NOTICE OF MEETING AND MANAGEMENT INFORMATION CIRCULAR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, DECEMBER 13, 2016

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1 NOTICE OF MEETING AND MANAGEMENT INFORMATION CIRCULAR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, DECEMBER 13, 2016 Aura Minerals Inc. Suite University Avenue Toronto, Ontario November 11, 2016 This Management Information Circular and the accompanying materials require your immediate attention. If you are in doubt as to how to deal with these documents or the matters to which they refer, please consult a professional advisor.

2 AURA MINERALS INC. NOTICE OF SPECIAL MEETING OF SHAREHOLDERS NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders (the Meeting ) of Aura Minerals Inc. (the Company ) will be held at the offices of Blake, Cassels & Graydon LLP, 199 Bay Street, Suite 4000, Commerce Court West, Toronto, Ontario on Tuesday, December 13, 2016, at 9:00 a.m. (EST), for the following purposes: (c) to consider and, if thought advisable, to approve, with or without modification, a special resolution, the full text of which is set out in the accompanying Information Circular, authorizing the Company to apply for a Certificate of Amendment under the Canada Business Corporations Act (the CBCA ) or should the Company have been continued into the British Virgin Islands under the BVI Business Companies Act, 2004, as amended from time to time, pursuant to the Continuance (as defined below) to file for registration a notice of amendment in the approved form or a restated memorandum or articles incorporating the amendment, to amend its Articles of Continuance to consolidate the Company s issued and outstanding common shares on the basis set out in the Information Circular in respect of the Meeting; to consider and, if thought advisable, to approve, with or without modification, a special resolution, the full text of which is set out in the accompanying Information Circular, authorizing and approving the continuance (the Continuance ) of the Company under the laws of the British Virgin Islands, as a company governed by the BVI Business Companies Act, 2004, as amended from time to time, and the adoption of new constating documents of the Company upon the Continuance; and to transact such other business as may properly come before the Meeting or any adjournment or adjournments thereof. Accompanying this Notice is the Information Circular in respect of the Meeting, which includes, among other things, the full text of the above special resolutions and detailed information relating to the matters to be addressed at the Meeting. Dissent Regarding the Continuance: Pursuant to section 190 of the CBCA, registered holders of common shares of the company (the Common Shares ) have the right to dissent in respect of the Continuance. If the Continuance becomes effective, a registered holder of Common Shares who dissents (a Dissenting Shareholder ) will be entitled to be paid the fair value of such Common Shares if the Dissenting Shareholder sends to the Corporation at or before the Meeting, a written objection to the Continuance (a Notice of Dissent ) and the Dissenting Shareholder shall have otherwise complied with section 190 of the CBCA. This right of dissent is described in the Information Circular under the heading Approval of the Continuance Resolution Rights of Dissent to the Continuance and in Schedule C thereto. Failure to comply strictly with such dissent procedures may result in the loss or unavailability of any dissent rights. The exercise of a proxy does not constitute a written objection. Beneficial owners of Common Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent should be aware that ONLY A REGISTERED OWNER OF COMMON SHARES IS ENTITLED TO EXERCISE RIGHTS OF DISSENT. Registered Shareholders: Every registered shareholder of common shares at the close of business on November 7, 2016 is entitled to receive notice of and to attend and vote such common shares at the Meeting. Registered shareholders who are unable to attend the Meeting in person and who wish to ensure that their common shares will be voted at the Meeting are requested to complete, sign and deliver the enclosed form of proxy c/o Proxy Dept., TSX Trust Company, at 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1. In order to be valid and acted upon at the Meeting, forms of proxy must be returned to the aforesaid address not later than 48 hours (excluding Saturdays, Sundays and holidays) before the time set for the holding of the Meeting or any adjournments thereof. Further instructions with respect to the voting by proxy are provided in the form of proxy and in the Information Circular accompanying this Notice. Non-Registered Shareholders: Shareholders may beneficially own common shares that are registered in the name of a broker, another intermediary or an agent of that broker or intermediary ( Non-Registered Shareholders ). Without specific instructions, intermediaries are prohibited from voting shares for their clients. If you are a Non-Registered Shareholder, it is vital that the voting instruction form provided to you by your broker, intermediary or its agent is returned according to their

3 instructions, sufficiently in advance of the deadline specified by the broker, intermediary or agent to ensure that they are able to provide voting instructions on your behalf. DATED at Toronto, Ontario this November 11, BY ORDER OF THE BOARD James Bannantine President & Chief Executive Officer 2

4 AURA MINERALS INC. (the Company ) MANAGEMENT INFORMATION CIRCULAR TABLE OF CONTENTS DATE OF INFORMATION... 5 FORWARD-LOOKING INFORMATION... 5 GENERAL INFORMATION REGARDING THE MEETING... 5 Solicitation of Proxies... 5 Appointment of Proxyholder... 5 Revocation of Proxies... 6 Information for Non-Registered Shareholders... 6 Voting of Proxies... 7 Voting Securities and Principal Holders Thereof... 7 Record Date... 7 Quorum Requirements... 8 APPROVAL OF THE CONSOLIDATION RESOLUTION... 8 Introduction... 8 Background and Reasons for the Share Consolidation... 9 Effective Date of Share Consolidation... 9 Effects of the Share Consolidation...10 Mechanics of the Share Consolidation...11 Form of Special Resolution and Vote Required...12 Recommendation of the Board of Directors...12 APPROVAL OF THE CONTINUANCE RESOLUTION Introduction...12 Procedure for the Continuance...13 Effect of the Continuance...14 Background and Reasons for the Continuance...15 Comparison between Canada and British Virgin Islands Corporate Law...15 Securities Matters...22 Certain Canadian Federal Income Tax Considerations...23 Certain British Virgin Islands Tax Considerations...26 Rights of Dissent to the Continuance...26 Form of Special Resolution and Vote Required...28 Recommendation of the Board of Directors...28 RISK FACTORS Certain Risk Factors Associated with the Share Consolidation...29 Certain Risk Factors Associated with the Continuance...29 AUDITOR ADDITIONAL INFORMATION Interest of Certain Persons in Matters to be Acted Upon...30 Interest of Informed Persons in Material Transactions...30 Management Contracts

5 Other Matters...30 Additional Information...30 APPROVAL OF DIRECTORS SCHEDULE A THE RESOLUTIONS... A-1 SCHEDULE B MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION... B-1 SCHEDULE C DISSENT RIGHTS... C-1 4

6 DATE OF INFORMATION Unless otherwise stated, the information contained in this management information circular ( Information Circular ) is as of November 11, FORWARD-LOOKING INFORMATION This Information Circular contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively, forward-looking statements ). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements in this Information Circular relate to future events or future performance and reflect the Company s current estimates, predictions, expectations or beliefs regarding future events and include, without limitation, statements relating to: the date of the Meeting; the method of solicitation of proxies; the method of delivery of proxy-related materials to objecting beneficial owners and non-objecting beneficial owners; the Company s beliefs and expectations related to the results of the Share Consolidation; the share consolidation ratio to be selected by the Board of Directors within the proposed range of share consolidation ratios; the timing for implementation, if at all, of the Share Consolidation; the economic effect of the Share Consolidation on Shareholders and holders of securities exercisable or exchangeable for, or convertible into, Shares; the treatment of fractional Shares; the procedure for the exchange of Shares pursuant to the Share Consolidation; the timing for implementation, if at all, of the Continuance; receipt of a letter of satisfaction to complete the Continuance and a certificate of discontinuance from the CBCA Director; and the receipt of a Certificate of Continuance from the BVI Registrar. Often, but not always, forward-looking statements may be identified by the use of words such as expects, anticipates, plans, projects, estimates, assumes, intends, strategy, goals, objectives or variations thereof or stating that certain actions, events or results may, could, would, might or will be taken, occur or be achieved, or the negative of any of these terms and similar expressions. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements in this Information Circular are based upon, without limitation, the following estimates and assumptions: the Company will be able to obtain all necessary regulatory approvals on a timely basis; and the Share Consolidation and Continuance will be approved by the Shareholders at the Meeting. Known and unknown risks, uncertainties and other factors, many of which are beyond the Company s ability to predict or control could cause actual results to differ materially from those contained in the forward-looking statements. Specific reference is made to the factors set out under the heading Risk Factors in this Information Circular and the factors set out under the heading Risk Factors in the Company s Annual Information Form ( AIF ) dated March 24, 2016 and the Company s Management s Discussion and Analysis ( MD&A ) dated March 24, 2016, and interim MD&As thereafter, which are available on SEDAR ( All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Solicitation of Proxies GENERAL INFORMATION REGARDING THE MEETING This Information Circular is furnished in connection with the solicitation of proxies by the management the Company for use at the special meeting (the Meeting ) of shareholders (the Shareholders ) of the Company (and any adjournment thereof) to be held at 9:00 a.m. (EST) on Tuesday, December 13, 2016 at the place and for the purposes set forth in the accompanying Notice of Meeting. While it is expected that the solicitation will be primarily by mail, proxies may be solicited personally or by telephone by the regular employees of the Company at nominal cost. All costs of solicitation by management will be borne by the Company. Appointment of Proxyholder The individuals named as proxyholder in the accompanying form of proxy are the President and Chief Executive Officer and the Vice President, Legal Affairs & Business Development, respectively, of the Company (collectively, Management s Nominees ). A SHAREHOLDER WISHING TO APPOINT SOME OTHER PERSON OR COMPANY (WHO NEED NOT BE A SHAREHOLDER) TO REPRESENT THE SHAREHOLDER AT THE MEETING HAS THE RIGHT TO DO SO, EITHER BY STRIKING OUT THE NAMES OF MANAGEMENT S NOMINEES NAMED IN THE 5

7 ACCOMPANYING FORM OF PROXY AND INSERTING THE DESIRED PERSON S OR COMPANY S NAME IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY. A proxy will not be valid unless the completed form of proxy is received by the Company s transfer agent, TSX Trust Company ( TSX Trust ), at 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1 no later than 9:00 a.m. (EST) on December 9, 2016, or no later than 48 hours (excluding Saturdays, Sundays and holidays) before the time of any adjourned Meeting. Proxies delivered after that time will not be accepted. Revocation of Proxies A Shareholder who has given a proxy may revoke it by an instrument in writing executed by the Shareholder or by his attorney duly authorized in writing or, where the Shareholder is a corporation, by a duly authorized officer or attorney of the corporation, and delivered to the registered office of the Company, c/o TSX Trust, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1 at any time up to and including the last business day preceding the day of the Meeting, or if adjourned, any reconvening thereof, or to the Chairman of the Meeting on the day of the meeting or, if adjourned, any reconvening thereof, or in any other manner provided by law. A revocation of a proxy does not affect any matter on which a vote has been taken prior to the revocation. Information for Non-Registered Shareholders Only registered Shareholders ( Registered Shareholders ) of the Company or the persons they appoint as their proxies are permitted to vote at the Meeting. Most Shareholders of the Company are non-registered Shareholders ( Non-Registered Shareholders ) because the shares they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased the shares. Shares beneficially owned by a Non- Registered Shareholder are registered either: (i) in the name of an intermediary (an Intermediary ) that the Non-Registered Shareholder deals with in respect of the shares of the Company (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a clearing agency (such as CDS Clearing and Depositary Services Inc. ( CDS )) of which the Intermediary is a participant. In accordance with applicable securities law requirements, the Company will have distributed copies of the Notice of Meeting, this Information Circular, the form of proxy and the supplemental mailing list return card (collectively, the Meeting Materials ) to the clearing agencies and Intermediaries for distribution to Non-Registered Shareholders. Intermediaries are required to forward the Meeting Materials to Non-Registered Shareholders unless a Non-Registered Shareholder has waived the right to receive them. Intermediaries often use service companies to forward the Meeting Materials to Non-Registered Shareholders. Generally, Non-Registered Shareholders who have not waived the right to receive Meeting Materials will either: be given a voting instruction form which is not signed by the Intermediary and which, when properly completed and signed by the Non-Registered Shareholder and returned to the Intermediary or its service company, will constitute voting instructions (often called a voting instruction form ) which the Intermediary must follow. Typically, the voting instruction form will consist of a one-page pre-printed form. Sometimes, instead of the one-page pre-printed form, the voting instruction form will consist of a regular printed proxy form accompanied by a page of instructions which contains a removable label with a bar-code and other information. In order for the form of proxy to validly constitute a voting instruction form, the Non-Registered Shareholder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and submit it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company; or be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of shares beneficially owned by the Non-Registered Shareholder but which is otherwise not completed by the Intermediary. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Non-Registered Shareholder when submitting the proxy. In this case, the Non-Registered Shareholder who wishes to submit a proxy should properly complete the form of proxy and deposit it with the Company, c/o TSX Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1. In either case, the purpose of these procedures is to permit Non-Registered Shareholders to direct the voting of the shares of the Company they beneficially own. Should a Non-Registered Shareholder who receives one of the above forms wish to vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Shareholder), the Non-Registered Shareholder should strike out the persons named in the form of proxy and insert the Non-Registered Shareholder or such other person s name in the blank space provided. In either case, Non-Registered Shareholders should carefully follow the 6

