Golden Star
Resources Ltd.
10901 W. Toller Drive
Suite 300
Littleton, Colorado
USA, 80127-6312
Attention:
Mr. Peter J. Bradford, President and Chief Executive
Officer
Based upon and
subject to the terms and conditions set out below, BMO Nesbitt
Burns Inc. and Blackmont Capital Inc., as co-lead managers (the
“ Lead Underwriters ”) and Wellington West
Capital Markets Inc. (collectively with the Lead Underwriters, the
“Underwriters” ) hereby severally, and not
jointly, offer to purchase from Golden Star Resources Ltd. (the
“Corporation” ), in the respective percentage
set out opposite each Underwriter’s name in Section 15,
and by its acceptance of the offer constituted by this letter, the
Corporation agrees to issue and sell to the Underwriters, at the
Time of Closing (as hereinafter defined), an aggregate of
29,200,000 common shares of the Corporation (the “Initial
Shares” ) at an offering price of $2.80 per Initial Share
for aggregate gross proceeds of $81,760,000.
The Corporation
hereby grants to the Underwriters an underwriters option (the
“ Option ”), to purchase severally, and not
jointly, up to an additional 4,200,000 common shares (the “
Additional Shares ” and together with the Initial
Shares, the “ Common Shares ”) for $2.80 per
Additional Share (an aggregate of $11,760,000) upon the terms and
conditions set forth herein. The Option may be exercised, in whole
or in part, by the Underwriters delivering notice to the
Corporation at any time up to 48 hours prior to the Closing Date
(as hereinafter defined), which notice shall state the number of
Additional Shares in respect of which the Option is being
exercised. The respective percentage of Additional Shares, if any,
to be purchased by the Underwriters is set forth opposite the
respective names of the Underwriters in Section 15. The
Additional Shares will be delivered by the Corporation and paid for
by the Underwriters at the Time of Closing. The offering of the
Common Shares by the Corporation pursuant to this Agreement is
hereinafter referred to as the “Offering”
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This offer is
conditional upon, among other things: the Corporation having
prepared and filed and obtained an MRRS Decision Document for a
preliminary short form prospectus by no later than 5:00 pm on
December 12, 2005 and using its reasonable best efforts to
file and obtain an MRRS Decision Document for a (final) short
form prospectus (the “ Final Prospectus ”) by no
later than 5:00 pm (Toronto time) on December 21, 2005, or
such later date as the
Corporation and
the Lead Underwriters on behalf of the Underwriters may agree, in
respect of the distribution of the Common Shares, with and from the
securities regulatory authorities in the provinces of British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick,
Nova Scotia, Prince Edward Island and Newfoundland and Labrador
(the “Qualifying Provinces” ), pursuant to the
Short Form Prospectus System (the “ POP System
”) established under National Instrument 44-101 of the
Canadian Securities Administrators (“ NI 44-101
”), qualifying the distribution by the Corporation of the
Common Shares to purchasers resident in such provinces; no stop
order suspending the effectiveness of the registration statement on
Form S-3 (File No. 333-118956), including a prospectus (the
“ U.S. Shelf Prospectus ”), filed with the
Securities and Exchange Commission (the “ SEC ”)
having been issued and no proceeding for that purpose having been
initiated or threatened by the SEC; the filing of a U.S.
preliminary and final prospectus supplement (the “ U.S.
Prospectus Supplement ” and, together with the U.S. Shelf
Prospectus, the “ U.S. Prospectus ”) relating to
the Common Shares pursuant to Rule 424(b) under the U.S. Securities
Act (as defined herein); no order preventing or suspending the use
of the U.S. Prospectus having been issued by the SEC; and the U.S.
