RAMBLER METALS AND MINING PLC (the Corporation ) Management Information Circular for the Annual General Meeting to be held on December 5, 2013

Transcription

1 SOLICITATION OF PROXIES RAMBLER METALS AND MINING PLC (the Corporation ) Management Information Circular for the Annual General Meeting to be held on December 5, 2013 Dated October 25, 2013 This management information circular (the Circular ) is furnished in connection with the solicitation of proxies for use at the annual general meeting of shareholders (the Meeting ) to be held at the time and place and for the purposes set forth in the accompanying notice of meeting (the Notice ) and at any adjournment(s) or postponement(s) thereof. Properly completed forms of proxy ( Proxies ) must be deposited with Computershare, 9th Floor, 100 University Avenue Toronto, Ontario M5J 2Y1 not less than 48 hours before the time for holding the Meeting (excluding Saturdays, Sundays and holidays) or any adjournment(s) or postponement(s) thereof. Only holders (the Shareholders ) of ordinary shares (the Shares ) of record at the close of business on October 11, 2013 will be entitled to receive the Notice, the Circular and the Proxy (collectively, the Proxy Materials ). Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001 (United Kingdom), entitlement to attend and vote at the Meeting and the number of votes which may be cast thereat will be determined by reference to the Register of Members of the Corporation at close of business on December 3, 2013, being two days before the date of the Meeting. Changes to entries on the Register of Members after that time shall be disregarded in determining the rights of any person to attend and vote at the Meeting. The Proxy must be in writing and must be executed by you or your attorney authorized in writing or, if you are a corporation, under your corporate seal or by an authorized officer or attorney of the corporation. The persons named in the enclosed form of proxy are officers or directors of the Corporation. As a Shareholder you have the right to appoint a person, who need not be a Shareholder, to represent you at the Meeting. To exercise this right you should insert the name of your representative in the blank space provided on the Proxy and strike out the other names or submit another appropriate proxy. The Corporation will not be relying on the notice and access delivery procedures outlined in National Instrument Communications with Beneficial Owners of Securities of a Reporting Issuer of the Canadian Securities Administrators. Voting of Shares - Advice to Beneficial Shareholders The information set forth in this section is of significant importance to you if you do not hold your Shares in your own name. Only proxies deposited by Shareholders whose names appear on our records as the registered holders of Shares can be recognized and acted upon at the Meeting. If Shares are listed in your account statement provided by your broker, then in almost all cases those Shares will not be registered in your name. Such Shares will likely be registered under the name of your broker. Shares held by your broker can only be voted upon your instructions. Without specific instructions, your broker is prohibited from voting your Shares. Applicable regulatory requirements requires your broker to seek voting instructions from you in advance of the Meeting. Each broker has its own mailing procedures and provides its own return instructions, which you should carefully follow in order to ensure that your shares are voted at the Meeting. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Investor Communications Solutions, Canada ( BICS ). BICS mails a voting information form (a VIF ) instead of the Proxy. You are asked to complete and return the VIF to them by mail or facsimile in accordance with the instructions written on the VIF. Alternately, you can call their toll-free telephone number or use their internet voting procedure to vote your Shares. If you receive a VIF from BICS it 1

2 cannot be used as a Proxy to vote Shares directly at the Meeting, as the Proxy must be returned to BICS in advance of the Meeting in order to have the Shares voted. Revocability of Proxy You may revoke your Proxy at any time prior to a vote. If you attend personally at the Meeting, you 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 the corporation. To be effective, the instrument in writing must be deposited either at the Corporation's head office, or with Computershare, at any time up to and including the last business day before the day of the Meeting, or any adjournment(s) or postponement(s) thereof, at which the Proxy is to be used, or with the Chairman of the Meeting on the day of the Meeting, or any adjournment(s) or postponement(s) thereof. Persons Making the Solicitation This solicitation is made on behalf of management. The Corporation will bear the costs of the solicitation. In addition to mailing, Proxies may be solicited by personal interviews, or by other means of communication, by the directors, officers and employees of the Corporation, who will not receive any additional remuneration for doing so. Exercise of Discretion by Proxy The Shares represented by a Proxy will be voted or withheld from voting in accordance with your instructions on any poll that may be called for and, where you specify a choice with respect to any matter to be acted upon, the Shares will be voted on any poll in accordance with the specification so made. If you do not provide instructions, your Shares will be voted in favour of the matters to be acted upon as set out in the Proxy. The persons appointed under the Proxy are conferred with discretionary authority with respect to amendments or variations of the matters specified in the Proxy and with respect to any other matters which may properly be brought before the Meeting or any adjournment(s) or postponement(s) thereof. As at the date of this Circular, the management of the Corporation is not aware of any such amendments or variations. VOTING SHARES AND PRINCIPAL SHAREHOLDERS The Corporation is authorized to issue Shares of 1p each. As at the date hereof, there were 143,280,614 Shares issued and outstanding. As a Shareholder, you are entitled to one vote for each Share you own. To the knowledge of management of the Corporation, as at the date hereof, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, more than 10% of the Shares, except as set forth in the following table. Name Number of Shares Henderson Global Investors 24,427, % Tinma International Ltd. ( Tinma ) 22,736, % Legal and General Investment Management 17,575, % Percentage of Outstanding Shares (Approximate) 2