8 instructions of their Intermediary, including those regarding when and where the proxy or voting instruction form is to be delivered. A Non-Registered Shareholder may revoke a voting instruction form, or a waiver of the right to receive Meeting Materials and to vote, which has been given to an Intermediary at any time by written notice to the Intermediary provided that an Intermediary is not required to act on a revocation of a voting instruction form or of a waiver of the right to receive Meeting Materials and to vote which is not received by the Intermediary at least seven days prior to the Meeting. These materials are being sent to both Registered Shareholders and Non-Registered Shareholders. If you are a Non-Registered Shareholder, and the issuer or its agent has sent these materials directly to you, your name and address and information about your holdings of securities, have been obtained in accordance with applicable securities regulatory requirements from the Intermediary holding on your behalf. By choosing to send these materials to you directly, the Company (and not the intermediary holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions. All references to Shareholders in this Information Circular and the accompanying form of proxy and Notice of Meeting are to Registered Shareholders of record unless specifically stated otherwise. Voting of Proxies The Common Shares represented by a properly executed proxy in favour of persons designated as proxyholders in the enclosed form of proxy will be voted or withheld from voting in accordance with the instructions of the Shareholder appointing the proxyholder on any ballot that may be called for; and where a choice with respect to any matter to be acted upon has been specified in the form of proxy, be voted in accordance with the specification made in such proxy. ON A POLL, SUCH COMMON SHARES WILL BE VOTED IN FAVOUR OF EACH MATTER FOR WHICH NO CHOICE HAS BEEN SPECIFIED OR WHERE BOTH CHOICES HAVE BEEN SPECIFIED BY THE SHAREHOLDER. The enclosed form of proxy, when properly completed and delivered and not revoked, confers discretionary authority upon the person appointed proxyholder thereunder to vote with respect to amendments or variations of matters identified in the Notice of Meeting, and with respect to other matters which may properly come before the Meeting. In the event that amendments or variations to matters identified in the Notice of Meeting are properly brought before the Meeting or any further or other business is properly brought before the Meeting, it is the intention of the persons designated by management as proxyholders in the enclosed form of proxy to vote in accordance with their best judgment on such matters or business. At the time of the printing of this Information Circular, management of the Company knows of no such amendment, variation or other matter which may be presented to the Meeting. Voting Securities and Principal Holders Thereof The Company is authorized to issue an unlimited number of Common Shares without par value (the Common Shares ). As of the date of this Information Circular, 329,503,557 Common Shares are issued and outstanding. To the knowledge of the directors and executive officers of the Company, as of the date of this Information Circular, no person or company beneficially owns, or controls or directs, directly or indirectly, voting securities of the Company carrying 10% or more of the voting rights attached to any class of voting securities of the Company, other than: Name of Shareholder Securities Beneficially Owned, or Controlled or Directed, Directly or Indirectly Percentage Outstanding Voting Securities of the Company Northwestern Enterprises Ltd. 157,142,757 Common Shares approximately 47.69% Carteira International N.V. 65,022,560 Common Shares approximately 19.73% Northwestern Enterprises Ltd. is beneficially owned and controlled by Paulo de Brito, a director of the Company. Record Date The board of directors of the Company (the Board of Directors or Board ) has fixed the record date as November 7, 2016 for the purpose of determining who is entitled to receive the Notice of Meeting. Shareholders entitled to vote at the Meeting will be the Shareholders of record at 5:00 p.m. (EST) on November 7, 2016 (the Record Date ). Each registered Shareholder at the close of business on the Record Date is entitled to one vote at the Meeting or at any adjournment thereof, either in person or by proxy. The failure of any Shareholder to receive the Notice of Meeting will not deprive the Shareholder of the right to vote at the Meeting. 7

9 Quorum Requirements The quorum for the Meeting is not less than two persons present in person, each being a Shareholder entitled to vote thereat, or a duly appointed proxy for an absent Shareholder so entitled. If a quorum is present at the opening of the Meeting, the Shareholders present or represented by proxy may proceed with the business of the Meeting notwithstanding that a quorum is not present throughout the Meeting. If a quorum is not present at the time appointed for the Meeting or within a reasonable time thereafter, as the Shareholders may determine, the Shareholders present or represented may adjourn the Meeting to a fixed time and place but may not transact any other business. Introduction APPROVAL OF THE CONSOLIDATION RESOLUTION The Company is asking Shareholders to authorize the Board of Directors to effect, at such time as the Board of Directors shall deem appropriate, but in any event no later than June 30, 2017, a share consolidation (or reverse stock split) of the issued and outstanding Common Shares (the Share Consolidation ) at a share consolidation ratio to be determined by the Board of Directors but within the range of one post-consolidation Common Share for every 6 to 10 pre-consolidation Common Shares. If approved, and subject to the Board of Directors authority to decide not to proceed with the implementation of the Share Consolidation, the Share Consolidation will be effected by (i) filing articles of amendment to the Company s Articles of Continuance, as amended, or (ii) should the Company have been continued into the British Virgin Islands (the BVI ), as described under the heading Approval of the Continuance Resolution in this Information Circular, filing for registration a notice of amendment in the approved form or a restated memorandum or articles incorporating the amendment made to amend its Articles of Continuance, as amended. The Board may, in its discretion, select any ratio for the Share Consolidation falling within the aforementioned range of ratios upon receipt of Shareholder approval and prior to the filing of articles of amendment to the Company s Articles of Amalgamation, as amended. Currently, the Board of Directors believes that an initial postconsolidation Common Share price in the range of C$1.00 to C$2.00 per Common Share would be appropriate. However, the Board may, in its sole discretion, select a ratio from within the range set forth in the Consolidation Resolution that would be expected to result in an initial post-consolidation Common Share price that is above or below this range. The actual timing for implementation, if any, of the Share Consolidation would be determined by the Board of Directors based upon its evaluation as to when such action would be most advantageous to the Company and its Shareholders. These determinations would be made by the Board of Directors based upon prevailing market conditions at that time. The full text of the resolution (the Consolidation Resolution ) to be considered and if thought advisable, passed, by the Shareholders is set forth in Schedule A to this Information Circular. The Share Consolidation remains subject to the receipt of all necessary regulatory approvals, including approval of the Toronto Stock Exchange (the TSX ). The Board of Directors will retain the authority, notwithstanding approval of the Share Consolidation by Shareholders, to determine in its discretion not to proceed with the Share Consolidation, without further approval or action by or prior notice to Shareholders. The Board would exercise this right if it determined that the Share Consolidation was no longer in the best interests of the Company and its Shareholders. If the Share Consolidation is not implemented prior to June 30, 2017, the Shareholder approval granted in respect of the Share Consolidation will be deemed to have been revoked and the Board of Directors will be required to obtain new Shareholder approval if it wishes to implement a share consolidation. The Board of Directors believes that the proposed range of share consolidation ratios (rather than a single ratio) will provide it with the flexibility to implement the Share Consolidation in a manner designed to maximize the anticipated benefits to the Company and its Shareholders and because it is not possible to predict market conditions at the time the Share Consolidation would be implemented. In determining which precise share consolidation ratio within the aforementioned range of ratios to implement, if any, following the receipt of Shareholder approval, the Board of Directors may consider, among other things, factors such as: the historical trading prices and trading volume of the Common Shares; the then prevailing trading price and trading volume of the Common Shares and the anticipated impact of the Share Consolidation on the trading market for the Common Shares; the outlook of the trading price of the Common Shares; threshold prices of brokerage houses or institutional investors that could impact their ability to invest or recommend investments in the Common Shares; 8

10 the number of Common Shares that may be issued pursuant to outstanding securities exercisable or exchangeable for, or convertible into, Common Shares; the greatest overall reduction of the Company s administrative costs; and prevailing general market and economic conditions. At the close of business on November 11, 2016, the closing price of the Common Shares on the TSX was C$0.175 and there were 329,503,557 Common Shares issued and outstanding. Based on the number of Common Shares issued and outstanding on November 11, 2016, immediately following the completion of the Share Consolidation, for illustrative purposes only: (i) assuming a share consolidation ratio of 10-for-1, the Company would have approximately 32,950,356 Common Shares issued and outstanding; (ii) assuming a share consolidation ratio of 8-for-1, the Company would have approximately 41,187,945 Common Shares issued and outstanding; and (iii) assuming a share consolidation ratio of 6-for-1, the Company would have approximately 54,917,260 Common Shares issued and outstanding (in each case without giving effect to the treatment of fractional Common Shares outlined below). The Company does not expect the Share Consolidation itself to have any economic effect on Shareholders or holders of securities exercisable or exchangeable for, or convertible into, Common Shares, except to the extent the Share Consolidation will result in fractional Common Shares as discussed below. Background and Reasons for the Share Consolidation The Board of Directors is seeking authority to implement the Share Consolidation for the following reasons: Potential for Increased and More Attractive Share Price The Company believes that it is desirable for its Common Shares to trade at a higher price per Common Share than it does currently. An increase in trading price of the Common Shares that may result from the Share Consolidation could heighten the interest of the financial community in the Company and potentially broaden the pool of investors that may consider investing or may be able to invest in Common Shares of the Company, potentially increasing the trading volume and liquidity of the Common Shares. The Share Consolidation could also help to attract institutional investors, investment funds and others who have internal policies which prohibit them from purchasing shares below a certain minimum trading price and, in respect of institutional investors, tend to discourage individual brokers from recommending such stocks to their customers. Potentially Less Volatility in Price Levels on a Percentage Basis Higher price levels for post-consolidation Common Shares could result in less volatility in the price levels of the Common Shares on a percentage basis. Reduction of Shareholder Transaction Costs Investors may benefit from relatively lower trading costs associated with a higher trading price for the post-consolidation Common Shares. It is likely that many investors pay commissions based on the number of Common Shares traded when they buy or sell Common Shares. If the trading price for the post-consolidation Common Shares is higher, investors may pay lower commissions to trade a fixed dollar amount of post-consolidation Common Shares than they would if they traded the same dollar amount of pre-consolidation Common Shares. Improved Trading Liquidity The combination of potentially lower transaction costs and increased interest from institutional investors, investment funds and others could ultimately improve the trading liquidity of the Common Shares. Effective Date of Share Consolidation If Shareholders approve the Share Consolidation, subject to the discretion of the Board, it is the intention of the Company to file articles of amendment giving effect thereto on the basis set out in the Consolidation Resolution, the full text of which is set forth in Schedule A to this Information Circular. The effective date of the Share Consolidation will be the date of issuance of the Certificate of Amendment by the director (the CBCA Director ) appointed under the Canada Business Corporations Act (the CBCA ), or the equivalent in the BVI if implemented after the Continuance, and such date is referred to herein as the Share Consolidation Effective Date. On the Share Consolidation Effective Date, the Common Shares will be consolidated on the basis described above. 9

