AGENCY AGREEMENT

1.

Nature of Transaction

(a)

Each Canadian Purchaser shall purchase Offered Securities under a Private Placement Exemption. The Agents will notify the Corporation with respect to the identity of any Purchaser as soon as practicable and with a view to leaving sufficient time to allow the Corporation to secure compliance with all relevant regulatory requirements of the applicable Offering Jurisdictions relating to the sale of the Offered Securities and, in any event not later than 12:00 p.m. (Toronto time) on the day before the Closing Date. The Corporation undertakes to file or cause to be filed all forms or undertakings required to be filed by the Corporation and to pay all filing fees in connection with the purchase and sale of the Offered Securities so that the distribution of such securities may lawfully occur without the necessity of filing a prospectus or an offering memorandum (apart from the Canadian Offering Memorandum distributed in conjunction with the base Prospectus and the Prospectus Supplement) in Canada or comparable document elsewhere. The Agents undertakes to use commercially reasonable efforts to cause Purchasers to complete any forms required by Applicable Securities Laws if so required.

(b)

It is understood and agreed that the Agents may arrange for Purchasers of the Offered Securities in jurisdictions other than Canada, on a private placement basis, provided that the sale of such Offered Securities in such other jurisdiction does not contravene the Applicable Securities Laws of such other jurisdiction or of Canada and provided that such sale does not trigger (i) any obligation to prepare and file a prospectus or similar disclosure document, or any other report with respect to such purchase in such other jurisdiction, or (ii) any registration or other obligation on the part of the Corporation in such other jurisdictions including but not limited to any continuing obligation in such other jurisdictions.

(c)

The certificate representing the Flow-Through Shares and the Warrants issued to a resident of Canada will bear a legend denoting the restrictions on transfer under Applicable Securities Laws in Canada (including National Instrument 45-102).

(d)

If at the date of their issue, the applicable restriction period has not expired, the certificates representing the Warrant Shares issued to a resident of Canada will bear a legend as prescribed by National Instrument 45-102.

(e)

In addition to the foregoing legends, the certificates representing the Flow-Through Shares and Warrant Shares, if issued prior to such time as the restrictive legends above are no longer required under Applicable Securities Laws in Canada, shall bear, in addition to any legend(s) required by National Instrument 45-102, the following legend:

2.

Agent's Compensation

(a)

In consideration for the performance of its obligations hereunder, the Corporation shall, subject to the provisions of this Agreement, pay to the Agents an agent fee (the "Agent Fees") equal to 7.5% of the Gross Proceeds.

(b)

The Agents may retain one or more registered securities brokers or investment dealers to act as selling agent in connection with the sale of the Offered Securities but the compensation payable to such selling agents shall be the sole responsibility of the Agents, and only as permitted by and in compliance with all Applicable Securities Laws, upon the terms and conditions set forth in this Agreement and will require each such selling agent to so agree.

(c)

As additional consideration for the performance of their obligations hereunder, the Corporation shall issue to the Agent compensation warrants (the "Compensation Warrants") (in such name or names as the Agents may direct in writing) on the Closing. Each Compensation Warrant will entitle the holder to purchase one Compensation Unit at $0.45 per Compensation Unit for a 24-month period following the date of the Closing.

(d)

The certificates representing the Compensation Warrants and any certificates issued in replacement thereof will bear a legend denoting the restrictions on transfer under Applicable Securities Laws in Canada (including National Instrument 45-102).

(e)

If at the date of their issue, the applicable restriction period has not expired, the certificates representing the Agent Common Shares and Agent Warrants will bear a legend as prescribed by National Instrument 45-102.

(f)

In addition to the foregoing legends, the certificates representing the Agent Common Shares and the Warrant Shares issuable on exercise of the Agent Warrants, if issued prior to such time as the restrictive legends above are no longer required under Applicable Securities Laws in Canada, shall bear, in addition to any legend(s) required by National Instrument 45-102, the following legend:

3.

Covenants and Certification of the Agents

(a)

will conduct activities and shall cause the selling agents to conduct their activities in connection with arranging for purchasers of the Offered Securities in compliance with the Applicable Securities Laws and will indemnify the Corporation from all losses incurred by it as a result of a violation by the Agents or any selling agent retained by it of such Applicable Securities Laws;

(b)

will not deliver to any prospective Purchaser any document or material which constitutes an offering memorandum under Applicable Securities Laws except (i) the Base Prospectus and the Prospectus Supplement, which shall be delivered to each Purchaser who is not a resident of Canada on or prior to Closing together with the Subscription Agreement for the Flow-Through Units; and (ii) the Canadian Offering Memorandum which shall be delivered to each Purchaser resident in Canada on or prior to Closing;

