NOTICES OF SPECIAL MEETINGS AND JOINT ... OF SPECIAL MEETINGS AND JOINT MANAGEMENT PROXY CIRCULAR with respect to the proposed BUSINESS COMBINATION involving SPROTT RESOURCE CORP

NOTICES OF SPECIAL MEETINGS

AND

JOINT MANAGEMENT PROXY CIRCULAR

with respect to the proposed

BUSINESS COMBINATION

involving

SPROTT RESOURCE CORP.

and

ADRIANA RESOURCES INC.

December 21, 2016

These materials are important and require your immediate attention. They require shareholders of Sprott Resource Corp. and Adriana Resources Inc. to make important decisions. If you are in doubt as to how to make such decisions please contact your financial, legal, tax or other professional advisors. If you are a holder of common shares of Sprott Resource Corp. or Adriana Resources Inc. and have any questions or require more information with regard to voting your common shares, please contact the joint proxy solicitation agent, Kingsdale Shareholder Services, (i) by telephone, toll-free in North America at 1-888-518-6805 or at +1-416-867-2272 outside of North America; or (ii) by e-mail at [email protected].

TABLE OF CONTENTS

LETTER TO SRC SHAREHOLDERS ................... i

LETTER TO ADI SHAREHOLDERS ................... iv

NOTICE OF SPECIAL MEETING OF SRC SHAREHOLDERS ......................................... vii

NOTICE OF SPECIAL MEETING OF ADI SHAREHOLDERS ...........................................ix

GENERAL QUESTIONS AND ANSWERS FOR SRC SHAREHOLDERS ..........................xi

GENERAL QUESTIONS AND ANSWERS FOR ADI SHAREHOLDERS ......................... xiv

JOINT MANAGEMENT PROXY CIRCULAR ........................................................ 1

FORWARD-LOOKING INFORMATION ............... 4

GLOSSARY OF TERMS .......................................... 6

INFORMATION FOR BENEFICIAL HOLDERS ....................................................... 18

SUMMARY ............................................................ 19

THE ARRANGEMENT .......................................... 34

EFFECT OF THE ARRANGEMENT .................... 45

PROCEDURE FOR THE ARRANGEMENT TO BECOME EFFECTIVE ..................................................... 59

RELATED TRANSACTIONS ................................ 65

INTERESTS OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON ................................................. 78

SRC SHAREHOLDER DISSENT RIGHTS ........... 79

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE ARRANGEMENT ........................................... 82

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE ARRANGEMENT ........................................... 88

TIMING ................................................................... 95

BUSINESS OF THE COMBINED ENTITY AFTER GIVING EFFECT TO THE ARRANGEMENT ........................................... 95

RISK FACTORS ................................................... 102

INTERESTS OF EXPERTS .................................. 105

INFORMATION CONCERNING SPROTT RESOURCE CORP. AND ADRIANA RESOURCES INC. ........................................ 105

MATTERS TO BE CONSIDERED AT THE SRC MEETING ..................................... 105

MATTERS TO BE CONSIDERED AT THE ADI MEETING ..................................... 106

GENERAL PROXY MATTERS SRC .................. 107

GENERAL PROXY MATTERS ADI .................. 109

QUESTIONS AND OTHER ASSISTANCE ........ 111

APPROVED BY DIRECTORS ............................ 112

EXPERTS’ CONSENTS ....................................... 113

APPENDICES

APPENDIX A – Arrangement Resolution APPENDIX B – ADI Resolutions APPENDIX C – Arrangement Agreement APPENDIX D – Interim Order APPENDIX E – Notice of Application APPENDIX F – Section 190 of the CBCA APPENDIX G – SRC Fairness Opinion APPENDIX H – ADI Fairness Opinion APPENDIX I – Information Concerning Sprott

Resource Corp. APPENDIX J – Information Concerning Adriana

Resources Inc. APPENDIX K – Sprott Resource Holdings Inc.

Unaudited Pro Forma Financial Statements

- i-

December 21, 2016

Dear Sprott Resource Corp. Shareholders:

You are invited to attend a special meeting (the “SRC Meeting”) of holders (“SRC Shareholders”) of common shares (“SRC Shares”) in the capital of Sprott Resource Corp. (“SRC”) to be held at the offices of Blake, Cassels & Graydon LLP, 199 Bay Street, Commerce Court West, Suite 4000, Toronto, Ontario M5L 1A9 at 9:00 a.m. (Toronto time) on January 25, 2017. At the SRC Meeting, SRC Shareholders will be asked to consider and vote upon a proposed plan of arrangement (the “Arrangement”) under Section 192 of the Canada Business Corporations Act involving SRC, SRC Shareholders and Adriana Resources Inc. (“ADI”).

On November 29, 2016, SRC and ADI entered into an arrangement agreement (the “Arrangement Agreement”) to effect a business combination of SRC and ADI pursuant to the Arrangement. The Arrangement Agreement provides for, among other things, the acquisition of all of the issued and outstanding SRC Shares by ADI. Pursuant to the Arrangement, SRC Shareholders will receive three common shares of ADI (“ADI Shares”) for each SRC Share held.

Under the Arrangement Agreement, ADI has agreed to issue one-quarter of a common share purchase warrant per ADI Share to holders of ADI Shares (“ADI Shareholders”) of record on the business day immediately preceding the effective date for the Arrangement (the “Warrant Distribution”). Each whole warrant (an “ADI Warrant”) will be exercisable to purchase one ADI Share at a price of $0.333 per share for a period of five years (subject to certain rights of ADI to accelerate expiry thereof). In connection with certain contemplated amendments to the second amended and restated partnership agreement between SRC and Sprott Resource Consulting Limited Partnership (“SRCLP”) concerning Sprott Resource Partnership (“SRP”) effective January 1, 2015, including the elimination of a 20% profit participation right in favour of SRCLP, ADI has also agreed to issue an aggregate of 21,750,000 ADI Warrants to or at the direction of SRC immediately following the consummation of the Arrangement in consideration of the subscription by ADI for additional SRC Shares. Such ADI Warrants will subsequently be transferred by SRC or SRP to SRCLP.

In connection with the Arrangement, (i) Sprott Inc. (“Sprott”), (ii) Exploration Capital Partners 2008 Limited Partnership, a fund managed by a subsidiary of Sprott (“Exploration Capital 2008 LP”), and (iii) Term Oil Inc., a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott) and a director of Sprott, have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity by purchasing a combination of ADI Shares and ADI Warrants (collectively, the “Committed Financings”). In addition, pursuant to the terms of finder agreements to be entered into among SRC, ADI and each of Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (both wholly-owned limited partnerships of Sprott), Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering of up to 40 million units of ADI (each unit comprised of one ADI Share and one ADI Warrant) for gross proceeds of up to $10 million (the “Sprott Global Financing” and together with the Committed Financings, the “Financings”).

We anticipate the Arrangement and related transactions will benefit SRC and SRC Shareholders in a variety of ways, including (among others):

• The Committed Financings will align shareholders of the combined entity with the manager of the combined entity and other well-known resource investors.

• The combined entity is expected to have, upon completion of the Arrangement, no debt, a cash position of approximately $55 million and available capital for investment of approximately $150 million, providing a larger capital base and positioning it for future growth in net asset value (“NAV”) through a diversified portfolio of investments.

• The difference between market capitalization and NAV of the combined entity is expected to be smaller than that currently experienced by SRC.

- ii -

• The combined entity is expected to benefit from improved access to global capital markets and liquidity to support new and existing investment opportunities.

• SRC Shareholders will participate in any value increases associated with the Lac Otelnuk iron ore project in Nunavik, Québec, Canada through ADI’s 40% interest in Lac Otelnuk Mining Ltd.

Immediately following completion of the Arrangement, the board of directors of ADI will be reconstituted to be comprised of the current members of the board of directors of SRC (other than Peter Grosskopf, who will step down in connection with the closing of the Arrangement), together with Donald K. Charter, the current Chairman of ADI, A.R. (Rick) Rule IV, and Mr. Xinting (Tony) Wang, a current member of the board of directors of ADI (or a different nominee identified by WISCO International Resources & Investment Limited). A.R. (Rick) Rule IV will become Vice Chairman of the board of directors of ADI and Chief Investment Officer. Michael Harrison, President and Chief Executive Officer of ADI, will assume the role of Managing Director of ADI.

The special resolution approving the Arrangement (the “Arrangement Resolution”) must be approved by at least 66 % of the votes cast by SRC Shareholders present in person or represented by proxy at the SRC Meeting. In addition, the Arrangement Resolution must also be approved by a majority of the votes cast by SRC Shareholders, other than SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as the Arrangement constitutes a “business combination” for SRC for the purposes of MI 61-101.

The board of directors of SRC (excluding two members of the board who have declared an interest in, and refrained from voting in respect of, the transactions contemplated by the Arrangement) has unanimously determined (i) that the Arrangement and the entry into of the Arrangement Agreement are in the best interests of SRC, (ii) based upon, among other factors, a fairness opinion delivered by SRC’s financial advisor, GMP Securities L.P., that the Arrangement is fair to the SRC Shareholders, and (iii) to recommend that SRC Shareholders vote in favour of the Arrangement Resolution.

On November 29, 2016, all of the directors and officers of SRC, together with Sprott and Eric Sprott, who collectively hold an aggregate of approximately 11% of the outstanding SRC Shares, entered into lock-up agreements with ADI pursuant to which they have agreed to vote in favour of the Arrangement Resolution. On the same date, directors, officers and other shareholders of ADI holding an aggregate of approximately 36.3% of the outstanding ADI Shares entered into lock-up agreements with SRC pursuant to which they agreed to vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution (defined below).

At a meeting of ADI Shareholders scheduled to be held on the same date as the SRC Meeting, ADI Shareholders will be asked to consider and, if thought advisable, pass a resolution (the “ADI Transactions Approval Resolution”) authorizing and approving the acquisition by ADI of SRC pursuant to the Arrangement Agreement, and certain related transactions, including the “Change of Management” (as defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance Manual) of ADI, the Warrant Distribution and the Committed Financings by a simple majority of the votes cast by ADI Shareholders present in person or represented by proxy at such meeting.

ADI Shareholders will also be asked to consider and, if thought advisable, pass a special resolution (the “ADI Name Change Resolution”) authorizing a change in the name of ADI from “Adriana Resources Inc.” to “Sprott Resource Holdings Inc.”, conditional on completion of the Arrangement.

It is a condition to the completion of the Arrangement that the Toronto Stock Exchange (“TSX”) conditionally approve the listing of the ADI Shares and the ADI Warrants on the TSX effective on the effective date of the Arrangement. Completion of the Arrangement is also subject to, among other things, the approval of the Arrangement Resolution by SRC Shareholders, the approval of the ADI Transactions Approval Resolution by ADI Shareholders, the approval of the Ontario Superior Court of Justice (Commercial List) and the receipt of all necessary regulatory approvals. The approval of the ADI Name Change Resolution by ADI Shareholders is not a condition to the completion of the Arrangement.

- iii -

If the requisite shareholder and regulatory approvals are obtained and if the other conditions to the Arrangement becoming effective are satisfied or waived, it is expected that the Arrangement will become effective on or about February 9, 2017. Immediately following completion of the Arrangement and the Committed Financings, on a non-diluted basis, former SRC Shareholders are anticipated to own approximately 57% of ADI, current ADI Shareholders are anticipated to own approximately 31% of ADI and Sprott, Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of ADI.

The accompanying joint management proxy circular (the “Circular”) contains a detailed description of the Arrangement and the other matters to be considered at the SRC Meeting and the ADI Meeting, as well as detailed information regarding SRC and ADI and certain pro forma financial information regarding ADI after giving effect to the Arrangement and related transactions. It also includes certain risk factors relating to the completion of the Arrangement and related transactions and the potential consequences of an SRC Shareholder exchanging such holder’s SRC Shares for ADI Shares in connection with the Arrangement. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.

If you are a registered SRC Shareholder (i.e., you hold a physical certificate representing your SRC Shares in your name) and are unable to attend the SRC Meeting in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to TSX Trust Company, SRC’s transfer agent. To be valid, completed proxy forms must be dated, completed, signed and deposited with TSX Trust Company, (i) by mail using the enclosed return envelope or one addressed to TSX Trust Company, Proxy Department, 200 University Avenue, Suite 300, Toronto Ontario M5H 4H1, (ii) by hand delivery to TSX Trust Company at 200 University Avenue, Suite 300, Toronto Ontario M5H 4H1, or (iii) by facsimile to (416) 595-9593.

Your proxy must be received in each case no later than 9:00 a.m. (Toronto time) on January 23, 2017 or, if the SRC Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the beginning of any adjournment or postponement of the SRC Meeting. If you are unable to attend the SRC Meeting, we encourage you to submit the enclosed form of proxy as soon as possible. Notwithstanding the foregoing, the Chair of the SRC Meeting will have the discretion to accept proxies received after such deadline.

If you are a non-registered SRC Shareholder and have received these materials from your broker or another intermediary, please complete and return the voting instruction form or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your SRC Shares not being eligible to be voted at the SRC Meeting.

If you have any questions or require more information with regard to voting your SRC Shares, please feel free to contact the joint proxy solicitation agent, Kingsdale Shareholder Services, (i) by telephone, toll-free in North America at 1-888-518-6805 or at +1-416-867-2272 outside of North America, or (ii) by e-mail at [email protected].

On behalf of the board of directors of SRC, I would like to express our gratitude for the support our shareholders have demonstrated. We would also like to thank SRC employees for their hard work and their support for the Arrangement. We look forward to seeing you at the SRC Meeting.

Yours very truly,

(signed) “Stephen Yuzpe “ Stephen Yuzpe Chief Executive Officer Sprott Resource Corp.

- iv-

December 21, 2016

Dear Adriana Resources Inc. Shareholders:

You are invited to attend a special meeting (the “ADI Meeting”) of holders (“ADI Shareholders”) of common shares (“ADI Shares”) in the capital of Adriana Resources Inc. (“ADI”) to be held at the offices of Stikeman Elliott LLP, 199 Bay Street, Suite 5300, Toronto, Ontario M5L 1B9 at 10:30 a.m. (Toronto time) on January 25, 2017. At the ADI Meeting, ADI Shareholders will be asked to consider and vote upon a proposed plan of arrangement (the “Arrangement”) under Section 192 of the Canada Business Corporations Act involving ADI and Sprott Resource Corp. (“SRC”) and certain other related matters.

On November 29, 2016, SRC and ADI entered into an arrangement agreement (the “Arrangement Agreement”) to effect a business combination of SRC and ADI pursuant to the Arrangement. The Arrangement Agreement provides for, among other things, the acquisition of all of the issued and outstanding common shares of SRC (“SRC Shares”) by ADI. Pursuant to the Arrangement, SRC Shareholders will receive three ADI Shares for each SRC Share held. Under the Arrangement Agreement, ADI has agreed to issue one-quarter of a common share purchase warrant per ADI Share to ADI Shareholders of record on the business day immediately preceding the effective date for the Arrangement (the “Warrant Distribution”). Each whole warrant (an “ADI Warrant”) will be exercisable to purchase one ADI Share at a price of $0.333 per share for a period of five years (subject to certain rights of ADI to accelerate expiry thereof). In connection with certain contemplated amendments to the second amended and restated partnership agreement between SRC and Sprott Resource Consulting Limited Partnership (“SRCLP”) concerning Sprott Resource Partnership (“SRP”) effective January 1, 2015, including the elimination of a 20% profit participation right in favour of SRCLP, ADI has also agreed to issue an aggregate of 21,750,000 ADI Warrants to or at the direction of SRC immediately following the consummation of the Arrangement in consideration of the subscription by ADI for additional SRC Shares. Such ADI Warrants will subsequently be transferred by SRC or SRP to SRCLP.

In connection with the Arrangement, (i) Sprott Inc. (“Sprott”), (ii) Exploration Capital Partners 2008 Limited Partnership, a fund managed by a subsidiary of Sprott (“Exploration Capital 2008 LP”), and (iii) Term Oil Inc., a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott) and a director of Sprott, have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity by purchasing a combination of ADI Shares and ADI Warrants (collectively, the “Committed Financings”). In addition, pursuant to the terms of finder agreements to be entered into among SRC, ADI and each of Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (both wholly-owned limited partnerships of Sprott), Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering of up to 40 million units of ADI (each unit comprised of one ADI Share and one ADI Warrant) for gross proceeds of up to $10 million (the “Sprott Global Financing” and together with the Committed Financings, the “Financings”).

We anticipate that the Arrangement and related transactions will have the following benefits to ADI Shareholders (among others):


• The combined entity is expected to have, upon completion of the Arrangement, no debt, a cash position of approximately $55 million and available capital for investment of approximately $150 million, providing a larger capital base and positioning it for future growth in net asset value (“NAV”) through a diversified portfolio of investments while reducing the risks associated with a single project and a single commodity.

• Proposed transactions are immediately accretive to the NAV per ADI Share.

• ADI Warrants provide further value upside to ADI Shareholders.

- v -

• Retained ownership of existing interest in the Lac Otelnuk iron ore project in Nunavik, Québec, Canada through ADI’s 40% interest in Lac Otelnuk Mining Ltd.

Immediately following completion of the Arrangement, the board of directors of ADI will be reconstituted to be comprised of the current members of the board of directors of SRC (other than Peter Grosskopf, who will step down in connection with the closing of the Arrangement), together with Donald K. Charter, the current Chairman of ADI, A.R. (Rick) Rule IV, and Mr. Xinting (Tony) Wang, a current member of the board of directors of ADI (or a different nominee identified by WISCO International Resources & Investment Limited). A.R. (Rick) Rule IV will become Vice Chairman of the board of directors of ADI and Chief Investment Officer. Michael Harrison, President and Chief Executive Officer of ADI, will assume the role of Managing Director of ADI.

ADI Shareholders will be asked to consider and pass a resolution, (the “ADI Transactions Approval Resolution”) which must be approved by a simple majority of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting, authorizing and approving the acquisition by ADI of SRC pursuant to the Arrangement Agreement, and certain related transactions, including the “Change of Management” (as defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance Manual) of ADI, the Warrant Distribution and Committed the Financings.

ADI Shareholders will also be asked to consider and pass a special resolution (the “ADI Name Change Resolution”), which must be approved by at least 66 % of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting, authorizing a change in the name of ADI from “Adriana Resources Inc.” to “Sprott Resource Holdings Inc.”, conditional on completion of the Arrangement.

The board of directors of ADI has determined (i) that the Arrangement and the entry into of the Arrangement Agreement are in the best interests of ADI, (ii) based upon, among other factors, a fairness opinion delivered by ADI’s financial advisor, Primary Capital Inc., that the Arrangement and the Warrant Distribution are fair to the ADI Shareholders , other than SRC and its affiliates, and (iii) to recommend that ADI Shareholders vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution.

Effective November 29, 2016, certain ADI Shareholders representing approximately 36.3% of the outstanding ADI Shares and the directors and officers of ADI, with the exception of one director of ADI, entered into lock-up agreements with SRC pursuant to which they have agreed to vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution Arrangement Resolution. On the same date, all of the directors and officers of SRC, together with Sprott and Eric Sprott, who collectively hold an aggregate of approximately 11% of the outstanding SRC Shares, entered into lock-up agreements with ADI pursuant to which they have agreed to vote in favour of the Arrangement Resolution.

At a meeting of SRC Shareholders scheduled to be held on the same date as the ADI Meeting, SRC Shareholders will be asked to consider, and if thought advisable, pass a special resolution (the “Arrangement Resolution”) approving the Arrangement. The Arrangement Resolution must be approved by at least 66 % of the votes cast by SRC Shareholders present in person or represented by proxy at the SRC Meeting. In addition, the Arrangement Resolution must also be approved by a majority of the votes cast by SRC Shareholders, other than SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as the Arrangement constitutes a “business combination” for SRC for the purposes of MI 61-101.

It is a condition to the completion of the Arrangement that the Toronto Stock Exchange (“TSX”) conditionally approve the listing of the ADI Shares and the ADI Warrants on the TSX effective on the effective date of the Arrangement. Completion of the Arrangement is also subject to, among other things, the approval of the Arrangement Resolution by SRC Shareholders, the approval of the ADI Transactions Approval Resolution by ADI Shareholders, the approval of the Ontario Superior Court of Justice (Commercial List) and the receipt of all necessary regulatory approvals. The approval of the ADI Name Change Resolution by ADI Shareholders is not a condition to the completion of the Arrangement.

- vi -

If the requisite shareholder and regulatory approvals are obtained and if the other conditions to the Arrangement becoming effective are satisfied or waived, it is expected that the Arrangement will become effective on or about February 9, 2017. Immediately following completion of the Arrangement and the Committed Financings, on a non-diluted basis, former SRC Shareholders are anticipated to own approximately 57% of ADI, current ADI Shareholders are anticipated to own approximately 31% of ADI and Sprott, Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of ADI.

The accompanying joint management proxy circular (the “Circular”) contains a detailed description of the Arrangement and the other matters to be considered at the ADI Meeting and the SRC Meeting, as well as detailed information regarding ADI and SRC and certain pro forma financial information regarding ADI after giving effect to the Arrangement and related transactions. It also includes certain risk factors relating to the completion of the Arrangement and related transactions and the potential consequences of an ADI Shareholder continuing to hold ADI Shares and receiving ADI Warrants under the Warrant Distribution in connection with the Arrangement. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.

If you are a registered ADI Shareholder (i.e., you hold a physical certificate representing your ADI Shares in your name) and are unable to attend the ADI Meeting in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to Computershare Investor Services Inc. (“Computershare”), ADI’s transfer agent. To be valid, completed proxy forms must be dated, completed, signed and deposited with Computershare, (i) by mail using the enclosed return envelope or one addressed to Computershare, Attention: Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or (ii) by hand delivery to Computershare at 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1.

Your proxy must be received in each case no later than 10:30 a.m. (Toronto time) on January 23, 2017 or, if the ADI Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the beginning of any adjournment or postponement of the ADI Meeting. If you are unable to attend the ADI Meeting, we encourage you to submit the enclosed form of proxy as soon as possible. Notwithstanding the foregoing, the Chair of the ADI Meeting will have the discretion to accept proxies received after such deadline.

If you are a non-registered ADI Shareholder and have received these materials from your broker or another intermediary, please complete and return the voting instruction form or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your ADI Shares not being eligible to be voted at the ADI Meeting.

If you have any questions or require more information with regard to voting your ADI Shares, please feel free to contact the joint proxy solicitation agent, Kingsdale Shareholder Services, (i) by telephone, toll-free in North America at 1-888-518-6805 or at +1-416-867-2272 outside of North America, or (ii) by e-mail at [email protected].

On behalf of the board of directors of ADI, I would like to express our gratitude for the support ADI Shareholders have demonstrated. I would also like to thank the board of directors of ADI and ADI employees for their hard work and their support for the Arrangement. We look forward to seeing you at the ADI Meeting.

Yours very truly,

(signed) “Michael J. Harrison” Michael J. Harrison President and Chief Executive Officer Adriana Resources Inc.

- vii-


NOTICE OF SPECIAL MEETING OF SRC SHAREHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “SRC Meeting”) of the holders (“SRC Shareholders”) of common shares (“SRC Shares”) in the capital of Sprott Resource Corp. (“SRC”) will be held on January 25, 2017 at the offices of Blake, Cassels & Graydon LLP, 199 Bay Street, Commerce Court West, Suite 4000, Toronto, Ontario M5L 1A9 at 9:00 a.m. (Toronto time), for the following purposes:

1. to consider, pursuant to an interim order of the Ontario Superior Court of Justice (Commercial List) dated December 21, 2016 (the “Interim Order”), and, if thought advisable, to pass, with or without variation, a special resolution (the “Arrangement Resolution”), the full text of which is set forth in Appendix A to the accompanying joint management proxy circular of SRC and Adriana Resources Inc. (“ADI”) dated December 21, 2016 (the “Circular”) to approve a plan of arrangement (the “Arrangement”) under Section 192 of the Canada Business Corporations Act involving SRC, SRC Shareholders and Adriana Resources Inc.; and

2. to transact such further and other business as may properly be brought before the SRC Meeting or any adjournment(s) or postponement(s) thereof.

Specific details of the matters to be put before the SRC Meeting are set forth in the accompanying Circular.

The board of directors of SRC (excluding two members of the board who have declared an interest in, and refrained from voting in respect of, the transactions contemplated by the Arrangement) unanimously recommends that SRC Shareholders vote in favour of the Arrangement Resolution. It is a condition to the completion of the Arrangement that the Arrangement Resolution be approved at the SRC Meeting.

Each SRC Share entitled to be voted at the SRC Meeting will entitle the holder to one vote at the SRC Meeting. The Arrangement Resolution must be approved by at least 66 % of the votes cast by SRC Shareholders present in person or represented by proxy at the SRC Meeting. In addition, the Arrangement Resolution must be approved by a majority of the votes cast by SRC Shareholders, other than SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as the Arrangement constitutes a “business combination” for SRC for purposes of MI 61-101.

The record date (the “SRC Record Date”) for the determination of SRC Shareholders entitled to receive notice of and to vote at the SRC Meeting is December 19, 2016. Only SRC Shareholders whose names have been entered in the register of SRC Shareholders on the close of business on the SRC Record Date will be entitled to receive notice of and to vote at the SRC Meeting and any adjournment(s) or postponement(s) of the SRC Meeting.

Registered SRC Shareholders (i.e., SRC Shareholders who hold a physical certificate representing SRC Shares in their name) may attend the SRC Meeting in person or may be represented thereat by proxy. If you are a registered SRC Shareholder and are unable to attend the SRC Meeting in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to TSX Trust Company, SRC’s transfer agent. To be valid, completed proxies must be deposited with TSX Trust Company, (i) by mail using the enclosed return envelope or one addressed to TSX Trust Company, Proxy Department, 200 University Avenue, Suite 300, Toronto Ontario M5H 4H1, (ii) by hand delivery to TSX Trust Company at 200 University Avenue, Suite 300, Toronto Ontario M5H 4H1, or (iii) by facsimile to (416) 595-9593.

Registered SRC Shareholders may also, rather than returning the enclosed form of proxy by mail or hand delivery, elect to submit a proxy by use of telephone or the Internet. Those registered SRC Shareholders electing to vote by telephone require a touch-tone telephone to transmit their voting preferences. Registered SRC Shareholders electing to vote by telephone or via the Internet must follow the instructions included in the enclosed form of proxy.

Your proxy must be received in each case no later than 9:00 a.m. (Toronto time) on January 23, 2017 or, if the SRC Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the beginning of any adjournment or postponement of the SRC Meeting. Notwithstanding the foregoing, the Chair of the SRC

- viii -

Meeting will have the discretion to accept proxies received after such deadline. If you are unable to attend the SRC Meeting, we encourage you to submit the enclosed form of proxy as soon as possible. If an SRC Shareholder receives more than one form of proxy because such holder owns SRC Shares registered in different names or addresses, each form of proxy should be completed and returned.

A proxyholder has discretion under the accompanying form of proxy in respect of amendments or variations to matters identified in this Notice and with respect to other matters which may properly come before the SRC Meeting, or any adjournment or postponement thereof. As of the date hereof, management of SRC knows of no amendments, variations or other matters to come before the SRC Meeting other than the matters set forth in this Notice. SRC Shareholders who are planning on returning the form of proxy are encouraged to review the Circular carefully before submitting proxies.

It is the intention of the persons named in the enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote in favour of the Arrangement Resolution.

Pursuant to the Interim Order, registered SRC Shareholders have a right to dissent in respect of the Arrangement Resolution and to be paid an amount equal to the fair value of their SRC Shares. This right is described in the Circular. The dissent procedures require that a registered SRC Shareholder who wishes to dissent must send a written notice of objection to the Arrangement Resolution to SRC at Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2750, Toronto Ontario M5J 2J2, to be received not later than 5:00 p.m. (Toronto Time) on January 23, 2017 (or 5:00 p.m. (Toronto Time) on the day which is two business days immediately preceding the date that any adjourned or postponed SRC Meeting is reconvened or held, as the case may be), and must otherwise strictly comply with the dissent procedures described in the Circular. Failure to strictly comply with these dissent procedures may result in the loss or unavailability of the right to dissent. See the section entitled “SRC Shareholder Dissent Rights” in the Circular and Appendix F to the Circular. Non-registered holders of SRC Shares who hold SRC Shares registered in the name of a broker or other intermediary should be aware that only registered holders of SRC Shares have a right to dissent in respect of the Arrangement Resolution.

If you are a non-registered SRC Shareholder and have received these materials from your broker or another intermediary, please complete and return the voting instruction form or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your SRC Shares not being eligible to be voted at the SRC Meeting.

Dated at Toronto, Ontario, this 21st day of December, 2016.

BY ORDER OF THE BOARD OF DIRECTORS OF SPROTT RESOURCE CORP.

(signed) “Stephen Yuzpe” Stephen Yuzpe Chief Executive Officer Sprott Resource Corp.

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NOTICE OF SPECIAL MEETING OF ADI SHAREHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “ADI Meeting”) of the holders (“ADI Shareholders”) of common shares (“ADI Shares”) in the capital of Adriana Resources Inc. (“ADI”) will be held on January 25, 2017 at the offices of Stikeman Elliott LLP, 199 Bay Street, Suite 5300, Toronto, Ontario M5L 1B9 at 10:30 a.m. (Toronto time), for the following purposes:

1. to consider and, if thought advisable, to pass, with or without variation, an ordinary resolution (the “ADI Transactions Approval Resolution”), the full text of which is set forth in Appendix B to the accompanying joint management proxy circular of ADI and Sprott Resource Corp. (“SRC”) dated December 21, 2016 (the ‘‘Circular’’), to authorize and approve the acquisition by ADI of SRC (the “Arrangement”) pursuant to the Arrangement Agreement (as defined in the Circular), and certain related transactions, including, among other things: (i) the “Change of Management” (as defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance Manual) of ADI; (ii) the issuance of ADI Shares to the shareholders of SRC pursuant to the Arrangement Agreement; (iii) the reconstitution of the board of directors of ADI pursuant to the Arrangement Agreement and the execution and delivery by ADI of a management services agreement and the reconstitution of the management of ADI thereunder; (iv) the issuance of ADI Shares and common share purchase warrants (“Warrants”) of ADI in connection with private placements to certain affiliates of SRC and a proposed marketed private placement to third parties to be consummated by ADI in connection with the foregoing transactions; (v) the issuance by ADI of 0.25 of a Warrant per ADI Share to ADI Shareholders of record on the business day immediately preceding the effective date of the Arrangement; and (vi) the SRCLP Warrant Issuance (as defined in the Circular);

2. to consider and, if thought advisable, to pass, with or without amendment, a special resolution (the “ADI Name Change Resolution”), the full text of which is set forth in Appendix B to the accompanying Circular, to approve an amendment to the articles of ADI to change the name of ADI to “Sprott Resource Holdings Inc.” following the consummation of the Arrangement; and

3. to transact such further and other business as may properly be brought before the ADI Meeting or any adjournment(s) or postponement(s) thereof.

Specific details of the matters to be put before the ADI Meeting are set forth in the accompanying Circular.

The board of directors of ADI recommends that ADI Shareholders vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution. It is a condition to the completion of the Arrangement that the ADI Transactions Approval Resolution be approved at the ADI Meeting. The Arrangement is not conditional on the approval by ADI Shareholders of the ADI Name Change Resolution.

Each ADI Share entitled to be voted at the ADI Meeting will entitle the holder to one vote at the ADI Meeting. The ADI Transactions Approval Resolution must be approved by a simple majority of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting. The ADI Name Change Resolution is a special resolution and must be approved by at least 66 % of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting.

The record date (the “ADI Record Date”) for the determination of ADI Shareholders entitled to receive notice of and to vote at the ADI Meeting is December 19, 2016. Only ADI Shareholders whose names have been entered in the register of ADI Shareholders on the close of business on the ADI Record Date will be entitled to receive notice of and to vote at the ADI Meeting and any adjournment(s) or postponement(s) of the ADI Meeting.

Registered ADI Shareholders (i.e., ADI Shareholders who hold a physical certificate representing ADI Shares in their name) may attend the ADI Meeting in person or may be represented thereat by proxy. If you are a registered ADI Shareholder and are unable to attend the ADI Meeting in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to Computershare Investor Services Inc., ADI’s transfer

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agent. To be valid, completed proxies must be deposited with Computershare Investor Services Inc., (i) by mail using the enclosed return envelope or one addressed to Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, Canada, M5J 2Y1, or (ii) by hand delivery to Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, Canada, M5J 2Y1.

You may also vote using the telephone or through the Internet. To vote using the telephone, call 1-866-732-VOTE (8683) toll free. Follow the telephone voting instructions given to you and vote using the telephone referring to your holder account number and proxy access number provided on the enclosed form of proxy. To vote through the Internet, visit the website address shown on the form of proxy provided. Follow the online voting instructions given to you and vote over the Internet referring to your holder account number and proxy access number provided on the enclosed form of proxy.

Your proxy must be received in each case no later than 10:30 a.m. (Toronto time) on January 23, 2017 or, if the ADI Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the beginning of any adjournment or postponement of the ADI Meeting. Notwithstanding the foregoing, the Chair of the ADI Meeting will have the discretion to accept proxies received after such deadline. If you are unable to attend the ADI Meeting, we encourage you to submit the enclosed form of proxy as soon as possible. If an ADI Shareholder receives more than one form of proxy because such holder owns ADI Shares registered in different names or addresses, each form of proxy should be completed and returned.

A proxyholder has discretion under the accompanying form of proxy in respect of amendments or variations to matters identified in this Notice and with respect to other matters which may properly come before the ADI Meeting, or any adjournment or postponement thereof. As of the date hereof, management of ADI knows of no amendments, variations or other matters to come before the ADI Meeting other than the matters set forth in this Notice. ADI Shareholders who are planning on returning the form of proxy are encouraged to review the Circular carefully before submitting proxies.

It is the intention of the persons named in the enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution.

If you are a non-registered ADI Shareholder and have received these materials from your broker or another intermediary, please complete and return the voting instruction form or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your ADI Shares not being eligible to be voted at the ADI Meeting.

Dated at Toronto, Ontario, this 21st day of December, 2016.

BY ORDER OF THE BOARD OF DIRECTORS OF ADRIANA RESOURCES INC. (signed) “Michael J. Harrison” Michael J. Harrison President and Chief Executive Officer Adriana Resources Inc.

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GENERAL QUESTIONS AND ANSWERS FOR SRC SHAREHOLDERS

All capitalized terms used in this “General Questions and Answers for SRC Shareholders” but not otherwise defined herein have the meanings set forth under “Glossary of Terms”.

Q. What is the proposed Arrangement?

A. At the SRC Meeting, SRC Shareholders will be asked to consider and vote upon a proposed plan of arrangement under Section 192 of the Canada Business Corporations Act involving SRC, SRC Shareholders and ADI. Upon completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI.

At the ADI Meeting scheduled to be held on the same date as the SRC Meeting, ADI Shareholders will be asked to consider and, if thought advisable, pass a resolution authorizing and approving the acquisition by ADI of SRC pursuant to the Arrangement Agreement, and certain related transactions, including the “Change of Management” of ADI, the Financings and the Warrant Distribution.

Q. What are the proposed Warrant Distribution and Financings?

A. Under the Arrangement Agreement, ADI has agreed to issue one-quarter of an ADI Warrant to ADI Shareholders of record on the Business Day immediately preceding the effective date for the Arrangement. Each ADI Warrant would be exercisable to purchase one ADI Share at a price of $0.333 per ADI Share for a period of five years (subject to certain rights of ADI to accelerate expiry thereof).

In connection with the Arrangement, (i) Sprott Inc., (ii) Exploration Capital 2008 LP, and (iii) Term Oil, a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott Inc.), have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity by purchasing a combination of ADI Shares and ADI Warrants. In addition, pursuant to the terms of finder agreements to be entered into among SRC, ADI and each of Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (both wholly-owned limited partnerships of Sprott), Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering of up to 40 million units of ADI (each unit comprised of one ADI Share and one ADI Warrant) for gross proceeds of up to $10 million.

Q. How does the board of directors of SRC recommend that I vote?

A. The board of directors of SRC unanimously recommends that SRC Shareholders vote FOR the Arrangement.

Q. What are the benefits of the Arrangement and related transactions?

A. The SRC Board anticipates the Arrangement and related transactions will benefit SRC and SRC Shareholders in a variety of ways, including (among others):

• The Committed Financings will align shareholders of the combined entity with the manager of the combined entity and other well-known resource investors;

• The combined entity is expected to have, upon completion of the Arrangement, no debt, a cash position of approximately $55 million and available capital for investment of approximately $150 million, providing a larger capital base and positioning it for future growth in NAV through a diversified portfolio of investments;

• The difference between market capitalization and NAV of the combined entity is expected to be smaller than that currently experienced by SRC;

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• The combined entity is expected to benefit from improved access to global capital markets and liquidity to support new and existing investment opportunities; and

• SRC Shareholders will participate in any value increases associated with the Lac Otelnuk iron ore project in Nunavik, Québec, Canada through ADI’s 40% interest in Lac Otelnuk Mining Ltd.

Q. What will SRC Shareholders receive in the Arrangement?

A. SRC Shareholders will receive three ADI Shares for every SRC Share held. Immediately following the completion of the Warrant Distribution, the Arrangement and the Committed Financings, on a non-diluted basis: (i) former SRC Shareholders are anticipated to hold approximately 57% of the issued and outstanding ADI Shares, (ii) current ADI Shareholders are anticipated to hold approximately 31% of the issued and outstanding ADI Shares, and (iii) Sprott Inc., Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of the issued and outstanding ADI Shares.

Q. What is required for the Arrangement to become effective?

A. The Arrangement is subject to a number of conditions, including (among others):

(a) the Arrangement Resolution must be approved by:

(i) not less than two-thirds of the votes cast at the SRC Meeting, and

(ii) a majority of the votes cast by SRC Shareholders, other than those required to be excluded in determining such approval pursuant to MI 61-101;

(b) the ADI Transactions Approval Resolution must be approved by a majority of the votes cast at the ADI Meeting; and

(c) the Arrangement must be approved by the Ontario Superior Court of Justice.

Q. When do you expect the Transaction to be completed?

A. If the requisite shareholder and regulatory approvals are obtained and if the other conditions to the Arrangement becoming effective are satisfied or waived, it is expected that the Arrangement will become effective on or about February 9, 2017.

Q. Am I entitled to vote?

A. Only SRC Shareholders, who are holders of record as at December 19, 2016, are entitled to receive notice of and vote at the SRC Meeting either in person or by proxy.

Q. How can I vote?

A. Registered SRC Shareholders as at the SRC Record Date may attend the SRC Meeting to vote in person. If you are a Registered SRC Shareholder and do not plan to attend the SRC Meeting, you may vote by submitting a proxy form.

SRC Shareholders should complete and return the proxy form accompanying this Circular as instructed and by no later than 9:00 a.m. (Toronto time) on January 23, 2017 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the SRC Meeting is adjourned or postponed). Notwithstanding the foregoing, the Chair of the SRC Meeting will have the discretion to accept proxies received after such deadline.

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If you are a Beneficial Holder, you will have received this Circular from your intermediary along with a voting instruction form. You may receive more than one set of voting materials and multiple proxy forms or voting instruction forms if you hold multiple accounts. You are required to reach out to your intermediary to provide instructions as to how to vote your SRC Shares. If you receive multiple proxy forms or voting instruction forms, please complete, sign, date and return each proxy form or voting instruction form that you receive to ensure that you vote all the SRC Shares that you hold.

SRC may utilize the Broadridge QuickVote™ service to assist Beneficial Shareholders with voting their SRC Shares over the telephone. Alternatively, Kingsdale Shareholder Services may contact such Beneficial Shareholders to assist them with conveniently voting their SRC Shares directly over the phone.

Q. Who votes my securities and how will they be voted if I return a form of proxy?

A. The SRC Shares represented by proxies will be voted in favour of or voted against the Arrangement Resolution by the persons designated in the proxy form in accordance with the direction of the SRC Shareholders appointing them. In the event that no specification is made in the proxies, the SRC Shares represented by such proxies will be voted by the proxy nominees FOR the Arrangement Resolution.

Q. Can I appoint someone other than the individuals named in the enclosed form of proxy to vote my securities?

A. Yes, you have the right to appoint the person of your choice, who does not need to be an SRC Shareholder, to attend and act on your behalf at the SRC Meeting. If you wish to appoint a person other than those names in the form of proxy, then strike out those printed names appearing on the form of proxy and insert the name of your chosen proxyholder in the space provided or submit another appropriate form of proxy permitted by law, and in either case, send or deliver the completed proxy to the offices of TSX Trust Company before the above-mentioned deadline. IF YOU APPOINT A NON-MANAGEMENT PROXYHOLDER PLEASE MAKE THEM AWARE AND ENSURE THEY WILL ATTEND THE MEETING IN ORDER FOR THE VOTE TO COUNT.

Q. Can I revoke a proxy or voting instruction?

A. An SRC Shareholder may revoke a proxy:

(a) by an instrument in writing executed by the SRC Shareholder or by an attorney in writing or, if the SRC Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(i) with the TSX Trust Company at the office of the TSX Trust Company designated in the Notice of Meeting to SRC Shareholders and the Circular not later than 5:00 p.m. (Toronto time) on the Business Day preceding the day of the SRC Meeting, or any adjournment or postponement thereof; or

(ii) with the Chairman on the day of the SRC Meeting (or any adjournment or postponement thereof); or

(b) by a proxy bearing a later date or time than the date or time of the proxy being revoked ; or

(c) in any other manner permitted by law.

Q. What do I need to do now?

A. Carefully read and consider the information contained, and incorporated by reference into this Circular. You are required to make an important decision. If you have any questions about deciding how to vote, you should contact your own legal, tax, financial or other professional advisor. Your vote is important and you are encouraged to vote promptly.

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Q. What if I have other questions?

A. SRC Shareholders that have questions regarding the Arrangement or require further assistance are encouraged to contact the joint proxy solicitation and information agent, Kingsdale Shareholder Services, by: (i) telephone, toll-free in North America at 1-888-518-6805 or at 1-416-867-2272 outside of North America; or (ii) e-mail to [email protected].

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GENERAL QUESTIONS AND ANSWERS FOR ADI SHAREHOLDERS

All capitalized terms used in this “General Questions and Answers for ADI Shareholders” but not otherwise defined herein have the meanings set forth under “Glossary of Terms”.

Q. What is the proposed Arrangement?

A. At the ADI Meeting, ADI Shareholders will be asked to consider and, if thought advisable, pass a resolution authorizing and approving the acquisition by ADI of SRC pursuant to the Arrangement Agreement, and certain related transactions, including the “Change of Management” of ADI, the Financings and the Warrant Distribution.

At the SRC Meeting scheduled to be held on the same date as the ADI Meeting, SRC Shareholders will be asked to consider and vote upon the proposed Arrangement under Section 192 of the Canada Business Corporations Act involving SRC, SRC Shareholders and ADI. Upon completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI.

Q. What are the proposed Warrant Distribution and Financings?

A. Under the Arrangement Agreement, ADI has agreed to issue one-quarter of an ADI Warrant to ADI Shareholders of record on the Business Day immediately preceding the effective date for the Arrangement. Each ADI Warrant would be exercisable to purchase one ADI Share at a price of $0.333 per ADI Share for a period of five years (subject to certain rights of ADI to accelerate expiry thereof).

In connection with the Arrangement, (i) Sprott Inc., (ii) Exploration Capital 2008 LP, and (iii) Term Oil, a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott Inc.), have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity by purchasing a combination of ADI Shares and ADI Warrants. In addition, pursuant to the terms of finder agreements to be entered into among SRC, ADI and each of Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (both wholly-owned limited partnerships of Sprott), Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering of up to 40 million units of ADI (each unit comprised of one ADI Share and one ADI Warrant) for gross proceeds of up to $10 million.

Q. How does the board of directors of ADI recommend that I vote?

A. The board of directors of ADI recommends that ADI Shareholders vote FOR the ADI Transactions Approval Resolution and FOR the ADI Name Change Resolution.

Q. What are the benefits of the Arrangement and related transactions?

A. The ADI Board anticipates the Arrangement and related transactions will benefit ADI and ADI Shareholders in a variety of ways, including (among others):


• The combined entity is expected to have, upon completion of the Arrangement, no debt, a cash position of approximately $55 million and available capital for investment of approximately $150 million, providing a larger capital base and positioning it for future growth in NAV through a diversified portfolio of investments while reducing the risks associated with a single project and a single commodity.

• Proposed transactions are immediately accretive to the NAV per ADI Share.

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• ADI Warrants provide further value upside to ADI Shareholders.

• Retained ownership of existing interest in the Lac Otelnuk iron ore project in Nunavik, Québec, Canada through ADI’s 40% interest in Lac Otelnuk Mining Ltd.

Q. How will the Arrangement impact the capitalization of ADI?

A. Immediately following the completion of the Warrant Distribution, the Arrangement and the Committed Financings, on a non-diluted basis: (i) former SRC Shareholders are anticipated to hold approximately 57% of the issued and outstanding ADI Shares, (ii) current ADI Shareholders are anticipated to hold approximately 31% of the issued and outstanding ADI Shares, and (iii) Sprott Inc., Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of the issued and outstanding ADI Shares.

Q. What is required for the Arrangement to become effective?

A. The Arrangement is subject to a number of conditions, including (among others):

(a) the Arrangement Resolution must be approved by:

(i) not less than two-thirds of the votes cast at the SRC Meeting, and

(ii) a majority of the votes cast by SRC Shareholders, other than those required to be excluded in determining such approval pursuant to MI 61-101;

(b) the ADI Transactions Approval Resolution must be approved by a majority of the votes cast at the ADI Meeting; and

(c) the Arrangement must be approved by the Ontario Superior Court of Justice.

The ADI Name Change Resolution is a special resolution and must be approved by not less than two-thirds of the votes cast at the ADI Meeting. The Arrangement is not conditional on the approval of the ADI Name Change Resolution at the ADI Meeting.

Q. When do you expect the Arrangement to be completed?

A. If the requisite shareholder and regulatory approvals are obtained and if the other conditions to the Arrangement becoming effective are satisfied or waived, it is expected that the Arrangement will become effective on or about February 9, 2017.

Q. Am I entitled to vote?

A. Only ADI Shareholders, who are holders of record as at December 19, 2016, are entitled to receive notice of and vote at the ADI Meeting either in person or by proxy.

Q. How can I vote?

A. Registered ADI Shareholders as at the ADI Record Date may attend the ADI Meeting to vote in person. If you are a Registered ADI Shareholder and do not plan to attend the ADI Meeting, you may vote by submitting a proxy form.

ADI Shareholders should complete and return the proxy form accompanying this Circular as instructed and by no later than 10:30 a.m. (Toronto time) on January 23, 2017 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the ADI Meeting is adjourned or

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postponed). Notwithstanding the foregoing, the Chair of the ADI Meeting will have the discretion to accept proxies received after such deadline.

If you are a Beneficial Holder, you will have received this Circular from your intermediary along with a voting instruction form. You may receive more than one set of voting materials and multiple proxy forms or voting instruction forms if you hold multiple accounts. You are required to reach out to your intermediary to provide instructions as to how to vote your ADI Shares. If you receive multiple proxy forms or voting instruction forms, please complete, sign, date and return each proxy form or voting instruction form that you receive to ensure that you vote all the ADI Shares that you hold.

ADI may utilize the Broadridge QuickVote™ service to assist Beneficial Shareholders with voting their ADI Shares over the telephone. Alternatively, Kingsdale Shareholder Services may contact such Beneficial Shareholders to assist them with conveniently voting their ADI Shares directly over the phone.

Q. Who votes my securities and how will they be voted if I return a form of proxy?

A. The ADI Shares represented by proxies will be voted in favour of or voted against the ADI Transactions Approval Resolution and the ADI Name Change Resolution by the persons designated in the proxy form in accordance with the direction of the ADI Shareholders appointing them. In the event that no specification is made in the proxies, the ADI Shares represented by such proxies will be voted by the proxy nominees FOR the ADI Transactions Approval Resolution and the ADI Name Change Resolution.

Q. Can I appoint someone other than the individuals named in the enclosed form of proxy to vote my securities?

A. Yes, you have the right to appoint the person of your choice, who does not need to be an ADI Shareholder, to attend and act on your behalf at the ADI Meeting. If you wish to appoint a person other than those names in the form of proxy, then strike out those printed names appearing on the form of proxy and insert the name of your chosen proxyholder in the space provided or submit another appropriate form of proxy permitted by law, and in either case, send or deliver the completed proxy to the offices of Computershare Investor Services Inc. before the above-mentioned deadline. IF YOU APPOINT A NON-MANAGEMENT PROXYHOLDER PLEASE MAKE THEM AWARE AND ENSURE THEY WILL ATTEND THE MEETING IN ORDER FOR THE VOTE TO COUNT.

Q. Can I revoke a proxy or voting instruction?

A. An ADI Shareholder may revoke a proxy:

(a) by an instrument in writing executed by the ADI Shareholder or by an attorney in writing or, if the ADI Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(i) with the ADI Transfer Agent at the office of the ADI Transfer Agent designated in the Notice of Meeting to ADI Shareholders and the Circular not later than 5:00 p.m. (Toronto time) on the Business Day preceding the day of the ADI Meeting, or any adjournment or postponement thereof; or

(ii) with the Chairman on the day of the ADI Meeting (or any adjournment or postponement thereof); or

(b) a proxy bearing a later date or time than the date or time of the proxy being revoked; or

(c) in any other manner permitted by law.

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Q. What do I need to do now?

A. Carefully read and consider the information contained, and incorporated by reference into this Circular. You are required to make an important decision. If you have any questions about deciding how to vote, you should contact your own legal, tax, financial or other professional advisor. Your vote is important and you are encouraged to vote promptly.

Q. What if I have other questions?

A. ADI Shareholders that have questions regarding the Arrangement or require further assistance are encouraged to contact the joint proxy solicitation and information agent, Kingsdale Shareholder Services, by: (i) telephone, toll-free in North America at 1-888-518-6805 or at 1-416-867-2272 outside of North America; or (ii) e-mail to [email protected].

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JOINT MANAGEMENT PROXY CIRCULAR

These securityholder materials are being sent to both registered and non-registered holders of SRC Shares and ADI Shares. If you are a non-registered holder, and SRC or ADI as applicable, or their respective agents have 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 the SRC Shares or ADI Shares, as applicable, on your behalf.

Introduction

This Circular is furnished in connection with the solicitation of proxies by the management of SRC and ADI for use at the SRC Meeting and the ADI Meeting, respectively, and at any adjournment(s) or postponement(s) thereof. No Person has been authorized to give any information or make any representation in connection with the Arrangement or the issuance of ADI Shares in connection with the Arrangement, or other matters to be considered at the SRC Meeting or the ADI Meeting, other than those contained in this Circular, and if given or made, any such information or representation must not be relied upon as having been authorized.

This Circular does not constitute an offer to sell or a solicitation of an offer to purchase any securities or the solicitation of a proxy by any Person in any jurisdiction in which such an offer or solicitation is not authorized or in which the Person making such offer or solicitation is not qualified to do so or to any Person to whom it is unlawful to make such an offer or solicitation of an offer or a proxy solicitation. Neither the delivery of this Circular nor any distribution of the securities referred to in this Circular will, under any circumstances, create an implication that there has been no change in the information set forth herein since the date as of which such information is given in this Circular.

The information concerning ADI contained in this Circular has been provided by ADI. Although SRC has no knowledge that would indicate that any of such information is untrue or incomplete, SRC does not assume any responsibility for the accuracy or completeness of such information or the failure by ADI to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to SRC.

The information concerning SRC contained in this Circular has been provided by SRC. Although ADI has no knowledge that would indicate that any of such information is untrue or incomplete, ADI does not assume any responsibility for the accuracy or completeness of such information or the failure by SRC to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to ADI.

All summaries of, and references to, the Arrangement Agreement and the Plan of Arrangement in this Circular are qualified in their entirety by reference to the complete text of the Arrangement Agreement and the Plan of Arrangement, copies of which are attached as Appendix C and Schedule A to Appendix C, respectively, to this Circular. You are urged to carefully read the full text of the Arrangement Agreement and the Plan of Arrangement.

All capitalized terms used in this Circular (excluding the Appendices hereto unless stated otherwise) but not otherwise defined herein have the meanings set forth under “Glossary of Terms”. Information contained in this Circular is given as of December 21, 2016, unless otherwise specifically stated.

Supplemental Disclosure – Non-GAAP Measures

This Circular and certain documents incorporated by reference herein make reference to certain non-GAAP financial measures to assist in assessing SRC’s and ADI’s respective financial performance. Some of these non-GAAP measures include references to net present value, internal rate of return, payback period, net asset value, discount to net asset value, working capital and cash flow netbacks. Non-GAAP financial measures do not have standard meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Such non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, net income, cash flow from operating activities and other measures of financial performance as determined in accordance with GAAP as an indicator of performance. For additional information regarding these non-GAAP

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measures, see the SRC Annual MD&A, the SRC Interim MD&A, the ADI Annual MD&A and the ADI Interim MD&A, all of which are incorporated by reference herein. See also Appendix I “Information Concerning Sprott Resource Corp. – Documents Incorporated by Reference” and Appendix J “Information Concerning Adriana Resources Inc. – Documents Incorporated by Reference” of this Circular.

Information for United States Shareholders

Each of ADI and SRC are Canadian companies, and the solicitation of proxies for the ADI Meeting and the SRC Meeting by means of this Circular is not subject to the requirements of Section 14(a) of the U.S. Exchange Act. Accordingly, the solicitations and transactions contemplated in this Circular are being made in accordance with Canadian corporate laws and Securities Laws, and this Circular has been prepared solely in accordance with disclosure requirements applicable in Canada. ADI Shareholders and SRC Shareholders in the United States should be aware that such requirements are different from those of the United States applicable to registration statements under the U.S. Securities Act and proxy statements under the U.S. Exchange Act.

Information concerning the assets and operations of ADI and SRC, respectively, contained or incorporated by reference herein has been prepared in accordance with Securities Laws and is not comparable in all respects to similar information disclosed by United States companies. In addition, the financial statements of ADI and SRC contained or incorporated by reference in this Circular have been prepared in accordance with International Financial Reporting Standards and are subject to Canadian auditing and auditor independence standards, which differ from United States generally accepted accounting principles and auditing and auditor independence standards in certain material respects and thus are not directly comparable to financial statements of United States companies.

The enforcement by ADI Shareholders and SRC Shareholders of civil liabilities under United States federal securities laws may be affected adversely by the fact that both ADI and SRC are organized under the laws of Canada, that some or all of their officers and directors are residents of countries other than the United States, that the experts named in this Circular are residents of countries other than the United States, and that all or a substantial portion of the assets of ADI, SRC and such persons are located outside the United States. As a result, it may be difficult or impossible for ADI Shareholders or SRC Shareholders in the United States to effect service of process within the United States upon ADI and SRC and their directors or officers, or to realize, against them, upon judgments of courts of the United States predicated upon civil liabilities under the federal securities laws of the United States or “blue sky” laws of any state within the United States. In addition, ADI Shareholders and SRC Shareholders in the United States should not assume that the courts of Canada: (a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil liabilities under the federal securities laws of the United States or “blue sky” laws of any state within the United States; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the federal securities laws of the United States or “blue sky” laws of any state within the United States.

No broker, dealer, salesperson or other person has been authorized to give any information or make any representation other than those contained in this Circular and, if given or made, such information or representation must not be relied upon as having been authorized by ADI or SRC.

The Arrangement

The ADI Shares issuable to SRC Shareholders in exchange for their SRC Shares pursuant to the Arrangement have not been and will not be registered under the U.S. Securities Act, and will be issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof (“Section 3(a)(10)”). Section 3(a)(10) exempts the issuance of any securities issued in exchange for one or more bona fide outstanding securities (or partly in such exchange and partly for cash) from the registration requirements of the U.S. Securities Act where the terms and conditions of the issuance and exchange of such securities have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions of such issuance and exchange at which all persons to whom it is proposed to issue the securities have the right to appear and receive timely notice thereof.

The ADI Shares issuable to SRC Shareholders pursuant to the Arrangement will be, immediately following completion of the Arrangement, not subject to resale restrictions under the U.S. Securities Act, except with respect

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to persons who are “affiliates” of ADI on the Effective Date or were affiliates of ADI within 90 days before the Effective Date. Persons who may be deemed to be “affiliates” of an issuer include individuals or entities that control, are controlled by, or are under common control with, the issuer, whether through the ownership of voting securities, by contract, or otherwise, and generally include executive officers and directors of the issuer as well as principal shareholders of the issuer. Any resale of such ADI Shares by such an affiliate (or former affiliate) will be subject to the registration requirements of the U.S. Securities Act, absent an exemption therefrom. See “Procedure for the Arrangement to Become Effective – Securities Laws Matters in Connection with the Arrangement – United States”.

SRC Shareholders subject to United States federal taxation should be aware that the tax consequences to them of the Arrangement under certain United States federal income tax laws described in this Circular are a summary only. See “Certain United States Federal Income Tax Considerations Relating to the Arrangement”. They are urged to consult their own tax advisors to determine the particular tax consequences to them of participating in the Arrangement and the ownership and disposition of ADI Shares acquired pursuant to the Arrangement.

THE ARRANGEMENT HAS NEITHER BEEN APPROVED OR DISAPPROVED BY THE SEC OR THE SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES, NOR HAS THE SEC OR ANY SUCH AUTHORITY PASSED ON THE ADEQUACY OR ACCURACY OF THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

Warrant Distribution

No U.S. Shareholders other than Qualified U.S. Shareholders of ADI will actually receive Warrant Certificates pursuant to the Warrant Distribution. See “Warrant Distribution” elsewhere in this Circular.

In order to receive Warrant Certificates, an ADI Shareholder that is a U.S. Shareholder will be required to complete and submit (and not withdraw) a Qualified U.S. Shareholder Certification (including all documentation required by ADI as part of the Qualified U.S. Shareholder Certification) certifying its status as an Accredited Investor. A U.S. Shareholder that is not an Accredited Investor or does not submit a properly completed and executed Qualified U.S. Shareholder Certification (including all required documentation) on or prior to the close of business (Toronto time) on the Business Day immediately preceding the Effective Date will not receive Warrant Certificates. Such Non-Qualified U.S. Shareholders will have their ADI Warrants issued to and held on their behalf by the Sales Agent and subsequently sold by the Sales Agent on their behalf as soon as practicable after the Effective Date, with the cash proceeds therefrom to be distributed to such Non-Qualified U.S. Shareholders of ADI. See “Warrant Distribution” elsewhere in this Circular.

The ADI Warrants to be issued and distributed under the Warrant Distribution have not been and will not be registered under the U.S. Securities Act, and will be issued and distributed in reliance on the exemption from registration set forth in Rule 506(c) of Regulation D under the U.S. Securities Act. The ADI Warrants will not be listed for trading on any United States stock exchange, and ADI Warrants issued and distributed to Qualified U.S. Shareholders of ADI may only be resold to ADI or outside the United States pursuant to Rule 904 of Regulation S under the U.S. Securities Act.

As described in the Qualified U.S. Shareholder Certification, ADI Warrants may not be exercised in the United States unless the ADI Shares underlying such ADI Warrants are registered under the U.S. Securities Act or an exemption from such registration requirements is available. In addition, ADI Shares issuable upon exercise of such ADI Warrants in the United States will also be subject to the resale restrictions set out in the Qualified U.S. Shareholder Certification.

ADI Shareholders subject to United States federal taxation should be aware that the tax consequences to them of the Warrant Distribution under certain United States federal income tax laws described in this Circular are a summary only. See “United States Federal Income Tax Considerations Relating to the Warrant Distribution”. They are urged to consult their own tax advisors to determine the particular tax consequences to them of the Warrant Distribution, the exercise of ADI Warrants and the ownership and disposition of ADI Warrants and/or ADI Shares acquired pursuant to the exercise of ADI Warrants.

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THE WARRANT DISTRIBUTION HAS NEITHER BEEN APPROVED OR DISAPPROVED BY THE SEC OR THE SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES, NOR HAS THE SEC OR ANY SUCH AUTHORITY PASSED ON THE ADEQUACY OR ACCURACY OF THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

Sprott Global Financing

Neither the ADI Units to be issued in the Sprott Global Financing, nor the ADI Shares and ADI Warrants underlying such units have been, nor will they be, registered under the U.S. Securities Act, and such securities may not be offered or sold in the United States absent an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The ADI Units will be issued in reliance upon an exemption from the registration requirements of the U.S. Securities Act. Accordingly, the ADI Units, including the ADI Shares and ADI Warrants underlying such units, issued to persons in the United States will be “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act and will be subject to resale restriction.

THE SPROTT GLOBAL FINANCING HAS NEITHER BEEN APPROVED OR DISAPPROVED BY THE SEC OR THE SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES, NOR HAS THE SEC OR ANY SUCH AUTHORITY PASSED ON THE ADEQUACY OR ACCURACY OF THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

Currency

Except as otherwise indicated, all dollar amounts indicated in this Circular are expressed in Canadian dollars. The following table sets forth, for the periods indicated, the high, low, average and period-end noon spot rates of exchange for the U.S. dollar, expressed in Canadian dollars per U.S. dollar, based on the data published by the Bank of Canada (the “Bank of Canada”).

Year Ended December 31 Nine Months Ended September 30 2015 2014 2013 2016 2015 Rate at end of Period $1.3840 $1.1601 $1.0636 $1.3117 $1.3394 Average rate during Period $1.2787 $1.1045 $1.0299 $1.3228 $1.2599High during Period $1.3990 $1.1643 $1.0697 $1.4589 $1.4589Low during Period $1.1728 $1.0614 $0.9839 $1.2544 $1.1728 On December 21, 2016, the Bank of Canada noon rate for the conversion of U.S. dollars into Canadian dollars was U.S.$1.00 = CDN$1.3401.

FORWARD-LOOKING INFORMATION

This Circular and the documents incorporated by reference herein contain certain forward-looking information and forward-looking statements (collectively referred to as “forward-looking statements”) within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intend”, “may”, “plan”, “predict”, “project”, “should”, “target”, “will”, or similar words suggesting future outcomes or language suggesting an outlook. In particular, this Circular and the documents incorporated by reference herein contain forward-looking statements pertaining to, among other things, the following:

• the anticipated tax treatment of the Arrangement for SRC Shareholders;

• the anticipated tax treatment of the Warrant Distribution for ADI Shareholders;

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• the anticipated closing date of the Warrant Distribution, the Arrangement and the Financings;

• the listing of the ADI Shares and the ADI Warrants on the TSX;

• the anticipated benefits of the Arrangement;

• the timing and anticipated receipt of required regulatory, Court and shareholder approvals for the Warrant Distribution, the Arrangement and the Financings, as applicable;

• the ability of SRC and ADI to satisfy the conditions to, and to complete, the Arrangement;

• the combined entity’s intended transition from a private equity firm to a diversified holding company and the anticipated benefits therefrom;

• the exercise of Dissent Rights by SRC Shareholders with regards to the Arrangement;

• the combined entity’s goals with respect to returns on capital, risk management and wealth preservation;

• the combined entity’s investment strategy, investment process and competitive advantage;

• realization of the anticipated benefits of acquisitions and dispositions of investments in the combined entity’s portfolio;

• anticipated changes in the mix of the businesses and investments currently held by SRC; and

• any increase in the value of the LOM Project.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to SRC, ADI, SRC Shareholders and ADI Shareholders. Forward-looking statements are provided for the purpose of providing information about current expectations of SRC and ADI management and plans relating to the future. Reliance on such information may not be appropriate for other purposes, such as making investment decisions.

Forward-looking statements are based on the current beliefs of SRC and ADI, as well as assumptions made by, and information currently available to, SRC and ADI, as applicable, concerning, among other things, matters relating to the Arrangement, the timely receipt of required regulatory and Court approvals and the satisfaction of other closing conditions in accordance with the terms of the Arrangement Agreement, satisfaction of the listing criteria of the TSX, the completion of the Financings, the success of SRC’s and ADI’s operations, prevailing regulatory and tax laws and regulations, stock market volatility and market valuations, and that there will be no significant events occurring outside of the normal course of business of SRC or ADI, as applicable. Although the management of SRC and ADI consider these assumptions to be reasonable based on information currently available, they may prove to be incorrect. See “Forward-Looking Information and Statements” in the SRC AIF and “Forward Looking Information” in the SRC Annual MD&A and “Cautionary Statement Regarding Forward-Looking Information” in the ADI Annual MD&A.

By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific), some of which are beyond the control of SRC and ADI and risks that forward-looking statements will not be achieved. These factors include, but are not limited to, failure to complete the Arrangement in all material respects in accordance with the Arrangement Agreement or at all, inability to meet the TSX’s listing conditions, unforeseen

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difficulties in integrating the assets of SRC’s and ADI’s operations, the regulatory environment and decisions, financial risks, substantial capital requirements, bank financing, prices, markets and marketing, uninsurable risks, management of growth, the impact of environmental events, unanticipated operating events, competition for, among other things, capital reserves and skilled personnel, reliance on key alliances and agreements, third party performance of obligations under contractual arrangements, conflicts of interest, variations in exchange rates and hedging and uncertainty in global financial markets. See “Forward-Looking Information and Statements” in the SRC AIF and “Forward Looking Information” in the SRC Annual MD&A and “Cautionary Statement Regarding Forward-Looking Information” in the ADI Annual MD&A.

SRC Shareholders and ADI Shareholders are cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate at the time of preparation, may prove to be incorrect. Accordingly, SRC Shareholders and ADI Shareholders are cautioned that the actual results achieved will vary from the information provided herein and the variations may be material. SRC Shareholders and ADI Shareholders are also cautioned that the foregoing list of factors is not exhaustive. Consequently, there is no representation by SRC or ADI that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements. Furthermore, the forward-looking statements contained in this Circular and the documents incorporated by reference herein are made as of the date of such documents, and neither SRC nor ADI undertakes any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this Circular and the documents incorporated by reference herein are expressly qualified by this cautionary statement.

GLOSSARY OF TERMS

The following is a glossary of certain terms used in this Circular including the Summary and Appendices.

“Accredited Investor” means a person that is an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the U.S. Securities Act;

“Acquisition Proposal” relating to a Party means, other than the transactions contemplated by the Arrangement Agreement, any offer, proposal or inquiry (written or oral) from any Person or group of Persons other than the other Party or one or more of its affiliates relating to: (i) any direct or indirect sale, disposition, alliance or joint venture (or any lease, long-term supply agreement or other arrangement having the same economic effect as a sale), in a single transaction or a series of related transactions, of assets (including voting or equity securities of such Party’s Subsidiaries) representing 20% or more of the consolidated assets of such Party (based on the consolidated statement of financial position of such Party most recently filed as part of the SRC Filings or the ADI Filings, as applicable, prior to such time) or contributing 20% or more of the consolidated annual revenue of such Party (based on the consolidated annual financial statements of such Party most recently filed as part of the SRC Filings or the ADI Filings, as applicable, prior to such time) or of 20% or more of the voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of such Party; (ii) any direct or indirect take-over bid, tender offer, exchange offer, treasury issuance or similar transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of such Party; (iii) any plan of arrangement, merger, amalgamation, consolidation, security exchange, business combination, reorganization, recapitalization, liquidation, dissolution, or winding up involving such Party or any of its Subsidiaries holding 20% or more of the consolidated assets of such Party or contributing 20% or more of the consolidated revenue of such Party; or (iv) any treasury issuance in consideration for securities of another issuer which represents 75% of more of the outstanding voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of such Party;

“ADI” means Adriana Resources Inc., a corporation existing under the CBCA;

“ADI Annual Financial Statements” means the audited consolidated financial statements of ADI, together with the notes thereto and the auditor’s report thereon as at and for the years ended December 31, 2015 and 2014;

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“ADI Annual MD&A” means the management’s discussion and analysis of ADI for the year ended December 31, 2015;

“ADI Assets” means all of the assets, properties (real or personal), permits, rights, licences, waivers or consents (whether contractual or otherwise) of ADI and its Subsidiaries;

“ADI Board” means the board of directors of ADI, as constituted from time to time;

“ADI Board Recommendation” means a statement that the ADI Board recommends that ADI Shareholders vote in favour of the ADI Resolutions;

“ADI Fairness Opinion” means the opinion of the ADI Financial Advisor to the effect that, as of the date of such opinion, the Arrangement and the Warrant Distribution are fair, from a financial point of view, to the ADI Shareholders, other than SRC and its affiliates;

“ADI Filings” means all documents publicly filed by or on behalf of ADI on SEDAR on or after January 1, 2014;

“ADI Financial Advisor” or “Primary Capital” means Primary Capital Inc.;

“ADI Interim Financial Statements” means the unaudited condensed interim consolidated financial statements of ADI, together with the notes thereto, as at September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015;

“ADI Interim MD&A” means the management’s discussion and analysis of ADI for the three and nine months ended September 30, 2016;

“ADI Lock-Up Agreements” means the lock-up agreements dated the date of the Arrangement Agreement between SRC and the ADI Locked-Up Shareholders;

“ADI Locked-Up Shareholders” means the directors, officers and other shareholders of ADI set forth in Section 1.1 of the disclosure letter of ADI delivered to SRC with the Arrangement Agreement;

“ADI Meeting” means the meeting of ADI Shareholders, including any adjournment or postponement of such meeting, to be called and held to consider the ADI Resolutions;

“ADI Name Change Resolution” means the special resolution of the ADI Shareholders to authorize and approve an amendment to the articles of ADI to change the name of ADI to Sprott Resource Holdings Inc. following the consummation of the Arrangement and the Financings, substantially in the form set out in Appendix B to this Circular (as such resolution may be amended or modified by ADI (with the consent of SRC, acting reasonably));

“ADI Options” means outstanding options to purchase ADI Shares issued by ADI under the ADI SOPs;

“ADI Record Date” means December 19, 2016;

“ADI Resolutions” means, collectively, the ADI Transactions Approval Resolution and the ADI Name Change Resolution;

“ADI Shareholders” means the registered and/or beneficial holders of the ADI Shares, as the context requires;

“ADI Shares” means the common shares in the capital of ADI;

“ADI SOPs” means, collectively: (i) the incentive stock option plan of ADI approved by the ADI Shareholders on June 13, 2013; and (ii) the stock option plan of ADI approved by the ADI Board on May 9, 2016;

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“ADI Transaction Committee” has the meaning ascribed thereto under the heading “The Arrangement – Background to the Arrangement”;

“ADI Transactions Approval Resolution” means (i) the ordinary resolution of the ADI Shareholders to authorize and approve the acquisition by ADI of SRC pursuant to the Arrangement Agreement and certain related transactions provided for herein, including the “Change of Management” (as defined in Policy 1.1 of the TSXV) of ADI, substantially in the form set out in Appendix B to this Circular;

“ADI Transfer Agent” means Computershare Investor Services Inc.;

“ADI Units” means the units of ADI, each comprised of one ADI Share and one ADI Warrant, to be issued in connection with the Exploration Capital Partners 2008 Financing, the Term Oil Financing and the Sprott Global Financing;

“ADI Warrant Shares” has the meaning ascribed thereto under the heading “Related Transactions – Warrant Distribution – Certain Canadian Federal Income Tax Considerations Relating to the Warrant Distribution”;

“ADI Warrants” means the common share purchase warrants of ADI providing for the right of the holder to purchase one ADI Share per warrant at a price equal to $0.333 with an expiry date of five years from the Effective Date; provided, however, that if, after the fourth month following the Effective Date, the weighted average trading price of the ADI Shares for any 45 consecutive trading day period is greater than $0.583 per ADI Share, the expiry date may be accelerated by ADI providing a notice to holders of such warrants whereupon the expiry date shall become the 30th day following the date on which such notice is provided, and with such other terms and conditions as may be specified in the Warrant Indenture;

“affiliate” has the meaning ascribed thereto in National Instrument 45-106 – Prospectus Exemptions;

“Arrangement” means an arrangement under Section 192 of the CBCA in respect of SRC on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations to the Plan of Arrangement made in accordance therewith and with the terms of the Arrangement Agreement or made at the direction of the Court in the Final Order with the consent of SRC and ADI, each acting reasonably;

“Arrangement Agreement” means the Arrangement Agreement between SRC and ADI dated November 29, 2016, as amended or supplemented from time to time, providing for, among other things, the Plan of Arrangement and the Arrangement and all amendments thereto, a copy of which is attached as Appendix C to this Circular;

“Arrangement Resolution” means the special resolution approving the Arrangement to be considered at the SRC Meeting by the SRC Shareholders, substantially in the form set out in Appendix A to this Circular;

“Articles of Arrangement” means the articles of arrangement of SRC in respect of the Arrangement, required by the CBCA to be sent to the Director after the Final Order is made, which shall include the Plan of Arrangement and otherwise be in a form and content satisfactory to SRC and ADI, each acting reasonably;

“Authorization” means, with respect to any Person, any order, permit, certificate, accreditation, approval, consent, waiver, registration, licence or similar authorization of any Governmental Entity having jurisdiction over the Person;

“Beneficial Holders” has the meaning ascribed thereto under the heading “Information for Beneficial Holders”;

“Broadridge” means Broadridge Financial Solutions, Inc.;

“Business Day” means any day of the year, other than a Saturday, a Sunday or a day on which major banks are closed for business in Toronto, Ontario;

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“Canada-U.S. Tax Convention” has the meaning ascribed thereto under the heading “Related Transactions – Warrant Distribution – Certain Canadian Federal Income Tax Considerations Related to the Warrant Distribution – ADI Holders Not Resident in Canada – Dividends on ADI Warrant Shares”;

“CBCA” means the Canada Business Corporations Act;

“Certificate of Arrangement” means the certificate of arrangement to be issued by the Director pursuant to subsection 192(7) of the CBCA in respect of the Articles of Arrangement;

“Circular” means the notice of the SRC Meeting and the notice of the ADI Meeting and the accompanying joint management proxy circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such joint management proxy circular, to be sent to each SRC Shareholder and other Person as required by the Interim Order and Law in connection with the SRC Meeting and to be sent to each ADI Shareholder and other Person as required by Law in connection with the ADI Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of the Arrangement Agreement;

“Code” means the United States Internal Revenue Code of 1986, as amended;

“Committed Financings” means collectively, the Sprott Inc. Financing, the Term Oil Financing and the Exploration Capital Partners 2008 Financing;

“CRC” has the meaning ascribed thereto under the heading “The Arrangement – Background to the Arrangement”;

“Consideration” means three ADI Shares per SRC Share;

“Contract” means any agreement, commitment, engagement, contract, franchise, licence, lease, obligation, note, bond, mortgage, indenture, undertaking or joint venture (written or oral) to which a Party or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or affected or to which any of their respective properties or assets is subject;

“Court” means the Ontario Superior Court of Justice (Commercial List), or other court as applicable;

“CRA” means the Canada Revenue Agency;

“Depositary” means TSX Trust Company in its capacity as depositary in respect of the exchange of certificates representing SRC Shares;

“Director” means the Director appointed pursuant to Section 260 of the CBCA;

“Director DSU Plan” means the director deferred share unit plan of SRC effective as of August 13, 2013;

“Director DSUs” means the deferred share units issued under the Director DSU Plan;

“Dissent Rights” has the meaning ascribed thereto under the heading “SRC Shareholder Dissent Rights”;

“Effective Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement;

“Effective Time” means 12:01 a.m. in Toronto, Ontario on the Effective Date, or such other time in Toronto, Ontario on the Effective Date as SRC and ADI, each acting reasonably, may agree in writing prior to the Effective Date;

“Environmental Laws” means all Laws and agreements relating to pollution or the protection or quality of the environment or to the Release or threatened Release of Hazardous Substances into the environment and all Authorizations issued pursuant to such Laws;

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“Existing MSA” means the second amended and restated management services agreement between SRC and SCLP effective January 1, 2015;

“Existing Partnership Agreement” means the second amended and restated partnership agreement between SRC and SRCLP concerning SRP effective January 1, 2015;

“Exploration Capital 2008 LP” means Exploration Capital Partners 2008 Limited Partnership, a fund managed by a subsidiary of Sprott Inc.;

“Exploration Capital Partners 2008 Financing” means the proposed $4,000,000 private placement of ADI Units, at a price of $0.25 per unit, to Exploration Capital 2008 LP;

“Exploration Capital Partners 2008 Subscription Agreement” means the subscription agreement dated November 29, 2016 with respect to the Exploration Capital Partners 2008 Financing;

“Final Order” means the final order of the Court in a form acceptable to both SRC and ADI, each acting reasonably, approving the Arrangement, as such order may be amended, modified, supplemented or varied by the Court (with the consent of SRC and ADI, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn, abandoned or denied, as affirmed or as amended (provided that any such amendment is acceptable to SRC and ADI, each acting reasonably) on appeal;

“Financings” means, collectively, the Sprott Inc. Financing, the Term Oil Financing, the Exploration Capital Partners 2008 Financing and the Sprott Global Financing;

“GAAP” means generally accepted accounting principles as set out in the CPA Canada Handbook – Accounting for an entity that prepares its financial statements in accordance with International Financial Reporting Standards, at the relevant time, applied on a consistent basis;

“Governmental Entity” means (i) any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public body, authority or department, central bank, court, tribunal, arbitral body, commission, board, bureau, commissioner, ministry, governor-in-council, agency or instrumentality, domestic or foreign; (ii) any subdivision or authority of any of the above; (iii) any quasi-governmental, administrative or private body, including any tribunal, commission, committee, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or (iv) any stock exchange;

“Hazardous Substances” means any material or substance that is prohibited, listed, defined, designated or classified as dangerous, hazardous, radioactive, explosive, corrosive, flammable, leachable, oxidizing, or toxic or a pollutant or a contaminant under or pursuant to any applicable Environmental Laws, and including petroleum and all derivatives thereof or synthetic substitutes therefor (including polychlorinated biphenyls);

“Indemnified Person” has the meaning ascribed thereto under the heading “Effect of the Arrangement – The Arrangement Agreement – Covenants of SRC and ADI – Covenants Regarding Insurance and Indemnification”;

“Interested Directors” means those members of the SRC Board who, at the meeting of the SRC Board held on November 25, 2016, declared an interest in, and refrained from voting in respect of, the resolutions of the SRC Board approving the transactions contemplated by the Arrangement Agreement;

“Interim Order” means the interim order of the Court in a form acceptable to SRC and ADI, each acting reasonably, providing for, among other things, the calling and holding of the SRC Meeting, as such order may be amended, modified, supplemented or varied by the Court with the consent of SRC and ADI, each acting reasonably;

“Investment Company Act” means the United States Investment Company Act of 1940;

“IRS” means United States Internal Revenue Service;

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“Law” means, with respect to any Person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention, ordinance, by-law, code, rule, regulation, order, injunction, judgment, award, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business, undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended unless expressly specified otherwise;

“Letter of Transmittal” means the letter of transmittal to be sent by SRC to the SRC Shareholders in connection with the Arrangement;

“LOM Project” has the meaning ascribed thereto under the heading “The Arrangement – Background to the Arrangement”;

“Matching Period” has the meaning ascribed thereto under the heading “Effect of the Arrangement – The Arrangement Agreement – Right to Match”;

“Material Adverse Effect” in respect of a Party means any change, event, occurrence, effect, state of facts or circumstance that, individually or in the aggregate with other such changes, events, occurrences, effects, states of facts or circumstances, is or would reasonably be expected to be material and adverse to the business, results of operations, assets, properties, condition (financial or otherwise), liabilities (contingent or otherwise) or operations of the Party and its Subsidiaries, taken as a whole, except any such change, event, occurrence, effect, state of facts or circumstance resulting from or arising in connection with:

(i) any change affecting one or more of the industries in which the Party and its Subsidiaries operate;

(ii) any change in currency exchange, interest or inflation rates, in political conditions (including the outbreak or escalation of war, military action or acts of terrorism) or in general economic, business, regulatory, financial, credit or capital market conditions in Canada or elsewhere;

(iii) any adoption, proposal or implementation of, or change in, Law or in the interpretation thereof by any Governmental Entity;

(iv) any change in GAAP or changes in regulatory accounting requirements;

(v) any natural disaster;

(vi) the failure of a Party to meet any internal or published projections, forecasts or estimates of revenues, earnings, sales, margins or cash flows (it being understood that the causes underlying such failure may be taken into account in determining whether a Material Adverse Effect has occurred);

(vii) any action taken (or omitted to be taken) by the Party or any of its Subsidiaries upon the written request or with the written consent of the other Party;

(viii) the execution, announcement or performance of the Arrangement Agreement or the consummation of the transactions contemplated hereby, including any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of the Party or any of its Subsidiaries with any of their current or prospective employees, customers, securityholders, financing sources, vendors, distributors, regulators, suppliers or partners arising as a direct consequence thereof; or

(ix) any change in the market price or trading volume of any securities of the Party or any of its Subsidiaries (it being understood that the causes underlying such change in market

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price or trading volume may be taken into account in determining whether a Material Adverse Effect has occurred), or any suspension of trading in securities generally on any securities exchange on which the securities of the Party or any of its Subsidiaries trade;

provided, however, that (A) with respect to clauses (i) through to and including (v), such matter does not have a materially disproportionate effect on the Party and its Subsidiaries, taken as a whole, relative to other comparable companies and entities operating in the industries in which such Party and its Subsidiaries operate; and (B) references in certain Sections of the Arrangement Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative for purposes of determining whether a “Material Adverse Effect” has occurred;

“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions;

“misrepresentation” has the meaning ascribed thereto in the Securities Act (Ontario);

“NAV” means net asset value;

“New MSA” means the management services agreement to be entered into between ADI and SCLP in connection with the Arrangement;

“New Partnership Agreement” means the third amended and restated partnership agreement to be entered into between SRC and SRCLP in respect of SRP, in connection with the Arrangement;

“Non-Qualified U.S. Shareholder” means a U.S. Shareholder of ADI that is not an Accredited Investor or that fails to submit the required Qualified U.S. Shareholder Certification (including all documentation required by ADI as part of the Qualified U.S. Shareholder Certification);

“Ordinary Course” means, with respect to an action taken by any Person, that such action is consistent in nature and scope with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of the business of such Person;

“Outside Date” means March 31, 2017 or such later date as may be agreed to in writing by the Parties;

“Parties” means, collectively, SRC and ADI and “Party” means either one of them;

“Person” includes any individual, partnership, limited partnership, association, body corporate, organization, joint venture, trust, estate, trustee, executor, administrator, legal representative, government (including Governmental Entity), syndicate or other entity, whether or not having legal status;

“PFIC” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations Relating to the Arrangement – U.S. Federal Income Tax Consequences of the Arrangement – PFIC Status of SRC”;

“Plan” or “Plan of Arrangement” means the plan of arrangement, substantially in the form set out in Schedule A to the Arrangement Agreement, subject to any amendments or variations to such plan made in accordance with the Arrangement Agreement and the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of SRC and ADI, each acting reasonably;

“Proceeding” means any suit, claim, action, charge, complaint, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, audit, examination or investigation commenced, brought, conducted or heard by or before, any court or other Governmental Entity;

“Qualified U.S. Shareholder” means a registered U.S. Shareholder of ADI of record on the Business Day immediately preceding the Effective Date that is an Accredited Investor meeting the requirements determined by ADI in connection with the Warrant Distribution so as to permit ADI Warrants to be distributed to such U.S.

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Shareholder without registration under applicable U.S. federal or state securities laws, who submits (and does not withdraw) to ADI, on or prior to the Business Day immediately preceding the Effective Date, a properly completed and executed Qualified U.S. Shareholder Certification (including all documentation required by ADI as part of the Qualified U.S. Shareholder Certification);

“Qualified U.S. Shareholder Certification” means the certification to be provided by a U.S. Shareholder of ADI that qualifies a U.S. Shareholder as a Qualified U.S. Shareholder. A form of Qualified U.S. Shareholder Certification (including a list of required documentation) and related instructions is enclosed with this Circular for the benefit of U.S. Shareholders in connection with the Warrant Distribution;

“RRIF” means registered retirement income fund;

“RRSP” means registered retirement savings plan;

“Registered SRC Shareholder” means a registered holder of SRC Shares as recorded in the SRC’s shareholders’ register maintained by the SRC Transfer Agent;

“Release” has the meaning ascribed thereto in any Environmental Law and includes any spill, leak, pumping, addition, pouring, emission, emptying, discharge, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement or introduction of a Hazardous Substance into the environment;

“Representatives” of a Party means the officers, directors, employees, financial advisors, legal counsel, accountants and other agents and representatives of the Party;

“Sales Agent” means such institution as ADI and SRC may select;

“SCLP” means Sprott Consulting Limited Partnership;

“SEC” means the United States Securities and Exchange Commission;

“Section 3(a)(10)” has the meaning ascribed thereto under the heading “Information for United States Shareholders – The Arrangement”;

“Securities Authority” means the applicable securities commission or securities regulatory authority of a province or territory of Canada;

“Securities Laws” means the Securities Act (Ontario) and any other applicable Canadian provincial and territorial securities laws, rules and regulations and published policies thereunder;

“SEDAR” means the System for Electronic Document Analysis and Retrieval maintained on behalf of the Securities Authorities;

“Shareholders” means, collectively, SRC Shareholders and/or ADI Shareholders, as the context may require;

“Sprott Global Financing” means the proposed $10 million private placement of ADI Units, at a price of $0.25 per unit, to be marketed on a best efforts basis to certain accredited investors identified by Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed by them), acting as finders;

“Sprott Inc. Financing” means the proposed $10,000,000 private placement of ADI Shares at a price of $0.233 per share to Sprott Inc.;

“Sprott Inc. Subscription Agreement” means the subscription agreement dated November 29, 2016 with respect to the Sprott Inc. Financing;

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“SRC” means Sprott Resource Corp., a corporation existing under the CBCA;

“SRC 2016 AGM Circular” means the information circular of SRC dated April 6, 2016 in connection with the annual meeting of SRC Shareholders held on May 11, 2016;

“SRC AIF” means the annual information form of SRC dated March 4, 2016 for the year ended December 31, 2015;

“SRC Annual Financial Statements” means the audited consolidated financial statements of SRC, together with the notes thereto and the auditors’ reports thereon as at and for the years ended December 31, 2015 and 2014;

“SRC Annual MD&A” means management’s discussion and analysis of the financial and operating results of SRC for the year ended December 31, 2015;

“SRC Assets” means all of the assets, properties (real or personal), Authorizations, permits, rights, licences, waivers or consents (whether contractual or otherwise) of SRC and its Subsidiaries;

“SRC Board” means the board of directors of SRC, as constituted from time to time;

“SRC Board Recommendation” means a statement that the SRC Board (excluding the Interested Directors) unanimously recommends that SRC Shareholders vote in favour of the Arrangement Resolution;

“SRC Dissenting Shareholder” means an SRC Shareholder who, who has properly and validly exercised Dissent Rights in strict compliance with the dissent procedures described under the heading “SRC Shareholder Dissent Rights” in this Circular and who has not withdrawn or been deemed to have withdrawn such dissent, but only in respect of the SRC Shares;

“SRC Dissenting Shares” means the SRC Shares in respect of which an SRC Dissenting Shareholder dissents;

“SRC Fairness Opinion” means the opinion of the SRC Financial Advisor to the effect that, as of the date of such opinion, the consideration to be received by the SRC Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the SRC Shareholders;

“SRC Filings” means all documents publicly filed by or on behalf of SRC on SEDAR on or after January 1, 2014;

“SRC Financial Advisor” or “GMP” means GMP Securities L.P.;

“SRC Interim Financial Statements” means the unaudited consolidated interim financial statements of SRC, together with the notes thereto, as at and for the three and nine months ended September 30, 2016;

“SRC Interim MD&A” means management’s discussion and analysis of the financial and operating results of SRC for the three and nine months ended September 30, 2016;

“SRC Lock-Up Agreements” means the lock-up agreements dated the date of the Arrangement Agreement between ADI and the SRC Locked-Up Shareholders;

“SRC Locked-Up Shareholders” means (i) all of the directors and officers of SRC, (ii) Sprott Inc. and (iii) Eric Sprott;

“SRC Meeting” means the special meeting of the SRC Shareholders, including any adjournment or postponement of such special meeting, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution;

“SRC Options” means the outstanding options to purchase SRC Shares issued by SRC under the SRC SOP;

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“SRC Record Date” means December 19, 2016;

“SRC Shareholders” means the registered holders and/or beneficial owners of the SRC Shares, as the context requires;

“SRC Shares” means the common shares in the capital of SRC;

“SRC SOP” means SRC’s amended and restated share option plan, effective as of May 14, 2014;

“SRC Transfer Agent” means TSX Trust Company in its capacity as transfer agent of SRC;

“SRCLP” means Sprott Resource Consulting Limited Partnership;

“SRCLP Warrant Issuance” has the meaning ascribed thereto under the heading “Related Transactions – SRCLP Warrant Issuance”;

“SRH” means Sprott Resource Holdings Inc.;

“SRP” means Sprott Resource Partnership;

“Subsidiary” has the meaning ascribed thereto in National Instrument 45-106 – Prospectus Exemptions;

“Superior Proposal” means any unsolicited bona fide written Acquisition Proposal in respect of a Party from a Person who is an arm’s length third party made after the date of the Arrangement Agreement: (i) to acquire, (A) in the case of SRC, 100% of the outstanding SRC Shares, or SRC Assets (including voting or equity securities of its Subsidiaries) representing 50% or more of the consolidated assets of SRC (based on the consolidated statement of financial position of SRC most recently filed as part of SRC Filings prior to such time) or contributing 50% or more of the consolidated annual revenue of SRC (based on the consolidated annual financial statements of SRC most recently filed as part of the SRC Filings prior to such time), or (B) in the case of ADI, 100% of the outstanding ADI Shares, or ADI Assets (including voting or equity securities of its Subsidiaries) representing 50% or more of the consolidated assets of ADI (based on the consolidated statement of financial position of ADI most recently filed as part of the ADI Filings prior to such time) or contributing 50% or more of the consolidated annual revenue of ADI (based on the consolidated annual financial statements of ADI most recently filed as part of the ADI Filings prior to such time); (ii) that complies with Securities Laws and did not result from or involve a breach of the Arrangement Agreement; (iii) in respect of which the SRC Board, in the case of SRC, or the ADI Board, in the case of ADI, determines in good faith, after receiving the advice of its outside legal counsel and financial advisors, that adequate arrangements have been made in respect of any required financing to complete such Acquisition Proposal; (iv) that is not subject to any due diligence and/or access condition; (v) that the SRC Board, in the case of SRC, or the ADI Board, in the case of ADI, determines in good faith, after receiving the advice of its outside legal counsel and financial advisors, is reasonably capable of completion in accordance with its terms without undue delay, taking into account all financial, legal, regulatory and other aspects of such Acquisition Proposal and the Person making such Acquisition Proposal; and (vi) in respect of which the SRC Board, in the case of SRC, or the ADI Board, in the case of ADI, determines, in its good faith judgment, after receiving the advice of its outside legal counsel and financial advisors and after taking into account all the terms and conditions of the Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Acquisition Proposal and the party making such Acquisition Proposal, that such Acquisition Proposal would, if consummated in accordance with its terms, but without assuming away the risk of non-completion, result in a transaction which is more favourable, from a financial point of view, to SRC Shareholders, in the case of SRC, or to the ADI Shareholders, in the case of ADI, than the Arrangement (including any amendments to the terms and conditions of the Arrangement proposed by ADI or SRC pursuant to Section 5.4(1)(vi)) of the Arrangement Agreement;

“Superior Proposal Notice” has the meaning ascribed thereto under the heading “Effect of the Arrangement – The Arrangement Agreement – Right to Match”;

“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, as amended;

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“Tax Proposals” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations Relating to the Arrangement”;

“Taxes” means (i) any and all taxes, duties, fees, excises, premiums, assessments, imposts, levies and other charges or assessments of any kind whatsoever imposed by any Governmental Entity, whether computed on a separate, consolidated, unitary, combined or other basis, including those levied on, or measured by, or described with respect to, income, gross receipts, profits, gains, windfalls, capital, capital stock, production, recapture, transfer, land transfer, license, gift, occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services, harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business, franchising, real or personal property, health, employee or employer health, payroll, workers’ compensation, employment or unemployment, severance, social services, social security, education, utility, surtaxes, customs, import or export, and including all license and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions; (ii) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity on or in respect of amounts of the type described in clause (i) above or this clause (ii); (iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (iv) any liability for the payment of any amounts of the type described in clauses (i) or (ii) as a result of any express or implied obligation to indemnify any other Person or as a result of being a transferee or successor in interest to any Party;

“Term Oil” means Term Oil Inc.;

“Term Oil Financing” means the proposed $1,000,000 private placement of ADI Units at a price of $0.25 per unit, to Term Oil;

“Term Oil Subscription Agreement” means the subscription agreement dated November 29, 2016 with respect to the Term Oil Financing;

“Termination Fee” has the meaning ascribed thereto under the heading “Effect of the Arrangement – Termination Fee and Expenses”;

“Termination Fee Event” has the meaning ascribed thereto under the heading “Effect of the Arrangement – Termination Fee and Expenses”;

“TFSA” means tax free savings account;

“TSX” means the Toronto Stock Exchange;

“TSXV” means the TSX Venture Exchange;

“United States” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia;

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

“U.S. Securities Act” means the United States Securities Act of 1933, as amended;

“U.S. Shareholder” means any ADI Shareholder that is within the United States;

“Warrant Agent” has the meaning ascribed thereto under the heading “Related Transactions – Warrant Distribution – Warrant Indenture”;

“Warrant Certificate” means a physical certificate in registered form evidencing an ADI Warrant;

“Warrant Distribution” means the issuance by ADI of 0.25 of an ADI Warrant per ADI Share to ADI Shareholders of record on the Business Day immediately preceding the Effective Date;

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“Warrant Indenture” means the warrant indenture of ADI to be entered into by ADI and such Person as ADI may appoint to act as Warrant Agent prior to the Effective Time (with the consent of SRC, acting reasonably) governing the ADI Warrants, in form and substance satisfactory to SRC, acting reasonably; and

“WISCO” means WISCO International Resources & Investment Limited.

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INFORMATION FOR BENEFICIAL HOLDERS

The information set forth in this section is of significant importance to many SRC Shareholders and ADI Shareholders, as a substantial number of SRC Shareholders and ADI Shareholders do not hold SRC Shares or ADI Shares, as applicable, in their own name but instead hold such shares through brokers or other intermediaries. SRC Shareholders and ADI Shareholders who do not hold their respective SRC Shares or ADI Shares, as applicable, in their own name (referred to in this Circular as “Beneficial Holders”) should note that only proxies deposited by SRC Shareholders and ADI Shareholders whose names appear on the records of the SRC Transfer Agent or the ADI Transfer Agent, as applicable, as the registered holders of such shares can be recognized and acted upon at the SRC Meeting or the ADI Meeting, as applicable. If SRC Shares or ADI Shares, as applicable, are listed in an account statement provided to an SRC Shareholder or an ADI Shareholder by a broker, then, in almost all cases, such shares will not be registered in a holder’s name on the records of SRC or ADI. Such shares will more likely be registered in the name of the holder’s broker or an agent of the broker. In Canada, the vast majority of such shares are registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., or CDS, which acts as nominee for many Canadian brokerage firms). SRC Shares or ADI Shares, as applicable, held by brokers or their nominees can only be voted (for or against resolutions) upon instructions of the Beneficial Holder. Without specific instructions, brokers/nominees are prohibited from voting such shares for their clients. Beneficial Holders should therefore ensure that instructions regarding the voting of their SRC Shares or ADI Shares, as applicable, are properly communicated to the appropriate Person or that such shares are duly registered in their name well in advance of the SRC Meeting or the ADI Meeting, as applicable.

Applicable regulatory policies require intermediaries/brokers to seek voting instructions from Beneficial Holders in advance of shareholder meetings. Every broker or other intermediary has its own mailing procedures and provides its own return instructions which should be carefully followed by Beneficial Holders in order to ensure that their SRC Shares or ADI Shares, as applicable, are voted at the SRC Meeting or the ADI Meeting, as applicable. Often, the form of proxy supplied to a Beneficial Holder by its broker or other intermediary is identical to that provided to a registered shareholder. However, its purpose is limited to instructing the registered shareholder on how to vote on behalf of the Beneficial Holder. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge. Broadridge typically mails a scannable voting instruction form in lieu of the applicable form of proxy. The Beneficial Holder is requested to complete and return the voting instruction form by mail or facsimile. Alternatively, the Beneficial Holder can call a toll-free telephone number or access the internet to vote the SRC Shares or ADI Shares, as applicable, held by the Beneficial Holder. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of such shares to be represented at the SRC Meeting or the ADI Meeting, as applicable. A Beneficial Holder receiving a form of proxy or voting instruction form from their broker or other intermediary (or an agent or nominee of such broker or other intermediary) cannot use that form to vote SRC Shares or ADI Shares, as applicable, directly at the SRC Meeting or the ADI Meeting, as applicable. Voting instructions must be communicated to the broker, intermediary, agent or nominee (in accordance with the instructions provided by it or on its behalf) well in advance of the SRC Meeting or the ADI Meeting, as applicable, in order to have the SRC Shares or ADI Shares, as applicable, to which such instructions relate voted at the SRC Meeting or the ADI Meeting, as applicable.

If you are a Beneficial Holder and wish to vote in person at the SRC Meeting or the ADI Meeting, as applicable, please contact your broker or other intermediary well in advance of the SRC Meeting or the ADI Meeting, as applicable, to determine how you can do so.

Although a Beneficial Holder may not be recognized directly at the SRC Meeting or the ADI Meeting, as applicable, for the purpose of voting their respective SRC Shares or ADI Shares, as applicable, registered in the name of its broker or other intermediary, a Beneficial Holder may vote those shares as a proxyholder for the registered shareholder. To do this, a Beneficial Holder should enter such Beneficial Holder’s own name in the blank space on the applicable form of proxy or voting instruction form provided to the Beneficial Holder and return the document to such Beneficial Holder’s broker or other intermediary (or the agent of such broker or other intermediary) in accordance with the instructions provided by such broker, intermediary or agent well in advance of the SRC Meeting or the ADI Meeting, as applicable.

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SUMMARY

This summary is qualified in its entirety by the more detailed information appearing elsewhere in this Circular, including the Appendices hereto. Terms with initial capital letters used in this Summary but not otherwise defined are defined in the Glossary of Terms.

SRC Meeting

The SRC Meeting will be held at 9:00 a.m. (Toronto time) on January 25, 2017, at the offices of Blake, Cassels & Graydon LLP, 199 Bay Street, Commerce Court West, Suite 4000, Toronto, Ontario M5L 1A9, for the purposes set forth in the accompanying notice of meeting. The business of the SRC Meeting will be to consider and vote upon the Arrangement Resolution and to transact such further and other business as may properly be brought before the SRC Meeting. See “The Arrangement” and “Matters to be Considered at the SRC Meeting”.

ADI Meeting

The ADI Meeting will be held at 10:30 a.m. (Toronto time) on January 25, 2017, at the offices of Stikeman Elliott LLP, 199 Bay Street, Suite 5300, Toronto, Ontario M5L 1B9, for the purposes set forth in the accompanying notice of meeting. The business of the ADI Meeting will be to consider and vote upon the ADI Transactions Approval Resolution and the ADI Name Change Resolution and to transact such further and other business as may properly be brought before the ADI Meeting. See “The Arrangement” and “Matters to be Considered at the ADI Meeting”.

Sprott Resource Corp.

SRC is a publicly-listed private equity firm focused on the natural resource sector. SRC is a reporting issuer under the securities laws of each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. The SRC Shares are listed on the TSX under the symbol “SCP”. SRC currently has investments in three industry sectors: (i) energy, production and services; (ii) mining; and (iii) agriculture. SRC invests through SRP, SRC’s only subsidiary. SRP is a partnership formed pursuant to the Existing Partnership Agreement.

Following completion of the Arrangement, it is anticipated that the SRC Shares will be delisted from the TSX.

SRC’s registered office is located at 855-2nd Street, S.W., Suite 3500, Calgary, Alberta, T2P 4J8. SRC’s head office is located at Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2750, Toronto, Ontario, M5J 2J2.

Adriana Resources Inc.

ADI is a mineral exploration and development company focused on the exploration and development of iron ore. ADI is a reporting issuer under the securities laws of each of Alberta, British Columbia and Ontario. The ADI Shares are listed on the TSXV under the symbol “ADI”. ADI’s principal holdings are its cash balance and its 40% interest in the Lac Otelnuk Iron Project, located in Nunavik, Québec, which is located approximately 170 kilometres north of the town of Schefferville, Québec, within the Labrador Trough. ADI has advanced the Lac Otelnuk Iron Project with its joint venture partner, WISCO, which is an indirect subsidiary of Wuhan Iron & Steel (Group) Corporation, a Chinese state-owned integrated iron and steel company headquartered in Wuhan, Hubei Province, People’s Republic of China.

The head, principal and registered office of ADI is located at 141 Adelaide St. West, Suite 420, Toronto, Ontario, M5H 3L5.

Combined Entity

The purpose of the Arrangement is to combine the businesses of SRC and ADI. Following the completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI and ADI will continue the operations of ADI and SRC on a combined basis. If the ADI Name Change Resolution is passed by the ADI Shareholders and

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implemented by ADI, it is anticipated that the name of the combined entity will be changed from ADI to “Sprott Resource Holdings Inc.”. Following the consummation of the Arrangement, SRC and ADI intend that the combined entity will operate as a diversified holding company focused on holding businesses in the natural resource industry that it believes can generate sustainable free cash flow or attractive returns on investment. Management of SRC expects that it will take the combined entity less than 12 months to make the transition from a private equity firm to a diversified holding company. The combined entity will continuously review acquisitions of businesses, securities and assets that have the potential for significant long-term value creation, invest in a broad array of businesses, and evaluate the retention and disposition of SRC’s and ADI’s existing operations and holdings. Changes in the mix of the businesses and investments currently held by SRC should be expected. See “Business of the Combined Entity After Giving Effect to the Arrangement” and “Risk Factors”.

SRC and ADI expect that the Arrangement will provide the combined entity with greater scale and financial strength and a greater capital markets profile. Upon completion of the Arrangement, it is anticipated that the combined entity will have no debt, a cash position of approximately $55 million and approximately $150 million in capital available for investment in an attractive environment for resource investments to create long-term shareholder value. The combined entity is expected to have an increased liquidity and market presence on the TSX. The combined entity’s increased scale is expected to improve access to global capital markets to assist future growth efforts. In addition, the Arrangement will result in an enhanced management team with the addition of members with proven track records of success and deep networks of relationships in the resource industry to improve and expand the existing portfolio of SRC and assets of ADI. See “The Arrangement – Background to the Arrangement – Reasons for the Arrangement – SRC” and “– Reasons for the Arrangement – ADI”.

The following chart illustrates the anticipated principal entities in the organizational structure of the combined entity after giving effect to the Arrangement and the change of name of ADI to “Sprott Resource Holdings Inc.”:

Sprott Resource Holdings Inc. (1)


Lac OtelnukMining Ltd.

Sprott Consulting GP Inc.

Sprott Resource Consulting LP

Sprott Resource Consulting GP

Inc.

Sprott Resource Partnership

ADI Mining Ltd.

Sprott Consulting LP

Sprott Inc.

New Management Services Agreement

100% Class A Units

100% Class B Voting Units

LP

40%

GP

100%

GP

GP

LP 100%

100%

100%100%

_______________

Notes:

(1) Formerly named “Adriana Resources Inc.”.

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For further information regarding the combined entity, see “Business of the Combined Entity After Giving Effect to the Arrangement”.

The Arrangement

On November 29, 2016, SRC and ADI agreed to combine their respective businesses and entered into the Arrangement Agreement, a copy of which is attached as Appendix C to this Circular. Pursuant to the Arrangement, SRC Shareholders (excluding SRC Dissenting Shareholders) will receive three ADI Shares for each SRC Share held. Upon completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI.

As at December 21, 2016, there were 157,554,238 ADI Shares and 96,672,102 SRC Shares outstanding (each on a non-diluted basis). Assuming that there are no SRC Dissenting Shareholders and assuming no SRC Shares are issued pursuant to SRC Options and no ADI Shares are issued pursuant to ADI Options, there will be, immediately following the completion of the Arrangement, the Warrant Distribution and the Committed Financings: 510,488,999 ADI Shares and 81,138,560 ADI Warrants issued and outstanding. Immediately following the completion of the Arrangement and the Committed Financings, on a non-diluted basis: (i) former SRC Shareholders are anticipated to hold approximately 57% of the issued and outstanding ADI Shares, (ii) current ADI Shareholders are anticipated to hold approximately 31% of the issued and outstanding ADI Shares, and (iii) Sprott Inc., Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of the issued and outstanding ADI Shares.

Background to the Arrangement

The terms of the Arrangement are the result of arm’s length negotiations between representatives of SRC and ADI and their respective advisors. The Circular contains a summary of the events leading up to the negotiation of the Arrangement Agreement and the meetings, negotiations, discussions and actions between the Parties that preceded the execution and public announcement of the Arrangement Agreement. See “The Arrangement – Background to the Arrangement”.

Reasons for the Arrangement – SRC

In reaching its determinations and making its recommendations, the SRC Board considered, among other things, the following factors:

• Greater scale, financial strength and a greater capital markets profile than SRC. Upon completion of the Arrangement, it is anticipated that the combined entity will have no debt and approximately $150 million in capital available for investment in an attractive environment for resource investments to create long-term shareholder value.

• Participation by Former SRC Shareholders in the LOM Project. Former SRC Shareholders will participate in any value increases associated with LOM Project, through ADI’s continued 40% interest in Lac Otelnuk Mining Ltd.

• Aligned equity investment. Sprott Inc., Exploration Capital 2008 LP and Term Oil have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity, which will align shareholders of the combined entity with the manager of the combined entity and other well-known resource investors.

• Consideration. The NAV (which consists primarily of cash) of the three ADI Shares that SRC Shareholders will receive in consideration for each SRC Share pursuant to the Arrangement was $0.65 as at September 30, 2016 (and after giving effect to the transactions contemplated by the Arrangement Agreement). This amount represents a 31% premium to the closing price of the SRC Shares on the TSX on November 28, 2016, the day prior to the announcement of the Arrangement. After giving effect to the Arrangement, the NAV of the combined entity compared to that of SRC as at September 30, 2016 will decrease from $1.09 per SRC Share to $0.92 per ADI Share, representing a total dilution of only 16%. Net asset value is a non-GAAP financial measure and does not have standard meanings

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prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. See “Supplemental Disclosure – Non-GAAP Measures”.

• Enhanced management team. The Arrangement will result in an enhanced management team with the addition of members with proven track records of success and deep networks of relationships in the resource industry to improve and expand the existing portfolio of SRC. Mr. Harrison, who will serve as Managing Director of the combined entity, has over 20 years of executive, financial and technical experience in the mining industry. Mr. Charter, who will serve as director on the board of the combined entity, is a corporate director serving on four public company boards, including the ADI Board, and is the current Chairman of HGC Holdings, the private holding company of HGC Investment Management Inc., an employee-owned investment firm specializing in low volatility, highly liquid, event-driven mandates. Mr. Rule, who will serve as Chief Investment Officer of the combined entity, is a leading resource investor specializing in mining, energy, water utilities, forest products and agriculture with a deep network of industry contacts.

The information and factors described above and considered by the SRC Board in reaching its determinations and making its recommendations are not intended to be exhaustive but include material factors considered by the SRC Board. In view of a wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the SRC Board did not find it useful to, and did not attempt to, quantify, rank, or otherwise assign relative weights to these factors. In addition, individual members of the SRC Board may have given different weight to different factors. For further information regarding the factors considered by the SRC Board, see “The Arrangement – Reasons for the Arrangement – SRC”.

SRC Fairness Opinion

The SRC Board retained GMP as its financial advisor to, among other things, provide the SRC Board with GMP’s opinion as to the fairness, from a financial point of view, of the consideration to be received by the SRC Shareholders under the Arrangement. In connection with this mandate, GMP has prepared the SRC Fairness Opinion. The SRC Fairness Opinion states that, on the basis of the assumptions and limitations summarized therein, in the opinion of GMP, as of November 25, 2016, the consideration to be received by the SRC Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the SRC Shareholders. The SRC Fairness Opinion is subject to the assumptions and limitations contained therein and should be read in its entirety. See “The Arrangement – SRC Fairness Opinion” and Appendix G to this Circular.

Recommendation of the SRC Board

The SRC Board (excluding the Interested Directors) unanimously determined (i) that the Arrangement and the entry into of the Arrangement Agreement are in the best interests of SRC, (ii) based upon, among other factors, the SRC Fairness Opinion, that the Arrangement is fair to the SRC Shareholders, and (iii) to recommend that SRC Shareholders vote in favour of the Arrangement Resolution. See “The Arrangement – Recommendation of the SRC Board”.

Reasons for the Arrangement – ADI

In reaching its determinations and making its recommendations, the ADI Board considered, among other things, the following factors:

• Review of strategic alternatives. The Arrangement was arrived at following an extensive review of strategic alternatives in various sectors, including precious metals, base metals and bulk mining, oil and gas, financial services, healthcare and diversified industrial companies, including consideration of a range of potential transactions with a number of possible counterparties by ADI.

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• Greater scale, financial strength and a greater markets profile. Upon completion of the Arrangement, it is anticipated that the combined entity will have no debt and approximately $150 million in capital available for investment in an attractive environment for resource investments to create long-term shareholder value.

• Enhanced management team. The Arrangement will result in an enhanced management team with the addition of members with proven track records of success and deep networks of relationships in the resource industry to improve and expand the the combined portfolio of SRC and ADI. Sprott Inc. and the management of SRC are well-known resource investors, and receive significant deal flow through Sprott Inc.’s substantial network. Mr. Rule, who will serve as Chief Investment Officer of the combined entity, is a leading resource investor specializing in mining, energy, water utilities, forest products and agriculture with a deep network of industry contacts.

• Diversified portfolio will result in reduced investment risk. A diversified portfolio of investments in the resources sector reduces the risk associated with a single project and single commodity investment that currently exists in ADI.

• Continued ownership in the LOM Project. Current ADI Shareholders will continue to participate in any increases in value of the LOM Project that may develop in the future through ADI’s continued 40% interest in Lac Otelnuk Mining Ltd.

• Aligned equity investment. Under a series of private placements, Sprott Inc., Exploration Capital 2008 LP and Term Oil have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity at a premium to market price. This will align shareholders of the combined entity with the manager of the combined entity and other well-known resource investors.

• Increase in NAV. After giving effect to the Arrangement, the NAV of the combined entity compared to that of ADI as of September 30, 2016 will increase from $0.22 per ADI Share to $0.29 per ADI Share, representing a total accretion of 32%. The Warrant Distribution provides further upside potential to ADI Shareholders. Net asset value is a non-GAAP financial measure and does not have standard meanings prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. See “Supplemental Disclosure – Non-GAAP Measures”.

The information and factors described above and considered by the ADI Board in reaching its determinations and making its recommendations are not intended to be exhaustive but include material factors considered by the ADI Board. In view of the wide variety of factors considered in connection with its evaluation of the Arrangement and the related transactions and the complexity of these matters, the ADI Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. In addition, individual members of the ADI Board may have given different weight to different factors. For further information regarding the factors considered by the ADI Board, see “The Arrangement – Reasons for the Arrangement – ADI”.

ADI Fairness Opinion

The ADI Board retained Primary Capital as its financial advisor to, among other things, provide the ADI Board with Primary Capital’s opinion as to the fairness, from a financial point of view, to the ADI Shareholders of the Arrangement and the Warrant Distribution. In connection with this mandate, Primary Capital has prepared the ADI Fairness Opinion. The ADI Fairness Opinion states that, in the opinion of Primary Capital, as of November 21, 2016, the Arrangement and the Warrant Distribution are fair, from a financial point of view, to ADI Shareholders, other than SRC and its affiliates. The ADI Fairness Opinion is subject to the assumptions and limitations contained therein and should be read in its entirety. See “The Arrangement – ADI Fairness Opinion” and Appendix H to this Circular.

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Recommendation of the ADI Board

The ADI Board has determined (i) that the Arrangement and the entry into of the Arrangement Agreement are in the best interests of ADI, (ii) based upon, among other factors, the ADI Fairness Opinion, that the Arrangement and the Warrant Distribution are fair to ADI Shareholders, other than SRC and its affiliates, and (iii) to recommend that ADI Shareholders vote in favour of the ADI Resolutions. See “The Arrangement – Recommendation of the ADI Board”.

Effect of the Arrangement

The following is a summary only of the Plan of Arrangement and reference should be made to the full text of the Arrangement Agreement and the Plan of Arrangement set forth in Appendix C and Schedule A to Appendix C, respectively, to this Circular.

The Arrangement involves a number of steps, including those events set out below, which will occur and will be deemed to occur, except as otherwise expressly noted, two minutes apart and in the following order commencing at the Effective Time, without any further authorization, act or formality required on the part of any Person, except as otherwise expressly provided in the Plan of Arrangement:

(a) each SRC Option outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the SRC SOP, shall immediately be cancelled, and neither SRC nor ADI shall be obligated to pay the holder of such SRC Option any amount in respect of such SRC Option and, in respect of each such SRC Option, the holder thereof shall cease to be a holder of such SRC Option and the name of such holder shall be removed from the applicable register;

(b) the SRC SOP and all agreements relating to the SRC Options shall be terminated and shall be of no further force and effect;

(c) each SRC Share held by an SRC Dissenting Shareholder entitled to be paid fair value for its SRC Dissenting Share will be deemed to be transferred by the holder thereof, without any further act or formality on its part, free and clear of all liens, charges, encumbrances and any other rights of others, to SRC and SRC shall thereupon be obligated to pay the amount determined and payable in accordance with Article 4 of the Plan of Arrangement and each SRC Dissenting Shareholder will have only the rights set out in Article 4 of the Plan of Arrangement and each SRC Dissenting Shareholder will cease to be the holder of such SRC Shares; and

(d) each outstanding SRC Share (other than those SRC Shares acquired from SRC Dissenting Shareholders) held by an SRC Shareholder shall be transferred to, and acquired by ADI, free and clear of all liens, charges, encumbrances and any other rights of others, in exchange for the issuance by ADI to such SRC Shareholders of the Consideration and, in respect of each such SRC Share so transferred:

(i) the registered holder thereof shall cease to be the registered holder of such SRC Share and the name of such registered holder shall be removed from SRC’s register of holders of SRC Shares as of the time of this step; and

(ii) ADI shall be recorded as the registered holder of such SRC Share and will be entered in SRC’s register of holders of SRC Shares as the holder thereof.

Completion of the Arrangement is subject to a number of conditions including, among other things, the approval of the Arrangement Resolution by SRC Shareholders, the approval of the ADI Transactions Approval Resolution by ADI Shareholders, the receipt of all necessary regulatory approvals and the granting of the Final Order. It is a condition of closing that the TSX shall have conditionally approved the listing of the ADI Shares and the ADI Warrants, subject to standard listing conditions of the TSX. At the time of the mailing of this Circular, the TSXV has not provided conditional approval of the Arrangement, the Warrant Distribution or any of the other

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transactions described herein, all of which remain subject to the approval of the TSXV, and there can be no assurance that SRC and ADI will obtain such approvals from the TSXV in a timely manner, if at all. See “Summary – Stock Exchange Listings”.

ADI and SRC expect the Effective Date to occur on, or as soon as practicable after, February 9, 2017. See “Procedure for the Arrangement to Become Effective” and “Timing”.

SRCLP ADI Warrant Issuance

Under the Arrangement Agreement, in connection with certain contemplated amendments to the Existing Partnership Agreement including the elimination of a 20% profit participation right in favour of SRCLP, ADI has agreed to issue an aggregate of 21,750,000 ADI Warrants to or at the direction of SRC immediately following the consummation of the Arrangement in consideration of the subscription by ADI for additional SRC Shares. Such ADI Warrants will subsequently be transferred by SRC or SRP to SRCLP. See “Related Transactions – SRCLP Warrant Issuance” and “Business of the Combined Entity After Giving Effect to the Arrangement – Third Amended and Restated Partnership Agreement”.

