) Registered holders of Common Shares who have not received a share certificate and are entitled to do so on the earlier of the Separation Time and the Expiration Time shall be entitled to Rights as if such certificates had been issued and such Rights shall for all purposes hereof be evidenced by the corresponding entries on the Corporation’s securities registers for the Common Shares,

2.2 Initial Exercise Price, Exercise of Rights and Detachment of Rights

(a) Subject to adjustment as provided herein, each Right will entitle the Holder thereof, after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price as at the Business Day immediately preceding the date of exercise of the Right, one Common Share (which Exercise Price and number of Common Shares are subject to adjustment as set forth herein). Notwithstanding any other provision of this Agreement, any Rights Beneficially Owned by the Corporation or any of its Subsidiaries shall be void.

(b) Until the Separation Time, (i) the Rights shall not be exercisable and no Right may be exercised, and (ii) for administrative purposes, each Right will be evidenced by the certificates for the associated Common Share registered in the name of the holder thereof (which certificate shall also be deemed to be a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share.

(c) From and after the Separation Time and prior to the Expiration Time, the Rights shall be exercisable and the registration and transfer of the Rights shall be separate from and independent of the Common Shares. Promptly following the Separation Time, the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time and, in respect of each Convertible Security converted into or exchanged or exercised for Common Shares after the Separation Time and prior to the Expiration Time, promptly after such conversion, exchange or exercise to the holder so converting, exchanging or exercising (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “ Nominee ”)), at such holder’s address as shown on the records of the Corporation (the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose),

(i) a certificate (a “ Rights Certificate ”) in substantially the form of Exhibit A hereto appropriately completed, representing the number of Rights held by such Holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule, regulation or judicial or administrative order or with any rule or regulation made pursuant thereto or with any rule or regulation of any self-regulatory

organization, stock exchange or quotation system on which the Rights may from time to time be listed or admitted to trading, or to conform to standard usage; and

(ii) a disclosure statement prepared by or on behalf of the Corporation describing the Rights;

provided that a Nominee shall be sent the materials provided for in clauses (i) and (ii) in respect of all Common Shares held of record by it which are not Beneficially Owned by an Acquiring Person. In order for the Corporation to determine whether any Person is holding Common Shares which are Beneficially Owned by another Person, the Corporation may require such first mentioned Person to furnish it with such information and documentation as the Corporation considers advisable.

(d) Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent, at its principal office in the city of Vancouver or any other office of the Rights Agent or Co-Rights Agent in the cities designated from time to time for that purpose by the Corporation with the approval of the Rights Agent:

(i) the Rights Certificate evidencing such Rights;

(ii) an election to exercise such Rights (an “ Election to Exercise ”) substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the Holder or his executors or administrators or other personal representatives or his or their legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and

(iii) payment by certified cheque, banker’s draft or money order payable to or to the order of the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the Holder of the Rights being exercised.

(e) Upon receipt of a Rights Certificate, accompanied by an Election to Exercise appropriately completed and duly exercised that does not indicate that such Right is null and void as provided by subsection 3.1(b) and by payment as set forth in subsection 2.2(d)(iii), the Rights Agent (unless otherwise instructed in writing by the Corporation in the event that the Corporation is of the opinion that the Rights cannot by exercised in accordance with this Agreement) will thereupon promptly:

(i) requisition from the transfer agent for the Common Shares, certificates representing the number of Common Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agent to comply with all such requisitions);

(ii) after receipt of any certificates referred to in clause 2.2(e)(i), deliver such certificates to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder;

(iii) when appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuing fractional Common Shares;

(iv) when appropriate, after receipt, deliver such cash (less any amounts required to be withheld) by way of cheque to or to the order of the registered holder of the Rights Certificate; and

(v) tender to the Corporation all payments received on exercise of the Rights.

(f) In case the Holder of any Rights shall exercise less than all the Rights evidenced by such Holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such Holder or to such Holder’s duly authorized assigns.

(g) The Corporation covenants and agrees that it will:

(i) take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable;

(ii) take all such action as may be necessary and within its power to comply with any applicable requirements of the Business Corporations Act , the Securities Act (British Columbia) the 1933 Securities Act , the 1934 Exchange Act and the comparable securities legislation of each of the provinces and territories of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights;

(iii) on or before the issuance thereof, use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed or admitted to trading upon issuance on the principal exchange or exchanges on which the Common Shares are then listed or admitted to trading at that time;

(iv) cause to be reserved and kept available out of its authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights; and

(v) pay when due and payable any and all Canadian and United States federal, provincial and state transfer taxes (not including any tax in the nature of income or capital gains taxes of the Holder or exercising Holder or any liability of the Corporation to withhold tax) and charges which may be payable in respect of the original issuance or delivery of the Rights Certificates or certificates for Common Shares or registration of the Common Shares in the securities register of the Corporation, provided that the Corporation shall not be required to pay any transfer tax or charge which may be payable in respect of the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares or registration of the Common Shares in the securities register of the

Corporation in a name other than that of the Holder of the Rights being transferred or exercised.

2.3 Adjustments to Exercise Price Number of Rights

(a) The Exercise Price, the number and kind of securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this section 2.3 and in subsection 3.1(a).

(b) In the event the Corporation shall at any time after the Record Time and prior to the Expiration Time:

(i) declare or pay a dividend on Common Shares payable in Common Shares or Convertible Securities other than pursuant to any regular dividend reinvestment plan of the Corporation providing for the acquisition of Common Shares;

(ii) subdivide or change the then outstanding Common Shares into a greater number of Common Shares;

(iii) consolidate or change the then outstanding Common Shares into a smaller number of Common Shares; or

(iv) issue any Common Shares, Convertible Securities or other capital stock of the Corporation in respect of, in lieu of or in exchange for existing Common Shares except as otherwise provided in this section 2.3;

the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, consolidation, other change, or issuance and the number of Common Shares or other securities, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right shall be entitled to receive, upon payment of the applicable Exercise Price then in effect, the aggregate number of Common Shares or other securities, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the share transfer books of the Corporation were open, such holder would have been entitled to receive as a result of such dividend, subdivision, consolidation, other change, or issuance.

(c) In the event the Corporation shall at any time after the Record Time and prior to the Expiration Time fix a record date for the issuance of rights, options or warrants to all holders of Common Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Shares, shares having the same rights, privileges, restrictions and conditions as Common Shares (“equivalent common shares”), or securities convertible into or exchangeable for or carrying a right to purchase Common Shares or equivalent common shares at a price per Common Share or per equivalent common share (or, if a security convertible into or exchangeable for or carrying a right to purchase or subscribe for Common Shares or equivalent common shares, having a conversion, exchange or exercise price, including the price required to be paid to purchase such convertible or exchangeable security or right per share) less than 90% of the Market Price per Common Share on the second Trading Day immediately preceding such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction:

(i) the numerator of which shall be the number of Common Shares outstanding on such record date, plus the number of Common Shares that the aggregate offering price of the total number of Common Shares and/or equivalent common shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the convertible or exchangeable securities or rights so to be offered, including the price required to be paid to purchase such convertible or exchangeable securities or rights) would purchase at such Market Price per Common Share; and

(ii) the denominator of which shall be the number of Common Shares outstanding on such record date, plus the number of additional Common Shares and/or equivalent common shares to be offered for subscription or purchase (or into which the convertible or exchangeable securities or rights so to be offered are initially convertible, exchangeable or exercisable).

In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the Holders of Rights. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, or if issued, are not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would have been in effect if such record date had not been fixed, or to the Exercise Price which would be in effect based upon the number of Common Shares, equivalent common shares or securities convertible into or exchangeable or exercisable for Common Shares actually issued upon the exercise of such rights, options or warrants, as the case may be.

For the purposes of this Agreement, the granting of the right to purchase Common Shares (whether from treasury or otherwise) pursuant to a dividend reinvestment plan or any employee benefit, stock option or similar plans shall be deemed not to constitute an issue of rights, options or warrants by the Corporation; provided, however, that, in all such cases, the right to purchase Common Shares is at a price per share of not less than 90% of the current market price per share (determined as provided in such plans) of the Common Shares.

(d) In the event the Corporation shall at any time after the Record Time and prior to the Expiration Time fix a record date for the making of a distribution to all holders of Common Shares (including any such distribution made in connection with a merger in which the Corporation is the continuing corporation or amalgamation) of evidences of indebtedness or assets, including cash (other than a regular periodic cash dividend or a dividend paid in Common Shares, but including any dividend payable in securities other than Common Shares), subscription rights, options or warrants (excluding those referred to in subsection 2.3(c)) hereof at a price per Common Share that is less than 90% of the Market Price per Common Share on the second Trading Day immediately preceding such record date, the Exercise Price in respect of the Rights to be in effect after such record date shall be determined by multiplying the Exercise Price in respect of the Rights in effect immediately prior to such record date by a fraction:

(i) the numerator of which shall be the Market Price per Common Share on such record date, less the fair market value (as determined in good faith by the Board

of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the Holders of Rights), on a per share basis, of the portion of the evidences of indebtedness, cash, assets, subscription rights, options or warrants so to be distributed; and

(ii) the denominator of which shall be such Market Price per Common Share.

Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such a distribution is not so made, the Exercise Price shall be readjusted to be the Exercise Price which would have been in effect if such record date had not been fixed.

(e) Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price; provided, however, that any adjustments which by reason of this subsection 2.3(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth of a Common Share or Right. Notwithstanding the first sentence of this subsection 2.3(e), any adjustment required by this section 2.3 shall be made no later than the Expiration Time.

(f) In the event the Corporation shall at any time after the Record Time and prior to the Expiration Time issue any shares of capital stock (other than Common Shares), or rights, options or warrants to subscribe for or purchase any such capital stock, or securities convertible into or exchangeable for any such capital stock, in a transaction referred to in clause 2.3(b)(i) or (iv), if the Board of Directors acting in good faith determines that the adjustments contemplated by subsection 2.3(b) in connection with such transaction will not appropriately protect the interests of the Holders of Rights, the Board of Directors acting in good faith may determine what other adjustments to the Exercise Price, number of Rights and/or securities purchasable upon exercise of Rights would be appropriate and, notwithstanding subsection 2.3, such adjustments, rather than the adjustments contemplated by subsection 2.3, shall be made. The Corporation and the Rights Agent shall have authority with the prior approval of the holders of the Common Shares or the Holders of Rights as may be required to amend this Agreement in accordance with section 5.5 hereof, as appropriate to provide for such adjustments.

(g) Unless the Corporation shall have exercised its election as provided in subsection 2.3(h), upon each adjustment of an Exercise Price as a result of the calculations made in subsections 2.3(c) and (d), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Common Shares, as the case may be (calculated to the nearest one ten-thousandth), obtained by:

(i) multiplying:

(A) the number of such Common Shares which would have been issuable upon the exercise of a Right immediately prior to this adjustment; by

(B) the relevant Exercise Price in effect immediately prior to such adjustment of the relevant Exercise Price; and

(ii) dividing the product so obtained by the relevant Exercise Price in effect immediately after such adjustment of the relevant Exercise Price.

(h) The Corporation may elect on or after the date of any adjustment of an Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number of Common Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of Common Shares for which such a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the relevant Exercise Price in effect immediately prior to adjustment of the relevant Exercise Price by the relevant Exercise Price in effect immediately after adjustment of the relevant Exercise Price. The Corporation shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the relevant Exercise Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this subsection 2.3(h), the Corporation shall, as promptly as is practicable, cause to be distributed to holders of record of Rights Certificates on such record date, Rights Certificates evidencing, subject to section 5.6, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Corporation, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein and may bear, at the option of the Corporation, the relevant adjusted Exercise Price and shall be registered in the names of holders of record of Rights Certificates on the record date specified in the public announcement.

(i) Each Right originally issued by the Corporation subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of Common Shares purchasable from time to time hereunder upon exercise of a Right immediately prior to such issue, all subject to further adjustment as provided herein.

(j) If as a result of an adjustment made pursuant to this section 2.3, the holder of any Right thereafter exercised shall become entitled to receive any shares other than Common Shares, thereafter the number of such other shares so receivable upon exercise of any Right and the applicable Exercise Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as is practicable to the provisions with respect to the Common Shares contained in this section 2.3, and the provisions of this Agreement with respect to the Common Shares shall apply on like terms to any such other shares.

(k) Irrespective of any adjustment or change in the Exercise Price or the number of Common Shares issuable upon the exercise of the Rights, the Rights Certificate theretofore and thereafter issued may continue to express the Exercise Price per Common Share and the

number of Common Shares which were expressed in the initial Rights Certificates issued hereunder.

(l) In any case in which this section 2.3 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer until the occurrence of such event the issuance to the Holder of any Right exercised after such record date of the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise over and above the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Corporation shall deliver to such Holder a due bill or other appropriate instrument evidencing such Holder’s right to receive such additional Common Shares (fractional or otherwise) or other securities upon the occurrence of the event requiring such adjustment.

(m) Notwithstanding anything in this section 2.3 to the contrary, the Corporation shall be entitled to make such reductions in each Exercise Price, in addition to those adjustments expressly required by this section 2.3, as and to the extent that in its good faith judgment the Board of Directors shall determine to be advisable in order that any: (i) consolidation or subdivision of Common Shares; (ii) issuance wholly for cash of any Common Share or Convertible Securities; (iii) stock dividends; or (iv) issuance of rights, options or warrants referred to in this section 2.3, hereafter made by the Corporation to holders of its Common Shares, shall not be taxable to such shareholders.

(n) The Corporation covenants and agrees that, after the Separation Time, it will not, except as permitted by sections 5.1, 5.2 and 5.5, take (or permit any Subsidiary of the Corporation to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

(o) Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon exercise of the Rights is made at any time after the Separation Time pursuant to this section 2.3, the Corporation shall promptly:

(i) file with the Rights Agent and with the transfer agent for the Common Shares a certificate specifying the particulars of such adjustment or change; and

(ii) give, or cause the Rights Agent to give, notice of the particulars of such adjustment or change to Holders of the Rights who request a copy;

provided that failure to file such certificate or cause such notice to be given as aforesaid, or any defect therein, shall not affect the validity of any such adjustment or change.

2.4 Date on Which Exercise is Effective

Each Person in whose name any certificate for Common Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Common Shares represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered (together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising Holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the Common Share transfer books of the Corporation

are closed, such person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Common Share transfer books of the Corporation are open.

2.5 Execution. Authentication, Delivery and Dating of Right Certificates

(a) The Rights Certificates shall be executed on behalf of the Corporation by any two of its officers or directors, provided that at the time of such execution none of such officer or director, any Affiliate or Associate of such officer or director or any person with whom such officer or director or any such Affiliate or Associate is acting jointly or in concert has commenced or publicly announced an intention to commence a Take-over Bid. The signature of any of these officers or directors on the Rights Certificates may be manual or facsimile. Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers or directors of the Corporation shall bind the Corporation, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the countersignature and delivery of such Rights Certificates.

(b) Promptly after the Corporation learns of the Separation Time, the Corporation will notify the Rights Agent in writing of such Separation Time and will deliver Rights Certificates executed by the Corporation to the Rights Agent for countersignature, and the Rights Agent shall countersign (manually or by facsimile signature in a manner satisfactory to the Corporation) and send such Rights Certificates to the Holders of the Rights pursuant to subsection 2.2(c) hereof. No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid.

2.6 Registration, Registration of Transfer and Exchange

(a) After the Separation Time, the Corporation will cause to be kept a register (the “ Rights Register ”) in which, subject to such reasonable regulations as it may prescribe, the Corporation will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed “ Rights Registrar ” for the purpose of maintaining the Rights Register for the Corporation and registering Rights and transfers of Rights as herein provided. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times.

After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to the provisions of subsection 2.6(c) and the other provisions of this Agreement, the Corporation will execute, and the Rights Agent will countersign and deliver, in the name of the Holder or the designated transferee or transferees as required pursuant to the Holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.

(b) All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be valid obligations of the Corporation, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange.

(c) Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this section 2.6, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) connected therewith.

(d) The Corporation shall not be required to register the transfer or exchange of any Rights after the Rights have been terminated pursuant to the provisions of this Agreement.

2.7 Mutilated. Destroyed, Lost and Stolen Rights Certificates

(a) If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Corporation shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.

(b) If there shall be delivered to the Corporation and the Rights Agent prior to the Expiration Time (i) evidence to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate and (ii) such security or indemnity as may be required by each of them in their sole discretion to save each of them and any of their agents harmless, then, in the absence of notice to the Corporation or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Corporation shall execute and upon its request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.

(c) As a condition to the issuance of any new Rights Certificate under this section 2.7, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) connected therewith,

(d) Every new Rights Certificate issued pursuant to this section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence a contractual obligation of the Corporation, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time enforceable by anyone, and shall entitle the Holder of the Rights to all the benefits of this Agreement equally and proportionately with any and all other Rights duly issued by the Corporation hereunder.

2.8 Persons Deemed Owners

Prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever and the Corporation and the Rights Agent shall not be affected by any notice or knowledge to the contrary except as required by statute or by order of a court of competent jurisdiction.

2.9 Delivery and Cancellation of Certificates

All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Corporation may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Corporation may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided in this section 2.9, except as expressly permitted by this Agreement. The Rights Agent shall destroy all cancelled Rights Certificates and deliver a certificate of destruction to the Corporation on request by the Corporation.

2.10 Agreement of Rights Holders

Every Holder of Rights, by accepting such Rights, becomes a party to this Agreement and for greater certainty is bound by the provisions herein and consents and agrees with the Corporation and the Rights Agent and with every other Holder of Rights that:

(a) such holder shall be bound by and subject to the provisions of this Agreement, as amended from time to time in accordance with the terms hereof, in respect of all Rights held;

(b) prior to the Separation Time, each Right will be transferable only together with, and will be transferred by a transfer of, the associated Common Share certificate representing such Right;

(c) after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;

(d) prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) for registration of transfer or exchange, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated Common Share certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected by any notice to the contrary;

(e) such holder is not entitled and has waived his right to receive any fractional Rights or any fractional Common Shares upon exercise of a Right (except as provided herein); and

(f) notwithstanding anything in this Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any Holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of a preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by

any governmental authority, prohibiting or otherwise restraining performance of such obligation.

2.11 Rights Certificate Holder not Deemed a Shareholder

No Holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever to be the holder of any Common Share or any other share or security of the Corporation which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed to confer upon the Holder of any Right or Rights Certificate, as such, any of the rights, title, benefits or privileges of a holder of Common Shares or any other shares or securities of the Corporation or any right to vote at any meeting of shareholders of the Corporation whether for the election of directors or otherwise or upon any matter submitted to holders of shares of the Corporation at any meeting thereof, or to give or withhold consent to any action of the Corporation, or to receive notice of any meeting or other action affecting any holder of Common Shares or any other shares or securities of the Corporation except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise, until such Rights shall have been duly exercised in accordance with the terms and provisions hereof.

ARTICLE 3
ADJUSTMENTS TO THE RIGHTS ON FLIP-IN EVENT

3.1 Flip-in Event

(a) Subject to subsection 3.1(b) and section 5.2, in the event that prior to the Expiration Time a Flip-in Event shall occur, each Right shall constitute, effective from and after the later of its date of issue and at the close of business on the tenth Trading Day after the Stock Acquisition Date or such later time as the Board of Directors (or a committee of the Board of Directors so designated by the Board of Directors) may determine if the Board of Directors acting in good faith determines that a longer period of time is required to satisfy the requirements of the Business Corporations Act , the Securities Act (British Columbia), the 1933 Securities Act , the 1934 Exchange Act and the applicable securities laws or comparable legislation in each of the provinces and territories of Canada and of the United States and each of the States thereof in respect of the issue of Common Shares upon the exercise of Rights in accordance with this Agreement, the right to purchase from the Corporation, upon exercise thereof in accordance with the terms hereof, that number of Common Shares having an aggregate Market Price on the date of consummation or occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in section 2.3, without duplication, in the event that after such date of consummation or occurrence, an event of a type analogous to any of the events described in section 2.3 shall have occurred with respect to such Common Shares).

(b) Notwithstanding anything in this Agreement to the contrary, upon the occurrence of a Flip-in Event, any Rights that are or were Beneficially Owned on or after the earlier of the Separation Time or the Stock Acquisition Date by:

(i) an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate of an Acquiring Person); or

(ii) a transferee or other successor in title, direct or indirect, of Rights held by an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate of an Acquiring Person), whether or not for consideration, in a transfer that the Board of Directors acting in good faith has determined is part of a plan, arrangement, understanding or scheme of an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate of an Acquiring Person), that has the purpose or effect of avoiding clause 3.1(b)(i);

shall become null and void without any further action, and any Holder of such Rights (including transferees or other successor in title) shall thereafter have no right to exercise such Rights under any provision of this Agreement and further shall thereafter not have any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Holder of any Rights represented by a Rights Certificate which is submitted to the Rights Agent upon exercise or for registration of transfer or exchange which does not contain the necessary certifications set forth in the Rights Certificate establishing that such Rights are not void under this subsection 3.1(b) shall be deemed to be an Acquiring Person for the purposes of this subsection 3.1(b) and such rights shall be null and void.

(c) From and after the Separation Time, the Corporation shall do all such acts and things as shall be necessary and within its power to ensure compliance with the provisions of this section 3.1, including without limitation, all such acts and things as may be required to satisfy the requirements of the Business Corporations Act , the Securities Act (British Columbia), the 1933 Securities Act and the securities laws or comparable legislation of each of the provinces of Canada and of the United States and each of the states thereof in respect of the issue of Common Shares upon the exercise of Rights in accordance with this Agreement.

(d) Any Rights Certificate that represents Rights Beneficially Owned by a Person described in either clause 3.1(b)(i) or (ii) or transferred to any nominee of any such Person, and any Rights Certificate issued upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain the following legend:

The Rights represented by this Rights Certificate were Beneficially Owned by a Person who was an Acquiring Person or who was an Affiliate or an Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) or was acting jointly or in concert with any of them. This Rights Certificate and the Rights represented hereby are void or shall become void in the circumstances specified in subsection 3.1(b) of the Rights Agreement.

provided, however, that the Rights Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend but shall impose such legend only if instructed to do so by the Corporation in writing or if a Holder fails to certify upon transfer or exchange in the space provided on the Rights Certificate that such Holder is not a Person described in such legend. The issuance of a Rights Certificate without the legend referred to in this subsection 3.1(d) shall be of no effect on the provisions of subsection 3.1(b).

ARTICLE 4
THE RIGHTS AGENT

4.1 General

(a) The Corporation hereby appoints the Rights Agent to act as agent for the Corporation and the Holders of the Rights in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from time to time appoint one or more co-rights agents (“ Co-Rights Agents ”) as it may deem necessary or desirable, subject to the prior written approval of the Rights Agent. In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as the Corporation may determine with the written approval the Rights Agent and the Co-Rights Agents. The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder (including the reasonable fees and disbursements of any expert or advisor retained by the Rights Agent with the prior approval of the Corporation where such approval may reasonably be obtained and such approval not be unreasonably withheld). The Corporation also agrees to indemnify the Rights Agent and its directors, officers, employees and agents for, and to hold them harmless against, any loss, liability, cost, claim, action, damage, suit or expense, incurred without gross negligence, bad faith or wilful misconduct on the part of the Rights Agent, its officers, directors employees and agents, for anything done, suffered or omitted by the Rights Agent in connection with the acceptance, execution and administration of this Agreement and the exercise and performance of its duties hereunder, including the legal costs and expenses of defending against any claim of liability, which right to indemnification will survive the termination of this Agreement on the resignation or removal of the Rights Agent.

(b) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for Common Shares or any Rights Certificate or certificate for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged by the proper Person or Persons.

(c) The Corporation will inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this Agreement by the Rights Agent, and at any time, upon request, shall provide to the Rights Agent an incumbency certificate with respect to the then current directors and officers of the Corporation, provided that failure to inform the Rights Agent of any such events, or any defect therein, shall not affect the validity of any action taken hereunder in relation to such events.

4.2 Merger or Amalgamation or Change of Name of Rights Agent

(a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or amalgamated or with which it may be consolidated, or any corporation resulting from any merger, amalgamation, statutory arrangement or consolidation to

which the Rights Agent or any successor Rights Agent is a party, or any corporation succeeding to the shareholder or stockholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of section 4.4 hereof. In case at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates have not been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement.

(b) In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

4.3 Duties of Rights Agent

The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Corporation and the Holders of Rights Certificates, by their acceptance thereof, shall be bound.

(a) The Rights Agent, at the expense of the Corporation, may retain and consult with legal counsel (who may be legal counsel for the Corporation) or such other expert that the Rights Agent considers necessary to carry out its duties under this Agreement, and the opinion of such counsel or other expert will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion; the Rights Agent may also, with the approval of the Corporation (where such approval may reasonably be obtained and such approval not be unreasonably withheld), retain and consult with such other experts or advisors as the Rights Agent shall consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement (at the Corporation’s expense) and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert or advisor.

(b) Whenever in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by a person believed by the Rights Agent to be an officer or a director of the Corporation and delivered to the Rights Agent; and such certificate will be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

(d) The Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the certificates for Common Shares or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Corporation only.

(e) The Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Common Share certificate or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Corporation of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to subsection 3.1(b) hereof) or any adjustment required under the provisions of section 2.3 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by section 2.3 hereof describing any such adjustment or any written notice from the Corporation or any holder that a person has become an Acquiring Person); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization of any Common Shares to be issued pursuant to this Agreement or any Rights or as to whether any Common Shares will, when issued, be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable.

(f) The Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person believed by the Rights Agent to be an officer or a director of the Corporation, and to apply to such persons for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such person. All such instruction shall, except where circumstances make it impracticable or the Rights Agent otherwise agrees, be given in writing and, where not in writing, such instructions will be confirmed in writing as soon as is reasonably practicable after the giving of such instructions,

(h) The Rights Agent and any shareholder or stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or other securities of the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity.

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in good faith in the selection and continued employment thereof.

4.4 Change of Rights Agent

The Rights Agent may resign and be discharged from its duties under this Agreement upon 60 days’ notice (or such lesser notice as is acceptable to the Corporation) in writing, mailed by registered or certified mail or transmitted by facsimile to the Corporation and to the transfer agent of Common Shares, and to the Holders of the Rights in accordance with section 5.9 at the Corporation’s expense. The Corporation may remove the Rights Agent upon 60 days’ notice in writing, mailed by registered or certified mail or transmitted by facsimile to the Rights Agent and to the transfer agent of the Common Shares, and to the Holders of the Rights in accordance with section 5.9. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the Holder of any Rights (which Holder shall, with such notice, submit such Holder’s Rights Certificate for inspection by the Corporation), then the outgoing Rights Agent or Holder of any Rights may apply to any court of competent jurisdiction for the appointment of a new Rights Agent at the Corporation’s expense. Any successor Rights Agent, whether appointed by the Corporation or by such a court, shall be a corporation incorporated under the laws of Canada or a province thereof authorized to carry on the business of a trust company in the Province of British Columbia. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent, upon payment by the Corporation to the predecessor Rights Agent of all outstanding fees and expenses, owed by the Corporation to the predecessor Rights Agent pursuant to this Agreement, shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Corporation will file notice thereof in writing with the predecessor Rights Agent and the transfer agent of the Common Shares, and mail or cause to be mailed a notice thereof in writing to the Holders of the Rights. Failure to give any notice provided for in this section 4.4, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

4.5 Compliance with Money Laundering Legislation

The Rights Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Rights Agent reasonably determines that such an act might cause it to be in non-compliance with any applicable anti-money laundering or antiterrorist legislation, regulation or guideline. Further, should the Rights Agent reasonably determine at any time that its acting under this Agreement has resulted in it being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days’ written notice to the Corporation, provided: (i) that the Rights Agent’s written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Rights Agent’s satisfaction within such 10-day period, then such resignation shall not be effective.

