Corporate Governance

  • Board Mandate

    SOUTHGOBI RESOURCES LTD.
    BOARD MANDATE

    The Board of Directors (the “Board”) of SouthGobi Resources Ltd. (the “Company”) shall have the oversight responsibility, authority and specific duties described below.

    Under the Business Corporations Act (British Columbia), the directors of the Company are required to manage, or supervise the management of, the Company’s business and affairs, and in doing so to act honestly and in good faith with a view to the best interests of the Company. In addition, each director must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

    The Board is responsible for supervising the conduct of the Company's affairs and the management of its business. This includes setting long term goals and objectives for the Company, formulating the plans and strategies necessary to achieve those objectives and supervising senior management in their implementation. Although the Board delegates the responsibility for managing the day to day affairs of the Company to senior management, the Board retains a supervisory role in respect of, and ultimate responsibility for, all matters relating to the Company and its business.

    The Board needs to be satisfied that the Company’s senior management will manage the affairs of the Company in the best interest of the shareholders, and that the arrangements made for the management of the Company’s business and affairs are consistent with the Board’s duties described above. The Board is responsible for protecting shareholder interests and ensuring that the interests of the shareholders and management are aligned. The obligations of the Board must be performed continuously, and not merely from time to time, and in times of crisis or emergency the Board may have to assume a more direct role in managing the affairs of the Company.

    In discharging this responsibility, the Board oversees and monitors significant corporate plans and strategic initiatives. The Board’s strategic planning process includes annual and quarterly budget reviews and approvals, and discussions with management relating to strategic and budgetary issues. At least one Board meeting per year is to be devoted substantially to a review of strategic plans proposed by management.

    The Board reviews the principal risks inherent in the Company’s business, including financial risks, through periodic reports from management of such risks. This review takes place in conjunction with the Board’s review of operations and risk issues at each Board meeting, at which time the Board assesses the systems established to manage those risks. Directly and through the Audit Committee, the Board also assesses the integrity of the internal financial control and management information systems.

    In addition to those matters that must, by law, be approved by the Board, the Board is required to approve annual operating and capital budgets, any material dispositions, acquisitions and investments outside of the ordinary course of business or not provided for in the approved budgets, long-term strategy, organizational development plans and the appointment of senior executive officers. Management is authorized to act, without Board approval, on all ordinary course matters relating to the Company's business.

    The Board also expects management to provide the directors on a timely basis with information concerning the business and affairs of the Company, including financial and operating information and information concerning industry developments as they occur, all with a view to enabling the Board to discharge its stewardship obligations effectively. The Board expects management to efficiently implement its strategic plans for the Company, to keep the Board fully apprised of its progress in doing so and to be fully accountable to the Board in respect to all matters for which it has been assigned responsibility.

    The Board has instructed management to maintain procedures to monitor and promptly address shareholder concerns and has directed and will continue to direct management to apprise the Board of any major concerns expressed by shareholders.

    Each committee of the Board is empowered to engage external advisors as it sees fit. Any individual director is entitled to engage an external advisor at the expense of the Company provided such director has obtained the approval of the Nominating and Corporate Governance Committee to do so.

    The roles of each of the Chair and the Chief Executive Officer will be as set forth in position statements as may be established by the Board from time to time.

    This Mandate will be reviewed periodically by the Board and supplemented as required from time to time.

    The Roles of the Board of Directors

    The Board fulfills its mandate through direct oversight, setting policy, appointing committees and appointing management. Specific responsibilities include the following:

    1. Approving the issuance of any securities of the Company.
    2. Approving the incurrence of any debt by the Company outside the ordinary course of business.
    3. Reviewing and approving the annual and quarterly capital and operating budgets.
    4. Reviewing and approving major deviations from the capital and operating budgets.
    5. Approving the annual financial statements and quarterly financial statements (including management’s discussion and analysis related thereto), information circulars, annual information forms, annual reports, offering memorandums and prospectuses.
    6. Approving material investments, dispositions and joint ventures, and approving any other major initiatives outside the scope of approved budgets.
    7. Reviewing and approving, on at least an annual basis, the Company’s strategic plans (which takes into account, among other things, the opportunities and risks of the Company’s business), adopting a strategic planning process and monitoring the Company’s performance as against the adopted plans.
    8. Reviewing and approving the Company’s incentive compensation plans.
    9. Determining the composition, structure, processes, and characteristics of the Board and the terms of reference of committees of the Board, and establishing a process for monitoring the Board and its directors on an ongoing basis.
    10. Appointing Nominating and Corporate Governance Committee, an Audit Committee, a Compensation and Benefits Committee and other Board committees and delegating to any such committees powers of the Board as appropriate and legally permissible.
    11. Nominating the candidates for the Board to the shareholders, based on recommendations from the Nominating and Corporate Governance Committee.
    12. Ensuring an appropriate orientation and education program for new directors is provided.
    13. Determining whether individual directors meet the requirements for independence under applicable securities laws, rules and regulations, stock exchange rules and policies, and any other regulatory requirements.
    14. Monitoring the ethical conduct of the Company and ensuring that it complies with applicable legal and regulatory requirements, as well as the Company’s written code of business conduct and ethics (“The Way We Work”). Any waivers from the code that are granted in respect of a director or executive officer of the Company shall be granted only by the Board or one of its committees.
    15. Satisfying itself as to the integrity of the chief executive officer and other executive officers of the Company, and that the chief executive officer and other executive officers of the Company are creating and fostering culture of integrity throughout the organization.
    16. Ensuring that the directors that are independent of management have the opportunity to meet regularly.
    17. Reviewing this Mandate and other Board policies and terms of reference for committees in place from time to time and proposing modifications as applicable.
    18. Appointing, training and monitoring the performance of senior management, formulating succession plans for senior management and, with the advice of the Compensation and Benefits Committee, approving the compensation of senior management.
    19. Ensuring policies and processes are in place for identifying principal business risks and opportunities for the Company, addressing the extent to which such risks are acceptable to the Company, and ensuring that appropriate systems are in place to manage risks.
    20. Ensuring policies and processes are in place to ensure the integrity of the Company’s internal control, financial reporting and management information systems.
    21. Ensuring appropriate policies and processes are in place to ensure the Company’s compliance with applicable laws and regulations, including timely disclosure of relevant corporate information and regulatory reporting.
    22. Adopting a communication policy for the Company in respect of communications with its shareholders and maintaining a system for receiving feedback from shareholders.
    23. Exercising direct control during periods of crisis.
    24. Serving as a source of advice to senior management, based on directors’ particular backgrounds and experience.
    25. Ensuring that the directors have direct access to management and, as necessary and appropriate, independent professional advisors, at the Company’s expense.
    26. Ensuring evaluations of the Board and its committees are carried out at least annually.

    Organization of the Board of Directors
    Independence: At least one-third of the members of the Board must be independent non- executive directors. Of these independent non-executive directors, at least one of them must have past employment experience in finance or accounting of public companies, requisite professional certification in accounting, or any other comparable experience or background which results in such individual's financial sophistication (including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities).

    The Company intends to monitor best practices recommendations and to fully comply with the corporate governance requirements relating to the composition and independence of board and committee members under applicable legislation and stock exchange rules by the date of the effectiveness of such legislation and rules or earlier and, through the Nominating and Corporate Governance Committee, to identify additional qualified Board candidates where required to meet such requirements.
    Fees: The Board shall establish and review, from time to time, guidelines for determining the form and amount of director compensation based upon the recommendation of the Compensation and Benefits Committee in accordance with the policies and principles set forth in its charter and with reference to any recommendations made by the Company’s compensation consultants.
    Committees: The Company has an Audit Committee, a Compensation and Benefits Committee and a Nominating and Corporate Governance Committee. The Company will have such other committees of the Board as may be required from time to time.

    Meetings

    The Board shall hold regular annual and quarterly meetings. Between the quarterly meetings, the Board will meet on an ad hoc basis as required, in person or by means of telephone conferencing facilities. As part of the annual and quarterly meetings, the independent directors shall have the opportunity to meet separate from management. Management will communicate informally with members of the Board on a regular basis, and will solicit the advice of Board members falling within their specific knowledge and experience. Each director shall review all Board meeting materials in advance of each meeting and shall make all reasonable efforts to attend all Board and committee meetings, as applicable.

    The Board will appoint a Secretary who will keep full minutes of all meetings. The Secretary may be the Company’s Corporate Secretary or another person who does not need to be a member of the Board. Draft and final versions of the meeting minutes should be sent to all members of the Board within a reasonable time following such meetings, which, in the case of draft meeting minutes, shall be circulated no later than 21 days following the date of the applicable meeting.

    The Chair of the Board shall hold annual meetings with the non-executive directors (including independent non-executive directors) of the Board without the presence of executive directors.

    Resources and Access to Information

    The Board shall be provided with sufficient resources by the Company to perform its duties. The Board shall have the authority to: (i) retain, at the expense of the Company, independent legal, accounting and other advisors or consultants to advise the Board as it determines necessary to carry out its duties; and (ii) approve the terms and conditions of the arrangement (including, the fees and other retention terms) with such outside advisors.

    The Board has the authority to conduct any investigation appropriate to fulfilling its responsibilities. The Board has direct and unrestricted access to any officer, employee or consultant of the Company and its subsidiaries. The Board may request any officer, employee or consultant of the Company or its subsidiaries, the Company’s outside counsel or the Auditors to attend a meeting of the Board or to meet with any members of, or consultants to, the Board with or without the presence of management. In the performance of any of its duties and responsibilities, the Board shall have unrestricted access to any and all books and records of the Company and its subsidiaries necessary for the execution of the Board’s obligations.

    Training

    New directors shall be provided with a comprehensive information package regarding the Company and its management, and are fully briefed by senior management on the Company’s business and key current issues.

    All directors should participate in continuous professional development to develop and refresh their knowledge and skills. Directors should provide a record of the training they received to the Company.

  • Audit Committee Charter

    AUDIT COMMITTEE CHARTER

    I. Purpose

    The primary objective of the Audit Committee (the “Committee”) of SouthGobi Resources Ltd. (the “Company”) is to act as a liaison between the Board and the Company’s independent auditors (the “Auditors”) and to assist the Board in fulfilling its oversight responsibilities with respect to: (a) the integrity and accuracy of the financial statements and other financial information provided by the Company to its shareholders, the public and others; (b) the Company’s compliance with legal and regulatory requirements; (c) the Company's risk management and internal financial and accounting controls, and management information systems; and (d) the qualification, independence and performance of the Auditors.

    Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee is oversight. The members of the Committee are not full-time employees of the Company and may or may not be accountants or auditors by profession or experts in the fields of accounting or auditing and, in any event, do not serve in such capacity. Consequently, it is not the duty of the Committee to conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the Auditors.

    The responsibilities of a member of the Committee are in addition to such member’s duties as a member of the Board.

    II. Organization

    The Committee shall consist of three or more independent non-executive directors of the Company. The Committee membership shall satisfy, at a minimum, the laws governing the Company and the independence, financial literacy, expertise and financial experience requirements under applicable securities laws, rules and regulations, stock exchange rules and policies, and any other regulatory requirements applicable to the Company.

    The members of the Committee and the Chair of the Committee shall be appointed (and may be replaced) by the Board on the recommendation of the Nominating & Corporate Governance Committee. The appointment of members of the Committee shall take place annually at the first meeting of the Board after a meeting of shareholders at which directors are elected, provided that if the appointment of members of the Committee is not so made, the directors who are then serving as members of the Committee shall continue as members of the Committee until their successors are appointed.

    Members of the Committee shall not simultaneously serve on the audit committees of more than two other public companies, unless the Board first determines that such simultaneous service will not impair the ability of the relevant member to effectively serve on the Committee.

    Members of the Committee must be financially literate, as the Board interprets such qualification in its business judgment, and all members shall be able to read and understand the Company’s financial statements and to understand the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.

    No member of the Committee shall have (i) been a partner of or otherwise have had a financial interest in the Auditors during the past year; or (ii) participated in the preparation of the financial statements of the Company or any current subsidiary at any time during the past three years. At least one member of the Committee shall have past employment experience in finance or accounting of public companies, requisite professional certification in accounting, or any other comparable experience or background which results in such individual's financial sophistication (including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities).

    Any member of the Committee may be removed or replaced at any time by the Board and shall cease to be a member of the Committee as soon as such member ceases to be a director of the Company. Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board on the recommendation of the Nominating & Corporate Governance Committee.

    The Committee may form and delegate authority to individual members or subcommittees when appropriate.