New MSA and New Partnership Agreement

The current day-to-day management of SRC is conducted in accordance with the Existing MSA. It is a condition precedent to the closing of the Arrangement that ADI enter into the New MSA. On the Effective Date, the Existing MSA will be terminated by SRC and SCLP and the New MSA shall become effective. Under the New MSA, SCLP will manage or, subject to certain restrictions, engage others to manage, all of the undertaking, affairs and assets of the combined entity and will provide all necessary or advisable administrative services and facilities to the combined entity. The New MSA will provide that the combined entity will pay to SCLP, in respect of each fiscal quarter, a management services fee equal to 0.5% of the Quarterly Net Asset Value of the combined entity (as defined in the New MSA) for such fiscal quarter, less the total remuneration paid directly by the combined entity to all persons nominated by SCLP as employees, officers or directors of the combined entity who provide investment management services to the combined entity, but excluding any expenses recorded as a result of the granting of stock options under the combined entity’s stock option plan for such fiscal quarter. The New MSA provides that Adjusted Annual Operating Expenses (as defined in the New MSA) shall not: (a) exceed 3.25% of the Annual Net Asset Value of the combined entity (as defined in the New MSA) in respect of its fiscal year ending December 31, 2017 (on a pro-rated basis from the closing of the Arrangement), and (b) exceed 3% of the Annual Net Asset Value of the combined entity in respect of fiscal year 2018 and onwards. See “Business of the Combined Entity After Giving Effect to the Arrangement - Management Services Agreement”.

SRC and SRCLP are parties to the Existing Partnership Agreement. It is a condition precedent to the closing of the Arrangement that SRC enter into the New Partnership Agreement with SRCLP in respect of SRP. Under the New Partnership Agreement, SRP will be deemed to have commenced business as of September 28, 2011, being the date of the original partnership agreement in respect of SRP between SRC and an affiliate thereof. Subject to the provisions of the New Partnership Agreement, SRCLP, as managing partner thereunder, will have the power and authority to transact the business of SRP and to deal with and in SRP’s assets for the use and benefit of SRP. Under the terms of the New Partnership Agreement, SRCLP must distribute to the ordinary partners, on an annual basis, out of the net profits of SRP for the fiscal year, an amount equal to the net profits of SRP for such fiscal year. The New Partnership Agreement eliminates the 20% profit participation right in favour of SRCLP found in the Existing Partnership Agreement. See “SRCLP Warrant Issuance” and “Business of the Combined Entity After Giving Effect to the Arrangement – Third Amended and Restated Partnership Agreement”.

The purpose of ADI and SRC entering into the New MSA and the New Partnership Agreement, respectively, on the closing of the Arrangement is to substantially replicate the current management and governance structure of SRC at the ADI corporate level following the closing of the Arrangement.

Name Change

At the ADI Meeting, ADI Shareholders will also be asked to consider and, if thought advisable, pass the ADI Name Change Resolution authorizing a change in the name of ADI from “Adriana Resources Inc.” to “Sprott Resource

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Holdings Inc.”, conditional on completion of the Arrangement. The Arrangement is not conditional on the approval by ADI Shareholders of the ADI Name Change Resolution. See “Matters to be Considered at the ADI Meeting”.


Each ADI Shareholder at the close of business (Toronto time) on the Business Day immediately preceding the Effective Date will receive from ADI 0.25 of an ADI Warrant in respect of each ADI Share held by such ADI Shareholder at such time.

In order to receive Warrant Certificates, an ADI Shareholder that is a U.S. Shareholder will be required to complete and submit (and not withdraw) a Qualified U.S. Shareholder Certification (including all documentation required by ADI as part of the Qualified U.S. Shareholder Certification) certifying its status as an Accredited Investor. A U.S. Shareholder that is not an Accredited Investor or does not submit a properly completed and executed Qualified U.S. Shareholder Certification (including all required documentation) on or prior to the close of business (Toronto time) on the Business Day immediately preceding the Effective Date will not receive Warrant Certificates. Such Non-Qualified U.S. Shareholders will have their ADI Warrants issued to and held on their behalf by the Sales Agent and subsequently sold by the Sales Agent on their behalf as soon as practicable after the Effective Date, with the cash proceeds therefrom to be distributed to such Non-Qualified U.S. Shareholders of ADI.

The ADI Warrants to be issued and distributed pursuant to the Warrant Distribution have not been and will not be registered under the U.S. Securities Act, and will be issued and distributed in reliance on the exemption from registration set forth in Rule 506(c) of Regulation D under the U.S. Securities Act. The ADI Warrants will not be listed for trading on any United States stock exchange, and ADI Warrants issued and distributed to Qualified U.S. Shareholders of ADI may only be resold to ADI or outside the United States pursuant to Rule 904 of Regulation S under the U.S. Securities Act.

As described in the Qualified U.S. Shareholder Certification, ADI Warrants may not be exercised in the United States unless the ADI Shares underlying such ADI Warrants are registered under the U.S. Securities Act or an exemption from such registration requirements is available. In addition, ADI Shares issuable upon exercise of such ADI Warrants in the United States will also be subject to the resale restrictions set out in the Qualified U.S. Shareholder Certification.

See “Related Transactions – Warrant Distribution”.

Financings

In connection with the Arrangement, pursuant to the Committed Financings, (i) Sprott Inc., (ii) Exploration Capital 2008 LP, and (iii) Term Oil, a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott Inc.), have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity by purchasing a combination of ADI Shares and ADI Warrants. In addition, pursuant to the terms of finder agreements to be entered into among SRC, ADI and each of Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (both wholly-owned limited partnerships of Sprott Inc.), Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering of up to 40 million ADI Units for gross proceeds of up to $10 million. See “Related Transactions – Financings”.

Arrangement Agreement

The Arrangement will be effected pursuant to the Arrangement Agreement. The Arrangement Agreement contains, among other things, covenants, representations and warranties of and from each of SRC and ADI and various conditions precedent to the completion of the Arrangement.

The Arrangement Agreement provides that, upon the occurrence of certain termination events, either of the Parties may be required to pay the other Party the Termination Fee of $1,250,000 or up to $500,000 for the payment of reasonable costs and documented expenses incurred in connection with the transactions contemplated by the Arrangement Agreement. See “Effect of the Arrangement – Termination Fee and Expenses”.

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This Circular contains a summary of certain provisions of the Arrangement Agreement which is qualified in its entirety by the full text of the Arrangement Agreement, a copy of which is attached as Appendix C to this Circular.

SRC Lock-Up Agreements

On November 29, 2016, all of the directors and officers of SRC, together with Sprott Inc. and Eric Sprott (collectively holding an aggregate of 10,685,702 SRC Shares, representing approximately 11% of the issued and outstanding SRC Shares), entered into the SRC Lock-Up Agreements with ADI pursuant to which they agreed, among other things, to vote the SRC Shares beneficially owned or controlled or directed by them, directly or indirectly, at the SRC Meeting, in favour of the Arrangement Resolution and all matters related thereto.

ADI Lock-Up Agreements

On November 29, 2016, directors, officers and other shareholders of ADI holding an aggregate of 57,117,427 ADI Shares, representing approximately 36.3% of the issued and outstanding ADI Shares, entered into the ADI Lock-Up Agreements with SRC pursuant to which they agreed, among other things, to vote the ADI Shares beneficially owned or controlled or directed by them, directly or indirectly, at the ADI Meeting in favour of the ADI Resolutions and all matters related thereto.

Procedure for the Arrangement to Become Effective

Procedural Steps

The Arrangement is proposed to be carried out pursuant to Section 192 of the CBCA. The following procedural steps must be taken in order for the Arrangement to become effective:

(a) the Arrangement Resolution must be approved by the SRC Shareholders at the SRC Meeting in the manner set forth in the Interim Order;

(b) the ADI Transactions Approval Resolution must be approved by the ADI Shareholders at the ADI Meeting;

(c) the Court must grant the Final Order approving the Arrangement;

(d) all other conditions precedent to the Arrangement, as set forth in the Arrangement Agreement, must be satisfied or waived by the appropriate Party; and

(e) the Articles of Arrangement and related documents in the form prescribed by the CBCA must be filed with the Director.

There is no assurance that the conditions set out in the Arrangement Agreement will be satisfied or waived on a timely basis or at all.

SRC Shareholder Approval

Pursuant to the terms of the Interim Order, the Arrangement Resolution must, subject to further order of the Court, be approved by at least 66 % of the votes cast by the SRC Shareholders present in person or represented by proxy at the SRC Meeting. In addition, the Arrangement Resolution must also be approved by a majority of the votes cast by SRC Shareholders, other than SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under MI 61-101. If the Arrangement Resolution is not approved by SRC Shareholders, the Arrangement cannot be completed. See Appendix A to this Circular for the full text of the Arrangement Resolution. See “Procedure for the Arrangement to Become Effective – Shareholder Approvals”, “Matters to be Considered at the SRC Meeting” and “Procedure for the Arrangement to Become Effecitve – Securities Laws Matters in Connection with the Arrangement – Canada – MI 61-101”.

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ADI Shareholder Approval

The ADI Transactions Approval Resolution must be approved by a simple majority of the votes cast by the ADI Shareholders present in person or represented by proxy at the ADI Meeting. If the ADI Transactions Approval Resolution is not approved by ADI Shareholders, the Arrangement cannot be completed. The ADI Name Change Resolution must be approved by at least 66 % of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting. The Arrangement is not conditional on the approval of the ADI Name Change Resolution. See Appendix B to this Circular for the full text of the ADI Transactions Approval Resolution and the ADI Name Change Resolution. See “Procedure for the Arrangement to Become Effective – Shareholder Approvals” and “Matters to be Considered at the ADI Meeting”.

Court Approval

The Arrangement requires approval by the Court under Section 192 of the CBCA. On December 21, 2016, SRC obtained the Interim Order, which provides for the calling and holding of the SRC Meeting, the Dissent Rights and other procedural matters. A copy of the Interim Order is attached as Appendix D to this Circular. Subject to the terms of the Arrangement Agreement, if the Arrangement Resolution and the ADI Transactions Approval Resolution are approved at the SRC Meeting and the ADI Meeting, respectively, SRC will make an application to the Court for the Final Order at 330 University Avenue, Toronto, M5G 1R7 on January 27, 2017 at 10:00 a.m. (Toronto time) or as soon thereafter as counsel may be heard.

At the hearing in respect of the Final Order, the Court will consider, among other things, the fairness and reasonableness of the Arrangement. The Court may approve the Arrangement in any manner the Court may direct, subject to compliance with such terms and conditions, if any, as the Court deems fit. Prior to the hearing on the Final Order, the Court will be informed that the Final Order will also constitute the basis for an exemption from registration under the U.S. Securities Act for the ADI Shares to be issued in the Arrangement to SRC Shareholders in the United States pursuant to Section 3(a)(10). See “Procedure for the Arrangement to Become Effective — Court Approval”.

Stock Exchange Listings

The SRC Shares are listed and posted for trading on the TSX under the symbol “SCP”. On November 28, 2016, the last trading day on which the SRC Shares traded prior to announcement of the Arrangement, the closing price of the SRC Shares on the TSX was $0.495. On December 21, 2016, the closing price of the SRC Shares on the TSX was $0.52.

The ADI Shares are listed and posted for trading on the TSXV under the symbol “ADI”. On November, 28, 2016, the last trading day on which the ADI Shares traded prior to announcement of the Arrangement, the closing price of the ADI Shares on the TSXV was $0.14. On December 21, 2016, the closing price of the ADI Shares on the TSXV was $0.17.

It is a condition to the completion of the Arrangement that the TSX shall have conditionally approved the listing of the ADI Shares and the ADI Warrants. Pursuant to the Arrangement Agreement, ADI has agreed to use its commercially reasonable efforts to obtain the conditional approval of the TSX for the listing of the ADI Shares (including the ADI Shares issuable pursuant to the Arrangement and the Financings, the ADI Shares issuable upon the exercise of the ADI Warrants to be issued in connection with the Warrant Distribution and the Financings, and the ADI Shares issuable upon the exercise of ADI Options) and the ADI Warrants on the TSX effective on the Effective Date. It is anticipated that the SRC Shares will be delisted from the TSX following completion of the Arrangement.

At the time of the mailing of this Circular, the TSXV has not provided conditional approval of the Arrangement, the Warrant Distribution or any of the other transactions described herein, all of which remain subject to the approval of the TSXV, and there can be no assurance that SRC and ADI will obtain such approvals from the TSXV in a timely manner, if at all.

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For information with respect to the trading history of the ADI Shares and SRC Shares, see Appendix I and Appendix J to this Circular, as applicable.

Securities Laws Matters

The distribution of ADI Shares to SRC Shareholders pursuant to the Arrangement shall be exempt from the prospectus requirements of Securities Laws, and the first trade of such ADI Shares shall not be subject to resale restrictions under Securities Laws, other than as a result of any control block restrictions which may arise by virtue of the ownership thereof.

The distribution of the ADI Warrants to ADI Shareholders (other than U.S. Shareholders) pursuant to the Warrant Distribution shall be exempt from the prospectus requirements of Securities Laws, and the first trade of such ADI Warrants (and/or the underlying ADI Shares) shall not be subject to resale restrictions under Securities Laws, other than as a result of any control block restrictions which may arise under such laws by virtue of the ownership of ADI Shares.

The ADI Shares issuable to SRC Shareholders pursuant to the Arrangement will be, immediately following completion of the Arrangement, not subject to resale restrictions under the U.S. Securities Act, except with respect to persons who are “affiliates” of ADI on the Effective Date or were affiliates of ADI within 90 days before the Effective Date. Any resale of such ADI Shares by such an affiliate (or former affiliate) will be subject to the registration requirements of the U.S. Securities Act, absent an exemption therefrom. See “Procedure for the Arrangement to Become Effective – Securities Laws Matters in Connection with the Arrangement – United States”.

Any ADI Warrants issued to U.S. Shareholders, as well as any ADI Shares issuable upon exercise of the ADI Warrants in the United States, will be “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act, and will therefore be subject to certain restrictions on resale. See “Related Transactions – Warrant Distribution” for additional information.

Procedure for Exchange of SRC Share Certificates

If you are a Registered SRC Shareholder, you should receive a copy of the Letter of Transmittal with this Circular. If the conditions precedent to the Arrangement are satisfied or waived and the Arrangement is implemented, in order to receive the ADI Shares issuable pursuant to the Arrangement for your SRC Shares, you must complete and sign the Letter of Transmittal enclosed with this Circular and deliver such Letter of Transmittal (or a manually executed facsimile thereof) together with the certificate(s) representing your SRC Shares and the other documents required by the instructions set out therein to the Depositary in accordance with the instructions contained in the Letter of Transmittal. You can request additional copies of the Letter of Transmittal by contacting the Depositary using the contact information set forth on the back cover of this Circular. The Letter of Transmittal is also available on the SEDAR website at www.sedar.com. It is recommended that Registered SRC Shareholders complete, sign and return the Letter of Transmittal with the certificate(s) representing the SRC Shares to the Depositary as soon as possible.

Any certificate formerly representing SRC Shares that is not deposited with all other required documents on or before the sixth anniversary of the Effective Date will cease to represent any claim or interest of any kind or nature against ADI, SRC or the Depositary or any of their successors and will be deemed to have been donated, surrendered and forfeited to ADI for no consideration.

The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully. The deposit of SRC Shares pursuant to the procedures in the Letter of Transmittal will constitute a binding agreement among the depositing SRC Shareholder, SRC and ADI upon the terms and subject to the conditions of the Arrangement.

SRC Shareholders whose SRC Shares are registered in the name of a broker or other intermediary must contact their broker or other intermediary to deposit their SRC Shares. See “Procedure for the Arrangement to Become Effective – Procedure for Exchange of SRC Share Certificates”.

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SRC Shareholder Dissent Rights

Each Registered SRC Shareholder will have the right to dissent with respect to the Arrangement Resolution as provided in Section 190 of the CBCA as modified by the Interim Order and Article 4 of the Plan of Arrangement; provided that, notwithstanding section 190(5) of the CBCA, the written objection to the Arrangement Resolution referred to in section 190(5) of the CBCA must be received by SRC not later than 5:00 p.m. (Toronto time) on the Business Day that is two Business Days prior to the date of the SRC Meeting (as it may be adjourned or postponed from time to time in accordance with the terms of the Arrangement Agreement). If a Registered SRC Shareholder dissents, and the Arrangement is completed, the SRC Dissenting Shareholder is entitled to be paid the “fair value” of its SRC Dissenting Shares as of the close of business on the day before the day the Arrangement Resolution is adopted. This amount may be the same as, more than or less than the consideration offered under the Arrangement. Only Registered SRC Shareholders are entitled to dissent. Accordingly, a Beneficial Holder of SRC Shares desiring to exercise Dissent Rights must make arrangements for such beneficially owned SRC Shares to be registered in such holder’s name prior to the time the written objection to the Arrangement Resolution is required to be received by SRC, or alternatively, make arrangements for the registered holder of such SRC Shares to dissent on such holder’s behalf. SRC Shareholders should read carefully the information in this Circular under the heading “SRC Shareholder Dissent Rights” if they wish to exercise Dissent Rights.

The Arrangement Agreement provides that, unless otherwise waived by ADI, it is a condition to the completion of the Arrangement that Dissent Rights shall not have been validly exercised and not withdrawn with respect to more than 5% of the issued and outstanding SRC Shares. See “SRC Shareholder Dissent Rights”.

Summary of Certain Canadian Federal Income Tax Considerations Relating to the Arrangement

Generally, an SRC Shareholder who is resident in Canada and holds SRC Shares as capital property will not realize a capital gain (or a capital loss) upon the exchange of SRC Shares for ADI Shares under the Arrangement unless the SRC Shareholder chooses to recognize any portion of the capital gain or capital loss otherwise arising on such exchange by taking the positive step of reporting the capital gain or capital loss in the SRC Shareholder’s tax return under the Tax Act for the SRC Shareholder’s taxation year in which the exchange occurs.

An SRC Shareholder who is not resident in Canada and holds SRC Shares as capital property will generally not be taxable in Canada with respect to any capital gain arising on the disposition of SRC Shares pursuant to the Arrangement provided that such SRC Shares do not constitute “taxable Canadian property” as defined in the Tax Act to such SRC Shareholder.

This Circular contains a summary of the principal Canadian federal income tax considerations applicable to SRC Shareholders in respect of the steps comprising the Arrangement, and the above comments are qualified in their entirety by reference to such summary. For more information, see “Certain Canadian Federal Income Tax Considerations Relating to the Arrangement”.

Summary of Certain United States Federal Income Tax Considerations Relating to the Arrangement

The Arrangement is intended to qualify as a “reorganization” under the Code. In accordance with this treatment, U.S. Holders, as defined below, generally will not recognize gain or loss for U.S. federal income tax purposes with respect to the exchange of SRC Shares for ADI Shares pursuant to the Arrangement. U.S. Holders are urged to consult their own tax advisors regarding the specific tax consequences of the Arrangement to them.

This Circular contains a discussion of certain U.S. federal income tax consequences of the Arrangement applicable to SRC Shareholders who are U.S. Holders. The above comments are qualified in their entirety by reference to that discussion. See “Certain United States Federal Income Tax Considerations Relating to the Arrangement”.

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Other Tax Considerations

This Circular discusses certain Canadian and United States federal income tax considerations generally applicable to SRC Shareholders. Foreign tax consequences to SRC Shareholders who are resident in jurisdictions other than Canada or the United States are not discussed. Such SRC Shareholders should consult their tax advisors with respect to the tax implications of the Arrangement, including any associated filing requirements, in such jurisdictions and with respect to the tax implications in such jurisdictions of owning ADI Shares after the Arrangement. All SRC Shareholders are urged to consult their own tax advisors regarding the provincial, state, local and territorial tax consequences of the Arrangement and of holding ADI Shares.

Timing

Subject to all conditions precedent to the Arrangement as set forth in the Arrangement Agreement being satisfied or waived by the appropriate Party, the Arrangement will become effective upon the filing with the Director of the Articles of Arrangement. If the SRC Meeting and the ADI Meeting are held and the Arrangement Resolution and the ADI Transactions Approval Resolution are approved by the requisite majorities, SRC will apply to the Court for the Final Order approving the Arrangement. If the Final Order is obtained on or about January 27, 2017, in form and substance satisfactory to ADI and SRC and all other conditions specified in the Arrangement Agreement are satisfied or waived, ADI and SRC expect the Effective Date to occur on or as soon as practicable after February 9, 2017. It is not possible, however, to state with certainty when the Effective Date will occur. The Effective Date could be delayed for a number of reasons, including a delay in receiving required regulatory approvals or an objection before the Court in the hearing of the application for the Final Order.

Selected Unaudited Pro Forma Financial Information for Sprott Resource Holdings Inc.

The following tables set out selected unaudited pro forma financial information for SRH after giving effect to the Arrangement and Committed Financings for the year ended December 31, 2015 and for the nine month period ended September 30, 2016.

The following tables should be read in conjunction with the unaudited pro forma consolidated financial statements of SRH for the year ended December 31, 2015 and the nine month period ended September 30, 2016, including the notes thereto, attached as Appendix K to this Circular. Reference should also be made to: (a) the SRC Annual Financial Statements; (b) the ADI Annual Financial Statements; (c) the SRC Interim Financial Statements; and (d) the ADI Interim Financial Statements, each of which are incorporated by reference herein. See “Business of the Combined Entity After Giving Effect to the Arrangement”.

Unaudited Pro Forma Financial Information ($000’s) For the Year Ended December 31, 2015

Sprott Resource

Corp.

Adriana Resources

Inc. Pro Forma

Adjustments

Pro Forma Statement of Operations for Sprott Resource

Holdings Inc. Investment gain (loss) $ (111,551) $ (37,719) $ 5,201 $ (144,069) Expenses 7,064 3,233 (267) 10,031 Net income (loss) attributable to shareholders (119,494) (49,796) 5,468 (163,822)

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Unaudited Pro Forma Financial Information ($000’s) as at and for the Nine Months Ended September 30, 2016

Sprott Resource

Corp.

Adriana Resources

Inc.

Pro Forma Adjustments

and Financing Transactions


Holdings Inc. Investment gain $ 2,860 $ 223 $ - $ 3,083 Expenses 4,420 1,418 (31) 5,807 Net income (loss) attributable to shareholders (1,560) (1,195) 31 (2,724) Total assets 115,349 34,700 14,700 164,749 Total liabilities 9,666 338 2,308 12,312 Total equity attributable to shareholders 105,683 34,362 12,392 152,437 Risk Factors

SRC Shareholders voting in favour of the Arrangement Resolution and ADI Shareholders voting in favour of the ADI Resolutions will be choosing to combine the businesses of SRC and ADI. The completion of the Arrangement involves risks. In addition to the risk factors described under the heading “Risk Factors” in the SRC AIF and under the heading “Risks and Uncertainties” in the ADI Annual MD&A, which are specifically incorporated by reference into this Circular, there are additional and supplemental risk factors which SRC Shareholders should carefully consider before making a decision regarding approving the Arrangement Resolution and which ADI Shareholders should carefully consider before making a decision regarding approving the ADI Resolutions. Readers are cautioned that such risk factors are not exhaustive and additional risks and uncertainties, including those currently unknown or considered immaterial to SRC and ADI, may also adversely affect the SRC Shares and the ADI Shares before the Arrangement, and the ADI Shares following the Arrangement, and/or the business of SRC and ADI before the Arrangement and of ADI following the Arrangement.

The following is a list of certain risk factors associated with the Arrangement which SRC Shareholders and ADI Shareholders should carefully consider before approving the Arrangement Resolution and the ADI Resolutions, respectively:

• The Arrangement is subject to satisfaction or waiver of several conditions;

• The Arrangement may be terminated;

• There can be no certainty that the required approvals of SRC Shareholders and ADI Shareholders will be obtained;

• Officers and directors of SRC and ADI may have interests in the Arrangement that may be different from the interests of other SRC Shareholders or ADI Shareholders;

• The application of interim operating covenants under the Arrangement Agreement may prevent SRC or ADI, as applicable, from pursuing or undertaking a business opportunity that is out of the Ordinary Course or is not consistent with past practices;

• Payments in connection with the exercise of Dissent Rights may impair the combined entity’s financial resources;

• The issuance of ADI Shares will have a dilutive effect;

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• There can be no assurance that the CRA, the IRS or other taxing authorities will agree with the Canadian and U.S. federal income tax consequences of the Arrangement or the Warrant Distribution;

• The combined entity will need to transition its business to operate as a diversified holding company within twelve months following the Effective Date so as not to be an investment company under the Investment Company Act and may suffer adverse consequences if it is deemed an investment company under the Investment Company Act, may be required to incur significant costs to avoid investment company status and its activities may be restricted;

• There may be adverse U.S. federal income tax consequences to U.S. shareholders if ADI or SRC is, or ADI becomes, a “passive foreign investment company” under the Code; and

• The sale price of the ADI Warrants sold on behalf of Non-Qualified U.S. Shareholders of ADI is subject to price risk and market risk.

See “Risk Factors”.

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THE ARRANGEMENT

Overview of the Arrangement

The purpose of the Arrangement is to combine the businesses of SRC and ADI. The Arrangement will result in the acquisition of all of the SRC Shares by ADI. Pursuant to the Arrangement, SRC Shareholders (excluding SRC Dissenting Shareholders) will receive three ADI Shares in exchange for each SRC Share held. Following the completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI and ADI will continue the operations of ADI and SRC on a combined basis. If the ADI Name Change Resolution is passed by ADI Shareholders and implemented by ADI, it is anticipated that the name of the combined entity will be changed from ADI to “Sprott Resource Holdings Inc.”. Following the consummation of the Arrangement, the combined entity will operate as a diversified holding company focused on holding businesses in the natural resource industry that current management of SRC and ADI believe can generate sustainable free cash flow or attractive returns on investment. Immediately following the completion of the Arrangement and the Committed Financings, on a non-diluted basis: (i) former SRC Shareholders are anticipated to hold approximately 57% of the issued and outstanding ADI Shares, (ii) current ADI Shareholders are anticipated to hold approximately 31% of the issued and outstanding ADI Shares, and (iii) Sprott Inc., Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of the issued and outstanding ADI Shares. See “Effect of the Arrangement”, “Related Transactions”, “Business of the Combined Entity After Giving Effect to the Arrangement” and “Risk Factors”.

Background to the Arrangement

The Arrangement Agreement is the result of a lengthy and detailed series of discussions and negotiations between representatives of SRC and ADI and their respective legal and financial advisors. The following is a summary description of the meetings and deliberations leading up to the announcement of the Arrangement.

The SRC Board and the senior management team of SRC regularly discuss opportunities intended to enhance value for SRC Shareholders. In that regard, SRC had continuously considered the possibility of strategic transactions that will meet key business objectives, such as improving liquidity, creating long-term shareholder value, narrowing the difference between market capitalization and NAV, and securing new capital to develop scale and optimize execution of its strategy.

ADI has been previously engaged in the advancement of its Lac Otelnuk iron ore project located in Nunavik, Québec, within the Labrador Trough (the “LOM Project”). During 2015, iron ore prices and the junior mineral resources sector as a whole suffered serious declines. ADI took a number of necessary actions to protect and preserve the long-term option value of the LOM Project in anticipation of the commodity cycle returning to more favourable iron ore pricing and a more favourable financing market in the future as well as to conserve ADI’s treasury. The LOM Project was, therefore, placed on care and maintenance and all other ADI discretionary expenditures were reduced. In May 2015, the ADI Board engaged the ADI Financial Advisor to act as financial advisor to ADI with respect to, among other things, any potential acquisitions of assets by ADI by way of purchase or joint venture, any merger or other business combination with ADI and any acquisition by ADI or of ADI. In November 2015, the ADI Board appointed Mr. Michael Harrison as President and Chief Executive Officer of ADI with a view to pursuing strategic alternatives to increase shareholder value through the completion of a transaction that could involve the merger, acquisition, sale or other type of business combination with another private or public company. From November 2015 to May 2016, ADI assessed a broad number of opportunities in various sectors, including precious metals, base metals and bulk mining, oil and gas, financial services, healthcare and diversified industrial companies.

On April 18, 2016, Mr. Harrison met with Mr. Steve Yuzpe, Chief Executive Officer and President of SRC, and Mr. Arthur Einav, General Counsel, Corporate Secretary and Managing Director of SRC, to discuss SRC’s experience with investments in the agricultural sector. Mr. Harrison advised SRC that senior management of ADI and the ADI Board were continuing to critically assess opportunities for ADI to deploy its cash balance and other assets in order to enhance shareholder value. Mr. Harrison advised that ADI had assessed a broad number of opportunities in various sectors, in the form of a single investment and had also considered transitioning ADI towards a business model similar to that of SRC. In light of the potential synergies between ADI’s corporate strategy and SRC’s business objectives of improving liquidity and building scale, Messrs. Yuzpe and Einav proposed that the companies

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discuss a possible business combination. Messrs. Harrison, Yuzpe and Einav had a high-level discussion of the potential merits of such a transaction.

Shortly after the meeting on April 18, 2016, Mr. Yuzpe raised the possible business combination of SRC and ADI with Mr. Peter Grosskopf, a director of SRC and the Chief Executive Officer of Sprott Inc. Mr. Grosskopf was of the view that, based on certain assumptions, such a transaction would be beneficial to SRC and, as such, Sprott Inc. was supportive of SRC exploring the matter further. Mr. Yuzpe separately discussed the potential transaction with Mr. Terrence A. Lyons, the Chair of the SRC Board, and Mr. A.R. (Rick) Rule IV, a director of Sprott Inc. and the President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott Inc.), both of whom indicated they were supportive of continued discussions with ADI regarding a possible business combination. Around the time of these discussions, Mr. Yuzpe also met with the other members of the senior management team of SRC, each of whom supported continued negotiations with ADI.

Also shortly after the meeting on April 18, 2016, Mr. Harrison undertook a review of SRC and discussed the possibility of a business combination between ADI and SRC with Mr. Donald K. Charter, the current Chairman of the ADI Board, who indicated his support of continued discussions.

On April 27, 2016, SRC and ADI executed the Confidential Information and Nondisclosure Agreement dated April 27, 2016 pursuant to which they agreed to provide each other access to certain information relevant for the evaluation of a possible business combination between them, following which certain confidential information was exchanged between the Parties including information relating to SRC’s investment thesis and portfolio valuations.

In May 2016, Mr. Harrison attended at the offices of SRC on two separate occasions to further discuss the structure and terms of a possible business combination of SRC and ADI with Messrs. Yuzpe and Einav. On May 16, 2016, SRC provided ADI with an indicative non-binding term sheet.

By May 2016, ADI was also considering a number of other potential opportunities, including three non-binding proposals presented to the ADI Board at a meeting of the ADI Board held on May 23, 2016. After careful consideration, the ADI Board instructed Mr. Harrison to enter into a non-binding letter of intent with another company to undertake a potential transaction. Following this step, ADI was advised through a discussion with the board nominee of WISCO, a significant shareholder of ADI, that WISCO would not be supportive of this potential transaction as it was outside of the resources sector and would encourage ADI to pursue transactions which focused on the resources sector.

At that point, Mr. Harrison re-engaged with SRC management regarding a potential business combination. Mr. Harrison requested re-confirmation that Sprott Inc. remained supportive of the proposed transaction. In response, Messrs. Yuzpe and Harrison undertook to arrange for Mr. Grosskopf to meet with Mr. Charter.

On June 8, 2016, Mr. Grosskopf and Mr. Charter met to discuss Sprott Inc.’s views of the proposed business combination. Mr. Grosskopf confirmed that Sprott Inc. continued to be supportive of the proposed transaction and that Sprott Inc. and related entities intended to make a concurrent investment in the combined entity to ensure that it would have enough capital to make new acquisitions and support existing investments.

At a regularly scheduled meeting of the ADI Board on June 14, 2016, Mr. Harrison reported to the ADI Board on his continuing discussions with SRC. The ADI Board authorized Mr. Harrison to continue discussions with SRC with respect to the possible business combination.

Negotiations continued through June 2016. On June 22, 2016, Mr. Harrison met with Messrs. Yuzpe and Einav and discussed, among other things, the appropriate share exchange ratio, SRC’s portfolio valuations, the valuation of ADI’s interest in the LOM Project and certain proposed amendments to the Existing MSA (including in respect of a cap on the management fee and operating expenses) and the Existing Partnership Agreement (including in respect of the elimination of a 20% profit participation right). In early July 2016, the parties continued their negotiation of a term sheet for the Arrangement and related transactions for consideration by their respective boards of directors.

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Shortly before a scheduled meeting of the SRC Board on July 7, 2016 to discuss other matters, Mr. Yuzpe called each member of the SRC Board to provide a brief overview of the negotiations between SRC and ADI. Mr. Yuzpe then provided another update at the meeting of the SRC Board on July 7, 2016. Each member of the SRC Board indicated that they were supportive of continued negotiations.

At Mr. Yuzpe’s request, Messrs. Charter, Harrison, Grosskopf and Yuzpe met on July 20, 2016 to discuss the key parameters of a possible business combination, including the appropriate share exchange ratio, valuation, Sprott Inc.’s capital commitment, management of annual operating expenses and constitution of the management team and board of directors of the continuing entity.

At a regularly scheduled meeting of the SRC Board on July 22, 2016, Mr. Yuzpe reported to the SRC Board on his discussions with Mr. Harrison and Mr. Charter. The SRC Board authorized Mr. Yuzpe to continue discussions with ADI with respect to the possible business combination.

Throughout July and August 2016, Messrs. Harrison, Yuzpe and Einav had numerous telephone discussions regarding the structure and terms of a potential transaction. In addition, between July 18, 2016 and August 18, 2016, Mr. Grosskopf, Mr. Richard Surratt, Executive Vice President of Sprott Inc., Mr. Kevin Hibbert, Chief Financial Officer of Sprott Inc., and various members of the SRC team met to discuss the proposed business combination and the status of negotiations with ADI.

On August 9, 2016, at a meeting of the ADI Board, the ADI Board was provided with: (i) an overview of SRC, including information relating to SRC’s investments, its investment thesis, valuations of its investments, biographies of the SRC senior management team and the SRC Board and information relating to Sprott Inc.; (ii) a draft term sheet and an overview of the proposed transaction (including the proposed structure thereof); (iii) transaction rationale considerations; and (iv) information relating to net asset values and the impact thereon of the proposed transaction. The ADI Board discussed the potential business combination and received advice from the ADI Financial Advisor and its legal advisors. After discussion, the ADI Board indicated that it was supportive of the Arrangement and related transactions as reflected in the draft term sheet, subject to satisfactory completion of due diligence and negotiation of all necessary definitive agreements.

At a regularly scheduled meeting of the board of directors of Sprott Inc. on August 11, 2016, Mr. Grosskopf and Mr. Surratt outlined for the board of directors the terms of the proposed business combination and Sprott Inc.’s proposed capital contribution.

On August 24, 2016, at a meeting of the Sprott Inc. Capital Allocation Committee, Mr. Grosskopf summarized the terms of the proposed business combination and Sprott Inc.’s proposed capital contribution. Mr. Grosskopf recused himself from voting on the matter because of his role as a member of the SRC Board. The remaining members of the Sprott Inc. Capital Allocation Committee voted unanimously to approve the proposed transaction, subject to completion of due diligence and negotiation of all necessary definitive agreements.

On August 25, 2016, the SRC Board was presented with: (i) an overview of ADI and the LOM Project and biographies of ADI’s senior management team and the ADI Board; (ii) a draft term sheet and an overview of the proposed transaction; (iii) transaction rationale considerations; and (iv) an analysis of the impact of the transaction on SRC’s NAV and a sensitivity analysis at various exchange ratios. The SRC Board indicated that it was supportive of the Arrangement as reflected in the term sheet subject to satisfactory completion of due diligence and negotiation of all necessary definitive agreements.

Mr. Harrison provided an update to the ADI Board relating to the negotiations of the term sheet at a regularly scheduled ADI Board meeting held on August 25, 2016 and the ADI Board confirmed its support for the term sheet related to the Arrangement and related transactions.

On August 25, 2016, advisors of SRC and ADI commenced negotiating the Arrangement Agreement and other transaction documents. On the same date, representatives and advisors of SRC and ADI also commenced detailed reciprocal due diligence. Each Party’s review included extensive due diligence of the other Party and its assets,

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including with respect to operations, environmental, financial, accounting, tax, human resources and corporate matters.

On August 30, 2016, Messrs. Harrison and Charter met with representatives of WISCO to provide WISCO with additional details on the proposed transaction with SRC. WISCO advised Messrs. Harrison and Charter that the transaction would be reviewed by WISCO.

On September 6, 2016, the Conflict Resolution Committee (the “CRC”) of the SRC Board, consisting of Mr. Lyons, Mr. Lenard F. Boggio, Ms. Joan E. Dunne and Mr. Ron F. Hochstein, each of whom is an independent director, recommended that SRC management approach two financial advisors on behalf of the CRC to solicit a proposal to provide a fairness opinion to the SRC Board in respect of the Arrangement.

On September 13, 2016, Mr. Yuzpe had a telephone conversation with Mr. Rule, wherein he provided an update on the status of the transaction and discussed Mr. Rule’s proposed role as Chief Investment Officer and Vice-Chairman of the combined entity.

Throughout September and early October, Mr. Yuzpe and Mr. Harrison had numerous telephone conversations wherein they continued to refine the terms of the proposed transaction and settle the definitive arrangements.

On October 5, 2016, Mr. Yuzpe, Mr. Einav, Mr. Michael Staresinic, Chief Financial Officer of SRC, Mr. Andrew Stronach, Managing Director of SRC, Mr. Harrison and Mr. Xinting (Tony) Wang, President and Chief Executive Officer of WISCO Canada Resources Investment Limited and WISCO’s nominee on the ADI Board, met to introduce Mr. Wang to SRC and its management team.

On October 18, 2016, the CRC met to review drafts of the New MSA and the New Partnership Agreement necessary to facilitate the Arrangement and to confirm the terms of the SRC Financial Advisor’s engagement. On the same date, the SRC Board held a meeting at which the SRC Financial Advisor delivered its verbal opinion that, as of October 14, 2016, and based upon and subject to the various assumptions, explanations, qualifications and limitations set forth in its opinion, the consideration to be received by SRC Shareholders pursuant to the Arrangement was fair, from a financial point of view, to SRC Shareholders. At the same meeting, senior management of SRC provided the SRC Board with an update on the status of the transaction, a summary of the due diligence work that had been completed and a detailed overview of the key risks and benefits associated with the Arrangement and related transactions.

On October 19, 2016, the ADI Board met to discuss the Arrangement and related transactions. The ADI Board received an update on the status of the proposed transaction, a summary of the due diligence work that had been completed, an overview of the proposed definitive agreements in connection with the Arrangement and related transactions, an update on SRC’s portfolio investments and the valuation thereof and a detailed overview of the key risks and benefits associated with the Arrangement and related transactions. The ADI Financial Advisor delivered an updated analysis and presentation with respect to the Arrangement and the Warrant Distribution. After extensive discussion by the ADI Board of the Arrangement and related transactions, Mr. Wang indicated that, although the analysis was continuing, based on its analysis completed to date, WISCO was not in a position, at that time, to support the Arrangement. The ADI Board discussed the potential approach by ADI management of other significant ADI Shareholders on a confidential basis to seek their views and possible support for the potential business combination. The meeting of the ADI Board was adjourned until ADI management could discuss these matters with SRC and, if SRC was agreeable to ADI management approaching certain ADI Shareholders, return with the responses of such ADI Shareholders.

Subsequent to this meeting, Mr. Harrison called Mr. Yuzpe and advised that the ADI Board had met to consider the Arrangement and related transactions and that, although no vote had been taken in respect thereof, each director of ADI indicated that he would be supportive of the proposed transactions subject to final definitive agreements with the exception of the WISCO nominee on the ADI Board. Mr. Harrison also advised that WISCO had not provided a formal response to ADI at that time and that its work was continuing.

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On October 27, 2016, the SRC Board met to further consider the Arrangement. In light of the circumstances, the SRC Board directed SRC’s management to continue to work towards reaching a definitive agreement with respect to the proposed transaction, subject to certain requirements, including ADI obtaining voting support agreements in respect of the Arrangement from the holders of at least 30% of the ADI Shares and an increase in the Termination Fee.

Following communication to ADI of the results of the SRC Board meeting held on October 27, 2016, ADI entered into confidentiality agreements with twelve ADI Shareholders, each of whom was provided with a summary of the Arrangement and related transactions and a draft form of the Arrangement Agreement. Between November 10 and November 17, 2016, these twelve ADI Shareholders who own or exercise control or direction over approximately 36.3% of the issued and outstanding ADI Shares entered into ADI Lock-Up Agreements pursuant to which they agreed to, among other things, support and vote in favour of the Arrangement and related transactions.

From late October through November 2016, Mr. Yuzpe and Mr. Harrison engaged in numerous telephone conversations to address the requirements established by the SRC Board and the status of the draft definitive agreements. At a regularly scheduled meeting of the SRC Board on November 7, 2016, Mr. Yuzpe advised that SRC management was continuing to work towards meeting the requirements set by the SRC Board at the meeting on October 27, 2016.

On November 18, 2016, Mr. Yuzpe advised the SRC Board that (i) ADI had received signed voting support agreements from ADI Shareholders holding more than 36.3% of the issued and outstanding ADI Shares; (ii) ADI had advised WISCO of the voting support agreements which had been signed and requested that WISCO support the Arrangement; and (iii) the Parties had agreed in principle to an increase in the Termination Fee from $1,000,000 to $1,250,000.

On November 21, 2016, the meeting of the ADI Board previously adjourned on October 19, 2016 was reconvened to consider the updated information in respect of the Arrangement and related transactions. The ADI Board was updated in connection with the draft definitive documentation with respect to the Arrangement and related transactions and SRC and its investment portfolio and the valuation thereof. The ADI Board also received an update regarding the voting support from ADI Shareholders, as well as an updated analysis and presentation from the ADI Financial Advisor and a verbal opinion that, as of November 21, 2016, and based upon and subject to the various assumptions, explanations, qualifications and limitations set forth therein, the transaction comprised of the Arrangement and the Warrant Distribution was fair, from a financial point of view, to ADI Shareholders , other than SRC and its affiliates. The ADI Board carefully discussed and considered the terms of the Arrangement and the related transactions with the advice of its financial and legal advisors and, subject to final approval to be provided by a transaction committee comprised of three independent members of the ADI Board (Messrs. Charter, Ronald S. Simkus and Ronald P. Gagel) (the “ADI Transaction Committee”) (i) determined that the Arrangement and the Warrant Distribution were in the best interests of ADI and fair to ADI Shareholders; (ii) approved the entering into of the Arrangement Agreement and other definitive agreements in connection with the Arrangement and related transactions; and (iii) resolved to submit the Arrangement and certain related matters to a vote of ADI Shareholders at a meeting of ADI Shareholders and to recommend that ADI Shareholders vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution. At a regularly scheduled meeting of the ADI Board on November 24, 2016, Mr. Harrison provided an update to the ADI Board relating to the Arrangement.

On November 25, 2016, the CRC met to further discuss the Arrangement. After the CRC considered the terms of the Arrangement and the related transactions and the impact of the Arrangement and the related transactions on the various stakeholders of SRC, the CRC determined that it was in the best interests of SRC. The CRC unanimously resolved, amongst other things, to recommend to the SRC Board that the SRC Board authorize and approve the Arrangement Agreement and recommend that SRC Shareholders vote in favour of the Arrangement Resolution. Immediately following the meeting of the CRC, the SRC Board met and received the updated verbal opinion from the SRC Financial Advisor that, as of November 25, 2016, and based upon and subject to the various assumptions, explanations, qualifications and limitations set forth in its opinion, the consideration to be received by SRC Shareholders pursuant to the Arrangement was fair, from a financial point of view, to SRC Shareholders. Following receipt of the SRC Financial Advisor’s oral opinion and the recommendation of the CRC, the SRC Board (excluding the Interested Directors) discussed and carefully considered the terms of the Arrangement and the related transactions and unanimously (i) determined that the Arrangement was in the best interests of SRC and fair to SRC

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Shareholders; (ii) approved the entering into of the Arrangement Agreement; and (iii) resolved to submit the Arrangement to a vote of SRC Shareholders at a special meeting of SRC Shareholders and to recommend that SRC Shareholders vote in favour of the Arrangement Resolution.

On November 25, 2016, the ADI Transaction Committee met telephonically to receive an update on the final negotiations of the Arrangement Agreement and the other definitive documents reflecting the related transactions and the ADI Transaction Committee confirmed their support of the Arrangement. Between November 25 and 28, 2016, the management and legal teams of each of SRC and ADI finalized the terms of the Arrangement Agreement. On November 28, 2016, the members of the SRC Board confirmed their support of the Arrangement.

SRC and ADI signed the Arrangement Agreement late on November 28, 2016 and issued a joint press release announcing the Arrangement on November 29, 2016.

Reasons for the Arrangement - SRC

Following receipt of the advice and assistance of its financial advisors and legal counsel, the CRC and SRC Board carefully evaluated the terms of the proposed Arrangement at meetings of the CRC and the SRC Board held on November 25, 2016 and, on the recommendation of the CRC, the SRC Board (excluding the Interested Directors) unanimously determined (i) that the Arrangement and the entry into of the Arrangement Agreement are in the best interests of SRC, (ii) based upon, among other factors, the SRC Fairness Opinion delivered by SRC’s Financial Advisor, that the Arrangement is fair to the SRC Shareholders, and (iii) to recommend that SRC Shareholders vote in favour of the Arrangement Resolution. In reaching these determinations and making these recommendations the SRC Board considered, among other things, the following factors:

• Combined entity will have greater scale and financial strength and a greater capital markets profile than that of SRC.

o Upon completion of the Arrangement, it is anticipated that the combined entity will have no debt and approximately $150 million in capital available for investment in an attractive environment for resource investments to create long-term shareholder value;

o The combined entity will have an increased liquidity and market presence on the TSX;

o The difference between market capitalization and NAV of the combined entity is expected to be smaller than that currently experienced by SRC; and

o The combined entity’s increased scale is expected to improve access to global capital markets to assist future growth efforts.

• Participation by Former SRC Shareholders in the LOM Project. Former SRC Shareholders will participate in any value increases associated with LOM Project, through ADI’s continued 40% interest in Lac Otelnuk Mining Ltd.

• Aligned equity investment. Sprott Inc., Exploration Capital 2008 LP and Term Oil have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity, which will align shareholders of the combined entity with the manager of the combined entity and other well-known resource investors.

• Consideration. The NAV (which consists primarily of cash) of the three ADI Shares that SRC Shareholders will receive in consideration for each SRC Share pursuant to the Arrangement was $0.65 as at September 30, 2016 (and after giving effect to the transactions contemplated by the Arrangement Agreement). This amount represents a 31% premium to the closing price of the SRC Shares on the TSX on November 28, 2016, the day prior to the announcement of the Arrangement. After giving effect to the Arrangement, the NAV of the combined entity compared to that of SRC as at September

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30, 2016 will decrease from $1.09 per SRC Share to $0.92 per ADI Share, representing a total dilution of only 16%. Net asset value is a non-GAAP financial measure and does not have standard meanings prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. See “Supplemental Disclosure – Non-GAAP Measures”.

• Enhanced management team with the addition of members with proven track records of success and deep networks of relationships in the resource industry to improve and expand the existing portfolio of SRC.

o Mr. Harrison, who will serve as Managing Director of the combined entity, has over 20 years of executive, financial and technical experience in the mining industry.

o Mr. Charter, who will serve as director on the board of the combined entity, is a corporate director serving on four public company boards, including the ADI Board, and is the current Chairman of HGC Holdings, the private holding company of HGC Investment Management Inc., an employee-owned investment firm specializing in low volatility, highly liquid, event-driven mandates.

o Mr. Rule, who will serve as Chief Investment Officer of the combined entity, is a leading resource investor specializing in mining, energy, water utilities, forest products and agriculture with a deep network of industry contacts.

• SRC Fairness Opinion. The SRC Board considered the SRC Fairness Opinion of the SRC Financial Advisor delivered orally to the SRC Board on November 25, 2016, and subsequently confirmed in writing as of such date, as to the fairness, from a financial point of view, of the consideration to be received by SRC Shareholders under the Arrangement. A copy of the written SRC Fairness Opinion is attached as Appendix G to this Circular. SRC Shareholders should read the SRC Fairness Opinion in its entirety.

• Alternatives to the Arrangement. The SRC Board will remain able to respond, in accordance with its fiduciary duties, to bona fide unsolicited written Acquisition Proposals that are more favourable to SRC Shareholders than the Arrangement and constitute Superior Proposals under the Arrangement Agreement. Under such circumstances, subject to payment by SRC of the Termination Fee in the amount of $1,250,000, SRC may, in accordance with the Arrangement Agreement, terminate the Arrangement Agreement and approve and recommend any such Superior Proposal if ADI does not exercise its right to match such Superior Proposal in accordance with the Arrangement Agreement. The ADI Board has the same rights under the Arrangement Agreement, in which case, if the ADI Board wished to terminate the Arrangement Agreement and approve and recommend any Superior Proposal made to ADI, and SRC did not exercise its right to match such Superior Proposal in accordance with the Arrangement Agreement, ADI would be required to pay to SRC the Termination Fee in the amount of $1,250,000.

• Termination Fee reasonable. The SRC Board believes that the Termination Fee payable to ADI by SRC in certain circumstances is reasonable and not preclusive of other proposals.

• Lock-Up Agreements. The SRC Locked-Up Shareholders, who at the time of the signing of the Arrangement Agreement on November 29, 2016 held in total approximately 11% of the outstanding SRC Shares, entered into the SRC Lock-Up Agreements with ADI pursuant to which they agreed, among other things, to vote in favour of the Arrangement Resolution. The ADI Locked-Up Shareholders, who at the time of the signing of the Arrangement Agreement on November 29, 2016 held in total approximately 36.3% of the outstanding ADI Shares entered into the ADI Lock-Up Agreements with SRC pursuant to which they agreed, among other things, to vote in favour of the ADI Resolutions.

• Required shareholder and Court approvals. The SRC Board considered the following rights and approvals that protect SRC Shareholders:

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o the Arrangement Resolution must be approved at the SRC Meeting by: (a) at least 66 % of the votes cast by the SRC Shareholders present in person or represented by proxy at the SRC Meeting; and (b) a simple majority of the votes cast by the SRC Shareholders present in person or represented by proxy at the SRC Meeting, other than by those SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under MI 61-101 as the Arrangement constitutes a “business combination” for SRC for the purposes of MI 61-101;

o the Arrangement must be approved by the Court, which will consider, among other things, the fairness and reasonableness of the Arrangement; and

o each Registered SRC Shareholder is entitled to exercise Dissent Rights in respect of the Arrangement.

• Reasonable terms of the Arrangement Agreement. The terms and conditions of the Arrangement Agreement, including SRC’s and ADI’s representations, warranties and covenants, and the conditions to their respective obligations are, in the judgment of SRC, reasonable.

• Likelihood of completion. It is likely that the conditions to complete the Arrangement will be satisfied, including taking into account the nature of the approvals required by both SRC and ADI to be obtained as a condition to completing the Arrangement.

• Tax deferred rollover. In general, taxable Canadian resident SRC Shareholders will be able to receive ADI Shares on a tax deferred basis for Canadian federal income tax purposes; it is also intended that SRC Shareholders that are U.S. Holders will generally receive ADI Shares on a tax-deferred basis for U.S. federal income tax purposes.

The information and factors described above and considered by the SRC Board in reaching its determinations and making its recommendations are not intended to be exhaustive but include material factors considered by the SRC Board. In view of a wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the SRC Board did not find it useful to, and did not attempt to, quantify, rank, or otherwise assign relative weights to these factors. In addition, individual members of the SRC Board may have given different weight to different factors.

SRC Fairness Opinion

SRC retained the SRC Financial Advisor to provide, among other things, financial advisory and related services in evaluating various strategic alternatives, including the Arrangement and asked the SRC Financial Advisor to prepare and deliver an opinion as to whether the consideration to be received by the SRC Shareholders pursuant to the Arrangement is fair, from a financial point of view, to SRC Shareholders.

Neither the SRC Financial Advisor nor any of its affiliates or associates is an insider, associate or affiliate (as such terms are defined in the Securities Act (Ontario)) of SRC or ADI or any of their respective associates or affiliates. Neither the SRC Financial Advisor nor any of its affiliates or associates is acting as an advisor to ADI or SRC in connection with any matter, other than acting as a financial advisor to SRC.

In consideration for its services, SRC agreed to pay fees to the SRC Financial Advisor (which fees are not contingent upon completion of the Arrangement), to reimburse the SRC Financial Advisor for reasonable out-of-pocket expenses and to indemnify the SRC Financial Advisor in respect of certain liabilities as may be incurred by it in connection with its arrangement.

The SRC Financial Advisor has provided the SRC Board with the SRC Fairness Opinion, as of November 25, 2016, that the consideration to be received by the SRC Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the SRC Shareholders. The SRC Fairness Opinion is subject to the assumptions and limitations contained therein and should be read in its entirety. See Appendix G to this Circular.

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The SRC Board concurs with the views of the SRC Financial Advisor and such views were an important consideration in the SRC Board’s decision to proceed with the Arrangement.

Recommendation of the SRC Board

At a meeting of the SRC Board held on November 25, 2016, the SRC Board received the report of the CRC and considered the Arrangement with ADI on the terms and conditions provided in the Arrangement Agreement as well as the verbal opinion from the SRC Financial Advisor stating that the consideration to be received by the SRC Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the SRC Shareholders. The SRC Board (excluding the Interested Directors) unanimously determined (i) that the Arrangement and the entry into of the Arrangement Agreement are in the best interests of SRC, (ii) based upon, among other factors, the SRC Fairness Opinion, that the Arrangement is fair to the SRC Shareholders, and (iii) to recommend that SRC Shareholders vote in favour of the Arrangement Resolution. In coming to its conclusion and recommendations the SRC Board considered, among others, the following factors:

• the unanimous recommendation of the CRC;

• the purpose and benefits of the Arrangement as outlined elsewhere in this Circular including under “Reasons for the Arrangement – SRC” above;

• information concerning the financial condition, results of operations, business plans and prospects of SRC, and the resulting potential for the enhancement of the management effectiveness and financial results of the combined entity;

• the alternatives available to SRC; and

• the advice and assistance of the SRC Financial Advisor in evaluating the Arrangement. See Appendix G to this Circular.

The SRC Board realized that there are risks associated with the Arrangement, including that some of the potential benefits set forth above may not be realized or that there may be significant costs associated with realizing such benefits. The SRC Board believes that the factors in favour of the Arrangement outweigh the risks and potential disadvantages, although there can be no assurance in this regard. See “Business of the Combined Entity After Giving Effect to the Arrangement” and “Risk Factors”.

Reasons for the Arrangement - ADI

Following receipt of the advice and assistance of its financial advisors and legal counsel, the ADI Board carefully evaluated the terms of the proposed Arrangement at a meeting of the ADI Board initially held on October 19, and subsequently adjourned and resumed on November 21, 2016, and, subject to the final approval of the ADI Transaction Committee on behalf of the ADI Board (received on November 25, 2016), (a) determined that (i) based upon, among other factors, the ADI Fairness Opinion, that the transactions comprised of the Arrangement and the Warrant Distribution were fair to ADI Shareholders, other than SRC and its affiliates; and (ii) the Arrangement and the entering into of the Arrangement Agreement and the Warrant Distribution are in the best interests of ADI; (b) approved the entering into of the Arrangement Agreement and the other definitive agreements in connection with the transactions related to the Arrangement; and (c) resolved to recommend that ADI Shareholders vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution. In reaching these determinations and granting these approvals the ADI Board considered, among other things, the following factors:

• Review of strategic alternatives. The Arrangement was arrived at following an extensive review of strategic alternatives in various sectors, including precious metals, base metals and bulk mining, oil and gas, financial services, healthcare and diversified industrial companies, including consideration of a range of potential transactions with a number of possible counterparties by ADI.

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• Combined entity will have greater scale and financial strength and a greater markets profile.

o Upon completion of the Arrangement, it is anticipated that the combined entity will have no debt and approximately $150 million in capital available for investment in an attractive environment for resource investments to create long-term shareholder value;

o The combined entity will have an increased liquidity and market presence on the TSX;

o The difference between market capitalization and NAV of the combined entity is expected to be smaller than that currently experienced by ADI; and

o The combined entity’s increased scale is expected to improve access to global capital markets to assist future growth efforts.

• Enhanced management team with the addition of members with proven track records of success and deep networks of relationships in the resource industry to improve and expand the combined portfolio of SRC and ADI.

o Sprott Inc. and the management of SRC are well-known resource investors, and receive significant deal flow through Sprott Inc.’s substantial network.

o Mr. Rule, who will serve as Chief Investment Officer of the combined entity, is a leading resource investor specializing in mining, energy, water utilities, forest products and agriculture with a deep network of industry contacts.

• Diversified portfolio will result in reduced investment risk. A diversified portfolio of investments in the resources sector reduces the risk associated with a single project and single commodity investment that currently exists in ADI.

• Continued ownership in the LOM Project. Current ADI Shareholders will continue to participate in any increases in value of the LOM Project that may develop in the future through ADI’s continued 40% interest in Lac Otelnuk Mining Ltd.

• Aligned equity investment. Pursuant to the Committed Financings, Sprott Inc., Exploration Capital 2008 LP and Term Oil have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity at a premium to market price. This will align shareholders of the combined entity with the manager of the combined entity and other well-known resource investors.

• Increase in NAV. After giving effect to the Arrangement, the NAV of the combined entity compared to that of ADI as of September 30, 2016 will increase from $0.22 per ADI Share to $0.29 per ADI Share, representing a total accretion of 32%. The Warrant Distribution provides further upside potential to ADI Shareholders. Net asset value is a non-GAAP financial measure and does not have standard meanings prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. See “Supplemental Disclosure – Non-GAAP Measures”.

• ADI Fairness Opinion. The ADI Board considered the ADI Fairness Opinion of the ADI Financial Advisor delivered orally to the ADI Board on November 21, 2016, and subsequently confirmed in writing as of such date, as to the fairness, from a financial point of view, of the Arrangement and the Warrant Distribution to ADI Shareholders, other than SRC and its affiliates. A copy of the written ADI Fairness Opinion is attached as Appendix H. ADI Shareholders should read the ADI Fairness Opinion in its entirety.

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• Alternatives to the Arrangement. The ADI Board will remain able to respond, in accordance with its fiduciary duties, to bona fide unsolicited written Acquisition Proposals that are more favourable to ADI Shareholders than the Arrangement and constitute Superior Proposals under the Arrangement Agreement. Under such circumstances, subject to payment by ADI of the Termination Fee in the amount of $1,250,000, ADI may, in accordance with the Arrangement Agreement, terminate the Arrangement Agreement and approve and recommend any such Superior Proposal if SRC does not exercise its right to match such Superior Proposal in accordance with the Arrangement Agreement. The SRC Board has the same rights under the Arrangement Agreement, in which case, if the SRC Board wished to terminate the Arrangement Agreement and approve and recommend any Superior Proposal made to SRC, and ADI did not exercise its right to match such Superior Proposal in accordance with the Arrangement Agreement, SRC would be required to pay to ADI the Termination Fee in the amount of $1,250,000.

• Termination Fee reasonable. The ADI Board believes that the Termination Fee payable to SRC by ADI in certain circumstances is reasonable and not preclusive of other proposals.

• Lock-Up Agreements. The ADI Locked-Up Shareholders, who at the time of the signing of the Arrangement Agreement on November 29, 2016 held in total approximately 36.3% of the outstanding ADI Shares, entered into the ADI Lock-Up Agreements with SRC pursuant to which they agreed, among other things, to vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution. The SRC Locked-Up Shareholders, who at the time of the signing of the Arrangement Agreement on November 29, 2016 held in total approximately 11% of the outstanding SRC Shares entered into the SRC Lock-Up Agreements with ADI pursuant to which they agreed, among other things, to vote in favour of the Arrangement Resolution.

• Required shareholder approval. The ADI Board considered that the ADI Transactions Approval Resolution must be approved at the ADI Meeting by at least 50% of the votes cast by the ADI Shareholders present in person or represented by proxy at the ADI Meeting.

• Reasonable terms of the Arrangement Agreement. The terms and conditions of the Arrangement Agreement, including ADI’s and SRC’s representations, warranties and covenants, and the conditions to their respective obligations are, in the judgment of ADI, reasonable.

• Likelihood of completion. It is likely that the conditions to complete the Arrangement will be satisfied, including taking into account the nature of the approvals required by both ADI and SRC to be obtained as a condition to completing the Arrangement.

The information and factors described above and considered by the ADI Board in reaching its determinations and making its recommendations are not intended to be exhaustive but include material factors considered by the ADI Board. In view of the wide variety of factors considered in connection with its evaluation of the Arrangement and the related transactions and the complexity of these matters, the ADI Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. In addition, individual members of the ADI Board may have given different weight to different factors.

ADI Fairness Opinion

The ADI Board retained the ADI Financial Advisor in May 2015 to provide, among other things, financial advisory services in connection with any potential acquisitions of assets by ADI by way of purchase or joint venture, any merger or other business combination with ADI and any acquisition by ADI or of ADI. During the negotiations with SRC, ADI requested the ADI Financial Advisor to prepare and deliver an opinion as to the fairness, from a financial point of view, to ADI Shareholders of the Arrangement and the Warrant Distribution.

Neither the ADI Financial Advisor nor any of its affiliates or associates is an insider, associate or affiliate (as such terms are defined in the Securities Act (Ontario)) of ADI or SRC or any of their respective associates or affiliates. The ADI Financial Advisor or any of its affiliates or associates is not acting as an advisor to SRC or ADI or any of

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their respective associates or affiliates in connection with any other matter, other than acting as a financial advisor to ADI.

In consideration for its services, ADI agreed to pay fees to the ADI Financial Advisor, to reimburse the ADI Financial Advisor for reasonable out-of-pocket expenses and to indemnify the ADI Financial Advisor in respect of certain liabilities as may be incurred by it in connection with its arrangement. As part of the May 2015 engagement of the ADI Financial Advisor, a portion of the fee payable to the ADI Financial Advisor is contingent upon completion of the Arrangement and the Warrant Distribution.

The ADI Financial Advisor has provided the ADI Board with the ADI Fairness Opinion, which states that, as of November 21, 2016, the Arrangement and the Warrant Distribution are fair, from a financial point of view, to the ADI Shareholders, other than SRC and its affiliates. The ADI Fairness Opinion is subject to the assumptions and limitations contained therein and should be read in its entirety. See Appendix H to this Circular.

The ADI Board concurs with the views of the ADI Financial Advisor and such views were an important consideration in the ADI Board’s decision to proceed with the Arrangement.

Recommendation of the ADI Board

At a meeting of the ADI Board held on November 21, 2016, the ADI Board considered the Arrangement with SRC on the terms and conditions provided in the Arrangement Agreement as well as the verbal opinion from Primary Capital stating that the Arrangement and the Warrant Distribution are fair, from a financial point of view, to the ADI Shareholders, other than SRC and its affiliates. The ADI Board has determined (i) that the participation of ADI in the Arrangement and the entry into of the Arrangement Agreement are in the best interests of ADI, (ii) based upon, among other factors, the ADI Fairness Opinion that the Arrangement and the Warrant Distribution are fair to ADI Shareholders, other than SRC and its affiliates, and (iii) to recommend that ADI Shareholders vote in favour of the ADI Resolutions. In coming to its conclusion and recommendations the ADI Board considered, among others, the following factors:

• the purpose and benefits of the Arrangement as outlined elsewhere in this Circular including under “Reasons for the Arrangement – ADI” above;

• information concerning the financial condition, results of operations, business plans and prospects of ADI, and the resulting potential for the enhancement of the management effectiveness and financial results of the combined entity;

• the alternatives available to ADI; and

• the advice and assistance of the ADI Financial Advisor in evaluating the Arrangement. See Appendix H to this Circular.

The ADI Board realized that there are risks associated with the Arrangement, including that some of the potential benefits set forth above may not be realized or that there may be significant costs associated with realizing such benefits. The ADI Board believes that the factors in favour of the Arrangement outweigh the risks and potential disadvantages, although there can be no assurance in this regard. See “Business of the Combined Entity After Giving Effect to the Arrangement” and “Risk Factors”.

EFFECT OF THE ARRANGEMENT

General

Pursuant to the Arrangement, SRC Shareholders (excluding SRC Dissenting Shareholders) will receive three ADI Shares for each SRC Share held and each SRC Option (whether vested or unvested) will be cancelled by SRC without payment of any consideration. Upon completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI.

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On the Business Day immediately preceding the Effective Date, as a pre-Arrangement step, ADI will complete the Warrant Distribution to ADI Shareholders of 0.25 of an ADI Warrant for each ADI Share held by ADI Shareholders of record on that date. See “Related Transactions – Warrant Distribution”.

As at December 21, 2016, there were 157,554,238 ADI Shares and 96,672,102 SRC Shares outstanding (each on a non-diluted basis). Assuming that there are no SRC Dissenting Shareholders and assuming no SRC Shares are issued pursuant to SRC Options and no ADI Shares are issued pursuant to ADI Options, there will be, immediately following the completion of the Arrangement, the Warrant Distribution and the Committed Financings: 510,488,999 ADI Shares and 81,138,560 ADI Warrants issued and outstanding. Immediately following the completion of the Arrangement and the Committed Financings, on a non-diluted basis: (i) former SRC Shareholders are anticipated to hold approximately 57% of the issued and outstanding ADI Shares, (ii) current ADI Shareholders are anticipated to hold approximately 31% of the issued and outstanding ADI Shares, and (iii) Sprott Inc., Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of the issued and outstanding ADI Shares. See “Related Transactions – Financings” and “Business of the Combined Entity After Giving Effect to the Transactions”.

Details of the Arrangement

The following is a summary only of the Plan of Arrangement and reference should be made to the full text of the Arrangement Agreement and the Plan of Arrangement set forth in Appendix C and Schedule A to Appendix C, respectively, to this Circular.

The Arrangement involves a number of steps, including those events set out below, which will occur and will be deemed to occur, except as otherwise expressly noted, two minutes apart and in the following order commencing at the Effective Time, without any further authorization, act or formality required on the part of any Person, except as otherwise expressly provided in the Plan of Arrangement:

(a) each SRC Option outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the SRC SOP, shall immediately be cancelled, and neither SRC nor ADI shall be obligated to pay the holder of such SRC Option any amount in respect of such SRC Option and, in respect of each such SRC Option, the holder thereof shall cease to be a holder of such SRC Option and the name of such holder shall be removed from the applicable register;

(b) the SRC SOP and all agreements relating to the SRC Options shall be terminated and shall be of no further force and effect;

(c) each SRC Share held by an SRC Dissenting Shareholder entitled to be paid fair value for its SRC Dissenting Share will be deemed to be transferred by the holder thereof, without any further act or formality on its part, free and clear of all liens, charges, encumbrances and any other rights of others, to SRC and SRC shall thereupon be obligated to pay the amount determined and payable in accordance with Article 4 of the Plan of Arrangement and each SRC Dissenting Shareholder will have only the rights set out in Article 4 of the Plan of Arrangement and each SRC Dissenting Shareholder will cease to be the holder of such SRC Shares; and

(d) each outstanding SRC Share (other than those SRC Shares acquired from SRC Dissenting Shareholders) held by an SRC Shareholder shall be transferred to, and acquired by ADI, free and clear of all liens, charges, encumbrances and any other rights of others, in exchange for the issuance by ADI to such SRC Shareholders of the Consideration and, in respect of each such SRC Share so transferred:

(i) the registered holder thereof shall cease to be the registered holder of such SRC Share and the name of such registered holder shall be removed from SRC’s register of holders of SRC Shares as of the time of this step; and

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(ii) ADI shall be recorded as the registered holder of such SRC Share and will be entered in SRC’s register of holders of SRC Shares as the holder thereof.

The respective obligations of SRC and ADI to complete the transactions contemplated by the Arrangement are subject to a number of conditions which must be satisfied in order for the Arrangement to become effective. Upon all of the conditions being fulfilled or waived, SRC is required to file a copy of the Articles of Arrangement with the Director in order to give effect to the Arrangement. ADI and SRC expect the Effective Date to occur on, or as soon as practicable after February 9, 2017.

The Arrangement Agreement

General

The Arrangement will be effected pursuant to the Arrangement Agreement. The Arrangement Agreement contains, among other things, covenants, representations and warranties of and from each of SRC and ADI and various conditions precedent, both mutual and with respect to SRC and ADI. Unless all of such conditions are satisfied or waived by the Party for whose benefit such conditions exist, to the extent they may be capable of waiver, the Arrangement will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all.

The following is a summary of certain provisions of the Arrangement Agreement which is qualified in its entirety by the full text of the Arrangement Agreement, set forth in Appendix C to this Circular. SRC Shareholders and ADI Shareholders are urged to read the Arrangement Agreement in its entirety.

Effective Date

If the approvals of the Arrangement Resolution by SRC Shareholders and the ADI Transactions Approval Resolution by ADI Shareholders are obtained, the Final Order is obtained approving the Arrangement, every requirement of the CBCA relating to the Arrangement has been complied with and all other conditions precedent are satisfied or waived, the Arrangement will become effective on the Effective Date.

Representations and Warranties

The Arrangement Agreement contains customary representations and warranties made by SRC to ADI and customary representations and warranties made by ADI to SRC. Those representations and warranties were made solely for purposes of the Arrangement Agreement, were made as of a specified date and may be subject to contractual standards of materiality different from what may be viewed as material to SRC Shareholders and ADI Shareholders. For the foregoing reasons, SRC Shareholders and ADI Shareholders should not rely on the representations and warranties contained in the Arrangement Agreement as statements of factual information at the time they were made or otherwise.

The representations and warranties provided by SRC in favour of ADI relate to: corporate existence and power, corporate authorization, the execution and binding obligation of and under the Arrangement Agreement, governmental authorization, non-contravention, capitalization, subsidiaries, securities laws matters, financial statements, disclosure controls and internal control over financial reporting, auditors, undisclosed material liabilities, absence of certain changes, compliance with laws, operational authorizations, material contracts, title to and sufficiency of assets, owned real property, leased real property, personal property, intellectual property, litigation, environmental matters, employees, collective agreements, employee plans, insurance, taxes, bankruptcy and insolvency, the SRC Fairness Opinion and brokers.

In addition to providing reciprocal representations and warranties to those provided by SRC in favour of ADI, ADI additionally provided representations and warranties in favour of SRC related to the issuance of ADI Shares, security ownership and Investment Canada Act (Canada) status.

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Conditions Precedent to the Arrangement

In order for the Arrangement to become effective, certain conditions must have been satisfied, waived or released on or before the Effective Time, which conditions are summarized below.

Mutual Conditions Precedent

The respective obligations of SRC and ADI to complete the transactions contemplated in the Arrangement Agreement are subject to the fulfillment, on or before the Effective Time, of the following conditions, each of which may only be waived, in whole or in part, with the mutual consent of the Parties: (a) the Arrangement Resolution shall have been approved and adopted at the SRC Meeting in accordance with the Interim Order; (b) the Interim Order and the Final Order shall have each been obtained on terms consistent with the Arrangement Agreement and shall not have been set aside or modified in a manner unacceptable to either SRC or ADI, each acting reasonably, on appeal or otherwise; (c) the ADI Transactions Approval Resolution shall have been approved and adopted at the ADI Meeting; (d) the TSX shall have conditionally approved the listing thereon of the ADI Shares and the ADI Warrants, subject only to the standard listing conditions of the TSX and such approval shall not have been revoked; (e) no Law shall be in effect that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins SRC or ADI from consummating the Arrangement, the Warrant Distribution, the Financings or the other transactions contemplated by the Arrangement Agreement; and (f) no Proceeding shall be pending or threatened by any Governmental Entity seeking an injunction, judgment, decree or other order to prevent or challenge the consummation of the Arrangement, the Warrant Distribution, the Financings or the other transactions contemplated by the Arrangement Agreement.

Additional Conditions Precedent to the Obligations of ADI

The obligation of ADI to complete the Arrangement will also be subject to the fulfillment of each of the following conditions precedent on or prior to the Effective Time, each of which is for the exclusive benefit of ADI and may be waived, in whole or part, by ADI in its sole discretion: (a) (i) certain fundamental representations of SRC shall be true and correct in all respects (other than, in the case of the representations and warranties of SRC regarding its capitalization, for de minimis inaccuracies) as of the Effective Time as though made at and as of the Effective Time (except, in each case, for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date) and (ii) all of the other representations and warranties of SRC set forth in the Arrangement Agreement shall be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained in them) as of the Effective Time as if made at and as of the Effective Time (except, in each case, for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date), except to the extent that the failure or failures of such representations and warranties to be so true and correct, individually or in the aggregate, would not have a Material Adverse Effect on SRC; and SRC shall have delivered to ADI a certificate addressed to ADI, dated the Effective Date and executed by two of its senior officers (without personal liability), confirming the same; (b) SRC shall have fulfilled or complied in all material respects with each of the covenants of SRC contained in the Arrangement Agreement to be fulfilled or complied with by it on or prior to the Effective Time, and SRC shall have delivered to ADI a certificate addressed to ADI, dated the Effective Date and executed by two of its senior officers (without personal liability), confirming the same; (c) Dissent Rights shall not have been validly exercised and not withdrawn with respect to more than 5% of the issued and outstanding SRC Shares; (d) SCLP shall have executed and delivered the New MSA; (e) SRCLP and SRC shall have executed the New Partnership Agreement; (f) all conditions to the Committed Financings (including the payments by Sprott Inc., Term Oil and Exploration Capital 2008 LP in escrow of the aggregate consideration payable to ADI in connection with such financings) shall have been satisfied, other than conditions solely in ADI’s favour; and (g) since the date of the Arrangement Agreement there shall not have been or occurred a Material Adverse Effect in respect of SRC.

Additional Conditions Precedent to the Obligations of SRC

The obligation of SRC to complete the Arrangement will also be subject to the fulfillment of each of the following conditions precedent on or prior to the Effective Time, each of which is for the exclusive benefit of SRC and may only be waived, in whole or in part, by SRC in its sole discretion: (a) (i) certain fundamental representations of ADI shall be true and correct in all respects (other than, in the case of the representations and warranties of ADI

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regarding its capitalization, for de minimis inaccuracies) as of the Effective Time as though made at and as of the Effective Time (except, in each case, for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date) and (ii) all of the other representations and warranties of ADI set forth in the Arrangement Agreement shall be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained in them) as of the Effective Time as if made at and as of the Effective Time (except, in each case, for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date), except to the extent that the failure or failures of such representations and warranties to be so true and correct, individually or in the aggregate, would not have a Material Adverse Effect on ADI; and ADI shall have delivered to SRC a certificate addressed to SRC, dated the Effective Date and executed by two of its senior officers (without personal liability), confirming the same; (b) ADI shall have fulfilled or complied in all material respects with its covenants contained in the Arrangement Agreement to be fulfilled or complied with by it on or prior to the Effective Time, and ADI shall have delivered to SRC a certificate addressed to SRC, dated the Effective Date and executed by two of its senior officers (without personal liability), confirming the same; (c) ADI shall have complied with its obligations under the Arrangement Agreement to provide the Depositary with an irrevocable treasury direction to the ADI Transfer Agent for the issuance of a sufficient number of ADI Shares to be held in escrow (the terms and conditions of such escrow to be satisfactory to SRC, acting reasonably) to satisfy the aggregate Consideration for the SRC Shares (excluding SRC Shares in respect of which Dissent Rights have been validly exercised and not withdrawn as provided in the Plan of Arrangement) in connection with the Arrangement and in accordance with the terms of the Arrangement Agreement and the Depositary shall have confirmed to SRC receipt from or on behalf of ADI of the irrevocable direction as so contemplated under the Arrangement Agreement; (d) the distribution of ADI Shares pursuant to the Arrangement shall be exempt from the prospectus and registration requirements of Securities Laws, either by virtue of exemptive relief from the applicable Securities Authorities or by virtue of applicable exemptions under Securities Laws, and the first trade of such ADI Shares shall not be subject to resale restrictions under Securities Laws; (e) executed documentation in respect of the reconstitution of the ADI Board, such that the members of the ADI Board shall be Terrence A. Lyons, Stephen Yuzpe, Lenard F. Boggio, Joan E. Dunne, John P. Embry, A.R. (Rick) Rule IV, Ron F. Hochstein, Donald K. Charter and an individual nominated by WISCO, if applicable, pursuant to the terms and conditions of the subscription agreement between ADI and WISCO dated February 15, 2011, shall have been provided to SRC, such documentation to be held in escrow and subsequently released immediately following the consummation of the Arrangement on the Effective Date as contemplated in the Arrangement Agreement; and (f) since the date of the Arrangement Agreement there shall not have been or occurred a Material Adverse Effect in respect of ADI.

Covenants of SRC and ADI

Covenants Relating to the Conduct of Business

In the Arrangement Agreement, SRC and ADI agreed to certain customary negative and affirmative covenants, modified as necessary, relating to the operation of their businesses between the date of the Arrangement Agreement and until the earlier of the Effective Time and the time that the Arrangement Agreement is terminated in accordance with its terms. These include: (a) covenants that each of SRC and ADI, as applicable, shall, and shall cause its Subsidiaries to, conduct its business in the Ordinary Course, and the Party shall use commercially reasonable efforts to maintain and preserve its and its Subsidiaries’ business organization, assets (including, for greater certainty, the SRC Assets and ADI Assets, as applicable), goodwill and business relationships with other Persons with which the Party or any of its Subsidiaries have business relations; and (b) covenants relating to, among other things, (i) amendments to constating documents, (ii) capital structure, (iii) acquisitions and dispositions, (iv) accounting and tax matters, (v) discharging and satisfying obligations, (vi) material contracts and other contracts, (vii) litigation, and (viii) insurance.

Covenants Relating to the Arrangement

Pursuant to the Arrangement Agreement, each of SRC and ADI agreed, as applicable, to perform and cause its Subsidiaries to perform, all obligations required or desirable to be performed by the Party or any of its Subsidiaries under the Arrangement Agreement, cooperate with the other Party in connection therewith, and do all such other acts and things as may be necessary or desirable to consummate and make effective, as soon as reasonably practicable, the Arrangement, including: (a) using commercially reasonable efforts to, (i) satisfy all conditions precedent in the Arrangement Agreement, (ii) obtain and maintain all third party or other consents, waivers, permits,

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exemptions, orders, approvals, agreements, amendments or confirmations necessary to permit the consummation of the transactions contemplated by the Arrangement Agreement or required to maintain the respective Party’s Material Contracts, (iii) effect all necessary registrations, filings and submissions of information required by Governmental Entities, (iv) upon reasonable consultation with the other Party, oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of the Arrangement and defend, or cause to be defended, any Proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement or the Arrangement Agreement, (v) obtain conditional approval of the TSX prior to the completion of the Arrangement, subject only to satisfaction of the standard listing conditions of the TSX, for the listing of the ADI Shares and the ADI Warrants on the TSX and confirmation from the TSX that such ADI Shares and ADI Warrants will be listed and posted for trading on the TSX on the Effective Date, and cooperate fully with the other Party in the preparation of all applications, filings, responses and submissions in connection therewith, (vi) for SRC, assist ADI in respect of its applications to, and for ADI, to obtain the approval of, the TSXV (or TSX, as applicable) in connection with the Warrant Distribution, the Arrangement and the Financings; (b) not take any action, or refrain from taking any commercially reasonable action, or permit any action to be taken or not taken, which is inconsistent with the Arrangement Agreement; and (c) the applicable Party shall promptly notify the other Party of, (i) any Material Adverse Effect in respect of itself, (ii) notice of required consents that may be required in connection with the Arrangement, or (iii) any material Proceeding.

Covenants Regarding Access to Information; Confidentiality

From the date of the Arrangement Agreement until the Effective Time or the termination of the Arrangement Agreement, whichever is first, SRC and ADI have agreed to afford each other and their respective Representatives reasonable access to the other Party to their offices, properties, books and records, and make available all financial data and other information as reasonably requested, subject to reasonable notice requirements. Notwithstanding the foregoing, neither Party is obligated to provide access to, or to disclose, any information to the other Party if the applicable Party reasonably determines that such access or disclosure would violate applicable Law, result in the disclosure of any trade secrets or similar information or violate any obligations of SRC or ADI, as applicable, or any other Person with respect to confidentiality, amongst other things.

Covenants Regarding Public Communications

Except as required by Law, no Party shall issue any press release or make any other public statement or disclosure with respect to this Agreement, the Arrangement, the Warrant Distribution and the Financings without the consent of the other Party.

Covenants Regarding Tax Free Reorganization

It is intended that, for United States federal income Tax purposes, the transactions completed by the Arrangement Agreement shall qualify as a reorganization within the meaning of Section 368(a) of the Code, as amended. The Parties agree to file their Tax returns accordingly, except as otherwise required by a change in applicable Tax laws or a final determination.

Covenants Regarding Insurance and Indemnification

In the Arrangement Agreement, ADI agreed to obtain, from an insurance carrier with the same or better credit rating as ADI’s current insurance carriers with respect to directors’ and officers’ liability insurance, and fully pay a single premium for, customary “tail” policies of directors’ and officers’ liability insurance providing protection for not less than six years from and after the Effective Time; such polices shall have terms, conditions, retentions and limits of liability that are no less favourable to the directors and officers of ADI in the aggregate than the protection provided by the policies maintained by ADI which are in effect immediately prior to the Effective Date and providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Date; provided that the premium for any such extension or run off insurance coverage will not exceed 200% of the annual premium of ADI’s existing directors’ and officers’ insurance policy.

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Furthermore, from and after the Effective Time, ADI shall indemnify and hold harmless, to the fullest extent permitted under applicable Law (and to also advance expenses as incurred to the fullest extent permitted under applicable Law), each present and former director and officer of ADI and its Subsidiaries (each, an “Indemnified Person”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any Proceeding arising out of or related to such Indemnified Person’s service as a director or officer of ADI or any of its Subsidiaries or services performed by such Persons at the request of ADI or any of its Subsidiaries at or prior to or following the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, including the approval or completion of the Arrangement Agreement and the Arrangement or any of the other transactions contemplated by the Arrangement Agreement or arising out of or related to it and the transactions contemplated thereunder. None of ADI, SRC or any of their respective Subsidiaries shall settle, compromise or consent to the entry of any judgment in any Proceeding involving or naming an Indemnified Person or arising out of or related to an Indemnified Person’s service as a director or officer of ADI or any of its Subsidiaries or services performed by such Indemnified Person at the request of ADI or any of its Subsidiaries at or prior to or following the Effective Time without the prior written consent of that Indemnified Person, unless such settlement, compromise or consent includes an unconditional release of such Indemnified Person from all liability arising out of such Proceeding.

The rights of the Indemnified Persons under the Arrangement Agreement shall be in addition to any rights such Indemnified Persons may have under the constating documents of ADI and any of its Subsidiaries, or under any applicable Law or agreement of any Indemnified Person with ADI or any of its Subsidiaries. All rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time and rights to advancement of expenses relating thereto in favour of any Indemnified Person as provided in the constating documents of ADI or any of its Subsidiaries or any agreement between such Indemnified Person and ADI or any of its Subsidiaries shall survive the Effective Time for a period of not less than six years and shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such Indemnified Person.

Covenants Regarding Non-Solicitation and Acquisition Proposals

The Arrangement Agreement provides that, subject to the exceptions below, neither Party nor its Subsidiaries shall, directly or indirectly, do or authorize or permit any of its Representatives to do, any of the following:

(a) solicit, assist, initiate, encourage or otherwise facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of such Party or any of its Subsidiaries or entering into any form of agreement, arrangement or understanding) any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

(b) enter into or otherwise engage or participate in any discussions or negotiations with any Person (other than the other Party) regarding any Acquisition Proposal, provided that such Party may (a) communicate with any Person for the purposes of clarifying the terms of any inquiry, proposal or offer made by such Person that constitutes or could reasonably be expected to constitute or lead to, an Acquisition Proposal; (b) advise any Person of the restrictions of the Arrangement Agreement; and (c) advise any Person making an Acquisition Proposal that the SRC Board or the ADI Board, as applicable, has determined that such Acquisition Proposal does not constitute a Superior Proposal, in each case, if, in so doing, no other information that is prohibited from being communicated under the Arrangement Agreement is communicated to such Person;

(c) withdraw, amend, modify or qualify in a manner adverse to the other Party or the consummation of the Arrangement, or publicly propose or state an intention to withdraw, amend, modify or qualify in a manner adverse to the other Party or the consummation of the Arrangement, the SRC Board Recommendation or the ADI Board Recommendation, as applicable;

(d) accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend any Acquisition Proposal (it being understood that publicly taking no position or a neutral position with respect to a publicly announced, or otherwise publicly disclosed, Acquisition

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Proposal for a period of no more than five Business Days will not be considered to be in violation of the Arrangement Agreement, provided the SRC Board or the ADI Board, as applicable, has rejected such Acquisition Proposal and affirmed the SRC Board Recommendation or the ADI Board Recommendation, as applicable, before the end of such five Business Day period (or in the event that the SRC Meeting or ADI Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the date of the SRC Meeting or ADI Meeting, as applicable)); or

(e) accept, approve, endorse, recommend or execute or enter into or publicly propose to accept, approve, endorse, recommend or execute or enter into any agreement, letter of intent, understanding or arrangement in respect of an Acquisition Proposal (other than a confidentiality agreement permitted by and in accordance with the Arrangement Agreement).

Each Party has agreed that it shall, and shall cause its Subsidiaries and their Representatives to, immediately cease and terminate, and cause to be terminated, any solicitation, encouragement, discussion, negotiation or other activities commenced prior to the date of the Arrangement Agreement with any Person (other than the other Party) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal, and in connection therewith, each Party agreed that it will:

(a) immediately discontinue access to and disclosure of all information, including any information in the SRC data room or the ADI data room, as applicable, and any confidential information, properties, facilities and books and records by any such Person; and

(b) within three Business Days after the date of the Arrangement Agreement, request, and exercise all rights it has to require (a) the return or destruction of all copies of any confidential information regarding such Party or any of its Subsidiaries provided to any such Person and (b) the destruction of all material including or incorporating or otherwise reflecting such confidential information regarding such Party or any of its Subsidiaries provided to any such Person, in each case using its commercially reasonable efforts to ensure that such requests are fully complied with in accordance with the terms of such rights or entitlements.

In addition, each Party covenanted and agreed that (i) it shall take all commercially reasonable action necessary to enforce each confidentiality, standstill or similar agreement, restriction or covenant to which it or any of its Subsidiaries is a party and (ii) none of it, any of its Subsidiaries or any of their respective Representatives have or will, without the prior written consent of the other Party (which may be withheld or delayed in such other Party’s sole and absolute discretion), release any Person from, or waive, amend, suspend or otherwise modify such Person’s obligations respecting such Party or any of its Subsidiaries under any confidentiality, standstill or similar agreement, restriction or covenant to which such Party or any of its Subsidiaries is a party (it being acknowledged by such Party that the automatic termination or release of any standstill restrictions as a result of entering into and announcing the Arrangement Agreement shall not be a violation of the foregoing covenants.

Covenant Regarding Notification of Acquisition Proposals

The Arrangement Agreement provides that, if either Party, any of its Subsidiaries or any of their respective Representatives receives or otherwise becomes aware of any inquiry, proposal, or offer that constitutes or may reasonably be expected to lead to an Acquisition Proposal, or any request for copies of, access to, or disclosure of, confidential information relating to such Party or any of its Subsidiaries, including but not limited to information, access or disclosure relating to the properties, facilities, books or records of such Party or any of its Subsidiaries, such Party shall immediately notify the other Party, at first orally and then promptly (and in any event within 24 hours) in writing, of such Acquisition Proposal, inquiry, proposal, offer or request, including a description of its material terms and conditions, and the identity of all Persons making the Acquisition Proposal, inquiry, proposal, offer or request, and shall provide the other Party with summaries or copies of all written documents or other material received in respect of, from or on behalf of any such Person. Such Party shall keep the other Party fully informed of the current status of developments and negotiations with respect to any such Acquisition Proposal, inquiry, proposal, offer or request, including any changes, modifications or other amendments to the material terms thereof, and shall provide to the other Party copies of all material or substantive correspondences if in writing or

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electronic form, and if not in writing or electronic form, a description of the material terms of such correspondence sent or communicated to such Party by or on behalf of any Person making any such Acquisition Proposal, inquiry, proposal, offer or request.

Covenants Regarding Responding to an Acquisition Proposal

If at any time prior to the approval by the SRC Shareholders of the Arrangement Resolution or the approval by the ADI Shareholders of the ADI Resolutions, as applicable, either Party receives a written Acquisition Proposal from a Person, then such Party may enter into, participate in, facilitate and maintain discussions or negotiations with, and otherwise co-operate with or assist, such Person regarding such Acquisition Proposal, and may provide copies of, access to or disclosure of any information, properties, facilities, books or records of such Party and its Subsidiaries to such Person, but, in each case, if and only if:

(a) the SRC Board or the ADI Board, as applicable, first determines in good faith, after consultation with its financial advisors and its outside legal counsel, that such Acquisition Proposal constitutes or could reasonably be expected to lead to a Superior Proposal;

(b) such Person was not restricted from making such Acquisition Proposal pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction with the Party or any of its Subsidiaries;

(c) such Party has been, and continues to be, in compliance with its obligations with respect to non-solicitation under the Arrangement Agreement;

(d) prior to providing any such copies, access or disclosure, (a) such Party enters into a confidentiality and standstill agreement with such Person and (b) any such copies, access or disclosure provided to such Person shall have already been (or shall simultaneously be) provided to the other Party; and

prior to providing any such copies, access or disclosure to such Person, such Party provides the other Party with a true, complete and final executed copy of the confidentiality and standstill agreement referred to above.

Nothing contained in the Arrangement Agreement shall prohibit the SRC Board or the ADI Board, as applicable, from making disclosure to the SRC Shareholders or ADI Shareholders, as applicable, to comply with their fiduciary duties in response to a Superior Proposal or as required by applicable Securities Laws in response to an Acquisition Proposal (including by responding to an Acquisition Proposal in a directors’ circular). In addition, nothing contained in the Arrangement Agreement shall prevent the SRC Board or the ADI Board, as applicable, from calling and holding a meeting of the SRC Shareholders or ADI Shareholders, as applicable, or any of them, requisitioned by the SRC Shareholders or ADI Shareholders, as applicable, or any of them, in accordance with the CBCA or ordered to be held by a court in accordance with applicable Laws.

Right to Match

If either Party receives an Acquisition Proposal that constitutes a Superior Proposal prior to the approval by the SRC Shareholders of the Arrangement Resolution or the approval by the ADI Shareholders of the ADI Resolutions, as applicable, the SRC Board or the ADI Board, as applicable, may, subject to compliance with the Arrangement Agreement, authorize such Party to enter into a definitive agreement with respect to such Superior Proposal, if and only if:

(a) the Person making the Superior Proposal was not restricted from making such Superior Proposal pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction;

(b) such Party has been, and continues to be, in compliance with its obligations with respect to non-solicitation under the Arrangement Agreement;

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(c) such Party has delivered to the other Party a written notice of the determination of the SRC Board or the ADI Board, as applicable, that such Acquisition Proposal constitutes a Superior Proposal and of the intention of the SRC Board or the ADI Board, as applicable, to enter into such definitive agreement with respect to such Acquisition Proposal, together with written notice from the SRC Board or the ADI Board, as applicable, regarding the value and financial terms that such board has determined, in consultation with its financial advisors, has determined should be ascribed to any non-cash consideration offered under such Acquisition Proposal (a “Superior Proposal Notice”);

(d) such Party has provided the other Party with a copy of the proposed definitive agreement for the Superior Proposal and all supporting materials supplied to such Party in connection therewith;

(e) at least five Business Days have elapsed from the date that is the later of the date on which the other Party received the Superior Proposal Notice and the date on which the other Party received all of the materials as set forth in the Arrangement Agreement (the “Matching Period”);

(f) during any Matching Period, the other Party has had the opportunity (but not the obligation), in accordance with the terms of the Arrangement Agreement, to offer to amend the Arrangement Agreement and the Arrangement in order for such Acquisition Proposal to cease to be a Superior Proposal;

(g) after the Matching Period, the SRC Board or the ADI Board, as applicable, has determined in good faith, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal continues to constitute a Superior Proposal (if applicable, compared to the terms of the Arrangement as proposed to be amended by the other Party under the Arrangement Agreement); and

(h) prior to or concurrently with entering into such definitive agreement such Party terminates the Arrangement Agreement in accordance with its terms and pays the Termination Fee.

The Arrangement Agreement provides that, during the Matching Period, or such longer period as such Party may approve in writing for such purpose: (i) the SRC Board or the ADI Board, as applicable, shall review any offer made by the other Party under the Arrangement Agreement to amend the terms of the Arrangement Agreement and the Arrangement, in good faith in and in consultation with outside legal and financial advisors, to determine whether such offer would, upon acceptance, result in the Acquisition Proposal previously determined to constitute a Superior Proposal ceasing to be a Superior Proposal; and (ii) if such Acquisition Proposal would no longer constitute a Superior Proposal, such Party shall negotiate in good faith with the other Party to make such amendments to the terms of the Arrangement Agreement and the Arrangement as would enable the other Party to proceed with the transactions contemplated by the Arrangement Agreement on such amended terms.

Each successive amendment or modification to any Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the securityholders of such Party or other material terms or conditions thereof shall constitute a new Acquisition Proposal and the other Party shall be afforded a new Matching Period in connection therewith, provided that the duration of such Matching Period shall be four Business Days rather than five Business Days.

The SRC Board or the ADI Board, as applicable, shall promptly reaffirm the SRC Board Recommendation or the ADI Board Recommendation, as applicable, by press release if the SRC Board or the ADI Board, as applicable, determines that a proposed amendment to the terms of the Arrangement Agreement or the Arrangement would result in an Acquisition Proposal no longer being a Superior Proposal.

If either Party provides a Superior Proposal Notice to the other Party on a date that is less than ten Business Days before the SRC Meeting or the ADI Meeting, as the case may be, the Party providing the Superior Proposal Notice shall be entitled to, and the other Party shall be entitled to require such Party to, adjourn or postpone the SRC

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Meeting or the ADI Meeting, as applicable, to a date that is not more than ten Business Days after the date of the Superior Proposal Notice.

Each Party shall advise its Subsidiaries and their respective Representatives of the prohibitions set out in the Arrangement Agreement and any violation of these restrictions by such Party, its Subsidiaries or their respective Representatives shall be deemed to be a breach of the Arrangement Agreement by such Party.

Termination of the Arrangement Agreement

The Arrangement Agreement may be terminated at any time prior to the Effective Time by:

(a) the mutual written agreement of the Parties; or

(b) SRC or ADI if:

(i) the Arrangement Resolution is not approved by the SRC Shareholders entitled to vote thereon at the SRC Meeting in accordance with the Interim Order; or

(ii) the ADI Transactions Approval Resolution is not approved at the ADI Meeting by a majority of the votes cast in respect of the ADI Shares held by ADI Shareholders present in person or by proxy at the ADI Meeting; or

(iii) after the date of the Arrangement Agreement, any Law is enacted, made, enforced or amended, as applicable, that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins SRC or ADI from consummating the Arrangement and such Law has, if applicable, become final and non-appealable; or

(iv) the Effective Time does not occur on or prior to the Outside Date, provided that a Party may not terminate the Arrangement Agreement pursuant this provision if the failure of the Effective Time to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under the Arrangement Agreement; or

(c) SRC if:

(i) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of ADI under the Arrangement Agreement occurs that would cause any condition in the representations and warranties or in the covenants of ADI under the Arrangement Agreement not to be satisfied, and such breach or failure is incapable of being cured or is not cured in accordance with the terms of the Arrangement Agreement; provided that SRC is not then in breach of the Arrangement Agreement so as to cause any condition in the representations and warranties or in the covenants of SRC under the Arrangement Agreement not to be satisfied; or

(ii) (A) the ADI Board fails to recommend, or withdraws, amends, modifies or qualifies, or publicly proposes to withdraw, amend, modify or qualify, the ADI Board Recommendation, in each case in a manner adverse to SRC, (B) the ADI Board accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend, an Acquisition Proposal (it being understood that publicly taking no position or a neutral position with respect to a publicly announced, or otherwise publicly disclosed, Acquisition Proposal for a period of no more than five Business Days will not be considered to be an acceptance, approval, endorsement or recommendation of such Acquisition Proposal, provided the ADI Board has rejected such Acquisition Proposal and affirmed the ADI Board Recommendation before the end of such five Business Day period), or (C) the ADI Board accepts or enters into or publicly proposes to accept or

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enter into any written agreement, understanding or arrangement in respect of an Acquisition Proposal (other than a confidentiality and standstill agreement permitted by and in accordance with the terms of the Arrangement Agreement); or

(iii) prior to the approval of the Arrangement Resolution, the SRC Board authorizes SRC, subject to complying with the terms of the Arrangement Agreement (including the non-solicitation terms of the Arrangement Agreement and payment of the Termination Fee) to enter into a written agreement (other than a confidentiality and standstill agreement permitted by and in accordance with the terms of the Arrangement Agreement) with respect to a Superior Proposal; or

(iv) ADI does not provide or cause to be provided the Depositary with the irrevocable direction regarding the issuance of sufficient ADI Shares to complete the transactions contemplated by, and required pursuant to, the Arrangement Agreement; provided that SRC is not then in breach of the Arrangement Agreement so as to cause any condition in the representations and warranties or in the covenants of SRC under the Arrangement Agreement not to be satisfied; or

(d) ADI if:

(i) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of SRC under the Arrangement Agreement occurs that would cause any condition in the representations and warranties or in the covenants of SRC under the Arrangement Agreement not to be satisfied, and such breach or failure is incapable of being cured or is not cured in accordance with the terms of the Arrangement Agreement; provided that ADI is not then in breach of the Arrangement Agreement so as to cause any condition in the representations and warranties or in the covenants of ADI under the Arrangement Agreement not to be satisfied; or

(ii) (A) the SRC Board fails to recommend, or withdraws, amends, modifies or qualifies, or publicly proposes to withdraw, amend, modify or qualify, the SRC Board Recommendation, in each case in a manner adverse to ADI, (B) the SRC Board accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend, an Acquisition Proposal (it being understood that publicly taking no position or a neutral position with respect to a publicly announced, or otherwise publicly disclosed, Acquisition Proposal for a period of no more than five Business Days will not be considered to be an acceptance, approval, endorsement or recommendation of such Acquisition Proposal, provided the SRC Board has rejected such Acquisition Proposal and affirmed the SRC Board Recommendation before the end of such five Business Day period), or (C) the SRC Board accepts or enters into or publicly proposes to accept or enter into any written agreement, understanding or arrangement in respect of an Acquisition Proposal (other than a confidentiality and standstill agreement permitted by and in accordance the terms of the Arrangement Agreement); or

(iii) prior to the approval of the ADI Transactions Approval Resolution, the ADI Board authorizes ADI, subject to complying with the terms of the Arrangement Agreement (including the non-solicitation terms and payment of the Termination Fee) to enter into a written agreement (other than a confidentiality and standstill agreement permitted by and in accordance with the terms of the Arrangement Agreement) with respect to a Superior Proposal.

The Party desiring to terminate the Arrangement Agreement pursuant to the termination provisions (other than by mutual written agreement) shall give notice of such termination to the other Party, specifying in reasonable detail the basis for such Party’s exercise of its termination right.

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Termination Fee and Expenses

In the Arrangement Agreement, if a Termination Fee Event occurs, SRC or ADI, as the case may be, shall pay or cause to be paid to ADI or SRC, as the case may be, the Termination Fee as liquidated damages.

For the purposes of the Arrangement Agreement, “Termination Fee” means $1,250,000 and “Termination Fee Event” means the termination of the Arrangement Agreement:

(a) by SRC, pursuant to paragraph (c)(ii) under the heading “Termination of the Arrangement Agreement” above;

(b) by ADI, pursuant to paragraph (d)(ii) under the heading “Termination of the Arrangement Agreement” above;

(c) by SRC, pursuant to paragraph (c)(iii) under the heading “Termination of the Arrangement Agreement” above;

(d) by ADI, pursuant to pursuant to paragraph (d)(iii) under the heading “Termination of the Arrangement Agreement” above;

(e) by SRC or ADI, pursuant to paragraphs (b)(i), (b)(ii), or (b)(iv) under the heading “Termination of the Arrangement Agreement” above if:

(i) prior to such termination, an Acquisition Proposal is proposed, offered or made to the SRC Board or the ADI Board, as the case may be, or publicly announced or otherwise publicly disclosed by any Person; and

(ii) within six months following the date of such termination, such Acquisition Proposal is consummated.

For purposes of the foregoing, the term “Acquisition Proposal” shall have the meaning assigned to such term in the “Glossary of Terms” of this Circular, except that references to “20% or more” shall be deemed to be references to “50% or more”.

If a Termination Fee Event occurs due to a termination of the Arrangement Agreement by SRC pursuant to paragraph (c)(ii) or by ADI pursuant to paragraph (d)(iii) under the heading “Termination of the Arrangement Agreement” above, the Termination Fee shall be paid by SRC or ADI, respectively, prior to or concurrently with the occurrence of such Termination Fee Event. If a Termination Fee Event occurs due to a termination of the Arrangement Agreement by ADI pursuant to paragraph (d)(ii) or by SRC pursuant to paragraph (c)(ii) under the heading “Termination of the Arrangement Agreement” above, the Termination Fee shall be paid by SRC or ADI, respectively, within two Business Days following such Termination Fee Event. If a Termination Fee Event occurs in the circumstances set out in paragraph (e) above, the Termination Fee shall be paid by ADI or SRC, as the case may be, upon the consummation/closing of the Acquisition Proposal in respect of ADI or SRC, as the case may be, referred to therein. Any Termination Fee shall be paid, or caused to be paid, by SRC to ADI or by ADI to SRC, as the case may be by wire transfer in immediately available funds to an account designated by ADI.

Any Termination Fee payable by SRC or ADI pursuant to the Arrangement Agreement shall be paid free and clear of and without deduction or withholding for, or on account of, any present or future Taxes, unless such deduction or withholding is required by Law.

In the Arrangement Agreement, each Party acknowledges that the Termination Fee and expenses provisions as set out above are an integral part of the transactions contemplated by the Arrangement Agreement, and that without these agreements the Parties would not have entered into the Arrangement Agreement, and that the amounts set out above represent liquidated damages which are a genuine pre-estimate of the damages, including opportunity costs, which ADI or SRC, as the case may be, would suffer or incur as a result of the event giving rise to such damages

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and resultant termination of the Arrangement Agreement, and are not penalties. Each Party irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. Each Party agrees that the payment of the Termination Fee is the sole and exclusive remedy of such Party in respect of the event giving rise to such payment. Each Party shall also have the right to injunctive and other equitable relief in accordance with the terms of the Arrangement Agreement to prevent breaches or threatened breaches of the Arrangement Agreement and to enforce compliance with the terms of the Arrangement Agreement.

The Arrangement Agreement further provides that:

(a) Except as otherwise expressly provided in the Arrangement Agreement, all costs and expenses incurred in connection with the Arrangement Agreement and the Arrangement will be paid by the Party incurring such cost or expense.

(b) SRC will pay ADI (by wire transfer of immediately available funds) the reasonable and documented expenses of ADI incurred in connection with the transactions contemplated in the Arrangement Agreement not to exceed $500,000 if the Arrangement Agreement is terminated by ADI pursuant to paragraphs (d)(i) or (b)(i) under the heading “Termination of the Arrangement Agreement” above, such payment to be made within two Business Days of any such termination.

(c) ADI will pay SRC (by wire transfer of immediately available funds) the reasonable and documented expenses of SRC incurred in connection with the transactions contemplated by the Arrangement Agreement not to exceed $500,000 if the Arrangement Agreement is terminated by SRC pursuant to paragraphs (c)(i) or (b)(ii) under the heading “Termination of the Arrangement Agreement” above, such payment to be made within two Business Days of any such termination.

(d) For the avoidance of doubt, payment of any amounts for reasonable and documented expenses under paragraphs (b) and (c) directly above shall not be exclusive of any other remedies to which the Parties may be entitled as a result of termination of the Arrangement Agreement.

SRC Lock-Up Agreements

On November 29, 2016, all of the directors and officers of SRC, together with Sprott Inc. and Eric Sprott (collectively holding an aggregate of 10,685,702 SRC Shares, representing approximately 11% of the issued and outstanding SRC Shares), entered into the SRC Lock-Up Agreements with ADI pursuant to which they agreed, among other things, to vote all of the respective SRC Locked-Up Shareholder’s SRC Shares in favour of the Arrangement Resolution and the transactions contemplated by the Arrangement Agreement and to vote, or cause to be voted, all of the respective SRC Locked-Up Shareholder’s SRC Shares against any proposed action by SRC (including its Subsidiaries), any SRC Shareholders, or any other Person whatsoever which would reasonably be regarded as being directed towards or likely to prevent or delay the successful completion of the transactions contemplated by the Arrangement Agreement. In addition, each SRC Locked-Up Shareholder has agreed not to solicit proxies; assist in any action that would inhibit ADI in connection with the Arrangement; solicit, initiate, assist, encourage or otherwise facilitate any inquiry relating to any Acquisition Proposal in respect of SRC; or cooperate in any way with any Person whatsoever to do any of the foregoing.

Each SRC Lock-Up Agreement will terminate and be of no further force or effect upon the earliest to occur of: (a) the mutual agreement in writing of ADI and the SRC Locked-Up Shareholder; (b) the termination of the Arrangement Agreement; (c) written notice by the SRC Locked-Up Shareholder to ADI if, without the prior written consent of the SRC Locked-Up Shareholder, the conditions to the consummation of the Arrangement as set forth in the Arrangement Agreement are amended, or the terms of the Arrangement Agreement are otherwise varied in a manner that is materially adverse to the SRC Locked-Up Shareholder; (d) written notice by the SRC Locked-Up Shareholder to ADI if, subject to the notice and cure provisions in the SRC Lock-Up Agreement, any representation or warranty of ADI under such agreement is untrue or incorrect in any material respect or ADI has not complied in any material respect with its covenants contained therein, provided that at the time of such termination, the SRC Locked-Up Shareholder is not in material default in the performance of its obligations under the SRC Lock-Up Agreement; (e) written notice by ADI to the SRC Locked-Up Shareholder if, subject to the notice and cure provisions in the SRC Lock-Up Agreement, any representation or warranty of the SRC Locked-Up Shareholder

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under such agreement is untrue or incorrect in any material respect or the SRC Locked-Up Shareholder has not complied in any material respect with its covenants contained therein, provided that at the time of such termination, ADI is not in material default in the performance of its obligations under the SRC Lock-Up Agreement; (f) the Effective Time; and (g) the Outside Date.

ADI Lock-Up Agreements

On November 29, 2016, directors, officers and other shareholders of ADI disclosed in writing to SRC, holding an aggregate of 57,117,427 ADI Shares, representing approximately 36.3% of the issued and outstanding ADI Shares, entered into the ADI Lock-Up Agreements with SRC pursuant to which they agreed, among other things, to vote all of the respective ADI Locked-Up Shareholder’s ADI Shares in favour of the ADI Resolutions and the transactions contemplated by the Arrangement Agreement and to vote, or cause to be voted, all of the respective ADI Locked-Up Shareholder’s ADI Shares against any proposed action by ADI (including its Subsidiaries), any ADI Shareholders, or any other Person whatsoever which would reasonably be regarded as being directed towards or likely to prevent or delay the successful completion of the transactions contemplated by the Arrangement Agreement. In addition, each ADI Locked-Up Shareholder has agreed not to solicit proxies; assist in any action that would inhibit SRC in connection with the Arrangement; solicit, initiate, assist, encourage or otherwise facilitate any inquiry relating to any Acquisition Proposal in respect of ADI; or cooperate in any way with any Person whatsoever to do any of the foregoing.

Each ADI Lock-Up Agreement will terminate and be of no further force or effect upon the earliest to occur of: (a) the mutual agreement in writing of SRC and the ADI Locked-Up Shareholder; (b) the termination of the Arrangement Agreement; (c) the conditions to the consummation of the Arrangement as set forth in the Arrangement Agreement are amended, or the terms of the Arrangement Agreement are otherwise varied in a manner that is materially adverse to the ADI Locked-Up Shareholder; (d) the Effective Time; and (e) the Outside Date. Each ADI Lock-Up Agreement entered into with a director or officer of ADI may also be terminated upon: (a) written notice by the ADI Locked-Up Shareholder if, subject to the notice and cure provisions in the ADI Lock-Up Agreement, any representation or warranty of SRC under such agreement is untrue or incorrect in any material respect or SRC has not complied in any material respect with its covenants contained therein, provided that at the time of such termination, the ADI Locked-Up Shareholder is not in material default in the performance of its obligations under such agreement; or (b) written notice by SRC to the ADI Locked-Up Shareholder if, subject to the notice and cure provisions in the ADI Lock-Up Agreement, any representation or warranty of the ADI Locked-Up Shareholder under such agreement is untrue or incorrect in any material respect or the ADI Locked-Up Shareholder has not complied in any material respect with its covenants contained therein, provided that at the time of such termination, SRC is not in material default in the performance of its obligations under the ADI Lock-Up Agreement.

PROCEDURE FOR THE ARRANGEMENT TO BECOME EFFECTIVE

Procedural Steps

The Arrangement is proposed to be carried out pursuant to Section 192 of the CBCA. The following procedural steps must be taken in order for the Arrangement to become effective:

(a) the Arrangement Resolution must be approved by the SRC Shareholders at the SRC Meeting in the manner set forth in the Interim Order;

(b) the ADI Transactions Approval Resolution must be approved by the ADI Shareholders at the ADI Meeting;

(c) the Court must grant the Final Order approving the Arrangement;

(d) all other conditions precedent to the Arrangement, as set forth in the Arrangement Agreement, must be satisfied or waived by the appropriate Party; and

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(e) the Articles of Arrangement and related documents in the form prescribed by the CBCA must be filed with the Director.

There is no assurance that the conditions set out in the Arrangement Agreement will be satisfied or waived on a timely basis or at all.

Upon the conditions precedent set forth in the Arrangement Agreement being fulfilled or waived, SRC will file a copy of the Articles of Arrangement with the Director under the CBCA, together with such other materials as may be required by the Director, in order to give effect to the Arrangement.

Shareholder Approvals

SRC Shareholder Approval

Pursuant to the terms of the Interim Order, the Arrangement Resolution must, subject to further order of the Court, be approved by at least 66 % of the votes cast by the SRC Shareholders present in person or represented by proxy at the SRC Meeting.

In addition, the Arrangement Resolution must also be approved by a majority of the votes cast by SRC Shareholders, other than SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under MI 61-101. Pursuant to MI 61-101, votes attached to SRC Shares held by related parties of SRC who are a party to “connected transactions” (as defined in MI 61-101) to the Arrangement may not be included by SRC as votes in favour of the Arrangement in determining whether minority approval has been obtained. Each of the Committed Financings, the New MSA and the New Partnership Agreement constitute a “connected transaction” (as defined in MI 61-101) to the Arrangement and as such the following SRC Shareholders will not have the votes attached to their SRC Shares included by SRC as votes in favour of the Arrangement in determining whether minority approval has been obtained:

Name SRC Shares Eric Sprott 7,018,100 Sprott Inc. 1,671,100 Steve Yuzpe 115,600 Arthur Einav 21,404 Michael Staresinic 21,600 Andrew Stronach 29,148 A.R. (Rick) Rule IV 11,400

See “Securities Laws Matters in Connection with the Arrangement – Canada – MI 61-101”.

If the Arrangement Resolution is not approved by SRC Shareholders, the Arrangement cannot be completed.

It is the intention of the persons named in the form of proxy for the SRC Meeting, if not expressly directed to the contrary in such form of proxy, to vote such proxy in favour of the Arrangement Resolution set forth in Appendix A to this Circular. See “Matters to be Considered at the SRC Meeting”.

Notwithstanding that the Arrangement Resolution is passed (and the Arrangement adopted) by SRC Shareholders, as contemplated herein, or that the Arrangement is approved by the Court, the Arrangement Resolution authorizes the SRC Board, at its discretion, without further notice to or approval of the SRC Shareholders: (i) to amend or modify the Arrangement Agreement or the Plan of Arrangement to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions. See Appendix A to this Circular for the full text of the Arrangement Resolution.

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ADI Shareholder Approval

The ADI Transactions Approval Resolution must be approved by a simple majority of the votes cast by the ADI Shareholders present in person or represented by proxy at the ADI Meeting. If the ADI Transactions Approval Resolution is not approved by ADI Shareholders, the Arrangement cannot be completed. The ADI Name Change Resolution must be approved by at least 66 % of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting. The Arrangement is not conditional on the approval of the ADI Name Change Resolution.

It is the intention of the persons named in the form of proxy for the ADI Meeting, if not expressly directed to the contrary in such form of proxy, to vote such proxy in favour of the ADI Resolutions set forth in Appendix B to this Circular. See “Matters to be Considered at the ADI Meeting”.

Notwithstanding that the ADI Transactions Approval Resolution is passed by ADI Shareholders, as contemplated herein, the ADI Transactions Approval Resolution authorizes the ADI Board to revoke the ADI Transactions Approval Resolution at any time prior to the Effective Date and to determine not to proceed with the transactions contemplated in the Arrangement Agreement. Similarly, notwithstanding that the ADI Name Change Resolution is passed by ADI Shareholders, the ADI Name Change Resolution authorizes the ADI Board to revoke the ADI Name Change Resolution at any time prior to the amendment of ADI’s articles and to determine not to proceed with changing the name of ADI.

Court Approval

Interim Order

The Arrangement requires Court approval under Section 192 of the CBCA. On December 21, 2016, SRC obtained the Interim Order providing for the calling and holding of the SRC Meeting, the Dissent Rights, and other procedural matters. The Interim Order is attached as Appendix D to this Circular.

Final Order

Subject to approval of the Arrangement Resolution by SRC Shareholders at the SRC Meeting and to approval of the ADI Transactions Approval Resolution by ADI Shareholders at the ADI Meeting, the hearing in respect of the Final Order is currently scheduled to take place on January 27, 2017 at 10:00 a.m. (Toronto Time) in Toronto, Ontario. Any SRC Shareholder or other Person who wishes to appear, or to be represented, and to present evidence or argument, must serve and file a notice of appearance (a “Notice of Appearance”) as set out in the Notice of Application for the Final Order and satisfy any other requirements of the Court. The Court will consider, among other things, the substantive and procedural fairness of the Arrangement to the parties affected, including SRC Shareholders. The Court may approve the Arrangement in any manner the Court may direct, subject to compliance with any terms and conditions, if any, as the Court deems fit. In the event that the hearing is postponed, adjourned or rescheduled then, subject to further order of the Court, only those Persons having previously served a Notice of Appearance in compliance with the Notice of Application and the Interim Order will be given notice of the postponement, adjournment or rescheduled date. A copy of the Notice of Application for the Final Order is attached as Appendix E to this Circular.

The ADI Shares issuable to SRC Shareholders in exchange for their SRC Shares pursuant to the Arrangement have not been and will not be registered under the U.S. Securities Act, and will be issued pursuant to the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10). Prior to the hearing on the Final Order, the Court will be informed that the Final Order, if granted, will constitute the basis for such exemption from the registration requirements of the U.S. Securities Act with respect to the ADI Shares to be issued pursuant to the Arrangement.

Assuming the Final Order is granted and the other conditions to closing contained in the Arrangement Agreement are satisfied or waived to the extent legally permissible, then Articles of Arrangement will be filed with the Director to give effect to the Arrangement.