11 Effects of the Share Consolidation General The Share Consolidation will affect all Shareholders uniformly. If the Share Consolidation is approved and implemented, the principal effect will be to proportionately decrease the number of issued and outstanding Common Shares, based on the share consolidation ratio chosen by the Board of Directors. The Share Consolidation will not affect the listing of the Shares on the TSX. Following the Share Consolidation, except as described herein, the Common Shares will continue to be listed on the TSX under the symbol ORA, although the post-consolidation Common Shares will be considered a substitutional listing with a new ISIN/CUSIP number. At the Meeting, Shareholders will also be asked to approve the Continuance Resolution described under the heading Approval of the Continuance Resolution in this Information Circular. If both the Share Consolidation and Continuance are approved by Shareholders, it is anticipated that each will be implemented concurrently on or around December 31, In that case, the post-consolidation Common Shares held by Shareholders would be shares of the Company as continued under the laws of the BVI with a new ISIN/CUSIP numbers. See Approval of the Continuance Resolution Effects of Continuance. Because the Share Consolidation would apply to all of the issued and outstanding Common Shares, the proportionate voting and equity interests in the Company and other rights, preferences, privileges or priorities of the holders of Common Shares will not be affected by the Share Consolidation, other than as a result of the treatment of fractional Common Shares as described below. For example, a holder of two percent of the voting power attached to all of the outstanding Common Shares immediately prior to the Share Consolidation Effective Date will generally continue to hold two percent of the voting power attached to all of the outstanding Common Shares immediately after the Share Consolidation Effective Date. The number of Registered Shareholders will not be affected by the Share Consolidation (except to the extent any Shareholder s Common Shares are cancelled as a result of holding fractional Common Shares as described below under No Fractional Shares to be Issued ). No fractional Common Shares will be issued or delivered to Registered Shareholders in connection with the Share Consolidation. If, as a result of the Share Consolidation, a Shareholder becomes entitled to a fractional Common Share, the number of new post-consolidation Common Shares to which the Registered Shareholder is entitled, will be rounded down to the nearest whole number, and any and all fractional Common Shares to which registered holders would otherwise be entitled as a result of the Share Consolidation shall be deemed to have been cancelled as described below under No Fractional Shares to be Issued. If approved and implemented, the Share Consolidation may result in some Shareholders owning odd lots of less than a board lot. Odd lot Common Shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots may be higher than the costs of transactions in round lots of even multiples of board lots. The Board of Directors believes, however, that these potential effects are outweighed by the anticipated benefits of the Share Consolidation. Beneficial Shareholders holding their Common Shares through a nominee should note that such nominee may have different procedures for processing the Share Consolidation than those that will be put in place for Registered Shareholders. If you hold your Common Shares with a nominee and if you have questions in this regard, you are encouraged to contact your nominee. In general, the Share Consolidation will not be considered to result in a disposition of Common Shares by Shareholders for Canadian federal income tax purposes (other than with respect to fractions of Common Shares which shall be cancelled without consideration as described under No Fractional Shares to be Issued ). The aggregate adjusted cost base to a Shareholder for such purposes of all Common Shares held by the Shareholder (other than with respect to fractions of Common Shares) will not change as a result of the Share Consolidation; however, the Shareholder s adjusted cost base per Common Share will increase proportionately. Effect on Convertible Securities, Stock Options and other Arrangements Subject to TSX approval, where required, the exercise or conversion price and/or the number of Common Shares issuable under any of the Company s outstanding convertible securities, stock options, warrants, rights and any other similar securities or, in the case of the Company s outstanding restricted stock units, the number of restricted stock units, will be proportionately adjusted upon the implementation of the Share Consolidation based on the share consolidation ratio selected by the Board of Directors. Shareholder approval is not required in order for the Board of Directors to make the necessary adjustments mentioned above in order to give effect to the Share Consolidation. 10

12 Mechanics of the Share Consolidation Book-Entry Shares (Registered or Beneficial) If the Share Consolidation is effected, the holders of Common Shares who hold uncertificated Common Shares (i.e., shares held in book-entry form and not represented by a physical share certificate), either as registered holders or beneficial owners, will have their existing book-entry account(s) electronically adjusted by the Company s transfer agent or, for Beneficial Shareholders, by their brokerage firms, banks, trusts or other nominees that hold in street name for their benefit, as the case may be, to give effect to the Share Consolidation. Such holders do not need to take any additional actions to exchange their preconsolidation book-entry Common Shares, if any, for post-consolidation Common Shares. Beneficial Shareholders Beneficial Shareholders holding their Common Shares through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the Share Consolidation than those that will be put in place by the Company for Registered Shareholders. If you hold your Common Shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee. Registered Shareholders holding Share Certificates Exchange of Share Certificates If the Share Consolidation is approved by Shareholders and subsequently implemented, those Registered Shareholders who hold share certificates representing Common Shares and who will hold at least one post-consolidation Common Share will be required to exchange their Common Share certificates representing their pre-consolidation Common Shares for new Common Share certificates representing the new post-consolidation Common Shares. In the event the Share Consolidation is approved and implemented, the Company (or its transfer agent) will mail to each Registered Shareholder a letter of transmittal addressed to the Company and its transfer agent, which each Registered Shareholder will need to sign and complete following the Company s announcement of the Share Consolidation Effective Date. The letter of transmittal will contain instructions on how to surrender to the transfer agent the certificate(s) representing the Registered Shareholder s Common Shares. The transfer agent will send to each Registered Shareholder who has sent the required documents, including their Common Share certificates representing their pre-consolidation Common Shares, new Common Share certificate(s) representing the number of post-consolidation Common Shares to which the Registered Shareholder is entitled, rounded down to the nearest whole number. If both the Share Consolidation and the Continuance are approved by Shareholders at the Meeting, and the Board of Directors decides to proceed with both the Share Consolidation and Continuance, the new Common Share certificate(s) representing the post-consolidation Common Shares would be shares of the Company as continued under the laws of the BVI. Until surrendered to the transfer agent, each Common Share certificate representing pre-consolidation Common Shares will be deemed cancelled and, for all purposes, will be deemed to represent, respectively, only the number of post-consolidation Common Shares to which the Registered Shareholder is entitled as a result of the Share Consolidation, if any. If a Registered Shareholder would otherwise be entitled to receive a fractional Common Share, such fractional Share shall be deemed to have been cancelled as described below under the heading No Fractional Shares to be Issued. Until surrendered as contemplated herein, a Registered Shareholder s pre-consolidation Common Share certificate(s) shall be deemed as of and after the Share Consolidation Effective Date to represent the number of full Common Shares resulting from the Share Consolidation, if any. However, until Registered Shareholders have returned their properly completed and duly executed letter of transmittal and surrendered their pre-consolidation Common Share certificate(s) for exchange, Registered Shareholders will not be entitled to receive any dividends or other distributions, if any, that may be declared and payable to holders of record following the Share Consolidation. The use of the mail to transmit certificates representing pre-consolidation Common Shares is at each Shareholder s option and risk and neither the Company nor its transfer agent will have any liability in respect of Common Share certificates and/or letters of transmittal which are not actually received by the transfer agent. The Company recommends that such certificates and documents be delivered by hand to the transfer agent and a receipt therefor be obtained or, if mailed, that registered mail with return receipt be used and that appropriate insurance be obtained. All questions as to form, validity and acceptance of any pre-consolidation Common Shares deposited pursuant to the Share Consolidation will be determined by the Company in its sole discretion. Shareholders depositing Common Shares agree that such determination shall be final and binding. The Company reserves the absolute right to reject any and all deposits which the Company determines not to be in proper form or right to waive any defect or irregularity in the deposit of any pre-consolidation 11

13 Common Shares. There shall be no duty or obligation on the Company, the transfer agent or any other person to give notice of any defect or irregularity in any deposit of Common Shares and no liability shall be incurred by any of them for failure to give such notice. The Company reserves the right to permit the procedure for the exchange of Common Shares pursuant to the Share Consolidation to be completed other than that as set out above. Any registered Shareholder whose pre-consolidation Common Share certificate(s) have been lost, destroyed or stolen will be entitled to a replacement Common Share certificate only after complying with the requirements that the Company and the transfer agent customarily apply in connection with lost, destroyed or stolen certificates. Registered Shareholders should neither destroy nor submit any share certificate(s) until requested to do so. No Fractional Shares to be Issued No fractional Common Shares will be issued in connection with the Share Consolidation and, in the event that a Shareholder would otherwise be entitled to receive a fractional Common Share upon the Share Consolidation becoming effective, such Shareholder shall have such fractional Common Share cancelled without consideration. Except for any variances attributable to fractional Common Shares, the change in the number of issued and outstanding Common Shares that will result from the Share Consolidation will cause no change in the capital attributable to the Common Shares and will not materially affect any Shareholder s percentage ownership in the Company, even though such ownership will be represented by a smaller number of Common Shares. No Dissent Rights Under the CBCA, Shareholders do not have dissent rights with respect to the proposed Share Consolidation. Accounting Consequences Following the Share Consolidation, earnings (loss) per Common Share, and other per share amounts, will be increased in absolute terms because there will be fewer Common Shares issued and outstanding. In future financial statements of the Company, earnings (loss) per Common Share and other per share amounts for periods ending before the Share Consolidation Effective Date would be recast to give retroactive effect to the Share Consolidation. Form of Special Resolution and Vote Required A copy of the full text of the Consolidation Resolution is set forth in Schedule A to this Information Circular. In order to be effective, the Consolidation Resolution must be approved by not less than two-thirds (66 2/3 %) of the votes cast by Shareholders present in person or by proxy at the Meeting. Recommendation of the Board of Directors The Board of Directors believes that the proposed Share Consolidation is in the best interests of the Company and recommends that the Shareholders vote FOR the Consolidation Resolution to approve the Share Consolidation. Unless contrary instructions are indicated on the Form of Proxy or the voting instruction form, the persons designated in the accompanying Form of Proxy or voting instruction form intend to vote for the Consolidation Resolution to approve the Share Consolidation. Introduction APPROVAL OF THE CONTINUANCE RESOLUTION The Shareholders will be asked to consider and, if thought advisable, pass a special resolution (the Continuance Resolution ) authorizing the Board of Directors, in its sole discretion to apply for the discontinuance of the Company so it is no longer a company governed by the CBCA and to continue (the Continuance ) the Company to the BVI as a company governed by the BVI Business Companies Act, 2004, as amended from time to time (the BVI Act ). Upon the Continuance, the Company will adopt the proposed Memorandum of Association and Articles of Association (the Articles and, together with the Memorandum of Association, the M&A ) pursuant to the BVI Act which shall replace the current CBCA articles and by-laws. The text of the Continuance Resolution and the M&A are set out in Schedule A and Schedule B to this Information Circular, respectively. If the Continuance is implemented, the Company will cease to be domiciled in Canada and its registered office will be at Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. 12

14 The Continuance will affect certain of the rights of the Shareholders as they currently exist under the CBCA. See Comparison between Canada and British Virgin Islands Corporate Law. Shareholders should consult their legal and other advisors regarding implications of the Continuance which may be of particular importance to them. Procedure for the Continuance For the Continuance to be effective, the following procedure will be followed: Shareholder Authorization By special resolution, the Shareholders must authorize the Company to make the application for the Continuance to the CBCA Director and to the Registrar of Corporate Affairs (the BVI Registrar ), requesting that the Company be continued as a company under the BVI Act. Application to the CBCA Director The Company must make an application to the CBCA Director for the CBCA Director s letter of satisfaction to permit the Continuance, and the Company must establish to the satisfaction of the CBCA Director that the proposed Continuance will not adversely affect creditors or Shareholders. Necessary CBCA Conditions for Continuance According to the CBCA, the continuation of the Company as a body corporate to another jurisdiction, such as the BVI, cannot be completed unless the laws of that jurisdiction provide in effect that: (c) (d) (e) the property of the Company continues to be the property of the body corporate; the body corporate continues to be liable for the obligations of the Company; an existing cause of action, claim or liability to prosecution is unaffected; a civil, criminal or administrative action or proceeding pending by or against the Company may be continued to be prosecuted by or against the body corporate; and a conviction against, or ruling, order or judgment in favour of or against the Company may be enforced by or against the body corporate. The Company believes that this requirement will be satisfied. British Virgin Islands Certificate of Continuance The Company must also make an application to the BVI Registrar (the Continuance Application ) to continue in the BVI. Subject to compliance with all applicable requirements, the BVI Registrar will issue the Company a certificate of continuation (the Certificate of Continuance ). Transition Upon the issue of the Certificate of Continuance by the BVI Registrar, the Company will become a company governed by the laws of the BVI, including the BVI Act, and the M&A will become the constating documents of the Company, replacing the existing CBCA compliant articles and by-law. Consequences of Continuance The BVI Act provides that when a company continues under the BVI Act: the: (i) (ii) (iii) (iv) BVI Act applies to the company as if it had been incorporated under the BVI Act; company is capable of exercising all the powers of a company incorporated under the BVI Act; company is no longer to be treated as a company incorporated under the laws of a jurisdiction outside the BVI; and the memorandum and articles filed as part of the continuation become the memorandum and articles of the company; 13