Prospectus, at the time of filing thereof, conforming in all
material respects to the requirements of the U.S. Securities Act
and the rules and regulations of the SEC thereunder, and not
containing an untrue statement of a material fact or omitting to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
The Corporation
shall pay to the Lead Underwriters, on behalf of the Underwriters,
a fee (the “Underwriting Fee” ) at the Time of
Closing equal to $0.126 per Common Share sold pursuant to the terms
of this Agreement (being 4.5% of the issue price per Common Share)
in consideration of the services to be rendered by the Underwriters
in connection with the Offering. Such services shall include,
without limitation: (i) acting as financial advisors to the
Corporation in the preparation of documentation relating to the
sale of the Common Shares; (ii) forming and managing banking,
selling and other groups for the sale of the Common Shares;
(iii) distributing the Common Shares to the public both
directly and through other registered dealers and brokers;
(iv) assisting the Corporation in connection with the
preparation and finalization of the Preliminary Prospectus (as
hereinafter defined), the Final Prospectus and the U.S. Prospectus
qualifying the distribution of, or registering, as the case may be,
the Common Shares; (v) performing administrative work in
connection with these matters; and (vi) all other services
arising out of the agreement resulting from the Corporation’s
acceptance of this offer.
The schedules
attached to this Agreement shall, for all purposes of this
Agreement, form an integral part of it.
The Underwriters
and the Corporation acknowledge that an offering of the Common
Shares is also being concurrently conducted in the United States by
the Agents (as defined below), who are affiliates of the
Underwriters, under the terms of the Agency Agreement (as defined
below) and the terms of the Inter-Dealer Agreement (as defined
below), as well as U.S. Securities Laws.
The following, in
addition to the above preamble, are the terms and conditions of the
agreement between the Corporation and the Underwriters:
Section 1 Definitions and
Interpretation
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(1)
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In
this Agreement:
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“Additional
Shares” has the meaning ascribed thereto on
page 1 hereof;
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“Agency
Agreement” means the agency agreement, dated
the date hereof, between the Agents and the Corporation;
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“Agents”
means, collectively,
Harris Nesbitt Corp., Blackmont Capital Corp. and Wellington West
Capital Markets (USA) Inc.;
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“ 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;
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“ 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;
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“ Closing Date ”
has the meaning ascribed thereto in Section 10(1)
hereof;
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“ Common Shares ”
has the meaning ascribed thereto on page 1 hereof;
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“ Defaulted Securities
” has the meaning ascribed thereto in Section 15(2)
hereof;
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“ Exchanges ”
means the Toronto Stock Exchange (“ TSX ”) and
the American Stock Exchange (“ AMEX
”);
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“ Final Prospectus
” means the Canadian (final) short form prospectus dated
the date hereof including any documents or information incorporated
therein by reference, prepared by the Corporation and relating to
the distribution of the Common Shares and the Offering;
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“ Incorporated
Documents ” means all documents incorporated or deemed to
be incorporated in the Preliminary Prospectus, the Final Prospectus
and any Prospectus Amendment.
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“ Initial Shares
” has the meaning ascribed thereto on page 1
hereof;
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“Inter-Dealer
Agreement” means that certain inter-dealer
agreement, dated the date hereof, between the Underwriters and the
Agents;
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“ Lead
Underwriters” has the meaning ascribed thereto on page 1
hereof;
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“ Material Resource
Properties ” has the meaning ascribed thereto in
Section 6(j);
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“ 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
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therein set forth and unless the
context otherwise requires, shall be deemed to include St.