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Regulatory Approvals

It is a condition to the completion of the Arrangement that the TSX shall have conditionally approved the listing of the ADI Shares and the ADI Warrants. Pursuant to the Arrangement Agreement, ADI has agreed to use its commercially reasonable efforts to obtain the conditional approval of the TSX for the listing of the ADI Shares (including the ADI Shares issuable pursuant to the Arrangement and the Financings, the ADI Shares issuable upon the exercise of the ADI Warrants to be issued in connection with the Warrant Distribution and the Financings, and the ADI Shares issuable upon the exercise of ADI Options) and the ADI Warrants on the TSX effective on the Effective Date.

Securities Laws Matters in Connection with the Arrangement

Canada

The distribution of ADI Shares to SRC Shareholders pursuant to the Arrangement shall be exempt from the prospectus requirements of Securities Laws, and the first trade of such ADI Shares shall not be subject to resale restrictions under Securities Laws, other than as a result of any control block restrictions which may arise under such laws by virtue of the ownership of ADI Shares.

The distribution of the ADI Warrants to ADI Shareholders (other than U.S. Shareholders) pursuant to the Warrant Distribution shall be exempt from the prospectus requirements of Securities Laws, and the first trade of such ADI Warrants (and/or the underlying ADI Shares) shall not be subject to resale restrictions under Securities Laws, other than as a result of any control block restrictions which may arise under such laws by virtue of the ownership of ADI Shares.

MI 61-101

Each of SRC and ADI is subject to the provisions of MI 61-101. MI 61-101 is intended to regulate insider bids, issuer bids, business combinations and related party transactions to ensure equality of treatment among securityholders, generally by requiring enhanced disclosure, minority securityholder approval, and, in certain instances, independent valuations and approval and oversight of certain transactions by a special committee of independent directors.

The Arrangement constitutes a “business combination” for SRC under MI 61-101 because (i) it is a transaction as a consequence of which the interest of a holder of SRC Shares may be terminated without the consent of such holder of SRC Shares, and (ii) pursuant to the Arrangement, Persons who constitute “related parties” (as defined in MI 61-101) of SRC are party to the Committed Financings, the New MSA and the New Partnership Agreement, each of which constitutes a “connected transaction” (as defined in MI 61-101). Accordingly, under MI 61-101, in addition to the approval of the Arrangement Resolution by at least 66 % of the votes cast by SRC Shareholders at the SRC Meeting, the Arrangement Resolution must also be approved by the affirmative vote of a simple majority of the votes cast by the SRC Shareholders, other than SRC Shares, as applicable, held by each “interested party” (as defined in MI 61-101), any “related party” of an “interested party”, unless the related party meets that description solely in its capacity as a director or senior officer of one or more Persons that are neither “interested parties” nor “issuer insiders” (in each case within the meaning of MI 61-101), and any “joint actor” (as defined in MI 61-101) with any of the foregoing Persons.

MI 61-101 provides that, unless an exemption is available, a reporting issuer proposing to carry out a business combination may be required to obtain a formal valuation of the affected securities from a qualified independent valuator and provide the holders of the affected securities with a summary of such valuation. Despite the fact that the Arrangement constitutes a “business combination”, SRC is not required to obtain a formal valuation under MI 61-101 since, in the circumstances, (i) no interested party would, as a consequence of the Arrangement, directly or indirectly acquire SRC or its business, or combine with SRC, through an amalgamation, arrangement or otherwise, whether alone or with joint actors, and (ii) no interested party is a party to any connected transaction to the business combination that is a related party transaction described in any of paragraphs (a) to (g) of the definition of “related party transaction” (as defined in MI 61-101).

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To the knowledge of SRC and its directors and senior officers, after reasonable inquiry, there have been no prior valuations (as defined in MI 61-101) prepared in respect of SRC, the SRC Shares or any material assets of SRC during the 24 months prior to the date of this Circular.

United States

The ADI Shares issuable to SRC Shareholders in exchange for their SRC Shares pursuant to the Arrangement have not been and will not be registered under the U.S. Securities Act, and will be issued pursuant to the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10). Section 3(a)(10) exempts the issuance of any securities issued in exchange for one or more bona fide outstanding securities (or partly in such exchange and partly for cash) from the registration requirements of the U.S. Securities Act where the terms and conditions of the issuance and exchange of such securities have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions of such issuance and exchange at which all persons to whom it is proposed to issue the securities have the right to appear and receive timely notice thereof. The Court is authorized to conduct a hearing at which the fairness of the terms and conditions of the Arrangement will be considered. The Court granted the Interim Order on December 21, 2016 and, subject to the approval of the Arrangement by SRC Shareholders and satisfaction of certain other conditions, a hearing on the Arrangement will be held on January 27, 2017 by the Court. See “Procedure for the Arrangement to Become Effective – Court Approval”.

The ADI Shares issuable to SRC Shareholders pursuant to the Arrangement will, immediately following completion of the Arrangement, not be subject to resale restrictions under the U.S. Securities Act, except with respect to persons who are “affiliates” of ADI on the Effective Date or were affiliates of ADI within 90 days before the Effective Date. Persons who may be deemed to be “affiliates” of an issuer include individuals or entities that control, are controlled by, or are under common control with, the issuer, whether through the ownership of voting securities, by contract, or otherwise, and generally include executive officers and directors of the issuer as well as principal shareholders of the issuer. Any resale of such ADI Shares by such an affiliate (or former affiliate) will be subject to the registration requirements of the U.S. Securities Act, absent an exemption or exclusion therefrom.

Affiliates – Rule 144

In general, under Rule 144 under the U.S. Securities Act, persons who are affiliates of ADI after the Effective Date (or were affiliates of ADI within 90 days prior to the Effective Date) will be entitled to sell, during any three-month period, the ADI Shares that they receive in connection with the Arrangement, provided that the number of such securities sold does not exceed the greater of one percent of the then-outstanding securities of such class or, if such securities are listed on a United States securities exchange (which is not currently contemplated) and/or reported through the automated quotation system of a U.S. registered securities association, the average weekly trading volume of such securities during the four calendar week period preceding the date of sale, in each case subject to specified restrictions on manner of sale, filing requirements, aggregation rules and the availability of current public information about ADI. Persons who are affiliates of ADI after the Effective Date (or were affiliates of ADI within 90 days prior thereto) will continue to be subject to the resale restrictions described in this paragraph for so long as they continue to be affiliates of ADI.

Affiliates – Regulation S

In general, under Regulation S, persons who are affiliates of ADI following the Effective Date (or were affiliates of ADI within 90 days prior to the Effective Date) solely by virtue of their status as an officer or director of ADI may sell their ADI Shares outside the United States in an “offshore transaction” if neither the seller, an affiliate nor any person acting on its behalf engages in “directed selling efforts” in the United States and provided that no selling commission, fee or other remuneration is paid in connection with such sale other than the usual and customary broker’s commission that would be received by a person executing such transaction as agent. For purposes of Regulation S, “directed selling efforts” means “any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the securities being offered”. Also, under Regulation S, subject to certain exceptions contained in Regulation S, an “offshore transaction” is a transaction in which the offer of the applicable securities is not made to a person in the United States, and either (a) at the time the buy order is originated, the buyer is outside the United States or the seller

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reasonably believes that the buyer is outside of the United States, or (b) the transaction is executed in, on or through the facilities of a designated offshore securities market (which would include a sale on the TSX). Certain additional restrictions, set forth in Rule 903 of Regulation S, are applicable to sales outside the United States and to “U.S. persons” (as such term is defined in Regulation S) by a holder of ADI Shares who is an affiliate of ADI after the completion of the Arrangement (or was an affiliate of ADI within 90 days prior to the Effective Date) other than by virtue of his or her status as an officer or director of ADI.

The foregoing discussion is only a general overview of certain requirements of United States federal securities laws applicable to the resale of ADI Shares received upon completion of the Arrangement. All holders of such securities are urged to consult with counsel to ensure that the resale of their securities complies with applicable securities legislation.

Procedure for Exchange of SRC Share Certificates

If you are a Registered SRC Shareholder, you should have received a copy of the Letter of Transmittal with this Circular. If the conditions precedent to the Arrangement are satisfied or waived and the Arrangement is implemented, in order to receive the ADI Shares issuable pursuant to the Arrangement, you must complete and sign the Letter of Transmittal enclosed with this Circular and deliver such Letter of Transmittal (or a manually executed facsimile thereof) together with the certificate(s) representing your SRC Shares and the other documents required by the instructions set out in the Letter of Transmittal to the Depositary in accordance with those instructions. You can request a copy of the Letter of Transmittal by contacting the Depositary using the contact information set forth on the back cover of this Circular. The Letter of Transmittal is also available on the SEDAR website at www.sedar.com under SRC’s profile. It is recommended that Registered SRC Shareholders complete, sign and return the Letter of Transmittal with the certificate(s) representing the SRC Shares to the Depositary as soon as possible.

The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully. The deposit of SRC Shares pursuant to the procedures in the Letter of Transmittal will constitute a binding agreement among the depositing SRC Shareholder, SRC and ADI upon the terms and subject to the conditions of the Arrangement.

To receive the consideration under the Arrangement, you must sign and return the Letter of Transmittal with the accompanying certificate(s) representing the SRC Shares to the Depositary on or before the sixth anniversary of the Effective Date, after which any certificate formerly representing SRC Shares will cease to represent any claim or interest of any kind or nature against ADI, SRC or the Depositary or any of their successors and will be deemed to have been donated, surrendered and forfeited to ADI for no consideration.

Where a certificate for SRC Shares has been destroyed, lost or stolen, the Registered SRC Shareholder of that certificate should immediately contact the Depositary at 1-866-600-5869 or by e-mail at [email protected]. The full contact details of the Depositary are set out on the last page of the Letter of Transmittal. A replacement certificate will be issued upon the Registered SRC Shareholder satisfying the requirements of SRC relating to replacement of the SRC Share certificate(s).

If a Letter of Transmittal is executed by a Person other than the registered holder of the certificate(s) deposited therewith, the certificate(s) must be endorsed or be accompanied by an appropriate securities transfer power of attorney duly and properly completed by the registered holder, with the signature on the endorsement panel, or securities transfer power of attorney guaranteed by an Eligible Institution (as defined in the Letter of Transmittal).

All questions as to validity, form, eligibility (including timely receipt) and acceptance of any SRC Shares deposited pursuant to the Arrangement will be determined by ADI in its sole discretion. Depositing SRC Shareholders agree that such determination shall be final and binding. ADI reserves the absolute right to reject any and all deposits which SRC determines not to be in proper form or which may be unlawful for it to accept under the laws of any jurisdiction. ADI reserves the absolute right to waive any defect or irregularity in the deposit of any SRC Shares. There shall be no duty or obligation on ADI, SRC, the Depositary or any other Person to give notice of any defect or irregularity in any deposit of SRC Shares and no liability shall be incurred by any of them for failure to give such notice. SRC’s interpretation of the terms and conditions of the Arrangement (including the Circular and the Letter of Transmittal) shall be final and binding.

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The method of delivery of certificates representing SRC Shares and all other required documents is at the option and risk of the Person depositing the same. SRC recommends that such documents be delivered by hand to the Depositary and a receipt obtained or, if mailed, that registered mail with return receipt requested be used and that appropriate insurance be obtained.

SRC Shareholders whose SRC Shares are registered in the name of a broker or other intermediary must contact their broker or other intermediary to deposit their SRC Shares.

From and after the Effective Time, certificates formally representing SRC Shares shall represent only the right to receive ADI Shares to which the holders are entitled pursuant to the Arrangement.

In the event that the Arrangement does not proceed, all certificates representing SRC Shares deposited with a related Letter of Transmittal will be returned to SRC Shareholders at the name and address specified in the Letter of Transmittal by first class mail or, if no name or address is specified, at such name and such address as is shown on the register maintained by SRC.

RELATED TRANSACTIONS

Financings

In connection with the Arrangement, pursuant to the Committed Financings, (i) Sprott Inc., (ii) Exploration Capital 2008 LP and (iii) Term Oil, a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. (a subsidiary of Sprott Inc.) and a director of Sprott Inc., have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined entity by purchasing a combination of ADI Shares and ADI Warrants. In addition, Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP, both wholly-owned limited partnerships of Sprott Inc., (and other members of a selling group that may be appointed) have agreed to act as finders in connection with a best efforts marketed offering of ADI Units for gross proceeds of up to $10 million.

Sprott Inc. Financing

Under the terms of the Sprott Inc. Subscription Agreement, Sprott Inc. has agreed to subscribe by way of a non-brokered private placement for 42,918,455 ADI Shares for a subscription price of $0.233 per ADI Share, for gross proceeds to ADI of approximately $10 million. The closing of the Sprott Inc. Financing and the closing of the Arrangement are cross-conditional. The Sprott Inc. Financing is expected to be completed immediately following the consummation of the Arrangement.

Exploration Capital Partners 2008 Financing

Under the terms of the Exploration Capital Partners 2008 Subscription Agreement, Exploration Capital 2008 LP has agreed to subscribe by way of a non-brokered private placement for 16 million ADI Units for a subscription price of $0.25 per ADI Unit, for gross proceeds to ADI of $4 million. Sprott Global Resource Investments, Ltd. is entitled, subject to TSXV acceptance, to payment of a finder’s fee in cash equal to 6.0% of the gross proceeds received by ADI from the Exploration Capital Partners 2008 Financing.

The closing of the Exploration Capital Partners 2008 Financing and the closing of the Arrangement are cross-conditional. The Exploration Capital Partners 2008 Financing is expected to be completed immediately following the consummation of the Arrangement.

Term Oil Financing

Under the terms of the Term Oil Subscription Agreement, Term Oil has agreed to subscribe by way of a non-brokered private placement for 4 million ADI Units for a subscription price of $0.25 per ADI Unit, for gross proceeds to ADI of $1 million. Sprott Global Resource Investments, Ltd. is entitled, subject to TSXV acceptance, to payment of a finder’s fee in cash equal to 6.0% of the gross proceeds received by ADI from the Term Oil Financing.

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The closing of the Term Oil Financing and the closing of the Arrangement are cross-conditional. The Term Oil Financing is expected to be completed immediately following the consummation of the Arrangement.

Sprott Global Financing

Pursuant to the terms of finder agreements to be entered into among SRC, ADI and each of Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP, Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering of up to 40 million ADI Units for gross proceeds to ADI of up to $10 million. Sprott Global Resource Investments, Ltd. and Sprott Private Wealth LP shall be entitled, subject to TSXV acceptance, to payment of a finder’s fee in cash equal to 6.0% of the gross proceeds received by ADI from the Sprott Global Financing, if applicable.

The closing of the Sprott Global Financing is not a condition precedent of the Arrangement, but the closing of the Arrangement is a condition precedent of the closing of the Sprott Global Financing.

SRCLP Warrant Issuance

Under the Arrangement Agreement, in connection with certain contemplated amendments to the Existing Partnership Agreement, including the elimination of a 20% profit participation right in favour of SRCLP, ADI has agreed to issue an aggregate of 21,750,000 ADI Warrants to, or at the direction of, SRC immediately following the consummation of the Arrangement in consideration of the subscription by ADI for additional SRC Shares. Such ADI Warrants will subsequently be transferred by SRC or SRP to SRCLP (the “SRCLP Warrant Issuance”). See “Business of the Combined Entity After Giving Effect to the Arrangement – Third Amended and Restated Partnership Agreement”.


The Warrant Distribution (and the issuance of ADI Warrants thereunder) remains subject to approval by the TSXV. There is no certainty that ADI will obtain such approval from the TSXV in a timely manner, if at all.

Subject to the satisfaction or waiver (to the extent permitted) of all of the mutual conditions precedent and conditions precedent to the obligations of SRC set forth in the Arrangement Agreement (other than any condition that by its nature cannot be satisfied until the Effective Date), ADI covenanted and agreed under the Arrangement Agreement to consummate the Warrant Distribution effective as of the Business Day immediately preceding the Effective Date.

Issue of ADI Warrants and Record Date

Pursuant to the Warrant Distribution, ADI will issue to each ADI Shareholder as at the close of business (Toronto time) on the Business Day immediately preceding the Effective Date, 0.25 of an ADI Warrant in respect of each ADI Share held by such ADI Shareholder at such time. Each ADI Warrant would represent the right of the holder to purchase one ADI Share per ADI Warrant at a price equal to $0.333 with an expiry date of five years from the Effective Date; provided, however, that if following the fourth month after issuance, the weighted average trading price of the ADI Shares for any 45 consecutive trading day period is greater than $0.583 per ADI Share, the expiry date may be accelerated by ADI providing a notice to holders of such ADI Warrants and in such case the expiry date shall be the date which is 30 days following the date on which such notice is provided, and with such other terms and conditions as may be specified in the Warrant Indenture.

Listing of ADI Warrants

It is a condition to the completion of the Arrangement that the TSX has conditionally approved the listing of the ADI Warrants (and the ADI Shares, including the ADI Shares issuable upon due exercise of the ADI Warrants) on the TSX effective on the Effective Date of the Arrangement.

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There is currently no market through which the ADI Warrants may be sold and ADI Shareholders may not be able to resell the ADI Warrants acquired pursuant to the Warrant Distribution. This may affect the price of the ADI Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the ADI Warrants and the extent of issuer regulations.

Warrant Certificate – ADI Shares Held in Registered Form

For all ADI Shareholders (other than U.S. Shareholders) who hold their ADI Shares in registered form, a Warrant Certificate representing the total number of ADI Warrants to which each such ADI Shareholder is entitled as at the close of business (Toronto time) on the Business Day immediately preceding the Effective Date will be issued in registered form and will be mailed to each such ADI Shareholder.

Warrant Certificate – ADI Shares Held Through CDS

For all ADI Shareholders (other than U.S. Shareholders) who hold their ADI Shares through a securities broker or dealer, bank or trust company or other participant in the book-based systems administered by CDS, a global certificate representing the total number of ADI Warrants to which all such shareholders at the close of business (Toronto time) on the Business Day immediately preceding the Effective Date are entitled will be issued in registered form to CDS, and will be deposited with CDS. ADI expects that each beneficial ADI Shareholder (other than U.S. Shareholders) will receive a confirmation of the number of ADI Warrants issued to him, her or it from his, her or its participant in accordance with the practices and procedures of that participant. CDS will be responsible for establishing and maintaining book-entry accounts for participants holding ADI Warrants.

Neither ADI nor the Warrant Agent will have any liability for (i) the records maintained by CDS or participants relating to the ADI Warrants or the book-entry accounts maintained by them; (ii) maintaining, supervising or reviewing any records relating to such ADI Warrants; or (iii) any advice or representations made or given by CDS or participants with respect to the rules and regulations of CDS or any action to be taken by CDS or its participants.

The ability of a Person having an interest in an ADI Warrant held through a participant to pledge such interest or otherwise take action with respect to such interest (other than through a participant) may be limited due to the lack of a physical certificate.

ADI Shareholders who hold their ADI Shares through a participant must arrange transactions in ADI Shares or ADI Warrants through their participant. It is anticipated by ADI that each such holder of an ADI Warrant who exercises an ADI Warrant will receive a customer confirmation of issuance or purchase, as applicable, from the participant through which such ADI Warrant is held or in accordance with the practices and policies of such participant.

Undeliverable ADI Warrants

Warrant Certificates returned to the Warrant Agent as undeliverable will not be sold by the Warrant Agent and no proceeds of sale will be credited to such holders of ADI Warrants, and the Warrant Agent will retain such Warrant Certificates in accordance with applicable law.

U.S. Regulatory Matters Relating to the Warrant Distribution

The ADI Warrants to be issued and distributed under the Warrant Distribution have not been and will not be registered under the U.S. Securities Act, and will be issued and distributed in reliance on the exemption from registration set forth in Rule 506(c) of Regulation D under the U.S. Securities Act. The ADI Warrants will not be listed for trading on any United States stock exchange, and ADI Warrants issued and distributed to Qualified U.S. Shareholders of ADI may only be resold to ADI or outside the United States pursuant to Rule 904 of Regulation S under the U.S. Securities Act.

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Qualified U.S. Shareholders of ADI

Only U.S. Shareholders of ADI of record as of the close of business (Toronto time) on the Business Day immediately preceding the Effective Date who are Qualified U.S. Shareholders will actually receive Warrant Certificates.

In order to receive Warrant Certificates, an ADI Shareholder that is a U.S. Shareholder will be required to complete and submit (and not withdraw) a Qualified U.S. Shareholder Certification (including all documentation required by ADI as part of the Qualified U.S. Shareholder Certification) certifying its status as an Accredited Investor. A U.S. Shareholder that is not an Accredited Investor or does not submit a properly completed and executed Qualified U.S. Shareholder Certification (including all required documentation) on or prior to the close of business (Toronto time) on the Business Day immediately preceding the Effective Date will not receive Warrant Certificates. Such Non-Qualified U.S. Shareholders will have their ADI Warrants issued to and held on their behalf by the Sales Agent and subsequently sold by the Sales Agent on their behalf as soon as practicable after the Effective Date, with the cash proceeds therefrom to be distributed to such Non-Qualified U.S. Shareholders of ADI.

A form of Qualified U.S. Shareholder Certification (including a list of required documentation) and related instructions is enclosed with this Circular for the benefit of U.S. Shareholders in connection with the Warrant Distribution. Additional copies of the Qualified U.S. Shareholder Certification can be obtained by contacting the joint proxy solicitation agent, Kingsdale Shareholder Services, (i) by telephone, toll-free in North America at 1-888-518-6805 or at +1-416-867-2272 outside of North America, or (ii) by e-mail at [email protected].

A U.S. Shareholder who satisfies the requirements for treatment as a Qualified U.S. Shareholder will receive Warrant Certificates issuable to ADI Shareholders pursuant to the Warrant Distribution. ADI Warrants issued and distributed to Qualified U.S. Shareholders of ADI may only be resold to ADI or outside the United States pursuant to Rule 904 of Regulation S under the U.S. Securities Act.

As set forth in the Qualified U.S. Shareholder Certification, a U.S. Shareholder will have to be a registered ADI Shareholder as of the close of business (Toronto time) on the Business Day immediately preceding the Effective Date in order to be a Qualified U.S. Shareholder. U.S. Shareholders of ADI are advised to promptly review the Qualified U.S. Shareholder Certification to determine if they satisfy the requirements to receive Warrant Certificates and then promptly contact their intermediary or participant to obtain certificates representing their ADI Shares.

Qualified U.S. Shareholders of ADI are urged to obtain the advice of their own legal counsel with respect to the application of these restrictions to the offer or sale of such ADI Warrants by such persons.

Non-Qualified U.S. Shareholders of ADI

Warrant Certificates that would otherwise be issued to Non-Qualified U.S. Shareholders will instead be issued to the Sales Agent who will receive such Warrant Certificates as agent of the applicable Non-Qualified U.S. Shareholder.

As soon as practicable after the Effective Date, the Sales Agent, for the account of Non-Qualified U.S. Shareholders, will sell the ADI Warrants of such registered Non-Qualified U.S. Shareholders through a registered dealer on the facilities of the TSX or any stock exchange on which such ADI Warrants are then listed or in such other manner as deemed appropriate by the Sales Agent.

As soon as reasonably possible thereafter, the Sales Agent will forward to each such Non-Qualified U.S. Shareholder whose ADI Warrants have been sold a cheque or any other form of payment agreed to by such person (net of any applicable withholding taxes and expenses) in Canadian dollars in an amount equal to the net proceeds received by the Sales Agent upon the sale of the ADI Warrants on behalf of the Non-Qualified U.S. Shareholder. In effecting the sale of any ADI Warrants, the Sales Agent will exercise its sole judgment as to the timing and manner of sale and will not be obligated to seek or obtain a minimum price for such ADI Warrants. Neither ADI nor the Sales Agent will be liable for any loss arising out of any such sales. The sale price of the ADI Warrants sold on behalf of such Non-Qualified U.S. Shareholders of ADI will fluctuate with the market price of the ADI Warrants

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and no assurances can be given that any particular price will be received upon such sale. ADI and the Sales Agent will be entitled to deduct and withhold from any consideration otherwise payable to any Non-Qualified U.S. Shareholder such amounts as ADI or the Sales Agent are required to deduct and withhold with respect to such payment under the Tax Act, the Code or any provision of provincial, state, local or foreign tax law, in each case as amended or succeeded. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes as having been paid to the shareholder in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

Exercise of ADI Warrants; Resales of Warrant Shares

As described in the Qualified U.S. Shareholder Certification, ADI Warrants may not be exercised in the United States unless the ADI Shares underlying such ADI Warrants are registered under the U.S. Securities Act or an exemption from such registration requirements is available. In addition, ADI Shares issuable upon exercise of such warrants in the United States will also be subject to the resale restrictions set out in the Qualified U.S. Shareholder Certification.

Warrant Indenture

The ADI Warrants will be created and issued pursuant to, and governed by, the terms of the Warrant Indenture to be negotiated and entered into between ADI and Computershare Trust Company of Canada (the “Warrant Agent”), which Warrant Indenture shall be executed and dated as of the date of the Warrant Distribution. It is expected that the Warrant Indenture will contain customary provisions with respect to adjustment in the number of ADI Shares issuable upon the exercise of the ADI Warrants and/or the exercise price per ADI Share upon the occurrence of certain events, including:

(a) the issuance of ADI Shares or securities exchangeable for or convertible into ADI Shares to all or substantially all of the holders of ADI Shares as a stock dividend or other distribution (other than a distribution of ADI Shares upon the exercise of the ADI Warrants or pursuant to the exercise of director, officer or employee stock options under ADI’s equity compensation plans);

(b) the subdivision, redivision or change of the ADI Shares into a greater number of shares;

(c) the reduction, combination or consolidation of the ADI Shares into a lesser number of shares;

(d) the issuance to all or substantially all of the holders of ADI Shares of rights, options or warrants under which such holders are entitled, during a period expiring not more than 45 days after the record date for such issuance, to subscribe for or purchase ADI Shares, or securities exchangeable for or convertible into ADI Shares, at a price per share to the holder (or at an exchange or conversion price per share) of less than 95% of the “current market price”, as defined in the Warrant Indenture, for the ADI Shares on such record date; and

(e) the issuance or distribution to all or substantially all of the holders of ADI Shares of shares of any class other than the ADI Shares, rights, options or warrants to acquire ADI Shares or securities exchangeable or convertible into ADI Shares, of evidences of indebtedness or cash, securities or any property or other assets.

ADI expects that the Warrant Indenture will also provide for adjustment in the class and/or number of securities issuable upon the exercise of ADI Warrants and/or exercise price per security in the event of the following additional events: (1) reclassifications or re-designations of ADI Shares; (2) consolidations, amalgamations, take-over bids, compulsory acquisitions, plans of arrangement or mergers of ADI with or into another entity (other than consolidations, amalgamations, take-over bids, compulsory acquisitions, plans of arrangement or mergers which do not result in any reclassification of ADI Shares or a change of ADI Shares into other shares); (3) a change, exchange or conversion of ADI Shares into or for other shares or securities or property; or (4) the transfer (other than to one of ADI’s Subsidiaries) of the undertaking or assets of ADI as an entirety or substantially as an entirety to another corporation or other entity.

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ADI expects that the Warrant Indenture shall provide for no adjustment in the exercise price or the number of ADI Shares purchasable upon the exercise of ADI Warrants will be required to be made unless the cumulative effect of such adjustment or adjustments would change the exercise price by at least 1% or the number of ADI Shares purchasable upon exercise by at least one one-hundredth of an ADI Share.

ADI expects that the Warrant Indenture shall provide that no fractional ADI Shares will be issuable upon the exercise of any ADI Warrants, and no cash or other consideration will be paid in lieu of fractional shares. Holders of ADI Warrants will not have any voting or pre-emptive rights or any other rights which a holder of ADI Shares would have.

ADI also expects that the Warrant Indenture will provide that, from time to time, ADI and the Warrant Agent, without the consent of the holders of ADI Warrants, may amend or supplement the Warrant Indenture for certain purposes, including curing defects or inconsistencies or making any change that does not adversely affect the rights of holders of ADI Warrants. Any amendment or supplement to the Warrant Indenture that adversely affects the interests of the holders of the ADI Warrants may only be made by “extraordinary resolution”, which will be defined in the Warrant Indenture as a resolution either (1) passed at a meeting of the holders of ADI Warrants at which there are holders of ADI Warrants present in person or represented by proxy representing at least 25% of the aggregate number of the then outstanding ADI Warrants and passed by the affirmative vote of holders of ADI Warrants representing not less than 66 % of the aggregate number of all the then outstanding ADI Warrants represented at the meeting and voted on the poll upon such resolution or (2) adopted by an instrument in writing signed by the holders of ADI Warrants representing not less than 66 % of the aggregate number of all of the then outstanding ADI Warrants.

Certain Canadian Federal Income Tax Considerations Relating to the Warrant Distribution

The following is a summary of the principal Canadian federal income tax considerations under the Tax Act, as of the date hereof, generally applicable with respect to the ADI Warrants issuable to ADI Shareholders pursuant to the Warrant Distribution and the ADI Shares (the “ADI Warrant Shares”) issuable pursuant to the exercise of such ADI Warrants. This summary is only applicable to an ADI Shareholder who, for purposes of the Tax Act and at all relevant times (i) is a beneficial owner of ADI Warrants and ADI Warrant Shares, (ii) deals at arm’s length with and is not affiliated with ADI, and (iii) holds the ADI Warrants and the ADI Warrant Shares issued pursuant to the exercise of the ADI Warrants as a capital property (for the purposes of this summary, an “ADI Holder”).

ADI Warrants received pursuant to the Warrant Distribution and ADI Warrant Shares issuable on the exercise of ADI Warrants generally will be considered capital property to an ADI Holder for purposes of the Tax Act unless the ADI Holder holds such ADI Warrants or ADI Warrant Shares in the course of carrying on a business of buying and selling securities or the ADI Holder has acquired or holds them in a transaction or transactions considered to be an adventure or concern in the nature of trade.

This summary does not apply to an ADI Holder (i) that is a “financial institution”, for the purposes of the mark-to- market rules in the Tax Act; (ii) an interest in which is a “tax shelter investment”, as defined in the Tax Act; (iii) that is a “specified financial institution”, as defined in the Tax Act; (iv) that has made a “functional currency” election under section 261 of the Tax Act; or (v) that has entered, or will enter, into a “derivative forward agreement” as such term is defined in the Tax Act with respect to ADI Warrants or ADI Warrant Shares. Such ADI Holders should consult their own tax advisors.

This summary does not address the possible application of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act to an ADI Holder that (i) is a corporation resident in Canada and (ii) is (or does not deal at arm’s length for purposes of the Tax Act with a corporation resident in Canada that is), or becomes as part of a transaction or event or series of transactions or events that includes the acquisition of an ADI Warrant or ADI Warrant Share, controlled by a non-resident corporation for purposes of such rules. Such ADI Holders should consult their own tax advisors with respect to the possible application of these rules.

This summary is based on the current provisions of the Tax Act in force as of the date hereof and an understanding of the current published administrative policies and assessing practices of the CRA made publicly available prior to the date hereof. This summary takes into account the Tax Proposals and assumes that the Tax Proposals will be

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enacted in the form proposed. No assurance can be given that the Tax Proposals will be enacted in the form proposed, or at all. This summary does not otherwise take into account or anticipate any other changes in law, whether by judicial, governmental or legislative decision or action or changes in the administrative policies or assessing practices of the CRA, nor does it take into account provincial, territorial or foreign tax legislation or considerations, which may differ materially from those described in this summary.

This summary is of a general nature only and is not, and is not intended to be, nor should it be construed to be, legal or tax advice or representations to any particular ADI Holder. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, ADI Holders are urged to consult their own legal and tax advisors with respect to the tax consequences to them having regard to their particular circumstances, including the application and effect of the income and other tax laws of any country, province or other jurisdiction that may be applicable to the ADI Holder.

ADI Holders Resident in Canada

This part of the summary is applicable only to an ADI Holder who, for purposes of the Tax Act and at all relevant times, is resident, or is deemed to be resident, in Canada (for the purpose of this summary, an “ADI Resident Holder”).

Certain ADI Resident Holders whose ADI Warrant Shares might not otherwise constitute capital property may be eligible to make an irrevocable election in accordance with subsection 39(4) of the Tax Act to have their ADI Warrant Shares and every other “Canadian security” (as defined in the Tax Act) owned by such ADI Resident Holder in the taxation year in which the election is made and in all subsequent taxation years be deemed to be capital property. ADI Warrants are not “Canadian securities” for this purpose; accordingly, the characterization of ADI Warrants as capital property is unaffected by an ADI Resident Holder’s election under subsection 39(4) of the Tax Act. ADI Resident Holders should consult their own tax advisors with respect to whether this election is available or advisable in their particular circumstances.

Receipt of ADI Warrants Pursuant to Warrant Distribution

An ADI Resident Holder who receives ADI Warrants pursuant to the Warrant Distribution will not be required to include the value of such ADI Warrants in computing the ADI Resident Holder’s income for purposes of the Tax Act.

The cost of ADI Warrants acquired by an ADI Resident Holder pursuant to the Warrant Distribution will be nil. In determining the adjusted cost base of each ADI Warrant, the cost of each such ADI Warrant held by an ADI Resident Holder will be averaged with the adjusted cost base of each other identical ADI Warrant held by that ADI Resident Holder as capital property (including any identical ADI Warrants acquired otherwise than pursuant to the Warrant Distribution).

Exercise of ADI Warrants

The exercise of ADI Warrants will not constitute a disposition of property for purposes of the Tax Act and, consequently, no gain or loss will be realized upon the exercise of ADI Warrants.

An ADI Warrant Share acquired by an ADI Resident Holder upon the exercise of ADI Warrants will have a cost to the ADI Resident Holder equal to aggregate of the exercise price paid by the ADI Resident Holder for such ADI Warrant Shares pursuant to the terms of the ADI Warrants and the adjusted cost base, if any, to the ADI Resident Holder of the ADI Warrants so exercised. The cost of an ADI Warrant Share acquired by an ADI Resident Holder upon the exercise of ADI Warrants will be averaged with the adjusted cost base to the ADI Resident Holder of all other ADI Shares held by the ADI Resident Holder immediately before that time as capital property in order to determine the adjusted cost base of each such ADI Warrant Share to the ADI Resident Holder.

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Disposition of ADI Warrants

An ADI Resident Holder who disposes of or is deemed to dispose of an ADI Warrant (otherwise than pursuant to the expiry thereof) will generally realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of the ADI Warrant to the ADI Resident Holder. For a description of the treatment of capital gains and capital losses, see “ADI Holders Resident in Canada – Taxation of Capital Gains and Capital Losses” below.

Expiry of ADI Warrants

Upon the expiry of an unexercised ADI Warrant, an ADI Resident Holder will realize a capital loss equal to the adjusted cost base, if any, of the ADI Warrant immediately before its expiry. For a description of the treatment of capital losses, see “ADI Holders Resident in Canada – Taxation of Capital Gains and Capital Losses” below.

Taxation of Capital Gains and Capital Losses

Generally, an ADI Resident Holder will be required to include in computing such ADI Resident Holder’s income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized in that year. An ADI Resident Holder generally will be required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a taxation year from taxable capital gains realized by the ADI Resident Holder in that year. Allowable capital losses in excess of taxable capital gains realized in a taxation year may be carried back to any of the three preceding taxation years or carried forward to any subsequent taxation year and deducted against net taxable capital gains realized in such years, subject to and in accordance with the detailed rules contained in the Tax Act.

The amount of any capital loss realized on the disposition of an ADI Warrant Share by an ADI Resident Holder that is a corporation may, to the extent and under the circumstances specified by the Tax Act, be reduced by the amount of any dividends received or deemed to have been received by the corporation on such share (or on a share for which such share is substituted or exchanged). Similar rules may apply where shares are owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. ADI Resident Holders to whom these rules may be relevant are urged to consult their own tax advisors.

Holding and Disposing of ADI Warrant Shares

(a) Dividends on ADI Warrant Shares

Dividends (including deemed dividends) paid or credited on ADI Warrant Shares will be required to be included in an ADI Resident Holder’s income for the purposes of the Tax Act. Such dividends received by an ADI Resident Holder who is an individual (other than certain trusts) will be subject to the gross-up and dividend tax credit rules in the Tax Act normally applicable to taxable dividends received from taxable Canadian corporations. An enhanced dividend tax credit will be available to individuals in respect of “eligible dividends” (as defined in the Tax Act) designated by ADI to the ADI Resident Holder in accordance with the provisions of the Tax Act. There may be limitations on the ability of ADI to designate dividends as eligible dividends.

In the case of an ADI Resident Holder of ADI Warrant Shares that is a corporation, dividends received on ADI Warrant Shares will be required to be included in computing the corporation’s income for the taxation year in which such dividends are received and will generally be deductible in computing the corporation’s taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by an ADI Resident Holder that is a corporation as proceeds of disposition or a capital gain. ADI Resident Holders that are corporations should consult their own tax advisors having regard to their own circumstances.

An ADI Resident Holder of ADI Warrant Shares that is a “private corporation” or “subject corporation” (each as defined in the Tax Act) may be liable under Part IV of the Tax Act to pay a refundable tax on dividends received (or deemed to be received) on ADI Warrant Shares to the extent that such dividends are deductible in computing the ADI Resident Holder’s taxable income.

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(b) Disposition of ADI Warrant Shares

A disposition or deemed disposition of an ADI Warrant Share by an ADI Resident Holder (other than a disposition to ADI in circumstances other than a purchase by ADI in the open market in the manner in which shares are normally purchased by a member of the public in the open market) will generally result in the realization of a capital gain (or a capital loss) to the extent that the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the ADI Resident Holder of the ADI Warrant Share immediately before the disposition. For a description of the tax treatment of capital gains and capital losses, see “ADI Holders Resident in Canada — Taxation of Capital Gains and Capital Losses” above.

Additional Refundable Tax

An ADI Resident Holder that is throughout the year a “Canadian-controlled private corporation”, as defined in the Tax Act, may be liable to pay an additional refundable tax on certain investment income, including taxable capital gains realized, and certain dividends.

Minimum Tax

Capital gains realized and dividends received or deemed to be received by an ADI Resident Holder that is an individual, other than certain specified trusts, may give rise to minimum tax under the Tax Act. ADI Resident Holders should consult their own advisors with respect to the application of the minimum tax.

Eligibility for Investment

Provided the ADI Warrant Shares are listed on a “designated stock exchange” as defined in the Tax Act (which includes the TSX and Tiers 1 and 2 of the TSXV) at the particular time, the ADI Warrant Shares issued on the exercise of ADI Warrants will, at that particular time, be qualified investments under the Tax Act for a trust governed by a RRSP, RRIF, deferred profit sharing plan, registered disability savings plan, registered education savings plan or a TFSA (each a “Registered Plan”). The ADI Warrants will be qualified investments under the Tax Act at a particular time for a Registered Plan provided that, at the particular time, (i) the ADI Warrants are listed on a designated stock exchange, or (ii) the ADI Warrant Shares are listed on a designated stock exchange and ADI is not, and deals at arm’s length for the purposes of the Tax Act with each person who is, an annuitant, a beneficiary, an employer, or a subscriber under, or a holder of, such Registered Plan.

Notwithstanding that the ADI Warrants and ADI Warrant Shares may be qualified investments, the holder of a TFSA or the annuitant under an RRSP or RRIF will be subject to a penalty tax in respect of ADI Warrants or ADI Warrant Shares if the ADI Warrants or ADI Warrant Shares are a “prohibited investment” (as defined in the Tax Act) for the TFSA, RRSP or RRIF, as the case may be. The ADI Warrants and ADI Warrant Shares generally will not be a “prohibited investment” for a TFSA, RRSP or RRIF provided the holder or annuitant thereof, as the case may be, (i) deals at arm’s length with ADI for purposes of the Tax Act and (ii) does not have a “significant interest” (as defined in the Tax Act) in ADI. In addition, ADI Warrant Shares will not be a prohibited investment for a TFSA, RRSP or RRIF if such shares are “excluded property” (as defined in the Tax Act) for such TFSA, RRSP or RRIF. ADI Resident Holders to whom these rules may be relevant are urged to consult their own tax advisors in this regard.

ADI Holders Not Resident in Canada

This part of the summary is generally applicable to an ADI Holder who, at all relevant times, for purposes of the Tax Act and any applicable income tax treaty or convention, is not resident, and is not deemed to be resident, in Canada and does not use or hold, and is not deemed to use or hold, ADI Warrants or ADI Warrant Shares in connection with carrying on a business in Canada (for the purpose of this summary, an “ADI Non-Resident Holder”). This part of the summary is not applicable to ADI Non-Resident Holders that are insurers carrying on an insurance business in Canada and elsewhere.

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Receipt of ADI Warrants Pursuant to Warrant Distribution

The issuance of ADI Warrants to an ADI Non-Resident Holder pursuant to the Warrant Distribution will not be subject to Canadian withholding tax and no other tax will be payable under the Tax Act by an ADI Non-Resident Holder in respect of the receipt of such ADI Warrants.

Disposition of ADI Warrants or ADI Warrant Shares

An ADI Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of ADI Warrants or ADI Warrant Shares unless those ADI Warrants or ADI Warrant Shares, as the case may be, constitute “taxable Canadian property” and are not “treaty-protected property” of the ADI Non-Resident Holder.

Provided that at the time of disposition the ADI Warrant Shares are listed on a “designated stock exchange” as defined in the Tax Act (which includes the TSX and Tiers 1 and 2 of the TSXV), an ADI Warrant Share generally will not constitute taxable Canadian property of an ADI Non-Resident Holder at the time of disposition unless at any time during the 60-month period immediately preceding the time of disposition (a) the ADI Non-Resident Holder, persons with whom the ADI Non-Resident Holder did not deal at arm’s length, partnerships in which the ADI Non-Resident Holder or a person with whom the ADI Non-Resident Holder did not deal at arm’s length holds a membership interest directly or indirectly through one or more partnerships, or the ADI Non-Resident Holder together with any combination of such persons or partnerships, owned 25% or more of the issued shares of any class of shares of ADI, and (b) more than 50% of the fair market value of the ADI Warrant Share was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in the Tax Act), and options in respect of, or interests in, or for civil law rights in, any such property (whether or not such property exists).

ADI Warrants will not be “taxable Canadian property” of an ADI Non-Resident Holder at a particular time unless the ADI Warrant Shares for which such ADI Warrants are exercisable constitute “taxable Canadian property” at that particular time.

ADI Non-Resident Holders whose ADI Warrants or ADI Warrant Shares may constitute taxable Canadian property are urged to consult their own tax advisors having regard to their particular circumstances.

Notwithstanding the foregoing, ADI Warrants or ADI Warrant Shares may, in certain circumstances, be deemed to be taxable Canadian property to an ADI Non-Resident Holder for the purposes of the Tax Act. ADI Non-Resident Holders whose ADI Warrants or ADI Warrant Shares may constitute taxable Canadian property are urged to consult their own tax advisors for advice having regard to their particular circumstances.

Even if ADI Warrants or ADI Warrant Shares are considered to be taxable Canadian property to an ADI Non-Resident Holder, a taxable capital gain (or an allowable capital loss) resulting from the disposition of such ADI Warrants or ADI Warrant Shares will not be included (or deducted) in computing the ADI Non-Resident Holder’s income for purposes of the Tax Act if the ADI Warrants or ADI Warrant Shares, as the case may be, constitute “treaty-protected property”, as defined in the Tax Act. ADI Warrants or ADI Warrant Shares owned by an ADI Non-Resident Holder will generally be treaty-protected property if the gain from the disposition of such ADI Warrants or ADI Warrant Shares, respectively, would, because of an applicable income tax treaty or convention to which Canada is a signatory, be exempt from tax under Part I of the Tax Act.

If the ADI Warrants or ADI Warrant Shares are considered to be taxable Canadian property but not treaty-protected property to a particular ADI Non-Resident Holder, upon a disposition of such ADI Warrants or ADI Warrant Shares, as applicable, such ADI Non-Resident Holder will realize a capital gain (or capital loss) generally in the circumstances and computed in the manner described above under “ADI Holders Resident in Canada – Disposition of ADI Warrants”, “ADI Holders Resident in Canada – Holding and Disposing of ADI Warrant Shares – Disposition of ADI Warrant Shares” and “ADI Holders Resident in Canada – Taxation of Capital Gains and Losses” as if the ADI Non-Resident Holder were an ADI Resident Holder thereunder.

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An ADI Non-Resident Holder who disposes of ADI Warrants or ADI Warrant Shares that are taxable Canadian property is urged to consult such ADI Non-Resident Holder’s own tax advisors regarding any resulting Canadian reporting obligations.

Dividends on ADI Warrant Shares

Any dividends paid or credited, or deemed to be paid or credited, to an ADI Non-Resident Holder on ADI Warrant Shares will be subject to Canadian withholding tax at a rate of 25%, subject to any reduction pursuant to an applicable income tax treaty or convention. For example, under the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended, and the protocols thereto (the “Canada-U.S. Tax Convention”), where dividends are paid to, or in certain circumstances derived by, an ADI Non-Resident Holder who is a U.S. resident for the purpose of, and who is entitled to the benefits in accordance with the provisions of, the Canada-U.S. Tax Convention, the applicable rate of Canadian withholding tax may generally be reduced to 15%.

United States Federal Income Tax Considerations Relating to the Warrant Distribution

The following is a summary of the U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of the receipt, exercise, expiration and disposition of ADI Warrants received pursuant to the Warrant Distribution. This summary addresses only holders who hold the ADI Warrants and ADI Shares on which ADI Warrants are distributed as “capital assets” (generally, assets held for investment purposes). The U.S. federal income tax considerations generally applicable to a U.S. Holder relating to the ownership and disposition of ADI Warrant Shares generally will be the same as the U.S. federal income tax considerations relating to the ownership and disposition of ADI Shares received pursuant to the Arrangement. For a summary of such U.S. federal income tax considerations, see “Certain United States Federal Income Tax Considerations Relating to the Arrangement – U.S. Federal Income Tax Consequences of the Ownership and Disposition of ADI Shares.”

The following summary does not purport to address all U.S. federal income tax consequences that may be relevant to a U.S. Holder as a result of the receipt, exercise, expiration and disposition of ADI Warrants, nor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules (including, but not limited to, tax-exempt organizations (including private foundations), qualified retirement plans, individual retirement accounts, or other tax-deferred accounts, banks or other financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, dealers traders in securities or currencies that elect to use a mark-to-market accounting method of accounting, U.S. expatriates or former long-term residents of the United States, holders subject to the U.S. federal alternative minimum tax, partnerships and other pass-through entities and investors in such entities, persons that own (or have or will own), directly, indirectly or by attribution, 5% or more of ADI’s voting stock, controlled foreign corporations, passive foreign investment companies, persons that acquire ADI Warrants in connection with the exercise of employee stock options or otherwise as compensation for services, persons that hold an ADI Warrant as part of a straddle, hedging arrangement, conversion arrangement, constructive sale transaction or other integrated transaction, and U.S. Holders that have a “functional currency” other than the U.S. dollar).

This summary is based on the Code, U.S. Treasury regulations, administrative pronouncements and rulings of the IRS, judicial decisions and the Canada-U.S. Tax Convention, all as in effect on the date hereof, and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. Except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. This summary does not describe any state, local or non-U.S. tax law considerations, or any aspect of U.S. federal tax law other than income taxation (e.g., estate or gift tax or the Medicare contribution tax). U.S. Holders are urged to consult their own tax advisors regarding such matters.

No legal opinion from U.S. legal counsel or ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the receipt, exercise, expiration and disposition of ADI Warrants. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

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As used in this summary, a “U.S. Holder” is a beneficial owner of ADI Warrants, as applicable, that, for U.S. federal income tax purposes, is (i) a citizen or individual resident of the United States as determined for U.S. federal income tax purposes, (ii) a corporation (or an entity taxable as a corporation) created or organized under the law of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income tax without regard to its source, or (iv) a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) the trust has an election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

The tax treatment of an entity or arrangement classified as a partnership for U.S. federal income tax purposes may depend on both the partnership’s and the partner’s status and the activities of the partnership. Entities or arrangements classified as partnerships for U.S. federal income tax purposes that are beneficial owners of ADI Warrants, and their partners and other owners, are urged to consult their own tax advisors regarding the tax consequences of the receipt, exercise, expiration and disposition of ADI Warrants.

This summary is of a general nature only. It is not intended to constitute, and should not be construed to constitute, legal or tax advice to any particular holder. U.S. Holders are urged to consult their own tax advisors as to the tax considerations applicable to them in their particular circumstances.

Receipt, Exercise, and Expiration of ADI Warrants

It is intended that the distribution of ADI Warrants will constitute a non-taxable distribution for U.S. federal income tax purposes. This position is not binding on the IRS, or the courts, however. If this position is determined by the IRS or a court to be incorrect, subject to the PFIC rules discussed below and in “Certain United States Federal Income Tax Considerations Relating to the Arrangement—PFIC Status of ADI”, the fair market value of the ADI Warrants would be includable in the income of any U.S. Holders as a dividend to the extent of the holder’s pro rata share of ADI’s current and accumulated earnings and profits, if any, with any excess being treated as a return of capital to the extent of such holder’s basis in its ADI Shares, to the extent thereof, and then as capital gain. The remaining discussion assumes that U.S. Holders will not be subject to U.S. federal income tax on the receipt of an ADI Warrant.

If the fair market value of ADI Warrants when received by a U.S. Holder is less than 15% of the fair market value of the ADI Shares with respect to which such ADI Warrants are received, the ADI Warrants will have no basis unless the U.S. Holder affirmatively elects to allocate its adjusted tax basis in its ADI Shares between its ADI Shares and the ADI Warrants received in proportion to their relative fair market values (as determined on the date the ADI Warrants are received). A U.S. Holder must make this election in its timely filed U.S. federal income tax return for the taxable year in which the ADI Warrants are received and once made, the election is irrevocable. If, at the time of receipt, the fair market value of the ADI Warrants is 15% or more of the fair market value of the ADI Shares with respect to which the ADI Warrants are received, a U.S. Holder’s adjusted tax basis in its ADI Shares must be allocated between its ADI Shares and the ADI Warrants received in proportion to their relative fair market values (as determined on the date ADI Warrants are received). Any tax basis allocated to ADI Warrants under these rules will be allocated back to the ADI Shares if the ADI Warrants expire unexercised.

A U.S. Holder generally will not realize gain or loss for U.S. federal income tax purposes on the exercise of an ADI Warrant. A U.S. Holder’s tax basis in an ADI Share acquired upon the exercise of an ADI Warrant will be equal to the sum of such U.S. Holder’s adjusted tax basis in such ADI Warrant plus the U.S. dollar value exercise price determined at the spot rate on the date of exercise. Subject to the PFIC rules discussed below, a U.S. Holder’s holding period of an ADI Share received on the exercise of an ADI Warrant will begin on the date that such ADI Warrant is exercised by such U.S. Holder. If a U.S. Holder receives the ADI Warrants pursuant to the Arrangement and such ADI Warrants expire, the U.S. Holder generally will not recognize gain or loss for U.S. federal income tax purposes. In addition, the tax bases of the associated ADI Shares will be the same as they were prior to the distribution of the ADI Warrants.

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Sale, Exchange, or Other Taxable Disposition of ADI Warrants

Subject to the PFIC rules discussed below and in “Certain United States Federal Income Tax Considerations Relating to the Arrangement—PFIC Status of ADI”, a U.S. Holder will recognize capital gain or loss on the sale or other taxable disposition of ADI Warrants (including, in the case of a Non-Qualified U.S. Shareholder, a sale on its behalf by the Sales Agent, as described more fully under “Related Transactions – Warrant Distribution—U.S. Regulatory Matters Relating to the Warrant Distribution”) in an amount equal to the difference between the U.S. Holder’s tax basis in the ADI Warrants, if any, and the U.S. dollar value of the amount realized from the sale or other taxable disposition. Any such gain will generally be gain sourced within the United States for U.S. foreign tax credit purposes. If the U.S. Holder’s holding period for the ADI Warrants exceeds one year, any gain or loss will be long-term capital gain or loss. The deductibility of capital losses may be subject to limitations.

The amount realized on a sale or other disposition of an ADI Warrant for an amount in a currency other than the U.S. dollar (a “foreign currency”) will be the U.S. dollar value of this amount on the date of sale or disposition (or in the case of cash basis and electing accrual basis taxpayers, the settlement date, provided that the ADI Warrants are traded on an established securities market). On the settlement date, the U.S. Holder will recognize U.S. source foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference, if any, between the U.S. dollar value of the amount received based on the exchange rate in effect on the date of sale or other disposition and the settlement date. However, in the case of ADI Warrants traded on an established securities market that are sold by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), the amount realized will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognized at that time. If an accrual basis U.S. Holder makes the election described above, it must be applied consistently from year to year and cannot be revoked without the consent of the IRS.

If any Canadian taxes are imposed upon a gain from the sale or other disposition of an ADI Warrant by a U.S. Holder, foreign tax credits may not be available with respect to such Canadian taxes. U.S. Holders are urged to consult their own tax advisors regarding the potential imposition of any Canadian taxes on any gain and the related U.S. federal income tax consequences.

Certain Adjustments to the ADI Warrants

The number of ADI Shares issuable upon exercise of the ADI Warrants and/or the exercise price per ADI Share may be adjusted in certain circumstances. See “Related Transactions – Warrant Distribution – Warrant Indenture.” For U.S. federal income tax purposes, an adjustment to the number of ADI Shares that will be issued on the exercise of the ADI Warrants, or an adjustment to the exercise price of the ADI Warrants, may be treated as a constructive distribution to a U.S. Holder of the ADI Warrants if, and to the extent that, such adjustment has the effect of increasing such U.S. Holder’s proportionate interest in the earnings and profits or assets of ADI, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property to shareholders of ADI). Any constructive distributions generally will be taxable as a distribution, as described below under “Certain United States Federal Income Tax Considerations Relating to the Arrangement—U.S. Federal Income Tax Consequences of the Ownership and Disposition of ADI Shares.” However, adjustments to the exercise price of the ADI Warrants made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing the dilution of the interest of the holders of ADI Warrants generally will not be considered to result in a constructive distribution to a U.S. Holder of ADI Warrants. U.S. Holders are urged to carefully review the conversion rate adjustment provisions and consult their own tax advisors with respect to the tax consequences of any such adjustment.

Passive Foreign Investment Company Rules

Certain adverse U.S. federal income tax rules could apply to U.S. Holders owning stock of a PFIC. Under proposed U.S. Treasury Regulations, if a U.S. Holder has an option, warrant, or other right to acquire stock of a PFIC (such as the ADI Warrants), such option, warrant or right is considered to be PFIC stock subject to the rules discussed below. In addition, under proposed U.S. Treasury Regulations, the holding period for any shares acquired on the exercise of ADI Warrants will begin on the date a U.S. Holder acquires the ADI Warrants. This could affect adversely the availability of any election that otherwise may be available with respect to ADI Shares received upon exercise of the

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ADI Warrants. Thus, a U.S. Holder will have to account for ADI Warrants under the PFIC rules and any applicable election differently.

Based on current assets and activities and on assumptions about activities during the balance of the current taxable year, we believe that ADI will be classified as a PFIC for the current taxable year and in some or all years preceding the Arrangement, and may be a PFIC in future tax years. However, PFIC classification for any taxable year is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and is fundamentally factual in nature, and the determination of ADI’s PFIC status is made annually based on the types of income ADI earns and the type and value of its assets in each such year, as well as on the application of complex U.S. federal income tax rules, including “look through” rules with respect to its Subsidiaries, and cannot be determined until after the end of such taxable year. Each U.S. Holder is urged to consult its own tax advisor regarding the application of such rules.

For more information concerning the PFIC rules, see “Certain United States Federal Income Tax Considerations Relating to the Arrangement – U.S. Federal Income Tax Consequences of the Ownership and Disposition of ADI Shares – PFIC Status of ADI”.

Required Disclosure with Respect to Foreign Assets

Certain U.S. Holders are required to report information relating to an interest in the ADI Warrants and ADI Shares acquired upon the exercise of ADI Warrants, subject to exceptions (including an exception for ADI Warrants and ADI Shares held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with its tax return for each year in which it held an interest in the ADI Warrants and ADI Shares. U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements relating to their ownership of ADI Warrants and ADI Shares acquired upon the exercise of ADI Warrants.

INTERESTS OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

SRC

Certain executive officers of SRC have interests in the transactions contemplated by the Arrangement that may be different from, and/or in addition to, the interests of other SRC Shareholders generally. The SRC Board was aware of these potential interests and considered them, along with other matters, in reaching its decision to approve the Arrangement and to recommend that SRC Shareholders vote in favour of the Arrangement Resolution. Except as described below, to the knowledge of SRC, the directors and executive officers of SRC have no material interest in the Arrangement that differs from the interests of other SRC Shareholders generally.

Peter Grosskopf, the Chief Executive Officer of Sprott Inc., a director of Sprott U.S. Holdings Inc. (which controls Exploration Capital 2008 LP and Sprott Global Resource Investments Ltd.) and a director and officer of the general partner of SCLP, and Steve Yuzpe, an officer of the general partner of SCLP and a director and officer of the general partner of SRCLP, each disclosed the nature and extent of a conflict or potential conflict of interest when the proposed Arrangement was disclosed at an SRC Board meeting, and confirmed each would be recusing themselves from participation in considering, and in voting on, matters relating to the proposed transactions with ADI. See “Related Transactions”.

As at the date hereof, the directors and officers of SRC and their associates and affiliates, as a group, beneficially own, or control or direct, approximately 2.0% of the outstanding SRC Shares (on a non-diluted basis) and no ADI Shares.

Immediately after giving effect to the Arrangement, it is anticipated that the current directors and officers of SRC and their associates and affiliates, as a group, would beneficially own, or control or direct, directly or indirectly, less than 1.0% of the then outstanding ADI Shares on a non-diluted basis.

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The directors and executive officers of SRC have indicated their intention to vote their SRC Shares in favour of the Arrangement Resolution and have entered into SRC Lock-Up Agreements with ADI agreeing to do so. See “Effect of the Arrangement – SRC Lock-Up Agreements”.

SRC has retained GMP to be the SRC Financial Advisor with respect to the Arrangement. GMP has received or will receive fees from SRC for services rendered.

ADI

Certain executive officers of ADI have interests in the transactions contemplated by the Arrangement that may be different from, and/or in addition to, the interests of ADI Shareholders generally. The ADI Board was aware of these potential interests and considered them, along with other matters, in reaching its decision to approve the Arrangement and to recommend that ADI Shareholders vote in favour of the ADI Resolutions. Except as described below, to the knowledge of ADI, the directors and executive officers of ADI have no material interest in the Arrangement that differs from the interests of ADI Shareholders generally.

In connection with the Arrangement, Mr. Michael J. Harrison, the President and Chief Executive Officer of ADI, entered into an employment agreement with Sprott Consulting GP Inc., the general partner of SCLP, and ADI with respect to the continued employment of Mr. Harrison following completion of the Arrangement (in the capacity of Managing Director of ADI). See “The Arrangement – Reasons for the Arrangement – SRC”.

As at the date hereof, the directors and officers of ADI and their associates and affiliates, as a group, beneficially own, or control or direct, less than 1.0% of the outstanding SRC Shares (on a non-diluted basis) and less than 1.6% of the outstanding ADI Shares (on a non-diluted basis).

Immediately after giving effect to the Arrangement, it is anticipated that the current directors and officers of ADI and their associates and affiliates, as a group, would beneficially own, or control or direct, directly or indirectly, less than 1.0% of the then outstanding ADI Shares on a non-diluted basis.

Certain directors and executive officers of ADI have indicated their intention to vote their ADI Shares in favour of the ADI Resolutions and have entered into ADI Lock-Up Agreements with SRC agreeing to do so. See “Effect of the Arrangement – ADI Lock-Up Agreements”.

ADI has retained Primary Capital to be the ADI Financial Advisor with respect to the Arrangement. Primary Capital has received or will receive fees from ADI for services rendered. See “The Arrangement – ADI Fairness Opinion”.

SRC SHAREHOLDER DISSENT RIGHTS

If you are a Registered SRC Shareholder, you are entitled to dissent from the Arrangement Resolution in the manner provided in Section 190 of the CBCA, as modified by the Interim Order and the Plan of Arrangement (“Dissent Rights”). Pursuant to the Interim Order and the Plan of Arrangement, SRC Dissenting Shareholders are given rights analogous to rights of dissenting shareholders under the CBCA.

The following description of the rights of Registered SRC Shareholders to dissent from the Arrangement Resolution is not a comprehensive statement of the procedures to be followed by an SRC Dissenting Shareholder who seeks payment of the fair value of its SRC Shares. A Registered SRC Shareholder’s failure to follow exactly the procedures set forth in the Plan of Arrangement and the Interim Order will result in the loss of such SRC Shareholder’s Dissent Rights. If you are a Registered SRC Shareholder and wish to dissent, you are urged to obtain your own legal advice and carefully read the Plan of Arrangement, the provisions of Section 190 of the CBCA and the Interim Order, which are attached to this Circular at Schedule A to Appendix C, Appendix F and Appendix D, respectively, to this Circular.

An SRC Shareholder may make a claim only with respect to all of the SRC Shares held by the SRC Shareholder in the SRC Shareholder’s name. A Registered SRC Shareholder may exercise the Dissent Rights only in respect of

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SRC Shares which are registered in that SRC Shareholder’s name. In many cases, SRC Shares beneficially owned by a Beneficial Holder are registered either:

• in the name of an intermediary; or

• in the name of a clearing agency (such as CDS or similar entities) of which the intermediary is a participant.

A Beneficial Holder of SRC Shares will not be entitled to exercise the Dissent Rights directly unless the SRC Shares are re-registered in the Beneficial Holder’s name.

A Beneficial Holder of SRC Shares who wishes to exercise the Dissent Rights should immediately contact the intermediary with whom the Beneficial Holder deals in respect of its SRC Shares and either:

• instruct the intermediary to exercise the Dissent Right on the Beneficial Holder’s behalf (which, if the SRC Shares are registered in the name of CDS or any other clearing agency, would require that the SRC Shares first be re-registered in the name of the intermediary); or

• instruct the intermediary to re-register the SRC Shares in the name of the beneficial SRC Shareholder, in which case, the Beneficial Holder of SRC Shares would be able to exercise the Dissent Rights directly. In this regard, the Beneficial Holder of SRC Shares will have to demonstrate that such Person beneficially owned the SRC Shares in respect of which the Dissent Rights are being exercised, on the SRC Record Date established for the SRC Meeting.

Any SRC Dissenting Shareholder will be entitled, in the event that the Arrangement becomes effective, to be paid the fair value of the SRC Dissenting Shares held by such SRC Dissenting Shareholder, determined as at the close of business on the day immediately preceding the SRC Meeting, and will not be entitled to any other payment or consideration. There can be no assurance that an SRC Dissenting Shareholder will receive consideration for its SRC Dissenting Shares of equal value to the consideration that such SRC Dissenting Shareholder would have received upon completion of the Arrangement.

A Registered SRC Shareholder who wishes to dissent must ensure that a written notice (a “Dissent Notice”) is received by SRC, Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2750, Toronto Ontario M5J 2J2, no later than 5:00 p.m. (Toronto Time) on January 23, 2017 (or the day that is two Business Days immediately preceding any adjourned or postponed SRC Meeting). The filing of a Dissent Notice does not deprive a Registered SRC Shareholder of the right to vote; however, a Registered SRC Shareholder who has submitted a Dissent Notice and who votes in favour of the Arrangement Resolution will no longer be considered an SRC Dissenting Shareholder with respect to SRC Shares voted in favour of the Arrangement Resolution. If such SRC Dissenting Shareholder votes in favour of the Arrangement Resolution in respect of a portion of the SRC Shares registered in his, her or its name and held by same on behalf of any one Beneficial Holder, such vote approving the Arrangement Resolution will be deemed to apply to the entirety of SRC Shares held by such SRC Dissenting Shareholder in the name of that Beneficial Holder, given that Section 190 of the CBCA provides there is no right of partial dissent. A vote against the Arrangement Resolution will not constitute a Dissent Notice.

Under the terms of the Plan of Arrangement and Interim Order, an SRC Dissenting Shareholder will be deemed to have transferred its SRC Dissenting Shares to SRC, free and clear of any liens, as of the Effective Date. Any SRC Dissenting Shareholder who (a) is ultimately entitled to be paid fair value for its SRC Dissenting Shares will be deemed to have transferred such SRC Shares (free and clear of all liens, charges, encumbrances and any other rights of others) to SRC in consideration for a right to receive a payment for such fair value from SRC and will not be entitled to any other payment or consideration, including any payment that would be payable under the Plan of Arrangement had such holder not exercised its Dissent Rights in respect of such SRC Dissenting Shares; and (b) is ultimately not entitled, for any reason, to be paid fair value for its SRC Dissenting Shares, will be deemed to have participated in the Arrangement in respect of those SRC Shares, on the same basis as a non-dissenting SRC Shareholder and will be entitled to receive only the Consideration that such non-dissenting SRC Shareholders are entitled to receive and, for greater certainty, will be considered to have transferred such SRC Shares in exchange for

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the Consideration pursuant to, and at the same time as the SRC Shares were transferred by the other former SRC Shareholders. Pursuant to the Plan of Arrangement, in no event will SRC, ADI or any other Person be required to recognize an SRC Dissenting Shareholder as a registered holder or Beneficial Holder of SRC Shares or any interest therein at or after the Effective Time, and at the Effective Time the names of such SRC Dissenting Shareholders will be deleted from SRC’s register of holders of SRC Shares. In addition to any other restrictions in the Interim Order or under Section 190 of the CBCA, no Person will be entitled to exercise Dissent Rights with respect to SRC Shares in respect of which a Person has voted in favour of the Arrangement Resolution.

Within 10 days after the approval of the Arrangement Resolution, SRC is required to notify each SRC Dissenting Shareholder that the Arrangement Resolution has been approved. Such notice is however not required to be sent to a Registered SRC Shareholder who voted in favour of the Arrangement Resolution or who has withdrawn a Dissent Notice previously filed. An SRC Dissenting Shareholder must, within 20 days after the SRC Dissenting Shareholder receives notice that the Arrangement Resolution has been approved or, if the SRC Dissenting Shareholder does not receive such notice, within 20 days after the SRC Dissenting Shareholder learns that the Arrangement Resolution has been approved, send a written notice (a “Demand for Payment”) containing the SRC Dissenting Shareholder’s name and address, the number of SRC Dissenting Shares held by the SRC Dissenting Shareholder, and a Demand for Payment of the fair value of such SRC Dissenting Shares. Within 30 days after sending a Demand for Payment, the SRC Dissenting Shareholder must send to SRC, Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2750, Toronto Ontario M5J 2J2, the certificates representing the SRC Dissenting Shares. An SRC Dissenting Shareholder who fails to send the certificates representing the SRC Dissenting Shares forfeits its right to make a claim under Section 190 of the CBCA.

No later than seven days after the later of the Effective Date and the date on which, as applicable, a Demand for Payment of an SRC Dissenting Shareholder is received, SRC must send to each SRC Dissenting Shareholder who has sent a Demand for Payment a written offer (an “Offer to Pay”) for its SRC Dissenting Shares in an amount considered by the SRC Board to be the fair value of the SRC Dissenting Shares, accompanied by a statement showing the manner in which the fair value was determined.

Payment for the SRC Dissenting Shares of an SRC Dissenting Shareholder must be made within 10 days after an Offer to Pay has been accepted by an SRC Dissenting Shareholder, but any such Offer to Pay lapses if an acceptance thereof is not received within 30 days after the Offer to Pay has been made. If an Offer to Pay for the SRC Dissenting Shares of an SRC Dissenting Shareholder is not made, or if an SRC Dissenting Shareholder fails to accept an Offer to Pay that has been made, SRC may apply to a court to fix a fair value for the SRC Dissenting Shares of SRC Dissenting Shareholders; such application may be made within 50 days after the Effective Date or within such further period as a court may allow.

If no such application is made, an SRC Dissenting Shareholder may apply to the Court for the same purpose within a further period of 20 days or within such further period as a court may allow. An SRC Dissenting Shareholder is not required to give security for costs in such an application.

Upon an application to the Court, all SRC Dissenting Shareholders whose SRC Dissenting Shares have not been purchased will be joined as parties and bound by the decision of the Court, and each affected SRC Dissenting Shareholder shall be notified of the date, place and consequences of the application and of its 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 an SRC Dissenting Shareholder who should be joined as a party, and the Court will then fix a fair value for the SRC Dissenting Shares of all such SRC Dissenting Shareholders. The Final Order of the Court will be rendered against SRC in favour of each SRC Dissenting Shareholder joined as a party and for the amount of the SRC Dissenting 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 SRC Dissenting Shareholder from the Effective Date until the date of payment.

Registered SRC Shareholders who are considering exercising Dissent Rights should be aware that there can be no assurance that the fair value of their SRC Shares as determined under the applicable provisions of the CBCA (as modified by the Plan of Arrangement and the Interim Order) will be more than or equal to the Consideration payable under the Arrangement. In addition, any judicial determination of fair value may result in a delay of receipt by an SRC Dissenting Shareholder of consideration for such SRC Dissenting Shareholder’s SRC Dissenting Shares.

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The above is only a summary of the provisions of the CBCA pertaining to Dissent Rights, as modified by the Interim Order and the Plan of Arrangement, which are technical and complex. If you are a Registered SRC Shareholder and wish to exercise your Dissent Rights, you should seek your own legal advice as failure to strictly comply with the provisions of the CBCA, as modified by the Interim Order and the Plan of Arrangement, will result in the loss of your Dissent Rights. For a general summary of certain income tax implications to an SRC Dissenting Shareholder, see “Certain Canadian Federal Income Tax Considerations Relating to the Arrangement”. Registered SRC Shareholders considering exercising Dissent Rights should also seek the advice of their own tax and investment advisors.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE ARRANGEMENT

The following is a summary of the principal Canadian federal income tax considerations under the Tax Act, as of the date hereof, generally applicable to an SRC Shareholder who, for purposes of the Tax Act and at all relevant times (i) is a beneficial owner of SRC Shares, (ii) deals at arm’s length with SRC and ADI (iii) is not affiliated with SRC or ADI, (iv) holds the SRC Shares, and will hold ADI Shares acquired pursuant to the Arrangement, as capital property, and (v) who disposes of SRC Shares pursuant to the Arrangement (for the purpose of this summary, a “Holder”).

SRC Shares and ADI Shares generally will be considered capital property to a Holder for purposes of the Tax Act unless the Holder holds such shares in the course of carrying on a business of buying and selling securities or the Holder has acquired or holds them in a transaction or transactions considered to be an adventure or concern in the nature of trade. Such Holders should consult their own tax advisors.

This summary does not apply to a Holder (i) that is a “financial institution”, for the purposes of the mark-to-market rules in the Tax Act; (ii) an interest in which is a “tax shelter investment”, as defined in the Tax Act; (iii) that is a “specified financial institution”, as defined in the Tax Act; (iv) that has made a “functional currency” election under section 261 of the Tax Act; or (v) that has entered, or will enter, into a “derivative forward agreement” as such term is defined in the Tax Act with respect to SRC Shares or ADI Shares.

This summary does not address the possible application of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act to a Holder that (i) is a corporation resident in Canada and (ii) is (or does not deal at arm’s length for purposes of the Tax Act with a corporation resident in Canada that is), or becomes as part of a transaction or event or series of transactions or events that includes the acquisition of an ADI Share, controlled by a non-resident corporation for purposes of such rules. Such Holders should consult their own tax advisors with respect to the possible application of these rules.

This summary is based on the current provisions of the Tax Act in force as of the date hereof and an understanding of the current published administrative policies and assessing practices of the CRA made publicly available prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act that have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that the Tax Proposals will be enacted in the form proposed. No assurance can be given that the Tax Proposals will be enacted in the form proposed, or at all. This summary does not otherwise take into account or anticipate any other changes in law, whether by judicial, governmental or legislative decision or action or changes in the administrative policies or assessing practices of the CRA, nor does it take into account provincial, territorial or foreign tax legislation or considerations, which may differ materially from those described in this summary.

This summary is of a general nature only and is not, and is not intended to be, nor should it be construed to be, legal or tax advice or representations to any particular Holder. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, Holders are urged to consult their own legal and tax advisors with respect to the tax consequences to them having regard to their particular circumstances, including the application and effect of the income and other tax laws of any country, province or other jurisdiction that may be applicable to the Holder.

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Holders Resident in Canada

This part of the summary is applicable only to a Holder who, for purposes of the Tax Act and at all relevant times, is resident, or is deemed to be resident, in Canada (for the purpose of this summary, a “Resident Holder”).

Certain Resident Holders whose SRC Shares or ADI Shares might not otherwise constitute capital property may be eligible to make an irrevocable election in accordance with subsection 39(4) of the Tax Act to have their SRC Shares and ADI Shares and every other “Canadian security” (as defined in the Tax Act) owned by such Resident Holder in the taxation year in which the election is made and in all subsequent taxation years be deemed to be capital property. Resident Holders contemplating such an election should first consult their own tax advisors.

Disposition of SRC Shares Pursuant to the Arrangement

Pursuant to the Arrangement, each outstanding SRC Share owned by an SRC Shareholder (other than SRC Shares owned by SRC Dissenting Shareholders who are entitled to be paid fair value for their SRC Dissenting Shares) shall be transferred to ADI in exchange for the issuance by ADI to such SRC Shareholder of the Consideration (being three ADI Shares per SRC Share). A capital gain or capital loss that would otherwise be realized by a Resident Holder on the exchange of an SRC Share for the Consideration may be deferred under the provisions of subsection 85.1(1) of the Tax Act.

In general, under these provisions a Resident Holder will be deemed to have disposed of the Resident Holder’s SRC Shares for proceeds of disposition equal to the adjusted cost base of such shares to the Resident Holder immediately before the disposition, and will be deemed to have acquired the ADI Shares at a cost equal to such adjusted cost base. This deferral will not apply where (i) such Resident Holder has, in the Resident Holder’s income tax return for the year of the exchange, included in computing its income for that year any portion of the gain or loss otherwise determined from the disposition of such an exchanged SRC Share; or (ii) immediately after the exchange, such Resident Holder, or persons with whom such Resident Holder does not deal at arm’s length for purposes of the Tax Act, or such Resident Holder together with such persons, either controls ADI or beneficially owns shares of the capital stock of ADI having a fair market value of more than 50% of the fair market value of all outstanding shares of the capital stock of ADI. Resident Holders are referred to CRA Income Tax Folio S4-F5-C1 for further information concerning section 85.1 of the Tax Act.

Resident Holders who in their income tax returns for the year of exchange include in their income for such year any portion of the gain or loss otherwise determined in respect of the exchange of an SRC Share will be considered to have disposed of such exchanged SRC Share for proceeds of disposition equal to the fair market value of the ADI Shares received in exchange therefor and to have acquired such ADI Shares at a cost equal to such fair market value. Such Resident Holders will realize a capital gain (or capital loss) equal to the amount, if any, by which such proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Resident Holders of the exchanged SRC Shares immediately before the disposition. For a description of the treatment of capital gains and capital losses, see “Holders Resident in Canada – Taxation of Capital Gains and Capital Losses” below.

If a Resident Holder owns ADI Shares as capital property immediately prior to the Arrangement, the adjusted cost base of all ADI Shares owned by the Resident Holder as capital property immediately after the Arrangement will be determined by averaging the cost of the ADI Shares acquired on the exchange pursuant to the Arrangement with the adjusted cost base of those other ADI Shares owned by the Resident Holder immediately prior to the Arrangement.

Taxation of Capital Gains and Capital Losses

Generally, a Resident Holder will be required to include in computing such Resident Holder’s income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized in that year. A Resident Holder generally will be required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a taxation year from taxable capital gains realized by the Resident Holder in that year. Allowable capital losses in excess of taxable capital gains realized in a taxation year may be carried back to any of the three preceding taxation

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years or carried forward to any subsequent taxation year and deducted against net taxable capital gains realized in such years, subject to and in accordance with the detailed rules contained in the Tax Act.

The amount of any capital loss realized on the disposition of an SRC Share or ADI Share by a Resident Holder that is a corporation may, to the extent and under the circumstances specified by the Tax Act, be reduced by the amount of any dividends received or deemed to have been received by the corporation on such share (or on a share for which such share is substituted or exchanged). Similar rules may apply where shares are owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Resident Holders to whom these rules may be relevant are urged to consult their own tax advisors.

SRC Dissenting Shareholders

An SRC Dissenting Shareholder that is entitled to be paid fair value for its SRC Dissenting Shares will be deemed to transfer such SRC Dissenting Shares to SRC for cancellation in consideration for a right to receive a cash payment equal to such fair value from SRC. An SRC Dissenting Shareholder that is a Resident Holder (for the purpose of this summary, a “Dissenting Resident Holder”) who is paid fair value for such SRC Dissenting Shares by SRC will be deemed to have received a dividend equal to the amount, if any, by which the cash received in respect of the fair value of such Dissenting Resident Holder’s SRC Dissenting Shares (other than in respect of interest awarded by a court) exceeds the “paid-up capital” of such SRC Dissenting Shares as determined under the Tax Act.

In general, the tax consequences described under “Holders Resident in Canada – Holding and Disposing of ADI Shares – Dividends on ADI Shares” below will apply in respect of any dividend deemed to be received by a Dissenting Resident Holder as a result of disposing of such Dissenting Resident Holder’s SRC Dissenting Shares to SRC.

A Dissenting Resident Holder will also be considered to have disposed of SRC Dissenting Shares for proceeds of disposition equal to the cash payment received in respect of such Dissenting Resident Holder’s SRC Dissenting Shares less any amount that is deemed to be a dividend received by the Dissenting Resident Holder and less any amount in respect of interest awarded by a court. A Dissenting Resident Holder will realize a capital gain (or a capital loss) to the extent that the proceeds of disposition, adjusted as described above, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Dissenting Resident Holder of the SRC Dissenting Shares immediately prior to the disposition. For a description of the tax treatment of capital gains and capital losses, see “Holders Resident in Canada – Taxation of Capital Gains and Capital Losses” above.

A Dissenting Resident Holder will be required to include in computing its income any interest awarded by a court in connection with the Arrangement.

In general, the tax consequences as described above under “Holders Resident in Canada –Disposition of SRC Shares Pursuant to the Arrangement” should apply to an SRC Dissenting Shareholder that is a Resident Holder who is deemed to have participated in the Arrangement on the same basis as non-dissenting SRC Shareholders and is entitled to receive the Consideration under the Arrangement that such SRC Dissenting Shareholder would have received had it not exercised Dissent Rights.

SRC Dissenting Shareholders are urged to consult their own tax advisors.

Holding and Disposing of ADI Shares

Dividends on ADI Shares

Dividends (including deemed dividends) paid or credited on ADI Shares will be required to be included in a Resident Holder’s income for the purposes of the Tax Act. Such dividends received by a Resident Holder who is an individual (other than certain trusts) will be subject to the gross-up and dividend tax credit rules in the Tax Act normally applicable to taxable dividends received from taxable Canadian corporations. An enhanced dividend tax credit will be available to individuals in respect of “eligible dividends” (as defined in the Tax Act) designated by

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ADI to the Resident Holder in accordance with the provisions of the Tax Act. There may be limitations on the ability of ADI to designate dividends as eligible dividends.

In the case of a Resident Holder of ADI Shares that is a corporation, dividends received on ADI Shares will be required to be included in computing the corporation’s income for the taxation year in which such dividends are received and will generally be deductible in computing the corporation’s taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain. Resident Holders that are corporations should consult their own tax advisors having regard to their own circumstances.

A Resident Holder of ADI Shares that is a “private corporation” or “subject corporation” (each as defined in the Tax Act) may be liable under Part IV of the Tax Act to pay a refundable tax on dividends received (or deemed to be received) on ADI Shares to the extent that such dividends are deductible in computing the Resident Holder’s taxable income.

Disposition of ADI Shares

A disposition or deemed disposition of an ADI Share by a Resident Holder (other than a disposition to ADI in circumstances other than a purchase by ADI in the open market in the manner in which shares are normally purchased by a member of the public in the open market) will generally result in the realization of a capital gain (or a capital loss) to the extent that the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Resident Holder of the ADI Share immediately before the disposition. For a description of the tax treatment of capital gains and capital losses, see “Holders Resident in Canada — Taxation of Capital Gains and Capital Losses” above.

Additional Refundable Tax

A Resident Holder that is throughout the year a “Canadian-controlled private corporation”, as defined in the Tax Act, may be liable to pay an additional refundable tax on certain investment income, including taxable capital gains realized, interest and certain dividends.

Minimum Tax

Capital gains realized and dividends received or deemed to be received by a Resident Holder that is an individual, other than certain specified trusts, may give rise to minimum tax under the Tax Act. Resident Holders should consult their own advisors with respect to the application of the minimum tax.

Eligibility for Investment

Provided the ADI Shares are listed on a “designated stock exchange” as defined in the Tax Act (which includes the TSX and Tiers 1 and 2 of the TSXV) at the time of issuance pursuant to the Arrangement, the ADI Shares will be qualified investments under the Tax Act at the time of issuance pursuant to the Arrangement for a trust governed by a RRSP, RRIF, deferred profit sharing plan, registered disability savings plan, registered education savings plan or a TFSA.

Notwithstanding that the ADI Shares may be qualified investments, the holder of a TFSA or the annuitant under an RRSP or RRIF will be subject to a penalty tax in respect of ADI Shares if the ADI Shares are a “prohibited investment” (as defined in the Tax Act) for the TFSA, RRSP or RRIF, as the case may be. The ADI Shares generally will not be a “prohibited investment” for a TFSA, RRSP or RRIF provided the holder or annuitant thereof, as the case may be, (i) deals at arm’s length with ADI for purposes of the Tax Act and (ii) does not have a “significant interest” (as defined in the Tax Act) in ADI. In addition, ADI Shares will not be a prohibited investment for a TFSA, RRSP or RRIF if such shares are “excluded property” (as defined in the Tax Act) for such TFSA, RRSP or RRIF. Resident Holders to whom these rules may be relevant are urged to consult their own tax advisors in this regard.

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Holders Not Resident in Canada

This part of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act and any applicable income tax treaty or convention, is not resident, and is not deemed to be resident, in Canada and does not use or hold, and is not deemed to use or hold, SRC Shares or ADI Shares in connection with carrying on a business in Canada (for the purpose of this summary, a “Non-Resident Holder”). This part of the summary is not applicable to Non-Resident Holders that are insurers carrying on an insurance business in Canada and elsewhere.

Disposition of SRC Shares Pursuant to the Arrangement

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of SRC Shares pursuant to the Arrangement unless those SRC Shares constitute “taxable Canadian property” and are not “treaty-protected property” of the Non-Resident Holder.

Provided that at the time of disposition the SRC Shares are listed on a “designated stock exchange” as defined in the Tax Act (which includes the TSX and Tiers 1 and 2 of the TSXV), an SRC Share generally will not constitute taxable Canadian property of a Non-Resident Holder at the time of disposition unless at any time during the 60-month period immediately preceding the time of disposition (a) the Non-Resident Holder, persons with whom the Non-Resident Holder did not deal at arm’s length, partnerships in which the Non-Resident Holder or a person with whom the Non-Resident Holder did not deal at arm’s length holds a membership interest directly or indirectly through one or more partnerships, or the Non-Resident Holder together with any combination of such persons or partnerships, owned 25% or more of the issued shares of any class of shares of SRC, and (b) more than 50% of the fair market value of the SRC Share was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in the Tax Act), and options in respect of, or interests in, or for civil law rights in, any such property (whether or not such property exists). Notwithstanding the foregoing, SRC Shares may, in certain circumstances, be deemed to be taxable Canadian property to a Non-Resident Holder for the purposes of the Tax Act. Non-Resident Holders whose SRC Shares may constitute taxable Canadian property are urged to consult their own tax advisors for advice having regard to their particular circumstances.

Even if SRC Shares are considered to be taxable Canadian property to a Non-Resident Holder, a taxable capital gain (or an allowable capital loss) resulting from the disposition of such SRC Shares will not be included (or deducted) in computing the Non-Resident Holder’s income for purposes of the Tax Act if the SRC Shares constitute “treaty-protected property”, as defined in the Tax Act. SRC Shares owned by a Non-Resident Holder will generally be treaty-protected property if the gain from the disposition of such shares would, because of an applicable income tax treaty or convention to which Canada is a signatory, be exempt from tax under Part I of the Tax Act.

A Non-Resident Holder whose SRC Shares are considered to be taxable Canadian property but not treaty protected property to the Non-Resident Holder on the disposition thereof pursuant to the Arrangement may be entitled to the automatic tax deferral provisions of subsection 85.1(1) of the Tax Act as described above under the heading “Holders Resident in Canada – Disposition of SRC Shares Pursuant to the Arrangement” if such Non-Resident Holder satisfies the conditions set out under such heading and such Non-Resident Holder is generally not a foreign affiliate of a taxpayer resident in Canada and has not included the gain or loss otherwise determined in its “foreign accrual property income” (as defined in the Tax Act). If subsection 85.1(1) of the Tax Act applies in respect of a disposition by a Non-Resident Holder of SRC Shares that are taxable Canadian property, ADI Shares received pursuant to the Arrangement will be deemed to be taxable Canadian property to such Non-Resident Holder in accordance with the rules in the Tax Act.

If the SRC Shares are considered to be taxable Canadian property but not treaty-protected property to a particular Non-Resident Holder and the provisions of subsection 85.1(1) of the Tax Act do not apply, upon a disposition of SRC Shares pursuant to the Arrangement such Non-Resident Holder will realize a capital gain (or capital loss) generally in the circumstances and computed in the manner described above under “Holders Resident in Canada – Holding and Disposing of ADI Shares – Disposition of ADI Shares” and “Holders Resident in Canada – Taxation of Capital Gains and Losses” as if the Non-Resident Holder were a Resident Holder thereunder.

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SRC Dissenting Shareholders

An SRC Dissenting Shareholder that is entitled to be paid fair value for its SRC Dissenting Shares will be deemed to transfer such SRC Dissenting Shares to SRC for cancellation in consideration for a right to receive a cash payment equal to such fair value from SRC. A dividend will be deemed to have been paid or credited to an SRC Dissenting Shareholder that is paid fair value for its SRC Dissenting Shares by SRC and that is a Non-Resident Holder (for the purpose of this summary, a “Dissenting Non-Resident Holder”) equal to the amount, if any, by which the cash received in respect of the fair value of such Dissenting Non-Resident Holder’s SRC Dissenting Shares (other than in respect of interest awarded by the court) exceeds the “paid-up capital” of such SRC Dissenting Shares as determined under the Tax Act.

In general, the tax consequences described below under “Holders Not Resident in Canada – Holding and Disposing of ADI Shares – Dividends on ADI Shares” should apply in respect of any dividend that is deemed to be paid or credited by SRC to a Dissenting Non-Resident Holder in respect of a disposition by the Dissenting Non-Resident Holder of SRC Dissenting Shares to SRC.

A Dissenting Non-Resident Holder will also be considered to have disposed of its SRC Dissenting Shares to SRC. In general, the tax consequences described above under “Holders Not Resident in Canada – Disposition of SRC Shares Pursuant to the Arrangement” (other than with respect to the availability of the automatic deferral provisions in subsection 85.1(1) of the Tax Act) should apply to a Dissenting Non-Resident Holder in respect of the disposition of its SRC Shares to SRC.

Any interest paid or credited to a Dissenting Non-Resident Holder in respect of the exercise of Dissent Rights will generally not be subject to Canadian withholding tax.

In general, the tax consequences as described above under “Holders Not Resident in Canada –Disposition of SRC Shares Pursuant to the Arrangement” should apply to an SRC Dissenting Shareholder that is a Non-Resident Holder who is deemed to have participated in the Arrangement on the same basis as non-dissenting SRC Shareholders and is entitled to receive the Consideration under the Arrangement that such SRC Dissenting Shareholder would have received had it not exercised Dissent Rights.

Dissenting Non-Resident Holders are urged to consult their own tax advisors.

Holding and Disposing of ADI Shares

Dividends on ADI Shares

Any dividends paid or credited, or deemed to be paid or credited, to a Non-Resident Holder on ADI Shares will be subject to Canadian withholding tax at a rate of 25%, subject to any reduction pursuant to an applicable income tax treaty or convention. For example, under the Canada-U.S. Tax Convention, where dividends are paid to, or in certain circumstances derived by, a Non-Resident Holder who is a U.S. resident for the purpose of, and who is entitled to the benefits in accordance with the provisions of, the Canada-U.S. Tax Convention, the applicable rate of Canadian withholding tax may generally be reduced to 15%.


A Non-Resident Holder who holds ADI Shares that are not “taxable Canadian property” will not be subject to tax under the Tax Act on a capital gain arising on the disposition of such ADI Shares (other than a disposition to ADI). The circumstances in which ADI Shares may constitute “taxable Canadian property” will be the same as described above under “Holders Not Resident in Canada – Disposition of SRC Shares Pursuant to the Arrangement”.

Even if ADI Shares are considered to be “taxable Canadian property” to a Non-Resident Holder, a taxable capital gain resulting from the disposition of ADI Shares will not be included in computing the Non-Resident Holder’s income for purposes of the Tax Act if the ADI Shares constitute “treaty-protected property”. The circumstances in which ADI Shares may constitute “treaty protected property” will be the same as described above under “Holders

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Not Resident in Canada – Disposition of SRC Shares Pursuant to the Arrangement”. Non-Resident Holders who hold ADI Shares that are or may be “taxable Canadian property” are urged to consult their own advisors as to the Canadian income tax consequences of disposing of ADI Shares.

In the event that ADI Shares constitute taxable Canadian property but not “treaty-protected property” to a particular Non-Resident Holder, the tax consequences as described above under “Holders Resident in Canada – Holding and Disposing of ADI Shares – Disposition of ADI Shares” and “Holders Resident in Canada – Taxation of Capital Gains and Losses” will generally apply as if such Non-Resident Holder were a Resident Holder thereunder.

A Non-Resident Holder who disposes of taxable Canadian property is urged to consult such Non-Resident Holder’s own tax advisors regarding any resulting Canadian reporting obligations.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE ARRANGEMENT

Scope of this Disclosure

The following is a discussion of certain material U.S. federal income tax considerations generally applicable to the Arrangement and the ownership and disposition of the ADI Shares received pursuant to the Arrangement to U.S. Holders of the SRC Shares. This summary is for general information purposes only and does not purport to be a complete analysis or listing of all of the U.S. federal income tax considerations that may be relevant to a U.S. Holder with respect to the Arrangement and the ownership and disposition of ADI Shares received pursuant to the Arrangement. In addition, this summary does not take into account the individual facts and circumstances that may affect particular U.S. Holders and the U.S. federal income tax considerations that may be relevant in such circumstances. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice to any U.S. Holder. Each U.S. Holder is urged to consult its own tax advisor regarding the U.S. federal, U.S. state and local, and non-U.S. tax consequences of the Arrangement and the ownership and disposition of ADI Shares received pursuant to the Arrangement.

This summary is based on the Code, existing and proposed Treasury regulations promulgated under the Code, applicable judicial decisions, published IRS rulings and other administrative guidance, the Canada-U.S. Tax Convention and authoritative guidance on the interpretation and implementation of the Canada-U.S. Tax Convention, in each case as in effect and available on the date of this Joint Circular. All of the preceding authorities are subject to change, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those discussed below. No ruling has been or will be sought from the IRS with respect to the matters described in this summary and there is no assurance that the IRS will not challenge, or the IRS or U.S. courts will not disagree with, any of the conclusions reached and described herein.

For purposes of this summary, a “U.S. Holder” is a beneficial owner of SRC Shares (or, following completion of the Arrangement, ADI Shares) that, for U.S. federal income tax purposes, is (a) a citizen or individual resident of the United States as determined for U.S. federal income tax purposes, (b) a corporation (or an entity taxable as a corporation) created or organized under the laws of the United States, any state thereof, or in the District of Columbia, (c) an estate, the income of which is subject to U.S. federal income tax without regard to its source, or (d) a trust if: (i) a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (ii) the trust has an election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a pass-through entity, including a partnership or other entity classified as a partnership for U.S. federal income tax purposes, is a beneficial owner of SRC Shares (or, following completion of the Arrangement, ADI Shares), the U.S. federal income tax treatment generally will depend on the status of the partners or other owners and the activities of the partnership or other pass-through entity. Partners and other owners of pass-through entities that own SRC Shares are urged to consult their own tax advisors regarding the tax consequences of the Arrangement and the ownership and disposition of ADI Shares received pursuant to the Arrangement.

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For purposes of this summary, a “Non-U.S. Holder” is a beneficial owner of SRC Shares that is not a U.S. Holder. This summary does not address U.S. federal income tax considerations applicable to Non-U.S. Holders. Non-U.S. Holders are urged to consult their own tax advisors regarding the U.S. federal, state and local, and non-U.S. tax consequences of the Arrangement (including the potential application and operation of tax treaties) and the ownership and disposition of ADI Shares received pursuant to the Arrangement.

This summary deals only with U.S Holders who hold their SRC Shares (or, following the completion of the Arrangement, will hold their ADI Shares) as capital assets for U.S. federal income tax purposes (generally, property held for investment) and does not address U.S. federal income tax considerations applicable to U.S. Holders that are subject to special U.S. federal income tax rules, including U.S. Holders: (a) that own (or have or will own), directly or by attribution, 5% or more, by voting power or value, of the outstanding SRC Shares (or, following the completion of the Arrangement, ADI Shares); (b) that are tax-exempt entities (including private foundations), qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (c) that are banks or other financial institutions, insurance companies, real estate investment trusts, or regulated investment companies or that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) that have a “functional currency” other than the U.S. dollar; (e) that are subject to the U.S. federal alternative minimum tax; (f) that own SRC Shares (or, following the completion of the Arrangement, ADI Shares) as part of a straddle, hedging arrangement, conversion arrangement, constructive sale transaction or other integrated transaction; (g) that acquired SRC Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (h) who are U.S. expatriates or former long-term residents of the U.S; (i) that are partnerships and other pass-through entities or investors in such entities; or (j) that are controlled foreign corporations or passive foreign investment companies. These and other U.S. Holders that are subject to special U.S. federal income tax rules are urged to consult their own tax advisors regarding the U.S. federal, state and local and non-U.S. tax consequences of the Arrangement and the ownership and disposition of ADI Shares received pursuant to the Arrangement.

This summary does not address the U.S. federal income tax consequences of the Arrangement to a U.S. Holder that is a resident of Canada. Such holders are urged to consult their own tax advisors regarding the U.S. federal, state and local, and non-U.S. tax consequences of the Arrangement and the ownership and disposition of ADI Shares received pursuant to the Arrangement.

This summary does not address the U.S. state and local, U.S. estate and gift, U.S. 3.8% tax on net investment income or any non-U.S. tax consequences to U.S. Holders of the Arrangement or the ownership and disposition of ADI Shares received pursuant to the Arrangement. U.S. Holders are urged to consult their own tax advisor regarding such tax consequences.

U.S. Federal Income Tax Consequences of the Arrangement

Exchange of SRC Shares Pursuant to the Arrangement

Except as discussed below in “—PFIC Status of SRC”, the exchange of SRC Shares for ADI Shares pursuant to the Arrangement is intended to qualify as a “reorganization” under section 368(a) of the Code (a “Reorganization”). Because the determination of whether the Arrangement qualifies as a Reorganization depends on the resolution of complex issues and facts, some of which will not be known until the closing of the Arrangement, there can be no assurance that the Arrangement will qualify as a Reorganization. The U.S. federal income tax consequences of the Arrangement qualifying as a Reorganization or as a taxable transaction are discussed below. U.S. Holders are urged to consult their own tax advisors regarding the proper tax reporting of the Arrangement.

Subject to the PFIC rules discussed below, treatment of the Arrangement as a Reorganization generally would result in the following U.S. federal income tax consequences of the exchange by U.S. Holders of SRC Shares for ADI Shares pursuant to the Arrangement:

(a) no gain or loss would be recognized by a U.S. Holder on the exchange of SRC Shares for ADI Shares pursuant to the Arrangement;

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(b) a U.S. Holder’s adjusted tax basis in the ADI Shares received in exchange for SRC Shares pursuant to the Arrangement would be equal to the U.S. Holder’s adjusted tax basis in the SRC Shares exchanged;

(c) a U.S. Holder’s holding period in the ADI Shares received in exchange for SRC Shares pursuant to the Arrangement would include the U.S. Holder’s holding period in the SRC Shares exchanged; and

(d) a U.S. Holder that exchanges SRC Shares for ADI Shares pursuant to the Arrangement would be required to report certain information to the IRS on its U.S. federal income tax return for the taxable year in which the Arrangement occurs, and would be required to retain certain records related to the Arrangement.

PFIC Status of SRC

Certain adverse U.S. federal income tax rules could apply to U.S. persons owning stock of a passive foreign investment company (a “PFIC”). A non-U.S. entity that is treated as a corporation for U.S. federal income tax purposes is a PFIC for any taxable year in which, either (i) at least 75% of its gross income is passive income (as defined for such purpose) or (ii) at least 50% of the average value of its assets is attributable to assets that produce or are held for the production of passive income. For this purpose, passive income generally includes, among other things, dividends, interest, certain rents and royalties, gains from the disposition of passive assets and certain net gains from commodities transactions. “Look-through” and other special rules treat certain income and assets of subsidiaries and other wholly or partially owned entities as directly and indirectly owned by the non-U.S. entity in testing whether the non-U.S. entity is a PFIC.

Section 1291(f) of the Code provides that, to the extent provided in U.S. Treasury regulations, any gain on the transfer of stock in a PFIC shall be recognized notwithstanding any other provision of law. As a result, pursuant to proposed U.S. Treasury regulations promulgated under Section 1291(f) (the “Proposed Regulations”), and subject to the discussion in the next paragraph, U.S. Holders may be required to recognize gain, if any, on the exchange, even if the Arrangement otherwise qualifies as a Reorganization. If gain is required to be recognized as a result of Section 1291(f) of the Code and the Proposed Regulations, a U.S. Holder of SRC Shares that exchanged SRC Shares for ADI Shares generally would recognize taxable gain on the exchange, unless one of several elections (as discussed below in “—PFIC Status of ADI”) for alternate tax treatment was made by the U.S. Holder. In such case, any gain realized on the exchange would be treated as ordinary income and would be subject to tax as if (a) the gain had been realized ratably over the U.S. Holder’s holding period, (b) the portion of the gain that would be allocable to prior taxable years, other than any year before SRC became a PFIC, would be subject to U.S. federal income tax at the highest rate applicable to ordinary income for the relevant taxable years, regardless of the tax rate otherwise applicable to the U.S. Holder, and (c) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in prior taxable years (other than any year before SRC became a PFIC).

However, the Proposed Regulations provide that where a U.S. Holder of shares of a corporation that is a PFIC exchanges the shares of such corporation for shares of another corporation that is a PFIC in a transaction that qualifies as a tax-free reorganization pursuant to section 368 of the Code, the general rule described above does not apply and the exchange is generally treated as a tax-free reorganization for U.S. federal income tax purposes.

Based on current assets and activities and on assumptions about activities during the balance of the current taxable year, we believe that each of SRC and ADI will be classified as a PFIC for the current taxable year and in some or all years preceding the Arrangement, and may be a PFIC in future taxable years. However, PFIC classification for any taxable year is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and is fundamentally factual in nature, and the determination of SRC and ADI’s PFIC status is made annually based on the types of income SRC and ADI earn and the type and value of their assets in each such year, as well as on the application of complex U.S. federal income tax rules, including “look through” rules with respect to their subsidiaries, and cannot be determined until the end of such taxable year. Accordingly, if the Proposed Regulations were finalized and made applicable to the Arrangement (even if this occurs after the Effective Date of the Arrangement), no assurances can be provided that the exchange of SRC Shares for ADI Shares would not be

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treated as a taxable transaction pursuant to Section 1291(f) of the Code and the U.S. Treasury regulations promulgated thereunder. If finalized in their current form, the Proposed Regulations would be effective for transactions occurring on or after April 11, 1992. Because the Proposed Regulations have not yet been adopted in final form, they are not currently effective, and there is no assurance that they will be adopted in the form and with the effective date proposed. Nevertheless, the IRS has announced that, in the absence of final U.S. Treasury regulations, taxpayers may apply reasonable interpretations of the Code provisions applicable to PFICs and that it considers the rules set forth in the Proposed Regulations to be reasonable interpretations of those Code provisions. The PFIC rules are complex, and the implementation of certain aspects of the PFIC rules requires the issuance of U.S. Treasury regulations which in many instances have not been promulgated and which, when promulgated, may have retroactive effect. U.S. Holders are urged to consult their own tax advisors about the potential PFIC status of SRC and ADI, the tax consequences of such status with respect to the Arrangement and the availability of elections for alternate tax treatment.

Treatment As a Taxable Transaction

If the exchange of SRC Shares for ADI Shares pursuant to the Arrangement did not qualify as a Reorganization, a U.S. Holder generally would recognize taxable gain or loss on the exchange equal to the difference, if any, between the fair market value of the ADI Shares (determined as of the Effective Date) received in exchange for SRC Shares pursuant to the Arrangement and its adjusted tax basis in SRC Shares exchanged. Any such gain or loss should be capital gain or loss and would be long-term capital gain or loss if the U.S. Holder held the SRC Shares for more than one year at the time of the exchange. Long-term capital gains of non-corporate U.S. Holders are generally eligible for reduced rates of taxation and the deductibility of capital losses for U.S. federal income tax purposes is subject to limitations.

However, if SRC is treated as a PFIC (as discussed above in “—PFIC Status of SRC”), unless one of several elections for alternate tax treatment was made by the U.S. Holder, any gain realized on the exchange would be treated as ordinary income and would be subject to tax as if (a) the gain had been realized ratably over the U.S. Holder’s holding period, (b) the portion of the gain that would be allocable to prior taxable years, other than any year before SRC became a PFIC, would be subject to U.S. federal income tax at the highest rate applicable to ordinary income for the relevant taxable years, regardless of the tax rate otherwise applicable to the U.S. Holder, and (c) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in prior taxable years (other than any year before SRC became a PFIC). These rules would apply to a U.S. Holder that held SRC Shares during any year in which SRC were a PFIC, even if SRC were not a PFIC in the year in which the U.S. Holder disposed of the SRC Shares pursuant to the Arrangement.

If the exchange were taxable for U.S. federal income tax purposes, a U.S. Holder’s initial tax basis in its ADI Shares would equal their fair market value and the holding period of the ADI Shares would begin on the day after the date of the exchange.

U.S. Holders Exercising Dissent Rights

Except as discussed above in “—PFIC Status of SRC”, a U.S. Holder that exercises Dissent Rights in the Arrangement and is paid cash for all of such U.S. Holder’s SRC Shares generally will recognize gain or loss in an amount equal to the difference, if any, between (a) the amount of cash received for the SRC Shares, and (b) the U.S. Holder’s adjusted tax basis in such shares surrendered. Such gain or loss generally will be capital gain or loss, which will be long-term if the SRC Shares have been held for more than one year. Long-term capital gains of non-corporate U.S. Holders are generally eligible for reduced rates of taxation and the deductibility of capital losses for U.S. federal income tax purposes is subject to limitations.

However, in the case of a taxable disposition of shares of a corporation that is a PFIC (as discussed above in “—PFIC Status of SRC”), unless one of several elections for alternate tax treatment was made by the U.S. Holder, any gain realized on the disposition would be treated as ordinary income and would be subject to tax as if (a) the gain had been realized ratably over the U.S. Holder’s holding period, (b) the portion of the gain that would be allocable to prior taxable years, other than any year before SRC became a PFIC, would be subject to U.S. federal income tax at the highest rate applicable to ordinary income for the relevant taxable years, regardless of the tax rate otherwise applicable to the U.S. Holder, and (c) the interest charge generally applicable to underpayments of tax had been

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imposed on the taxes deemed to have been payable in prior taxable years (other than any year before the SRC became a PFIC). These rules would apply to a U.S. Holder that held SRC Shares during any year in which SRC were a PFIC, even if SRC were not a PFIC in the year in which the U.S. Holder disposed of the SRC Shares pursuant to the Arrangement.

U.S. Federal Income Tax Consequences of the Ownership and Disposition of ADI Shares

Distributions on ADI Shares following the Arrangement

Except as discussed below in “—PFIC Status of ADI” a U.S. Holder that receives a distribution on ADI Shares, including a constructive distribution, generally must include the amount distributed (plus any Canadian income tax withheld from the distribution) in income as a dividend to the extent of ADI’s current and accumulated “earnings and profits” (as determined for U.S. federal income tax purposes). Such amount will be includable in gross income by U.S. Holders as ordinary income on the date that such holders actually or constructively receive the distribution in accordance with their regular method of accounting for U.S. federal income tax purposes. The amount of any distribution made by the ADI in property other than cash will be the fair market value of such property on the date of the distribution. Dividends on the ADI Shares will not be eligible for the dividends received deduction generally available to a U.S. corporation on dividends received from another U.S. corporation. However, ADI does not intend to maintain calculations of its earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by ADI with respect to the ADI Shares will constitute ordinary dividend income.

To the extent a distribution exceeds current and accumulated earnings and profits, as calculated in accordance with U.S. federal income tax principles, it will be treated first as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in the ADI Shares, causing a reduction in the holder’s adjusted tax basis in the ADI Shares held by such holder (and thereby increasing the amount of gain, or decreasing the amount of loss, to be recognized by such holder upon a subsequent disposition of the shares) and then as capital gain from the sale or exchange of the ADI Shares, which will be long-term capital gain if the U.S. Holder has held the ADI Shares for more than one year at the time of the distribution.

If a holder is eligible for benefits under the Canada-U.S. Tax Convention, such holder may be able to claim a reduced rate of Canadian withholding tax on any distribution to it. Holders are urged to consult their own tax advisors about their eligibility for reduction of Canadian withholding tax.

Distributions on ADI Shares that are treated as dividends generally will constitute income from sources outside the United States and generally will be categorized for U.S. foreign tax credit purposes as “passive category income.” U.S. Holders may be eligible to claim a deduction or a foreign tax credit, subject to other applicable limitations and holding period requirements, for Canadian tax withheld from such distributions at the appropriate rate. Holders should not be allowed a foreign tax credit for withholding tax for any portion of the tax that could have been avoided by claiming benefits under the Canada-U.S. Tax Convention. The rules governing the foreign tax credit are complex and involve the application of rules that depend upon a holder’s particular circumstances. Accordingly, holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances. Dividends on ADI Shares will not be eligible for the dividends received deduction generally available to U.S. Holders that are corporations.

The gross amount of distributions paid in Canadian dollars (including amounts withheld to pay Canadian withholding taxes) will be included by U.S. Holders in income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the distributions are paid regardless of whether the payment is in fact converted into U.S. dollars. If the Canadian dollars are converted into U.S. dollars on the date of the payment, U.S. Holders should not be required to recognize any foreign currency gain or loss with respect to the receipt of Canadian dollars as distributions. If, instead, the Canadian dollars are converted at a later date, the U.S. Holder may recognize gain or loss on the subsequent conversion of the Canadian dollars, which generally will be treated as U.S.-source ordinary income or loss for U.S. foreign tax credit purposes.

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Except as discussed below in “—PFIC Status of ADI” a U.S. Holder that sells or exchanges ADI Shares in a taxable disposition generally will recognize gain or loss on the disposition in an amount equal to the difference, if any, between (i) the amount realized on the taxable disposition and (ii) such holder’s adjusted tax basis in the shares. The gain or loss generally will be capital gain or loss, which will be long-term if the ADI Shares were held for more than one year at the time of the disposition. Long-term capital gains of non-corporate U.S. Holders may be generally eligible for reduced rates of taxation. Deductions for capital losses are subject to limitations under the Code.

Gain or loss, if any, that a U.S. Holder realizes upon a sale, exchange or other taxable disposition of the ADI Shares will be treated as having a United States source for U.S. foreign tax credit limitation purposes. Consequently, U.S. Holders may not be able to use any foreign tax credits arising from any Canadian tax imposed on the sale, exchange or other taxable disposition of ADI Shares unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources or unless an applicable treaty provides otherwise.

If U.S. Holders receive any foreign currency on the sale, exchange or other taxable disposition of ADI Shares, such holders may recognize ordinary income or loss as a result of currency fluctuations between the date of the sale, exchange or other taxable disposition of the ADI Shares and the date the proceeds thereof are converted into U.S. dollars. U.S. Holders are urged to consult their own tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of Canadian currency.

PFIC Status of ADI

Certain adverse U.S. federal income tax rules apply to U.S. persons owning stock of a PFIC. A foreign corporation will be considered a PFIC for any taxable year in which (i) 75% or more of its gross income is passive income, or (ii) 50% or more of the average value (or, if elected, the adjusted tax basis) of its assets are considered “passive assets” (generally, assets that generate passive income). For this purpose, passive income generally includes, among other things, dividends, interest, certain rents and royalties, gains from the disposition of passive assets and certain net gains from commodities transactions.

Based on current assets and activities and on assumptions about activities during the balance of the current taxable year, we believe that ADI will be classified as a PFIC for the current taxable year and in some or all years preceding the Arrangement, and may be a PFIC in future taxable years. However, PFIC classification for any taxable year is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and is fundamentally factual in nature, and the determination of ADI’s PFIC status is made annually based on the types of income ADI earns and the type and value of its assets in each such year, as well as on the application of complex U.S. federal income tax rules, including “look through” rules with respect to ADI’s Subsidiaries, and cannot be determined until the end of such taxable year. U.S. Holders are urged to consult their own tax advisors about the potential PFIC status of ADI, the tax consequences of such status with respect to the ownership and disposition of the ADI Shares and the availability of elections for alternate tax treatment.

If ADI were classified as a PFIC for any taxable year during which a U.S. Holder owns ADI Shares (regardless of whether ADI continues to be a PFIC), the U.S. Holder would be subject to special adverse rules, including taxation at maximum ordinary income rates plus an interest charge on both gains on the sale or other disposition of the ADI Shares and the receipt of certain receipt of certain distributions treated as “excess distributions,” unless the holder elects to be taxed currently (as discussed below) on its pro rata portion of ADI’s income, regardless of whether such income was actually distributed. An “excess distribution” generally would be any distribution to a holder with respect to the ADI Shares during a single taxable year that is greater than 125% of the average annual distributions received by the holder with respect to such shares during the three preceding taxable years or, if shorter, during the holder’s holding period for the shares. In addition, any dividends from a PFIC will not be qualified dividends, and therefore will not be eligible for the reduced rate that currently applies to certain dividends received by U.S. Holders that are not corporations.

Certain additional adverse tax rules will apply to a U.S. Holder for any taxable year in which ADI is treated as a PFIC with respect to such U.S. Holder and any subsidiary of ADI is also treated as a PFIC (a “Subsidiary PFIC”).

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In such a case, the U.S. Holder will generally be deemed to own its proportionate interest (by value) in any Subsidiary PFIC and be subject to the PFIC rules described above with respect to the Subsidiary PFIC regardless of such U.S. Holder’s percentage ownership in ADI.

In addition, certain special, generally adverse rules will apply to the ADI Shares if ADI is a PFIC. For example, under Section 1298(b)(6) of the Code, if a holder uses PFIC shares as security for a loan (including a margin loan) such holder will, except as may be provided in Treasury regulations, be treated as having made a taxable disposition of such shares. Gifts and exchanges pursuant to corporate reorganizations may also be treated as taxable dispositions of the ADI Shares.

Mark-to-Market Election

If the ADI Shares are regularly traded on a registered national securities exchange or certain other exchanges or markets, then such ADI Shares would constitute “marketable stock” for purposes of the PFIC rules, and a U.S. Holder generally would not be subject to the foregoing PFIC rules if such holder made a mark-to-market election. After making such an election, a U.S. Holder generally would include as ordinary income each year during which the election is in effect and during which ADI is a PFIC the excess, if any, of the fair market value of the ADI Shares at the end of the taxable year over such holder’s adjusted basis in such shares. These amounts of ordinary income would not be eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains.

U.S. Holders also would be allowed to take an ordinary loss in respect of the excess, if any, of their adjusted basis in their ADI Shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income that was previously included as a result of the mark-to-market election). A U.S. Holder’s tax basis in the ADI Shares would be adjusted to reflect any income or loss amounts resulting from a mark-to-market election.

If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless the ADI Shares ceased to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consented to the revocation of the election. U.S. Holders are urged to consult their tax advisor regarding the availability of the mark-to-market election, and whether the election would be advisable in their particular circumstances.

QEF Election

The PFIC tax rules outlined above also would not apply to a U.S. Holder if such holder alternatively elected to treat ADI as a “qualified electing fund” or “QEF”. An election to treat ADI as a QEF will not be available, however, if ADI does not provide the information necessary to make such an election. ADI has not provided, and does not intend to provide, the information necessary to make a QEF election, and thus, the QEF election will not be available with respect to the ADI Shares.

Notwithstanding any election made with respect to the ADI Shares, dividends received with respect to such shares should not constitute “qualified dividend income” if ADI is a PFIC in either the year of the Arrangement or the preceding taxable year. Dividends that do not constitute qualified dividend income are not eligible for taxation at the reduced tax rate discussed above. Instead, such dividends would be subject to tax at ordinary income rates. If a holder owns ADI Shares during any year in which ADI is a PFIC, such holder must also file IRS Form 8621.

Holders are urged to consult their tax advisors concerning the U.S. federal income tax consequences of holding ADI Shares if ADI is considered a PFIC in any taxable year.

Other Tax Considerations

Information Reporting; Taxpayer Identification Number and Backup Withholding

A U.S. Holder may be subject to information reporting and backup withholding with respect to distributions on, or proceeds from the sale, exchange or taxable disposition of, ADI Shares, unless such U.S. Holder (i) is an exempt

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recipient and, when required, establishes this exemption or (ii) in the case of backup withholding, provides the U.S. Holder’s correct taxpayer identification number (“TIN”), certifies that the U.S. Holder is not currently subject to backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A U.S. Holder can satisfy these requirements by completing and submitting Form W-9, which can be found on the IRS website at www.irs.gov. A U.S. Holder that does not provide the U.S. Holder’s correct TIN may be subject to penalties imposed by the IRS.

Backup withholding is not an additional tax; any amount so withheld may be credited against the U.S. Holder’s U.S. federal income tax liability. If backup withholding results in an overpayment of U.S. federal income taxes, a refund may be obtained from the IRS, provided that the required information is timely furnished to the IRS. A U.S. Holder that does not provide a correct U.S. taxpayer identification number also may be subject to penalties imposed by the IRS. U.S. Holders are urged to consult their own tax advisors regarding the applicability to them of these information reporting and backup withholding provisions and any exemptions that may be available.

Under legislation enacted in 2010, owners of “specified foreign financial assets” with an aggregate value in excess of $50,000 (and in some circumstances, a higher threshold), may be required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” generally include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons (including ADI Shares), (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties and (iii) interests in foreign entities. U.S. Holders are urged to consult their own tax advisors regarding the application of this legislation to their ownership of the ADI Shares.

Other Tax Consequences

State or local taxation may apply to SRC, ADI, or their shareholders in various state or local jurisdictions, including those in which it or they transact business or reside. The state and local tax treatment of the Arrangement or the subsequent ownership of ADI Shares may not conform to the U.S. federal income tax consequences discussed above. Consequently, holders of SRC Shares (or, following completion of the Arrangement, ADI Shares) are urged to their own tax advisors regarding the effect of state and local tax laws on the Arrangement.

TIMING

If the SRC Meeting and the ADI Meeting are held as scheduled and are not adjourned, SRC will apply for the Final Order approving the Arrangement on January 27, 2017. If the Final Order is obtained on January 27, 2017 in form and substance satisfactory to SRC and ADI and all other conditions set forth in the Arrangement Agreement are satisfied or waived, SRC and ADI expect the Effective Date will be on or about February 9, 2017. It is not possible, however, to state with certainty when the Effective Date will occur. The Effective Date could be delayed, however, for a number of reasons, including a delay in receiving required regulatory approvals or an objection before the Court at the hearing of the application for the Final Order.

