AGENCY AGREEMENT

Attention: Mr.

  Peter J. Bradford, President and Chief Executive Officer

(1)

In this Agreement:

“Agents” has the meaning ascribed thereto on page 1 hereof;

“Agents’ Fee” has the meaning ascribed thereto on page 1 hereof;

“Authorities” has the meaning ascribed thereto in Section 6(1)(h) hereof;

“ business day ” means any day other than a Saturday, Sunday or statutory or civic holiday in the City of Toronto, Ontario and the City of New York, New York;

“Canadian Preliminary Prospectus” has the meaning ascribed thereto in Section 2(2) hereof;

“Canadian Prospectus” has the meaning ascribed thereto in Section 2(2) hereof;

“ Canadian Securities Laws ” means, collectively, all applicable securities laws of each of the Qualifying Provinces and the respective rules and regulations under such laws, together with applicable published policy statements, notices and orders of the securities regulatory authorities in the Qualifying Provinces;

“ Closing Date ” has the meaning ascribed thereto in Section 10(1) hereof;

“Common Shares” has the meaning ascribed thereto on page 1 hereof;

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

“Exchanges ” means the Toronto Stock Exchange (“ TSX ”) and the American Stock Exchange (“ AMEX ”);

“Incorporated Documents” has the meaning ascribed thereto in Section 2(2) hereof;

“ Inter-Dealer Agreement ” means that certain inter-dealer agreement, dated the date hereof, between the Underwriters and the Agents;

“Lead Managers” has the meaning ascribed thereto on page 1 hereof;

“ Material Resource Properties ” has the meaning ascribed thereto in Section 6(1)(h) hereof;

“ Material Subsidiaries ” means the entities set out in Schedule A in which the Corporation holds the types and percentages of securities or other ownership interests therein set forth, and, unless the context otherwise requires, shall be deemed to include St. Jude;

“Offering” has the meaning ascribed thereto on page 1 hereof;

“Preliminary Prospectus Supplements” has the meaning ascribed thereto in Section 2(2) hereof;

“Prospectus Supplements” has the meaning ascribed thereto in Section 2(2) hereof;

“Qualifying Provinces” means the provinces of Canada in which the Corporation has filed a Canadian preliminary short form prospectus and a (final) short form prospectus in respect to the Common Shares to be sold by the Underwriters in Canada;

“Registration Statement” has the meaning ascribed thereto in Section 2(2) hereof;

“SEC” means the United States Common Shares and Exchange Commission;

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

“Selling Firms” has the meaning ascribed thereto in Section 5(1)(a) hereof;

“ St. Jude ” means St. Jude Resources Ltd.;

“ Stock Option Plans ” means the stock option plans of the Corporation as approved by the shareholders of the Corporation, as constituted on the date hereof;

“ Time of Closing ” has the meaning ascribed thereto in Section 10(1) hereof;

“Underwriters” has the meaning ascribed thereto on page 1 hereof;

“Underwriting Agreement” has the meaning ascribed thereto on page 1 hereof;

“ United States” means the United States of America, its territories and possessions, any state of the United States, the District of Columbia, and the areas subject to the jurisdiction of the United States of America;

“U.S. Preliminary Prospectus” has the meaning ascribed thereto in Section 2(2) hereof;

“U.S. Prospectus” has the meaning ascribed thereto in Section 2(2) hereof;

“U.S. Securities Laws” has the meaning ascribed thereto in Section 2(2) hereof; and

“U.S. Shelf Prospectus” has the meaning ascribed thereto in Section 2(2) hereof.

(2)

Any references in this Agreement to gender include all genders and words importing the singular number shall include the plural and vice versa.

(3)

The division of this Agreement into sections, subsections, paragraphs and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Unless something in the subject matter or context is inconsistent therewith, references herein to sections, subsections, paragraphs and other subdivisions are to sections, subsections, paragraphs and other subdivisions of this Agreement.

(4)

Except as otherwise indicated, all amounts expressed herein in terms of money refer to lawful currency of the United States and all payments to be made hereunder shall be made in such currency.

The Corporation represents and warrants to each Agent that:

Preliminary Prospectus ” means the Canadian preliminary short form prospectus filed with the Qualifying Provinces together with the U.S. Shelf Prospectus (annexed thereto as Appendix C). The term “Prospectuses” means collectively, the U.S. Prospectus and the Canadian Prospectus. As used herein, the terms “Registration Statement”, “U.S. Shelf Prospectus”, “U.S. Preliminary Prospectus”, “U.S. Prospectus”, “Canadian Preliminary Prospectus” and “Canadian Prospectus” shall include, in each case, all documents incorporated, or deemed incorporated, therein by reference pursuant to the requirements of Item 12 of Form S-3 (the “ Incorporated Documents ”), and any reference herein to the terms “amend”, “amendment“ or “supplement” with respect to any of the foregoing documents shall be deemed to refer to and include the filing of the Incorporated Documents.

