10.

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12.

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14.

15.

subscription privileges, and the money which the company will receive if, when and to the extent that
the share options are exercised, will be used for the undermentioned purposes :—

(i) The payment of the preliminary administrative expenses of the company, including
the costs of and incidental to its incorporation and organization and to the acquisition by it of the
undertaking, which expenses are estimated not to exceed $5,000.00, of which no part has, as yet,
been paid by it.

(ii) The development of the mineral claims comprised in the undertaking, including the
purchase of machinery, equipment and supplies.

(iii) For the general purposes of the company.

It is not, at this stage, possible to determine the approximate amounts to be devoted to the purposes to
which clauses (ii) and (iii) above relate.

With the exceptions of the share options and of the right of Frederick M. Connell and W. Harold
Connell to take up and pay for any of the company’s shares to be offered by it to the shareholders of
Conwest which such shareholders shall fail duly to take up and pay for, no option agreement is outstand-
ing or is proposed to be given: there is no underwriting agreement outstanding or proposed to be given;
there is no sub-option agreement outstanding or proposed to be given, and there is no assignment or
proposed assignment of the share options or of the said right, either in whole or in part. The share
options are held by Conwest for itself, and not on behalf of anyone else. The only persons having more
than a 5% interest in Conwest are:—

Frederick Martin Connell, 85 Richmond Street West, Toronto, Ont.

William Harold Connell, 85 Richmond Street West, Toronto, Ont.

Montreal Trust Company, 15 King Street West, Toronto, Ont.

Roytor & Co. #10 Acc’t., Royal Bank of Canada, Bay & Temperance Streets, Toronto, Ont.

The net proceeds derived by the company from the sale by it to Conwest of 500,000 of its shares; the
net proceeds to be derived by the company from the said offering of subscription privileges to the share-
holders of Conwest, and the net proceeds to be derived by the company if, when and to the extent that
the share options are exercised, will be the full issue prices of such shares. No commission has hereto-
fore been paid by the company upon or with respect to sales of its treasury shares, nor will any commis-
sion be paid upon or with respect to sales made under the said offering of subscription privileges and
under the share options.

The company has not borrowed any money; it has not purchased any property other than the under-
taking, the considerations for the purchase of which are hereinbefore fully set out, and it does not now
propose to purchase any property other than such machinery, equipment and supplies as, from time to
time, the company shall find it necessary or desirable to purchase in relation to the development of the
mineral claims comprised in the undertaking. In the opinion of the board of directors of the company,
no minimum amount must be raised by the issue of shares offered to the public for subscription in order
to provide money for the foregoing matters.

No director or officer of the company has received, or will receive during the current financial year, any
remuneration paid or to be paid by the company. No services have been rendered, or are proposed to
be rendered, to the company which have been or are to be paid for by the company, either by the issue
of its shares or otherwise; save and except only the costs of its solicitors, the salary of the mining
engineer who is in charge of the development work upon and in relation to its mineral claims and the
wages of its employees engaged in that work.

The company has been incorporated upon the instructions of, and at the instance of, Conwest. Save
only with respect to the purchase by the company of the undertaking for the considerations hereinbefore
mentioned, the company has not made any payment to any promoter and does not intend to make any
such payment.

None of the directors of the company has or has had any interest in the promotion of the company or in
any property acquired or proposed to be acquired by the company. Frederick M. Connell, W. Harold
Connell, Charles R. Elliott and Arthur B. Mortimer are directors and shareholders of Conwest. Nothing
has been paid, or has been agreed to be paid, to any director of the company, in money, shares or
otherwise, by any person, to induce him to become a director, or otherwise for services rendered by him
in connection with the promotion or formation of the company. Each of the directors has, however,
been provided, free of expense to him, with one share in the authorized capital of the company in order
to qualify him as a director.