3 MATTERS TO BE ACTED UPON Financial Statements The audited financial statements of the Corporation for the financial year ended July 31, 2013, together with the report of the auditors thereon, will be presented to the Shareholders at the Meeting for their review and approval. Unless authority to do so is withheld, the Chairman of the Meeting will vote Proxies for the approval of audited financial statements. Election of Directors In accordance with the Articles of Association of the Corporation, the board of directors (the Board ) must consist of a minimum of two directors. There are currently eight directors of the Corporation whose terms are expiring at the conclusion of the Meeting, unless re-elected. All of the current directors of the Corporation, with the exception of Mr. Stanley Neamonitis, will be nominated by management at the Meeting for re-election as directors of the Corporation. Unless authority to do so is withheld, the Chairman of the Meeting will vote Proxies for the election of the nominees whose names are set forth below. Management does not contemplate that any of the nominees will be unable to serve as a director but, if that should occur for any reason prior to the Meeting, it is intended that discretionary authority shall be exercised by the Chairman of the Meeting to vote the Proxy for the election of any other person or persons in place of any nominee or nominees named below who are unable to serve. In accordance with the requirements of the TSX Venture Exchange (the Exchange ), if elected, each nominee will hold office as a director of the Corporation until the close of the next annual general meeting of Shareholders or until a successor is elected or appointed, unless earlier resigned or otherwise removed from office. The table and notes below set out, in respect of each nominee to the Board, the name, province or state and country of residence, the period or periods during which the nominee has served as a director, the nominee s principal occupation or employment during the last five years and the number of Shares beneficially owned, or controlled or directed, directly or indirectly, by the nominee as at the date hereof. The statement as to ownership of, or control and direction over, Shares is based upon information furnished by the relevant nominee. (remainder of page intentionally left blank) 3

4 Name and Province or State and Country of Residence Shares (1) Offices Held and Time as Director Principal Occupation David Harry Williamson Dobson Monaco Brian Hinchcliffe New York, NY USA Leslie Goodman (4,5) London, United Kingdom 8,838,000 (2) Chairman of the Corporation Director since April 14, 2004 Financier and Mining Entrepreneur 1,710,001 (3) Director since April 14, 2004 Company Director 400,000 Director since April 14, 2004 Company Director John S. Thomson (4,5) Dundee, United Kingdom George O Neil Ogilvie Newfoundland & Labrador, Canada Tat Sze (Dalis) Chan (5) British Columbia, Canada Cong (Eason) Chen (4) British Columbia, Canada Notes 146,667 CFO of the Corporation until May 2, 2010 Director since October 20, 2008 Director, President & CEO since March 3, 2008 VP & COO from October 12, 2006 to March 3, 2008 Director since March 26, Director since September 24, Company Director Company Director, President and CEO Vice President of Tinma International Ltd. Independent Accounting Consultant 1. Information with respect to each nominee as to the number of Shares beneficially owned, or controlled or directed (directly or indirectly), not being within the knowledge of the Corporation, has been furnished by the respective nominee or from third party sources. 2. Held through Zila Corporation and Whitmill Trust Company Limited. 3. Held through Vidacos Nominees Ltd. 4. Member of the audit committee of the Board. 5. Member of the remuneration committee of the Board. Tat Sze (Dalis) Chan and Cong (Eason) Chen are nominees of Tinma International Ltd. (the Tinma Nominees ) and were initially appointed as directors of the Corporation following the closing of private placements on March 19, and July 19, respectively, pursuant to director nomination rights granted to Tinma in connection with a subscription agreement dated March 6,. Reference is made to the material change reports of the Corporation dated March 20,, May 25, and July 26, which are available under the Corporation s profile on SEDAR at See Voting Shares and Principal Shareholders. Corporate Cease Trade Orders, Bankruptcies and Penalties and Sanctions To the knowledge of the management of the Corporation, (a) no proposed director is, or within ten years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company (including the Corporation) that, (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant 4