15 (c) (d) the continuation under the BVI Act does not affect: (i) (ii) the continuity of the company as a legal entity; or the assets, rights, obligations or liabilities of the company; without limiting subsection above, (i) (ii) Discontinuance under the CBCA no conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become due, and no cause existing, against the company or against any shareholder, director, officer or agent thereof, is released or impaired by its continuation as a company under the BVI Act; and no proceedings, whether civil or criminal, pending at the time of the issue by the BVI Registrar of a certificate of continuation by or against the company, or against any shareholder, director, officer or agent thereof, are abated or discontinued by its continuation as a company under the BVI Act, but the proceedings may be enforced, prosecuted, settled or compromised by or against the company or against the shareholder, director, officer or agent thereof, as the case may be; and all shares in the company that were outstanding before the issue by the BVI Registrar of a certificate of continuation shall be deemed to have been issued in conformity with the BVI Act. Pursuant to the CBCA, the Company must file the Certificate of Continuance with the CBCA Director and obtain a certificate of discontinuance. The Company will cease to be governed by the CBCA upon issuance of the certificate of discontinuance, effective as of the date of the Certificate of Continuance. Effect of the Continuance Assuming that the Continuance Resolution is approved by the Shareholders at the Meeting, it is expected that the Company will make an application to the CBCA Director and file the Continuance Application with the BVI Registrar and the procedures outlined above will begin as soon as practicable, as determined by the Board in its sole discretion, in order to give effect to the Continuance. It is currently anticipated that the Continuance would be completed on or about December 31, The Continuance, if approved and implemented, will effect a change in the legal domicile of the Company on the effective date thereof to the laws of the BVI. Upon the Continuance, the Company s registered office in the BVI will be at Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. On the effective date of the Continuance, Shareholders will continue to hold one Common Share of the Company (which will then be domiciled in the BVI) for each Common Share then held (after giving effect to the Share Consolidation, if approved by Shareholders). The share certificates or direct registration statements representing Common Shares will not be cancelled and will continue to represent Common Shares following the Continuance; however, upon a transfer of Common Shares represented by an existing post-consolidation share certificate, a new share certificate in the form adopted by the Company following the Continuance will be issued to the transferee. Furthermore, a new ISIN/CUSIP number will be assigned to the Common Shares following the Continuance. Holders of warrants, stock options and restricted share units of the Company on the effective date of the Continuance will continue to hold warrants, stock options and restricted share units that have rights to purchase, convert into or otherwise acquire, an identical number of Common Shares on the same terms, subject to any adjustments to be made in connection with the Consolidation, as described above under Effects of the Share Consolidation Effect on Convertible Securities, Stock Options and other Arrangements. The principal attributes of the share capital of the Company will be identical, before and after the Continuance, other than differences in Shareholders rights under the BVI Act as compared to the CBCA and as supplemented by the M&A, including those described below under the heading Comparison between Canada and British Virgin Island Law. Immediately following the Continuance, the directors and officers of the Company will remain unchanged; however, the election, duties, resignations and removal of the Company s directors and officers will be governed by the BVI Act and the Company will no longer be subject to the CBCA. Upon completion of the Continuance, the Company s Common Shares will remain listed and traded on the TSX under the symbol ORA. As noted above, on the effective date of the Continuance, the property of the Company will continue to be the property of the Company, the Company will continue to be liable for the obligations of the Company, existing causes of action, claims or liabilities to prosecution of the Company will be unaffected, civil, criminal or administrative actions or proceedings pending by 14

16 or against the Company may be continued to be prosecuted by or against the Company, convictions against the Company may be continued against the Company, and rulings, orders or judgments in favour of or against the Company may be enforced by or against the Company. Background and Reasons for the Continuance The Board of Directors is seeking to implement the Continuance for the following reasons: No requirement to be incorporated and resident in Canada The Company s principal mineral properties are located in Central and South America and the Company has no business operations in Canada, nor does it own any assets there. The Company s Common Shares are listed and traded on the TSX, and this is intended to continue following the Continuance; however, the continued listing does not require the Company to be incorporated in Canada. The BVI has enjoyed a long history of political and economic stability and is considered to be a welldeveloped international business and financial centre. Favourable tax treatment to the Company Since the Company has no commercial connections to Canada, there is no reason for it to be incorporated and resident there and thereby be potentially subject to Canadian income taxes or for it to bear the compliance costs associated with being a Canadian resident for tax purposes. By contrast, the BVI has a simpler tax regime overall. Following the Continuance, under section 242 of the BVI Act (1) the Company, all dividends, interest, rents, royalties, compensations and other amounts paid by the Company, and (c) capital gains realised with respect to any shares, debt obligations or other securities of the Company would be exempt from all provisions of the BVI Income Tax Ordinance; and (2) provided the Company does not own an interest in land in the BVI, all instruments relating to transfers of property to or by the Company, all instruments relating to transactions in respect of shares, debt obligations or other securities of the Company and (c) all instruments relating to other transactions relating to the business of the Company would be exempt from BVI stamp duty. The Company would be subject to payroll tax if it carried on a business activity in the BVI under a BVI trade licence and employed persons resident in the BVI within that business. Following the Continuance, it is possible that the Company may become subject to taxation in other jurisdictions based on its residency. See Risk Factors Maintenance of Tax Residence. Reinvestment of Profits The Company anticipates that because the Company will be exempt from all provisions of the BVI Income Tax Ordinance it will be in a better position to re-invest the profits of the Company into its mines and thereby create additional value for Shareholders. Comparison between Canada and British Virgin Islands Corporate Law The following is a comparison of certain key features of the CBCA and the BVI Act, the statute that will govern the corporate affairs of the Company upon the Continuance. The corporate laws of Canada and the BVI have many points of difference. Provisions have been included in the proposed M&A to align certain matters with the approach taken in the CBCA, some of which are addressed below. Certain key differences are summarized below, however this summary does not purport to be, nor should it be construed to be, an exhaustive analysis of all differences. Shareholders should consult their legal and other advisors regarding implications of the Continuance which may be of particular importance to them. Charter Documents Under the CBCA, a corporation must have articles of incorporation, which require the name of the corporation, the province in which the corporation s registered office is located, the classes and the maximum amount of shares the corporation may issue, the rights, privileges and restrictions that attach to each class of shares (should multiple classes exist), the authority given to directors to fix the number of shares and determine the designation of rights, privileges, restrictions and conditions attaching to shares of each series, a statement that the issue, transfer or ownership of shares of the corporation is restricted if applicable (and a statement as to the nature of such restrictions), the number of directors or a minimum and maximum number of directors, and any restriction on business that the corporation may carry on. The articles of incorporation may also set out provisions permitted by the CBCA or other law that should be set out in the corporation s by-laws. The CBCA further provides that the records of the corporation shall be maintained at the registered office of the corporation, or at such other place in Canada designated by the directors. CBCA corporations such as the Company also generally have by-laws governing the management of the company, although these are not expressly required by the CBCA. Under the BVI Act, the constating documents of a company which has been continued into the BVI are its memorandum and articles. Upon Continuation into the BVI, the Company is required to adopt memorandum and articles that comply with the BVI Act. As part of the Continuation, the Company s current articles and bylaws will be revised so that upon the Continuation, the 15

17 Company s memorandum and articles will comply with the necessary requirements of the BVI Act. The M&A to be adopted upon the Continuance are set out in Schedule B to this Information Circular in their entirety. Certain shareholder protection mechanisms similar to those provided to shareholders under the CBCA, such as, but not limited to, the right to dissent to certain corporate actions, the right to requisition a shareholder meeting and the right to submit a shareholder proposal are included in the M&A. Amendments to the Charter Documents Under the CBCA, any change to the articles of a corporation must be approved by special resolution, other than a change in the corporation s name from a number name to a verbal name. If a proposed amendment requires approval by special resolution, the holders of shares of a class (or of a series of a class, if the proposed amendment would affect such series differently from the other series of shares of such class) are entitled to vote separately as a class or series if the proposed amendment affects the class or series as specified in the CBCA, whether or not the class or series otherwise carries the right to vote. Pursuant to the CBCA, the board of directors of a corporation may make, amend or repeal by-laws provided that any such bylaw, amendment or repeal of a by-law must be confirmed at the next meeting of shareholders by the affirmative vote of a majority of the shareholders entitled to vote thereat. Any by-law or amendment is effective when made by the board of directors but ceases to be effective if not confirmed by the shareholders. Under the BVI Act, subject to any limitation in its memorandum and articles, a BVI company may amend its memorandum and articles by an ordinary resolution of shareholders or, where permitted by its memorandum and articles or by the BVI Act, by a resolution of directors. The M&A, however, will provide for rights substantially the same as those in the CBCA, including with respect to varying the rights attaching to the Common Shares. Sale of All or Substantially All of the Company s Assets Under the CBCA, the sale, lease, or exchange of all or substantially all the property of a corporation, other than in the ordinary course of business, requires shareholder approval by a special resolution (i.e., approval of not less than two-thirds of the votes cast by shareholders in respect of such resolution) and a shareholder is entitled to dissent and to be paid the fair value of shares held by that shareholder. The BVI Act, subject to any limitation in a company s memorandum and articles, requires that any sale, transfer, lease, exchange or other disposition, other than a mortgage, charge or other encumbrance or the enforcement thereof, of more than 50% in value of the assets of a company, subject to certain exceptions, if not made in the usual or regular course of the business carried on by the company, be approved by the directors and by ordinary resolution of shareholders. The Articles to be adopted as part of the Continuance will suspend the application of the BVI Act with respect to the sale of more than 50% of the values of the Company s assets and will contain provisions requiring a special resolution for the sale of all or substantially all of the Company s assets and conferring a right of dissent with respect to any such resolution, aligning with the CBCA approach. Rights of Dissent and Appraisal The CBCA provides that shareholders have the right to dissent to certain actions being taken by the corporation and to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents. The dissent right is available to shareholders of any class if the corporation resolves to: (c) (d) (e) (f) (g) amend its articles to add, remove or change restrictions or constraints on the issue, transfer or ownership of shares of a class of the corporation; amend its articles to add, remove or change any restriction upon the business or businesses that the corporation may carry on; amalgamate with another corporation subject to certain exceptions under the CBCA; be continued under the laws of another jurisdiction; sell, lease or exchange all or substantially all of its property; carry out a going-private or a squeeze-out transaction; or amend its articles so as to modify, directly or indirectly, the rights of shareholders as provided in the articles. 16

18 Under the BVI Act, a shareholder may dissent from certain transactions and receive payment upon redemption of his or her shares. Shareholders may dissent from the following actions: (c) (d) (e) a merger, if the company is a constituent company (being an existing company that is participating in a merger or consolidation with one or more other existing companies) unless the company is the surviving company and the shareholder continues to hold the same or similar shares; consolidation, if the company is a constituent company; the sale, transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in its usual or regular course of business (other than a disposition pursuant to an order of a court having jurisdiction in the matter, a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders in accordance with their respective interests within one year after the date of disposition, and certain transfers of assets of the company in trust for the benefit of the company, its shareholders or creditors or any other person having a direct or indirect interest in the company); a compulsory redemption of shares by a company; and an arrangement, if permitted by the High Court of BVI. The M&A will also provide for dissent rights in certain additional circumstances. The BVI Act sets forth a procedure for exercising the right to dissent and for determination of a fair value for the dissenter s shares. Generally, under the BVI Act, where a shareholder has given notice of his or her election to dissent, the company must make a written offer to each dissenting shareholder to purchase his or her shares at a specified price that the company determines to be their fair value. If within 30 days immediately following the date on which the offer is made, the company and the dissenting shareholder agree upon the price to be paid for the shares, the company shall pay to such shareholder the amount in money upon the surrender of the certificates representing his or her shares. If the company and dissenting shareholder fail, within the aforementioned period of 30 days to agree on the price to be paid for such shares, within 20 days immediately following the date on which the period of 30 days expires, the following applies: (c) (d) the company and the dissenting shareholder shall each designate an appraiser; the two designated appraisers together shall designate a third appraiser; the three appraisers shall fix the value of the shares owned by the dissenting shareholder as of the close of business on the day before the date on which the vote of the shareholders authorizing the action was taken or the date on which written consent of shareholders without a meeting was obtained, excluding any appreciation or depreciation directly or indirectly by the action or its proposal, and that value is binding on the company and the dissenting shareholder for all purposes; and the company shall pay to the shareholder the amount in money upon the surrender by him of the certificates representing his shares. Following the Continuation, the Articles will confer a right of dissent substantially similar to the dissent right available under the CBCA although the procedures to be followed to exercise the right of dissent will be those under the BVI Act as summarized above. Oppression Remedy Under the CBCA, a shareholder, former shareholder, director, former director, officer, former officer of a corporation or any of its affiliates, the CBCA Director, or any other person who, in the discretion of the court, is a proper person to seek an oppression remedy, may apply to the court for an order to rectify the matters complained of where, in respect of a corporation or any of its affiliates, any act or omission of the corporation or its affiliates effects a result, or the business or affairs of the corporation or its affiliates are or have been carried on or conducted in a manner, or the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly prejudicial to or that unfairly disregards the interest of any security holder, creditor, director or officer. The BVI Act provides that if a company or a director of a company engages in, or proposes to engage in, conduct that contravenes the BVI Act or the memorandum and articles of the company, the High Court of BVI may, on the application of a shareholder or a director of the company, make an order directing the company or director to comply with, or restraining the company or director from engaging in conduct that contravenes, the BVI Act or the memorandum and articles. 17