    III. Meetings

    The Committee shall meet as frequently as the Committee deems necessary to cary out its duties effectively, but not less frequently than four times per year. The Committee shall meet at least quarterly with management, the Company’s financial and accounting officer(s) and the Auditors in separate sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. Meetings may be held in person, by telephone, by video-conference or by any combination of any of the foregoing, to the extent permitted by the Company’s constating documents and applicable corporate law.

    A majority of the members of the Committee, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. Matters decided by the Committee shall be decided by a majority vote. The Chair of the Committee shall have an ordinary vote and not a casting vote.

    The Chair of the Committee shall be an independent chair who is not the Chair of the Board. In the absence of the appointed Chair of the Committee at any meeting, the members shall elect a temporary Chair from those in attendance at the meeting. The Chair of the Committee, in consultation with the other members of the Committee, shall set the frequency and length of each meeting and the agenda of items to be addressed at each upcoming meeting. The Chair shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee in advance of the meeting.

    The Committee will appoint a Secretary who will keep full minutes of all meetings. The Secretary may be the Company’s Corporate Secretary or another person who does not need to be a member of the Committee. Draft and final versions of the meeting minutes should be sent to all members of the Committee within a reasonable time following such meetings, which, in the case of draft meeting minutes, shall be circulated no later than 21 days following the date of the applicable meeting.

    The Committee may invite, from time to time, such persons as it may see fit to attend its meetings and to take part in discussion and consideration of the affairs of the Committee. The Company’s accounting and financial officer(s) and the Auditors shall attend any meeting when requested to do so by the Chair of the Committee.

    IV. Authority and Responsibilities

    The Board, after consideration of the recommendation of the Committee, shall nominate the Auditors for appointment by the shareholders of the Company in accordance with applicable law. The Auditors report directly to the Audit Committee. The Auditors are ultimately accountable to the Committee and the Board as representatives of the shareholders.

    In fulfilling its duties and responsibilities under this Charter, the Committee will be entitled to reasonably rely on: (a) the integrity of those persons within the Company and of the professionals and experts (such as the Auditors) from whom it receives information; (b) the accuracy of the financial and other information provided to the Committee by such persons, professionals or experts; and (c) the representations made by the Auditors as to any services provided by them to the Company.

    The Committee shall have the following responsibilities:

    (a) Auditors

    1. Recommend to the Board the independent auditors to be nominated for appointment or reappointment as the Auditors of the Company at the Company’s annual meeting of shareholders and the remuneration to be paid to the Auditors; approve the scope of all auditing services to be provided by the Auditors; be directly responsible for the oversight of the work of the Auditors, including the resolution of disagreements between management and the Auditors regarding financial reporting; and recommend to the Board and the shareholders the termination of the appointment of the Auditors, if and when advisable.
    2. When there is to be a change of the Auditors, (i) review all issues related to the change, including any notices required under applicable law, stock exchange rules or policies, or other regulatory requirements, and the planned steps for an orderly transition; and (ii) be primarily responsible for questions relating to such change.
    3. Review and discuss with the Auditors their audit plan, scope, staffing, materiality threshold, and general audit approach.
    4. Review and monitor the Auditors’ independence and objectivity and the effectiveness of the audit process in accordance with applicable standards. The Committee should discuss with the Auditors the nature and scope of the audit and reporting obligations prior to the commencement of the audit.
    5. Review on an annual basis the performance of the Auditors, including the lead audit partner.
    6. Take reasonable steps to confirm the independence of the Auditors, which include:
      1. ensuring receipt from the Auditors of a formal written statement in accordance with applicable regulatory requirements delineating all relationships between the Auditors and the Company;
      2. considering and discussing with the Auditors any disclosed relationships or services, including non-audit services, that may impact the objectivity and independence of the Auditors;
      3. developing and implementing a policy on the provision of non-audit related services provided by the Auditors to the Company or its subsidiaries and approving in advance the provision of and the fees for such services, with a view to ensure independence of the Auditors, and in accordance with applicable regulatory standards, including applicable stock exchange requirements with respect to approval of non-audit related services performed by the Auditors (for the purposes of this Part IV(a)(6)(c), Auditors include any entity that is under common control, ownership or management with the Auditors or any entity that a reasonable and informed third party knowing all the relevant information would reasonably conclude to be part of the Auditors, nationally or internationally); and
      4. as necessary, taking or recommending that the Board take appropriate action to oversee the independence of the Auditors.
    7. Review and approve any disclosures required to be included in periodic reports under applicable securities laws, rules and regulations and stock exchange and other regulatory requirements with respect to non-audit services provided by the Auditors.
    8. Confirm with the Auditors and receive written confirmation at least once per year: (i) indicating that the Auditors are a member in good standing with the Canadian Public Accountability Board (CPAB) and comparable bodies elsewhere to the extent required and disclosing any sanctions or restrictions imposed by the CPAB and such other comparable bodies; and (ii) responding to any other reasonable request of the Committee for confirmation as to their qualifications to act as the Company’s Auditors.
    9. Consider the tenure of the lead audit partner on the engagement in light of applicable law, stock exchange rules and policies or other regulatory requirements.
    10. Review all reports required to be submitted by the Auditors to the Committee under applicable laws, rules and regulations, stock exchange rules and policies or other regulatory requirements.
    11. Receive and consider all recommendations and explanations which the Auditors place before the Committee.
    12. Ensure that the provision of any non-audit related services by the Auditors does not impair their independence or objectivity and develop and implement any necessary policies in that regard.

    (b) Financial Statements and Financial Information

    1. Review and discuss with management, the financial and accounting officer(s) of the Company and the Auditors, the Company’s annual audited financial statements, including the disclosure made in Management’s Discussion and Analysis relating thereto and the Auditor’s report thereon, prior to filing or distribution of such statements, and recommend to the Board, if appropriate, that the Company’s audited financial statements be included in the Company’s annual reports distributed and filed under applicable laws and regulatory requirements.
    2. Review and discuss with management, the financial and accounting officer(s) of the Company and the Auditors, the Company’s interim financial statements, including the disclosure made in Management’s Discussion and Analysis relating thereto and the Auditors’ review of such interim financial statements, prior to filing or distribution of such statements.
    3. Review any earnings press release of the Company before the Company publicly discloses this information.
    4. Be satisfied that adequate procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the Company’s financial statements and periodically assess the adequacy of these procedures.
    5. Discuss with the Auditors and review the matters required to be discussed by applicable auditing standards requirements relating to the conduct of the audit, including:
      1. the adoption of, or changes to, the Company’s significant auditing and accounting principles and practices, including significant assumptions and qualifications;
      2. the management letter provided by the Auditors and the Company’s timely response to that letter;
      3. any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to requested information, or personnel and any significant disagreements with management; and
      4. any material queries raised by the Auditors to management about accounting records, financial accounts or systems of control and management’s response.
    6. Discuss with management and the Auditors any major issues regarding accounting principles used in the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, at least twice a year. Review and discuss analyses prepared by management and/or the Auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative approaches under generally accepted accounting principles.
    7. Review any report under applicable securities law, stock exchange rules or policies or other regulatory requirements, including any reports required to be included in statutory filings, including in the Company’s annual proxy statement.

    (c) Ongoing Reviews and Discussions with Management and Others

    1. Obtain and review an annual report from management relating to the accounting principles used in the preparation of the Company’s financial statements, including those policies for which management is required to exercise discretion or judgments regarding the implementation thereof.
    2. Periodically review separately with each of management, the financial and accounting officer(s) of the Company and the Auditors;: (a) any significant disagreement between management and the Auditors in connection with the preparation of the financial statements,; (b) any difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information; and (c) management’s response to each.
    3. Periodically discuss with the Auditors, without management being present: (a) their judgments about the quality, integrity and appropriateness of the Company's accounting principles and financial disclosure practices as applied in its financial reporting; and (b) the completeness and accuracy of the Company's financial statements.
    4. Monitor the integrity of the Company’s financial statements and annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and review significant financial reporting judgments contained therein. In reviewing such reports before submission to the Board, the Committee’s review shall include a review of:
      1. any changes in accounting policies and practices;
      2. major judgmental areas;
      3. significant adjustments resulting from the audit;
      4. going concern assumptions and any qualifications;
      5. compliance with accounting standards; and
      6. compliance with applicable stock exchange regulations and other legal requirements relating to financial reporting.
    5. Consider and approve, if appropriate, significant changes to the Company's accounting principles and financial disclosure practices as suggested by the Auditors or management and the resulting financial statement impact. Review with the Auditors or management the extent to which any changes or improvements in accounting or financial practices, as approved by the Committee, have been implemented.
    6. Review and discuss with management, the Auditors and the Company's independent counsel, as appropriate, any legal, regulatory or compliance matters that could have a significant impact on the Company's financial statements, including applicable changes in accounting standards or rules, or compliance with applicable laws and regulations, inquiries received from regulators or government agencies and any pending material litigation.
    7. Discuss with the Company’s financial and accounting officer(s) and the Auditors any matters which should be brought to the attention of the Committee concerning accounting, financial and operating practices and controls and accounting practices of the Company and give due consideration to such matters.
    8. Review the principal control risks to the business of the Company, its subsidiaries and joint ventures; and verify that effective control systems are in place to manage and mitigate these risks.
    9. Review and discuss with management any earnings press releases, including the use of “pro forma” or “adjusted” non-GAAP information, as well as any financial information and earnings guidance provided to analysts and rating agencies, before the Company publicly discloses this information. Such discussions may be done generally (i.e., discussion of the types of information to be disclosed and the types of presentations made).
    10. Review and discuss with management any material off-balance sheet transactions, significant or unusual items, arrangements, obligations (including contingent obligations) and other relationships of the Company with unconsolidated entities or other persons, that may need to be reflected in the reports or accounts, or may have a material current or future effect on financial condition, changes in financial condition, results of operations, liquidity, capital resources, capital reserves or significant components of revenues or expenses. Obtain explanations from management of all significant variances between comparative reporting periods.
    11. Review and discuss with management the Company’s major risk exposures and the steps management has taken to monitor, control and manage such exposures, including the Company’s risk assessment and risk management guidelines and financial and accounting policies.

    (d) Risk Management and Internal Controls

    1. Review, based upon the recommendation of the Auditors and management, the scope and plan of the work to be done by the Company’s financial and accounting group and the responsibilities, budget and staffing needs of such group.
    2. Discuss the internal control system with management to ensure that management has performed its duty to have an effective internal control system. Such discussions should include adequacy of resources, staff qualifications and experience, training programs and budget of the Company’s accounting and financial reporting function.
    3. Ensure that management has designed and implemented effective systems of risk management and internal controls and, at least annually, review and assess the effectiveness of such systems.
    4. Approve and recommend to the Board for adoption policies and procedures on risk oversight and management to establish an effective system for identifying, assessing, monitoring and managing risk.
    5. In consultation with the Auditors and management, review the adequacy of the Company’s internal control structure and procedures designed to ensure compliance with applicable laws and regulations, and discuss the responsibilities, budget and staffing needs of the Company’s financial and accounting group.
    6. Establish and review procedures for: (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns, including without limitation, concerns with respect to internal controls, financial reporting and questionable accounting or auditing matters. The Committee should ensure that proper arrangements are in place for fair and independent investigation of such matters and for appropriate follow-up.
    7. Ensure coordination between the Auditors and the Company’s internal audit team and ensure that the internal auditor function is adequately resourced and has appropriate standing within the Company; Maintain a direct reporting relationship with the Company’s internal audit team and review: (i) the internal control reports prepared by management, including management’s assessment of the effectiveness of the Company’s internal control structure and procedures for financial reporting; (ii) the Auditors’ attestation and report on the assessment made by management; and (iii) the performance of the Company’s internal audit team on an annual basis.
    8. Review the appointment of the Chief Financial Officer and any key financial executives involved in the financial reporting process and recommend to the Nominating and Corporate Governance Committee and to the Board any changes in such appointments.
    9. Review arrangements that employees of the Company can use, in confidence, to raise concerns about possible improprieties in financial reporting, internal control or other matters. The Committee should ensure that proper arrangements are in place for fair and independent investigation of these matters and for appropriate follow-up action; and act as the key representative body for overseeing the Company’s relations with the Auditors.