5 company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; (b) no proposed director (i) is, or within ten years prior to the date hereof 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 that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became 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; or (ii) has, within the ten years before the date hereof, 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; and (c) no proposed director has been subject to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable shareholder in deciding whether to vote for a proposed director. Appointment of Auditors Management is nominating the firm of BDO LLP (as successor to PKF(UK) LLP) of London, England as auditors, to hold office until the next annual meeting or until their successor is appointed and to authorize the directors to fix their remuneration. BDO LLP has been the Corporation s auditors since Unless authority to do so is withheld, the Chairman of the Meeting will vote Proxies for the election of BDO LLP as auditors, to hold office until the next annual meeting or until their successor is appointed and to authorize the directors to fix their remuneration. Authority to Allot Equity Securities Ordinary Resolution At the Meeting, Shareholders will be asked to pass an ordinary resolution (the Allotment Ordinary Resolution ) authorizing the Board, in accordance with section 551 of the Companies Act 2006 (United Kingdom) (the Act ), to allot equity securities (as defined in section 560 of the Act) up to a maximum aggregate nominal amount of 477, with such authority (unless renewed) to expire at the conclusion of the next annual general meeting. If approved, the Corporation may, before this authority expires, make an offer or agreement which would or might require equity securities to be allotted after the authority expires and the Board may allot equity securities pursuant to such offer or agreement as if the authority conferred hereby had not expired. English companies (such as the Corporation) need shareholder authority pursuant to section 551 of the Act to issue shares. Such authority is sought at each annual general meeting of the Corporation. In this instance, the Corporation is seeking a standard authority to allot up to one-third of its current issued share capital. It should be noted that the directors require empowerment pursuant to section 570 of the Act in order to allot shares for cash consideration. Without authority from shareholders pursuant to section 551 of the Act, English companies (such as the Corporation) are unable to issue shares at all, whether to existing shareholders on a pro-rata basis, or pursuant to a share option plan, or for non-cash consideration in the form of shares in another corporation or a non-cash asset (subject to a valuation report being obtained for such assets), or for cash on a non pro-rata basis as described below in relation to the Allotment Special Resolution. The Allotment Ordinary Resolution to be put before the Meeting is as follows: 5

6 NOW THEREFORE BE IT RESOLVED THAT the Directors be and they are hereby generally and unconditionally authorized in accordance with section 551 of the Companies Act 2006 (the Act ) to allot equity securities (as defined in section 560 of the Act) up to a maximum aggregate nominal amount of 477,602.04; and this authority will (unless renewed) expire at the conclusion of the next Annual General Meeting of the Corporation but the Corporation may, before this authority expires, make an offer or agreement which would or might require equity securities to be allotted after the authority expires and the Directors may allot equity securities pursuant to such offer or agreement as if the authority conferred hereby had not expired. Unless authority to do so is withheld, the Chairman of the Meeting will vote Proxies for the approval of the Allotment Ordinary Resolution. Authority to Allot Equity Securities for Cash Special Resolution At the Meeting, Shareholders will be asked to pass a special resolution (the Allotment Special Resolution ) empowering the Board, pursuant to section 570 of the Act, to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred by the Allotment Ordinary Resolution above as if section 561 of the Act did not apply to any such allotment, provided that this power shall be limited to: (a) (b) the allotment of equity securities in connection with an issue in favour of the holders of ordinary shares of the Corporation in proportion (as nearly as may be) to their respective holdings of ordinary shares, subject only to such exclusions or other arrangements as the Board may deem necessary or expedient to deal with fractional entitlements, legal or practical problems arising in any overseas territory or the requirements of any regulatory body or stock exchange in any territory; and the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of 143, If approved, this power shall expire at the conclusion of the next annual general meeting of the Corporation save that the Corporation may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry but otherwise in accordance with the foregoing provisions of this power in which case the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired. As noted above, the Corporation requires empowerment pursuant to section 570 of the Act to allot Shares for cash consideration on a non-pro-rata basis. In this instance, the Corporation is seeking a standard authority to allot up to one-tenth of its current issued share capital for cash. The Allotment Special Resolution to be put before the Meeting is as follows: NOW THEREFORE BE IT RESOLVED THAT the Directors be and they are hereby empowered pursuant to section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred by the Allotment Ordinary Resolution as if section 561 of the Act did not apply to any such allotment provided that this power shall be limited to: (a) the allotment of equity securities in connection with an issue in favour of the holders of ordinary shares of the Corporation in proportion (as nearly as may be) to their respective holdings of ordinary shares, subject only to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with fractional entitlements, legal or practical problems arising in any overseas territory or the requirements of any regulatory body or stock exchange in any territory; and 6