19 If the High Court of BVI makes an order under the BVI Act, it may also grant such consequential relief as it thinks fit. A shareholder may also bring a derivative action in accordance with the BVI Act (see Shareholder Derivative Actions below). A shareholder of a company may also bring an action against the company for breach of a duty owed by the company to him or her as a shareholder. Where a shareholder of a company brings proceedings against the company and other shareholders have the same or substantially the same interest in relation to the proceedings, the High Court of BVI may appoint that shareholder to represent all or some of the shareholders having the same interest and may, for that purpose, make such orders as it thinks fit, including: (c) an order as to the control and conduct of the proceedings; as to the costs of the proceedings; and directing the distribution of any amount ordered to be paid by a defendant in the proceedings among the shareholder represented. A shareholder of a company who considers that the affairs of the company have been, are being or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to him or her in that capacity, may apply to the High Court of BVI for an order. If the High Court of BVI considers that it is just and equitable to do so, it may make such an order as it thinks fit, including, one or more of the following orders: (c) (d) (e) (f) (g) in the case of a shareholder, requiring the company or any other person to acquire the shareholder s shares; requiring the company or any other person to pay compensation to the shareholder; regulating the future conduct of the company s affairs; amending the memorandum and articles of the company; appointing a liquidator of the company; directing the rectification of the records of the company; or setting aside any decision made or action taken by the company or its directors in breach of the BVI Act or the memorandum and articles of the company. Also, shareholders may exercise common law rights to rectify actions which, among other things, are inconsistent with a company s memorandum and articles, the BVI Act or general law, and which are oppressive or have been exercised in bad faith. Also, a shareholder who has not approved a transaction in which the directors have a conflict of interest and which is proven to be unfairly prejudicial to one or more shareholders is capable of impugning such a transaction. Shareholders may also, in appropriate circumstances, petition for a just and equitable winding-up of a company. The High Court of BVI s jurisdiction is an equitable one and, even if a petitioner has standing, his petition may nevertheless not be allowed to proceed. Shareholder Derivative Actions Under the CBCA, a shareholder, former shareholder, director, former director, officer, former officer of a corporation or any of its affiliates, or any other person who, in the discretion of the court, is a proper person, may apply to the court for leave to bring, defend or discontinue an action in the name and on behalf of a corporation or any of its subsidiaries (called a derivative action ) if the directors of the corporation do not bring, diligently prosecute or defend or discontinue the action, and it appears to be in the interests of the corporation that the action be brought, prosecuted, defended or discontinued. Under the BVI Act a shareholder of a company may apply to the BVI court for leave to bring proceedings in the name and on behalf of the company or intervene in proceedings to which the company is a party for the purpose of continuing, defending or discontinuing the proceedings on behalf of the company. The court in determining whether to grant leave to the member shall consider whether the member is acting in good faith, whether the proceedings are likely to succeed, whether the derivative action is in the interest of the company, the cost of the proceedings in relation to the relief to be obtained and whether an alternative remedy to the derivative claim is available. The BVI court must be satisfied that the company does not intend to bring, diligently continue or defend, or discontinue proceedings or it is in the interest of the company that the conduct of the proceedings should not be left to the directors or to the determination of the shareholders as a whole. 18

20 The BVI Act provides that the court may make any order it considers appropriate including an order: (c) (d) Requisition of Meetings authorizing the shareholder or any other person to control the proceedings; giving directions for the conduct of the proceedings; that the company or its directors provide information or assistance in relation to the proceedings; and directing that any amount ordered to be paid by a defendant in the proceedings must be paid, in whole or in part, directly to former and present shareholders of the company instead of to the company. The CBCA provides that one or more shareholders of a corporation holding at least 5% of the issued voting shares in a corporation may give notice to the directors requiring them to call and hold a meeting of shareholders. Further, the CBCA generally provides that on receiving the requisition, the directors shall call a meeting of shareholders to transact the business stated in the requisition. The BVI Act permits the directors of a company or such persons authorized by the memorandum or articles to call the meeting to convene a meeting of the members of the company at any time. The Articles will contain provisions substantially the same as the provisions of the CBCA. Notice of Meetings The CBCA provides that any meeting of shareholders may be convened upon no less than 21 days notice. The Articles will contain provisions substantially the same as the provisions of the CBCA. Voting In order to amend a company s articles, the CBCA requires a resolution passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution. Under the BVI Act, in addition to amending the memorandum or articles of a company, the approval of a majority in excess of 50% of the shareholders of a company is required for: (c) (d) (e) a disposition of more than 50% in value of the company s assets otherwise than in the regular course of its business (subject to the company s memorandum and articles of association); mergers; a compulsory redemption of minority shares; approval or ratification of certain agreements or transactions where a director or liquidator has a conflict of interest; and the rescission of articles of dissolution in the voluntary winding-up of a company. Under the M&A to be adopted as part of the Continuance, except as described below, the vote of shareholders generally required to pass resolutions is a simple majority of the votes of shares entitled to vote thereon and which were present at the meeting and were voted or, if the resolution is consented to in writing, all of the votes attaching to the issued and outstanding shares entitled to vote thereon. The approval of not less than two-thirds of the votes of the shares or class of shares entitled to vote thereon and which were present at the meeting and were voted or, if the resolution is consented to in writing, all of the votes attaching to the issued and outstanding shares or class of shares entitled to vote thereon, is required for certain actions, including: (c) (d) (e) the amendment of the Memorandum of Association of the Company; the variation of rights attached to a class of shares; to increase or decrease the number of directors or the minimum or maximum number of directors; to add, change or remove restriction on the issue, transfer or ownership of shares; and the continuation of our Company. Upon completion of the Continuance, certain actions by the Company that currently require shareholder approval under the CBCA may no longer require such approval (unless the High Court of BVI otherwise orders), and the percentage vote of 19

21 shareholders required to approve certain matters may be lower than the percentage vote of shareholders currently required to approve such matters. Indemnification of Directors The CBCA permits indemnification of a director or officer of the corporation, a former director or officer of the corporation or another individual who acts or acted at the corporation s request as a director or officer, or an individual acting in a similar capacity, of another entity (an Indemnifiable Person ), against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity, if: (i) the individual acted honestly and in good faith with a view to the best interests of the corporation, or as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the corporation s request, and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual s conduct was lawful. The current by-laws of the Company provide for such indemnification. Under the CBCA, a corporation may also, with the approval of the court, indemnify an Indemnifiable Person in respect of an action by or on behalf of the corporation or other entity to procure a judgment in its favour, to which the individual is made a party because of the individual s association with the corporation or other entity against all costs, charges and expenses reasonably incurred by the individual in connection with such action if the individual fulfills the conditions set out in clauses (i) and (ii) above. In any event, an Indemnifiable Person is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual s association with the corporation or other entity as described above, if the Indemnifiable Person was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual out to have done and fulfills the conditions set out in clauses (i) and (ii) above. Under the BVI Act, and subject to subsection (2) of Section 132 of the BVI Act (which makes it a condition that the relevant person must inter alia have acted honestly and in good faith) a company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceeding any person who: is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director of the company; or is or was, at the request of the company, serving as a director of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise. Subsection (1) of Section 132 of the BVI Act only applies to a person referred to in that subsection if the person acted honestly and in good faith with a view to the best interests of the company and, in the case of criminal proceedings, the person has no reasonable cause to believe that his conduct was unlawful. The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the company or that the person had reasonable cause to believe that his conduct was unlawful. If a person referred to in subsection (1) of Section 132 of the BVI Act has been successful in defense of any proceedings referred to in the said subsection (1), the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection with the proceedings. The Articles will contain provisions substantially the same as the provisions of the CBCA. Place of Shareholder Meetings The CBCA provides that meetings of shareholders of a corporation shall be held at the place within Canada provided in the bylaws or, in the absence of such provision, at the place within Canada that the directors determine. A meeting of shareholders may be held outside Canada if the place is specified in the articles or all the shareholders entitled to vote at the meeting agree that the meeting is to be held at that place. The BVI Act, subject to a company s memorandum and articles, permits a meeting of the members of the company to be held at such time and in such place, within or outside the BVI, as the convener of the meeting considers appropriate. 20

22 The Articles will permit any director of the Company to convene meetings of the Shareholders in such places within or outside the British Virgin Islands as the director considers necessary or desirable. Directors and Company Secretary The CBCA provides that a public company must have not fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates. Further, the CBCA requires that at least 25% of the directors of a corporation shall be resident Canadians and, if there are fewer than four directors, one of them must be a resident Canadian. Under the BVI Act, the number of directors must be fixed by the articles of association of a company and subject to any limitation in the memorandum and articles of a company, the articles of association may be amended to change the number of directors, and any amendment may, subject to a company s memorandum and articles, be effected by the company s directors or shareholders. No such amendment is effective until filed at the Registry of Corporate Affairs. A BVI company must have at least one director. The M&A will provide that the Board of Directors shall consist of at least three individuals and no more than seven individuals. There are no residency requirements for directors. Following the Continuance, the Company s existing Board, comprised of five directors (being Paulo de Brito Chairman and Director, Patrick Mars Director, Stephen Keith Director, Juarez Saliba de Avelar Director and Jim Bannantine Chief Executive Officer and Director, all of whom can be contacted at the registered office of the Company), will continue in office. TSX rules regarding independent directors will continue to apply for so long as the Company is listed on the TSX. For example, the TSX requires listed companies to have at least two independent directors. The Company currently has three independent directors. Harneys Corporate Services Limited will be appointed as Company Secretary, and may be contacted at the registered office of the Company following the Continuance. Issuance of Shares The CBCA provides that a share shall not be issued until the consideration for the share is fully paid in money or in property or past services that are not less in value than the fair equivalent of the money that the corporation would have received if the share had been issued for money. Further, directors of a corporation who vote for or consent to a resolution authorizing the issue of a share for consideration other than money are jointly and severally, or solidarily, liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution. The CBCA provides that shares issued by a corporation are non-assessable and the holders are not liable to the corporation or to its creditors in respect thereof. In addition, the CBCA states that a share shall not be issued until the consideration for the share is fully paid in money or in property or past services. Under the BVI Act companies may be authorized to issue a specific number of shares or an unlimited number of shares. Shares may be issued with or without a par value and in any currency. Furthermore, under the BVI Act a company may issue shares which are partly paid or nil paid (although the consideration for a share with par value shall not be less than the par value of the share) and for consideration in any form. The Articles to be adopted as part of the Continuance, however, will contain provisions substantially similar to the provisions of the CBCA and require all shares to be fully paid and prohibit the issuance of shares for a promissory note or other binding obligation to contribute money or property. Share Buybacks Subject to certain solvency requirements, the CBCA permits corporations to redeem their redeemable shares and to purchase any of their shares for cancellation. Under the BVI Act, a company may only redeem its shares if a solvency test similar to the test applicable under the CBCA is satisfied or if a shareholder has a right to have his, her or its shares redeemed. The consent of the shareholder is generally required for a redemption. Form of Proxy and Information Circular for Reporting Issuers In Canada, the CBCA together with provincial securities legislation requires that reporting issuers provide a notice of a general meeting, a form of proxy and an information circular containing prescribed information regarding the matters to be considered at the meeting. As the Company will continue to be a reporting issuer under applicable Canadian securities laws and listed on the TSX following the Continuance, these proxy requirements will continue to apply. 21

23 Entitlement to Information National Instrument Communication with Beneficial Owners of Securities of a Reporting Issuer of the Canadian Securities Administrators ( NI ) applies to all reporting issuers under Canadian securities laws and sets out a scheme pursuant to which reporting issuers, including the Company, shall communicate with both registered and non-registered beneficial shareholders of a company. NI , together with all disclosure requirements of applicable Canadian securities laws and the TSX Company Manual, will continue to apply to the Company following the Continuance. See Securities Law Matters. The Articles will provide for the Company s communication with not only Registered Shareholders, but also their nominees who have beneficial rights to the shares held by the Registered Shareholders. The Articles will provide Shareholders with information rights comparable to those granted under the CBCA. Dividends The CBCA permits directors alone to declare dividends. Under the BVI Act, subject to any limitations or provisions to the contrary in the memorandum and articles of a company, a company may, by resolution of directors, declare and pay dividends in money, shares or other property. Dividends may only be declared if the directors are satisfied that the company is able to satisfy the solvency test set out in the BVI Act which is comparable to the solvency test under the CBCA. Borrowing The CBCA provides that, without shareholder authorization, directors of a corporation may borrow money on the credit of the corporation, may issue, reissue, sell, pledge or hypothecate a debt obligation of the corporation, may give a guarantee on behalf of the corporation to secure performance of an obligation of any person and may mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any obligation of the corporation. Under the BVI Act, directors have similar powers as under the CBCA, unless provided otherwise in the memorandum and articles. The M&A to be adopted following the Continuance will not restrict such powers and the Company will not be subject to a unanimous shareholders agreement following the Continuance. Takeovers Before the Continuance, the take-over bid regime under Canadian provincial securities legislation applies in respect of any proposed takeover of the Company. The Canadian take-over bid rules are expected to continue to apply following the Continuance, however an exemption from those rules may be available in certain circumstances including if Registered Shareholders resident in Canada cease to hold at least 10% of the Company s voting securities and the TSX is not the principal market for trading such voting securities. Shareholder Proposals The CBCA provides that a shareholder who holds at least 1% of the total number of outstanding voting shares of the corporation, provided that such voting shares have a fair market value of at least C$2,000, may submit to the corporation notice of any matter that the shareholder proposes to raise at a meeting called by the corporation and may discuss any such matter at the meeting. If such a proposal is submitted to the corporation at least 90 days before the anniversary of the date of the notice of meeting that was sent to shareholders in connection with the previous annual meeting of shareholders, a corporation who receives such a proposal is required to set out the proposal in its management information circular. There is no comparable provision in the BVI Act. However, the M&A to be adopted following the Continuance will contain provisions substantially the same as those in the CBCA. Securities Matters As a result of the Continuance, the Common Shares will have a new ISIN/CUSIP number. It is not anticipated that this will affect trading on the TSX. The Company will continue to be a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia and to comply with all applicable timely and continuous disclosure requirements prescribed by Canadian securities laws and the TSX Company Manual. It is expected that the Common Shares will, following the Continuance, continue to be tradeable through the relevant bookentry only systems of CDS. Trading in Common Shares following the Continuance would be under the new ISIN/CUSIP number referred to above. 22