Jude;
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“ MRRS Decision
Document ” means a decision document issued by the
applicable Canadian securities regulatory authority pursuant to
National Policy 43-201 and which evidences the receipts by the
applicable Canadian securities regulatory authorities in each of
the Qualifying Provinces for the Preliminary Prospectus or the
Final Prospectus, as the case may be;
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“ NI 44-101 ” has
the meaning ascribed thereto on page 2 hereof;
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“ Offering ” has
the meaning ascribed thereto on page 1 hereof;
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“ Option ” has
the meaning ascribed thereto on page 1 hereof;
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“ POP System ”
has the meaning ascribed thereto on page 2 hereof;
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“ Preliminary
Prospectus ” means the Canadian preliminary short form
prospectus dated December 12, 2005, including any documents or
information incorporated therein by reference, prepared by the
Corporation and relating to the distribution of the Common Shares
and the Offering;
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“ Prospectus Amendment
” means any amendment to the Preliminary Prospectus or the
Final Prospectus required to be prepared and filed by the
Corporation under applicable Canadian Securities Laws in connection
with the Offering;
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“ Qualifying
Authorities ” means each of the securities regulatory
authorities in each of the Qualifying Provinces;
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“ Qualifying Provinces
” has the meaning ascribed thereto on page 2
hereof;
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“ SEC ” has the
meaning ascribed thereto on page 2 hereof;
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“ St. Jude ”
means St. Jude Resources Ltd.;
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“ 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;
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“Supplementary
Material” has the meaning ascribed thereto in
Section 12(1)(a);
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“Time of
Closing” has the meaning ascribed thereto in
Section 10(1) hereof;
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“ Underwriters ”
has the meaning ascribed thereto on page 1 hereof;
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“ Underwriting Fee
” has the meaning ascribed thereto on page 2
hereof;
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“ 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;
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“ U.S. Exchange Act
” means the United States Securities Exchange Act of
1934 , as amended;
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“ U.S. Preliminary
Prospectus ” means the U.S. Shelf Prospectus together
with a preliminary prospectus supplement dated December 12,
2005 specifically relating to the Common Shares;
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“ U.S. Prospectus
” has the meaning ascribed thereto on page 2
hereof;
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“ U.S. Prospectus
Supplement ” has the meaning ascribed thereto on page 2
hereof;
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“U.S. Registration
Statement” means the registration statement on
Form S-3 (File No. 333-118956), filed with the SEC, with respect to
the Common Shares, under the U.S. Securities Act, including the
exhibits, financial statements and schedules thereto, which
Registration Statement has been declared effective by the SEC and
includes the U.S. Prospectus;
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“U.S. Securities
Act ”
means the United States Securities Act of 1933 , as
amended;
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“ U.S. Securities Laws
” means the applicable blue sky or securities legislation in
the United States, together with the U.S. Exchange Act and the U.S.
Securities Act and the rules and regulations of the SEC and the
applicable state securities regulators thereunder;
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“ U.S. Shelf Prospectus
” has the meaning ascribed thereto on page 2
hereof;
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(2)
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Any
reference in this Agreement to gender includes all genders and
words importing the singular number only shall include the plural
and vice versa.
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(3)
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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.
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(4)
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Except as otherwise indicated, all
amounts expressed herein in terms of money refer to lawful currency
of Canada and all payments to be made hereunder shall be made in
such currency.
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Section 2 Compliance with Securities
Laws
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(1)
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As
of the date of this Agreement, the Corporation has prepared and
filed the Preliminary Prospectus with the Qualifying Authorities
together with the required supporting documents, has addressed the
comments made by such Qualifying Authorities in respect of the
Preliminary Prospectus and any amendment thereto, and shall have
received an MRRS Decision Document in respect thereof. The
Corporation covenants and agrees with the Underwriters that as soon
as practicable, it will prepare (subject to review by the
Underwriters) and file with the Qualifying Authorities,
the
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Final Prospectus, together with the
required supporting documents, and use its reasonable best efforts
to obtain the MRRS Decision Document from such Qualifying
Authorities in order to qualify the distribution of the Common
Shares by no later than 5:00 pm (Toronto time) on December 21,
2005.
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(2)
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The
representations and warranties made by the Corporation in
Section 2 of the Agency Agreement are incorporated herein by
reference and shall have the same effect as if made to the
Underwriters under this Agreement.
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Prior to the Time
of Closing, prior to filing the Final Prospectus, and, if
applicable, prior to the filing of any Prospectus Amendment and
prior to the filing of any Supplementary Material, including on any
intervening weekends, the Corporation shall allow the Underwriters
to participate fully in the preparation of such documents and shall
allow the Underwriters to conduct all due diligence that the
Underwriters may reasonably require in order to fulfil their
obligations as Underwriters and in order to enable the Underwriters
responsibly to execute any certificate required to be executed by
them, provided, however, that the conduct of due diligence is not
intended to operate as a condition of the Offering.