7 (b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of 143,280.61, and the power hereby granted shall expire at the conclusion of the next Annual General Meeting of the Corporation save that the Corporation may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry but otherwise in accordance with the foregoing provisions of this power in which case the Directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired. Unless authority to do so is withheld, the Chairman of the Meeting will vote Proxies for the approval of the Allotment Special Resolution. In order to be effective, the Allotment Special Resolution must be passed by not less than 75 percent of the votes cast by Shareholders present in person or by proxy at the Meeting. STATEMENT OF EXECUTIVE COMPENSATION The Corporation's Statement of Executive Compensation, in accordance with the requirements of NI , is set forth below. Compensation Discussion and Analysis Objectives of the Compensation Program The objectives of the Corporation's compensation program are to attract, hold and motivate performance of members of senior management of a quality and nature that will enhance the sustainable growth of the Corporation. Overview of the Compensation Philosophy The following principles guide the Corporation's overall compensation philosophy: (a) (b) (c) (d) (e) compensation is determined on an individual basis by the need to attract and retain talented, high-achievers; each individual s total compensation is calculated with reference to the market; in appropriate circumstances, a portion of total compensation is variable and linked to achievements (both individual and corporate) may be included; internal equity is maintained such that individuals in similar jobs and locations are treated fairly; and the Corporation supports reasonable expenses in order that employees continuously maintain and enhance their skills. The Board is given discretion to determine the emphasis of each principle of compensation discussed above in a manner which best measures the success of the Corporation and its executive officers. Compensation Governance Role of the Remuneration Committee The Board has a remuneration committee (the Remuneration Committee ) and neither the Remuneration Committee nor the Corporation has retained a compensation consultant during the previous financial year of the Corporation. The Remuneration Committee was established by the Board to assist the Board in fulfilling its responsibilities relating to human resources and compensation issues and 7

8 to establish a plan of continuity for executive officers. The Remuneration Committee ensures that the Corporation has an executive compensation plan that is both motivational and competitive so that it will attract, hold and inspire performance of executive officers of a quality and nature that will enhance the sustainable profitability and growth of the Corporation. The Remuneration Committee is comprised of Leslie Goodman (Chair), John Thomson and Dalis Chan of which Messrs. Goodman, Chan and Thomson are independent within the meaning of National Instrument Audit Committees of the Canadian Securities Administrators ( NI ). The direct experience that is relevant to the Remuneration Committee members responsibilities in executive compensation are set out below: Leslie Goodman Mr. Goodman is qualified and practiced as a Solicitor in London and has held numerous director and executive level positions, including as a director of Corporate Finance with Hill Samuel and several AIM-traded companies. John Thomson Mr. Thomson is a chartered accountant from Scotland who studied at INSEAD. He has international experience in a variety of senior roles for companies including PepsiCo and Canadian mining issuer Kirkland Lake Gold Inc. Dalis Chan Mr. Chan is the Vice President overseeing the trading and recycling businesses of the Tinma group of companies, which focus on the trading, processing, logistics and financial investment of non-ferrous metals. Dalis Chan has over 15 years of related experience in the financial sector, mainly in the treasury departments, including working at Standard London (Asia) in Hong Kong. The Remuneration Committee is responsible for, among other things, reviewing executive compensation matters and making recommendations to the Board for its approval. The Remuneration Committee reviews, on an as-needed basis, the cash compensation, performance and overall compensation package for each executive officer. It then submits to the Board recommendations with respect to the basic salary, bonus and participation in share compensation arrangements for each executive officer. Compensation of all executive officers is based primarily on corporate performance which includes achievement of the Corporation's strategic objective of growth and the enhancement of shareholder value. Elements of Executive Compensation The Corporation's executive compensation program is based on the objectives of: (a) recruiting and retaining the executives critical to the success of the Corporation, (b) providing fair and competitive compensation, (c) balancing the interests of management and shareholders of the Corporation, and (d) rewarding performance, on the basis of both individual and corporate performance. For the financial year ended July 31, 2013, the Corporation's executive compensation program consisted of the following elements: (a) (b) base salary ( Short-Term Incentive ); and long-term equity compensation consisting of share options granted under the Corporation's share incentive plan ( Long-Term Incentive ). The specific rationale and design of each of these elements (and other elements which may comprise a part of the Corporation s executive compensation program from time to time) are outlined in detail below. 8

9 Element of Compensation Summary and Purpose of Element Short-Term Incentives Base Salary Salaries form an essential element of the Corporation's compensation mix as they are the first base measure to compare and remain competitive. Base salaries are fixed and therefore not subject to uncertainty and are used as the base to determine other elements of compensation and benefits. The Remuneration Committee and the Board review executive salaries on an as-needed basis. Annual Performance-Based Cash Incentives Other Compensation (Perquisites) Any bonus paid to the executive officers is entirely within the discretion of the Board, following consideration by the Remuneration Committee. In making bonus determinations, the Board reviews corporate and individual performance. Annual performance-based cash bonuses are a variable component of compensation designed to reward the Corporation s executive officers for maximizing annual operating performance. The Corporation s executive employee benefit program includes life, medical, dental and disability insurance. Such benefits and perquisites are designed to be competitive overall with equivalent positions in comparable organisations. Long-Term Incentives Share Option Plan The granting of share options is a variable component of compensation intended to reward the Corporation's executive officers for success in achieving sustained exploration growth and appreciation in share value. Base Salary In determining the base salary of an executive officer, the Board's practice has been to consider the recommendations made by the Remuneration Committee and then review and summarise these recommendations in light of the circumstances of the Corporation. The Remuneration Committee and the Board relies on the knowledge and experience of its members to set appropriate levels of base salary for executive officers. In determining the base salary to be paid to a particular executive officer, the Board also considers the particular responsibilities related to the position, the experience level of the executive officer, and his or her past performance at the Corporation. Salary levels for executive officers are reviewed from time to time by the Remuneration Committee. In determining base salary levels for executive officers, the Remuneration Committee and the Board uses all the data available to it to ensure that the Corporation is maintaining a level of compensation that is both commensurate with the size of the Corporation and sufficient to retain key personnel. In light of the current stage of development and the limited elements of executive compensation (base salary and share options), at this time neither the Board nor the Remuneration Committee have formally assessed the implications of the risks associated with the Corporation s policies and practices. The Board has not, as yet, adopted a policy restricting its NEOs (as such term is defined in NI , NEOs ) or directors from purchasing instruments, including, for greater certainty, prepaid variable 9

