STATEMENT OF CORPORATE GOVERNANCE PRACTICES

The Board of Directors has considered the Corporate Governance Guidelines set out in National Policy 58-201. A description of the Company’s practices is set out below in response to the requirement of National Instrument 58-101, “Disclosure of Corporate Governance Practices” and in the form set out in Form 58-101F1, “Corporate Governance Disclosure”.

Many of the items for which disclosure is required by Form 58-101F1 are dealt with in the Board Mandate, which is set out in its entirety below.

BOARD MANDATE PURPOSE

The directors are elected by the shareholders and are responsible for the stewardship of the business and affairs of the Company. The board of directors (the “Board”) seeks to discharge this responsibility by reviewing, discussing and approving the Company’s strategic planning and organizational structure and supervising management to oversee that the strategic planning and organizational structure enhance and preserve the business of the Company and the underlying value of the Company.

COMPOSITION

The Board shall be constituted at all times of a majority of individuals who are “independent” directors for the purposes of the requirements or guidelines, as the case may be, of the securities regulatory authorities applicable to the Company and the stock exchanges on which the Company’s securities are listed, as adopted and amended and in force from time to time. The general assembly shall appoint a chairperson of the Board who shall ensure that the Board’s agenda enables it to successfully carry out its duties. The composition of the Board, including the qualification of its members, shall comply with all other applicable requirements of the Yukon Business Corporations Act.

RESPONSIBILITIES AND DUTIES

The Board discharges its responsibility for overseeing the management of the Company’s business by delegating to the Company’s senior officers the responsibility for day-to-day management of the Company. The Board discharges its responsibilities directly and through its committees – the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. In addition to these regular committees, the Board may appoint ad hoc committees periodically to address issues of a more short-term nature. The Board may delegate to its committees matters for which the Board is responsible, to the extent such delegation is permitted by law. Notwithstanding the delegation of any of its responsibilities to a committee, the Board retains its oversight function and ultimate responsibility for all delegated matters. The Board’s primary roles are overseeing corporate performance and providing quality, depth and continuity of management to meet the Company’s strategic objectives. Other principal duties include, but are not limited to, the following:

MEETINGS

The powers of the Board may be exercised at a meeting for which notice has been given and at which a quorum is present or, in appropriate circumstances, by resolution in writing signed by all the directors. The Board shall meet as frequently as required to attend to its responsibilities and the independent directors of the Board shall meet regularly, without members of management (or other directors) in attendance.

Board meetings shall normally proceed as follows:

- Review and approval of the minutes of the preceding meeting;
- Business arising from the previous minutes;
- Reports of committees;
- President’s report, financial and operational reports;
- Other business;
- Date and time of the next meeting;
- In-Camera session, and
- Termination
Minutes of the meetings
A secretary should be named for each Board and committee meeting and minutes should be circulated within one week after such meeting. Minutes of the committees meetings will be given to each Board member and to the Secretary of the Company for inclusion in the Company’s minute books.

Board Composition, Attendance, Committees and Other Matters

The Board is currently composed of five members. Of the four (Øvrevik, Ørnebo, Sttod and Patriksson) are independent within the meaning of National Instrument 58-101. However, none are independent in matters of all parties have consulatncy agreements with the company in terms of business principal matters.  All Board members are in their contractual forms committed to the company represented thorough a registered company.

Code of Business Conduct

As noted in the Board’s mandate, the Board has adopted a Code of Business Conduct and Ethics which is available at company office and is reffered to thorugh the company HES (Health Environment and Safety) handbook.