(3)

The Registration Statement at the time it became effective, and the U.S. Shelf Prospectus contained therein, complied, and on the date of the Prospectuses, and at the Closing Date, the Registration Statement and the Prospectuses will comply, fully in all material respects with the requirements of the Securities Act and the U.S. Securities Laws; the Incorporated Documents, as of the date each was filed, comply and will comply fully in all material respects with the requirements of the Exchange Act and the rules and regulations adopted by the SEC thereunder; and at the date of the Prospectuses, and at the Closing Date, the Registration Statement and the Prospectuses will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except that this representation and warranty does not apply to statements or omissions in the Registration Statement, U.S. Prospectus or the Canadian Prospectus made in reliance upon information furnished in writing to the Corporation by any Agent or Underwriter concerning the Agents or Underwriters expressly for use therein.

(4)

The representations and warranties made by the Corporation in Section 2 of the Underwriting Agreement are incorporated herein by reference and shall have the same effect as if made to the Agents under this Agreement.

The Agents’ obligations under this Agreement are conditional upon and subject to:

(1)

the Agents receiving at the Time of Closing favourable legal opinions to be delivered to the Agents by Fasken Martineau DuMoulin LLP, Canadian counsel to the Corporation, and Davis Graham & Stubbs LLP, the Corporation’s U.S. counsel (who may rely, to the

extent appropriate in the circumstances, on the opinions of local counsel acceptable to counsel to the Corporation as to the qualification or the registration of the Common Shares for sale to the public in Canada and the United States and as to other matters governed by the laws of the Qualifying Provinces other than the provinces in which they are qualified to practice and may rely, to the extent appropriate in the circumstances, as to matters of fact on certificates of officers, of public officials and Exchange officials or of the auditors or transfer agent of the Corporation), dated the Closing Date, addressed to the Agents, as to those matters set forth in Schedule B hereto, and in form and substance satisfactory to the Agents and their counsel, acting reasonably;

(2)

the Agents having received the comfort letters referred to in Section 9(1)(a) and Section 9(1)(b);

(3)

the Agents having received comfort letters, dated the Closing Date, in form and substance satisfactory to the Agents, acting reasonably, bringing forward to a date not more than two business days prior to the Closing Date, the information contained in the comfort letters referred to in Section 9(1)(a) and Section 9(1)(b);

(4)

the Agents receiving at the Time of Closing a legal opinion (or opinions), dated the Closing Date in form and substance satisfactory to the Agents and their counsel, acting reasonably, addressed to the Agents, from local counsel to the Corporation, as to mining title matters with respect to each of the Material Resource Properties (other than Hwini-Butre);

(5)

the Agents receiving at the Time of Closing a legal opinion (or opinions) dated the Closing Date, in form and substance satisfactory to the Agents and their counsel, addressed to the Agents, from local counsel to the Corporation, stating that the Material Subsidiaries have been duly created and that each is validly existing under the laws of the jurisdiction in which it was incorporated, amalgamated or continued, and that the Corporation or a Material Subsidiary owns all of the issued and outstanding share capital of each such corporation, except as set out in Schedule A;

(6)

at the Time of Closing, there having been no material adverse change in the business, affairs, operations, assets, liabilities or financial condition of the Corporation on a consolidated basis since the date hereof;

(7)

at the Time of Closing, CIBC Mellon Trust Company, at its principal office in Vancouver, having been duly appointed as the transfer agent and registrar for the Common Shares;

(8)

the Underwriting Agreement having been executed by the Corporation and the Underwriters, and none of the Underwriters shall have relied upon any rights of termination in the Underwriting Agreement to terminate the offering of the Common Shares in Canada and all conditions to the Underwriters obligations thereunder having been waived or satisfied;

(9)

the Corporation delivering a certificate signed on behalf of the Corporation by the Chief Executive Officer of the Corporation and the Chief Financial Officer of the Corporation, addressed to the Agents and dated the Closing Date, in a form satisfactory to the Agents

and their counsel acting reasonably, certifying for and on behalf of the Corporation and not in their personal capacities that, to the actual knowledge of the persons signing such certificate, after having made due inquiry:

(10)

the Agents having received favourable opinions of Stikeman Elliott LLP and Dorsey & Whitney LLP, their Canadian and United States counsel, respectively, as to such matters as the Agents shall reasonably request; and

(11)

the Agents having received at the Time of Closing such further certificates, opinions of counsel and other documentation from the Corporation as are consistent with the transactions contemplated herein and provided that no less than 48 hours notice thereof is given prior to the Time of Closing.