    (f) Other Responsibilities

    1. Create an agenda and timetable for the Committee for the ensuing year.
    2. Review and approve related-party transactions if required under applicable law, stock exchange or other regulatory requirements.
    3. Consider major investigation findings with respect to risk management and internal control matters, as delegated by the Board or on its own initiative, and management’s response to such findings.
    4. Review and approve: (a) any change or waiver in the Company’s code of ethics applicable to senior financial officers; and (b) any disclosures made under applicable law, stock exchange or other regulatory requirements regarding such change or waiver.
    5. Establish, review and approve policies for the hiring of partners, former partners, employees, or former employees of the Auditors or the Company’s former independent auditors.
    6. Review and reassess the adequacy of, and the duties and responsibilities set out in, this Charter annually and recommend to the Nominating and Corporate Governance Committee and to the Board any changes deemed appropriate by the Committee.
    7. CReview its own performance annually, seeking input from management and the Board.
    8. Confirm to the Board annually that all responsibilities outlined in this Charter have been carried out.
    9. Perform any other activities consistent with this Charter, the Company's constating documents and governing law, as the Committee or the Board deems necessary or appropriate.

    V. Reporting

    The Committee shall report regularly to the Board, including on matters set out in applicable stock exchange regulations, and shall submit the minutes of all meetings of the Committee to the Board (which minutes shall ordinarily be included in the papers for the next full board meeting after the relevant meeting of the Committee). The Committee shall also report to the Board on the proceedings and deliberations of the Committee at such times and in such manner as the Board may require. The Committee shall review with the full Board any issues that have arisen with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance or independence of the Auditors or the performance of the Company’s financial and accounting group.

    VI. Resources and Access to Information

    The Committee shall be provided with sufficient resources by the Company to perform its duties. The Committee shall have the authority to: (i) retain, at the expense of the Company, independent legal, accounting and other advisors or consultants to advise the Committee, as it determines necessary to carry out its duties; and (ii) approve the terms and conditions of the arrangement (including, the fees and other retention terms) with such outside advisors.

    The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities. The Committee has direct and unrestricted access to any officer, employee or consultant of the Company and its subsidiaries. The Committee may request any officer, employee or consultant of the Company or its subsidiaries, the Company’s outside counsel or the Auditors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee with or without the presence of management. In the performance of any of its duties and responsibilities, the Committee shall have unrestricted access to any and all books and records of the Company and its subsidiaries necessary for the execution of the Committee’s obligations.

    The Committee shall determine the extent of funding necessary for payment of: (a) compensation to the Company’s independent public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; (b) compensation to any independent legal, accounting and other advisors or consultants retained to advise the Committee; and (c) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

  • Health, Environment, Safety and Social Responsibility Committee Charter

    SOUTHGOBI RESOURCES LTD.
    HEALTH, ENVIRONMENT, SAFETY AND SOCIAL RESPONSIBILITY COMMITTEE CHARTER

    I. Purpose

    The Health, Environment, Safety and Social Responsibility Committee (the “Committee”) assists the Board of Directors (the “Board”) of SouthGobi Resources Ltd. (the “Company”) in fulfilling its oversight responsibilities by monitoring and reviewing performance, and recommending for approval policies and management systems, with respect to health, environmental, safety and social responsibility related matters affecting the Company.

    II. Organization

    The Committee shall consist of not less than three members. Members of Executive Management are eligible to be members of the Committee.

    The members of the Committee and the Chair of the Committee shall be appointed by the Board upon the recommendation of the Nominating & Corporate Governance Committee. The appointment of members of the Committee shall take place annually at the first meeting of the Board after a meeting of shareholders at which directors are elected, provided that if the appointment of members of the Committee is not so made, the directors who are then serving as members of the Committee shall continue as members of the Committee until their successors are appointed. Any member of the Committee may be removed or replaced at any time by the Board and shall cease to be a member of the Committee as soon as such member ceases to be a director of the Company. Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board on the recommendation of the Nominating & Corporate Governance Committee.

    The Committee may form and delegate authority to individual members or subcommittees when appropriate.

    The members of the Committee shall be entitled to receive such remuneration for acting as members of the Committee as the Board may from time to time determine.

    III. Meetings

    The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than two times per year. Meetings may be held in person, by telephone, by video-conference or by any combination of any of the foregoing, to the extent permitted by the Company’s constating documents and applicable corporate law.

    A majority of the members of the Committee, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. Matters decided by the Committee shall be decided by a majority vote. The Chair of the Committee shall have an ordinary vote and not a casting vote.

    The Chair of the Committee shall be selected by the Board based upon the recommendation of the Nominating and Corporate Governance Committee. In the absence of the appointed Chair of the Committee at any meeting, the members shall elect a temporary Chair from those in attendance at the meeting. The Chair of the Committee, in consultation with the other members of the Committee, and subject to the two meeting minimum noted above, shall set the frequency and length of each meeting and the agenda of items to be addressed at each upcoming meeting. The Chair shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee in advance of the meeting.

    The Committee will appoint a Secretary who will keep full minutes of all meetings. The Secretary may be the Company’s Corporate Secretary or another person who does not need to be a member of the Committee. Draft and final versions of the meeting minutes should be sent to all members of the Committee within a reasonable time following such meetings, which, in the case of draft meeting minutes, shall be circulated no later than 21 days following the date of the applicable meeting.

    The Committee may invite, from time to time, such persons as it may see fit to attend its meetings and to take part in discussion and consideration of the affairs of the Committee.

    IV. Authority and Responsibilities
    1. The Committee is responsible for reviewing and recommending, as appropriate, changes to the health, environmental, safety and social responsibility policies of the Company.
    2. The Committee will, at least annually, monitor the status of compliance with the Company policies and applicable laws and regulations in the areas of health, environment, safety and social responsibility based on written reports from management.
    3. The Committee will review, at least semi-annually, the performance of the Company in the area of health, environment, safety and social responsibility.
    4. In the event of the occurrence of a material health, environmental or safety incident where the occurrence is required to be reported to the appropriate authorities, the Committee will receive and review as soon as practicable a report from management detailing the nature of the incident and describing the remedial action being taken. In all cases, the Committee will be responsible for providing guidance to the Board and management on how to prevent any recurrences of such incidents in the future.
    5. The Committee will ensure risk assessments are conducted and a risk register is maintained concerning the health, environmental and safety risks impacting the Company.
    6. The Committee will, at least annually, review a report from management outlining the status of the risk register and controls.
    7. The Committee shall assess its performance annually, seeking input from the Board.
    8. The Committee will confirm to the Board annually that all responsibilities outlined in this Charter have been carried out.
    9. The Committee will review and reassess the adequacy of, and the duties and responsibilities set out in, this Charter annually and recommend to the Nominating and Corporate Governance Committee and to the Board any changes deemed appropriate by the Committee.

    V. Reporting

    The Committee shall report regularly to the Board, and shall submit the minutes of all meetings of the Committee to the Board (which minutes shall ordinarily be included in the papers for the next full board meeting after the relevant meeting of the Committee). The Committee shall also report to the Board on the proceedings and deliberations of the Committee at such times and in such manner as the Board may require.

    VI. Resources and Access to Information

    The Committee shall have the authority to retain, at the expense of the Company, independent legal, engineering and other consultants to advise the Committee. The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities. The Committee shall have direct access to anyone in the organization and may request any officer or employee of the Company and its subsidiaries or the Company’s outside counsel or its auditors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee, with or without the presence of management. In the performance of any of its duties and responsibilities, the Committee shall have unrestricted access to any and all books and records of the Company and its subsidairies necessary for the performance of the Committee’s obligations.

  • Nominating & Corporate Governance Committee Charter

    SOUTHGOBI RESOURCES LTD.
    NOMINATING & CORPORATE GOVERNANCE COMMITTEE CHARTER

    I. Purpose

    The primary objective of the Nominating & Corporate Governance Committee (the “Committee”) of SouthGobi Resources Ltd. (the “Company”) is to assist the Board in fulfilling its oversight responsibilities by: (a) identifying individuals qualified to become Board and committee members and recommending that the Board select such individuals as director nominees for appointment or election to the Board or committee, as the case may be; and (b) developing and recommending to the Board corporate governance guidelines for the Company and making recommendations to the Board with respect to corporate governance practices.

    II. Organization

    The Committee shall consist entirely of independent non-executive directors of the Company as determined by the Board, each of whom shall satisfy the laws governing the Company and the independence requirements under applicable securities laws, rules and regulations, stock exchange policies and rules and any other regulatory requirements applicable to the Company.

    The members of the Committee and the Chair of the Committee shall be appointed (and may be replaced) by the Board. All members shall have a working familiarity with corporate governance practices. The appointment of members of the Committee shall take place annually at the first meeting of the Board after a meeting of shareholders at which directors are elected, provided that if the appointment of members of the Committee is not so made, the directors who are then serving as members of the Committee shall continue as members of the Committee until their successors are appointed. Any member of the Committee may be removed or replaced at any time by the Board and shall cease to be a member of the Committee as soon as such member ceases to be a director of the Company. Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board.

    The Committee may form and delegate authority to individual members or subcommittees when appropriate.

    III. Meetings

    The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than once per year. Meetings may be held in person, by telephone, by video-conference or by any combination of any of the foregoing, to the extent permitted by the Company’s constating documents and applicable corporate law.

    A majority of the members of the Committee, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. Matters decided by the Committee shall be decided by a majority vote. The Chair of the Committee shall have an ordinary vote and not a casting vote.

    The Chair of the Committee shall be an independent director who is not the Chair of the Board. In the absence of the appointed Chair of the Committee at any meeting, the members shall elect a temporary Chair from those in attendance at the meeting. The Chair of the Committee, in consultation with the other members of the Committee, shall set the frequency and length of each meeting and the agenda of items to be addressed at each upcoming meeting. The Chair shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee in advance of the meeting.

    The Committee will appoint a Secretary who will keep full minutes of all meetings. The Secretary may be the Company’s Corporate Secretary or another person who does not need to be a member of the Committee. Draft and final versions of the meeting minutes should be sent to all members of the Committee within a reasonable time following such meetings, which, in the case of draft meeting minutes, shall be circulated no later than 21 days following the date of the applicable meeting.

    The Committee may invite, from time to time, such persons as it may see fit to attend its meetings and to take part in discussion and consideration of the affairs of the Committee.

    IV. Authority and Responsibilities

    To fulfill its responsibilities, the Committee shall:

    1. Examine the structure, size and diversity (including but not limited to the skills, knowledge, experience, gender, age, cultural and educational background, ethnicity, professional experience and length of service) of the Board and recommend adjustments from time to time, at least annually, to ensure that the Board is of a size and composition that facilitates effective decision making and complements the Company’s strategy.
    2. Identify and assess the necessary and desirable competencies and characteristics for Board membership and regularly assess the extent to which those competencies and characteristics are represented on the Board.
    3. Develop and implement processes to identify and assess necessary and desirable competencies and characteristics for Board membership.
    4. Identify individuals qualified to become members of the Board. In identifying suitable candidates, the Committee shall consider candidates on merits and against objective criteria, with due regard to the diversity policy of the Board (the “Diversity Policy”).
    5. Make recommendations to the Board for the appointment or re-appointment or election of director nominees.
    6. Make recommendations to the Board with respect to membership on committees of the Board (other than the Committee).
    7. Make recommendations to the Board with respect to potential successors to the Chief Executive Officer.
    8. Ensure that Board has appropriate structures and procedures so that the Board can function with the proper degree of independence from management.
    9. Provide a forum (without management present) to receive expressions of concerns regarding management, including any concern regarding the independence of the Board from management.
    10. Assess the independence of independent non-executive directors.
    11. Regularly review the time required from non-executive directors to perform their duties and assess whether they are satisfying those time requirements.
    12. Establish induction programs for new directors.
    13. Make recommendations, from time to time, to the Board with respect to continuing education programs for Board members.
    14. Ensure succession plans are in place to maintain an appropriate balance of skills and diversity on the Board and periodically review those plans.
    15. Recommend the removal of directors for cause (if and when appropriate).
    16. Receive comments from all directors as to the Board's performance; oversee the execution of a process for assessing the effectiveness of the Board as a whole, Board committees, and the contribution of individual directors, and report annually to the Board on such assessments.
    17. Prepare and recommend to the Board the corporate governance policies and procedures for the Company. Review practices and procedures of the Board in light of ongoing developments in securities law, stock exchanges and regulatory requirements, and industry best practices, relating to matters of corporate governance. Review and reassess the adequacy of the Company’s corporate governance policies, practices and procedures annually and recommend to the Board any changes deemed appropriate by the Committee.
    18. Review and monitor the Diversity Policy and identify measurable objectives for promoting diversity under the policy. Report to the Board on the achievement of the measurable objectives.
    19. Review any proposed changes to the Company’s constating documents as such documents relate to corporate governance matters.
    20. Review and monitor the company’s policies and practices on compliance, and ensure systems are in place to verify compliance, with legal, regulatory, corporate governance and disclosure requirements.
    21. Review and monitor the training and continuous professional development of directors and senior management.
    22. Review the Company’s corporate governance disclosure in its annual report.
    23. Review and assess the adequacy of, and the duties and responsibilities set out in, this Charter annually and recommend to the Board any changes deemed appropriate by the Committee.
    24. Assist the Board in dealing with conflict of interest issues as contemplated by the Company’s code of business conduct, The Way We Work.
    25. At the request of an individual director, consider and, if deemed advisable, authorize the engagement by any individual director of an outside advisor for such director at the expense of the Company.
    26. Review its own performance annually, seeking input from the Board.
    27. Confirm to the Board annually that all responsibilities outlined in this Charter have been carried out.
    28. Review and assess the effectiveness of the Company’s Board Diversity Policy annually and recommend to the Board any changes deemed appropriate by the Committee.
    29. Perform any other activities consistent with this Charter, the Company's constating documents and governing law, as the Committee or the Board deems necessary or appropriate.