4.6 Privacy Provision

The parties acknowledge that federal, provincial and/or state legislation that addresses the protection of individual’s personal information (collectively, “ Privacy Laws ”) applies to obligations and activities under this Agreement. Despite any other provision of this Agreement, neither party will take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Corporation will, prior to transferring or causing to be transferred personal information to the Rights Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or will have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Rights Agent will use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.

4.7 Force Majeure

Except for the payment obligations of the Corporation contained herein, neither party shall be liable to the other, or held in breach of this Agreement, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Agreement shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this section 4.7.

ARTICLE 5
MISCELLANEOUS

5.1 Redemption of Rights

(a) Redemption of Holders of Voting Shares

Until the occurrence of a Flip-in Event as to which the application of section 3.1 has not been waived pursuant to section 5.2 and provided that the provisions of subsection 5.2(c) are not applicable to such Flip-in Event, the Board of Directors may at any time (i) prior to the Separation Time, with the prior consent of the holders of Common Shares given in accordance with subsection 5.5(d)(i) or (ii) after the Separation Time, with the prior consent of the Holders of Rights given in accordance with subsection 5.5(d)(ii), elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.0000l per Right, appropriately adjusted in a manner analogous to the applicable adjustment provided for in section 2.3 if an event of a type analogous to any of the events described in section 2.3 shall have occurred (such redemption price being herein referred to as the “ Redemption Price ”).

(b) Deemed Redemption

The Board of Directors shall, without further formality, be deemed to have elected to redeem the Rights at the Redemption Price on the date that a Person who has made a Permitted Bid, a Competing Permitted Bid or a Take-over Bid in respect of which the Board of Directors has waived the application of section 3.1 takes up and pays for Voting Shares pursuant to the terms and conditions of such Permitted Bid, Competing Permitted Bid or Take-over Bid, as the case may be.

Where a Take-over Bid that is not a Permitted Bid or Competing Permitted Bid expires, is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption Price.

(d) Effect of Redemption

If the Board of Directors elects or is deemed to have elected to redeem the Rights, (i) the right to exercise the Rights will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price, and (ii) subject to subsection 5.1(f) no further Rights shall be issued.

(e) Notice of Redemption

Within ten Business Days after the Board of Directors electing or having been deemed to have elected to redeem the Rights, the Corporation shall give notice of redemption to the Holders of the then outstanding Rights by mailing such notice to all such Holders at their last address as they appear upon the Rights Register or, prior to the Separation Time, on the share register maintained by the Corporation’s transfer agent or transfer agents for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the Holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. The Corporation may not redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this section 5.1, except in connection with the purchase of Common Shares prior to the Separation Time.

(f) Reissuance of Rights

Upon the Rights being redeemed pursuant to this section 5.1, Rights shall be reissued under this Agreement to holders of record of Common Shares immediately following such redemption, and thereafter, all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Common Shares as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement, the Separation Time shall be deemed not to have occurred and such reissued Rights shall, without any further formality, be attached to the outstanding Common Shares in the same manner as prior to the occurrence of such Separation Time.

5.2 Waiver of Flip-In Event

(a) Subject to sections 5.2(c) and (d) (including, where applicable, with respect to obtaining the prior consent of the holders of Voting Shares), the Board of Directors may, at any time prior to the occurrence of a Flip-in Event as to which the application of section 3.1 has not been waived pursuant to this section 5.2, waive the application of section 3.1 to such Flip-in Event by written notice delivered to the Rights Agent.

(b) Notwithstanding and without limiting the generality of subsection 5.2(a), the Board of Directors may waive the application of section 3.1 to a Flip-in Event provided that the following conditions are satisfied:

(i) the Board of Directors has determined that the Acquiring Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become, an Acquiring Person; and

(ii) such Acquiring Person has reduced its Beneficial Ownership of Voting Shares such that at the time of the granting of the waiver pursuant to this subsection 5.2(b), it is no longer an Acquiring Person;

and, in the event of any such waiver, for the purposes of this Agreement, such Flip-in Event shall be deemed not to have occurred and the Separation Time shall be deemed not to have occurred as a result of such Person having inadvertently become an Acquiring Person. Written notice of any such waiver shall be given to the Rights Agent as soon as is reasonably practicable.

(c) Until the occurrence of a Flip-in Event as to which the application of section 3.1 has not been waived pursuant to this section 5.2, upon written notice to the Rights Agent, the Board of Directors may, with the prior consent of the holders of Voting Shares given in accordance with subsection 5.2(e), determine, if such Flip-in Event would occur by reason of an acquisition of Voting Shares otherwise than pursuant to a Take-over Bid made by means of a take-over bid circular to all holders of record of Voting Shares other than the Offeror and otherwise than in the circumstances set forth in subsection 5.2(b), to waive the application of section 3.1 to such Flip-in Event. In the event that the Board of Directors proposes such a waiver, the Board of Directors shall extend the Separation Time to a date subsequent to and not more than ten Business Days following the meeting of shareholders called to approve such waiver.

(d) Until the occurrence of a Flip-in Event as to which the application of section 3.1 has not been waived pursuant to this section 5.2, upon written notice delivered to the Rights Agent, the Board of Directors may determine to waive the application of section 3.1 to any Flip-in Event provided that the Flip-in Event would occur by reason of a Take-over Bid made by take-over bid circular sent to all holders of record of Voting Shares other than the Offeror and provided further that if the Board of Directors waives the application of section 3.1 to such Flip-in Event, the Board of Directors shall be deemed to have waived the application of section 3.1 to any other Flip-in Event occurring by reason of any Take-over Bid made by take-over bid circular to all holders of record of Voting Shares other than the respective Offeror which is made prior to the expiry of any Takeover Bid (as the same may be extended from time to time) made by take-over bid circular in respect of which a waiver is, or is deemed to have been, granted under this subsection 5.2(d).

(e) If a waiver of a Flip-in Event pursuant to subsection 5.2(c) is proposed at any time prior to the Separation Time, such redemption or waiver shall be submitted for approval to the holders of Voting Shares. Such approval shall be deemed to have been given if the redemption or waiver is approved by the affirmative vote of a majority of the votes cast by Independent Shareholders represented in person or by proxy at a meeting of such holders duly held in accordance with applicable laws and the Corporation’s articles.

5.3 Expiration

No Person shall have any rights whatsoever pursuant to or arising out of this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in subsection 4.1(a) hereof.

5.4 Issuance of New Rights Certificates

Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of Directors to reflect any adjustment or change in the number or kind or class of shares purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.

5.5 Supplements and Amendments

(a) The Corporation may from time to time supplement or amend this Agreement without the approval of any Holders of Rights or Voting Shares in order to correct any clerical or typographical error or which are required to maintain the validity or effectiveness of this Agreement as a result of any change in any applicable legislation, rules or regulations thereunder. The Board of Directors acting in good faith may by resolution, at or prior to the shareholders’ meeting referred to in section 5.15, or any adjournment or postponement thereof, supplement or amend this Agreement without the approval of any Holders of Rights or Voting Shares in order to make any changes which the Board of Directors may deem necessary or desirable (whether or not such action would materially adversely affect the interest of the holders of Rights generally). Notwithstanding anything in this section 5.5 to the contrary, no such supplement or amendment shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent to such supplement or amendment.

(b) Subject to the ability of the Board of Directors to supplement or amend this Agreement without the approval of any Holders of Rights or Voting Shares as provided in section 5.5(a), the Corporation may, with the prior consent of the holders of Common Shares obtained as set forth below, at any time prior to the Separation Time, amend, vary or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the Holders of Rights generally), provided that no such amendment, variation or deletion shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent to such amendment, variation or deletion. Such consent shall be deemed to have been given if such amendment, variation or deletion is authorized by the affirmative vote of a majority of the votes cast by Independent Shareholders present or represented at and entitled to be voted at a meeting of the holders of Common Shares duly called and held in compliance with applicable laws and the memorandum and articles of the Corporation.

(c) Subject to the ability of the Board of Directors to supplement or amend this Agreement without the approval of any Holders of Rights or Voting Shares as provided in section 5.5(a), the Corporation may, with the prior consent of the Holders of Rights, at any time on or after the Separation Time, amend, vary or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the Holders of Rights generally), provided that no such amendment, variation or deletion shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto. Such consent shall be deemed to have been

given if such amendment, variation or deletion is authorized by the affirmative vote of a majority of the votes cast by the Holders of Rights (other than Rights which are void pursuant to the provisions hereof) present or represented at and entitled to vote at a meeting of the Holder of Rights. For the purposes, hereof, the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Corporation’s notice of articles and articles and the Business Corporations Act with respect to meetings of shareholders of the Corporation and each Right shall be entitled to one vote at any such meeting.

(d) Any amendments, variations or deletions to or from this Agreement made by the Corporation to this Agreement pursuant to subsection 5.5(a) which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulation thereunder shall:

(i) if made before the Separation Time, be submitted to the holders of the Common Shares at the next meeting of such holders and the holders of the Common Shares may, by the majority referred to in subsection 5.5(b), confirm or reject such amendment, variation or deletion; or

(ii) if made on or after the Separation Time, be submitted to the Holders of Rights at a meeting to be called for a date not later than immediately following the next meeting of shareholders and the Holders of Rights may, by resolution passed by the majority referred to in subsection 5.5(c), confirm or reject such amendment, variation or deletion.

Any such amendment, variation or deletion shall, unless the Board of Directors otherwise stipulates, be effective from the date of the resolution of the Board of Directors adopting such amendment, variation or deletion until it is confirmed or rejected or until it ceases to be effective (as described in the next sentence) and, where such amendment, variation or deletion is confirmed, it continues in effect in the form so confirmed. If such amendment, variation or deletion is rejected by the holders of the Common Shares or the Holders of Rights or is not submitted to the holders of the Common Shares or the Holders of Rights as required, then such amendment, variation or deletion shall cease to be effective from and after the termination of the meeting at which it was rejected or to which it should have been but was not submitted or from and after the date of the meeting of Holders of Rights that should have been but was not held, and no subsequent resolution of the Board of Directors to amend, vary or delete all or any portion of this Agreement to substantially the same effect shall be effective until confirmed by the holders of the Common Shares or the Holders of Rights, as the case may be.

(e) The Corporation shall give notice in writing to the Rights Agent of any supplement, amendment, deletion, variation or rescission to this Agreement pursuant to this section 5.5 within five Business Days of the date of any such supplement, amendment, deletion, variation or rescission, provided that failure to give such notice, or any defect therein, shall not affect the validity of any such supplement, amendment, deletion, variation or rescission.

(f) Any amendment or supplement to this Agreement shall be subject to the receipt of any requisite approvals or consent from any applicable regulatory authority including, without limitation, any necessary approvals of any stock exchange on which the Common Shares are listed for trading.

5.6 Fractional Rights and Fractional Shares

(a) The Corporation shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. After the Separation Time, in lieu of issuing fractional Rights, the Corporation shall pay to the Holders of record of the Rights Certificates (provided the Rights represented by such Rights Certificates are not void pursuant to the provisions of subsection 3.1(b) at the time such fractional Rights would otherwise be issuable), an amount in cash equal to the same fraction of the Market Price of one whole Right in lieu of such fractional Rights.

(b) Share Certificates for Common Shares shall only be issued upon written request to the Corporation and the Corporation shall not be required in any circumstances to issue fractional Common Shares upon exercise of the Rights or to distribute certificates which evidence fractional Common Shares. In lieu of issuing fractional Common Shares, the Corporation shall pay to the registered Holders of Rights Certificates at the time such Rights are exercised as herein provided, an amount in cash equal to the same fraction of the Market Price of one Common Share.

(c) The Rights Agent shall have no obligation to make any payments in lieu of issuing fractions of Rights or Common Shares pursuant to subsections 5.6(a) or (b), respectively, unless and until the Corporation shall have provided to the Rights Agent the amount of cash to be paid in lieu of issuing such fractional Rights or Common Shares, as the case may be.

5.7 Rights of Action

Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective registered Holders of the Rights; and any registered Holder of any Rights, without the consent of the Rights Agent or of the registered Holder of any other Rights, may, on such Holder’s own behalf and for such Holder’s own benefit and the benefit of other Holders of Rights enforce, and may institute and maintain any suit, action or proceeding against the Corporation to enforce, or otherwise act in respect of, such Holder’s right to exercise such Holder’s Rights in the manner provided in such Holder’s Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the Holders of Rights, it is specifically acknowledged that the Holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

5.8 Notice of Proposed Actions

If after the Separation Time and prior to the Expiration Time:

(a) the Corporation shall propose to effect the liquidation, dissolution or winding up of the Corporation or the sale of all or substantially all of the Corporation’s assets;

(b) there shall occur an adjustment in the rights attaching to the Rights pursuant to section 3.1 as a result of the occurrence of a Flip-in Event,

(c) the Corporation shall propose to effect or permit (in cases where the Corporation’s permission is required) any Flip-in Event,

then, in each such case, the Corporation shall give to each Holder of a Right, in accordance with section 5.9 hereof, a notice of such proposed action or event, which shall specify the date on which such change to the Rights, Flip-in Event, liquidation, dissolution, winding up or sale is to take place, and such notice shall be so given at least 20 Business Days prior to the date of taking of such proposed action.

5.9 Notices

Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the Holder of any Rights to or on the Corporation shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent), or sent by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:

International Tower Hill Mines Ltd.
Suite 2300 - 1177 Hasting Street
Vancouver, B.C.
V6E 2K3

Attention: Corporate Secretary
Facsimile: (604) 408-7499

Any notice or demand authorized or required by this Agreement to be given or made by the Corporation or by a Holder of Rights to or on the Rights Agent shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Corporation), or sent by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:

Computershare Investor Services Inc.
510 Burrard Street, Floor
Vancouver, B.C. V6C 3B9

Attention: Manager Client Services, Stock Transfer
Facsimile: (604) 661-9401

Notices or demands authorized or required by this Agreement to be given or made by the Corporation or the Rights Agent to or on any Holder of Rights shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed to such Holder at the address of such Holder as it appears upon the Rights Register or, prior to the Separation Time, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the Holder receives the notice.

Any notice given or made in accordance with this section 5.9 shall be deemed to have been given and to have been received on the day of delivery, if so delivered; on the third Business Day (excluding each day during which there exists any general interruption of postal service due to strike, lockout or other cause) following the mailing thereof, if so mailed; and on the day of telegraphing, telecopying or sending of the same by other means of recorded electronic communication (provided such sending is during the normal business hours of the addressee on a Business Day and if not, on the first Business Day thereafter). Each of the Corporation and the Rights Agent may from time to time change its address for notice by notice to the other given in the manner aforesaid.

5.10 Costs of Enforcement

The Corporation agrees that if the Corporation or any other Person the securities of which are purchasable upon exercise of Rights fails to fulfil any of its obligations pursuant to this Agreement, then the Corporation or such Person will reimburse the Holder of any Rights for the costs and expenses (including reasonable legal fees) incurred by such Holder in actions to enforce his rights pursuant to any Rights or this Agreement.

5.11 Benefits of this Agreement

Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the Rights Agent and the Holders of the Rights any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights Agent and the Holders of the Rights.

5.12 Governing Law

This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws of the Province of British Columbia and for all purposes shall be governed by and construed in accordance with the laws of such province applicable to contracts to be made and performed entirely within such province.

5.13 Language

Les parties aux présentes ont exigées que la présente convention ainsi que tous les documents et avis qui s’y rattachent et/ou qui en découleront soient rédigés en langue anglaise. The parties hereto have required that this Agreement and all documents and notices related thereto and/or resulting therefrom be drawn up in the English language.

5.14 Severability

If any section, subsection, clause, subclause, term or provision hereof or the application thereof to any circumstance or any right hereunder shall, in any jurisdiction and to any extent, be invalid or unenforceable, such section, subsection, clause, subclause, term or provision or such right shall be ineffective only as to such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining sections, subsections, clauses, subclauses, terms and provisions hereof or rights hereunder in such jurisdiction or the application of such section, subsection, clause, subclause, term or provision or rights hereunder in any other jurisdiction or to circumstances other than those as to which it is specifically held invalid or unenforceable.

5.15 Effective Date

This Agreement is in full force and effect in accordance with its terms from and after the Record Time; provided, however, that if this Agreement is not ratified in the manner required by the TSX Venture Exchange, including by a resolution passed by a majority of the votes cast by the Independent Shareholders present or represented by proxy at a meeting of shareholders to be held not later than February 26, 2010, then this Agreement and all outstanding Rights shall, without further formality, terminate and be void and of no further force and effect on and from that date which is the earlier of (i) the date of termination of the meeting called to consider the confirmation of this Agreement, and (ii) February 26, 2010.

5.16 Determinations and Actions by the Board of Directors

All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made by the Board of Directors, in good faith, for the purposes of this Agreement shall not subject the Board of Directors or any director of the Corporation to any liability to the Holders of the Rights.

5.17 Rights of Board of Directors and the Corporation

Without limiting the generality of the foregoing, nothing contained herein shall be construed to suggest or imply that the Board of Directors shall not be entitled to recommend that holders of Voting Shares reject or accept any Take-over Bid or take any other action (including, without limitation, the commencement, prosecution, defence or settlement of any litigation and the submission of additional or alternative Take-over Bids or other proposals to the holders of the Voting Shares with respect to any Take-over Bid or otherwise that the Board of Directors believes is necessary or appropriate in the exercise of its fiduciary duties.

5.18 Regulatory Approvals

Any obligation of the Corporation or action or event contemplated by this Agreement shall be subject to the receipt of any requisite approval or consent from any governmental or regulatory authority, including any necessary approvals and/or acceptances of any stock exchange. Any amendment or supplement to this Agreement is subject to the approval of any stock exchange on which the Common Shares are listed.

5.19 Declaration as to Non-Canadian Holders

If, in the opinion of the Board of Directors (who may rely upon the advice of counsel), any action or event contemplated by this Agreement would require compliance by the Corporation with the securities laws or comparable legislation of a jurisdiction outside Canada, the Board of Directors acting in good faith shall take such actions as it may deem appropriate to ensure compliance. In no event shall the Corporation or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to persons who are citizens, residents or nationals of any jurisdiction other than Canada or the United States, in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes.

5.20 Time of the Essence

Time shall be of the essence in this Agreement.

5.21 Successors

All the covenants and provisions of this Agreement by or for the benefit of the Corporation or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

[Remainder of page left blank intentionally.]

5.22 Execution in Counterparts

This Agreement may be executed in any number of counterparts; each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	INTERNATIONAL TOWER HILL MINES LTD.


	By:	/s/ Donald C. Ewigleben

	By:	/s/ Tom S. Q. Yip


	COMPUTERSHARE INVESTOR SERVICES INC.


	By:	/s/ Pam Hosfield


	By:	/s/ Mariano Banting

EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
RIGHTS CERTIFICATE

Certificate No.

Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, OR TRANSFEREES OF AN ACQUIRING PERSON OR ITS ASSOCIATES OR AFFILIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM, MAY BECOME VOID WITHOUT ANY FURTHER ACTION.

This certifies that , or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan Agreement dated as of the 26 th day of August, 2009, as amended from time to time (the “Rights Agreement”), between International Tower Hill Mines Ltd., a corporation subsisting under the Business Corporations Act (British Columbia) (the “Corporation”) and Computershare Investor Services Inc., a company incorporated under the laws of Canada, as rights agent (the “Rights Agent”, which term shall include any successor Rights Agent under the Rights Agreement) to purchase from the Corporation at any time after the Separation Time (as such term is defined in the Rights Agreement) and prior to the Expiration Time (as such term is defined in the Rights Agreement), one fully paid and non-assessable Common Share of the Corporation (a “Common Share”) at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate together with the Form of Election to Exercise duly executed and submitted to the Rights Agent at its principal office in the city of Vancouver. The Exercise Price shall initially be $64 (Canadian) per Right and shall be subject to adjustment in certain events as provided in the Rights Agreement. The Rights evidenced by this Rights Certificate may not be exercised unless the Common Shares issuable upon such exercise have been qualified and registered or are exempt from such qualification and registration under all applicable securities laws in Canada and the United States.

In certain circumstances described in the Rights Agreement, the number of Common Shares which each Right entitles the registered holder thereof to purchase shall be adjusted as provided in the Rights Agreement.

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Corporation and the holders of the Rights. Copies of the Rights Agreement are on file at the registered office of the Corporation and are available upon written request.

This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights entitling the holder to purchase a like aggregate number of Common Shares as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in

part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation at a redemption price of $0.00001 per Right.

No fractional Common Shares will be issued upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof, a payment by cheque will be made, as provided in the Rights Agreement.

No holder of this Rights Certificate, as such, shall be entitled to vote, receive dividends or be deemed for any purpose the holder of Common Shares or of any other securities of the Corporation which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, any of the rights of a shareholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to shareholders of the Corporation at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders of the Corporation (except as provided in the Rights Agreement), or to receive dividends, distributions or subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Corporation.

Date:

INTERNATIONAL TOWER HILL MINES LTD.


By:			By:


Countersigned:

COMPUTERSHARE INVESTOR SERVICES INC.


By:

A-2

(To be attached to each Rights Certificate)

FORM OF ELECTION TO EXERCISE

TO:	INTERNATIONAL TOWER HILL MINES LTD.

AND TO:	COMPUTERSHARE INVESTOR SERVICES INC.

The undersigned hereby irrevocably elects to exercise whole Rights represented by the attached Rights Certificate to purchase the Common Shares issuable upon the exercise of such Rights and requests that certificates for such Shares be issued to:


(Name)

(Address)

(City and Province or State)

(Social Insurance Number or other taxpayer identification number)

If such number of Rights are not all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:


(Name)

(Address)

(City and Province or State)

(Social Insurance Number or other taxpayer identification number)

Dated:			Signature:

Signature Guaranteed:			(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

Signature must be guaranteed by a Canadian chartered bank, a major Canadian trust company, a member firm of a recognized stock exchange in Canada, a member of a registered national securities exchange in the United States, or a member of the Securities Transfer Association Medallion (STAMP) Program.

A-3

CERTIFICATE

(To be completed if true)

The undersigned hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or any Person acting jointly or in concert with any of the foregoing (all capitalized terms are used as defined in the Rights Agreement).

	Signature:


NOTICE

In the event the certification set forth in the Form of Election to Exercise is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (all capitalized terms are used as defined in the Rights Agreement) and accordingly such Rights shall be null and void.

A-4

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED

hereby sells, assigns and transfers unto
(Please print name and address of transferee)

the Rights represented by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitutes and appoints, as attorney, to transfer the within Rights on the books of the Corporation, with full power of substitution.

Dated:			Signature:

Signature Guaranteed:			(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

CERTIFICATE

(To be completed if true)

Signature:

NOTICE

In the event the certification set forth in the Form of Assignment is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (all capitalized terms are used as defined in the Rights Agreement) and accordingly such Rights shall be null and void.

A-5

Exhibit 10.8

INTERNATIONAL TOWER HILL MINES LTD.

SUBSCRIPTION AGREEMENT

(SHARES —NON-BROKERED)

INSTRUCTIONS

All Subscribers:

1. Complete and sign pages i and ii of the Subscription Agreement.

2. If you are a portfolio manager resident outside of Canada and you are not purchasing securities with an aggregate acquisition cost of at least $150,000, complete and sign the Accredited Investor Certificate — Appendix I to Schedule A

All Canadian Residents:

1. Complete and sign the Canadian Exemption Certificate — Schedule A, and if you are an “Accredited Investor”, complete and sign the Accredited Investor Certificate — Appendix I to Schedule A

All U.S. Purchasers (as defined herein):

1. Complete and sign the U.S. Accredited Investor Certificate — Schedule B

PLEASE DELIVER YOUR COMPLETED AND ORIGINALLY EXECUTED COPY OF, AND THE OTHER DOCUMENTS REQUIRED TO BE DELIVERED WITH, THIS SUBSCRIPTION AGREEMENT TO THE CORPORATION, ATTENTION MARLA K. RITCHIE AS SOON AS POSSIBLE.

THE SHARES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. HEDGING TRANSACTIONS INVOLVING THE SHARES OFFERED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.

TO: International Tower Hill Mines Ltd. (the “ Corporation ”) of Suite 2300— 1177 West Hastings Street, Vancouver, BC V6E 2K3

The undersigned (the “ Subscriber ”) on its own behalf or, if applicable, on behalf of the disclosed purchaser who is identified by name and on whose behalf the Subscriber, as agent, is purchasing hereunder (the “ Disclosed Purchaser ”), hereby irrevocably subscribes for and agrees to purchase from the Corporation, on and subject to the terms and conditions attached hereto, that number of common shares in the capital of the Corporation (“ Common Shares ”) set forth below, for the aggregate subscription price set forth below at a subscription price of $2.60 per share (the “ Purchase Price ”). Attached as Appendix 1 to this Agreement are the terms and conditions of the sale of the Purchased Securities and the representations, warranties and covenants hereby made by the Subscriber and the Corporation, all of which Appendix 1 forms part of and is hereby incorporated by reference into this Agreement (the “ Terms and Conditions ”).

The Offering (as defined herein) is subject to the Corporation obtaining conditional acceptance from The Toronto Stock Exchange to list the Offered Securities (as defined herein).

Number of Common Shares subscribed for		Subscriber’s Total Subscription Funds

Execution by the Subscriber (Please also ensure all schedules (as applicable) are completed and executed (see “Instructions” on the first page of this Agreement)):

EXECUTED by the Subscriber this day of , 2012.