Section 4 Conditions of the
Offering
The
Underwriters’ obligations under this Agreement are
conditional upon and subject to:
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the
Underwriters receiving at the Time of Closing favourable legal
opinions dated the Closing Date, addressed to the Underwriters and
their counsel from (i) Fasken Martineau DuMoulin LLP, Canadian
counsel to the Corporation (who may rely, to the extent appropriate
in the circumstances, on the opinions of local counsel acceptable
to counsel to the Corporation and counsel to the Underwriters as to
the qualification of the Common Shares for sale to the public 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 of Exchange officials or of the auditors or
transfer agent of the Corporation), to the effect set forth
below:
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(a)
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the
Corporation having been amalgamated and existing under the laws of
Canada;
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(b)
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the
Corporation having the corporate capacity and power to own and
lease its properties and assets and to conduct its business as
described in the Final Prospectus and to execute and deliver this
Agreement and to carry out the transactions contemplated
hereby;
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(c)
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the
authorized and issued share capital of the Corporation being as
described in the Final Prospectus;
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(d)
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all
necessary corporate action having been taken by the Corporation to
authorize the execution and delivery of this Agreement and the
Agency Agreement and the
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performance of its obligations
hereunder and thereunder and this Agreement and the Agency
Agreement have been duly executed and delivered by the Corporation
and this Agreement constitutes 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, general
equitable principles including the availability of equitable
remedies and the qualification that no opinion need be expressed as
to rights to indemnity, contribution and waiver of contribution)
and the execution and delivery by the Corporation of this Agreement
and the Agency Agreement, the fulfilment of the terms hereof and
thereof by the Corporation, and the issue, sale and delivery on the
Closing Date of the Common Shares to the Underwriters and the
Agents as contemplated herein and in the Agency Agreement do not
constitute or result in a breach of or a default under, and do not
create a state of facts which, after notice or lapse of time or
both, will constitute or result in a breach of, and will not
conflict with, any of the terms, conditions or provisions of the
articles or by-laws of the Corporation;
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(e)
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the
Option and the issuance and sale of the Common Shares have been
authorized by all necessary action on the part of the
Corporation;
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(f)
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all
documents required to be filed by the Corporation and all
proceedings required to be taken by the Corporation under
applicable Canadian Securities Laws having been filed and taken in
order to qualify the distribution (or distribution to the public,
as the case may be) of the Common Shares in each of the Qualifying
Provinces through investment dealers or brokers duly registered in
the appropriate category under the applicable laws thereof who have
complied with the relevant provisions thereof;
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(g)
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the
Common Shares having been conditionally approved for listing on the
TSX subject only to compliance with the documentary filing
requirements of such Exchange;
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(h)
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the
attributes and characteristics of the Common Shares being
accurately summarized in all material respects under the heading
“Description of Share Capital” in the Final
Prospectus;
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(i)
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the
Common Shares, when issued by the Corporation upon receipt of the
aggregate purchase price as consideration for the issue thereof,
having been validly issued by the Corporation and being fully-paid
and non-assessable shares in the capital of the
Corporation;
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(j)
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as
to certain Canadian federal income tax matters, as described in the
Final Prospectus under the heading “Eligibility for
Investment”; and
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(k)
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a
“10b-5” opinion to the effect that during the course of
the Corporation’s preparation of the Final Prospectus and its
participation in conferences with officers and other
representatives of the Corporation, the Corporation’s
independent public accountants, the Agents and the Underwriters and
their
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counsel, during which the contents
of the Final Prospectus were discussed, and while it has not
independently verified and is not passing upon the accuracy,
completeness or fairness of the statements made in the Final
Prospectus except as explicitly set forth in paragraph
(k) hereof, no facts have come to its attention that lead it
to believe that the Final Prospectus contained any untrue statement
of a material fact (as such term is defined in the Securities
Act (Ontario)) or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading (other than the financial statements and
notes thereto and related schedules therein or other financial data
derived from accounting records; other than Appendix C to the
Final Prospectus; and other than statistical, ore reserve and
resource and geological information, as to which such counsel is
not expressing an opinion);
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and
(ii) from Davis Graham & Stubbs LLP, the
Corporation’s U.S. counsel, as to those matters set forth in
Schedule B to the Agency Agreement, in each case addressed to
the Underwriters, dated the Closing Date, and in form and substance
satisfactory to the Underwriters and their counsel acting