24 Certain Canadian Federal Income Tax Considerations The following is a summary of the principal Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations thereunder (collectively, the Tax Act ) as of the date hereof, generally applicable in respect of the Continuance to holders of Common Shares who, at all relevant times, for purposes of the Tax Act and any applicable income tax convention, (i) is or is deemed to be resident in Canada, (ii) beneficially owns the Common Shares as capital property, and (iii) deals at arm s length and is not affiliated with the Company (a Holder ). Common Shares will generally be considered to be capital property to a holder provided such holder does not hold such Common Shares in the course of carrying on a business of trading or dealing in securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade. Certain holders who might not otherwise be considered to hold their Common Shares as capital property may, in certain circumstances, be entitled to have such Common Shares, and all other Canadian securities, as defined in the Tax Act, owned or subsequently acquired by such holders, treated as capital property by making the irrevocable election permitted by subsection 39(4) of the Tax Act (but any such election would not be applicable in respect of such Common Shares on or after the Continuance). This summary is not applicable to a Holder (i) that is a financial institution, as defined in the Tax Act for purposes of the mark-to-market rules, (ii) that is a specified financial institution, as defined in the Tax Act, (iii) an interest in which is a tax shelter investment, as defined in the Tax Act, (iv) that makes or has made a functional currency reporting election pursuant to section 261 of the Tax Act, (v) that has entered or will enter into a derivative forward agreement, as defined in the Tax Act, in respect of the Common Shares, (vi) that is a corporation resident in Canada and that is, or does not deal at arm s length with a corporation resident in Canada that is, at any time controlled by a non-resident corporation for purposes of the foreign affiliate dumping rules in the Tax Act, or (vii) if the Company is at any time a foreign affiliate, as defined in the Tax Act, of such Holder or of another corporation resident in Canada that does not deal at arm s length with the Holder for the purposes of the Tax Act. Such Holders should consult their own tax advisors. Once the Company has been granted the Certificate of Continuance under the BVI Act, it will be deemed, for purposes of the Tax Act, to have been incorporated in the BVI at that time, and as a result will cease to be a resident of Canada provided its central management and control is not situated in Canada. This summary is based on the assumption that, upon the Continuance, the Company will cease to be a resident of Canada for purposes of the Tax Act and that the central management and control of the Company will not be situated in Canada on or after the time of the Continuance. This summary further assumes that pursuant to the applicable corporate law the Company will remain the same corporate entity following the Continuance and that the Continuance will not result in any disposition of the Common Shares or of any property of the Company. This summary is based upon the provisions of the Tax Act in force as of the date hereof, all specific proposals to amend the Tax Act that have been publicly announced prior to the date hereof (the Proposed Amendments ) and counsel s understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (the CRA ) made publicly available in writing prior to the date hereof. This summary assumes the Proposed Amendments will be enacted in the form proposed; however, no assurance can be given that the Proposed Amendments will be enacted in the form proposed, if at all. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not take into account any changes in the law or in the administrative policies or assessing practices of the CRA, whether by legislative, governmental or judicial action, nor does it take into account any other federal or any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Shareholder, and no representations with respect to the income tax consequences to any Shareholder are made. Consequently, Shareholders should consult their own tax advisors for advice with respect to the tax consequences of the Continuance based on their particular circumstances. Effect of Continuance for Holders of Common Shares Except as described below under the heading Effect of Continuance for Dissenting Holders, a Holder will not dispose of his, her or its Common Shares solely as a consequence of the Continuance. Effect of Continuance for Dissenting Holders A Holder who duly and validly exercises CBCA Dissent Rights (a Dissenting Holder ) and who receives a cash payment from the Company in respect of the fair value of Common Shares will be deemed to have disposed of such Common Shares to the Company for proceeds of disposition equal to the amount received by the Holder (excluding the amount of any interest awarded by a court and the amount, if any, treated as a dividend received from the Company for the purposes of the Tax Act). As a result, such Dissenting Holder will generally realize a capital gain (or a capital loss) to the extent that such proceeds of 23

25 disposition net of any reasonable costs of disposition exceed (or are exceeded by) the adjusted cost base to the Dissenting Holder of such Common Shares. If a Dissenting Holder disposes of Common Shares pursuant to CBCA Dissent Rights prior to the Continuance, then the cash payment received by the Dissenting Holder in respect of such Common Shares will generally be deemed to have been received by the Dissenting Holder as a dividend on the Common Shares to the extent that the payment exceeds the paid-up capital of such Common Shares for the purposes of the Tax Act. Any such dividend deemed to be received will be included in the Holder s income for the purposes of the Tax Act. In the case of a Dissenting Holder that is an individual (other than certain trusts), such deemed dividend will be subject to the gross-up and dividend tax credit rules normally applicable in respect of taxable dividends received from taxable Canadian corporations (as defined in the Tax Act). An enhanced dividend tax credit will be available to individuals in respect of eligible dividends designated by the Company to the Dissenting Holder in accordance with the provisions of the Tax Act. Any such dividend deemed to be received by a Dissenting Holder that is a corporation must be included in computing its income but generally will be deductible in computing its taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to be received by a Dissenting Holder that is a corporation as proceeds of disposition or a capital gain. A Dissenting Holder that is a private corporation (as defined in the Tax Act) and certain other corporations controlled by or for the benefit of an individual (other than a trust) or related group of individuals (other than trusts) generally will be liable to pay a refundable tax under Part IV of the Tax Act on dividends received or deemed to be received on the Common Shares to the extent such dividends are deductible in computing such Dissenting Holder s taxable income. Dissenting Holders that are corporations should consult their own tax advisors having regard to their own circumstances. The amount of any capital loss realized by a Dissenting Holder that is a corporation on the disposition of a Common Share pursuant to the exercise of CBCA Dissent Rights may be reduced by the amount of any dividends received by the Dissenting Holder on such Common Share to the extent and under the circumstances prescribed by the Tax Act. Similar rules may apply where a Common Share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Such Dissenting Holders should consult their own tax advisors. One-half of any capital gain (a "taxable capital gain") realized by a Dissenting Holder in a taxation year must be included in the Dissenting Holder s income for the year, and one-half of any capital loss (an "allowable capital loss") realized by a Dissenting Holder in a taxation year must be deducted from taxable capital gains realized by the Dissenting Holder in that year. Allowable capital losses for a taxation year in excess of taxable capital gains for that year generally may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances described in the Tax Act. Interest awarded by a court to a Dissenting Holder will be included in the Dissenting Holder s income for purposes of the Tax Act. A Dissenting Holder that, throughout the relevant taxation year, is a Canadian-controlled private corporation, as defined in the Tax Act, may be liable to pay a refundable tax on its aggregate investment income, which includes interest income and taxable capital gains. Dissenting Holders should consult their own tax advisors concerning the tax consequences of an exercise of CBCA Dissent Rights. Dividends on Common Shares following Continuance Dividends, if any, paid by the Company to a Holder that is an individual after the Continuance will no longer be eligible for the gross-up and dividend tax credit treatment applicable under the Tax Act to dividends received from taxable Canadian corporations. A Holder that is a taxable Canadian corporation will generally be required to include such payments in its income, but will no longer be entitled to the intercorporate dividend deduction in computing taxable income which generally applies to dividends received from taxable Canadian corporations. To the extent that non-canadian withholding tax is payable by a Holder in respect of any dividends received on Common Shares following the Continuance, the Holder may be eligible for a foreign tax credit or deduction under the Tax Act to the extent and under the circumstances described in the Tax Act. Holders should consult their own tax advisors regarding the availability of a foreign tax credit or deduction, having regard to their particular circumstances. Offshore Investment Fund Property Rules The Tax Act contains provisions (the OIF Rules ) which, in certain circumstances, may require a Holder to include an amount in income in each taxation year in respect of the acquisition and holding of Common Shares following the Continuance if (1) the value of such Common Shares may reasonably be considered to be derived, directly or indirectly, primarily from portfolio investments in: (i) shares of the capital stock of one or more corporations, (ii) indebtedness or annuities, (iii) interests in one or more corporations, trusts, partnerships, organizations, funds or entities, (iv) commodities, (v) real estate, (vi) Canadian or 24

26 foreign resource properties, (vii) currency of a country other than Canada, (viii) rights or options to acquire or dispose of any of the foregoing, or (ix) any combination of the foregoing, which are collectively referred to as Investment Assets in this Information Circular; and (2) it may reasonably be concluded that one of the main reasons for the Holder acquiring, holding or having Common Shares was to derive a benefit from portfolio investments in Investment Assets in such a manner that the taxes, if any, on the income, profits and gains from such Investment Assets for any particular year are significantly less than the tax that would have been applicable under Part I of the Tax Act if the income, profits and gains had been earned directly by the Holder. In making the determination under point (2) in the preceding paragraph, the OIF Rules provide that regard must be had to all of the circumstances, including: (i) the nature, organization and operation of any non-resident entity, including the Company following the Continuance, and the form of, and the terms and conditions governing, the Holder s interest in, or connection with, any such non-resident entity, (ii) the extent to which any income, profit and gains that may reasonably be considered to be earned or accrued, whether directly or indirectly, for the benefit of any non-resident entity, including the Company, are subject to an income or profits tax that is significantly less than the income tax that would be applicable to such income, profits and gains if they were earned directly by the Holder, and (iii) the extent to which any income, profits and gains of any non-resident entity, including the Company, for any fiscal period are distributed in that or the immediately following fiscal period. If applicable, the OIF Rules generally require a Holder to include in the Holder s income for each taxation year in which such Holder owns Common Shares the amount, if any, by which (i) the total of all amounts each of which is the product obtained when the Holder s designated cost (as defined in the Tax Act) of Common Shares at the end of a month in the year is multiplied by 1/12 of the aggregate of the prescribed rate of interest for the period including that month plus two percentage points exceeds (ii) any dividends or other amounts included in computing such Holder s income for the year (other than a capital gain) from Common Shares determined without reference to the OIF Rules. Any amount required to be included in computing a Holder s income in respect of Common Shares under these provisions will be added to the adjusted cost base and the designated cost of the Common Shares to the Holder. The CRA has taken the position that the term portfolio investment should be given a broad interpretation. If the term portfolio investment should be given a broad interpretation, and even if the value of Common Shares may reasonably be considered to be derived, directly or indirectly, primarily from portfolio investments in Investment Assets, the OIF Rules will apply to a Holder only if it is reasonable to conclude that one of the main reasons for the Holder acquiring, holding or having Common Shares was to derive a benefit from Investment Assets in such a manner that the taxes, if any, on the income, profits and gains from such Investment Assets for any particular year are significantly less than the tax that would have been applicable under Part I of the Tax Act if the income, profits and gains had been earned directly by the Holder. Foreign Property Information Reporting after Continuation Subsequent to the Continuance, a Holder may need to comply with certain foreign property information reporting applicable to a specified Canadian entity holding specified foreign property (as such terms are defined in the Tax Act) with a tax cost which exceeds C$100,000. Holders should consult their own tax advisors as to whether they must comply with these reporting requirements. In general, a Holder that is a specified Canadian entity (as defined in the Tax Act) for a taxation year or a fiscal period and whose total cost amount (as defined in the Tax Act) of specified foreign property (as defined in the Tax Act), and including Common Shares following the Continuance, at any time in the year or fiscal period exceeds C$100,000 will be required to file an information return with the CRA for the taxation year or fiscal period disclosing certain prescribed information in respect of such property. Subject to certain exceptions, a taxpayer resident in Canada, other than a corporation or trust exempt from tax under Part I of the Tax Act, will be a specified Canadian entity, as will certain partnerships. Common Shares will be specified foreign property to a Holder following the Continuance. Penalties may apply where a Holder fails to file the required information return in respect of such Holder s specified foreign property on a timely basis in accordance with the Tax Act. The reporting rules in the Tax Act relating to specified foreign property are complex and this summary does not purport to address all circumstances in which reporting may be required by a Holder. Holders should consult their own tax advisors regarding the reporting rules contained in the Tax Act. The Company The corporate emigration rules under the Tax Act will apply to the Company upon the Continuance. As a result, the Company will be deemed to have a tax year end immediately prior to the Certificate of Continuance being granted under the BVI Act. Each property owned by the Company immediately before the deemed year end will be deemed to have been disposed of by the Company for proceeds of disposition equal to the fair market value of each such property at that time. Any 25