Signature of Subscriber (if Subscriber is an individual) or of the Authorized Signatory (if Subscriber is not an individual)		(Subscriber’s Residential or Head Office Address) (please print)


Name of Subscriber (please print)


Name and Official Capacity or Title of Authorized Signatory (please print)		(Telephone Number)


		(Facsimile Number)

IF YOU ARE SIGNING THIS AGREEMENT AS AGENT FOR A DISCLOSED PURCHASER PLEASE PROVIDE THE FOLLOWING INFORMATION FOR EACH DISCLOSED PURCHASER

Details of Disclosed Purchaser, if applicable


Name of Disclosed Purchaser (please print)		Disclosed Purchaser’s Residential or Head Office Address


(Telephone Number)		(Facsimile Number)

Registration Instructions (if other than in name of Subscriber):		Certificate Delivery Instructions (if other than the address above):


Name and Address (as it should appear on the certificates)		Address




Account reference, if applicable		Account reference, if applicable


Address of Intermediary		Contact Name

		( )
		Telephone Number

The Purchased Securities (as defined herein) will be subject to a hold period in Canada of four months from the Closing Date pursuant to applicable securities laws. The certificates evidencing the Purchased Securities will bear a legend to that effect, as applicable. Consequently, the Purchased Securities will be subject to resale restrictions during such period. Additional restrictions will apply to Purchased Securities purchased by persons in the United States or purchasing for the account or benefit of persons in the United States, as described in Schedule B. You are advised to consult your own legal advisors in this regard.

Present Ownership of Securities

The Subscriber or Disclosed Purchaser, as the case may be, either [check appropriate box]:

o owns directly or indirectly, or exercises control or direction over, no common shares in the capital stock of the Corporation or securities convertible into common shares in the capital stock of the Corporation; or

o owns directly or indirectly, or exercises control or direction over, common shares in the capital stock of the Corporation and convertible securities entitling the Subscriber to acquire an additional common shares in the capital stock of the Corporation.

Insider

The Subscriber or Disclosed Purchaser, as the case may be, is either [check appropriate box]:

o an “Insider” as such term is defined in the Company Manual of the Toronto Stock Exchange; or

o is not an “Insider” as so defined.

This Agreement is accepted by International Tower Hill Mines Ltd. , subject to the Terms and Conditions, this day of , 2012.

INTERNATIONAL TOWER HILL MINES LTD.

Per:
	Authorized Signatory

iii

APPENDIX 1
TERMS AND CONDITIONS OF THE OFFERING

THE TERMS AND CONDITIONS OF THE OFFERING ARE AS FOLLOWS:

1. Definitions

Definitions : In this Agreement, unless the context otherwise requires:

(a) “1933 Act” means the United States Securities Act of 1933 , as amended;

(b) “Accredited Investor” has the meaning ascribed to such term in National Instrument 45-106;

(c) “Agreement” means the subscription agreement of which this Appendix 1 forms part, and includes all other schedules and appendices attached thereto, in each case, as the same may be amended, supplemented or restated from time to time;

(d) “Business Day” means a day on which Canadian chartered banks are open for the transaction of regular business in the City of Vancouver, British Columbia;

(e) “Closing” means the closing of the purchase and sale of the Offered Securities which may, at the discretion of the Corporation, occur in one or more tranches;

(f) “Closing Date” means the date or dates (as applicable) of Closing, which will be such date or dates (as applicable) as the Corporation may determine following receipt by the Corporation of all required regulatory approvals;

(g) “Commissions” means the provincial securities commission or other regulatory authority in each of the Offering Jurisdictions;

(h) “Common Shares” means the common shares of the Corporation as constituted on the date hereof;

(i) “Corporation” means International Tower Hill Mines Ltd., a corporation incorporated under the Business Corporations Act (British Columbia) and includes any successor corporation thereto;

(j) “CRA” means the Canada Revenue Agency;

(k) “Directed Selling Efforts” means “directed selling efforts” as defined under Regulation S;

(l) “Disclosed Purchaser” means the person on whose behalf the Subscriber, as agent, is purchasing hereunder, if any;

(m) “Distribution Compliance Period” means the “distribution compliance period” as defined under Rule 902(f) of Regulation S;

(n) “Distributor” means a “distributor” as defined in Rule 902(d) of Regulation S;

(o) “Dollars” or “$” means lawful money of Canada;

(p) “Exchanges” means The Toronto Stock Exchange and the NYSE-MKT;

(q) “General Solicitation” or “General Advertising” means “general solicitation or general advertising”, as used under Rule 502(c) of Regulation D, including any advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or

broadcast over radio or television, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising;

(r) “National Instrument 45-106” means National Instrument 45-106 “Prospectus and Registration Exemptions” of the Canadian Securities Administrators;

(s) “Offered Securities” means up to 12,458,308 Common Shares offered for sale by the Corporation pursuant to the Offering;

(t) “Offering” means the offering of the Offered Securities on a private placement basis;

(u) “Offering Jurisdictions” means collectively the provinces British Columbia, Alberta and Ontario, the United States and such other jurisdictions as may be agreed to by the Corporation;

(v) “Person” means an individual, a firm, a corporation, a syndicate, a partnership, a trust, an association, an unincorporated organization, a joint venture, an investment club, a government or an agency or political subdivision thereof and every other form of legal or business entity of whatsoever nature or kind;

(w) “Personal Information” means any information about an identifiable individual and includes information provided by the Subscriber in this Agreement;

(x) “Purchase Price” means $2.60 per Offered Security;

(y) “Purchased Securities” means the Common Shares which the Subscriber has agreed to purchase under this Agreement;

(z) “Regulation D” means Regulation D promulgated under the 1933 Act;

(aa) “Regulation S” means Regulation S promulgated under the 1933 Act;

(bb) “Regulatory Authorities” means the Commissions and the Exchanges;

(cc) “Securities Laws” means the securities legislation and regulations of, and the instruments, policies, rules, orders, codes, notices and interpretation notes of each of the Commissions;

(dd) “Subscriber” means the Person purchasing the Purchased Securities,whose name appears on the execution page of the Agreement and who has signed the Agreement or, if the Person whose name appears on the execution pages hereof has signed the Agreement as agent for or on behalf of a Disclosed Purchaser and is not purchasing the Purchased Securities as principal, the Disclosed Purchaser as identified on page ii of the Agreement;

(ee) “Subscription Proceeds” means the aggregate Purchase Price paid by the Subscriber for the Purchased Securities;

(ff) “U.S. Accredited Investor” means an “accredited investor” that satisfies one or more of the criteria set forth in Rule 501(a) of Regulation D;

(gg) “U.S. Person” means “U.S. person” as defined in Rule 902(k) of Regulation S;

(hh) “U.S. Purchaser” means (i) any person resident in the United States; (ii) any U.S. Person; (iii) any person purchasing the Purchased Securities for the account or benefit of a U.S. Person or person in the United States; (iv) any person that receives or received an offer of the Purchased Securities while in the United States; or (iv) any person that was (or whose authorized signatory was) in the United States at the time their buy order was originated or this Agreement was executed. U.S. Purchaser

does not include persons excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(vi) of Regulation S or persons holding accounts excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(i) of Regulation S, solely in their capacities as holders of such accounts; and

(ii) “United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

2. Conditions of the Offering

In connection with your purchase of the Purchased Securities, you agree to return to the Corporation as soon as possible the following documents:

(a) this Agreement, duly completed and executed;

(b) a certified cheque, bank draft or wire transfer for the aggregate Purchase Price of the Purchased Securities payable to the Corporation;

(c) if you are, or, if applicable, the Disclosed Purchaser is, a resident of Canada, a duly completed Canadian Exemption Certificate, attached as Schedule A hereto, and if you are, or, if applicable, the Disclosed Purchaser is, an “Accredited Investor”, a duly executed and completed Accredited Investor Certificate, attached as Appendix I to Schedule A hereto;

(d) if you are a portfolio manager resident outside of Canada and you are not purchasing sufficient Offered Securities so that the aggregate acquisition cost of the Purchased Securities is $150,000, a duly executed and completed Accredited Investor Certificate, attached as Appendix I to Schedule A hereto;

(e) if you are, or, if applicable, the Disclosed Purchaser is, in the United States or purchasing for the benefit or account of a person in the United States, a duly executed and completed U.S. Accredited Investor Certificate, attached as Schedule B hereto; and

(f) any further documentation as required under the Securities Laws or by the policies of the Exchanges or other Regulatory Authorities.

The obligation of the Corporation to sell the Purchased Securities to you is subject to, among other things, the conditions that:

(a) you having executed and returned all documents required by the Securities Laws and the policies of the Exchanges for delivery on your behalf, including the forms set out in Schedule A and Schedule B attached hereto, as applicable, to the Corporation, as the sale of the Purchased Securities by the Corporation to you will not be qualified by a prospectus;

(b) the representations and warranties made by you on your own behalf or, if applicable, on behalf of the Disclosed Purchaser (including representations and warranties made in any Schedule attached hereto, as applicable) being true and correct when made and true and correct on the Closing Date with the same force and effect as if they had been made on and as of such date;

(c) all covenants, agreements and conditions contained in this Agreement to be performed by you or, if applicable, the Disclosed Purchaser on or prior to the Closing Date having been performed or complied with in all material respects;

(d) the Corporation having received conditional acceptance of the Offering and conditional approval for the listing of the Purchased Securities from the Exchanges; and

(e) all other necessary regulatory approvals having been obtained prior to the Closing Date.

By returning this Agreement you consent on your own behalf or, if applicable, on behalf of the Disclosed Purchaser, to the filing by the Corporation of all documents and personal information concerning you or, if applicable, the Disclosed Purchaser, provided in this Agreement required by the Securities Laws and the policies of the Exchanges.

If you are not subscribing for the Purchased Securities for your own account, each Disclosed Purchaser for whom you are contracting hereunder must be purchasing the Purchased Securities as principal, for such Disclosed Purchaser’s own account, and (unless you are an authorized agent with power to sign on behalf of the beneficial purchaser) must execute all documents required by the Securities Laws of the Offering Jurisdictions and the policies of the Exchanges with respect to the Purchased Securities being acquired by such Disclosed Purchaser as principal. If you are signing this Agreement as agent or pursuant to a power of attorney for the Subscriber, you represent and warrant that you have authority to bind the Subscriber.

You agree, and you agree to cause any Disclosed Purchaser for whom you are contracting hereunder, to comply with all Securities Laws and with the policies of the Exchanges concerning the purchase of, the holding of, and the resale restrictions applicable to, the Purchased Securities.

You acknowledge on your own behalf or, if applicable, on behalf of the Disclosed Purchaser, that the Corporation has the right to close the subscription books at any time without notice and to accept or reject any subscription in its sole discretion.

3. The Purchased Securities

The Purchased Securities will be issued and registered in the name of the Subscriber or its nominee in accordance with the instructions provided by the Subscriber on page ii of this Agreement.

The issue of the Purchased Securities will not restrict or prevent the Corporation from obtaining any other financing, or from issuing additional securities, options, warrants or rights.

4. The Closing

Subject to receipt of all completed documentation in accordance with section 2, the Closing of the purchase and sale of the Offered Securities will take place at the offices of McCarthy Tetrault LLP, counsel to the Corporation, Suite 1300, 777 Dunsmuir Street, Vancouver, British Columbia V7Y 1K2, at 10:00 a.m. (Vancouver time) on the Closing Date, or at such other place and time as the Corporation may determine. Certificates representing the Purchased Securities will be available for delivery to you against payment to the Corporation of the amount of the Purchase Price for the Purchased Securities in freely transferable Canadian funds.

The Subscriber acknowledges that the Offering may be completed at one or more partial closings in the discretion of the Corporation and that the Closing as contemplated in this Agreement may be effected at one or more of such partial closings.

Upon completion of the Closing, the Corporation is irrevocably entitled to the Purchase Price for the Purchased Securities, subject to the rights of the Subscriber under this Agreement and any applicable laws.

5. Representations and Warranties of the Subscriber

The sale of the Purchased Securities by the Corporation to the Subscriber is conditional upon such sale being exempt from the requirements as to the filing of a prospectus or registration statement and as to the preparation of an offering memorandum or similar document contained in any statute, regulation, instrument, rule or policy applicable to the sale of the Purchased Securities or upon the issue of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or registration statement or delivering an offering memorandum or similar document.

The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, acknowledge, represent, warrant, covenant and certify to and with the Corporation that, as at the date given above and at the Closing Date:

(a) the Corporation has advised you that the Corporation is relying on exemptions from the requirements under the Securities Laws to provide you with a prospectus or registration statement and no prospectus or registration statement has been filed by the Corporation with any of the Commissions in connection with the issuance of the Purchased Securities, and as a consequence:

(i) you are restricted from using most of the civil remedies available under the Securities Laws and certain protections, rights and remedies provided by the Securities Laws, including statutory rights of rescission or damages, will not be available to you;

(ii) you may not receive information that would otherwise be required to be provided to you under the Securities Laws; and

(iii) the Corporation is relieved from certain obligations that would otherwise apply under the Securities Laws;

(b) you are resident in the jurisdiction set out under “Subscriber’s Residential or Head Office Address” on the first page of this Agreement or under “Disclosed Purchaser’s Residential or Head Office Address” on the second page of this Agreement (if applicable), which address is your residence or principal place of business, and such address was not obtained or used solely for the purpose of acquiring the Purchased Securities;

(i) purchasing the Purchased Securities as principal for your own account or, in the case section 5(d)(i) below applies, are deemed under the applicable Securities Laws to be purchasing as principal, and not for the benefit of any other person; or

(ii) purchasing the Purchased Securities as agent for the Disclosed Purchaser and the Disclosed Purchaser for whom you may be acting is purchasing the Purchased Securities as principal for its own account and not for the benefit of any other person;

(d) if you are resident in any province or territory in Canada you:

(i) are an Accredited Investor, by virtue of the fact that you fall within one or more of the sub-paragraphs of the definition of Accredited Investor set out in the Accredited Investor Certificate attached as Appendix I to Schedule A , you confirm the truth and accuracy of all statements in such schedule as of the date of this Agreement and the Closing Date, and you were not created or used solely to purchase securities as an Accredited Investor as described in paragraph (m) of the definition of Accredited Investor set out in Schedule A; or

(ii) are purchasing sufficient Offered Securities so that the aggregate acquisition cost of the Purchased Securities is not less than $150,000 and, if you are not an individual, you were not created solely to purchase or hold securities in reliance on section 2.10 of National Instrument 45-106;

(e) if you are a portfolio manager resident outside of Canada and you are not purchasing sufficient Offered Securities so that the aggregate acquisition cost of the Purchased Securities is $150,000, you have completed an Accredited Investor Certificate, attached as Appendix I to Schedule A hereto and you confirm the truth and accuracy of all statements in such schedule as of the date of this Agreement and the Closing Date;

(f) if you are not an individual, you pre-existed the offering of the Offered Securities and you have a bona fide business purpose other than the investment in the Offered Securities and you were not created, formed or established solely or primarily to acquire Offered Securities, or permit purchases of securities without a prospectus, in reliance on an exemption from the prospectus requirements of applicable Securities Laws;

(g) unless you are a U.S. Purchaser and have completed and delivered the U.S. Accredited Investor Certificate attached as Schedule B hereto (in which case you have properly completed, executed and delivered to the Corporation such U.S. Accredited Investor Certificate and make the representations, warranties and covenants therein and you confirm the truth and accuracy of all statements in such U.S. Accredited Investor Certificate as of the date of this Agreement and the Closing Date), you acknowledge and agree that:

(i) unless you are excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(vi) of Regulation S or a person holding accounts excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(i) of Regulation S, solely in your capacity as holder of such accounts, the Offered Securities were not offered to you, or any beneficial purchaser for whom you are acting, in the United States;

(ii) unless you are excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(vi) of Regulation S or a person holding accounts excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(i) of Regulation S, solely in your capacity as holder of such accounts, the order to purchase the Purchased Securities was made outside the United States and this Agreement was delivered to, executed and delivered by, you (or your authorized signatory) outside the United States;

(iii) you are not, and will not be, purchasing the Purchased Securities for the account or benefit of, a U.S. Person or a person in the United States;

(iv) the current structure of this transaction and all transactions and activities contemplated hereunder is not a scheme to avoid the registration requirements of the 1933 Act;

(v) you, and any beneficial purchaser for whom you are acting, have no intention to distribute either directly or indirectly any of the Purchased Securities in the United States or to, or for the account or benefit of, a U.S. Person or person in the United States, except in compliance with the 1933 Act, any applicable securities laws of any state of the United States and applicable Securities Laws;

(vi) you, and any beneficial purchaser for whom you are acting, have not purchased the Purchased Securities as a result of any form of Directed Selling Efforts;

(vii) you, and any beneficial purchaser for whom you are acting, understand that the Purchased Securities have not been registered under the 1933 Act or the applicable securities laws of any state of the United States, the Purchased Securities may not be offered or sold, directly or indirectly, in the United States except pursuant to registration under the 1933 Act and the applicable securities laws of any state of the United States or pursuant to applicable exemptions from such registration requirements, and the Corporation has no obligation or present intention of filing a registration statement under the 1933 Act in respect of any of the Purchased Securities; and

(viii) hedging transactions involving the Purchased Securities may not be conducted unless in compliance with the 1933 Act.

(h) you understand and acknowledge that the Corporation is not obligated to remain a “foreign issuer” as defined in Rule 902 under the 1933 Act;

(i) if you are resident outside of Canada and the United States, you:

(i) are knowledgeable of, or have been independently advised as to the applicable securities laws of the securities regulatory authorities (the “ Authorities ”) having application in the jurisdiction in which you are resident (the “ International Jurisdiction ”) which would apply to the acquisition of the Purchased Securities, if any;

(ii) are purchasing the Purchased Securities pursuant to exemptions from the prospectus and registration requirements under the applicable securities laws of the Authorities in the International Jurisdiction or, if such is not applicable, you are permitted to purchase the Purchased Securities under the applicable securities laws of the Authorities in the International Jurisdiction without the need to rely on any exemption;

(iii) confirm that the subscription by the Subscriber does not contravene any applicable securities laws of the Authorities in the International Jurisdiction and does not require the Corporation to make any filings or seek any approvals of any nature whatsoever from any Authority of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Purchased Securities; and

(iv) confirm that the purchase of the Purchased Securities by you does not trigger:

(A) an obligation by the Corporation or any other Person to prepare and file a registration statement, prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction; or

(B) continuous disclosure reporting obligations of the Corporation in the International Jurisdiction; and

you will, if requested by the Corporation, comply with such other requirements as the Corporation may reasonably require;

(j) no agency, stock exchange or governmental agency, securities commission or similar regulatory authority or other entity has reviewed or passed on or made any finding or determination as to the merits of or made any recommendation or endorsement with respect to the Purchased Securities;

(k) if you are not a resident of the Province of British Columbia, you certify to the Corporation that you are not a resident of British Columbia and acknowledge that:

(i) no securities commission or similar regulatory authority has reviewed or passed on or passed on the merits of the Purchased Securities;

(ii) there is no government or other insurance covering the Purchased Securities;

(iii) there are risks associated with the purchase of the Purchased Securities and you are aware of the risks and other characteristics of the Purchased Securities;

(iv) there are restrictions on your ability to resell the Purchased Securities and it is your responsibility to find out what those restrictions are and to comply with them before selling the Purchased Securities; and

(v) the Corporation has advised you that it is relying on an exemption from the requirements to provide you with a prospectus and to sell securities through a person registered to sell

securities under the Securities Act (British Columbia) and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (British Columbia), including statutory rights of rescission or damages, will not be available to you;

(l) you acknowledge and consent to the fact that the Corporation is collecting personal information (as that term is defined under applicable privacy legislation, including, without limitation, the Personal Information Protection and Electronic Documents Act (Canada) and any other applicable similar, replacement or supplemental provincial or federal legislation or laws in effect from time to time) of the Subscriber and Disclosed Purchaser, if any, for the purpose of completing this Agreement. You acknowledge and consent to the Corporation retaining such personal information for as long as permitted or required by law or business practices; you agree and acknowledge that the Corporation may use and disclose such personal information: (i) for internal use with respect to managing the relationships between and contractual obligations of the Corporation and the Subscriber and Disclosed Purchaser, if any; (ii) for use and disclosure for income tax-related purposes, including, without limitation, where required by law, disclosure to CRA; (iii) disclosure to professional advisers of the Corporation; (iv) disclosure to securities regulatory authorities and other regulatory bodies with jurisdiction with respect to reports of trade or similar regulatory filings; (v) disclosure to a governmental or other authority to which the disclosure is required by court order or subpoena compelling such disclosure and where there is no reasonable alternative to such disclosure; (vi) disclosure to any person where such disclosure is necessary for legitimate business reasons and is made with your prior written consent; (vii) disclosure to a court determining the rights of the parties under this Agreement; and (viii) for use and disclosure as otherwise required or permitted by law; in addition, you further acknowledge and consent to the fact that the Corporation may be required to provide any one or more of the Canadian securities regulators, stock exchanges, the Investment Industry Regulatory Organization of Canada, other regulatory agencies or the Corporation’s registrar and transfer agent with any personal information provided by the Subscriber and Disclosed Purchaser, if any, in this Agreement, and may make any other filings of such personal information as the Corporation’s counsel deems appropriate, and you acknowledge receipt of notification of the disclosure of Personal Information by the Corporation to the Exchanges and the Subscriber and Disclosed Purchaser, if any, hereby consent to and authorize the foregoing use and disclosure of such Personal Information and agree to provide, on request, all particulars required by the Corporation in order to comply with the foregoing;

(m) you further acknowledge and expressly consent to:

(i) the disclosure of Personal Information by the Corporation to the Exchanges and other applicable regulatory authorities, as required; and

(ii) the collection, use and disclosure of Personal Information by the Exchanges for such purposes as may be identified by the Exchanges from time to time.

For the purposes of this subsection 5(l) “Personal Information” means any information about the Subscriber and, if applicable, any beneficial purchaser for whom the Subscriber is contracting hereunder;

(n) if you are a resident of Ontario you authorize the indirect collection of personal information by the Ontario Securities Commission and confirm that you have been notified by the Corporation:

(i) that the Corporation will be delivering the Personal Information to the Ontario Securities Commission;

(ii) that such Personal Information is being collected indirectly by the Ontario Securities Commission under the authority granted to it in applicable Securities Laws;

(iii) that such Personal Information is being collected for the purpose of the administration and enforcement of applicable Securities Laws; and

(iv) that the title, business address and business telephone number of the public official in the Province of Ontario, who can answer questions about the Ontario Securities Commission’s indirect collection of the Personal Information is as follows:

Administrative Assistant to the Director of Corporate Finance
Ontario Securities Commission
Suite 1903, Box 55, 20 Queen Street West
Toronto, Ontario M5H 2S8
Telephone: (416) 593-3684

(o) the funds representing the aggregate Purchase Price in respect of the Purchased Securities which will be advanced by the Subscriber to the Corporation hereunder will not represent proceeds of crime for the purpose of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “ PCMLTF Act ”) or the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “ PATRIOT Act ”) and you acknowledge that the Corporation may in the future be required by law to disclose the Subscriber’s or Disclosed Purchaser’s name and other information relating to this Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLTF Act or PATRIOT Act; to the best of your knowledge, none of the subscription funds to be provided hereunder (i) have been or will be obtained or derived, directly or indirectly, from or related to any activity that is deemed illegal under the laws of Canada or the United States or any other jurisdiction, or (ii) are being tendered on behalf of a person or entity who has not been identified to you. You shall promptly notify the Corporation if you discover that any such representation ceases to be true, and shall provide the Corporation with appropriate information in connection therewith;

(p) you have been advised to consult your own legal advisors with respect to the applicable hold periods imposed in respect of the Purchased Securities by the applicable Securities Laws and confirm that no representation by the Corporation has been made respecting the hold periods applicable to the Purchased Securities and you are solely responsible (and the Corporation is not responsible) for compliance with the applicable resale restrictions;

(q) no person has made to you any written or oral representations:

(i) that any Person will resell or repurchase any of the Purchased Securities;

(ii) that any Person will refund the Purchase Price of any Purchased Security;

(iii) as to the future price or value of any of the Purchased Securities; or

(iv) other than as set forth in this Agreement, that any of the Purchased Securities will be listed and posted for trading on a stock exchange or that application has been made to list and post any of the Purchased Securities for trading on a stock exchange;

(r) you acknowledge that you have not received an offering memorandum, prospectus or other disclosure document in respect of the Purchased Securities or the Corporation describing the business and affairs of the Corporation in order to assist you in making an investment decision in respect of the Purchased Securities, that you have had access to the Corporation’s public filings on the Internet at www.sedar.com and www.sec.gov and that you have not become aware of any advertisement in printed media of general and regular paid circulation, radio or television with respect to the distribution of the Purchased Securities;

(s) you have no knowledge of a “material fact” or “material change” (as those terms are defined in the Securities Laws) in the affairs of the Corporation that has not been generally disclosed to the public;

(t) your decision to tender this offer and purchase the Purchased Securities has not been made as a result of any non-public oral or written representation as to fact made by or on behalf of the Corporation or any other Person and is based entirely upon the representations, warranties and covenants of the Corporation provided to the Subscriber in this Agreement and on currently available public information concerning the Corporation;

(u) the offer made by this subscription is irrevocable and requires acceptance by the Corporation and the acceptance or approval of the Exchanges;

(v) the acceptance of this subscription offer will be conditional upon the sale of the Purchased Securities to you being exempt from the prospectus and registration requirements under applicable Securities Laws;

(w) if you are:

(i) a corporation, you are duly incorporated and are validly subsisting under the laws of your jurisdiction of incorporation and have all requisite legal and corporate power and authority to execute and deliver this Agreement, to subscribe for the Purchased Securities as contemplated herein and to carry out and perform your covenants and obligations under the terms of this Agreement and the entering into of this Agreement and the transactions contemplated hereby will not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, you or any agreement, written or oral, to which you may be a party or by which you are or may be bound;

(ii) a partnership, syndicate or other form of unincorporated organization, you have the necessary legal capacity and authority to execute and deliver this Agreement and to observe and perform your covenants and obligations hereunder and have obtained all necessary approvals in respect thereof; or

(iii) an individual, you are of full age of majority and have the legal capacity and competence to enter into and to execute this Agreement and to observe and perform your covenants and obligations hereunder;

(x) this Agreement has been duly executed and delivered by you and constitutes a legal, valid and binding obligation of you enforceable against you;

(y) if required by applicable Securities Laws, policy or order or by any Regulatory Authority, you will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Purchased Securities as may be required;

(z) the Purchased Securities are highly speculative in nature and you have such sophistication and experience in business and financial matters as to be capable of evaluating the merits and risks of this investment and you are able to bear the economic risk of loss of this investment;

(aa) this subscription is not enforceable by you unless it has been accepted by the Corporation and you waive any requirement on the Corporation’s behalf to immediately communicate its acceptance of this subscription to you;

(bb) in connection with your subscription, you have not relied upon the Corporation for investment, legal or tax advice, or other professional advice, and have in all cases sought or elected not to seek

the advice of your own personal investment advisers, legal counsel and tax advisers and you are able, without impairing your financial condition, to bear the economic risk of, and withstand a complete loss of, the investment and you can otherwise be reasonably assumed to have the capacity to protect your own interest in connection with your investment;

(cc) all costs and expenses incurred by you (including any fees and disbursements of any special counsel or other advisors retained by you) relating to the purchase of the Purchased Securities shall be borne by you;

(dd) you are at arm’s length with the Corporation within the meaning of the Securities Laws and the policies of the Exchanges;

(ee) you are not a “control person” of the Corporation as defined in the Securities Act (British Columbia), will not become a “control person” by virtue of the purchase of any of the Purchased Securities and do not intend to act in concert with any other person to form a control group of the Corporation;

(ff) you acknowledge that legal counsel retained by the Corporation is acting as counsel to the Corporation and not as counsel to you and you may not rely upon such counsel in any respect;

(gg) this Agreement has been duly executed and delivered and, when accepted by the Corporation, will constitute your legal, valid and binding obligation enforceable against you in accordance with the terms hereof or, if you are acting on behalf of a Disclosed Purchaser , will constitute a legal, valid and binding obligation against such Disclosed Purchaser in accordance with the terms hereof; and

(hh) the above representations, warranties, covenants and acknowledgements in this section will be true and correct both as of the execution of this subscription and as of the Closing Date.

