No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities offered herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold in the United States, as such term is defined in Regulation S under the U.S. Securities Act, unless pursuant to an exemption therefrom. See “Plan of Distribution”.

PROSPECTUS

Initial Public Offering February 15, 2017

$28,450,000 28,450,000 COMMON SHARES ISSUED FROM TREASURY AND 32,600,000 COMMON SHARES ISSUABLE ON DEEMED EXERCISE OF OUTSTANDING SPECIAL WARRANTS

This prospectus is being filed by Superior Gold Inc. (“Superior” or the “Corporation”) to qualify the distribution (the “Offering”) of up to 28,450,000 common shares in the capital of the Corporation (the “Treasury Shares”) to be issued at a price of $1.00 per Treasury Share (the “Offering Price”) for gross proceeds of up to $28,450,000. The Treasury Shares will be offered for sale on a “best efforts” agency basis pursuant to the terms and conditions of an agency agreement (the “Agency Agreement”) dated February 15, 2017 by and among the Corporation, GMP Securities L.P. (“GMP”), acting as lead agent, and BMO Nesbitt Burns Inc., Cormark Securities Inc., Haywood Securities Inc., TD Securities Inc. and Sprott Private Wealth LP (collectively, the “Agents”). The Offering Price for the Treasury Shares was determined by negotiation between the Corporation and GMP, on behalf of the Agents, in the context of the market.

Price: $1.00 per Treasury Share

Proceeds to Offering Price Agents’ Fee(1) the Corporation(2)(3) Per Treasury Share ...... $1.00 $0.06 $0.94 Total(3) ...... $28,450,000 $1,707,000 $26,743,000

Notes: (1) Pursuant to the terms and conditions of the Agency Agreement, the Corporation has agreed to pay the Agents a cash commission (the “Agents’ Fee”) equal to 6.0% of the gross proceeds received by the Corporation from the Offering. The Corporation has also agreed to issue to the Agents broker warrants of the Corporation (the “Offering Broker Warrants”) entitling the Agents to acquire at the Offering Price up to that number of common shares in the capital of the Corporation (the “Offering Broker Shares”) as is equal to 3.0% of the total number of Treasury Shares sold under the Offering, including under the Over-Allotment Option (as defined herein), but excluding such number of Treasury Shares equal to the quotient obtained by dividing the Consideration Payment (as defined herein) by the Offering Price, at any time and from time to time for up to 24 months from the Closing Date (as defined herein). See ‘‘Plan of Distribution.” (2) After deducting the Agents’ Fee, but before deducting expenses of the Offering, which are estimated to be $1,500,000, which the Corporation will pay from the proceeds of the Offering. (3) The Corporation has granted to the Agents an over-allotment option (the “Over-Allotment Option”) to offer for sale up to an additional number of Treasury Shares representing 15% of the number of Treasury Shares sold under the Offering at the Offering Price. The Over-Allotment Option is exercisable, in whole or in part, at any time after the Closing Date up to 30 days following the Closing Date to cover over-allotments, if any, and for market stabilization purposes. If the Agents exercise the Over-Allotment Option relating to the Treasury Shares in full, the total Offering Price, Agents’ Fee and Proceeds to the Corporation (excluding expenses of the Offering) will be $32,717,500, $1,963,050 and $30,754,450, respectively. This prospectus also qualifies the grant of the Over-Allotment Option and the distribution of any Treasury Shares, as applicable, issued pursuant to the exercise of the Over-Allotment Option. See “Plan of Distribution”. The following table sets forth the maximum number of options that may be granted by the Corporation to the Agents in connection with the Offering.

Number of Agents’ Position(1) Securities Available Exercise Period Exercise Price Over-Allotment Option ...... 4,267,500 30 days from the Closing $1.00 per Treasury Share Date of the Offering Offering Broker Warrants ...... 553,500(2) 24 months from the Closing $1.00 per Offering Date of the Offering Broker Share

(1) This prospectus qualifies the grant of the Over-Allotment Option and the grant of the Offering Broker Warrants. See “Plan of Distribution”. (2) If the Agents exercise the Over-Allotment Option relating to the Treasury Shares in full, the total Offering Broker Warrants will be 681,525.

Subject to applicable laws in connection with the Offering, the Agents may over-allot or effect transactions which stabilize or maintain the market price of the common shares in the capital of the Corporation (the “Common Shares”) at levels other than those which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. See “Plan of Distribution”.

Unless the context otherwise requires, all references to the “Offering”, the “Treasury Shares”, the “Offering Broker Warrants” and the “Offering Broker Shares” in this prospectus includes all securities issuable assuming the exercise of the Over-Allotment Option. A purchaser that acquires Treasury Shares forming part of the Agents’ over-allocation position acquires the Treasury Shares under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or through secondary market purchases.