27 gains or losses realized by the Company from the deemed disposition will be taken into account when determining the amount of the Company s taxable income for the taxation year which is deemed to end immediately before the Continuance. The amount of any taxable income so determined will be subject to tax in accordance with the provisions of the Tax Act. The Company will also be required to pay a special branch tax generally equal to 25% of the amount by which the fair market value of the Company s assets exceeds the aggregate of its liabilities and the paid-up capital of its issued and outstanding shares immediately before the Continuance. In certain circumstances, the paid-up capital of the issued and outstanding shares of the Company may be deemed to be nil for this purpose if (i) the Company is or becomes a foreign affiliate of another corporation that is a resident in Canada for purposes of the Tax Act, and (ii) that other corporation is controlled at the time of the Continuance by a corporation that is not a resident for Canada for the purposes of the Tax Act. The Corporation does not expect to have any material amount of tax to pay under the Tax Act (or under any applicable provincial or territorial tax legislation) as a result of the Continuance. Eligibility for Investment Provided that the Common Shares remain listed on a designated stock exchange for purposes of the Tax Act (which currently includes the TSX), the Common Shares will, following the Continuance, remain qualified investments under the Tax Act for trusts governed by registered retirement saving plans ( RRSPs ), registered retirement income funds ( RRIFs ), registered education savings plans, deferred profit sharing plans, registered disability savings plan and tax-free savings accounts ( TFSAs ). Notwithstanding that Common Shares may be qualified investments for a trust governed by an RRSP, RRIF or TFSA, the holder of a TFSA or the annuitant of an RRSP or RRIF, as the case may be, will be subject to a penalty tax if the Common Shares are a prohibited investment within the meaning of the Tax Act for such TFSA, RRSP or RRIF. The Common Shares will not be prohibited investments for a TFSA, RRSP or RRIF provided the holder of the TFSA or annuitant of the RRSP or RRIF, as the case may be, (i) deals at arm s length with the Company for purposes of the Tax Act, and (ii) does not have a significant interest, as defined in the Tax Act, in the Company. In addition, Common Shares will not be a prohibited investment if the Common Shares are excluded property, as defined in the Tax Act, for trusts governed by a TFSA, RRSP and RRIF. Holders who hold Common Shares in a TFSA, RRSP or RRIF are urged to consult their personal tax advisors. Certain British Virgin Islands Tax Considerations Following the Continuance, under section 242 of the BVI Act (1) the Company, all dividends, interest, rents, royalties, compensations and other amounts paid by the Company and (c) capital gains realised with respect to any shares, debt obligations or other securities of the Company would be exempt from all provisions of the BVI Income Tax Ordinance; and (2) provided the Company does not own an interest in land in the BVI, all instruments relating to transfers of property to or by the Company, all instruments relating to transactions in respect of shares, debt obligations or other securities of the Company and (c) all instruments relating to other transactions relating to the business of the Company would be exempt from BVI stamp duty. The Company would be subject to payroll tax if it carried on a business activity in the BVI under a BVI trade licence and employed persons resident in the BVI within that business. Rights of Dissent to the Continuance The CBCA expressly provides Registered Shareholders with the right to dissent to the Continuance (the CBCA Dissent Rights ). If the Continuance Resolution is approved, any Registered Shareholder who dissents to the Continuance is entitled to be paid by the Company the fair value of the Common Shares held on behalf of any one beneficial owner and registered in such Shareholder s name, in accordance with section 190 of the CBCA. The fair value of Shareholders Common Shares will be determined as of the close of business on the business day before the approval of the Continuance Resolution. The following summary does not purport to be a comprehensive description of the procedures to be followed by a Shareholder seeking to exercise its CBCA Dissent Rights with respect to the Continuance Resolution and is qualified in its entirety by reference to section 190 of the CBCA, which is set out in Schedule C to this Information Circular. The CBCA requires strict adherence to the procedures it establishes in relation to the CBCA Dissent Rights. Failure to adhere to such procedures may result in a Shareholder s loss of all CBCA Dissent Rights with respect to the Continuance Resolution. Accordingly, each Shareholder who wishes to exercise CBCA Dissent Rights should carefully consider and comply with the provisions of section 190 of the CBCA and consult its legal and tax advisors. 26

28 CBCA Dissent Rights are restricted by sub-section 190(4) of the CBCA, which stipulates that there shall be no partial dissent. Shareholders wishing to exercise their CBCA Dissent Rights may only claim with respect to all of the Common Shares held on behalf of any one beneficial owner and registered in its own name. Many Common Shares are beneficially owned by a Non-Registered Shareholder and such Common Shares are registered either (i) in the name of an Intermediary that the beneficial Shareholder deals with in respect of such Common Shares, such as banks, trust companies, securities brokers, trustees and other similar entities, or (ii) in the name of a depository, such as CDS, of which the Intermediary is a participant. Accordingly, a Non-Registered Shareholder is not entitled to exercise his or her CBCA Dissent Rights directly (unless the Common Shares are re-registered in the Non-Registered Shareholder's name). A Non- Registered Shareholder who wishes to exercise CBCA Dissent Rights should immediately contact the Intermediary with whom the Non-Registered Shareholder deals in respect of its Common Shares and either: (i) instruct the Intermediary to exercise the CBCA Dissent Rights on the Non-Registered Shareholder's behalf (which, if the Common Shares are registered in the name of CDS or any other clearing agency, may require that such Common Shares first be re-registered in the name of the Intermediary), or (ii) instruct the Intermediary to re-register such Common Shares in the name of the Non-Registered Shareholder, in which case the Non-Registered Shareholder would have to exercise the CBCA Dissent Rights directly. Pursuant to subsection 190(5) of the CBCA, a dissenting Shareholder who seeks payment of the fair value of its Common Shares must deliver to the Company a written objection to the Continuance at or before the Meeting (or, if the Meeting is adjourned or postponed, at or before the reconvened or postponed Meeting). If the written objection is delivered before the Meeting, it is to be delivered to the Company, c/o TSX Trust, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1. A vote against the Continuance Resolution, an abstention from voting on the Continuance Resolution, or the execution or exercise of a proxy to vote against the Continuance Resolution does not constitute a notice of dissent. However, a Shareholder need not vote against the Continuance Resolution in order to dissent. Further, a Shareholder who consents to or votes in favour of the Continuance Resolution, other than as a proxy for another Shareholder whose proxy required an affirmative vote, or otherwise acts inconsistently with the dissent, will not be entitled to exercise any CBCA Dissent Rights. If the Continuance Resolution is approved by the Shareholders, the Company must notify each Shareholder who sent a written objection in respect of the Continuance (unless such Shareholder voted for the Continuance Resolution or has withdrawn its objection). Within 20 days of receiving such notice from the Company, (or, if such dissenting Shareholder does not receive such notice, within 20 days after learning of the approval of the Continuance Resolution), the dissenting Shareholder must send to the Company a written notice containing its name and address, the number of Common Shares in respect of which the Shareholder dissents and a demand for payment of the fair value of such Common Shares. Within 30 days of sending such written notice, the Shareholder must send to the Company or TSX Trust the Common Share certificate(s) in respect of which the Shareholder dissents. A dissenting Shareholder who fails to send such Common Share certificates to the Company within 30 days forfeits the right to make a claim under section 190 of the CBCA. TSX Trust will endorse on the share certificates received from a dissenting Shareholder a notice that the Shareholder is exercising his or her CBCA Dissent Rights and will forthwith return the certificates to such Shareholder. Pursuant to section 190 of the CBCA, upon sending a written demand for payment to the Company, a Shareholder ceases to have any rights as a Shareholder other than the right to be paid the fair value of the Shareholder's Common Shares, which fair value shall be determined as of the close of business on the business day before the adoption of the Continuance Resolution, except where: (c) the dissenting Shareholder withdraws the demand for payment before the Company makes an offer to purchase the Common Shares in respect of which the Shareholder dissents, the Company fails to make an offer to purchase such Common Shares and the dissenting Shareholder withdraws the demand for payment, or the Board terminates the application for the Continuance, in which case the rights as a Shareholder will be reinstated as of the date the dissenting Shareholder sent the demand for payment. If the Continuance becomes effective, the Company will be required to send to each dissenting Shareholder who has sent demand for payment, not later than seven days after the later of (i) the day the Continuance Resolution is approved, or (ii) the day on which the Company receives the demand for payment, a written offer to pay for such Shareholder's Common Shares such amount as the Board considers fair value and a statement showing how the fair value was determined. The Company must pay for the Common Shares of a dissenting Shareholder within 10 days after an offer to pay has been accepted by such dissenting Shareholder. Any such offer lapses, however, if the Company does not receive an acceptance 27

29 thereof within 30 days after such offer is made. If the Company fails to make an offer to pay or a dissenting Shareholder fails to accept such an offer, the Company may, within 50 days after the Continuance Resolution is approved or within such further period as the Court (defined below) may allow, apply to the Ontario Superior Court of Justice (the Court ) to fix the fair value of such Common Shares. There is no obligation of the Company to apply to the Court. If the Company fails to make such an application, a dissenting Shareholder has the right to so apply within a further 20 days, or within such further period as the Court may allow. A dissenting Shareholder is not required to give security for costs in such an application. Upon an application to the Court, all dissenting Shareholders whose Common Shares have not been purchased by the Company will be joined as parties and be bound by the decision of the Court, and the Company will be required to notify each affected dissenting Shareholder of the date, place and consequences of the application and of the right to appear and be heard in person or by counsel. Upon any such application to the Court, the Court may determine whether any other person is a dissenting Shareholder who should be joined as a party, and the Court will then fix a fair value for the Common Shares of all dissenting Shareholders who have not accepted an offer to pay from the Company. The final order of the Court will be rendered against the Company in favour of each dissenting Shareholder and for the amount of Common Shares as fixed by the court. The Court may, in its discretion, allow a reasonable rate of interest on the amount payable to each such dissenting Shareholder from the date the Continuance Resolution is approved until the date of payment. The foregoing summary does not purport to provide a comprehensive statement of the procedures to be followed by a dissenting Shareholder who seeks payment of fair value of its Common Shares. Section 190 of the CBCA requires strict compliance with the procedures established therein. Failure to so comply may result in the loss of a Shareholder's CBCA Dissent Rights. Accordingly, each Shareholder who desires to exercise its CBCA Dissent Rights should (i) carefully consider and comply with section 190 of the CBCA, the full text of which is set out in Schedule C to this Information Circular, (ii) consult his, her or its own legal advisor, and (iii) consult his, her, or its own tax advisor regarding the income tax consequences of such action. Form of Special Resolution and Vote Required A copy of the full text of the Continuance Resolution is set out in Schedule A to this Information Circular. In order to be effective, the Continuance Resolution must be approved by not less than two-thirds (66 2/3 %) of the votes cast by Shareholders present in person or by proxy at the Meeting. Recommendation of the Board of Directors The Board of Directors believes that the proposed Continuance is in the best interests of the Company and recommends that the Shareholders vote FOR the Continuance Resolution to approve the Continuance. Unless contrary instructions are indicated on the Form of Proxy or the voting instruction form, the persons designated in the accompanying Form of Proxy or voting instruction form intend to vote for the Continuance Resolution to approve the Continuance. RISK FACTORS As stated above, this Information Circular should be read in conjunction with the Company s AIF and MD&As, which disclose certain general risks faced by the Company and its subsidiaries. In addition to these general risks, the Company has identified additional risks with respect to the Share Consolidation and Continuance which are described below. Accordingly, Shareholders should consider carefully the specific risk factors set out below in addition to the other information contained in this Information Circular. If any of the risks identified below and in the Company s AIF and MD&As materialize, the business, financial condition, results or future operations of the Company could be materially and adversely affected. In such circumstances, the trading price of the Common Shares could decline and Shareholders could lose part or all of their investment in the Common Shares. In addition, the risks below, as well as those in the Company s AIF and MD&As, are not the only risks to which the Company may be subject. The Company may be unaware of certain risks or believe certain risks to be immaterial which later prove to be material. Therefore, the information set out in this Information Circular should be carefully considered, together with the risks normally associated with businesses of a similar nature to the Company, the risks disclosed in the Company s AIF and MD&As mentioned above, and those risks described below which solely relate to the Share Consolidation and Continuance. 28