10 forward contracts, equity swaps, collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by NEOs or directors. To the knowledge of the management of the Corporation, no such purchases have been made by NEOs or directors during the Corporation s most recently completed financial year. Annual Performance-Based Cash Incentives Executive officers may, in the future, be eligible for annual cash bonuses, but cash bonuses did not form part of the executive compensation for the Corporation s most recently completed financial year. If awarded, such bonuses would take into account and give varying degrees of weight, depending on the relevance of these factors to the particular executive officer, to the following indicators of Corporation and individual performance: (a) (b) (c) (d) (e) (f) relative share performance; relative change in cash flow per share; performance against budget; expense control; performance factors; and other exceptional or unexpected factors. In taking into account the financial performance aspect, it is recognised that executive officers cannot control certain factors, such as overall market conditions. When applying the financial performance criteria, the Board considers factors over which the executive officers can exercise control, such as meeting budget targets established by the Board at the beginning of each year, controlling costs, taking successful advantage of business opportunities and enhancing the competitive and business prospects of the Corporation. Other Compensation Perquisites There were no material perquisites provided to the NEOs during the financial year ended July 31, Share Options In determining whether to recommend the granting of share options to executive officers, the Remuneration Committee reviews the matter and makes a recommendation to the Board. Such review consists of: 1) an analysis of share options granted to similar roles in comparative companies; 2) the number of share options previously granted to the individual; and 3) taking into consideration the number of unissued options remaining in the approved Share Option Plan (as defined and described below). Other Long-Term Incentive Plans The Corporation does not have any other long-term incentive plans, including any supplemental executive retirement plans. Overview of How the Compensation Program Fits with Compensation Goals 1. Attract, Hold and Motivate Key Talent The compensation package meets the goal of attracting, holding and motivating key talent in a highly competitive copper and gold exploration environment through the following elements: 10

11 (a) (b) A competitive cash compensation program, consisting of base salary and bonus opportunity; Providing an opportunity to participate in the Corporation's growth through options. 2. Alignment of Interest of Management with Interest of the Corporation's shareholders The compensation package meets the goal of aligning the interest of management with the interest of the Corporation's shareholders through the following elements: (a) (b) Through the grant of share options, if the price of the Shares increases over time, both executives and Shareholders will benefit. By providing a vesting period on share option awards, management has an interest in increasing the price of the Corporation's shares over time, rather than focusing on shortterm increases. Summary Compensation Table The following table provides a summary of the compensation of the Chief Executive Officer; Chief Financial Officer; and Vice-President, Corporate Development and Corporate Secretary, who were the Corporation s only NEOs for the year ended July 31, Optionbased Non-equity incentive plan compensation Name and principal position Year Salary Sharebased Awards Awards granted during the year (2) Annual incentive plans Longterm incentive plans Pension Value All other compens ation Total compens ation George Ogilvie (1) President, CEO and Director , , ,169 N/A N/A N/A 330, , ,169 Norman Williams CFO , , ,500 N/A N/A N/A 191, , ,500 Peter Mercer VP Corporate Development, Corporate Secretary , , ,794 67,500 N/A N/A N/A 177, , ,294 Notes 1. Mr. George Ogilvie received compensation in his capacity as an executive officer of the Corporation and he received no compensation in his capacity as a director of the Corporation. 2. The grant date fair value of options was estimated using a Black-Scholes model. 11