    V. Reporting

    The Committee shall report regularly to the Board, including on matters set out in applicable stock exchange regulations, and shall submit the minutes of all meetings of the Committee to the Board (which minutes shall ordinarily be included in the papers for the next full board meeting after the relevant meeting of the Committee). The Committee shall also report to the Board on the proceedings and deliberations of the Committee at such times and in such manner as the Board may require.

    VI. Resources and Independent Advice

    The Committee shall be provided with sufficient resources by the Company to perform its duties. The Committee shall have ability to engage independent professional advisors as it sees fit, at the expense of the Company, including the sole authority to: (i) determine the extent of funding necessary for payment of compensation to any search firm and the authority to determine the extent of funding necessary for payment of compensation to any other professionals retained to advise the Committee; and (ii) retain and terminate a search firm to be used to identify director candidates and the authority to retain other professionals to assist it with any background checks.

    VII. Appointing new directors

    In fulfilling its responsibility to identify individuals qualified to become members of the Board, the Committee will consider: (i) the independence of each nominee; (ii) the experience and background of each nominee; (iii) the competencies and skills that are necessary for the Board and its committees to meet their respective mandates; (iv) the competencies and skills that the Board considers each director standing for re-election to possess; (v) the competencies and skills that each nominee will bring to the Board; (vi) the past performance of directors being considered for re-election; (vii) whether or not each nominee can devote sufficient time and resources to his or her duties as a member of the Board; (viii) applicable regulatory requirements; and (ix) such other criteria as may be established by the Board or the Committee from time to time.

    Each nominee will be considered on the basis of merit and suitably extensive enquiries to find candidates should be made, including:

    1. regularly assessing and identifying the necessary and desirable skills, experience and knowledge that the Board, as a whole, should possess;
    2. regularly assessing and identifying the skills, experience, diversity and knowledge represented on the Board;
    3. regularly assessing and determining the time commitment needed from each Board member to adequately perform his or her duties;
    4. making suitable inquiries of others (which may include engaging the services of professional executive search and recruitment consultants) for candidates;
    5. interviewing each candidate and conducting background and reference checks; and
    6. ensuring that each candidate has the necessary skills, experience and knowledge to perform his or her duties and responsibilities as a director and is able to devote the time necessary to perform those duties and responsibilities.
  • Compensation and Benefits Committee Charter

    COMPENSATION AND BENEFITS COMMITTEE CHARTER

    I. Purpose

    The primary objective of the Compensation and Benefits Committee (the “Committee”) of SouthGobi Resources Ltd. (the “Company”) is to discharge the Board of Directors’ (the “Board”) responsibilities relating to the determination of compensation and benefits for its executive officers and directors of the Company. These responsibilities include, but are not limited to:

    1. Assist the Board and the Nominating and Corporate Governance Committee with the recruitment, development and retention of the Company’s senior management.
    2. Performance evaluation and compensation of senior management.
    3. Succession planning systems for senior management positions.
    4. Compensation structure for the Board and senior management, including salaries, annual and long-term incentive plans and plans involving share options, share issuances and share unit rewards.
    5. Benefit plans applicable to senior management.
    6. Any share ownership guidelines.

    II. Organization

    The Committee shall consist entirely of independent non-executive directors of the Company as determined by the Board and shall satisfy the laws governing the Company and the independence and experience requirements under applicable securities laws, rules and regulations, stock exchange rules and policies, and any other regulatory requirements applicable to the Company.

    The members of the Committee and the Chair of the Committee shall be appointed (and may be replaced) by the Board upon the recommendation of the Nominating and Corporate Governance Committee. Each member of the Committee shall have or develop an understanding of senior management resources and compensation principles and practices. The appointment of members of the Committee shall take place annually at the first meeting of the Board after a meeting of shareholders at which directors are elected, provided that if the appointment of members of the Committee is not so made, the directors who are then serving as members of the Committee shall continue as members of the Committee until their successors are appointed. Any member of the Committee may be removed or replaced at any time by the Board and shall cease to be a member of the Committee as soon as such member ceases to be a director of the Company. Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board on the recommendation of the Nominating and Corporate Governance Committee.

    The Committee may form and delegate authority to individual members or subcommittees when appropriate.

    III. Meetings

    The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than one time per year. Meetings may be held in person, by telephone, by video-conference or by any combination of any of the foregoing, to the extent permitted by the Company’s constating documents and applicable corporate law.

    A majority of the members of the Committee, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. Matters decided by the Committee shall be decided by a majority vote. The Chair of the Committee shall have an ordinary vote and not a casting vote.

    The Chair of the Committee shall be an independent chair who is not the Chair of the Board. In the absence of the appointed Chair of the Committee at any meeting, the members shall elect a temporary Chair from those in attendance at the meeting. The Chair of the Committee, in consultation with the other members of the Committee, shall set the frequency and length of each meeting and the agenda of items to be addressed at each upcoming meeting. The Chair shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee in advance of the meeting.

    The Committee will appoint a Secretary who will keep full minutes of all meetings. The Secretary may be the Company’s Corporate Secretary or another person who does not need to be a member of the Committee. Draft and final versions of the meeting minutes should be sent to all members of the Committee within a reasonable time following such meetings, which, in the case of draft meeting minutes, shall be circulated no later than 21 days following the date of the applicable meeting.

    The Committee may invite, from time to time, such persons as it may see fit to attend its meetings and to take part in discussion and consideration of the affairs of the Committee.

    IV. Authority and Responsibilities

    The Committee shall:

    1. On an ongoing basis, review and make recommendations to the Board relating to: (i) the Company’s policy and structure for all director and senior management remuneration; and (ii) the establishment of a formal and transparent procedure for developing such remuneration policy, which shall take into account the Company’s corporate goals and objectives and any remuneration proposals from management.
    2. At least annually, review and approve corporate goals and objectives relevant to the Chief Executive Officer’s (the “CEO”) compensation, evaluate the CEO’s performance in light of those goals and objectives and make recommendations to the Board with respect to the CEO’s compensation level based on such evaluation. In determining the long-term incentive component of the CEO’s compensation, the Committee shall also consider, among such other factors as it may deem relevant, the Company’s performance, shareholder returns, the value of similar incentive awards to chief executive officers at comparable companies and the awards given to the CEO in past years.
    3. At least annually, review (in consultation with the Chair of the Board and the CEO), make recommendations to the Board and approve, the adequacy and forms of compensation, benefits and individual remuneration packages of all other executive officers, executive and non-executive directors and senior management, including compensation for termination, dismissal or loss of office. Where possible, a significant proportion of compensation and benefits provided to executive officers should link rewards to corporate and individual performance.
    4. Administer and make recommendations to the Board with respect to the Company’s Employees’ and Directors’ Equity Incentive Plan and any other incentive compensation plans and equity-based plans, including any share ownership guidelines, and review such plans annually.
    5. Fix and determine the recipients of, and the nature, vesting criteria (if applicable) and size of equity compensation awards and equity bonuses granted from time to time, in compliance with applicable securities laws, stock exchange rules and policies, and other regulatory requirements.
    6. Periodically review with the Board the succession plans relating to key senior management positions and make recommendations to the Board with respect to the selection of individuals to occupy these positions.
    7. When making its recommendations to the Board, consider the remuneration paid to the directors and executive officers of comparable companies in the Company’s peer group, in light of their expected time commitments and responsibilities and the employment conditions under which they work.
    8. Review and approve any compensation payable to any executive director or member of senior management in connection with any loss or termination of office or appointment to ensure that such compensation is consistent with contractual terms and is otherwise fair and not excessive.
    9. Review and approve any compensation arrangement relating to the dismissal or removal of any director for misconduct to ensure that such arrangement is consistent with contractual terms and is otherwise reasonable and appropriate in the circumstances.
    10. Ensure that no director, or any of his or her associates, is involved in the determination of his or her own remuneration.
    11. Ensure systems are in place to verify compliance with regulatory, corporate governance and disclosure requirements.
    12. Review compensation disclosure prior to public disclosure by the Company.
    13. Review any report as may be required under applicable securities law, stock exchange rules and policies, and any other regulatory requirements.
    14. Review and reassess the adequacy of, and the duties and responsibilities set out in, this Charter annually and recommend to the Nominating and Corporate Governance Committee and the Board any changes deemed appropriate by the Committee.
    15. Review its own performance annually, seeking input from the Board.
    16. Confirm to the Board annually that all responsibilities outlined in this Charter have been carried out.
    17. Perform any other activities consistent with this Charter, the Company's constating documents and governing law, as the Committee or the Board deems necessary or appropriate.

    V. Reporting

    The Committee shall report regularly to the Board, including on matters set out in applicable stock exchange rules and policies, and shall submit the minutes of all meetings of the Committee to the Board (which minutes shall ordinarily be included in the papers for the next full board meeting after the relevant meeting of the Committee). The Committee shall also report to the Board on the proceedings and deliberations of the Committee at such times and in such manner as the Board may require.

    VI. Resources and Independent Advice

    The Committee shall be provided with sufficient resources by the Company to perform its duties. The Committee shall have the authority to retain, at the expense of the Company, independent professional advisors, including (i) the sole authority to retain consultants to assist the Committee in the evaluation of compensation of executive officers, senior management and directors and (ii) the sole authority to determine the terms of engagement and the extent of funding necessary for payment of compensation to any consultants retained to advise the Committee.

  • Appointment of Directors

    Cover Sheet

    SOUTHGOBI RESOURCES LTD.

    Confirmation of Service
    Form Filed: Notice of Change of Directors
    Date and Time of Filing: April 13, 2018 09:52 AM Pacific Time
    Name of Company: SOUTHGOBI RESOURCES LTD.
    Incorporation Number: BC0812493

    This package contains:

    Certified Copy of the Notice of Articles

    Check your documents carefully to ensure there are no errors or omissions. If errors or omissions are discovered, please contact the Corporate Registry for instructions on how to correct the errors or omissions.

    Notice of Articles

    BUSINESS CORPORATIONS ACT

    This Notice of Articles was issued by the Registrar on: April 13, 2018 09:52 AM Pacific Time

    Incorporation Number: BC0812493

    Recognition Date and Time: January 1, 2008 12:01 AM Pacific Time as a result of an Amalgamation

    NOTICE OF ARTICLES

    Name of Company: SOUTHGOBI RESOURCES LTD.

    Translation(s) of Company Name: The Company has adopted a Chinese translation to use outside Canada which, in letters from the English alphabet, is "SouthGobi Resources Limited"

    REGISTERED OFFICE INFORMATION

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    RECORDS OFFICE INFORMATION

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    DIRECTOR INFORMATION

    Last Name, First Name, Middle Name: Liu, Zhu

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Sun, Mao

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Aminbuhe,

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Quan, Jin Lan

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Guo, Yulan

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Yao, Wayne

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: He, Y.B. Ian

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Chen, Zhiwei

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Last Name, First Name, Middle Name: Li, Xiaoxiao

    Mailing Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    Delivery Address: 20TH FLOOR - 250 HOWE STREET VANCOUVER BC V6C 3R8 CANADA

    AUTHORIZED SHARE STRUCTURE
    No Maximum COMMON Shares Without Par Value
    With Special Rights or Restrictions attached
    No Maximum PREFERRED Shares Without Par Value
    With Special Rights or Restrictions attached
  • Majority Voting Policy

    MAJORITY VOTING POLICY FOR ELECTION OF DIRECTORS

    PURPOSE:

    The board of directors (the "Board") believes that each director should have the confidence and support of the Company's shareholders. The purpose of this policy is to provide that any nominee for election as a director, at any meeting of the shareholders at which directors are to be elected, for whom the number of votes withheld exceeds the number of votes cast in favour of his or her election (a "Non-Supported Director"), will be considered not to have received the support of shareholders even though duly elected as a matter of law and will be deemed to have submitted his or her resignation to the Board.