The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, acknowledges and agrees that the foregoing representations, warranties and covenants are made by the Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, with the intent that they may be relied upon in determining its eligibility as a purchaser of the Offered Securities under relevant Securities Laws and the Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, hereby agrees to indemnify and hold harmless the Corporation and its representatives, directors, officers, employees, legal counsel and agents from and against all losses, liability, claims, costs, expenses and damages (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) from reliance thereon in the event that any of such representations or warranties are untrue in any material respect. The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, further agrees that by accepting the Purchased Securities, the Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, shall be representing and warranting that the foregoing representations and warranties contained herein or in any document furnished by the Subscriber or, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, to the Corporation are true as at the Closing, with the same force and effect as if they had been made by the Subscriber as at the Closing and shall continue in full force and effect notwithstanding any subsequent disposition by the Subscriber or Disclosed Purchaser (if applicable) of the Purchased Securities. The Subscriber or, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, undertakes to notify the Corporation immediately of any changes in any representation, warranty or other information relating to the Subscriber or the Disclosed Principal (if applicable) set forth herein which takes place prior to the Closing Date.

6. Legends

The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, acknowledges that the certificates representing the Purchased Securities will bear the following legends:

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE · , 2012” [the date which is four months and one day after the Closing Date will be inserted]

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE (“ TSX ”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT ‘GOOD DELIVERY’ IN SETTLEMENT OF TRANSACTIONS ON THE TSX.”

provided that subsequent to the date which is four months and one day after the Closing Date the certificates representing the Purchased Securities may be exchanged for certificates bearing no such legends.

The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, also acknowledges that it has been advised to consult its own independent legal advisor with respect to the applicable resale restrictions; that it is solely responsible for complying with such restrictions; that the Corporation is not responsible for ensuring compliance by the Subscriber or, if applicable, the Disclosed Purchaser, of the applicable resale restrictions; and that additional restrictions are applicable to resales of, and additional restrictive legends will be placed upon, Purchased Securities acquired by U.S. Persons as described in Schedule B.

7. Representations and Warranties of the Corporation

The Corporation represents, warrants and covenants that, as of the date given above and at the Closing:

(a) the Corporation is a valid and subsisting company continued and in good standing under the laws of the Province of British Columbia;

(b) the Corporation is duly registered and licensed to carry on business in each jurisdiction in which it carries on business or owns property where required under the laws of that jurisdiction;

(c) all annual information forms, financial statements, information circulars, press releases, material change reports and other documents filed by or on behalf of the Corporation within the past 12 months with the Exchanges and any of the Commissions (the “ Disclosure Record ”) were true and correct in all material respects and did not contain any misrepresentation (as defined in the Securities Act (British Columbia)) as at the respective dates of such filings;

(d) except as qualified by the disclosure in the Disclosure Record, the Corporation is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record as being beneficially owned by the Corporation;

(e) the financial statements of the Corporation contained in the Disclosure Record, filed with any of the Commissions have all been prepared in accordance with Canadian generally accepted accounting principles, accurately reflect the financial position and all known material liabilities (accrued, absolute, contingent or otherwise) of the Corporation in all material respects as of the dates thereof;

(f) subject to the representations and warranties of the Subscriber herein contained being accurate and truthful in all material respects and the Subscriber fulfilling all of its covenants and obligations herein contained, the Corporation has complied and will comply fully with the requirements of all applicable corporate and securities laws and administrative policies and directions, including, without limitation, the Securities Laws and the Business Corporations Act (British Columbia) in relation to the issue and trading of its securities and in all matters relating to the private placement of the Offered Securities;

(g) there is not presently any material change, as defined in the Securities Laws, relating to the Corporation or change in any material fact, as defined in the Securities Laws, relating to any of the Purchased Securities, which has not been fully disclosed in accordance with the requirements of the Securities Laws and the policies of the Exchange;

(h) the issue and sale of the Offered Securities by the Corporation does not and will not conflict with, and does not and will not result in a material breach of, any of the terms of the Corporation’s constating documents or any agreement or instrument to which the Corporation is a party or by which it is bound;

(i) the Corporation is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Corporation’s knowledge, no such actions, suits or proceedings are contemplated or have been threatened;

(j) there are no judgments against the Corporation which are unsatisfied, nor is the Corporation subject to any consent decrees or injunctions;

(k) this Agreement has been or will be at the Closing Date duly authorized by all necessary corporate action on the part of the Corporation, and the Corporation has full corporate power and authority to undertake the Offering;

(l) to the Corporation’s knowledge, it is not in material default of any of the requirements of the Securities Laws or any of the administrative policies or notices of the Exchange;

(m) to the Corporation’s knowledge, no order ceasing or suspending trading in securities of the Corporation nor prohibiting the sale of such securities has been issued to and is outstanding against the Corporation or its directors, officers or promoters; and

(n) except for as provided in the Disclosure Record, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Corporation, or any other security convertible into or exchangeable for any such shares, or to require the Corporation to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital.

8. Finder’s Fee

(a) The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, understands and acknowledges that upon Closing of the Offering, the Corporation may pay to one or more finders a finder’s fee, payable in cash or through the issuance of securities of the Corporation or a combination thereof, in connection with proceeds received by the Corporation from the sale of Offered Securities to Subscribers, other than any insiders, introduced to the Corporation by the finders. All payments and issuances of securities to any finders are subject to Exchange acceptance.

9. General

(a) Headings: The division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms “this Agreement,” “hereof,” “hereunder”, “herein” and similar expressions refer to this Agreement and not to any particular article, section or other portion hereof and include any agreement supplemental thereto and any exhibits attached hereto. Unless something in the subject matter or context is inconsistent therewith, reference herein to articles, sections and paragraphs are to articles, sections, subsections and paragraphs of this Agreement.

(b) Number and Gender: Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and neuter and vice versa.

(c) Severability: If one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired thereby. Each of the provisions of this Agreement is hereby declared to be separate and distinct.

(d) Notices: All notices or other communications to be given hereunder shall be delivered by hand or by telecopier, and if delivered by hand, shall be deemed to have been given on the date of delivery or, if sent by telecopier, on the date of transmission if sent before 5:00 p.m. and such day is a Business Day or, if not, on the first Business Day following the date of transmission.

Notices to the Corporation shall be addressed to:

International Tower Hill Mines Ltd. Ltd.
Suite 2300, 1177 West Hastings Street
Vancouver, British Columbia
V6E 2K3

Attention: Vice-President
Fax Number: (604) 408-7499

Notices to the Subscriber shall be addressed to the address of the Subscriber set out on the execution page hereof.

Either the Corporation or the Subscriber may change its address for service aforesaid by notice in writing to the other party hereto specifying its new address for service hereunder.

(e) Further Assurances: Each party hereto shall from time to time at the request of the other party hereto do such further acts and execute and deliver such further instruments, deeds and documents as shall be reasonably required in order to fully perform and carry out the provisions of this Agreement. The parties hereto agree to act honestly and in good faith in the performance of their respective obligations hereunder.

(f) Successors and Assigns: Except as otherwise provided, this Agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

(g) Notification of Changes : The parties hereby covenant and agree to notify the other party upon the occurrence of any event prior to the Closing which would cause any party’s representations, warranties or covenants contained in this Agreement to be false or incorrect in any material respect.

(h) Assignment: This Agreement is not assignable or transferable by the parties hereto without the express written consent of the other party to this Agreement.

(i) Entire Agreement: The terms of this Agreement express and constitute the entire agreement between the parties hereto with respect to the subject matter hereof and no implied term or liability of any kind is created or shall arise by reason of anything in this Agreement.

(j) Time of Essence: Time is of the essence of this Agreement.

(k) Amendments: The provisions of this Agreement may only be amended with the written consent of all of the parties hereto.

(l) Survival: Notwithstanding any other provision of this Agreement, the representations, warranties, covenants and indemnities of or by the Corporation, the Subscriber and the Disclosed Purchaser contained herein or in any certificate, document or instrument delivered pursuant hereto shall survive the completion of the transactions contemplated by this Agreement.

(m) Governing Law and Venue: The contract arising out of this Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein, governing contracts made and to be performed wholly therein, and without reference to its principles governing the choice or conflict of laws. The parties hereto irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of British Columbia, sitting in the City of Vancouver, with respect to any dispute related to or arising from this Agreement.

(n) Counterparts: This Agreement may be executed in two or more counterparts which when taken together shall constitute one and the same agreement. Delivery of counterparts may be effected by facsimile transmission thereof.

(o) Facsimile Copies: The Corporation shall be entitled to rely on a facsimile copy of an executed subscription agreement and acceptance by the Corporation of such facsimile subscription shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms thereof. If less than a complete copy of this Agreement is delivered to the Corporation at Closing, the Corporation and its advisors are entitled to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered at Closing unaltered.

(p) Regulatory Acceptance/Approval: Without limitation, this Agreement and the transactions contemplated hereby are conditional upon receipt by the Corporation of the conditional acceptance/approval from the Exchanges to list the Purchased Securities.

If the foregoing is in accordance with your understanding, please sign and return this Agreement together with the other required documents signifying your agreement to purchase the Purchased Securities.

SCHEDULE A

CANADIAN EXEMPTION CERTIFICATE

Capitalized terms used in this Schedule A and defined in the Agreement to which this Schedule A is attached have the meaning defined in the Agreement unless otherwise defined herein.

In connection with the purchase by the Subscriber of the Purchased Securities, the Subscriber or, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, hereby represents, warrants, covenants and certifies that:

1. the Subscriber or, if applicable, the Disclosed Purchaser (please check the appropriate line):

(a) Accredited Investor Exemption: is an “accredited investor” within the meaning of National Instrument 45-106 entitled “Prospectus and Registration Exemptions” (“NI 45-106”) by virtue of the fact that the Subscriber or Disclosed Purchaser, as the case may be, falls within one or more of the subparagraphs of the definition of “accredited investor” set out in Appendix I to this Schedule A ( YOU MUST ALSO COMPLETE APPENDIX A ATTACHED TO THIS CERTIFICATE ); or

(b) $150,000 Exemption: is purchasing sufficient Purchased Securities such that the aggregate acquisition cost of the Purchased Securities is not less than $150,000 and if the Subscriber or, if applicable, the Disclosed Purchaser, is not an individual, it was not created or used solely to purchase or hold securities in reliance on the exemptions from the dealer registration requirement or the prospectus requirement contained in Section 2.10 of NI 45-106;

2. the above representations, warranties and covenants will be true and correct both as of the execution of this certificate and as of the closing time of the purchase and sale of the Purchased Securities and will survive the completion of the issue of the Purchased Securities; and

3. the foregoing representations, warranties and covenants are made by the Subscriber or, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, with the intent that they be relied upon in determining the suitability of the Subscriber or Disclosed Purchaser as a purchaser of the Purchased Securities and the Subscriber undertakes to immediately notify the Corporation of any change in any statement or other information relating to the Subscriber or, if applicable, the Disclosed Purchaser, set forth herein which takes place prior to the closing time of the purchase and sale of the Purchased Securities.

The Subscriber has executed this certificate as of the day of , 2012.

If a trust, partnership or other entity:		If an individual:


Name of Entity		Signature


Type of Entity		Name of Individual


Signature of Person Signing


Title of Person Signing

APPENDIX I TO SCHEDULE A

ACCREDITED INVESTOR CERTIFICATE

TO: INTERNATIONAL TOWER HILL MINES LTD.

Capitalized terms used in this Appendix I to Schedule A and defined in the Agreement to which this Appendix I to Schedule A is attached have the meaning defined in the Agreement unless otherwise defined herein.

The undersigned or, if applicable, the Disclosed Purchaser through the undersigned acting as its agent, hereby represents, warrants and certifies to the Corporation that the undersigned, or, if applicable, the Disclosed Purchaser, is an “Accredited Investor” as defined in subsection 1.1 of National Instrument 45-106. The undersigned has indicated below the categories which the undersigned, or, if applicable, the Disclosed Purchaser, satisfies in order to qualify as an “Accredited Investor”.

The undersigned or, if applicable, the Disclosed Purchaser through the undersigned acting as its agent, understands that the Corporation and its counsel are relying upon this information in determining to sell securities to the undersigned or, if applicable, the Disclosed Purchaser, in a manner exempt from the prospectus and registration requirements of applicable securities laws.

The undersigned or, if applicable, the Disclosed Purchaser through the undersigned acting as its agent, represents, warrants and certifies that it, he or she is: [initial or place a checkmark above the line to the left of each applicable item]

o	(a)	a Canadian financial institution, or an authorized foreign bank named in Schedule III of the Bank Act (Canada);

o	(b)	the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

o	(c)	a subsidiary of any person referred to in paragraphs (a) to (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

o	(d)	a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);

o	(e)	an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);

o	(f)	the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

o	(g)	a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec;

o	(h)	any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

o	(i)	a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada;

o	(j)	an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;

o	(k)	an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

o	(l)	an individual who, either alone or with a spouse, has net assets of at least $5,000,000;

o	(m)	a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;

o	(n)	an investment fund that distributes or has distributed its securities only to:

		(i) a person that is or was an accredited investor at the time of the distribution,

		(ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 Minimum amount investment and 2.19 Additional investment in investment funds of NI 45-106; or

		(iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 Investment fund reinvestment of NI 45-106;

o	(o)	an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

o	(p)	a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully-managed account managed by the trust company or trust corporation, as the case may be;

o	(q)	a person acting on behalf of a fully-managed account managed by that person, if that person:

		(i) is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; and

		(ii) in Ontario, is purchasing a security that is not a security of an investment fund;

o	(r)	a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

o	(s)	an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) through (d) or paragraph (i) in form and function;

o	(t)	a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

o	(u)	an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; or

(v)

a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor.

The Subscriber has executed this Certificate as of the day of , 2012.

If a trust, partnership or other entity:		If an individual:


Name of Entity		Signature


Type of Entity		Name of Individual


Signature of Person Signing


Title of Person Signing

As used in this Certificate, the following terms have the following meanings:

An issuer is an “ affiliate ” of another issuer if:

(a) one of them is the subsidiary of the other, or

(b) each of them is controlled by the same person;

“ Canadian financial institution ” means:

(a) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act; or

(b) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

“ control person ” has the meaning ascribed to that term in securities legislation except in Ontario, Québec and Nova Scotia where “control person” means any person that holds or is one of a combination of persons that holds:

(a) a sufficient number of any of the securities of an issuer so as to affect materially the control of the issuer, or

(b) more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holding of those securities does not affect materially the control of the issuer;

“ eligibility advisor ” means:

(a) a person that is registered as an investment dealer or in an equivalent category of registration under the securities legislation of the jurisdiction of a purchaser and authorized to give advice with respect to the type of security being distributed; and

(b) in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not:

(i) have a professional business or personal relationship with the issuer, or any of its directors, executive officers, founders or control persons, and

(ii) have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months;

“ financial assets ” means cash, securities, or a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

“ foreign jurisdiction ” means a country other than Canada or a political subdivision of a country other than Canada;

“ fully managed account ” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction;

“ investment fund ” has the same meaning as in National Instrument 81-106 Investment Fund Continuous Disclosure and means a mutual fund or a non-redeemable investment fund;

“ jurisdiction ” means a province or territory of Canada except when used in the term foreign jurisdiction;

“ local jurisdiction ” means the jurisdiction in which the Canadian securities regulatory authority is situated;

“ non-redeemable investment fund ” has the same meaning as in National Instrument 81-106 Investment Fund Continuous Disclosure and means an issuer:

(a) whose primary purpose is to invest money provided by its securityholders;

(b) that does not invest;

(i) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund; or

(ii) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund; and

“ person ” includes an individual, a corporation, a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not; and an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative;

“ regulator ” means, for the local jurisdiction, the Executive Director as defined under securities legislation of the local jurisdiction;

“ related liabilities ” means:

(a) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets; or

(b) liabilities that are secured by financial assets;

“ securities legislation ” means securities legislation as such term is defined in National Instrument 14-101 Definitions ;

“ spouse ” means, an individual who:

(a) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual;

(b) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender; or

(c) in Alberta, is an individual referred to in paragraph (a) or (b), or is an adult interdependent partner within the meaning of the Audit Interdependent Relationships Act (Alberta); and

“ subsidiary ” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

Calculation of purchaser’s net assets: To calculate a purchaser’s net assets under paragraph (a) of the “Accredited Investor” definition, subtract the purchaser’s total liabilities from the purchaser’s total assets. The value attributed to assets should reasonably reflect their estimated fair value. Income tax should be considered a liability if the obligation to pay it is outstanding at the time of the trade.

SCHEDULE B

U.S. ACCREDITED INVESTOR CERTIFICATE

TO: INTERNATIONAL TOWER HILL MINES LTD. (the “Corporation”)

Capitalized terms used in this Schedule B and defined in the Agreement to which is Schedule B is attached have the meaning defined in the Agreement unless otherwise defined herein.

The undersigned or, if applicable, the Disclosed Purchaser through the undersigned acting as its agent, (the “Subscriber”) represents, warrants and covenants (which representations, warranties and covenants shall survive the Closing) to the Corporation (and acknowledges that the Corporation is relying thereon) that:

(a) it understands and agrees that the Purchased Securities have not been and will not be registered under the 1933 Act, or applicable securities laws of any state of the United States, and the Purchased Securities are being offered and sold by the Corporation to the Subscriber in reliance upon the exemption from the registration requirements of the 1933 Act set forth in Section 4(2) of the 1933 Act and Rule 506 of Regulation D;

(b) it is purchasing the Purchased Securities for its own account or for the account or benefit of one or more persons for whom it is exercising sole investment discretion, (a “Beneficial Purchaser” ), for investment purposes only and not with a view to resale or distribution and, in particular, neither it nor any Beneficial Purchaser for whose account it is purchasing the Purchased Securities has any intention to distribute either directly or indirectly any of the Purchased Securities in the United States or to, or for the account or benefit of a U.S. Person; provided, however, that this paragraph shall not restrict the Subscriber from selling or otherwise disposing of any of the Purchased Securities pursuant to registration thereof pursuant to the 1933 Act and any applicable securities laws of any state of the United States or under an applicable exemption from such registration requirements;

(c) it, and if applicable, each Beneficial Purchaser for whose account or benefit it is purchasing the Purchased Securities, is a U.S. Accredited Investor that satisfies one or more of the categories of U.S. Accredited Investor as indicated below ( the Subscriber must initial “SUB” for the Subscriber, and “BP” for each Beneficial Purchaser, if any, on the appropriate line(s) ):

o	Category 1.	A bank, as defined in Section 3(a)(2) of the 1933 Act, whether acting in its individual or fiduciary capacity; or

o	Category 2.	A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in its individual or fiduciary capacity; or

o	Category 3.	A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934 , as amended; or

o	Category 4.	An insurance company as defined in Section 2(13) of the 1933 Act; or

o	Category 5.	An investment company registered under the United States Investment Company Act of 1940 ; or

o	Category 6.	A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940 ; or

o	Category 7.	A small business investment company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958 ; or

o	Category 8.	A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; or

o	Category 9.	An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U.S. $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons who are U.S. accredited investors; or

o	Category 10.	A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940 ; or

o	Category 11.	An organization described in Section 501(c)(3) of the United States Internal Revenue Code , a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; or

o	Category 12.	Any director or executive officer of the Corporation; or

o	Category 13.	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of this purchase exceeds US$1,000,000; provided, however, that (i) person’s primary residence shall not be included as an asset; (ii) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of the sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (iii) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; or

o	Category 14.	A natural person who had an individual income in excess of U.S. $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of U.S. $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or

o	Category 15.	A trust, with total assets in excess of U.S. $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act; or

o	Category 16.	Any entity in which all of the equity owners meet the requirements of at least one of the above categories;

(d) it acknowledges that the Purchased Securities are “restricted securities”, as such term is defined under Rule 144 of the 1933 Act, and may not be offered, sold, pledged, or otherwise transferred, directly or indirectly, without prior registration under the 1933 Act and applicable securities laws

of any state of the United States, and it agrees that if it decides to offer, sell, pledge or otherwise transfer, directly or indirectly, any of the Purchased Securities absent such registration, it will not offer, sell, pledge or otherwise transfer, directly or indirectly, any of the Purchased Securities, directly or indirectly, except:

(i) to the Corporation; or

(ii) outside the United States in an “offshore transaction” in compliance with the requirements of Rule 904 of Regulation S under the 1933 Act, if available, and in compliance with applicable local laws and regulations; or

(iii) in compliance with an exemption from registration under the 1933 Act provided by Rule 144 thereunder, if available, and in accordance with any applicable securities or “Blue Sky” laws of any state of the United States; or

(iv) in a transaction that does not require registration under the 1933 Act or any applicable securities laws of any state of the United States;

and, in the case of subparagraph (iii) or (iv), it has furnished to the Corporation an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation to such effect;

(e) it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state laws and regulations, the certificates representing the Purchased Securities, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF INTERNATIONAL TOWER HILL MINES LTD. (THE “CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF SUBPARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

provided, that if the Purchased Securities are being sold under clause (B) above, at a time when the Corporation is a “foreign issuer” as defined in Rule 902 under the 1933 Act, the legend set forth above may be removed by providing a declaration to the Corporation and its transfer agent in the form attached hereto as Appendix I to Schedule B or such other evidence of exemption as the Corporation or its transfer agent may from time to time prescribe, to the effect that the sale of the securities is being made in compliance with Rule 904 of Regulation S;

provided further, that if any of the Purchased Securities are being sold pursuant to Rule 144 of the 1933 Act and in compliance with any applicable securities laws of any state of the United States,

the legend may be removed by delivery to the Corporation’s transfer agent of an opinion of reputable counsel in form and substance satisfactory to the Corporation and its transfer agent to the effect that the legend is no longer required under applicable requirements of the 1933 Act or applicable securities laws of any state of the United States;

(f) it has had the opportunity to ask questions of and receive answers from the Corporation regarding the investment, and has received all the information regarding the Corporation that it has requested;

(g) it consents to the Corporation making a notation on its records or giving instruction to the registrar and transfer agent of the Corporation in order to implement the restrictions on transfer with respect to the Purchased Securities set forth and described herein and understands that the Corporation may instruct its registrar and transfer agent not to record any transfer of any securities of the Corporation without first being notified by the Corporation that it is satisfied that such transfer is exempt from or not subject to the registration requirements of the 1933 Act and applicable securities laws of any state of the United States;

(h) it understands and acknowledges that the Corporation has no obligation or present intention of filing with the United States Securities and Exchange Commission or with any state securities administrator any registration statement in respect of resales of the Purchased Securities in the United States;

(i) the office or other address of the Subscriber at which the Subscriber received and accepted the offer to purchase the Purchased Securities is the address listed as the “Subscriber’s Residential or Head Office Address” on the first page of the Subscription Agreement;

(j) it understands and agrees that there may be material tax consequences to the Subscriber of an acquisition, disposition or exercise of any of the Purchased Securities, the Corporation gives no opinion and makes no representation with respect to the tax status of the Corporation or the consequences to the Subscriber under United States, state, local or foreign tax law of the Subscriber’s acquisition or disposition or exercise of the Purchased Securities, including whether the Corporation will at any given time be deemed a “passive foreign investment company” within the meaning of Section 1297 of the United States Internal Revenue Code;

(k) it understands and acknowledges that the Corporation (i) is not obligated to remain a “foreign issuer” within the meaning of Regulation S, (ii) may not, at the time the Purchased Securities are resold by it or at any other time, be a foreign issuer, and (iii) may engage in one or more transactions which could cause the Corporation not to be a foreign issuer, and if the Corporation is not a foreign issuer at the time of sale or transfer of the Purchased Securities pursuant to Rule 904 of Regulation S, the certificates representing the Purchased Securities may continue to bear the legend described above;

(l) it understands that (i) the Corporation may be deemed to be an issuer that is, or that has been at any time previously, an issuer with no or nominal operations and no or nominal assets other than cash and cash equivalents (a “Shell Company”), (ii) if the Corporation is deemed to be, or to have been at any time previously, a Shell Company, Rule 144 under the 1933 Act may not be available for resales of the Purchased Securities, and (iii) the Corporation is not obligated to make Rule 144 under the 1933 Act available for resales of the Purchased Securities;

(m) it understands and agrees that the financial statements of the Corporation have been prepared in accordance with International Financial Reporting Standards or Canadian generally accepted accounting principles, which differ in some respects from United States generally accepted accounting principles, and thus may not be comparable to financial statements of United States companies;

(n) it acknowledges that it had a prior relationship with either the Corporation or a finder of the Corporation before such time as any announcement, press release, or other notice or report of the offering of the Purchased Securities was made by the Corporation;

(o) it acknowledges that it has not purchased the Securities as a result of any form of General Solicitation or General Advertising, including any advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television or internet or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

(p) it confirms that it or the Beneficial Purchaser, if any, (i) is able to bear the economic risk of the investment in the Purchased Securities, (ii) is able to hold the Purchased Securities for an indefinite period of time, (iii) is able to afford a complete loss of its investment and that it has adequate means of providing for its current needs and possible personal contingencies, and that it has no need for liquidity in this investment, (iv) finds this investment is suitable for it based upon its investment holdings and financial situation and needs, and this investment does not exceed ten percent of its net worth, and (v) by reason of its business or financial experience could be reasonably assumed to have the capacity to protect its own interests in connection with this investment; and

(q) it acknowledges that the representations, warranties and covenants contained in this Schedule are made by it with the intent that they may be relied upon by the Corporation in determining its eligibility to purchase the Purchased Securities. It agrees that by accepting the Purchased Securities it shall be representing and warranting that the representations and warranties above are true as at the Closing with the same force and effect as if they had been made by it at the Closing and that they shall survive the purchase by it of the Purchased Securities and shall continue in full force and effect notwithstanding any subsequent disposition by it of such securities.

The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, undertakes to notify the Corporation immediately of any change in any representation, warranty or other information relating to the Subscriber or, if applicable, the Disclosed Purchaser set forth herein which takes place prior to the Closing.

