NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 25, 2018 TO THE HOLDERS OF COMMON SHARES

Transcription

1 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 25, 2018 TO THE HOLDERS OF COMMON SHARES Notice is hereby given that an annual meeting (the "Meeting") of the holders ("Shareholders") of common shares (the "Common Shares") of Chronos Resources Ltd. ("Chronos" or the "Corporation") will be held at the offices of Burnet, Duckworth and Palmer LLP, Suite 2400, th Avenue S.W., Calgary, Alberta, on Thursday, January 25, 2018 at 10:00 a.m. (Calgary time), to: 1. receive the financial statements of the Corporation for the year ended December 31, 2016; 2. fix the number of directors to be elected at the Meeting at six (6); 3. elect six (6) directors of the Corporation; 4. appoint KPMG LLP as the auditors of the Corporation for the ensuing year, and authorize the directors to fix their remuneration; and 5. transact such further and other business as may properly come before the Meeting or any adjournment or adjournments thereof. The nature of the business to be transacted at the Meeting and the specific details of the matters proposed to be put to the Meeting are described in further detail in the accompanying Information Circular Management Proxy Statement of the Corporation dated December 27, The board of directors of the Corporation has fixed the record date for the Meeting at the close of business on December 22, 2017 (the "Record Date"). Holders of Common Shares whose names have been entered in the register of Shareholders at the close of business on the Record Date will be entitled to receive notice of and to vote on all matters to be voted on at the Meeting, provided that, to the extent a Shareholder transfers the ownership of any of such Common Shares after such date and the transferee of those Common Shares establishes that he, she or it owns the Common Shares and requests, not later than 10 days before the Meeting, to be included in the list of Shareholders eligible to vote at the Meeting, such transferee will be entitled to vote those Common Shares at the Meeting. A Shareholder may attend the Meeting in person or may be represented by proxy. Shareholders who are unable to attend the Meeting or any adjournment thereof in person are requested to date, sign and return the accompanying form of proxy for use at the Meeting or any adjournment thereof. To be effective, the enclosed proxy must be received by: (i) by mail using the enclosed return envelope or one addressed to Odyssey Trust Company, th Ave SW, Calgary, Alberta, T2P 3C4; (ii) by hand delivery to Odyssey Trust Company at the same; (iii) by facsimile to ; or (iv) by internet by clicking Vote Proxy at and following the instructions provided. If you vote through the internet, you may also appoint another person to be your proxyholder. You will require your 12-digit control number found on your proxy form. Your proxy must be received no later than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the time set for the Meeting or any adjournment thereof. No instrument appointing a proxy shall be valid after the expiration of twelve (12) months from the date of its execution.

2 The instrument appointing a proxy shall be in writing and shall be executed by the Shareholder or his or her attorney authorized in writing or, if the Shareholder is a corporation, under its corporate seal, if such corporation's constating documents so require, and signed by an officer or attorney thereof duly authorized. The persons named in the enclosed form of proxy are directors and/or officers of Chronos. Each Shareholder has the right to appoint a proxyholder other than such persons named in the form of proxy, who need not be a Shareholder, to attend and to act for such Shareholder and on such Shareholder's behalf at the Meeting. To exercise such right, the names of the nominees of management should be crossed out and the name of the Shareholder's appointee should be legibly printed in the blank space provided. In the event of a strike, lockout or other work stoppage involving postal employees, all documents required to be submitted by a Shareholder should be delivered to Odyssey Trust Company by hand. DATED at Calgary, Alberta this 27 th day of December, BY ORDER OF THE BOARD OF DIRECTORS (signed) "Michael C. Erickson" Michael C. Erickson President, Chief Executive Officer and a Director