    SCOPE:

    This policy only applies to uncontested elections, meaning elections where the number of nominees for election is equal to the number of directors to be elected as set out in the management information circular for the particular meeting. In an uncontested election, a "withhold" vote in respect of a particular nominee for election as a director will, for the purposes of this policy, be treated as effectively the same as a vote against the director nominee.

    ELECTION PROCEDURE:

    Each individual who is nominated for election to the Board after the date that this policy is adopted will be required to:

    1. confirm that he or she will abide by this policy; and
    2. submit to the Chair of the Nominating & Corporate Governance Committee (the "Committee") an undated resignation letter.

    The form of proxy for any meeting of the Company's shareholders at which directors are to be elected will permit a shareholder to vote in favour of, or to withhold from voting, his or her shares separately for each director nominee. The Corporate Secretary will ensure that the number of shares voted in favour or withheld from voting for each director nominee is recorded and promptly made public after the meeting. If the vote was by a show of hands, the Company will disclose the number of shares voted by proxy in favour or withheld for each director.

    CONSEQUENCE OF MAJORITY OF VOTES WITHHELD:

    If, upon the tabulation of the voting results, it is determined that a director nominee is a Non-Supported Director, he or she will be considered not to have received the support of the shareholders, even though duly elected as a matter of corporate law and such Non-Supported Director will be deemed to have submitted his or her resignation to the Board, effective upon acceptance by the Board. The Board will refer the Non-Supported Director's resignation to the Committee for consideration.

    The Committee will make a recommendation to the Board as to whether or not it is appropriate to accept the resignation of the Non-Supported Director. In formulating its recommendation, the Committee will consider all factors its members deem relevant including, without limitation, the stated reason or reasons why shareholders who cast "withhold" votes for the Non-Supported Director did so, extenuating circumstances, if any, in respect of the Non-Supported Director that address the stated reason or reasons why shareholders cast "withhold" votes, the qualifications of the Non-Supported Director including, the anticipated impact the Non-Supported Director's resignation would have on the Company, and whether the Non-Supported Director's resignation from the Board would be in the best interests of the Company.

    Within 90 days of the date of the meeting of shareholders at which the election of directors took place:

    1. the Committee will make its recommendation to the Board,
    2. the Board will decide whether or not to accept the Non-Supported Director's resignation, and
    3. the Company will issue a press release announcing the resignation of the Non-Supported Director or explaining the reasons justifying the Board's decision not to accept the resignation.

    Subject to applicable law, the Board may (1) leave a vacancy in the Board unfilled until the next annual meeting of shareholders, (2) fill the vacancy by appointing a new director whom the Board considers to merit the confidence of the shareholders, or (3) call a special meeting of shareholders to consider new board nominee(s) to fill the vacant position(s).

    RECUSAL OF NON-SUPPORTED DIRECTOR:

    No Non-Supported Director may participate in any deliberations of the Committee or the Board respecting whether or not to accept his or her resignation pursuant to the operation of this policy.

  • Board Diversity Policy

    BOARD DIVERSITY POLICY

    1. Purpose

    This Policy is intended to set out a framework to promote diversity on the Company’s board of directors (the “Board”). The Policy has as its objectives, the advancement of the representation of women and other minority groups on the Board, and the advancement and facilitation of a range of diversity initiatives throughout the Company.

    2. Vision

    The Company recognizes the importance and benefits of having a diverse Board to enhance the quality of its performance. The Company is committed to promoting diversity on the Board.

    3. Policy Statement

    The Company believes that a diverse Board will enhance the decision making of the Board by utilizing the difference in skills, experience and background, geographical and industry experience, ethnicity, gender, knowledge and length of services, and other distinguishing qualities of the members of the Board. Diversity will be considered in determining the optimum composition of the Board, and all appointments will be based on merit, having due regard to the overall effectiveness of the Board.

    The Nominating & Corporate Governance Committee of the Company (the “Committee”) is required to review the effectiveness of the Policy on an annual basis. The Committee will also review the structure, size and diversity of the Board and make recommendations on any proposed changes to the Board to complement the Company’s objectives and strategy.

    4. Specific Measures

    The Committee will annually discuss and agree on the specific measures to be taken for promoting diversity on the Board and make recommendations for consideration and approval by the Board. The final decision will be based on merit against objective criteria and with due regard to the benefits of diversity on the Board.

    5. Monitoring and Reporting

    The Committee will monitor and implement this Policy and periodically report to the Board on the implementation of this Policy.

    6. Review of the Policy

    The Committee will review this Policy from time to time as necessary, and make recommendations on any required changes to the Board for consideration and approval.

  • Shareholder Communication Policy

    SHAREHOLDER COMMUNICATION POLICY

    I. PURPOSE

    This Policy sets out the general policy and measures adopted by the Company in respect of its communication with shareholders, both individual and institutional (collectively, the “Shareholders”), and, in appropriate circumstances, potential investors and analysts who report on and analyze the Company’s performance (collectively, the “investment community”), with the objective that all of them will be provided with complete, equal, and timely information about the Company (including its financial performance, strategic goals and plans, material business developments, corporate governance, risk profile and other material information) in order to enable Shareholders to make an informed decision with respect to their shares and other securities of the Company and to allow the investment community to engage in constructive dialogue with the Company.

    II. GENERAL POLICY

    The board of directors of the Company (the “Board”) shall maintain an on-going dialogue with Shareholders and the investment community, and shall regularly review this Policy to ensure its effectiveness.

    The Company shall communicate with Shareholders and the investment community through various channels, including, but not limited to, financial reports (annual, half-yearly and quarterly reports), proxy circulars, annual general and special meetings of shareholders that may be convened, announcements submitted to the stock exchanges on which the Company’s securities are listed, press releases, the Company’s website (www.southgobi.com) and other continuous and periodic disclosure documents.

    Documents filed or submitted by the Company with securities regulators and stock exchanges in accordance with applicable securities laws and stock exchange rules will be made available under the Company’s profile on the SEDAR website (www.sedar.com), the website of The Stock Exchange of Hong Kong (www.hkex.com.hk), and the Company’s website (www.southgobi.com).

    The Company shall ensure effective and timely dissemination of information concerning the Company to Shareholders and the investment community at all times. Any question regarding this Policy shall be directed to the Company’s Investor Relations Officer.

    III. COMMUNICATION CHANNEL

    Shareholders’ Meetings

    The Company uses shareholders meetings (including annual general meetings and special meetings) as one of its principal communication channels with Shareholders.

    The Company will monitor and review regularly the process of its shareholders meetings and, where necessary, make appropriate changes to ensure that Shareholders’ needs are best served.

    Representatives of the Board, senior management and the Company’s external auditors will attend shareholders meetings to answer Shareholders’ questions.

    Shareholders are encouraged to participate in the Company’s shareholders meetings in person or, if they are unable to attend the meetings in person, to appoint proxies to attend and vote at the meetings for and on their behalf.

    Shareholders are encouraged to attend Shareholders’ activities organized by the Company, where the latest information about the Company will be communicated.

    Corporate Communication

    Documents filed or submitted by the Company with securities regulators and stock exchanges in accordance with applicable securities laws and stock exchange rules will be made available to Shareholders in English and summarized in Chinese to facilitate Shareholders’ understanding.

    Shareholders’ enquiries

    Shareholders should direct their questions about their shareholdings to the Company’s transfer agents (AST Trust Company in Canada (Tel: 604-235-3701) and Computershare in Hong Kong (Tel: +852-2862-8504)).

    Shareholders, potential investors, analysts and the media may at any time request publicly available information about the Company or make enquiries concerning the Company through the following means:

    By telephone: +852-2156-1438
    By fax: +852-2156-1439
    By mail: Attention: Investor Relations
    SouthGobi Resources Ltd.
    Suite 3712-15, Tower Two, Times Square 1 Matheson Street
    Causeway Bay, Hong Kong

    IV. SHAREHOLDER PRIVACY

    The Company recognizes the importance of Shareholders’ privacy and will not disclose a Shareholder’s personal information to a third party without their prior consent, unless required by law to do so.

  • Articles of Continuation

    ARTICLES OF CONTINUATION

    PART 1 – INTERPRETATION

    I. Definitions

    Without limiting Article 1.2 in these Articles, unless the context otherwise requires:

    board of directors”, “directors” and “board” mean the directors or sole director of the Company for the time being;

    Business Corporations Act” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

    Interpretation Act” means the Interpretation Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

    legal personal representative” means the personal or other legal representative of a shareholder;

    registered address” of a shareholder means the shareholder’s address as recorded in the central securities register; and

    seal” means the seal of the Company, if any.

    II. Business Corporations Act and Interpretation Act Definitions Applicable

    The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict or inconsistency between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

    PART 2 – SHARES AND SHARE CERTIFICATES

    I. Authorized Share Structure

    The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

    II. Form of Share Certificate

    Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

    III. Shareholder Entitled to Certificate or Acknowledgment

    Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

    IV. Delivery by Mail

    Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

    V. Replacement of Worn Out or Defaced Certificate or Acknowledgement

    If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit

    1. order the share certificate or acknowledgment, as the case may be, to be cancelled; and
    2. issue a replacement share certificate or acknowledgment, as the case may be.

    VI. Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

    If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive:

    1. proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and
    2. any indemnity the directors consider adequate.

    VII. Splitting Share Certificates

    If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

    VIII. Certificate Fee

    There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act, determined by the directors.

    IX. Recognition of Trusts

    Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as required by law or statute or these Articles or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

    X. Lien on Shares

    The Company has a lien on any share or shares registered in the name of a shareholder or his legal representative for any debt of that shareholder to the Company.

    XI. Enforcement of Lien

    The lien referred to in Article 2.10 may be enforced by any means permitted by law and:

    1. where the share or shares are redeemable pursuant to the articles of the Company by redeeming such share or shares and applying the redemption price to the debt;
    2. subject to the Business Corporations Act, by purchasing the share or shares for cancellation for a price equal to the book value of such share or shares and applying the proceeds to the debt;
    3. by selling the share or shares to any third party whether or not such party is at arm’s length to the Company, and including, without limitation, any officer or director of the Company, for the best price which the directors consider to be obtainable for such share or shares; or
    4. by refusing to register a transfer of such share or shares until the debt is paid.

    PART 3 – ISSUE OF SHARES

    I. Directors Authorized

    Subject to the Business Corporations Act and the rights, if any, of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

    II. Commissions and Discounts

    The Company may at any time, pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

    III. Brokerage

    The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

    IV. Conditions of Issue

    Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

    1. consideration is provided to the Company for the issue of the share by one or more of the following:
      1. past services performed for the Company;
      2. property;
      3. money; and
    2. the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

    V. Share Purchase Warrants and Rights

    Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

    VII. Fractional Shares

    The Company may issue fractional shares, and the holders of fractional shares of the Company shall be entitled to exercise the rights of a shareholder for such fractional share in proportion to the fraction of the share held.

    PART 4 – SHARE REGISTERS

    I. Central Securities Register

    As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

    PART 5 – SHARE TRANSFERS

    I. Registering Transfers

    A transfer of a share of the Company must not be registered unless the Company or the transfer agent or registrar for the class or series of share to be transferred has received:

    1. a duly signed instrument of transfer in respect of the share;
    2. if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate;
    3. if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment; and
    4. such other evidence, if any, as the Company or the transfer agent or registrar for the class or series of share to be transferred may require to prove the title of the transferor or the transferor’s right to transfer the share, the due signing of the instrument of transfer and the right of the transferee to have the transfer registered.

    II. Form of Instrument of Transfer

    The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.

    III. Transferor Remains Shareholder

    Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

    IV. Signing of Instrument of Transfer

    If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:

    1. in the name of the person named as transferee in that instrument of transfer, or
    2. if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

    V. Enquiry as to Title Not Required

    Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

    VI. Transfer Fee

    There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.

    PART 6 – TRANSMISSION OF SHARES

    I. Legal Personal Representative Recognized on Death

    In case of the death of a shareholder, the legal personal representative of the shareholder, or in the case of shares registered in the shareholder’s name and the name of another person in joint tenancy, the surviving joint holder will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative of a shareholder, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

    II. Rights of Legal Personal Representative

    The legal personal representative of a shareholder has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company. This Article 6.2 does not apply in the case of the death of a shareholder with respect to shares registered in the shareholder’s name and the name of another person in joint tenancy.

    PART 7 – PURCHASE OF SHARES

    I. Company Authorized to Purchase Shares

    Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms determined by the directors.

    II. Purchase When Insolvent

    The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

    1. the Company is insolvent; or
    2. making the payment or providing the consideration would render the Company insolvent.