reasonably;
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(2)
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the
Underwriters having received the comfort letters referred to in
Section 9(1)(a) and Section 9(1)(b);
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(3)
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the
Underwriters having received comfort letters, dated the Closing
Date, in form and substance satisfactory to the Underwriters,
acting reasonably, bringing forward to a date not more than two
business days prior to the Closing Date the information contained
in the comfort letter referred to in Section 9(1)(a) and
Section 9(1)(b);
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(4)
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the
Underwriters receiving at the Time of Closing a legal opinion (or
opinions) dated the Closing Date, in form and substance
satisfactory to the Underwriters and their counsel acting
reasonably, addressed to the Underwriters and their counsel, from
local counsel to the Corporation, as to mining title matters with
respect to each of the Material Resource Properties (other than
Hwini-Butre);
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(5)
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the
Underwriters receiving at the Time of Closing a legal opinion (or
opinions) dated the Closing Date, in form and substance
satisfactory to the Underwriters and their counsel, addressed to
the Underwriters and their counsel, from local counsel to the
Corporation, stating that each of the Material Subsidiaries has
been duly created and 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 such
corporations, except as set out in Schedule A;
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(6)
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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;
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(7)
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at
the Time of Closing, CIBC Mellon Trust Company, at is principal
office in Vancouver, having been duly appointed as the transfer
agent and registrar for the Common Shares;
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(8)
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the
Agency Agreement having been executed by the Corporation and the
Agents;
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(9)
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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
Underwriters and dated the Closing Date, in a form satisfactory to
the Underwriters 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:
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(a)
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the
Corporation has complied in all respects with all covenants and
satisfied all terms and conditions of this Agreement on its part to
be complied with and satisfied at or prior to the Time of Closing
on the Closing Date;
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(b)
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no
order, ruling or determination having the effect of ceasing or
suspending trading in any securities of the Corporation or
prohibiting the sale of the Common Shares or any of the
Corporation’s issued securities has been issued and no
proceeding for such purpose is pending or, to the knowledge of such
officers, threatened;
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(c)
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no
order suspending the effectiveness of the U.S. Registration
Statement shall be in effect and no proceedings for such purpose
shall be pending before or, to the knowledge of such officers,
threatened by the SEC and any additional information requested on
the part of the SEC shall have been complied with to the reasonable
satisfaction of the Underwriters;
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(d)
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the
Corporation is a “reporting issuer” or its equivalent
under the securities laws of each of the Qualifying Provinces and
eligible to use the POP System and no material change relating to
the Corporation on a consolidated basis has occurred since the date
hereof with respect to which the requisite material change report
has not been filed and no such disclosure has been made on a
confidential basis that remains subject to confidentiality;
and
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(e)
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all
of the representations and warranties made by the Corporation in
this Agreement are true and correct as of the Time of Closing with
the same force and effect as if made at and as of the Time of
Closing after giving effect to the transactions contemplated
hereby; and
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(10)
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the
Underwriters receiving 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.
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Section 5 Covenants of the
Underwriters
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(a)
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shall offer or arrange the offer of
the Common Shares for sale to the public, directly and through
other investment dealers and brokers (such other investment dealers
and brokers, are referred to herein as the “Selling
Firms” ), only as permitted by and in compliance with all
relevant laws and the requirements of Canadian Securities Laws,
upon the terms and conditions set
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forth in the Final Prospectus and in
this Agreement and will require each Selling Firm to so agree and
provided that the fees (exclusive of expenses) of the Selling Firms
will be paid by the Underwriters;
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(b)
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shall not solicit offers to purchase
or sell the Common Shares so as to require registration thereof or
the filing of a prospectus or similar document with respect thereto
under the laws of any jurisdiction other than the Qualifying
Provinces, and will require each Selling Firm to agree with the
Underwriters not to so solicit or sell. In this connection, the
Underwriters agree that they will not offer or sell any of the
Common Shares constituting a part of their allotment within the
United States except, if applicable, through the Agents on the
terms and conditions set forth in the Agency Agreement and the
Inter-Dealer Agreement and in compliance with U.S. Securities Law.