3 Solicitation of Proxies INFORMATION CIRCULAR - MANAGEMENT PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 25, 2018 INTRODUCTION AND GENERAL PROXY INFORMATION This Information Circular - Management Proxy Statement (the "Information Circular") is furnished in connection with the solicitation of proxies by the management of Chronos Resources Ltd. ("Chronos" or the "Corporation") for use at the annual meeting (the "Meeting") of the holders (the "Shareholders") of common shares (the "Common Shares") of the Corporation to be held at the offices of Burnet, Duckworth and Palmer LLP, Suite 2400, th Avenue S.W., Calgary, Alberta, on Thursday, January 25, 2018 at 10:00 a.m. (Calgary time), or at any adjournment or adjournments thereof, for the purposes set forth in the Notice of Meeting accompanying this Information Circular. Unless otherwise stated, the information contained in this Information Circular is given as at December 27, No person has been authorized by Chronos to give any information or make any representations in connection with the matters herein described other than those contained in this Information Circular and, if given or made, any such information or representation must not be relied upon as having been authorized by Chronos. Each outstanding Common Share is entitled to one vote on each resolution voted on at the Meeting. The board of directors of Chronos (the "Board") has fixed the record date for the Meeting at the close of business on December 22, 2017 (the "Record Date"). Shareholders of record as at the Record Date are entitled to receive notice of the Meeting and to vote those Common Shares included in the list of Shareholders entitled to vote at the Meeting prepared as at the Record Date, unless any such Shareholder transfers Common Shares after the Record Date and the transferee of those Common Shares, having produced properly endorsed certificates evidencing such Common Shares or having otherwise established that he, she or it owns such Common Shares, demands, not later than 10 days before the Meeting, that the transferee's name be included in the list of Shareholders entitled to vote at the Meeting, in which case such transferee shall be entitled to vote such Common Shares at the Meeting. A quorum for the transaction of business at the Meeting shall consist of two or more persons either present in person or represented by proxy and representing in the aggregate not less than 5% of the Common Shares entitled to vote at the Meeting. Appointment of Proxies Those Shareholders who desire to be represented at the Meeting by proxy must deposit their proxy: (i) by mail using the enclosed return envelope or one addressed to Odyssey Trust Company, th Ave SW, Calgary, Alberta, T2P 3C4; (ii) by hand delivery to Odyssey Trust Company at the same address; (iii) by facsimile to ; or (iv) by internet by clicking Vote Proxy at and following the instructions provided. If you vote through the internet, you may also appoint another person to be your proxyholder. You will require your 12-digit control number found on your proxy form. Your proxy must be received no later than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the time set for the Meeting or any adjournment thereof. A proxy must be executed by the Shareholder, or his attorney authorized in writing, or if the Shareholder is a corporation, under its seal, if such corporation's

4 2 constating documents so require, and signed by an officer or attorney thereof duly authorized. A proxy is valid only at the Meeting in respect of which it is given or any adjournment of the Meeting. The persons named in the accompanying form of proxy are directors and/or officers of Chronos. As a Shareholder submitting a proxy you have the right to appoint a person (who need not be a Shareholder) to attend and act on your behalf at the Meeting other than the person or persons named in the form of proxy. To exercise this right, you must strike out the name of the persons named in the form of proxy and insert the name of the desired representative in the blank space provided, or complete another appropriate form of proxy and, in either case, deposit the proxy with Odyssey Trust Company at the place and within the time specified above for the deposit of proxies. Persons Making the Solicitation The solicitation is being made on behalf of the management of Chronos. The costs incurred in the preparation and mailing of the form of proxy, Notice of Meeting and this Information Circular will be borne by Chronos. In addition to solicitation by mail, proxies may be solicited by personal interviews, telephone or by other means of communication and by directors, officers and agents of Chronos, who will not be specifically remunerated therefor. While no arrangements have been made to date by Chronos, Chronos may contract for the distribution and solicitation of proxies for the Meeting. The costs incurred by Chronos in soliciting proxies will be paid by Chronos. Exercise of Discretion by Proxy The Common Shares represented by the enclosed form of proxy will be voted or withheld from voting in accordance with the instructions of the Shareholder on any ballot that may be called for, and where a Shareholder specifies a choice with respect to any matter to be acted upon, the Common Shares will be voted accordingly. In the absence of any direction in the form of proxy, the management designees named in the enclosed form of proxy will vote in favour of all the matters set out therein. The form of proxy enclosed, when properly signed, confers discretionary authority with respect to amendments or variations to any matters which may properly be brought before the Meeting or any adjournment or postponement thereof. At the time of printing of this Information Circular, management is not aware of any such amendments, variations or other matters to be presented at the Meeting. However, if any other matters which are not now known to management should properly come before the Meeting, or any adjournment or postponement thereof, the proxies hereby solicited will be exercised on such matters in accordance with the best judgment of the nominee. Revocation of Proxies You may revoke your proxy at any time prior to a vote. If you or the person you give your proxy attends personally at the Meeting, you or such person may revoke the proxy and vote in person. In addition to revocation in any other manner permitted by law, a proxy may be revoked by an instrument in writing executed by you or your attorney authorized in writing or, if you are a corporation, under your corporate seal or by a duly authorized officer or attorney of such corporation. To be effective the instrument in writing must be deposited at the registered office of Chronos at any time up to and including 10:00 a.m. (Calgary time) on the last day (other than Saturdays, Sundays and statutory holidays in the Province of Alberta) preceding the day of the Meeting at which the proxy is to be used, or any adjournment or adjournments thereof, or with the Chairman of the Meeting on the day of the Meeting, or on the day of any adjournment thereof, in either case prior to the commencement of the Meeting. Advice to Beneficial Holders of Common Shares The information set forth in this section is of significant importance to many Shareholders, as a substantial number of Shareholders do not hold shares in their own names. Shareholders who do not hold Common Shares in their own names ("Beneficial Shareholders") should note that only proxies deposited by Shareholders whose names appear on the records of Chronos as the registered holders of Common Shares can be recognized and acted upon at the Meeting. If Common Shares are listed in an account statement provided to a Shareholder by a broker, then in almost all cases those securities will not be registered in the Shareholder's name on the records of Chronos. Such Common Shares will more likely be registered under the name of the Shareholder's broker, or an agent of that broker. In Canada, the majority