    III. Sale and Voting of Purchased Shares

    If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it

    1. is not entitled to vote the share at a meeting of its shareholders;
    2. must not pay a dividend in respect of the share; and
    3. must not make any other distribution in respect of the share.

    PART 8 – BORROWING POWERS

    The Company, if authorized by the directors, may:

    1. borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;
    2. issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;
    3. guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
    4. mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

    PART 9 – ALTERATIONS

    I. Alteration of Authorized Share Structure

    Subject to Article 9.2 and the Business Corporations Act, the Company may by special resolution:

    1. create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;
    2. increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;
    3. subdivide or consolidate all or any of its unissued, or fully paid issued, shares;
    4. if the Company is authorized to issue shares of a class of shares with par value:
      1. decrease the par value of those shares; or
      2. if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;
    5. change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;
    6. alter the identifying name of any of its shares; or
    7. otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act;

    and, if applicable, alter its Notice of Articles and, if applicable, its Articles, accordingly.

    II. Special Rights and Restrictions

    Subject to the Business Corporations Act, the Company may by special resolution:

    1. create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or
    2. vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued;

    and alter its Articles and Notice of Articles accordingly.

    III. Change of Name

    The Company may by special resolution authorize an alteration of its Notice of Articles in order to change its name and may, by ordinary resolution or directors’ resolution, adopt or change any translation of that name.

    IV. Other Alterations

    If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by special resolution alter these Articles.

    PART 10 – MEETINGS OF SHAREHOLDERS

    I. Annual General Meetings

    Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

    II. Resolution Instead of Annual General Meeting

    If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

    III. Place of Meetings

    Meetings of the shareholders shall be held at the place where the registered office of the Company is situated or, if the directors shall so determine, at some other place within or outside British Columbia.

    IV. Calling of Meetings of Shareholders

    The directors may, whenever and wherever they think fit, call a meeting of shareholders. The Company can hold its general meetings at a specified location outside of British Columbia if so authorized by a resolution of its directors.

    V. Notice for Meetings of Shareholders

    The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

    1. if and for so long as the Company is a public company, 21 days;
    2. otherwise, 10 days.

    VI. Record Date for Notice

    The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

    1. if and for so long as the Company is a public company, 21 days;
    2. otherwise, 10 days.

    If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

    VII. Record Date for Voting

    The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

    VIII. Failure to Give Notice and Waiver of Notice

    The accidental omission to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive that entitlement or may agree to reduce the period of that notice. Attendance of a person at a meeting of shareholders is a waiver of entitlement to notice of the meeting unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

    IX. Notice of Special Business at Meetings of Shareholders

    If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

    1. state the general nature of the special business; and
    2. if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders
      1. at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and
      2. during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

    PART 11 – PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

    I. At a meeting of shareholders, the following business is special business:

    1. at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;
    2. at an annual general meeting, all business is special business except for the following:
      1. business relating to the conduct of or voting at the meeting;
      2. consideration of any financial statements of the Company presented to the meeting;
      3. consideration of any reports of the directors or auditor;
      4. the setting or changing of the number of directors;
      5. the election or appointment of directors;
      6. the appointment of an auditor;
      7. the setting of the remuneration of an auditor;
      8. business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;
      9. any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

    II. Special Majority

    The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

    III. Quorum

    Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

    IV. One Shareholder May Constitute Quorum

    If there is only one shareholder entitled to vote at a meeting of shareholders:

    1. the quorum is one person who is, or who represents by proxy, that shareholder; and
    2. that shareholder, present in person or by proxy, may constitute the meeting.

    V. Other Persons May Attend

    The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company, and such other persons entitled to attend under the Business Corporations Act and any other persons invited by the directors or with the consent of the meeting are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

    VI. Requirement of Quorum

    No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

    VII. Lack of Quorum

    If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

    1. in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and
    2. in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

    VIII. Lack of Quorum at Succeeding Meeting

    If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

    IX. Chair

    The following individual is entitled to preside as chair at a meeting of shareholders:

    1. the chair of the board, if any; or
    2. if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

    X. Selection of Alternate Chair

    If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president

    XI. Adjournments

    The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from timed) time and from place to place, but no business may be transacted at any meeting reconvened after an adjournment other than the business left unfinished at the meeting from which the adjournment took place.

    XII. Notice of Adjourned Meeting

    It is not necessary to give any notice of an adjourned meeting of shareholders or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

    XIII. Decisions by Show of Hands or Poll

    Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

    XIV. Declaration of Result

    The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

    XV. Motion Need Not be Seconded

    No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

    XVI. Casting Vote

    In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

    XVII. Manner of Taking Poll

    Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

    1. the poll must be taken:
      1. at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and
      2. in the manner, at the time and at the place that the chair of the meeting directs.
    2. the result of the poll is deemed to be the decision of the meeting at which the poll is demanded and
    3. the demand for the poll may be withdrawn by the person who demanded it.

    XVIII. Demand for Poll on Adjournment

    A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

    XIX. Chair Must Resolve Dispute

    In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

    XX. Casting of Votes

    On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

    XXI. Demand for Poll Not to Prevent Continuance of Meeting

    The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

    XXII. Retention of Ballots and Proxies

    The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

    PART 12 – VOTES OF SHAREHOLDERS

    I. Number of Votes by Shareholder or by Shares

    Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

    1. on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and
    2. on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

    II. Votes of Persons in Representative Capacity

    A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

    III. Votes by Joint Holders

    If there are joint shareholders registered in respect of any share:

    1. any one of the joint shareholders may vote at any meeting of shareholders, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or
    2. if more than one of the joint shareholders is present at any meeting of shareholders, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

    IV. Legal Personal Representatives as Joint Shareholders

    Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

    V. Representative of a Corporate Shareholder

    If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

    1. for that purpose, the instrument appointing a representative must:
      1. be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or
      2. be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;
    2. if a representative is appointed under this Article 12.5:
      1. the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and
      2. the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

    Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

    VI. Proxy Provisions Do Not Apply to All Companies

    Articles 12.7 to 12.15 do not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

    VII. Appointment of Proxy Holders

    Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled - to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

    VIII. Alternate Proxy Holders

    A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

    IX. When Proxy Holder Need Not Be Shareholder

    A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

    1. the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;
    2. the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or
    3. the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

    X. Deposit of Proxy

    A proxy for a meeting of shareholders must:

    1. be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting or any adjourned meeting or
    2. unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting or adjourned meeting

    A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

    XI. Validity of Proxy Vote

    A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

    1. at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or
    2. by the chair of the meeting or adjourned meeting, before the vote is taken.

    XII. Form of Proxy

    A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

    [name of company] (the “Company”)

    The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

    Number of shares in respect of which this proxy is given (if no number is specified, then this proxy is given in respect of all shares registered in the name of the undersigned):

    Signed [month, day, year]

    [Signature of shareholder]

    [Name of shareholder—printed]

    XIII. Revocation of Proxy

    Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is

    1. received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used or
    2. provided, at the meeting or any adjourned meeting, to the chair of the meeting, before any vote in respect of which the proxy has been given has been taken.

    XIV. Revocation of Proxy

    An instrument referred to in Article 12.13 must be signed as follows:

    1. if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;
    2. if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

    XV. Production of Evidence of Authority to Vote

    The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

    PART 13 – DIRECTORS

    I. First Directors; Number of Directors

    The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act. The number of directors, excluding additional directors appointed under Article 14.8, is set at:

    1. subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Company’s first directors;
    2. if the Company is a public company, the greater of three and the most recently set of:
      1. the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and
      2. the number of directors set under Article 14.4;
    3. if the Company is not a public company, the most recently set of:
      1. the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and
      2. the number of directors set under Article 14.4.

    II. Change in Number of Directors

    If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a):

    1. the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;
    2. subject to Article 14.8, if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

    III. Directors’ Acts Valid Despite Vacancy

    An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

    IV. Qualifications of Directors

    A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

    V. Remuneration of Directors

    The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

    VI. Reimbursement of Expenses of Directors

    The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

    VII. Special Remuneration for Directors

    If any director who is not an employee or officer performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director who is not an employee or officer, or if any director who is not an employee or officer is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director who is not an employee or officer, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

    VIII. Gratuity, Pension or Allowance on Retirement of Director

    Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

    PART 14 – ELECTION AND REMOVAL OF DIRECTORS

    I. Election at Annual General Meeting

    At every annual general meeting and in every unanimous resolution in lieu of an annual general meeting as contemplated by Article 10.2:

    1. the shareholders entitled to vote at the annual general meeting for the election of directors are entitled to elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and
    2. all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

    II. Consent to be a Director

    No election, appointment or designation of an individual as a director is valid unless

    1. that individual consents to be a director in the manner provided for in the Business Corporations Act;
    2. that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or
    3. with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

    III. Failure to Elect or Appoint Directors

    If:

    1. the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or
    2. the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors; then each director then in office continues to hold office until the earlier of:
    3. the date on which his or her successor is elected or appointed; and
    4. the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

    IV. Places of Retiring Directors Not Filled

    If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not reelected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

    V. Directors May Fill Casual Vacancies

    Any casual vacancy occurring in the board of directors may be filled by the directors.

    VI. Remaining Directors Power to Act

    The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of calling a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

    VII. Shareholders May Fill Vacancies

    If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

    VIII. Additional Directors

    Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at anytime exceed:

    1. one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or
    2. in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

    Any director so appointed ceases to hold office immediately before the, next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

    IX. Ceasing to be a Director

    A director ceases to be a director when:

    1. the term of office of the director expires;
    2. the director dies;
    3. the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company, or
    4. the director is removed from office pursuant to Articles 14.10 or 14.11.

    X. Removal of Director by Shareholders

    The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

    XI. Removal of Director by Directors

    The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

    PART 15 – POWERS AND DUTIES OF DIRECTORS

    I. Powers of Management

    The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

    II. Appointment of Attorney of Company

    The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

    PART 16 – DISCLOSURE OF INTEREST OF DIRECTORS

    I. Obligation to Account for Profits

    A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

    II. Restrictions on Voting by Reason of Interest

    A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

    III. Interested Director Counted in Quorum

    A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

    IV. Disclosure of Conflict of Interest or Property

    A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

    V. Director Holding Other Office in the Company

    A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

    VI. No Disqualification

    No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

    VII. Professional Services by Director or Officer

    Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

    VIII. Director or Officer in Other Corporations

    A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

    PART 17 – PROCEEDINGS OF DIRECTORS

    I. Meetings of Directors

    The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

    II. Voting at Meetings

    Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

    III. Chair of Meetings

    The following individual is entitled to preside as chair at a meeting of directors:

    1. the chair of the board, if any;
    2. in the absence of the chair of the board, the president, if any, if the president is a director; or
    3. any other director chosen by the directors if:
      1. neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;
      2. neither the chair of the board nor the president, if a director, is willing to chair the meeting; or
      3. the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

    IV. Meetings by Telephone or Other Communications Medium

    A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 17.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

    V. Calling of Meetings

    A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

    VI. Notice of Meetings

    Other than for meetings held at regular intervals as determined by the directors pursuant to Article 17, 1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors by any method set out in Article 23.1 or orally or by telephone.

    VII. When Notice Not Required

    It is not necessary to give notice of a meeting of the directors to a director if:

    1. the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or
    2. the director has waived notice of the meeting.

    VIII. Meeting Valid Despite Failure to Give Notice

    The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director, does not invalidate any proceedings at that meeting.

    IX. Waiver of Notice of Meetings

    Any director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director. Attendance of a director at a meeting of the directors is a waiver of notice of the meeting unless that director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

    X. Quorum

    The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be a majority of the number directors, provided that where the number of directors of the Company is two directors, both directors must be present to constitute a meeting.

    XI. Validity of Acts Where Appointment Defective

    Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

    XII. Consent Resolutions in Writing

    A resolution of the directors or of any committee of the directors consented to in writing by all of the directors entitled to vote on it, whether by signed document, fax, email or any other method of transmitting legibly recorded messages, is as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors duly called and held. Such resolution may be in two or more counterparts which together are deemed to constitute one resolution in writing. A resolution passed in that manner is effective on the date stated in the resolution or on the latest date stated on any counterpart. A resolution of the directors or of any committee of the directors passed in accordance with this Article 17.12 is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

    PART 18 – EXECUTIVE AND OTHER COMMITTEES

    I. Appointment and Powers of Executive Committee

    The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

    1. the power to fill vacancies in the board of directors;
    2. the power to remove a director;
    3. the power to change the membership of, or fill vacancies in, any committee of the directors; and
    4. such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

    II. Appointment and Powers of Other Committees

    The directors may, by resolution:

    1. appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;
    2. delegate to a committee appointed under paragraph (1) any of the directors’ powers, except
      1. the power to fill vacancies in the board of directors;
      2. the power to remove a director;
      3. the power to change the membership of, or fill vacancies in, any committee of the directors; and
      4. the power to appoint or remove officers appointed by the directors; and
    3. make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

    III. Obligations of Committees

    Any committee appointed under Articles 18.1 or 18.2, in the exercise of the powers delegated to it, must

    1. conform to any rules that may from time to time be imposed on it by the directors and
    2. report every act or thing done in exercise of those powers at such times as the directors may require.