If a Corporation, Partnership or Other Entity:		If an Individual:


Name of Entity		Signature


Type of Entity		Print or Type Name


Signature of Person Signing


Print or Type Name and Title of Person Signing

Appendix I to Schedule B

U.S. Accredited Investor Certificate

FORM OF DECLARATION FOR REMOVAL OF U.S. LEGEND

To: Computershare Investor Services Inc., as Registrar and Transfer Agent for the Shares of International Tower Hill Mines Ltd. (the “Corporation”).

The undersigned (a) acknowledges that the sale of the securities of the Corporation to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “1933 Act”) and (b) certifies that (1) the undersigned is not an affiliate of the Corporation (as that term is defined in Rule 405 under the 1933 Act), (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was executed in, on or through the facilities of a “Designated Offshore Securities Market” as defined in Rule 902 of Regulation S under the 1933 Act and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities of the Corporation and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the 1933 Act. Terms used herein have the meanings given to them by Regulation S. securities. Terms used herein have the meanings given to them by Regulation S.

			X
Date			Authorized signatory (if Holder is not an individual)

X
Signature of individual (if Holder is an individual)			Name of authorized signatory (please print)


Name of Holder (please print)			Official capacity of authorized signatory (please print)

Affirmation by Seller’s Broker-Dealer

We have read the foregoing representations of our customer, (the “Seller”), dated , with regard to our sale, for such Seller’s account, of the common shares, represented by certificate number (the “Shares”), of the Corporation described therein, and on behalf of ourselves we certify and affirm that (A) we have no knowledge that the transaction had been prearranged with a buyer in the United States, (B) the transaction was executed on or through the facilities of The Toronto Stock Exchange and (C) neither we, nor any person acting on our behalf, engaged in any directed selling efforts in connection with the offer and sale of such securities. Terms used herein have the meanings given to them by Regulation S.


Name of Firm

By:
	Authorized officer

Date:

SCHEDULE TO EXHIBIT 10.8

This Schedule of Subscribers Who Have Executed a Subscription Agreement is included pursuant to Instruction 2 of Item 601(a) of Regulation S-K for the purposes of setting forth the material details in which the specific agreements differ from the form of agreement filed herewith as Exhibit 10.8.

Subscriber	Disclosed Purchaser	Date	Number of Common Shares	Total Subscription Price (C$)
Paulson Gold Master Fund LP	Paulson & Company	August 3, 2012	3,846,154	$	10,000,000
Jayvee & Co	Tocqueville Asset Management	August 3, 2012	1,923,077	$	5,000,000
Jayvee & Co	Weiss Asset Management	August 3, 2012	1,307,692	$	3,400,000
Jayvee & Co	Weiss Asset Management	August 3, 2012	615,385	$	1,600,000
AngloGold Ashanti (U.S.A.) Exploration, Inc.	AngloGold Ashanti	August 3, 2012	1,275,000	$	3,315,000
Gundy Co ITF New Gen Mining Fund LP	New Generation Asset Management	August 3, 2012	275,000	$	715,000
Chris Puchner	Same as Subscriber	August 3, 2012	100,000	$	260,000
Karl Hanneman	Same as Subscriber	August 3, 2012	50,000	$	130,000
Thomas E. Irwin	Same as Subscriber	August 3, 2012	30,000	$	78,000
Tom S. Q. Yip	Same as Subscriber	August 3, 2012	20,000	$	52,000
Donald C. Ewigleben	Same as Subscriber	August 3, 2012	10,000	$	26,000
Roger R. W. Taplin	Same as Subscriber	August 3, 2012	6,000	$	15,600
Jayvee & Co	Weiss Asset Management	September 17, 2012	1,309,959	$	3,400,000
Jayvee & Co	Weiss Asset Management	September 17, 2012	616,452	$	1,600,000
Total:			11,384,719	$	29,591,600

Exhibit 10.9

INTERNATIONAL TOWER HILL MINES LTD.

(the “Company”)

2006 INCENTIVE STOCK OPTION PLAN

(AS AMENDED SEPTEMBER 19, 2012)

1. Objectives

The Plan is intended as an incentive to enable the Company to:

(a) attract and retain qualified directors, officers, employees and consultants of the Company and its Affiliates,

(b) promote a proprietary interest in the Company and its Affiliates among its employees, officers, directors and consultants, and

(c) stimulate the active interest of such persons in the development and financial success of the Company and its Affiliates.

2. Definitions

As used in the Plan, the terms set forth below shall have the following respective meanings:

“ Affiliate ” has the meaning ascribed thereto in the Securities Act , as amended from time to time;

“ Associate ” has the meaning ascribed thereto in the Securities Act , as amended from time to time;

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

“ Committee ” means a committee of the Board that the Board may, in accordance with subsection 3.1, designate to administer the Plan;

“ Consultant ” shall have the meaning set forth in National Instrument 45-106, as amended or superseded from time to time;

“ Company ” means International Tower Hill Mines Ltd., a company subsisting under the Business Corporations Act (British Columbia) and its successor corporations;

“ Director ” means a member of the Board;

“ Effective Amendment Date ” means September 19, 2012;

“ Employees ” means an employee of the Company or any of its Affiliates and includes:

(a) an individual who is (or would be if he were employed in Canada) considered an employee of the Company or any of its Affiliates under the Income Tax Act (Canada);

(b) an individual who works full-time for the Company or any of its Affiliates providing services normally provided by an employee and who is subject to the same

direction and control by the Company or such Affiliate over the details and methods of work as an employee of the Company or such Affiliate; and

(c) an individual who works for the Company or any of its Affiliates on a continuing and regular basis for a minimum amount of time per week or month providing services normally provided by an employee and who is subject to the same control and direction by the Company or such Affiliate over the details of work as an employee of the Company or such Affiliate;

“ Insider ” has the same meaning ascribed thereto in the TSX Company Manual;

“ Management Company Employee ” means an Employee of a management company or other similar entity providing management services to the Company or an Affiliate of the Company (not including promotional or investor relations services);

“ Non-Employee Director ” means a director of the Company or of an Affiliate of the Company who is not an Employee or an Officer;

“ Officer ” has the meaning ascribed thereto in the Securities Act ;

“ Option ” means an option to purchase Shares granted under or subject to the terms of the Plan;

“ Option Agreement ” means a written agreement between the Company and an Optionee that sets forth the terms, conditions and limitations applicable to an Option;

“ Option Period ” means the period for which an Option is granted;

“ Optioned Shares ” means the Shares for which an Option is or may become exercisable;

“ Optionee ” means a person to whom an Option has been granted under the terms of the Plan or who holds an Option that is otherwise subject to the terms of the Plan;

“ Plan ” means this Incentive Stock Option Plan of the Company;

“ Securities Act ” means the Securities Act (British Columbia), R.S.B.C. 1996 c.418, as amended from time to time;

“ Shares ” means common shares without par value in the capital stock of the Company as the same are presently constituted; and

“ TSX ” means the Toronto Stock Exchange or any successor thereto.

3. Administration of the Plan

3.1 The Plan will be administered by a Committee of two or more Directors who may be designated from time to time to serve as the Committee for the Plan, all of the sitting members of which shall be current Directors. Notwithstanding the existence of any such Committee, the Board itself will retain independent and concurrent power to undertake any action hereunder delegated to the Committee, whether with respect to the Plan as a whole or with respect to individual Options granted or to be granted under the Plan.

3.2 Subject to the limitations of the Plan, the Committee shall have full power to grant Options, to determine the terms, limitations, restrictions and conditions respecting such Options and to settle, execute and deliver Option Agreements and bind the Company accordingly, to interpret the Plan and to adopt such rules, regulations and guidelines for carrying out the Plan as it may deem necessary or proper and to reserve, allot, fix the price of and issue Shares pursuant to the grant and exercise of Options, all of which powers shall be exercised in the best interests of the Company and in keeping with the objectives of the Plan.

3.3 Any decision of the Committee in the interpretation and administration of the Plan shall lie within its absolute discretion and shall be final, conclusive and binding on all parties concerned. No member of the Committee shall be liable for anything done or omitted to be done by such member, by any other member of the Committee or by any officer of the Company, in connection with the performance of any duties under the Plan, except those which arise from such member’s own wilful misconduct or as expressly provided by statute.

3.4 The Company shall pay all administrative costs of the Plan.

4. Eligibility for Options

4.1 Options may be granted to Employees, Officers, Directors (including Non-Employee Directors), Management Company Employees, and Consultants of the Company and its Affiliates who are, in the opinion of the Committee, in a position to contribute to the success of the Company or any of its Affiliates or who, by virtue of their service to the Company or any predecessors thereof or to any of its Affiliates, are in the opinion of the Committee, worthy of special recognition. Except as may be otherwise set out in this Plan, the granting of Options is entirely discretionary. Nothing in this Plan shall be deemed to give any person any right to participate in this Plan or to be granted an Option and the designation of any Optionee in any year or at any time shall not require the designation of such person to receive an Option in any other year or at any other time. The Committee shall consider such factors as it deems pertinent in selecting participants and in determining the amounts and terms of their respective Options.

4.2 If an Optionee who is granted an Option is an Employee, Management Company Employee or Consultant of the Company or any of its Affiliates, the Option Agreement pertaining to such Option shall contain a representation by the Optionee that the Optionee is a bona fide Employee, Management Company Employee or Consultant of the Company or its Affiliates.

4.3 Any options over securities of the Company previously granted by the Company which remain outstanding as at September 19, 2012 (including Options granted prior to the Effective Amendment Date) will be deemed to have been issued under and will be governed by the terms of the Plan, as amended, provided that, in the event of inconsistency between the terms of the agreements governing such options previously granted and the terms of the Plan, as amended, the terms of such agreements shall govern.

4.4 Subject to any applicable regulatory approvals, Options may also be granted under the Plan in exchange for outstanding options granted by the Company or any predecessor Company thereof or any Affiliate thereof, whether such outstanding options were granted

under the Plan, under any other stock option plan of the Company or any predecessor Company or any Affiliate thereof, or under any stock option agreement with the Company or any predecessor Company or Affiliate thereof.

4.5 Subject to any applicable regulatory approvals, Options may also be granted under the Plan in substitution for outstanding options of one or more other companies in connection with a plan of arrangement or exchange, amalgamation, merger, consolidation, acquisition of property or shares, or other reorganization between or involving such other companies and the Company or any of its Affiliates.

5. Number of Shares Reserved under the Plan

5.1 The number of Shares that may be reserved for issuance pursuant to the exercise of Options granted under the Plan is limited as follows:

(a) the maximum aggregate number of Shares issuable pursuant to the exercise of Options granted under the Plan (together with those Shares which may be issued pursuant to any other security-based compensation plan of the Company or any other options for services granted by the Company) shall be a maximum of ten percent (10%) of the number of issued and outstanding Shares at the date of grant, provided that:

(i) if any Option subject to the Plan is forfeited, expires, is terminated or is cancelled for any reason whatsoever (other than by reason of the exercise thereof, in which case the Shares issuable pursuant to the exercise of such Option shall be automatically “reloaded” and available for future issuance pursuant to the exercise of Options granted subsequent to such exercise), the Shares otherwise issuable upon the exercise of such Option shall remain available for issuance pursuant to the exercise of Options granted subsequent to the date of such forfeiture, expiry or termination; and

(ii) such maximum number of Shares shall be appropriately adjusted in the event of any subdivision or consolidation of the Shares; and

(b) if and for so long as the Shares are listed on the TSX:

(i) the maximum aggregate number of Shares that may be reserved for issuance pursuant to the exercise of Options granted under the Plan (together with those Shares which may be issued pursuant to any other security-based compensation plan of the Company or any other options for services granted by the Company) shall not exceed ten percent (10%) of the issued and outstanding number of Shares; and

(ii) the maximum aggregate number of Shares issued pursuant to the exercise of Options granted to Insiders under the Plan (together with those Shares which may be issued pursuant to any other security-based compensation plan of the Company or any other options for services granted by the Company) within a twelve (12) month period shall not exceed ten percent (10%) of the issued and outstanding number of Shares.

6. Number of Optioned Shares per Option

6.1 Subject always to the limitations in subsection 5.1, the number of Optioned Shares under an Option shall be determined by the Committee, in its discretion, at the time such Option is granted, taking into consideration the Optionee’s present and potential contribution to the success of the Company and taking into account all other Options then held by such Optionee.

7. Price

7.1 The exercise price per Optioned Share under an Option shall be determined by the Committee, in its discretion, at the time such Option is granted, but such price shall be fixed in compliance with the applicable provisions of the TSX Company Manual in force at the time of grant and, in any event, shall not be less than the closing price of the Shares on the TSX on the trading day immediately preceding the day on which the Option is granted (provided that if there are no trades on such day then the last closing price within the preceding ten trading days will be used, and if there are no trades within such ten-day period, then the simple average of the bid and ask prices on the trading day immediately preceding the day of grant will be used). The exercise price at which, and the number of optioned securities for which, an outstanding Option may be exercised following a subdivision or consolidation of the Shares shall be subject to adjustment in accordance with section 11.

7.2 The exercise price per Optioned Share under an Option may be reduced at the discretion of the Committee if:

(a) at least six (6) months has elapsed since the later of the date such Option was granted and the date the exercise price for such Option was last amended; and

(b) shareholder approval (including, if required by the TSX, disinterested shareholder approval) is obtained for such reduction in the exercise price under an Option;

provided that none of the conditions in this subsection 7.2 will apply in the case of an adjustment made under subsection 5.1(a)(ii) or section 11.

8. Option Period and Exercise of Options

8.1 The Option Period for an Option shall be determined by the Committee at the time the Option is granted and may be up to ten (10) years from the date the Option is granted; provided, however, that the Option Period for any Option granted to an Optionee who is an Employee, Officer, Director, Management Company Employee or Consultant shall expire ninety (90) days after the Optionee ceases to be in at least one of those categories. At the time an Option is granted, the Committee may determine that the Option Period with respect to that Option shall, in the event of the termination or death of the applicable Optionee, be different than the Option Period provided for in this subsection 8.1 and, in the event of such a determination, the Option Agreement for such Option shall contain provisions which specify the events and time limits related to that determination. Subject to the applicable maximum Option Period provided for in this subsection 8.1 and subject to applicable regulatory requirements and approvals, the Committee may extend the Option Period of an outstanding Option beyond its original expiration date, provided that shareholder approval (including, if required by the TSX,

disinterested shareholder approval) is obtained for any extension of the Option Period of an outstanding Option.

8.2 The Committee may determine when any Option will become exercisable and may determine that the Option shall be exercisable in instalments.

8.3 If there is a takeover bid or tender offer made for all or any of the issued and outstanding Shares, then the Board may, in its sole and absolute discretion and if permitted by applicable legislation and the policies and rules of any stock exchange or regulatory body having jurisdiction over the securities of the Company, unilaterally determine that outstanding Options, whether fully vested and exercisable or subject to vesting provisions or other limitations on exercise, shall be conditionally exercisable in full to enable the Optioned Shares subject to such Options to be conditionally issued and tendered to such bid or offer, subject to the conditions that if the bid or offer is not duly completed the exercise of such Options and the issue of such Shares will be rescinded and nullified and the Options, including any vesting provisions or other limitations on exercise which were in effect will be re-instated.

8.4 The vested portions of Options will be exercisable, in whole or in part, at any time after vesting. If an Option is exercised for fewer than all of the Optioned Shares for which the Option has then vested, the Option shall remain in force and exercisable for the remaining Optioned Shares for which the Option has then vested, according to the terms of such Option.

8.5 The exercise of any Option will be contingent upon receipt by the Company of payment in full for the exercise price of the Shares being purchased in cash by way of certified cheque or bank draft. Neither an Optionee nor the legal representatives, legatees or distributees of such Optionee will be, or will be deemed to be, a holder of any Shares subject to an Option under the Plan unless and until certificates for such Shares are issuable to the Optionee or such other persons pursuant to the Option or the Plan.

8.6 Notwithstanding the provisions of subsection 8.1 or the expiry date of an Option determined in accordance with this Plan, if the expiry date of an Option would otherwise fall during or within ten days after the end of a blackout period imposed on the Optionee by the Company (a “ Blackout Period ”), the expiry date of such Option shall, without any further action by the Board or Committee, be extended to the close of business on the tenth business day after the end of such Blackout Period.

9. Stock Option Agreement

9.1 Upon the grant of an Option to an Optionee, the Company and the Optionee shall enter into an Option Agreement setting out the number of Optioned Shares subject to the Option, the Option Period and, if applicable, the vesting schedule for the Option, and incorporating the terms and conditions of the Plan and any other requirements of regulatory authorities and stock exchanges having jurisdiction over the securities of the Company, together with such other terms and conditions as the Committee may determine in accordance with the Plan.

10. Effect of Termination of Employment or Death

10.1 An outstanding Option shall remain in full force and effect and exercisable according to its terms for the Option Period notwithstanding that the holder of such Option ceases to be an Employee, Officer, Director, Management Company Employee or Consultant of the Company for any reason, including death, subject always to subsection 8.1 and the express terms of the applicable Option Agreement. So long as the Shares are listed on the TSX (unless otherwise permitted by the TSX), the maximum period within which the heirs or administrators of a deceased Optionee may exercise any portion of an outstanding Option is one (1) year from the date of death or the balance of the Option Period, which ever is earlier.

10.2 In the event of the death of an Optionee, an Option which remains exercisable may be exercised in accordance with its terms by the person or persons to whom such Optionee’s rights under the Option shall have passed under the Optionee’s will or pursuant to law.

11. Adjustment in Shares Subject to the Plan

11.1 Following the date an Option is granted, the exercise price for and the number of Optioned Shares which are subject to an Option will be adjusted, with respect to the then unexercised portion thereof, by the Committee from time to time (on the basis of such advice as the Committee considers appropriate, including, if considered appropriate by the Committee, a certificate of the auditor of the Company) in the events and in accordance with the provisions and rules set out in this section 11, with the intent that the rights of Optionees under their Options are, to the extent possible, preserved notwithstanding the occurrence of such events. The Committee will conclusively determine any dispute that arises at any time with respect to any adjustment pursuant to such provisions and rules, and any such determination will be binding on the Company, the Optionee and all other affected parties.

11.2 The number of Optioned Shares to be issued on the exercise of an Option shall be adjusted from time to time to account for each dividend of Shares (other than a dividend in lieu of cash dividends paid in the ordinary course), so that upon exercise of the Option for an Optioned Share the Optionee shall receive, in addition to such Optioned Share, an additional number of Shares (“ Additional Shares ”), at no further cost, to adjust for each such dividend of Shares. The adjustment shall take into account every dividend of Shares that occurs between the date of the grant of the Option and the date of exercise of the Option for such Optioned Share. If there has been more than one such dividend, the adjustment shall also take into account that the dividends that are later in time would have been distributed not only on the Optioned Share had it been outstanding, but also on all Additional Shares which would have been outstanding as a result of previous dividends.

11.3 If the outstanding Shares are changed into or exchanged for a different number or kind of shares or into or for other securities of the Company or securities of another Company or entity, whether through an arrangement, amalgamation or other similar procedure or otherwise, or a share recapitalization, subdivision or consolidation, then on each exercise of the Option which occurs following such events, for each Optioned Share for which the Option is exercised, the Optionee shall instead receive the number and kind of shares or other securities of the Company or other Company into which such Option

Share would have been changed or for which such Option Share would have been exchanged if it had been outstanding on the date of such event.

11.4 If the outstanding Shares are changed into or exchanged for a different number or kind of shares or into or for other securities of the Company or securities of another Company or entity, in a manner other than as specified in subsections 11.2 or 11.3, then the Committee, in its sole discretion, may make such adjustment to the securities to be issued pursuant to any exercise of the Option and the exercise price to be paid for each such security following such event as the Committee in its sole and absolute discretion determines to be equitable to give effect to the principle described in subsection 11.1, and such adjustments shall be effective and binding upon the Company and the Optionee for all purposes.

11.5 If the Company distributes, by way of a dividend or otherwise, to all or substantially all holders of Shares, property, evidences of indebtedness or shares or other securities of the Company (other than Shares) or rights, options or warrants to acquire Shares or securities convertible into or exchangeable for Shares or other securities or property of the Company, other than as a dividend in the ordinary course, then, if the Committee, in its sole discretion, determines that such action equitably requires an adjustment in the exercise price under any outstanding Option or in the number(s) of Optioned Shares subject to any such Option, or both, such adjustment may be made by the Committee and shall be effective and binding on the Company and the Optionee for all purposes.

11.6 No adjustment or substitution provided for in this section 11 shall require the Company to issue a fractional share in respect of any Option. Fractional shares shall be eliminated.

11.7 The grant or existence of an Option shall not in any way limit or restrict the right or power of the Company to effect adjustments, reclassifications, reorganizations, arrangements or changes of its capital or business structure, or to amalgamate, merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets.

12. Non-Assignability

12.1 Neither the Options nor the benefits and rights of any Optionee under any Option or under the Plan shall be assignable or otherwise transferable, except as specifically provided in subsection 10.2 in the event of the death of the Optionee. During the lifetime of the Optionee, all such Options, benefits and rights may only be exercised by the Optionee.

13. Employment

13.1 Nothing contained in the Plan shall confer upon any Optionee, or any person employing a Management Company Optionee, any right with respect to employment or continuance of employment with, or the provision of services to, the Company or any of its Affiliates, or interfere in any way with the right of the Company or any of its Affiliates to terminate the Optionee’s employment or the services of any such person at any time. Participation in the Plan by an Optionee is voluntary.

14. Regulatory Acceptances

14.1 Subject to the acceptance of any amendments to the Plan for filing by the TSX, the Committee is authorized to amend the Plan from time to time in accordance with the terms hereof in order to comply with any changes required from time to time by the TSX or any other regulatory authority having jurisdiction over the Company, whether as conditions to the acceptance for filing of the Plan or otherwise, provided that no such amendment will in any way derogate from the rights held by Optionees holding Options (vested or unvested) at the time thereof without the consent of such Optionees.

14.2 The obligation of the Company to issue and deliver Optioned Shares pursuant to the exercise of any Options granted under the Plan is subject to the acceptance of the Plan for filing by the TSX. If any Shares cannot be issued to any Optionee for any reason, including, without limitation, the failure to obtain such acceptance for filing, then the obligation of the Company to issue such Optioned Shares shall terminate and any amounts paid to the Company for such Optioned Shares shall be returned to the Optionee forthwith without interest or deduction.

15. Securities Regulation and Tax Withholding

15.1 Where necessary to enable the Company to use an exemption from requirements to register Optioned Shares or file a prospectus or use a registered dealer to distribute Optioned Shares under securities laws applicable to the securities of the Company in any jurisdiction, an Optionee, upon the acquisition of any Optioned Shares by the exercise of Options and as a condition to such exercise, shall provide to the Committee such evidence as the Committee requires to demonstrate that the Optionee or recipient will acquire such Optioned Shares with investment intent (i.e. for investment purposes) and not with a view to their distribution, including an undertaking to that effect in a form acceptable to the Committee. The Committee may cause a legend or legends to be placed upon any certificates for the Optioned Shares to make appropriate reference to applicable resale restrictions, and the Optionee or recipient shall be bound by such restrictions. The Committee also may take such other action or require such other action or agreement by such Optionee or proposed recipient as may from time to time be necessary to comply with applicable securities laws. This provision shall in no way obligate the Company to undertake the registration or qualification of any Options or the Optioned Shares under any securities laws applicable to the securities of the Company.

15.2 The Committee and the Company may take all such measures as they deem appropriate to ensure that the Company’s obligations under the withholding provisions under income tax laws applicable to the Company and other provisions of applicable laws are satisfied with respect to the issuance of Shares pursuant to the Plan or the grant or exercise of Options under the Plan.

15.3 Without limiting the generality of subsection 15.2, the Company shall have the right to deduct and withhold from any amount payable or consideration deliverable to a participant (a “ Participant ”), either under the Plan or otherwise, such amount or consideration as may be necessary to enable the Company to comply with the applicable requirements of any federal, provincial, state or local law, or any administrative policy of any applicable tax authority, relating to the deduction, withholding or remittance of tax or any other required deductions or remittances with respect to awards hereunder (“ Withholding Obligations ”). The Company shall also

have the right in its discretion to satisfy any liability for any Withholding Obligations by withholding and selling, or causing a broker to sell, on behalf of any Participant such number of Shares issued to the Participant pursuant to an exercise of Options hereunder as is sufficient to fund the Withholding Obligations (after deducting commissions payable to the broker and other costs and expenses), or retaining any amount or consideration which would otherwise be paid, delivered or provided to the Participant hereunder. The Company may require a Participant, as a condition to granting an Option or the exercise of an Option, to make - such arrangements as the Company may in its discretion require so that the Company can satisfy applicable Withholding Obligations, including, without limitation (i) requiring the Participant to remit the amount of any such Withholding Obligations to the Company in advance; (ii) requiring the Participant to indemnify and reimburse the Company for any such Withholding Obligations; (iii) withholding and selling Shares acquired by the Participant under the Plan, or causing a broker to sell such Shares on behalf of the Participant, withholding from the proceeds realized from such sale the amount required to satisfy any such Withholding Obligations, and remitting such amount directly to the Company; or (iv) any combination thereof.

15.4 Any Shares of a Participant that are sold by the Company, or by a broker engaged by the Company (the “ Broker ”), to fund Withholding Obligations will be sold as soon as practicable in transactions effected on the exchange on which the Shares are then listed for trading, if any. In effecting the sale of any such Shares, the Company or the Broker will exercise its sole judgment as to the timing and manner of sale and will not be obligated to seek or obtain a minimum price. Neither the Company nor the Broker will be liable for any loss arising out of any sale of such Shares including any loss relating to the manner or timing of such sales, the prices at which the Shares are sold or otherwise. In addition, neither the Company nor the Broker will be liable for any loss arising from a delay in transferring any Shares to a Participant. The sale price of Shares sold on behalf of Participants will fluctuate with the market price of the Company’s shares and no assurance can be given that any particular price will be received upon any such sale.

15.5 Issuance of Common Shares or delivery of share certificates for Common Shares purchased pursuant to the Plan may be delayed, at the discretion of the Committee, until the Committee is satisfied that the applicable requirements of income tax laws and other applicable laws have been met.