5 3 of such securities are registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as nominee for many Canadian brokerage firms). Common Shares held by brokers, or their agents or nominees, can only be voted (for or against resolutions) upon the instructions of the Beneficial Shareholder. Without specific instructions, brokers, and their agents and nominees, are prohibited from voting securities for a Beneficial Shareholder. The directors and officers of Chronos do not know for whose benefit the Common Shares registered in the name of CDS & Co. or of other brokers/agents are held. Therefore, Beneficial Shareholders should ensure that instructions respecting the voting of their Common Shares are communicated to the appropriate person. Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of securityholder meetings. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their securities are voted at the applicable meeting. The form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is similar to the form of proxy provided to registered shareholders by Chronos; however, its purpose is limited to instructing the registered shareholder (the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The majority of brokers now delegate responsibility for obtaining voting instructions from clients to Broadridge Financial Solutions, Inc. ("Broadridge"). Broadridge typically mails a scannable voting instruction form instead of the form of proxy. The Beneficial Shareholder is asked to complete the voting instruction form and return it to Broadridge by mail or facsimile. Alternatively, the Beneficial Shareholder may call a toll-free number to vote the shares held by the Beneficial Shareholder or vote online. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of securities to be represented at the applicable meeting. A Beneficial Shareholder receiving a voting instruction form cannot use that voting instruction form to vote Common Shares directly at the Meeting as the voting instruction form must be returned as directed by Broadridge well in advance of the Meeting in order to have the Common Shares voted. Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting securities registered in the name of his broker (or agent of the broker), a Beneficial Shareholder may attend the Meeting as proxyholder for the registered Shareholder and vote the Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly vote their Common Shares as proxyholders for the registered Shareholder should enter their own names in the blank space on the instrument of proxy or other voting instruction form provided to them and return the same to their brokers (or the brokers' agents) in accordance with the instructions provided by such brokers (or the brokers' agents) well in advance of the Meeting. VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES As at December 27, 2017, there were 29,935,004 Common Shares issued and outstanding. Shareholders are entitled to receive notice of, to attend and to one vote per Common Share at all meetings of Shareholders. Shareholders have the right to receive any dividends declared by the Board on the Common Shares and to receive pro rata the remaining assets of the Corporation in the event of the liquidation, dissolution or winding-up of the Corporation. Other than as disclosed below, to the best of the Corporation's knowledge, and based on existing information, as at December 27, 2017, no person or company beneficially owns or controls or directs, directly or indirectly, Common Shares carrying more than 10% of the votes attached to all of the issued and outstanding Common Shares. % of Issued and Name Number of Common Shares Outstanding Common Shares JOG Limited Partnership No. VI 7,500, % Receipt of the Financial Statements MATTERS TO BE ACTED UPON AT THE MEETING At the Meeting, Shareholders will receive and consider the financial statements of the Corporation for the year ended December 31, No formal action is required, or proposed to be taken, at the Meeting with respect to the financial statements.