    IV. Powers of Board

    The directors may, at any time; with respect to a committee appointed under Articles 18.1 or 18.2:

    1. revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;
    2. terminate the appointment of, or change the membership of the committee; and
    3. fill vacancies in the committee.

    V. Committee Meetings

    Subject to Article 18.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 18.1 or 18.2:

    1. the committee may meet and adjourn as it thinks proper;
    2. the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;
    3. a majority of the members of the committee constitutes a quorum of the committee; and
    4. questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

    PART 19 – OFFICERS

    I. Directors May Appoint Officers

    The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

    II. Functions, Duties and Powers of Officers

    The directors may, for each officer:

    1. determine the functions and duties of the officer;
    2. entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and
    3. revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

    III. Qualifications

    No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as the managing director must be a director. Any other officer need not be a director.

    IV. Remuneration and Terms of Appointment

    All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors think fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

    PART 20 – INDEMNIFICATION

    I. Definitions In this Article 20:

    1. “eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of an eligible proceeding;
    2. “eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director or a former director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director of the Company:
      1. is or may be joined as a party; or
      2. is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;
    3. “expenses” has the meaning set out in the Business Corporations Act.

    II. Mandatory Indemnification of Eligible Parties

    Subject to the Business Corporations Act, the Company must indemnify a director or former director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 20.2.

    III. Indemnification of Other Persons

    Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

    IV. Non-Compliance with Business Corporations Act

    The failure of a director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

    V. Company May Purchase Insurance

    The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

    1. is or was a director, officer, employee or agent of the Company;
    2. is or was a director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;
    3. at the request of the Company, is or was a director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;
    4. at the request of the Company, holds or held a position equivalent to that of a director or officer of a partnership, trust, joint venture or other unincorporated entity;

    against any liability incurred by him or her as such director, officer, employee or agent or person who holds or held such equivalent position.

    PART 21 – DIVIDENDS

    I. Payment of Dividends Subject to Special Rights

    The provisions of this Article 21 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

    II. Declaration of Dividends

    Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

    III. No Notice Required

    The directors need not give notice to any shareholder of any declaration under Article21.2.

    IV. Record Date

    The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

    V. Manner of Paying Dividend

    A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of cash or cash equivalents, specific assets or of fully paid shares or of bonds, debentures or other securities of the Company or any other corporation, or in any one or more of those ways.

    VI. Settlement of Difficulties

    If any difficulty arises in regard to a distribution under Article 21.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

    1. set the value for distribution of specific assets;
    2. determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and
    3. vest any such specific assets in trustees for the persons entitled to the dividend.

    VII. When Dividend Payable

    Any dividend may be made payable on such date as is fixed by the directors.

    VIII. Dividends to be Paid in Accordance with Number of Shares

    All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

    IX. Receipt by Joint Shareholders

    If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

    X. Dividend Bears No Interest

    No dividend bears interest against the Company.

    XI. Fractional Dividends

    If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

    XII. Payment of Dividends

    Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

    XIII. Capitalization of Retained Earnings or Surplus

    Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any retained earnings or surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the reined earnings or surplus so capitalized or any part thereof.

    PART 22 – DOCUMENTS, RECORDS AND REPORTS

    I. Recording of Financial Affairs

    The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act.

    II. Inspection of Accounting Records

    Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

    PART 23 – NOTICES

    I. Method of Giving Notice

    Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

    1. mail addressed to the person at the applicable address for that person as follows:
      1. for a record mailed to a shareholder, the shareholder’s registered address;
      2. for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;
      3. in any other case, the mailing address of the intended recipient;
    2. delivery at the applicable address for that person as follows, addressed to the person:
      1. for a record delivered to a shareholder, the shareholder’s registered address;
      2. for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;
      3. in any other case, the delivery address of the intended recipient;
    3. sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;
    4. sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;
    5. physical delivery to the intended recipient.

    II. Deemed Receipt

    A notice, statement, report or other record that is:

    1. mailed to a person by ordinary mail to the applicable address for that person referred to in Article 23.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing;
    2. faxed to a person to the fax number provided by that person referred to in Article 23.1 is deemed to be received by the person to whom it was faxed on the day it was faxed; and
    3. e-mailed to a person to the e-mail address provided by that person referred to in Article 23.1 is deemed to be received by the person to whom it was e-mailed on the day it was emailed.

    III. Certificate of Sending

    A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that capacity on behalf of the Company stating that a notice, statement, report or other record was sent in accordance with Article 23.1 is conclusive evidence of that fact.

    IV. Notice to Joint Shareholders

    A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing such record to the joint shareholder first named in the central securities register in respect of the share.

    V. Notice to Legal Representatives and Trustees

    A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by

    1. mailing the record, addressed to them
      1. by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and
      2. at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or
    2. if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a mariner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

    VI. Undelivered Notices

    If any record sent to a shareholder pursuant to Article 23.1 is returned on two consecutive occasions because the shareholder cannot be located, the Company shall not be required to send any further records to the shareholder until the shareholder informs the Company in writing of his or her new address.

    PART 24 – SEAL

    I. Who May Attest Seal

    The Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of any one or more duly authorized directors or officers or other persons as may be determined by the directors from time to time.

    II. Sealing Copies

    For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 24.1, the impression of the seal may be attested by the signature of any director or officer or the signature of any other person as may be determined by the directors.

    III. Mechanical Reproduction of Seal

    The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

    PART 25 – PROHIBITIONS

    I. Definitions

    In this Article 25:

    1. “designated security” means:
      1. a voting security of the Company;
      2. a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or
      3. a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);
    2. “security” has the meaning assigned in the Securities Act (British Columbia);
    3. “voting security” means a security of the Company that:
      1. is not a debt security, and
      2. carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

    II. Application

    Article 25.3 does not apply to the Company if and for so long as it is a public company or a preexisting reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

    III. Consent Required for Transfer of Shares or Designated Securities

    No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

    PART 26 – SPECIAL RIGHTS AND RESTRICTIONS COMMON SHARES

    I. Voting

    The holders of the Common Shares shall be entitled to one vote at any meeting of the members of the Company in respect of each Common Share held and shall be entitled to receive notice of and attend all general meetings of the shareholders of the Company.

    II. Dividends

    Subject to the prior rights of the holders of Preferred Shares and any other shares ranking senior to the Common Shares with respect to priority in the payment of dividends, the holders of Common Shares shall be entitled to receive dividends and the Company shall pay dividends thereon, as and when declared by the board of directors of the Company out of moneys properly applicable to the payment of dividends, in such amount and in such form as the board of directors of the Company may from time to time determine and all dividends which the board of directors of the Company may declare on the Common Shares shall be declared and paid in equal amounts per share on all Common Shares at the time outstanding.

    III. Dissolution, Liquidation or Winding Up

    In the event of the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, or any other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, subject to the prior rights of the holders of the Preferred Shares and any other Shares ranking senior to the Common Shares with respect to priority in the distribution of assets upon dissolution, liquidation, winding up, the holders of the Common Shares shall be entitled to receive the remaining property and assets of the Company.

    PART 27 – SPECIAL RIGHTS AND RESTRICTIONS PREFERRED SHARES

    I. Voting

    The holders of the Preferred Shares shall not, as such, have any right to receive notice of, or to attend or to vote at, any general meeting of the Company.

    II. Priority

    No rights, privileges, restrictions or conditions attached to a series of Preferred Shares shall confer upon that series a priority in respect of dividends or return of capital over any other series of Preferred Shares then outstanding.

    The Preferred Shares shall be entitled to priority over the Common Shares of the Company and over any other Shares of the Company ranking junior to the Preferred Shares with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs.

    III. Dividends

    After payment to the holders of Preferred Shares of the amounts of dividends and capital payable in accordance with these provisions and the rights, privileges and restrictions attached to each series of Preferred Shares, the holders of Preferred Shares shall not be entitled to share in any further distribution of the property and assets of the Company. The Preferred Shares of any series may also be given such other preferences, not inconsistent with the articles, over the Common Shares and over any other shares ranking junior to the Preferred Shares as may be determined in the case of such series of Preferred Shares.

    IV. Liquidation, Dissolution or Winding Up

    If, upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, there are insufficient assets to satisfy in full all claims with respect to unpaid dividends and return of capital in respect of all Preferred Shares outstanding, all such Preferred Shares shall participate rateably in the assets available to satisfy such claims based on the total amount of all such claims relative to the total amount of the assets available.

    V. Issuable in Series

    The board of directors of the Company may issue the Preferred Shares at any time and from time to time in one or more series and, before the first shares of any particular series are issued, shall fix the number of Preferred Shares in such series and, determine, subject to the limitations in the articles, the designation, rights, privileges, restrictions and conditions attached to the shares of such series including without limitation, the rate or rates, amount or method or methods of calculation of dividends thereon, the time and place of payment of dividends, whether cumulative or non-cumulative or partially cumulative and whether such rate, amount or method of calculation shall be subject to change or adjustment in the future, the currency or currencies of payment of dividends, the priorities thereof in relation to other shares or the priorities of other shares in relation thereto, if any, the consideration and the terms and conditions of any purchase for cancellation, retraction or redemption rights, if any, the conversion or exchange rights attached thereto, if any, the voting rights attached thereto, if any, and the terms and conditions of any share purchase plan or sinking fund with respect thereto.

    PART 28 – OTHER

    I. Translation of Company Name

    The Company has adopted a Chinese translation of its name that it intends to use outside of Canada which, set out in letters from the English alphabet, is “SouthGobi Resources Limited”.

  • BC Annual Report

  • Position Description Chief Executive Officer

    This position description describes the appointment, responsibilities and specific duties of the Chief Executive Officer (the “CEO”) of SouthGobi Resources Ltd. (the “Company”).

    Appointment

    The CEO is appointed by, and reports to, the Board of Directors (the “Board”) and will have the competencies and skills recommended by the Nominating and Corporate Governance Committee and determined by the Board.

    Specific Duties

    The CEO has responsibility for the overall stewardship of the Company. The CEO will:

    1. have executive responsibility for the day to day operations and affairs of the Company;
    2. provide strategic leadership to the Company and develop, with approval of the Board, the Company’s strategic direction and strategic, business and operational plans;
    3. lead in the development and implementation of business and financial plans, policies and operations, to create long-term sustainable shareholder value in a way that is consistent with the interest of shareholders, customers, employees and other stakeholders;
    4. lead the Company in carrying out specific financial and business objectives for the Company as may be set by the Board;
    5. report regularly to the Board on the Company’s progress towards its strategic goals and any material deviations from the strategic goals;
    6. bring matters identified in the Board Mandate forward for Board approval;
    7. keep the Board informed of the Company’s performance and events affecting the Company’s business and financial affairs, including opportunities in the marketplace and adverse or positive developments;
    8. ensure that the Company has systems in place to safeguard the Company’s assets and effectively monitor and manage the principal risks related to the operation of the business;
    9. in concert with the Chief Financial Officer, establish and maintain the integrity of the Company’s financial controls and reporting systems and compliance of the financial information with applicable accounting principles through appropriate policies andprocedures, and provide required regulatory certifications regarding the Company and its activities;
    10. in concert with the Chief Financial Officer, establish and monitor processes and systems designed to ensure compliance with applicable laws by the Company, its officers and employees;
    11. work with the Board to develop and maintain a human resource strategy to include plans for the recruitment, remuneration, development, and succession of senior managers, officers and executives of the Company;
    12. work with the Board to establish and maintain an effective communications policy with the financial community, the media, the community at large and other stakeholders;
    13. act as a principal spokesman for the Company, communicating with and representing the Company to its major stakeholders;
    14. foster a corporate culture that promotes ethical practices, encourages individual integrity and deters wrongdoing;
    15. maintain a positive and ethical work climate that is conducive to attracting, retaining and motivating top-quality employees at all levels;
    16. serve as a member of the Company’s Disclosure Committee to ensure appropriate and timely disclosure of material information to the public pursuant to applicable securities laws and stock exchange rules;
    17. collaborate with the Chairperson and Lead Director of the Board, as well as the Corporate Secretary, to prepare agendas for Board meetings; and
    18. carry out such other specific roles and responsibilities as may be assigned to the CEO by the Board.