(c)

will not solicit offers to purchase or sell the Offered Securities so as to require registration thereof or filing of a prospectus with respect thereto or continuing obligations on the part of the Corporation under the laws of any jurisdiction including, without limitation, the United States or any state thereof, and not solicit offers to purchase or sell the Offered Securities in any jurisdiction outside of Canada and the United States where the solicitation or sale of the Offered Securities would result in any statutory ongoing disclosure requirements in such jurisdiction or any registration requirements in such jurisdiction on the part of the Corporation except for the filing of a notice or report of the solicitation or sale;

(d)

will obtain from each Purchaser an executed Subscription Agreement in a form reasonably acceptable to the Corporation and to the Agents relating to the transactions herein contemplated, together with all documentation as may be necessary in connection with subscriptions for Offered Securities;

(e)

other than filing the Prospectus Supplement with the SEC, will refrain from any form of general advertising or any form of general solicitation in connection with the Offering including in (A) printed media of general and regular circulation or any similar medium, (B) radio, (C) television, or (D) electronic media or conduct any seminar or meeting concerning the offer and sale of the Offered Securities whose attendees have been invited by any form of general solicitation or general advertising, and not make use of any green sheet or other internal marketing document without the consent of the Corporation, such consent to be promptly considered and not to be unreasonably withheld;

(f)

will comply with, and ensure that it and its selling agents and it and its respective directors, officers, employees and affiliates comply with all Applicable Securities Laws and the terms and conditions set forth in this Agreement; and

(g)

certifies to the Corporation (and acknowledges that the Corporation is relying thereon) that the Agents, and (if applicable) others for whom they are contracting hereunder, are resident or otherwise subject to the securities legislation of the Province of Ontario and can avail themselves of the relevant Private Placement Exemptions available under the applicable securities legislation in such province.

4.

Representations and Warranties of the Corporation

(a)

the Corporation and each Subsidiary has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority necessary to, and is qualified to, carry on its business as now conducted, and to own or lease its properties and assets in all jurisdictions in which it currently carries on business and/or owns or leases its properties and assets; and the Corporation has all required corporate power and authority to create, issue and sell the Offered Securities and the Compensation Warrants, to enter into this Agreement and the Subscription Agreements and to carry out the provisions of each of such agreements;

(b)

the authorized capital of the Corporation consists of an unlimited number of Common Shares of which, as of October 11, 2006 (being the date of the Letter Agreement) 123,321,883 Common Shares are issued and outstanding as fully paid and non-assessable shares in the capital of the Corporation;

(c)

the Corporation has no subsidiaries other than the Subsidiaries listed in Schedule "C" and the Corporation beneficially owns, directly or indirectly, the percentage indicated of all the issued and outstanding shares in the capital of each Subsidiary free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands of any kind whatsoever, all of such shares have been duly authorized and validly issued and are outstanding as fully-paid and non-assessable shares and no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the purchase from the Corporation of any interest in any of such shares or for the issue or allotment of any unissued shares in the capital of any Subsidiary or any other security convertible into or exchangeable for any such shares;

(d)

the Corporation does not have any Significant Interest Companies other than the Subsidiaries;

(e)

no order prohibiting the sale of the Offered Securities or the issuance of the Compensation Warrants has been issued and no proceedings for such purpose are pending or, to the knowledge of the Corporation, threatened;

(f)

no person, firm or corporation, as of the date hereof, has any agreement or option, or any right or privilege (whether pre-emptive or contractual) capable of becoming an agreement or option, for the purchase, subscription or issuance of any securities of the Corporation, other than as set out in Schedule "B";

(g)

other than as disclosed in Schedule "D", each of the Corporation and the Subsidiaries has conducted and is conducting its business in compliance in all material respects with all applicable laws and regulations of each jurisdiction in which it carries on business (including, without limitation, all applicable Canadian federal, provincial, municipal and local environmental, anti-pollution and licensing laws, regulations and other lawful requirements of any governmental or regulatory body, including, but not limited to relevant exploration and exploitation permits and concessions) and has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations or permits which would have a material adverse effect on the Corporation or the Subsidiaries;

(h)

except as qualified in the Disclosure Documents, the Corporation or a Subsidiary is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to as owned by it in the Disclosure Documents, all agreements under which the Corporation or a Subsidiary holds an interest in a property, business or asset are in good standing according to their terms except where the failure to be in such good standing does not and will not have a material adverse effect on the Corporation (on a consolidated basis) or its properties, business or assets, and the Disclosure Documents were as at the respective dates thereof true and correct in all material respects concerning the Corporation and the Subsidiaries, and contained no misrepresentations;

(i)

all information which has been prepared by the Corporation relating to the Corporation and the Subsidiaries and their business, property and liabilities and either publicly disclosed or provided to the Agents, including all financial, marketing and operational information provided to the Agents is, as of the date of such information, true and correct in all material respects, and no fact or facts have been omitted therefrom which would make such information materially misleading;