The Arrangement will become effective upon the filing with the Director of the Articles of Arrangement.

BUSINESS OF THE COMBINED ENTITY AFTER GIVING EFFECT TO THE ARRANGEMENT

General

The Arrangement will result in the acquisition of all of the SRC Shares by ADI. Pursuant to the Arrangement, SRC Shareholders (excluding SRC Dissenting Shareholders) will receive three ADI Shares in exchange for each SRC Share held. Following the completion of the Arrangement, SRC will become a wholly-owned subsidiary of ADI and ADI will continue the operations of ADI and SRC on a combined basis.

Immediately following the completion of the Arrangement and the Committed Financings, on a non-diluted basis: (i) former SRC Shareholders are anticipated to hold approximately 57% of the issued and outstanding ADI Shares, (ii) current ADI Shareholders are anticipated to hold approximately 31% of the issued and outstanding ADI Shares,

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and (iii) Sprott Inc., Exploration Capital 2008 LP and Term Oil are anticipated to collectively own approximately 12% of the issued and outstanding ADI Shares. See “Related Transactions – Financings”.

The following sets forth certain information relating to ADI and SRC, together with pro forma information of ADI after giving effect to the Arrangement and certain other adjustments. Additional information concerning each of SRC and ADI is set forth elsewhere in this Circular. See Appendix I and Appendix J, respectively, to this Circular.

If the ADI Name Change Resolution is passed by ADI Shareholders and implemented by ADI, it is anticipated that the name of ADI will be changed to “Sprott Resource Holdings Inc.” (“SRH”). In this section, “SRH” is used to refer to ADI after giving effect to the Arrangement.

Business of Sprott Resource Holdings Inc.

Following the consummation of the Arrangement, SRC and ADI intend that SRH will operate as a diversified holding company focused on holding businesses in the natural resource industry that it believes can generate sustainable free cash flow or attractive returns on investment. Management of SRC expects that it will take less than 12 months to make the transition from a private equity firm to a diversified holding company. See “Risk Factors”.

SRH will continuously review acquisitions of businesses, securities and assets that have the potential for significant long-term value creation, invest in a broad array of businesses, and evaluate the retention and disposition of SRC’s and ADI’s existing operations and holdings. Changes in the mix of the businesses and investments currently held by SRC should be expected. See “Risk Factors”.

The following chart illustrates the principal entities of the anticipated organizational structure of SRH after giving effect to the Arrangement and the name change:

Sprott Resource Holdings Inc. (1)


Lac OtelnukMining Ltd.

Sprott Consulting GP Inc.

Sprott Resource Consulting LP

Sprott Resource Consulting GP

Inc.

Sprott Resource Partnership

ADI Mining Ltd.

Sprott Consulting LP

Sprott Inc.

New Management Services Agreement

100% Class A Units

100% Class B Voting Units

LP

40%

GP

100%

GP

GP

LP 100%

100%

100%100%

_______________

Notes:

(1) Formerly named “Adriana Resources Inc.”.

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Officers and Directors of SRH

Directors

Following completion of the Arrangement, the board of directors of SRH will be reconstituted to be comprised of the following directors:

• Terrence A. Lyons (current Chairman of the SRC Board); • Lenard Boggio (current director of SRC); • Ron F. Hochstein (current director of SRC); • Joan E. Dunne (current director of SRC); • Steve Yuzpe (current President, Chief Executive Officer and director of SRC); • John Embry (current director of SRC); • A.R. (Rick) Rule IV (President and CEO of Sprott US Holdings Inc., a Subsidiary of Sprott Inc.); • Donald K. Charter (the current Chairman of the ADI Board); and • Mr. Xinting (Tony) Wang (current director of ADI) (or a different nominee identified by WISCO

pursuant to a subscription agreement dated February 15, 2011 with ADI).

Officers

Following completion of the Arrangement, senior management of ADI will be replaced with the existing senior management of SRC. A.R. (Rick) Rule IV will become Chief Investment Officer of SRH. Michael Harrison, the current President and Chief Executive Officer of ADI, will assume the role of Managing Director of SRH. Mr. Lyons will continue as the Chairman of the SRH board of directors and Mr. Rule will also assume the role of Vice-Chairman of the SRH board of directors.

New MSA

The current day-to-day management of SRC is conducted in accordance with the Existing MSA. It is a condition precedent to the closing of the Arrangement that ADI enter into the New MSA. The following summary of the material terms of the New MSA is qualified in its entirety by reference to the complete text of the form of the New MSA, which is attached as Schedule E to the Arrangement Agreement, a copy of which is attached as Appendix C to this Circular. You are urged to carefully read the full text of the form of New MSA.

On the Effective Date, the Existing MSA will be terminated by SRC and SCLP and the New MSA between SRH and SCLP shall become effective.

Under the New MSA, SCLP will manage or, subject to certain restrictions, engage others to manage, all of the undertaking, affairs and assets of SRH and will provide all necessary or advisable administrative services and facilities. Without limiting the generality of the foregoing, under the terms of the New MSA, subject to the directions and orders of SRH from time to time, SCLP will be responsible for:

(a) administering the day-to-day business and affairs of SRH, including identifying and making investment decisions relating to SRH (in consultation with SRH), the preparation of all written and printed material for distribution to shareholders of SRH and assisting SRH in compliance with Securities Laws, applicable stock exchange matters or other applicable regulatory matters;

(b) providing all internal accounting, asset valuation (in consultation with SRH), audit and legal services in respect of SRH and other usual and ordinary office services as may be necessary;

(c) nominating at least four separate individuals to serve in the following capacities: two as Directors of SRH, one as a Director, President and Chief Executive Officer of SRH, and one as Chief Financial Officer of SRH;

(d) providing services in respect of SRH’s daily operations;

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(e) distributing all securities which SRH may decide to issue during the term of the New MSA and to take all actions as SCLP reasonably considers necessary or desirable in the sale of securities of SRH;

(f) authorizing payment on behalf of SRH of expenses incurred on behalf of SRH and negotiating contracts with third party providers of services;

(g) maintaining the books and records of SRH and supervising compliance by SRH with record-keeping requirements under applicable law;

(h) dealing with banks, insurance companies and custodians, including the maintenance of bank records and the negotiation and securing of bank financing or refinancing and insurance policies;

(i) monitoring relationships with the custodians, registrar and transfer agents, auditors, legal counsel, insurance agents and other organizations or professionals serving SRH;

(j) from time to time, or when requested by SRH, making reports to SRH and/or its shareholders of SCLPs performance of the services provided under the New MSA;

(k) preparing accounting, management and other reports, including reports of SRH’s performance to shareholders, interim and annual reports to shareholders and financial statements;

(l) providing all other administrative services and facilities required by SRH in relation to its shareholders, including the preparation for and holding of meetings of shareholders; and

(m) providing such other managerial and administrative services and carrying out such other duties as may be reasonably required for the ongoing business and administration of SRH.

In consideration for the management and administrative services provided by SCLP to SRH under the New MSA, SRH will pay to SCLP, in respect of each fiscal quarter, a management services fee (to be paid in cash within five business days following the completion of SRH’s financial statements for such fiscal quarter) equal to 0.5% of the Quarterly Net Asset Value of SRH (as defined in the New MSA) for such fiscal quarter, less the total remuneration paid directly by SRH to all persons nominated by SCLP as employees, officers or directors of SRH who provide investment management services to SRH, but excluding any expenses recorded as a result of the granting of stock options under SRH’s stock option plan for such fiscal quarter (the “Management Services Fee”). To the extent the Quarterly Net Asset Value of SRH for a fiscal quarter is in excess of $1 billion, the Management Services Fee payable in respect of such excess amount will be reduced to 0.375%.

If and to the extent that SCLP is requested in writing by the directors of SRH to render services to SRH other than those required to be rendered pursuant to New MSA, such additional services and activities will be compensated for separately and will be on such terms that are generally no less favourable to SRH than those available from arm’s length parties (within the meaning of the Tax Act) for comparable services. In addition to the Management Services Fee payable to SCLP pursuant to the New MSA, SRH will be responsible for paying all fees and expenses incurred in connection with the operation and administration of its business.

The Adjusted Annual Operating Expenses (as defined in the New MSA) shall not: (a) exceed 3.25% of the Annual Net Asset Value of SRH (as defined in the New MSA) in respect of its fiscal year ending December 31, 2017 (provided that SRH’s fiscal year ending December 31, 2017 and fiscal quarter ending March 31, 2017 shall each be deemed to begin on the date of the New MSA for the purposes of calculating both the Adjusted Annual Operating Expenses and the Maximum Adjusted Annual Operating Expenses (as defined below) pursuant to this item (a)), and (b) exceed 3% of the Annual Net Asset Value of SRH in respect of fiscal years commencing with SRH’s fiscal year ended December 31, 2018 and thereafter (the “Maximum Adjusted Annual Operating Expenses”). Where such Adjusted Annual Operating Expenses exceed the Maximum Adjusted Annual Operating Expenses, the Management Services Fee payable by SRH to SCLP in respect of the last quarterly payment to be made in respect of such fiscal

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year shall be reduced to ensure the Adjusted Annual Operating Expenses are equal (or, in any case, do not exceed) the applicable Maximum Adjusted Annual Operating Expenses.

SCLP shall, and shall ensure that its nominees shall, exercise the powers granted and discharge its, and their, duties under the New MSA honestly, in good faith and in the best interests of SRH and, in connection therewith, shall exercise the degree of care, diligence and skill that a reasonably prudent manager, or Person, would exercise in comparable circumstances. SCLP will be required to provide to SRH within 45 days after the end of each fiscal year of SRH a certificate of compliance with respect to SCLP’s standard of care under the New MSA.

The New MSA will continue in full force and effect until it is terminated by either SRH or SCLP giving at least one year prior written notice (or such shorter period as the parties may mutually agree upon) to the other party of such termination. If the New MSA is terminated by SRH, other than for the reasons set out in the paragraph immediately below, SRH shall pay to SCLP within five business days of such termination, a termination payment equal to 1% of the Net Asset Value of SRH (as defined in the New MSA).

SRH may terminate the New MSA at any time if SCLP breaches any of its material obligations under the New MSA and such breach has not been cured within 30 days following notice thereof from SRH. Notwithstanding the foregoing, the New MSA will terminate immediately where a winding-up, liquidation, dissolution, bankruptcy, sale of substantially all assets, sale of business or insolvency proceeding has been commenced or is being contemplated by SCLP, and will be terminated upon the completion of any such proceeding by SRH. In addition, in the event that a Person or group of Persons, acting jointly or in concert, acquires control over at least 50% of the voting securities of SRH (a “Change of Control”), SCLP may elect, in its sole discretion, to terminate the New MSA by giving SRH written notice of such termination within 90 days after the Change of Control. In the event that SCLP terminates the New MSA upon a Change of Control, SRH will (a) call a meeting of its shareholders to approve the change of SRH’s name to remove any reference to “Sprott”, and (b) pay to SCLP within five business days of such termination, a termination fee equal to 3% of the Net Asset Value of SRH, plus (if and to the extent applicable) an amount equal to 20% of the amount by which the market capitalization of SRH exceeds the Net Asset Value of SRH, all determined as at the termination date. Any change of SCLP (other than by assignment to its successor or affiliate) will require SRH’s approval. SRH may, in its sole discretion, terminate and replace SCLP where it deems it to be in the best interests of SRH.

SRH will acknowledge and agree under the New MSA that SCLP, for and on behalf of Sprott Inc., reserves all right, title and interest in or to the name or designation, or reference to “Sprott” in the name or designation of any of SRH’s affiliates or, if applicable, SRH. Upon termination of the New MSA, SRH will forthwith upon written request of SCLP call a meeting of its shareholders to approve an amendment of its articles to change the name of SRH or any of its affiliates to one which does not include the word “Sprott” or any words similar thereto, and to cause to be executed and delivered all instruments necessary to evidence such change of name.

New Partnership Agreement

SRC and SRCLP are parties to the Existing Partnership Agreement. It is a condition precedent to the closing of the Arrangement that SRC enter into the New Partnership Agreement with SRCLP in respect of SRP.

The following summary of the material terms of the New Partnership Agreement is qualified in its entirety by reference to the complete text of the form of the New Partnership Agreement, which is attached as Schedule F to the Arrangement Agreement, a copy of which is attached as Appendix C to this Circular. You are urged to carefully read the full text of the form of the New Partnership Agreement.

Under the New Partnership Agreement, SRP will be deemed to have commenced business as of September 28, 2011, being the date of the original partnership agreement in respect of SRP between SRC and an affiliate thereof, and shall continue until the earliest of: (a) the passing of a special resolution of the unitholders of SRP to dissolve SRP, (b) the disposition of all or substantially all of the assets of SRP, (c) the date on which one partner holds all of the units of SRP, and (d) the entry of a final judgment, order or decree of a court of competent jurisdiction adjudicating SRP to be a bankrupt, and the expiration without appeal of the period, if any, allowed by applicable law in which to appeal therefrom.

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Subject to the provisions of the New Partnership Agreement and the authority limits in effect from time to time thereunder, SRCLP, as managing partner under the New Partnership Agreement, will have power and authority to transact the business of SRP and to deal with and in SRP’s assets for the use and benefit of SRP (as further set out in Section 5.5 and except as limited by Section 5.7 of the New Partnership Agreement). SRCLP shall exercise the powers granted and discharge its duties under the New Partnership Agreement honestly, in good faith and in the best interests of SRP and, in connection therewith, shall exercise the degree of care, diligence and skill that a reasonably prudent managing partner, or person, would exercise in comparable circumstances. Without limiting any other duties or responsibilities imposed upon SRCLP under the New Partnership Agreement, SRCLP shall perform the following specific services: (a) engage personnel to provide the overall management, financial and business supervision of SRP’s business; (b) establish books of account, record and payment procedures for SRP; (c) provide bookkeeping and other related services to SRP; (d) make distributions in accordance with the New Partnership Agreement; (e) receive all funds paid to SRP and make all necessary payments and expenditures required to entitle SRP to discharge its obligations in accordance with the terms thereof; (f) provide such reports to the directors of each of SRC and ADI and to the ordinary partners as is reasonably requested by the directors of SRC and/or ADI from time to time or as required by law; and (g) perform all duties imposed by the New Partnership Agreement on SRCLP in a prompt and diligent manner.

SRCLP must distribute to the ordinary partners, on an annual basis, out of the net profits of SRP for the fiscal year an amount equal to net profits of SRP for such fiscal year. SRCLP will make such distributions within five business days following the completion of the financial statements of SRP for the relevant fiscal year to which the distribution relates, subject to cash limitations as described in Section 8.2 of the New Partnership Agreement.

A special meeting of the ordinary partners of SRP may be called at any time by SRCLP and shall be called by SRCLP upon written request signed by at least one ordinary partner entitled to vote. Each holder of class B units of SRP will be entitled to one vote for each class B unit owned by it in respect of all matters to be voted upon by the ordinary partners, and holders of class A units will not be entitled to any voting rights.

The New Partnership Agreement eliminates the 20% profit participation right in favour of SRCLP found in the Existing Partnership Agreement. See “SRCLP Warrant Issuance”.

Selected Unaudited Pro Forma Financial Information of Sprott Resource Holdings Inc.

The following tables set out certain unaudited pro forma financial information for SRH after giving effect to the Arrangement and the Committed Financings for the year ended December 31, 2015 and the nine month period ended September 30, 2016.

The following tables should be read in conjunction with the unaudited pro forma consolidated financial statements of SRH as at September 30, 2016, for the year ended December 31, 2015 and the nine month period ended September 30, 2016, including the notes thereto, attached as Appendix K to this Circular. Reference should also be made to: (a) the SRC Annual Financial Statements; (b) the SRC Interim Financial Statements; (c) the ADI Annual Financial Statements; and (d) the ADI Interim Financial Statements, each of which is incorporated by reference herein and can be found on SEDAR at www.sedar.com.

The unaudited pro forma consolidated financial statements of SRH are presented for illustrative purposes only and are not necessarily indicative of (i) the financial results that would have occurred had the Arrangement and the Committed Financings actually occurred at the times contemplated by the notes to the unaudited pro forma consolidated financial statements; or (ii) the results expected in future periods.

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Unaudited Pro Forma Financial Information ($000’s) For the Year Ended December 31, 2015

Sprott Resource

Corp.

Adriana Resources

Inc. Pro Forma

Adjustments


Holdings Inc. Investment gain (loss) $ (111,551) $ (37,719) $ 5,201 $ (144,069) Expenses 7,064 3,233 (267) 10,031 Net income (loss) attributable to shareholders (119,494) (49,796) 5,468 (163,822) Unaudited Pro Forma Financial Information ($000’s) as at and for the Nine Months Ended September 30, 2016

Sprott Resource

Corp.

Adriana Resources

Inc.

Pro Forma Adjustments

and Financing Transactions


Holdings Inc. Investment gain $ 2,860 $ 223 $ - $ 3,083 Expenses 4,420 1,418 (31) 5,807 Net income (loss) attributable to shareholders (1,560) (1,195) 31 (2,724) Total assets 115,349 34,700 14,700 164,749 Total liabilities 9,666 338 2,308 12,312 Total equity attributable to shareholders 105,683 34,362 12,392 152,437 Pro forma Consolidated Capitalization of SRH

The following table sets forth the consolidated capitalization of SRH as at September 30, 2016 and the pro forma consolidated capitalization of SRH as at September 30, 2016 after giving effect to the Arrangement and the Committed Financings:

Designation Authorized As at September 30, 2016

($000’s, except share amounts)

As at September 30, 2016 after giving effect to the Arrangement

and the Committed Financings ($000’s, except share amounts)

ADI Shares Unlimited $280,902 (157,554,238 ADI Shares)

$321,741 (510,488,999 ADI Shares)(1)(2)

Indebtedness N/A - -

____________________________ Notes:

(1) Includes: (a) 290,016,306 ADI Shares to be issued to SRC Shareholders pursuant to the Arrangement, (b) 42,918,455 ADI Shares to be issued to Sprott Inc. in connection with the Sprott Inc. Financing, (c) 16,000,000 ADI Shares to be issued to Exploration Capital 2008 LP in connection with the Exploration Capital Partners 2008 Financing and (d) 4,000,000 ADI Shares to be issued to Term Oil in connection with the Term Oil Financing.

(2) 596,877,559 ADI Shares on a fully-diluted basis, assuming the exercise of: (a) 39,388,560 ADI Warrants to be issued to ADI Shareholders immediately preceding the Effective Date pursuant to the Warrant Distribution, (b) 16,000,000 ADI Warrants to be issued to Exploration Capital 2008 LP in connection with the Exploration Capital Partners 2008 Financing, (c) 4,000,000 ADI Warrants to be issued to Term Oil in connection with the Term Oil Financing, (d) 21,750,000 ADI Warrants to be issued to SRCLP in connection with the SRCLP Warrant Issuance and (e) 5,250,000 outstanding ADI Options.

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Principal Holders of ADI Shares Following the Arrangement

To the knowledge of the respective directors and executive officers of ADI, as at the date hereof, assuming the completion of the Arrangement and the Committed Financings, no Persons would beneficially own, or control or direct, directly or indirectly, 10% or more of ADI Shares.

RISK FACTORS

SRC Shareholders voting in favour of the Arrangement Resolution and ADI Shareholders voting in favour of the ADI Resolutions will be choosing to combine the businesses of SRC and ADI. The completion of the Arrangement and related transactions involves risks. In addition to the risk factors described under the heading “Risk Factors” in the SRC AIF and under the heading “Risks and Uncertainties” in the ADI Annual MD&A, which are specifically incorporated by reference into this Circular, the following are additional and supplemental risk factors which SRC Shareholders should carefully consider before making a decision regarding approving the Arrangement Resolution and which ADI Shareholders should carefully consider before making a decision regarding approving the ADI Resolutions. Readers are cautioned that such risk factors are not exhaustive and additional risks and uncertainties, including those currently unknown or considered immaterial to SRC and ADI, may also adversely affect the SRC Shares and the ADI Shares before the Arrangement, and the ADI Shares following the Arrangement, and/or the business of SRC and ADI before the Arrangement and that of SRH following the Arrangement.

The Arrangement is Subject to Satisfaction or Waiver of Several Conditions

The completion of the Arrangement is subject to a number of conditions precedent, some of which are outside of the control of the Parties, including obtaining the necessary Court and required regulatory approvals and the satisfaction of customary closing conditions. There can be no certainty that all conditions precedent to the Arrangement will be satisfied or waived, nor can there be any certainty of the timing of their satisfaction or waiver. Moreover, a substantial delay in obtaining satisfactory approvals could result in the Arrangement not being completed. If, for any reason, the Arrangement is not completed, the market price of the ADI Shares and SRC Shares may be adversely affected. The Arrangement Agreement provides for an Outside Date for the completion of the Arrangement of March 31, 2017, unless otherwise extended by mutual agreement of the Parties; otherwise, the Arrangement Agreement may be terminated.

The Arrangement May be Terminated

The Arrangement Agreement may be terminated by SRC or ADI in certain circumstances. Accordingly, there is no certainty, nor can SRC or ADI provide any assurance, that the Arrangement Agreement will not be terminated by either SRC or ADI before the completion of the Arrangement and related transactions. Failure to complete the Arrangement could materially negatively impact the market price of the ADI Shares and SRC Shares. Moreover, if the Arrangement Agreement is terminated, there is no assurance that the SRC Board will be able to find a party willing to pay an equivalent or greater price for the SRC Shares than the Consideration to be paid pursuant to the terms of the Arrangement Agreement or that the ADI Board will be able to find another transaction similar to the Arrangement and related transactions that will provide the same benefits to ADI Shareholders. Certain costs relating to the Arrangement, such as legal, accounting and certain financial advisor fees, must be paid by SRC and ADI even if the Arrangement is not completed. In addition, the failure of SRC or ADI to comply with certain terms of the Arrangement Agreement may result in SRC or ADI, as applicable, being required to pay the Termination Fee, the result of which could have a Material Adverse Effect on SRC’s or ADI’s financial position, as applicable, and results of operations and their ability to fund growth prospects and current operations.

Required Shareholder Approvals

The Arrangement requires that the Arrangement Resolution be approved by (i) 66 % of the votes cast by the SRC Shareholders present in person or by proxy at the SRC Meeting; and (ii) a majority of the votes cast by SRC Shareholders, other than SRC Shareholders whose votes are required to be excluded for the purposes of “minority approval” under MI 61-101, present in person or by proxy at the SRC Meeting. In addition, the Arrangement requires that the ADI Transactions Approval Resolution be approved by a simple majority of the votes cast by ADI Shareholders present in person or represented by proxy at the ADI Meeting. There can be no certainty, nor can SRC

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or ADI provide any assurance, that the required SRC Shareholder and ADI Shareholder approvals will be obtained. If such approvals are not obtained and the Arrangement is not completed, the market price of the ADI Shares and SRC Shares may decline to the extent that the current market price reflects a market assumption that the Arrangement will be completed. If the Arrangement is not completed and the SRC Board or the ADI Board, as applicable, decides to seek another transaction, there can be no assurance that it will be able to find a party willing to pay an equivalent or more attractive price than the Consideration to be paid pursuant to the Arrangement or another transaction or series of transactions similar to the Arrangement and related transactions that will provide the same benefits to ADI Shareholders, as the case may be.

Interests of Certain Persons in the Arrangement

Certain officers and directors of SRC and ADI may have interests in the Arrangement that may be different from, or in addition to, the interests of other SRC Shareholders or ADI Shareholders, as applicable, generally including, but not limited to, those interests discussed under the heading “Interests of Certain Persons or Companies in Matters to Be Acted Upon”. In considering the recommendations of the SRC Board and the ADI Board to vote in favour of the Arrangement Resolution and the ADI Resolutions, as applicable, SRC Shareholders and ADI Shareholders should consider these interests.

Application of Interim Operating Covenants

Pursuant to the Arrangement Agreement, each of SRC and ADI has agreed to certain interim operating covenants intended to ensure that each of SRC and ADI and their Subsidiaries carry on business in the Ordinary Course of business consistent with past practice, except as required or expressly authorized by the Arrangement Agreement. These operating covenants cover a broad range of activities and business practices. Consequently, it is possible that a business opportunity will arise that is out of the Ordinary Course or is not consistent with past practices, and that, as applicable, SRC or ADI will not be able to pursue or undertake the opportunity due to its covenants in the Arrangement Agreement unless the prior written consent of the other Party is obtained (such consent not to be unreasonably withheld, conditioned or delayed).

Dissent Rights Payments

Registered SRC Shareholders have the right to exercise certain Dissent Rights and demand payment of the fair value of their SRC Shares in cash in connection with the Arrangement in accordance with the CBCA (as varied by the Arrangement Agreement and the Interim Order). If there are a significant number of SRC Dissenting Shareholders, a substantial cash payment may be required to be made to such SRC Dissenting Shareholders that could have an adverse effect on the combined entity’s financial condition and cash resources if the Arrangement is completed. It is a condition to the completion of the Arrangement that Dissent Rights shall not have been validly exercised and not withdrawn with respect to more than 5% of the issued and outstanding SRC Shares, which condition may only be waived, in whole or in part, by ADI in its sole discretion.

Dilutive Effect

The issuance of ADI Shares pursuant to the Arrangement, if completed, will have an immediate dilutive effect on the ownership interest in ADI.

Income Tax Laws

There can be no assurance that the CRA, the IRS or other applicable taxing authorities will agree with the Canadian and U.S. federal income tax consequences of the Arrangement, as applicable, as set forth in this Circular. Furthermore, there can be no assurance that applicable Canadian and U.S. income tax laws, regulations or tax treaties will not be changed or interpreted in a manner, or that applicable taxing authorities will not take administrative positions, that are adverse to ADI and its securityholders following completion of the Arrangement. Such taxation authorities may also disagree with how ADI or SRC calculate or have in the past calculated their income for income tax purposes. Any such events could adversely affect ADI, its share price or the dividends or other payments to be paid to ADI’s securityholders following completion of the Arrangement.

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United States Investment Company Act

It is intended that the combined entity will make acquisitions and other investments in a manner so as not to be an investment company under the Investment Company Act. The Investment Company Act contains substantive legal requirements that regulate the manner in which investment companies are permitted to conduct their business activities. If the SEC or a court were to determine that the combined entity is an investment company, the combined entity, or a newly created U.S. entity that would acquire the assets on behalf of the combined entity, could be required to register as an investment company. This would negatively affect the combined entity’s ability to consummate acquisitions; subject the combined entity to disclosure and accounting guidance geared toward investment, rather than operating companies; limit the combined entity’s ability to borrow money, issue options, issue multiple classes of stock and debt, and engage in transactions with affiliates; and require the combined entity to undertake significant costs and expenses to meet the disclosure and regulatory requirements to which it would be subject as a registered investment company. In order not to be regulated as an investment company under the Investment Company Act, unless the combined entity can qualify for an exemption, the combined entity must ensure that it is engaged primarily in a business other than investing, reinvesting, owning, holding or trading in securities (as defined in the Investment Company Act) and that it does not own or acquire “investment securities” (as defined in the Investment Company Act) having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. The combined entity will monitor its holdings to ensure continuing and ongoing compliance with the 40% test.

To ensure that majority-owned investments do not become categorized as “investment securities,” the combined entity may need to make additional investments in these subsidiaries to offset any dilution of its interest that would otherwise cause such a subsidiary to cease to be majority-owned or dispose of such investments at inopportune times. The combined entity may also need to forego acquisitions that it would otherwise make or retain, or dispose of investments that it might otherwise hold. Although the combined entity intends to monitor its holdings periodically and prior to each acquisition or disposition, it may not be able to maintain an exclusion from registration as an investment company. If the combined entity is required to register as an investment company but fails to do so, the combined entity would be prohibited from engaging in its business, and criminal and civil actions could be brought against it. In addition, the combined entity’s contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of the combined entity and liquidate its business. Finally, if the combined entity were to become an investment company then it would be subject to material additional regulation under the Investment Company Act, and its operations would be materially and adversely affected. There can no assurance that the combined entity will be able to make the acquisitions and/or other investments in a manner that would enable the combined entity to comply with the Investment Company Act.

U.S. federal income tax consequences of “passive foreign investment company” status

U.S. Holders (as defined under “United States Federal Income Tax Considerations Relating to the Warrant Distribution” and “Certain United States Federal Income Tax Considerations Relating to the Arrangement”) should be aware that they could be subject to certain adverse U.S. federal income tax consequences in the event that ADI or SRC is, or ADI becomes, classified as a PFIC for U.S. federal income tax purposes. The determination as to whether a non-U.S. corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the income, expenses and assets of the non-U.S. corporation from time to time and the nature of the corporation’s activities. Based on current assets and activities and on assumptions about activities during the balance of the current taxable year, we believe that each of SRC and ADI will be classified as a PFIC for the current taxable year and in some or all years preceding the Arrangement, and may be a PFIC in future tax years. However, PFIC classification for any taxable year is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and is fundamentally factual in nature, and the determination of SRC and ADI’s PFIC status is made annually based on the types of income SRC and ADI earn and the type and value of their assets in each such year, as well as on the application of complex U.S. federal income tax rules, including “look through” rules with respect to their subsidiaries, and cannot be determined until after the end of such taxable year.

Shareholders of ADI Shares and SRC Shares are urged to carefully read “Certain United States Federal Income Tax Considerations Relating to the Arrangement—PFIC Status of SRC” and “Certain United States Federal Income Tax Considerations Relating to the Arrangement—PFIC Status of ADI” for more information and to consult their own

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tax advisors regarding the likelihood and consequences of SRC or ADI being treated as a PFIC for U.S. federal income tax purposes, including the availability and advisability of any elections that may help mitigate the tax consequences to a U.S. Holder if SRC or ADI is a PFIC.

Under proposed U.S. Treasury Regulations, if ADI is classified as a PFIC, the holding period for any ADI Shares acquired on the exercise of ADI Warrants would begin on the date a U.S. Holder acquires the ADI Warrants. This could affect adversely the availability of any election that otherwise may be available with respect to ADI Shares received upon the exercise of ADI Warrants. Shareholders of ADI are urged to carefully read “United States Federal Income Tax Considerations Relating to the Warrant Distribution—Passive Foreign Investment Company Rules” for more information and to consult their own tax advisors regarding the consequences of these rules with respect to the ADI Warrants and ADI Shares received upon the exercise of ADI Warrants, including the availability and advisability of any elections that may help mitigate the tax consequences to a U.S. Holder if ADI is a PFIC.

Warrant Distribution and U.S. Shareholders of ADI

As soon as practicable after the Effective Date, the Sales Agent, for the account of Non-Qualified U.S. Shareholders, will sell the ADI Warrants of such Non-Qualified U.S. Shareholders through a registered dealer on the facilities of the TSX or any stock exchange on which such ADI Warrants are then listed or in such other manner as deemed appropriate by the Sales Agent. In effecting the sale of any ADI Warrants, the Sales Agent will exercise its sole judgment as to the timing and manner of sale and will not be obligated to seek or obtain a minimum price for such ADI Warrants. Neither ADI nor the Sales Agent will be liable for any loss arising out of any such sales. The sale price of the ADI Warrants sold on behalf of such Non-Qualified U.S. Shareholders of ADI will fluctuate with the market price of the ADI Warrants and no assurances can be given that any particular price will be received upon such sale.

INTERESTS OF EXPERTS

Certain legal matters relating to the Arrangement have been passed upon on behalf of SRC by Blake Cassels & Graydon LLP, with respect to Canadian matters, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, with respect to U.S. matters, and on behalf of ADI by Stikeman Elliott LLP, with respect to Canadian matters, and Skadden, Arps, Slate, Meagher & Flom LLP, with respect to U.S. matters. As at the date hereof, the partners and associates of Blake, Cassels & Graydon LLP and Stikeman Elliott LLP, respectively, beneficially own, directly or indirectly, less than 1% of the outstanding SRC Shares and less than 1% of the outstanding ADI Shares.

INFORMATION CONCERNING SPROTT RESOURCE CORP. AND ADRIANA RESOURCES INC.

For detailed information regarding SRC, please see Appendix I of this Circular. For detailed information regarding ADI, please see Appendix J of this Circular.

MATTERS TO BE CONSIDERED AT THE SRC MEETING

At the SRC Meeting, SRC Shareholders will be asked to consider the Arrangement Resolution in the form set forth in Appendix A to this Circular. SRC Shareholders are urged to review the various sections of this Circular when considering the Arrangement Resolution. In particular, see, “The Arrangement” and Appendix J to this Circular. For information relating to the impact of the Arrangement on SRC and ADI, see “Business of the Combined Entity After Giving Effect to the Arrangement” and Appendix K to this Circular.

The Arrangement Resolution must be approved by at least 66 % of the votes cast by SRC Shareholders, present in person or by proxy at the SRC Meeting.

Unless otherwise directed, the persons named in the accompanying form of proxy for the SRC Meeting intend to vote in favour of the Arrangement Resolution.

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MATTERS TO BE CONSIDERED AT THE ADI MEETING

At the ADI Meeting, ADI Shareholders will be asked to consider the ADI Transactions Approval Resolution and the ADI Name Change Resolution in the forms set forth in Appendix B to this Circular. ADI Shareholders are urged to review the various sections of this Circular when considering the ADI Resolutions. In particular, see “The Arrangement” and Appendix I to this Circular. For information relating to the impact of the Arrangement on SRC and ADI, see “Business of the Combined Entity After Giving Effect to the Arrangement” and Appendix K to this Circular.

The ADI Transactions Approval Resolution must be approved by a majority of the votes cast by ADI Shareholders present in person or by proxy at the ADI Meeting. The ADI Name Change Resolution must be approved by 66 % of the votes cast by ADI Shareholders present in person or by proxy at the ADI Meeting.

Unless otherwise directed, the persons named in the accompanying form of proxy for the ADI Meeting intend to vote in favour of the ADI Transactions Approval Resolution and the ADI Name Change Resolution.

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GENERAL PROXY MATTERS SRC

Solicitation of Proxies

This Circular is furnished in connection with the solicitation of proxies by management of SRC to be used at the SRC Meeting. Solicitations of proxies will be primarily by mail and electronic means, but may also be by newspaper publication, in person or by telephone, facsimile or oral communication by directors, officers, employees or agents of SRC who will be specifically remunerated therefor. SRC will pay for the delivery of its proxy-related materials indirectly to all Beneficial Holders.

SRC and ADI have also jointly retained Kingsdale Shareholder Services to assist each of them in their solicitation of proxies from SRC Shareholders and ADI Shareholders, respectively. The Parties have agreed to pay Kingsdale Shareholder Services an aggregate fee of $65,000, plus reasonable out-of-pocket expenses, for these services.

All costs of the solicitation for the SRC Meeting will be borne by SRC.

The information set forth below generally applies to registered holders of SRC Shares. If you are a Beneficial Holder of SRC Shares (i.e., your SRC Shares are held through a broker, financial institution or other nominee), please see “Information for Beneficial Holders” at the front of this Circular.

Appointment and Revocation of Proxies

Accompanying this Circular delivered to SRC Shareholders is a form of proxy for holders of SRC Shares to be used in connection with the SRC Meeting. The persons named in the form of proxy for the SRC Meeting are directors and/or officers of SRC. An SRC Shareholder has the right to appoint a person (who need not be an SRC Shareholder) other than the persons designated in the form of proxy provided by SRC to represent the SRC Shareholder at the SRC Meeting. To exercise this right, the SRC Shareholder should strike out the names of management designees in the form of proxy for the SRC Meeting and insert the name of the desired representative in the blank space provided in the form of proxy or submit another appropriate form of proxy. If you are a Registered SRC Shareholder and are unable to attend the SRC Meeting in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to TSX Trust Company, SRC’s Transfer Agent. To be valid, completed proxy forms must be dated, completed, signed and deposited with TSX Trust Company, (i) by mail using the enclosed return envelope or one addressed to TSX Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1, (ii) by hand delivery to TSX Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1, or (iii) by facsimile to (416) 595-9593. SRC Shareholders may also vote through the internet and if you do vote through the internet, you may also appoint another person to be your proxyholder. Please go to www.voteproxyonline.com and follow the instructions. You will require your 12-digit control number found on your proxy form. Your proxy or voting instructions must be received in each case no later than 9:00 a.m. (Toronto time) on January 23, 2017 or, if the SRC Meeting is adjourned or postponed, 48 hours (excluding Saturdays and holidays) before the beginning of any adjournment or postponement of the SRC Meeting. The proxy shall be in writing and executed by the SRC Shareholder or such SRC Shareholder's attorney authorized in writing, or if such SRC Shareholder is a corporation, under its corporate seal or by a duly authorized officer or attorney. The Chairman of the SRC Meeting shall have the discretion to accept all, but not less than all, valid proxies received after the foregoing deadline and prior to the SRC Meeting.

In addition to revocation in any other manner permitted by law, an SRC Shareholder may revoke a proxy: (a) by instrument in writing executed by the SRC Shareholder or such SRC Shareholder’s attorney authorized in writing or if the SRC Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, and deposited either with the SRC Transfer Agent, acting as scrutineers, at the office of the SRC Transfer Agent designated in the Notice of Meeting to SRC Shareholders and the Circular not later than 5:00 p.m. (Toronto time) on the Business Day preceding the day of the SRC Meeting (or any adjournment or postponement thereof) or with the Chairman on the day of the SRC Meeting (or any adjournment thereof or postponement); (b) by a duly executed and deposited proxy bearing a later date or time than the date or time of the proxy being revoked; or (c) as permitted by law.

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Proxy Voting

The SRC Shares represented by an effective proxy will be voted in accordance with the instructions specified therein. Where no choice is specified, the SRC Shares will be voted FOR the approval of the Arrangement Resolution. The form of proxy for the SRC Meeting confers discretionary authority upon the persons named therein in respect of amendments or variations to matters identified in the Notice of Meeting to SRC Shareholders and with respect to other matters which may properly come before the SRC Meeting or any adjournment or postponement thereof. As of the date hereof, management of SRC knows of no amendments, variations or other matters to come before the SRC Meeting; however, if any other matter properly comes before the SRC Meeting, the form of proxy for the SRC Meeting will be voted on such matter in accordance with the best judgment of the person(s) voting the proxies.

Voting Securities of SRC and Principal Holders thereof

As at December 21, 2016, there were 96,672,102 SRC Shares issued and outstanding which are its only outstanding voting securities. Each SRC Share entitles the holder thereof to one vote per share at the SRC Meeting. In addition, pursuant to the Interim Order, each SRC Share that is outstanding at the SRC Record Date will be entitled to one vote in respect of the Arrangement Resolution.

The SRC Record Date for determination of SRC Shareholders entitled to receive notice of and to vote at the SRC Meeting is the close of business on December 19, 2016. SRC will prepare, as of the SRC Record Date, a list of SRC Shareholders entitled to receive the Notice of the SRC Meeting and showing the number of SRC Shares held by each such SRC Shareholder. Only SRC Shareholders whose names have been entered in the register of holders of SRC Shares on the close of business on the SRC Record Date will be entitled to receive notice of and to vote the SRC Shares shown opposite such SRC Shareholder’s name at the SRC Meeting.

To the knowledge of the directors and executive officers of SRC, as of the date hereof, no person or company beneficially owns, or exercises control or direction over, directly or indirectly, more than 10% of the voting rights attached to all of the outstanding SRC Shares.

Procedure and Votes Required

The Interim Order provides that each holder of SRC Shares at the close of business on the SRC Record Date will be entitled to receive notice of, to attend and to vote at the SRC Meeting.

Pursuant to the Interim Order:

(a) each SRC Share entitled to be voted at the SRC Meeting will entitle the holder to one vote at the SRC Meeting in respect of the Arrangement Resolution;

(b) the number of votes required to pass the Arrangement Resolution shall be at least 66 % of the votes cast by SRC Shareholders, present in person or represented by proxy, voting at the SRC Meeting; and

(c) the quorum at the SRC Meeting shall be not less than two persons present in person at the opening of the SRC Meeting, who are entitled to vote at the SRC Meeting either as an SRC Shareholder or a duly appointed proxyholder or representative for an SRC Shareholder so entitled, representing in the aggregate not less than 25% of the aggregate number of outstanding SRC Shares. If a quorum is present at the opening of the SRC Meeting, the SRC Shareholders present or represented may proceed with the business of the SRC Meeting notwithstanding that a quorum is not present throughout the SRC Meeting. If a quorum is not present at the opening of the SRC Meeting, the SRC Shareholders present or represented may adjourn the SRC Meeting to a fixed time and place but may not transact any other business.

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Notwithstanding the foregoing, the Arrangement Resolution authorizes the SRC Board, without further notice to or approval of the SRC Shareholders, to amend the Arrangement Agreement or the Plan of Arrangement, to the extent permitted by the Arrangement Agreement or the Plan of Arrangement, and, subject to the terms of the Arrangement Agreement, to decide not to proceed with the Arrangement. See Appendix A to this Circular for the full text of the Arrangement Resolution.

GENERAL PROXY MATTERS ADI

Solicitation of Proxies

This Circular is furnished in connection with the solicitation of proxies by management of ADI to be used at the ADI Meeting. Solicitations of proxies will be primarily by mail and electronic means, but may also be by newspaper publication, in person or by telephone, facsimile or oral communication by directors, officers, employees or agents of ADI who will be specifically remunerated therefor. ADI will pay for the delivery of its proxy-related materials indirectly to all Beneficial Holders.

ADI and SRC have also jointly retained Kingsdale Shareholder Services to assist each of them in their solicitation of proxies from ADI Shareholders and SRC Shareholders, respectively. The Parties have agreed to pay Kingsdale Shareholder Services an aggregate fee of $65,000, plus reasonable out-of-pocket expenses, for these services.

All costs of the solicitation for the ADI Meeting will be borne by ADI.

The information set forth below generally applies to registered holders of ADI Shares. If you are a Beneficial Holder of ADI Shares (i.e., your ADI Shares are held through a broker, financial institution or other nominee), please see “Information for Beneficial Holders” at the front of this Circular.

Appointment and Revocation of Proxies

Accompanying this Circular delivered to ADI Shareholders is a form of proxy for holders of ADI Shares to be used in connection with the ADI Meeting. The persons named in the form of proxy for the ADI Meeting are directors and/or officers of ADI. An ADI Shareholder has the right to appoint a person (who need not be a ADI Shareholder) other than the persons designated in the form of proxy for the ADI Meeting provided by ADI to represent the ADI Shareholder at the ADI Meeting. To exercise this right, the ADI Shareholder should strike out the names of management designees in the form of proxy for the ADI Meeting and insert the name of the desired representative in the blank space provided in the form of proxy or submit another appropriate form of proxy. If you are a registered ADI Shareholder and are unable to attend the ADI Meeting in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to Computershare Investor Services Inc., ADI’s transfer agent. To be valid, completed proxy forms must be dated, completed, signed and deposited with ADI’s transfer agent, Computershare Investor Services Inc., (i) by mail using the enclosed return envelope or one addressed to Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, Canada, M5J 2Y1, or (ii) by hand delivery to Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, Canada, M5J 2Y1. You may also vote using the telephone. If you vote using the telephone, you may not appoint another person to be your proxyholder. To vote using the telephone, call 1-866-732-VOTE (8683) toll free. Follow the telephone voting instructions given to you and vote using the telephone referring to your holder account number and proxy access number provided on the enclosed form of proxy. You may also vote through the internet and if you vote through the internet, you may also appoint another person to be your proxyholder. Please go to www.investorvote.com and follow the instructions. You will require your 15-digit control number found on your enclosed form of proxy. Your proxy or voting instructions must be received in each case no later than 10:30 a.m. (Toronto time) on January 23, 2017 or, if the ADI Meeting is adjourned or postponed, 48 hours (excluding Saturdays and holidays) before the beginning of any adjournment or postponement of the ADI Meeting. The proxy shall be in writing and executed by the ADI Shareholder or such ADI Shareholder's attorney authorized in writing, or if such ADI Shareholder is a corporation, under its corporate seal or by a duly authorized officer or attorney.

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In addition to revocation in any other manner permitted by law, a ADI Shareholder may revoke a proxy: (a) by instrument in writing executed by the ADI Shareholder or such ADI Shareholder’s attorney authorized in writing or if the ADI Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, and deposited either with the ADI Transfer Agent, acting as scrutineers, at the office of the ADI Transfer Agent designated in the Notice of Meeting to ADI Shareholders and the Circular not later than 5:00 p.m. (Toronto time) on the Business Day preceding the day of the ADI Meeting (or adjournment or postponement thereof) or with the Chairman on the day of the ADI Meeting (or any adjournment or postponement thereof); (b) by a duly executed and deposited proxy bearing a later date or time than the date or time of the proxy being revoked; or (c) as permitted by law.

Proxy Voting

The ADI Shares represented by an effective proxy will be voted in accordance with the instructions specified therein. Where no choice is specified, the ADI Shares will be voted FOR approval of the ADI Resolutions. The form of proxy for the ADI Meeting confers discretionary authority upon the persons named therein in respect of amendments or variations to matters identified in the Notice of Meeting to ADI Shareholders and with respect to other matters which may properly come before the ADI Meeting or any adjournment or postponement thereof. As of the date hereof, management of ADI knows of no amendments, variations or other matters to come before the ADI Meeting; however, if any other matter properly comes before the ADI Meeting, the form of proxy for the ADI Meeting will be voted on such matter in accordance with the best judgment of the person(s) voting the proxies.

Voting Securities of ADI and Principal Holders Thereof

As at December 21, 2016, there are 157,554,238 ADI Shares issued and outstanding which are its only outstanding voting securities. Each ADI Share entitles the holder thereof to one vote per share at the ADI Meeting. In addition, each ADI Share that is outstanding at the ADI Record Date will be entitled to one vote in respect of the ADI Resolutions.

The ADI Record Date for determination of ADI Shareholders entitled to receive notice of and to vote at the ADI Meeting is the close of business on December 19, 2016. ADI will prepare, as of the ADI Record Date, a list of ADI Shareholders entitled to receive the Notice of the ADI Meeting and showing the number of ADI Shares held by each such ADI Shareholder. Only ADI Shareholders whose names have been entered in the register of holders of ADI Shares on the close of business on the ADI Record Date will be entitled to receive notice of and to vote the ADI Shares shown opposite such ADI Shareholder’s name at the ADI Meeting.

To the knowledge of the directors and executive officers of ADI, the only person or corporation who beneficially owns, directly or indirectly, or exercises control or direction over, ADI Shares carrying more than 10% of the voting rights attached to all outstanding ADI Shares as at the date hereof is:

Beneficial Holder Number of ADI Shares Owned(1) Percentage of Issued and Outstanding ADI Shares

WISCO International Resources Development and Investment

Limited 30,216,480 19.2%

Notes:

(1) Based on reports publicly filed on The System for Electronic Disclosure by Insiders (SEDI).

Quorum

Pursuant to the by-laws of ADI, a quorum of ADI Shareholders is present at the ADI Meeting if two or more persons are present and are holding personally or representing as proxies more in aggregate than 10% of the total number of the issued and outstanding ADI Shares. If a quorum is not present at the ADI Meeting, the ADI Meeting may be adjourned to a fixed time and place, but no other business shall be transacted at the ADI Meeting.

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QUESTIONS AND OTHER ASSISTANCE

If you are an SRC Shareholder or an ADI Shareholder and you have any questions about the information contained in the Circular or require assistance in completing your applicable form of proxy or Letter of Transmittal or the Qualified U.S. Shareholder Certification, please contact SRC’s and ADI’s joint proxy solicitation agent, Kingsdale Shareholder Services using the contact details listed on the back page of this Circular.

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APPROVED BY DIRECTORS

Sprott Resource Corp. Board of Directors’ Approval

The contents and the sending of this Circular have been approved by the SRC Board.

(signed) “Stephen Yuzpe” Stephen Yuzpe Chief Executive Officer and Director Sprott Resource Corp.

December 21, 2016 Adriana Resources Inc. Board of Directors’ Approval

The contents and the sending of this Circular have been approved by the ADI Board.

(signed) “Michael J. Harrison” Michael J. Harrison President, Chief Executive Officer and Director Adriana Resources Inc.

December 21, 2016

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EXPERTS’ CONSENTS

Consent of GMP Securities L.P.

We have read the joint management proxy circular dated December 21, 2016 (the “Circular”) with respect to a proposed business combination involving Sprott Resource Corp. (“SRC”), the shareholders of SRC and Adriana Resources Inc.

We consent to the inclusion in the Circular of our fairness opinion to the board of directors of SRC and to the references to our firm name and our fairness opinion in the Circular.

(signed) “GMP Securities L.P.” Toronto, Ontario December 21, 2016

Consent of Primary Capital Inc.

We have read the joint management proxy circular dated December 21, 2016 (the “Circular”) with respect to a proposed business combination involving Sprott Resource Corp. (“SRC”), the shareholders of SRC and Adriana Resources Inc. (“ADI”).

We consent to the inclusion in the Circular of our fairness opinion to the board of directors of ADI and to the references to our firm name and our fairness opinion in the Circular.

(signed) “Primary Capital Inc.” Toronto, Ontario December 21, 2016

APPENDIX A

ARRANGEMENT RESOLUTION

BE IT RESOLVED THAT:

1. The arrangement (the “Arrangement”) under Section 192 of the Canada Business Corporations Act (the “CBCA”) involving Sprott Resource Corp. (the “Company”), pursuant to the arrangement agreement between the Company and Adriana Resources Inc. (“ADI”) dated November 29, 2016, as it may be modified, supplemented or amended from time to time in accordance with its terms (the “Arrangement Agreement”), the full text of which is set out as Appendix A to the joint management proxy circular of the Company and ADI dated December 21, 2016 (the “Circular”), and all transactions contemplated thereby, are hereby authorized, approved and adopted.

2. The plan of arrangement, as it has been or may be modified, supplemented or amended in accordance with the Arrangement Agreement and its terms, involving the Company (the “Plan of Arrangement”), the full text of which is set out as Schedule A to Appendix C to the Circular, is hereby authorized, approved and adopted.

3. The Arrangement Agreement and all the transactions contemplated therein, the actions of the directors of the Company in approving the Arrangement and the Arrangement Agreement and the actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement and any modifications, supplements or amendments thereto are hereby ratified and approved.

4. The Company is hereby authorized to apply for a final order from the Ontario Superior Court of Justice (the “Court”) to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement.

5. Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the shareholders of the Company or that the Arrangement has been approved by the Court, the directors of the Company are hereby authorized and empowered, at their discretion, without further notice to or approval of the shareholders of the Company: (i) to amend or modify the Arrangement Agreement or the Plan of Arrangement to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions.

6. Any officer or director of the Company is hereby authorized and directed, for and on behalf of the Company, to execute and deliver for filing with the Director under the CBCA articles of arrangement and such other documents as may be necessary or desirable to give effect to the Arrangement in accordance with the Arrangement Agreement, such determination to be conclusively evidenced by the execution and delivery of such articles of arrangement and any such other documents.

7. Any officer or director of the Company is hereby authorized and directed, for and on behalf of the Company, to execute or cause to be executed and to deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such other document or instrument or the doing of any other such act or thing.

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APPENDIX B

ADI RESOLUTIONS

BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

1. The acquisition by Adriana Resources Inc. (“ADI”) of Sprott Resource Corp. (the “SRC”) pursuant to the arrangement agreement between ADI and SRC dated November 29, 2016, as it may be modified, supplemented or amended from time to time in accordance with its terms (the “Arrangement Agreement”), the full text of which is set out as Appendix B to the joint management proxy circular of ADI and SRC dated December 21, 2016 (the “Circular”), including the “Change of Management” (as defined in Policy 1.1 of the TSX Venture Exchange) described in the Circular, and all transactions contemplated thereby, are hereby authorized, approved and adopted, including, among other things: (i) the issuance of common shares of ADI to the shareholders of SRC pursuant to the Arrangement Agreement; (ii) the reconstitution of the board of directors of ADI pursuant to the Arrangement Agreement and the execution and delivery by ADI of a management services agreement and the reconstitution of the management of ADI thereunder; (iii) the issuance of common shares and warrants of ADI in connection with proposed private placements to certain affiliates of SRC and a proposed marketed private placement to third parties to be consummated by ADI in connection with the foregoing transactions; (iv) the Warrant Distribution (as defined in the Arrangement Agreement); and (v) the SRCLP Warrant Issuance (as defined in the Arrangement Agreement) (the “ADI Transactions Approval Resolution”).

2. Notwithstanding that this resolution has been duly passed by the shareholders of ADI, the directors of ADI be, and they hereby are, authorized and empowered to revoke this resolution at any time prior to the Effective Date and to determine not to proceed with the transactions contemplated in the Arrangement Agreement.

3. Any officer or director of ADI is hereby authorized and directed, for and on behalf of ADI, to execute or cause to be executed and to deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such other document or instrument or the doing of any other such act or thing.

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

1. Provided that the ADI Transactions Approval Resolution is passed and the plan of arrangement provided for in the Arrangement Agreement is completed, ADI be and is hereby authorized to amend its articles to change its name from “Adriana Resources Inc.” to “Sprott Resource Holdings Inc.”, as more particularly described in the Circular.

2. Notwithstanding that this resolution has been duly passed by the shareholders of ADI, the directors of ADI be, and they hereby are, authorized and empowered to revoke this resolution at any time prior to the amendment of ADI’s articles and to determine not to proceed with changing the name of ADI.

3. Any officer or director of ADI is hereby authorized and directed, for and on behalf of ADI, to execute or cause to be executed and to deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such other document or instrument or the doing of any other such act or thing.

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EXECUTION VERSION


and


ARRANGEMENT AGREEMENT

November 29, 2016

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APPENDIX C


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TABLE OF CONTENTS

ARTICLE 1INTERPRETATION

Section 1.1 Defined Terms ............................................................................................ 2Section 1.2 Certain Rules of Interpretation.................................................................. 17

ARTICLE 2THE ARRANGEMENT

Section 2.1 Arrangement ............................................................................................. 18Section 2.2 Interim Order ............................................................................................ 18Section 2.3 The Company Meeting ............................................................................. 19Section 2.4 The Purchaser Meeting ............................................................................. 21Section 2.5 The Joint Circular ..................................................................................... 22Section 2.6 Final Order ................................................................................................ 24Section 2.7 Court Proceedings..................................................................................... 24Section 2.8 U.S. Securities Law Matters ..................................................................... 24Section 2.9 Employment Matters................................................................................. 25Section 2.10 Company SOP........................................................................................... 26Section 2.11 Articles of Arrangement and Effective Date ............................................ 26Section 2.12 Payment of Consideration......................................................................... 26Section 2.13 Withholding Taxes.................................................................................... 26Section 2.14 Pre-Arrangement and Post-Arrangement Transactions ............................ 27Section 2.15 Additional Issuance of Purchaser Warrants .............................................. 27Section 2.16 Purchaser Change of Name Resolution .................................................... 28

ARTICLE 3REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties of the Company..................................... 28Section 3.2 Representations and Warranties of the Purchaser..................................... 29

ARTICLE 4COVENANTS

Section 4.1 Conduct of Business of the Company....................................................... 30Section 4.2 Covenants of the Company Relating to the Arrangement ........................ 33Section 4.3 Conduct of Business of the Purchaser ...................................................... 35Section 4.4 Covenants of the Purchaser Relating to the Arrangement ........................ 38Section 4.5 Access to Information; Confidentiality..................................................... 40Section 4.6 Privacy Matters ......................................................................................... 41Section 4.7 Public Communications............................................................................ 41Section 4.8 Tax Free Reorganization........................................................................... 42Section 4.9 Insurance and Indemnification.................................................................. 42

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ARTICLE 5ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

Section 5.1 Non-Solicitation........................................................................................ 43Section 5.2 Notification of Acquisition Proposals....................................................... 45Section 5.3 Responding to an Acquisition Proposal.................................................... 46Section 5.4 Right to Match .......................................................................................... 47

ARTICLE 6CONDITIONS

Section 6.1 Mutual Conditions Precedent.................................................................... 49Section 6.2 Additional Conditions Precedent to the Obligations of the Purchaser ..... 49Section 6.3 Additional Conditions Precedent to the Obligations of the Company...... 50Section 6.4 Satisfaction of Conditions......................................................................... 52

ARTICLE 7TERM AND TERMINATION

Section 7.1 Term.......................................................................................................... 52Section 7.2 Termination............................................................................................... 52Section 7.3 Notice and Cure Provisions ...................................................................... 55Section 7.4 Effect of Termination/Survival ................................................................. 55

ARTICLE 8GENERAL PROVISIONS

Section 8.1 Amendments ............................................................................................. 56Section 8.2 Termination Fee and Expenses ................................................................. 56Section 8.3 Notices ...................................................................................................... 58Section 8.4 Time of the Essence .................................................................................. 59Section 8.5 Injunctive Relief........................................................................................ 60Section 8.6 Third Party Beneficiaries .......................................................................... 60Section 8.7 Waiver....................................................................................................... 60Section 8.8 Entire Agreement ...................................................................................... 60Section 8.9 Successors and Assigns............................................................................. 61Section 8.10 Severability ............................................................................................... 61Section 8.11 Governing Law ......................................................................................... 61Section 8.12 Rules of Construction ............................................................................... 61Section 8.13 No Liability............................................................................................... 61Section 8.14 Counterparts.............................................................................................. 62

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SCHEDULES

Schedule A PLAN OF ARRANGEMENTSchedule B ARRANGEMENT RESOLUTION AND PURCHASER RESOLUTIONSSchedule C REPRESENTATIONS AND WARRANTIES OF THE COMPANYSchedule D REPRESENTATIONS AND WARRANTIES OF THE PURCHASERSchedule E FORM OF MANAGEMENT SERVICES AGREEMENTSchedule F FORM OF AMENDED AND RESTATED PARTNERSHIP AGREEMENT

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THIS AGREEMENT is made as of November 29, 2016

BETWEEN:

SPROTT RESOURCE CORP., a corporation existing under the laws ofCanada

(the “Company”)

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ADRIANA RESOURCES INC., a corporation existing under the laws ofCanada

(the “Purchaser”).

WHEREAS:

(a) the Purchaser desires to acquire all of the outstanding Company Shares in exchange forPurchaser Shares;

(b) the Parties intend to carry out the proposed acquisition by way of a plan of arrangementunder the provisions of the CBCA;

(c) the Purchaser will effect the Warrant Distribution prior to the Effective Time and prior tothe completion of the Financings;

(d) the Purchaser has entered into the Company Lock-Up Agreements with the CompanyLocked-Up Shareholders and the Company has entered into the Purchaser Lock-UpAgreements with the Purchaser Locked-Up Shareholders;

(e) the Purchaser has entered into the Sprott Subscription Agreements with Sprott Inc., TermOil Inc. and Exploration Capital Partners 2008 Limited Partnership;

(f) the Purchaser, the Company, Sprott Global Resource Investments, Ltd. and Sprott PrivateWealth LP have entered into the Sprott Global Financing Term Sheet; and

(g) for United States federal income Tax purposes the transactions described in thisAgreement and the Schedules hereto are intended to be treated as an integratedtransaction all of which are intended to qualify as a “reorganization” under, and withinthe meaning of, Section 368(a) of the United States Internal Revenue Code of 1986, asamended (the “Code”), and this Arrangement Agreement is intended to constitute and isadopted as a “plan of reorganization” with respect to such transactions for purposes ofSections 354 and 361 of the Code.

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NOW THEREFORE, in consideration of the covenants and agreements hereincontained, the Parties agree as follows:


Section 1.1 Defined Terms

As used in this Agreement (including the recitals), the following terms have the followingmeanings:

“Acquisition Proposal” relating to a Party means, other than the transactions contemplated bythis Agreement, any offer, proposal or inquiry (written or oral) from any Person or group ofPersons other than the other Party or one or more of its affiliates relating to: (i) any direct orindirect sale, disposition, alliance or joint venture (or any lease, long-term supply agreement orother arrangement having the same economic effect as a sale), in a single transaction or a seriesof related transactions, of assets (including voting or equity securities of such Party’sSubsidiaries) representing 20% or more of the consolidated assets of such Party (based on theconsolidated statement of financial position of such Party most recently filed as part of theCompany Filings or the Purchaser Filings, as applicable, prior to such time) or contributing 20%or more of the consolidated annual revenue of such Party (based on the consolidated annualfinancial statements of such Party most recently filed as part of the Company Filings or thePurchaser Fillings, as applicable, prior to such time) or of 20% or more of the voting or equitysecurities (including securities convertible into or exercisable or exchangeable for voting orequity securities) of such Party; (ii) any direct or indirect take-over bid, tender offer, exchangeoffer, treasury issuance or similar transaction that, if consummated, would result in such Personor group of Persons beneficially owning 20% or more of any class of voting or equity securities(including securities convertible into or exercisable or exchangeable for voting or equitysecurities) of such Party; (iii) any plan of arrangement, merger, amalgamation, consolidation,security exchange, business combination, reorganization, recapitalization, liquidation,dissolution, or winding up involving such Party or any of its Subsidiaries holding 20% or moreof the consolidated assets of such Party or contributing 20% or more of the consolidated revenueof such Party; or (iv) any treasury issuance in consideration for securities of another issuer whichrepresents 75% of more of the outstanding voting or equity securities (including securitiesconvertible into or exerciseable or exchangeable for voting or equity securities) of such Party.

“affiliate” has the meaning ascribed thereto in National Instrument 45-106 – ProspectusExemptions.

“Agreement” means this arrangement agreement, as amended or supplemented from time totime.

“Arrangement” means an arrangement under Section 192 of the CBCA in respect of theCompany on the terms and subject to the conditions set out in the Plan of Arrangement, subjectto any amendments or variations to the Plan of Arrangement made in accordance therewith andwith the terms of this Agreement or made at the direction of the Court in the Final Order with theconsent of the Company and the Purchaser, each acting reasonably.

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“Arrangement Resolution” means the special resolution approving the Arrangement to beconsidered at the Company Meeting by the Company Shareholders, substantially in the form setout in Schedule B.

“Articles of Arrangement” means the articles of arrangement of the Company in respect of theArrangement, required by the CBCA to be sent to the Director after the Final Order is made,which shall include the Plan of Arrangement and otherwise be in a form and content satisfactoryto the Company and the Purchaser, each acting reasonably.

“Authorization” means, with respect to any Person, any order, permit, certificate, accreditation,approval, consent, waiver, registration, licence or similar authorization of any GovernmentalEntity having jurisdiction over the Person.

“Breaching Party” has the meaning ascribed thereto in Section 7.3(3).

“Business Day” means any day of the year, other than a Saturday, a Sunday or a day on whichmajor banks are closed for business in Toronto, Ontario.

“CBCA” means the Canada Business Corporations Act.

“Certificate of Arrangement” means the certificate of arrangement to be issued by the Directorpursuant to subsection 192(7) of the CBCA in respect of the Articles of Arrangement.

“Company Assets” means all of the assets, properties (real or personal), Authorizations, permits,rights, licences, waivers or consents (whether contractual or otherwise) of the Company and itsSubsidiaries.

“Company Board” means the board of directors of the Company, as constituted from time totime.

“Company Board Recommendation” has the meaning ascribed thereto in Section 2.5(1).

“Company Constating Documents” means the articles and by-laws of the Company, as theymay be amended from time to time.

“Company Data Room” means the virtual data room established by the Company, the index ofdocuments of which, as of the date of this Agreement, is appended to the Company DisclosureLetter.

“Company Disclosure Letter” means the disclosure letter of the Company dated the date of thisAgreement and delivered by the Company to the Purchaser with this Agreement.

“Company Employees” means the officers and employees of the Company and its Subsidiaries.

“Company EPSP” means the Company’s amended and restated 2014 employee profit sharingplan effective as of May 21, 2014.

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“Company Fairness Opinion” means the opinion of the Company Financial Advisor to theeffect that, as of the date of such opinion, the consideration to be received by the CompanyShareholders pursuant to the Arrangement is fair, from a financial point of view, to the CompanyShareholders.

“Company Filings” means all documents publicly filed by or on behalf of the Company onSEDAR on or after January 1, 2014.

“Company Financial Advisor” means GMP Securities L.P.

“Company Fundamental Representations” means the representations and warranties of theCompany set forth in paragraphs (2), (3), (5)(a) and (6) of Schedule C and the first sentence ofparagraph (1) of Schedule C.

“Company Lock-Up Agreements” means the lock-up agreements dated the date hereofbetween the Purchaser and the Company Locked-Up Shareholders.

“Company Locked-Up Shareholders” means (i) all of the directors and officers of theCompany, (ii) Sprott Inc. and (iii) Eric Sprott.

“Company Material Contract” means any Contract: (i) that if terminated or modified or if itceased to be in effect, would reasonably be expected to have a Material Adverse Effect on theCompany; (ii) that is a partnership agreement, joint venture agreement or similar agreementrelating to the formation, creation or operation of any partnership or joint venture in which theinterest of the Company and/or its Subsidiaries exceeds $2 million (book value); (iii) relating tothe guarantee of any liabilities or obligations in excess of $1 million of a Person other than theCompany or any of its Subsidiaries, or to indebtedness (currently outstanding or which maybecome outstanding) for borrowed money in excess of $1 million, in each case excludingguarantees or intercompany liabilities or obligations between two or more Persons each of whomis a Subsidiary of the Company or between the Company and one or more Persons each of whomis a Subsidiary of the Company; (iv) that creates an exclusive dealing arrangement or a right offirst offer or refusal in respect of assets that are material to the Company and its Subsidiaries,taken as a whole, to the benefit of a third party; or (v) providing for the purchase, sale orexchange of, or option to purchase, sell or exchange, any property or asset where the purchase orsale price or agreed value of such property or asset exceeds $1 million.

“Company Meeting” means the special meeting of the Company Shareholders, including anyadjournment or postponement of such special meeting, to be called and held in accordance withthe Interim Order to consider the Arrangement Resolution.

“Company Options” means the outstanding options to purchase Company Shares issued by theCompany under the Company SOP.

“Company Securityholders” means, collectively, the Company Shareholders, the holders ofCompany Options, and the holders of Director DSUs.

“Company Shareholders” means the registered holders and/or beneficial owners of theCompany Shares, as the context requires.

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“Company Shares” means the common shares in the capital of the Company.

“Company SOP” means the Company’s amended and restated share option plan, effective as ofMay 14, 2014.

“Confidentiality Agreement” means the confidential information and nondisclosure agreementdated April 27th, 2016 between the Company and the Purchaser.

“Consideration” means three (3) Purchaser Shares per Company Share.

“Contract” means any agreement, commitment, engagement, contract, franchise, licence, lease,obligation, note, bond, mortgage, indenture, undertaking or joint venture (written or oral) towhich a Party or any of its Subsidiaries is a party or by which it or any of its Subsidiaries isbound or affected or to which any of their respective properties or assets is subject.

“Court” means the Ontario Superior Court of Justice (Commercial List), or other court asapplicable.

“Depositary” means such Person as the Company may appoint to act as depositary for theCompany Shares in relation to the Arrangement, with the approval of the Purchaser, actingreasonably.

“Director” means the Director appointed pursuant to section 260 of the CBCA.

“Director DSU Plan” means the director deferred share unit plan of the Company, effective asof August 13, 2013.

“Director DSUs” means the deferred share units issued under the Director DSU Plan.

“Dissent Rights” means the rights of dissent exercisable by registered Company Shareholders inrespect of the Arrangement described in the Plan of Arrangement.

“Effective Date” means the date shown on the Certificate of Arrangement giving effect to theArrangement.

“Effective Time” means 12:01 a.m. in Toronto, Ontario on the Effective Date, or such othertime in Toronto, Ontario on the Effective Date as the Company and the Purchaser, each actingreasonably, may agree in writing prior to the Effective Date.

“Employee Plans” means all health, welfare, supplemental unemployment benefit, bonus, profitsharing, option, stock appreciation, savings, insurance, incentive, incentive compensation,deferred compensation, security purchase, security compensation, disability, pension orsupplemental retirement plans and other material employee or director compensation or benefitplans, policies, trusts, funds, agreements or arrangements for the benefit of current or formerdirectors of a Party or any of its Subsidiaries, Company Employees or former CompanyEmployees, in the case of the Company, or Purchaser Employees or former PurchaserEmployees, in the case of the Purchaser, which are maintained by or binding upon the Party orany of its Subsidiaries or in respect of which such Party or any of its Subsidiaries has any actual

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or potential liability, but does not include (i) individual offer letters or Contracts with anyCompany Employees or former Company Employees, in the case of the Company, or PurchaserEmployees or former Purchaser Employees, in the case of the Purchaser (including in each caseamendments thereto), or (ii) any statutory plans administered by a Governmental Entity,including the Canada Pension Plan and Québec Pension Plan and plans administered pursuant toapplicable federal or provincial health, worker’s compensation or employment insurancelegislation.

“Environmental Laws” means all Laws and agreements relating to pollution or the protection orquality of the environment or to the Release or threatened Release of Hazardous Substances intothe environment and all Authorizations issued pursuant to such Laws.

“Exploration Capital Partners 2008 Financing” means the $4,000,000 private placement ofunits of the Purchaser, each unit comprised of one Purchaser Share and one Purchaser Warrant,at a price of $0.25 per unit, to Exploration Capital Partners 2008 Limited Partnership.

“Exploration Capital Partners 2008 Subscription Agreement” means the subscriptionagreement dated as of the date hereof signed by the Purchaser and Exploration Capital Partners2008 Limited Partnership with respect to the Exploration Capital Partners 2008 Financing.

“Final Order” means the final order of the Court in a form acceptable to both the Company andthe Purchaser, each acting reasonably, approving the Arrangement, as such order may beamended, modified, supplemented or varied by the Court (with the consent of the Company andthe Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed,then, unless such appeal is withdrawn, abandoned or denied, as affirmed or as amended(provided that any such amendment is acceptable to the Company and the Purchaser, each actingreasonably) on appeal.

“Financings” means, collectively, the Sprott Inc. Financing, the Term Oil Financing, theExploration Capital Partners 2008 Financing and the Sprott Global Financing.

“GAAP” means generally accepted accounting principles as set out in the CPA CanadaHandbook – Accounting for an entity that prepares its financial statements in accordance withInternational Financial Reporting Standards, at the relevant time, applied on a consistent basis.

“Governmental Entity” means (i) any international, multinational, national, federal, provincial,territorial, state, regional, municipal, local or other government, governmental or public body,authority or department, central bank, court, tribunal, arbitral body, commission, board, bureau,commissioner, ministry, governor-in-council, agency or instrumentality, domestic or foreign;(ii) any subdivision or authority of any of the above; (iii) any quasi-governmental, administrativeor private body, including any tribunal, commission, committee, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or forthe account of any of the foregoing; or (iv) any stock exchange.

“Hazardous Substances” means any material or substance that is prohibited, listed, defined,designated or classified as dangerous, hazardous, radioactive, explosive, corrosive, flammable,leachable, oxidizing, or toxic or a pollutant or a contaminant under or pursuant to any applicable

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Environmental Laws, and including petroleum and all derivatives thereof or synthetic substitutestherefor (including polychlorinated biphenyls).

“Indemnified Persons” has the meaning ascribed thereto in Section 4.9(2).

“Intellectual Property” means anything that is or may be protected by any Intellectual PropertyRights in any jurisdiction such as, but not limited to, works (including software), performances,trade secrets, inventions (whether patentable or not), improvements to such inventions, industrialdesigns, mask work and integrated circuit topographies, trade-marks, trade names, businessnames, corporate names, domain names, website names and world wide web addresses, whetheror not they may also be protected, at any given time, as a trade secret or confidential information,including proprietary and non-public business information, know-how, methods, processes,designs, technology, technical data, schematics, models, simulations and documentation relatingto any of the foregoing.

“Intellectual Property Rights” means domestic and foreign: (i) patents and applications forpatents, and reissues, re-examinations, divisions, continuations, continuations-in-part, renewals,extensions and validations of patents and applications for patents, utility models and pettypatents; (ii) copyrights, copyright registrations and applications for copyright registration;(iii) mask work registrations and applications for mask work registrations; (iv) design patentsand registrations, design patents and registration applications and integrated circuit topographyregistrations and applications; and (v) common law rights to trade-marks, trade-markregistrations and trade-mark applications.

“Interim Order” means the interim order of the Court in a form acceptable to the Company andthe Purchaser, each acting reasonably, providing for, among other things, the calling and holdingof the Company Meeting, as such order may be amended, modified, supplemented or varied bythe Court with the consent of the Company and the Purchaser, each acting reasonably.

“Investment Portfolio” means the investment portfolio of the Company as of date hereof as setforth in Section 1.1 of the Company Disclosure Letter.

“Joint Circular” means the notice of the Company Meeting and the notice of the PurchaserMeeting and the accompanying joint management proxy circular, including all schedules,appendices and exhibits to, and information incorporated by reference in, such joint managementproxy circular, to be sent to each Company Shareholder and other Person as required by theInterim Order and Law in connection with the Company Meeting and to be sent to eachPurchaser Shareholder and other Person as required by Law in connection with the PurchaserMeeting, as amended, supplemented or otherwise modified from time to time in accordance withthe terms of this Agreement.

“Law” means, with respect to any Person, any and all applicable law (statutory, common, civilor otherwise), constitution, treaty, convention, ordinance, by-law, code, rule, regulation, order,injunction, judgment, award, decree, ruling or other similar requirement, whether domestic orforeign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding uponor applicable to such Person or its business, undertaking, property or securities, and to the extent

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that they have the force of law, policies, guidelines, notices and protocols of any GovernmentalEntity, as amended unless expressly specified otherwise.

“Lien” means any mortgage, charge, pledge, hypothec, security interest, prior claim, lien(statutory or otherwise), or restriction or adverse right or claim, or other encumbrance of anykind.

“Matching Period” has the meaning ascribed thereto in Section 5.4(1)(v).

“Material Adverse Effect” means any change, event, occurrence, effect, state of facts orcircumstance that, individually or in the aggregate with other such changes, events, occurrences,effects, states of facts or circumstances, is or would reasonably be expected to be material andadverse to the business, results of operations, assets, properties, condition (financial orotherwise), liabilities (contingent or otherwise) or operations of a Party and its Subsidiaries,taken as a whole, except any such change, event, occurrence, effect, state of facts orcircumstance resulting from or arising in connection with:

(i) any change affecting one or more of the industries in which the Party and itsSubsidiaries operate;

(ii) any change in currency exchange, interest or inflation rates, in political conditions(including the outbreak or escalation of war, military action or acts of terrorism)or in general economic, business, regulatory, financial, credit or capital marketconditions in Canada or elsewhere;

(iii) any adoption, proposal or implementation of, or change in, Law or in theinterpretation thereof by any Governmental Entity;

(iv) any change in GAAP or changes in regulatory accounting requirements;

(v) any natural disaster;

(vi) the failure of a Party to meet any internal or published projections, forecasts orestimates of revenues, earnings, sales, margins or cash flows (it being understoodthat the causes underlying such failure may be taken into account in determiningwhether a Material Adverse Effect has occurred);

(vii) any action taken (or omitted to be taken) by the Party or any of its Subsidiariesupon the written request or with the written consent of the other Party;

(viii) the execution, announcement or performance of this Agreement or theconsummation of the transactions contemplated hereby, including any loss orthreatened loss of, or adverse change or threatened adverse change in, therelationship of the Party or any of its Subsidiaries with any of their current orprospective employees, customers, securityholders, financing sources, vendors,distributors, regulators, suppliers or partners arising as a direct consequencethereof; or

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(ix) any change in the market price or trading volume of any securities of the Party orany of its Subsidiaries (it being understood that the causes underlying such changein market price or trading volume may be taken into account in determiningwhether a Material Adverse Effect has occurred), or any suspension of trading insecurities generally on any securities exchange on which the securities of theParty or any of its Subsidiaries trade;

provided, however, that (A) with respect to clauses (i) through to and including (v), such matterdoes not have a materially disproportionate effect on the Party and its Subsidiaries, taken as awhole, relative to other comparable companies and entities operating in the industries in whichsuch Party and its Subsidiaries operate; and (B) references in certain Sections of this Agreementto dollar amounts are not intended to be, and shall not be deemed to be, illustrative for purposesof determining whether a “Material Adverse Effect” has occurred.

“Material Subsidiary” means, with respect to a Party, a Subsidiary of the Party the total assetsof which constituted more than 10% of the consolidated assets of the Party as at September 30,2016, or the total revenues of which constituted more than 10% of the consolidated revenues ofthe Party for the year ended December 31, 2015.

“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders inSpecial Transactions.

“Misrepresentation” has the meaning ascribed thereto under the Securities Act (Ontario).

“MSA” means the second amended and restated management services agreement between theCompany and Sprott Consulting Limited Partnership effective January 1, 2015.

“Ordinary Course” means, with respect to an action taken by any Person, that such action isconsistent in nature and scope with the past practices of such Person and is taken in the ordinarycourse of the normal day-to-day operations of the business of such Person.

“Outside Date” means March 31, 2017 or such later date as may be agreed to in writing by theParties.

“Parties” means, collectively, the Company and the Purchaser and “Party” means either one ofthem.

“Partnership Agreement” means the second amended and restated partnership agreementbetween the Company and Sprott Resource Consulting Limited Partnership concerning SprottResource Partnership effective January 1, 2015.

“Permitted Liens” means, in respect of a Party or any of its Subsidiaries, any one or more of thefollowing:

(x) Liens or deposits for Taxes, assessments or governmental charges or levies whichare not due or delinquent or which are being contested in good faith byappropriate Proceedings;

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(xi) easements, rights of way, restrictions, restrictive covenants, servitudes and similarrights in real property, including rights of way and servitudes for highways andother roads, railways, sewers, drains, gas and oil pipelines, gas and water mains,electric light, power, telephone, telegraph or cable television conduits, poles,wires and cables that do not materially adversely affect the use of the relevantproperty as it is being used at the date hereof;

(xii) inchoate or statutory Liens of contractors, subcontractors, mechanics, workers,suppliers, materialmen, warehousemen, carriers and others in respect of theconstruction, maintenance, repair, operation or storage of Company Assets, in thecase of the Company, or the Purchaser Assets, in the case of the Purchaser, orother Liens arising out of judgments or awards with respect to which an appeal orother Proceeding for review is being prosecuted;

(xiii) municipal by-laws, regulations, zoning law, building or land use restrictions andother limitations imposed by any Governmental Entity having jurisdiction overreal property and any other restrictions affecting or controlling the use,marketability or development of real property;

(xiv) customary rights of general application reserved to or vested in any GovernmentalEntity to control or regulate any interest in the facilities in which the Company orany of its Subsidiaries, in the case of the Company, or the Purchaser and any of itsSubsidiaries, in the case of the Purchaser, conduct their business, provided thatsuch Liens, encumbrances, exceptions, agreements, restrictions, limitations,contracts and rights (a) were not incurred in connection with any indebtedness and(b) do not, individually or in the aggregate, have a Material Adverse Effect on thevalue or materially impair or add material cost to the use of the subject property;

(xv) Liens against furniture, leasehold improvements and equipment securingindebtedness incurred to finance the acquisition of such furniture, leaseholdimprovements or equipment;

(xvi) Liens arising solely by virtue of any statutory or common law provision relatingto banker’s liens, rights of combination of accounts or similar rights in theOrdinary Course in relation to deposit accounts or other funds maintained with acreditor depository institution;

(xvii) pledges, deposits and Liens under worker’s compensation laws, employmentinsurance laws or similar legislation; good faith deposits in connection with bids,tenders and contracts; deposits to secure surety or appeal bonds;

(xviii) registered agreements with any Governmental Entities or public utilities,including subdivision agreements, development agreements, engineering orgrading agreements and similar agreements;

(xix) easements, rights of way, servitudes and similar rights in real property for thepassage, ingress and egress of Persons and vehicles over parts of the CompanyAssets, in the case of the Company, or the Purchaser Assets, in the case of the

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Purchaser, that do not materially adversely affect the use of the relevant propertyas it is being used at the date hereof;

(xx) cost sharing, servicing, access, reciprocal and other similar agreements withneighbouring landowners and/or Governmental Entities that do not materiallyadversely affect the use of the relevant property as it is being used at the datehereof;

(xxi) any minor encroachments by any structure located on the Company Assets, in thecase of the Company, or the Purchaser Assets, in the case of the Purchaser, ontoany adjoining lands and any minor encroachment by any structure located onadjoining lands onto the Company Assets, in the case of the Company, or thePurchaser Assets, in the case of the Purchaser;

(xxii) any reservations, exceptions, limitations, provisos and conditions contained in theoriginal Crown grant or patent;

(xxiii) any leases, licenses or occupancy agreements granted by the Company and itsSubsidiaries, in the case of the Company, or the Purchaser and its Subsidiaries, inthe case of the Purchaser, over portions of the Company Assets, in the case of theCompany, or the Purchaser Assets, in the case of the Purchaser, that do notmaterially adversely affect the use of the relevant property as it is being used atthe date hereof;

(xxiv) the Company Material Contracts, in the case of the Company, or the PurchaserMaterial Contracts, in the case of the Purchaser, and any Liens in connectiontherewith;

(xxv) any encumbrances registered as of the Effective Time against title to real propertycomprising Company Assets, in the case of the Company, or the PurchaserAssets, in the case of the Purchaser, in applicable Land Registry Offices;

(xxvi) such other imperfections of title or Liens as do not materially affect the use of theproperties or assets subject thereto or affected thereby or otherwise materiallyimpair business operations at such properties; and

(xxvii) any Liens listed and described in the Company Disclosure Letter or the PurchaserDisclosure Letter, as the case may be.

“Person” includes any individual, partnership, limited partnership, association, body corporate,organization, joint venture, trust, estate, trustee, executor, administrator, legal representative,government (including Governmental Entity), syndicate or other entity, whether or not havinglegal status.

“Plan of Arrangement” means the plan of arrangement, substantially in the form set out inSchedule A, subject to any amendments or variations to such plan made in accordance with thisAgreement and the Plan of Arrangement or made at the direction of the Court in the Final Orderwith the consent of the Company and the Purchaser, each acting reasonably.

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“Proceeding” means any suit, claim, action, charge, complaint, litigation, arbitration, proceeding(including any civil, criminal, administrative, investigative or appellate proceeding), hearing,audit, examination or investigation commenced, brought, conducted or heard by or before, anycourt or other Governmental Entity.

“Purchaser Assets” means all of the assets, properties (real or personal), permits, rights,licences, waivers or consents (whether contractual or otherwise) of the Purchaser and itsSubsidiaries.

“Purchaser Board” means the board of directors of the Purchaser, as constituted from time totime.

“Purchaser Board Recommendation” has the meaning ascribed thereto in Section 2.5(2).

“Purchaser Constating Documents” means the articles and by-laws of the Purchaser as theymay be amended from time to time.

“Purchaser Data Room” means the virtual data room established by the Purchaser, the index ofdocuments of which, as of the date of this Agreement, is appended to the Purchaser DisclosureLetter.

“Purchaser Disclosure Letter” means the disclosure letter of the Purchaser dated the date ofthis Agreement and delivered by the Purchaser to the Company with this Agreement.

“Purchaser Employees” means the officers and employees of the Purchaser and its Subsidiaries.

“Purchaser Fairness Opinion” means the opinion of the Purchaser Financial Advisor to theeffect that, as of the date of such opinion, the Arrangement and the Warrant Distribution are fair,from a financial point of view, to the Purchaser Shareholders.

“Purchaser Filings” means all documents publicly filed by or on behalf of the Purchaser onSEDAR on or after January 1, 2014.

“Purchaser Financial Advisor” means Primary Capital Inc.

“Purchaser Fundamental Representations” means the representations and warranties of theCompany set forth in paragraphs (2), (3), (5)(a) and (6) of Schedule D and the first sentence ofparagraph (1) of Schedule D.

“Purchaser Lock-Up Agreements” means the lock-up agreements dated the date hereofbetween the Company and the Purchaser Locked-Up Shareholders.

“Purchaser Locked-Up Shareholders” means the directors, officers and shareholders of thePurchaser set forth in Section 1.1 of the Purchaser Disclosure Letter.

“Purchaser Material Contract” means any Contract: (i) that if terminated or modified or if itceased to be in effect, would reasonably be expected to have a Material Adverse Effect on thePurchaser; (ii) that is a partnership agreement, joint venture agreement or similar agreement

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relating to the formation, creation or operation of any partnership or joint venture in which theinterest of the Purchaser and/or its Subsidiaries exceeds $2 million (book value); (iii) relating tothe guarantee of any liabilities or obligations in excess of $1 million of a Person other than thePurchaser or any of its Subsidiaries, or to indebtedness (currently outstanding or which maybecome outstanding) for borrowed money in excess of $1 million, in each case excludingguarantees or intercompany liabilities or obligations between two or more Persons each of whomis a Subsidiary of the Purchaser or between the Purchaser and one or more Persons each ofwhom is a Subsidiary of the Purchaser; (iv) that creates an exclusive dealing arrangement or aright of first offer or refusal in respect of assets that are material to the Purchaser and itsSubsidiaries, taken as a whole, to the benefit of a third party; or (v) providing for the purchase,sale or exchange of, or option to purchase, sell or exchange, any property or asset where thepurchase or sale price or agreed value of such property or asset exceeds $1 million.

“Purchaser Meeting” means the meeting of Purchaser Shareholders, including any adjournmentor postponement of such meeting, to be called and held to consider the Purchaser Resolutions.

“Purchaser Name Change Resolution” means the special resolution of the PurchaserShareholders to authorize and approve an amendment to the articles of the Purchaser to changethe name of the Purchaser to Sprott Resource Holdings Inc., or such other name as the Purchaserand the Company shall deem appropriate, following the consummation of the Arrangement andthe Financings, substantially in the form set out in Schedule B (as such resolution may beamended or modified by the Purchaser (with the consent of the Company, acting reasonably)).

“Purchaser Options” means outstanding options to purchase Purchaser Shares issued by thePurchaser under the Purchaser SOPs.

“Purchaser Resolutions” means, collectively, the Purchaser Transactions Approval Resolutionand the Purchaser Name Change Resolution.

“Purchaser Shareholders” means the registered and/or beneficial holders of the PurchaserShares, as the context requires.

“Purchaser Shares” means the common shares in the capital of the Purchaser.

“Purchaser SOPs” means, collectively: (i) the incentive stock option plan of the Purchaserapproved by the shareholders of the Purchaser on June 13, 2013; and (ii) the stock option plan ofthe Purchaser approved by the Purchaser Board on May 9, 2016.

“Purchaser Transactions Approval Resolution” means (i) the ordinary resolution of thePurchaser Shareholders to authorize and approve the Arrangement and certain relatedtransactions provided for herein, including the “Change of Management” (as defined in Policy1.1 of the TSXV) of the Purchaser, substantially in the form set out in Schedule B, as suchresolution may be amended or modified by the Purchaser in response to a requirement of theTSXV, giving reasonable consideration to any comments made by the Company and its counsel,and (ii) any other ordinary resolutions of the Purchaser Shareholders required by the TSXV inconnection with the Warrant Distribution, the Arrangement or the Financings, such resolutions tobe in form and content satisfactory to the Purchaser, giving reasonable consideration to anycomments made by the Company and its counsel.

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“Purchaser Warrants” means the common share purchase warrants of the Purchaser providingfor the right of the holder to purchase one Purchaser Share per warrant at a price equal to $0.333with an expiry date of five (5) years from the Effective Date; provided, however, that if, after thefourth month following the Effective Date, the weighted average trading price of the PurchaserShares for any 45 consecutive trading day period is greater than $0.583 per Purchaser Share, theexpiry date may be accelerated by the Purchaser providing a notice to holders of such warrantswhereupon the expiry date shall become the 30th day following the date on which such notice isprovided, and with such other terms and conditions as may be specified in the Warrant Indenture.

“Recipient” has the meaning ascribed thereto in Section 4.6(1).

“Regulatory Approvals” means, any consent, waiver, permit, exemption, review, order,decision or approval of, or any registration and filing with, any Governmental Entity, or theexpiry, waiver or termination of any waiting period imposed by Law or a Governmental Entity,in each case required under Laws to consummate the transactions contemplated by theArrangement.

“Release” has the meaning ascribed thereto in any Environmental Law and includes any spill,leak, pumping, addition, pouring, emission, emptying, discharge, injection, escape, leaching,disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement orintroduction of a Hazardous Substance into the environment.

“Representatives” means the officers, directors, employees, financial advisors, legal counsel,accountants and other agents and representatives of a Party.

“Securities Authority” means the applicable securities commission or securities regulatoryauthority of a province or territory of Canada.

“Securities Laws” means the Securities Act (Ontario) and any other applicable Canadianprovincial and territorial securities laws, rules and regulations and published policies thereunder.

“SEDAR” means the System for Electronic Document Analysis and Retrieval maintained onbehalf of the Securities Authorities.

“Sprott Global Financing” means the proposed private placement of units of the Purchaser,each unit comprised of one Purchaser Share and one Purchaser Warrant, at a price of $0.25 perunit, to be marketed on a best efforts basis to accredited investors identified by Sprott GlobalResource Ltd. and Sprott Private Wealth LP (and other members of a selling group that may beappointed by them), acting as finders.

“Sprott Global Financing Term Sheet” means the non-binding term sheet entered into amongthe Company, Sprott Global Resource Ltd. and Sprott Private Wealth LP in respect of the SprottGlobal Financing.

“Sprott Inc. Financing” means the $10,000,000 private placement of Purchaser Shares at aprice of $0.233 per share to Sprott Inc.

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“Sprott Inc. Subscription Agreement” means the subscription agreement dated as of the datehereof signed by the Purchaser and Sprott Inc. with respect to the Sprott Inc. Financing.

“Sprott Subscription Agreements” means, collectively, the Sprott Inc. SubscriptionAgreement, the Term Oil Subscription Agreement and the Exploration Capital Partners 2008Subscription Agreement.

“Subsidiary” has the meaning ascribed thereto in National Instrument 45-106 – ProspectusExemptions.

“Superior Proposal” means any unsolicited bona fide written Acquisition Proposal in respect ofa Party from a Person who is an arm’s length third party made after the date of this Agreement:(i) to acquire, (A) in the case of the Company, 100% of the outstanding Company Shares, orCompany Assets (including voting or equity securities of its Subsidiaries) representing 50% ormore of the consolidated assets of the Company (based on the consolidated statement of financialposition of the Company most recently filed as part of the Company Filings prior to such time)or contributing 50% or more of the consolidated annual revenue of the Company (based on theconsolidated annual financial statements of the Company most recently filed as part of theCompany Filings prior to such time), or (B) in the case of the Purchaser, 100% of theoutstanding Purchaser Shares, or Purchaser Assets (including voting or equity securities of itsSubsidiaries) representing 50% or more of the consolidated assets of the Purchaser (based on theconsolidated statement of financial position of the Purchaser most recently filed as part of thePurchaser Filings prior to such time) or contributing 50% or more of the consolidated annualrevenue of the Purchaser (based on the consolidated annual financial statements of the Purchasermost recently filed as part of the Purchaser Filings prior to such time); (ii) that complies withSecurities Laws and did not result from or involve a breach of this Agreement; (iii) in respect ofwhich the Company Board, in the case of the Company, or the Purchaser Board, in the case ofthe Purchaser, determines in good faith, after receiving the advice of its outside legal counsel andfinancial advisors, that adequate arrangements have been made in respect of any requiredfinancing to complete such Acquisition Proposal; (iv) that is not subject to any due diligenceand/or access condition; (v) that the Company Board, in the case of the Company, or thePurchaser Board, in the case of the Purchaser, determines in good faith, after receiving the adviceof its outside legal counsel and financial advisors, is reasonably capable of completion inaccordance with its terms without undue delay, taking into account all financial, legal, regulatoryand other aspects of such Acquisition Proposal and the Person making such AcquisitionProposal; and (vi) in respect of which the Company Board, in the case of the Company, or thePurchaser Board, in the case of the Purchaser, determines, in its good faith judgment, afterreceiving the advice of its outside legal counsel and financial advisors and after taking intoaccount all the terms and conditions of the Acquisition Proposal, including all legal, financial,regulatory and other aspects of such Acquisition Proposal and the party making such AcquisitionProposal, that such Acquisition Proposal would, if consummated in accordance with its terms,but without assuming away the risk of non-completion, result in a transaction which is morefavourable, from a financial point of view, to Company Shareholders, in the case of theCompany, or to the Purchaser Shareholders, in the case of the Purchaser, than the Arrangement(including any amendments to the terms and conditions of the Arrangement proposed by thePurchaser or the Company pursuant to Section 5.4(1)(vi)).

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“Superior Proposal Notice” has the meaning ascribed thereto in Section 5.4(1)(iii).

“Tax Act” means the Income Tax Act (Canada).

“Tax Returns” means any and all returns, reports, declarations, elections, notices, forms,designations, filings, statements and other similar documents (including estimated tax returnsand reports, withholding tax returns and reports, and information returns and reports) filed orrequired to be filed in respect of Taxes including all amendments, schedules, attachments orsupplements thereto.

“Taxes” means (i) any and all taxes, duties, fees, excises, premiums, assessments, imposts, leviesand other charges or assessments of any kind whatsoever imposed by any Governmental Entity,whether computed on a separate, consolidated, unitary, combined or other basis, including thoselevied on, or measured by, or described with respect to, income, gross receipts, profits, gains,windfalls, capital, capital stock, production, recapture, transfer, land transfer, license, gift,occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services,harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business,franchising, real or personal property, health, employee or employer health, payroll, workers’compensation, employment or unemployment, severance, social services, social security,education, utility, surtaxes, customs, import or export, and including all license and registrationfees and all employment insurance, health insurance and government pension plan premiums orcontributions; (ii) all interest, penalties, fines, additions to tax or other additional amountsimposed by any Governmental Entity on or in respect of amounts of the type described in clause(i) above or this clause (ii); (iii) any liability for the payment of any amounts of the typedescribed in clauses (i) or (ii) as a result of being a member of an affiliated, consolidated,combined or unitary group for any period; and (iv) any liability for the payment of any amountsof the type described in clauses (i) or (ii) as a result of any express or implied obligation toindemnify any other Person or as a result of being a transferee or successor in interest to anyParty.

“Terminating Party” has the meaning ascribed thereto in Section 7.3(3).

“Termination Fee” has the meaning ascribed thereto in Section 8.2(2).

“Termination Fee Event” has the meaning ascribed thereto in Section 8.2(2).

“Termination Notice” has the meaning ascribed thereto in Section 7.3(3).

“Term Oil Financing” means the $1,000,000 private placement of units of the Purchaser, eachunit comprised of one Purchaser Share and one Purchaser Warrant, at a price of $0.25 per unit, toTerm Oil Inc.

“Term Oil Subscription Agreement” means the subscription agreement dated as of the datehereof signed by the Purchaser and Term Oil Inc. with respect to the Term Oil Financing.

“Transaction Personal Information” has the meaning ascribed thereto in Section 4.6(1).

“Transferor” has the meaning ascribed thereto in Section 4.6(1).

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“TSX” means the Toronto Stock Exchange.

“TSXV” means the TSX Venture Exchange.

“United States” means the United States of America, its territories and possessions, any State ofthe United States, and the District of Columbia.

“U.S. Securities Act” means the United States Securities Act of 1933.

“Warrant Distribution” means the issuance by the Purchaser of 0.25 of a Purchaser Warrantper Purchaser Share to Purchaser Shareholders of record on the Business Day immediatelypreceding the Effective Date.

“Warrant Indenture” means the warrant indenture of the Purchaser to be entered into by thePurchaser and such person as the Purchaser may appoint to act as warrant agent prior to theEffective Time (with the consent of the Company, acting reasonably) governing the PurchaserWarrants, in form and substance satisfactory to the Company, acting reasonably.

“WISCO” means Wisco International Resources Development and Investment Limited.

Section 1.2 Certain Rules of InterpretationIn this Agreement, unless otherwise specified:

(1) Headings, etc. The provision of a Table of Contents, the division of this Agreement intoArticles and Sections and the insertion of headings are for convenient reference only anddo not affect the construction or interpretation of this Agreement.

(2) Currency. All references to dollars or to “$” are references to Canadian dollars, unlessspecified otherwise.

(3) Gender and Number. Any reference to gender includes all genders. Words importingthe singular number only include the plural and vice versa.

(4) Certain Phrases, etc. The words (i) “including”, “includes” and “include” mean“including (or includes or include) without limitation,” (ii) “the aggregate of”, “the totalof”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum),without duplication, of,” and (iii) unless stated otherwise, “Article”, “Section”, and“Schedule” followed by a number or letter mean and refer to the specified Article orSection of, or Schedule to, this Agreement.

(5) Capitalized Terms. All capitalized terms used in any Schedule or in the CompanyDisclosure Letter or Purchaser Disclosure Letter have the meanings ascribed to them inthis Agreement.

(6) Knowledge. Where any representation or warranty is expressly qualified by reference tothe knowledge (i) of the Company, it is deemed to refer to the actual knowledge, afterreasonable internal inquiry, of the following Persons: Stephen Yuzpe, President andCEO, Michael Staresinic, CFO and Arthur Einav, Managing Director, General Counsel

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and Corporate Secretary; or (ii) of the Purchaser, it is deemed to refer to the actualknowledge, after reasonable internal inquiry, of the following Persons: Michael Harrison,President and Chief Executive Officer, Carlos Pinglo, Chief Financial Officer, ConnieDos Santos, Corporate Secretary and Daniella Dimitrov.

(7) Accounting Terms. Unless otherwise stated, all accounting terms are to be interpretedin accordance with GAAP and all determinations of an accounting nature in respect of theCompany or the Purchaser required to be made hereunder shall be made in a mannerconsistent with GAAP.

(8) Statutes. Any reference to a statute refers to such statute and all rules and regulationsmade under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.

(9) Business Days. If the date on which any action is required or permitted to be taken underthis Agreement by a Person is not a Business Day, such action shall be required orpermitted to be taken on the next succeeding day which is a Business Day.

(10) Time References. References to time are to local time in Toronto, Ontario.

(11) Subsidiaries. To the extent any covenants or agreements relate, directly or indirectly, toa Subsidiary of the Company or the Purchaser, each such provision shall be construed asa covenant by the Company or the Purchaser, as applicable, to cause (to the fullest extentto which it is legally capable) such Subsidiary to perform the required action.

(12) Schedules. The Schedules attached to this Agreement form an integral part of thisAgreement.


Section 2.1 Arrangement

The Company and the Purchaser agree that the Arrangement will be implemented inaccordance with and subject to the terms and conditions of this Agreement and the Plan ofArrangement.

Section 2.2 Interim Order

As soon as reasonably practicable after the date of this Agreement, the Company shallapply in a manner acceptable to the Purchaser, acting reasonably, pursuant to Section 192 of theCBCA and, in cooperation with the Purchaser, prepare, file and diligently pursue an applicationfor the Interim Order, which must provide, among other things:

(i) for the classes of Persons to whom notice is to be provided in respect of theArrangement and the Company Meeting and for the manner in which such noticeis to be provided;

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(ii) that the requisite level of approval for the Arrangement Resolution shall be (A)two-thirds of the votes cast on such resolution by Company Shareholders presentin person or represented by proxy at the Company Meeting and (B) a majority ofthe votes cast on such resolution by Company Shareholders present in person orrepresented by proxy at the Company Meeting, excluding for purposes of (B)votes cast in respect of Company Shares held by Eric Sprott, Sprott Inc. and anyother Person described in items (a) through (d) of section 8.1(2) of MI 61-101;

(iii) that, in all other respects, the terms, restrictions and conditions of the CompanyConstating Documents, including quorum requirements and all other matters,shall apply in respect of the Company Meeting;

(iv) for the grant of the Dissent Rights to those Company Shareholders who areregistered Company Shareholders as contemplated in the Plan of Arrangement;

(v) for the notice requirements with respect to the presentation of the application tothe Court for the Final Order;

(vi) that the Company Meeting may be adjourned or postponed from time to time bythe Company in accordance with the terms of this Agreement without the need foradditional approval of the Court or the Company Shareholders; and

(vii) for such other matters as the Purchaser may reasonably require, subject toobtaining the prior consent of the Company, such consent not to be unreasonablywithheld or delayed.

In seeking the Interim Order, the Company shall advise the Court that it is the Purchaser’sintention to rely upon the exemption from registration provided by Section 3(a)(10) of the U.S.Securities Act with respect to the issuance of Purchaser Shares pursuant to the Arrangement,based on the Court’s approval of the Arrangement.

Section 2.3 The Company Meeting

The Company shall:

(i) convene and conduct the Company Meeting in accordance with the Interim Order,the Company Constating Documents and Law on or before January 31, 2017 and,in this regard, the Company shall abridge, as necessary, any time periods that maybe abridged under Securities Laws, for the purpose of considering theArrangement Resolution and for any other proper purpose as may be set out in theJoint Circular and agreed to by the Purchaser, acting reasonably, use itscommercially reasonable efforts to schedule the Company Meeting on the sameday as the Purchaser Meeting, and not adjourn, postpone or cancel (or propose theadjournment, postponement or cancellation of) the Company Meeting without theprior written consent of the Purchaser, except as required or permitted underSection 5.4(5) or Section 7.3(3), as required for quorum purposes (in which casethe Company Meeting shall be adjourned and not cancelled), as required by Law

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or by a Governmental Entity or for the purpose of attempting to obtain therequisite approval for the Arrangement Resolution;

(ii) subject to compliance by the directors and officers of the Company with theirfiduciary duties, use commercially reasonable efforts to solicit proxies in favourof the approval of the Arrangement Resolution and against any resolutionsubmitted by any Person that is inconsistent with the Arrangement Resolution andthe completion of the transactions contemplated by this Agreement, including, ifso requested by the Purchaser, using proxy solicitation services firms andcooperating with any Persons engaged by the Purchaser to solicit proxies infavour of the approval of the Arrangement Resolution;

(iii) provide the Purchaser with copies of or access to information regarding theCompany Meeting generated by any proxy solicitation services firm, as requestedfrom time to time by the Purchaser;

(iv) consult with the Purchaser in fixing the date of the Company Meeting and therecord date of the Company Meeting and give notice to the Purchaser of theCompany Meeting and allow the Purchaser’s representatives and legal counsel toattend the Company Meeting;

(v) promptly advise the Purchaser, at such times as the Purchaser may reasonablyrequest and at least on a daily basis on each of the last 10 Business Days prior tothe date of the Company Meeting, as to the aggregate tally of the proxies receivedby the Company in respect of the Arrangement Resolution;

(vi) promptly advise the Purchaser of any communication (written or oral) receivedfrom, or claims brought by (or threatened to be brought by), any Person relating tothe purported exercise of Dissent Rights by Company Shareholders, and theCompany shall not settle or compromise or agree to settle or compromise anysuch Dissent Rights without the prior written consent of the Purchaser, not to beunreasonably withheld, conditioned or delayed;

(vii) not change the record date for the Company Shareholders entitled to vote at theCompany Meeting in connection with any adjournment or postponement of theCompany Meeting unless required by Law; and

(viii) at the reasonable request of the Purchaser from time to time, provide thePurchaser with a list (in both written and electronic form) of (a) the CompanyShareholders, together with their addresses and respective holdings of CompanyShares, (b) the names, addresses and holdings of all Persons having rights issuedby the Company to acquire Company Shares (including holders of any optionsand convertible securities), and (c) participants and book-based nomineeregistrants such as CDS & Co., CEDE & Co. and DTC, and non-objectingbeneficial owners of shares, together with their addresses and respective holdings.The Company shall from time to time require that its registrar and transfer agentfurnish the Purchaser with such additional information, including updated or

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additional lists of Company Shareholders and lists of securities positions andother assistance as the Purchaser may reasonably request in order to be able tocommunicate with respect to the Arrangement and other transactions hereunderwith the Company Shareholders and with such other Persons as are entitled tovote at the Company Meeting.

Section 2.4 The Purchaser MeetingThe Purchaser shall:

(i) convene and conduct the Purchaser Meeting in accordance with the PurchaserConstating Documents and Law on or before January 31, 2017 and, in this regard,the Purchaser shall abridge, as necessary, any time periods that may be abridgedunder Securities Laws, for the purpose of considering the Purchaser Resolutionsand for any other proper purpose as may be set out in the Joint Circular andagreed to by the Company, acting reasonably, use its commercially reasonableefforts to schedule the Purchaser Meeting on the same day as the CompanyMeeting, and not adjourn, postpone or cancel (or propose the adjournment,postponement or cancellation of) the Purchaser Meeting without the prior writtenconsent of the Company, except as required or permitted under Section 5.4(5) orSection 7.3(3), as required for quorum purposes (in which case the PurchaserMeeting shall be adjourned and not cancelled), as required by Law or by aGovernmental Entity or for the purpose of attempting to obtain the requisiteapproval for the Purchaser Resolutions;

(ii) subject to compliance by the directors and officers of the Purchaser with theirfiduciary duties, use commercially reasonable efforts to solicit proxies in favourof the approval of the Purchaser Resolutions, and against any resolution submittedby any Person that is inconsistent with the Purchaser Resolutions and thecompletion of the transactions contemplated by this Agreement, including, if sorequested by the Company, using proxy solicitation services firms andcooperating with any Persons engaged by the Company to solicit proxies infavour of the approval of the Purchaser Resolutions;

(iii) provide the Company with copies of or access to information regarding thePurchaser Meeting generated by any proxy solicitation services firm, as requestedfrom time to time by the Company;

(iv) consult with the Company in fixing the date of the Purchaser Meeting and therecord date of the Purchaser Meeting and give notice to the Company of thePurchaser Meeting and allow the Company’s representatives and legal counsel toattend the Purchaser Meeting;

(v) promptly advise the Company, at such times as the Company may reasonablyrequest and at least on a daily basis on each of the last 10 Business Days prior tothe date of the Purchaser Meeting, as to the aggregate tally of the proxies receivedby the Purchaser in respect of each of the Purchaser Resolution;

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(vi) not change the record date for the Purchaser Shareholders entitled to vote at thePurchaser Meeting in connection with any adjournment or postponement of thePurchaser Meeting unless required by Law; and

(vii) at the reasonable request of the Company from time to time, provide the Companywith a list (in both written and electronic form) of (a) the Purchaser Shareholders,together with their addresses and respective holdings of Purchaser Shares, (b) thenames, addresses and holdings of all Persons having rights issued by thePurchaser to acquire Purchaser Shares (including holders of any options andconvertible securities), and (c) participants and book-based nominee registrantssuch as CDS & Co., CEDE & Co. and DTC, and non-objecting beneficial ownersof shares, together with their addresses and respective holdings. The Purchasershall from time to time require that its registrar and transfer agent furnish theCompany with such additional information, including updated or additional listsof Purchaser Shareholders and lists of securities positions and other assistance asthe Company may reasonably request in order to be able to communicate withrespect to the Arrangement and other transactions hereunder with the PurchaserShareholders and with such other Persons as are entitled to vote at the PurchaserMeeting.

Section 2.5 The Joint Circular

(1) The Company shall use its commercially reasonable efforts to obtain and furnish to thePurchaser the information required on its behalf to be included in the Joint Circular,including, if applicable, pro forma financial statements prepared in accordance with IFRSand applicable Laws, and to prepare with the Purchaser the Joint Circular. As of the datethe Joint Circular is first mailed to the Company Shareholders and the PurchaserShareholders and the date of the Company Meeting and the Purchaser Meeting, theinformation relating to the Company and its affiliates, including information relating tothe Company Meeting, contained in the Joint Circular shall be complete and correct in allmaterial respects, shall not contain a Misrepresentation and shall comply in all materialrespects with all applicable Laws. The Company shall ensure that the Joint Circularprovides Company Shareholders with information in sufficient detail to permit them toform a reasoned judgment concerning the matters to be placed before them at theCompany Meeting. Without limiting the generality of the foregoing, the Joint Circularmust include: (i) a copy of the Company Fairness Opinion; (ii) a statement that theCompany Board unanimously recommends that Company Shareholders vote in favour ofthe Arrangement Resolution (the “Company Board Recommendation”); and (iii) astatement that each of the Company Locked-Up Shareholders intends to vote all of suchPerson’s Company Shares in favour of the Arrangement Resolution, subject to the termsof this Agreement and the Company Lock-Up Agreements.

(2) The Purchaser shall use its commercially reasonable efforts to obtain and furnish to theCompany the information required on its behalf to be included in the Joint Circular,including all necessary information in respect of its material mineral properties, includingone or more National Instrument 43-101 – Standards of Disclosure for Mineral Projectscompliant technical reports on its material properties (if required), and to prepare with the

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Company the Joint Circular. As of the date the Joint Circular is first mailed to theCompany Shareholders and the Purchaser Shareholders and the date of the CompanyMeeting and the Purchaser Meeting, the information relating to the Purchaser and itsaffiliates, including, without limitation, information relating to the Purchaser Meeting andthe Purchaser Shares, contained in the Joint Circular shall be complete and correct in allmaterial respects, shall not contain any Misrepresentation and shall comply in all materialrespects with all applicable Laws. The Purchaser shall ensure that the Joint Circularprovides Purchaser Shareholders with information in sufficient detail to permit them toform a reasoned judgment concerning the matters to be placed before them at thePurchaser Meeting. Without limiting the generality of the foregoing, the Joint Circularmust include: (i) a copy of the Purchaser Fairness Opinion; (ii) a statement that thePurchaser Board recommends that Purchaser Shareholders vote in favour of thePurchaser Resolutions (the “Purchaser Board Recommendation”); and (iii) a statementthat each of the Purchaser Locked-Up Shareholders intends to vote all of such Person’sPurchaser Shares in favour of the Purchaser Resolutions, subject to the terms of thisAgreement and the Purchaser Lock-Up Agreements.

(3) Each Party shall use commercially reasonable efforts to obtain any necessary certificatesand/or consents from any of its auditors, independent qualified persons and any otheradvisors to the use of any financial, technical or other expert information required to beincluded or incorporated by reference in the Joint Circular and to the identification in theJoint Circular of each such Person.

(4) Each Party and its legal counsel shall be given a reasonable opportunity to review andcomment on drafts of the Joint Circular and other related documents prior to the printingof the Joint Circular, and reasonable consideration shall be given to any comments madeby each Party and its counsel, provided that all information relating to the Company andits Subsidiaries included in the Joint Circular shall be in a form and content satisfactoryto the Company, acting reasonably, and all information relating to the Purchaser and itsSubsidiaries included in the Joint Circular shall be in a form and content satisfactory tothe Purchaser, acting reasonably.

(5) The Company shall, promptly after obtaining the Interim Order, cause the Joint Circularand such other documents to be filed with the applicable Securities Authorities and sentto each Company Shareholder and other Person as required by the Interim Order andLaw, in each case using all commercially reasonable efforts so as to permit the CompanyMeeting to be held by the date specified in Section 2.3(i).

(6) The Purchaser shall, promptly after the Interim Order is obtained by the Company, causethe Joint Circular and such other documents to be filed with the applicable SecuritiesAuthorities and sent to each Purchaser Shareholder and other Person as required by Lawin connection with the Purchaser Meeting, in each case using all commercially reasonableefforts so as to permit the Purchaser Meeting to be held by the date specified inSection 2.4(i).

(7) Each Party shall promptly notify the other Party if at any time before the Effective Date itbecomes aware (in the case of the Company only with respect to the Company and in the

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case of the Purchaser only with respect to the Purchaser) that the Joint Circular contains aMisrepresentation, or otherwise requires an amendment or supplement. The Parties shallco-operate in the preparation of any amendment or supplement, as required orappropriate, and the Company shall promptly mail, file or otherwise publicly disseminateany such amendment or supplement to the Company Shareholders and such other Personsas required by Law in accordance with the Interim Order and, if required by the InterimOrder or by Law, file the same with the Securities Authorities or as otherwise required,and the Purchaser shall promptly mail, file or otherwise publicly disseminate any suchamendment or supplement to the Purchaser Shareholders and, if required by Law, file thesame with the Securities Authorities or as otherwise required.

Section 2.6 Final Order

If the Interim Order is obtained and the Arrangement Resolution is passed at theCompany Meeting as required by applicable Law, the Company shall, as soon as reasonablypracticable (but in any event within three Business Days) thereafter, take all steps necessary ordesirable to submit the Arrangement to the Court and diligently pursue an application for theFinal Order pursuant to Section 192 of the CBCA.

Section 2.7 Court Proceedings

The Purchaser will cooperate with the Company in pursuing the Interim Order and theFinal Order, including by providing the Company on a timely basis any information required tobe supplied by the Purchaser in connection therewith. The Company will provide the Purchaserand its legal counsel with reasonable opportunity to review and comment upon drafts of allmaterial to be filed with the Court in connection with the Arrangement (including by providing,on a timely basis and prior to the service and filing of such material, a description of anyinformation required to be supplied by the Purchaser for inclusion in such material) and theCompany will give reasonable consideration to all comments made by the Purchaser’s counselon such material. In addition, the Company will not object to legal counsel to the Purchasermaking such submissions on the application for the Interim Order and the application for theFinal Order as such counsel considers appropriate, acting reasonably. The Company will alsoprovide the Purchaser’s legal counsel, on a timely basis, with copies of any notice, written ororal, indicating the intention of any Person to appeal, or oppose the granting of, the InterimOrder or Final Order.

Section 2.8 U.S. Securities Law Matters

The Parties agree that the Arrangement will be carried out with the intention that allPurchaser Shares issued under the Arrangement will be issued by the Purchaser in reliance on theexemption from the registration requirements of the U.S. Securities Act provided bySection 3(a)(10) thereunder. In order to ensure the availability of the exemption underSection 3(a)(10) of the U.S. Securities Act and to facilitate the Purchaser’s compliance withother United States securities Laws, the Parties agree that the Arrangement will be carried out onthe following basis:

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(i) pursuant to Section 2.2, prior to the issuance of the Interim Order, the Court willbe advised as to the intention of the Parties to rely on the exemption fromregistration provided by Section 3(a)(10) of the U.S. Securities Act with respect tothe issuance of Purchaser Shares pursuant to the Arrangement, based on theCourt’s approval of the Arrangement;

(ii) prior to the issuance of the Interim Order, the Company will file with the Court acopy of the proposed draft text of the Joint Circular together with any otherdocuments required by Law in connection with the Company Meeting;

(iii) the Court will have determined that the terms and conditions of the Arrangementare fair and reasonable to all Persons who are entitled to receive Purchaser Sharespursuant to the Arrangement;

(iv) the Company will ensure that each Company Shareholder and other Personentitled to receive Purchaser Shares pursuant to the Arrangement will be givenadequate and appropriate notice advising them of their right to attend the hearingof the Court to give approval to the Arrangement and providing them withsufficient information necessary for them to exercise that right;

(v) all Persons entitled to receive Purchaser Shares pursuant to the Arrangement willbe advised that Purchaser Shares issued pursuant to the Arrangement have notbeen registered under the U.S. Securities Act and will be issued by the Purchaserin reliance on the exemption provided by Section 3(a)(10) of the U.S. SecuritiesAct;

(vi) the Final Order approving the terms and conditions of the Arrangement that isobtained from the Court will state that the Court has determined that theArrangement is fair and reasonable;

(vii) the Interim Order approving the Company Meeting will specify that each Personentitled to receive Purchaser Shares pursuant to the Arrangement will have theright to appear before the Court at the hearing of the Court to give approval of theArrangement so long as they enter an appearance within a reasonable time; and

(viii) the Court will hold a hearing before approving the fairness of the terms andconditions of the Arrangement and issuing the Final Order.

Section 2.9 Employment Matters

From and after the Effective Time, the Purchaser shall honour and perform, or cause theCompany or its Subsidiaries (and any successor to the Company or its Subsidiaries) to honourand perform, all of the obligations of the Company and any of its Subsidiaries under Contractswith current or former Company Employees, including offer letters and employment and otheragreements, and Employee Plans, in accordance with their terms as in effect immediately beforethe Effective Time, all of which are described in Schedule 2.9 of the Company Disclosure Letter.

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Section 2.10 Company SOP

In accordance with the Plan of Arrangement, at the time specified in the Plan of Arrangement,each Company Option outstanding immediately prior to the Effective Time (whether vested orunvested) will be cancelled by the Company without payment of any consideration.