16. Amendment and Termination of Plan

16.1 Subject to the policies, rules and regulations of any lawful authority or regulatory body having jurisdiction over the Company (including the TSX or any other stock exchange on which the Shares may be listed), the Board may, at any time, without further action or approval by the shareholders of the Company, amend the Plan, or any Option or Option Agreement, for administrative purposes or in such other respects as it may consider advisable including without limitation to:

(a) ensure that the Options granted hereunder will comply with any provisions respecting stock options under tax or other laws in force in any country or jurisdiction of which a Optionee to whom an Option has been granted may from time to time be resident or a citizen;

(b) correct any defect or omission or reconcile any inconsistency in the Plan or any Option or Option Agreement;

(d) subject to clause (m) below, change the termination provisions of an Option;

(e) add or modify a cashless exercise feature providing for payment in cash or securities upon the exercise of Options;

(f) ensure compliance with applicable laws or the requirements of the TSX or any regulatory body or stock exchange with jurisdiction over the Company;

(g) add or change provisions relating to any form of financial assistance provided by the Company to participants under the Plan that would facilitate the purchase of securities under the Plan; and

provided that shareholder approval shall be obtained for any amendment that results in:

(h) an increase in the numbers of Shares issuable pursuant to the exercise of Options granted pursuant to the Plan;

(i) a change in the persons who qualify as eligible participants under subsection 4.1;

(j) a reduction in the exercise price of an Option;

(k) the cancellation and reissuance of any Option;

(l) the extension of the term of an Option;

(m) a change in the Insider participation limit contained in subsection 5.1(b);

(n) Options becoming transferable or assignable other than for the purposes described in section 10; and

(o) a change in the amendment provisions contained in this section 16.

16.2 No Shares shall be issued under any amendment to this Plan unless and until the amended Plan has been approved by the TSX;

16.3 The Plan may be abandoned or terminated in whole or in part at any time by the Board, except with respect to any Option then outstanding under the Plan;

16.4 The Board may not, without the consent of the applicable Optionee, alter or impair any of the rights or obligations under any Option then outstanding under the Plan.

17. No Representation or Warranty

17.1 The Company makes no representation or warranty as to the future market value of any Shares or Optioned Shares.

18. General Provisions

18.1 Nothing contained in the Plan shall prevent the Company or any of its Affiliates from adopting or continuing in effect other compensation arrangements (subject to

shareholder approval if such approval is required by TSX) and such arrangements may be either generally applicable or applicable only in specific cases.

18.2 The validity, construction and effect of the Plan, the grants of Options, the issue of Optioned Shares, any rules and regulations relating to the Plan any Option Agreement, and all determinations made and actions taken pursuant to the Plan, shall be governed by and determined in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

18.3 If any provision of the Plan or any Option Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any person or Option, or would disqualify the Plan or any Option under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Option, such provision shall be stricken as to such jurisdiction, person, or Option and the remainder of the Plan and any such Option Agreement shall remain in full force and effect.

18.4 Neither the Plan nor any Option shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any of its Affiliates and an Optionee or any other person.

18.5 Headings are given to the sections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

19. Term of the Plan

19.1 The Plan shall be effective as of August 22, 2006, subject to its approval by the shareholders of the Company and acceptance for filing by the TSX pursuant to section 14.

19.2 The Plan shall be effective until August 22, 2016 unless the Plan is earlier terminated by the Board pursuant to section 16, and no Option shall be granted under the Plan after that date. Unless otherwise expressly provided in the Plan or in an applicable Option Agreement, the Option Period for any Option granted hereunder will, and any authority of the Board to amend, alter, adjust, suspend, discontinue or terminate any such Option or to waive any conditions or rights under any such Option shall, continue after termination of the Plan on August 22, 2016 or any earlier termination date of the Plan, notwithstanding such termination.

Adopted by the Board:		August 22, 2006
Approved by the Shareholders:		September 22, 2006
Amended by the Board
(subject to Shareholder and TSX approval):		August 13, 2012
Approved by the Shareholders:		September 19, 2012

Exhibit 10.10

INTERNATIONAL TOWER HILL MINES LTD.

STOCK OPTION AGREEMENT
(Under 2006 Incentive Stock Option Plan)

THIS AGREEMENT made as of the · day of · .

BETWEEN:

(the “Optionee”)

AND:

INTERNATIONAL TOWER HILL MINES LTD. , a company validly existing under the laws of British Columbia and having its head office at Suite 2300 — 1177 West Hastings Street, Vancouver, British Columbia, CANADA V6E 2K3

(the “Company”)

WHEREAS:

A. The common shares of the Company are listed on the TSX Venture Exchange (the “TSXV”) and the Company is subject to the regulatory jurisdictions of the TSXV and the British Colombia and Alberta Securities Commissions (the “Commissions”);

B. In accordance with the Company’s 2006 Incentive Stock Option Plan (the “Plan”), the Directors of the Company have authorized the granting of options to purchase shares in the capital stock of the Company to Employees, Senior Officers, Directors, Non-Employee Directors, Management Company Employees and Consultants of the Company and its Affiliates in order to provide an additional incentive to such persons to participate actively in the success of the Company;

C. This Agreement is made and entered into pursuant to and in accordance with the Plan.

NOW THEREFORE THIS AGREEMENT WITNESSES:

DEFINITION

1. In this Agreement, all terms used herein and which are defined in the Plan will have the same meanings as assigned to them in the Plan.

GRANTING OF OPTION

2. The Company hereby irrevocably grants to the Optionee a non-assignable, non-transferable option to purchase · Shares (the “Option”) at a price of $ · per Share (the “Option Price”).

3. The Option is not qualified under Section 422 of the United States Internal Revenue Code , and is therefore a “non-qualified” stock option for US tax purposes.

EXERCISE OF OPTION

4. The Option, or any part thereof, may be exercised by the Optionee at any time and from time to time, until and including · , by notice in writing to the Company to that effect. Any such notice given to the Company (an “Exercise Notice”) will specify the number of Shares with respect to which the Option is then being exercised and will be accompanied by a certified cheque, bank draft or money order in favour of the Company in full payment of the Option Price for the number of Shares then being purchased.

DELIVERY OF SHARE CERTIFICATE

5. The Company will, within three (3) business days after receipt of an Exercise Notice, deliver to the Optionee a certificate representing the number of Shares with respect to which the Option was exercised and issued as of the date of the Exercise Notice.

6. An Exercise Notice will be deemed to have been given, if delivered, on the date of delivery, or if mailed, on the second (2nd) day after the date of mailing in any post office in Canada. A mailed Exercise Notice will be sent by prepaid registered mail addressed to the Company at its head office from time to time.

OPTION ONLY

7. Nothing herein contained or done pursuant hereto will obligate the Optionee to purchase and/or pay for any Shares, except those Shares in respect of which the Optionee has exercised all or any part of the Option granted hereunder.

8. The Optionee will not have any rights whatsoever as a member of the Company or the holder of any of the Shares optioned hereunder other than in respect of optioned Shares for which the Optionee has exercised all or any part of the Option granted hereunder and which have been taken up and paid for in full.

INCORPORATION OF TERMS AND CONDITIONS OF PLAN

9. The Option has been granted in accordance with and subject to the terms and conditions of the Plan, all of which are incorporated herein by reference as fully as if each and every such term and condition were set forth in this agreement seriatim .

TIME OF THE ESSENCE

10. Time is and will be of the essence of this agreement.

SUCCESSORS

11. This agreement will enure to the benefit of and be binding upon the heirs, executors and administrators of the Optionee and the successors and assigns of the Company.

COLLECTION OF PERSONAL INFORMATION

12. The Optionee acknowledges and consents to the fact the Company is collecting the Optionee’s personal information for the purpose of completing the grant of the Option to the Optionee and obtaining all necessary regulatory acceptances, orders, approvals and consents thereto. The Optionee acknowledges and consents to the Company retaining the personal information for as long as permitted or required by applicable law or business practices. The Optionee further acknowledges and consents to the fact the Company may be required by applicable securities laws, stock exchange rules, and Investment Dealers Association (“IDA”) rules to provide regulatory authorities with any personal information provided by the Optionee respecting him/herself, and further consents to the collection, use and disclosure of any such personal information by any securities regulatory authority or stock exchange or the IDA from time to time including, without limitation, the collection, use and disclosure as set out in Appendix 6A to the TSXV Policy entitled “Acknowledgement — Personal Information”.

[Rest of page left blank intentionally.]

IN WITNESS WHEREOF the parties hereto have caused these presents to be executed as of the day and year first above written.

SIGNED, SEALED and DELIVERED by	)
· in the presence of:	)
	)
	)
Name	)
	)
	)
Address	)	·
	)
	)
	)
	)
	)
Occupation	)

The Corporate Seal of	)
INTERNATIONAL TOWER HILL	)
MINES LTD. was hereunto affixed in the	)
presence of:	)
	)
	)
	)	C/S
Authorized Signatory	)
	)

Authorized Signatory

Exhibit 10.11

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into by and between Tower Hill Mines (US) LLC (hereafter “Company”), and Tom S. Q. Yip (hereafter “Executive”). Company and Executive shall be collectively referred to as “the Parties.”

1. Effective Date and Commencement of Employment.

(a) This Agreement shall be effective on March 11, 2013 (“Effective Date”). Executive’s employment commenced on September 7, 2011 (the “Employment Commencement Date”).

(b) The period commencing on the Employment Commencement Date and ending at the close of business on the date that this Agreement and Executive’s employment is terminated (“the Termination Date”) shall constitute the “Employment Period.”

(c) Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any time during the Employment Period in accordance with Section 6 .

2. Position . During the Employment Period (as defined in Section 1 hereof), the Company shall be Executive’s employer, and Executive shall serve as Chief Financial Officer (“CFO”) of the Company and each of its affiliates including but not limited to International Tower Hill Mines Ltd. (ITH), reporting directly to the President and Chief Executive Officer (“CEO”). Executive shall hold all other positions as deemed necessary by the CEO and the Board. On the Termination Date, Executive shall be deemed to have resigned from all positions held with all affiliates of the Company, including ITH.

3. Duties and Responsibilities of Executive .

(b) Executive’s duties will include those normally incidental to the position of CFO (to include the duties set forth in Exhibit A), as well as such additional duties consistent therewith as may be assigned to him by the CEO and Board. If, in its sole and complete discretion, the CEO or the Board changes Executive’s title and/or Executive’s reporting responsibilities, the CEO or Board may make such changes, and such changes shall thereafter apply for purposes of this Agreement, subject only to the provisions of Section 7(c) hereof.

(c) Executive agrees to cooperate fully with the CEO and Board and not engage directly or indirectly in any activity that materially interferes with the performance of Executive’s

duties hereunder. During the Employment Period, Executive will not hold outside employment, or perform substantial personal services for parties unrelated to the Company, without the advance written approval of the Company; provided, that it shall not be a violation of this Agreement for Executive to (i) serve on any corporate, civic, or charitable boards or committees (except for boards or committees of any business organization that competes with the Company or its affiliates, including ITH, in any business in which they are regularly engaged), so long as such service does not materially interfere with the performance of Executive’s duties and responsibilities under this Agreement, as the CEO in his reasonable discretion shall determine, (ii) manage personal investments, or (iii) take vacation days and reasonable absences due to injury or illness as permitted by the general policies of the Company.

(d) Executive represents and covenants to the Company that he is not subject or a party to any employment agreement, non-competition covenant, non-solicitation agreement, nondisclosure agreement, or any other agreement, covenant, understanding, or restriction that would prohibit Executive from executing this Agreement and fully performing his duties and responsibilities hereunder.

(e) Executive acknowledges and agrees that Executive owes the Company and its affiliates, including ITH, a duty of loyalty and that any obligations described in this Agreement are in addition to, and not in lieu of, any obligations Executive owes the Company as a matter of law.

4. Compensation .

(a) Base Salary . Commencing on the Employment Commencement Date, and during the Employment Period, the Company shall pay to Executive an annual base salary of $350,000 (the “Base Salary”), payable in conformity with the Company’s customary payroll practices for executive salaries. For all purposes of this Agreement, Executive’s Base Salary shall include any portion thereof which Executive elects to defer under any nonqualified plan or arrangement.

(b) Annual Performance Bonus . Executive shall be eligible for an annual discretionary performance bonus with respect to each full calendar year during the Employment Period (the “Annual Performance Bonus”), beginning with the calendar year 2013, which shall, if earned, consist of a cash payment targeted at 100% of Base Salary. The CEO will, on an annual basis (at or near the beginning of each full calendar year in such Employment Period) establish performance objectives for Executive for the upcoming year, and will communicate such objectives to Executive. The amount, if any, of the Annual Performance Bonus will be determined by the Board, or the Compensation Committee if designated this task by the Board, acting in its sole and complete discretion but based on the CEO’s recommendation based on annual performance objectives established by the CEO. A bonus determination will be made by the Board typically within 90 calendar days of the end of each calendar year and the Annual Performance Bonus, if any, will be paid within 120 days of the end of the calendar year for which the Annual Performance Bonus is awarded. Executive must be employed by the Company at the time of payment of the Annual Performance Bonus to be entitled to payment of the Annual Performance Bonus, except as provided in Sections 7(a), 7(b), and 7(c) .

(c) Equity Awards. Subject to the approval of the Board and/or the Compensation Committee, as applicable, and, subject to all terms and conditions of the 2006 Incentive Stock

Option Plan of ITH (“2006 Plan”) reapproved in 2012 by the stockholders, the Company granted to Executive on August 23, 2011, an option to purchase 600,000 ITH common shares at a price of 8.07 per share with vesting to occur over 2 years, with 1/3 of the option vested on the grant date, and an additional 1/3 to be vested on both the first and second anniversary of the grant date. These options will expire August 23, 2016. On August 24, 2012, the company granted Executive an option to purchase 500,000 ITH common shares at a price of 3.17 per share with vesting to occur over 2 years, with 1/3 of the option vested on the grant date, and an additional 1/3 to be vested on both the first and second anniversary of the grant date. These options will expire August 24, 2017. In addition, Executive shall be eligible to receive future equity incentive awards as determined in the sole discretion of the Board or the Compensation Committee, as applicable.

5. Benefits . Subject to the terms and conditions of this Agreement, Executive shall be entitled to the following benefits during the Employment Period:

(a) Reimbursement of Business Expenses and Travel . The Company agrees to promptly reimburse Executive for reasonable business-related expenses, including travel expenses, incurred in the performance of Executive’s duties under this Agreement in accordance with Company policies. Executive understands and agrees that his position may entail frequent and significant travel to places outside of Colorado, including to Alaska.

(b) Benefit Plans and Programs . To the extent permitted by applicable law, Executive (and where applicable, his plan-eligible dependents) will be eligible to participate in all benefit plans and programs, including improvements or modifications of the same, then being actively maintained by the Company for the benefit of its executive employees (or for an employee population which includes its executive employees), subject in any event to the eligibility requirements and other terms and conditions of those plans and programs, including, without limitation, 401(k) plan, medical and dental insurance, life insurance and disability insurance. The Company will not, however, by reason of this Section 5(b) , have any obligation to institute, maintain, or refrain from changing, amending, or discontinuing any such benefit plan or program.

(c) Disability Insurance . The Company shall maintain a disability insurance policy that will pay, upon Executive’s termination due to Disability (as defined below), no less than 60% of the Executive’s then-current Base Salary for the shorter of (i) two years, or (ii) the duration of such Disability.

6. Termination of Agreement and Employment .

(a) Automatic Termination in the Event of Death . This Agreement shall automatically terminate in the event of the Executive’s death.

(b) Company’s Right to Terminate . At any time during the Employment Period, the Company shall have the right to terminate this Agreement with the Company for any of the following reasons:

(1) Upon Executive’s Disability (as defined below);

(2) For Cause (as defined in Section 7 ); or

(3) For any other reason whatsoever, in the sole and complete discretion of the Company.

(c) Executive’s Right to Terminate . At any time during the Employment Period, Executive will have the right to terminate this Agreement with the Company for:

(1) Good Reason (as defined in Section 7 ); or

(2) For any other reason whatsoever, in the sole and complete discretion of Executive.

(d) “Disability.” For purposes of this Agreement, “Disability” means that Executive has sustained sickness or injury that renders Executive incapable, with reasonable accommodation, of performing the duties and services required of Executive hereunder for a period of 90 consecutive calendar days or a total of 120 calendar days during any 12-month period; provided, however, that any termination based on Disability will be made in accordance with applicable law, including the Americans with Disabilities Act, as amended.

(e) “Notices.” Any termination of this Agreement with the Company by the Company under Section 6(b) or by Executive under Section 6(c) shall be communicated by a Notice of Termination to the other party. A “Notice of Termination” means a written notice that (1) indicates the specific termination provision in this Agreement relied upon and (2) if the termination is by the Company for Cause or by Executive for Good Reason, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. The Notice of Termination must specify Executive’s Termination Date. The Termination Date may be as early as 14 calendar days after such Notice is given but no later than 60 calendar days after such Notice is given, unless otherwise agreed to by the Parties in writing or unless the termination is For Cause, in which case the Termination Date may be immediate.

(f) The termination of this Agreement shall also result in the contemporaneous termination of Executive’s employment.

7. Severance Payments .

(a) Termination by the Company pursuant to Section 6(b)(3) . If the Company terminates this Agreement during the Employment Period pursuant to Section 6(b)(3) hereof, then, except as set forth in Section 7(c), the Company shall pay Executive the following severance, in a lump sum, subject to all applicable withholdings, on the 60 th day after the Termination Date, provided that Executive has executed, not revoked, and any period to revoke has lapsed, a full general release in favor of the Company and its affiliates, including but not limited to ITH:

(1) One year’s Base Salary; and

(2) The portion, if any, of his Annual Performance Bonus for the year in which the termination occurs based on the degree of achievement of the

relevant performance targets established for such year through the date of termination, using pro-rated performance targets where necessary to account for the shortened performance period.

(b) Termination by Executive for Good Reason . If Executive terminates this Agreement during the Employment Period pursuant to Section 6(c)(1) hereof, then, except as set forth in Section 7(c), the Company shall pay Executive the following severance, in a lump sum, subject to all applicable withholdings, within on the 60 th day after the Termination Date, provided that Executive has executed, not revoked, and any period to revoke has lapsed, a full general release in favor of the Company and its affiliates, including but not limited to ITH:

(1) One year’s Base Salary; and

(2) The portion, if any, of his Annual Performance Bonus for the year in which the termination occurs based on the degree of achievement of the relevant performance targets established for such year through the date of termination, using pro-rated performance targets where necessary to account for the shortened performance period.

(c) Termination by Company pursuant to Section 6(b)(3) or Executive for Good Reason after a Change in Control . If a Change in Control occurs and within six months of the Change in Control (i) Executive is terminated pursuant to Section 6(b)(3) hereof or (ii) Executive terminates this Agreement during the Employment Period pursuant to Section 6(c)(1) hereof, then Section 7(a) and 7(b) will not apply, but instead pursuant to this Section 7(c) , the Company shall pay Executive the following severance, in a lump sum, subject to all applicable withholdings, on the 60 th day after the Termination Date, provided that Executive has executed, not revoked, and any period to revoke has lapsed, a full general release in favor of the Company and its affiliates, including but not limited to ITH:

(1) Two year’s Base Salary; and

(2) Two year’s Annual Performance Bonus at target.

In addition, immediately prior to the termination of Executive’s employment in a situation entitling him to severance under this Section 7(c) , Executive shall become 100% vested in all of the rights and interests then held by Executive under the Company’s stock and other equity plans (to the extent not theretofore vested), including without limitation any stock options, restricted stock, restricted stock units, performance units, and/or performance shares.

(d) Additional Benefits . If the Company is required to pay Executive severance by, and subject to, Section 7(a) or 7(b) or 7(c) , or if Executive is terminated pursuant to Section 6(b)(1) then:

(1) Such severance shall be paid in addition to any other payments the Company may make to Executive (including, without limitation, salary, fringe benefits, and expense reimbursements) in discharge of the Company’s obligations to Executive under this Agreement with respect to periods ending coincident with or prior to the Termination Date.

(2) The Company shall reimburse Executive for COBRA continuation coverage for twelve full months (or for the lesser duration of such COBRA coverage) beginning with the month following the month in which the Termination Date occurs, such that employee’s cost of such COBRA coverage shall equal the cost, if any, that Executive would pay (on behalf of himself and his spouse and dependents, as applicable) under the Company’s group health plan had Executive not terminated; provided, that if group health coverage under another group health plan becomes available thereafter to Executive, Executive’s spouse, or Executive’s dependents (as applicable), the Company’s reimbursement obligations under this paragraph will cease with respect to each person to whom such coverage becomes available. Executive shall notify the Company immediately upon group health coverage becoming available to Executive, Executive’s spouse, or Executive’s dependents.

(3) Payments under Sections 7(a) or 7(b) or 7(c) , or payment under the disability insurance policy pursuant to Section 5(c) , shall be in lieu of any severance benefits otherwise due to Executive or under any severance pay plan or program maintained by the Company that covers its employees and/or its executives.

(e) “Cause” means the occurrence or existence, prior to occurrence of circumstances constituting Good Reason, of any of the following events during the Employment Period:

(1) Executive’s gross negligence or material mismanagement in performing, or material failure or inability (excluding as a result of death or Disability) to perform, Executive’s duties and responsibilities as described herein or as lawfully directed by the Board;

(2) Executive’s having committed any act of willful misconduct or material dishonesty (including but not limited to theft, misappropriation, embezzlement, forgery, fraud, falsification of records, or misrepresentation) against the Company or any of its affiliates, including but not limited to ITH, or any act that results in, or could reasonably be expected to result in, material injury to the reputation, business or business relationships of the Company or any of its affiliates, including but not limited to ITH;

(3) Executive’s material breach of this Agreement, any fiduciary duty owed by Executive to the Company or its affiliates (including but not limited to ITH), or any written workplace policies applicable to Executive (including but not limited to the Company’s code of conduct and policy on workplace harassment) whether adopted on or after the date of this Agreement;

expected to have a material adverse impact on the Company’s or any of its affiliates’ reputations (including but not limited to ITH’s reputation); or

(5) Executive’s having committed any material violation of any federal law regulating securities (without having relied on the advice of the Company’s attorney) or having been the subject of any final order, judicial or administrative, obtained or issued by the Securities and Exchange Commission, for any securities violation involving fraud, including, for example, any such order consented to by Executive in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied.

(f) “ Good Reason ” means the occurrence, prior to occurrence of circumstances constituting Cause, of any of the following events during the Employment Period without Executive’s consent:

(1) Any material breach by the Company of this Agreement;

(2) Any requirement by the Company that Executive relocate outside of the Denver metropolitan area;

(3) Failure of any successor to assume this Agreement not later than the date as of which it acquires substantially all of the assets or businesses of the Company;

(4) Any material reduction in Executive’s title, responsibilities, or duties or the Board directs Executive to report to someone other than the CEO or the Board; or

(5) The assignment to Executive of any duties materially inconsistent with his duties as Chief Financial Officer of the Company;

provided however, that no Good Reason shall have occurred unless Executive provides the Board written notice of the initial occurrence of the event or condition described in (1) through (5) immediately above within 90 days of the initial occurrence of such event or condition, the event or condition is not remedied or cured within 30 days of the Board’s receipt of such written notice, and Executive actually terminates his employment with the Company within 120 days of the initial occurrence of such event or condition.

51% of the total voting power of outstanding stock of the surviving or resulting entity is then “beneficially owned” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company immediately prior to such merger, consolidation or reorganization. Notwithstanding the foregoing, in no event shall a Change of Control be deemed to occur in the event of a sale of Company securities or debt as part of a bona fide capital raising transaction or internal corporate reorganization.

· the Parent is merged or consolidated in a transaction in which its shareholders receive less than 50% of the outstanding voting shares of the new or continuing corporation,

· a majority of the incumbent directors of the Parent who were previously nominated by management and elected as directors at the immediately preceding annual general meeting or who were appointed by the Board to fill a vacancy occurring since the immediately preceding annual general meeting are:

· not nominated for re-election at any annual general meeting of the shareholders of the Parent,

· after having been nominated by management for re-election as directors, not re-elected as directors at any annual general meeting of the shareholders of the Parent,

· removed as directors of the Parent, or

· as a result of an increase in the size of the Board and the appointment of new directors, no longer a majority of the Board, except as a result of the death, disability or normal retirement of any such directors in accordance with the normal retirement practices of the Parent, or

· the acquisition by any person, or by any person and its affiliates, or by any person acting jointly or in concert with any of the foregoing persons or affiliates, and whether directly or indirectly, of voting securities of the Parent that, when added to all other voting securities at the time held by such person, its affiliates and any person acting in concert with any of the foregoing persons or affiliates, totals for the first time, not less than TWENTY (20%) PERCENT of the then outstanding voting securities of the Parent,

· the disposition, by whatever means, by the Parent, or any affiliate of the Parent, of a majority of the ownership interests in the Company or the occurrence of any other transaction whereby the Parent, or an affiliate of the Parent, ceases to hold a majority of the ownership interests of the Company.

(k) No Mitigation by Employee . If the Company is required to pay Employee severance by, and subject to, Section 6(f) , then Employee will not be required to mitigate any damages the Employee may suffer by reason of the termination of the Employee’s employment hereunder (whether by actual termination without Good Cause by the Company or by virtue of the occurrence of an event of Good Reason, nor will any mitigation of damages be taken into account in any action for actual or alleged damages by the Employee against the Company or the Parent

for the amounts payable or benefits receivable pursuant to this Agreement. The Company and the Parent expressly agree to waive the defense of failure to mitigate in any such action. No rights or benefits required to be provided to the Employee hereunder will be terminated or reduced as a result of the Employee’s employment by another employer, or engaging in any other business on the Employee’s own or on behalf of or with others, at any time after the termination of the Employee’s employment hereunder, nor will such obligations be affected by virtue of the death of the Employee subsequent to the termination of the Employee’s employment hereunder (in which event all amounts payable at and after the time of death will be payable to the Employee’s legal representative s) except to the extent specifically provided in this Agreement.

(l) “Parent,” as used in Section 6(f) means International Tower Hill Mines Ltd., a company incorporated and subsisting under the laws of British Columbia, Canada, and having its head office at Suite 2300- 1177 West Hastings Street, Vancouver, British Columbia, CANADA V6E 2K3

(m) The Parent hereby guarantees to the Employee the due and timely performance by the Company of the obligations of the Company hereunder subject to the prior or concurrent due and valid execution and delivery by the Employee to the Company of the Release in accordance with Section 6(f) .

8. Parachute Payment .

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) including, by example and not by way of limitation, acceleration (by the Company or otherwise) of the date of vesting or payment under any plan, program, arrangement or agreement of the Company, would be subject to the excise tax imposed by Code Section 4999 or any interest or penalties with respect to such excise tax (such excise tax together with any such interest and penalties, shall be referred to as the “Excise Tax”), then there shall be made a calculation under which such Payments provided to Executive are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the “4999 Limit”). A comparison shall then be made between (i) Executive’s Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit; and (ii) Executive’s Net After-Tax Benefit without application of the 4999 Limit. If (ii) exceeds (i), then no limit on the Payments shall be imposed by this Section 8 . Otherwise, the amount payable to Executive shall be reduced so that no such Payment is subject to the Excise Tax. “Net After-Tax Benefit” shall mean the sum of (x) all payments that Executive receives or is entitled to receive that are in the nature of compensation and contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2) (either, a “Section 280G Transaction”), less (y) the amount of federal, state, local and employment taxes and Excise Tax (if

any) imposed with respect to such payments.