(j)

the Corporation has, and to the best of the Corporation's knowledge the directors and officers of the Corporation have, answered every question or inquiry of the Agents and their counsel in connection with the Agents' due diligence investigations fully and truthfully;

(k)

the Corporation is not aware of any legislation, or proposed legislation (published by a legislative body), which it anticipates will materially and adversely affect the business, affairs, operations, assets or liabilities (contingent or otherwise) of the Corporation and the Subsidiaries, considered as a whole;

(l)

the Corporation and each Subsidiary has obtained all certificates, authorizations, permits or licences necessary to conduct the business now owned or operated by it and the Corporation has not received any notice of proceedings relating to the revocation or modification of any material certificate, authority, permit or license necessary which, if the subject of an unfavourable decision, ruling or finding would materially and adversely affect the conduct of the business, operations, financial condition or income of the Corporation (on a consolidated basis);

(m)

the execution and delivery of this Agreement and the Subscription Agreements and the performance of the transactions contemplated thereunder and the filing with the SEC of the Prospectus Supplement does not and will not:

(i)

require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, securities regulatory authority or other third party, except: (i) such as have been obtained; or (ii) such as may be required under the applicable by-laws, policies, regulations and prescribed forms of the Exchange and the AMEX;

(ii)

result in a breach of or default under, nor create a state of facts which, after notice or lapse of time or both, would result in a breach of or default under, nor conflict with:

(A)

any of the terms, conditions or provisions of the constating documents or resolutions of the shareholders, directors or any committee of directors of the Corporation or any Subsidiary or any material indenture, agreement or instrument to which the Corporation or any Subsidiary is a party or by which it or they are contractually bound; or

(B)

any statute, rule, regulation or law applicable to the Corporation, or the Subsidiaries including, without limitation, the Applicable Securities Laws of the Offering Jurisdictions, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation or the Subsidiaries; or

(C)

any material mortgage, note, indenture, contract, agreement (written or oral), instrument, lease or other document to which the Corporation or any Subsidiary is a party or by which the Corporation or any Subsidiary or a material portion of the assets of the Corporation or any Subsidiary are bound (a "Material Agreement"), or any judgment, decree, order, statute, rule or regulation applicable to any of them; and

(iii)

except as encumbered hereby, only, give rise to any lien, charge or claim in or with respect to the properties or assets now owned or hereafter acquired by the Corporation or any Subsidiary or the acceleration of or the maturity of any debt under any indenture, mortgage, lease, agreement or instrument binding or affecting any of them or any of their properties;

(n)

the auditors of the Corporation are independent public accountants as required by the Applicable Securities Laws and there has never been any reportable disagreement (within the meaning of National Instrument 51-102 - Continuous Disclosure) with the present or any former auditor of the Corporation;

(o)

the Corporation and each Subsidiary has filed all federal, provincial, territorial, state, local and foreign tax returns that are required to be filed or have requested extensions thereof (except in any case in which the failure so to file would not have a material adverse effect on the assets and properties, business, results of operations or condition (financial or otherwise) of the Corporation) on a consolidated basis and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith;

(p)

the Corporation and each Subsidiary has established on its books and records reserves that are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Corporation or any Subsidiary and there are no audits known by the Corporation's management to be pending of the tax returns of the Corporation or any Subsidiary (whether federal, state, provincial, territorial, local or foreign) and there are no claims which have been or may be asserted relating to any such tax returns, which audits and claims, if determined adversely, would result in the assertion by any governmental agency of any deficiency that would have a material adverse effect on the assets or properties, business, results of operations or condition (financial or otherwise) of the Corporation (on a consolidated basis);

(q)

no domestic or foreign taxation authority has asserted or, to the best of the Corporation's knowledge, threatened to assert any assessment, claim or liability for taxes due or to become due in connection with any review or examination of the tax returns of the Corporation or each Subsidiary (including, without limitation, any predecessor companies) filed for any year which would have a material adverse effect on the assets or properties, business, results of operations or condition (financial or otherwise) of the Corporation (on a consolidated basis);

(r)

the Corporation and each Subsidiary maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;

(s)

neither the Corporation nor, to the best of the Corporation's knowledge, any other party is in material default in the observance or performance of any term or obligation to be performed by it under any of the Material Agreements and no event has occurred which with notice or lapse of time or both would constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations or condition (financial or otherwise) of the Corporation (on a consolidated basis);

(t)

at Closing, the Corporation will have filed all documents, taken all proceedings and obtained all regulatory consents necessary as a precondition to the sale of the Offered Securities and the issuance of the Compensation Warrants hereunder;