Section 2.11 Articles of Arrangement and Effective Date

(1) The Company shall file the Articles of Arrangement with the Director, and cause theEffective Date to occur, as soon as reasonably practicable, and in no event later than theeighth (8th) Business Day following the satisfaction or waiver of all conditions tocompletion of the Arrangement set out in Article 6 (excluding conditions that, by theirterms, cannot be satisfied until the Effective Date, but subject to the satisfaction or, wherenot prohibited, waiver of those conditions as of the Effective Date by the applicable Partyor Parties for whose benefit such conditions exist), unless another date is agreed to by theParties, and the Arrangement shall be effective at the Effective Time on the EffectiveDate and will have all of the effects provided by applicable Law.

(2) The closing of the Arrangement will take place at the offices of Blake, Cassels &Graydon LLP in Toronto, Ontario or at such other location as may be agreed upon by theParties.

Section 2.12 Payment of Consideration

The Purchaser shall, following receipt of the Final Order but prior to the filing by theCompany of the Articles of Arrangement with the Director, provide the Depositary with anirrevocable treasury direction to the Purchaser’s transfer agent for the issuance of a sufficientnumber of Purchaser Shares to be held in escrow (the terms and conditions of such escrow to besatisfactory to the Company, acting reasonably) to satisfy the aggregate Consideration for theCompany Shares (excluding Company Shares in respect of which Dissent Rights have beenvalidly exercised and not withdrawn as provided in the Plan of Arrangement) in connection withthe Arrangement and in accordance with the terms of this Agreement.

Section 2.13 Withholding Taxes

(1) The Purchaser, the Company and the Depositary, as applicable, shall each be entitled todeduct and withhold from any consideration otherwise payable or otherwise deliverableto any Company Securityholders pursuant to or in connection with the Plan ofArrangement such amounts as the Purchaser, the Company or the Depositary, asapplicable, are required or reasonably believe to be required to deduct and withhold fromsuch consideration under any provision of any Law in respect of Taxes. Any suchamounts will be deducted, withheld and remitted from the consideration payable pursuantto or in connection with the Plan of Arrangement and shall be treated for all purposes ashaving been paid to the Company Securityholders in respect of which such deduction,withholding and remittance was made; provided that such deducted and withheldamounts are actually remitted to the appropriate Governmental Entity.

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(2) The Purchaser, the Company and the Depositary shall be authorized to sell or otherwisedispose of such portion of the consideration as is necessary to provide sufficient funds toenable it to comply with its deducting or withholding requirements and such party shallnotify the Company Securityholder thereof and remit any unapplied balance of the netproceeds of such sale to such Company Securityholder.

Section 2.14 Pre-Arrangement and Post-Arrangement Transactions

(1) Subject to the satisfaction or waiver (to the extent permitted) of all of the conditions setforth in Section 6.1 and Section 6.2 (other than any condition that by its nature cannot besatisfied until the Effective Date), the Purchaser covenants and agrees to consummate theWarrant Distribution effective as of the Business Day immediately preceding theEffective Date.

(2) Immediately following the consummation of the Arrangement on the Effective Date, thePurchaser and the Company covenant and agree that the following steps shall occur in thefollowing order and that all documents tabled by the Parties in connection with suchsteps, if any, shall be released from escrow to the party or parties entitled thereto:

(i) subject to the satisfaction or waiver (to the extent permitted) of all of theconditions set forth in the Sprott Subscription Agreements, the Sprott Inc.Financing, the Term Oil Financing and the Exploration Capital Partners 2008Financing shall be completed, whereupon the purchased Purchaser Shares andpurchased Purchaser Warrants, as applicable, shall be issued by the Purchaser anddelivered to the purchasers thereof, and the funds representing the purchase pricefor such purchased Purchaser Shares and purchased Purchaser Warrants shall bereleased to the Purchaser;

(ii) the Purchaser Board shall be reconstituted such that the members of the PurchaserBoard shall be Terrence A. Lyons, Stephen Yuzpe, Lenard F. Boggio, Joan E.Dunne, John P. Embry, Arthur Richards Rule IV, Ron F. Hochstein, Donald K.Charter and an individual nominated by WISCO, if applicable, pursuant to theterms and conditions of the subscription agreement between the Purchaser andWISCO dated February 15, 2011;

(iii) the management services agreement referred to in Section 6.2(iv) and theamended and restated partnership agreement referred to in Section 6.2(v) shalleach become effective; and

(iv) conditional on the approval of the Purchaser Name Change Resolution by thePurchaser Shareholders, the Purchaser shall file with the Director articles ofamendment of the Purchaser to give effect to the Purchaser Name ChangeResolution.

Section 2.15 Additional Issuance of Purchaser Warrants(1) The Purchaser covenants and agrees to issue an aggregate of 21,750,000 Purchaser

Warrants to or at the direction of the Company immediately following the consummation

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of the Arrangement (and prior to, or at such time as, the amended and restated partnershipagreement referred to in Section 6.2(v) becomes effective) in consideration of thesubscription by the Purchaser for additional Company Shares, which Purchaser Warrantsshall be delivered by the Company or Sprott Resource Partnership to Sprott ResourceConsulting Limited Partnership in connection with amendments to the terms of thePartnership Agreement.

(2) In connection with the foregoing, the Purchaser covenants and agrees to deliver to theCompany, no later than 4:00 p.m. (Toronto time) on the Business Day immediatelypreceding the Effective Date, an irrevocable warrant direction addressed to the warrantagent under the Warrant Indenture directing the issuance of a certificate representing21,750,000 Purchaser Warrants to Sprott Resource Consulting Limited Partnership (or asthe Company may otherwise direct the Purchaser in writing) following the consummationof the Arrangement (and prior to, or at such time as, the amended and restated partnershipagreement referred to in Section 6.2(v) becomes effective).

(3) The Parties acknowledge and agree that the warrant certificate referred to in Section2.15(1) shall contain a legend restricting the sale of the Purchaser Warrants evidenced bysuch certificate for such period of time as Sprott Consulting Limited Partnership is themanager of the Purchaser pursuant to the management services agreement referred to inSection 6.2(iv); for greater certainty, in the event of an acceleration of the expiry date ofthe Purchaser Warrants, the foregoing restriction on sale shall not apply.

(4) The Company acknowledges and agrees that no termination fee or other amount ispayable to Sprott Resource Consulting Limited Partnership in connection with theentering into of the amended and restated partnership agreement referred to inSection 6.2(v).

Section 2.16 Purchaser Change of Name Resolution

The Parties acknowledge and agree that the consummation of the Arrangement and thecompletion of the transactions contemplated in Section 2.14 (other than Section 2.14(2)(iv)) arenot conditional or contingent on the approval of the Purchaser Name Change Resolution by thePurchaser Shareholders, and that the failure of the Purchaser Shareholders to approve thePurchaser Name Change Resolution shall not have any impact on the obligations of theCompany or the Purchaser to consummate such transactions.

ARTICLE 3REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties of the Company

(1) Except as set forth in the Company Disclosure Letter (it being expressly understood andagreed that the disclosure of any fact or item in any section of the Company DisclosureLetter shall only be deemed to be an exception to (or, as applicable, disclosure for thepurposes of) the representations and warranties of the Company that are contained in thecorresponding section of this Agreement), the Company represents and warrants to the

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Purchaser as set forth in Schedule C and acknowledges and agrees that the Purchaser isrelying upon such representations and warranties in connection with the entering into ofthis Agreement.

(2) Except for the representations and warranties set forth in this Agreement, neither theCompany nor any other Person has made or makes any other express or impliedrepresentation and warranty, either written or oral, on behalf of the Company, includingany representation as to the accuracy or completeness of any information regarding theCompany furnished or made available to the Purchaser, or any officer, director,employee, representative (including any financial or other advisor) or agent of thePurchaser or any of its Subsidiaries or as to the future revenue, profitability or success ofthe Company, or any representation or warranty arising in Law.

(3) The representations and warranties of the Company contained in this Agreement shall notsurvive the completion of the Arrangement and shall expire and be terminated at theearlier of the Effective Time and the termination of this Agreement in accordance with itsterms.

Section 3.2 Representations and Warranties of the Purchaser

(1) Except as set forth in the Purchaser Disclosure Letter (it being expressly understood andagreed that the disclosure of any fact or item in any section of the Purchaser DisclosureLetter shall only be deemed to be an exception to (or, as applicable, disclosure for thepurposes of) the representations and warranties of the Purchaser that are contained in thecorresponding section of this Agreement), the Purchaser represents and warrants to theCompany as set forth in Schedule D and acknowledges and agrees that the Company isrelying upon such representations and warranties in connection with the entering into ofthis Agreement.

(2) Except for the representations and warranties set forth in this Agreement, neither thePurchaser nor any other Person has made or makes any other express or impliedrepresentation and warranty, either written or oral, on behalf of the Purchaser, includingany representation as to the accuracy or completeness of any information regarding thePurchaser furnished or made available to the Company, or any officer, director,employee, representative (including any financial or other advisor) or agent of theCompany or any of its Subsidiaries or as to the future revenue, profitability or success ofthe Purchaser, or any representation or warranty arising in Law.

(3) The representations and warranties of the Purchaser contained in this Agreement shall notsurvive the completion of the Arrangement and shall expire and be terminated at theearlier of the Effective Time and the termination of this Agreement in accordance with itsterms.

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ARTICLE 4COVENANTS

Section 4.1 Conduct of Business of the Company

(1) The Company covenants and agrees that, during the period from the date of thisAgreement until the earlier of the Effective Time and the time that this Agreement isterminated in accordance with its terms, except (i) with the express prior written consentof the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed,and in any event the Purchaser shall respond within five days of any request for consent),(ii) as required or permitted by this Agreement, (iii) as required by Law or (iv) as set outin the Company Disclosure Letter, the Company shall, and shall cause its Subsidiaries to,conduct their business in the Ordinary Course, and the Company shall use commerciallyreasonable efforts to maintain and preserve its and its Subsidiaries’ business organization,assets (including, for greater certainty, the Company Assets), goodwill and businessrelationships with other Persons with which the Company or any of its Subsidiaries havebusiness relations.

(2) Without limiting the generality of Section 4.1(1), the Company covenants and agreesthat, during the period from the date of this Agreement until the earlier of the EffectiveTime and the time that this Agreement is terminated in accordance with its terms, except(i) with the express prior written consent of the Purchaser (such consent not to beunreasonably withheld, conditioned or delayed, and in any event the Purchaser shallrespond within five days of any request for consent), (ii) as required or permitted by thisAgreement, (iii) as required by Law or (iv) as set out in the Company Disclosure Letter,the Company shall not, and the Company shall not permit any of its Subsidiaries to,directly or indirectly:

(i) amend its notice of articles, articles, articles of incorporation, articles ofamalgamation, articles of continuance, by-laws, declaration of trust, partnershipagreement or similar organizational documents;

(ii) split, combine, reclassify or amend any term of any securities of the Company orany of its Subsidiaries;

(iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase orotherwise acquire any securities of the Company or any of its Subsidiaries (exceptfor a transaction between two or more Persons each of which is a wholly-ownedSubsidiary of the Company or between the Company and one or more Persons,each of which is a wholly-owned Subsidiary of the Company);

(iv) issue, grant, deliver, or sell, or authorize the issuance, grant, delivery, or sale, ofany Company Shares or any options, warrants or similar rights exercisable orexchangeable for or convertible into Company Shares, except for the issuance ofCompany Shares issuable upon the exercise of the outstanding Company Optionsin accordance with their terms;

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(v) declare, set aside or pay any dividend or other distribution or payment in cash,securities or property with respect to any class of securities (except transactions inthe Ordinary Course and consistent with past practice between two or morewholly-owned Subsidiaries of the Company or between the Company and one ormore of its wholly-owned Subsidiaries);

(vi) other than increasing or decreasing the Company’s ownership (directly orindirectly) in the investments in the Investment Portfolio, acquire (by merger,consolidation, acquisition of shares or assets (not including capital expenditurespermitted under (xii) below) or otherwise), directly or indirectly, in onetransaction or in a series of related transactions, any assets, securities, properties,interests or businesses having a cost (inclusive of assumed liabilities), on a pertransaction or series of related transactions basis, in excess of $1 million;

(vii) other than increasing or decreasing the Company’s ownership (directly orindirectly) in the investments in the Investment Portfolio, sell, lease or otherwisetransfer any Company Assets or any interest in any Company Assets having anaggregate value for all such transactions of $1 million, other than (A) obsolete,damaged or destroyed assets or (B) a transaction between two or more Personseach of whom is a wholly-owned Subsidiary of the Company or between theCompany and one or more Persons, each of whom is a wholly-owned Subsidiaryof the Company;

(viii) reorganize, amalgamate or merge with any other Person;

(ix) reduce the stated capital of the shares of the Company or any of its Subsidiaries;

(x) adopt a plan of liquidation or resolutions providing for its liquidation ordissolution;

(xi) grant any Lien (other than Permitted Liens) on any Company Assets;

(xii) make any capital expenditures or commitment to do so other than expenditures orcommitments relating to the maintenance of its assets that, in the aggregate, donot exceed $500,000;

(xiii) make any material Tax election or designation where such making is inconsistentwith past practice and is not necessary to avoid the triggering of Tax, income orgain in the taxation year to which the election or designation relates, settle orcompromise any material Tax claim, assessment, reassessment or liability, fileany amended Tax Return, enter into any material agreement with a GovernmentalEntity with respect to Taxes, surrender any right to claim a material Taxabatement, reduction, deduction, exemption, credit or refund or materially amendor change any of its methods for reporting income, deductions or accounting forincome Tax purposes;

(xiv) make, in one transaction or in a series of related transactions, any loans, advancesor capital contributions to, investments in, any other Person, other than the

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Company or any of its Subsidiaries, in an amount on a per transaction or series ofrelated transactions basis in excess of $500,000 in the aggregate;

(xv) prepay any long-term indebtedness before its scheduled maturity or create, incur,assume or otherwise become liable, in one transaction or in a series of relatedtransactions, with respect to any indebtedness for borrowed money or guaranteesthereof in an amount, on a per transaction or series of related transactions basis, inexcess of $500,000 other than (a) indebtedness owing by the Company or awholly-owned Subsidiary of the Company to the Company or to another wholly-owned Subsidiary of the Company, (b) in connection with the refinancing ofindebtedness outstanding on the date hereof on substantially similar terms; (c) inconnection with advances under the Company’s or any of its Subsidiaries’existing credit facilities in connection with actions otherwise permitted bySection 4.1 or (d) in connection with repayments of the Company’s existing termcredit facility;

(xvi) except as may be required by applicable Law or the terms of any existingEmployee Plan or Contract disclosed in Section 2.9 of the Company DisclosureLetter: (a) increase any severance, change of control or termination pay to (oramend any existing arrangement with) any Company Employee or any director ofthe Company or any of its Subsidiaries; (b) enter into any employment, deferredcompensation or other similar agreement (or amend any such existing agreement)with any director or officer of the Company or, other than in the Ordinary Course,any Company Employee (other than a director or officer); (c) increasecompensation, retention or incentive compensation or other benefits payable toany director or officer of the Company or any of its Subsidiaries or, other than inthe Ordinary Course, any Company Employee (other than a director or officer);(d) loan or advance money or other property by the Company or its Subsidiariesto any of their present or former directors, officers or Company Employees;(e) establish, adopt, enter into, amend or terminate any Employee Plan (or anyplan, agreement, program, policy, trust, fund or other arrangement that would bean Employee Plan if it were in existence as of the date hereof) or collectivebargaining agreement; (f) grant any equity-based awards; or (g) increase, or agreeto increase, any funding obligation or accelerate, or agree to accelerate, the timingof any funding contribution under any Employee Plan or the vesting provisions ofany of the awards under any Employee Plan;

(xvii) make any material change in the Company’s methods of accounting, except asrequired by GAAP, or pursuant to written instructions, comments or orders fromany applicable Securities Authority;

(xviii) waive, release, assign, settle or compromise any Proceeding in a manner thatcould require a payment by, or release another Person of an obligation to, theCompany or any of its Subsidiaries in excess of $500,000 in the aggregate, orwhich could reasonably be expected to have a Material Adverse Effect on theCompany (other than claims reflected or reserved against in the audited financial

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statements of the Company for the year ended December 31, 2015 or in anysubsequent financial statements of the Company filed on SEDAR);

(xix) other than the termination of the MSA and the amending and restating of thePartnership Agreement contemplated by this Agreement, amend or modify in anymaterial respect or terminate or waive any material right under any CompanyMaterial Contract or enter into, amend or modify in any material respect anyContract or agreement that would be a Company Material Contract if in effect onthe date hereof;

(xx) amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of the Company or any of its Subsidiaries in effect on the dateof this Agreement, other than scheduled renewals of any insurance policy in effecton the date hereof in the Ordinary Course; or

(xxi) agree, resolve or otherwise commit, whether or not in writing, to do any of theforegoing.

Section 4.2 Covenants of the Company Relating to the Arrangement

(1) Subject to the terms and conditions of this Agreement, the Company shall perform andshall cause its Subsidiaries to perform, all obligations required or desirable to beperformed by the Company or any of its Subsidiaries under this Agreement, cooperatewith the Purchaser in connection therewith, and do all such other acts and things as maybe necessary or desirable to consummate and make effective, as soon as reasonablypracticable, the Arrangement and, without limiting the generality of the foregoing, theCompany shall:

(i) use its commercially reasonable efforts to satisfy all conditions precedent in thisAgreement and take all steps set forth in the Interim Order and Final Orderapplicable to it and comply promptly with all requirements imposed by Law on itwith respect to this Agreement or the Arrangement;

(ii) use its commercially reasonable efforts to obtain and maintain all third party orother consents, waivers, permits, exemptions, orders, approvals, agreements,amendments or confirmations that are (i) necessary or advisable under theCompany Material Contracts to permit the consummation of the transactionscontemplated by this Agreement or (ii) required in order to maintain the CompanyMaterial Contracts in full force and effect following completion of theArrangement, in each case on terms satisfactory to the Purchaser, actingreasonably and without paying or providing a commitment to pay anyconsideration in respect thereof without the prior written consent of the Purchaser;and

(iii) use its commercially reasonable efforts to effect all necessary registrations, filingsand submissions of information required by Governmental Entities from itrelating to the Arrangement and the Company Meeting as soon as practicable;

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(iv) use its commercially reasonable efforts to, upon reasonable consultation with thePurchaser, oppose, lift or rescind any injunction, restraining or other order, decreeor ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect theconsummation of the Arrangement and defend, or cause to be defended, anyProceedings to which it is a party or brought against it or its directors or officerschallenging the Arrangement or this Agreement, provided that neither theCompany nor any of its Subsidiaries shall consent to the entry of any judgment orsettlement with respect to any such Proceeding without the prior written approvalof the Purchaser, not to be unreasonably withheld, conditioned or delayed;

(v) use its commercially reasonable efforts to obtain conditional approval of the TSXprior to the completion of the Arrangement, subject only to satisfaction of thestanding listing conditions of the TSX, for the listing of the Purchaser Shares(including the Purchaser Shares issuable pursuant to the Arrangement and theFinancings, the Purchaser Shares issuable upon the exercise of the PurchaserWarrants to be issued in connection with the Warrant Distribution and theFinancings, and the Purchaser Shares issuable upon the exercise of PurchaserOptions) and the Purchaser Warrants on the TSX and confirmation from the TSXthat such Purchaser Shares and Purchaser Warrants will be listed and posted fortrading on the TSX on the Effective Date, and cooperate fully with the Purchaserin the preparation of all applications, filings, responses and submissions inconnection therewith;

(vi) use its commercially reasonable efforts to assist the Purchaser in respect of itsapplications to the TSXV (or TSX, as applicable) in connection with the WarrantDistribution, the Arrangement and the Financings; and

(vii) not take any action, or refrain from taking any commercially reasonable action, orpermit any action to be taken or not taken, which is inconsistent with thisAgreement or which could reasonably be expected to prevent, materially delay orotherwise impede the consummation of the Arrangement or the transactionscontemplated by this Agreement.

(2) The Company shall promptly notify the Purchaser orally and, if requested, in writing of:

(i) any Material Adverse Effect in respect of the Company or any change, event,occurrence, effect, state of facts or circumstances which would reasonably beexpected to have a Material Adverse Effect in respect of the Company;

(ii) any notice or other communication from any Person alleging that the consent (orwaiver, permit, exemption, order, approval, agreement, amendment orconfirmation) of such Person (or another Person) is or may be required inconnection with this Agreement or the Arrangement or the transactionscontemplated hereby or thereby; or

(iii) any material Proceeding commenced or, to the Company’s knowledge, threatenedagainst, relating to or involving or otherwise affecting (a) the Company, its

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Subsidiaries and/or, the Company Assets or (b) this Agreement or theArrangement.

Section 4.3 Conduct of Business of the Purchaser

(1) The Purchaser covenants and agrees that, during the period from the date of thisAgreement until the earlier of the Effective Time and the time that this Agreement isterminated in accordance with its terms, except (i) with the express prior written consentof the Company (such consent not to be unreasonably withheld, conditioned or delayed,and provided that in any event the Company shall respond within five days of any requestfor consent), (ii) as required or permitted by this Agreement, or (iii) as required by Law,the Purchaser shall, and shall cause its Subsidiaries to, conduct their business in theOrdinary Course, and the Purchaser shall use commercially reasonable efforts to maintainand preserve its and its Subsidiaries’ business organization, assets (including, for greatercertainty, the Purchaser Assets), goodwill and business relationships with other Personswith which the Purchaser or any of its Subsidiaries have business relations.

(2) Without limiting the generality of Section 4.3(1), the Purchaser covenants and agreesthat, during the period from the date of this Agreement until the earlier of the EffectiveTime and the time that this Agreement is terminated in accordance with its terms, except(i) with the express prior written consent of the Company (such consent not to beunreasonably withheld, conditioned or delayed, and provided that in any event theCompany shall respond within five days of any request for consent), (ii) as required orpermitted by this Agreement, (iii) as required by Law or (iv) as set out in the PurchaserDisclosure Letter, the Purchaser shall not, and the Purchaser shall not permit any of itsSubsidiaries to, directly or indirectly:

(i) other than as contemplated by the Purchaser Name Change Resolution, amend itsnotice of articles, articles, articles of incorporation, articles of amalgamation,articles of continuance, by-laws, declaration of trust, partnership agreement orsimilar organizational documents;

(ii) split, combine, reclassify or amend any term of any securities of the Purchaser orany of its Subsidiaries;

(iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase orotherwise acquire any securities of the Purchaser or any of its Subsidiaries (exceptfor a transaction between two or more Persons each of which is a wholly-ownedSubsidiary of the Purchaser or between the Purchaser and one or more Persons,each of which is a wholly-owned Subsidiary of the Purchaser);

(iv) issue, grant, deliver, or sell, or authorize the issuance, grant, delivery, or sale, ofany Purchaser Shares or any options, warrants or similar rights exercisable orexchangeable for or convertible into Purchaser Shares, except for (a) the issuanceof Purchaser Shares upon the exercise of outstanding Purchaser Options inaccordance with their terms; (b) the issuance of Purchaser Warrants in connectionwith the Warrant Distribution; (c) the issuance of Purchaser Shares and Purchaser

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Warrants pursuant to the Financings; and (d) the issuance of any Purchaser Sharesand/or Purchaser Warrants in connection with existing pre-emptive rightsdisclosed in Section 4.3(2)(iv) of the Purchaser Disclosure Letter;

(v) other than in connection with the Warrant Distribution, declare, set aside or payany dividend or other distribution or payment in cash, securities or property withrespect to any class of securities (except transactions in the Ordinary Course andconsistent with past practice between two or more wholly-owned Subsidiaries ofthe Purchaser or between the Purchaser and one or more of its wholly-ownedSubsidiaries);

(vi) acquire (by merger, consolidation, acquisition of shares or assets or otherwise),directly or indirectly, in one transaction or in a series of related transactions, anyassets, securities, properties, interests or businesses outside the current business ofthe Purchaser as disclosed in the Purchaser Filings;

(vii) reorganize, amalgamate or merge with any other Person;

(viii) reduce the stated capital of the shares of the Purchaser or any of its Subsidiaries;

(ix) adopt a plan of liquidation or resolutions providing for its liquidation ordissolution;

(x) sell, lease or otherwise transfer any Purchaser Assets or any interest in anyPurchaser Assets, other than Purchaser Assets sold, leased or otherwisetransferred in the Ordinary Course or obsolete, damaged or destroyed assets or atransaction between two or more Persons each of whom is a wholly-ownedSubsidiary of the Purchaser or between the Purchaser and one or more Persons,each of whom is a wholly-owned Subsidiary of the Purchaser;

(xi) grant any Lien (other than Permitted Liens) on any Purchaser Assets;

(xii) make any capital expenditures or commitment to do so other than expenditures orcommitments relating to the maintenance of its assets that, in the aggregate, donot exceed $500,000;

(xiii) make any material Tax election or designation where such making is inconsistentwith past practice and is not necessary to avoid the triggering of Tax, income orgain in the taxation year to which the election or designation relates, settle orcompromise any material Tax claim, assessment, reassessment or liability, fileany amended Tax Return, enter into any material agreement with a GovernmentalEntity with respect to Taxes, surrender any right to claim a material Taxabatement, reduction, deduction, exemption, credit or refund or materially amendor change any of its methods for reporting income, deductions or accounting forincome Tax purposes;

(xiv) make, in one transaction or in a series of related transactions, any loans, advancesor capital contributions to, investments in, any other Person, other than the

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Purchasers or any of its Subsidiaries, in an amount on a per transaction or seriesof related transactions basis in excess of $500,000 in the aggregate;

(xv) prepay any long-term indebtedness before its scheduled maturity or create, incur,assume or otherwise become liable, in one transaction or in a series of relatedtransactions, with respect to any indebtedness for borrowed money or guaranteesthereof in an amount, on a per transaction or series of related transactions basis, inexcess of $500,000 other than (a) indebtedness owing by the Purchaser or awholly-owned Subsidiary of the Purchaser to the Purchaser or to another wholly-owned Subsidiary of the Purchaser, (b) in connection with advances under thePurchaser's or any of its Subsidiaries' existing credit facilities in connection withactions otherwise permitted by Section 4.3, or (c) in connection with repaymentsof the Purchaser's existing revolving credit facility;

(xvi) except as may be required by applicable Law or the terms of any existingEmployee Plan or Contract disclosed in Section 4.3(2)(xvi) of the PurchaserDisclosure Letter: (a) increase any severance, change of control or terminationpay to (or amend any existing arrangement with) any Purchaser Employee,consultant or any director of the Purchaser or any of its Subsidiaries; (b) enter intoany employment, deferred compensation or other similar agreement (or amendany such existing agreement) with any director or officer of the Purchaser or,other than in the Ordinary Course, any Purchaser Employee (other than a directoror officer) or consultant; (c) increase compensation, retention or incentivecompensation or other benefits payable to any director or officer of the Purchaseror any of its Subsidiaries or, other than in the Ordinary Course, any PurchaserEmployee (other than a director or officer) or consultant; (d) loan or advancemoney or other property by the Purchaser or its Subsidiaries to any of theirpresent or former directors, officers, Purchaser Employees or consultants; (e)establish, adopt, enter into, amend or terminate any Employee Plan (or any plan,agreement, program, policy, trust, fund or other arrangement that would be anEmployee Plan if it were in existence as of the date hereof) or collectivebargaining agreement; (f) grant any equity-based awards; or (g) increase, or agreeto increase, any funding obligation or accelerate, or agree to accelerate, the timingof any funding contribution under any Employee Plan or the vesting provisions ofany of the awards under any Employee Plan;

(xvii) make any material change in the Purchaser's methods of accounting, except asrequired by GAAP, or pursuant to written instructions, comments or orders fromany applicable Securities Authority;

(xviii) waive, release, assign, settle or compromise any Proceeding in a manner thatcould require a payment by, or release another Person of an obligation to, thePurchaser or any of its Subsidiaries in excess of $500,000 in the aggregate, orwhich could reasonably be expected to have a Material Adverse Effect on thePurchaser (other than claims reflected or reserved against in the audited financialstatements of the Purchaser for the year ended December 31, 2015 or in anysubsequent financial statements of the Purchaser filed on SEDAR);

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(xix) amend or modify in any material respect or terminate or waive any material rightunder any Purchaser Material Contract or enter into, amend or modify in anymaterial respect any Contract or agreement that would be a Purchaser MaterialContract if in effect on the date hereof, other than as set forth in Section4.3(2)(xix) of the Purchaser Disclosure Letter;

(xx) except as contemplated in Section 4.9, amend, modify, terminate, cancel or letlapse any material insurance (or re-insurance) policy of the Purchaser or any of itsSubsidiaries in effect on the date of this Agreement, other than scheduledrenewals of any insurance policy in effect on the date hereof in the OrdinaryCourse; or

(xxi) agree, resolve or otherwise commit, whether or not in writing, to do any of theforegoing.

Section 4.4 Covenants of the Purchaser Relating to the Arrangement

(1) Subject to the terms and conditions of this Agreement, the Purchaser shall perform, andshall cause its Subsidiaries to perform, all obligations required or desirable to beperformed by the Purchaser or its Subsidiaries under this Agreement, cooperate with theCompany in connection therewith, and do all such other acts and things as may benecessary or desirable to consummate and make effective, as soon as reasonablypracticable, the Arrangement and, without limiting the generality of the foregoing, thePurchaser shall:

(i) use its commercially reasonable efforts to satisfy all conditions precedent in thisAgreement and take all steps set forth in the Interim Order and the Final Orderapplicable to it and comply promptly with all requirements imposed by Law on itwith respect to this Agreement, the Arrangement or the Purchaser Meeting;

(ii) use its commercially reasonable efforts to obtain and maintain all third party orother consents, waivers, permits, exemptions, orders, approvals, agreements,amendments or confirmations that are (i) necessary or advisable under thePurchaser Material Contracts to permit the consummation of the transactionscontemplated by this Agreement, including the Warrant Distribution, theArrangement and the Financings or (ii) required in order to maintain thePurchaser Material Contracts in full force and effect following completion of theArrangement and the Financings, including without limitation those listed inSection 4.4(1)(ii) of the Purchaser Disclosure Letter, in each case on termssatisfactory to the Company, acting reasonably and without paying or providing acommitment to pay any consideration in respect thereof without the prior writtenconsent of the Company;

(iii) use its commercially reasonable efforts to effect all necessary registrations, filingsand submissions of information required by Governmental Entities from itrelating to the Arrangement and the Purchaser Meeting as soon as reasonablypracticable;

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(iv) use its commercially reasonable efforts, upon reasonable consultation with theCompany, to oppose, lift or rescind any injunction, restraining or other order,decree or ruling seeking to restrain, enjoin or otherwise prohibit or adverselyaffect the consummation of the Arrangement and defend, or cause to be defended,any Proceedings to which it is a party or brought against it or its directors orofficers challenging the Arrangement or this Agreement or the transactionscontemplated thereby;

(v) use its commercially reasonable efforts to obtain conditional approval of the TSXprior to the completion of the Arrangement, subject only to satisfaction of thestanding listing conditions of the TSX, for the listing of the Purchaser Shares(including the Purchaser Shares issuable pursuant to the Arrangement and theFinancings, the Purchaser Shares issuable upon the exercise of the PurchaserWarrants to be issued in connection with the Warrant Distribution and theFinancings, and the Purchaser Shares issuable upon the exercise of PurchaserOptions) and the Purchaser Warrants on the TSX and confirmation from the TSXthat such Purchaser Shares and Purchaser Warrants will be listed and posted fortrading on the TSX on the Effective Date, and cooperate fully with the Companyin the preparation of all applications, filings, responses and submissions inconnection therewith;

(vi) use its commercially reasonable efforts to obtain the approval of the TSXV (orTSX, as applicable) in connection with the Warrant Distribution, the Arrangementand the Financings;

(vii) not take any action, or refrain from taking any commercially reasonable action, orpermit any action to be taken or not taken, which is inconsistent with thisAgreement or which could reasonably be expected to prevent, materially delay orotherwise impede the consummation of the Arrangement or the transactionscontemplated by this Agreement.

(2) The Purchaser shall promptly notify the Company orally and, if requested, in writing of:

(i) any Material Adverse Effect in respect of the Purchaser or any change, event,occurrence, effect, state of facts or circumstances which would reasonably beexpected to have a Material Adverse Effect in respect of the Purchaser;

(ii) any notice or other communication from any Person alleging that the consent (orwaiver, permit, exemption, order, approval, agreement, amendment orconfirmation) of such Person (or another Person) is or may be required inconnection with this Agreement or the Arrangement or the transactionscontemplated hereby or thereby; or

(iii) any material Proceeding commenced or, to the Purchaser’s knowledge, threatenedagainst, relating to or involving or otherwise affecting (a) the Purchaser, itsSubsidiaries and/or the Purchaser Assets or (b) this Agreement or theArrangement.

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Section 4.5 Access to Information; Confidentiality

(1) From the date hereof until the earlier of the Effective Time and the termination of thisAgreement, subject to Law and the terms of any existing Contracts, the Company shall,and shall cause its Subsidiaries and their respective Representatives to, afford thePurchaser and its Representatives such access as the Purchaser may reasonably request atall reasonable times, including for the purpose of facilitating integration businessplanning, to their offices, properties, books and records, and shall make available to thePurchaser all financial data and other information as the Purchaser may reasonablyrequest (including continuing access to the Company Data Room); provided that: (i) thePurchaser provides the Company with reasonable notice of any request under thisSection 4.5(1); (ii) access to any materials contemplated in this Section 4.5(1) (other thanthe materials on the Company Data Room) shall be provided during the Company’snormal business hours only and in such manner not to interfere unreasonably with theconduct of the business of the Company or its Subsidiaries; and (iii) none of thePurchaser or any of its Representatives shall contact Company Employees except afterprior approval of Stephen Yuzpe, the President and CEO of the Company, on behalf ofthe Company, which approval shall not be unreasonably withheld, conditioned ordelayed. Notwithstanding the foregoing, the Company shall not be obligated to provideaccess to, or to disclose, any information to the Purchaser if the Company reasonablydetermines that such access or disclosure would violate applicable Law, result in thedisclosure of any trade secrets or similar information or violate any obligations of theCompany or any other Person with respect to confidentiality, jeopardize any privilegeclaim by the Company or any of its Subsidiaries, interfere unreasonably with the conductof the business of the Company or its Subsidiaries or require any action by the Companyoutside of normal business hours. All requests for information made pursuant to thisSection 4.5(1) shall solely be directed to Stephen Yuzpe.

(2) From the date hereof until the earlier of the Effective Time and the termination of thisAgreement, subject to Law and the terms of any existing Contracts, the Purchaser shall,and shall cause its Subsidiaries and their respective Representatives to, afford theCompany and its Representatives such access as the Company may reasonably request atall reasonable times, including for the purpose of facilitating integration businessplanning, to their offices, properties, books and records, and shall make available to theCompany all financial data and other information as the Company may reasonablyrequest (including continuing access to the Purchaser Data Room); provided that: (i) theCompany provides the Purchaser with reasonable notice of any request under this Section4.5(2); (ii) access to any materials contemplated in this Section 4.5(2) (other than thematerials on the Purchaser Data Room) shall be provided during the Purchaser’s normalbusiness hours only and in such manner not to interfere unreasonably with the conduct ofthe business of the Purchaser or its Subsidiaries; and (iii) none of the Company or any ofits Representatives shall contact Purchaser Employees except after prior approval ofMichael Harrison, the President and CEO of the Purchaser, on behalf of the Purchaser,which approval shall not be unreasonably withheld, conditioned or delayed.Notwithstanding the foregoing, the Purchaser shall not be obligated to provide access to,or to disclose, any information to the Company if the Purchaser reasonably determinesthat such access or disclosure would violate applicable Law, result in the disclosure of

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any trade secrets or similar information or violate any obligations of the Purchaser or anyother Person with respect to confidentiality, jeopardize any privilege claim by thePurchaser or any of its Subsidiaries, interfere unreasonably with the conduct of thebusiness of the Purchaser or its Subsidiaries or require any action by the Purchaseroutside of normal business hours. All requests for information made pursuant to thisSection 4.5(2) shall solely be directed to Michael Harrison.

(3) Investigations made by or on behalf of the Purchaser or the Company, whether under thisSection 4.5 or otherwise, will not waive, diminish the scope of, or otherwise affect anyrepresentation or warranty made by the Company or the Purchaser, respectively, in thisAgreement.

Section 4.6 Privacy Matters

(1) For the purposes of this section, “Transaction Personal Information” means thepersonal information (namely, information about an identifiable individual other thantheir business contact information when used or disclosed for the purpose of contactingsuch individual in that individual’s capacity as an employee or an official of anorganization and for no other purpose) to be disclosed or conveyed to one Party or any ofits Representatives (a “Recipient”) by or on behalf of another Party (a “Transferor”) asa result of or in conjunction with the Arrangement, and includes all such personalinformation disclosed to the Recipient prior to the execution of this Agreement.

(2) Each Transferor acknowledges and confirms that the disclosure of Transaction PersonalInformation is necessary for the purposes of determining if the Parties shall proceed withthe Arrangement and that the disclosure of Transaction Personal Information relatessolely to the carrying on of the business of the respective Transferor and the completionof the Arrangement.

(3) In addition to its other obligations hereunder, the Recipient covenants and agrees to:(i) prior to the completion of the Arrangement, collect, use and disclose the TransactionPersonal Information solely for the purpose of reviewing and completing theArrangement, including for the purpose of determining to complete the Arrangement;(ii) protect and safeguard Transaction Personal Information against unauthorizedcollection, use or disclosure; and (iii) return or destroy the Transaction PersonalInformation, at the option of the Transferor, should the Arrangement not be completed.

Section 4.7 Public Communications

The Parties shall agree on the text of joint press releases by which they will announce(i) the execution of this Agreement and (ii) the completion of the Arrangement, the WarrantDistribution and the Financings. Except as required by Law, no Party shall issue any pressrelease or make any other public statement or disclosure with respect to this Agreement, theArrangement, the Warrant Distribution and the Financings without the consent of the other Party(which consent shall not be unreasonably withheld, conditioned or delayed); provided that anyParty that is required to make disclosure by Law or to ensure compliance with the fiduciaryduties of its board of directors shall, if permitted by Law, use its commercially reasonable efforts

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to give the other Party prior oral or written notice and a reasonable opportunity to review andcomment on the disclosure (other than with respect to confidential information contained in suchdisclosure) and if such prior notice is not possible, shall give such notice immediately followingthe making of such disclosure. The Parties acknowledge that each Party will file this Agreementand a material change report relating thereto on its profile on SEDAR.

Section 4.8 Tax Free Reorganization

It is intended that, for the United States federal income Tax purposes, the transactionscompleted by this Agreement shall qualify as a reorganization within the meaning of Section368(a) of the Code, and that this Agreement be, and is hereby adopted as, a plan ofreorganization for purposes of Section 354 and 361 of the Code. The Parties agree to file theirTax Returns accordingly, except as otherwise required by a change in applicable Tax Laws or afinal determination, and no Party shall take any action that could reasonably be expected to causethe transactions contemplated by this Agreement to fail to qualify as a reorganization within themeaning of Section 368(a) of the Code.

Section 4.9 Insurance and Indemnification

(1) Prior to the Effective Date, the Purchaser shall obtain from an insurance carrier with thesame or better credit rating as the Purchaser’s current insurance carriers with respect todirectors’ and officers’ liability insurance, and fully pay a single premium for, customary“tail” policies of directors’ and officers’ liability insurance providing protection for notless than six years from and after the Effective Time; such polices shall have terms,conditions, retentions and limits of liability that are no less favourable to the directors andofficers of the Purchaser in the aggregate than the protection provided by the policiesmaintained by the Purchaser which are in effect immediately prior to the Effective Dateand providing protection in respect of claims arising from facts or events which occurredon or prior to the Effective Date; provided that the premium for any such extension or runoff insurance coverage will not exceed 200% of the annual premium of the Purchaser’sexisting directors’ and officers’ insurance policy.

(2) From and after the Effective Time, the Purchaser shall indemnify and hold harmless, tothe fullest extent permitted under applicable Law (and to also advance expenses asincurred to the fullest extent permitted under applicable Law), each present and formerdirector and officer of the Purchaser and its Subsidiaries (each, an “IndemnifiedPerson”) against any costs or expenses (including reasonable attorneys’ fees), judgments,fines, losses, claims, damages or liabilities incurred in connection with any Proceedingarising out of or related to such Indemnified Person’s service as a director or officer ofthe Purchaser or any of its Subsidiaries or services performed by such persons at therequest of the Purchaser or any of its Subsidiaries at or prior to or following the EffectiveTime, whether asserted or claimed prior to, at or after the Effective Time, including theapproval or completion of this Agreement and the Arrangement or any of the othertransactions contemplated by this Agreement or arising out of or related to thisAgreement and the transactions contemplated hereby. None of the Purchaser, theCompany or any of their respective Subsidiaries shall, settle, compromise or consent tothe entry of any judgment in any Proceeding involving or naming an Indemnified Person

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or arising out of or related to an Indemnified Person’s service as a director or officer ofthe Purchaser or any of its Subsidiaries or services performed by such IndemnifiedPerson at the request of the Purchaser or any of its Subsidiaries at or prior to or followingthe Effective Time without the prior written consent of that Indemnified Person, unlesssuch settlement, compromise or consent includes an unconditional release of suchIndemnified Person from all liability arising out of such Proceeding.

(3) If any Indemnified Person makes any claim for indemnification or advancement ofexpenses under this Section 4.9 that is denied by the Company or the Purchaser, and acourt of competent jurisdiction determines that the Indemnified Person is entitled to suchindemnification, then the Company and the Purchaser shall pay such IndemnifiedPerson’s costs and expenses, including reasonable legal fees and expenses, incurred inconnection with pursuing such claim against the Company or the Purchaser.

(4) The rights of the Indemnified Persons under this Section 4.9 shall be in addition to anyrights such Indemnified Persons may have under the constating documents of thePurchaser and any of its Subsidiaries, or under any applicable Law or agreement of anyIndemnified Person with the Purchaser or any of its Subsidiaries. All rights toindemnification and exculpation from liabilities for acts or omissions occurring at or priorto the Effective Time and rights to advancement of expenses relating thereto in favour ofany Indemnified Person as provided in the constating documents of the Purchaser or anyof its Subsidiaries or any agreement between such Indemnified Person and the Purchaseror any of its Subsidiaries shall survive the Effective Time for a period of not less than sixyears and shall not be amended, repealed or otherwise modified in any manner that wouldadversely affect any right thereunder of any such Indemnified Person.

(5) If any of the Company, the Purchaser or any of their successors or assigns shall(i) amalgamate, consolidate with or merge or wind-up into any other Person and shall notbe the continuing or surviving corporation or entity; or (ii) transfer all or substantially allof its properties and assets to any Person, then, and in each such case, proper provisionsshall be made so that the successors and assigns and transferees of the Company or thePurchaser, as the case may be, shall assume all of the obligations set forth in thisSection 4.9. The Purchaser shall ensure that the Company, the Purchaser and any of theirsuccessors or assigns have adequate financial resources to satisfy all of the obligations setforth in this Section 4.9.

ARTICLE 5ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

Section 5.1 Non-Solicitation

(1) Except as provided in this Article 5 neither Party nor its Subsidiaries shall, directly orindirectly, do or authorize or permit any of its Representatives to do, any of thefollowing:

(i) solicit, assist, initiate, encourage or otherwise facilitate (including by way offurnishing or providing copies of, access to, or disclosure of, any confidential

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information, properties, facilities, books or records of such Party or any of itsSubsidiaries or entering into any form of agreement, arrangement orunderstanding) any inquiry, proposal or offer that constitutes, or may reasonablybe expected to constitute or lead to, an Acquisition Proposal;

(ii) enter into or otherwise engage or participate in any discussions or negotiationswith any Person (other than the other Party) regarding any Acquisition Proposal,provided that such Party may (a) communicate with any Person for the purposesof clarifying the terms of any inquiry, proposal or offer made by such Person thatconstitutes or could reasonably be expected to constitute or lead to, an AcquisitionProposal; (b) advise any Person of the restrictions of this Agreement; and (c)advise any Person making an Acquisition Proposal that the Company Board or thePurchaser Board, as applicable, has determined that such Acquisition Proposaldoes not constitute a Superior Proposal, in each case, if, in so doing, no otherinformation that is prohibited from being communicated under this Agreement iscommunicated to such Person;

(iii) withdraw, amend, modify or qualify in a manner adverse to the other Party or theconsummation of the Arrangement, or publicly propose or state an intention towithdraw, amend, modify or qualify in a manner adverse to the other Party or theconsummation of the Arrangement, the Company Board Recommendation or thePurchaser Board Recommendation, as applicable;

(iv) accept, approve, endorse or recommend, or publicly propose to accept, approve,endorse or recommend any Acquisition Proposal (it being understood thatpublicly taking no position or a neutral position with respect to a publiclyannounced, or otherwise publicly disclosed, Acquisition Proposal for a period ofno more than five Business Days will not be considered to be in violation of thisSection 5.1, provided the Company Board or the Purchaser Board, as applicablehas rejected such Acquisition Proposal and affirmed the Company BoardRecommendation or the Purchaser Board Recommendation, as applicable, beforethe end of such five Business Day period (or in the event that the CompanyMeeting or Purchaser Meeting is scheduled to occur within such five BusinessDay period, prior to the third Business Day prior to the date of the CompanyMeeting or Purchaser Meeting, as applicable)); or

(v) accept, approve, endorse, recommend or execute or enter into or publicly proposeto accept, approve, endorse, recommend or execute or enter into any agreement,letter of intent, understanding or arrangement in respect of an AcquisitionProposal (other than a confidentiality agreement permitted by and in accordancewith Section 5.3).

(2) Each Party shall, and shall cause its Subsidiaries and their Representatives to,immediately cease and terminate, and cause to be terminated, any solicitation,encouragement, discussion, negotiation or other activities commenced prior to the date ofthis Agreement with any Person (other than the other Party) with respect to any inquiry,

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proposal or offer that constitutes, or may reasonably be expected to constitute or lead to,an Acquisition Proposal, and in connection therewith, each Party will:

(i) immediately discontinue access to and disclosure of all information, including anyinformation in the Company Data Room or the Purchaser Data Room, asapplicable, and any confidential information, properties, facilities and books andrecords by any such Person; and

(ii) within three Business Days after the date hereof, request, and exercise all rights ithas to require (a) the return or destruction of all copies of any confidentialinformation regarding such Party or any of its Subsidiaries provided to any suchPerson and (b) the destruction of all material including or incorporating orotherwise reflecting such confidential information regarding such Party or any ofits Subsidiaries provided to any such Person, in each case using its commerciallyreasonable efforts to ensure that such requests are fully complied with inaccordance with the terms of such rights or entitlements.

(3) Each Party covenants and agrees that (i) it shall take all commercially reasonable actionnecessary to enforce each confidentiality, standstill or similar agreement, restriction orcovenant to which it or any of its Subsidiaries is a party and (ii) none of it, any of itsSubsidiaries or any of their respective Representatives have or will, without the priorwritten consent of the other Party (which may be withheld or delayed in such otherParty’s sole and absolute discretion), release any Person from, or waive, amend, suspendor otherwise modify such Person’s obligations respecting such Party or any of itsSubsidiaries under any confidentiality, standstill or similar agreement, restriction orcovenant to which such Party or any of its Subsidiaries is a party (it being acknowledgedby such Party that the automatic termination or release of any standstill restrictions as aresult of entering into and announcing this Agreement shall not be a violation of thisSection 5.1(3)).

Section 5.2 Notification of Acquisition Proposals

(1) If either Party, any of its Subsidiaries or any of their respective Representatives receivesor otherwise becomes aware of any inquiry, proposal, or offer that constitutes or mayreasonably be expected to lead to an Acquisition Proposal, or any request for copies of,access to, or disclosure of, confidential information relating to such Party or any of itsSubsidiaries, including but not limited to information, access or disclosure relating to theproperties, facilities, books or records of such Party or any of its Subsidiaries, such Partyshall immediately notify the other Party, at first orally and then promptly (and in anyevent within 24 hours) in writing, of such Acquisition Proposal, inquiry, proposal, offeror request, including a description of its material terms and conditions, and the identity ofall Persons making the Acquisition Proposal, inquiry, proposal, offer or request, and shallprovide the other Party with summaries or copies of all written documents or othermaterial received in respect of, from or on behalf of any such Person. Such Party shallkeep the other Party fully informed of the current status of developments and negotiationswith respect to any such Acquisition Proposal, inquiry, proposal, offer or request,including any changes, modifications or other amendments to the material terms thereof,

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and shall provide to the other Party copies of all material or substantive correspondencesif in writing or electronic form, and if not in writing or electronic form, a description ofthe material terms of such correspondence sent or communicated to such Party by or onbehalf of any Person making any such Acquisition Proposal, inquiry, proposal, offer orrequest.

Section 5.3 Responding to an Acquisition Proposal

(1) Notwithstanding Section 5.1, if at any time prior to the approval by the CompanyShareholders of the Arrangement Resolution or the approval by the PurchaserShareholders of the Purchaser Resolutions, as applicable, either Party receives a writtenAcquisition Proposal from a Person, then such Party may enter into, participate in,facilitate and maintain discussions or negotiations with, and otherwise co-operate with orassist, such Person regarding such Acquisition Proposal, and may provide copies of,access to or disclosure of any information, properties, facilities, books or records of suchParty and its Subsidiaries to such Person, but, in each case, if and only if:

(i) the Company Board or the Purchaser Board, as applicable, first determines ingood faith, after consultation with its financial advisors and its outside legalcounsel, that such Acquisition Proposal constitutes or could reasonably beexpected to lead to a Superior Proposal;

(ii) such Person was not restricted from making such Acquisition Proposal pursuantto an existing confidentiality, standstill, non-disclosure, use, business purpose orsimilar restriction with the Party or any of its Subsidiaries;

(iii) such Party has been, and continues to be, in compliance with of its obligationsunder this Article 5;

(iv) prior to providing any such copies, access or disclosure, (a) such Party enters intoa confidentiality and standstill agreement with such Person and (b) any suchcopies, access or disclosure provided to such Person shall have already been (orshall simultaneously be) provided to the other Party; and

(v) prior to providing any such copies, access or disclosure to such Person, such Partyprovides the other Party with a true, complete and final executed copy of theconfidentiality and standstill agreement referred to in Section 5.3(1)(iv).

(2) Nothing contained in this Agreement shall prohibit the Company Board or the PurchaserBoard, as applicable, from making disclosure to Company Securityholders or PurchaserShareholders, as applicable, to comply with their fiduciary duties in response to aSuperior Proposal or as required by applicable Securities Laws in response to anAcquisition Proposal (including by responding to an Acquisition Proposal in a directors’circular). In addition, nothing contained in this Agreement shall prevent the CompanyBoard or the Purchaser Board, as applicable, from calling and holding a meeting of theCompany Shareholders or Purchaser Shareholders, as applicable, or any of them,requisitioned by the Company Shareholders or Purchaser Shareholders, as applicable, or

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any of them, in accordance with the CBCA or ordered to be held by a court in accordancewith applicable Laws.

Section 5.4 Right to Match

(1) If either Party receives an Acquisition Proposal that constitutes a Superior Proposal priorto the approval by the Company Shareholders of the Arrangement Resolution or theapproval by the Purchaser Shareholders of the Purchaser Resolutions, as applicable, theCompany Board or the Purchaser Board, as applicable, may, subject to compliance withArticle 7 and Section 8.2, authorize such Party to enter into a definitive agreement withrespect to such Superior Proposal, if and only if:

(i) the Person making the Superior Proposal was not restricted from making suchSuperior Proposal pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction;

(ii) such Party has been, and continues to be, in compliance with its obligations underthis Article 5;

(iii) such Party has delivered to the other Party a written notice of the determination ofthe Company Board or the Purchaser Board, as applicable, that such AcquisitionProposal constitutes a Superior Proposal and of the intention of the CompanyBoard or the Purchaser Board, as applicable, to enter into such definitiveagreement with respect to such Acquisition Proposal, together with written noticefrom the Company Board or the Purchaser Board, as applicable, regarding thevalue and financial terms that such board has determined, in consultation with itsfinancial advisors, has determined should be ascribed to any non-cashconsideration offered under such Acquisition Proposal (a “Superior ProposalNotice”);

(iv) such Party has provided the other Party with a copy of the proposed definitiveagreement for the Superior Proposal and all supporting materials supplied to suchParty in connection therewith;

(v) at least five Business Days have elapsed from the date that is the later of the dateon which the other Party received the Superior Proposal Notice and the date onwhich the other Party received all of the materials set forth in Section 5.4(1)(iv)(the “Matching Period”);

(vi) during any Matching Period, the other Party has had the opportunity (but not theobligation), in accordance with Section 5.4(2), to offer to amend this Agreementand the Arrangement in order for such Acquisition Proposal to cease to be aSuperior Proposal;

(vii) after the Matching Period, the Company Board or the Purchaser Board, asapplicable, has determined in good faith, after consultation with its outside legalcounsel and financial advisors, that such Acquisition Proposal continues toconstitute a Superior Proposal (if applicable, compared to the terms of the

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Arrangement as proposed to be amended by the other Party under Section 5.4(2));and

(viii) prior to or concurrently with entering into such definitive agreement such Partyterminates this Agreement pursuant to Section 7.2(1)(iii)(c) orSection 7.2(1)(iv)(c), as applicable, and pays the Termination Fee pursuant toSection 8.2.

(2) During the Matching Period, or such longer period as such Party may approve in writingfor such purpose: (i) the Company Board or the Purchaser Board, as applicable, shallreview any offer made by the other Party under Section 5.4(1)(vi) to amend the terms ofthis Agreement and the Arrangement, in good faith in and in consultation with outsidelegal and financial advisors, to determine whether such offer would, upon acceptance,result in the Acquisition Proposal previously determined to constitute a Superior Proposalceasing to be a Superior Proposal; and (ii) if such Acquisition Proposal would no longerconstitute a Superior Proposal, such Party shall negotiate in good faith with the otherParty to make such amendments to the terms of this Agreement and the Arrangement aswould enable the other Party to proceed with the transactions contemplated by thisAgreement on such amended terms.

(3) Each successive amendment or modification to any Acquisition Proposal that results inan increase in, or modification of, the consideration (or value of such consideration) to bereceived by the securityholders of such Party or other material terms or conditions thereofshall constitute a new Acquisition Proposal for the purposes of this Section 5.4 and theother Party shall be afforded a new Matching Period in connection therewith, providedthat, notwithstanding Section 5.4(1)(v) above, the duration of such Matching Period shallbe four Business Days rather than five Business Days.

(4) The Company Board or the Purchaser Board, as applicable, shall promptly reaffirm theCompany Board Recommendation or the Purchaser Board Recommendation, asapplicable, by press release if the Company Board or the Purchaser Board, as applicable,determines that a proposed amendment to the terms of this Agreement or theArrangement as contemplated under Section 5.4(2) would result in an AcquisitionProposal no longer being a Superior Proposal.

(5) If either Party provides a Superior Proposal Notice to the other Party on a date that is lessthan ten Business Days before the Company Meeting or the Purchaser Meeting, as thecase may be, the Party providing the Superior Proposal Notice shall be entitled to, and theother Party shall be entitled to require such Party to, adjourn or postpone the CompanyMeeting or the Purchaser Meeting, as applicable, to a date that is not more than tenBusiness Days after the date of the Superior Proposal Notice.

(6) Each Party shall advise its Subsidiaries and their respective Representatives of theprohibitions set out in this Article 5 and any violation of the restrictions set forth in thisArticle 5 by such Party, its Subsidiaries or their respective Representatives shall bedeemed to be a breach of this Article 5 by such Party.

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ARTICLE 6CONDITIONS

Section 6.1 Mutual Conditions Precedent

The Parties are not required to complete the Arrangement unless each of the followingconditions is satisfied on or prior to the Effective Time, which conditions may only be waived, inwhole or in part, by the mutual consent of each of the Parties:

(1) Arrangement Resolution. The Arrangement Resolution shall have been approved andadopted at the Company Meeting in accordance with the Interim Order.

(2) Interim Order and Final Order. The Interim Order and the Final Order shall have eachbeen obtained on terms consistent with this Agreement and shall not have been set asideor modified in a manner unacceptable to either the Company or the Purchaser, eachacting reasonably, on appeal or otherwise.

(3) Purchaser Transactions Approval Resolution. The Purchaser Transactions ApprovalResolution shall have been approved and adopted at the Purchaser Meeting by a majorityof the votes cast in respect of the Purchaser Shares held by Purchaser Shareholderspresent in person or represented by proxy at the Purchaser Meeting.

(4) TSX Approval. The TSX shall have conditionally approved the listing thereon of thePurchaser Shares and the Purchaser Warrants, subject only to the standard listingconditions of the TSX and such approval shall not have been revoked.

(5) Illegality. No Law shall be in effect that makes the consummation of the Arrangementillegal or otherwise prohibits or enjoins the Company or the Purchaser fromconsummating the Arrangement, the Warrant Distribution, the Financings or the othertransactions contemplated by this Agreement.

(6) Proceedings. No Proceeding shall be pending or threatened by any Governmental Entityseeking an injunction, judgment, decree or other order to prevent or challenge theconsummation of the Arrangement, the Warrant Distribution, the Financings or the othertransactions contemplated by this Agreement.

Section 6.2 Additional Conditions Precedent to the Obligations of the Purchaser

The Purchaser is not required to complete the Arrangement unless each of the followingconditions is satisfied on or prior to the Effective Time, which conditions are for the exclusivebenefit of the Purchaser and may only be waived, in whole or in part, by the Purchaser in its solediscretion:

(i) Representations and Warranties. (A) Each Company FundamentalRepresentation shall be true and correct in all respects (other than, in the case ofthe representations and warranties of the Company set forth in paragraph 6 ofSchedule C, de minimis inaccuracies) as of the Effective Time as though made atand as of the Effective Time (except, in each case, for representations and

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warranties made as of a specified date, the accuracy of which shall be determinedas of such specified date) and (B) all of the other representations and warranties ofthe Company set forth in this Agreement shall be true and correct (without regardto any materiality or Material Adverse Effect qualifications contained in them) asof the Effective Time as if made at and as of the Effective Time (except, in eachcase, for representations and warranties made as of a specified date, the accuracyof which shall be determined as of such specified date), except to the extent thatthe failure or failures of such representations and warranties to be so true andcorrect, individually or in the aggregate, would not have a Material AdverseEffect on the Company; and the Company shall have delivered to the Purchaser acertificate addressed to the Purchaser, dated the Effective Date and executed bytwo of its senior officers (without personal liability), confirming the same.

(ii) Performance of Covenants. The Company shall have fulfilled or complied in allmaterial respects with each of the covenants of the Company contained in thisAgreement to be fulfilled or complied with by it on or prior to the Effective Time,and the Company shall have delivered to the Purchaser a certificate addressed tothe Purchaser, dated the Effective Date and executed by two of its senior officers(without personal liability), confirming same.

(iii) Dissent Rights. Dissent Rights shall not have been validly exercised and notwithdrawn with respect to more than 5% of the issued and outstanding CompanyShares.

(iv) Management Services Agreement. Sprott Consulting Limited Partnership shallhave executed a management services agreement, substantially in the formattached as Schedule E.

(v) Amended and Restated Partnership Agreement. Sprott Resource ConsultingLimited Partnership and the Company shall have executed an amended andrestated partnership agreement governing Sprott Resource Partnership,substantially in the form attached as Schedule F.

(vi) Financings. All conditions to the Sprott Inc. Financing, the Term Oil Financingand the Exploration Capital Partners 2008 Financing (including the payment bySprott Inc., Term Oil Inc. and Exploration Capital Partners 2008 LimitedPartnership in escrow of the aggregate consideration payable to the Purchaser inconnection with the Sprott Inc. Financing, the Term Oil Financing and theExploration Capital Partners 2008 Financing, respectively) shall have beensatisfied, other than conditions solely in the Purchaser’s favour.

(vii) Company Material Adverse Effect. Since the date of this Agreement there shallnot have been or occurred a Material Adverse Effect in respect of the Company.

Section 6.3 Additional Conditions Precedent to the Obligations of the Company

The Company is not required to complete the Arrangement unless each of the followingconditions is satisfied on or prior to the Effective Time, which conditions are for the exclusive

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benefit of the Company and may only be waived, in whole or in part, by the Company in its solediscretion:

(i) Representations and Warranties. (A) Each Purchaser FundamentalRepresentation shall be true and correct in all respects (other than, in the case ofthe representations and warranties of the Purchaser set forth in paragraph 6 ofSchedule D, de minimis inaccuracies) as of the Effective Time as though made atand as of the Effective Time (except, in each case, for representations andwarranties made as of a specified date, the accuracy of which shall be determinedas of such specified date) and (B) all of the other representations and warranties ofthe Purchaser set forth in this Agreement shall be true and correct (without regardto any materiality or Material Adverse Effect qualifications contained in them) asof the Effective Time as if made at and as of the Effective Time (except, in eachcase, for representations and warranties made as of a specified date, the accuracyof which shall be determined as of such specified date), except to the extent thatthe failure or failures of such representations and warranties to be so true andcorrect, individually or in the aggregate, would not have a Material AdverseEffect on the Purchaser; and the Purchaser shall have delivered to the Company acertificate addressed to the Company, dated the Effective Date and executed bytwo of its senior officers (without personal liability), confirming the same.

(ii) Performance of Covenants. The Purchaser shall have fulfilled or complied in allmaterial respects with its covenants contained in this Agreement to be fulfilled orcomplied with by it on or prior to the Effective Time, and the Purchaser shall havedelivered to the Company a certificate addressed to the Company, dated theEffective Date and executed by two of its senior officers (without personalliability), confirming same.

(iii) Payment of Consideration. The Purchaser shall have complied with itsobligations under Section 2.12 and the Depositary shall have confirmed to theCompany receipt from or on behalf of the Purchaser of the irrevocable directioncontemplated by Section 2.12.

(iv) No Prospectus or Resale Restrictions. The distribution of the Purchaser Sharespursuant to the Arrangement shall be exempt from the prospectus and registrationrequirements of Securities Law, either by virtue of exemptive relief from theapplicable Securities Authorities or by virtue of applicable exemptions underSecurities Law, and the first trade of such Purchaser Shares shall not be subject toresale restrictions under Securities Law.

(v) Purchaser Board. Executed documentation in respect of the reconstitution of thePurchaser Board as set forth in Section 2.14(2)(ii) shall have been provided to theCompany, such documentation to be held in escrow and subsequently released ascontemplated by Section 2.14.

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(vi) Purchaser Material Adverse Effect. Since the date of this Agreement thereshall not have been or occurred a Material Adverse Effect in respect of thePurchaser.

Section 6.4 Satisfaction of Conditions

The conditions precedent set out in Section 6.1, Section 6.2 and Section 6.3 will beconclusively deemed to have been satisfied, waived or released at the Effective Time. Forgreater certainty, and notwithstanding the terms of any escrow arrangement entered into betweenthe Purchaser and the Depositary, the irrevocable direction held in escrow by the Depositarypursuant to Section 2.12 hereof shall be released from escrow at the Effective Time without anyfurther act or formality required on the part of any Person.

ARTICLE 7TERM AND TERMINATION

Section 7.1 Term

This Agreement shall be effective from the date hereof until the earlier of the EffectiveTime and the termination of this Agreement in accordance with its terms.

Section 7.2 Termination

(1) This Agreement may be terminated and the Arrangement abandoned at any time prior tothe Effective Time (notwithstanding approval of the Arrangement Resolution and/orreceipt of the Final Order) by:

(i) the mutual written agreement of the Parties; or

(ii) the Company or the Purchaser if:

(a) the Arrangement Resolution is not approved by the CompanyShareholders entitled to vote thereon at the Company Meeting inaccordance with the Interim Order; or

(b) the Purchaser Transactions Approval Resolution is not approved at thePurchaser meeting by a majority of the votes cast in respect of thePurchaser Shares held by Purchaser Shareholders present in person or byproxy at the Purchaser Meeting; or

(c) after the date of this Agreement, any Law is enacted, made enforced oramended, as applicable, that makes the consummation of the Arrangementillegal or otherwise prohibits or enjoins the Company or the Purchaserfrom consummating the Arrangement and such Law has, if applicable,become final and non-appealable; or

(d) the Effective Time does not occur on or prior to the Outside Date,provided that a Party may not terminate this Agreement pursuant to this

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Section 7.2(1)(ii)(d) if the failure of the Effective Time to so occur hasbeen caused by, or is a result of, a breach by such Party of any of itsrepresentations or warranties or the failure of such Party to perform any ofits covenants or agreements under this Agreement; or

(iii) the Company if:

(a) a breach of any representation or warranty or failure to perform anycovenant or agreement on the part of the Purchaser under this Agreementoccurs that would cause any condition in Section 6.3(i) [PurchaserRepresentations and Warranties Condition] or Section 6.3(ii) [PurchaserCovenants Condition] not to be satisfied, and such breach or failure isincapable of being cured or is not cured in accordance with the terms ofSection 7.3; provided that the Company is not then in breach of thisAgreement so as to cause any condition in Section 6.2(i) [CompanyRepresentations and Warranties Condition] or Section 6.2(ii) [CompanyCovenants Condition] not to be satisfied; or

(b) (A) the Purchaser Board fails to recommend, or withdraws, amends,modifies or qualifies, or publicly proposes to withdraw, amend, modify orqualify, the Purchaser Board Recommendation, in each case in a manneradverse to the Company, (B) the Purchaser Board accepts, approves,endorses or recommends, or publicly proposes to accept, approve, endorseor recommend, an Acquisition Proposal (it being understood that publiclytaking no position or a neutral position with respect to a publiclyannounced, or otherwise publicly disclosed, Acquisition Proposal for aperiod of no more than five Business Days will not be considered to be anacceptance, approval, endorsement or recommendation of suchAcquisition Proposal, provided the Purchaser Board has rejected suchAcquisition Proposal and affirmed the Purchaser Board Recommendationbefore the end of such five Business Day period), or (C) the PurchaserBoard accepts or enters into or publicly proposes to accept or enter intoany written agreement, understanding or arrangement in respect of anAcquisition Proposal (other than a confidentiality and standstill agreementpermitted by and in accordance with Section 5.3); or

(c) prior to the approval of the Arrangement Resolution, the Company Boardauthorizes the Company, subject to complying with the terms of thisAgreement (including the terms of Section 5.1 and payment of theTermination Fee in accordance with Section 8.2) to enter into a writtenagreement (other than a confidentiality and standstill agreement permittedby and in accordance with Section 5.3) with respect to a SuperiorProposal; or

(d) the Purchaser does not provide or cause to be provided the Depositarywith the irrevocable direction regarding the issuance of sufficientPurchaser Shares to complete the transactions contemplated by this

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Agreement as required pursuant to Section 2.12; provided that theCompany is not then in breach of this Agreement so as to cause anycondition in Section 6.2(i) [Company Representations and WarrantiesCondition] or Section 6.2(ii) [Company Covenants Condition] not to besatisfied; or

(iv) the Purchaser if:

(a) a breach of any representation or warranty or failure to perform anycovenant or agreement on the part of the Company under this Agreementoccurs that would cause any condition in Section 6.2(i) [CompanyRepresentations and Warranties Condition] or Section 6.2(ii) [CompanyCovenants Condition] not to be satisfied, and such breach or failure isincapable of being cured or is not cured in accordance with the terms ofSection 7.3; provided that the Purchaser is not then in breach of thisAgreement so as to cause any condition in Section 6.3(i) [PurchaserRepresentations and Warranties Condition] or Section 6.3(ii) [PurchaserCovenants Condition] not to be satisfied; or

(b) (A) the Company Board fails to recommend, or withdraws, amends,modifies or qualifies, or publicly proposes to withdraw, amend, modify orqualify, the Company Board Recommendation, in each case in a manneradverse to the Purchaser, (B) the Company Board accepts, approves,endorses or recommends, or publicly proposes to accept, approve, endorseor recommend, an Acquisition Proposal (it being understood that publiclytaking no position or a neutral position with respect to a publiclyannounced, or otherwise publicly disclosed, Acquisition Proposal for aperiod of no more than five Business Days will not be considered to be anacceptance, approval, endorsement or recommendation of suchAcquisition Proposal, provided the Company Board has rejected suchAcquisition Proposal and affirmed the Company Board Recommendationbefore the end of such five Business Day period), or (C) the CompanyBoard accepts or enters into or publicly proposes to accept or enter intoany written agreement, understanding or arrangement in respect of anAcquisition Proposal (other than a confidentiality and standstill agreementpermitted by and in accordance with Section 5.3); or

(c) prior to the approval of the Purchaser Transactions Approval Resolution,the Purchaser Board authorizes the Purchaser, subject to complying withthe terms of this Agreement (including the terms of Section 5.1 andpayment of the Termination Fee in accordance with Section 8.2) to enterinto a written agreement (other than a confidentiality and standstillagreement permitted by and in accordance with Section 5.3) with respectto a Superior Proposal.

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(2) The Party desiring to terminate this Agreement pursuant to this Section 7.2 (other thanpursuant to Section 7.2(1)(i)) shall give notice of such termination to the other Party,specifying in reasonable detail the basis for such Party’s exercise of its termination right.

Section 7.3 Notice and Cure Provisions

(1) Each Party shall promptly notify the other Party of the occurrence, or failure to occur, ofany event or state of facts which occurrence or failure would, or would be reasonablylikely to:

(i) cause any of the representations or warranties of any Party contained in thisAgreement to be untrue or inaccurate in any material respect at any time from thedate of this Agreement to the Effective Time; or

(ii) result in the failure to comply with or satisfy any covenant, condition oragreement to be complied with or satisfied by any Party under this Agreement.

(2) Notification provided under this Section 7.3 will not affect the representations,warranties, covenants, agreements or obligations of the Parties (or remedies with respectthereto) or the conditions to the obligations of the Parties under this Agreement.

(3) The Purchaser may not elect to exercise its right to terminate this Agreement pursuant toSection 7.2(1)(iv)(a) and the Company may not elect to exercise its right to terminate thisAgreement pursuant to Section 7.2(1)(iii)(a), unless the Party seeking to terminate thisAgreement (the “Terminating Party”) has delivered a written notice (“TerminationNotice”) to the other Party (the “Breaching Party”) specifying in reasonable detail allbreaches of covenants, representations and warranties or other matters which theTerminating Party asserts as the basis for termination. After delivering a TerminationNotice, provided the Breaching Party is proceeding diligently to cure such matter andsuch matter is capable of being cured prior to the Outside Date, the Terminating Partymay not exercise such termination right until the earlier of (i) the Outside Date, and(ii) the date that is 15 Business Days following receipt of such Termination Notice by theBreaching Party, if such matter has not been cured by such date. If the Terminating Partydelivers a Termination Notice prior to the date of the Company Meeting or the PurchaserMeeting, unless the Parties agree otherwise, the Company or the Purchaser, as applicable,may postpone or adjourn the Company Meeting, in the case of the Company, or thePurchaser Meeting, in the case of the Purchaser, to the earlier of (a) five Business Daysprior to the Outside Date and (b) the date that is 10 Business Days following receipt ofsuch Termination Notice by the Breaching Party (without causing any breach of anyother provision contained herein).

Section 7.4 Effect of Termination/Survival

If this Agreement is terminated pursuant to Section 7.1 or Section 7.2, this Agreementshall become void and of no further force or effect without liability of any Party (or anyshareholder, director, officer, employee, agent, consultant or representative of such Party) to theother Party to this Agreement, except that: (i) in the event of termination under Section 7.1 as aresult of the Effective Time occurring, Section 4.9 shall survive for a period of six years

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thereafter; (ii) in the event of termination under Section 7.2, Section 4.6, Section 4.9 (only withrespect to indemnification), this Section 7.4 and Section 8.2 through to and includingSection 8.13 shall survive; and (iii) neither the termination of this Agreement nor anythingcontained in this Section 7.4 shall relieve any Party from any liability for any breach of thisAgreement.

ARTICLE 8GENERAL PROVISIONS

Section 8.1 Amendments

This Agreement and the Plan of Arrangement may, at any time and from time to timebefore or after the holding of the Company Meeting or the Purchaser Meeting but not later thanthe Effective Time, be amended by mutual written agreement of the Parties, without furthernotice to or authorization on the part of the Company Shareholders or the PurchaserShareholders, and any such amendment may, subject to the Interim Order and Final Order andLaws, without limitation:

(i) change the time for performance of any of the obligations or acts of the Parties;

(ii) modify any representation or warranty contained in this Agreement or in anydocument delivered pursuant to this Agreement;

(iii) modify any of the covenants contained in this Agreement and waive or modifyperformance of any of the obligations of the Parties; and/or

(iv) modify any mutual conditions contained in this Agreement.

Section 8.2 Termination Fee and Expenses

(1) If a Termination Fee Event occurs, the Company or the Purchaser, as the case may be,shall pay or cause to be paid to the Purchaser or the Company, as the case may be, theTermination Fee in accordance with Section 8.2(3) as liquidated damages.

(2) For the purposes of this Agreement, “Termination Fee” means $1,250,000, and“Termination Fee Event” means the termination of this Agreement:

(i) by the Company, pursuant to Section 7.2(1)(iii)(b) [Purchaser Change inRecommendation];

(ii) by the Purchaser, pursuant to Section 7.2(1)(iv)(b) [Company Change inRecommendation];

(iii) by the Company, pursuant to Section 7.2(1)(iii)(c) [Company Superior Proposal];

(iv) by the Purchaser, pursuant to Section 7.2(1)(iv)(c) [Purchaser SuperiorProposal];

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(v) by the Company or the Purchaser, pursuant to Section 7.2(1)(ii)(a) [ArrangementResolution not Approved], Section 7.2(1)(ii)(b) [Purchaser TransactionsApproval Resolution not Approved] or Section 7.2(1)(ii)(d) [Effective Time notPrior to Outside Date], if:

(a) prior to such termination, an Acquisition Proposal is proposed, offered ormade to the Company Board or the Purchaser Board, as the case may be,or publicly announced or otherwise publicly disclosed by any Person; and

(b) within 6 months following the date of such termination, such AcquisitionProposal is consummated.

For purposes of the foregoing, the term “Acquisition Proposal” shall have themeaning assigned to such term in Section 1.1, except that references to “20% ormore” shall be deemed to be references to “50% or more”.

(3) If a Termination Fee Event occurs due to a termination of this Agreement by theCompany pursuant to Section 7.2(1)(iii)(c) [Company Superior Proposal] or thePurchaser Pursuant to Section 7.2(1)(iv)(c) [Purchaser Superior Proposal], theTermination Fee shall be paid by the Company or the Purchaser, respectively, prior to orconcurrently with the occurrence of such Termination Fee Event. If a Termination FeeEvent occurs due to a termination of this Agreement by the Purchaser pursuant toSection 7.2(1)(iv)(b) [Company Change in Recommendation] or by the Companypursuant to Section 7.2(1)(iii)(b) [Purchaser Change in Recommendation], theTermination Fee shall be paid by the Company or the Purchaser, respectively, within twoBusiness Days following such Termination Fee Event. If a Termination Fee Event occursin the circumstances set out in Section 8.2(2)(v) [Acquisition Proposal Tail], theTermination Fee shall be paid by the Purchaser or the Company, as the case may be, uponthe consummation/closing of the Acquisition Proposal in respect of the Purchaser or theCompany, as the case may be, referred to therein. Any Termination Fee shall be paid, orcaused to be paid, by the Company to the Purchaser or by the Purchaser to the Company,as the case may be by wire transfer in immediately available funds to an accountdesignated by the Purchaser.

(4) Any Termination Fee payable by the Company or the Purchaser pursuant to thisAgreement shall be paid free and clear of and without deduction or withholding for, or onaccount of, any present or future Taxes, unless such deduction or withholding is requiredby Law.

(5) Each Party acknowledges that the agreements contained in this Section 8.2 are an integralpart of the transactions contemplated by this Agreement, and that without theseagreements the Parties would not enter into this Agreement, and that the amounts set outin this Section 8.2 represent liquidated damages which are a genuine pre-estimate of thedamages, including opportunity costs, which the Purchaser or the Company, as the casemay be, would suffer or incur as a result of the event giving rise to such damages andresultant termination of this Agreement, and are not penalties. Each Party irrevocablywaives any right it may have to raise as a defence that any such liquidated damages are

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excessive or punitive. Each Party agrees that the payment of the Termination Fee in themanner provided in this Section 8.2 is the sole and exclusive remedy of such Party inrespect of the event giving rise to such payment. Each Party shall also have the right toinjunctive and other equitable relief in accordance with Section 8.5 to prevent breaches orthreatened breaches of this Agreement and to enforce compliance with the terms of thisAgreement.

(6) Except as otherwise expressly provided herein, all costs and expenses incurred inconnection with this Agreement and the Arrangement will be paid by the Party incurringsuch cost or expense.

(7) The Company will pay the Purchaser (by wire transfer of immediately available funds)the reasonable and documented expenses of the Purchaser incurred in connection with thetransactions contemplated hereby not to exceed $500,000 if this Agreement is terminatedby the Purchaser pursuant to Section 7.2(1)(iv)(a) [Breach] or Section 7.2(1)(ii)(a)[Arrangement Resolution Not Approved], such payment to be made within two BusinessDays of any such termination.

(8) The Purchaser will pay the Company (by wire transfer of immediately available funds)the reasonable and documented expenses of the Company incurred in connection with thetransactions contemplated hereby not to exceed $500,000 if this Agreement is terminatedby the Company pursuant to Section 7.2(1)(iii)(a) [Breach] or Section 7.2(1)(ii)(b)[Purchaser Transactions Approval Resolution Not Approved], such payment to be madewithin two Business Days of any such termination.

(9) For the avoidance of doubt, payment of any amounts under Section 8.2(7) and Section8.2(8) hereof shall not be exclusive of any other remedies to which the Parties may beentitled as a result of termination of this Agreement.

Section 8.3 Notices

Any notice, or other communication to be given regarding the matters contemplated bythis Agreement will be sufficient if in writing and (i) hand delivered, (ii) sent by certified orregistered mail, (iii) sent by express courier or (iv) if notice is also contemporaneously sent byone of the other methods of delivery, sent by facsimile or email, addressed as follows:

(i) to the Purchaser at:

Adriana Resources Inc.141 Adelaide St. West, Suite 420Toronto, Ontario, CanadaM5H 3L5

Attention: Michael Harrison, President and CEOEmail: [email protected]

with a copy (which shall not constitute notice) to:

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Stikeman Elliott LLP5300 Commerce Court West199 Bay StreetToronto, Ontario, CanadaM5L 1B9

Attention: Mihkel E. VooreFacsimile: (416) 947-0866Email: [email protected]

(ii) to the Company at:

Sprott Resources Corp.Royal Bank Plaza, South Tower200 Bay Street, Suite 2750Toronto, Ontario, CanadaM5J 2J2

Attention: Steve Yuzpe, President and CEOFacsimile: (416) 977-9555Email: [email protected]

with a copy (which shall not constitute notice) to:

Blake, Cassels & Graydon LLP199 Bay St., Suite 4000Toronto, Ontario, CanadaM5L 1A9

Attention: Jeff LloydFacsimile: (416) 863-2653Email: [email protected]

Any notice or other communication is deemed to be given and received on the day on which itwas delivered or, in the case of notices or other communications transmitted by facsimile oremail, transmitted (or if such day is not a Business Day or if such notice or communication wasdelivered or transmitted after 5:00 p.m. (local time in the place of receipt) on the next followingBusiness Day). Sending a copy of a notice or other communication to a Party’s legal counsel ascontemplated above is for information purposes only and does not constitute delivery of thenotice or other communication to that Party. The failure to send a copy of a notice or othercommunication to a Party’s legal counsel does not invalidate delivery of that notice or othercommunication to such Party.

Section 8.4 Time of the Essence

Time is of the essence in this Agreement.

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Section 8.5 Injunctive Relief

The Parties agree that irreparable harm would occur for which money damages would notbe an adequate remedy at Law in the event that any of the provisions of this Agreement were notperformed in accordance with their specific terms or were otherwise breached. It is accordinglyagreed that prior to the termination of this Agreement in accordance with its terms, the Partiesshall be entitled to injunctive and other equitable relief to prevent breaches or threatenedbreaches of this Agreement and to specifically enforce compliance with, or performance of, theterms of this Agreement without any requirement for the securing or posting of any bond inconnection with the obtaining of any such injunctive or other equitable relief, this being inaddition to any other remedy to which the Parties may be entitled at Law or in equity.

Section 8.6 Third Party Beneficiaries

(1) Except as provided in Section 4.9 and Section 8.13(1), which, without limiting theirterms, are intended as stipulations for the benefit of the Indemnified Persons and of theother Persons identified therein as the beneficiaries thereof, and except for the right of theCompany Shareholders to receive the Consideration following the Effective Time and inaccordance with the terms of this Agreement, the Company and the Purchaser intend thatthis Agreement will not benefit or create any right or cause of action in favour of anyPerson other than the Parties and that no Person, other than the Parties, shall be entitled torely on the provisions of this Agreement in any Proceeding or other forum.

(2) Despite the foregoing, the Parties acknowledge to each of the Indemnified Persons theirdirect rights against the applicable Party under Section 4.9, which are intended for thebenefit of, and shall be enforceable by, each Indemnified Person, his or her heirs and hisor her legal representatives, and for such purpose, the Company or the Purchaser, asapplicable, confirms that it is acting as trustee on their behalf, and agrees to enforce suchprovisions on their behalf.

Section 8.7 Waiver

No waiver of any of the provisions of this Agreement will constitute a waiver of anyother provision (whether or not similar). No waiver will be binding unless executed in writingby the Party to be bound by the waiver. A Party’s failure or delay in exercising any right underthis Agreement will not operate as a waiver of that right. A single or partial exercise of any rightwill not preclude a Party from any other or further exercise of that right or the exercise of anyother right.

Section 8.8 Entire Agreement

This Agreement and the Confidentiality Agreement, taken together, constitute the entireagreement between the Parties with respect to the transactions contemplated by this Agreementand supersede all prior agreements, understandings, negotiations and discussions, whether oral orwritten, of the Parties, including without limitation the term sheet dated August 26, 2016. Thereare no representations, warranties, covenants, conditions or other agreements, express or implied,collateral, statutory or otherwise, between the Parties in connection with the subject matter ofthis Agreement, except as specifically set forth in this Agreement and the Confidentiality

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Agreement. The Parties have not relied and are not relying on any other information, discussionor understanding in entering into and completing the transactions contemplated by thisAgreement.

Section 8.9 Successors and Assigns

(1) This Agreement becomes effective only when executed by the Company and thePurchaser. After that time, it will be binding upon and enure to the benefit of theCompany and the Purchaser and their respective successors and permitted assigns.

(2) Neither this Agreement nor any of the rights or obligations under this Agreement areassignable or transferable by any Party without the prior written consent of the otherParty.

Section 8.10 Severability

If any provision of this Agreement is determined to be illegal, invalid or unenforceableby any court of competent jurisdiction, that provision will be severed from this Agreement andthe remaining provisions shall remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any manner materiallyadverse to any Party. Upon such determination that any term or other provision is invalid, illegalor incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreementso as to effect the original intent of the Parties as closely as possible in an acceptable manner tothe end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

Section 8.11 Governing Law

(1) This Agreement will be governed by and interpreted and enforced in accordance with theLaws of the Province of Ontario and the federal Laws of Canada applicable therein.

(2) Each Party irrevocably attorns and submits to the non-exclusive jurisdiction of the courtsof Ontario and waives objection to the venue of any Proceeding in such court or that suchcourt provides an inconvenient forum, provided that any court Proceedings will beconducted in the English language.

Section 8.12 Rules of Construction

The Parties to this Agreement waive the application of any Law or rule of constructionproviding that ambiguities in any agreement or other document shall be construed against theparty drafting such agreement or other document.

Section 8.13 No Liability

(1) No director or officer of the Purchaser or any of its Subsidiaries shall have any personalliability whatsoever to the Company or any third party beneficiary under this Agreementor any other document delivered in connection with the transactions contemplated herebyon behalf of the Purchaser or any of its Subsidiaries. No director or officer of theCompany or any of its Subsidiaries, shall have any personal liability whatsoever to the

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Purchaser under this Agreement or any other document delivered in connection with thetransactions contemplated hereby on behalf of the Company, any of its Subsidiaries.

Section 8.14 Counterparts

This Agreement may be executed in any number of counterparts (including counterpartsby facsimile or any other form of electronic communication) and all such counterparts takentogether shall be deemed to constitute one and the same instrument. The Parties shall be entitledto rely upon delivery of an executed facsimile or similar executed electronic copy of thisAgreement, and such facsimile or similar executed electronic copy shall be legally effective tocreate a valid and binding agreement between the Parties.

[Remainder of page left intentionally blank. Signature page follows.]

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IN WITNESS WHEREOF the Parties have executed this Arrangement Agreement on the datefirst written above.


By: (signed) “Steve Yuzpe”Authorized Signing Officer


By: (signed) “Michael J. Harrison”Authorized Signing Officer

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SCHEDULE APLAN OF ARRANGEMENT


Section 1.1 Definitions

In this Plan of Arrangement, unless there is something in the subject matter or contextinconsistent therewith, the following terms will have the respective meanings set forth below.Capitalized terms used herein and not otherwise defined have the respective meanings ascribedto them in the Arrangement Agreement.

“Arrangement” means an arrangement under Section 192 of the CBCA in respect of theCompany on the terms and subject to the conditions set out in this Plan of Arrangement, subjectto any amendments or variations thereto made in accordance herewith or with the terms of theArrangement Agreement or made at the direction of the Court in the Final Order with the consentof the Company and the Purchaser, each acting reasonably.

“Arrangement Agreement” means the arrangement agreement dated November 29, 2016between the Company and the Purchaser, as amended or supplemented from time to time.

“Arrangement Resolution” means the special resolution approving the Arrangement to beconsidered at the Company Meeting.

“Articles of Arrangement” means the articles of arrangement of the Company in respect of theArrangement, required by the CBCA to be sent to the Director after the Final Order is made,which shall include this Plan of Arrangement and otherwise be in a form and content satisfactoryto the Company and the Purchaser, each acting reasonably.

“Business Day” means any day of the year, other than a Saturday, a Sunday or a day on whichmajor banks are closed for business in Toronto, Ontario.

“CBCA” means the Canada Business Corporations Act.

“Certificate of Arrangement” means the certificate of arrangement to be issued by the Directorpursuant to subsection 192(7) of the CBCA in respect of the Articles of Arrangement.

“Company” means Sprott Resource Corp., a corporation governed by the CBCA.

“Company Options” means the outstanding options to purchase Company Shares issued by theCompany under the Company SOP.

“Company Meeting” means the special meeting of the Company Shareholders, including anyadjournment or postponement of such special meeting, to be called and held in accordance withthe Interim Order to consider the Arrangement Resolution.

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“Company Shareholders” means the registered holders and/or beneficial owners of theCompany Shares, as the context requires.

“Company Shares” means the common shares in the capital of the Company.

“Company SOP” means the Company’s amended and restated share option plan, effective as ofMay 14, 2014.

“Consideration” means three (3) Purchaser Shares per Company Share.

“Court” means the Ontario Superior Court of Justice (Commercial List).

“Depositary” means such Person as the Company may appoint to act as depositary for theCompany Shares in relation to the Arrangement, with the approval of the Purchaser, actingreasonably.

“Director” means the Director appointed pursuant to Section 260 of the CBCA.

“Director DSU Plan” means the director deferred share unit plan of the Company, effective asof August 13, 2013.

“Dissent Company Shares” means the Company Shares held by a Dissenting CompanyShareholder and in respect of which the Dissenting Company Shareholder has validly exercisedDissent Rights.

“Dissent Rights” means the rights of dissent exercisable by Company Shareholders in respect ofthe Arrangement Resolution provided for in Article 4 of this Plan of Arrangement.

“Dissenting Company Shareholder” means a registered Company Shareholder who has dulyexercised its Dissent Rights and has not withdrawn or been deemed to have withdrawn suchexercise of Dissent Rights, but only in respect of the Company Shares in respect of which suchDissent Rights are validly exercised by such Company Shareholders.

“Effective Date” means the date shown on the Certificate of Arrangement giving effect to thePlan of Arrangement.

“Effective Time” means 12:01 a.m. in Toronto, Ontario on the Effective Date, or such othertime in Toronto, Ontario on the Effective Date as the Company and the Purchaser, each actingreasonably, may agree in writing prior to the Effective Date.

“Final Order” means the final order of the Court approving the Arrangement, as such order maybe amended, modified, supplemented or varied by the Court (with the consent of both theCompany and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, ifappealed, then, unless such appeal is withdrawn, abandoned or denied, as affirmed or asamended (provided that any such amendment is acceptable to both the Company and thePurchaser, each acting reasonably) on appeal.

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“Governmental Entity” means (i) any international, multinational, national, federal, provincial,territorial, state, regional, municipal, local or other government, governmental or public body,authority or department, central bank, court, tribunal, arbitral body, commission, board, bureau,commissioner, ministry, governor-in-council, agency or instrumentality, domestic or foreign; (ii)any subdivision or authority of any of the above; (iii) any quasi-governmental, administrative orprivate body, including any tribunal, commission, committee, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or forthe account of any of the foregoing; or (iv) any stock exchange.

“Interim Order” means the interim order of the Court providing for, among other things, thecalling and holding of the Company Meeting, as such order may be amended, modified,supplemented or varied by the Court with the consent of the Company and the Purchaser, eachacting reasonably.

“Law” means, with respect to any Person, any and all applicable law (statutory, common, civilor otherwise), constitution, treaty, convention, ordinance, by-law, code, rule, regulation, order,injunction, judgment, award, decree, ruling or other similar requirement, whether domestic orforeign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding uponor applicable to such Person or its business, undertaking, property or securities, and to the extentthat they have the force of law, policies, guidelines, notices and protocols of any GovernmentalEntity, as amended unless expressly specified otherwise.

“Letter of Transmittal” means the letter of transmittal to be sent by the Company to theCompany Shareholders in connection with the Arrangement.

“Person” includes any individual, partnership, limited partnership, association, body corporate,organization, joint venture, trust, estate, trustee, executor, administrator, legal representative,government, syndicate or other entity, whether or not having legal status.

“Plan of Arrangement” means this plan of arrangement, and references to “Article” or“Section” means the specified Article or Section of this Plan of Arrangement.

“Purchaser” means Adriana Resources Inc., a corporation governed by the CBCA.

“Purchaser Shares” means the common shares in the capital of the Purchaser.

“Purchaser Warrants” means the common share purchase warrants of the Purchaser eachrepresenting the right of the holder to purchase one Purchaser Share per warrant at a price equalto $0.333 with an expiry date of five (5) years from the Effective Date; provided, however, that ifthe weighted average trading price of the Purchaser Shares for any 45 consecutive trading dayperiod is greater than $0.583 per Purchaser Share, the expiry date may be accelerated by thePurchaser providing a notice to holders of such warrants and in such case the expiry date shall bethe date which is 30 days following the date on which such notice is provided, and with suchother terms and conditions as may be specified in the Warrant Indenture.

“Taxes” means (i) any and all taxes, duties, fees, excises, premiums, assessments, imposts, leviesand other charges or assessments of any kind whatsoever imposed by any Governmental Entity,whether computed on a separate, consolidated, unitary, combined or other basis, including those

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levied on, or measured by, or described with respect to, income, gross receipts, profits, gains,windfalls, capital, capital stock, production, recapture, transfer, land transfer, license, gift,occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services,harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business,franchising, real or personal property, health, employee or employer health, payroll, workers’compensation, employment or unemployment, severance, social services, social security,education, utility, surtaxes, customs, import or export, and including all license and registrationfees and all employment insurance, health insurance and government pension plan premiums orcontributions; (ii) all interest, penalties, fines, additions to tax or other additional amountsimposed by any Governmental Entity on or in respect of amounts of the type described in clause(i) above or this clause (ii); (iii) any liability for the payment of any amounts of the typedescribed in clauses (i) or (ii) as a result of being a member of an affiliated, consolidated,combined or unitary group for any period; and (iv) any liability for the payment of any amountsof the type described in clauses (i) or (ii) as a result of any express or implied obligation toindemnify any other Person or as a result of being a transferee or successor in interest to anyparty.

“Warrant Distribution” means the issuance by the Purchaser of 0.25 of a Purchaser Warrantper Purchaser Share to Purchaser Shareholders of record on the Business Day immediatelypreceding the Effective Date.

“Warrant Indenture” means the warrant indenture of the Purchaser to be entered into by thePurchaser and such person as the Purchaser may appoint to act as warrant agent prior to theEffective Time (with the consent of the Company, acting reasonably) governing the PurchaserWarrants, in form and substance satisfactory to the Company, acting reasonably.

Section 1.2 Certain Rules of Interpretation

In this Plan of Arrangement:

(1) Currency — Unless otherwise specified, all references to money amounts are tolawful currency of Canada.

(2) Headings — The insertion of headings is for convenience of reference only andwill not affect in any way the meaning or interpretation of this Plan ofArrangement.

(3) Including — Where the word “including” or “includes” is used in this Plan ofArrangement, it means “including (or includes) without limitation”.

(4) Number and Gender — In this Plan of Arrangement, unless the contraryintention appears, words importing the singular include the plural and vice versa,and words importing gender include all genders.

(5) Statutory References — A reference to a statute includes all rules andregulations made pursuant to such statute and, unless otherwise specified, theprovisions of any statute or regulation or rule which amends, supplements orsupersedes any such statute or any such regulation or rule.

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(6) Time — Time is of the essence in every matter or action contemplated hereunder.Unless otherwise specified, time periods within or following which any paymentis to be made or act is to be done will be calculated by excluding the day on whichthe period commences and including the day on which the period ends and byextending the period to the next Business Day if the last day of the period is not aBusiness Day.

ARTICLE 2EFFECT OF THE ARRANGEMENT

Section 2.1 Arrangement Agreement

This Plan of Arrangement is made pursuant to the Arrangement Agreement.

Section 2.2 Binding Effect

This Plan of Arrangement will become effective at the Effective Time and will bebinding at and after the Effective Time on:

(a) the Company;

(b) the Purchaser;

(c) all Company Shareholders (including Dissenting Company Shareholders); and

(d) the Depositary.

Section 2.3 Integrated Transaction

No portion of this Plan of Arrangement will take effect with respect to any Person untilthe Effective Time. Further, each of the events listed in Section 3.2 will be, without affecting thetiming set out in Section 3.2, mutually conditional, such that no event described in Section 3.2may occur without all steps occurring, and those events will effect the integrated transactionwhich constitutes the Arrangement.


Section 3.1 Pre-Implementation Transactions

Prior to the Effective Date, the Warrant Distribution shall have been completed.

Section 3.2 The Arrangement

Commencing at the Effective Time, the events described in each subsection set out belowwill occur and will be deemed to occur, except as otherwise expressly noted, two minutes apart

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and in the following order without any further authorization, act or formality required on the partof any Person, except as expressly provided herein:

(1) each Company Option outstanding immediately prior to the Effective Time(whether vested or unvested), notwithstanding the terms of the Company SOP,shall immediately be cancelled, and neither the Company nor the Purchaser shallbe obligated to pay the holder of such Company Option any amount in respect ofsuch Company Option and, in respect of each such Company Option, the holderthereof shall cease to be a holder of such Company Option and the name of suchholder name shall be removed from the applicable register;

(2) the Company SOP and all agreements relating to the Company Options shall beterminated and shall be of no further force and effect;

(3) each Company Share held by a Dissenting Company Shareholder entitled to bepaid fair value for its Dissent Company Share will be deemed to be transferred bythe holder thereof, without any further act or formality on its part, free and clearof all liens, charges, encumbrances and any other rights of others, to the Companyand the Company shall thereupon be obligated to pay the amount determined andpayable in accordance with Article 4 and each Dissenting Company Shareholderwill have only the rights set out in Article 4 and each Dissenting CompanyShareholder will cease to be the holder of such Company Shares;

(4) each outstanding Company Share (other than those Company Shares acquiredfrom Dissenting Shareholders under Section 3.2(3)) held by a CompanyShareholder shall be transferred to, and acquired by the Purchaser, free and clearof all liens, charges, encumbrances and any other rights of others, in exchange forthe issuance by the Purchaser to such Company Shareholders of the Considerationand, in respect of each such Company Share so transferred:

(a) the registered holder thereof shall cease to be the registered holder of suchCompany Share and the name of such registered holder shall be removedfrom the Company’s register of holders of Company Shares as of the timeof this step; and

(b) the Purchaser shall be recorded as the registered holder of such CompanyShare and will be entered in the Company’s register of holders ofCompany Shares as the holder thereof.

ARTICLE 4RIGHTS OF DISSENT

Section 4.1 Dissenting Company Shareholders

(1) Each registered Company Shareholder will have the right to dissent with respectto the Arrangement Resolution as provided in Section 190 of the CBCA asmodified by the Interim Order and this Section 4.1; provided that,

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notwithstanding section 190(5) of the CBCA, the written objection to theArrangement Resolution referred to in section 190(5) of the CBCA must bereceived by the Company not later than 5:00 p.m. (Toronto time) on the BusinessDay that is two Business Days prior to the date of the Company Meeting (as itmay be adjourned or postponed from time to time in accordance with the terms ofthe Arrangement Agreement).

(2) Any Dissenting Company Shareholder who:

(a) is ultimately entitled to be paid fair value for its Dissent Company Shareswill be deemed to have transferred such Dissent Company Shares (freeand clear of all liens, charges, encumbrances and any other rights ofothers) to the Company in accordance with Section 3.2(3) in considerationfor a right to receive a payment for such fair value from the Company andwill not be entitled to any other payment or consideration, including anypayment that would be payable under the Plan of Arrangement had suchholder not exercised its Dissent Rights in respect of such DissentCompany Shares; and

(b) is ultimately not entitled, for any reason, to be paid fair value for itsCompany Shares in respect of which they dissent, will be deemed to haveparticipated in the Arrangement in respect of those Company Shares, onthe same basis as a non-dissenting Company Shareholder and will beentitled to receive only the Consideration that such non-dissentingCompany Shareholders are entitled to receive, on the basis set forth inSection 3.2(4) and, for greater certainty, will be considered to havetransferred such Company Shares in exchange for the Considerationpursuant to, and at the same time as the Company Shares were transferredby the other former Company Shareholders pursuant to Section 3.2(4).

(3) In no event will the Purchaser, the Company or any other Person be required torecognize a Dissenting Company Shareholder as a registered holder or beneficialowner of Company Shares or any interest therein (other than the rights set out inthis Article 4) at or after the Effective Time, and at the Effective Time the namesof such Dissenting Company Shareholder will be deleted from the Company’sregister of holders of Company Shares at the Effective Time.

(4) For greater certainty, in addition to any other restrictions in the Interim Order orunder Section 190 of the CBCA, no Person will be entitled to exercise DissentRights with respect to Company Shares in respect of which a Person has voted infavour of the Arrangement Resolution.

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ARTICLE 5CERTIFICATES AND PAYMENTS

Section 5.1 Entitlement to Consideration

(1) At or prior to the Effective Date, in accordance with the Arrangement Agreement,the Purchaser will deposit with the Depositary certificates representing thePurchaser Shares to be issued to Company Shareholders in accordance withSection 3.2, which Purchaser Share certificates shall be held by the Depositary asagent and nominee for the Company Shareholders entitled to receive PurchaserShares pursuant to Section 3.2.

(2) Following the deposit with the Depositary of the certificates specified in Section5.1(1), the Purchaser will be fully and completely discharged from its obligationto pay the Consideration to the former Company Shareholders and the rights ofsuch holders will be limited to receiving, from the Depositary, the Considerationto which they are entitled in accordance with the remainder of this Article 5.

(3) Until such time as a former Company Shareholder deposits with the Depositary aduly completed Letter of Transmittal, any documents, certificates and instrumentscontemplated by the Letter of Transmittal and such other documents andinstruments as the Depositary or the Purchaser reasonably requires, theConsideration to which such former Company Shareholder is entitled will, subjectto Section 5.1(4), be delivered to the Depositary to be held in trust for such formerCompany Shareholder for delivery to the former Company Shareholder, net of allapplicable withholding and other Taxes, if any, upon delivery of the Letter ofTransmittal, documents, certificates and instruments contemplated by the Letterof Transmittal and such other documents, certificates and instruments as theDepositary or the Purchaser reasonably requires.

(4) Upon surrender to the Depositary for cancellation of a certificate whichimmediately prior to the Effective Time represented one or more CompanyShares, other than Dissent Company Shares, if applicable, a completed Letter ofTransmittal and such additional documents, certificates and instruments as theDepositary or the Purchaser may reasonably require, the holder of suchsurrendered certificate or the deliverer of such Letter of Transmittal, asapplicable, will be entitled to receive in exchange therefor, and the Depositarywill deliver to such former Company Shareholder following the Effective Time,certificates representing the Consideration, to which such former CompanyShareholder is entitled in accordance with Section 3.2 hereof and subject toSection 5.4.

(5) After the Effective Time and until surrender for cancellation as contemplated bySection 5.1(4) hereof, each certificate which immediately prior to the EffectiveTime represented one or more Company Shares will be deemed at all times torepresent only the right to receive in exchange therefor certificates representing

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the Consideration to which the holder of such certificate is entitled in accordancewith Section 5.1(4) hereof.

Section 5.2 Lost Certificates

(1) In the event that any certificate, which immediately prior to the Effective Timerepresented one or more outstanding Company Shares that were transferredpursuant to Section 3.2(4), shall have been lost, stolen or destroyed, upon themaking of an affidavit of that fact by the holder claiming such certificate to belost, stolen or destroyed, the Depositary will deliver in exchange for such lost,stolen or destroyed certificate, the Consideration which such former CompanyShareholder is entitled to receive in accordance with Section 3.2. Whenauthorizing such delivery of the Consideration which such former CompanyShareholder is entitled to receive in exchange for such lost, stolen or destroyedcertificate, the former Company Shareholder to whom such Consideration is to bedelivered will, as a condition precedent to the delivery of such Consideration, givea bond satisfactory to the Purchaser, the Company and the Depositary in such sumas the Purchaser, the Company and the Depositary may direct, or otherwiseindemnify the Purchaser, the Company and the Depositary in a mannersatisfactory to the Purchaser, the Company and the Depositary, against any claimthat may be made against the Purchaser, the Company and the Depositary withrespect to the certificate alleged to have been lost, stolen or destroyed.

(2) In the event of a transfer of ownership of Company Shares that were notregistered in the applicable securities register of the Company, the Considerationpayable for such Company Shares under Section 3.2 hereof may be delivered tothe transferee if the certificate representing such Company Shares is presented tothe Depositary as set out in Section 5.1(3) accompanied by all documents,certificates and instruments required by the Depositary or the Purchaser toevidence and effect such transfer and to evidence that any applicable transferTaxes have been paid.

Section 5.3 Termination of Rights

Any certificate formerly representing Company Shares that is not deposited with all otherdocuments as provided in this Article 5 on or before the sixth anniversary of the Effective Datewill cease to represent any claim or interest of any kind or nature against the Purchaser, theCompany or the Depositary or any of their successors and will be deemed to have been donated,surrendered and forfeited to the Purchaser for no consideration.

Section 5.4 Withholding Taxes

(1) The Purchaser, the Company and the Depositary, as applicable, shall each beentitled to deduct and withhold from the Consideration or any amount otherwisepayable to any Company Shareholders pursuant to or in connection with this Planof Arrangement such amounts as the Purchaser, the Company or the Depositary,as applicable, are required or reasonably believe themselves to be required to

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deduct and withhold from such consideration under any provision of any Law inrespect of Taxes. Any such amounts will be deducted, withheld and remittedfrom the consideration payable pursuant to or in connection with this Plan ofArrangement and shall be treated for all purposes under this Plan of Arrangementas having been paid to the Company Shareholders in respect of which suchdeduction, withholding and remittance was made; provided that such deductedand withheld amounts are actually remitted to the appropriate GovernmentalEntity.

(2) The Purchaser, the Company and the Depositary shall each be authorized to sellor otherwise dispose of such portion of the Consideration as is necessary toprovide sufficient funds to enable it to comply with its deducting or withholdingrequirements and the Purchaser, the Company or the Depositary, as applicable,will notify the Company Shareholder of such sale or disposition and remit anyunapplied balance of the net proceeds of such sale to such Company Shareholder.

Section 5.5 Transfer Free of Claim

Any exchange or transfer of Company Shares pursuant to this Plan of Arrangement shallbe free and clear of any Liens or other claims of third parties of any kind.

Section 5.6 U.S. Securities Laws Exemption.

Notwithstanding any provision herein to the contrary, this Plan of Arrangement will becarried out with the intention that all Purchaser Shares issued on completion of this Plan ofArrangement to the Company Shareholders will be issued by the Purchaser in reliance on theexemption from the registration requirements of the U.S. Securities Act of 1933, as amended, asprovided by Section 3(a)(10) thereof.

ARTICLE 6AMENDMENTS; FURTHER ASSURANCES

Section 6.1 Amendments

(1) Subject to Section 6.1(2), this Plan of Arrangement may be amended, modifiedand/or supplemented as provided in the Arrangement Agreement at any time andfrom time to time prior to the Effective Date, provided that each such amendment,modification and/or supplement must be (i) set out in writing, (ii) filed with theCourt and, if made following the Company Meeting, approved by the Court, and(iii) communicated to the Company Shareholders, if and as required by the Court.

(2) Any amendment, modification or supplement to this Plan of Arrangement may beproposed by the Company at any time prior to the Company Meeting with orwithout any other prior notice or communication to the Company Shareholders,and if so proposed and accepted by the Company Shareholders voting at theCompany Meeting, will become part of this Plan of Arrangement for all purposes.

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(3) Any amendment, modification and/or supplement to this Plan of Arrangementthat is approved by the Court following the Company Meeting will be effectiveonly if it is made in accordance with the terms of the Arrangement Agreement andprovided that, if required by the Court, such amendment, modification and/orsupplement is consented to by the Company Shareholders voting in the mannerdirected by the Court.

(4) Any amendment, modification or supplement to this Plan of Arrangement may bemade following the Effective Date by the mutual written agreement of theCompany and the Purchaser, provided that it concerns a matter which, in thereasonable opinion of the Company and the Purchaser, is of an administrativenature required to better give effect to the implementation of this Plan ofArrangement and is not adverse to the financial or economic interests of anyholder or former holder of the Company Shares.

Section 6.2 Further Assurances

Notwithstanding that the transactions and events set out herein will occur and be deemedto occur in the order set out in this Plan of Arrangement without any further act or formality,each of the parties to the Arrangement Agreement will make, do and execute, or cause to bemade, done and executed, all such further acts, deeds, agreements, transfers, assurances,instruments or documents as may reasonably be required by any of them in order to furtherdocument or evidence any of the transactions or events set out herein.

Section 6.3 Paramountcy

From and after the Effective Time (i) this Plan of Arrangement will take precedence andpriority over any and all Company Shares issued prior to the Effective Time, (ii) the rights andobligations of the registered holders of the Company Shares, and of the Company, the Purchaserand the Depositary and any trustee or transfer agent therefor in relation thereto, will be solely asprovided for in this Plan of Arrangement, and (iii) all actions, causes of action, claims orproceedings (actual or contingent and whether or not previously asserted) against the Company,the Purchaser or any of their respective affiliates based on or in any way relating to anyCompany Shares will be deemed to have been settled, compromised, released and determinedwithout liability except as set forth herein.

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SCHEDULE BARRANGEMENT RESOLUTION

ARRANGEMENT RESOLUTION

BE IT RESOLVED THAT:

1. The arrangement (the “Arrangement”) under Section 192 of the Canada BusinessCorporations Act (the “CBCA”) involving Sprott Resource Corp. (the “Company”),pursuant to the arrangement agreement between the Company and Adriana ResourcesInc. dated November 29, 2016, as it may be modified, supplemented or amended fromtime to time in accordance with its terms (the “Arrangement Agreement”), the full textof which is set out as Appendix to the joint management proxy circular of theCompany and the Purchaser dated [ , 2016 (the “Circular”), and all transactionscontemplated thereby, are hereby authorized, approved and adopted.

2. The plan of arrangement, as it has been or may be modified, supplemented or amended inaccordance with the Arrangement Agreement and its terms, involving the Company (the“Plan of Arrangement”), the full text of which is set out as Appendix [ to theCircular, is hereby authorized, approved and adopted.

3. The Arrangement Agreement and all the transactions contemplated therein, the actions ofthe directors of the Company in approving the Arrangement and the ArrangementAgreement and the actions of the directors and officers of the Company in executing anddelivering the Arrangement Agreement and any modifications, supplements oramendments thereto are hereby ratified and approved.

4. The Company is hereby authorized to apply for a final order from the Ontario SuperiorCourt of Justice, or other court as applicable to approve the Arrangement on the terms setforth in the Arrangement Agreement and the Plan of Arrangement.

5. Notwithstanding that this resolution has been passed (and the Arrangement adopted) bythe Company Shareholders (as defined in the Arrangement Agreement) or that theArrangement has been approved by the Ontario Superior Court of Justice (the “Court”),the directors of the Company are hereby authorized and empowered, at their discretion,without further notice to or approval of the Company Shareholders: (i) to amend ormodify the Arrangement Agreement or the Plan of Arrangement to the extent permittedby their terms; and (ii) subject to the terms of the Arrangement Agreement, not toproceed with the Arrangement and any related transactions.

6. Any officer or director of the Company is hereby authorized and directed, for and onbehalf of the Company, to execute and deliver for filing with the Director under theCBCA articles of arrangement and such other documents as may be necessary ordesirable to give effect to the Arrangement in accordance with the ArrangementAgreement, such determination to be conclusively evidenced by the execution and deliveryof such articles of arrangement and any such other documents.

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7. Any officer or director of the Company is hereby authorized and directed, for and onbehalf of the Company, to execute or cause to be executed and to deliver or cause to bedelivered, all such other documents and instruments and to perform or cause to beperformed all such other acts and things as, in such person’s opinion, may be necessaryor desirable to give full force and effect to the foregoing resolutions and the mattersauthorized thereby, such determination to be conclusively evidenced by the execution anddelivery of such other document or instrument or the doing of any other such act or thing.

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PURCHASER RESOLUTIONS

BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

1. The acquisition by Adriana Resources Inc. (the “Purchaser”) of Sprott Resource Corp.(the “Company”) pursuant to the arrangement agreement between the Purchaser and theCompany dated November 29, 2016, as it may be modified, supplemented or amendedfrom time to time in accordance with its terms (the “Arrangement Agreement”), the fulltext of which is set out as Appendix to the joint management proxy circular of thePurchaser and Company dated [ , 2016 (the “Circular”), including the “Change ofManagement” (as defined in Policy 1.1 of the TSX Venture Exchange) described in theCircular, and all transactions contemplated thereby, is hereby authorized, approved andadopted, including, among other things: (i) the issuance of common shares of thePurchaser to the shareholders of the Company pursuant to the Arrangement Agreement;(ii) the reconstitution of the board of directors of the Purchaser pursuant to theArrangement Agreement and the execution and delivery by the Purchaser of amanagement services agreement and the reconstitution of the management of thePurchaser thereunder; (iii) the issuance of common shares and warrants of the Purchaserin connection with private placements to certain affiliates of the Company and a proposedmarketed private placement to third parties to be consummated by the Purchaser inconnection with the foregoing transactions; and (iv) the Warrant Distribution (as definedin the Arrangement Agreement) (the “Purchaser Transactions Approval Resolution”).

2. Notwithstanding that this resolution has been duly passed by the shareholders of thePurchaser, the directors of the Purchaser be, and they hereby are, authorized andempowered to revoke this resolution at any time prior to the Effective Date and todetermine not to proceed with the transactions contemplated in the ArrangementAgreement.

3. Any officer or director of the Purchaser is hereby authorized and directed, for and onbehalf of the Purchaser, to execute or cause to be executed and to deliver or cause to bedelivered, all such other documents and instruments and to perform or cause to beperformed all such other acts and things as, in such person’s opinion, may be necessaryor desirable to give full force and effect to the foregoing resolution and the mattersauthorized thereby, such determination to be conclusively evidenced by the execution anddelivery of such other document or instrument or the doing of any other such act or thing.

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

1. Provided that the Purchaser Transactions Approval Resolution is passed and the plan ofarrangement provided for in the Arrangement Agreement is completed, the Purchaser beand is hereby authorized to amend its articles to change its name from “AdrianaResources Inc.” to “Sprott Resource Holdings Inc.”, or such other name as the Purchaserand the Company deem appropriate, as more particularly described in the Circular.

2. Notwithstanding that this resolution has been duly passed by the shareholders of thePurchaser, the directors of the Purchaser be, and they hereby are, authorized andempowered to revoke this resolution at any time prior to the amendment of the

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Purchaser’s articles and to determine not to proceed with changing the name of thePurchaser.

3. Any officer or director of the Purchaser is hereby authorized and directed, for and onbehalf of the Purchaser, to execute or cause to be executed and to deliver or cause to bedelivered, all such other documents and instruments and to perform or cause to beperformed all such other acts and things as, in such person’s opinion, may be necessaryor desirable to give full force and effect to the foregoing resolution and the mattersauthorized thereby, such determination to be conclusively evidenced by the execution anddelivery of such other document or instrument or the doing of any other such act or thing.

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SCHEDULE CREPRESENTATIONS AND WARRANTIES OF THE COMPANY

(1) Organization and Qualification. The Company and each of its Subsidiaries is acorporation or other entity duly incorporated or organized, as applicable, validly existingand in good standing under the Laws of the jurisdiction of its incorporation, organizationor formation, as applicable, and has all requisite power and capacity to own, lease andoperate its assets and properties and to conduct its business as now owned, leased,operated and conducted. The Company and each of its Subsidiaries is duly registered orotherwise authorized to carry on business and is in good standing in each jurisdiction inwhich the character of its assets and properties, whether owned, leased, licensed orotherwise held, or the nature of its activities make such registration or other authorizationnecessary, and has all Authorizations required to own, lease and operate its properties andassets and to conduct its business as now owned and conducted, except as to the extentthat any failure of the Company or any of its Subsidiaries to be so qualified, licenced orregistered or to possess such Authorizations would not reasonably be expected to have aMaterial Adverse Effect on the Company.

(2) Authorization. The Company has the requisite corporate power and capacity to enterinto and perform its obligations under this Agreement. The execution and delivery of thisAgreement and the performance by the Company of its obligations under this Agreementand the consummation of the Arrangement and the other transactions contemplatedhereby, have been duly authorized by all necessary action on the part of the Company,and no other corporate proceedings on the part of the Company are necessary to authorizethis Agreement or the consummation of the Arrangement and the other transactionscontemplated hereby, other than approval by the Company Board of the Joint Circular,approval of the Arrangement Resolution in the manner required by the Interim Order andLaw and approval of the Arrangement by the Court.

(3) Execution and Binding Obligation. This Agreement has been duly executed anddelivered by the Company and, assuming the due execution and delivery of thisAgreement by the Purchaser, constitutes a legal, valid and binding agreement of theCompany enforceable against it in accordance with its terms, subject only to anylimitation under bankruptcy, insolvency or other Laws affecting the enforcement ofcreditors’ rights generally and the discretion that a court may exercise in the granting ofequitable remedies such as specific performance and injunction.

(4) Governmental Authorization. To the knowledge of the Company as of the date hereof,the execution and delivery of this Agreement and the performance by the Company of itsobligations under this Agreement and the consummation of the Arrangement and theother transactions contemplated hereby, do not require any Authorization or other actionby or in respect of, or filing with, or notification to, any Governmental Entity by theCompany or by any of its Subsidiaries other than: (i) the Interim Order and any approvalsrequired by the Interim Order; (ii) the Final Order; (iii) filings with the Director under theCBCA, (iv) filings with the Securities Authorities or the TSX; and (v) any Authorizationsor other actions by or in respect of, or filings with, or notifications to, any GovernmentalEntity which, if not obtained, taken or made, would not, individually or in the aggregate,

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materially impede the ability of the Company to consummate the Arrangement and theother transactions contemplated hereby or which would not reasonably be expected tohave a Material Adverse Effect on the Company.

