satisfied by the allotment and issue by the company of 625,000 shares in its authorized capital, at
the issue value of 10¢ per share and as fully paid and non-assessable; being the residue of the
vendors’ shares.

(d) The offering by the company to the shareholders of Conwest of the right to purchase
one share in the authorized capital of the company, at the price of $1.00 and as fully paid and non-
assessable, for each five shares in Conwest held by its shareholders at the close of business on July
16th, 1951; shareholders of Conwest whose holdings are not divisible by five to be entitled to
purchase such number of shares of the company as shall be determined by dividing their holdings
by that figure and ignoring any remaining shares; shareholders of Conwest whose holdings are less
than five shares to have no subscription privilege, and such subscription privileges to be exercisable
up to, but not after, 4 o’clock in the afternoon, Toronto daylight saving time, on August 15th, 1951.
In the event and to the extent that the shareholders of Conwest shall fail to exercise their said
subscription privileges, the company will, on or before September 15th, 1951, sell to Frederick M.
Connell and W. Harold Connell, or either of them or the nominee or nominees.of them or of either
of them, at the price of $1.00 per share and as fully paid and non-assessable, all or any part or parts
of the shares in the authorized capital of the company so to be offered by it to the shareholders of
Conwest which such shareholders shall fail duly to take up and pay for and which Frederick M.
Connell and W. Harold Connell, or either of them, shall elect to take up and pay for.

(e) The payment by the company to Conwest of the sum of $55,000.00 of lawful money
of Canada.

(f) The payment by the company of the costs of and incidental to its incorporation and
organization and the acquisition by it of the undertaking.

(g) The sale by the company to Conwest of 500,000 fully paid and non-assessable shares in
the authorized capital of the company for the sum of $140,000.000 of lawful money of Canada, being
at the issue price of 28¢ per share. In satisfaction of the purchase price of those shares, Conwest
has paid to the company the sum of $100,000.00 (which the company will pay to Victor A. Sittler
and his said associates) and has reduced by the balance of $40,000.00 the amount of $55,000.00
which, as above-mentioned, the company has contracted to pay to Conwest.

(h) The granting by the company to Conwest of sole and exclusive options, which are herein
referred to as “THE SHARE OPTIONS”, to purchase a total of a further 574,993 of the unissued
shares in the authorized capital of the company, as fully paid and non-assessable, at the prices and
in the quantities hereunder mentioned :—

(i) The whole or any part or parts of 200,000 shares at the price of $1.25 per share.
(ii) The whole or any part or parts of 200,000 shares at the price of $1.50 per share.
(iii) The whole or any part or parts of 174,993 shares at the price of $1.75 per share.

Each of the share options shall be exercisable on or before such date or dates, being not later than
June 30th, 1954, as shall, from time to time, be fixed by the board of directors of the company. Upon
the fixing by the board of directors of the company of each date on or before which any portion or
portions of any one or more of the share options shall be exercisable, the company shall give to
Conwest not less than thirty (30) days’ prior notice of such date. Without the consent of Conwest,
the board of directors of the company shall not fix a date on or before which the whole or any part
or parts of the share options other than the first of them shall be exercisable unless and until each
preceding share option, in the order in which they are above set out, shall have been fully exercised
or shall have lapsed.

7. The mineral claims mentioned in the report of William V. Smitheringale, dated July 3rd, 1951, which
accompanies this prospectus are Rugged Nos. 1 to 14, inclusive, and Rugged Fr. The remaining mineral
claims comprised in the undertaking are at present regarded as being of subsidiary interest.

8. The signatories hereto undertake to file an amendment to this prospectus in the event of any default in
the exercise of the share options if the shares of the company are then in course of primary distribution.

9. The company is about to offer to the shareholders of Conwest the above-mentioned subscription
privileges entitling such shareholders to purchase 500,000 shares in the authorized capital of the company
at the price of $1.00 per share, payable in full on application, and that is the only offering to the public
to which this prospectus relates. The money which the company will receive from the said offer of

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