12 The charge for the fair value of the options included in the Corporation s annual financial statements represents the grant date fair value of the options amortised over the vesting period of the options and was as follows: Name and principal position George Ogilvie President, CEO and Director Norman Williams CFO Peter Mercer VP Corporate Development, Corporate Secretary Year Accounting Fair Value Option-based Awards 7,610 2, ,771 1,936 66,020 The following variables were used in determining the fair value of the options: Option Date Market Price Exercise Price Term of Option Volatility Discount Rate Value of Option Aug. 17, 2010 $0.45 $ years 75% 2.50% $0.27 May 7, 2010 $0.50 $ years 75% 2.50% $0.30 Nov.10, 2008 $0.19 $ years 65% 4.30% $0.11 Jul.7, 2008 $0.96 $ years 82% 4.30% $0.63 Nov.12, 2007 $1.10 $ years 55% 4.30% $0.55 The Corporation calculates the fair value of stock options on the date of grant in the Option Based Awards column of the summary compensation table using the Black-Scholes-Merton Model, a mathematical valuation model that ascribes a value to a stock option based on a number of variables, including the exercise price of the options, the market price of the underlying shares on the date the option was granted, the term of the option and assumptions with respect to the volatility of the price of the underlying share and the risk-free rate of return. The Corporation used this model because it is the methodology recommended by the Canadian Institute of Chartered Accountants in its Handbook for valuing securities based compensation and, in line with that recommendation, is the methodology used by the Corporation, and most UK and Canadian publicly traded companies, in valuing and reporting stock options in its financial statements. Calculating the value of stock options using the Black-Scholes-Merton Model is very different from simple in-the-money value calculation. Stock options that are well out-of-the-money can still have a significant fair value based on a Black-Scholes-Merton valuation. Accordingly, caution must be exercised in 12

13 comparing grant date fair value amounts with cash compensation or an in-the-money option value calculation. The value of the in-the-money options currently held by each NEO and director (based on share market price less option exercise price) is set forth in the Value of Unexercised in-the-money Options column of the table in the section Outstanding Share and Option Based Awards below. Outstanding Option-Based Awards and Share-Based Awards The following table sets forth, for each NEO, all awards outstanding at the end of the most recently completed financial year, including awards granted before the most recently completed financial year. Option-based Awards Share-based Awards Name and principal position Number of securities underlying unexercised options (#) Option exercise price Option expiration date Value of unexercis ed in-themoney options (5) Number of shares or units of shares that have not vested (#) Market or payout value of vested share-based awards that have not vested Market or payout value of vested sharebased awards not paid out or distributed George Ogilvie President, CEO and Director 200,000 (1) 150,000 (3) 750,000 (2) December 7, 2016 November 12, 2017 November 10, ,500 Norman Williams CFO 100,000 (2) 75,000 (2) 250,000 (4) July 7, 2018 November 10, 2018 May 7, ,750 Peter Mercer VP Corporate Development, Corporate Secretary 100,000 (3) 45,000 (2) 250,000 (4) November 12, 2017 November 10, 2018 August 17, ,450 Notes 1. These options vested immediately. 2. These options vest in three equal tranches on the first, second and third anniversaries of the date of grant. 3. These options vest in three equal tranches, one third immediately and one third on each of the first and second anniversaries of the date of grant. 4. These options vest in two equal tranches, one half immediately and one half on the first anniversary of the date of grant. 5. The value of unexercised in-the-money options is the difference between the mid-market price of the Shares at the end of the financial year ($0.40) and the option exercise price multiplied by the number of options. (remainder of page intentionally left blank) 13

14 Incentive plan awards value vested or earned during the year The following table sets forth, for each NEO, information regarding the value of awards vested or earned during the most recently completed financial year. Name and principal position George Ogilvie President, Chief Executive Officer and Director Norman Williams Chief Financial Officer Peter Mercer VP Corporate Development, Corporate Secretary Option-based awards Value vested during the year Share-based awards Value vested during the year Non-equity incentive plan compensation Value earned during the year Other Compensation Matters The Corporation currently has no pension plan (including defined benefit and defined contribution) benefits or deferred compensation plans in place for the NEOs. Termination of Employment, Change in Responsibilities and Employment Contracts The Corporation has no contract, agreement, plan or arrangement that provides for payments to an NEO at, following or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change in control of the Corporation or a change in an NEO s responsibilities. Compensation of Directors During the fiscal year ended July 31, 2013, the directors received the fees set out below for serving as directors of the Corporation. Relevant disclosure for executive director George Ogilvie has already been provided under the heading Summary Compensation Table. (remainder of page intentionally left blank) 14

15 Sharebased awards Optionbased awards Non-equity incentive plan compensation Name Fees earned All other compensation Total Harry Dobson (1) (4) Stanley Neamonitis 12,598 50,000 (6) 62,598 Merfyn Roberts (2) 6,999 (4) 6,999 Leslie Goodman 12,598 (4) 12,598 Brian Hinchcliffe 12,598 (5) 12,598 John Thomson 12,598 12,598 Tat Sze (Dalis) Chan 12,598 12,598 Cong (Eason) Chen (3) 10,708 10,708 TOTALS 80,697 (7) 50, ,697 Notes 1. Harry Dobson waived his entitlement to director s fees for the financial year ended July 31, Resigned as a director on February 20, Appointed as a director on September 24,. 4. Pursuant to letters of appointment dated March 31, 2005, Harry Dobson and Leslie Goodman are each entitled to a consultancy fee for time spent on the affairs of the Corporation, other than for preparing for and attending bi-monthly Board meetings. The appointment may be terminated by either party by giving, in the case of Mr. Dobson, 12 months written notice and, in the case of Messrs. Roberts and Goodman, three months written notice. No such fees have been paid in the financial year ended July 31, Pursuant to a letter of appointment dated November 15, 2006, Brian Hinchcliffe is entitled to a consultancy fee of 300 ($470) per day for time spent on the affairs of the Corporation other than preparing for and attending by-monthly Board meetings. The appointment may be terminated by either party giving three months written notice. No such fees have been paid in the financial year ended July 31, Pursuant to a letter of appointment dated February 28, 2008, Stanley Neamonitis is entitled to a consultancy fee of 300 ($470) per day for time spent on the affairs of the Corporation other than preparing for and attending bi-monthly Board meetings. The appointment may be terminated by either party giving 12 months written notice. A total of $50,000 was paid in the financial year ended July 31, As at July 31, 2013, fees of $18,874 out of the total of $80,697 remained outstanding to the non-executive directors. (remainder of page intentionally left blank) 15