(5) Non-Contravention. The execution and delivery of this Agreement and the performanceby the Company of its obligations under this Agreement and the consummation of theArrangement and the other transactions contemplated hereby do not and will not:

(a) contravene, conflict with, or result in any violation or breach of the CompanyConstating Documents or the organizational documents of any of its MaterialSubsidiaries;

(b) assuming compliance with the matters referred to in Paragraph (4) above,contravene, conflict with or result in a violation or breach of any Law applicableto the Company or any of its Subsidiaries or any of their respective properties orassets;

(c) allow any Person to exercise any rights, require any consent of or notice to orother action by any Person, or constitute a default under, or cause or permit thetermination, cancellation, acceleration or other change of any right or obligationor the loss of any benefit to which the Company or any of its Subsidiaries isentitled (including by triggering any rights of first refusal or first offer, change incontrol provision or other restriction or limitation) under any Company MaterialContract or any Authorization to which the Company or any of its Subsidiaries isa party or by which the Company or any of its Subsidiaries is bound; or

(d) result in the creation or imposition of any Lien (other than Permitted Liens) uponany of the properties or assets of the Company or its Subsidiaries,

with such exceptions, in the case of clauses (c) and (d), as would not, individually or inthe aggregate, materially impede the ability of the Company to consummate theArrangement and the other transactions contemplated hereby or which would notreasonably be expected to have a Material Adverse Effect on the Company.

(6) Capitalization.

(a) The authorized capital of the Company consists of an unlimited number ofCompany Shares. As of the close of business on November 28, 2016, there were96,672,102 Company Shares issued and outstanding. As of the close of businesson November 28, 2016, the Company also had Company Options to acquire160,000 Company Shares upon the exercise thereof issued and outstanding. Alloutstanding Company Shares have been duly authorized and validly issued, arefully paid and non-assessable. All of the Company Shares issuable upon theexercise of the Company Options have been duly authorized and, upon issuancein accordance with their respective terms, will be validly issued as fully paid andnon-assessable and are not and will not be subject to or issued in violation of, anypre-emptive rights. No Company Shares or Company Options have been issuedin violation of any Law or any pre-emptive or similar rights applicable to them.

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(b) As of the close of business on November 28, 2016 no Company Shares wereissuable on an “in-the-money” basis upon exercise of the outstanding CompanyOptions, based on exercise prices ranging from $4.00 to $4.07 per CompanyShare.

(c) As of the date of this Agreement, there are 133,680 Director DSUs issued andoutstanding. Section C(6)(c) of the Company Disclosure Letter contains acomplete and accurate list of all Director DSUs issued and outstanding as of thedate hereof, including, with respect to each such Director DSU, a unique identifierfor the holder, the date of grant, the base price per Company Share subject to suchDirector DSU, the number of Company Shares covered by such Director DSU atthe time of grant (as adjusted to reflect all dividends and other adjustments), thevesting schedule and the expiration date. No Company Shares are issuable uponsettlement of any Director DSUs.

(d) As of the date of this Agreement, there are 1,933,147 Company Shares issued andoutstanding subject to the Company EPSP. Section C(6)(d) of the CompanyDisclosure Letter contains a complete and accurate list of all Company Sharesissued and outstanding under the Company EPSP as of the date hereof, including,with respect to each participant in the Company EPSP, a unique identifier for theholder, the date of grant, the applicable price per Company Share, the vestingschedule and the expiration date.

(e) Except the rights under the Company Options and the Company EPSP, there areno issued, outstanding or authorized options, equity-based awards, warrants, calls,conversion, pre-emptive, redemption, repurchase, stock appreciation or otherrights, or any other agreements, arrangements, instruments or commitments ofany kind that obligate the Company or any of its Subsidiaries to, directly orindirectly, issue or sell any securities of the Company or any of its Subsidiaries, orgive any Person a right to subscribe for or acquire, any securities of the Companyor any of its Subsidiaries.

(7) Subsidiaries.

(a) The following information with respect to each Subsidiary of the Company andeach of the Company’s direct or indirect investments in the Investment Portfoliois accurately set out in Section C(7)(a) of the Company Disclosure Letter: (i) itsname; (ii) the percentage owned directly or indirectly by the Company; (iii) itsjurisdiction of incorporation, organization or formation; and (iv) with respect toeach Subsidiary of the Company, the name of and percentage owned by anyregistered holders of shares or other equity interests if other than the Companyand its Subsidiaries.

(b) The Company is, directly or indirectly the holder of record and beneficial ownerof all of the outstanding Class B units of Sprott General Partnership, theCompany’s only Subsidiary, free and clear of any Liens, except for PermittedLiens. The Company holds, directly or indirectly, its investments in the

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Investment Portfolio free and clear of any Liens, except for Permitted Liens. Allof such shares and other equity interests so owned by the Company are validlyissued, fully paid and non-assessable (and no such shares have been issued inviolation of any pre-emptive or similar rights).

(c) Except for the shares or other equity interests owned by the Company in itsSubsidiaries and its investments in the Investment Portfolio, the Company doesnot own, beneficially or of record, any equity interests of any kind in any otherPerson.

(8) Securities Law Matters. The Company is a “reporting issuer” under Securities Laws ineach of the provinces of Canada, other than Québec. The Company does not have anysecurities listed for trading on any securities exchange other than the TSX, and theCompany is not subject to any continuous or periodic or other disclosure requirementsunder the securities laws of any jurisdiction other than the provinces of Canada, otherthan Québec. No delisting, suspension of trading or cease trade or other order orrestriction with respect to any securities of the Company is pending, in effect or, to theknowledge of the Company, has been threatened, or is expected to be implemented orundertaken (other than in connection with the transactions contemplated by thisAgreement). The Company has, for the past two years, timely filed or furnished with theapplicable Securities Authorities and the TSX all documents and other materials requiredto be filed or furnished by the Company under Securities Laws with such SecuritiesAuthorities and/or the TSX, as applicable, except where such failure to file would not,individually or in the aggregate, reasonably be expected to have a Material AdverseEffect on the Company. The documents comprising the Company Filings, as of theirrespective dates (or, if amended or superseded by a subsequent filing prior to the date ofthis Agreement, on the date of such filing), complied in all material respects with Lawand did not contain any Misrepresentation. The Company has not filed any confidentialmaterial change report (which at the date of this Agreement remains confidential) or anyother confidential filings filed to or furnished with, as applicable, any SecuritiesAuthority or stock exchange.

(9) Financial Statements.

(a) The Company’s audited consolidated financial statements as at and for the fiscalyears ended December 31, 2015 and 2014 (including any of the notes or schedulesthereto, the auditor’s report thereon and related management’s discussion andanalysis) and unaudited consolidated interim financial statements as at and for thethree and nine months ended September 30, 2016 and 2015 (including any of thenotes or schedules thereto and related management’s discussion and analysis), ineach case filed as part of the Company Filings: (i) were prepared in accordancewith GAAP and Law; and (ii) fairly present, in all material respects, theconsolidated financial position, results of operations and cash flows of theCompany and its Subsidiaries as of their respective dates and for the respectiveperiods covered thereby. Except as set forth in the Company’s financialstatements, neither of the Company nor any of its Subsidiaries is party to any

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material off-balance sheet transaction with unconsolidated entities or otherPersons.

(b) The financial books, records and accounts of the Company and each of itsSubsidiaries: (i) have been maintained, in all material respects, in accordance withGAAP, Canadian Accounting Standards for Private Enterprises or applicable localaccounting standards; (ii) are stated in reasonable detail; (iii) accurately and fairlyreflect all the material transactions, acquisitions and dispositions of the Companyand its Subsidiaries; and (iv) accurately and fairly reflect the basis of theCompany’s financial statements.

(10) Disclosure Controls and Internal Control over Financial Reporting.

(a) The Company has established and maintains a system of disclosure controls andprocedures that are designed to provide reasonable assurance that informationrequired to be disclosed by the Company in its annual filings, interim filings orother reports filed or submitted by it under Securities Laws is recorded, processed,summarized and reported within the time periods specified in Securities Laws.Such disclosure controls and procedures include controls and procedures designedto ensure that information required to be disclosed by the Company in its annualfilings, interim filings or other reports filed or submitted under Securities Laws isaccumulated and communicated to the Company’s management, including itschief executive officer and chief financial officer, as appropriate, to allow timelydecisions regarding required disclosure.

(b) The Company has established and maintains a system of internal control overfinancial reporting that is designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with GAAP.

(c) There is no material weakness (as such term is defined in NationalInstrument 52-109 – Certification of Disclosure in Issuers’ Annual and InterimFilings) relating to the design, implementation or maintenance of the Company’sinternal control over financial reporting. To the knowledge of the Company, thereis no fraud that involves management or other employees who have a significantrole in the internal control over financial reporting of the Company.

(11) Auditors. The auditors of the Company are independent public accountants as requiredby applicable Laws and there is not now, and there has never been, any reportable event(as such term is defined in National Instrument 51-102 – Continuous DisclosureObligations) with the present or any former auditors of the Company.

(12) No Undisclosed Liabilities. There are no material liabilities or obligations of theCompany or of any of its Subsidiaries of any kind whatsoever, whether accrued,contingent, absolute, determined, determinable or otherwise, other than liabilities orobligations: (i) disclosed in the audited consolidated financial statements of the Companyas at and for the fiscal years ended December 31, 2015 and 2014 (including any notes or

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schedules thereto) or the unaudited consolidated interim financial statements as at and forthe three and nine months ended September 30, 2016 and 2015 (including any notes orschedules thereto) included in the Company Filings; (ii) incurred in the Ordinary Coursesince September 30, 2016; or (iii) incurred in connection with this Agreement or thetransactions contemplated hereby.

(13) Absence of Certain Changes or Events. Since December 31, 2015, other than thetransactions contemplated in this Agreement or as publicly disclosed in the CompanyFilings, the business of the Company and of each of its Subsidiaries has been conductedin the Ordinary Course and nothing has occurred that would reasonably be expected tohave a Material Adverse Effect on the Company.

(14) Compliance with Law. The Company and each of its Subsidiaries are, and sinceJanuary 1, 2014 have been, in compliance in all material respects with Law. None of theCompany, any of its Subsidiaries, nor any of the directors or officers of the Company orthe Company’s Subsidiaries is, to the knowledge of the Company, under anyinvestigation with respect to, or has been charged or threatened to be charged with, or hasreceived notice of, any material violation or potential material violation of any Law.

(15) Authorizations.

(a) The Company and each of its Subsidiaries own, possess or have obtained allmaterial Authorizations that are required by Law in connection with the operationof the business of the Company and each of its Subsidiaries as currentlyconducted, or in connection with the ownership, operation or use of the CompanyAssets.

(b) To the knowledge of the Company, no event has occurred which, with the givingof notice, lapse of time or both, could constitute a default under, or in respect of,any material Authorization referred to in (15)(a).

(c) No Proceeding is, to the knowledge of the Company, pending or threatened inrespect of or regarding any such Authorization referred to in (15)(a) and (15)(b)and none of the Company or any of its Subsidiaries has received notice, whetherwritten or oral, of revocation, non-renewal or material amendments of any suchAuthorization, or of the intention of any Person to revoke, refuse to renew ormaterially amend any such material Authorization.

(16) Company Material Contracts.

(a) Section C(16)(a) of the Company Disclosure Letter sets out a complete andaccurate list of all Company Material Contracts. True and complete copies of theCompany Material Contracts (other than the MSA and the PartnershipAgreement, which are available on SEDAR) have been disclosed in the DataRoom and no such Company Material Contract has been modified in any materialrespect, rescinded or terminated.

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(b) Each Company Material Contract is legal, valid, binding and in full force andeffect and is enforceable against the Company or a Subsidiary of the Company, asapplicable, in accordance with its terms (subject to bankruptcy, insolvency andother Laws affecting creditors’ rights generally, and to general principles ofequity).

(c) Neither the Company nor any of its Subsidiaries is in material breach or defaultunder any Company Material Contract, nor does the Company have knowledge ofany condition that with the passage of time or the giving of notice or both wouldresult in such a breach or default.

(d) To the knowledge of the Company, there is no, nor has it received any notice(whether written or oral) of, any material breach or default under nor, to theknowledge of the Company, does there exist any condition which with thepassage of time or the giving of notice or both would result in such a materialbreach or default under any such Company Material Contract by any other partyto a Company Material Contract.

(e) Neither the Company nor any of its Subsidiaries has received any notice (whetherwritten or oral) that any party to a Company Material Contract intends to cancel,terminate or otherwise modify or not renew its relationship with the Company orany of its Subsidiaries, and, to the knowledge of the Company, no such action hasbeen threatened.

(17) Title to and Sufficiency of Assets. The Company and its Subsidiaries own, lease orhave the right to use (pursuant to the terms and conditions of the MSA, the PartnershipAgreement, or otherwise) all of the material property and assets necessary for the conductof the Company’s business as it is currently being conducted. All of such materialproperty and assets are, to the knowledge of the Company, sufficient to permit thecontinued operation of the Company’s business in substantially the same manner ascurrently conducted.

(18) Real Property.

(a) The Company and its Subsidiaries, as applicable, have good and marketable titlein fee simple to all material freehold real or immovable property owned by them(the “Company Owned Properties”) free and clear of any Liens, except forPermitted Liens.

(b) Each lease, sublease, license or occupancy agreement (the “Company Leases”)for material real or immovable property leased, subleased, licensed or occupiedby the Company and its Subsidiaries (the “Company Leased Properties”) islegal, valid, binding and in full force and effect and is enforceable by theCompany and its Subsidiaries, as applicable, in accordance with its terms (subjectto any limitation under bankruptcy, insolvency and other Law affecting theenforcement of creditors’ rights generally and the discretion that a court mayexercise in the granting of equitable remedies such as specific performance and

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injunction). To the knowledge of the Company, none of the Company or any ofits Subsidiaries has received or delivered any written notice of any breach of, ordefault under, any Company Lease. No consent of any other party to a CompanyLeases is required, nor is any notice required to be given under any CompanyLease, in connection with the completion of the transactions contemplated by thisAgreement. The completion of the transactions contemplated by this Agreementwill not afford any Person the right to terminate any of the Company Leases.

(c) To the knowledge of the Company, no Person, other than the Company or any ofits Subsidiaries is using or has any claim or right to use any material part of theCompany Owned Properties, or is in or has any claim or right of possession oroccupancy of any material part of the Company Owned Properties, except in eachcase for Permitted Liens.

(d) To the knowledge of the Company, the present use of the Company OwnedProperties and the Company Leased Properties complies in all material respectswith Law.

(e) To the knowledge of the Company, none of the Company or any of itsSubsidiaries has received any written notice of any existing or threatenedexpropriation proceedings that would result in the taking of all or any materialpart of the Company Owned Properties or the Company Leased Properties or thatwould materially adversely affect the current use of the Company OwnedProperties or the Company Leased Properties.

(19) Personal Property. Each of the Company and its Subsidiaries is the owner of all of itsmaterial personal property and assets with good and marketable title thereto free of anyLiens, except for Permitted Liens.

(20) Intellectual Property. The Company and its Subsidiaries have sufficient rights to use orotherwise exploit the Intellectual Property necessary to carry on the business nowoperated by them and there is no Proceeding pending or, to the knowledge of theCompany, threatened by any Person challenging the Company’s or its Subsidiaries’ rightsin or to such intellectual property which is used for the conduct of the business ascurrently carried on as set forth in Company Filings.

(21) Litigation. There are no material Proceedings pending or, to the knowledge of theCompany, threatened against the Company or any of its Subsidiaries or affecting any oftheir respective properties or assets by or before any Governmental Entity. None of theCompany or any of its Subsidiaries or any of their respective properties or assets issubject to any outstanding judgment, order, writ, injunction or decree that wouldreasonably be expected to have a Material Adverse Effect on the Company.

(22) Environmental Matters.

(a) To the knowledge of the Company, the Company and each of its Subsidiarieshave been and are in material compliance with all Environmental Laws.

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(b) Except as would not reasonably be expected to have a Material Adverse Effect onthe Company, none of the Company or any of its Subsidiaries has Released anyHazardous Substances (in each case except in compliance with applicableEnvironmental Laws) on, at, in, under or from any of the immovable properties,any real properties, currently owned or leased by the Company or by any of itsSubsidiaries.

(c) There are no pending material claims, notices, complaints, penalties, prosecutionsor any other judicial or administrative Proceedings against the Company, any ofits Subsidiaries or any of the Company Assets arising out of any EnvironmentalLaws.

(d) To the knowledge of the Company, there has not been: (i) any written order,directive or similar requirement which relates to environmental matters that wouldreasonably be expected to have a Material Adverse Effect on the Company; or(ii) any written demand or notice with respect to a material breach of anyEnvironmental Law in each case applicable to the Company, any of itsSubsidiaries, or the Company Assets.

(e) No Liens, other than Permitted Liens, in favour of a Governmental Entity arisingunder Environmental Laws, are pending or, to the knowledge of the Company,threatened in writing affecting, in any material respect, the Company, itsSubsidiaries or the Company Assets.

(23) Employees.

(a) The Company and its Subsidiaries are in material compliance with all terms andconditions of employment applicable to Company Employees and all Lawrespecting employment in all locations where Company Employees work,including pay equity, employment and labour standards, labour relations, humanrights, privacy, workers’ compensation and occupational health and safety, andthere are no material outstanding claims, complaints, investigations or ordersunder any such Law.

(b) All amounts due or accrued for all salary, wages, bonuses, commissions, vacationwith pay, sick days and benefits under Employee Plans and other similar accrualshave either been paid or are accurately reflected in all material respects in thebooks and/or records of the Company, of the applicable Subsidiary.

(c) There are no change of control payments, golden parachutes, severance payments,notice or payment in lieu of notice, retention payments or agreements with any ofthe Company Employees providing for cash or other compensation or benefitsupon the consummation of the Arrangement or any other transactioncontemplated by this Agreement.

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(24) Collective Agreements.

(a) There are no collective bargaining or similar agreements in force with respect toCompany Employees nor is there any agreement with any trade union, employeeassociation or similar entity in respect of the Company, its Subsidiaries orCompany Employees.

(b) There is no labour strike, dispute, lock-out, work slowdown or stoppage pendingor involving or, to the knowledge of the Company, threatened against theCompany or any Subsidiary.

(c) To the knowledge of the Company, no trade union has applied to have theCompany or any of its Subsidiaries declared a related, successor, or commonemployer pursuant to the Labour Relations Code (Ontario) or any similarlegislation in any jurisdiction in which the Company or any of its Subsidiariescarry on business.

(25) Employee Plans.

(a) Each material Employee Plan is and has been established, registered, qualified,funded and, in all material respects, administered in accordance with Law and inaccordance with their terms. No fact or circumstance exists which couldadversely affect the registered or qualified status of any such material EmployeePlan, except as would not reasonably be expected to have a Material AdverseEffect on the Company. Neither the Company nor any Company Employee hasbreached any fiduciary obligation with respect to the administration or investmentof any material Employee Plan.

(b) All contributions or premiums required to be made or paid by the Company orany of its Subsidiaries, as the case may be, under the terms of each materialEmployee Plan or by Law have been made in a timely fashion in accordance withLaw in all material respects and in accordance with the terms of the applicableEmployee Plan.

(c) None of the Employee Plans (other than pension or retirement plans) provide forretiree benefits or for benefits to retired employees or to the beneficiaries ordependents of retired employees.

(d) To the knowledge of the Company, no material Employee Plan is subject to anyProceeding initiated by any Governmental Entity, or by any other party (otherthan routine claims for benefits).

(e) No Employee Plan is a multi-employer pension plan as such term is defined underthe Pension Benefits Plan Act (Ontario) or any similar plan for purposes ofpension standards legislation of another jurisdiction.

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(26) Insurance.

(a) The Company and each of its Subsidiaries are, and have been continuously sinceJanuary 1, 2014, insured by reputable third party insurers with reasonable andprudent policies appropriate for the size and nature of the business of theCompany, taken as a whole.

(b) To the knowledge of the Company, each material insurance policy of theCompany and its Subsidiaries currently in effect that insures the physicalproperties, business, operations and assets of the Company and its Subsidiaries isin full force and effect and the Company and its Subsidiaries are not in defaultunder the terms of any such policy. To the knowledge of the Company, there isno material claim pending under any insurance policy of the Company or itsSubsidiaries that has been denied, rejected, questioned or disputed by any insureror as to which any insurer has made any reservation of rights or refused to coverall or any material portion of such claims. To the knowledge of the Company, allmaterial Proceedings covered by any insurance policy of the Company or any ofits Subsidiaries have been properly reported to and accepted by the applicableinsurer.

(27) Taxes.

(a) The Company and each of its Subsidiaries have duly and timely filed all TaxReturns required by Law to be filed by them prior to the date hereof and all suchTax Returns are complete and correct in all material respects.

(b) The Company and each of its Subsidiaries have paid as required by Law on atimely basis all material Taxes which are due and payable, all materialassessments and material reassessments, and all other material Taxes due andpayable by them on or before the date hereof, other than those which are being orhave been contested in good faith and in respect of which reserves have beenprovided in the most recently published consolidated financial statements of theCompany. The Company and its Subsidiaries have provided adequate accruals inaccordance with applicable accounting standards in its books and records and inthe most recently published consolidated financial statements of the Company forany Taxes of the Company and each of its Subsidiaries for the period covered bysuch financial statements that have not been paid whether or not shown as beingdue on any Tax Returns. Since such publication date, no material liability inrespect of Taxes not reflected in such statements or otherwise provided for hasbeen assessed, proposed to be assessed, incurred or accrued, other than in theOrdinary Course.

(c) No material claims, audits, deficiencies, litigation, proposed adjustments ormatters in controversy exist or have been asserted with respect to Taxes of theCompany or any of its Subsidiaries, and none of the Company or any of itsSubsidiaries is a party to any material Proceeding for assessment or collection ofTaxes and no such event has, to the knowledge of the Company, been asserted or

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threatened against the Company or any of its Subsidiaries or any of theirrespective assets.

(d) To the knowledge of the Company, no claim has been made by any GovernmentEntity in a jurisdiction where the Company or any of its Subsidiaries do not fileTax Returns that the Company or any of its Subsidiaries is or may be subject tomaterial Tax by that jurisdiction.

(e) To the knowledge of the Company, there are no Liens (other than PermittedLiens) with respect to Taxes upon any of the assets of the Company or any of itsSubsidiaries.

(f) The Company and each of its Subsidiaries has withheld or collected all materialamounts required by Law to be withheld or collected by it on account of Taxesand has remitted all such amounts to the appropriate Governmental Entity whenrequired by Law to do so. The Company and each of its Subsidiaries haveremitted all Canada Pension Plan contributions, provincial pension plancontributions, employment insurance premiums, employer health taxes and otherTaxes payable by it in respect of its employees to the appropriate GovernmentalAuthority within the time required under applicable Law. The Company and eachof its Subsidiaries have charged, collected and remitted on a timely basis all Taxesas required under applicable Law on any sale, supply or delivery whatsoever,made by it.

(g) The Company has made available to the Purchaser true, correct and completecopies of all filed income Tax Returns of the Company and its Subsidiariesmaterial to the Company as a whole in respect of their 2014 and 2015 taxationyears.

(h) Neither the Company nor any of its Subsidiaries has, directly or indirectly,transferred property or supplied services to, acquired property or services from, orotherwise entered into any transactions with any Person with whom it was notdealing at arm's length (for the purposes of the Tax Act) for consideration otherthan fair market value consideration for such property, services, or transactions,or otherwise subject to terms and conditions that differ from those that wouldhave been entered into between persons dealing at arm’s length (for purposes ofthe Tax Act).

(i) There are no circumstances which exist and could result in, or which have existedand resulted in, the application of any of sections 17, 78, 80 to 80.04 of the TaxAct, or any equivalent provision of the taxation legislation of any province or anyother jurisdiction, to the Company or any of its Subsidiaries.

(j) The Company has not taken nor agreed to take any action, nor knows of theexistence of any fact, that would reasonably be expected to prevent thetransactions contemplated by this Agreement from qualifying as a reorganizationwithin the meaning of Section 368(a) of the Code.

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(28) Bankruptcy and Insolvency. Neither of the Company nor any of its Subsidiaries hasmade an assignment in favour of its creditors or a proposal in bankruptcy to its creditorsor any class thereof nor has any petition for a receiving order been presented in respect ofit. Neither the Company nor any of its Subsidiaries has initiated Proceedings with respectto a compromise or arrangement with its creditors or for its winding up, liquidation ordissolution and, to the knowledge of the Company, no such Proceedings have beenthreatened by any other Person. No receiver has been appointed in respect of theCompany or any of its Subsidiaries or any of their respective property or assets and noexecution or distress has been levied upon any of their respective property or assets and,to the knowledge of the Company, no such Proceedings have been threatened by anyother Person.

(29) Opinion of Financial Advisor. The Company Board has received the CompanyFairness Opinion, and such Company Fairness Opinion has not been withdrawn ormodified as of the date of this Agreement.

(30) Brokers. Except for the Financial Advisor, no investment banker, broker, finder,financial adviser or other intermediary has been retained by or is authorized to act onbehalf of the Company or any of its Subsidiaries or is entitled to any fee, commission orother payment from the Company or any of its Subsidiaries in connection with thisAgreement or any other transaction contemplated by this Agreement. In Section C(30) ofthe Company Disclosure Letter the Company has disclosed to the Purchaser all fees,commissions or other payments that may be payable to the Financial Advisor inconnection with this Agreement or any other transaction contemplated by thisAgreement.

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SCHEDULE DREPRESENTATIONS AND WARRANTIES OF THE PURCHASER

(1) Organization and Qualification. The Purchaser and each of its Subsidiaries is acorporation or other entity duly incorporated or organized, as applicable, validly existingand in good standing under the Laws of the jurisdiction of its incorporation, organizationor formation, as applicable, and has all requisite power and capacity to own, lease andoperate its assets and properties and to conduct its business as now owned, leased,operated and conducted. The Purchaser and each of its Subsidiaries is duly registered orotherwise authorized to carry on business and is in good standing in each jurisdiction inwhich the character of its assets and properties, whether owned, leased, licensed orotherwise held, or the nature of its activities make such registration or other authorizationnecessary, and has all Authorizations required to own, lease and operate its properties andassets and to conduct its business as now owned and conducted, except as to the extentthat any failure of the Purchaser or any of its Subsidiaries to be so qualified, licenced orregistered or to possess such Authorizations would not reasonably be expected to have aMaterial Adverse Effect on the Purchaser.

(2) Authorization. The Purchaser has the requisite corporate power and capacity to enterinto and perform its obligations under this Agreement. The execution and delivery of thisAgreement and the performance by the Purchaser of its obligations under this Agreementhave been duly authorized by all necessary action on the part of the Purchaser, and noother corporate proceedings on the part of the Purchaser are necessary to authorize thisAgreement or the consummation of the Arrangement and the other transactionscontemplated hereby, other than approval by the Purchaser Board of the Joint Circularand the Warrant Indenture and approval of the Purchaser Resolutions by the PurchaserShareholders (including approval of the Purchaser Transactions Approval Resolution bythe affirmative vote of greater than 50% of the votes cast by Purchaser Shareholdersentitled to vote thereon).

(3) Execution and Binding Obligation. This Agreement has been duly executed anddelivered by the Purchaser and, assuming the due execution and delivery of thisAgreement by the Company, constitutes a legal, valid and binding agreement of thePurchaser enforceable against it in accordance with its terms, subject only to anylimitation under bankruptcy, insolvency or other Laws affecting the enforcement ofcreditors’ rights generally and the discretion that a court may exercise in the granting ofequitable remedies such as specific performance and injunction.

(4) Governmental Authorization. To the knowledge of the Purchaser as of the date hereof,the execution and delivery of this Agreement and the performance by the Purchaser of itsobligations under this Agreement and the consummation of the Arrangement and theother transactions contemplated hereby do not require any Authorization or other actionby or in respect of, or filing with, or notification to, any Governmental Entity by thePurchaser or by any of its Subsidiaries other than: (i) the approvals of the TSX describedin Section 6.1(4); (ii) filings with the Securities Authorities; or (iii) any Authorizations orother actions by or in respect of, or filings with, or notifications to, any GovernmentalEntity which, if not obtained, taken or made, would not, individually or in the aggregate,

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materially impede the ability of the Purchaser to consummate the Arrangement and theother transactions contemplated hereby.

(5) Non-Contravention. The execution and delivery of this Agreement and the performanceby the Purchaser of its obligations under this Agreement and the consummation of theArrangement and the other transactions contemplated hereby do not and will not:

(a) contravene, conflict with, or result in any violation or breach of the organizationaldocuments of the Purchaser or any of its Material Subsidiaries;

(b) assuming compliance with the matters referred to in Paragraph (4) above,contravene, conflict with or result in a violation or breach of any Law applicableto the Purchaser or any of its Subsidiaries or any of their respective properties orassets;

(c) allow any Person to exercise any rights, require any consent of or notice to orother action by any Person, or constitute a default under, or cause or permit thetermination, cancellation, acceleration or other change of any right or obligationor the loss of any benefit to which the Purchaser or any of its Subsidiaries isentitled (including by triggering any rights of first refusal or first offer, change incontrol provision or other restriction or limitation) under any Purchaser MaterialContract or any Authorization to which the Purchaser or any of its Subsidiaries isa party or by which the Purchaser or any of its Subsidiaries is bound; or

(d) result in the creation or imposition of any Lien (other than Permitted Liens) uponany of the properties or assets of the Purchaser or its Subsidiaries,

with such exceptions, in the case of clauses (c) and (d), as would not, individually or inthe aggregate, materially impede the ability of the Company to consummate theArrangement and the other transactions contemplated hereby or which would notreasonably be expected to have a Material Adverse Effect on the Purchaser.

(6) Capitalization.

(a) The authorized capital of the Purchaser consists of an unlimited number ofPurchaser Shares. As of the close of business on November 28, 2016, there were157,554,238 Purchaser Shares issued and outstanding. As of the close of businesson November 28, 2016, there were Purchaser Options to acquire 5,250,000Purchaser Shares upon the exercise thereof issued and outstanding. Alloutstanding Purchaser Shares have been duly authorized and validly issued, arefully paid and non-assessable. All of the Purchaser Shares issuable upon theexercise of the Purchaser Options have been duly authorized and, upon issuancein accordance with their respective terms, will be validly issued as fully paid andnon-assessable and are not and will not be subject to or issued in violation of, anypre-emptive rights. No Purchaser Shares have been issued in violation of anyLaw or any pre-emptive or similar rights applicable to them.

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(b) Except as set out in Section D(6)(b) of the Purchaser Disclosure Letter, there areno issued, outstanding or authorized options, equity-based awards, warrants, calls,conversion, pre-emptive, redemption, repurchase, stock appreciation or otherrights, or any other agreements, arrangements, instruments or commitments ofany kind that obligate the Purchaser or any of its Subsidiaries to, directly orindirectly, issue or sell any securities of the Purchaser or any of its Subsidiaries,or give any Person a right to subscribe for or acquire, any securities of thePurchaser or any of its Subsidiaries.

(7) Subsidiaries.

(a) The following information with respect to each Subsidiary of the Purchaser isaccurately set out in Section D(7)(a) of the Purchaser Disclosure Letter: (i) itsname; (ii) the percentage owned directly or indirectly by the Purchaser; (iii) to theknowledge of the Purchaser, the name of and percentage owned by any registeredholders of shares or other equity interests if other than the Purchaser and itsSubsidiaries; and (iii) its jurisdiction of incorporation, organization or formation.

(b) Except as disclosed in in Section D(7)(a) of the Purchaser Disclosure Letter, all ofthe outstanding common shares or other equity interests of the Purchaser’sSubsidiaries are owned, directly or indirectly, by the Purchaser, free and clear ofany Liens (other than Permitted Liens), all such shares or other equity interests soowned by the Purchaser have been validly issued and are fully paid and non-assessable, as the case may be, and no such shares or other equity interests havebeen issued in violation of any pre-emptive or similar rights.

(c) Except for the shares or other equity interests owned by the Purchaser in any of itsSubsidiaries, the Purchaser does not own, beneficially or of record, any equityinterests of any kind in any other Person.

(8) Securities Law Matters. The Purchaser is a “reporting issuer” under Securities Laws inBritish Columbia, Alberta and Ontario. The Purchaser does not have any securities listedfor trading on any securities exchange other than the TSXV, and the Purchaser is notsubject to any continuous or periodic or other disclosure requirements under the securitieslaws of any jurisdiction other than British Columbia, Alberta and Ontario. No delisting,suspension of trading or cease trade or other order or restriction with respect to anysecurities of the Purchaser is pending, in effect or, to the knowledge of the Purchaser, hasbeen threatened, or is expected to be implemented or undertaken (other than inconnection with the transactions contemplated by this Agreement). The Purchaser has,for the past two years, timely filed or furnished with the applicable Securities Authoritiesand the TSXV all documents and other materials required to be filed or furnished by thePurchaser under Securities Laws with such Securities Authorities and/or the TSXV, asapplicable, except where such failure to file would not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect on the Purchaser. Thedocuments comprising the Purchaser Filings, as of their respective dates (or, if amendedor superseded by a subsequent filing prior to the date of this Agreement, on the date ofsuch filing), complied in all material respects with Law and did not contain any

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Misrepresentation. The Purchaser has not filed any confidential material change report(which at the date of this Agreement remains confidential) or any other confidentialfilings filed to or furnished with, as applicable, any Securities Authority or stockexchange.

(9) Financial Statements.

(a) The Purchaser’s audited consolidated financial statements as at and for the fiscalyears ended December 31, 2015 and 2014 (including any of the notes or schedulesthereto, the auditor’s report thereon and related management’s discussion andanalysis) and unaudited consolidated interim financial statements as at and for thethree and nine months ended September 30, 2016 and 2015 (including any of thenotes or schedules thereto and related management’s discussion and analysis), ineach case filed as part of the Purchaser Filings: (i) were prepared in accordancewith GAAP and Law; and (ii) fairly present, in all material respects, theconsolidated financial position, results of operations and cash flows of thePurchaser and its Subsidiaries as of their respective dates and for the respectiveperiods covered thereby. Except as set forth in the Purchaser’s financialstatements, neither the Purchaser nor any of its Subsidiaries is party to anymaterial off-balance sheet transaction with unconsolidated entities or otherPersons.

(b) The financial books, records and accounts of the Purchaser and each of itsSubsidiaries: (i) have been maintained, in all material respects, in accordance withGAAP or applicable local accounting standards; (ii) are stated in reasonabledetail; (iii) accurately and fairly reflect all the material transactions, acquisitionsand dispositions of the Purchaser and its Subsidiaries; and (iv) accurately andfairly reflect the basis of the Purchaser’s financial statements.

(10) Disclosure Controls and Internal Control over Financial Reporting.

(a) The Purchaser has established and maintains a system of disclosure controls andprocedures that are designed to provide reasonable assurance that informationrequired to be disclosed by the Purchaser in its annual filings, interim filings orother reports filed or submitted by it under Securities Laws is recorded, processed,summarized and reported within the time periods specified in Securities Laws.Such disclosure controls and procedures include controls and procedures designedto ensure that information required to be disclosed by the Purchaser in its annualfilings, interim filings or other reports filed or submitted under Securities Laws isaccumulated and communicated to the Purchaser’s management, including itschief executive officer and chief financial officer, as appropriate, to allow timelydecisions regarding required disclosure.

(b) The Purchaser has established and maintains a system of internal control overfinancial reporting that is designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with GAAP.

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(c) To the knowledge of the Purchaser, there is no fraud that involves management orother employees who have a significant role in the internal control over financialreporting of the Purchaser.

(11) Auditors. The auditors of the Purchaser are independent public accountants as requiredby applicable Laws and there is not now, and there has never been, any reportable event(as such term is defined in National Instrument 51-102 – Continuous DisclosureObligations) with the present or any former auditors of the Purchaser.

(12) No Undisclosed Liabilities. There are no material liabilities or obligations of thePurchaser or of any of its Subsidiaries of any kind whatsoever, whether accrued,contingent, absolute, determined, determinable or otherwise, other than liabilities orobligations: (i) disclosed in the audited consolidated financial statements of the Purchaseras at and for the fiscal years ended December 31, 2015 and 2014 (including any notes orschedules thereto) or the unaudited consolidated interim financial statements as at and forthe three and nine months ended September 30, 2016 and 2015 (including any notes orschedules thereto) included in the Purchaser Filings; (ii) incurred in the Ordinary Coursesince September 30, 2016; or (iii) incurred in connection with this Agreement or thetransactions contemplated hereby.

(13) Absence of Certain Changes or Events. Since December 31, 2014, other than thetransactions contemplated in this Agreement or as publicly disclosed in the PurchaserFilings, the business of the Purchaser and of each of its Subsidiaries has been conductedin the Ordinary Course and nothing has occurred that would reasonably be expected tohave a Material Adverse Effect on the Purchaser.

(14) Compliance with Law. The Purchaser and each of its Subsidiaries are, and sinceJanuary 1, 2014 have been, in compliance in all material respects with Law. None of thePurchaser, any of its Subsidiaries nor any of the directors or officers of the Purchaser orthe Purchaser’s Subsidiaries is, to the knowledge of the Purchaser, under anyinvestigation with respect to, or has been charged or threatened to be charged with, or hasreceived notice of, any material violation or potential material violation of any Law.

(15) Authorizations.

(a) The Purchaser and each of its Subsidiaries own, possess or have obtained allmaterial Authorizations that are required by Law in connection with the operationof the business of the Purchaser and each of its Subsidiaries as currentlyconducted, or in connection with the ownership, operation or use of the PurchaserAssets.

(b) To the knowledge of the Purchaser, no event has occurred which, with the givingof notice, lapse of time or both, could constitute a default under, or in respect of,any of material Authorization of the Purchaser.

(c) No Proceeding is, to the knowledge of the Purchaser, pending or threatened inrespect of or regarding any such Authorization referred to in (15)(a) and (15)(b)and none of the Purchaser or any of its Subsidiaries has received notice, whether

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written or oral, of revocation, non-renewal or material amendments of any suchAuthorization, or of the intention of any Person to revoke, refuse to renew ormaterially amend any such material Authorization.

(16) Purchaser Material Contracts.

(a) Section (16)(a) of the Purchaser Disclosure Letter sets out a complete andaccurate list of all Purchaser Material Contracts. True and complete copies of thePurchaser Material Contracts have been disclosed in the Purchaser Data Roomand no such Purchaser Material Contract has been modified in any materialrespect, rescinded or terminated. Each Purchaser Material Contract is legal, valid,binding and in full force and effect and is enforceable against the Purchaser or aSubsidiary of the Purchaser, as applicable, in accordance with its terms (subject tobankruptcy, insolvency and other Laws affecting creditors’ rights generally, andto general principles of equity).

(b) None of the Purchaser, nor any of its Subsidiaries is in material breach or defaultunder any Purchaser Material Contract, nor does the Purchaser have knowledge ofany condition that with the passage of time or the giving of notice or both wouldresult in such a breach or default.

(c) To the knowledge of the Purchaser, there is no, nor has it received any notice(whether written or oral) of, any material breach or default under nor, to theknowledge of the Purchaser, does there exist any condition which with thepassage of time or the giving of notice or both would result in such a materialbreach or default under any such Purchaser Material Contract by any other partyto a Purchaser Material Contract.

(d) None of the Purchaser nor any of its Subsidiaries has received any notice(whether written or oral) that any party to a Purchaser Material Contract intendsto cancel, terminate or otherwise modify or not renew its relationship with thePurchaser or any of its Subsidiaries, and, to the knowledge of the Purchaser, nosuch action has been threatened.

(17) Title to and Sufficiency of Assets. The Purchaser and its Subsidiaries own or lease allof the material property and assets necessary for the conduct of their business as it iscurrently being conducted and there is no agreement, option or other right or privilegeoutstanding in favour of any Person for the purchase from the Purchaser or any of itsSubsidiaries of any of such material property or assets. All of such material property andassets are, to the knowledge of the Purchaser, sufficient to permit the continued operationof the Purchaser’s business in substantially the same manner as currently conducted.

(18) Real Property.

(a) The Purchaser and its Subsidiaries, as applicable, have good and marketable titlein fee simple to all material freehold real or immovable property owned by them(the “Purchaser Owned Properties”) free and clear of any Liens, except forPermitted Liens.

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(b) Each lease, sublease, license or occupancy agreement (the “Purchaser Leases”)for material real or immovable property leased, subleased, licensed or occupiedby the Purchaser and its Subsidiaries (the “Purchaser Leased Properties”) islegal, valid, binding and in full force and effect and is enforceable by thePurchaser and its Subsidiaries, as applicable, in accordance with its terms (subjectto any limitation under bankruptcy, insolvency and other Law affecting theenforcement of creditors’ rights generally and the discretion that a court mayexercise in the granting of equitable remedies such as specific performance andinjunction). To the knowledge of the Purchaser, none of the Purchaser or any ofits Subsidiaries has received or delivered any written notice of any breach of, ordefault under, any Purchaser Lease. No consent of any other party to a PurchaserLeases is required, nor is any notice required to be given under any PurchaserLease, in connection with the completion of the transactions contemplated by thisAgreement. The completion of the transactions contemplated by this Agreementwill not afford any Person the right to terminate any of the Purchaser Leases.

(c) To the knowledge of the Purchaser, no Person, other than the Purchaser or any ofits Subsidiaries, is using or has any claim or right to use any material part of thePurchaser Owned Properties, or is in or has any claim or right of possession oroccupancy of any material part of the Purchaser Owned Properties, except in eachcase for Permitted Liens.

(d) To the knowledge of the Purchaser, the present use of the Purchaser OwnedProperties and the Purchaser Leased Properties complies in all material respectswith Law.

(e) To the knowledge of the Purchaser, none of the Purchaser or any of itsSubsidiaries has received any written notice of any existing or threatenedexpropriation proceedings that would result in the taking of all or any materialpart of the Purchaser Owned Properties or the Purchaser Leased Properties or thatwould materially adversely affect the current use of the Purchaser OwnedProperties or the Purchaser Leased Properties.

(19) Personal Property. Each of the Purchaser and its Subsidiaries is the owner of all of itsmaterial personal property and assets with good and marketable title thereto free of anyLiens, except for Permitted Liens.

(20) Intellectual Property. The Purchaser and its Subsidiaries have sufficient rights to use orotherwise exploit the Intellectual Property necessary to carry on the business nowoperated by them and there is no Proceeding or claim pending or, to the knowledge of thePurchaser, threatened by any Person challenging the Purchaser’s or its Subsidiaries’rights in or to such intellectual property which is used for the conduct of the business ascurrently carried on as set forth in Purchaser Filings.

(21) Litigation. There are no Proceedings pending or, to the knowledge of the Purchaser,threatened against the Purchaser or any of its Subsidiaries or affecting any of theirrespective properties or assets by or before any Governmental Entity. Neither the

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Purchaser nor any of its Subsidiaries nor any of their respective properties or assets issubject to any outstanding judgment, order, writ, injunction or decree that wouldreasonably be expected to have a Material Adverse Effect on the Purchaser.

(22) Environmental Matters.

(a) To the knowledge of the Purchaser, the Purchaser and each of its have been andare in material compliance with all Environmental Laws.

(b) Except as would not reasonably be expected to have a Material Adverse Effect onthe Purchaser, neither the Purchaser nor any of its Subsidiaries has Released anyHazardous Substances (in each case except in compliance with applicableEnvironmental Laws) on, at, in, under or from any of the immovable properties,any real properties, currently owned or leased by the Purchaser or by any of itsSubsidiaries.

(c) There are no pending material claims, notices, complaints, penalties, prosecutionsor any other judicial or administrative Proceedings against the Purchaser or any ofits Subsidiaries arising out of any Environmental Laws.

(d) To the knowledge of the Purchaser, there has not been: (i) any written order,directive or similar requirement which relates to environmental matters that wouldreasonably be expected to have a Material Adverse Effect on the Purchaser; or(ii) any written demand or notice with respect to a material breach of anyEnvironmental Law in each case applicable to the Purchaser, any of itsSubsidiaries, or the Purchaser Assets.

(e) No Liens, other than Permitted Liens, in favour of a Governmental Entity arisingunder Environmental Laws, are pending or, to the knowledge of the Purchaser,threatened in writing affecting, in any material respect, the Purchaser, itsSubsidiaries or the Purchaser Assets.

(23) Employees.

(a) The Purchaser and its Subsidiaries are in material compliance with all terms andconditions of employment applicable to Purchaser Employees and all Lawrespecting employment in all locations where Purchaser Employees work,including pay equity, employment and labour standards, labour relations, humanrights, privacy, workers’ compensation and occupational health and safety, andthere are no material outstanding claims, complaints, investigations or ordersunder any such Law.

(b) All amounts due or accrued for all salary, wages, bonuses, commissions, vacationwith pay, sick days and benefits under Employee Plans and other similar accrualshave either been paid or are accurately reflected in all material respects in thebooks and/or records of the Purchaser, of the applicable Subsidiary.

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(c) Other than as disclosed in Section D(23)(a) of the Purchaser Disclosure Letter,there are no change of control payments, golden parachutes, severance payments,notice or payment in lieu of notice, retention payments or agreements with any ofthe Purchaser Employees providing for cash or other compensation or benefitsupon the consummation of the Arrangement or any other transactioncontemplated by this Agreement.

(24) Collective Agreements.

(a) There are no collective bargaining or similar agreements in force with respect toPurchaser Employees, nor is there any agreement with any trade union, employeeassociation or similar entity in respect of the Purchaser, its Subsidiaries orPurchaser Employees.

(b) There is no labour strike, dispute, lock-out, work slowdown or stoppage pendingor involving or, to the knowledge of the Purchaser, threatened against thePurchaser or any Subsidiary.

(c) To the knowledge of the Purchaser, no trade union has applied to have thePurchaser or any of its Subsidiaries declared a related, successor, or commonemployer pursuant to the Labour Relations Code (Ontario) or any similarlegislation in any jurisdiction in which the Purchaser or any of its Subsidiariescarry on business.

(25) Employee Plans.

(a) Each material Employee Plan is and has been established, registered, qualified,funded and, in all material respects, administered in accordance with Law and inaccordance with their terms. No fact or circumstance exists which couldadversely affect the registered or qualified status of any such material EmployeePlan, except as would not reasonably be expected to have a Material AdverseEffect on the Purchaser. Neither the Purchaser nor any Purchaser Employee hasbreached any fiduciary obligation with respect to the administration or investmentof any material Employee Plan.

(b) All contributions or premiums required to be made or paid by the Purchaser orany of its Subsidiaries, as the case may be, under the terms of each materialEmployee Plan or by Law have been made in a timely fashion in accordance withLaw in all material respects and in accordance with the terms of the applicableEmployee Plan.

(c) None of the Employee Plans (other than pension or retirement plans) provide forretiree benefits or for benefits to retired employees or to the beneficiaries ordependents of retired employees.

(d) To the knowledge of the Purchaser, no material Employee Plan is subject to anyProceeding initiated by any Governmental Entity, or by any other party (otherthan routine claims for benefits).

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(e) No Employee Plan is a multi-employer pension plan as such term is defined underthe Pension Benefits Plan Act (Ontario) or any similar plan for purposes ofpension standards legislation of another jurisdiction.

(26) Insurance.

(a) The Purchaser and each of its Subsidiaries are, and have been continuously sinceJanuary 1, 2014, insured by reputable third party insurers with reasonable andprudent policies appropriate for the size and nature of the business of thePurchaser, taken as a whole.

(b) To the knowledge of the Purchaser, each material insurance policy of thePurchaser and its Subsidiaries currently in effect that insures the physicalproperties, business, operations and assets of the Purchaser and its Subsidiaries isin full force and effect and the Purchaser and its Subsidiaries are not in defaultunder the terms of any such policy. To the knowledge of the Purchaser, there isno material claim pending under any insurance policy of the Purchaser or itsSubsidiaries that has been denied, rejected, questioned or disputed by any insureror as to which any insurer has made any reservation of rights or refused to coverall or any material portion of such claims. To the knowledge of the Purchaser, allmaterial Proceedings covered by any insurance policy of the Purchaser or any ofits Subsidiaries have been properly reported to and accepted by the applicableinsurer.

(27) Taxes.

(a) The Purchaser and each of its Subsidiaries have duly and timely filed all TaxReturns required by Law to be filed by them prior to the date hereof and all suchTax Returns are complete and correct in all material respects.

(b) The Purchaser and each of its Subsidiaries have paid as required by Law on atimely basis all material Taxes which are due and payable, all materialassessments and material reassessments, and all other material Taxes due andpayable by them on or before the date hereof, other than those which are being orhave been contested in good faith and in respect of which reserves have beenprovided in the most recently published consolidated financial statements of thePurchaser (where required in accordance with applicable accounting standards).The Purchaser and its Subsidiaries have provided adequate accruals in accordancewith applicable accounting standards in its books and records and in the mostrecently published consolidated financial statements of the Purchaser for anyTaxes of the Purchaser and each of its Subsidiaries for the period covered by suchfinancial statements that have not been paid whether or not shown as being due onany Tax Returns. Since such publication date, no material liability in respect ofTaxes not reflected in such statements or otherwise provided for has beenassessed, proposed to be assessed, incurred or accrued, other than in the OrdinaryCourse.

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(c) No material claims, audits, deficiencies, litigation, proposed adjustments ormatters in controversy exist or have been asserted with respect to Taxes of thePurchaser or any of its Subsidiaries, and none of the Purchaser or any of itsSubsidiaries is a party to any material Proceeding for assessment or collection ofTaxes and no such event has, to the knowledge of the Purchaser, been asserted orthreatened against the Purchaser or any of its Subsidiaries or any of theirrespective assets.

(d) To the knowledge of the Purchaser, no claim has been made by any GovernmentEntity in a jurisdiction where the Purchaser or any of its Subsidiaries do not fileTax Returns that the Purchaser or any of its Subsidiaries is or may be subject tomaterial Tax by that jurisdiction.

(e) To the knowledge of the Purchaser, there are no Liens (other than PermittedLiens) with respect to Taxes upon any of the assets of the Purchaser or any of itsSubsidiaries.

(f) The Purchaser and each of its Subsidiaries has withheld or collected all materialamounts required by Law to be withheld or collected by it on account of Taxesand has remitted all such amounts to the appropriate Governmental Entity whenrequired by Law to do so. The Purchaser and each of its Subsidiaries haveremitted all Canada Pension Plan contributions, provincial pension plancontributions, employment insurance premiums, employer health taxes and otherTaxes payable by it in respect of its employees to the appropriate GovernmentalAuthority within the time required under applicable Law. The Purchaser and eachof its Subsidiaries have charged, collected and remitted on a timely basis all Taxesas required under applicable Law on any sale, supply or delivery whatsoever,made by it.

(g) The Purchaser has made available to the Company true, correct and completecopies of all filed income Tax Returns of the Purchaser and its Subsidiariesmaterial to the Purchaser as a whole in respect of their 2015 and 2014 taxationyears.

(h) Neither the Purchaser nor any of its Subsidiaries has, directly or indirectly,transferred property or supplied services to, acquired property or services from, orotherwise entered into any transactions with any Person with whom it was notdealing at arm's length (for the purposes of the Tax Act) for consideration otherthan fair market value consideration for such property, services, or transactions,or otherwise subject to terms and conditions that differ from those that wouldhave been entered into between persons dealing at arm’s length (for purposes ofthe Tax Act).

(i) There are no circumstances which exist and could result in, or which have existedand resulted in, the application of any of sections 17, 78, 80 to 80.04 of the TaxAct, or any equivalent provision of the taxation legislation of any province or anyother jurisdiction, to the Purchaser or any of its Subsidiaries.

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(j) The Purchaser has not taken nor agreed to take any action, nor knows of theexistence of any fact, that would reasonably be expected to prevent thetransactions contemplated by this Agreement from qualifying as a reorganizationwithin the meaning of Section 368(a) of the Code.

(28) Bankruptcy and Insolvency. None of the Purchaser or any of its Subsidiaries has madean assignment in favour of its creditors or a proposal in bankruptcy to its creditors or anyclass thereof nor has any petition for a receiving order been presented in respect of it.None of the Purchaser or any of its Subsidiaries has initiated Proceedings with respect toa compromise or arrangement with its creditors or for its winding up, liquidation ordissolution and, to the knowledge of the Purchaser, no such Proceedings have beenthreatened by any other Person. No receiver has been appointed in respect of thePurchaser or any of its Subsidiaries or any of their respective property or assets and noexecution or distress has been levied upon any of their respective property or assets and,to the knowledge of the Purchaser, no such Proceedings have been threatened by anyother Person.

(29) Opinion of Financial Advisor. The Purchaser Board has received the PurchaserFairness Opinion, and such Purchaser Fairness Opinion has not been withdrawn ormodified as of the date of this Agreement.

(30) Brokers. Except for the Purchaser Financial Advisor, no investment banker, broker,finder, financial adviser or other intermediary has been retained by or is authorized to acton behalf of the Purchaser or any of its Subsidiaries or is entitled to any fee, commissionor other payment from the Purchaser or any of its Subsidiaries in connection with thisAgreement or any other transaction contemplated by this Agreement. In Section D(30) ofthe Purchaser Disclosure Letter the Purchaser has disclosed to the Company all fees,commissions or other payments that may be payable to the Purchaser Financial Advisorin connection with this Agreement or any other transaction contemplated by thisAgreement.

(31) Issuance of Purchaser Shares. The Purchaser Shares to be issued as Consideration will,when issued pursuant to the Arrangement, be validly issued as fully paid and non-assessable common shares in the capital of the Purchaser.

(32) Security Ownership. None of the Purchaser, any of its affiliates or any Person actingjointly or in concert with any of them owns any securities of the Company.

(33) Investment Canada Act Status. The Purchaser is (i) not a “non-Canadian” within themeaning of the Investment Canada Act, and (ii) not a “state-owned enterprise” as definedpursuant to Section 3 of the Investment Canada Act.

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SCHEDULE EFORM OF MANAGEMENT SERVICES AGREEMENT

THIS AGREEMENT made and entered into as of the day of , 2017

B E T W E E N:

ADRIANA RESOURCES INC.,a corporation incorporated under the laws of Canada(hereinafter referred to as the “Corporation”)

- and -

SPROTT CONSULTING LIMITED PARTNERSHIP,a limited partnership existing under the laws of Ontario(hereinafter referred to as the “Consultant”)

WHEREAS:

1. on the date hereof Sprott Resource Corp. (“SRC”) consummated a plan of arrangementunder Section 192 of the Canada Business Corporations Act (the “Arrangement”)pursuant to which the Corporation acquired all of the outstanding common shares in thecapital of SRC and SRC became a wholly-owned subsidiary of the Corporation and theCorporation became a company that, through its indirect ownership interest in SprottResource Partnership, owns and operates businesses and assets in the natural resourcesector;

2. concurrently with the execution and delivery of this Agreement by the Corporation andthe Consultant, SRC and the Consultant have terminated (without payment of anytermination fee or other amount) the second amended and restated management servicesagreement effective January 1, 2015 between SRC and the Consultant as of the datehereof;

3. the Corporation wishes to retain the Consultant, and the Consultant wishes to provide orcause to be provided management and administrative services to the Corporation and toprovide or cause to be provided such other services and facilities pursuant to the termsand subject to the conditions of this Agreement; and

4. the Board of Directors of the Corporation and the general partner of the Consultant haveeach approved this Agreement;

NOW THEREFORE in consideration of the mutual covenants and agreements contained hereinand for other good and valuable consideration (the receipt and sufficiency of which are herebyacknowledged) the parties hereto agree as follows:

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1. Definitions and Interpretations

The terms defined in this Section whenever used in this Agreement shall, unless thecontext otherwise requires, have the respective meanings hereinafter specified:

(a) “Adjusted Annual Operating Expenses” means for any fiscal year theManagement Services Fee calculated in accordance with Section 5, plus the othergeneral and administrative expenses incurred in connection with the operation andadministration of the Corporation as set forth in this Agreement, less:

(i) costs resulting from servicing debt of the Corporation;(ii) costs incurred in the purchasing or selling of the Corporation’s direct or

indirect investments;(iii) initial and ongoing expenses recorded as a result of the granting of stock

options under the Corporation’s stock option plan other than those grantedto directors of the Corporation;

(iv) mark-to-market stock-based compensation paid by the Corporation;(v) any taxes imposed on the Corporation by government authorities; and(vi) any other amounts as approved by the Conflict Resolution Committee of

the Board of Directors of the Corporation;

(b) “Affiliate” has the meaning ascribed thereto in the Securities Act (Ontario);

(c) “Agreement” means this management services agreement made and entered intoas of , 2017, as the same may be supplemented, amended and/or restated fromtime to time and “herein”, “hereof”, “hereby”, “hereunder” and similarexpressions refer to this Agreement and include every instrument supplemental orancillary to this Agreement and, except where the context otherwise requires, notto any particular article, section or subsection thereof;

(d) “Annual Net Asset Value of the Corporation” means, in respect of a fiscal year,the average of each Quarterly Net Asset Value of the Corporation for such fiscalyear;

(e) “Applicable Securities Legislation” means the securities laws, regulations, rules,requirements and policies of the Province of Ontario and equivalent regulatoryauthorities in each province of Canada;

(f) “Business Day” means any day, other than a Saturday, Sunday or statutoryholiday on which the Toronto Stock Exchange is open for trading;

(g) “Change of Control” shall have the meaning set forth in Section 15 hereof;

(h) “Consultant” means Sprott Consulting Limited Partnership;

(i) “Corporation” means Adriana Resources Inc. and its subsidiaries;

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(j) “Management Services Fee” shall have the meaning set forth in Section 5hereof;

(k) “Net Asset Value of the Corporation” means, in respect of a particular date, theCorporation’s total assets less its total liabilities and less its minority interest ornon-controlling interest, all as at such date as set forth in the Corporation’sconsolidated financial statements prepared as at such date;

(l) “Nominees” shall have the meaning set forth in Subsection 3(c);

(m) “Quarterly Net Asset Value of the Corporation” means, in respect of a fiscalquarter of the Corporation the average of the Net Asset Value of the Corporationas at end of such fiscal quarter and the Net Asset Value of the Corporation as atthe end of the immediately preceding fiscal quarter;

(n) “SRC” has the meaning set out in the Recitals hereto; and

(o) “SRC Third Amended and Restated Partnership Agreement” means the ThirdAmended and Restated Partnership Agreement of Sprott Resource Partnershipmade as of the date hereof between SRC and Sprott Resources ConsultingLimited Partnership, an entity wholly-owned by the Consultant.

In this Agreement, where the context so indicates, the singular shall include the pluraland the masculine shall include the feminine and neuter.

2. Appointment

The Corporation hereby appoints the Consultant to manage, or, subject to the terms ofthis Agreement, to engage others (including through its wholly-owned entity, Sprott ResourceConsulting Limited Partnership, pursuant to the terms of the SRC Third Amended and RestatedPartnership Agreement) to manage, all of the undertaking, affairs and assets of the Corporationand to provide all necessary or advisable administrative services and facilities as hereinafter setforth and the Consultant hereby accepts such appointment and agrees to act in such capacity andto provide or cause to be provided such management and administrative services and facilitiesupon the terms set forth in this Agreement.

3. Management and Administrative Services

Without limiting the generality of the foregoing, during the term of this Agreement theConsultant shall, subject to the terms of this Agreement:

(a) administer the day-to-day business and affairs of the Corporation, includingidentifying and making investment decisions relating to the Corporation (inconsultation with the Corporation), the preparation of all written and printedmaterial for distribution to shareholders of the Corporation and assisting theCorporation in compliance with registration, filing, reporting and similarrequirements of Applicable Securities Legislation, relevant securities regulatoryauthorities or any similar government entity and of any stock exchange upon

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which the securities of the Corporation may be posted and to which theCorporation is obligated to report;

(b) provide or cause to be provided all internal accounting, asset valuation (inconsultation with the Corporation), audit and legal services in respect of theCorporation and other usual and ordinary office facilities, supplies and servicesnecessary or desirable for carrying on the management and administration of theCorporation;

(c) nominate at least four (4) separate individuals to serve in the following capacities:two as directors of the Corporation, one as a director, president and chiefexecutive officer, and one as chief financial officer of the Corporation togetherwith nominees for such other executive positions as may be required by theCorporation from time to time (the “Nominees”). Such officers will be employeesor consultants of the Corporation and shall be remunerated by the Corporationdirectly (such remuneration to be determined by the Consultant in consultationwith the directors of the Corporation), subject to offset against the ManagementServices Fee as provided in this Agreement. Should the Consultant terminate theemployment of such officers, as officers of the Corporation, or cause suchdirectors to resign, as directors of the Corporation, in either case after priorconsultation with the independent directors of the Corporation, it shall fullyindemnify the Corporation for all costs and expenses in connection therewith. TheCorporation agrees to propose to its shareholders for election a slate of directorswhich includes at least three Nominees;

(d) provide or cause to be provided services in respect of the Corporation’s dailyoperations, including administration services related to the acceptance or rejectionof subscriptions for securities of the Corporation;

(e) distribute or cause to be distributed all securities which the Corporation maydecide to issue during the term of this Agreement and take or cause to be taken allsuch actions as the Consultant reasonably considers necessary or desirable in thesale of securities of the Corporation whether by prospectus or private placementoffering;

(f) authorize payment on behalf of the Corporation of expenses incurred on behalf ofthe Corporation and negotiate contracts with third party providers of services(including, but not limited to, custodians, transfer agents, legal counsel, auditors,insurance companies and printers);

(g) keep and maintain the books and records of the Corporation and supervisecompliance by the Corporation with record-keeping requirements underapplicable law;

(h) deal with banks, insurance companies and custodians, including the maintenanceof bank records and the negotiation and securing of bank financing or refinancingand insurance policies;

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(i) monitor relationships with the custodians, registrar and transfer agents, auditors,legal counsel, insurance agents and other organizations or professionals servingthe Corporation;

(j) from time to time, or when otherwise reasonably requested by the Corporation,make reports to the Corporation and/or its shareholders of the Consultant’sperformance of the services provided to the Corporation pursuant to thisAgreement;

(k) prepare or cause to be prepared accounting, management and other reports,including reports of the Corporation’s performance to shareholders, interim andannual reports to shareholders and financial statements, such financial statementsto be prepared in accordance with Canadian generally accepted accountingprinciples (including, without limitation, International Financial ReportingStandards), as applicable from time to time applied on a consistent basis;

(l) provide or cause to be provided all other administrative services and facilitiesrequired by the Corporation in relation to its shareholders including, withoutlimitation, the preparation for and holding of meetings of shareholders and otherservices for the provision of information to shareholders; and

(m) provide such other managerial and administrative services and carry out suchother duties as may be reasonably required for the ongoing business andadministration of the Corporation,

subject to the directions and orders of the Corporation from time to time, which directions andorders shall be reasonably consistent with the nature of the duties set out above.

The Corporation grants and delegates to the Consultant the power and authority to act inthe name of and on behalf of the Corporation for the purpose of providing and performing themanagement and administrative services.

4. Records and Reporting

The Consultant shall keep at all times proper books of account and records relating to theservices performed hereunder, which books of account and records shall be accessible forinspection by the directors of the Corporation at any time during normal business hours.

5. Management Services Fee

In consideration for the management and administrative services provided by theConsultant to the Corporation pursuant to this Agreement, the Corporation shall pay to theConsultant, in respect of each fiscal quarter, a management services fee equal to 0.5% of theQuarterly Net Asset Value of the Corporation for such fiscal quarter, less the total remunerationpaid directly by the Corporation to all persons nominated by the Consultant as employees,officers or directors of the Corporation who provide investment management services to theCorporation (the “Management Personnel”) but excluding any expenses recorded as a result ofthe granting of stock options under the Corporation’s stock option plan for such fiscal quarter

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(the “Management Services Fee”). To the extent the Quarterly Net Asset Value of theCorporation for a fiscal quarter is in excess of $1,000,000,000, the Management Services Fee inrespect of such excess amount will be reduced to 0.375%. The Management Services Fee shallbe paid in cash within five (5) Business Days following the completion of the Corporation’sfinancial statements for such fiscal quarter.

If the Management Services Fee is payable in respect of a period that is less than a fullfiscal quarter, the Management Services Fee payable to the Consultant shall be pro-rated for thatfiscal quarter. The Management Services Fee payable to the Consultant shall be subject toapplicable harmonized sales tax, goods and services tax, Québec sales tax and other applicablesales taxes.

6. Compensation for Additional Services

If and to the extent that the Consultant is requested in writing by the directors of theCorporation to render services to the Corporation other than those required to be renderedpursuant to the provisions of this Agreement, such additional services and activities will becompensated for separately and shall be on such terms that are generally no less favourable to theCorporation than those available from arm’s length parties (within the meaning of the IncomeTax Act (Canada)) for comparable services.

7. Expenses of the Corporation

In addition to Management Services Fees payable to the Consultant pursuant to thisAgreement, the Corporation shall pay all fees and expenses incurred in connection with theoperation and administration of the Corporation’s business including, without limitation: (i) feesand expenses payable to the directors of the Corporation to be agreed annually with the directorsof the Corporation; (ii) fees payable to custodians; (iii) legal and audit fees and expenses payableto the Corporation’s external legal counsel and auditors; (iv) insurance fees; (v) shareholderreporting costs; (vi) registrar and transfer agency costs; (vii) fees and expenses payable forlistings, the maintenance of listings and filings or other requirements of stock exchanges onwhich any of the securities of the Corporation are listed or quoted; (viii) other administrativeexpenses and costs incurred in connection with the Corporation’s continuous public filingrequirements and investor relations; (ix) securities commission participation fees; (x) all taxes(income, capital and sales taxes); (xi) brokerage and trading commissions; (xii) costs andexpenses relating to the offering and issue of securities of the Corporation (including the costs ofprinting and preparing offering documents, legal expenses, auditing expenses, marketingexpenses and other reasonable out-of-pocket expenses); (xiii) costs and expenses of preparing,printing and mailing financial and other reports; (xiv) costs and expenses arising as a result ofcomplying with all Applicable Securities Legislation and other applicable laws, regulations andpolicies; (xv) all amounts paid by the Corporation on account of the indebtedness of theCorporation; (xvi) all travel, transportation, accommodation, meals and entertainment,conferences and other reasonable out-of-pocket expenses relating to the operation andadministration of the Corporation’s business; (xvii) all professional development expenses andprofessional designation fees of the Nominees, including related costs required to maintain them;(xviii) market rate finder and brokerage fees associated with Sprott Inc. sourced investments; and(xix) market rate investment due diligence costs provided by Sprott Inc.; provided that the

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Corporation shall not pay the rent and customary investment management services expenses ofthe Management Personnel.

8. Total Adjusted Annual Operating Expenses

Notwithstanding any other provision of this Agreement, the Adjusted Annual OperatingExpenses shall not (i) exceed 3.25% of the Annual Net Asset Value of the Corporation in respectof the Corporation’s fiscal year ended December 31, 2017 (provided that the Corporation’s fiscalyear ended December 31, 2017 and fiscal quarter ended March 31, 2017 shall each be deemed tobegin on the date hereof for the purposes of calculating both the Adjusted Annual OperatingExpenses and the Maximum Adjusted Annual Operating Expenses pursuant to this subsection(i)); and (ii) exceed 3% of the Annual Net Asset Value of the Corporation in respect of fiscalyears commencing with the Corporation's fiscal year ended December 31, 2018 and thereafter(the “Maximum Adjusted Annual Operating Expenses”). Where such Adjusted AnnualOperating Expenses exceed the Maximum Adjusted Annual Operating Expenses, theManagement Services Fees payable by the Corporation to the Consultant in respect of the lastquarterly payment to be made in respect of such fiscal year shall be reduced to ensure AdjustedAnnual Operating Expenses equal (or, in any case, do not exceed) the applicable MaximumAdjusted Annual Operating Expenses.

9. Other Activities of the Consultant and Nominees

The Corporation acknowledges and agrees that the Consultant or any Affiliate of theConsultant has provided or may provide management and administrative services to otherpersons and entities which are the same or different from the services provided to theCorporation by the Consultant (even though such other persons or entities may be the same orsimilar to the Corporation, or engage in other activities). Subject to the duty of an Affiliate tooffer opportunities it identifies to its client(s), unless the directors of the Corporation otherwisepermit (such permission not to be unreasonably withheld), all suitable opportunities coming tothe attention of the Consultant or its Affiliates to make private equity investments in the naturalresource sector shall first be offered to the Corporation. The Nominees who are acting as ChiefExecutive Officer and Chief Financial Officer of the Corporation shall, unless otherwise agreedto in writing with the independent directors of the Corporation, devote substantially all of theirbusiness time and attention to the business and affairs of the Corporation.

10. Authority to Enter into Agreement

Each of the parties to this Agreement hereby represents and warrants to the other that it isduly authorized and empowered to execute, deliver and perform this Agreement and that suchaction does not conflict with or violate any provision of law, regulation, policy, contract, deed oftrust or other instrument to which it is a party or by which it is bound and that this Agreementconstitutes a valid and binding obligation of it enforceable in accordance with its terms.

The Corporation shall provide to the Consultant concurrently with the execution anddelivery by the Corporation of this Agreement all such evidence of authority to act including,without limitation, designations of authorized persons and certified copies of charter documents

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and resolutions, as the Consultant may require. The Consultant may continue to rely on all suchevidence until notice to the contrary given hereunder has been received by it.

11. Standard of Care

The Consultant shall, and shall ensure that its Nominees shall, exercise the powersgranted and discharge its, and their, duties hereunder honestly, in good faith and in the bestinterests of the Corporation and, in connection therewith, shall exercise the degree of care,diligence and skill that a reasonably prudent manager, or person, would exercise in comparablecircumstances.

If the Consultant and its Nominee directors, officers and employees are uncertain as tocompliance with the obligations in the preceding paragraph, when any issues are to be decided inrespect of which the interests of the Corporation and those of the Consultant (or its relatedparties) may differ materially (including but not limited to, capital management,investment/divestment decisions, reputational matters and potential conflict of interest matters),the Consultant shall, and shall ensure that its Nominees shall, fully inform the Board of Directorsof the Corporation and the Conflicts Resolution Committee of the Board of Directors of theCorporation (and the Nominees shall at least contemporaneously therewith inform the Consultantof only such issue or matter) and, except where the resolution of such issues or matters has beenprescribed by contract or written policy approved by the directors of the Corporation, theConsultant shall, and shall ensure that its Nominees shall, facilitate the exercise of informed andindependent judgement by the directors of the Corporation in resolving the issue or matter onbehalf of the Corporation. The Consultant shall provide to the Corporation within 45 days afterthe end of the fiscal year of the Corporation a certificate of compliance with this Section 11 ofthe Agreement.

12. Liability of the Consultant

Neither the Consultant nor any of its officers, directors, employees, partners, agents ortrustees shall be liable to the Corporation or any shareholder thereof for any loss or damagesuffered by the Corporation or any shareholder thereof, as the case may be, (i) which arose out ofany action or inaction of the Consultant if such course of conduct did not constitute bad faith,gross negligence, wilful misconduct, wilful neglect or default or a material failure to complywith applicable laws, regulations or restrictions or the provisions set forth in this Agreement orwilful failure to comply with express written directions given by either the directors of theCorporation or by binding resolution of the Corporation’s shareholders, or (ii) where theConsultant, in good faith, and absent fraud of its Nominees, determined that such course ofconduct was in the best interests of the Corporation.

The Corporation acknowledges and agrees that neither the Consultant nor any of itsofficers, directors, employees, partners, agents or trustees shall be responsible for any loss ofopportunity whereby the value of any of the Corporation’s assets or its business could have beenincreased nor shall any of them be responsible for any decline in value of the assets or businessof the Corporation where (i) such decline is not the result of the Consultant’s bad faith, grossnegligence, wilful misconduct, wilful neglect or default or a material failure to comply withapplicable laws, regulations or restrictions and the provisions set forth in this Agreement or

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wilful failure to comply with express written directions given by either the directors of theCorporation or by binding resolution of the Corporation’s shareholders, or (ii) the Consultant, ingood faith, and absent fraud of its Nominees, determined that such course of conduct was in thebest interests of the Corporation.

The Corporation acknowledges and agrees that the Consultant shall not be responsible forany losses or damages to the Corporation arising out of any action or inaction by a custodian orsub-custodian holding assets or investments of the Corporation, provided such third party wasselected and engaged by the Consultant with the care, diligence and skill that a reasonablyprudent manager would exercise in comparable circumstances.

The Consultant may rely and act upon any statement, report or opinion prepared by orany advice received from auditors, solicitors, notaries or other professional advisors of theConsultant and shall not be responsible or held liable for any loss or damage resulting fromrelying or acting thereon if the advice was within the area of professional competence of theperson from whom it was received and the Consultant acted reasonably in relying thereon,provided such third party was selected and engaged by the Consultant with the care, diligenceand skill that a reasonably prudent manager would exercise in comparable circumstances.

The Consultant hereby acknowledges and agrees that the obligations of the Corporationhereunder are not personally binding upon the shareholders of the Corporation, any annuitantunder a plan of which a shareholder of the Corporation acts as a trustee or carrier, or the agentsof the Corporation and that the Consultant shall not resort to or seek redress, recourse orsatisfaction from the private property of any of the foregoing, whether the liability be based oncontract, tort or otherwise. The Consultant agrees that only the Corporation and property held bythe Corporation shall be bound by and subject to the obligations and liabilities arising out of thisAgreement.

13. Indemnity

The Corporation shall indemnify and hold harmless the Consultant and its directors,officers, agents and employees from and against any and all expenses, losses, damages,liabilities, demands, charges, costs and claims of any kind or nature whatsoever (including legalfees, judgments and amounts paid in settlement, provided that the Corporation has approved suchsettlement) in respect of the acts, omissions, transactions, duties, obligations or responsibilities ofthe Consultant as manager and administrator to the Corporation, save and except where (a) suchexpenses, losses, damages, liabilities, demands, charges, costs or claims are the result of the badfaith, gross negligence, wilful misconduct, wilful neglect or default or a material failure tocomply with applicable laws, regulations or restrictions or the provisions set forth in thisAgreement or wilful failure to comply with express written directions given by either thedirectors of the Corporation or by binding resolution of the Corporation’s shareholders and (ii)the Consultant did not, in good faith, and absent fraud of its Nominees, determine such course ofconduct was in the best interests of the Corporation.

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14. Not Partners or Joint Venturers

The Corporation and the Consultant are not partners or joint venturers with each otherand nothing herein shall be construed so as to make them partners or joint venturers or imposeany liability as such on either of them, provided however that nothing herein shall be construedso as to prohibit the Corporation and the Consultant or its affiliates from embarking upon aninvestment together as partners, joint venturers or in any other manner whatsoever, subject toapplicable law.

15. Term

This Agreement shall become effective on the date hereof and shall be in force until it isterminated pursuant to Section 16 hereof.

16. Termination

This Agreement shall continue in full force and effect until this Agreement is terminatedby either party giving at least one (1) year prior written notice (or such shorter period as theparties may mutually agree upon) to the other party of such termination. If the Agreement isterminated by the Corporation, other than for reasons described in the three paragraphs whichimmediately follow, the Corporation shall pay to the Consultant within five (5) business days ofsuch termination a termination payment equal to 1% of the Net Asset Value of the Corporation.

The Corporation may terminate this Agreement at any time if the Consultant breachesany of its material obligations under this Agreement and such breach has not been cured within30 days following notice thereof from the Corporation.

Notwithstanding the foregoing, this Agreement shall terminate immediately where awinding-up, liquidation, dissolution, bankruptcy, sale of substantially all assets, sale of businessor insolvency proceeding has been commenced or is being contemplated by the Consultant, andshall be terminated upon the completion of any such proceeding by the Corporation.

In addition, in the event that a person or group of persons, acting jointly or in concert,acquires control over at least 50% of the voting securities of the Corporation (a “Change ofControl”), the Consultant may elect, in its sole discretion, to terminate this Agreement by givingthe Corporation written notice of such termination within 90 days after the Change of Control. Inthe event that the Consultant terminates this Agreement upon a Change of Control, theCorporation shall (i) call a meeting of its shareholders to approve the change of theCorporation’s name to remove any reference to “Sprott” pursuant to Section 17 hereof; and (ii)pay to the Consultant within five (5) Business Days of such termination, a termination fee equalto 3% of the Net Asset Value of the Corporation, plus (if and to the extent applicable) an amountequal to 20% of the amount by which the market capitalization of the Corporation exceeds theNet Asset Value of the Corporation, all determined as at the termination date. The payment ofthe termination fee to the Consultant is in addition to any accrued compensation andreimbursement for expenses to which the Consultant is then entitled.

Such termination of the Agreement will be without prejudice to the rights and liabilitiescreated under this Agreement prior to the effective date of the termination including, but not

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limited to, the pro-rated amount of the Management Services Fee determined pursuant to Section5 in respect of any partial fiscal quarter of the Corporation as if the fiscal quarter of theCorporation ended on the date of such termination of the Agreement and any other fees andexpenses owed to the Consultant as of such date. Termination of this Agreement in accordancewith the terms hereof shall not result in any penalty or other fee, other than the aforementionedtermination fee payable following a Change of Control.

The parties acknowledge and agree that any change of the Consultant (other than byassignment to its successor or Affiliate) requires the Corporation’s approval. The Corporationmay, in its sole discretion, terminate and replace the Consultant where it deems it to be in thebest interests of the Corporation.

Upon termination or assignment of this Agreement, the Consultant shall forthwith deliverto the Corporation, in the case of termination, or to the assignee, in the case of an assignment:

(a) all records, documents and books of account; and

(b) all materials and supplies of the Corporation,

which are in the possession or control of the Consultant and relate directly or indirectly to theperformance by the Consultant of its obligations under this Agreement; provided, however, thatthe Consultant may retain notarial or other copies of such records, documents and books ofaccount and the Corporation or the assignee shall produce at its head office the originals of suchrecords, documents and books of account whenever reasonably required to do so by theConsultant for the purpose of legal proceedings or dealings with any governmental authorities.Upon termination or assignment of this Agreement, the Consultant shall forthwith pay over tothe Corporation, in the case of a termination, or to an assignee, in the case of an assignment, allmonies held for the account of the Corporation pursuant to this Agreement, after deducting anyaccrued compensation and reimbursement for expenses to which it is then entitled.

With respect to any transactions entered into by the Consultant on behalf of theCorporation prior to giving or receiving notice of termination or partial withdrawal, suchtransactions shall not be affected by such termination or partial withdrawal and adequateprovisions will be made for proper settlement of outstanding commitments.

17. Change of Name

The Corporation acknowledges and agrees that the Consultant, for and on behalf of SprottInc., reserves all right, title and interest in or to the name or designation, or reference to “Sprott”in the name or designation of any of the Corporation’s Affiliates or, if applicable, theCorporation. Upon termination of this Agreement, the Corporation shall forthwith upon writtenrequest of the Consultant:

(a) call a meeting of its shareholders to approve an amendment to its articles ofincorporation or take such other action as required to change the name of theCorporation or any of its Affiliates, as applicable, to one which does not includethe word “Sprott” or any words similar thereto; and

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(b) upon the filing of articles of amendment or such other action changing the nameof the Corporation or any of its Affiliates, as applicable, to remove the word“Sprott”, cause to be executed and delivered all instruments necessary to evidencesuch change of name in each public registry where the name of the Corporation orany of its Affiliates, as applicable, shall have been registered and to disclaim anyright, title or interest in or to the designation “Sprott”.

The Corporation agrees that it shall be responsible for any expenses incurred by it incarrying out the foregoing provisions.

18. Confidentiality and Compliance with Laws

The Consultant shall treat as confidential all information pertaining to the Corporationthat has not been publicly disclosed with the Corporation’s consent or otherwise in accordancewith applicable law, including, without limitation, the financial affairs of the Corporation, andthe Consultant shall not disclose such confidential information to persons who are not involvedin the management and operation of the Corporation, except with the Corporation’s consent or asmay be necessary to comply with applicable laws, regulations and policies and shall comply, andcause its Nominees to comply, with all applicable laws, regulations and policies and shallindemnify the Corporation for all losses, costs and expenses for failure to do so. The Corporationwill treat all advice and information which it receives from the Consultant as confidential and forthe exclusive use of the Corporation.

19. Notice

Any notice or other communication required or permitted to be given hereunder shall bein writing and if delivered, shall be delivered to a responsible officer of the Consultant or to theCorporation, or its directors, as the case may be, and if mailed shall be mailed by prepaidregistered mail:

(a) if to the Corporation, at Suite 2700, Royal Bank Plaza, South Tower, 200 BayStreet, Toronto, Ontario M5J 2J1, Attention: Chief Executive Officer, with a copyto the directors of the Corporation at their address specified in the Directors’Register of the Corporation; and

(b) if to the Consultant, at Suite 2700, Royal Bank Plaza, South Tower, 200 BayStreet, Toronto, Ontario M5J 2J1, Attention: Chief Executive Officer, with a copyto the Chief Financial Officer of Sprott Inc.

Any notice so delivered shall be deemed to have been given and received at the time ofdelivery. Any notice so mailed shall be deemed to have been given and received on the thirdBusiness Day following such mailing, except in the event of interruption of normal postalservice, in which event it shall be deemed given when received. Either party may from time totime upon written notice to the other party change their or its address.

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20. Headings

The inclusion of section headings in this Agreement is for convenience of reference onlyand shall not affect the construction or interpretation hereof.

21. Governing Law

This Agreement shall be governed by and constructed in accordance with the laws of theProvince of Ontario and the laws of Canada applicable therein and shall be treated in all respectsas an Ontario contract. The parties hereto hereby attorn to the jurisdiction of the courts ofOntario for arbitration of any disputes between them with respect to the subject matter hereof.

22. Entire Agreement

This Agreement constitutes the entire agreement between the parties pertaining to thesubject matter hereof and supersedes and replaces all prior understandings, agreements,negotiations or discussions, whether written or oral, between the parties with respect thereto.There are no representations, warranties, terms, conditions, undertakings or collateral agreementsor understanding, express or implied, between the parties other than those expressly set forth inthis Agreement.

23. Further Acts

Each of the Corporation and the Consultant shall promptly do, make, execute or deliver,or cause to be done, made, executed or delivered, all such further acts, documents and things asthe other party hereto may reasonably require from time to time for the purpose of giving effectto this Agreement.

24. Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and adeclaration of invalidity or unenforceability of any such provision or part thereof by a court ofcompetent jurisdiction shall not affect the validity or enforceability of any other provision hereof.To the extent permitted by applicable law, the parties waive any provision of law which rendersany provision of this Agreement invalid or unenforceable in any respect.

25. Amendment

This Agreement may not be amended, changed, supplemented or otherwise modified inany respect except by written instrument executed by the parties hereto or their respectivesuccessors or permitted assigns.

26. Assignment

This Agreement shall not be assigned by the Corporation without the prior writtenconsent of the Consultant. Upon notice to the Corporation, the Consultant may transfer or assignany and all rights granted hereunder to any of its successors or Affiliates, provided such assigneecontinues to be controlled by Sprott Inc.

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27. Successors

This Agreement shall enure to the benefit of and be binding upon the parties hereto andtheir respective successors and permitted assigns.

28. Counterparts

This Agreement may be executed in several counterparts, each of which when soexecuted shall be deemed to be an original and such counterparts together shall constitute oneand the same instrument.

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IN WITNESS WHEREOF the Corporation and the Consultant, by proper officers dulyauthorized on their behalf, have executed this Agreement as of the date first above written.


By:Name:Title:

SPROTT CONSULTING LIMITEDPARTNERSHIP, BY ITS GENERALPARTNER SPROTT CONSULTING GPINC.

By:Name:Title:

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SCHEDULE FFORM OF AMENDED AND RESTATED PARTNERSHIP AGREEMENT

SPROTT RESOURCE CORP.as an Ordinary Partner

and

SPROTT RESOURCE CONSULTING LIMITED PARTNERSHIPas Managing Partner

THIRD AMENDED AND RESTATED PARTNERSHIP AGREEMENTOF SPROTT RESOURCE PARTNERSHIP

[��], 2017

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TABLE OF CONTENTS

ARTICLE 1DEFINITIONS

Section 1.1 Definitions............................................................................................................. 6Section 1.2 Interpretation ......................................................................................................... 9

ARTICLE2THE PARTNERSHIP

Section 2.1 Name ................................................................................................................... 10Section 2.2 Fiscal Year........................................................................................................... 10Section 2.3 Business of the Partnership ................................................................................. 10Section 2.4 Office of the Partnership ..................................................................................... 10Section 2.5 Representations and Warranties of Each Ordinary Partner................................. 10Section 2.6 Actions Against Property and Assets .................................................................. 11Section 2.7 Title ..................................................................................................................... 12Section 2.8 Term of Partnership............................................................................................. 12

ARTICLE 3THE UNITS

Section 3.1 Number of Units.................................................................................................. 12Section 3.2 Nature of the Units .............................................................................................. 12Section 3.3 Unit Certificates and Confirmation ..................................................................... 12Section 3.4 Subdivision or Consolidation of Units: Fractional Units .................................... 13Section 3.5 Receipt................................................................................................................. 13Section 3.6 Registrar and Transfer Agent .............................................................................. 13Section 3.7 Inspection of Register.......................................................................................... 13Section 3.8 Transfer of Units ................................................................................................. 14Section 3.9 Successors in Interest of Ordinary Partners ........................................................ 14

ARTICLE 4PARTNERSHIP CAPITAL

Section 4.1 Partnership Capital .............................................................................................. 14Section 4.2 No Additional Contribution by Managing Partner.............................................. 15Section 4.3 Allocations of Net Profits and Losses for Accounting Purposes ........................ 15Section 4.4 Capital Account................................................................................................... 15Section 4.5 Return of Capital ................................................................................................. 16

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ARTICLE 5MANAGEMENT OF PARTNERSHIP

Section 5.1 Management of Partnership ................................................................................ 16Section 5.2 Assignment of Rights of Managing Partner, Etc. ............................................... 16Section 5.3 Removal of Managing Partner ............................................................................ 17Section 5.4 Resignation of Managing Partner........................................................................ 18Section 5.5 Power and Authority of the Managing Partner ................................................... 18Section 5.6 Evidence of Authority ......................................................................................... 19Section 5.7 Limitations on Powers and Authority of Managing Partner ............................... 19Section 5.8 Representations and Warranties of Managing Partner ........................................ 20Section 5.9 Specific Duties .................................................................................................... 21Section 5.10 Compensation of Ordinary Partners.................................................................... 22Section 5.11 Bank Accounts .................................................................................................... 22Section 5.12 Insurance ............................................................................................................. 22Section 5.13 Standard of Care of Managing Partner................................................................ 22

ARTICLE 6LIABILITY AND INDEMNIFICATION

Section 6.1 Liability of the Managing Partner ....................................................................... 23Section 6.2 Liability of the Ordinary Partners ....................................................................... 24Section 6.3 Indemnification of the Managing Partner ........................................................... 24Section 6.4 Indemnification of the Partnership...................................................................... 24

ARTICLE 7ACCOUNTING

Section 7.1 Books of Account................................................................................................ 24Section 7.2 Additional Financial Information........................................................................ 25Section 7.3 Method of Accounting ........................................................................................ 25Section 7.4 Appointment of Accountants .............................................................................. 26Section 7.5 Preparation of Tax Information........................................................................... 26

ARTICLE 8DISTRIBUTIONS AND ALLOCATIONS TO PARTNERS

Section 8.1 Distributions........................................................................................................ 26Section 8.2 Timing of Distributions....................................................................................... 26Section 8.3 Determination and Allocation of Taxable Income and Loss............................... 26

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ARTICLE 9ADMISSION AND WITHDRAWAL OF ORDINARY PARTNERS

Section 9.1 No Admission of New Ordinary Partners ........................................................... 27Section 9.2 Assignment of Class B Units .............................................................................. 27

ARTICLE 10MEETINGS

Section 10.1 Special Meetings of Ordinary Partners ............................................................... 27Section 10.2 Notice of Meetings and Quorum......................................................................... 27Section 10.3 Powers Exercisable by Special Resolution ......................................................... 28Section 10.4 Voting.................................................................................................................. 28Section 10.5 Proxies................................................................................................................. 29Section 10.6 Conduct of Meetings ........................................................................................... 29Section 10.7 Resolutions Binding ............................................................................................ 29Section 10.8 Rules of Order ................................................................................................. 30Section 10.9 Admission of Additional Ordinary Partners ....................................................... 30

ARTICLE 11DEFAULT

Section 11.1 Deemed Default................................................................................................... 30Section 11.2 Notice of Default and Consequences .................................................................. 31

ARTICLE 12LIQUIDATION AND DISSOLUTION OF PARTNERSHIP

Section 12.1 Liquidation or Dissolution of Partnership........................................................... 31Section 12.2 Right to Acquire Managing Partner Units .......................................................... 32

ARTICLE 13AMENDMENT OF AGREEMENT

Section 13.1 Amendment by Managing Partner ...................................................................... 32Section 13.2 Amendment by Ordinary Partners....................................................................... 32Section 13.3 Mutual Review of Agreement ............................................................................. 32

ARTICLE 14MISCELLANEOUS PROVISIONS

Section 14.1 Notices................................................................................................................. 33Section 14.2 Third Party Beneficiaries .................................................................................... 33Section 14.3 Binding Effect ..................................................................................................... 33Section 14.4 Governing Law.................................................................................................... 33Section 14.5 Other Instruments................................................................................................ 33Section 14.6 Legal Construction .............................................................................................. 33

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Section 14.7 Counterparts ........................................................................................................ 34Section 14.8 Taxes ................................................................................................................... 34Section 14.9 Time .................................................................................................................... 34Section 14.10 Currency .......................................................................................................... 34

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THIRD AMENDED AND RESTATEDPARTNERSHIP AGREEMENT

THIS AGREEMENT made as of the [��] day of [�], 2017

BETWEEN:

SPROTT RESOURCE CORP.,a corporation existing under the laws of Canada(hereinafter referred to as “SRC”)

- and -

SPROTT RESOURCE CONSULTING LIMITED PARTNERSHIP,a limited partnership existing under the laws of Ontario(hereinafter referred to as the “Managing Partner”)

WHEREAS:

(a) SRC and an affiliate of SRC (“SRC Subco”) each subscribed for and purchasedone Class B Unit at a price of $100 paid in cash per Class B Unit and formed ageneral partnership (defined herein as the “Partnership”) under the name “SprottResource Partnership” pursuant to the Partnership Agreement between them datedthe 28th day of September, 2011 (the “Original Agreement”);

(b) the Partnership’s primary activity is to own and operate businesses and assets inthe natural resource sector;

(c) SRC subsequently subscribed for and purchased 4.4 million Class B Units by wayof a contribution of certain of its assets to the Partnership;

(d) following the subscription and purchase by SRC of 4.4 million Class B Units, theManaging Partner subscribed for and purchased ten Class A Units at a price of$100 paid in cash per Class A Unit and SRC and SRC Subco admitted theManaging Partner into the Partnership pursuant to an amended and restatedpartnership agreement dated October 1, 2011 (the “First Amended Agreement”)amending and restating the Original Agreement;

(e) following the execution of the First Amended Agreement on October 1, 2011, theClass B Unit held by SRC Subco was redeemed by the Partnership at the optionof SRC Subco, SRC Subco ceased to be a Partner of the Partnership and the FirstAmended Agreement was further amended and restated as of the same date;

(f) on May 11th, 2015, SRC and Sprott Resource Consulting Limited Partnershipamended and restated the First Amended Agreement, as further amended andrestated as of the same date to address changes to SRC's financial reporting and tobetter align the interests of SRC and the Managing Partner (“Second AmendedAgreement”);

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(g) on the date hereof, SRC consummated a plan of arrangement under Section 192 ofthe Canada Business Corporations Act (the “Arrangement”) pursuant to whichAdriana Resources Inc. (the “Corporation”) acquired all of the shares in thecapital of SRC and SRC became a wholly-owned subsidiary of the Corporation;

(h) in connection with the consummation of the Arrangement, the parties heretodesire to amend and restate the Second Amended Agreement, and intend that thePartnership and their relationship in respect thereof be governed by thisAgreement which shall record the agreement among the Partners respecting thePartnership going forward;

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of thepremises and the mutual covenants and agreements herein contained and for other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged by theparties hereto, the parties hereby agree as follows:

ARTICLE 1DEFINITIONS

Section 1.1 Definitions

In this Agreement, unless the context otherwise requires, the following terms shall havethe following meanings:

“Accountant” means PricewaterhouseCoopers LLP or such other national accountingfirm that is agreed to by the parties;

“Act” means the Partnerships Act (Ontario), as amended from time to time;

“Affiliate” has the meaning ascribed thereto in the Securities Act (Ontario);

“Agreement” means this third amended and restated partnership agreement, and anyamendment hereto or amendment and restatement hereof made from time to time;

“Annual Net Asset Value of the Partnership” means, in respect of a fiscal year, theaverage of each Quarterly Net Asset Value of the Partnership for such fiscal year;

“Authority Limits” means that document approved and delivered to the ManagingPartner from time to time by the directors of the Corporation which sets forth the amounts andlimits of delegation of authority to the Managing Partner;

“Business Day” means any day, other than a Saturday, Sunday or statutory holiday onwhich the Toronto Stock Exchange is open for trading;

“Capital” means, at any time, the aggregate amount of original capital contributed by thePartners through the subscription for and purchase of Units, plus any additional amountscontributed either by the contribution of additional capital by the Partners in accordance herewithor by the issue of additional Units;

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“Capital Account” means the separate account to be established and maintained for eachOrdinary Partner pursuant to Section 4.4 hereof;

“Class A Unit” means a Class A unit interest in the Partnership, with a subscription priceof $100 per unit or such other amount as the Managing Partner may determine from time to time;

“Class B Unit” means a Class B unit interest in the Partnership, with a subscription priceof $100 per unit or such other amount as the Managing Partner may determine from time to time;

“Corporation” has the meaning set forth in the recitals hereto;

“Corporation MSA” means the Management Services Agreement between theCorporation and Sprott Consulting Limited Partnership, the parent of the Managing Partner;

“First Amended Agreement” has the meaning set forth in the recitals hereto;

“Government Authority” means any national, federal, state, provincial, county,municipal, district or local government or government body, or any public administrative orregulatory agency, political subdivision, commission, court, arbitral body, board orrepresentative of any of the foregoing, foreign or domestic, of, or established by, any suchgovernment or government body which has authority in respect of a particular matter or anyquasi-governmental body having the right to exercise any regulatory authority thereunder;

“Managing Partner” means Sprott Resource Consulting Limited Partnership or anysuccessor managing partner of the Partnership appointed pursuant to the terms hereof;

“Net Asset Value of the Partnership” means, in respect of a particular date, thePartnership’s total assets less its total liabilities and less its minority interest or non-controllinginterest, all as at such date as set forth in the Partnership’s financial statements prepared inrespect of the fiscal quarter ending on such date;

“Net Profits of the Partnership” means, for any fiscal year of the Partnership, the netprofits of the Partnership less the profits or loss attributable to the minority interest or non-controlling interest for such fiscal year as set forth in the Partnership’s audited financialstatements prepared in respect of such fiscal year and adjusted for any amounts to be agreedupon between the Partners; provided that if the Partnership incurs net losses for such fiscal yearafter deducting the profits or loss attributable to the minority interest or non-controlling interestand any amounts to be agreed upon between the Partners, such amount shall be referred to hereinas “Net Losses of the Partnership”;

“Ordinary Partners” means SRC and any additional persons who may be admitted tothe Partnership from time to time with the consent of SRC;

“Ordinary Resolution” means (a) if there is more than one Ordinary Partner holdingClass B Units, a resolution (i) approved by more than 50% of the votes cast by those OrdinaryPartners holding Class B Units who vote on the resolution, in person or by proxy, at a meeting ofOrdinary Partners, or at any adjournment thereof, called in accordance with this Agreement or(ii) consented to in writing by Ordinary Partners holding more than 50% of the Class B Units; or

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(b) if there is only one Ordinary Partner holding Class B Units, a resolution consented to inwriting by that Ordinary Partner;

“Original Agreement” has the meaning set forth in the recitals hereto;

“Original Capital Contribution” means the amount initially contributed by SRC andSRC Subco through the subscription for Class B Units pursuant to the provisions of Section 4.1of the Original Agreement;

“Partners” means, collectively, the Managing Partner and the Ordinary Partners;“Partnership” has the meaning set forth in the recitals hereto;

“Partnership Business” means the owning and operating of natural resource relatedbusinesses and assets;

“Quarterly Net Asset Value of the Partnership” means, in respect of a fiscal quarter ofthe Partnership, the average of the Net Asset Value of the Partnership as at end of such fiscalquarter and the Net Asset Value of the Partnership as at the end of the immediately precedingfiscal quarter;

“Register” means the register of Partners maintained by the Managing Partner;“Resolution” means an Ordinary Resolution or a Special Resolution;

“Second Amended Agreement” has the meaning set forth in the recitals hereto;

“Special Resolution” means (a) if there is more than one Ordinary Partner holding ClassB Units, a resolution (i) approved by not less than 66 2/3% of the votes cast by those OrdinaryPartners holding Class B Units who vote on the resolution, in person or by proxy, at a meeting ofthe Ordinary Partners, or at any adjournment thereof, called in accordance with this Agreementor (ii) consented to in writing by Ordinary Partners holding not less than 66 2/3% of the Class BUnits; or (b) if there is only one Ordinary Partner holding Class B Units, a resolution consentedto in writing by that Ordinary Partner;

“SRC” has the meaning set forth in the recitals hereto;

“SRC Subco” means 7983956 Canada Inc., a corporation incorporated under the laws ofCanada and being a wholly-owned subsidiary of SRC;

“Subsequent Capital Contribution” means any amount(s) subsequently contributed,from time to time, by the Ordinary Partners through the subscription for Units pursuant to theprovisions of Section 4.1 hereof;

“Tax Act” means Income Tax Act (Canada), as amended from time to time;

“Taxes” means all taxes including all income, sales, use, goods and services,harmonized sales, value added, capital, capital gains, alternative, net worth, transfer, profits,withholdings, payroll, employer health, excise, franchise, real property and personal propertytaxes, and any other taxes, customs duties, fees, levies, imposts and other assessments or similar

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charges in the nature of a tax including Canada Pension Plan and provincial pension plancontributions, employment insurance and unemployment insurance payments and workers’compensation premiums, together with any instalments with respect thereto, and any interest,fines and penalties, in all casts imposed by any Government Authority in respect thereof; and

“Units” means, collectively, the Class A Units and the Class B Units.

Section 1.2 Interpretation

For all purposes of this Agreement, except as otherwise expressly provided for, or unlessthe context otherwise requires:

(a) “this Agreement” means this amended and restated partnership agreement as itmay from time to time be supplemented or further amended pursuant to theapplicable provisions hereof;

(b) the table of contents, headings, articles and sections hereof are for convenience ofreference only and do not form a part of this Agreement nor are they intended tointerpret, define or limit the scope, extent or intent of this Agreement or anyprovision hereof;

(c) all accounting terms not otherwise defined herein have the meanings ordinarilyassigned to them in accordance with, and all computations made pursuant to thisAgreement shall be made in accordance with Canadian generally acceptedaccounting principles (including, without limitation, International FinancialReporting Standards), as applicable from time to time applied on a consistentbasis; notwithstanding the foregoing, the parties agree that any accounting policychanges, from time to time, that are retrospective in nature as they relate todistributions under this Agreement shall be applied as agreed to by the Partnersacting reasonably on an equitable basis;

(d) any reference to a currency herein is a reference to Canadian currency and theaccounts of the Partnership shall be maintained in that currency;

(e) any reference to a statute shall include and shall be deemed to be a reference tosuch statute and to the regulations made pursuant thereto, with all amendmentsmade thereto and in force from time to time, and to any statute or regulation thatmay be passed which has the effect of supplementing or superseding the statute soreferred to or the regulations made pursuant thereto;

(f) any reference to an entity shall include and shall be deemed to be a reference toany entity that is a successor to such entity; and

(g) words importing gender shall include the masculine, feminine or neuter genderand words in the singular include the plural and vice versa.

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ARTICLE2THE PARTNERSHIP

Section 2.1 Name

The Partnership shall carry on business under the name “Sprott Resource Partnership” orsuch other name as the Managing Partner, acting reasonably, may determine from time to time.However, no change in the reference to “Sprott” shall be made unless it is in conjunction withsuch a change pursuant to the provisions of the Corporation MSA. The Managing Partner shallnotify the Ordinary Partners of any change in the name of the Partnership.

Section 2.2 Fiscal Year

The fiscal year of the Partnership shall end on December 31 in each calendar year or suchother date as the Managing Partner, acting reasonably, may determine from time to time. TheManaging Partner shall notify the Ordinary Partners of any change in the fiscal year of thePartnership.

Section 2.3 Business of the Partnership

The Partnership has been formed primarily for the purpose of owning and operatingnatural resource related businesses and assets. Sprott Consulting Limited Partnership, the parentof the Managing Partner, has entered into the Corporation MSA with the Corporation whereby itprovides management and administrative services to the Corporation.

Section 2.4 Office of the Partnership

The principal office of the Partnership shall be at Suite 2700, Royal Bank Plaza, SouthTower, 200 Bay Street, Toronto, Ontario M5J 2J1. The Managing Partner may, from time totime, change the location of the Partnership’s principal office within the Province of Ontario.The Managing Partner shall give prior notice in writing to the Ordinary Partners of any change inthe location of the principal office of the Partnership.

Section 2.5 Representations and Warranties of Each Ordinary Partner

Each Ordinary Partner represents, warrants and covenants to the Managing Partner that:

(a) it is resident in Canada for the purposes of the Tax Act;

(b) it is not a person nor a partnership an interest in which is a “tax shelterinvestment” for the purposes of the Tax Act;

(c) it is not a “non-Canadian” within the meaning of the Investment Canada Act(Canada);

(d) it has the legal capacity or competence to enter into and be bound by thisAgreement, and to take all actions required pursuant hereto, and further that all

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necessary approvals of directors, shareholders, partners, members, trustees orotherwise have been given in connection with the entering into of this Agreement;

(e) this Agreement has been duly executed and delivered by the Ordinary Partner andconstitutes a legal, valid and binding obligation of the Ordinary Partnerenforceable against it in accordance with its terms, subject to usual exceptionsregarding equitable remedies and creditors’ rights generally; and

(f) the execution, delivery and performance by the Ordinary Partner of thisAgreement does not or would not with the passage of time or the giving of notice,or both, constitute or result in a violation or a breach of or a default under itsconstating documents, by-laws or any agreement to which it is or will be a partyor by which it is or will be bound or any law or regulation applicable to it.

Each Ordinary Partner covenants and agrees that, unless prior written notice is given tothe Managing Partner, it will not cease to be resident in Canada for the purposes of the Tax Act,will not take any action or omit to take any action that would cause it or an interest therein to bea “tax shelter investment” for purposes of the Tax Act, or otherwise change its status asrepresented herein or transfer or purport to transfer its Units to any person, firm or corporationthat is not resident in Canada or a partnership that is not a “Canadian partnership” for thepurposes of the Tax Act or any person or partnership that is or an interest in which would be a“tax shelter investment” or in any other case if such change, transfer or purported transfer wouldhave the effect of altering the status of the Partnership in relation to any of the above-mentionedstatutes or any similar statute affecting such status. Each Ordinary Partner shall advise theManaging Partner on behalf of the Partnership upon request of its status under such statute or anysimilar statute affecting the status of the Partnership or of any other matter which affects or mayfrom time to time affect such status. The Managing Partner may require those Ordinary Partnerswho are non-residents of Canada for the purposes of the Tax Act, or partnerships that are not“Canadian partnerships” for the purposes of the Tax Act or are persons or partnerships that are orinterests in which are tax shelter investments, to sell their Units to persons resident in Canada forpurposes of the Tax Act or partnerships that are “Canadian partnerships” for purposes of the TaxAct and which are neither tax shelter investments nor persons or partnerships interests in whichare tax shelter investments. In the event that an Ordinary Partner fails to comply with such arequest, the Managing Partner shall have the right to sell such Ordinary Partner’s Units or topurchase the same on behalf of the Partnership at fair market value, as determined by anindependent third party selected by the Managing Partner.

Section 2.6 Actions Against Property and Assets

No Ordinary Partner shall, in its capacity as an Ordinary Partner, register any lien, caveat,charge or other encumbrance against the property or other assets of the Partnership, whether realor personal, or permit any lien, caveat, charge or other encumbrance affecting them personally tobe recorded or to remain undischarged against such property or assets, nor shall any OrdinaryPartner bring any action for partition or sale in connection with such property or assets.

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Section 2.7 Title

All assets and securities brought into the Partnership or acquired on account of thePartnership are assets of the Partnership and will be used by the Partners exclusively for thepurposes of the Partnership Business. Except as prohibited by law or as expressly set forth in thisAgreement, legal title to all such assets and securities shall be registered in the name of theManaging Partner (in trust for the Partnership), the Partnership or any entity which the ManagingPartner determines to be the registered holder of title to Partnership assets or securities either asnominee or in trust for the Partnership.

Section 2.8 Term of Partnership

The Partnership shall be deemed to have commenced business as of the date of theOriginal Agreement and shall continue until the happening of the earliest of:

(a) the passing of a Special Resolution to dissolve the Partnership;

(b) the disposition of all or substantially all of the assets of the Partnership;

(c) the date on which one Partner holds all of the Units; and

(d) the entry of a final judgment, order or decree of a court of competent jurisdictionadjudicating the Partnership to be a bankrupt, and the expiration without appeal ofthe period, if any, allowed by applicable law in which to appeal therefrom;

ARTICLE 3THE UNITS

Section 3.1 Number of Units

The Partnership is authorized to issue 100 Class A Units and an unlimited number ofClass B Units.

Section 3.2 Nature of the Units

Each issued and outstanding Unit of a class shall be equal to each other Unit of such classwith respect to all matters, including the right to receive distributions from the Partnership andotherwise, and no Unit shall have any preference, conversion, exchange, pre-emptive orredemption rights in any circumstances over any other Unit of a class. Each holder of Class BUnits will be entitled to one vote for each Class B Unit owned by it in respect of all matters to bevoted upon by the Ordinary Partners. Holders of Class A Units will not be entitled to any votingrights.

Section 3.3 Unit Certificates and Confirmation

The Partnership will not issue certificates evidencing the number of Units held byPartners. However, on any purchase or redemption of Units, the Partnership shall issue

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confirmation slips indicating the nature of the transaction effected by the Partner and the numberof Units held by such Partner after such transaction.

Section 3.4 Subdivision or Consolidation of Units: Fractional Units

The Managing Partner may not subdivide or consolidate the Units of a class without priorconsent of the Ordinary Partners by Ordinary Resolution. Fractions of Units may be issued bythe Partnership. Fractions of Units will carry all the rights and be subject to the provisions hereofapplicable to whole Units of a class in the proportion which they bear to one Unit. Any fractionsof Units shall be rounded to three decimal places.

Section 3.5 Receipt

The receipt of any money, liquid securities or other property from the Partnership by aperson in whose name any Unit is registered or by the duly authorized agent of such person inthat regard, or if such Unit is registered in the names of more than one person, the receipt thereofby any one of such persons or by the duly authorized agent of any such person in that regard,shall be a sufficient discharge (i) for such money, liquid securities or other property and (ii) fromall liability of the Partnership to see to the application thereof. The receipt of other property willbe subject to a current independent valuation of such property to be arranged by the ManagingPartner, acting reasonably, upon prior notice to, and in consultation with, the Ordinary Partnersand the Corporation.

Section 3.6 Registrar and Transfer Agent

The registrar and transfer agent shall be the Managing Partner or such other person as theManaging Partner may designate by notice in writing to the Ordinary Partners. The registrar andtransfer agent shall:

(a) maintain the Register to record the names and addresses of the Partners, thenumber of Units held by each Partner and particulars of the issue and transfer ofthe Units;

(b) maintain such other records as may be required by law; and

(c) cause transfers of the Units to be recorded in accordance with the provisions ofSection 3.8, if applicable.

The Managing Partner shall be authorized to make such reasonable rules and regulationspertaining to maintenance of the Register and the period of time during normal business hoursthat the Register is open for inspection as provided for in Section 3.7.

Section 3.7 Inspection of Register

The Managing Partner shall permit any Ordinary Partner or his agent duly authorized inwriting to:

(a) inspect and take extracts from the Register during normal business hours; and

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(b) obtain a copy of the information set forth in the Register within a reasonableperiod of time after the date of filing of its written request therefor,

provided that such person agrees, in writing, that the information contained in the Register willnot be used by such person except in connection with any matter relating to the affairs of thePartnership.

Section 3.8 Transfer of Units

Subject to Section 5.2, Class A Units are not transferable by the Managing Partnerwithout the prior approval of (a) the Corporation and (b) the Ordinary Partners by SpecialResolution, provided that such Units may be transferred to an Affiliate of Sprott Inc.

Class B Units are not transferable by an Ordinary Partner without the prior writtenconsent of the Managing Partner, provided that such Units may be transferred to an Affiliate ofan Ordinary Partner subject to such transferee providing the representations and warranties setout in Section 2.5.

Section 3.9 Successors in Interest of Ordinary Partners

The Managing Partner shall cause to be recorded in the Register as the holder of suchUnits, the name of any person becoming entitled to any Units as a result of a transfer made inaccordance with Section 3.8 or as a consequence of the death or insolvency of any OrdinaryPartner, or otherwise by operation of law, upon:

(a) production of proper evidence of such entitlement and such other evidence as maybe required by law and upon compliance with the requirements of the ManagingPartner; and

(b) delivery of a form of transfer acceptable to the Managing Partner duly completedand properly executed.

ARTICLE 4PARTNERSHIP CAPITAL

Section 4.1 Partnership Capital

Acting reasonably, the Managing Partner is authorized and directed to do all things whichit deems to be necessary, convenient, appropriate or advisable in connection with the terms ofany subscription for Units. Notwithstanding the foregoing, at no time when any Unit isoutstanding shall Units be issued for consideration other than $100 per Unit or such otheramount as the Managing Partner may determine from time to time acting reasonably, upon priornotice to, and in consultation with, the Ordinary Partners.

SRC and SRC Subco each initially subscribed for and purchased one (1) Class B Unit for$100 paid in cash per Class B Unit (each, an “Original Capital Contribution”).

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Following the Original Capital Contribution, SRC subscribed for and purchased anadditional 4.4 million Class B Units by way of a contribution of property in an amount equal tothe fair market value of such property. Such additional number of Class B Units subscribed forby SRC shall be subject to adjustment in the manner described in section 2.4 of the AssetTransfer Agreement dated October 1, 2011.

Each of the Ordinary Partners may subsequently, from time to time, subscribe for andpurchase additional Class B Units (each such additional capital contribution following theOriginal Capital Contribution, a “Subsequent Capital Contribution”).

Following the additional subscription and purchase of 4.4 million Class B Units by SRC,the Managing Partner subscribed for and purchased ten (10) Class A Units for $100 paid in cashper Class A Unit.

Section 4.2 No Additional Contribution by Managing Partner

On the issuance of additional Class B Units, the Managing Partner shall not be requiredto contribute any further Capital to the Partnership.

Section 4.3 Allocations of Net Profits and Losses for Accounting Purposes

(a) At the end of each fiscal year of the Partnership, any Net Profits of the Partnershipfor such fiscal year shall be allocated to the Managing Partner and to the OrdinaryPartners in the proportion of the distributions set out in Section 8.1(a) and Section8.1(b). All allocations to the Ordinary Partners shall be made to each OrdinaryPartner pro rata based on the number of Class B Units held by such OrdinaryPartner.

(b) At the end of each fiscal year of the Partnership, any Net Losses of thePartnership for such fiscal year shall be allocated to each Ordinary Partner prorata based on the number of Class B Units held by such Ordinary Partner.

Section 4.4 Capital Account

An individual Capital Account shall be established and maintained in the records of thePartnership for each Ordinary Partner.

The Capital Account of each Ordinary Partner shall be credited with the amount of theOriginal Capital Contribution and any Subsequent Capital Contribution such Ordinary Partnerhas contributed to the Partnership.

The Capital Account of each Ordinary Partner shall be debited for the amount of theOriginal Capital Contribution and any Subsequent Capital Contribution returned to the OrdinaryPartner by the Partnership.

The Ordinary Partners shall not have the right to withdraw or to make any demand forwithdrawal of any amount of income or capital from the Partnership or to receive any allocationor distribution from the Partnership except as expressly provided in this Agreement. Except as

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may be expressly provided in this Agreement, an Ordinary Partner shall not be entitled to anyinterest on its Capital Account and shall not have the right to demand the return of all or any partof the amount standing to its credit in its Capital Account in the Partnership.

Section 4.5 Return of Capital

Subject to the provisions of this Agreement, the Managing Partner shall, in consultationwith the directors of SRC and the Corporation, determine when capital should, in whole or inpart, be returned to the Ordinary Partners. If the Ordinary Partners receive any return of capitalpursuant to this Section 4.5, they shall be liable to the Partnership for any sum (not in excess ofsuch amount of capital returned) necessary to discharge debts and liabilities of the Partnership tocreditors who extended credit or whose claims otherwise arose prior to such return of capital.

ARTICLE 5MANAGEMENT OF PARTNERSHIP

Section 5.1 Management of Partnership

Subject to the provisions of this Agreement and the Authority Limits in effect from timeto time, the Managing Partner shall have power and authority to transact the business of thePartnership and to deal with and in the Partnership assets for the use and benefit of thePartnership. For these purposes, subject to any provisions of this Agreement to the contrary, andin accordance with the standard of care set forth in Section 5.13, the Managing Partner shall havepower and authority to manage and carry on the Partnership Business and to do any and all actsand things required in connection therewith and incidental thereto and to execute all documentsin respect thereof required to be signed by the Partnership. The Managing Partner shall be incharge of the Partnership, the Partnership Business and assets in all respects and in all matters,and, shall have such power and authority as may be necessary to carry out its rights, duties andobligations as provided in this Agreement. No person dealing with the Partnership is required todetermine or inquire into the authority or power of the Managing Partner to take any action ormake any decision on behalf of and in the name of the Partnership.

Section 5.2 Assignment of Rights of Managing Partner, Etc.

(a) Assignment of Rights of Managing Partner. The Managing Partner shall not sell,assign, encumber, transfer or otherwise dispose of its Class A Units except withthe prior written consent of the Ordinary Partners (and, where such OrdinaryPartners include SRC, the prior written consent of the Corporation), unless suchdisposition of interest or rights is in connection with and ancillary to a corporatereorganization provided that the surviving or resulting entity is an Affiliate ofSprott Inc. and is resident in Canada for purposes of the Tax Act or, where suchAffiliate is a partnership, is a “Canadian partnership” for purposes of the Tax Act.The Managing Partner shall promptly notify the Ordinary Partners and theCorporation in writing of any change in the effective control of the ManagingPartner, directly or indirectly.

(b) Deemed Withdrawal of Managing Partner. The Managing Partner shall bedeemed to withdraw as managing partner of the Partnership in the event of

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bankruptcy, dissolution, liquidation or winding-up of the Managing Partner (orthe commencement of any act or proceeding in connection therewith which is notcontested in good faith by the Managing Partner) or by the insolvency of theManaging Partner or by the appointment of a trustee, receiver or receiver andmanager of the affairs of the Managing Partner or if a mortgagee or otherencumbrancer shall take possession of the property or assets of the ManagingPartner or a substantial part thereof or if a levy or execution or any similar processshall be levied or enforced against the property or assets of the Managing Partner.The Managing Partner shall forthwith advise the Ordinary Partners and theCorporation by written notice of the occurrence of any event referred to in thisSection 5.2(b).