6 4 Fixing Number of Directors At the Meeting, Shareholders will be asked to consider and, if thought fit, approve an ordinary resolution fixing the number of directors to be elected at the Meeting at six (6) as may be adjusted between Shareholders' meetings by way of resolution of the Board. Accordingly, unless otherwise directed, it is the intention of management to vote proxies, in the accompanying form, in favour of the ordinary resolution fixing the number of directors to be elected at the Meeting at six (6). In order to be effective, the ordinary resolution in respect of fixing the number of directors to be elected at the Meeting at six (6) must be passed by a majority of the votes cast by Shareholders who vote in respect of this ordinary resolution. Election of Directors Unless otherwise directed, it is the intention of management to vote proxies, in the accompanying form, in favour of the election as directors for the ensuing year the six (6) nominees hereinafter set forth: Ian Atkinson Michael C. Erickson Michael Kohut Robert Purdy Dale O. Shwed Don Cowie The names and provinces of residence of all of the persons nominated for election as directors, their principal occupations for the past five years, the date on which they became directors of the Corporation and the number of Common Shares beneficially owned, controlled or directed, directly or indirectly, by each of them, is set forth below. Each director elected will hold office until the next annual meeting of shareholders or until his successor is duly elected or appointed, unless his office is earlier vacated. Name and Province and Country of Residence Director Since Common Shares Beneficially Owned or Controlled or Directed Principal Occupation Ian Atkinson (5) Michael C. Erickson September 19, ,667 Mr. Atkinson is currently President, Chief Executive Officer and a director of Gulf Pine Energy Partners, LP. Prior thereto, Mr. Atkinson was President and Chief Executive Officer and a director of Dixie Energy Ltd. from 2013 until April 24, Mr. Atkinson is a co-founder of Athabasca Oil Corporation and was the Senior Vice President, Thermal Oil of Athabasca Oil Corporation from November 28, 2012 to October 12, From January 2007 to November 2012, Mr. Atkinson was the Vice President, Geoscience, Technology and Reservoir of Athabasca Oil Corporation. June 5, ,333 (7) Mr. Erickson is currently the President and Chief Executive Officer of Chronos. Prior thereto, Mr. Erickson was President and Chief Executive Officer of Renegade Petroleum Inc. from 2009 to 2013.

7 5 Name and Province and Country of Residence Director Since Common Shares Beneficially Owned or Controlled or Directed Principal Occupation Michael Kohut (1)(4) Robert Purdy (2)(4) Dale O. Shwed (3)(6) August 25, ,667 Mr. Kohut is the Vice President Finance of Paramount Resources Ltd. since September Prior thereto, Mr. Kohut was the Chief Financial Officer of Trilogy Energy Corp. from June 2006 to September Prior thereto, Mr. Kohut was President, Chief Executive Officer and a director of Global Railway Industries Ltd. Mr. Kohut is also a director and Chairman of the board of directors for Big Rock Brewery Inc. and a director and chairman of the audit committee for Ikkuma Resources Corp. September 19, ,033 (8) Mr. Purdy is a co-founder and has been a principal of Purdy & Partners Inc. since Mr. Purdy is also a director of several private companies in the oil and gas, technology, and other businesses. August 25, ,333 Mr. Shwed has been the President and Chief Executive Officer of Crew Energy Inc. since September Prior thereto, Mr. Shwed was President and Chief Executive Officer of Baytex Energy Corp. from 1993 to August Mr. Shwed is also a director of Inplay Oil Corp., Baytex Energy Corp. and TORC Oil & Gas Ltd. Don Cowie (2)(6) August 11, ,500,000 (9) Mr. Cowie was the founding Partner of JOG Capital Inc. ( JOG ) in 2002 and was the President of the firm from inception until Nov Mr. Cowie has been the Chairman of the Investment Committee of JOG since Nov Mr. Cowie retired from JOG effective December 31, 2017, however he will remain a significant shareholder of JOG and its funds and will remain on the board of directors of several of JOG s portfolio companies. From 1992 to 2002, Mr. Cowie was the head of Energy Investment Banking for Bank of America in Calgary. Prior thereto, Mr. Cowie was one of the founders and directors of two junior oil and gas companies. From 1987 to 1991, Mr. Cowie was employed in investment banking for Midland Doherty, a Canadian investment dealer, during which, Mr. Cowie was responsible for IPOs, flowthrough offerings and M&A for the junior oil and gas sector. Mr. Cowie is also a director of Leucrotta Exploration Inc., Inplay Oil Corp., Red River Oil Inc and Shiningstar Energy Ltd. Notes: (1) Chairman of the Audit Committee (the "Audit Committee"). (2) Member of the Audit Committee. (3) Chairman of the Compensation and Corporate Governance Committee (the "Compensation and Corporate Governance Committee"). (4) Member of the Compensation and Corporate Governance Committee.