16 The charge for the fair value of the options granted to directors and included in the Corporation s annual financial statements represents the grant date fair value of the options amortised over the vesting period of the options and was as follows (relevant disclosure for Mr. George Ogilvie has already been provided above): Name Year Accounting Fair Value Option-based Awards Harry Dobson Stanley Neamonitis ,716 11, Merfyn Roberts Leslie Goodman Brian Hinchcliffe John Thomson ,611 5,042 Tat Sze (Dalis) Chan 2013 N/A Cong (Eason) Chen 2013 N/A N/A The following variables were used in determining the fair value of the options: Option Date Market Price Exercise Price Term of Option Volatility Discount Rate Value of Option Nov 10, 2008 $0.19 $ years 65% 4.30% $0.11 Mar 23, $0.53 $ years 69% 1.64% $

17 Director Outstanding Option-Based Awards and Share-Based Awards The following table sets forth, for each director, all awards outstanding at the end of the most recently completed financial year, including awards granted before the most recently completed financial year. (relevant disclosure for Mr. George Ogilvie has already been provided above). Name Harry Dobson Number of securities underlying unexercised options (#) Option-based Awards Option exercise price 45,000 (1) 0.19 Option expiration date November 10, 2018 Value of unexercised in-themoney options (3) Number of shares or units of shares that have not vested (#) Share-based Awards Market or payout value of share-based awards that have not vested Market or payout value of sharebased awards not paid out or distributed 9,450 Stanley Neamonitis 100,000 (1) 0.53 March 23, 2022 Merfyn Roberts 45,000 (1) 0.19 Leslie Goodman 45,000 (1) 0.19 Brian Hinchcliffe 45,000 (1) 0.19 November 10, 2018 November 10, 2018 November 10, ,450 (4) 9,450 9,450 John S Thomson 100,000 (2) ,000 (1) 0.19 December 7, 2016 November 10, ,000 Tat Sze (Dalis) Chan Cong (Eason) Chen N/A N/A Notes 1. These options vest in three equal tranches on the first, second and third anniversaries of the date of grant. 2. These options vested on the date of grant. 3. The value of unexercised in-the-money options is the difference between the mid-market price of the Shares at the end of the financial year ($0.40) and the option exercise price multiplied by the number of options. 4. These options were exercised on August 31, 2013, subsequent to the financial year ended July 31, (remainder of page intentionally left blank) 17

18 Director Incentive plan awards - value vested or earned during the year The following table sets forth, for each director, information regarding the value of awards vested or earned during the most recently completed financial year. (relevant disclosure for Mr. George Ogilvie has already been provided above). Name Option-based awards Value vested during the year Share-based awards Value vested during the year Non-equity incentive plan compensation Value earned during the year Harry Dobson Stanley Neamonitis Merfyn Roberts Leslie Goodman Brian Hinchcliffe John S. Thomson Tat Sze (Dalis) Chan Cong (Eason) Chen Share Option Plan In 2007, the Corporation adopted a fixed number share option plan (as amended, the Share Option Plan ) under which a maximum aggregate of 7,161,375 Shares were reserved for issuance upon the exercise of options. As at the date of this Circular, options exercisable for 4,087,334 Shares were outstanding and unexercised under the Share Option Plan, representing approximately 2.85% of the total Shares currently outstanding. As of the date of this Circular, options exercisable for a further 3,074,041 Shares will be available for issue under the Share Option Plan. The purpose of the Share Option Plan is to attract and motivate the directors, officers and employees of the Corporation and consultants to the Corporation (collectively the Optionees ) and thereby advance the Corporation s interests by providing them an opportunity to acquire an equity interest in the Corporation through the exercise of share options granted to them under the Share Option Plan. See Statement of Executive Compensation Compensation Discussion and Analysis. Pursuant to the Share Option Plan, the directors may grant non-assignable share options to Optionees in consideration for services to the Corporation. The number of shares subject to each option is determined by the Board or a committee thereof. Options may have a term of up to 10 years and are exercisable to purchase Shares at an exercise price which is not less than the greater of the Discounted Market Price (as defined by TSXV rules) or $0.10. Under the Share Option Plan: (a) the aggregate number of Shares pursuant to options that may be granted to any one Optionee in any 12 month period may not exceed 5% of the issued and outstanding Shares, as calculated on the date that the option is granted unless disinterested shareholder approval has been obtained; 18