(b) In the event that a reduction in Payments is required pursuant to this Section 8 , then, except as provided below with respect to Payments that consist of health and welfare benefits, the reduction in Payments shall be implemented by determining the “Parachute Payment Ratio” (as defined below) for each Payment and then reducing the Payments in order beginning with the Payment with the highest Parachute Payment Ratio. For Payments with the same Parachute Payment Ratio, such Payments shall be reduced based on the time of payment of such Payments, with amounts being paid furthest in the future being reduced first. For Payments with the same Parachute Payment Ratio and the same time of payment, such Payments shall be reduced on a pro-rata basis (but not below zero) prior to reducing Payments next in order for reduction. For purposes of this Section, “Parachute Payment Ratio” shall mean a fraction, the numerator of which is the value of the applicable Payment as determined for purposes of Code Section 280G, and the denominator of which is the financial present value of such Parachute Payment, determined at the date such payment is treated as made for purposes of Code Section 280G (the “Valuation Date”). In determining the denominator for purposes of the preceding sentence (i) present values shall be determined using the same discount rate that applies for purposes of discounting payments under Code Section 280G; (ii) the financial value of payments shall be determined generally under Q&A 12, 13 and 14 of Treasury Regulation 1.280G-1; and (iii) other reasonable valuation assumptions as determined by the Company shall be used. Notwithstanding the foregoing, Payments that consist of health and welfare benefits shall be reduced after all other Payments, with health and welfare Payments being made furthest in the future being reduced first. Upon any assertion by the Internal Revenue Service that any such Payment is subject to the Excise Tax, Executive shall be obligated to return to the Company any portion of the Payment determined by the Professional Services Firm to be necessary to appropriately reduce the Payment so as to avoid any such Excise Tax.

(c) All determinations required to be made under this Section 8 , including whether and when a Payment is cut back pursuant to Section 8(c) and the amount of such cut-back, and the assumptions to be utilized in arriving at such determination, shall be made by a professional services firm designated by the Board that is experienced in performing calculations under Section 280G (the “Professional Services Firm”) which shall provide detailed supporting calculations both to the Company and Executive. If the Professional Services Firm is serving as accountant or auditor for the individual, entity or group effecting the Section 280G Transaction, the Board shall appoint another qualified professional services firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Professional Services Firm hereunder). All fees and expenses of the Professional Services Firm shall be borne solely by the Company.

9. Conflicts of Interest . Executive agrees that he shall promptly disclose to the Board any conflict of interest involving Executive upon Executive becoming aware of such conflict. Executive’s ownership of an interest not in excess of one percent in a business organization that competes with the Company or its affiliates (including but not limited to ITH) shall not be deemed to constitute a conflict of interest.

Confidential Information and other valuable consideration provided hereunder, Executive agrees to comply with this Section 10.

(a) “Confidential Information” means, without limitation and regardless of whether such information or materials are expressly identified as confidential or proprietary, (i) any and all non-public, confidential or proprietary information or work product of the Company or its affiliates (including but not limited to ITH), (ii) any information that gives the Company or its affiliates (including but not limited to ITH) a competitive business advantage or the opportunity of obtaining such advantage, (iii) any information the disclosure or improper use of which is reasonably expected to be detrimental to the interests of the Company or its affiliates (including but not limited to ITH), (iv) any trade secrets of the Company or its affiliates (including but not limited to ITH), and (v) any other information of or regarding the Company or any of its affiliates (including but not limited to ITH), or its or their past, present or future, direct or indirect, potential or actual officers, directors, employees, owners, or business partners, including but not limited to information regarding any of their businesses, operations, assets, liabilities, properties, systems, methods, models, processes, results, performance, investments, investors, financial affairs, future plans, business prospects, acquisition or investment opportunities, strategies, business partners, business relationships, contracts, contractual relationships, organizational or personnel matters, policies or procedures, management or compensation matters, compliance or regulatory matters, as well as any technical, seismic, industry, market or other data, studies or research, or any forecasts, projections, valuations, derivations or other analyses, performed, generated, collected, gathered, synthesized, purchased or owned by, or otherwise in the possession of, the Company or its affiliates (including but not limited to ITH)or which Executive has learned of through his employment with the Company. Confidential Information also includes any non-public, confidential or proprietary information about or belonging to any third party that has been entrusted to the Company or its affiliates (including but not limited to ITH). Notwithstanding the foregoing, Confidential Information does not include any information which is or becomes generally known by the public other than as a result of Executive’s actions or inactions.

(b) Protection . In return for the Company’s promise to provide Executive with Confidential Information, Executive promises (i) to keep the Confidential Information, and all documentation, materials and information relating thereto, strictly confidential, (ii) not to use the Confidential Information for any purpose other than as required in connection with fulfilling his duties as CFO for the benefit of the Company, and (iii) to return to the Company all documents containing Confidential Information in Executive’s possession upon separation from the Company for any reason.

(c) Value and Security . Executive understands and agrees that all Confidential Information, and every portion thereof, constitutes the valuable intellectual property of the Company, its affiliates (including but not limited to ITH), and/or third parties, and Executive further acknowledges the importance of maintaining the security and confidentiality of the Confidential Information and of not misusing the Confidential Information.

oppose any effort by the Company and/or its affiliates (including but not limited to ITH) to resist or narrow such request or to seek a protective order or other appropriate remedy. In any case, Executive will (i) disclose only that portion of the Confidential Information that, according to the advice of Executive’s counsel, is required to be disclosed (and Executive’s disclosure of Confidential Information to Executive’s counsel in connection with obtaining such advice shall not be a violation of this Agreement), (ii) use reasonable efforts (at the expense of the Company) to obtain assurances that such Confidential Information will be treated confidentially, and (iii) promptly notify the Company and/or its affiliates (including but not limited to ITH) in writing of the items of Confidential Information so disclosed.

(e) Third-Party Confidentiality Agreements . To the extent that the Company or its affiliates (including but not limited to ITH) possesses any Confidential Information which is subject to any confidentiality agreements with, or obligations to, third parties, Executive will comply with all such agreements or obligations in full. The immediately preceding sentence shall apply only if the Company or any affiliate (including but not limited to ITH) has provided Executive with a copy of such agreements, and Executive may disclose such agreements and any related Confidential Information to Company’s attorneys and rely on their advice regarding compliance therewith.

11. Agreement Not to Compete . The Executive acknowledges that, in the course of the performance of the Executive’s duties and obligations under this Agreement, the Executive will acquire access to Confidential Information and the Executive further acknowledges that if the Executive were to compete against the Company or any of its affiliates (including but not limited to ITH), or be employed or in any way involved with a person or company that was in competition with the Company or any of its affiliates (including but not limited to ITH) following the termination of the Executive’s employment with the Company, the Company and its affiliates (including but not limited to ITH) would suffer irreparable damages. Accordingly, the Executive will not, at any time or in any manner, during the Executive’s Employment Period or at any time within one (1) year following the termination of Executive’s employment for whatever reason, and notwithstanding any alleged breach of this Agreement:

(a) directly or indirectly engage in any business involving the acquisition, exploration, development or operation of any mineral property which is competitive or in conflict with the business of the Company or any of its affiliates (including but not limited to ITH);

(b) accept employment or office with or render services or advice to any other company, firm or individual, whether a competitor or otherwise, engaged in the acquisition, exploration, development or operation of mineral property which is competitive or in conflict with the business of the Company or any of its affiliates (including but not limited to ITH);

(c) solicit or induce any director, officer or employee of the Company or of any its affiliates (including but not limited to ITH) to end their association with the Company or any of its affiliates (including but not limited to ITH); or

(d) directly or indirectly, on the Executive’s own behalf or on behalf of others, solicit, divert or appropriate to or in favor of any person, entity or corporation, any maturing business opportunity or any business of the Company or of any of its affiliates (including but not limited to

ITH); or

(e) directly or indirectly take any other action inconsistent with the fiduciary relationship of a senior officer to his company, without the prior written consent of the Board, which consent may be withheld in the Board’s sole discretion.

(f) For this purpose of this Section 11, mineral property which is competitive or in conflict with the business of the Company or any of its affiliates (including but not limited to ITH) means one:

(1) which is primarily prospective for gold, and

(2) any part of which lies within a horizontal distance of twenty-five (25) kilometers from the outer boundaries of any mineral property in which the Company or any of its affiliates (including but not limited to ITH) holds, or has the right to acquire, an interest.

12. Withholdings . The Company may withhold and deduct from any payments made or to be made pursuant to this Agreement (a) all federal, state, local and other taxes as may be required pursuant to any law or governmental regulation or ruling, and (b) any deductions consented to in writing by Executive.

13. Severability . It is the desire of the Parties hereto that this Agreement be enforced to the maximum extent permitted by law, and should any provision contained herein be held unenforceable by a court of competent jurisdiction or arbitrator (pursuant to Section 15 ), the Parties hereby agree and consent that such provision shall be reformed to create a valid and enforceable provision to the maximum extent permitted by law; provided, however, if such provision cannot be reformed, it shall be deemed ineffective and deleted from this Agreement without affecting any other provision of this Agreement.

14. Title and Headings; Construction . Titles and headings to Sections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions hereof. Any and all Exhibits referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes. The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement and not to any particular provision hereof. This Agreement shall be deemed drafted equally by both the Parties. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any Party shall not apply.

15. Arbitration; Injunctive Relief; Attorneys’ Fees .

(a) Subject to Section 15(b) , any dispute, controversy or claim between Executive and the Company arising out of or relating to this Agreement, Executive’s employment with Company, or the termination of either (other than with respect to claims arising exclusively under one or more of the Company’s employee benefit plans subject to ERISA) will be finally settled by arbitration in Denver, Colorado before, and in accordance with the rules for the resolution of employment disputes then in effect at the American Arbitration Association. The arbitrator’s award shall be final and binding on both Parties.

(b) Notwithstanding Section 15(a) , an application for emergency or temporary injunctive relief by either party shall not be subject to arbitration under this Section 15 ; provided, however, that the remainder of any such dispute (beyond the application for emergency or temporary injunctive relief) shall be subject to arbitration under this Section 15. Executive acknowledges that Executive’s violation of Sections 9 and/or 10 and/or 11 of this Agreement will cause irreparable harm to the Company and its affiliates (including but not limited to ITH), Executive agrees not to contest that Executive’s violation of Sections 9 and/or 10 and/or 11 of this Agreement will cause irreparable harm to the Company and its affiliates (including but not limited to ITH), and Executive agrees that the Company shall be entitled as a matter of right to specific performance of Executive’s obligations under Sections 9 and 10 and 11 and an injunction, from any court of competent jurisdiction, restraining any violation or further violation of such agreements by Executive or others acting on his/her behalf, without any showing of irreparable harm and without any showing that the Company and its affiliates (including but not limited to ITH) does not have an adequate remedy at law. The right of the Company and its affiliates (including but not limited to ITH) to injunctive relief shall be cumulative and in addition to any other remedies provided by law or equity.

(c) Each side shall share equally the cost of the arbitrator and bear its own costs and attorneys’ fees incurred in connection with any arbitration, unless a statutory claim authorizing the award of attorneys’ fees is at issue, in which event the arbitrator may award a reasonable attorneys’ fee in accordance with the jurisprudence of that statute.

(d) Nothing in this Section 15 shall prohibit a party to this Agreement from (i) instituting litigation to enforce any arbitration award or (ii) joining another party to this Agreement in a litigation initiated by a person which is not a party to this Agreement.

16. Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. THE EXCLUSIVE VENUE FOR THE RESOLUTION OF ANY DISPUTE RELATING TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT (THAT IS NOT SUBJECT TO ARBITRATION UNDER SECTION 15 FOR ANY REASON) SHALL BE IN THE STATE AND FEDERAL COURTS LOCATED IN DENVER, COLORADO AND THE PARTIES HEREBY EXPRESSLY CONSENT TO THE JURISDICTION OF THOSE COURTS.

17. Entire Agreement and Amendment . This Agreement contains the entire agreement of the Parties with respect to Executive’s employment and the other matters covered herein (except to the extent that other agreements are specifically referenced herein); moreover, this Agreement supersedes all prior and contemporaneous agreements and understandings, oral or written, between the Parties hereto concerning the subject matter hereof and thereof. This Agreement may be amended, waived or terminated only by a written instrument executed by both Parties hereto.

18. Survival of Certain Provisions . Wherever appropriate to the intention of the Parties hereto, the respective rights and obligations of said Parties, including, but not limited to, the rights and obligations set forth in Sections 6 through 16 hereof, shall survive any termination or expiration of this Agreement for any reason.

19. Waiver of Breach . No waiver by either pay hereto of a breach of any provision of this Agreement by the other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provision or condition at the same or any subsequent time. The failure of either party hereto to take any action by reason of any breach will not deprive such party of the right to take action at any time while such breach continues.

20. Assignment . Neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by Executive (except by will or by operation of the laws of intestate succession) or by the Company, except that the Company shall assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially all of the equity, assets or businesses of the Company, if such successor expressly agrees to assume the obligations of the Company hereunder.

21. Notices . Notices provided for in this Agreement shall be in writing and shall be deemed to have been duly received (a) when delivered in person or sent by facsimile transmission, (b) on the first business day after such notice is sent by air express overnight courier service, or (c) on the third business day following deposit in the United States mail, registered or certified mail, return receipt requested, postage prepaid and addressed, to the following address, as applicable:

(a) If to Company, addressed to: Suite 350 - 9635 Maroon Circle, Englewood, Colorado 80112; Attention: Donald Ewigleben with a copy for informational purposes only to: International Tower Hill Mines Ltd., Suite 2300-1177 West Hastings Street Vancouver British Columbia Canada, V6E 2K3

(b) If to Executive, addressed to the address set forth below Executive’s name on the execution page hereof; or to such other address as either party may have furnished to the other party in writing in accordance with this Section 21.

22. Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party, but together signed by both parties hereto.

23. Definitions . The Parties agree that as used in this Agreement the following terms shall have the following meanings: an “affiliate” of a person shall mean any person directly or indirectly controlling, controlled by, or under common control with, such person; the terms “controlling, controlled by, or under common control with” shall mean the possession, directly or indirectly, of the power to direct or influence or cause the direction or influence of management or policies (whether through ownership of securities or other ownership interest or right, by contract or otherwise) of a person; the term “person” shall mean a natural person, partnership (general or limited), limited liability Company, trust, estate, association, corporation, custodian, nominee, or any other individual or entity in its own or any representative capacity, in each case, whether domestic or foreign.

24. Internal Revenue Code Section 409A .

(a) If at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code), the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid additional taxes or interest under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first to occur of (x) the first business day after such six-month period, (y) Executive’s death, or (z) such other date as will not cause such payment to be subject to tax or interest under Code Section 409A.

(b) It is the intention of the Parties that payments or benefits payable under this Agreement not be subject to the additional tax or interest imposed pursuant to Code Section 409A. To the extent such potential payments or benefits could become subject to Code Section 409A, the Parties shall cooperate to amend this Agreement with the goal of giving the Executive the economic benefits described herein in a manner that does not result in such tax being imposed. The Executive shall, at the request of the Company, take any action (or refrain from taking any action), required to comply with any correction procedure promulgated pursuant to Code Section 409A. In no event shall the Company be liable to Executive for any taxes, penalties, or interest that may be due as a result of the application of Code Section 409A.

(c) With respect to payments under this Agreement, for purposes of Code Section 409A, each severance payment will be considered one of a series of separate payments, and each such payment shall be a separately identifiable and determinable amount.

(d) For purposes of determining the timing of any payment of severance compensation, the Executive will be deemed to have a termination of employment only upon a “separation from service” within the meaning of Code Section 409A.

(e) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical, and in any event not later than the last day of the calendar year following the year in which the expenses were incurred.

(f) Executive’s termination of his employment for Good Reason is intended to be a separation from service for good reason as described in Treas. Reg. § 1.409A-1(n)(2) and this Agreement shall be interpreted and construed accordingly.

(g) For purposes of this Agreement, each payment of severance compensation is intended to be excepted from Code Section 409A to the maximum extent provided under Code Section 409A as follows: (i) each payment that is scheduled to be made following Executive’s termination of employment and within the applicable 2 1/2 month period specified in Treas. Reg. § 1.409A(b)(4) is intended to be excepted under the short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4) and (ii) each payment that is not otherwise excepted under the short-term deferral exception is intended to be excepted under the involuntary separation pay

exception as specified in Treas. Reg. § 1.409A-1(b)(9)(iii) or the exception for limited payments described in Treas. Reg. § 1.409A-1(b)(9)(v)(D). The Executive shall have no right to designate the date of any payment of severance compensation to be made hereunder.

25. Employment at Will . Executive agrees that by signing below he agrees that he is an employee at will and just as he is free to terminate his employment at any time, for any reason, the Company is also free to terminate his employment at any time, for any reason.

SIGNATURE PAGE FOLLOWS

IN WITNESS WHEREOF, Executive and the Company have executed this Agreement to be effective for all purposes as of the Effective Date.

		EXECUTIVE:


Dated:	March 11, 2013	/s/ Tom S. Q. Yip
		Tom S. Q. Yip


		THE COMPANY:


Dated:	March 11, 2013	By:	/s/ Donald C. Ewigleben

Exhibit “A”

Description of Duties and Responsibilities of Employee

Without limiting the provisions of section 3 of the Agreement, Employee has the following specific duties and responsibilities:

· acting as the primary financial advisor for the Company;

· ensuring that the Company’s business alternatives are accurately analyzed;

· providing strategic direction in the areas of treasury, risk analysis, finance, accounting and financial reporting, planning/budgeting, internal audit, tax planning, purchasing, human resources, investor relations, compliance, and information systems as they relate to overall corporate strategy, growth, and stability of the Company;

· developing and overseeing the implementation and operation of appropriate financial policies and compliance systems for the Company, including internal controls, financial and risk management, corporate governance, investor reporting requirements, and debt covenants;

· Ensure that relationships with the Company’s investors and financiers are cultivated and maintained, thereby maximizing the Company’s ability to raise capital and obtain financing.

· Being involved as an integral part of negotiating equipment, commodity and supply contracts.

· Overseeing the preparation of financial filings required for the Company.

· Serve as primary liaison with the audit committee and external auditors of the Company’s parent company.

· Interpreting financial statements, cost data, budgets and all internal management information reports of the Company and assisting other Employees in appraising their activities in terms of financial results.

· Identify significant trends as indicated by analysis of the Company’s financial reports.

· Prepare and/or review financial and risk analyses as required by management in assessing alternative capital or other transactional decisions.

· Managing the Company’s cash flow, determining the Company’s financial requirements and ensuring sufficient funds are available for all development and operating purposes.

· Providing leadership in respect of both short-term and long-term budgeting, forecasting and planning for the Company, including developing, as accurately as possible, the one year and longer-term financial outlook for the Company.

· Overseeing the internal and external audit processes of the Company.

· Developing local, state, and federal income tax strategies, and overseeing preparation of required schedules and filing of applicable tax returns.

· Providing guidance in human resources initiatives, purchasing activities, and information systems as required.

· Overseeing and participating in investor relations activities including making presentations to key contacts in the investment and financial communities.

· Initiating, preparing, and issuing standard practices relating to accounting policies, cost and corporate governance procedures as necessary to ensure that adequate accounting records are maintained of all assets, liabilities, and transactions of the Company, and that suitable systems are used in compilation of costs.

· Defining and implementing policies and practices, as needed, to properly manage corporate information and records.

· Performing financial and presentation analysis of other gold sector companies to support corporate development activities.

· Managing and developing internal accounting staff

· Otherwise carrying out the duties normally associated with the position of the Chief Financial Officer of a company providing services to, and managing the activities of, a mineral exploration and development company.

Exhibit 10.12

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into by and between Tower Hill Mines (US) LLC (hereafter “Company”), and Donald C. Ewigleben (hereafter “Executive”). Company and Executive shall be collectively referred to as “the Parties.”

1. Effective Date and Commencement of Employment.

(a) This Agreement shall be effective on September 19, 2012 (“Effective Date”). Executive hereby represents and warrants that as of the Effective Date, he has given written notice to his previous employer, Uranium Resources, Inc. (“URI”), that he has resigned from his employment with URI and there are no provisions of his employment agreement with URI that may otherwise conflict with or prohibit Executive from executing this Agreement and fully performing his duties and responsibilities hereunder.

(b) Executive’s employment with the Company shall commence on September 19, 2012 (the “Employment Commencement Date”).

(c) The period commencing on the Employment Commencement Date and ending at the close of business on the date that this Agreement and Executive’s employment is terminated (“the Termination Date”) shall constitute the “Employment Period.”

(d) Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any time during the Employment Period in accordance with Section 6 .

2. Position . During the Employment Period (as defined in Section 1 hereof), the Company shall be Executive’s employer, and Executive shall serve as President and Chief Executive Officer of the Company and each of its affiliates, including but not limited to International Tower Hill Mines Ltd. (“ITH”), reporting directly to the Board of Directors of ITH (the “Board”). Executive shall hold all other positions as deemed necessary by the Board. On the Termination Date, Executive shall be deemed to have resigned from all positions held with all affiliates of the Company, including ITH.

3. Duties and Responsibilities of Executive .

(a) During the Employment Period (as defined in Section 1 hereof) and except as set forth below, Executive shall devote his full time and attention during normal business hours to the business of the Company and its affiliates, including ITH, will act in the best interests of the Company and its affiliates, including ITH, and will perform with due care his duties and responsibilities. Notwithstanding the foregoing, for a period of up to the first forty-two (42) calendar days of Executive’s employment with the Company, Executive may be in a transition period and perform services for URI as follows:

(i) For the first twelve (12) calendar days of the Employment Period, Executive shall spend the majority of each standard business day working on matters for URI, provided that Executive also performs duties, as

needed, for the Company, and fulfills his fiduciary obligations toward the Company.

(ii) For the thirteenth (13 th ) through forty-second (42nd) calendar days of the Employment Period, Executive shall spend the majority of each standard business day working on matters for the Company, provided that Executive shall be permitted to also perform duties for URI so long as such duties do not interfere with his duties or fiduciary obligations of the Company.

(b) Executive’s duties will include those normally incidental to the position of President and Chief Executive Officer (to include the duties set forth in Exhibit A), as well as such additional duties consistent therewith as may be assigned to him by the Board. If, in its sole and complete discretion, the Board changes Executive’s title and/or Executive’s reporting responsibilities, the Board may make such changes, and such changes shall thereafter apply for purposes of this Agreement, subject only to the provisions of Section 7(c) hereof.

(c) Executive agrees to cooperate fully with the Board and not engage directly or indirectly in any activity that materially interferes with the performance of Executive’s duties hereunder. During the Employment Period, Executive will not hold outside employment, or perform substantial personal services for parties unrelated to the Company, without the advance written approval of the Board; provided , that it shall not be a violation of this Agreement for Executive to (i) serve on any corporate, civic, or charitable boards or committees (except for boards or committees of any business organization that competes with the Company or its affiliates, including ITH, in any business in which they are regularly engaged), so long as such service does not materially interfere with the performance of Executive’s duties and responsibilities under this Agreement, as the Board in its reasonable discretion shall determine, (ii) manage personal investments, (iii) take vacation days and reasonable absences due to injury or illness as permitted by the general policies of the Company, or (iv) perform services for URI in accordance with Section 3(a)(i) and (ii) .

4. Compensation .

(a) Base Salary . Commencing on the Employment Commencement Date, and during the Employment Period, the Company shall pay to Executive an annual base salary of $500,000

(the “Base Salary”), payable in conformity with the Company’s customary payroll practices for executive salaries. For all purposes of this Agreement, Executive’s Base Salary shall include any portion thereof which Executive elects to defer under any nonqualified plan or arrangement.

(b) Annual Performance Bonus . Executive shall be eligible for an annual discretionary performance bonus with respect to each full calendar year during the Employment Period (the “Annual Performance Bonus”), beginning with the calendar year 2013, which shall, if earned, consist of a cash payment targeted at 100% of Base Salary. The Board will, on an annual basis (at or near the beginning of each full calendar year in such Employment Period) establish performance objectives for Executive for the upcoming year, and will communicate such objectives to Executive. The amount, if any, of the Annual Performance Bonus will be determined by the Board, or the Compensation Committee if designated this task by the Board, acting in its sole and complete discretion but based on annual performance objectives established by the Board. A bonus determination will be made by the Board typically within 90 calendar days of the end of each calendar year and the Annual Performance Bonus, if any, will be paid within 120 days of the end of the calendar year for which the Annual Performance Bonus is awarded. Executive must be employed by the Company at the time of payment of the Annual Performance Bonus to be entitled to payment of the Annual Performance Bonus, except as provided in Sections 7(a), 7(b), and 7(c) .

(c) Equity Awards. Subject to the approval of the Board and/or the Compensation Committee, as applicable, and, to the extent necessary, subject to the reapproval of the 2006 Incentive Stock Option Plan of ITH (“2006 Plan”) by the stockholders, the Company shall grant to Executive on the Employment Commencement Date an option to purchase up to 1,000,000 ITH common shares at a price per share equal to the fair market value of such shares on the date of grant. The option grant shall be made under and subject to all terms and conditions of the 2006 Plan, as amended and reapproved from time to time, and shall generally have a 5 year term, with vesting to occur over 2 years, with 1/3 of the option to be vested on the grant date, and an additional 1/3 to be vested on both the first and second anniversary of the grant date. In addition, Executive shall be eligible to receive future equity incentive awards as determined in the sole discretion of the Board or the Compensation Committee, as applicable.

5. Benefits . Subject to the terms and conditions of this Agreement, Executive shall be entitled to the following benefits during the Employment Period:

eligibility requirements and other terms and conditions of those plans and programs, including, without limitation, 401(k) plan, medical and dental insurance, life insurance and disability insurance. The Company will not, however, by reason of this Section 5(b) , have any obligation to institute, maintain, or refrain from changing, amending, or discontinuing any such benefit plan or program.

6. Termination of Agreement and Employment .

(a) Automatic Termination in the Event of Death . This Agreement shall automatically terminate in the event of the Executive’s death.

(b) Company’s Right to Terminate . At any time during the Employment Period, the Company shall have the right to terminate this Agreement with the Company for any of the following reasons:

(1) Upon Executive’s Disability (as defined below);

(2) For Cause (as defined in Section 7 ); or

(3) For any other reason whatsoever, in the sole and complete discretion of the Company.

(c) Executive’s Right to Terminate . At any time during the Employment Period, Executive will have the right to terminate this Agreement with the Company for:

(1) Good Reason (as defined in Section 7 ); or

(2) For any other reason whatsoever, in the sole and complete discretion of Executive.

(d) “Disability.” For purposes of this Agreement, “Disability” means that Executive has sustained sickness or injury that renders Executive incapable, with reasonable accommodation, of performing the duties and services required of Executive hereunder for a period of 90 consecutive calendar days or a total of 120 calendar days during any 12-month period; provided, however, that any termination based on Disability will be made in accordance with applicable law, including the Americans with Disabilities Act, as amended.