For the purposes of this Section 5(1)(b), the Underwriters
shall be entitled to assume that the Common Shares are qualified
for distribution in any Qualifying Province where a decision
document or receipt or similar document for the Final Prospectus
shall have been obtained from the applicable Canadian securities
regulatory authority following the filing of the Final
Prospectus;
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(c)
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agree that if they offer to sell or
sell any Common Shares in jurisdictions (which may include Europe)
other than the Qualifying Provinces and through the Agents in the
United States, 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;
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(d)
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shall use all reasonable efforts to
complete and to cause the other Selling Firms to complete the
distribution of the Initial Shares and any Additional Shares as
soon as practicable;
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(e)
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shall notify the Corporation when,
in their opinion, the Underwriters and the other Selling Firms have
ceased distribution of the Common Shares and shall provide a
breakdown of the number of Common Shares distributed in each of the
Qualifying Provinces; and
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(f)
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shall comply in all material
respects with any applicable laws with respect to the use of
“green sheets” and other marketing materials during the
“waiting period” (as defined under Canadian Securities
Laws).
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(2)
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Notwithstanding the foregoing, no
Underwriter shall be liable to the Corporation with respect to any
other Underwriter under this Section 5.
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Section 6 Representations and Warranties of
the Corporation
The Corporation
hereby represents and warrants to the Underwriters, intending that
the same may be relied upon by the Underwriters, that:
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(a)
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each of the Corporation and the
Material Subsidiaries has been duly incorporated, continued or
amalgamated and organized and is validly existing under the laws of
its jurisdiction of incorporation, continuance or amalgamation, has
all requisite corporate power and authority to carry on its
business as now conducted and as contemplated by the Final
Prospectus, and to own, lease and operate its properties and
assets, and the Corporation has all requisite power and authority
to carry out its obligations under this Agreement;
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(b)
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the
only material operating subsidiaries of the Corporation are listed
in Schedule A;
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(c)
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the
Corporation or one of its Material Subsidiaries owns the issued and
outstanding shares of each of the Material Subsidiaries as set out
in Schedule A, in each case free and clear of any pledge,
lien, security interest, charge, claim or encumbrance other than as
described in the Prospectus or the Incorporated
Documents;
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(d)
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the
Corporation is a reporting issuer or the equivalent in each of the
Qualifying Provinces and the Corporation is not in default in any
material respect of any of the requirements of the Canadian
Securities Laws;
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(e)
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the
Corporation is eligible to use the POP System and at the respective
times of filing, each of the Preliminary Prospectus and the Final
Prospectus together with any Prospectus Amendment and any
Supplementary Material have complied and will comply with the
requirements of the Canadian Securities Laws pursuant to which they
have been or will be filed, have and will provide full, true and
plain disclosure of all material facts (as defined in the
Securities Act (Ontario)) relating to the Corporation on a
consolidated basis and to the Common Shares and do not and will not
contain any misrepresentation (as defined in the Securities
Act (Ontario)) as of the date of filing, provided that the
foregoing shall not apply with respect to statements contained in
such documents relating solely to the Underwriters or Agents or
provided by the Underwriters or Agents;
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(f)
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no
order, ruling or determination having the effect of ceasing,
suspending or restricting trading in any securities 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;
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(g)
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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;
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(h)
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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
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- 12 -
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 Final Prospectus;
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(i)
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as
at December 9, 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;
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(j)
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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 Corporation’s knowledge
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
Corporation’s knowledge 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 and
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:
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(i)
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the
Bogoso/Prestea property;
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(ii)
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the
Prestea Underground property;
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(iii)
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the
Dunkwa-Mampon properties;
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(iv)
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the
Wassa property; and
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- 13 -
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(v)
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the
Hwini-Butre property.
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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.
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(k)
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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 Incorporated Documents and other than such liens,
charges and encumbrances that are not individually or in the
aggregate material to the Corporation and the Material Subsidiaries
taken as a whole;
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(l)
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except as set out in the Final
Prospectus or the Incorporated Documents or as are not individually
or in the aggregate material to the Corporation and 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
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