19 (b) the aggregate number of Shares pursuant to options that may be granted to employees conducting investor relations activities in any 12 month period may not exceed 2% of the issued and outstanding Shares, as calculated on the date that the option is granted; (c) the number of Shares pursuant to options that may be granted to any consultant in any 12 month period may not exceed 2% of the issued and outstanding Shares, as calculated on the date that the option is granted; (d) the Shares pursuant to options issued to consultants conducting investor relations activities must vest in stages over a 12 month period, with no more than 25% of the shares vesting in any three month period; (e) the number of Shares pursuant to options that may be granted to insiders in any 12 month period may not exceed 10% of the issued and outstanding Shares unless disinterested shareholder approval has been obtained in accordance with TSXV policies; and (f) the number of Shares pursuant to options that may be granted to insiders may not exceed 10% of the issued and outstanding Shares unless disinterested shareholder approval has been obtained in accordance with TSXV policies. The Share Option Plan does not impose vesting requirements, however, the Board may impose vesting requirements in its discretion and, subject to obtaining any required approval from the TSXV, may authorize all non-vested options to vest immediately. If there is a potential change of control of the Corporation due to a take-over bid being made for the Corporation or a similar event, the Board may decide that all non-vested options, subject to obtaining any required approval from the TSX, shall vest immediately. Options may only be exercised by the Optionee (to the extent they have already vested) for so long as the Optionee is a director, officer or employee of, or consultant to, the Corporation and (unless otherwise extended by the Board), within a period thereafter not exceeding the earlier of: (a) the original expiry date; (b) 90 days (or such longer period as the Board may determine) after ceasing to be a director, officer, employee or consultant; or (c) if the Optionee dies, within one year from the Optionee s death. Any amendments to the Share Option Plan or outstanding share options are subject to the approval of the TSXV and, if required by the TSXV or the Share Option Plan, of the shareholders of the Corporation, possibly with only disinterested shareholders being entitled to vote. An amendment to an outstanding share option also requires the consent of the Optionee. No options have been granted under the Share Option Plan which are subject to shareholder approval. (remainder of page intentionally left blank) 19

20 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The Share Option Plan is the Corporation s only equity compensation plan. The following table sets forth information with respect to the options outstanding under the Share Option Plan as at July 31, Plan Category Equity compensation plans approved by securityholders Equity compensation plans not approved by securityholders Number of Ordinary Shares to be Issued Upon Exercise of Outstanding Options Weighted-Average Exercise Price of Outstanding Options 20 Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Shares Reflected in Column (a)) 4,113,000 (1) ,048,375 (1) N/A N/A N/A TOTAL 4,113, ,048,375 Notes 1. Subsequent to the financial year ended July 31, 2013, a total of 25,666 options were cancelled following the departure of two Optionees from the Corporation, in accordance with the Share Option Plan. For a summary of the material features of the Share Option Plan, including the number of options outstanding as at the date hereof, see Statement of Executive Compensation Share Option Plan. AUDIT COMMITTEE AND EXTERNAL AUDITOR FEES The text of the charter of the audit committee of the Board (the Audit Committee ) is attached to this Circular at Schedule A. The following are the current members of the Audit Committee: Name Independence (1),(2) Financial Literacy (3) John S. Thomson (Chair) Independent Financially Literate Leslie D. Goodman Independent Financially Literate Eason C. Chen Independent Financially Literate Notes 1. Pursuant to NI , an audit committee member is independent if he or she has no direct or indirect material relationship (as such term is defined in NI ) with the issuer. 2. Pursuant to NI , as a TSXV-listed issuer, the Corporation is exempt from the general requirements under NI that the members of an issuer's audit committee be independent. The Corporation's audit committee remains subject to the TSXV's requirements that a majority of the members of its audit committee not be employees, control persons or officers of the Corporation or any of its associates or affiliates. The Corporation satisfies these requirements. 3. Pursuant to NI , an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation s financial statements. Relevant Education and Experience Set out below is a description of the education and experience of each Audit Committee member that is relevant to the performance of his responsibilities as an Audit Committee member. John S. Thomson Mr. Thomson is a qualified Chartered Accountant and CFO of Kirkland Lake Gold Inc. He has worked internationally in a variety of senior roles in the pharmaceutical and FMCG industries and also serves on the board of a number of other junior resource companies Leslie D. Goodman - Mr. Goodman is a qualified solicitor and has spent most of his career in the financial services industry. He was a director, first of Hill Samuel and later BZW and was responsible for the corporate financial advisory role in a number of transactions. Over the last five years he has held a number of directorships and consultancies. Mr. Goodman holds an MA in Law from Cambridge University.