(e) “Notices.” Any termination of this Agreement with the Company by the Company under Section 6(b) or by Executive under Section 6(c) shall be communicated by a Notice of Termination to the other party. A “Notice of Termination” means a written notice that (1) indicates the specific termination provision in this Agreement relied upon and (2) if the

termination is by the Company for Cause or by Executive for Good Reason, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. The Notice of Termination must specify Executive’s Termination Date. The Termination Date may be as early as 14 calendar days after such Notice is given but no later than 60 calendar days after such Notice is given, unless otherwise agreed to by the Parties in writing or unless the termination is For Cause, in which case the Termination Date may be immediate.

(f) The termination of this Agreement shall also result in the contemporaneous termination of Executive’s employment.

7. Severance Payments .

(1) One year’s Base Salary; and

(c) Termination by Executive for Good Reason after a Change in Control . If a Change in Control occurs and within six months of the Change in Control (i) Executive is

terminated pursuant to Section 6(b)(3) hereof or (ii) Executive terminates this Agreement during the Employment Period pursuant to Section 6(c)(1) hereof, then Section 7(a) and 7(b) will not apply, but instead pursuant to this Section 7(c) , the Company shall pay Executive the following severance, in a lump sum, subject to all applicable withholdings, on the 60 th day after the Termination Date, provided that Executive has executed, not revoked, and any period to revoke has lapsed, a full general release in favor of the Company and its affiliates, including but not limited to ITH:

(1) Two year’s Base Salary; and

(2) Two year’s Annual Performance Bonus at target.

(d) Additional Benefits . If the Company is required to pay Executive severance by, and subject to, Section 7(a) or 7(b) or 7(c) , or if Executive is terminated pursuant to Section 6(b)(1) then:

(2) The Company shall reimburse Executive for COBRA continuation coverage for twelve full months (or for the lesser duration of such COBRA coverage) beginning with the month following the month in which the Termination Date occurs, such that employee’s cost of such COBRA coverage shall equal the cost, if any, that Executive would pay (on behalf of himself and his spouse and dependents, as applicable) under the Company’s group health plan had Executive not terminated; provided , that if group health coverage under another group health plan becomes available thereafter to Executive, Executive’s spouse, or Executive’s dependents (as applicable), the Company’s reimbursement obligations under this paragraph will cease with respect to each person to whom such coverage becomes available. Executive shall notify the Company immediately upon group health coverage becoming available to Executive, Executive’s spouse, or Executive’s dependents.

plan or program maintained by the Company that covers its employees and/or its executives.

(e) “Cause” means the occurrence or existence, prior to occurrence of circumstances constituting Good Reason, of any of the following events during the Employment Period:

(4) Executive’s having been convicted of, or having entered a plea bargain, a plea of nolo contendere or settlement admitting guilt for, any felony, any crime of moral turpitude, or any other crime that could reasonably be expected to have a material adverse impact on the Company’s or any of its affiliates’ reputations (including but not limited to ITH’s reputation); or

(f) “Good Reason” means the occurrence, prior to occurrence of circumstances constituting Cause, of any of the following events during the Employment Period without Executive’s consent:

(1) Any material breach by the Company of this Agreement,;

(2) Any requirement by the Company that Executive relocate outside of the Denver metropolitan area;

(3) Failure of any successor to assume this Agreement not later than the date as of which it acquires substantially all of the assets or businesses of the Company;

(4) Any material reduction in Executive’s title, responsibilities, or duties or the Board directs Executive to report to someone other than the Board; or

(5) The assignment to Executive of any duties materially inconsistent with his duties as President and Chief Executive Officer of the Company;

provided however , that no Good Reason shall have occurred unless Executive provides the Board written notice of the initial occurrence of the event or condition described in (1) through (5) immediately above within 90 days of the initial occurrence of such event or condition, the event or condition is not remedied or cured within 30 days of the Board’s receipt of such written notice, and Executive actually terminates his employment with the Company within 120 days of the initial occurrence of such event or condition.

(g) “ Change of Control ” means (i) any person or group of affiliated or associated persons acquires more than 50% of the voting power of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company; (iii) the liquidation or dissolution of the Company; (iv) a majority of the members of the Board are replaced during any 12-month period by Board members whose nomination or election was not approved by the members of the Board at the beginning of such period (the “Incumbent Board”) (provided that any subsequent members of the Board whose nomination or election was previously approved by the Incumbent Board shall thereafter be also deemed to be a member of the Incumbent Board); or (v) the consummation of any merger, consolidation, or reorganization involving the Company in which, immediately after giving effect to such merger, consolidation or reorganization, less than 51% of the total voting power of outstanding stock of the surviving or resulting entity is then “beneficially owned” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company immediately prior to such merger, consolidation or reorganization. Notwithstanding the foregoing, in no event shall a Change of Control be deemed to occur in the event of a sale of Company securities or debt as part of a bona fide capital raising transaction or internal corporate reorganization.

8. Parachute Payment .

Section 4999 or any interest or penalties with respect to such excise tax (such excise tax together with any such interest and penalties, shall be referred to as the “Excise Tax”), then there shall be made a calculation under which such Payments provided to Executive are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the “4999 Limit”). A comparison shall then be made between (i) Executive’s Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit; and (ii) Executive’s Net After-Tax Benefit without application of the 4999 Limit. If (ii) exceeds (i), then no limit on the Payments shall be imposed by this Section 8 . Otherwise, the amount payable to Executive shall be reduced so that no such Payment is subject to the Excise Tax. “Net After-Tax Benefit” shall mean the sum of (x) all payments that Executive receives or is entitled to receive that are in the nature of compensation and contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2) (either, a “Section 280G Transaction”), less (y) the amount of federal, state, local and employment taxes and Excise Tax (if any) imposed with respect to such payments.

accountant or auditor for the individual, entity or group effecting the Section 280G Transaction, the Board shall appoint another qualified professional services firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Professional Services Firm hereunder). All fees and expenses of the Professional Services Firm shall be borne solely by the Company.

10. Confidentiality . The Company agrees to provide Executive valuable Confidential Information of the Company and its affiliates (including but not limited to ITH) and of third parties who have supplied such information to the Company. In consideration of such Confidential Information and other valuable consideration provided hereunder, Executive agrees to comply with this Section 10.

(a) “Confidential Information” means, without limitation and regardless of whether such information or materials are expressly identified as confidential or proprietary, (i) any and all non-public, confidential or proprietary information or work product of the Company or its affiliates (including but not limited to ITH), (ii) any information that gives the Company or its affiliates (including but not limited to ITH) a competitive business advantage or the opportunity of obtaining such advantage, (iii) any information the disclosure or improper use of which is reasonably expected to be detrimental to the interests of the Company or its affiliates (including but not limited to ITH), (iv) any trade secrets of the Company or its affiliates (including but not limited to ITH), and (v) any other information of or regarding the Company or any of its affiliates (including but not limited to ITH), or its or their past, present or future, direct or indirect, potential or actual officers, directors, employees, owners, or business partners, including but not limited to information regarding any of their businesses, operations, assets, liabilities, properties, systems, methods, models, processes, results, performance, investments, investors, financial affairs, future plans, business prospects, acquisition or investment opportunities, strategies, business partners, business relationships, contracts, contractual relationships, organizational or personnel matters, policies or procedures, management or compensation matters, compliance or regulatory matters, as well as any technical, seismic, industry, market or other data, studies or research, or any forecasts, projections, valuations, derivations or other analyses, performed, generated, collected, gathered, synthesized, purchased or owned by, or otherwise in the possession of, the Company or its affiliates (including but not limited to ITH)or which Executive has learned of through his affiliation as a Board Director or his employment with the Company. Confidential Information also includes any non-public, confidential or proprietary information about or belonging to any third party that has been entrusted to the Company or its affiliates (including but not limited to ITH). Notwithstanding the foregoing, Confidential Information does not include any information which is or becomes generally known by the public other than as a result of Executive’s actions or inactions.

(b) Protection . In return for the Company’s promise to provide Executive with Confidential Information, Executive promises (i) to keep the Confidential Information, and all documentation, materials and information relating thereto, strictly confidential, (ii) not to use the Confidential Information for any purpose other than as required in connection with fulfilling his duties as President and Chief Executive Officer for the benefit of the Company, and (iii) to return to the Company all documents containing Confidential Information in Executive’s possession upon separation from the Company for any reason.

(d) Disclosure Required By Law . If Executive is legally required to disclose any Confidential Information, Executive shall promptly notify the Company in writing of such request or requirement so that the Company and/or its affiliates (including but not limited to ITH) may seek an appropriate protective order or other relief. Executive agrees to cooperate with and not to oppose any effort by the Company and/or its affiliates (including but not limited to ITH) to resist or narrow such request or to seek a protective order or other appropriate remedy. In any case, Executive will (i) disclose only that portion of the Confidential Information that, according to the advice of Executive’s counsel, is required to be disclosed (and Executive’s disclosure of Confidential Information to Executive’s counsel in connection with obtaining such advice shall not be a violation of this Agreement), (ii) use reasonable efforts (at the expense of the Company) to obtain assurances that such Confidential Information will be treated confidentially, and (iii) promptly notify the Company and/or its affiliates (including but not limited to ITH) in writing of the items of Confidential Information so disclosed.

or at any time within one (1) year following the termination of Executive’s employment for whatever reason, and notwithstanding any alleged breach of this Agreement:

(f) For this purpose of this Section 11, mineral property which is competitive or in conflict with the business of the Company or any of its affiliates (including but not limited to ITH) means one:

(1) which is primarily prospective for gold, and

enforceable provision to the maximum extent permitted by law; provided, however, if such provision cannot be reformed, it shall be deemed ineffective and deleted from this Agreement without affecting any other provision of this Agreement.

14. Title and Headings; Construction . Titles and headings to Sections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions hereof. Any and all Exhibits referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes. The words “herein”, “hereof, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement and not to any particular provision hereof. This Agreement shall be deemed drafted equally by both the Parties. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any Party shall not apply.

15. Arbitration; Injunctive Relief; Attorneys’ Fees .

(a) If to Company, addressed to: Suite 350 - 9635 Maroon Circle, Suite 350, Englewood, Colorado 80112; Attention: The Chair of the Board

24. Internal Revenue Code Section 409A .

Code Section 409A. In no event shall the Company be liable to Executive for any taxes, penalties, or interest that may be due as a result of the application of Code Section 409A.

SIGNATURE PAGE FOLLOWS

IN WITNESS WHEREOF, Executive and the Company have executed this Agreement to be effective for all purposes as of the Effective Date.

		EXECUTIVE:


Dated:	9/19/12	/s/ Donald C. Ewigleben
		Donald C. Ewigleben

		THE COMPANY


Dated:	9/19/12	By:
			/s/ Tom Yip
			Tom Yip
			CFO

EXHIBIT A

· Executive is responsible for running a public company (ITH), and for all facets of the business.

· Executive is responsible for creating and maintaining stability and investor confidence.

· Executive is responsible for creating a vision and strategy for future growth.

· Executive is responsible for driving realistic value creation and growth in light of the strong near-term growth potential and challenging financing imperatives as the Livengood Project (the “Project”) moves through the early stages of development.

· Executive is responsible for ensuring that strategies are in place in the first year of his employment:

· To rapidly and responsibly commence a strategic process to secure a joint venture partner, either to advance the Project further or to pursue some other opportunity to maximise shareholder value in the near term;

· To obtain financing to satisfy the 2012/2013 requirements for the Project by gaining access to capital markets on appropriate terms;

· To successfully complete a comprehensive feasibility study on the Livengood deposit, to be completed during the second quarter of 2013;

· To develop strong relationships with existing key stakeholders and different levels of government (State and Federal) in Alaska to help ensure the acquisition of future environmental permitting; and

· To integrate the Denver and Fairbanks teams and continue to retain and build a top tier management team capable of building ITH into an operating company.

· Executive’s responsibilities also include:

· To craft, in conjunction with the management team, a mission and vision statement for ITH, and to communicate and ensure the understanding of this statement among employees, shareholders, community stakeholders and partners;

· To craft, in conjunction with the management team, a values statement to communicate ITH’s values with respect to operational excellence, workplace safety, environmental best practices, business ethics, integrity and entrepreneurship;

· In close partnership with the Board, to adjust and execute the current vision and strategic plan required for future value accrual and the success;

· To ensure ITH’s solid reputation among the local and global investment communities;

· To motivate, focus and retain a talented senior executive team capable of achieving ITH’s strategic business plan, and to ensure senior management succession;

· To understand and skillfully navigate the contextual dynamics involved in building relationships across the community at many levels;

· To execute a well-crafted exploration program to ensure the orderly development of the Project;

· To ensure the development and identification of merger, acquisition or partnership opportunities that fit the strategic direction and enhance Shareholder value; and

· Other duties as assigned by the Board.

Exhibit 10.13

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into by and between Tower Hill Mines (US) LLC (hereafter “Company”), and Thomas E. Irwin (hereafter “Executive”). Company and Executive shall be collectively referred to as “the Parties.”

1. Effective Date and Commencement of Employment.

(a) This Agreement shall be effective on March 11, 2013 (“Effective Date”). Executive’s employment commenced on March 16, 2011 (the “Employment Commencement Date”).

(c) Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any time during the Employment Period in accordance with Section 6 .

2. Position . During the Employment Period (as defined in Section 1 hereof), the Company shall be Executive’s employer, and Executive shall serve as Vice President, responsible for Alaska reporting directly to the President and Chief Executive Officer (“CEO”). Executive shall hold all other positions as deemed necessary by the Board. On the Termination Date, Executive shall be deemed to have resigned from all positions held with all affiliates of the Company, including ITH.

3. Duties and Responsibilities of Executive .

(b) Executive’s duties will include those normally incidental to the position of Vice President, responsible for Alaska (to include the duties set forth in Exhibit A), as well as such additional duties consistent therewith as may be assigned to him by the CEO and/or Board. If, in its sole and complete discretion, the Board or CEO changes Executive’s title and/or Executive’s reporting responsibilities, the Board may make such changes, and such changes shall thereafter apply for purposes of this Agreement, subject only to the provisions of Section 7(c) hereof.

(c) Executive agrees to cooperate fully with the CEO and the Board and not engage directly or indirectly in any activity that materially interferes with the performance of Executive’s duties hereunder. During the Employment Period, Executive will not hold outside employment, or perform substantial personal services for parties unrelated to the Company, without the advance written approval of the Board; provided, that it shall not be a violation of this Agreement for Executive to (i) serve on any corporate, civic, or charitable boards or committees (except for

boards or committees of any business organization that competes with the Company or its affiliates, including ITH, in any business in which they are regularly engaged), so long as such service does not materially interfere with the performance of Executive’s duties and responsibilities under this Agreement, as the Board in its reasonable discretion shall determine, (ii) manage personal investments, or (iii) take vacation days and reasonable absences due to injury or illness as permitted by the general policies of the Company.

4. Compensation .

(a) Base Salary . Commencing on the Employment Commencement Date, and during the Employment Period, the Company shall pay to Executive an annual base salary of $250,000 (The “Base Salary”), payable in conformity with the Company’s customary payroll practices for executive salaries. For all purposes of this Agreement, Executive’s Base Salary shall include any portion thereof which Executive elects to defer under any nonqualified plan or arrangement.

(b) Annual Performance Bonus . Executive shall be eligible for an annual discretionary performance bonus with respect to each full calendar year during the Employment Period (the “Annual Performance Bonus”), beginning with the calendar year 2013, which shall, if earned, consist of a cash payment targeted at 100% of Base Salary. The CEO will, on an annual basis (at or near the beginning of each full calendar year in such Employment Period) establish performance objectives for Executive for the upcoming year, and will communicate such objectives to Executive. The amount, if any, of the Annual Performance Bonus will be determined by the Board, or the Compensation Committee if designated this task by the Board, acting in its sole and complete discretion but based on the recommendation of the CEO based on annual performance objectives established by the CEO. A bonus determination will be made by the Board typically within 90 calendar days of the end of each calendar year and the Annual Performance Bonus, if any, will be paid within 120 days of the end of the calendar year for which the Annual Performance Bonus is awarded. Executive must be employed by the Company at the time of payment of the Annual Performance Bonus to be entitled to payment of the Annual Performance Bonus, except as provided in Sections 7(a), 7(b), and 7(c) .

(c) Equity Awards. Subject to the approval of the Board and/or the Compensation Committee, as applicable, and subject to all terms and conditions of the 2006 Incentive Stock Option Plan of ITH (“2006 Plan”) reapproved in 2012 by the stockholders, the Company granted to Executive on July 28, 2011 an option to purchase 100,000 ITH common shares at a price of 7.47 per share. These options are 100% vested and will expire July 28, 2013. On August 24, 2012, the Company granted to Executive 400,000 shares at a price of 3.17 per share with vesting to occur

over 2 years, 1/3 of the option vested on August 24, 2012, and an additional 1/3 to be vested on both the first and second anniversary of the grant date. These options will expire on August 24, 2017. In addition, Executive shall be eligible to receive future equity incentive awards as determined in the sole discretion of the Board or the Compensation Committee, as applicable.

5. Benefits . Subject to the terms and conditions of this Agreement, Executive shall be entitled to the following benefits during the Employment Period:

6. Termination of Agreement and Employment .

(a) Automatic Termination in the Event of Death . This Agreement shall automatically terminate in the event of the Executive’s death.

(b) Company’s Right to Terminate . At any time during the Employment Period, the Company shall have the right to terminate this Agreement with the Company for any of the following reasons:

(1) Upon Executive’s Disability (as defined below);

(2) For Cause (as defined in Section 7 ); or

(3) For any other reason whatsoever, in the sole and complete discretion of the Company.

Executive will have the right to terminate this Agreement with the Company for:

(1) Good Reason (as defined in Section 7 ); or

(2) For any other reason whatsoever, in the sole and complete discretion of Executive.

(f) The termination of this Agreement shall also result in the contemporaneous termination of Executive’s employment.

7. Severance Payments .

(1) One year’s Base Salary; and

(b) Termination by Executive for Good Reason . If Executive terminates this

Agreement during the Employment Period pursuant to Section 6(c)(1) hereof, then, except as set forth in Section 7(c), the Company shall pay Executive the following severance, in a lump sum, subject to all applicable withholdings, within on the 60 th day after the Termination Date, provided that Executive has executed, not revoked, and any period to revoke has lapsed, a full general release in favor of the Company and its affiliates, including but not limited to ITH:

(1) One year’s Base Salary; and

(c) Termination by Company pursuant to 6(b)(3) or Executive for Good Reason after a Change in Control . If a Change in Control occurs and within six months of the Change in Control (i) Executive is terminated pursuant to Section 6(b)(3) hereof or (ii) Executive terminates this Agreement during the Employment Period pursuant to Section 6(c)(1) hereof, then Section 7(a) and 7(b) will not apply, but instead pursuant to this Section 7(c) , the Company shall pay Executive the following severance, in a lump sum, subject to all applicable withholdings, on the 60 th day after the Termination Date, provided that Executive has executed, not revoked, and any period to revoke has lapsed, a full general release in favor of the Company and its affiliates, including but not limited to ITH:

(1) One year’s Base Salary; and

(2) One year’s Annual Performance Bonus at target.

(d) Additional Benefits . If the Company is required to pay Executive severance by, and subject to, Section 7(a) or 7(b) or 7(c) , or if Executive is terminated pursuant to Section 6(b)(1) then:

COBRA coverage shall equal the cost, if any, that Executive would pay (on behalf of himself and his spouse and dependents, as applicable) under the Company’s group health plan had Executive not terminated; provided, that if group health coverage under another group health plan becomes available thereafter to Executive, Executive’s spouse, or Executive’s dependents (as applicable), the Company’s reimbursement obligations under this paragraph will cease with respect to each person to whom such coverage becomes available. Executive shall notify the Company immediately upon group health coverage becoming available to Executive, Executive’s spouse, or Executive’s dependents.

(e) “Cause” means the occurrence or existence, prior to occurrence of circumstances constituting Good Reason, of any of the following events during the Employment Period:

(4) Executive’s having been convicted of, or having entered a plea bargain, a plea of nolo contendere or settlement admitting guilt for, any felony, any crime of moral turpitude, or any other crime that could reasonably be expected to have a material adverse impact on the Company’s or any of its affiliates’ reputations (including but not limited to ITH’s reputation); or

(5) Executive’s having committed any material violation of any federal law regulating securities (without having relied on the advice of the

Company’s attorney) or having been the subject of any final order, judicial or administrative, obtained or issued by the Securities and Exchange Commission, for any securities violation involving fraud, including, for example, any such order consented to by Executive in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied.

(f) “ Good Reason ” means the occurrence, prior to occurrence of circumstances constituting Cause, of any of the following events during the Employment Period without Executive’s consent:

(1) Any material breach by the Company of this Agreement;

(2) Any requirement by the Company that Executive relocate outside of the Fairbanks Alaska metropolitan area;

(3) Failure of any successor to assume this Agreement not later than the date as of which it acquires substantially all of the assets or businesses of the Company;

(4) Any material reduction in Executive’s title, responsibilities, or duties or the Board directs Executive to report to someone other than the CEO and/or the Board; or

(5) The assignment to Executive of any duties materially inconsistent with his duties as Vice President.

8. Parachute Payment .

ITH). Notwithstanding the foregoing, Confidential Information does not include any information which is or becomes generally known by the public other than as a result of Executive’s actions or inactions.

(b) Protection . In return for the Company’s promise to provide Executive with Confidential Information, Executive promises (i) to keep the Confidential Information, and all documentation, materials and information relating thereto, strictly confidential, (ii) not to use the Confidential Information for any purpose other than as required in connection with fulfilling his duties as Vice President for the benefit of the Company, and (iii) to return to the Company all documents containing Confidential Information in Executive’s possession upon separation from the Company for any reason.

(including but not limited to ITH) would suffer irreparable damages. Accordingly, the Executive will not, at any time or in any manner, during the Executive’s Employment Period or at any time within one (1) year following the termination of Executive’s employment for whatever reason, and notwithstanding any alleged breach of this Agreement:

(f) For this purpose of this Section 11, mineral property which is competitive or in conflict with the business of the Company or any of its affiliates (including but not limited to ITH) means one:

(1) which is primarily prospective for gold, and

enforceable provision to the maximum extent permitted by law; provided, however, if such provision cannot be reformed, it shall be deemed ineffective and deleted from this Agreement without affecting any other provision of this Agreement.

15. Arbitration; Injunctive Relief; Attorneys’ Fees .

(a) If to Company, addressed to: Suite 350 - 9635 Maroon Circle, Englewood, Colorado 80112; Attention: The CEO

(b) If to Executive, addressed to the address set forth below Executive’s name on the

execution page hereof; or to such other address as either party may have furnished to the other party in writing in accordance with this Section 21.

24. Internal Revenue Code Section 409A .

SIGNATURE PAGE FOLLOWS

IN WITNESS WHEREOF, Executive and the Company have executed this Agreement to be effective for all purposes as of the Effective Date.

		EXECUTIVE:


Dated:	March 11, 2013		/s/ Thomas E. Irwin
			Thomas E. Irwin


		THE COMPANY:


Dated:	March 11, 2013		By:	/s/ Donald C. Ewigleben

Exhibit “A”

Description of Duties and Responsibilities of Employee

Without limiting the provisions of section 3 of the Agreement, Employee has the following specific duties and responsibilities:

· To ensure the company’s project assets located in Alaska are developed in the most prudent manner including:

· Developing and maintaining safe operating standards for workplace;

· Creating and implementing plans for compiling all necessary environmental baseline information;

· Creating and implementing legal, regulatory and public strategies for permitting;

· Creating and implementing plans for the completion of drilling, engineering studies and project documentation necessary to support permitting for the Livengood Project;

· To assist in the successful completion of a comprehensive feasibility study on the Livengood deposit by mid-2013;

· To assist and analyse viable lower capital alternatives to the recommended alternative contained in the feasibility study;

· To support the company’s effort in developing a strategic alliance by ensuring site due diligence by third parties is completed efficiently and effectively

· To provide leadership in the supervision and management of project staff;

· by motivating, focusing and retaining talented project staff capable of achieving the company’s strategic business plan;

· Developing and maintaining organizational procedures and practices to ensure employees are completing requirements of their job duties

· To maintain the company’s solid reputation among the local and regional stakeholders by developing and execution of strategies to enhance public and governmental relations;

· To ensure the development and maintenance of an electronic database on technical project information

· To execute a well-crafted exploration program to ensure the orderly development of the Project;

· Support the CEO, CFO and Manager — Investor Relations & Communications with development of appropriate messaging and presentations in the marketplace.

· Other duties as assigned by the CEO and

· Otherwise carrying out the duties normally associated with the position of the Vice President of a company providing services to, and managing the activities and assets of Alaska.

Exhibit 21.1

Subsidiaries of International Tower Hill Mines Ltd.

Name of Subsidiary		Jurisdiction of Organization
Tower Hill Mines, Inc. (100% owned by International Tower Hill Mines Ltd.)		Alaska

Tower Hill Mines (US) LLC (100% owned by Tower Hill Mines, Inc.)		Colorado

Livengood Placers, Inc. (100% owned by Tower Hill Mines, Inc.)		Nevada

813034 Alberta Ltd. (100% owned by International Tower Hill Mines Ltd.)		Alberta, Canada

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on S-8 Forms (No. 333-174617, 333-158533 and 333-141353 ) of International Tower Hill Mines Ltd. of our report dated March 13, 2013, relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in this Annual Report on Form 10-K.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants

Vancouver, British Columbia

March 13, 2013

Exhibit 23.2

CHARTERED

ACCOUNTANTS

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File No. 333-174617, 333-158533, and 333-141353) of International Tower Hill Mines Ltd. (“the Company”) of our report, dated March 16, 2012, with respect to the Company’s consolidated financial statements included in this Annual Report on Form 10-K of the Company for the year ended December 31, 2012.

/s/ MacKay LLP

Vancouver, British Columbia
Mach 13, 2013

EXHIBIT 31.1

CERTIFICATION

I, Donald C. Ewigleben, certify that:

1. I have reviewed this Annual Report on Form 10-K of International Tower Hill Mines Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 13, 2013	By:	/s/ Donald C. Ewigleben
		Donald C. Ewigleben
		Chief Executive Officer (Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATIONS

I, Tom S. Q. Yip, certify that:

1. I have reviewed this Annual Report on Form 10-K of International Tower Hill Mines Ltd.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 13, 2013	By:	/s/ Tom S. Q. Yip
		Tom S. Q. Yip
		Chief Financial Officer (Principal Financial and Accounting Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of International Tower Hill Mines Ltd. (the “Company”), for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Donald C. Ewigleben, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: March 13, 2013	By:	/s/ Donald C. Ewigleben
		Donald C. Ewigleben
		Chief Executive Officer (Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of International Tower Hill Mines Ltd. (the “Company”), for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tom S. Q. Yip, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: March 13, 2013	By:	/s/ Tom S. Q. Yip
		Tom S. Q. Yip
		Chief Financial Officer (Principal Financial and Accounting Officer)