The Agents:

thereto under the laws of any jurisdiction other than the United States, and will require each Selling Firm to agree with the Agents not to so solicit or sell. In this connection, the Agents agree that they will not offer or sell any of the Common Shares constituting a part of their allotment within Canada except, if applicable, through the Underwriters on the terms and conditions set forth in the Underwriting Agreement and the Inter-Dealer Agreement and in compliance with the Canadian Securities Laws;

(c)

agree that if they offer to sell or sell any Common Shares in jurisdictions (which may include Europe) other than the United States and through the Underwriters in the Qualifying Provinces, such offers and sales shall be effected in accordance and compliance with the applicable laws of such jurisdictions and shall be effected in such manner so as not to: (i) require registration of the Common Shares, or the filing of a prospectus or other document with respect thereto; or (ii) subject the Corporation to any continuous disclosure or similar reporting requirements under the laws of any jurisdiction outside the provinces of Canada or the United States;

(d)

shall use all reasonable efforts to complete and to cause the other Selling Firms to complete the distribution of the Common Shares as soon as practicable;

(e)

shall notify the Corporation when, in their opinion, the Agents and the other Selling Firms have ceased distribution of the Common Shares; and

(f)

shall comply in all material respects with all U.S. Securities Laws with respect to the use of “green sheets” and other marketing materials.

(1)

The Corporation hereby represents and warrants to the Agents, intending that the same may be relied upon by the Agents, that:

in each case free and clear of any pledge, lien, security interest, charge, claim or encumbrance, other than as is described in the Prospectuses;

(d)

no order, ruling or determination having the effect of ceasing, suspending or restricting trading in any Common Shares of the Corporation or the sale of the Common Shares has been issued and no proceedings, investigations or inquiries for such purpose are pending or, to the Corporation’s knowledge, threatened;

(e)

the Corporation’s common shares are posted and listed for trading on the Exchanges and the Corporation is not in default in any material respect of any of the listing requirements of the Exchanges;

(f)

other than options under the Corporation’s Stock Option Plans, the Corporation is not a party to and has not entered into any agreement, warrant, option, right or privilege reasonably capable of becoming an agreement, for the purchase, subscription or issuance of any Common Shares or securities convertible into or exchangeable for common shares other than as set out in the Prospectuses;

(g)

as at December 20, 2005, the authorized share capital of the Corporation consisted of an unlimited number of Common Shares and an unlimited number of First Preferred shares, of which 142,987,394 Common Shares and no First Preferred shares are issued and outstanding;

(h)

the Corporation, each of the Material Subsidiaries, and, to the Corporation’s knowledge after due inquiry, St. Jude have conducted and are conducting their respective businesses in material compliance with all applicable laws, rules, regulations, tariffs, orders and directives, including without limitation, all laws, regulations and statutes relating to mining and to mining claims, concessions or leases, and environmental, health and safety laws, rules, regulations, or policies or other lawful requirements of any governmental or regulatory bodies having jurisdiction over the Corporation and the Material Subsidiaries in each jurisdiction in which the Corporation or the Material Subsidiaries carries on their respective businesses, other than those in respect of which the failure to comply would not individually or in the aggregate be material and adverse to the Corporation and the Material Subsidiaries (taken as a whole). Each of the Corporation, the Material Subsidiaries, and, to the knowledge of the Corporation after due inquiry, St. Jude hold all certificates, authorities, permits, licenses, registrations and qualifications (collectively, the “ Authorities ”) in all jurisdictions in which each carries on its business and which are material for and necessary or desirable to carry on their respective businesses as now conducted. To the best of the Corporation’s knowledge, information and belief all the Authorities are valid and existing and in good standing and none of the Authorities contain any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation and the Material Subsidiaries (taken as a whole) as now conducted or as currently proposed to be conducted. None of the Corporation, any of the Material Subsidiaries, or, to the knowledge of the Corporation after due inquiry, St. Jude has received any notice of proceedings relating to the revocation or

modification of any of the Authorities which, singly or in the aggregate, if the subject of an unfavourable decision, ruling or finding, would materially adversely affect the business, operations, financial condition, or income of the Corporation or the Material Subsidiaries (taken as a whole) or any notice of the revocation or cancellation of, or any intention to revoke or cancel, any of the mining claims, concessions or leases comprising:

The above-noted properties are referred to, collectively, as the “Material Resource Properties” and each such property, other than the Hwini-Butre property, is as described in the Form 10-K of the Corporation dated April 14, 2005;

(i)

the Corporation, each of its Material Subsidiaries, and, to the Corporation’s knowledge after due inquiry, St. Jude have good and marketable title to all assets owned by them free and clear of all liens, charges and encumbrances, other than as described in the Prospectuses, and other than such liens, charges and encumbrances that are not individually or in the aggregate material to the Corporation or the Material Subsidiaries taken as a whole;

(j)

except as set out in the Prospectuses or as are not individually or in the aggregate material to the Corporation and the Material Subsidiaries (taken as a whole), or other than as would not have a material effect on the value of such interests, all interests in the Material Resource Properties are owned, leased or held by the Corporation, its Material Subsidiaries or, to the Corporation’s knowledge after due inquiry, St. Jude as owner or lessee thereof, are so owned with good and marketable title or are so leased with good and valid title, are in good standing, are valid and enforceable, are free and clear of any liens, charges or encumbrances, except with respect to the litigation listed ion Schedule C, and no royalty is payable in respect of any of them; no other material property rights are necessary for the conduct or currently intended conduct of the Corporation’s, the Material Subsidiaries’ or, to the knowledge of the Corporation after due inquiry, St. Jude’s business and there are no restrictions on the ability of the Corporation or the Material Subsidiaries to use, transfer or otherwise exploit or explore (as the case may be) any such property rights, except as set out in the Prospectuses;

(k)

(A) the Corporation and its Material Subsidiaries are in material compliance with all material terms and provisions of all contracts, agreements, indentures, leases, instruments and licences material to the conduct of their businesses taken as a

whole and (B) all such contracts, agreements, indentures, leases, policies, instruments and licences are valid and binding in accordance with their terms and are in full force and effect;

(l)

except in each case as publicly disclosed: (i) to the best of the Corporation’s knowledge, information and belief none of the real property (and the buildings constructed thereon) in which the Corporation or any of the Material Subsidiaries or, to the knowledge of the Corporation after due inquiry, St. Jude has a direct or indirect interest, whether leasehold or fee simple or otherwise (the “ Real Property ”), or upon or within which it has operations, is subject to any judicial or administrative proceeding alleging the violation of any federal, provincial, state or municipal environmental, health or safety statute or regulation, domestic or foreign, or is subject to any investigation concerning whether any remedial action is needed to respond to a release of any Hazardous Material (as defined below) into the environment; (ii) except in material compliance with applicable environmental laws, neither the Corporation nor any Material Subsidiary nor, to the Corporation’s knowledge, St. Jude or any occupier of the Real Property, has filed any notice under any federal, provincial, state or municipal law, domestic or foreign, indicating past or present treatment, storage or disposal of a Hazardous Material; (iii) except in material compliance with applicable environmental laws, none of the Real Property has at any time been used by the Corporation or a Material Subsidiary or, to the knowledge of the Corporation after due inquiry, St. Jude or, to the best of the Corporation’s knowledge, information and belief by any other occupier, as a waste storage or waste disposal site; (iv) the Corporation, on a consolidated basis, has no contingent liability of which it has knowledge in connection with any release of any Hazardous Material on or into the environment from any of the Real Property or operations thereon; (v) none of the Corporation, any Material Subsidiary or, to the Corporation’s knowledge after due inquiry, St. Jude or, to the best of the Corporation’s knowledge, any occupier of the Real Property, generates, transports, treats, processes, stores or disposes of any waste on any of the Real Property in material contravention of applicable federal, provincial, state or municipal laws or regulations enacted for the protection of the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or human health or wildlife (vi) to the Corporation’s knowledge, no underground storage tanks or surface impoundments containing a petroleum product or Hazardous Material are located on any of the Real Property in contravention of applicable federal, provincial, state or municipal laws or regulations, domestic or foreign, enacted for the protection of the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), human health or wildlife. For the purposes of this Section 6(1)(l), “ Hazardous Material ” means any contaminant, chemical, pollutant, subject waste, hazardous waste, deleterious substance, industrial waste, toxic matter or any other substance that when released into the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) is likely to cause, at some immediate or future time, harm or degradation

to the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or risk to human health and, without restricting the generality of the foregoing, includes any contaminant, chemical, pollutant, subject waste, deleterious substance, industrial waste, toxic matter or hazardous waste as defined by applicable federal, provincial, state or municipal laws or regulations enacted for the protection of the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), or human health or wildlife;