(c) Effective Date of Deemed Withdrawal of Managing Partner. In the event of thedeemed withdrawal of the Managing Partner as managing partner of thePartnership by virtue of the provisions of Section 5.2(b) hereof, the effective dateof such deemed withdrawal and the date on which the Managing Partner shallcease to be the managing partner of the Partnership shall be the earlier of theappointment of a new managing partner of the Partnership by the OrdinaryPartners or the expiration of 90 days from the date of the giving of the notice ofthe occurrence of an event referred to in Section 5.2(b) hereof. In any such eventor upon a removal of the Managing Partner under Section 5.3, the ManagingPartner shall be deemed to have surrendered its Class A Units to the Partnershipfor cancellation and the Managing Partner shall cease to be the managing partnerfor all purposes hereof and to have any rights hereunder.

Section 5.3 Removal of Managing Partner

(a) With the prior written consent of the Corporation, the Managing Partner may beremoved as a managing partner of the Partnership at any time by a SpecialResolution of the Ordinary Partners provided that any such Special Resolutionshall also by its provisions appoint a new managing partner of the Partnership toreplace the Managing Partner and to fulfill its obligations hereunder and theremoval of the Managing Partner shall be effective upon the passing of suchSpecial Resolution.

(b) In the event that the Managing Partner ceases to be the Managing Partner for anyreason, the Managing Partner shall cease to have any rights hereunder (other thanto any fees and expenses owed to the Managing Partner as of such date), and shallbe deemed to have resigned and surrendered its Class A Units to the Partnershipfor cancellation, and the Ordinary Partners may appoint forthwith by OrdinaryResolution a new managing partner of the Partnership to replace the ManagingPartner.

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Section 5.4 Resignation of Managing Partner

The Managing Partner may resign as a managing partner of the Partnership by providingthe Ordinary Partners and the Corporation with a minimum of six (6) months written notice,which notice period may be waived by the Ordinary Partners.

Section 5.5 Power and Authority of the Managing Partner

Without limiting the generality of Section 5.1 but subject to Section 5.7 hereof, the powerand authority of the Managing Partner to make all decisions with respect to the business andaffairs of the Partnership and to take such action for and on behalf of the Partnership as it maydeem necessary or appropriate to enable the Partnership to carry out its purposes as set forthherein, shall include, without limitation (except as may be limited by any Special Resolution, andsubject to the Authority Limits and any direction by the directors of the Corporation), inaccordance with the standard of care set forth in Section 5.13, full and complete power andauthority:

(a) to execute any and all documents on behalf of the Partnership, including but notlimited to, agreements, leases, deeds, mortgages, notes, bonds, assignments, stockpowers and other forms of contracts and all amendments, modifications orrescissions of the same;

(b) provide or arrange for all portfolio management required by the Partnershipincluding, without limitation, managing the Partnership Business in a mannerconsistent with the investment objectives, guidelines and restrictions of thePartnership;

(c) enter into agreements and execute any documents required to make investmentsfor the Partnership and perform any and all acts as may be in its judgmentnecessary or appropriate to the management of the investments of the Partnershipsubject to the exceptions in this Agreement;

(d) to prepare, or have prepared, and file all tax returns for the Partnership (but notthe tax returns or other reporting of the individual Partners, or of their respectivesuccessors, heirs, representatives, executors or assigns, in their individualcapacities) and make all appropriate tax elections for the Partnership, includingany special basis adjustments, designations, objections or filings of any kindwhich may be appropriate or desirable under applicable laws pertaining totaxation on the income of the Partnership, provided, however, that the OrdinaryPartner(s) benefiting from such election, if any, shall reimburse the Partnershipfor any additional costs incurred by the Partnership in making the election for andon behalf of the Partnership;

(e) to institute, prosecute, defend and settle any legal, arbitration or administrativeactions or proceedings on behalf of or against the Partnership;

(f) to maintain and operate the assets of the Partnership or any part or parts thereof;

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(g) to employ, terminate the employment of, supervise and compensate such persons,firms or corporations (including legal counsel and accountants or auditors) for andin connection with the Partnership Business and the acquisition, development,improvements, operation, refinancing, sale, exchange or other disposition of anyassets of the Partnership or any interest in any of such assets as the ManagingPartner, in its sole discretion, may deem necessary or desirable;

(h) to pay any debts and other obligations of the Partnership, including amounts dueunder permanent financing of improvements and other loans to the Partnershipand costs of operation and maintenance of the assets of the Partnership;

(i) to pay all Taxes, assessments, rents and other impositions applicable to the assetsof the Partnership and undertake when appropriate any action or proceedingseeking to reduce or waive payment of such Taxes, assessments, rents or otherimpositions;

(j) to deposit all monies received by the Managing Partner for or on behalf of thePartnership as may be designated by the Managing Partner and to disburse andpay all funds on deposit on behalf of the Partnership in such amounts and at suchtimes as the same are required in connection with the ownership, maintenance andoperation of the assets of the Partnership;

(k) to hold the registered title to the assets of the Partnership in its name or the nameunder which it carries on the Partnership Business, for the use and benefit of andin trust for the Partnership;

(l) to perform other obligations provided elsewhere in this Agreement to beperformed by the Managing Partner; and

(m) to do anything (including the investment of Partnership funds) that is infurtherance of or is incidental to the Partnership Business or any obligations of theManaging Partner provided for in this Agreement.

Section 5.6 Evidence of Authority

The signed statement of the Managing Partner, reciting that it has authority to undertakeany act or has the necessary consents of the Ordinary Partners to take any such act, whendelivered to any third party, shall be sufficient evidence that any such third party shall requireconcerning the capacity of such Managing Partner, and any such third party shall be entitled torely upon such statement and shall not be required to inquire further as to any of the factscontained in such statement, said facts being deemed to be true insofar as such third party isconcerned. The Managing Partner, by its signature alone, may sign any instrument and bind thePartnership and the Partnership property.

Section 5.7 Limitations on Powers and Authority of Managing Partner

(a) Notwithstanding the powers of the Managing Partner set forth in this Agreement,the Managing Partner shall not have the right or power, without the prior written

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consent of the Ordinary Partners and, unless otherwise provided in the AuthorityLimits, the Corporation, to do any of the following:

(i) do any act in contravention of this Agreement;

(ii) do any act which would make it impossible to carry on the PartnershipBusiness;

(iii) encumber assets of the Partnership as security for, or otherwise guaranteethe repayment of, the indebtedness of persons, firms or entities other thanthe Partnership, except for Partnership purposes and in the best interests ofthe Partnership;

(iv) consent to or cause a judgment against the Partnership; and

(v) do any act set out in Section 10.3.

(b) The Managing Partner shall only have the right or power to invest or divestPartnership funds, or otherwise provide financing, to any person, firm or entity, orpurchase or divest of assets, as have been approved by a Special Resolution of theOrdinary Partners and by the directors of the Corporation or otherwise ascontemplated under the Authority Limits and such approval has beencommunicated in writing to the Managing Partner;

(c) Unless the directors of the Corporation otherwise permit (which permission shallnot be unreasonably withheld), the Managing Partner shall ensure that all suitableopportunities to make private equity investments in the natural resource sectorcoming to the attention of the Managing Partner or its Affiliates shall first beoffered to the Partnership. The Managing Partner shall ensure that the personnelengaged pursuant to Section 5.9(a) shall devote such amount of their businesstime and attention to the business and affairs of the Partnership and theCorporation as is necessary to perform all of its obligations hereunder and underthe Corporation MSA.

Section 5.8 Representations and Warranties of Managing Partner

The Managing Partner represents and warrants to the Ordinary Partners that, during theterm of the Partnership, the Managing Partner:

(a) is and will continue to be a partnership formed under the Partnerships Act(Ontario), as amended from time to time;

(b) will be duly registered and qualified to carry on business and will have allrequisite authority, licenses and permits to carry on the Partnership Business;

(c) has the legal capacity or competence to enter into and be bound by thisAgreement, and to take all actions required pursuant hereto, and further that all

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necessary approvals of its partners have been given in connection with theentering into this Agreement;

(d) will maintain its existence as long as it is the managing partner of the Partnership;

(e) will devote as much time to the conduct of the business and affairs of thePartnership as is reasonably required for the prudent management of the businessand affairs of the Partnership;

(f) is a “Canadian partnership” for purposes of the Tax Act; and

(g) is not, nor is an interest in the Managing Partner, a “tax shelter investment” forpurposes of the Tax Act.

The Managing Partner further represents and warrants to the Ordinary Partners that:

(h) this Agreement has been duly executed and delivered by the Managing Partnerand constitutes a legal, valid and binding obligation of the Managing Partnerenforceable against it in accordance with its terms, subject to usual exceptionsregarding equitable remedies and creditors’ rights generally; and

(i) the execution, delivery and performance by the Managing Partner of thisAgreement do not or would not with the passage of time or the giving of notice,or both, constitute or result in a violation or a breach of or a default under itsconstating documents, by-laws or any agreement to which it is or will be a partyor by which it is or will be bound or any law or regulation applicable to it.

The Managing Partner agrees and covenants that (i) it will not cease to be a “Canadianpartnership” for purposes of the Tax Act and will not take any action or omit to take any actionthat would cause it or the Partnership to cease to be a “Canadian partnership” for purposes of theTax Act; and (ii) it will not take any action or omit to take any action if such action or omissionwould cause it or the Partnership to be a “tax shelter investment” for purposes of the Tax Act.The Managing Partner shall not transfer its interest in the Partnership (i) to any person that is a“non-resident” within the meaning of the Tax Act or, in the case of a partnership, a partnershipthat is not a “Canadian partnership” for the purposes of the Tax Act or (ii) to any person orpartnership that is itself, or an interest in which person or partnership is, a ‘tax shelterinvestment” for the purposes of the Tax Act.

Section 5.9 Specific Duties

Without limiting any other duties or responsibilities imposed upon the Managing Partnerin this Agreement or usually performed by a managing partner, the Managing Partner shallperform, or cause to be performed, the following specific services:

(a) engage personnel to provide the overall management, financial and businesssupervision of the Partnership Business for the Partnership;

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(b) establish books of account, records and payment procedures including the CapitalAccounts as hereinbefore referred to;

(c) provide bookkeeping and other related services to the Partnership;

(d) make distributions in accordance with this Agreement;

(e) receive all funds paid to the Partnership and make all necessary payments andexpenditures required to entitle the Partnership to discharge its obligations inaccordance with the terms thereof;

(f) provide such reports to the directors of each of SRC and the Corporation and tothe Ordinary Partners as is reasonably requested by the directors of SRC and/orthe Corporation from time to time or is required by law; and

(g) perform all duties imposed by this Agreement on the Managing Partner in aprompt and diligent manner.

Section 5.10 Compensation of Ordinary Partners

The Ordinary Partners shall not receive any compensation from the Partnership.

Section 5.11 Bank Accounts

The cash funds of the Partnership shall be deposited in bank accounts in the name of thePartnership at such Canadian chartered banks as the Managing Partner shall determine.Disbursements therefrom shall be made by the Managing Partner in conformity with thisAgreement. The funds of the Partnership shall not be co-mingled with the funds of any otherperson including with those of the Managing Partner.

Section 5.12 Insurance

The Managing Partner shall ensure that the Partnership shall at all times maintaincomprehensive insurance coverage, including fire and third party property and personal liabilityand business interruption coverage, in such amounts as may be determined appropriate andadequate by the Managing Partner for the protection of the Partnership and its assets.

Section 5.13 Standard of Care of Managing Partner

The Managing Partner shall, and shall ensure that its personnel engaged pursuant toSection 5.9(a) shall, exercise the powers granted and discharge its, and their duties hereunderhonestly, in good faith and in the best interests of the Partnership and, in connection therewith,shall exercise the degree of care, diligence and skill that a reasonably prudent managing partner,or person, would exercise in comparable circumstances.

If the Managing Partner and any personnel engaged pursuant to Section 5.9(a) areuncertain as to compliance with the obligations in the preceding paragraph, when any issues areto be decided in respect of which the interests of the Ordinary Partners and those of the

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Managing Partner (or its related parties) may differ materially (including, but not limited to,capital management, investment/divestment decisions, reputational factors and conflict ofinterest areas), the Managing Partner shall, and shall ensure that its personnel engaged pursuantto Section 5.9(a) shall, fully inform the Board of Directors of SRC and the Corporation and theConflicts Resolution Committee of the Board of Directors of the Corporation (and the personnelengaged pursuant to Section 5.9(a) shall at least contemporaneously therewith inform theManaging Partner) and, except where the resolution of such issues has been prescribed bycontract or written policy approved by the independent directors of the Corporation, theManaging Partner shall, and shall ensure that its personnel engaged pursuant to Section 5.9(a)shall, facilitate the exercise of informed and independent judgement by the directors of theCorporation in resolving such issues. The Managing Partner shall provide to SRC and theCorporation within 45 days after the end of the fiscal year of the Partnership a certificate ofcompliance with this Section 5.13 of this Agreement.

ARTICLE 6LIABILITY AND INDEMNIFICATION

Section 6.1 Liability of the Managing Partner

Neither the Managing Partner nor any of its officers, directors, employees, partners,agents or trustees shall be liable to the Partnership or any Ordinary Partner thereof for any loss ordamage suffered by the Partnership or any Ordinary Partner thereof, as the case may be, (i)which arose out of any action or inaction of the Managing Partner if such course of conduct didnot constitute bad faith, gross negligence, wilful misconduct, wilful neglect or default or amaterial failure to comply with applicable laws, regulations or restrictions or the provisions setforth in this Agreement or wilful failure to comply with express written directions given by thedirectors of the Corporation, by Ordinary Resolution or with the Authority Limits, or (ii) wherethe Managing Partner, in good faith, and absent fraud of its personnel, determined that suchcourse of conduct was in the best interests of the Partnership.

The Ordinary Partners acknowledge and agree that neither the Managing Partner nor anyof its officers, directors, employees, partners, agents or trustees shall be responsible for any lossof opportunity whereby the value of any of the property or assets of the Partnership could havebeen increased nor shall any of them be responsible for any decline in value of the property orassets of the Partnership where (i) such decline is not the result of the Managing Partner’s badfaith, gross negligence, wilful misconduct, wilful neglect or default or a material failure tocomply with applicable laws, regulations or restrictions or the provisions set forth in thisAgreement or (ii) the Managing Partner, in good faith, and absent fraud of its personnel,determined that such course of conduct was in the best interests of the Partnership.

The Managing Partner may rely and act upon any statement, report or opinion preparedby or any advice received from auditors, solicitors, notaries or other professional advisors of thePartnership and shall not be responsible or held liable for any loss or damage resulting fromrelying or acting thereon if the advice was within the area of professional competence of theperson from whom it was received and the Managing Partner acted reasonably in relyingthereon, provided any such person was selected and engaged by the Managing Partner with the

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care, diligence and skill that a reasonably prudent managing partner would exercise incomparable circumstances.

Section 6.2 Liability of the Ordinary Partners

Except as may be otherwise expressly provided by applicable law, the Ordinary Partnersshall not be liable or accountable, in damages or otherwise, to the Partnership.

Section 6.3 Indemnification of the Managing Partner

The Partnership shall indemnify and hold harmless the Managing Partner and itsdirectors, officers, agents and employees from and against any and all expenses, losses, damages,liabilities, demands, charges, costs and claims of any kind or nature whatsoever (including legalfees, judgments and amounts paid in settlement, provided that the Partnership has approved suchsettlement) in respect of the acts, omissions, transactions, duties, obligations or responsibilities ofthe Managing Partner as the managing partner to the Partnership and from a breach by thePartnership of its obligations under Section 14.7, save and except where (a) such expenses,losses, damages, liabilities, demands, charges, costs or claims are the result of the bad faith,gross negligence, wilful misconduct, wilful neglect or default or a material failure to complywith applicable laws, regulations or restrictions and the provisions set forth in this Agreement orwilful failure to comply with express written directions given by either the independent directorsof the Corporation, by Ordinary Resolution or with the Authority Limits and (ii) the ManagingPartner did not, in good faith, and absent fraud of its personnel, determine such course ofconduct was in the best interests of the Partnership.

Section 6.4 Indemnification of the Partnership

The Managing Partner shall indemnify and hold harmless the Partnership from any costs,damages, liabilities or expenses suffered or incurred by the Partnership as a result of theManaging Partner’s bad faith, gross negligence, wilful misconduct, wilful neglect or default or amaterial failure to comply with applicable laws, regulations or restrictions or the provisions setforth in this Agreement or wilful failure to comply with express written directions given byeither the directors of the Corporation, or by Ordinary Resolution, unless the Managing Partner,in good faith, and absent fraud of its personnel, determined that such course of conduct was inthe best interest of the Partnership.

ARTICLE 7ACCOUNTING

Section 7.1 Books of Account

The Partnership books of account shall be maintained at the head office of the Partnershipor at such other locations and by such person or persons as may be designated by the ManagingPartner and permitted by any applicable law. The Corporation and each Ordinary Partner or itsauditor or any regulatory body having jurisdiction over the Corporation and the OrdinaryPartners shall have, during reasonable business hours and upon reasonable notice, access to thebooks of the Partnership and in addition, at his or her expense, shall have the right to copy suchbooks and to require, at any time, an audit of the Partnership’s books of account. The Managing

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Partner, at the expense of the Partnership, shall cause to be prepared, and distributed to theCorporation and each Ordinary Partner, the following:

(a) within 90 days of the end of each fiscal year of the Partnership, annual auditedfinancial statements, including a balance sheet, statement of income, statement ofchanges in financial position, statement of comprehensive income, statement ofcash flow and statement of changes in capital as of the close of the Partnership’sfiscal year, with comparative financial statements for the immediately precedingfiscal year;

(b) the annual income tax returns of the Partnership;

(c) a report on the allocations and distributions made by the Partnership during suchfiscal year pursuant to the terms of this Agreement; and

(d) such other information as is necessary to enable the Ordinary Partner to fileincome tax returns with respect to such Ordinary Partner’s income from thePartnership in respect of such fiscal year and is required or desirable to enable theOrdinary Partner to fulfill its continuous disclosure and other statutorycompliance obligations under applicable securities, corporate and other laws andunder stock exchange requirements.

Section 7.2 Additional Financial Information

Within 45 days after the end of each of the first three quarters of each fiscal year of thePartnership (or such shorter period of time as each Ordinary Partner may, pursuant to applicablesecurities laws, be required to file its quarterly financial statements with securities regulatoryauthorities or deliver its quarterly financial statements to holders of its outstanding securities),the Managing Partner will forward to each Ordinary Partner shown on the Register as anOrdinary Partner during such quarter and the Corporation the unaudited interim consolidatedfinancial statements of the Partnership for such quarter, which have been reviewed by the auditorfor the Partnership, containing statements of operations for the relevant quarter and year to dateperiod and such other information as is, in the reasonable opinion of the Managing Partner,material to the Partnership Business or is requested by the Ordinary Partner or by theCorporation (acting reasonably) and is required or desirable to assist such Ordinary Partner or theCorporation in fulfilling its continuous disclosure obligations under applicable securities lawsand stock exchange requirements.

Section 7.3 Method of Accounting

The Partnership books of account shall be maintained and its net income and net losscomputed in accordance with generally accepted accounting principles consistently applied fromyear to year except as otherwise required or permitted under applicable securities laws. However,the Managing Partner shall have the right, for income tax purposes to adopt any different methodof accounting, to adopt different treatment of particular items and to make and revoke suchelections on behalf of the Partnership and the Ordinary Partners under the Tax Act as theManaging Partner may deem, acting reasonably appropriate and in the best interests of theOrdinary Partners, not inconsistent with this Agreement.

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Section 7.4 Appointment of Accountants

The Managing Partner shall, on behalf of the Partnership, retain Accountants to audit andreport on the financial statements of the Partnership as at the end of each fiscal year of thePartnership. The Ordinary Partners, by Ordinary Resolution, may, at the Partnership’s expense,engage independent valuators to perform a valuation of the assets and portfolio investments ofthe Partnership.

Section 7.5 Preparation of Tax Information

The Managing Partner shall prepare and file all information returns as required by theTax Act and provide to the Partners all such materials in such form as will enable the Partners tofile information returns as required by that Act.

ARTICLE 8DISTRIBUTIONS AND ALLOCATIONS TO PARTNERS

Section 8.1 Distributions

The Managing Partner shall distribute to the Ordinary Partners, on an annual basis, out ofthe Net Profits of the Partnership for the fiscal year an amount equal to the Net Profits of thePartnership for such fiscal year.

Section 8.2 Timing of Distributions

The Managing Partner shall make the distributions referenced to in Section 8.1 withinfive (5) Business Days following the completion of the financial statements of the Partnership forthe relevant fiscal year of the Partnership to which the distribution relates, except that if thePartnership does not have sufficient cash on hand in the opinion of the Managing Partnerconsidered necessary to meet anticipated future operating deficiencies and future expenses andliabilities, the Managing Partner shall distribute only such cash on hand that is available fordistribution and the Partnership shall be indebted to the Ordinary Partner in an amount equal tothe unpaid portion of such distribution and shall repay such indebtedness as cash becomesavailable to it for distribution.

Section 8.3 Determination and Allocation of Taxable Income and Loss

The Managing Partner shall determine the Partnership’s taxable income or loss in eachfiscal year after claiming the maximum amount of any deductions, credits and other amountsavailable to it, including capital cost allowance for that fiscal year which is permitted under theTax Act. Taxable income and losses shall be allocated in respect of each fiscal year of thePartnership as follows:

(a) all taxable income, to the extent possible, will be allocated to each OrdinaryPartner pro rata based on the number of Class B Units held by the OrdinaryPartners; and

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(b) all losses shall be allocated to each Ordinary Partner pro rata based on thenumber of Class B Units held by the Ordinary Partners.

ARTICLE 9ADMISSION AND WITHDRAWAL OF ORDINARY PARTNERS

Section 9.1 No Admission of New Ordinary Partners

No new Ordinary Partners may be admitted to the Partnership, except as provided inSection 10.9.

Section 9.2 Assignment of Class B Units

The Ordinary Partners hereby covenant and agree that they will not sell, assign, transfer,mortgage, pledge, encumber, hypothecate or otherwise dispose of all or any part of their interestsin the Partnership to any person, firm, corporation or other entity except as agreed to by theOrdinary Partners subject to the exception set out in Section 3.8.

ARTICLE 10MEETINGS

Section 10.1 Special Meetings of Ordinary Partners

A special meeting of the Ordinary Partners may be called at any time by the ManagingPartner and shall be called by the Managing Partner upon written request signed by at least oneOrdinary Partner entitled to vote. Any such request shall specify the purpose for which themeeting is to be held and any Resolutions which Ordinary Partners may vote on pursuant to thisAgreement that are to be voted on at the meeting. If the Managing Partner fails to call a specialmeeting within five (5) days after the receipt of such request, any of the requesting OrdinaryPartners may call such meeting and the notice calling such meeting shall be signed by suchrequesting Ordinary Partner. Any meeting called by such requesting Ordinary Partner shall beconducted in accordance with the provisions of this Agreement. Special meetings shall be held inthe City of Toronto, Ontario or in such other city as the Managing Partner may reasonablydetermine.

Section 10.2 Notice of Meetings and Quorum

Notice of any meeting of the Ordinary Partners shall be given to each Ordinary Partnerentitled to vote at such meeting at its address shown in the Register, to the Managing Partner andto the Accountant. Any such notice shall be mailed by prepaid mail, personally delivered, ordelivered by facsimile transmission at least ten (10) days and not more than thirty (30) days priorto the meeting and shall state the time and place where such meeting is to be held. The noticeshall specify, in general terms, the nature of all business to be transacted thereat in sufficientdetail to enable the Ordinary Partners to make a reasoned judgement concerning each matter tobe considered at the meeting. A copy of the text of any proposed Special Resolution shallaccompany the mailing of the notice. Accidental failure to give notice to an Ordinary Partnershall not invalidate a meeting, any adjournment thereof or any proceeding thereat. A quorum fora meeting of Ordinary Partners shall consist of Ordinary Partners present in person or

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represented by proxy holding in total not less than ten percent (10%) of the number ofoutstanding Units, except for purposes of selecting a Chairman in respect of which a quorumshall be those Ordinary Partners present or represented by proxy. If a quorum is not present onthe date for which the meeting is called within one-half hour of the time fixed for the holding ofsuch meeting, the meeting shall be adjourned to be held on a date fixed by the Chairman, whichdate shall be not later than ten (10) days thereafter, at which adjourned meeting one or moreOrdinary Partners entitled to vote at the meeting and present in person or represented by proxyshall constitute a quorum. Notice for adjourned meetings shall be given not less than five (5)days in advance and otherwise in accordance with the provisions for notice contained in thisSection 10.2 except that such notice need not specify the nature of business to be transacted. Anybusiness may be transacted at the adjourned meeting which might properly have been transactedat the original meeting.

Section 10.3 Powers Exercisable by Special Resolution

The Ordinary Partners may by Special Resolution:

(a) amend this Agreement pursuant to Section 13.2;

(b) approve or disapprove the sale or exchange of all or substantially all of theproperty and assets of the Partnership;

(c) amend or rescind any Special Resolution;

(d) replace the Accountant;

(e) change the nature of the Partnership Business;

(f) authorize any borrowing of the Partnership whether secured or unsecured;

(g) require the Ordinary Partners to make Subsequent Capital Contributions;

(h) require the Managing Partner on behalf of the Partnership to enforce anyobligation or covenant against the Ordinary Partner; or

(i) remove the Managing Partner in accordance with Section 5.3 or accept theresignation of the Managing Partner in accordance with Section 5.4.

Section 10.4 Voting

Except as otherwise provided for herein, at all meetings of Ordinary Partners eachOrdinary Partner or his duly appointed proxy holder shall be entitled to one vote for each Class BUnit recorded in its name on the Register on the date of the meeting. With the exception ofSpecial Resolutions, each Resolution to be voted on at a meeting of Ordinary Partners shall bedecided by a show of hands unless a poll is demanded by any person entitled to vote at themeeting in which case a poll shall be taken by the Chairman of the meeting. The Chairman of themeeting shall not have a casting vote on any Resolution. A poll shall be taken on every SpecialResolution to be voted on at any meeting of the Ordinary Partners.

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With respect to the voting on any Resolution:

(a) for which no poll is required or requested, a declaration made by the Chairman ofthe meeting as to the results of the voting on any such Resolution shall beconclusive evidence thereof, and

(b) for which a poll is required or requested, the result of the poll shall be deemed tobe the decision of the meeting on such Resolution.

Section 10.5 Proxies

Any Ordinary Partner entitled to vote may vote in person or by proxy at any meeting ofOrdinary Partners provided that a proxy shall have been received by the Managing Partner forverification two days prior to the meeting or on the date of the meeting filed with the secretary ofthe meeting. A person appointed as proxy holder need not be an Ordinary Partner. Every proxypurporting to be executed by or on behalf of an Ordinary Partner shall be valid unless challengedby any Ordinary Partner or holder of another proxy prior to or at the time of its exercise, and theburden of proving an invalidity shall rest on the person so challenging. Any challenge to thevalidity of any proxy shall be made in such form and shall contain such material as the Chairmanof the meeting shall reasonably require and all the decisions concerning the validity of proxiesshall be made by the Chairman of the meeting. Each proxy is effective until notice in writing,including a subsequent form of proxy, revoking such proxy is delivered to (i) the ManagingPartner at any time up to two days prior to the meeting or (ii) the Chairman of the meeting towhich the proxy relates on the date of such meeting.

Section 10.6 Conduct of Meetings

The Chairman of any meeting of Ordinary Partners shall be an officer or director of theManaging Partner or an individual nominated in writing by the Managing Partner, failing whichthe Chairman shall be any other person approved by Ordinary Resolution at the outset of themeeting. The Managing Partner shall have the right to authorize the presence of any person atany meeting of Ordinary Partners regardless of whether such person is a Partner. With theapproval of the Managing Partner, such persons shall be entitled to address the meeting. Anylegal advisor of a Partner, any other person authorized in writing by a Partner and theAccountants and/or former Accountants may attend any meeting of Ordinary Partners and shallbe entitled to address the meeting and, except in the case of the Accountants or formerAccountants, to move resolutions thereat on behalf of a Partner. Officers and directors of theManaging Partner shall have the right to attend in their capacity as such at any meeting ofOrdinary Partners and shall be entitled to address the meeting on the matters properly before it,but the Managing Partner in its capacity as a managing partner shall not have a vote at any suchmeeting.

Section 10.7 Resolutions Binding

Any Resolution passed in accordance with this Agreement at a meeting or in writing shallbe binding on all Ordinary Partners and their respective heirs, executors, administrators, otherlegal representatives, successors and assigns, whether or not such Ordinary Partners were present

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or represented by proxy at the meeting at which such Resolution was passed, voted against suchResolution or elected not to sign a Resolution in writing.

Minutes of all Resolutions passed and proceedings taken at every meeting of OrdinaryPartners shall be made and recorded in a minute book by the Managing Partner. Minutes, whensigned by the Chairman of the meeting of Ordinary Partners, shall be prima facie evidence of thematters therein stated and, until the contrary is proved, every such meeting in respect of whichminutes shall have been made shall be taken to have been duly held and convened, and allResolutions passed or proceedings taken as referred to in the minutes shall be deemed to havebeen duly passed and taken in accordance with this Agreement. The minute book shall beavailable for inspection by the Ordinary Partners at all meetings of the Ordinary Partners and atall other reasonable times during normal business hours at the principal office of the Partnership.

Section 10.8 Rules of Order

The Managing Partner shall be responsible for all rules of order governing conduct ofmeetings and shall keep, or cause to be kept, an accurate record of all matters discussed and allaction taken at the meetings; records shall be available for inspection by any Ordinary Partner atall reasonable times.

Section 10.9 Admission of Additional Ordinary Partners

The Ordinary Partners may, by Special Resolution, amend this Agreement to admitadditional persons as Ordinary Partners of the Partnership.

ARTICLE 11DEFAULT

Section 11.1 Deemed Default

Any one or more of the following acts or omissions shall be deemed a default by anyOrdinary Partner under this Agreement:

(a) attempted dissolution of the Partnership by the Ordinary Partner, unless the sameis pursuant to, or is not inconsistent with, the provisions contained in thisAgreement;

(b) the commencement of proceedings in bankruptcy or reorganization under anybankruptcy or insolvency laws against or by the Ordinary Partner, which shall nothave been vacated within 60 days;

(c) the Ordinary Partner making any assignment for the benefit of creditors;

(d) the Ordinary Partner’s failure to perform any material obligation or act requiredhereunder, which shall be necessary for carrying out the purposes of thePartnership; and

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(e) the Ordinary Partner’s material violation or breach of any of the terms orprovisions of this Agreement including, without limitation, any assignment ortransfer of any Unit in violation of this Agreement.

Section 11.2 Notice of Default and Consequences

The Ordinary Partner shall promptly give the Managing Partner notice of any defaultunder this Agreement by such Ordinary Partner. If such default is not cured by the OrdinaryPartner within 30 days of receipt of such notice from the Ordinary Partner, the Managing Partnermay in its discretion dissolve the Partnership.

ARTICLE 12LIQUIDATION AND DISSOLUTION OF PARTNERSHIP

Section 12.1 Liquidation or Dissolution of Partnership

Subject to Section 12.2, upon the happening of any of the events specified in Section 2.8hereof, the Managing Partner shall immediately commence to wind up the affairs of thePartnership and shall liquidate the assets of the Partnership as promptly as possible, unless theManaging Partner shall determine that an immediate sale of the Partnership assets would causeundue loss to the Partnership in which event, or if the Ordinary Partners by Special Resolutionshall so determine, (i) the liquidation may be deferred for a reasonable time and/or (ii) all or partof the Partnership assets may be distributed in kind. The Ordinary Partners shall continue to havethe right to receive the distributions in accordance with Article 8 during the period of liquidationin the same proportions as before dissolution. The proceeds from liquidation of the Partnership,including repayment of any debts of the Ordinary Partners to the Partnership, shall be applied inthe order of priority as follows:

(a) to payment of the expenses of liquidation of the Partnership;

(b) to payment of debts of the Partnership;

(c) to the establishment of any reserves reasonably necessary for any contingent orunforeseen liabilities or obligations of the Partnership. Such reserves establishedhereunder shall be held for the purpose of paying any such contingent orunforeseen liability or obligations and, at the expiration of such period as theManaging Partner reasonably deems advisable, of distributing the balance of suchreserves in the manner provided hereinafter in this Section 12.1; and

(d) the balance, if any, shall be divided among the Partners as to 0.00001% to theManaging Partner and as to 99.99999% to the Ordinary Partners.

Any and all assets owned by the Partnership may be transferred to the Ordinary Partnersat no cost upon the passing of a Special Resolution to that effect. Acting reasonably, theManaging Partner will transfer employees directly employed by the Partnership to the OrdinaryPartners or an entity directed by the Ordinary Partners.

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Section 12.2 Right to Acquire Managing Partner Units

Upon the happening of any of the events specified in Section 2.8 hereof, any one or moreof the Ordinary Partners may purchase all but not less than all of the Class A Units held by theManaging Partner for consideration in an amount having a value equal to the amount that theManaging Partner would have received under Section 12.1(d).

ARTICLE 13AMENDMENT OF AGREEMENT

Section 13.1 Amendment by Managing Partner

The Managing Partner may, upon prior notice to but without consent from any OrdinaryPartner and the Corporation, amend this Agreement:

(a) in order to protect the interests of the Ordinary Partners if necessary in the opinionof the Managing Partner acting reasonably and in good faith;

(b) to permit the admission (subject to Section 10.9), substitution, withdrawal orremoval of Ordinary Partners in accordance with this Agreement;

(c) to effect a change that, as determined by the Managing Partner in good faith, isreasonable, necessary or appropriate to enable the Partnership to take advantageof, or not be detrimentally affected by, changes in applicable laws;

(d) to cure any ambiguity or clerical error or to correct, change, amend or supplementany provision contained herein which may be defective or inconsistent with anyother provision in this Agreement; or

(e) to effect a change that, as determined by the Managing Partner acting reasonably,does not adversely affect the interests of any Ordinary Partner.

Within fifteen (15) days following the date any amendment to this Agreement madepursuant to this Section 13.1 becomes effective, the Managing Partner shall provide OrdinaryPartners with full details and a copy of, the amendment.

Section 13.2 Amendment by Ordinary Partners

The Ordinary Partners may, by Special Resolution and with the concurrence of theManaging Partner, amend this Agreement.

Section 13.3 Mutual Review of Agreement

The Managing Partner and the directors of SRC and the Corporation agree to review thisAgreement every 3 years from and after the date hereof in order to ensure that it continues tomeet the reasonable expectations of the parties.

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ARTICLE 14MISCELLANEOUS PROVISIONS

Section 14.1 Notices

Any notice to be given under this Agreement shall be in writing and shall be delivered,mailed by prepaid mail or sent by telecopy addressed to a Partner as its address as shown on theRegister. All such notices shall if delivered, be deemed to have been received upon receipt; iftransmitted by facsimile, e-mail or other similar method of transmission, be deemed to have beengiven on the next Business Day following the day they were sent; and if mailed, be deemed tohave been given on the fifth Business Day following the date they were mailed. In the event ofdisruption of normal postal service, notice shall be made by delivery, facsimile, e-mail or othersimilar transmission only.

Section 14.2 Third Party Beneficiaries

The Managing Partner and SRC intend that the Corporation be a third party beneficiaryof this Agreement and that this Agreement is intended for the benefit of, and shall be enforceableby, the Corporation and its successors, and for such purpose, the Managing Partner and SRC, asapplicable, confirm that each of them is acting as trustee on its behalf, and agrees to enforce suchprovisions on its behalf. the Corporation shall be entitled to rely on the provisions of thisAgreement referring to the Corporation in any proceeding or other forum.

Section 14.3 Binding Effect

This Agreement shall enure to the benefit of and be binding upon the parties hereto, andtheir respective administrators, successors and permitted assigns.

Section 14.4 Governing Law

This Agreement shall be interpreted according to and shall be governed by the laws of theProvince of Ontario. Should any dispute arise in connection with this Agreement, including, butwithout restricting the generality of the foregoing, any question in respect of the interpretation,validity, termination or non-termination of this Agreement, the parties agree to submit to theexclusive jurisdiction of the courts of the Province of Ontario.

Section 14.5 Other Instruments

The parties hereto covenant and agree that they will execute such other and furtherinstruments and documents as are or may become necessary or convenient to effectuate and carryout the Partnership created by this Agreement and the transactions contemplated hereby. Thepartners acknowledge that the parent of the Managing Partner and the Corporation have enteredinto the Corporation MSA and this Agreement shall be read in conjunction with such agreement.

Section 14.6 Legal Construction

In case any one or more of the provisions contained in this Agreement shall for anyreason be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or

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unenforceability shall not affect any other provision hereof and this Agreement shall beconstrued as if such invalid, illegal or unenforceable provision had never been contained herein.Furthermore, in lieu of each such invalid, illegal or unenforceable provisions, there shall beadded automatically as a part of this Agreement, a provision as similar in terms to such invalid,illegal or unenforceable provision as may be possible and be valid, legal and enforceable.

Section 14.7 Counterparts

This Agreement may be executed in any number of counterparts by facsimile or PDFexecution with the same effect as if all parties hereto had signed the same document. ThisAgreement may also be adopted in any subscription form or similar instrument signed by anOrdinary Partner, with the same effect as if such Ordinary Partner had executed a counterpart ofthis Agreement. All counterparts and adopting instruments shall be construed together and shallconstitute one and the same Agreement.

Section 14.8 Taxes

Payments and distributions made pursuant to Section 8.1 shall be made exclusive ofapplicable Taxes (if any).

Section 14.9 Time

Time shall be of the essence of this Agreement.

Section 14.10 Currency

All amounts referred to in this Agreement and all references to “dollars” shall be deemedto be and to refer to Canadian dollars.

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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of thedate first written above.


By:

Name:

Title

SPROTT RESOURCE CONSULTING LIMITED PARTNERSHIP,by its general partner,SPROTT RESOURCE CONSULTING GP INC.

By:

Name:

Title

23036024.1

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APPENDIX D

INTERIM ORDER

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D-8

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APPENDIX E

NOTICE OF APPLICATION

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APPENDIX F

SECTION 190 OF THE CANADA BUSINESS CORPORATIONS ACT

Right to dissent

190. (1) Subject to sections 191 and 241, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under paragraph 192(4)(d) that affects the holder or if the corporation resolves to

(a) amend its articles under section 173 or 174 to add, change or remove any provisions restricting or constraining the issue, transfer or ownership of shares of that class;

(b) amend its articles under section 173 to add, change or remove any restriction on the business or businesses that the corporation may carry on;

(c) amalgamate otherwise than under section 184;

(d) be continued under section 188;

(e) sell, lease or exchange all or substantially all its property under subsection 189(3); or

(f) carry out a going-private transaction or a squeeze-out transaction.

Further right

(2) A holder of shares of any class or series of shares entitled to vote under section 176 may dissent if the corporation resolves to amend its articles in a manner described in that section.

If one class of shares

(2.1) The right to dissent described in subsection (2) applies even if there is only one class of shares.

Payment for shares

(3) In addition to any other right the shareholder may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which the shareholder dissents or an order made under subsection 192(4) becomes effective, to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

No partial dissent

(4) A Dissenting Holder may only claim under this section with respect to all the shares of a class held on behalf of any one beneficial owner and registered in the name of the Dissenting Holder.

Objection

(5) A Dissenting Holder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting and of their right to dissent.

Notice of resolution

(6) The corporation shall, within ten days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but such notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn their objection.

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Demand for payment

(7) A Dissenting Holder shall, within twenty days after receiving a notice under subsection (6) or, if the shareholder does not receive such notice, within twenty days after learning that the resolution has been adopted, send to the corporation a written notice containing

(a) the shareholder’s name and address;

(b) the number and class of shares in respect of which the shareholder dissents; and

(c) a demand for payment of the fair value of such shares.

Share certificate

(8) A Dissenting Holder shall, within thirty days after sending a notice under subsection (7), send the certificates representing the shares in respect of which the shareholder dissents to the corporation or its transfer agent.

Forfeiture

(9) A Dissenting Holder who fails to comply with subsection (8) has no right to make a claim under this section.

Endorsing certificate

(10) A corporation or its transfer agent shall endorse on any share certificate received under subsection (8) a notice that the holder is a Dissenting Holder under this section and shall forthwith return the share certificates to the Dissenting Holder.

Suspension of rights

(11) On sending a notice under subsection (7), a Dissenting Holder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section except where

(a) the shareholder withdraws that notice before the corporation makes an offer under subsection (12),

(b) the corporation fails to make an offer in accordance with subsection (12) and the shareholder withdraws the notice, or

(c) the directors revoke a resolution to amend the articles under subsection 173(2) or 174(5), terminate an amalgamation agreement under subsection 183(6) or an application for continuance under subsection 188(6), or abandon a sale, lease or exchange under subsection 189(9),

in which case the shareholder’s rights are reinstated as of the date the notice was sent.

Offer to pay

(12) A corporation shall, not later than seven days after the later of the day on which the action approved by the resolution is effective or the day the corporation received the notice referred to in subsection (7), send to each Dissenting Holder who has sent such notice

(a) a written offer to pay for their shares in an amount considered by the directors of the corporation to bathe fair value, accompanied by a statement showing how the fair value was determined; or

(b) if subsection (26) applies, a notification that it is unable lawfully to pay Dissenting Holders for their shares.

Same terms

(13) Every offer made under subsection (12) for shares of the same class or series shall be on the same terms.

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Payment

(14) Subject to subsection (26), a corporation shall pay for the shares of a Dissenting Holder within ten days after an offer made under subsection (12) has been accepted, but any such offer lapses if the corporation does not receive an acceptance thereof within thirty days after the offer has been made.

Company may apply to court

(15) Where a corporation fails to make an offer under subsection (12), or if a Dissenting Holder fails to accept an offer, the corporation may, within fifty days after the action approved by the resolution is effective or within such further period as a court may allow, apply to a court to fix a fair value for the shares of any Dissenting Holder.

Shareholder application to court

(16) If a corporation fails to apply to a court under subsection (15), a Dissenting Holder may apply to a court for the same purpose within a further period of twenty days or within such further period as a court may allow.

Venue

(17) An application under subsection (15) or (16) shall be made to a court having jurisdiction in the place where the corporation has its registered office or in the province where the Dissenting Holder resides if the corporation carries on business in that province.

No security for costs

(18) A Dissenting Holder is not required to give security for costs in an application made under subsection (15) or (16).

Parties

(19) On an application to a court under subsection (15) or (16),

(a) all Dissenting Holders whose shares have not been purchased by the corporation shall be joined as parties and are bound by the decision of the court; and

(b) the corporation shall notify each affected Dissenting Holder of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.

Powers of court

(20) On an application to a court under subsection (15) or (16), the court may determine whether any other person is a Dissenting Holder who should be joined as a party, and the court shall then fix a fair value for the shares of all Dissenting Holders.

Appraisers

(21) A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of the Dissenting Holders.

Final order

(22) The final order of a court shall be rendered against the corporation in favour of each Dissenting Holder and for the amount of the shares as fixed by the court.

Interest

(23) A court may in its discretion allow a reasonable rate of interest on the amount payable to each Dissenting Holder from the date the action approved by the resolution is effective until the date of payment.

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Notice that subsection (26) applies

(24) If subsection (26) applies, the corporation shall, within ten days after the pronouncement of an order under subsection (22), notify each Dissenting Holder that it is unable lawfully to pay Dissenting Holders for their shares.

Effect where subsection (26) applies

(25) If subsection (26) applies, a Dissenting Holder, by written notice delivered to the corporation within thirty days after receiving a notice under subsection (24), may

(a) withdraw their notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or

(b) retain a status as a claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its shareholders.

Limitation

(26) A corporation shall not make a payment to a Dissenting Holder under this section if there are reasonable grounds for believing that

(a) the corporation is or would after the payment be unable to pay its liabilities as they become due; or

(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.

R.S., 1985, c. C-44, s. 190; 1994, c. 24, s. 23; 2001, c. 14, ss. 94, 134(F), 135(E).

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November 25, 2016 The Board of Directors of Sprott Resource Corp. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2750 Toronto, Ontario M5J 2J2 Dear Sirs: GMP Securities L.P. (“GMP”) understands that Sprott Resource Corp. (“SRC”) intends to enter into an arrangement agreement (the “Arrangement Agreement”) with Adriana Resources Inc. (“Adriana” ) pursuant to which, among other things, Adriana will acquire all of the issued and outstanding common shares of SRC (“SRC Shares”) in exchange for common shares of Adriana (“Adriana Shares”) by way of a plan of arrangement under the Canada Business Corporations Act (the “Arrangement”). The Arrangement Pursuant to the Arrangement, holders of SRC Shares will receive three Adriana Shares for each SRC Share held (the “Consideration”). Under the terms of the Arrangement Agreement, holders of record of Adriana Shares on the business day immediately prior to completion of the Arrangement will receive 0.25 of a common share purchase warrant (each whole warrant a “Warrant”) for each Adriana Share held. Each Warrant will have a term of five years and an exercise price of $0.333 per Adriana Share. Shareholders of Adriana will be asked to approve a name change to Sprott Resource Holdings Inc.in connection with the Arrangement. The terms of the Arrangement are more fully described in the Arrangement Agreement. The Arrangement is subject to certain conditions, including, without limitation, approval by at least two-thirds of the votes cast by the SRC shareholders present in person or by proxy at a meeting of SRC shareholders; approval by a majority of the votes cast by SRC shareholders, other than SRC shareholders whose votes are required to be excluded for the purposes of minority approval pursuant to Multilateral Instrument 61-101 (“MI 61-101”); and approval by a simple majority of the votes cast in person or by proxy at a meeting of Adriana shareholders. GMP’s Engagement SRC retained GMP to act as its financial advisor in respect of the Arrangement pursuant to an engagement letter (the “Engagement Letter”) dated as of November 25, 2016 to, among other things, deliver, at the request of the Board of Directors of SRC (the “Board”), an opinion (the “Opinion”) as to the fairness of the Consideration to be received by the SRC shareholders, from a financial point of view. The Engagement Letter provides for GMP to receive from SRC, for the services provided thereunder, an opinion fee payable irrespective of whether the Arrangement is completed, in addition to reimbursement of all reasonable legal and out-of-pocket expenses. In addition, GMP and its affiliates and their respective directors, officers, employees, agents and controlling persons are to be indemnified by SRC under certain circumstances from and against certain liabilities arising out of the performance of professional services rendered to SRC. GMP may, in the future, in the ordinary course of business seek to perform financial advisory services or corporate finance services for SRC, Adriana and their associates from time to time. GMP has not been engaged to prepare, and has not prepared, a valuation or appraisal of SRC or Adriana, or any of their respective assets, securities or liabilities (whether on a standalone basis or as a combined entity), and the Opinion should not be construed as such. GMP was similarly not engaged to review any legal, tax or accounting aspects of the Arrangement and accordingly expresses no views

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APPENDIX G

SRC FAIRNESS OPINION

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thereon. We have assumed, with SRC’s agreement, that the Arrangement is not a “related party transaction” nor an “Insider Bid” as defined in MI 61-101 and, accordingly, the Arrangement is not subject to the valuation requirements under MI 61-101. Credentials of GMP GMP is a wholly-owned subsidiary of GMP Capital Inc. which is a publicly traded investment banking firm listed on the Toronto Stock Exchange with offices in Toronto, Calgary and Montreal, Canada; in New York and Dallas, USA and in Beijing and Hong Kong, China. GMP is a leading independent Canadian investment dealer focused on investment banking and institutional equities for corporate clients and institutional investors. As part of our investment banking activities, we are regularly engaged in the valuation of securities in connection with mergers and acquisitions, public offerings and private placements of listed and unlisted securities and regularly engage in market making, underwriting and secondary trading of securities in connection with a variety of transactions. GMP is not in the business of providing auditing services and is not controlled by a financial institution. The Opinion expressed herein represents the opinion of GMP as a firm. The form and content of the Opinion have been approved for release by a group of professionals of GMP, each of whom is experienced in merger, acquisition, divestiture, restructurings, valuation and fairness opinion matters. Independence of GMP None of GMP, its affiliates or associates, is an insider, associate or affiliate (as such terms are defined in the Securities Act (Ontario)) of SRC or Adriana or any of their respective associates or affiliates. GMP has been retained by SRC to, among other things, provide the Opinion to the Board in respect to the Arrangement. In the ordinary course of its business, GMP acts as a trader and dealer, both as principal and agent, in major financial markets and, as such, may have, today, or in the future, positions in the securities of SRC and Adriana and, from time to time, may have executed or may execute transactions on behalf of SRC and Adriana or other clients for which it received or may receive compensation. In addition, as an investment dealer, GMP conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including research with respect to SRC or Adriana and/or their respective affiliates or associates. Scope of Review GMP has acted as financial advisor to SRC in respect of the Arrangement and certain related matters. In this context, and for the purpose of preparing the Opinion, we have analyzed financial, operational and other information relating to SRC and Adriana, including information derived from meetings and discussions with the management of SRC. Except as expressly described herein, GMP has not conducted any independent investigations to verify the accuracy and completeness thereof. In connection with rendering the Opinion, and among other things, we attended to the following:

(a) reviewed the draft Arrangement Agreement between SRC and Adriana dated November 24, 2016;

(b) reviewed and analyzed certain publicly available financial statements, technical reports,

continuous disclosure documents and other information of SRC and Adriana; (c) performed a comparison of the multiples implied under the terms of the Arrangement to

an analysis of recent precedent acquisitions involving companies we deemed relevant and the consideration paid for such companies or the shares thereof;

(d) performed a comparison of the multiples implied under the terms of the Arrangement to

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an analysis of the trading levels of similar companies we deemed relevant under the circumstances;

(e) performed a comparison of the Consideration to be paid by Adriana to the recent trading

levels of securities of SRC; (f) reviewed certain internal financial models and analyses prepared by the management of

SRC relating to its business; (g) reviewed certain analysis prepared by the management of SRC relating to the respective

assets of SRC and Adriana;

(h) reviewed the officer’s certificate addressed to GMP and executed and delivered by each of the Chief Executive Officer and Chief Financial Officer of SRC dated the date hereof setting out representations as to certain factual matters and the completeness and accuracy of the Information (as defined herein) upon which the Opinion is based;

(i) reviewed various equity research reports and industry sources regarding SRC and the

mining industry;

(j) performed a comparison of the relative contribution of assets, cash flow, earnings and net asset value by SRC and Adriana to the relative pro forma ownership of SRC and Adriana if the Arrangement is completed;

(k) reviewed the terms of the proposed private placement financings to be effected between

Adriana and each of Sprott Inc., Term Oil Inc. and Exploration Capital Partners 2008 Limited Partnership; and

(l) considered such other corporate, industry and financial market information, investigations

and analyses as GMP considered necessary or appropriate in the circumstances. In its assessment, GMP looked at several methodologies, analyses and techniques and used the combination of these approaches to determine its opinion on the Arrangement. GMP based the Opinion upon a number of quantitative and qualitative factors as deemed appropriate based on GMP’s experience in rendering such opinions. GMP has not, to the best of its knowledge, been denied access by SRC to any information requested by GMP. GMP did not meet with the auditors of SRC or Adriana and has assumed the accuracy and fair presentation of the audited comparative consolidated financial statements of SRC and Adriana, and the reports of the auditors thereon.

Assumptions and Limitations With SRC’s approval and as provided for in the Engagement Letter, GMP has relied upon and has assumed the completeness, accuracy and fair representation of all budgets, strategic plans, financial forecasts, projections, models, estimates, financial information, business plans, and other information, data and representations obtained by GMP from public sources, including information relating to SRC and Adriana, or provided to GMP by SRC and its affiliates or advisors or otherwise pursuant to GMP’s engagement (collectively, the “Information”) and the Opinion is conditional upon such completeness, accuracy and fairness. Subject to the exercise of professional judgment and except as expressly described herein, GMP has not attempted to verify independently the accuracy or completeness of any such Information. Senior officers of SRC have represented to GMP, in separate certificates delivered as at the date hereof, among other things, that the Information provided to GMP by SRC (verbal or written): (i) in respect of itself is true and correct at the date the Information was provided to GMP and did not, and does not contain a misrepresentation; and (ii) in respect of Adriana, is true and correct as at the date the Information was provided to GMP and that, since the date of the Information, there has been no material

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change, or new material fact, financial or otherwise, in SRC’s or Adriana’s financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects and there has been no new material fact which is of a nature as to render the Information or any part of the Information untrue or misleading in any material respect or which could reasonably be expected to have a material effect on the Opinion. GMP was not engaged to review any legal, regulatory, tax or accounting aspects of the Arrangement and accordingly expresses no view thereon. The Arrangement is subject to a number of conditions outside the control of SRC and Adriana, and GMP has assumed all conditions precedent to the completion of the Arrangement can be satisfied in due course and all consents, agreements, permissions, exemptions or orders of relevant regulatory and governmental authorities will be obtained, without adverse conditions or qualification and that the Arrangement can be completed as currently planned without additional material costs or liabilities to SRC or Adriana. GMP has also assumed that the Arrangement will be completed in accordance with the terms and conditions of the Arrangement Agreement without wavier of, or amendment to, any term or condition that is any way material to our analyses, that the Arrangement will be completed in compliance with applicable laws and that the disclosure relating to SRC, Adriana and the Arrangement in any disclosure documents will be accurate and will comply with the requirements of applicable laws. The Opinion is rendered as of November 25, 2016 on the basis of securities markets, economic, financial and general business conditions prevailing as at the date hereof, and the condition and prospects, financial and otherwise, of SRC and Adriana as they were reflected in the Information and as they were represented to GMP in discussions with the management of SRC. In rendering the Opinion, GMP has assumed that there are no undisclosed material facts relating to SRC or Adriana, or their respective businesses, operations, capital or future prospects. Any changes therein may affect the Opinion and, although GMP reserves the right to change or withdraw the Opinion in such event, we disclaim any obligation to advise any person of any change that may come to our attention or to update the Opinion after today. GMP believes that the analyses and factors considered in arriving at the Opinion must be considered as a whole and is not amenable to partial analyses or summary description and that selecting portions of the analyses and the factors considered, without considering all factors and analyses together, could create a misleading view of the process employed and the conclusions reached. Any attempt to do so could lead to undue emphasis on any particular factor or analysis. In arriving at the Opinion, GMP has not attributed any particular weight to any specific analyses or factor but rather has based the Opinion on a number of qualitative and quantitative factors deemed appropriate by GMP based on GMP’s experience in rendering such opinions. In GMP’s analyses and in connection with the preparation of the Opinion, GMP made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the Arrangement. While in the opinion of GMP the assumptions used in preparing the Opinion are reasonable in the current circumstances, some or all of these assumptions may prove to be incorrect. The Opinion has been provided solely for the use of the Board for the purposes of considering the Arrangement and may not be used or relied upon by any other person or for any other purpose without the express prior written consent of GMP. The Opinion is not to be reproduced, disseminated, quoted from or referred to (in whole or in part) without GMP’s prior written consent.

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Conclusion and Fairness Opinion Based upon and subject to all of the foregoing, GMP is of the opinion that, as of the date hereof, the Consideration to be received by the shareholders of SRC pursuant to the Arrangement is fair, from a financial point of view, to the SRC shareholders. Yours very truly,

GMP SECURITIES L.P.

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Bentall Four 1055 Dunsmuir Street, Suite 2624 P.O. Box 49080 Vancouver, British Columbia V7X 1G4

December 21, 2016

Board of Directors Adriana Resources Inc. 141 Adelaide St. West, Suite 420 Toronto, ON M5H 3L5

To the Board of Directors:

Adriana Resources Inc. AdrianaSprott Resource Corp. ( Sprott entered into an Arrangement Agreement dated November 29, (i) Adriana will acquire all of the issued and outstanding common shares in the capital of Sprott SRC

pursuant to a Plan of Arrangement under the Canada Business Corporations Act, on the basis of 3 shares of Adriana in exchange for each SRC Share (the

; and (ii) each shareholder of record of Adriana at the close of business on the business day prior to the effective date of the Arrangement will receive 0.25 of a warrant for each ADI Share they hold, with each warrant exercisable for the purchase of one ADI Share for a period of five years at an exercise price of $0.333, subject to adjustment and acceleration in certain circumstances and the distribution of such ADI Warrants the

. The Arrangement and the Warrant Distribution are collectively referred Transaction will be described in detail in a management

information circular (the "Circular") to be prepared by Adriana in connection with a Adriana to approve, among other matters, the Arrangement.

Engagement

Pursuant to an Engagement Letter entered into on May 27, 2015 Primary was appointed financial advisor to Adriana. Subsequently, on October 18, 2016 Adriana and Primary amended the previously signed Advisor Agreement for Primary to act as financial advisor to Adriana in connection with the Transaction and to prepare an opinion as to the fairness, from a financial point of view, of the Transaction to the shareholders of Adriana, other than Sprott the proposed terms of the Transaction and the terms of the Arrangement Agreement by Primary, Primary rendered its verbal opinion with effect as of November 21 Opinion Effective to the Board of Directors of Adriana as to the fairness, from a financial point of view, of the Transaction to the shareholders of Adriana (other than Sprott and its affiliates). This Fairness Opinion confirms the verbal opinion rendered by Primary to the Adriana Board of Directors on November 21, 2016.

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APPENDIX H

ADI FAIRNESS OPINION

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The terms of the Advisor Agreement provide that Primary is to be paid a fee for its services in connection with this Fairness Opinion, whether or not the Transaction is completed. Primary is also entitled to a success fee upon successful completion of the Transaction. In addition, Adriana agrees to reimburse Primary for any reasonable out-of-pocket expenses and to indemnify Primary in certain circumstances. Primary consents to the inclusion of the entire Fairness Opinion and a summary thereof in the Circular to be mailed to the shareholders of Adriana and to the filing thereof, as necessary, by Adriana with the securities commission or similar regulatory authorities in each province and territory in Canada.

Credentials of Primary

Primary is a privately-owned exempt mprincipal activities include providing strategic financial advice to exploration and development resource companies as well as financing resource companies requiring development capital for growth. The opinion expressed herein is the opinion of Primary and the form and content herein have been approved for release by a committee of its senior management and legal counsel, each of whom is experienced in merger, acquisition, divestiture and fairness opinion matters.

This Fairness Opinion has been prepared in accordance with the Disclosure Standards for Formal Valuations and Fairness Opinions of Investment Industry Regulatory Organization of Canada ("IIROC") but IIROC has not been involved in the preparation or review of this Fairness Opinion.

Scope of Review

In connection with rendering this Fairness Opinion, Primary has reviewed and relied upon, or carried out, among other things, the following:

a) the Arrangement Agreement;

b) public filings of Sprott, Adriana and other companies available on the System for Electronic Document Analysis and Retrieval and deemed relevant to the Transaction;

c) other public information relating to the business, operations, and financial performance of Sprott, Adriana, and other companies deemed relevant to the Transaction, including published research and industry reports;

d) certain internal information, including capital and operating budgets and projections, and other reports prepared or provided by management of Sprott;

e) discussions with representatives of the Board of Directors and senior management of Adriana, and legal counsel to the Board of Directors;

f) current and historic trading information relating to common shares of Sprott, Adriana, and other companies;

g) information with respect to other transactions considered relevant by Primary; and

h) a certificate of representation as to certain factual matters provided by senior management of Adriana addressed to Primary.

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Primary has not, to the best of its knowledge, been denied access by Sprott to any information requested by Primary.

Assumptions and Limitations

This Fairness Opinion is subject to the assumptions, qualifications and limitations set forth below.

Primary has not been asked to prepare, and has not prepared, a formal valuation or appraisal of any of the assets or securities of Sprott, Adriana, or any of their respective affiliates, and this Fairness Opinion should not be construed as such.

With permission from the Board of Directors, Primary has relied upon, and has assumed the completeness, accuracy and fair presentation of all financial and other information, data, advice, opinions and representations obtained by Primary from public sources, or provided to Primary by Adriana or its affiliates or advisors or otherwise obtained by Primary pursuant to

Adriana, and this Fairness Opinion is conditional upon such completeness, accuracy and fair presentation. Primary has not been requested to, or attempted to, independently verify the accuracy, completeness or fairness of presentation of any such information, data, advice, opinions or representations. Primary has not met separately with the independent auditors of Adriana in connection with preparing this Fairness Opinion and, with permission from the Board of Directors, Primary has assumed the accuracy and presentation of, and relied upon, Adrianaunaudited financial statements and the respective reports of the auditors.

With respect to the historical financial data, operating and financial forecasts and budgets provided to Primary concerning Adriana Primary has assumed that they have been reasonably prepared on bases reflecting the most reasonable assumptions, estimates and judgement of management of Adriana, giving regard to Adriana

Adriana has represented to Primary, in a certificate signed by two of its senior officers and dated the Opinion Effective Date, among other things, that the information, data and other material (financial or otherwise) provided to Primary in writing by or on behalf of Adriana, including the written information concerning Adriana referred to above under the heading

respects as at the date the Information was provided to Primary and that, since the date of the Information, there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of Adriana or any of its affiliates and no material change has occurred in the Information or any part thereof which would have or which would reasonably be expected to have a material effect on this Fairness Opinion.

Primary is not a legal, tax or accounting expert and it expresses no opinion concerning any legal, tax or accounting matters concerning the Transaction or the sufficiency of this letter for the purpose it is intended by Adriana In preparing the Fairness Opinion, we have made several assumptions, including that all of the conditions required to complete the Transaction will be met and that the disclosure provided in the Circular with respect to Adriana, Sprott and their respective subsidiaries and affiliates and the Transaction will be accurate in all material respects.

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This Fairness Opinion is rendered on the basis of: securities markets; economic, general business and financial conditions prevailing as at the Opinion Effective Date; and the conditions and prospects, financial and otherwise, of Adriana as they are reflected in the

management of Adriana and its affiliates and advisors. connection with the preparation of this Fairness Opinion, Primary made numerous assumptions with respect to industry performance, general business, markets and economic conditions and other matters, many of which are beyond the control of any party involved in the Transaction.

This Fairness Opinion is being provided to the Board of Directors and Adriana for their exclusive use only in considering the Transaction and may not be published, disclosed to any other person, relied upon by any other person, or used for any other purpose, without the prior written consent of Primary. This Fairness Opinion is not intended to be and does not constitute a recommendation to any Shareholder to approve the Transaction. Furthermore, this Fairness Opinion is not, and should not be construed as, advice as to the price at which the common shares of Sprott and Adriana (before or after the announcement of the Transaction) may trade at any future date.

Primary believes that its financial analyses must be considered as a whole and that selecting portions of its analyses and the factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying this Fairness Opinion. The preparation of a fairness opinion is complex and is not necessarily susceptible to partial analysis or summary description and any attempt to carry out such could lead to undue emphasis on any particular factor or analysis.

This Fairness Opinion is given as of the Opinion Effective Date and, although Primary reserves the right to change or withdraw this Fairness Opinion, if Primary learns that any of the information that it relied upon in preparing this Fairness Opinion was inaccurate, incomplete or misleading in any material respect, Primary disclaims any obligation to change or withdraw this Fairness Opinion or to advise any person of any change that may come to

Opinion

Based upon and subject to the foregoing and such other matters as Primary considers Opinion Effective Date, that the Transaction is fair,

from a financial point of view, to the shareholders of Adriana (other than Sprott and its affiliates).

Yours truly,

(signed Primary Capital Inc.” PRIMARY CAPITAL INC.

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APPENDIX I

INFORMATION CONCERNING SPROTT RESOURCE CORP.

General

SRC is incorporated under the CBCA and is a reporting issuer or the equivalent in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. The SRC Shares are listed and posted for trading on the TSX under the symbol “SCP”.

SRC’s registered office is 855-2nd Street, S.W., Suite 3500, Calgary, Alberta, T2P 4J8. SRC’s head office is located at Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2750, Toronto, Ontario, M5J 2J2.

For a complete description of SRC’s organizational structure and material subsidiaries, see “Corporate Structure” in the SRC AIF, incorporated by reference into this Circular.

Summary Description of the Business

SRC is a publicly-listed private equity firm focused on the natural resource sector. SRC currently has investments in three industry sectors: (i) energy exploration, production and services; (ii) mining; and (iii) agriculture. SRC invests through SRP, SRC’s only subsidiary. SRP is a partnership formed pursuant to a partnership agreement between SRC and SRCLP, an affiliate of SCLP. Sprott Inc. is the sole limited partner of SCLP.

SRC’s Investment Portfolio consists of unlisted (private) investments and listed (public) investments. As of the date hereof, SRC does not have a majority interest in any exploration property and none of SRC’s investments are subsidiaries of SRC.

For further information regarding SRC and its business activities, see “Company Overview” and “General Development of the Business” in the SRC AIF, which is incorporated herein by reference.

Documents Incorporated by Reference

The following documents of SRC filed with the various securities commissions or similar authorities in the jurisdictions where SRC is a reporting issuer, are specifically incorporated by reference into and form an integral part of the Circular:

(a) the SRC AIF;

(b) the SRC Annual Financial Statements;

(c) the SRC Annual MD&A;

(d) the SRC Interim Financial Statements;

(e) the SRC Interim MD&A;

(f) the SRC 2016 AGM Circular; and

(g) the material change report of SRC dated December 9, 2016 regarding the Arrangement.

Any documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, including any material change reports (except confidential material change reports), interim financial statements, annual financial statements and the auditors’ report thereon, information circulars, annual information forms and business acquisition reports (excluding those portions that are not required pursuant to National Instrument 44-101 - Short Form Prospectus Distributions of the Canadian

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Securities Administrators to be incorporated by reference herein) filed by SRC with the securities commissions or similar authorities in Canada subsequent to the date of the Circular and prior to the completion of the Arrangement will be deemed to be incorporated by reference in the Circular. Copies of the documents incorporated herein by reference are available on SEDAR at www.sedar.com and, upon request by an SRC Shareholder to SRC at Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2750, Toronto, Ontario, M5J 2J2. SRC will promptly provide a copy of any such document without charge.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for the purposes of the Circular to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of the Circular.

Information contained or otherwise accessed through SRC’s website, www.sprottresource.com or any website, other than those documents incorporated by reference herein and filed on the SEDAR website, does not form part of this Circular.

Description of Share Capital

SRC Shares

SRC is authorized to issue an unlimited number of SRC Shares and the following is a summary of the rights, privileges, restrictions and conditions attached to such shares.

As at December 21, 2016, there were 96,672,102 issued and outstanding SRC Shares. To the knowledge of the directors and executive officers of SRC, no persons or companies beneficially own, or control or direct, directly or indirectly, 10% or more of the issued and outstanding SRC Shares. Holders of SRC Shares are entitled to receive notice of and to attend all meetings of SRC Shareholders and to one vote at such meetings for each SRC Share held. The holders of SRC Shares are, at the discretion of the SRC Board and subject to applicable legal restrictions, entitled to receive any dividends declared by the SRC Board on the SRC Shares, and are entitled to share in the remaining property of SRC upon liquidation, dissolution or winding up.

SRC Options

As at December 21, 2016, SRC had outstanding SRC Options exercisable to acquire 160,000 SRC Shares upon the exercise thereof and no SRC Shares were issuable on an “in-the-money” basis upon exercise of the outstanding SRC Options, based on exercise prices ranging from $4.00 to $4.07 per SRC Share.

Director DSUs

As at December 21, 2016, there were 133,680 Director DSUs issued and outstanding. The Director DSUs will remain outstanding following the Effective Date.

Significant Acquisitions

There are no acquisitions that SRC has completed within 75 days prior to the date of the Circular that is a significant acquisition for the purposes of Part 8 of National Instrument 51-102 - Continuous Disclosure Obligations. In addition, there are no proposed acquisitions that have progressed to a state where a reasonable person would believe that the likelihood of the acquisition being completed is high and would be a significant acquisition for the purposes

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of Part 8 of National Instrument 51-102 - Continuous Disclosure Obligations if completed as of the date of the Circular.

Price Range and Trading Volumes

The SRC Shares are listed and posted for trading on the TSX under the symbol “SCP”. The following table sets forth the price ranges and the volume traded of the SRC Shares for the periods indicated as reported by the TSX, as applicable.

SRC Shares (SCP) High ($) Low ($) Close ($) Volume

2016

June 0.62 0.53 0.60 1,444,778 July 0.63 0.52 0.55 2,358,156 August 0.56 0.41 0.43 2,307,947 September 0.50 0.395 0.475 2,579,554 October 0.54 0.47 0.51 2,541,485 November 0.55 0.49 0.53 1,840,344 December (1 – 21) 0.59 0.485 0.52 3,038,791 On November 28, 2016, the last trading day on which the SRC Shares traded prior to announcement of the Arrangement, the closing price of the SRC Shares on the TSX was $0.495. On December 21, 2016, the closing price of the SRC Shares on the TSX was $0.52.

Prior Sales

SRC has not issued or sold any SRC Shares or securities convertible into SRC Shares during the 12 months prior to the date hereof.

Risk Factors

Whether or not the Arrangement is completed, SRC will continue to face many of the risk factors that it currently faces with respect to its business and affairs. These risk factors are further detailed in the filings of SRC filed with the Securities Authorities and available on SEDAR at www.sedar.com.

Interest of Informed Persons in Material Transactions

Except as disclosed in the Circular, SRC is not aware of any material interest, direct or indirect, of any “informed person” (as defined in National Instrument 51-102 – Continuous Disclosure Obligations) of SRC, or any associate or affiliate of such persons, in any transaction since the commencement of SRC’s most recently completed financial year or in any proposed transaction which has materially affected or would materially affect SRC or any of its subsidiaries.

Interests of Experts

PricewaterhouseCoopers LLP, the auditor of SRC, is independent with respect to SRC within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.

Auditor, Transfer Agent and Registrar

The auditor of SRC is PricewaterhouseCoopers LLP, Chartered Professional Accountants, at its office located at PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, M5J 0B2.

The transfer agent and registrar for the SRC Shares is TSX Trust Company, at its principal office located at 200 University Avenue, Suite 300, Suite 300, Toronto, Ontario, M5H 4H1. The register of transfers of SRC Shares is located in the Toronto office of TSX Trust Company.

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Additional Information

Additional information relating to SRC is available on SEDAR at www.sedar.com. Financial information concerning SRC is contained in the SRC Annual Financial Statements and the SRC Interim Financial Statements and the accompanying SRC Annual MD&A and SRC Interim MD&A, respectively, each of which are incorporated herein by reference and can be accessed on SEDAR. In addition, SRC Shareholders may obtain copies of the SRC Annual Financial Statements, SRC Interim Financial Statements, SRC Annual MD&A and SRC Interim MD&A, upon request to the President and CEO of the Corporation at 416-977-7333 or [email protected].

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APPENDIX J

INFORMATION CONCERNING ADRIANA RESOURCES INC.

General

The following information about ADI should be read in conjunction with the information concerning ADI appearing elsewhere in the Circular. Particulars with respect to the “Statement of Executive Compensation”, “Corporate Governance Disclosure” and “Audit Committee Disclosure” are set out in Schedules I, II and III, respectively, to this Appendix J in this Circular.

Except as noted below under the heading “The LOM Project”, capitalized terms used but not otherwise defined in this Appendix J shall have the meanings ascribed to them in the Circular. See “Glossary of Terms”.

Documents Incorporated by Reference

The following documents of ADI filed with the various securities commissions or similar authorities in the jurisdictions where ADI is a reporting issuer, are specifically incorporated by reference into and form an integral part of the Circular:

(a) the ADI Annual Financial Statements;

(b) the ADI Annual MD&A;

(c) the ADI Interim Financial Statements;

(d) the ADI Interim MD&A; and

(e) ADI’s material change report dated December 9, 2016 with respect to the Arrangement and the Warrant Distribution.

Any documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, including any material change reports (except confidential material change reports), interim financial statements, annual financial statements and the auditors' report thereon, information circulars, annual information forms and business acquisition reports (excluding those portions that are not required pursuant to National Instrument 44-101 – Short Form Prospectus Distributions of the Canadian Securities Administrators to be incorporated by reference herein) filed by ADI with the securities commissions or similar authorities in Canada subsequent to the date of the Circular and prior to the completion of the Arrangement and the Warrant Distribution will be deemed to be incorporated by reference in the Circular. Copies of the documents incorporated herein by reference are available on SEDAR at www.sedar.com and, upon request by an ADI Shareholder to ADI at 141 Adelaide Street West, Suite 420, Toronto, Ontario, M5H 3L5. ADI will promptly provide a copy of any such document without charge.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for the purposes of the Circular to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of the Circular.

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Information contained in or otherwise accessed through ADI's website, www.adrianaresources.com or any website, other than those documents incorporated by reference in the Circular and filed on the SEDAR website, does not form part of this Circular.

Corporate Structure

Name, Address and Incorporation

ADI is a corporation continued under the CBCA and is a mineral exploration and development company focused on the exploration and development of iron ore. The registered and head office of ADI is located at 141 Adelaide St. West, Suite 420, Toronto, Ontario, M5H 3L5.

ADI is a reporting issuer or the equivalent in each of Alberta, British Columbia and Ontario and the ADI Shares are currently listed on the TSXV under the symbol “ADI”. ADI and SRC intend to apply to list the ADI Shares on the TSX effective following completion of the Arrangement. See “Procedure for the Arrangement to Become Effective – Regulatory Approvals”.

Intercorporate Relationships

As of the date hereof, ADI had one active subsidiary or holding company, ADI Mining Ltd., a CBCA corporation wholly-owned by ADI. ADI Mining Ltd. owns 40% of Lac Otelnuk Mining Ltd. (referred to herein as the “LOM JV”), also a CBCA corporation. The other 60% of the LOM JV is owned by WISCO Canada ADI Resources Development & Investment Limited, a corporation incorporated under the laws of British Columbia, (“WISCO JVCo”). WISCO JVCo is a wholly-owned subsidiary of WISCO International Resources Development and Investment Limited (“WISCO”), which in turn is a subsidiary of China Baowu Iron & Steel Group Corporation Limited (China Baowu Steel Group), a Chinese state-owned integrated iron and steel company headquartered in the People’s Republic of China.

Business of ADI

ADI’s principal assets are its cash balance, which totalled approximately $28,045,879 at December 16, 2016, and its 40% interest in the LOM JV which owns the Lac Otelnuk Iron Project (the “LOM Project”), located in Nunavik, Québec, approximately 170 kilometres north of the town of Schefferville within the Labrador Trough. ADI has been engaged in the advancement of the LOM Project through the LOM JV with its joint venture partner, WISCO JVCo.

Lac Otelnuk Iron Project Joint Venture

ADI entered into a joint venture and shareholders agreement, dated December 19, 2011, among ADI, WISCO JVCo, WISCO and the LOM JV (the “LOM JV Agreement”). As part of this transaction, in March 2011, ADI and WISCO also completed a private placement pursuant to a subscription agreement dated February 15, 2011 between ADI and WISCO (the “WISCO Subscription Agreement”), through which WISCO acquired a 19.9% interest in ADI at $0.97 per ADI Share for gross proceeds of approximately $28 million. Pursuant to the WISCO Subscription Agreement, WISCO has been and continues to be entitled to nominate one director to the ADI Board. On the formation of the LOM JV, WISCO funded an additional approximately $92 million for a total of approximately $120 million provided by WISCO. Of this additional amount, $40 million was injected into the LOM JV and approximately $52 million was paid to ADI. ADI’s interest in the LOM Project is held through LOM JV. WISCO acquired a 60% interest in the LOM JV while ADI continues to hold the remaining 40% interest. As part of the LOM JV Agreement, WISCO has agreed to use commercial best efforts to assist the LOM JV to obtain project financing for 70% of the development costs required to achieve the start of commercial production for the LOM Project, the size and scope of which would be determined by a bankable feasibility study. Further, WISCO agreed to provide dilution protection to ADI by providing funding assistance in certain circumstances subject to the terms of the LOM JV Agreement in the event that ADI has difficulty in funding its share of any cash call prior to the achievement of commercial production. ADI and WISCO have agreed to purchase all of the production from the LOM JV at fair market value in proportion to their respective equity interests. ADI has the right to appoint two of the five directors of the LOM JV. The LOM JV Agreement contains certain other provisions in respect of the LOM

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JV, including relating to the management of the LOM JV, including board and shareholders’ approvals, work plans and budgets, shareholder funding and WISCO assistance in connection therewith, transfer of the LOM JV’s rights and interests and termination and dissolution.

Following the formation of the LOM JV, ADI’s major strategic objective in advancing the LOM Project was to complete a bankable feasibility study in respect of the LOM Project. In 2013, Watts, Griffis and McOuat Limited (“WGM”) was retained to provide an updated mineral resource estimate in respect of the LOM Project based on previous drilling and exploration results and to document its findings in a technical report compliant with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and CIM definitions. In parallel, SNC-Lavalin Inc. (“SLI”) was mandated to produce a feasibility study in respect of the LOM Project based on the assumptions that a 50 million tonnes of product per year open pit mine and concentrator operation would be constructed together with the required tailings disposal works and site infrastructure. Trade-off studies to decide on the final product (pellets or concentrate), product delivery system and power supply type and logistics were part of the SLI study. A new port facility to be constructed at the Sept-Îles Port, capable of servicing +400,000 DWT vessels, was also assumed.

Met-Chem Canada Inc. (“Met-Chem”) was mandated to assemble an NI 43-101 compliant technical report based on the WGM mineral resources estimate and the SLI study titled “Lac Otelnuk Project Feasibility Study - NI 43-101 Technical Report” dated March 25, 2015 and issued on April 23, 2015 (the “LOM Technical Report”). A complete copy of the LOM Technical Report is available on SEDAR under ADI's issuer profile at www.sedar.com. See “ADI’s Mineral Property - LOM Project” below for a summary.

History and General Development of the Business Since January 1, 2014

Year Ended December 31, 2014

During the course of 2014, ADI, through the LOM JV, continued to advance the LOM Project and also progress on the feasibility study in respect of the LOM Project through the completion of studies on various components thereof including the mine, process plant, product delivery system, power transmission line and port de-watering and storage infrastructures. Plans for further environmental baseline data collections, environmental impact and social impact studies on different components of the LOM Project were being scheduled to start after the confirmation of the feasibility of the LOM Project.

Following the conclusion of a third party that global markets could not support the development of ADI’s Brazil port facility land into a financially viable iron ore export terminal for reasons including excess port capacity and a lack of growth in independent local mining production, ADI determined that it would not proceed with the development of certain owned Brazil lands into a port facility. As a result, ADI wrote down the land to a third party appraised value of $4.7 million and, subsequently, sold the lands on November 5, 2015.

In October 2014, the LOM JV joined a number of other stakeholders including certain representatives of the mining industry and the government of Québec in a partnership formed for the purpose of carrying out a feasibility study regarding a new multi-user rail link between the Port of Sept-Îles and the Labrador Trough. A special purpose entity was established to manage the feasibility study to conduct such evaluation with a focus on a phased construction approach that would satisfy the needs of all potential users.

Year Ended December 31, 2015

Following the completion of the SLI study in relation to the LOM Project, the LOM Technical Report prepared by Met-Chem was filed on SEDAR in April 2015. The development plan, as set out in the LOM Technical Report, outlined the LOM Project as a project that (i) would take six to eight years to permit, finance, construct and commission from a construction decision, (ii) is based on annual production of up to 50 million tonnes of high-quality, low-impurity iron ore concentrate over an estimated 30 year mine life with potential for expansion, and (iii) demonstrates attractive economic returns at higher iron ore prices than experienced in 2015.

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During 2015, iron ore prices, like prices of many other commodities, and the junior mineral resources sector in general suffered a significant decline. The iron ore price benchmark decreased over the course of 2015 and, at the end of 2015, dipped below $40 per tonne, representing an 80% fall from the peak in 2011. ADI took the necessary actions to protect and preserve the long-term option value of the LOM Project in anticipation of the commodity cycle returning to more favourable iron ore pricing and a more favourable financing market in the future as well as protect ADI’s treasury. The LOM Project was placed on care and maintenance and all other ADI discretionary expenditures were reduced.

In May 2015, ADI engaged the ADI Financial Advisor to act as financial advisor to ADI with respect to, among other things, an acquisition of assets by way of a purchase or joint venture, any merger or other business combination and any acquisition by ADI or of ADI.

In November 2015, ADI appointed Michael Harrison as President and Chief Executive Officer with a view to determining a new direction and considering new strategic opportunities to create value for ADI’s shareholders in the prevailing market environment. Mr. Harrison was also appointed as the Chief Executive Officer of the LOM JV, and joined Mr. Charter as a director of the LOM JV.

As at December 31, 2015, the LOM JV recognized an impairment charge. ADI’s share of the loss of the LOM JV for the year ended December 31, 2015 was $38.2 million.

Calendar Year 2016 to Date

During 2016, ADI has continued to take necessary steps to protect the value of the LOM Project as well as efforts to conserve cash and substantially reduce general and administrative expenditures. In January 2016, ADI made an additional investment of approximately $3.05 million in the LOM JV pursuant to a cash call. WISCO funded its portion of the cash call in the amount of approximately $4.52 million. Based on these cash contributions, the LOM Project was in possession of approximately $7.9 million of cash as at September 30, 2016, which ADI estimated was sufficient to cover care and maintenance expenses, maintain claims in good order and make advanced royalty payments until at least 2021 without further cash calls on ADI or its LOM JV partner. ADI also disposed of its port project located in Brazil on November 5, 2015 and reduced administrative costs including through downsizing its head office.

In May 2016, ADI adopted a new fixed incentive stock option plan, substantively identical to ADI’s previous rolling option plan, with the maximum number of ADI Shares which may be issued thereunder being fixed at 9.6 million ADI Shares (or approximately 6% of the outstanding ADI Shares).

In June 2016, ADI shareholders ratified and confirmed By-law No.3 which established advance notice requirements for the nomination of directors to ADI’s board of directors. By-law No. 3 provides for specified notice periods (in the case of an annual meeting of shareholders, not less than 30 days before the date of the meeting) and disclosure requirements to permit evaluation of the qualifications and suitability of any shareholder director nominee and for ADI to be able to respond in the best interests of ADI and also provide shareholders with sufficient time and information upon which to base an informed vote.

During 2016, the benchmark iron ore price improved, however, the magnitude and duration of this improvement has been difficult to predict. Accordingly, during 2016, ADI continued to critically assess opportunities for it to deploy its cash balance and other assets in order to generate an increase in shareholder value from its existing assets. As ADI has no source of cash flow, the criteria for opportunities were focused on deploying ADI’s capital as a catalyst for a public or private entity to reach positive cash flow and receive value for the ADI’s ownership in the LOM Project. ADI assessed a broad number of opportunities in various sectors, including precious metals, base metals and bulk mining, oil and gas, financial services, healthcare and diversified industrial companies.

On November 29, 2016, ADI entered into the Arrangement Agreement, setting forth the terms and conditions for the Arrangement and the Warrant Distribution. See “The Arrangement”, “Arrangement Agreement”, “Cautionary Statement Regarding Forward- Looking Statements” and “Risk Factors” in this Circular.

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The LOM Project

The LOM Project detailed hereunder is not in commercial production. The following summary and certain of the information below with respect to the LOM Project has been mainly based on or extracted from the LOM Technical Report, which was prepared by or under the supervision of Messrs. R.W. Risto, M.S.c, P. Geo, M.W. Kociumbas, P.Geo, R. Martinez, Ing., J. Lord, Ing., E. Giroux, Ing. M.S.c., M. Cote, Ing., S. Buccitelli, Ing., J. Cassoff, Ing. and Andre Boilard, Ing.

Readers should consult the LOM Technical Report to obtain further particulars regarding the LOM Project. The LOM Technical Report is available for review under ADI’s issuer profile on SEDAR at www.sedar.com. The information below is subject to the assumptions, qualifications and procedures set out in the LOM Technical Report and is qualified in its entirety with reference to the full text of the LOM Technical Report.

Capitalized terms used but not otherwise defined in the following section regarding the LOM Project and the LOM Technical Report shall have the meanings ascribed to them in the LOM Technical Report.

All currency information in this section is expressed in United States dollars unless otherwise indicated. LOM Project Description and Location

The LOM Project includes an undeveloped surface exposed, gently dipping taconite iron deposit, known as the Lac Otelnuk iron deposit, first recognized and mapped in 1948. It is located in the Labrador Trough (the “Labrador Trough”), Nunavik, Québec, approximately 170 km by air northwest of the village of Schefferville. Schefferville, which lies in Québec, almost on the border with Labrador, is located approximately 1,200 km by air northeast of Montréal.

In September 2005, ADI acquired the right to earn a 100% interest in certain claims, subject to certain royalties held by Bedford Resource Partners Inc. (“Bedford”) encompassing the LOM Project. Additional contiguous claims were staked by ADI in 2005 through 2013. ADI and Bedford executed an option agreement on November 30, 2005, amended by an amending agreement dated July 31, 2006 (the “Lac Otelnuk Option Agreement”). The Lac Otelnuk Option Agreement provided ADI with the option to earn a 100% interest in the original Bedford Lac Otelnuk property and also defined an “Area of Common Interest” surrounding the original Bedford claims. In 2010, ADI filed a court application for a judicial interpretation of certain provisions of the Lac Otelnuk Option Agreement. In 2011, the defendants to the application served a plea and cross demand. On August 19, 2011, the parties entered into a conditional settlement agreement pursuant to which the litigation was adjourned pending the satisfaction of the settlement's conditions. In January 2012, ADI formed the LOM JV and the LOM Project was transferred to the LOM JV. As a result, all the settlement conditions were satisfied and the litigation ended. As part of the settlement, ADI exercised the option in the Lac Otelnuk Option Agreement relating to certain claims and all the related titles were transferred to the LOM JV. One-half of the royalty in the Lac Otelnuk Option Agreement has been acquired and extinguished leaving a residual 1.25% gross revenue royalty on certain claims being the original Bedford claims and the claims in the Area of Common Interest. In 2015, 613 claims in the Lac Otelnuk claim block were abandoned as they were not included as part of the estimated mineral resource or feasibility study.

The LOM Project currently consists of 785 contiguous mineral claims for a total of approximately 37 879.96 HA registered 100% to the LOM JV. On certain claims a 1.25% gross revenue royalty in favour of the original claim holder is maintained. The royalty applies to 328 claims aggregating 158.09 km². Following the completion of the LOM Technical Report, the LOM JV released a number of mineral claims which do not form part of the description of the LOM Project.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

There is no road access to the LOM Project. Several lakes on the north and south parts of the LOM Project are accessible from Schefferville and Kuujjuaq via fixed-wing float or ski-equipped aircraft. Access to Schefferville and Kuujjuaq is provided by daily scheduled air service from Québec City, Montréal and Sept-Îles. There is also once-a-week round-trip passenger and freight train service between Schefferville and Sept-Îles. The village of

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Caniapiscau, situated about 160 km southwest of the LOM Project, provides an alternative access route. The village is connected by road from Val d’Or via Matagami and Radisson.

The LOM Project area has a sub-Arctic climate with temperatures averaging 12.6 °C in July and -23.2 °C in December. The average annual temperature is -4.7 °C. Average annual rainfall is approximately 355 mm and snowfall 340 cm. Winters are harsh and often lead to poor flying conditions. Exploration programs are normally carried out from June through September.

The Inuit village of Kuujjuaq located north of the LOM Project is the largest nearby community and has a population of approximately 2,200. Kuujjuaq is the administration center of Nunavik and head offices for the Makivik Corporation, the Kativik Regional Government, the Kativik development Council, and the Nunavik Board of Health and Social Services. Kuujjuaq has a modern hospital, schools, several stores and banking facilities. First Air and Air Inuit provide daily service to the modern airport in Kuujjuaq and charter fixed wing and helicopter services are available. Kuujjuaq and other Inuit villages in Nunavik are a potential source for employment.

Schefferville, in the Province of Québec, is the closest centre and has a population of approximately 300. The Matimekosh (Montagnais) Indian Reserve is contiguous with the town. The total Schefferville area population, including that of the Kawawachikamach (Naskapi) Indian Reserve, a few kilometres east of Schefferville, is approximately 1,500. The town is served by a reliable source of electricity. A very small pool of skilled labour exists in Schefferville. Several stores, accommodation, a restaurant, a health clinic, and some services are available, as well as primary and secondary schools.

Schefferville lies at the northern terminus of the Québec North Shore & Labrador Railway (“QNS&LR”). The town is serviced by once-a-week rail trips to Sept-Îles via Ross Bay Junction (the Wabush corner, 228 km to the south) and on to Sept-Îles, a further 360.5 km.

The topography in the area surrounding the LOM Project is generally flat to gently rolling. A northwest-southeast trending, several kilometres long, 5-10 m high cliff face representing the surface exposure of the iron formation occurs on the northern half of the LOM Project. The elevation varies from 260 to 380 m above sea level. The LOM Project is poorly drained, has extensive swampy areas, and is covered by sparse northern boreal forest consisting of stunted spruce, alders and willows.

History

The first recorded work was in 1948, when a Noranda/Conwest joint venture, carried out a regional iron exploration program over a large area, including over the LOM Project. The Lac Otelnuk iron formation was recognized and reconnaissance-mapped at that time. No more activity was reported until 1970 when the LOM Project was staked by King Resources Company (“King”), a Canadian subsidiary of a Denver-based company with the same name. MPH of Toronto was engaged to manage the field work, metallurgical test work, “mineral resource” estimates and economic studies, which were carried out between 1970 and 1977. Between 1970 and 1973, 31 vertical diamond drillholes aggregating 1,349 m were completed on the North Zone and in 1976, five (5) drillholes aggregating approximately 308 m were completed on the South Zone. All assay and test work was done at SGS-Lakefield Research of Canada Limited (“SGS-Lakefield”), Lakefield, Ontario. In 1973, a “mineral resource” estimate for the North Zone was completed. Using the northern-four of the 1976 holes, a very speculative South Zone “mineral resource” estimate was prepared in 1976. These estimates are regarded by Met-Chem as historical resources.

ADI’s 2007 drilling program was the first ground exploration reported after King’s 1976 field program. ADI’s activities are described more fully under the “Exploration and Drilling” sections below.

Geological Setting and Mineralization

The LOM Project is situated in the Churchill Province, of the Labrador Trough adjacent to Archean basement gneiss. The Labrador Trough, otherwise known as the Labrador-Québec Fold Belt, extends for more than 1,100 km along the eastern margin of the Superior Craton from Ungava Bay to Lake Pletipi, Québec. The belt is about 100 km wide in its central part and narrows considerably to the north and south. The LOM Project is located north of the Grenville Front in the Churchill Province where the Labrador Trough rocks have been subject to greenschist or sub-greenschist grade metamorphism and the principal iron formation unit is known as the Sokoman Formation. The lithological units of interest on the LOM Project due to their iron content are members of the Sokoman Formation.

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Towards the western edge of the Labrador Trough the older, lower units of the sequence are successively exposed as the upper younger units have been removed by erosion. To the northeast, the Sokoman rocks are overlain by the Menihek Formation shales and mudstones. The total thickness of the iron-bearing stratigraphic package, where all is preserved and capped by Menihek, from the top of Unit 2 to top of bottom of Subunit 4b (top of Unit 5) is in the order of 100 m to 120 m.

Within the LOM Project, the structure is very simple with the exception of the far northern portion. The iron formation is generally northwest-southeast striking, very flat-lying, monoclinic to gently inclined and rolling, with an average easterly dip of 5°. The individual members of the sedimentary succession are exposed as a series of benches or mesas in the west-central portion of the north half of the LOM Project.

Within oxide iron formation units, the most distinguishable compositional feature through the local stratigraphic column is the rather abrupt changes from dominantly magnetite to dominantly hematite, and corresponding change of the silica from chert over to jasper. These oxidation potential variations and changes in iron grade define the sub-unit or member lithology units. The iron carbonate minerals, principally siderite and ferro-dolomite, are widespread but are more abundant in the upper and middle iron formation units. These features all appear to be related to primary deposition. Units are named 2, 3 and 4 and sub-units are designated with a letter suffix. Unit 5 forms the basal unit and is the Ruth Formation which directly underlies the Sokoman Formation.

Deposit Types

The Lac Otelnuk deposits are composed of iron formations of the Lake Superior-type. This type of iron formation consists of banded sedimentary rocks composed principally of bands of magnetite and hematite within quartz (chert)-rich rock, with variable amounts of silicate, carbonate and sulphide lithofacies. Such iron formations have been the principal sources of iron throughout the world. Lithofacies that are not highly metamorphosed or altered by weathering are referred to as taconite and the Lac Otelnuk deposits are examples of this type. Mineralization in the iron formation consists mainly of magnetite (Fe3O4) and hematite (Fe2O3), however, some iron also occurs in siderite and ferro-ankerite. Iron oxide bands containing concentrations of magnetite and/or hematite alternate with grey chert of jasper.

Exploration and Drilling

The recent exploration programs on the LOM Project were completed in 2007, 2008, 2010, 2011 and 2012 and consisted mostly of diamond drilling. In September 2008, Eagle Mapping Limited was retained to conduct an aerial photographic survey of the LOM Project. In 2010, a reconnaissance geological mapping program covering a part of the north part of the LOM Project was carried out. A search for a survey to locate historic drill collars was also conducted. The initial aim of the programs was to drill test an area of the South Zone 250 m wide by 9 km along strike with vertical drillholes centred on a 600 m by 500 m grid aligned to the historic MPH cut grid. The first few drillholes were designed to test the entire iron formation stratigraphy, but most of the 2007 drilling targeted only the upper iron formation Sub-units 2a and 2b. The purpose of the 2008 program was to complete the grid drilling of the designated area of the South Zone and to target the entire Sokoman stratigraphy to the Ruth Formation. The following is a summary of the programs completed from 2007 to 2012:

Summary of Drilling Programs

Program Area Number of Holes Aggregate Meterage 2007 South Zone 27 2,195 2008 South Zone 41 5,203 2010 South Zone 41 5,874 2011 – Phase I South and North Zones 29 3,665 2011 - Phase II South and North Zones 83 11,696 2012 South and North Zones 196 22,249 Total(1) 414 50,229

Notes: 1. Totals exclude three geotechnical holes drilled in 2011 for water pressure assessment.

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For the 2007 program, core size was BTW (4.20 cm) diameter. For the 2008 through 2011 programs, the core size was BQ (3.65 cm diameter). The drilling in 2012 comprised BQ, NQ (4.76 cm) and PQ (8.5 cm) sized holes. All drill and crew moves, except at the very beginning of the 2007 program, were facilitated using a helicopter. All ADI drillholes were vertical hence no down-hole altitude surveys were completed. Upon completion, drillhole collars were staked with a marker and labelled with an aluminum tag. A certified Land Surveyor conducted certain surveys of all drillhole collars, triangulation targets established for aerial photography and other significant surface features.

In 2010, ADI purchased a second rig and drilling again was focused on the South Zone. Most of the holes were infill holes on a staggered grid pattern covering the central portion of the South Zone grid.

Drilling in 2011 expanded the drilling area into the North Zone and renamed the area of concentration the Main Zone. The 2011 diamond drill program comprised two phases. Phase II of the 2011 drill campaign was essentially delineation drilling designed to test the extension of the Main Zone on strike to the northwest and southeast over an additional strike length of approximately 26 km.

The 2012 program continued the delineation drilling. The program consisted of 157 BQ, 21 NQ and 18 PQ diamond drillholes. The objectives of the 2012 drill program were to (i) further expand and upgrade the LOM Project mineral resource estimate; (ii) conduct hydrogeology tests and establish hydrogeology monitoring wells in the area of the proposed initial open pit mine; (iii) investigate sub-surface soil and bedrock conditions for the proposed tailings facility; and (iv) collect large diameter PQ core samples for bench scale and pilot plant metallurgical testing.

Delineation drilling has been carried out over a total strike length of 35 km. Infill drilling, if warranted or required, will be done in subsequent drilling campaigns.

Sample Preparation, Analysis and Security

The procedures for the five field drilling programs on the LOM Project (2007, 2008, 2010 and 2011 Phase I and Phase II and 2012) have remained much the same. Julien Hélou, Geologist, has logged core since ADI program inception and provided continuity to the process.

Drill core was delivered to the campsite by helicopter on a daily basis where it was unpacked and ordered. Core trays were labelled with aluminum tags denoting drillhole identification and box number. Core logging software changed through the years but descriptive core logging lithology codes developed by MPH from the King programs have been used in all programs. Core logging included Rock Quality Index (“RQD”), magnetic susceptibility measurements on 0.25 m to 1.0 m intervals down the core and core photography.

Sample intervals were marked on the core by the logging geologists and then recorded in 3-part sample books. The entire iron-rich section of the drill core was sampled leaving no gaps.

Sample lengths were based on geological criteria and sample lengths have averaged approximately four metres. These sample lengths are similar to what was done by MPH for the King programs. The ADI protocol included shoulder samples bordering mineralized intervals, and for certain programs, blanks, standards and duplicates. No standards were used during the 2012 program but a number of sample rejects prepared at SGS-Lakefield were sent to a secondary laboratory, Midland Research Center for check assaying. One portion of the 3-part sample tickets were stapled into the core trays at the beginning of each sample interval. Aluminum tags recording the sample identification information were also stapled into the trays accompany the paper tags.

Split core samples were placed into plastic sample bags with the second portion of the 3-part sample tickets and stapled shut. Samples were packed into steel pails and labelled. Samples were sent as batches from the LOM Project by aircraft to Schefferville. From there, the samples went by rail and truck to SGS-Lakefield.

Dedicated core storage buildings were constructed at the camp site in 2008 and all historic and ADI core is stored securely on racks in these two buildings.

WGM made two site visits to the LOM Project to review field program procedures and monitor results. Only one of these visits (September 2007) was made during a period when logging and sampling was in progress. On the basis of their observations, WGM was satisfied that the core handling and core splitting was done to an adequate standard.

ADI’s standard analysis protocol from inception in 2007 through 2010 included Davis Tube tests. For the 2011 program, Davis Tube tests were partially discontinued and replaced by Satmagan determinations. This protocol was continued for the 2012 program. Sulphur content determinations were done on some samples and phosphorous content was also determined on some samples by Inductively Coupled Plasma (“ICP”). Specific gravity on selected

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pulps was completed using a gas comparison pycnometer. WGM understood that these samples were selected on the basis of trying to be representative of all rock types.

For the 2011 and 2012 programs, Satmagan determinations of magnetic Fe (“MagFe”) were completed on most samples. Many were still subjected to Davis Tube tests. A selection of samples had both Davis Tube tests and Satmagan determinations completed. Similar to the previous programs, heads were all analysed by X-Ray Fluorescence spectroscopy for major elements.

WGM was satisfied that sampling and assaying for ADI’s programs since 2007 have been performed well and have been effective but improvements could be made to ADI’s follow-up procedures.

Data Verification

WGM geologists made three visits to the LOM Project. A former-WGM geologist visited the LOM Project in September 2005 and viewed the LOM Project and historic drill core in storage. Mr. Richard Risto visited the LOM Project from August 28 to August 31, 2007 and again from September 13 to 16, 2008. Mr. Risto’s first visit was made during ADI’s first drill program, and drilling and core logging were in progress. At the time of Mr. Risto’s 2008 site visit, drilling and core logging was finished for the season.

WGM reviewed field procedures including core logging and sampling and checked drillhole locations. WGM validated logs and found that sampling records accurately reflected geology and mineralization in the core. WGM recommended more description in the core logs and better qualification of contacts between units. Coordinates for drillhole collars were found to reasonably match existing records.

WGM independently collected second half split core samples on each visit for independent assaying and results of this work validated ADI’s results. The second half core samples independently collected by WGM were “blind” to ADI and any other of its contractors.

The samples were then sent on to SGS-Lakefield for preparation, assay and test work following the flow sheet for routine samples. Analytical results for original and WGM independent second half core samples were found to correlate well. Results indicated that ADI sampling was reliable and no sample sequencing errors were apparent. The results also provided a measure of field sampling variance.

The check assaying programs completed at Midland Research Center in 2007 and 2008 were both a part of WGM’s corroboration work and also were a component of the general QA/QC program.

Mineral Processing and Metallurgical Testing

The LOM Project mineralization has been subject to a series of metallurgical testing programs beginning in 1971. This work was documented by WGM in Technical Reports in 2005 and 2009 and these reports are available on SEDAR. The work involved bench scale test work, as well as two pilot plant runs on bulk samples. The reports indicated that ore from the LOM Project could be processed into a saleable concentrate of approximately 68 % Fe and 4 % silica at a weight recovery of 30 %. Preliminary testing also demonstrated that the concentrate could be pelletized.

Metallurgical test work campaigns by ADI starting in 2007 utilized drill core to define variations in the metallurgical response based on recognized variations in mineralogy and ore work indices. In April 2011, a preliminary economic assessment was carried out by Met-Chem with a proposed flow sheet based on the metallurgical studies and documented in study entitled “Preliminary Economic Assessment for 50 MTPY - Otelnuk Lake Iron Ore Deposit”.

Test work on drill core continued in 2011, 2012, and 2013 with studies of ore type variability, mineralogy and tailings characterization to further refine the process flow sheet and the requirements to sustain a concentrator operation at Lac Otelnuk. In April 2013, two composites, representing the first 10 and 30 year pit, as well as three PQ composites from the LOM Project, were prepared for a beneficiation testing program. A final magnetite concentrate quality grading 3.11% of SiO2 and 68.8% Fe on average resulted from the five composites tested. The average overall weight and iron recoveries were 27.5% and 63.7% respectively, while the magnetite recovery was 94.7% on average.

At the end of 2013 a pilot plant was conducted with 80 tonnes of bulk sample at SGS-Lakefield facilities. Five bulk samples, representing the five main ore types from the LOM Project and totaling about 80 tonnes of material, were received at the SGS-Lakefield facilities to be tested in a grinding and beneficiation pilot plant. The five bulk

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samples were combined into a single composite for the pilot plant test work. The average overall weight recovery was 24.8%, while the magnetite recovery was 96.1% on average.

Mineral Resources Estimate

2013 Mineral Resources Estimate (Most Recent)

The previous Mineral Resource estimates from 2009 to 2012 are no longer current and should not be relied upon. WGM prepared a new Mineral Resource estimate for the mineralized zones that have sufficient data to allow for continuity of geology and grades. The current Gemcom™ drillhole database consists of 370 drillholes. An additional 157 holes were drilled for the 2013 Mineral Resource estimate and these holes were completed primarily as infill drilling in the north part of the previously defined Mineral Resource area to upgrade the categorization of the resources and to extend the up-dip mineralization to surface along the western margin of the mineralization.

WGM re-modeled the upper geological sub-units of the Lac Otelnuk iron formation that were previously defined (2a, 2b, 2c, 3a and 3b), retaining the transitional 2b-c sub-unit previously identified. WGM also added an internal shale waste unit north of the old Main Zone, starting at about Line 30 S. This waste unit has become better defined with additional drilling and is more prominent and thicker to the north. It directly underlies sub-unit 2c.

There is some confusion on whether to identify this unit as shale or 3c, so these were used almost interchangeably to define this internal waste unit in the north part of the LOM Project. It is not uncommon for this waste unit to reach thicknesses of 30 to 50 m to the northwest, but it thins and pinches out down-dip and to the east the further south one goes until about Line 30 S where it disappears completely.

The Mineral Resource estimate was completed using an Inverse Distance to the power of one method. Measured Resources are defined as blocks being within 400 m of a drillhole intercept, Indicated Mineral Resources are defined as blocks from 400 to 600 m from a drillhole intercept and Inferred Mineral Resources are defined as blocks more than 600 m distance from a drillhole intercept and interpolated out to a maximum of approximately 1,000 m where the drilling is more sparse, predominantly in the deeper parts of the deposit.

This categorization was used specifically in the previously named “Main Zone” area of the deposit and directly to the north of this area where more infill drilling was completed during 2012. Mineralization defined by more widely spaced drilling north of Line 270 N has been classified as Indicated and Mineral Resources south of Line 490 S were classified as Inferred, due to even more widely spaced drilling. The deeper intersections of mineralization, predominantly on the northeastern down-dip extension of the deposit, generally lie beneath 70 m or more of cover rock and this mineralization was re-categorized as Inferred.

Specific gravities for the 2013 Mineral Resource estimation of tonnage were completed using a variable density model based on the relationship generated by WGM between % TFe and measured densities (pycnometer and bulk density). Significantly more density information was collected during the most recent drilling programs and WGM determined that a variable density model would more accurately define the local variations based on grade than the “per sub-unit basis” used for previous Mineral Resource estimates.

Internally, the continuity of geology/geometry and grade of the sub-units was excellent, however, there appears to be some structural complexity to the northeast of the deposit where possible thrusting has occurred, but it was not followed up from the previous Mineral Resource estimate as this was not the focus of the 2012 drilling program. In general, the 2012 drilling program was successful in upgrading the categorization of the existing Mineral Resources and expanding the resources where continuity was not certain due to lack of drilling.

A summary of the 2013 Mineral Resource estimate is provided below:

2013 Categorized Mineral Resource Estimate for LOM Project (Cut-Off of 18% Davis Tube Weight Recovery (“DTWR”))

Resource Classification

Tonnes (in billions)

TFe Head (%)

DTWR (%)

Magnetic Fe (%)

Measured 16.21 29.3 25.8 17.8 Indicated 4.43 31.5 24.1 16.7 Total M&I 20.64 29.8 25.4 17.6 Inferred 6.84 29.8 26.3 17.8

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Notes: 1. Interpretation of the mineralized zones was created as 3D wireframes/solids based on logged geology and a nominal 10%

DTWR when required. 2. Mineral Resources were estimated using a block model with a block size of 50 m x 50 m x 5 m. 3. No grade capping was done. Tonnages and grades reported above are undiluted. 4. Assumed Fe price was US$110/dmt. 5. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. There is no certainty that

all or any part of the Mineral Resource will be converted into Mineral Reserves. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues.

6. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.

7. The Mineral Resources were estimated using the CIM Standards for Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council May 10, 2014.

8. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.

Mineral Reserve Estimates

The Mineral Reserves are the portion of the Measured and Indicated Mineral Resources that have been identified as being economically extractable and which incorporate mining losses and the addition of waste dilution. The Mineral Reserves for the LOM Project have been developed using best practices in accordance with CIM guidelines and NI 43-101 reporting.

The first step in the Mineral Reserve estimate is to carry out a pit optimization analysis to determine the parts of the Mineral Resources that are economical to mine. Pit optimization takes place at the start of the study and uses initial assumed operational costs and product selling prices to estimate the economics of mining and processing each block in the model. The pit optimization identifies the limits of the pit and the depth at which the mining costs outweigh the benefits of processing and selling the concentrate.

Since the Lac Otelnuk deposit is close to the surface and contains very little waste rock, the pit optimization analysis showed that the entire resource is economical to mine and to process. It should be noted that pit optimization analyses are strictly based on operating costs and do not consider the capital cost component of a project.

Although the 20,640 Mt of Measured and Indicated Mineral Resources are sufficient for a 105-year mine life at an annual production rate of 50 Mt of concentrate, it was decided that the LOM Project would be limited to a 30-year mine life since a market study cannot be reliably conducted for the period of 105 years. Furthermore, the cash flows generated beyond 30 years have little impact on the internal rate of return and no impact on the payback period of a project.

The open pit of the LOM Project was therefore designed to contain enough Mineral Reserves which when processed would produce 1,325 Mt of concentrate (30 years of production, considering the phased ramp up).

The location for the 30-year open pit was determined to achieve the following objectives:

Mine the Mineral Resources that are closest to the concentrator;

Mine the Mineral Resources that have a low waste-to-ore stripping ratio;

Mine the Mineral Resources that have a high weight recovery;

Mine the Mineral Resources that were estimated based on a high density of exploration drilling; and

Avoid disturbing as many water bodies as possible to limit the hydrological footprint of the open pit.

The Mineral Reserves within the 30-year open pit, which account for mining dilution and ore losses, have been estimated to include 4,943 Mt of Proven Mineral Reserves and 50 Mt of Probable Mineral Reserves for a total of 4,993 Mt at an average DTWR of 26.5%. In order to access these Mineral Reserves, 180 Mt of overburden, 142 Mt of waste rock and 1,052 Mt of low grade material must be mined. This total waste quantity of 1,374 Mt results in a

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stripping ratio of 0.28 to 1. The low grade material includes all of the Measured and Indicated Mineral Resources within the 30-year open pit that are below the cut-off grade for the Mineral Reserves of 20.65% DTWR.

The table below presents the Mineral Reserves estimate for the LOM Project:

LOM Project - Mineral Reserves Estimate

Category

Tonnage (Mt)

Total Fe Head (%)

DTWR (%)

Magnetic Fe (%)

Proven 4,943 28.7 26.5 18.3 Probable 50 27.5 26.6 18.3 Proven and Probable 4,993 28.7 26.5 18.3

Mining Methods

The mining method selected for the LOM Project is a conventional open pit consisting of drilling and blasting and a truck and shovel operation with a designed bench height of 15 m. Trees will be cleared prior to the start of mining. Next, a mining contractor will remove the topsoil and overburden using a fleet of dozers, excavators and haul trucks. The ore and waste rock will be drilled, blasted, and then loaded with large mining shovels into a fleet of rigid frame trucks which will haul the material either to the primary crushers, the low grade stockpiles, or the mine rock piles (for the waste rock).

The mining operations for the LOM Project will be 365 days per year, operating around the clock on two 12-hour shifts. A total of five days per year have been accounted for when the mine would be shut down due to severe weather conditions. During these periods, the primary crushers will be fed from the run of mine ore stockpiles using front end wheel loaders.

A mine plan was developed for the 30-year life of the open pit which follows the phased approach of the LOM Project producing 30 Mt/y of concentrate in Phase 1 and 50 Mt/y of concentrate in Phase 2. One of the goals of the mine plan is to ensure that several different ore types are always in production in order to avoid fluctuations in grade and hardness. Blending of the different ores will occur at the primary crushers as trucks arrive from different shovels that are mining the different ore types. Blending will also happen directly at the shovel face since several ore types may be present within a given 15 m high bench.

A 6-month period of pre-production has been included in the mine plan to prepare the pit for operations. During pre-production, 2.1 Mt of overburden will be stripped and four Mt of ore will be stockpiled.

In order to improve the economics of the LOM Project, mining will begin in the southeastern corner of the open pit where there is a considerable area of high grade ore. This high grade zone is limited to the 2a and 2b ore types at the top of the iron formation. To ensure the proper blending of ore types, a second area will be developed at the start of the operation on the western side of the deposit, adjacent to the primary crushers. This area will provide the 2c, 3a and 3b ore types. Both of these mining areas will be developed at an even pace for the first seven years of the operation.

Mining will begin in the northern part of the open pit in Year 7 to prepare for Phase 2, when the additional two primary crushers will be installed. During Phase 2, one-third of the production will come from the northern part of the open pit and two-thirds from the southern part. The purpose of this split in production is to optimize the use of the five primary crushers.

The DTWR throughout the mine plan averages 26.5% and varies from a high of 33.0% during year 1 to a low of 25.7% in year 10. The total material mined ranges from 34.8 Mt in Year 1 to a peak of 260 Mt/y for years 11 to 15.

During peak production, the total number of 363-tonne haul trucks is expected to reach 50, along with ten cable shovels, two hydraulic shovels, four front end wheel loaders, 16 production drills and a large fleet of support and service equipment. The total mine workforce during peak production is expected to reach 1,002 employees.

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Recovery Methods

The process plant will treat magnetite ore extracted from the LOM Project to produce a concentrate in two phases: Phase 1 will produce 30 Mt/y of iron ore concentrate and Phase 2 will produce 20 Mt/y to bring the plant to 50 Mt/y capacity. The process plant involves multiple grinding and milling stages followed by a conventional magnetite recovery circuit with desliming thickeners and magnetic separators to produce a pellet feed iron concentrate.

The process plant is designed to treat approximately 188.7 Mt/y of taconite ore with an average magnetite content of 18.2% and Fe grade of approximately 28.7% that will permit production of concentrate with a Fe content of about 68% and less than 4% silica. Operating 365 days per year, the process plant will recover a nominal 50 Mt/y of pellet feed iron ore concentrate. The plant design is based on a 30-year mine life.

The location and layout of the process plant has been chosen to minimize environmental impact, provide a safe working facility to suit subarctic conditions and ensure that no permanent infrastructure interferes with potential mineral resources. The equipment and process have been selected in view of their known and proven technology. The primary crushers and process plant have been designed on the basis of 70% and 90% availability respectively and to integrate operability, maintainability, and constructability elements.

Careful consideration has been given to natural topography and prevailing wind directions to minimize surface preparations (earthworks), facilitate building and system erection and construction during harsh weather conditions and limit dust carry-over from tailings and mine site, snow accumulation and excessive cold air infiltrations. The distance between the living camp and work areas has been minimized while ensuring adequate safety and providing adequate nuisance (noise, dust, etc.) separation. Material handling of ore has been optimized to minimize length of conveyors, number of transfer towers and maximize energy conservation.

The location of main equipment inside the plant has been done to minimize pumping requirement and make maximum use of gravity for slurry flows. The plant complex has also been designed such as to avoid unnecessary circulation and minimize ground use.

The process flow sheets were developed on the bench-scale test work results and complemented by supplier tests for equipment sizing. The bench-scale test work was performed on the 30 Y composite samples since these samples are representative of the average feed from the mine plan. The SAG process design has been defined with the pilot plant test results. The process plant is designed to treat approximately 188.7 Mt/y of taconite ore with an average magnetite content of 18.2% and Fe grade of approximately 28.7% that will permit production of concentrate with a Fe content of about 68% and less than 4% silica.

From the mine, the ore is first crushed by five large-capacity gyratory crushers (3 in Phase 1 + 2 in Phase 2) located at a minimum of approximately 0.5 km from the mine pit for safety reasons. The crushed ore is then transported to the process plant stockpiles using overland conveyors. At the process plant, the overland conveyors discharge the ore onto belt tripping conveyors installed on the top of the plant stockpile designed for 16 hours (equivalent to approximately 380,000 t for both phases combined) of live ore storage at nominal capacity. Ore reclaiming is achieved through an enclosed steel structure at the bottom of the stockpile housing three apron feeders for each ore-reclaiming line installed in individual tunnels. At the exit of each ore reclaiming tunnel, a main ore belt conveyor is installed in a gallery that extends into the process plant and discharges ore into its respective SAG mill feed hopper.

The concentration plant consists of five independent ore processing trains (3 in Phase 1 + 2 in Phase 2). Each train produces nominally 10 Mt/y of iron ore concentrate (dry basis).

Each train consists of three SAG mills, one common steel ball feeding system for all SAG mills, vibrating screens, oversized recirculation conveyors, three hydrocyclones, two first-stage ball mills, steel-ball feeding system for all first-stage ball mills, one second-stage ball mill, a steel ball feeding system for all second-stage ball mills, three stages of magnetic separators (cobber, rougher, and cleaner LIMS), three hydro-separators (desliming thickeners), two concentrate thickeners, one tailings thickener, coarse tailings hydrocyclone, process water pond and pumping station. Overhead cranes are provided inside the plant building to handle pieces of equipment and for removal of liners and for handling tools.

The concentrate, at 67% solid content will be pumped to slurry concentrate storage tanks, then through the Product Delivery System (“PDS”), one common (PDS) for all three Phase 1 process trains and another PDS for the two additional Phase 2 trains, will be transported from the concentrator to the port facilities located in the Port of Sept-Îles, where the slurry will be filtered and ship loaded.

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Project Infrastructure

The necessary infrastructure and logistic requirements for the LOM Project have been considered. They include power transmission and distribution, access roads, communication and automation systems, support infrastructures and utilities, camp site accommodations, airstrip, tailings management, dams, water management, stockpiles, concentrate transport (PDS) and port facilities.

It is expected that three incoming power transmission lines will be supplied at each of the main LOM Project locations these being the mine and process plant, PDS pump station PS3 and the Port of Sept-Îles.

The main access road linking the process plant site to the town of Schefferville, Québec is designed for delivery of consumables during operations as well as to provide access during construction for delivery of construction material and equipment. The road is approximately 185 km long, 10.3 m wide (including shoulders), and constructed of granular materials or crushed rocks suitable for traffic travelling at a nominal speed of up to 60 km/h. The plant and secondary roads are 8 m and 4 m wide respectively, and constructed of granular materials suitable for traffic traveling at a nominal speed of up to 30 km/h. The mine haul-truck roads required for off-highway mine 400-ton (short ton) haul trucks will be designed to be 30 m wide, and to feature a 2 m high rock safety berm on each side.