8 6 (5) Chairman of the Reserves and Health, Safety & Environmental Committee (the "Reserves and HSE Committee"). (6) Member of the Reserves and HSE Committee. (7) This includes 166,667 Common Shares held by Mr. Erickson's spouse. (8) This includes 306,700 Common Shares held by entities directly or indirectly controlled by Mr. Purdy. (9) Mr. Cowie is the Chairman of the Investment Committee of JOG, which owns, directly or indirectly, or exercises control or direction over, 7,500,000 (25.1%) of the issued and outstanding) Common Shares. Mr. Cowie retired from JOG effective December 31, (10) The above information with respect to Common Shares beneficially owned, or controlled or directed, directly or indirectly, is based upon information furnished to Chronos by the respective nominees. As at the date hereof, the directors and officers of the Corporation and their associates and affiliates, as a group, own, or control or direct, directly or indirectly, 10,636,702 Common Shares (35.5%) of the issued and outstanding Common Shares. Cease Trade Orders, Bankruptcies, Penalties or Sanctions No proposed director is or, within 10 years before the date of this Information Circular, has been a director, chief executive officer or chief financial officer of any company (including the Corporation) that: (a) (b) while that person was acting in that capacity was the subject of a cease trade or similar order, or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days; or was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days, that was issued after that person ceased to be a director, chief executive officer or chief financial officer in the company and which resulted from an event that occurred while that person was acting in such capacity. No proposed director is or, within 10 years before the date of this Information Circular, has been a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity or within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. No proposed director has, within the 10 years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director. Furthermore, no proposed director has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority nor has any proposed director ever been subject to any penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director. Appointment of Auditors Unless otherwise directed, the persons set forth in the form of proxy, if named as proxy, intend to vote the Common Shares represented by any such proxy in favour of a resolution to reappoint KPMG LLP, Chartered Accountants, as auditors of Chronos to hold office until the next annual meeting of Shareholders and to authorize the directors to fix their remuneration. KPMG LLP, at its office in Calgary, Alberta, has been the auditor of Chronos since October 24, DIRECTOR, OFFICER AND EMPLOYEE REMUNERATION During the fiscal year ended December 31, 2016, a director of the Corporation was awarded 87,500 options to purchase Common Shares ("Options") pursuant to the stock option plan of the Corporation. The Options expire on November

9 7 10, 2021 and are exercisable into Common Shares at a price of price of $2.20 per Common Share. No cash or other remuneration was paid to the directors of the Corporation during the fiscal year ended December 31, During the fiscal year ended December 31, 2016, the five (5) highest paid officers and employees of the Corporation, other than directors, were paid and aggregate of $1,056,063 in cash remuneration. No options were granted to the five (5) highest paid officers and employees of the Corporation during the fiscal year ended December 31, INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON Management is not aware of any material interest direct or indirect, by way of beneficial ownership or otherwise, of any director or nominee for director or executive officer of the Corporation or anyone who has held office as such since the beginning of the Corporation's last financial year, or of any associate or affiliate of any of the foregoing in any matter to be acted on at the Meeting other than the election of directors. INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS There are no material interests, direct or indirect, of directors or executive officers of Chronos or any of its subsidiaries, any Shareholder who beneficially owns, or controls or directs, directly or indirectly, more than 10% of the Common Shares, or any known director, executive officer, associate or affiliate of such persons in any transactions since the commencement of Chronos' most recently completed financial year or in any proposed transaction which has materially affected or would materially affect the Corporation or any of its subsidiaries. OTHER MATTERS COMING BEFORE THE MEETING Management knows of no other matters to come before the Meeting other than those referred to in the Notice of Meeting. Should any other matters properly come before the Meeting, the Common Shares represented by proxy solicited hereby will be voted on such matters in accordance with the best judgment of the person voting such proxy. ADDITIONAL INFORMATION Financial information in respect of the Corporation and its affairs is provided in the Corporation's annual audited financial statements for the year ended December 31, Additional information relating to the Corporation and copies of the Corporation's financial statements are available upon request from Michael C. Erickson, President, Chief Executive Officer and a director of the Corporation, at (403) or by at merickson@chronosres.com, or Brian Carr, the Vice-President, Finance and Chief Financial Officer of the Corporation, at (403) or by at bcarr@chronosres.com.