30 Certain Risk Factors Associated with the Share Consolidation No Guarantee of an Increased Share Price Reducing the number of issued and outstanding Common Shares through the Share Consolidation is intended, absent other factors, to increase the per share market price of the Common Shares; however, the market price of the Common Shares is, and will continue following the Share Consolidation also be based on the Company s financial and operational results, its available capital and liquidity resources, the state of the market for the Common Shares at the time, general economic, geopolitical, market and industry conditions, the market perception of the Corporation s business and other factors and contingencies, which are unrelated to the number of Common Shares outstanding. As a result, there can be no assurance that the market price of the Common Shares will in fact increase following the Share Consolidation or will not decrease in the future. For example, based on the closing price of the Common Shares on the TSX on November 11, 2016 of C$0.175 per Common Share, if the Board of Directors decided to implement the Share Consolidation and select a share consolidation ratio of one post-consolidation Share for every six pre-consolidation Common Shares, there can be no assurance that the post-consolidation market price of the Common Shares would be C$1.05 per Common Share or greater. If the market price of the Common Shares is lower than it was before the Share Consolidation, the respective total market capitalization of the Common Shares after the Share Consolidation may be lower than before the Share Consolidation. In addition, in the future, the market price of the Common Shares following the Share Consolidation may not exceed or remain higher than the market price prior to the Share Consolidation. No Guarantee of Improved Trading Liquidity While the Board of Directors believes that a higher Common Share price could help to attract institutional investors, investments funds and others who have internal policies that prohibit them from purchasing stocks below a certain minimum price and, in respect of institutional investors, tend to discourage individual brokers from recommending such stocks to their customers, the Share Consolidation may not result in a per share market price that will attract institutional investors, investment funds or others and such Common Share price may not satisfy the investing guidelines of institutional investors, investment funds or others. As a result, the trading liquidity of the Common Shares may not improve. Potential Decline of Market Capitalization If the Share Consolidation is effected and the market price of the Common Shares declines, the percentage decline as an absolute number and as a percentage of the Company s overall market capitalization may be greater than would occur in the absence of the Share Consolidation. In many cases, both the total market capitalization of a company and the market price of such company s shares following a share consolidation are lower than they were before the share consolidation. Furthermore, the liquidity of the Common Shares could be adversely affected by the reduced number of Common Shares that would be outstanding after the Share Consolidation. Shareholders may hold odd lots following the Share Consolidation The Share Consolidation may also result in some Shareholders owning odd lots of less than a board lot (as defined in the TSX Company Manual). Odd Lots may be more difficult to sell, or require greater transaction costs per Common Share to sell, than Common Shares in board lots. Certain Risk Factors Associated with the Continuance Changes to Tax Law The laws relating to taxation in the BVI or any other relevant jurisdiction (including any jurisdiction where the Company becomes resident for tax purposes) may change, which could adversely affect the financial prospects of the Company and/or the returns available to Shareholders. Any change in such tax legislation could impose a new tax liability. Maintenance of Tax Residence The composition of the Board, the place of residence of the individual members of the Board and senior management and the location(s) in which the Board makes decisions and holds meetings will be important in ensuring that the Company is not tax resident in Canada. The Company currently only has two resident Canadian directors and it intends to ensure that central management and control of the Company will not be situated in Canada at and following the time of the Continuance. Failure to establish tax residence in the BVI, however, could potentially lead to the Company being considered tax resident in a jurisdiction other than the BVI, which in turn could have a material adverse effect on the Company's business, financial condition and prospects and/or operating results. 29

31 Rights of Shareholders and Fiduciary Duties owed by the Board will be Governed by BVI Law and the M&A It is intended that the Company be continued under the BVI Act. The rights of Shareholders and the fiduciary duties that the Board owes to the Company and Shareholders will be governed by BVI law and the M&A. As a result, the rights of Shareholders and the fiduciary duties owed to them and the Company will differ from those under the CBCA and may differ in material respects from the rights and duties that would be applicable if the Company were organized under the laws of a different jurisdiction or if the Company was not permitted to vary such rights and duties in its M&A. See Comparison between Canada and BVI Corporate Law. AUDITOR PricewaterhouseCoopers LLP, Chartered Accountants, have been the auditors of the Company since July 6, Interest of Certain Persons in Matters to be Acted Upon ADDITIONAL INFORMATION No person who is either: a director or executive officer of the Company who has held such position at any time since the beginning of the last financial year; or an associate or affiliate of a person in has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting other than as set forth in this Information Circular. Interest of Informed Persons in Material Transactions No director or executive officer of the Company or any of its subsidiaries, no person who beneficially owns, directs or controls, directly or indirectly, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common Shares, no proposed director of the Company and no associate or affiliate of any of the foregoing persons has or has had any material interest, direct or indirect, in any transaction since the commencement of the Company's most recently completed financial year or in any proposed transaction which in either such case has materially affected or would materially affect the Company or any of its subsidiaries. Management Contracts No management functions of the Company or any of its subsidiaries are to any significant degree performed by a party other than the directors and executive officers of the Company or its subsidiaries except for as set forth below. Effective January 1, 2015, the services of Mr. Bannantine are provided through a management consulting services agreement between Acumen Capital LLC ( Acumen ) (a wholly-owned company of Mr. Bannantine and with an address of 5230 Casbury Drive, San Antonio, Texas, 78249) and the Company. Pursuant to the agreement, Acumen Capital LLC is paid an annual fee of US$495,000 (paid in accordance with the Company s payroll schedule) and Mr. Bannantine is solely responsible for performing the management functions provided to the Company. For the year ended December 31, 2015, the Company paid consulting fees to Acumen of US$798,000 (2014: US$Nil). As at September 30, 2016, the Company owed US$437,000 (December 31, 2015: US$300,000) to Acumen. Other Matters Management of the Company knows of no matters to come before the meeting other than those referred to in the Notice of Meeting accompanying this Information Circular. However, if any other matters properly come before the meeting, it is the intention of the persons designated by management as proxyholders in the form of proxy accompanying this Information Circular to vote the same in accordance with their best judgment of such matters. Additional Information Additional information relating to the Company may be found on SEDAR at or on the Company s website at Financial information is provided in the Company s audited financial statements as of and for the year ended December 31, 2015 and management discussion and analysis related thereto, and the Company s condensed interim consolidated financial statements as of and for the three and six month periods ended June 30, 2016 and 2015 and management discussion and analysis related thereto, which can be found on SEDAR. A copy of the Company s audited consolidated financial statements for the year ended December 31, 2015, the management s discussion and analysis relating thereto and AIF may be found on SEDAR at or be obtained free of charge by contacting us by phone at or via at info@auraminerals.com. 30

32 APPROVAL OF DIRECTORS The contents and the sending of this Circular have been approved by the Board of Directors of the Company. DATED as of the 11 th day of November, (signed) Jim Bannantine Director 31

33 Consolidation Resolution BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT: SCHEDULE A THE RESOLUTIONS 1. Aura Minerals Inc. (the Company ) be and is hereby authorized to (i) apply for a certificate of amendment under the Canada Business Corporations Act (the CBCA ); or (ii) should the Company have been continued into the British Virgin Islands (the BVI ) under Part X of the BVI Business Companies Act, 2004, as amended from time to time, to file for registration a notice of amendment in the approved form or a restated memorandum or articles incorporating the amendment made to amend its Articles of Continuance, as amended, to change the number of issued and outstanding common shares (the Common Shares ) in the capital of the Company by consolidating the issued and outstanding Common Shares on the basis of no more than (A) one new post-consolidation Common Share for every 10 pre-consolidation Common Shares, and no less than (B) one new post-consolidation Common Share for every 6 pre-consolidation Common Shares (the Share Consolidation ), and in the event that the Share Consolidation would otherwise result in a holder of Common Shares (a Shareholder ) holding a fraction of a Common Share, such Shareholder shall not receive any whole new Common Share for each such fraction, and any and all fractional Common Shares to which Shareholders would otherwise be entitled as a result of the Share Consolidation shall be cancelled, such amendment to become effective at a date in the future to be determined by the board of directors of the Company (the Board ) when the Board considers it to be in the best interests of the Company to implement such a Share Consolidation, but in any event not later than June 30, 2017, subject to approval of the Toronto Stock Exchange; 2. Notwithstanding that this special resolution has been duly passed by the Shareholders, the Board is authorized, in its sole discretion, to determine, at any time, to proceed or not to proceed with the Share Consolidation and to revoke this special resolution at any time prior to the implementation of the Share Consolidation without further notice to, or approval of, the Shareholders, and in such case, this resolution approving the Share Consolidation shall be deemed to have been rescinded; and 3. Any director or any officer of the Company be, and each of them is hereby, authorized and directed for and on behalf of the Company, to execute and deliver such notices and documents, including, without limitation, articles of amendment to the Director under the CBCA or a notice of amendment or a restated memorandum or articles to the Registrar of Corporate Affairs in the BVI, as applicable, and to do such acts and things as, in the opinion of that person, may be necessary or desirable to give effect to this special resolution, such determination to be conclusively evidenced by the execution and delivery of such documents or the doing of any such act or thing. Continuance Resolution BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT: 1. The continuance (the Continuance ) of Aura Minerals Inc. (the Company ) out of the federal jurisdiction of Canada and into the British Virgin Islands ( BVI ) under Part X of the BVI Business Companies Act, 2004, as amended from time to time, (the BVI Act ) is hereby authorized and approved subject to the right of the board of directors of the Company (the Board ) to abandon the continuance without further approval of the shareholders (the Shareholders ) of the Company; 2. Pursuant to section 188 of the Canada Business Corporations Act (the CBCA ), the Board is hereby, authorized, directed and empowered to take all such steps as are necessary or desirable for the Company to become a company continued under the BVI Act, including without limitation making all filings required to be made to the Director under the CBCA (the Director ) and to the Registrar of Corporate Affairs in the BVI; 3. Effective on the date of the Continuance, subject to the issuance by the Registrar of Corporate Affairs for the BVI of a certificate of continuation (the Certificate of Continuation ) and without affecting the validity of the Company and the existence of the Company by or under its charter documents and of any act done thereunder, the memorandum of association and articles of association (the Memorandum of Association and Articles of Association ) substantially in the form attached as Schedule B to the management information circular of the Company dated November 14, 2016 are hereby adopted as the charter documents of the Company and, in A-1

34 connection therewith, all amendments to the existing articles of the Company to be implemented by the adoption of the Memorandum of Association and Articles of Association are hereby approved the Board is authorized to make such additions or deletions to the form of Memorandum of Association and Articles of Association as the Board may deem necessary or advisable to give effect to these resolutions; 4. Subject to the issuance of the Certificate of Continuance, the repeal of the Company s current by-law is hereby authorized; 5. A duly authorized signatory of Harneys Corporate Services Limited ( Harneys ) be and is hereby authorized to sign the Memorandum of Association and Articles of Association of the Company for and on behalf of the Board pursuant to section 181(4) of the BVI Act; 6. Effective upon the Continuance the registered agent of the Company shall be Harneys Corporate Services Limited of Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, VG 1110, British Virgin Islands; 7. Effective upon the Continuance the registered office of the Company be situated at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, VG 1110, British Virgin Islands; 8. Harneys be and is hereby authorized to file the requisite documents with the Registrar of Corporate Affairs in the BVI to effect the change authorized by these resolutions; 9. Notwithstanding that this special resolution has been duly passed by the Shareholders, the Board is authorized, in its sole discretion, to determine, at any time, to proceed or not to proceed with the Continuance and to abandon this special resolution at any time prior to the implementation of the Continuance without further notice to, or approval of, the Shareholders and in such case, this resolution approving the Continuance shall be deemed to have been rescinded; and 10. Any director or any officer of the Company be, and each of them is hereby, authorized and directed for and on behalf of the Company, to execute and deliver such notices and documents and to do such acts and things as in the opinion of that person, may be necessary or desirable to give effect to this special resolution, such determination to be conclusively evidenced by the execution and delivery of such documents or the doing of any such act or thing. A-2

35 SCHEDULE B MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION British Virgin Islands BVI Business Companies Act 2004 Memorandum of Association and Articles of Association of AURA MINERALS INC. Continued on the [ ] day of [ ] HARNEYS CORPORATE SERVICES LIMITED Craigmuir Chambers Road Town Tortola British Virgin Islands B-1