(m)

except as disclosed in the Prospectuses, the Corporation and each of its Material Subsidiaries other than St. Jude maintain appropriate insurance against loss of, or damage to, their assets for all insurable risks on a repair, reinstatement or replacement cost basis, and all of the policies in respect of such insurance coverage are in good standing in all respects and not in default;

(n)

the consolidated audited financial statements of the Corporation for its fiscal year ended December 31, 2004 and the unaudited interim financial statements of the Corporation for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005 and the unaudited pro forma consolidated balance sheet as of September 30, 2005 (collectively the “ Corporation’s Financial Statements ”), copies of which are or will be included or incorporated by reference in the Preliminary Prospectuses and in the Prospectuses, together with management’s discussion and analysis of financial condition and results of operations on such annual and interim financial statements (but other than is respect of the foregoing pro forma financial statements for which there is no management discussion and analysis) and including any reconciliation of financial statements prepared in accordance with generally accepted accounting principles in Canada and with generally accepted accounting principles in the United States, are true and correct in every material respect and present fairly and accurately the financial position and results of the operations of the Corporation on a consolidated basis for the periods then ended and the Corporation’s Financial Statements have been prepared in accordance with generally accepted accounting principles in Canada applied on a consistent basis, and comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act, as applicable, and the related published rules and regulations thereunder;

(o)

the execution and delivery of and the performance by the Corporation of this Agreement and the Underwriting Agreement and the consummation of the transactions contemplated hereby and thereby, including the issuance and sale of the Common Shares have been authorized by all necessary action on the part of the Corporation;

(p)

this Agreement and the Underwriting Agreement have been duly executed and delivered by the Corporation and each such agreement is a legal, valid and binding obligation of, and is enforceable against, the Corporation in accordance

with its terms (subject to bankruptcy, insolvency or other laws affecting the rights of creditors generally, the availability of equitable remedies and the qualification that rights to indemnity and waiver of contribution may be contrary to public policy);

(q)

except as disclosed in the Preliminary Prospectus Supplement and the Prospectuses, since September 30, 2005: (A) there has been no material change in the business, affairs, operations, assets, liabilities or financial condition of the Corporation on a consolidated basis; (B) no current reports or other documents have been filed on a confidential basis with the SEC; (C) there has been no transaction entered into by the Corporation and not disclosed which is material to the Corporation; (D) the Corporation and its Material Subsidiaries, on a consolidated basis, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business, nor entered into any material transaction or agreement not in the ordinary course of business; and (E) there has been no dividend or distribution of any kind declared, paid or made by the Corporation or, except for dividends paid to the Corporation or its Material Subsidiaries, any of its Material Subsidiaries, or to the Corporation’s knowledge after due inquiry, St. Jude, on any class of capital stock or repurchase or redemption by the Corporation or any of its Material Subsidiaries of any class of capital stock;

(r)

the directors and officers of the Corporation and their compensation arrangements with the Corporation, whether as directors, officers or employees of the Corporation, are as disclosed in the Preliminary Prospectus Supplement and the Prospectuses if required to be so disclosed;

(s)

all of the material contracts and agreements of the Corporation, its Material Subsidiaries, and, to the Corporation’s knowledge after due inquiry, St. Jude, not made in the ordinary course of business (collectively the “ Material Contracts ”) have been disclosed in the Preliminary Prospectus Supplement and the Prospectuses;

(t)

all tax returns, reports, elections, remittances and payments of the Corporation, its Material Subsidiaries, and, to the Corporation’s knowledge after due inquiry, St. Jude, required by law to have been filed (or are in the process of being prepared for filing, which delayed filing will not have a material adverse effect on the Corporation and its Material Subsidiaries taken as a whole) or made in any applicable jurisdiction, have been filed or made (as the case may be), other than for taxes being contested in good faith, or with respect to which the failure to file or make would not have a material adverse effect, either individually or in the aggregate, to the Corporation and the Material Subsidiaries taken as a whole, and, to the knowledge of the Corporation, are substantially true, complete and correct and all taxes of the Corporation and of its Material Subsidiaries, in respect of which payment or accrual is required under applicable law, other than taxes being contested in good faith, have been so paid or accrued in the Corporation’s Financial Statements;

(u)

the Corporation is not and, after giving effect to the offeri