Blasting will be carried out with bulk emulsion which will be manufactured in a facility that will be built and operated on site by a properly licensed explosives supplier. The explosives plant and the magazines to store the accessories will be located at the south end of the open pit.

The telecommunication systems will need to be available 24 hours per day, 365 days per year. All active core components to be installed in each telecommunication systems will be designed to achieve 99.999% availability.

Diesel, gasoline and jet fuel will be delivered to Schefferville by train and then transferred to tanker trucks and transported to the plant site where they will be stored in dedicated storage tanks.

Electrical steam boilers will be used for heating the process plant, workshops and the warehouse. Eleven boiler trains for Phase 1 and five for Phase 2 are necessary to fulfill the heating requirements of the buildings.

A central compressed air station will provide all the necessary compressed air for the plant air distribution system adjacent to the boiler building.

The maintenance workshop will be used for the maintenance of small vehicles, rubber lining, and process equipment and can be accessed by utilidors. The mine equipment maintenance complex includes all necessary facilities and equipment required for mine equipment maintenance. It includes several mine truck wash bay stations, repair stations, welding shop, tire press shop, as well as storage and handling systems for all new and used oil and lubricants. A main warehouse used for storage for consumables, spare parts, tools is located next to the maintenance workshop.

The administration complex will be located adjacent to the process plant substation and next to the SAG mills area will house all management offices, and meeting and control rooms in a two story building. A laboratory, required for the process plant and environmental analysis, will be included within the same complex.

The domestic waste water treatment plant will be built in modular units and located to the north of the permanent camp. Waste water from the process plant, the camp, and the maintenance areas is collected and transferred to the waste water treatment plant.

Non-hazardous solid waste from the mine, the process plant, and the accommodation complexes and the residue from the wastewater treatment plant will be collected by truck and sent to waste disposal cells.

A potable water treatment plant will be built using modular units each consisting of two pre-assembled skids. The source of potable water at the process plant is from the Water Supply Pond. Water treated by the potable water system will be first pre-filtered by the raw water filtration package.

A portion of the water from the raw water filtration plant will be sent to the firewater tank. Three firewater pumps will be connected to the firewater network: one jockey pump and two pumps (one electrical and one diesel) which supply water to hydrants, sprinkler systems, and other fire protection systems.

Acting as a waste management facility on site, a landfill will receive trash, sludge, and garbage which consist mostly of food scraps.

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The permanent accommodations will be located approximately 0.5 km from the process plant. They consist of: living units (dormitories), a kitchen / dining room / recreational facilities building, a gym and fitness center, and security / first aid / emergency services building. The emergency and security building is a single level building consisting of offices and an emergency response centre. The security building includes a reception area, arrival and departure areas with luggage storage and distribution facilities, medical facilities fitted with a nurses’/doctor’s office, examination rooms, and washroom and a helipad for emergency evacuation.

The kitchen / dining room / recreational facility will have two floors, with the kitchen and dining area on the ground floor, and recreational facilities on the first floor. The kitchen will have a capacity of serving approximately 500 meals/hour. The dining area can accommodate a minimum of 750 persons in one seating, with additional space planned for vending machines, lunch room area, coat room, and washrooms for men and women. The living modules (dormitories) are arranged in nine separate wings of three floors each. Altogether, the complex comprises 1,134 one-person rooms, each with a surface area of approximately 17.4 m2.

The aerodrome area includes a pre-fabricated terminal building, maintenance garage, helicopter pad, and an apron area. The buildings will be heated by an electrical heating system. The apron sizing is designed for a Boeing B737-200C.

The final tailings footprint covers an area of approximately 45 to 50 km2. The average (struck level) tailings surface at about elevation 353 m provides the required tailings storage volume of about 2,300 Mm3. This results in a maximum tailings thickness at the end of operations of about 150 m at the West Dam.

The product delivery system (PDS) refers to a pair of slurry pipelines (one with a 30 Mt/y capacity for Phase 1 and the other having a 20 Mt/y capacity for Phase 2) required to bring iron ore concentrate in the form of a slurry from the LOM Project mine site to the Pointe Noire Terminal at the Port of Sept-Îles. The pipeline route is approximately 755 km and the pipelines are mostly shallow buried except when crossing water bodies, where they are on piles or on top of culverts for small crossings. The design has adopted a “No-Freezing, No-Plugging philosophy”, which means that the slurry transportation system will have the necessary reliability and emergency back-up equipment to maintain no-freeze conditions during an emergency stoppage and the slurry transportation system slope will be restricted to avoid plugs even if the line is shut down full of slurry.

The concept for the port area which includes product dewatering, storage, reclaiming, and shipping of the concentrate is comprised of a product dewatering facility for dewatering of the slurry in order to achieve a dry concentrate at 8% moisture content, transferred to the concentrate storage building, and ultimately reclaimed and conveyed to the ship loader on the wharf to be constructed and operated by the Sept-Îles Port Authorities.

The shipping concept for the dry concentrate is based on the use of the future Phase II deep-water wharf at the Port of Sept-Îles for the future potential use by the LOM JV where the ship loaders will be installed. The installation is designed to load bulk carriers ranging from 180,000 DWT to 400,000 DWT in capacity.

Market Studies

A review of the iron ore market in general and more specifically for high grade iron ore concentrates until the year 2050 was completed and updated in early 2015 in the context of the SLI study and the LOM Technical Report by SNL Metals & Minings (“SNL”).

SNL demand projections for iron ore give particular emphasis to expected Chinese developments, since China accounts for such a large portion of world demand and since its share is still growing. The projection of Chinese demand takes as a starting point the reduction of the share of investment in Chinese GDP from about 55% now to 41% in 2020, 30% in 2030 and 25% in 2040. It was assumed that the overall rate of growth in Chinese GDP will fall to an annual rate of 7% from 2014 to 2015 and that it will fall further to 6% from 2016 to 2020, 4% from 2021 to 2030 and 3% from 2031 to 2050. With respect to the rest of the world, the assumptions are conservative and the growth rates are generally lower than the ones achieved historically.

Under these assumptions, SNL projected that world iron ore demand will reach 2,098 Mt in 2015, 2,345 Mt in 2020, 2,601 Mt in 2025 and 2,892 Mt in 2030. The average annual increase over the entire period 2013 to 2030 was estimated at 2.5%, which is below the rate of growth achieved in the early 2000s, but higher than the growth rates in the 1980s and 1990s.

According to these projections, some 233 Mt of production would need to be added until 2020 and about 256 Mt more from 2020 to 2025. From 2000 to 2007, output rose by 765 Mt, or slightly more in terms of annual additions

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than what SNL projected for the period 2014 to 2020. SNL estimated that, due to additional capacity added, there would be an oversupply developing in 2014 and 2015. Despite the cancelling of many projects, the mismatch between planned capacity additions and expected demand will have to be resolved by some producers leaving the market.

Chinese iron ore mines have assumed the role of swing producers and are likely to remain in this position. A large part of the Chinese iron ore industry had to shut down following the slower demand growth and lower prices in 2008. The mines used to be protected by high freight rates but as freight rates came down and production costs went up, only the unexpectedly strong recovery of the Chinese steel industry and the consequent high prices for iron ore have saved them. Chinese ore production fell from 344 Mt (gross run of mine production converted to comparable grades) in 2010 to 269 Mt in 2013. SNL estimated that Chinese iron ore production would continue to decline by a further 100-150 Mt to about 120-170 Mt in 2020.

During the period 2015 to 2020, the market would be expected to rebalance at a higher price level. The reductions in capital expenditure by the large producers together with cancellations of projects by other producers will serve to eliminate the excess supply. However, a number of projects will be ready to come on stream at relatively short notice, so any price upturn is unlikely to be of more than short duration.

From 2020 to 2030, the need for capacity additions will remain and, given the experience of the complications associated with increasing capacity in Australia and Brazil, it is possible that these regions will find it difficult to grow production further. As a result, the 2020s may see the emergence of Africa as a major producing region. Many of the projects being planned in Africa will not become fully operational until the early 2020s, but they will be followed by others. However, the growth seen in iron ore production from Africa has stalled as new producers struggled with financing.

SNL was of the view that the Chinese market would be the main outlet for the LOM Project concentrate, with some of it going to blast furnace pellets and some to direct reduction pellets. North America and the Middle East are the other two possibly important destinations, where new Direct Reduction Iron plants would provide good opportunities for high grade concentrate from the LOM Project. The European market was expected to be of only marginal importance. SNL believed that it was appropriate to assume that the LOM Project concentrate would attract a premium.

The factors that have been described appear to support the following scenario in four stages for iron ore prices:

Over the next three years, prices would be determined by the oversupply with a floor being set by the need to ensure that enough mines break even.

From about 2017 to 2020, the situation would resemble that of the 1980s and 1990s, when production increased in an orderly fashion and iron ore price movements were moderate. While price spikes may occur temporarily, particularly if producers encounter unexpected problems with capacity additions, prices will rise somewhat at the beginning of the period and then remain more or less constant.

From 2020 to 2030, prices will be set by costs in new projects and could be expected to decline gradually as a function of productivity improvements. However, increases in costs resulting from significantly higher energy prices and/or rising extraction costs due to the need to mine lower grade ore bodies could set a floor for this decline.

From 2030 to 2050, productivity improvements are expected to lead to continuing declines in prices, to some extent offset by rising extraction costs in new mines.

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Prices for 62% Fe Iron Ore Delivered in China, USD/Dry Tonne

Source: Metal Bulletin (historical prices), SNL forecast

The table below shows the result of the netback calculations for the LOM Project. The calculations are based on assumptions for freight rates that are somewhat higher than those prevailing in 2015. It also includes a Fe grade premium which is based on historical values.

LOM Project - Netback Calculations

2015 2020 2025 2030 2040 2050 Low, MBIOI 62% 55 85 98 95 90 86 High, MBIOI 62% 65 95 118 124 124 124 Theoretical comparator values Low Alexandria 43.47 73.47 86.47 83.47 78.47 74.47 New Orleans 41.62 71.62 84.62 81.62 76.62 72.62 High Alexandria 53.47 83.47 106.47 112.47 112.47 112.47 New Orleans 51.62 81.62 104.62 110.62 110.62 110.62 Lac Otelnuk Freight Pointe Noire Alexandria, $/t wet 11.46 11.46 11.46 11.46 11.46 11.46 Freight Pointe Noire New Orleans, $/t wet 7.35 7.35 7.35 7.35 7.35 7.35 Freight Pointe Noire Qingdao, $/t wet 26.17 26.17 26.17 26.17 26.17 26.17 Humidity 8 % 8 % 8 % 8 % 8 % 8 % Freight Pointe Noire Alexandria, $/t dry 12.45 12.45 12.45 12.45 12.45 12.45 Freight Pointe Noire New Orleans, $/t dry 7.99 7.99 7.99 7.99 7.99 7.99 Freight Pointe Noire Qingdao, $/t dry 28.45 28.45 28.45 28.45 28.45 28.45 Netback Lac Otelnuk Fe grade premium, $/dry tonne 26 26 26 26 26 26 Low price alternative, FOB Pointe Noire Pointe Noire-Alexandria 57.02 87.02 100.02 97.02 92.02 88.02 Pointe Noire New Orleans 59.63 89.63 102.63 99.63 94.63 90.63

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2015 2020 2025 2030 2040 2050 Pointe Noire-Qingdao 52.55 82.55 95.55 92.55 87.55 83.55 High price alternative, FOB Pointe Noire Pointe Noire Alexandria 67.02 97.02 120.02 126.02 126.01 126.01 Pointe Noire New Orleans 69.63 99.63 122.63 128.63 128.63 128.63 Pointe Noire Qingdao 62.55 92.55 115.55 121.55 121.55 121.55

Environmental Studies, Permitting and Social or Community Impact

Golder Associates was retained to review the existing government reports, data bases and publications and to complete the various engineering and environmental studies in support of the Environmental Impact Assessment (“EIA”) and the feasibility study in respect of the LOM Project. In addition, a baseline study was conducted by AECOM for the mine site access trail corridor from Schefferville to the proposed mine site. No other environmental baseline studies have been conducted yet on other potential components of the LOM Project such as a power line, a slurry pipeline, access roads and an airstrip. The table below summarizes the environmental baseline studies and fieldwork that have already been completed on the proposed mine site and site access trail. This environmental baseline information serves as the basis for preparing the EIA that will be required.

LOM Project - Summary of Environmental Baseline Studies and Fieldwork Completed on Proposed Mine Site and Site Access Trail

Environmental Sector Baseline Field Work and Studies Climate Data The LOM JV has operated a meteorological station since July 2010 with Annual

Climate reports prepared by Golder: Annual reporting (years 2010 to 2013) of recorded climatic data, Golder (2013); Weather Report 2013, Golder (2013); Weather Report 2011-2012, Golder (2013).

Physical Environment General description, Golder (2011); Geomorphology – Field Report 2012, Golder (2013); Baseline Study – Geomorphology and Soils – 2012 Fieldwork Report, Golder (2013).

Hydrogeology Ground Water Sampling at LOM Site – Technical Memorandum – Fieldwork Result Compilation, Golder (2010); Initial Hydrogeology Study, Golder (2012); Complementary Hydrogeology Study - Summer 2012, Golder (2013).

Hydrology Hydrology Field Report - 2010 to 2012, Golder (2013). Baseline Water Quality Water Quality Surface Water and Sediments Baseline - Fieldwork, Golder (2013). Vegetation and Wetlands Vegetation and Wetlands - Baseline Study, Golder (2013). Bathymetry Technical Memorandum - Release of Bathymetry Data, Golder (2013). Fish Habitat Fish Habitat Baseline Study - Field Report 2011 and 2012, Golder (2013);

Fish Inventory Baseline Study - Field Report, Golder (2013). Wildlife Baseline Study - “Inventaire de la Sauvagine” - Field Report 2011, Golder (2013);

Baseline Study - Beavers – Field Report 2011, Golder (2013); Baseline Report - Upland Breeding Birds, Amphibian and Semi-Aquatic Mammals Surveys Golder (2013); Baseline Report - Aerial Survey of Ungulates, Golder (2013); Baseline Study - “Avifaune Nicheuse” (French), Golder (2013).

Mine Access Trail Corridor Baseline Study and Field Work Report, AECOM (2014).

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The following is a summary of the proposed environmental baseline studies conducted as of January 2015 and available public information review for the proposed mine site and associated infrastructure:

A meteorological station has been in operation at the LOM Project since July 2010.

The watercourses within the proposed mine site are located in the Caniapiscau River watershed which flows north up into Ungava Bay. The LOM Project is located at the edge of two sub-watersheds of which one flows through a series of lakes (Alpha Lake, Delta Lake, Lace Lake, du Gouffre Lake) into the Caniapiscau River. The other flows into the Swampy Bay River, upstream of Lake Otelnuk and the Hautes Chutes then into the Caniapiscau River approximately 100 km upstream.

The LOM Project is located in the territory regulated under the James Bay and Northern Québec Agreement (“JBNQA”). The JBNQA establishes an environmental protection regime which dictates specific social and environmental impact assessment processes from which the Environmental and Social Impact Assessment (“ESIA”) must be elaborated. Chapter II of the Environment Quality Act integrates provincial requirements concerning the impact assessment provided in Chapter 23 of the JBNQA.

The proposed mining infrastructure is located in a sporadic discontinuous permafrost area (surface cover between 10% and 50%) according to the Canada Atlas of Natural Resources Canada (1993). However, no permafrost was observed during preliminary summer field work conducted in 2012 and 2013.

The proposed mine site is located in the spruce-lichen bioclimatic domain within the boreal taiga subzone, which extends between the 52nd and 55th parallels (Saucier et al., 2003) in Québec and is characterized by low density forest stands.

No observations of plant species at risk were recorded within a 20 km radius from the LOM Project site. Two occurrences of special status plant species were observed during the summer of 2012 and 2013 rare plant surveys; the rock sedge (Carex petricosa var. Misandroides) and the Nahanni oak fern (Gymnocarpium jessoense subsp. parvulum), two species likely to be designated at risk or vulnerable under the provincial Act Respecting Species at Risk or Vulnerable Species.

According to public information, observation of a golden eagle (Aquila chrysaetos) was recorded near the LOM Project site. In addition, observations of the peregrine falcon (Falco peregrinus), the golden eagle, the harlequin duck (Histrionicus histrionicus), the bald eagle (Haliaeetus leucocephalus), and the short-eared owl (Asio flammeus) were recorded near the LOM Project site. If suitable habitats are present in the LOM Project site, these species could be present. Field investigations conducted in 2011, 2012 and 2013 for birds and six bird species at risk were identified within the LOM Project site: the rusty blackbird (Euphagus carolinus), the harlequin duck, the bald eagle, the golden eagle, the peregrine falcon, and the barrow's goldeneye (Bucephala islandica).

No observations or records of mammals, amphibians or fish species at risk were recorded at the LOM Project site either in the database or during the field surveys conducted to date.

The projected mining infrastructure is located in a sporadic discontinuous permafrost area (surface cover between 10% and 50%). The mine site is located in the spruce-lichen bioclimatic domain within the boreal taiga subzone, which is characterized by low density stands. Wildlife and fish observed in the LOM Project area is typical of northern environments.

There are no protected areas that are directly included in the LOM Project site. The Collines-Ondulées Provincial Park, located approximately 50 km southeast of the LOM Project site is the only legally protected area present within a 50 km radius of the LOM Project site. However, there are two reserved lands for potential provincial parks that are located in this radius: (i) the Lac-Cambrian territory, approximately 35 km northwest of the LOM Project site; and (ii) the Canyon-Eaton territory, approximately 25 km south of the LOM Project site.

Land tenure and organization in the LOM Project site is governed under JBNQA. The LOM Project is situated in the “Territoire non-organisé Rivière-Koksoak” (Koksoak river unorganized territory) which is administrated by the Kativik Regional Government with its head office in the northern village of Kuujjuaq. The Project site is uninhabited. The closest inhabited areas are:

The Indian Reserve of Kawawachikamach, located about 155 km south-east of the LOM Project site and inhabited by the Naskapi Nation of Kawawachikamach;

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The town of Schefferville, about 165 km south-east of the LOM Project site;

The Indian Reserve of Matimekosh and Lac-John, located about 167 km south-east of the LOM Project site and inhabited by the Matimekush-Lac John Innu Nation; and

The Northern Village of Kuujjuaq, about 230 km north of the LOM Project site.

The only access to the LOM Project site is by air or snowmobile in winter. Therefore, it is not believed that there is intensive land use by the communities, which are all located more than 150 km away. The closest railway link is Schefferville to Sept-Îles via Wabush and Labrador City (Tshiuetin Rail Transportation and QNS&LR). The closest airport is located in Schefferville.

Engaging with communities and stakeholders will be a key approach as the LOM Project progresses, including with the Inuit in Kuujjuaq, the Innus in Matimekosh-Lac John, and the Naskapis in Kawawachikamach.

The ESIA relating to the LOM Project was only at its early stage when the LOM Technical Report was completed. The initiation of the ESIA had started with the identification of the initial features and issues, as they will influence the potential positive and negative impacts.

Capital and Operating Costs

Capital Costs

The capital costs estimate consists of the direct, indirect and owner’s costs for the mine site area (including the power transmission lines), the product delivery system and the port area. Provisions for sustaining capital are also included, mainly for mining equipment replacement and tailings storage expansion. Amounts for closure and rehabilitation of the site and required working capital have been included as well. The LOM Project will be developed in two distinct construction phases: Phase 1 sized for 30 Mt/y (three process trains); and Phase 2 sized for an additional 20 Mt/y (two process trains). Each phase will be comprised of a multiple of 10 Mt/y process train.

The table below presents the summary of the capital costs for the major areas of the LOM Project:

LOM Project - Capital Costs Summary (December 1, 2014)

Area

Total USD $M

Phase 1 USD $M

Phase 2 USD $M

Direct Costs Mine/ROM 704 486 218 Process 3,325 1,998 1,327 Infrastructure &Tailings 1,037 758 279 Power Transmission and Distribution 898 830 68 Product Delivery System 4,396 2,622 1,774 Port Area 703 520 183 Sub-Total Direct Costs 11,063 7,214 3,849 Indirect Costs Construction Indirects 324 203 121 Freight, Spares, First Fills & Heavy Lift 399 247 152 Camp, Catering and Travel 379 287 92 EPCM 750 500 250 Contingency 700 458 242 Sub-Total Indirect Costs 2,552 1,695 857 Other Costs Owner's Costs 276 180 96 Power Line Extension to Port 63 63 0 Power to PDS Pumping Stations 2 & 3 232 232 0 Sub-Total 571 475 96 Total CAPEX 14,186 9,384 4,802

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Operating Costs

The operating costs have been estimated for the mine site facilities, the product delivery system and the port area. They were estimated as a function of the iron ore concentrate production and were developed for each production year up to the 30-year mine life.

The table below presents the summary of the operational costs for Year-3 of Phase 1 when the production capacity will reach 30 Mt/y and also Year-9 of Phase 2 when the production capacity will reach 50 Mt/y.

LOM Project - Operating Costs Summary (December 1, 2014)

Phase 1 Year-3 (30 Mt/y) Phase 2 Year-9 (50 Mt/y)

Total USD USD per tonne concentrate

Total USD USD per tonne concentrate

Mine Site 959,459,453 31.98 1,444,946,940 28.90

Product Delivery System 43,984,853 1.46 71,608,409 1.43

Port Area 24,138,432 0.80 38,886,823 0.78

Total 1,027,582,737 34.21 1,555,442,171 31.12

Economic Analysis

An economic analysis based on the production and cost parameters of the LOM Project has been carried out and the results are shown in the table set out below:

LOM Project - Summary of the Life of Project Production, Revenues and Costs

Description Units Results Production – Mineralization Mt 4,993 Production – Concentrate @ 68.5% Fe Mt 1,391.2 Revenue USD $M 138,878.8 Capital Costs USD $M 14,186.4 Operating Costs USD $M 42,360.8 Pre Tax Cash Flow USD $M 79,109.4 After Tax Cash Flow USD $M 47,673.5

For the base case, with a 100% equity funded project, variable yearly selling prices including premium based on SNL’s market study and all production being sold to the Chinese market have been assumed. The analysis of these estimates returned the financial indicators summarized in the table set out below:

LOM Project - Summary of Financial Indicators - Base Case

Before Taxes After Taxes

Project IRRi 15.8% 13.0% NPV @ 6%i $ 17,457 million $ 9,647 million NPV @ 8%i $ 10,388 million $ 5,240 million NPV @ 10%i $ 5,906 million $ 2,440 million Payback Period1 7.0 years 7.3 years

Notes: 1. Based on Free Cash Flow to Equity. 2. Calculated from start of commercial production and based on Free Cash Flow to Equity.

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Three additional scenarios have also been analysed. Scenario 1, assumes only 80% of the production was sold to China and the rest on the European market. Results set out below show a slight improvement in the LOM Project economics due to the higher selling price on the European market and lower shipping costs.

LOM Project - Summary of Financial Indicators - Scenario 1 (Production 80% China - 20% Europe, 100% Equity)


Project IRRi 15.9% 13.1% NPV @ 6%i $ 17,783 million $ 9,839 million NPV @ 8%i $ 10,618 million $ 5,378 million NPV @ 10%i $ 6,072 million $ 2,542 million Payback Period1 6.9 yrs 7.2 yrs Notes: 1. Based on Free Cash Flow to Equity. 2. Calculated from start of commercial production and based on Free Cash Flow to Equity.

In Scenario 2, the LOM Project funding is changed to 30% equity and 70% debt with the production being sold to China as in the base case. As can be seen in the table below, the LOM Project economics are improved by 3.3% after taxes without affecting the NPV.

LOM Project - Summary of Financial Indicators - Scenario 2 (Production 100% China, 30% Equity / 70% Debt)


Equity IRRi 19.7 % 16.4 % NPV* @8%i $ 10,174 million $ 5,519 million Payback Period1 7.2 years 7.5 years Notes: 1. Based on Free Cash Flow to Equity. 2. Calculated from start of commercial production and based on Free Cash Flow to Equity.

Scenario 3 is a variation of Scenario 1 showing the effect of the funding alternative proposed in Scenario 2. Again, adding debt in the equation improves the LOM Project economics by 3.4% after taxes without really affecting the NPV. The effect due to 20% of the product being also sold on the European market remains the same.

Summary of Financial Indicators - Scenario 3 (Production 80% China – 20% Europe, 30% Equity / 70% Debt)

Before Taxes After Taxes Equity IRRi 19.8% 16.5% NPVi @8% $ 10,393 million $ 5,646 million Payback Period1 7.2 years 7.4 years Notes: 1. Based on dividends to shareholders 2. Calculated from start of commercial production and based on dividends to shareholders

The results show that the LOM Project economics are equally good regardless of the scenario used. The LOM Project is quite sensitive to variations in the selling price of the iron ore concentrate which is mainly dependent on the demand for this product.

The LOM Technical Report was compiled according to widely accepted industry standards, however, there is no certainty that the conclusions reached in the LOM Technical Report will be realized.

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Adjacent Properties

There are four claims within the Lac Otelnuk claim block held by other parties. One of these is within the Mineral Resource area. There are claims that are contiguous and adjacent to the Lac Otelnuk claim block held by third parties.

Interpretation and Conclusions

Based on the review of the available information for the LOM Project, the LOM Technical Report provided the following conclusions:

The drilling programs have illustrated that the iron formation units have excellent continuity of geology/geometry and TFe grades, with the magnetic Fe grades being more variable due to changes in the magnetite/hematite ratio within the sub-units. The average thickness of the units does not significantly change in the main part of the deposit, but are more variable to the north and south. There appears to be some structural complexity to the northeast of the deposit where possible thrusting has occurred but this was not further explored during the 2013 drilling program as it was not the focus of the campaign.

The Lac Otelnuk deposits are composed of iron formations of the Lake Superior-type which consists of banded sedimentary rocks composed principally of bands of magnetite and hematite within quartz (chert)-rich rock, with variable amounts of silicate, carbonate and sulphide lithofacies. Lithofacies that are not highly metamorphosed or altered by weathering are referred to as taconite and the Lac Otelnuk deposits are examples of taconite-type iron formation.

Mineralization in the Lac Otelnuk iron formation consists mainly of magnetite (Fe3O4) and hematite (Fe2O3); some iron also occurs in silicates, siderite and ferro-ankerite but is economically insignificant. Iron oxide bands containing concentrations of magnetite and/or hematite alternate with grey chert of jasper and are the economically interesting parts of the iron formation that is a gently east dipping interbanded sequence of rocks.

WGM is satisfied that sampling and assaying for the LOM Project programs since 2007 have been performed well and have been effective leading to the generation of a data set sufficient in quality to support the Mineral Resource estimate.

Specific gravities for the 2013 Mineral Resource estimation of tonnage were completed using a variable density model based on the relationship generated by WGM between % TFe and measured densities, as WGM determined that a variable density model would more accurately define the local variations based on grade rather than using an average density on a per sub-unit basis.

As with the previous Mineral Resource estimate, WGM built a relationship between the magnetic Fe determined by Satmagan and that determined by DTWR where both techniques were used to account for the changeover to Satmagan measurements to replace Davis Tube results during the most recent assaying programs. For consistency with previous Mineral Resource estimates, a % DTWR cut-off was retained based on this relationship. A % Magnetic Fe value was determined for each block and this is reported in the current Mineral Resource estimate along with the % DTWR.

The 2013 Mineral Resource estimate included the new drilling results from the 2012 exploration program and uses of a total of 370 drillholes. WGM re-modeled the upper geological sub-units of the Lac Otelnuk iron formation that were previously defined (2a, 2b, 2c, 3a and 3b) and retaining the transitional 2b-c sub-unit identified in the 2012 estimate. A new internal shale waste unit was also defined in the northern part of the LOM Project. Internally, the continuity of the sub-units was excellent, so WGM had no issues with extending the interpretation beyond 600 m distance. This extension was taken into consideration when classifying the Mineral Resources and these areas were given a lower confidence category. A summary of the NI 43-101 compliant Mineral Resources is set out below:

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LOM Project - 2013 Categorized Mineral Resource Estimate (Cut-Off of 18% DTWR)

Resource Classification

Tonnes (in billions)

TFe Head (%)

DTWR (%)

Magnetic Fe (%)

Measured 16.21 29.3 25.8 17.8 Indicated 4.43 31.5 24.1 16.7 Total M&I 20.64 29.8 25.4 17.6 Inferred 6.84 29.8 26.3 17.8

The metallurgical testing to date demonstrates that the LOM Project mineralization can be recovered by fine

grinding and magnetic concentration to saleable concentrates with low silica and high iron grades. Test work performed on the 30 Y composite samples has demonstrated concentrate grades with <4% Si02 and >68.5% iron with a 27.6% weight recovery.

The open pit designed for the LOM Project will provide for a 30-year mine life. The Proven and Probable Mineral Reserves within this open pit include 4,993 Mt of ore at an average DTWR of 26.5%. The open pit is 11.6 km long and 2.8 km wide, reaches a maximum depth of 130 m and has a waste to ore stripping ratio of 0.28 to 1.

The 30-year mine plan that was developed follows the phased approach of the LOM Project, producing 30 Mt/y of concentrate in Phase 1 and 50 Mt/y in Phase 2. During peak production, the total number of 363-tonne haul trucks is expected to reach 50, along with ten cable shovels, two hydraulic shovels, four front end wheel loaders, 16 production drills and a large fleet of support and service equipment.

The processing plant will use proven and reliable equipment to produce a 68.5% Fe concentrate that will be transported via two pipelines (755 km) to the Pointe-Noire area in Sept-Îles, Québec, where is will be dewatered, stored and then shipped to its final destination.

It can be stated that the level of confidence in the test work results is high, since (a) a reputable laboratory was used, (b) significant effort was placed on sample representativeness, and (c) the results were largely coherent and repeatable and were given explanations for instances where these were not true.

Test work conducted on representative samples of tailings and waste rock have concluded that they should be considered to be non-acid generating with low metal leaching potential and therefore meet the “low risk” classification of the Québec Directive 019 regulations.

The system for the tailings and water management has been developed taking into considerations local topographical, geotechnical, geomorphological and climatic conditions, stringent engineering design and reliable construction concepts, environmental management and closure requirements. The configuration of the Tailings Management Facility provides a tailings storage volume of about 2,350 Mm3.

The product delivery system is a concentrate slurry transport system, an economical and reliable means of transporting iron ore concentrate to the project port of export. Further optimization, particularly with respect to the route alignment, will need to be assessed early in the basic engineering phase of the LOM Project, along with further field investigations.

A product dewatering-storage-reclaiming facility is designed to be located near the Port of Sept-Îles. The final product which contains less than 8% of moisture content will be loaded on the large Cape Size to Chinamax Size bulk carriers through a conveyor/ship loading system at the deep water wharf to be jointly built by the LOM JV and the Sept-Îles Port Authorities.

The power for the LOM Project would be supplied by a 735 kV power transmission line connected to the existing Hydro-Québec 735/315 kV substation at Tilly. The 735 kV overhead transmission line would be approximately 466 km long and includes one single circuit, one overhead shield wire, and one optical ground wire.

The project market study by SNL indicates future demand for pellet feed. Both trends and forecasts indicate a rebalancing of the pellet feed premium by the time the LOM Project would enter into production.

The economics of the LOM Project are based on the concentrate being shipped primarily to China.

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The LOM Project is technically feasible: the ore can be mined, treated, and delivered to the Port of Sept-Îles for export by employing proven processes and technologies.

Based on a 30-year mine life and a production of 50 Mt/y of iron ore concentrate as well as the parameters and assumptions set out in the LOM Technical Report, the internal rate of return of the LOM Project before taxes varies between 15.9% and 16.1% depending on the scenario.

Recommendations

The LOM Technical Report set out the following recommendations:

Carry-out a geotechnical study for the stability of the waste rock piles and overburden stockpiles to confirm the design parameters used in the LOM Technical Report.

Complete geochemical testing on the shale waste unit that appears at the north end of the 30-year open pit. If the test work identifies that the shale waste unit is not a net producer of acid rock drainage, the pit should be redesigned to include this area in the next phase of the LOM Project.

Complete pelletizing tests since the product of the LOM Project is a pellet feed.

Perform additional metallurgical evaluations to:

Finalize semiautogenous (SAG) vs. autogenous (AG) milling options;

Evaluate the potential to use of tower mills instead of ball mills;

Perform a variability-testing bench scale program with geographically dispersed samples from the first ten (10) years of the mining plan to further evaluate the metallurgical performance of the proposed flow sheets;

Map the ore hardness in the mine plan;

Develop a metallurgical model and calculate different mass balances for three qualities of ore (rich-average-poor) in order to validate the capacity of the plant and the sizing of the equipment.

Complete geotechnical investigations for the main access road, the process plant area, the tailings management facility and water management structures, the alignment along the 735 kV power interconnection line and the PDS and the Dewatering-Storage-Reclaiming facilities.

Perform topographical survey (LiDAR) for the alignment along the power transmission line and the PDS and for the Dewatering-Storage-Reclaiming facility at the port area.

Perform bathymetry survey on the water bodies along the PDS.

Finalize the EIA reports for submission to the Québec and Canadian governments

Finalize the Social Impact Assessment reports for submission to the Québec and Canadian governments.

Submit the LOM Project to public consultation on the Environmental Impact Assessment and Social Impact Assessment reports, permitting, and licences to obtain local community buy-in.

Risk Factors

ADI has been engaged in the exploration and evaluation of resource properties and operates in an industry that involves a high degree of risk. The reader should carefully consider the following risks and uncertainties in addition to other information contained herein in evaluating ADI and its business before making any investment decision in regards to the ADI Shares. The risks described below are not the only ones facing ADI. Additional risks not presently known to ADI may also impair its business operations. For additional information, see the risk factors described in ADI’s management`s discussion and analysis for the year ended December 31, 2015 and management discussion and analysis for the three and nine months ended September 30, 2016, each of which are incorporated by reference in this Circular.

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Dividends

ADI has not declared or paid any cash dividends on any of its issued shares since incorporation. ADI's dividend policy will be reviewed from time to time by the ADI Board of in the context of ADI's earnings, financial condition, capital requirements and other relevant factors. ADI currently intends to retain all available funds and any future earnings to fund the development and growth of its business and ADI does not anticipate to pay any cash dividends in the foreseeable future. Consolidated Capitalization

The authorized capital of ADI consists of an unlimited number of ADI Shares. As of the date hereof, there are 157,554,238 ADI Shares issued and outstanding, and ADI’s market capitalization is approximately $18.9 million.

Other than as set forth in the table below, there has been no material change in the consolidated capitalization of ADI since December 31, 2015:

Description

Amount Authorized as

at the date of this Circular

Number Outstanding as at December 31, 2015

(unaudited)

Number Outstanding as at the date of this

Circular (unaudited)

Common Shares Unlimited 157,554,238 157,554,238 Options 9,600,000 8,141,66 5,250,000

Prior Sales

The following table summarizes the securities of ADI issued or sold through financings within the 60 months prior to the date of this Circular:

Date of Issue

Type of Security

Number of Securities

Issue or Exercise Price per Security

November 17, 2015 Options 3,000,000 $0.185 September 18, 2014 Options 333,334 $0.16 June 14, 2013 Options 200,000 $0.22 May 13, 2013 Options 1,350,000 $0.22 June 22, 2012 Options 600,000 $0.68 April 2, 2012 Options 200,000 $1.02 January 16, 2012 Options 2,275,000 $1.04 July 5, 2011 Options 640,000 $0.99

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Trading Price and Volume

The ADI Shares are currently listed and posted for trading on the TSXV under the symbol “ADI”. The following table shows the price ranges and volume of the ADI Shares traded during the last 12 months.

Month High ($) Low ($) Volume December 1 to 21, 2016 0.19 0.16 3,968,000 November 2016 0.19 0.13 231,200

October 2016 0.14 0.12 57,300

September 2016 0.13 0.12 54,400 August 2016 0.14 0.11 54,300 July 2016 0.12 0.11 43,200 June 2016 0.12 0.10 55,000 May 2016 0.14 0.10 128,400 April 2016 0.15 0.11 103,900 March 2016 0.12 0.10 53,100 February 2016 0.12 0.10 91,200 January 2016 0.12 0.10 113,400

On November 28, 2016, the last trading day prior to the date of the public announcement of the Arrangement Agreement, the closing price of the ADI Shares on the TSXV was $0.14. On December 21, 2016, the closing price of the ADI Shares on the TSXV was $0.17.

Escrowed Securities

ADI has no securities held in escrow or subject to contractual restrictions on transfer.

Principal Shareholders

To the knowledge of the directors and executive officers of ADI, other than WISCO, which, based on publicly filed reports, owns 30,216,480 ADI Shares representing 19.2% of the issued and outstanding ADI Shares, there has been no report of any person or company that beneficially owns, controls or directs, directly or indirectly, 10% or more of the issued and outstanding ADI Shares.

Directors and Officers

The ADI Board is currently comprised of eight directors each of whom is elected at each annual meeting of shareholders to hold office for one year or until his successor is elected or appointed, unless he resigns or his office becomes vacant. The following table sets forth the name and residence of each director and executive officer of ADI, as well as such individuals’ position with ADI, period of service as a director and/or officer (as applicable), and principal occupation(s) within the five preceding years.

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Name, Position with ADI and Place of

Residence Occupation, Business or

Employment and Directorships (1)

Director or Officer of ADI Since

Brian L. Acton (2) (3) (4) Director Tequesta, FL, USA

Mr. Acton is currently engaged as President of Pac Basin Resources LLC and Sierra Minerals LLC and is a Principal of Optima Steel Holdings LLC. Mr. Acton joined Oxbow Carbon and Minerals LLC in 1985 and was the President and Chief Operating Officer of Oxbow until 2010. Oxbow, with annual sales of US$4 billion, was founded by Bill Koch in 1981. Oxbow is one of the largest international marketers of oil and natural gas refinery byproducts. Oxbow upgrades and transports petroleum coke and sulphur into industries where they can be used to produce aluminum, steel, electric power, fertilizer, glass and cement. Prior to 1985 he was Director of Marketing for Kaiser Resources/Westar Mining (now Teck Resources Limited). He received his undergraduate degree and MBA from Queen's University.

June 21, 2012

Donald K. Charter (3) (5) Director and Chairman Toronto, ON, Canada

Mr. Charter is currently a corporate director serving on four public company boards including ADI. He is the Chair of the Board of IAMGOLD Corporation (TSX), and is a director of Dream Office Real Estate Investment Trust (TSX) and Lundin Mining Corp. (TSX). He is currently the Chairman of HGC Holdings, the private holding company of HGC Investment Management Inc., an employee-owned investment firm specializing in low volatility, highly liquid, event-driven mandates. Mr. Charter was the President, CEO and a Director of Corsa Coal Corp., a metallurgical coal mining company listed on the TSXV with operations in Pennsylvania, from 2010 to August 2013. He was a partner in a national law firm. Mr. Charter then joined the Dundee group of companies as an Executive Vice President with a number of capital markets related responsibilities. He became the inaugural Chairman and CEO of the Dundee Securities group of companies, and oversaw its growth from a start up to a major independent full service financial services company. Mr. Charter left this group and focused his attention on his personal consulting and investment company, and as a corporate director primarily in the resource and real estate sectors. Mr. Charter has been a director of a number of other public companies and has extensive corporate governance experience having sat on and chaired a number of committees during his career. Mr. Charter is a graduate of McGill University where he obtained degrees in Economics and Law and has completed the Institute of Corporate Directors, Directors Education Program and is a member of the Institute.

December 16, 2009

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Ronald P. Gagel (2) (5) Director Mississauga, ON, Canada

Mr. Gagel is a chartered professional accountant, chartered accountant with more than 35 years of professional experience, predominantly in the mining sector. Mr. Gagel is currently Executive Vice President and Chief Financial Officer of TMAC Resources Inc. (TSX). Mr. Gagel joined FNX Mining Company Inc. in 2005 and held the position of Senior Vice President and Chief Financial Officer when FNX was acquired by Quadra Mining Ltd. in 2010. From 1988 to 2004, Mr. Gagel was at Aur Resources where he ultimately held the role of Vice President and Chief Financial Officer. Mr. Gagel is currently a director of Stonegate Agricom Ltd. (TSX) and Dalradian Resources Inc. (TSX) and has also been a director of other public companies including HudBay Minerals Inc., Central Sun Mining Inc. (now part of B2Gold Corp.) and FNX Mining Company Inc. Mr. Gagel received his C.A. designation in 1981 with Coopers & Lybrand (now PricewaterhouseCoopers) and holds a Bachelor of Commerce, Honours Business Administration from the University of Windsor and a Bachelor of Science, Honours Zoology from the University of Western Ontario. Mr. Gagel was a director of the Prospectors and Developers Association (“PDAC”) of Canada from 1997 to 2015 and was the 2013 recipient of the PDAC’s Distinguished Service Award. He has been the Chairman of a CPA Canada-PDAC International Financial Reporting Standards (“IFRS”) committee that produces Viewpoints on IFRS accounting issues for the mining industry since its inception in 2011.

February 12, 2010

Michael Harrison (5) Chief Executive Officer, President and Director Toronto, ON, Canada

Mr. Harrison has been the President and Chief Executive Officer of the Corporation since November 17, 2015. Mr. Harrison has over 20 years of capital markets and mining industry experience. Mr. Harrison held the position of Vice President of Corporate Development at Coeur Mining, Inc., a Director of Investment Banking at a Canadian Investment Dealer and also worked internationally for BHP Billiton in their exploration division. Mr. Harrison was a Director of Plateau Uranium Inc. (TSXV) from May 2011-January 2013. Mr. Harrison is currently a director of Corsa Coal Corp. Mr. Harrison holds a B.Sc.E Geophysics from Queen's University, and an MBA from the University of Western Ontario.

November 17, 2015

Ronald S. Simkus (4) Director Niagara-On-The-Lake, ON, Canada

Mr. Simkus brings over 39 years of experience in base metal ore processing technology, management of skilled operations, maintenance and engineering personnel. Mr. Simkus is currently an independent consultant and has been self-employed since 2006. Mr. Simkus was formerly the Chairman of the Board of Orvana Minerals Corp. Prior to 2006, he was the Senior Vice President, Mining – Corriente Resources Inc., and President & Chief Executive Officer of Compania Minera Antamina between 2001 and 2003.

June 21, 2012

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Xinting (Tony) Wang(6)

Director Toronto, ON, Canada

Mr. Wang is the Chief Executive Officer and President of WISCO Canada Resources Investment Limited, based in Toronto. He is a mining engineer by profession with over 20 years of experience with operations and investment in the iron ore mining industry. Mr. Wang also has a wealth of experience in overseas mining investment and management, having served as a director of Hong Kong WISCO GUANGXIN KAM WAH Resources Limited, which managed the development of the Soalala project in Madagascar. Mr. Wang sits on the board of Century Global Commodities Corporation (TSX). Mr. Wang attended the XI'AN University of Technology and Architecture in China, majoring in mining engineering and subsequently the Wuhan University of Technology and Science as the mining engineering graduate student. Mr. Wang also holds a Master Business Administration degree from Ohio University, USA.

March 31, 2016

David S. Warner (2) (5) Director Mississauga, ON, Canada

Mr. Warner brings over 36 years of experience as a chartered professional accountant, chartered accountant and independent advisor, including 30 years in public practice as a Partner with KPMG LLP. Mr. Warner's expertise includes mining, oil and gas, regulated utilities and real estate. Mr. Warner is currently a director of LeadFX Inc. (formerly Ivernia Inc.). Mr. Warner has a Bachelor of Commerce and a Masters of Business Administration from McMaster University.

June 21, 2012

Paul Yeou (3)

Director Vancouver, BC, Canada

Mr. Yeou is the Managing Director of Worldlink (Canada) Resources Ltd. Worldlink is a private integrated trading company engaged in import and export of iron ore, coal and other dry bulk commodities. Since 2007, Worldlink has made multi-million dollar investments in iron ore, coal and non-ferrous companies in the Americas and was considered to be the largest privately held integrated trader of iron ore and coking coal from the Americas to China by volume in Canada from 2002-2012. Mr. Yeou is currently a director of Colt Resources Inc. (TSXV).

February 18, 2008

Carlos Pinglo Chief Financial Officer Oakville, ON Canada

Mr. Pinglo is an economist with over 20 years of senior management experience, working with both private and public companies in corporate finance, strategic planning, financial reporting, turnarounds and mergers & acquisitions. He is currently Chief Financial Officer and Corporate Secretary of Eurotin Inc. Mr. Pinglo has previously held a number of senior finance roles, including Chief Financial Officer of Carpathian Gold, and Chief Financial Officer at both First Bauxite Corporation and Medoro Resources Ltd., Vice President, Finance at Pacific Coal Resources Ltd., Controller of both Silver Eagle Mines Inc. and Excellon Resources Inc. and a member of the Board of Directors at Mineros Nacionales S.A.

April 1, 2016

Notes: 1. The information as to principal occupation, business or employment has been provided by the individual director. 2. Member of the Audit Committee. 3. Member of the Compensation Committee. 4. Member of the Technical and Environmental, Health and Safety Committee. 5. Member of the Corporate Governance and Nominating Committee. 6. WISCO has the right to nominate one director for election to the ADI Board. Mr. Wang is the candidate nominated by

WISCO for election to the ADI Board.

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As at the date of this Circular, the directors and executive officers of ADI as a group owned beneficially, directly or indirectly, or exercised control or direction over 2,515,500 ADI Shares, or 1.6% of the outstanding ADI Shares.

Penalties or Sanctions

To the knowledge of ADI’s management, no director or executive officer of ADI has (a) 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; or (b) been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

Individual Bankruptcies

No director of ADI is or has, within the ten years prior to 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 that individual.

Corporate Cease Trade Orders or Bankruptcies

Except as described below, no director of ADI is, or has been within the past ten years, a director or executive officer of any company that, while such person was acting in that capacity:

(a) was the subject of a cease trade or similar order or an order that denied the company access to any exemptions under securities legislation for a period of more than 30 consecutive days;

(b) was subject to an event that resulted, after that individual ceased to be a director or executive officer, in the company being the subject of a cease trade or similar order or an order that denied the company access to any exemptions under securities legislation for a period of more than 30 consecutive days; or

(c) within a year of that individual ceasing to act in that 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.

Ronald P. Gagel was a director of Strategic Resource Acquisition Corporation (as the appointee of FNX Mining Company Inc.) from March 2008 to August 2008 which sought creditor protection under the Companies’ Creditors Arrangement Act on January 16, 2009 and emerged from creditor protection on August 19, 2009.

Conflicts of Interest

There are potential conflicts of interest to which the directors and officers of ADI may be subject in connection with the operations of ADI. Some of the directors and officers are engaged and will continue to be engaged, directly or indirectly, in other businesses and situations may arise where some of the directors and officers may be in direct competition with ADI. Except as otherwise disclosed in this Circular, no conflicts of interest currently exist between ADI and a director or officer of ADI. Legal Proceedings or Regulatory Actions

ADI is not, and has not been, a party to any legal proceedings or regulatory actions, since the beginning of the most recently completed financial year, and is not aware of any such proceedings or actions being contemplated.

Interest of Management and Others in Material Transactions

Other than otherwise disclosed in this Circular, no director or executive officer of ADI or shareholder who beneficially owns, or controls or directs, directly or indirectly, more than 10% of the outstanding ADI Shares, or any known associates or affiliates of such persons, has or has had any material interest, direct or indirect, in any transaction or in any proposed transaction that has materially affected or is reasonably expected to materially affect ADI. See “Interests of Certain Persons or Companies in Matters to be Acted Upon – ADI”.

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Auditor, Transfer Agent and Registrar

The auditor of ADI is Deloitte LLP, Chartered Professional Accountants, Toronto, Ontario, Canada. ADI’s transfer agent and registrar for the ADI Shares is Computershare Investor Services Inc. at its principal offices in Toronto, Ontario. ADI’s securities register and register of transfers are maintained by ADI’s transfer agent at its principal offices in Toronto, Ontario. Material Contracts

Except for contracts entered into by ADI in the ordinary course of business, the only material contracts entered into by ADI since the beginning of the most recently completed financial year or that are still in effect, are:

the LOM JV Agreement; and

the WISCO Subscription Agreement. Interests of Experts

Deloitte LLP, the auditor of ADI, is independent of ADI within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.

Messrs. R.W. Risto, M.C.c, P. Geo, M.W. Kocimubas, P.Geo, R. Martinez, Ing., J. Lord, Ing., E. Giroux, Ing. M.S.c., M. Cote, Ing., S. Buccitelli, Ing., J. Cassoff, Ing. and Andre Boilard, Ing. are the co-authors of the LOM Technical Report. To the knowledge of ADI, none of the aforementioned persons has a beneficial interest in the securities or assets of ADI. To the knowledge of ADI, each of Messrs. R.W. Risto, M.C.c, P. Geo, M.W. Kocimubas, P.Geo, R. Martinez, Ing., J. Lord, Ing., E. Giroux, Ing. M.S.c., M. Cote, Ing., S. Buccitelli, Ing., J. Cassoff, Ing. and Andre Boilard, Ing. are “qualified persons” as such term is defined in NI 43-101.

None of the foregoing experts, nor any partner, employee or consultant of such an expert who participated in and who was in a position to directly influence the preparation of the applicable statement, report or valuation, has, has received or is expected to receive, registered or beneficial interests, direct or indirect, in ADI Shares or other property of ADI or any of its associates or affiliates, representing 1% or more of the outstanding ADI Shares. Additional Information

Additional information relating to ADI is available on SEDAR at www.sedar.com. Financial information concerning ADI is contained in the financial statements of ADI incorporated herein by reference and can be accessed on SEDAR. In addition, ADI Shareholders may obtain copies of the ADI documents referred to herein upon request to ADI at 141 Adelaide Street West, Suite 420, Toronto, Ontario, M5H 3L5. ADI will promptly provide a copy of any such document without charge.

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SCHEDULE I

STATEMENT OF EXECUTIVE COMPENSATION

Compensation Discussion and Analysis Introduction This compensation discussion and analysis describes and explains ADI’s policies and practices with respect to the compensation of ADI’s named executive officers (“NEOs”), including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), for the year ended December 31, 2015. The ADI Board, with recommendations from the ADI Compensation Committee, determines the compensation of ADI’s CEO and CFO with a view to ensuring that the remuneration appropriately reflects the responsibilities and risks involved in being an effective executive officer and/or director of ADI. The ADI Compensation Committee periodically reviews ADI’s compensation philosophy and objectives taking into consideration various factors discussed below. A summary of the compensation received by the ADI NEOs for the year ended December 31, 2015 is provided under the heading “Summary Compensation Table” below. A summary of the compensation received by the directors of ADI for the year ended December 31, 2015 is provided under the heading “Director Compensation” below. With the completion of the joint venture with WISCO in January 2012, whereby WISCO acquired a 60% interest in the LOM JV, and ADI indirectly holds 40% interest in the common shares of the LOM JV, Mr. Palmiere began acting as the CEO of both ADI and the LOM JV. As such, Mr. Palmiere entered into a work sharing agreement between the LOM JV and ADI with respect to this role, and his base salary at both companies was adjusted to reflect this arrangement. The agreement was finalized in June 2013, and retroactive adjustments were made for payments made in the prior periods. The work sharing agreement was terminated on April 30, 2015. Mr. Palmiere ceased acting as ADI’s President and CEO on November 17, 2015. Mr. Michael J. Harrison was appointed as ADI’s President and CEO on November 17, 2015. Compensation Committee The Compensation Committee is comprised of three independent directors, namely Brian L. Acton, Donald K. Charter and Paul Yeou. Mr. Acton is the Chair of the Compensation Committee. All were members of the Compensation Committee during the previous year and all have extensive backgrounds as professionals in the mining industry, as described below. The members of the Compensation Committee are experienced in making decisions regarding the suitability of ADI’s compensation policies and practices.

Brian L. Acton Mr. Acton brings over 40 years of experience in mining, materials and logistics. Mr. Acton is currently engaged as President of Pac Basin Resources LLC and Sierra Minerals LLC and is a Principal of Optima Steel Holdings LLC. Mr. Acton joined Oxbow Carbon and Minerals LLC in 1985 and was the President and Chief Operating Officer of Oxbow until 2010. Prior to 1985 he was Director of Marketing for Kaiser Resources/Westar Mining (now Teck Resources). Mr. Acton has developed the requisite experience in reviewing and approving compensation programs, policies and guidelines in the mining industry for the Chief Executive Officer level, other executive officers and senior management.

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Donald K. Charter Mr. Charter is a corporate director with career experience in executive leadership positions in mining and financial services as well as mergers and acquisitions and finance. Mr. Charter’s business experiences which are relevant to the Compensation Committee include that he was the President and Chief Executive Officer of a publicly traded producing coal mining company; he was Chief Executive Officer of a large financial services company; and he is a member or former member of the compensation committees of several Canadian publicly traded companies including IAMGOLD Corporation, Lundin Mining Corp. and Dream Office Real Estate Investment Trust. As such, Mr. Charter has been directly involved with compensation matters. As a member of these committees and his executive positions, Mr. Charter has developed the requisite experience in reviewing and approving compensation programs, policies and guidelines in the mining industry for the Chief Executive Officer level, other executive officers and senior management, to ensure that such compensation programs are relevant to the goals of a business.

Paul Yeou

Mr. Yeou is the Managing Director of Worldlink (Canada) Resources Ltd. Since 2007, Worldlink has made multi-million dollar investments in iron ore, coal and non-ferrous companies in the Americas and was considered to be the largest privately held integrated trader of iron ore and coking coal from the Americas to China by volume in Canada from 2002-2012. Mr. Yeou is currently a director of Colt Resources Inc. Mr. Yeou has developed the requisite experience in reviewing and approving compensation programs, policies and guidelines in the mining industry.

Objectives of the Compensation Program The objectives of ADI’s compensation programs are as follows: to attract and retain talented, high-achieving executives that have a demonstrated track record of achieving results which are critical to ADI’s success and the creation and protection of long-term shareholder value, and to align the interests of such executives with those of the ADI Shareholders to achieve goals consistent with ADI’s business strategy which help create long-term shareholder value. Elements of Compensation Given the size of ADI’s operations and the very small number of employees, ADI’s compensation practices must be flexible, entrepreneurial and geared to the objectives of securing the best executives to manage ADI. During the year ended December 31, 2015, there were three key elements used to compensate the NEOs, consisting of: (a) base salary, (b) discretionary cash bonus, and (c) long-term incentives in the form of stock options. There has been competition in the mining industry for executives who have extensive industry experience and the necessary skills to achieve specified corporate objectives and deliver long-term shareholder value. ADI believes that providing competitive overall compensation enables ADI to attract and retain qualified executives. A competitive fixed base salary and discretionary cash bonus are used for this purpose. In addition, grants of long-term incentives in the form of time-vested stock options serve to further encourage the retention of ADI’s NEOs while incenting the NEOs to create and protect shareholder value. Determination of Compensation The ADI Compensation Committee is responsible for, among other things, determining and recommending to the ADI Board for approval, the compensation of the NEOs. The ADI Compensation Committee is also responsible for reviewing and approving corporate goals and objectives relevant to the CEO’s compensation and evaluation of the CEO against those goals and objectives and making recommendations to the ADI Board with respect to the CEO’s compensation based on its evaluation. ADI retained Mr. Harrison as its President and CEO in November 2015. Mr. Harrison’s overall compensation in the form of base salary and long-term incentives takes into consideration his extensive experience, ADI’s strategic focus, and the desire to attract and retain the necessary leadership to achieve ADI’s objectives. The general corporate goals and objectives set for the CEO relate to building shareholder value through seeking and assessing new opportunities for ADI. The CEO has been asked to cut corporate and general and administration costs to

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maintain as high a cash balance to use as part of a corporate transaction. The CEO was mandated to look for an accretive transaction in or outside of the mining sector, with a focus on cash flowing opportunities. The base salary for the CEO is generally fixed by the ADI Board with the recommendations of the ADI Compensation Committee. Increases or decreases in base salary on a year-over-year basis are dependent on the Compensation Committee’s assessment of the performance of ADI overall, ADI’s projects and the individual’s overall performance and skills. In determining base salaries, the ADI Compensation Committee generally balances the compensation objectives set out herein including the experience, skill and scope of responsibility of the executive with the goal of keeping cash compensation for its executive officers within the range of cash compensation paid by companies of similar size and industry. The CEO’s annual base salary was set at the time of his commencement of employment by contract at $225,000 in November 2015. Discretionary cash bonuses can be awarded to the ADI NEOs by the ADI Board with the recommendations of the ADI Compensation Committee for exceptional performance and determined by comparing to comparable cash bonuses in the marketplace. For the year ended December 31, 2015, no discretionary cash bonuses were awarded by ADI to the ADI NEOs. Option-Based Awards Long-term equity incentive compensation in the form of stock options comprises a significant portion of overall compensation for the ADI NEOs. The ADI Compensation Committee believes that this is appropriate because it creates a strong correlation between variations in ADI’s share price and the compensation of its executives, thereby aligning the interests of executives of ADI and the ADI Shareholders. The grant of stock options to executive officers is determined by the ADI Board as recommended by the ADI Compensation Committee. Options assist ADI in attracting, motivating and retaining top talent. ADI has used initial larger one-time grants to recruit new executives and ensure that the new ADI NEOs have a significant stake in ADI’s performance from the time they commence employment. Previous grants of options are taken into account when considering new grants. In addition to initial option grants when an individual joins ADI, the ADI Compensation Committee reviews the option schedule periodically during each financial year and the contributions made to ADI by executive officers to determine whether additional option grants should be made. Previous options issued by ADI vest over time and have a term of up to 10 years which encourages the long-term retention of ADI’s officers, employees and consultants. No options were granted to ADI NEOs during fiscal 2015 (last grant was in September 2014) other than a grant to Mr. Harrison as ADI’s incoming President and CEO in November of 2015 of options to purchase 3,000,000 ADI Shares. These options were granted at an exercise price of $0.19 which was a premium to the then market price of the ADI Shares and reflected the then cash value of ADI ensuring that ADI Shareholders’ cash value was not diluted. The ADI Board did not receive any options to purchase ADI Shares in 2015 (last grant to directors was May 2014). The grant of further options to the directors has been suspended pending the implementation of the new strategic plan representing a reduction in director compensation. The Fixed Option Plan The ADI Board adopted a new Incentive Stock Option Plan (the “Fixed Option Plan”), effective May 9, 2016, pursuant to which incentive stock options (the “Options”) will be granted pursuant to option agreements to directors, officers, employees or consultants of ADI or subsidiaries (as such term is defined in the Securities Act (Ontario)) of ADI. The Fixed Option Plan replaced the “rolling” Incentive Option Plan of ADI (the “Rolling Option Plan”). In connection with adopting the Fixed Option Plan, the ADI Board resolved to not issue further Options under the Rolling Option Plan. Options granted under the Rolling Option Plan continue to be governed by the terms of the Rolling Option Plan, except that Options outstanding under the Rolling Option Plan that expire unexercised shall not be available for re-issuance. The change to the Fixed Option Plan eliminates the costly requirement of seeking Shareholder approval annually. The following is as a summary of the Fixed Option Plan, and is qualified in its entirety by the full text of the Fixed Option Plan which is available under ADI’s issuer profile on SEDAR at www.sedar.com.

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The Fixed Option Plan is substantively identical to the Rolling Option Plan, except that the Fixed Option Plan is a “fixed” plan (as opposed to a “rolling” plan), whereby the number of ADI Shares which may be issued under the Fixed Option Plan shall not exceed 9,600,000 (or approximately 6.0% of the outstanding ADI Shares as of May 9, 2016) which, together with the 6,150,000 ADI Shares issuable under the Options outstanding under the Rolling Option Plan as of the dates on which the Fixed Option Plan was adopted by the ADI Board and approved by the TSXV, represents an amount equal to or less than 10% of the ADI Shares outstanding as of such date. As a fixed plan, the total number of ADI Shares available for issuance under the Fixed Option Plan will be less than what would have been available for issuance under the Rolling Option Plan. As a 10% fixed plan, the Fixed Option Plan does not require annual shareholder approval under the policies of the TSXV. As well, Options granted under the Fixed Option Plan will automatically expire five years following the date of grant (as opposed to ten years under the Rolling Option Plan). The Fixed Option Plan is identical to the Rolling Option Plan in all other material respects except that the number of Options which can be granted is limited to less than was available under the Rolling Option Plan. The ADI Board, with the assistance of the ADI Compensation Committee, administers the Fixed Option Plan and has full and final authority with respect to the granting of Options thereunder. Options may be granted under the Fixed Option Plan to such directors, officers, employees or consultants of ADI and its subsidiaries as the ADI Board may from time to time designate. Options, when granted, have a term of up to five (5) years and the exercise price per share is determined by the ADI Board at the time the Option is granted, but, in any event, is not less than the closing price of the ADI Shares on the TSXV on the trading day immediately preceding the date of the grant of the Option, unless the grant of the Option occurs during a blackout period, in which case the exercise price per ADI Share shall not be less than the closing price of the ADI Shares on the TSXV on the second trading day immediately following the expiry of the blackout period. If Options are granted within 90 days of a distribution by a prospectus, the minimum exercise price of those Options will be the greater of the Discounted Market Price (as such term is defined in the Fixed Option Plan) and the per ADI Share price paid by public investors for ADI Shares acquired under the distribution. Certain restrictions contained in the Fixed Option Plan include (all undefined terms in restrictions (a) through (e) below shall have the meaning ascribed to them in the Fixed Option Plan):

(a) the aggregate number of ADI Shares reserved for issuance or granted within any 12 month period to any one Optionee under the Fixed Option Plan, together with all of ADI’s previously established and outstanding stock option plans or grants, shall not exceed 5% of the Outstanding Issue, unless ADI has obtained Disinterested Shareholder Approval;

(b) the aggregate number of ADI Shares reserved for issuance under Options granted to Insiders under the

Fixed Option Plan, together with all of ADI’s previously established and outstanding stock option plans or grants, shall not at any time exceed 10% of the Outstanding Issue, unless ADI has obtained Disinterested Shareholder Approval;

(c) the number of Options issued to Insiders under the Fixed Option Plan, together with all of ADI’s previously

established and outstanding stock option plans or grants, within any 12 month period shall not exceed 10% of the Outstanding Issue without Disinterested Shareholder Approval;

(d) the aggregate number of ADI Shares which may be granted within any 12 month period to any one

Consultant is limited to 2% of the Outstanding Issue; and

(e) the aggregate number of ADI Shares which may be granted within any 12 month period to a participant employed to provide Investor Relations Activities is limited to 2% of the Outstanding Issue, and are subject to certain additional requirements for vesting, trading and obtaining necessary exemptions.

If desired by the ADI Board, and subject to all applicable securities laws and the rules and policies of the TSXV, Options granted under the Fixed Option Plan may be subject to vesting provisions. Options granted under the Fixed Option Plan are not transferable or assignable other than by will or otherwise by operation of law.

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Subject to certain exceptions and the discretion of the ADI Board, in the event that an Option holder (other than directors) ceases to be employed by or otherwise provide services to ADI and its subsidiaries other than as a result of death or termination for cause, Options granted to such Option holder under the Fixed Option Plan will expire upon the earlier of 90 days following the date of their termination or the expiry of the Options according to their terms. In the event of the death of an Option holder, options granted under the Fixed Option Plan expire one year from the death of the Option holder. In the event that an Option holder is dismissed from his or her employment or service with ADI for cause, his or her Options are immediately forfeited and no longer exercisable as of the date of dismissal. The ADI Board may at any time terminate or amend the Fixed Option Plan or any Option granted thereunder in any manner, except where ADI Shareholder approval (including, where applicable Disinterested Shareholder Approval) is required under applicable laws or the rules and policies of any stock exchange upon which the ADI Shares are listed. Summary Compensation Table During the year ended December 31, 2015, ADI had three NEOs, as defined in Form 51-102F6 – Statement of Executive Compensation (the “Form”), Michael Harrison, the CEO, Allen J. Palmiere, the previous CEO, and Daniel Im, the previous CFO. The following table, presented in accordance with the Form, sets forth the compensation awarded, paid to or earned by the ADI NEOs for the year ended December 31, 2015:

Name and

Principal Position

Year

Salary ($)

Share- Based

Awards ($)

Option- Based

Awards (1) ($)

Non-Equity Incentive Plan Compensation

($)

Pension Value

($)

All Other

Compensation ($)

Total Compensation

($)

Annual Incentive Plans

Long-Term Incentive Plans

Michael Harrison CEO

2015

$23,077(2)

Nil Nil Nil

$13,066

Nil

Nil

Nil

Nil

$36,143

Allen J. Palmiere Former CEO

2015 2014 2013

$306,090

(3) $100,000

(3) $100,000

(3)

Nil Nil Nil

$11,208

$45,784 (4)

$70,696

Nil Nil Nil

Nil Nil

Nil

Nil Nil

Nil

$1,021,923(5) $7,347 $5,656

$1,339,221 $153,132 $176,352

Daniel Im

Former CFO

2015 2014 2013

$200,000(3) $200,000 $200,000

Nil Nil Nil

$ 3,370

$5,887 (6)

$14,139

Nil Nil

$50,000

Nil Nil Nil

Nil Nil Nil

Nil $1,047 $2,040

$203,370 $206,934 $266,179

Notes: 1. The options to purchase ADI Shares have been valued using an accounting fair value calculated using a Black-Scholes

model with the following assumptions: a. 2015: expected annual volatility of 90%, risk free interest rate of 0.6%, expected life of 3.5 years and expected

dividend yield of 0%. b. 2014: expected annual volatility of 84%, risk free interest rate of 1.2%, expected life of 3.0 years and expected

dividend yield of 0%. c. 2013: expected annual volatility of 96%, risk free interest rate of 1.2%, expected life of 3.6 years and expected

dividend yield of 0%. ADI chose the Black-Scholes model because it is recognized as the most common methodology for valuing options and doing value comparisons.

2. Mr. Harrison’s annual base salary was set at the time of his commencement of employment by contract at $225,000 in November 2015. The amount above reflects the amount received from November 17, 2015 to December 31, 2015.

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3. Mr. Palmiere’s annual base salary was set at the time of his commencement of employment by contract at $500,000 in June 2009. During the work sharing arrangement with the LOM JV effective January 12, 2012 (which terminated on April 30, 2015), Mr. Palmiere’s annual base salary was reduced from $500,000 to $100,000 determined through negotiation with Mr. Palmiere to reflect the amount of time dedicated to the LOM JV. As at May 1, 2015, Mr. Palmiere’s annual base salary returned to $500,000. As CEO of the LOM JV, Mr. Palmiere received from the LOM JV an annual base salary of $700,000 for the year ended December 31, 2013 and December 31, 2014 and he was paid pro-rata by the LOM JV until termination of the sharing arrangement with the LOM JV in 2015 until April 30, 2015 for a total salary of $183,333 in 2015. The directors of the LOM JV awarded Mr. Palmiere a cash bonus of $300,000 for the year ended December 31, 2013, $70,000 for the year ended December 31, 2014 and no bonus was awarded for the period of January 1, 2015 to April 30, 2015. Indirectly through the LOM JV’s periodic cash calls, ADI pays 40% of the LOM JV’s operating costs and WISCO pays 60% of the costs. Mr. Palmiere ceased acting as ADI’s President and CEO on November 17, 2015. The above amounts reflect the amounts paid by ADI directly to Mr. Palmiere in his capacity as President and CEO in the applicable year and the amount paid in 2015 was pro-rated as a result of Mr. Palmiere’s departure in November 2015.

4. The options granted to Mr. Palmiere in 2014 to purchase: (a) 666,666 shares at exercise price of $0.19 per share were valued using an accounting fair value of $0.06 per share; and (b) 333,334 shares at exercise price of $0.16 per share were valued using an accounting fair value of $0.02 per share. The options granted to Mr. Palmiere in the years 2013-2015 expired on February 15, 2016.

5. Mr. Palmiere ceased acting as ADI’s President and CEO on November 17, 2015. Pursuant to his employment agreement with ADI, he was paid severance equal to 24 times his monthly compensation (based on an annual salary of $500,000, plus any bonus paid to Mr. Palmiere by ADI in the year preceding the termination of his employment). See “Termination and Change of Control Payments” below.

6. The options granted to Mr. Im in 2014 to purchase 100,000 shares at exercise price of $0.17 per share were valued using an accounting fair value of $0.06 per share.

Stock Options

ADI NEOs did not exercise any stock options during the year ended December 31, 2015. No options were re-priced on behalf of the ADI NEOs or any directors of ADI during the year ended December 31, 2015.

Outstanding Share-Based and Option-Based Awards

The following table sets forth the number of stock options outstanding for each ADI NEO and their value on December 31, 2015 based on $0.11 which was the closing trading price of the ADI Shares on the TSXV on December 31, 2015, the last trading day in ADI’s financial year.

Option-Based Awards Share-Based Awards

Name


Underlying Unexercised

Options (#)

Option Exercise

Price ($)

Option Expiration

Date

Value of Unexercised

In-the-Money Options

($) (1)

Number of Shares or Units of

Shares that Have Not

Vested (#)

Market Value of Share-Based

Awards that Have

Not Vested ($)

Market or Payout Value

of Vested Share-Based Awards Not Paid Out or Distributed

Michael Harrison 3,000,000 $0.19 17-Nov-2020 Nil Nil Nil Nil

Allen J. Palmiere

500,000 444,444 222,222

$0.22 $0.19 $0.16

15-Feb-2016 15-Feb-2016 15-Feb-2016

Nil Nil Nil

Nil Nil Nil

Nil Nil Nil

Nil Nil Nil

Daniel Im

300,000 100,000 100,000 100,000

$0.99 $1.04 $0.22 $0.17

05-Jul-2016(2) 16-Jan-2017(2)

13-May-2018(2) 12-May-2019(2)

Nil Nil Nil Nil

Nil Nil Nil Nil

Nil Nil Nil Nil

Nil Nil Nil Nil

Notes: 1. This value has been calculated as the difference between the exercise price of the options and the closing price of the ADI

Shares on December 31, 2015 of $0.11. 2. Mr. Im resigned from ADI effective March 31, 2016 and his options expired on June 29, 2016, which is 90 days after

resignation in accordance with the Rolling Option Plan.

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Incentive Plan Awards – Value Vested or Earned During the Year The following table sets forth detailed information for each ADI NEO with respect to the value of options to purchase ADI Shares that vested during the year ended December 31, 2015.

Name

Option-Based Awards – Value Vested During the

Year(1) ($)

Share-Based Awards – Value Vested During the Year

($)

Non-Equity Incentive Plan Compensation – Value

Earned During the Year ($)

Michael Harrison Nil Nil Nil Allen J. Palmiere Nil Nil Nil Daniel Im Nil Nil Nil

Note: 1. This value has been calculated as the difference between the exercise price of the options and the closing price of the Shares

on the date of vesting.

Pension Plan Benefits

ADI does not provide pension plan benefits to its directors or officers.

Termination and Change of Control Benefits

As at the end of ADI’s financial year ended December 31, 2015, ADI was a party to an employment agreement dated November 17, 2015, with Michael Harrison, ADI’s President and CEO. Mr. Harrison’s base salary in respect of the financial year ended December 2015 and 2016 was $225,000. At the end of each calendar year of employment, the ADI Compensation Committee will carry out a review of Mr. Harrison’s performance and a review of comparable salaries in the marketplace. Mr. Harrison’s base salary may be increased in subsequent years, if deemed appropriate. Mr. Harrison may be eligible to receive a discretionary cash bonus in recognition of exceptional performance. If Mr. Harrison’s employment is terminated other than for just cause, ADI will pay severance within 30 days of the termination. Severance includes a payment equal to 6 times the monthly compensation (based on base salary at the time of termination, plus any bonus paid to Mr. Harrison in the year preceding the termination of his employment), subject to ADI’s statutory obligations. Subject to applicable TSXV policies, upon termination by ADI of Mr. Harrison’s employment other than for just cause or good reason (each as defined in Mr. Harrison’s employment agreement), any options granted to Mr. Harrison that remain outstanding will be cancelled 90 days after the termination of Mr. Harrison’s employment. In addition, in connection with the Arrangement, Mr. Harrison entered into an employment agreement with SCLP and ADI with respect to the proposed continued employment of Mr. Harrison in the capacity of Managing Director of SCLP and ADI following completion of the Arrangement. See also “The Arrangement – Reasons for the Arrangement – SRC” and “Interests of Certain Persons or Companies in Matters to be Acted Upon – ADI”. In addition, concurrent with the entering into of the Arrangement Agreement between ADI and SRC, Mr. Harrison entered into an employment agreement with SCLP and SRC to be effective on the completion of the Arrangement with respect to the proposed employment of Mr. Harrison in the capacity of Managing Director of ADI following completion of the Arrangement. See also “The Arrangement – Reasons for the Arrangement – SRC” and “Interests of Certain Persons or Companies in Matters to be Acted Upon – ADI”.

At the end of each calendar year of employment, the ADI Compensation Committee carried out a review of Mr. Palmiere’s performance and a review of comparable salaries in the marketplace. Mr. Palmiere ceased acting as ADI’s President and CEO on November 17, 2015, as per the terms of Mr. Palmiere’s employment agreement if terminated other than for just cause, ADI would pay severance within 30 days of the termination. Severance included a payment equal to 24 times the monthly compensation (based on an annual salary of $500,000, plus any bonus paid to Mr. Palmiere by ADI in the year preceding the termination of his employment), subject to ADI’s statutory obligations. As a result, Mr. Palmiere received a one-time payment of $1,021,923 in connection him ceasing to act as ADI’s President and Chief Executive Officer on November 17, 2015. Subject to applicable TSXV policies, upon termination by ADI of Mr. Palmiere’s employment other than for just cause or good reason (each as

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defined in Mr. Palmiere’s employment agreement), any options granted to Mr. Palmiere that remain outstanding would be cancelled 90 days after the termination of Mr. Palmiere’s employment.

As at the end of ADI’s financial year ended December 31, 2015, ADI was a party to an employment agreement dated May 30, 2011 with Daniel Im, ADI’s CFO. Mr. Im’s annual base salary was $200,000. If Mr. Im’s employment was terminated other than for just cause, ADI would pay severance within 30 days of the termination. Severance includes a payment equal to 24 times the monthly compensation (based on base salary at the time of termination, plus any bonus paid to Mr. Im in the year preceding the termination of his employment), subject to ADI’s statutory obligations. Subject to applicable TSXV policies, upon termination by ADI of Mr. Im’s employment other than for just cause or good reason (each as defined in Mr. Im’s employment agreement), any options granted to Mr. Im that remain outstanding will be cancelled 90 days after the termination of Mr. Im’s employment. Mr. Im resigned from ADI effective March 31, 2016 and no termination payment was made.

Director Compensation

With respect to directors’ compensation, the ADI Compensation Committee takes into consideration such factors as time commitment, compensation of directors at comparable public companies and responsibilities, to ensure such directors’ compensation is reasonable, competitive, aligns with the interests of ADI Shareholders and is consistent with the time commitment, risks and responsibilities involved in being an effective director. ADI directors have received a flat fee and have not received meeting fees. ADI directors received an annual option grant which was suspended following the May 2014 grant representing a reduction in director compensation.

The following table sets forth detailed information for each director who was a director at any time during ADI’s financial year ended on December 31, 2015.

Name Fees

Earned ($)

Share-Based

Awards ($)

Outstanding Option-Based

Awards ($)(1)

Non-Equity Incentive Plan Compensation

($)

Pension Value

($)

All Other Compensation

($)

Total ($)

Brian L. Acton $42,000 Nil $3,370 Nil Nil Nil $45,370

Donald K. Charter $60,000 Nil $5,055 Nil Nil Nil $65,055

Ronald P. Gagel $48,000 Nil $3,370 Nil Nil Nil $51,370

Weike Peng $36,000 Nil $3,370 Nil Nil Nil $39,370

Ronald S. Simkus $42,000 Nil $3,370 Nil Nil Nil $45,370

David S. Warner $36,000 Nil $3,370 Nil Nil Nil $39,370

Paul Yeou $36,000 Nil $3,370 Nil Nil Nil $39,370 Note: 1. The options to purchase ADI Shares have been valued using an accounting fair value calculated using the Black-Scholes

valuation model. The following assumptions were used for the valuation: expected annual volatility of 84%, risk free interest rate of 0.6%, expected life of 3.5 years and expected dividend yield of 0%. The accounting fair value of the options was $0.05 per share.

Directors Outstanding Share-Based and Option-Based Awards

The ADI Board suspended the annual grant of options to directors following the grants made in May 2014. This reduction in compensation was considered appropriate in the context of the market and the status of the LOM Project. The ADI Board determined that it was not appropriate to dilute ADI Shareholders at market prices of ADI Shares given the discount of the market price to ADI’s cash value. Accordingly, there were no option grants to

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directors in 2015 or 2016 other than those granted to Mr. Harrison in his capacity as the incoming CEO, which grant was made at a price equal to ADI’s then cash value which represented a premium to the market value of the ADI Shares.

The following table sets forth the number of stock options outstanding at December 31, 2015 for each individual who was a director of ADI at any time during ADI’s financial year ended December 31, 2015 and their value on December 31, 2015 based on $0.11 which was the closing trading price of the ADI Shares on the TSXV on December 31, 2015, the last trading day in ADI’s financial year.

Option-Based Awards Share-Based Awards

Name


Underlying Unexercised Options ($)

Option Exercise

Price ($)

Option Expiration

Date

Value of Unexercised

In-the-Money Options

($)

Number of Shares or Units of

Shares that Have Not

Vested ($)

Market or

Payout Value of Share-Based

Awards that Have Not

Vested ($)

Market or Payout Value of Vested Share-Based Awards

Not Paid Out or Distributed

Brian L. Acton

200,000 100,000 100,000

$0.68 $0.22 $0.17

21-Jun-2017 13-May-2018 12-May-2019

Nil Nil Nil

Nil Nil Nil

Donald K. Charter

150,000 150,000 150,000 150,000

$1.30 $1.04 $0.22 $0.17

25-Jan-2016 16-Jan-2017

13-May-2018 12-May-2019

Nil Nil Nil Nil Nil

Nil Nil Nil

Ronald P. Gagel

200,000 100,000 100,000 100,000

$1.30 $1.04 $0.22 $0.17

25-Jan-2016 16-Jan-2017

13-May-2018 12-May-2019

Nil Nil Nil Nil

Nil Nil Nil

Weike Peng

200,000 100,000

$0.22 $0.17

14-June-2018 12-May-2019

Nil Nil Nil Nil Nil

Ronald S. Simkus

200,000 100,000 100,000

$0.68 $0.22 $0.17

21-Jun-2017 13-May-2018 12-May-2019

Nil Nil Nil

Nil Nil Nil

David S. Warner

200,000 100,000 100,000

$0.68 $0.22 $0.17

21-Jun-2017 13-May-2018 12-May-2019

Nil Nil Nil

Nil Nil Nil

Paul Yeou

200,000 100,000 100,000 100,000

$1.30 $1.04 $0.22 $0.17

25-Jan-2016 16-Jan-2017

13-May-2018 12-May-2019

Nil Nil Nil Nil

Nil Nil Nil

Directors Incentive Plan Awards - Value Vested or Earned During the Year The following table provides certain information with respect to options to purchase ADI Shares for each individual who was a director of ADI at any time during ADI’s financial year ended December 31, 2014, and their value on December 31, 2015 based on $0.11 which was the closing trading price of the ADI Shares on the TSXV on December 31, 2015, the last trading day in ADI’s financial year.

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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 ($)

Brian L. Acton Nil Nil Nil Donald K. Charter Nil Nil Nil

Ronald P. Gagel Nil Nil Nil

Weike Peng Nil Nil Nil

Ronald S. Simkus Nil Nil Nil David S. Warner Nil Nil Nil

Paul Yeou Nil Nil Nil Director Attendance The attendance record of each director for all ADI Board and Committee meetings held during the fiscal year ended December 31, 2015, while the relevant director was a member of the ADI Board or Committee, is as follows:

Name Board meetings Audit Committee Meetings

Corporate Governance and Nominating

Committee Meetings

Technical and EHS Committee

Meetings Brian L. Acton 11 of 11 5 of 5 - 1 of 1 Donald K. Charter 11 of 11 - 1 of 1 - Ronald P. Gagel 11 of 11 5 of 5 1 of 1 - Allen J. Palmiere 9 of 9 - - 1 of 1 Weike Peng 9 of 11 - - - Ronald S. Simkus 10 of 11 - - 1 of 1 David S. Warner 11 of 11 5 of 5 1 of 1 - Paul Yeou 11 of 11 - - -

Securities Authorized for Issuance under Equity Compensation Plans The following table provides information as of December 31, 2015 relating to options to purchase ADI Shares outstanding pursuant to the Rolling Option Plan which was at the relevant time ADI’s only compensation plan under which equity securities of ADI were authorized for issuance.

Plan Category

Number of securities to be

issued upon exercise of outstanding Options

Weighted-average exercise

price of outstanding Options

Number of securities remaining available for future issuance under equity compensation

plans Equity Compensation plans approved by Security Holders 8,141,666 $0.39 7,613,757

Equity Compensation plans not approved by Security Holders

Nil Nil Nil

Total 8,141,666 $0.39 7,613,757

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AUDIT COMMITTEE AND RELATIONSHIP WITH AUDITOR National Instrument 52-110 – Audit Committees (“NI 52-110”) requires ADI to disclose annually certain information concerning the constitution of the ADI Audit Committee and its relationship with its independent auditor. ADI is a “venture issuer” as defined in NI 52-110 and is relying on the exemption in section 6.1 of NI 52-110, which provides that ADI is not required to comply with Part 3 (Composition of Audit Committee) and Part 5 (Reporting Obligations) of NI-52-110. The Audit Committee’s Charter The ADI Audit Committee has a charter that sets out its mandate and responsibilities. A copy of the charter is included as Schedule III to this Appendix J. Composition of the Audit Committee The members of the ADI Audit Committee as of the date hereof are Brian L. Acton, Ronald P. Gagel and David S. Warner are all “independent” as defined by NI 52-110 and considered to be financially literate. Mr. Gagel is the Chair of the ADI Audit Committee. Relevant Education and Experience

Brian L. Acton Mr. Acton brings over 40 years of experience in mining, materials and logistics. Mr. Acton is currently engaged as President of Pac Basin Resources LLC, Sierra Minerals LLC and is a Principal of Optima Steel Holdings LLC. Mr. Acton joined Oxbow Carbon and Minerals LLC in 1985 and was the President and Chief Operating Officer of Oxbow until 2010. Prior to 1985 he was Director of Marketing for Kaiser Resources/Westar Mining (now Teck Resources).

Ronald P. Gagel Mr. Gagel is a chartered professional accountant and a chartered accountant with more than 35 years of professional experience, the last 28 years of which were in the mining sector. In January 2013, Mr. Gagel became the Executive Vice President and Chief Financial Officer of TMAC Resources Inc., a privately held Canadian mineral exploration company. Mr. Gagel is currently a director of Dalradian Resources Inc. and Stonegate Agricom Ltd., and has also been a director of other public companies including HudBay Minerals Inc., Central Sun Mining Inc. (now part of B2Gold Corp.) and FNX Mining Company Inc. (“FNX”) Mr. Gagel had joined FNX in 2005 as Vice President and Chief Financial Officer and became Senior Vice President and Chief Financial Officer in 2006, a position he held until May 2010 upon the acquisition of FNX by Quadra Mining Ltd. (subsequently acquired by KGHM International Inc.). Mr. Gagel was a director of PDAC from 1997 to 2015 and was the 2013 recipient of the PDAC’s Distinguished Service Award. He has been the Chairman of a CPA Canada-PDAC IFRS committee that produces Viewpoints on IFRS accounting issues for the mining industry since its inception in 2011.

David S. Warner

Mr. Warner brings over 38 years of experience to the ADI Board as a chartered professional accountant, chartered accountant and independent advisor, including 30 years in public practice as a Partner with KPMG LLP. Mr. Warner’s expertise includes mining, oil and gas, regulated utilities and real estate. Mr. Warner is currently a director of LeadFX Inc. (formerly, Ivernia Inc.).

Audit Committee Oversight The ADI Audit Committee is responsible for managing, on behalf of the ADI Shareholders, the relationship between ADI and the external auditor. In particular, it is responsible for:

(a) overseeing the work of the external auditors engaged for the purpose of preparing or issuing an auditor’s report or related work;

(b) recommending the nomination and compensation of the external auditor to the ADI Board; and

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(c) pre-approval of non-audit services.

Reliance on Certain Exemptions ADI’s auditor, Deloitte LLP, did not provide any non-audit services in the financial year ended December 31, 2015. Pre-Approval Policies and Procedures For specific policies and procedures for the provision of non-audit services by ADI’s auditor, please see the Charter of the ADI Audit Committee attached as Schedule III to this Appendix J. External Auditor Service Fees The ADI Audit Committee reviews the nature and amount of the services provided by its external auditors to ensure auditor independence. Fees incurred with ADI’s auditor, Deloitte LLP for audit and non-audit services in the last two fiscal years are outlined in the following table.

Notes: 1. “Audit Fees” include fees necessary to perform the annual audit and quarterly reviews of ADI’s consolidated financial

statements. Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.

2. “Audit-Related Fees” include services that are traditionally performed by the auditor. These audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.

3. “Tax Fees” include fees for all tax services other than those included in “Audit Fees” and “Audit-Related Fees”. This category includes fees for tax compliance, tax planning and tax advice. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities.

4. “All Other Fees” include all other non-audit services.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS No directors, executive officers, former officers or their respective associates or affiliates, or other ADI management were indebted to ADI as at the end of the most recently completed financial year or as at the date hereof.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS An informed person is one who, generally speaking, is a director or executive officer or a 10% ADI Shareholder. To the knowledge of ADI management, no informed person or director of ADI or any associate or affiliate of any informed person or director had any interest in any transaction which has materially affected or would materially affect ADI or any of its subsidiaries during the year ended December 31, 2015, or had any interest in any material transaction in the 2015 fiscal year other than as set out herein.

Nature of Services

Fees Paid to Auditor for the Year Ended December 31, 2015

Fees Paid to Auditor for the Year Ended December 31, 2014

Audit Fees (1) $115,753 $99,450 Audit-Related Fees (2) Nil Nil Tax Fees (3) Nil Nil All Other Fees (4) Nil Nil Total: $115,753 $99,450

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During the year ended December 31, 2015, ADI did not pay any consulting fees to persons who were directors of ADI. In addition, during the year ended December 31, 2015, certain options to purchase ADI Shares were granted to the NEOs pursuant to the Rolling Option Plan as set out above.

DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE AND INDEMNIFICATION During the year ended December 31, 2015, ADI had directors’ and officers’ liability insurance with coverage in the amount of up to $15,000,000 at an annual premium of $35,393. No indemnification under section 124 of the CBCA was paid for the fiscal years ended December 31, 2015 and December 31, 2016.

FINANCIAL ASSISTANCE ADI did not give any financial assistance to any of its employees or ADI Shareholders during the year ended December 31, 2015.

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SCHEDULE II

CORPORATE GOVERNANCE DISCLOSURE

General The ADI Board is responsible for supervising the management of the business and affairs of ADI and it believes that good governance improves performance and benefits all ADI Shareholders. The ADI Board is therefore committed to a high standard of governance. ADI stays abreast of legislative and other policy initiatives pertaining to corporate governance matters and proactively seeks to adjust its corporate governance to address such potential requirements. The ADI Board discharges its responsibilities directly and through its committees. At regularly scheduled meetings, the ADI Board and ADI management discuss the issues relevant to ADI’s strategy and business. The ADI Board is required to meet a minimum of four times per year and in 2015 met 11 times. The nature of the business discussed and conducted by the ADI Board at any particular meeting is dependent on the then-current state of ADI’s business and the opportunities and risks that ADI faces at that time. However, every regularly scheduled quarterly ADI Board meeting includes a review of ADI’s consolidated financial and operational status and performance and a report from any committees that have met since the last ADI Board meeting. During 2015, the ADI independent directors held regular quarterly meetings at which non-independent directors and members of management of ADI are not in attendance. Responsibilities of ADI management are clearly defined by the ADI Board. This is accomplished by identifying the roles and responsibilities of the President and Chief Executive Officer and the Chief Financial Officer of ADI and by defining the mandates of each of the ADI Board, the committees of the ADI Board, the independent directors and the chair of each committee of the ADI Board. Board Committees The ADI Board has established four committees: the Audit Committee, the Compensation Committee, the Technical and EHS Committee and the Governance Committee. Each committee of the ADI Board operates pursuant to a written mandate which is reviewed and approved by such committee and the ADI Board on an annual basis. Audit Committee The ADI Board has developed written terms of reference outlining the Audit Committee’s roles and responsibilities and provides appropriate guidance to Audit Committee members as to their duties. These terms of reference are reviewed annually by the ADI Board. The Audit Committee reviews the annual and interim financial statements of ADI and makes recommendations to the ADI Board with respect to those statements. The Audit Committee also reviews the nature and scope of the annual audit as proposed by the auditors and management, and the adequacy of the internal accounting control procedures and systems within ADI. The Audit Committee is responsible for ensuring that management has implemented an effective system of internal controls and has oversight responsibility for management reporting on internal control. The Audit Committee meets with ADI’s external auditors regularly, independent of management, and has direct communication channels with the auditors to discuss and review specific issues as appropriate. The Audit Committee currently consists of Brian L. Acton, Ronald P. Gagel and David S. Warner. All members of the Audit Committee are considered independent directors for an Audit Committee. Mr. Gagel is the Chair of the Audit Committee. Compensation Committee The Compensation Committee is responsible for, among other things, determining and recommending to the ADI Board for approval, the compensation of ADI’s Chief Executive Officer, Named Executive Officers (“NEOs”) and

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the directors of ADI. The Compensation Committee’s purpose is to ensure that the remuneration appropriately reflects the responsibilities and risks involved in being an effective director and/or executive officer of ADI. The Compensation Committee is also responsible for reviewing and approving corporate goals and objectives relevant to the President and Chief Executive Officer’s compensation and evaluation of the President and Chief Executive Officer against those goals and objectives and making recommendations to the ADI Board with respect to the President and Chief Executive Officer’s compensation based on its evaluation. The Compensation Committee currently consists of Brian L. Acton, Donald K. Charter and Paul Yeou. All members of the Compensation Committee are considered independent directors. Mr. Acton is the Chair of the Compensation Committee. Technical and Environmental, Health and Safety Committee The Technical and EHS Committee is responsible for reviewing the development and implementation of policies and best practices of ADI relating to technical matters, environmental, health and safety matters and compliance with applicable laws and regulations in all jurisdictions in which ADI operates. The Technical and EHS Committee is responsible for engaging advisors and independent counsel as the Technical and EHS Committee determines necessary to carry out its duties; set compensation and authorize payment for any advisors employed by the Technical and EHS Committee; and seek any information considered appropriate by the Technical and EHS Committee. The Technical and EHS Committee currently consists of Brian L. Acton, Michael J. Harrison, and Ronald S. Simkus. The majority of the members of the Technical and EHS Committee are considered independent directors. Mr. Simkus is the Chair of the Technical and EHS Committee. Corporate Governance and Nominating Committee The Governance Committee is responsible for: the development of the overall governance of ADI and its affiliates; a continuing assessment of corporate governance matters; making recommendations to the ADI Board regarding ADI’s approach to corporate governance; developing and recommending to the ADI Board a set of corporate governance guidelines applicable to ADI and periodically reviewing such guidelines and recommending any changes; and making recommendations to the ADI Board for the nomination of new directors. The Governance Committee is responsible for identifying individuals qualified to become directors of ADI and recommending that the ADI Board select the director nominees for election at each annual meeting of shareholders of ADI. The Governance Committee currently consists of Donald K. Charter, Ronald P. Gagel and David S. Warner. All members of the Governance Committee are considered independent directors. Mr. Charter is the Chair of the Governance Committee. Board of Directors The ADI Board is comprised of eight members. The ADI Board is responsible for determining whether or not each director is “independent”. To do this, the ADI Board analyzes all the relationships of the directors with ADI and its subsidiaries. Pursuant to National Instrument 58-101 - Disclosure of Corporate Governance Practices (“NI 58-101”) and NI 52-110, a director is independent if such director has no direct or indirect material relationship with ADI, which could, in the view of the ADI Board, be reasonably expected to interfere with the exercise of a member’s independent judgment. None of the independent directors are engaged in the day-to-day operations of ADI or is a party to any material on-going contracts with ADI. The ADI Board has determined that a majority (six of eight directors) of the ADI Board, namely, Donald K. Charter (Chairman of the ADI Board), Brian L. Acton, Ronald P. Gagel, Ronald S. Simkus, David S. Warner and Paul Yeou

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are independent directors. The only non-independent directors of ADI are Michael Harrison (President and Chief Executive Officer of ADI) and Xinting Wang, nominee of WISCO. The independent judgment of the ADI Board in carrying out its responsibilities is the responsibility of all directors of ADI. The ADI Board facilitates its independent supervision over management of ADI by holding periodic meetings of the ADI Board to approve various appropriate matters and discuss the business and operations of ADI. The ADI Board has free access to the external auditor, legal counsel and to any of the officers of ADI. Directorships The ADI Board has not adopted a formal policy limiting the number of directors who sit on a board of another public company but believes disclosure of other board memberships is important. Given that many of the directors have a variety of business interests, directors are required to disclose to the ADI Board or any applicable committee thereof, any real or perceived conflict in relation to any matter or proposed matter to be considered and in such circumstances it is the policy of the ADI Board that such directors excuse themselves from all deliberations on such matters. The following directors of ADI currently hold directorships in the following reporting issuers (or equivalent in a foreign jurisdiction) as noted below:

Director Other Reporting Issuer Stock Exchange Brian L. Acton None N/A Donald K. Charter IAMGOLD Corporation

Dream Office Real Estate Investment Trust Lundin Mining Corp.

Toronto Stock Exchange Toronto Stock Exchange Toronto Stock Exchange

Ronald P. Gagel Dalradian Resources Inc. Stonegate Agricom Ltd.

Toronto Stock Exchange Toronto Stock Exchange

Michael Harrison Corsa Coal Corp. TSX Venture Exchange Ronald S. Simkus None N/A Xinting Wang Century Global Commodities Corporation Toronto Stock Exchange David S. Warner LeadFX Inc. (formerly, Ivernia Inc.) Toronto Stock Exchange Paul Yeou Colt Resources Inc. TSX Venture Exchange

Orientation and Continuing Education When new directors are appointed, they receive orientation, commensurate with their previous experience, relating to ADI’s industry, business and operations and the responsibilities of directors of public companies. The members of the ADI Board have extensive experiences in mineral exploration projects, mining, financial and audit matters and capital markets and they continue to work in these areas. New directors meet with ADI management in addition to members of the Governance Committee to discuss ADI’s business. ADI Board meetings also include presentations by ADI’s management and employees to give the directors additional insight into ADI’s business. ADI has prepared a Board Policy Manual which provides a comprehensive introduction to the ADI Board, the committees of the ADI Board and their mandates and ADI. The orientation and continuing education process is reviewed on a periodic basis by the Governance Committee. Ethical Business Conduct The ADI Board has found that the fiduciary duties placed on individual directors by ADI’s governing corporate legislation, the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the ADI Board in which the director has an interest have been sufficient to ensure that the ADI Board operates independently of management and in the best interests of ADI. The Governance Committee has adopted a written Code of Business Conduct and Ethics. The ADI Board has established a whistle blower policy (the Compliance Reporting (Whistleblower) System) which, among other things, establishes procedures for the receipt, recording and treatment of complaints and concerns

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regarding accounting activities, internal controls or auditing matters and the confidential submission of concerns in these areas. The ADI Board has also established insider trading and blackout policies, as part of its Stock Trading Standard, which provides for certain restrictions in trading in securities of ADI. As well, the ADI Board has adopted a Related Party Transaction Policy that sets forth guidelines for identifying, evaluating and disclosing activities that may constituted a “related party transaction” under applicable securities laws. ADI’s Anti-Bribery and Anti-Corruption Policy is also key to ensuring full compliance by ADI and its directors, officers, employees and agents or contractors with Canada’s Corruption of Foreign Public Officials Act and any local anti-bribery or anti-corruption laws that may be applicable. Nomination of Directors The ADI Board, taking into consideration recommendations from the Governance Committee, considers its size each year when it considers the number of directors for election at the annual meeting of ADI Shareholders, taking into account the number required to carry out the duties of the ADI Board effectively and to maintain a diversity of views and experiences. The Governance Committee, comprised entirely of independent directors, is responsible for reviewing with the ADI Board on an annual basis, the size and composition of the ADI Board with a view to ensuring that the members of the ADI Board have the independence, expertise, experience, personal qualities and ability to make the necessary time commitment to ADI. The Governance Committee has the responsibility to identify, review and propose to the ADI Board nominees for election as directors within the parameters set out in this Schedule J. The Governance Committee identifies new candidates through one or more sources, including references from existing or former directors of ADI, the auditor of ADI, legal counsel to ADI and other industry contacts. Following an assessment of the ADI Board, the Governance Committee, based on current size and operations of ADI, recommended that the number of directors to be nominated at the 2016 meeting of ADI Shareholders should be eight. Accordingly, six independent and two non-independent directors were proposed for election by the ADI Shareholders. Assessments The ADI Board assesses, on a formal basis, the effectiveness of the ADI Board as a whole, the Chairman of the ADI Board, ADI Board committees and the contribution of individual directors. The ADI Board monitors the adequacy of information given to directors, communication between the ADI Board and management and the strategic direction and processes of the ADI Board and its committees. As a result of ADI’s size, its stage of development and the number of directors of ADI, the ADI Board considers this assessment process to be appropriate at this time. The Governance Committee will review this process periodically and make recommendations with respect to the assessment process as necessary. Director Share Ownership Requirements The Governance Committee and the ADI Board believe that the economic interests of ADI directors should be aligned with those of ADI Shareholders. The ADI Board determined that it is in best interests of ADI to adopt a share ownership requirement for directors. Pursuant to the share ownership requirement, ADI directors must within two years, directly or indirectly, hold ADI Shares equal to the directors’ annual base retainer. For the purpose of determining compliance with the share ownership requirements, a director’s ADI Shares will be valued at the higher of cost and market value.

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SCHEDULE III

AUDIT COMMITTEE DISCLOSURE

ADI AUDIT COMMITTEE CHARTER 1. Overall Purpose and Objectives The audit committee (the “Committee”) will assist the board of directors (individually a “Director” and collectively the “Board”) of Adriana Resources Inc. (the “Corporation”) in fulfilling their responsibilities under its mandate and applicable legal and regulatory requirements. To the extent considered appropriate by the Committee or as required by applicable legal or regulatory requirements, the Committee will: (a) Identify and monitor the management of the principal risks that could affect the reliability of

financial reporting.

(b) Monitor the integrity of the Corporation’s financial reporting process and system of internal control over financial reporting and accounting compliance.

(c) Assess whether the audited annual and unaudited interim financial statements are complete and fairly presented.

(d) The work of the external auditor including the independence and performance of the external auditor.

(e) Monitor the Corporation’s compliance with applicable legal and regulatory requirements affecting financial reporting.

(f) Provide an avenue for effective communication among the Committee, the external auditor, management, the internal auditor and the Board.

In fulfilling its responsibilities, the Committee maintains an effective working relationship with the Directors, management of the Corporation, internal audit and the external auditor as well as monitors the independence of the external auditor. In addition to the powers and responsibilities expressly delegated by the Board to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Corporation’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it. The Committee’s responsibilities are limited to oversight. Management of the Corporation is responsible for the preparation, presentation and integrity of the Corporation’s financial statements as well as the Corporation’s financial reporting process, accounting policies, internal audit function, internal accounting controls and disclosure controls and procedures. The independent auditor is responsible for performing an audit of the Corporation’s annual financial statements in accordance with Canadian Auditing Standards, expressing an opinion as to the conformity of such annual financial statements with International Financial Reporting Standards and reviewing the Corporation’s interim financial statements in accordance with Canadian Auditing Standards for performing reviews of interim financial statements. Each member of the Committee shall be entitled to rely on the integrity of those persons within the Corporation and of the

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professionals and experts (including the Corporation’s internal auditor - or others responsible for the internal audit function, including contracted non-employee or audit or accounting firms engaged to provide internal audit services - and the Corporation’s independent auditor) from which the Committee receives information and, absent actual knowledge to the contrary, the accuracy of the financial and other information provided to the Committee by such persons, professionals or experts. 2. Authority (a) The Committee shall have the authority to:

(i) engage independent counsel and other advisors as the Committee determines necessary to carry out its duties;

(ii) set compensation and authorize payment for any advisors employed by the Committee;

(iii) communicate directly with the internal auditor, if any, and the external auditor of the Corporation and require that the external auditor of the Corporation report directly to the Committee; and

(iv) seek any information considered appropriate by the Committee from any employee of the Corporation.

(b) The Committee shall have unrestricted and unfettered access to all personnel and documents of the Corporation and shall be provided with the resources reasonably necessary to fulfill its responsibilities.

3. Membership and Organization (a) The Committee will be composed of at least three members of the Board. The members of the

Committee (the “Members”) shall be appointed by the Board to serve one-year terms and shall be permitted to serve an unlimited number of consecutive terms. Every Member of the Committee must be a Director of the Corporation who is independent and financially literate, and at least one Member shall have accounting or related financial management expertise to qualify as a “financial expert”. In this Charter, the terms “independent” and “financially literate” have the meaning ascribed to such terms by applicable securities laws or the rules of any stock exchange on which the Corporation’s securities are listed (the “Applicable Laws”), including currently the requirements of National Instrument 52-110 Audit Committees (“NI 52-110”), which are reproduced in Appendix “A” attached hereto.

As the rules set out in Appendix “A” may be revised, updated or replaced from time to time, the Committee shall ensure that such Appendix is updated accordingly when required. (b) The chairman of the Committee (the “Chairman”) will be appointed by the Committee from time

to time on the recommendation of the corporate governance and nominating committee and must have such accounting or related financial management expertise as the Board may determine in its business judgment. The Chairman, if present, will act as the chairman of meetings of the Committee. If the Chairman is not present at a meeting of the Committee, the Members in attendance may select one of their number to act as chairman of the meeting.

(c) The secretary of the Committee will be the Secretary of the Corporation and will maintain minutes of all meetings and deliberations of the Committee. If the Secretary is not in attendance at any meeting, the Committee will appoint another person who may, but need not, be a Member to act as the secretary of that meeting.

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(d) The Committee may invite such persons to meetings of the Committee as the Committee considers appropriate, except to the extent exclusion of certain persons is required pursuant to this Charter or Applicable Laws. The Committee will meet in-camera without members of management in attendance for a portion of each meeting of the Committee where the review of financial statements is involved and at any other meeting that the Committee determines it necessary to do so.

(e) The Committee may invite the external auditor of the Corporation to be present at any meeting of the Committee and to comment on any financial statements or on any of the financial aspects of the Corporation.

(f) The Committee will meet as considered appropriate or desirable by the Committee, but in any event not less than four (4) times per year. Forty-eight (48) hours advanced notice of each meeting will be given to each Member orally, by telephone, by facsimile or email, unless all Members are present and waive notice, or if those absent waive notice before or after a meeting. Members may attend all meetings either in person or by telephone.

(g) At the request of any Member, the external auditor of the Corporation, the Chief Executive Officer or the Chief Financial Officer of the Corporation, the Chairman will convene a meeting of the Committee. Any such request will set out in reasonable detail the business proposed to be conducted at the meeting so requested.

(h) All decisions of the Committee shall be by simple majority and the Chairman shall not have a deciding or casting vote. Powers of the Committee may also be exercised by written resolutions signed by all Members.

(i) In advance of every regular meeting of the Committee, the Chairman, with the assistance of the Secretary, will prepare and distribute to the Members and others as deemed appropriate by the Chairman, an agenda of matters to be addressed at the meeting together with appropriate briefing materials. The Committee may require officers and employees of the Corporation to produce such information and reports as the Committee may deem appropriate in order for it to fulfill its duties.

(j) Except as may be delegated by the Committee to any one or more Members, no business shall be transacted by the Committee except at a meeting of the Members thereof at which a majority of the Members thereof is present.

4. Role and Responsibilities To the extent considered appropriate or desirable or required by applicable legal or regulatory requirements, the Committee shall, in respect of the: (a) Financial Reporting of the Corporation:

(i) review and recommend to the Board for approval, the unaudited interim and audited annual financial statements of the Corporation and the associated management’s discussion and analysis thereon and any annual and interim earnings press releases of the Corporation, as well as financial information and earning guidance provided to analysts and rating agencies, if applicable, before the Corporation publicly discloses such information and discuss these documents with the external auditor and with management of the Corporation as appropriate.

(ii) review and recommend to the Board for approval, where appropriate, financial information contained in any prospectuses, annual information forms, annual reports to shareholders, management proxy circulars, material change disclosures of a financial nature and similar disclosure documents prior to public disclosure of such information;

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(iii) consider the adequacy of disclosures and the fairness of the interim and annual financial statements and financial disclosure of the Corporation;

(iv) review significant accounting and reporting issues, including recent professional and regulatory pronouncements, and consider their impact on the financial statements of the Corporation;

(v) review any legal matters which could significantly impact the financial statements of the Corporation as reported on by counsel and meet with counsel to the Corporation whenever deemed appropriate;

(vi) review the selection of, and changes in the accounting policies of the Corporation;

(vii) review judgmental areas, for example those involving a valuation of the assets and liabilities and other commitments and contingencies of the Corporation;

(viii) review audit issues related to the material associated and affiliated entities of the Corporation that may have a significant impact on the equity investment therein of the Corporation;

(ix) meet separately and periodically with the management of the Corporation, the external auditor of the Corporation and the internal auditor (or other personnel responsible for the internal audit function of the Corporation) of the Corporation to discuss any matters that the Committee, the external auditor of the Corporation or the internal auditor of the Corporation, respectively, believes should be discussed privately;

(k) Internal Controls of the Corporation:

(i) review the planning and implementation of the work by the internal auditor, if any, pursuant to the internal audit charter, if any, which charter shall be approved by the Committee from time to time, including, without limitation, the identification and management of risks to the Corporation through the implementation of a system of internal controls appropriate to the Corporation;

(ii) ensure that there is an appropriate standard of corporate conduct for senior financial personnel and employees including, if necessary, adopting a corporate code of ethics;

(iii) review the areas of greatest financial and reporting and disclosure risks to the Corporation and whether management of the Corporation is managing these risks effectively;

(iv) review and determine if internal control recommendations made by either the internal auditor, if any, or external auditor of the Corporation have been implemented by management of the Corporation;

(v) review and be satisfied that adequate procedures are in place for the review of the public disclosure of the Corporation of financial information and periodically assess the adequacy of those procedures; and

(vi) establish procedures for:

the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and

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the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters relating to the Corporation;

(l) External Auditor of the Corporation:

(i) recommend to the Board:

the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report on the annual financial statements of the Corporation or performing other audit, review or attest services for the Corporation; and

the remuneration to be paid to the external auditor of the Corporation;

(ii) review the proposed audit scope and approach of the external auditor of the Corporation and ensure no unjustifiable restriction or limitations have been placed on the scope of the proposed audit;

(iii) receive a report from the external auditor relating to their findings during the conduct of their audit to assist the Committee’s review of the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report on the annual financial statements of the Corporation or performing other audit, review or attest services for the Corporation, including the resolution of disagreements between management of the Corporation and the external auditor of the Corporation regarding any financial reporting matter;

(iv) review the performance of the external auditor of the Corporation;

(v) consider the qualifications and confirm the independence of the external auditor of the Corporation, including reviewing the range of services provided by the external auditor of the Corporation in the context of all consulting services obtained by the Corporation;

(vi) pre-approve all non-audit services to be provided to the Corporation or any subsidiary entities thereof by the external auditor of the Corporation and, to the extent considered appropriate: (i) adopt specific policies and procedures in accordance with Applicable Laws for the engagement of such non-audit services; and/or (ii) delegate to one or more independent members of the Committee the authority to pre-approve all non-audit services to be provided to the Corporation or any subsidiary entities thereof by the external auditor of the Corporation provided that the other members of the Committee are informed of each such non-audit service;

(vii) the Committee shall review fees paid by the Corporation to the external auditors and other professionals in respect of audit and non-audit services on an annual basis;

(viii) review and approve the hiring policies of the Corporation regarding partners, employees and former partners and employees of the present and former external auditor of the Corporation; and

(ix) review with the external auditor of the Corporation any audit problems or difficulties and management’s response to such problems or difficulties;

(m) Financial Matters:

The Committee shall review and, where appropriate, make recommendations to the Directors regarding:

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(i) Policies relating to the Corporation’s cash flow, cash management and working capital,

shareholder dividends and related policy, and share issuance and repurchases;

(ii) Financial plans, including capital market and off-balance sheet transactions, including, without limitation, equity, debt and sale-leasebacks that may have a material impact on the Corporation’s financial position;

(iii) The Committee shall ensure that management establishes and maintains an appropriate budget process, which shall include assumptions regarding economic parameters that are well supported and that the risks facing the Corporation are taken into consideration, as well as periodic reports from the Chief Financial Officer comparing actual spending to the budget;

(iv) Acquisitions, joint ventures, divestitures and other similar transactions; and

(v) Other transactions or financial issues that management wishes to be reviewed by the Committee;

(n) Other Matters:

(i) the Committee shall review and assess annually this Charter and recommend any proposed changes to the Board for approval; and

(ii) the Committee shall perform an annual evaluation of the performance of the Committee, the results of which shall be reported to the Board.

5. Communication with the Directors (a) The Chairman will report to the Board at each Board meeting on the Committee's activities since

the last Board meeting. The Secretary will circulate the approved minutes of each meeting of the Committee to the Directors.

(b) The Committee shall produce and provide the Board with all reports or other information required to be prepared under Applicable Laws.

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Appendix “A”

Independence Requirement A member of the Audit Committee shall be considered “independent”, in accordance with National Instrument 52-110 Audit Committees (“NI 52-110”), subject to the additional requirements or exceptions provided in NI 52-110, if that member has no direct or indirect relationship with the Corporation, which could reasonably be expected to interfere with the exercise of the member’s independent judgment. The following persons are considered to have a material relationship with the Corporation and, as such, cannot be a member of the Audit Committee: (a) an individual who is, or has been within the last three years, an employee or executive officer of

the Corporation;

(b) an individual whose immediate family member is, or has been within the last three years, an executive officer of the Corporation;

(c) an individual who:

(i) is a partner of a firm that is the Corporation’s internal or external auditor;

(ii) is an employee of that firm; or

(iii) was within the last three years a partner or employee of that firm and personally worked on the Corporation’s audit within that time;

(d) an individual whose spouse, minor child or stepchild, or child or stepchild who shares a home with the individual:

(i) is a partner of a firm that is the Corporation’s internal or external auditor;

(ii) is an employee of that firm and participates in its audit, assurance or tax compliance (but not tax planning) practice, or

(iii) was within the last three years a partner or employee of that firm and personally worked on the Corporation’s audit within that time;

(e) an individual who, or whose immediate family member, is or has been within the last three years, an executive officer of an entity if any of the Corporation's current executive officers serves or served at the same time on the entity's compensation committee; and

(f) an individual who received, or whose immediate family member who is employed as an executive officer of the Corporation received, more than $75,000 in direct compensation from the Corporation during any 12 month period within the last three years, other than as remuneration for acting in his or her capacity as a member of the Board or any Board committee, or the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service for the Corporation if the compensation is not contingent in any way on continued service.

In addition to the independence criteria discussed above, any individual who: (a) has a relationship with the Corporation pursuant to which the individual may accept, directly or

indirectly, any consulting, advisory or other compensatory fee from the Corporation or any subsidiary entity of the Corporation, other than as remuneration for acting in his or her capacity as

J-56

a member of the Board or any Board committee; or as a part-time chair or vice-chair of the Board or any Board committee, or

(b) is an affiliated entity of the Corporation or any of its subsidiary entities, is deemed to have a material relationship with the Corporation, and therefore, is deemed not to be independent.

The indirect acceptance by an individual of any consulting, advisory or other fee includes acceptance of a fee by: (a) an individual's spouse, minor child or stepchild, or a child or stepchild who shares the individual's

home; or

(b) an entity in which such individual is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to the Corporation or any subsidiary entity of the Corporation.

Financial Literacy “Financially literate”, in accordance with NI 52-110, means that the director 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.

J-57

Sprott Resource Holdings Inc. (formerly Adriana Resources Inc.)

K-1

APPENDIX K

SPROTT RESOURCE HOLDINGS INC. UNAUDITED PRO FORMA FINANCIAL STATEMENTS

Sprott Resource Holdings Inc.

Table of Contents

K-2

K-3

K-4

K-5

K-6

Spro

tt R

esou

rce

Hol

ding

s In

c.

See

acco

mpa

nyin

g no

tes t

o th

e pr

o fo

rma

info

rmat

ion

Spr

ott

Res

ourc

e Co

rp.

Adr

iana

R

esou

rces

In

c.

Fin

anci

ng

Tra

nsac

tion

s N

ote

3 P

ro fo

rma

Adj

ustm

ents

N

ote

3

Pro

For

ma

Stat

emen

t of

Fina

ncia

l Po

siti

on fo

r Sp

rott

R

esou

rce

Hol

ding

s In

c.

Ass

ets

Tot

al a

sset

s11

5,34

9$

34,7

00$

14,7

00$

-$

164,

749

$

Liab

ilit

ies

Tot

al li

abil

itie

s

Equi

ty

Tot

al e

quit

y at

trib

utab

le to

sha

reho

lder

s of

the

Com

pany

Tot

al li

abil

itie

s an

d eq

uity

115,

349

$

34

,700

$

14

,700

$

-

$

16

4,74

9$

K-3


See accompanying notes to the pro forma information

Sprott Resource

Corp.

Adriana Resources

Inc. Pro Forma

Adjustments Note 3


Holdings Inc.

Investment gain

Expenses

Net income (loss) attributable to shareholders (1,560)$ (1,195)$ 31$ (2,724)$

Basic and diluted loss per share (0.01)$

Basic and diluted number of shares outstanding 510,488,999

K-4


See accompanying notes to the pro forma information

Sprott Resource

Corp.

Adriana Resources

Inc. Pro Forma

Adjustments Note 3


Holdings Inc.

Investment loss

Expenses

Loss before income tax

Income tax

Net income (loss) and comprehensive income (loss) for the year from continuing operations

Loss for the year from discontinued operations

Net income (loss) attributable to shareholders (119,494)$ (49,796)$ 5,468$ (163,822)$

Basic and diluted loss per share (0.32)$

Basic and diluted number of shares outstanding 512,292,600

K-5

1. BASIS OF PREPARATION

,

Canada Business Corporations Act

Business Combination

K-6

2. THE TRANSACTION

K-7

K-8

3. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

Consideration:

Total consideration 28,055$

Preliminary value of assets acquired:

Preliminary value of liabilities acquired:

Net assets acquired 33,256$

Gain on bargain purchase based on preliminary purchase price allocation as at September 30, 2016 5,201$

K-9

.

K-10

4. CAPITAL STOCK

K-11

Shareholders of: Shareholders of:

If you have any questions about the information contained in this document or

require assistance in completing your proxy form, please contact our proxy solicitation

agent at:

If you have any questions about the information contained in this document or

require assistance in completing your proxy form, please contact our proxy solicitation

agent at:

The Exchange Tower 130 King Street West, Suite 2950, P.O. Box 361

Toronto, Ontario M5X 1E2

www.kingsdaleshareholder.com

North American Toll Free Phone:

1-888-518-6805

Email: [email protected]

Facsimile: 416-867-2271

Toll Free Facsimile: 1-866-545-5580

Outside North America, Banks and Brokers Call Collect: 416-867-2272