    In performing his or her duties and responsibilities, the CEO is subject to the constating documents of the Company and the policies approved by the Board from time to time.

    Amendments

    At least annually, this position description will be fully evaluated by the Nominating and Corporate Governance Committee and any appropriate updates will be recommended to the Board for consideration. The Nominating and Corporate Governance Committee shall have the authority to make minor technical amendments to this position description from time to time as required.

  • Position Description Chief Financial Officer

    This position description describes the appointment, responsibilities and specific duties of the Chief Financial Officer (the “CFO”) of SouthGobi Resources Ltd. (the “Company”).

    Appointment

    The CFO is appointed by, and reports to, the Board of Directors (the “Board”), and will have the competencies and skills recommended by the Nominating and Corporate Governance Committee and determined by the Board.

    Responsibility

    The CFO has responsibility for providing effective financial leadership in order to manage the Company in the best interest of its stakeholders. The primary objective of the CFO position is to serve as the key financial advisor for the Company. The CFO will ensure that business alternatives are accurately analyzed, and provide strategic direction in the areas of treasury, financial reporting and control, accounting, hedging, tax planning and management information systems as they relate to overall corporate strategy, growth, and stability. Working together with the CEO and other members of senior management, the CFO sets the tone for management to foster ethical and responsible decision-making and appropriate management and corporate governance practices.

    Specific Duties

    The CFO will:

    1. assist in the day to day management of the Company’s operations and affairs and act as an advisor to the CEO;
    2. provide financial leadership in all areas of finance, accounting and tax to permit the Company to be managed in the best interests of its stakeholders;
    3. provide general supervision and management of the day-to-day financial and accounting affairs of the Company within the guidelines established by the Board, consistent with decisions requiring prior approval of the Board and the Board’s expectations of management;
    4. be a financial and strategic contributor to the Company in conjunction with the Board and the senior executive team to lead a proactive and responsible approach to the investment and financial function;
    5. together with the CEO and other members of senior management, assist in the development, preparation and implementation of the Company’s strategic direction and strategic, business and operational plans, including an annual business plan for the Company;
    6. measure the performance of the business and projects against plans, and make recommendations with regard to variances;
    7. together with the CEO and other members of senior management, monitor the activities and resources of the Company, consistent with the strategic direction, financial limits and operating objectives approved by the Board;
    8. serve as the Company’s governance liaison to financial rating agencies, and, together with other members of senior management, as an external spokesman as required and liaison for the Company with its stakeholders in the financial and investment communities;
    9. communicate in a timely fashion with the Audit Committee and the Board on material financial and accounting matters affecting the Company;
    10. ensure compliance with all financial and regulatory requirements associated with being a public company, including the preparation and release of timely and accurate financial statements and other continuous disclosure filings;
    11. serve as a member of the Company’s Disclosure Committee to ensure appropriate and timely disclosure of material information to the public;
    12. together with the CEO and other members of senior management, ensure the accuracy, completeness, integrity and appropriate disclosure of the Company’s financial statements and other financial information through appropriate policies and procedures;
    13. together with the CEO, ensure proper systems are in place to safeguard the Company’s assets and effectively monitor and manage the principal risks related to the operation of the business, and confirm that such risks are acceptable to the Company and are within the guidelines established by the Audit Committee and the Board;
    14. together with the CEO and other members of senior management, establish and maintain the Company’s internal controls over financial reporting and its disclosure controls and procedures through appropriate policies and procedures and provide required regulatory certifications regarding the Company and its activities;
    15. together with the CEO and other members of senior management, ensure appropriate financial risk, accounting and auditing policies and procedures of the Company are developed, maintained, approved and disclosed, as appropriate;
    16. ensure the Company maintains an appropriate capital structure to support its annual operating plans and strategic plans;
    17. together with the CEO, ensure the Company has adequate liquidity to implement its business plans;
    18. assist the CEO in his or her role as a spokesperson for the Company, overseeing interactions between the Company and its major stakeholders.
    19. together with the CEO, ensure that relationships with the financial community are cultivated and maintained, thereby maximizing the Company’s ability to raise capital and obtain financing;
    20. together with the CEO and other members of senior management, ensure that the Company’s financial commitments are reasonable and within the limits of delegated approval authorities;
    21. develop and maintain a strong team through effective selection, retention and retention programs throughout the organization and its subsidiaries. Foster and develop employees to ensure continual performance and skill development to enhance overall organizational performance;
    22. oversee the development and implementation of the Company’s information systems and technology strategy for effectively managing and growing the business platform; and
    23. carry out any other specific duties and responsibilities as may be assigned by the Board or the CEO.

    In performing his or her duties and responsibilities, the CFO is also subject to the constating documents of the Company and the policies approved by the Board from time to time.

    Amendments

    At least annually, this position description will be fully evaluated by the Nominating and Corporate Governance Committee and any appropriate updates will be recommended to the Board for consideration. The Nominating and Corporate Governance Committee shall have the authority to make minor technical amendments to this position description from time to time as required.

  • Position Description Chief Operating Officer

    POSITION DESCRIPTION
    CHIEF OPERATING OFFICER

    This position description describes the appointment, responsibilities and specific duties of the Chief Operating Officer (the “COO”) of SouthGobi Resources Ltd. (the “Company”).

    Appointment

    The COO is appointed by the Board of Directors (the “Board”) and reports to the CEO, and will have the competencies and skills recommended by the Nominating and Corporate Governance Committee and determined by the Board.

    Responsibility

    Under the direction of the CEO, the COO has responsibility for leading the day-to-day operations of all or such portions of the Company’s business and operations as may be designated by the CEO from time to time. The COO shall be responsible for improving the Company’s operational (including health and safety) performance, productivity and efficiency in accordance with the Company’s strategic, business and operational plans.

    Specific Duties

    Subject to the direction of the CEO, the COO will:

    1. assist in the day to day management of the Company’s operations and affairs as directed by the CEO and act as an advisor to the CEO;
    2. provide general supervision and management of the day-to-day mining and business operations of the Company within the guidelines established by the Board, consistent with decisions requiring prior approval of the Board and the Board's expectations of management;
    3. together with the CEO, CFO and other members of senior management, assist in the development, preparation and implementation of the Company’s strategic direction and strategic, business and operational plans, including an annual business plan for the Company;
    4. assist the CEO in carrying out specific financial and business objectives for the Company as may be set by the Board;
    5. measure the performance of the business and projects against plans, and make recommendations with regard to variances;
    6. keep the CEO informed in a timely and candid manner regarding the conduct of the day-to-day operations of the Company towards the achievement of its established goals and of all material deviations from the goals, objectives and policies established by the Board;
    7. together with the CEO, CFO and other members of senior management, monitor the activities and resources of the Company, consistent with the strategic direction, financial limits and operating objectives approved by the Board;
    8. oversee the development and implementation of the Company’s health and safety strategy and practices;
    9. ensure the Company’s operations complies with the Company’s environmental policies and applicable environmental laws and regulations.
    10. communicate in a timely fashion with the Health, Environment, Safety and Social Responsibility Committee and the Board on material health and safety, environmental and other related matters affecting the Company;
    11. together with the CEO and CFO, ensure proper systems are in place to safeguard the Company’s assets and effectively monitor and manage the principal risks related to the operation of the business;
    12. foster and maintain a positive and ethical corporate culture that is conducive to attracting, retaining and motivating a diverse group of top-quality employees at all levels; and
    13. carry out any other specific duties and responsibilities as may be assigned by the Board or the CEO.

    In performing his or her duties and responsibilities, the COO is also subject to the constating documents of the Company and the policies approved by the Board from time to time.

    Amendments

    At least annually, this position description will be fully evaluated by the Nominating and Corporate Governance Committee and any appropriate updates will be recommended to the Board for consideration. The Nominating and Corporate Governance Committee shall have the authority to make minor technical amendments to this position description from time to time as required.

  • Position Description Chairperson

    This position description describes the appointment, responsibilities and specific duties of the Chairperson of the Board of Directors (the “Board”) of SouthGobi Resources Ltd. (the “Company”).

    Appointment

    The Board will select one of its members to be appointed Chairperson at the first Board meeting following the annual general meeting of shareholders of the Company for such term as the Board may determine.

    Responsibilities

    The Chairperson’s primary responsibility is to provide overall leadership of the Board in order to enhance its effectiveness and performance. The roles and responsibilities of the Chairperson include:

    1. The Board shall review the adequacy of this position description annually or more frequently as it deems appropriate.
    2. acting as spokesperson for the Board and, as appropriate, the Company when called upon to do so;
    3. chairing meetings of the Board and facilitating Board discussions to ensure core issues facing the Company are properly addressed;
    4. preparing the agenda for all meetings of the Board in consultation with the Chief Executive Officer and the Corporate Secretary and ensuring that all items set out in the agenda are properly discussed, considered and resolved;
    5. briefing all directors in relation to issues arising at Board meetings;
    6. chairing meetings of shareholders of the Company as and when directed by the Board and otherwise in accordance with the constating documents of the Company;
    7. promoting cohesiveness among the directors and facilitating the effective contribution of all directors;
    8. promoting constructive and respectful relations between Board members and between the Board and management;
    9. ensuring that the Board receives appropriate and timely information, materials and reports from senior management regarding the Company’s business and financial affairs in order to permit the Board to discharge its duties and responsibilities;
    10. acting as an adviser and confidant to the Chief Executive Officer of the Company;
    11. ensuring that an appropriate committee structure is in place, and that the functions and responsibilities identified in the Board Mandate and Board committee charters are being effectively carried out by the Board and its committees;
    12. providing overall leadership in support of the Company’s commitment to corporate social responsibility;
    13. fostering ethical and responsible decision making by management, the Board and its committees and the individual directors; and
    14. carrying out such other duties and responsibilities as the Board may request from time to time.
    Review of Position Description

    The Board shall review the adequacy of this position description annually or more frequently as it deems appropriate.

  • Position Description Lead Director

    This position description describes the appointment, responsibilities and specific duties of the Lead Director of the Board of Directors (the “Board”) of SouthGobi Resources Ltd. (the “Company”).

    The Board may appoint a non-executive independent director of the Board as Lead Director of the Board if the Chairperson is not independent (as determined by the Board in accordance with applicable securities laws and stock exchange rules) or at any other time the Board determines that the appointment of a Lead Director is appropriate. The Lead Director shall hold office at the pleasure of the Board.

    Specific Duties

    The Lead Director will:

    1. work together with the Chairperson to provide overall leadership of the Board in order to enhance its effectiveness and performance;
    2. act as facilitator with respect to interaction among the independent directors and between the independent directors and management;
    3. as deemed appropriate by the Lead Director, consult and meet with any or all of the independent directors, and act as a liaison with the Chairperson and the senior management of the Company on behalf of the independent directors to ensure that questions and comments of the independent directors are heard and addressed;
    4. ensure the independent directors meet in-camera in conjunction with regular quarterly meetings of the Board, or additional meeting when requested by any independent director, chair such meetings and communicate the results of such meetings to the Chairperson;
    5. act as an ex-officio member of all other Committees of the Board (if not in fact an active/sitting member thereof);
    6. in conjunction with the Chairperson, ensure that the Board receives appropriate and timely information, material and reports from senior management regarding the Company’s business and affairs in order to permit the Board to discharge its duties and responsibilities;
    7. together with the Chairperson, facilitate Board discussions to ensure core issues facing the Company are properly addressed;
    8. work together with the Chairperson, Chief Executive Officer and Corporate Secretary to oversee and finalize the preparation of the agenda for all meetings of the Board;
    9. together with the Chairperson and senior management, brief all directors in relation to issues arising at Board meetings;
    10. review and provide comments on minutes of all meetings of the Board;
    11. represent the Board and, when appropriate, the Company when called upon to do so;
    12. work together with the Chairperson to ensure appropriate steps are taken with respect to (a) strategic planning; (b) succession planning; and (c) establishing and maintaining an ethical corporate culture;
    13. promote best practices and high standards of corporate governance;
    14. perform the functions of the Chairperson on an interim basis in the event there is either a vacancy in the office of the Chairperson or the Chairperson is unable to perform his or her duties for any reason;
    15. satisfy the independence requirements of applicable securities laws, any applicable stock exchange requirements or guidelines and any other applicable regulatory rules; and
    16. carry out such other duties and responsibilities as the Board may request from time to time.
    Review of Position Description

    The Board shall review the adequacy of this position description annually or more frequently as it deems appropriate.