No minimum amount of funds must be raised under the Offering. This means that the Corporation could complete the Offering after raising only a small proportion of the offering amount set out above.

The Offering is being conducted on a “best efforts” agency basis by the Agents who conditionally offer the Treasury Shares for sale, if, as and when issued by the Corporation and delivered to and accepted by the Agents, in accordance with the terms and conditions contained in the Agency Agreement referred to under “Plan of Distribution” and subject to the approval of certain legal matters on behalf of the Corporation by Stikeman Elliott LLP and on behalf of the Agents by Cassels Brock & Blackwell LLP.

This prospectus also qualifies the distribution of 32,600,000 Common Shares (the “Qualifying Shares”) issuable (for no additional consideration) upon the deemed exercise (without any further action by the holder thereof) of 32,600,000 previously issued special warrants of the Corporation (the “Special Warrants”), which were issued upon the automatic exercise of 32,600,000 subscription receipts of the Corporation (the “Subscription Receipts”) sold by the Corporation pursuant to a private placement (the “Private Placement”) for aggregate gross proceeds of $16,300,000, the net proceeds of which were principally used by the Corporation as partial consideration for its acquisition of the Plutonic Gold Operations from Northern Star Resources Ltd. See “Business of the Corporation”.

Price: $0.50 per Subscription Receipt

Private Placement Proceeds to Price Agent’s Fee(1) the Corporation(2) Per Subscription Receipt ...... $ 0.50 $ 0.03 $ 0.47 Total ...... $16,300,000 $615,000 $15,685,000

Notes: (1) GMP acted as sole agent (the “Private Placement Agent”) for the Private Placement. Pursuant to the terms and conditions of the agency agreement for the Private Placement, the Private Placement Agent was paid a cash commission equal to 6.0% of the gross proceeds received by the Corporation from the Private Placement, excluding for purposes of this determination the proceeds raised from the sale of Subscription Receipts to subscribers agreed upon by the Corporation and the Private Placement Agent. As part of the consideration for the services rendered by the Private Placement Agent in connection with the Private Placement, the Corporation issued the Private Placement Agent an aggregate of 1,230,000 broker warrants of the Corporation (the “Broker Warrants”). Each Broker Warrant entitles the Private Placement Agent to acquire one Common Share (a “Broker Share”) at $0.50 (being the subscription price of the Private Placement) at any time and from time to time in whole or in part for a period ending the earlier of (a) September 29, 2021; and (b) two years following the Corporation completing an initial public offering of the Common Shares to the public in Canada (an “IPO”). (2) Before deducting expenses of the Private Placement, which were approximately $211,760. The following table sets forth the maximum number of securities that may be issued by the Corporation to the Private Placement Agent in connection with the Private Placement.

Maximum Size or Private Placement Number of Agent’s Position Securities Available Exercise Period Exercise Price Broker Warrants ...... 1,230,000 Broker Earlier of September 29, 2021 $0.50 per Broker Share Shares and two years following the Corporation completing an IPO

The TSX Venture Exchange (the “Exchange”) has conditionally approved the listing of the Common Shares (including the Treasury Shares, Qualifying Shares, Offering Broker Shares and Broker Shares) under the stock symbol “SGI”, subject to the Corporation fulfilling all of the requirements of the Exchange on or before April 8, 2017. See “Plan of Distribution”.

At the date of this prospectus, the Corporation does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside Canada and the United States of America.

Subscriptions for Treasury Shares offered hereunder will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is expected that the closing of the Offering will take place on or about February 23, 2017 or on such other date as the Corporation and the Agents may agree (the “Closing Date”). Pending closing of the Offering, all subscription funds will be deposited and held by the Agents in trust pursuant to the terms and conditions of the Agency Agreement. If the Closing Date does not occur within 90 days from the date a receipt is issued for this prospectus or such other time as may be permitted by applicable securities legislation and consented to by persons or companies who subscribed within that period and the Agents, the Offering will be discontinued and all subscription monies will be returned to subscribers without interest, set-off or deduction. Other than pursuant to certain exceptions, CDS Clearing and Depositary Services Inc. (“CDS”), or its nominee, will be made the registered holder of the Treasury Shares electronically through the non-certificated inventory system (“NCI”) of CDS. Treasury Shares registered to CDS or its nominee will be deposited electronically with CDS on an NCI basis on the Closing Date. A purchaser of Treasury Shares (other than in limited circumstances) will receive only a customer confirmation from the registered dealer through which the Treasury Shares are purchased.

Other than in respect of certain United States subscribers who received physical certificates, the Subscription Receipts issued under the Private Placement (and the Special Warrants that were issued on the conversion of the Subscription Receipts) were also issued on an NCI basis through CDS. Upon the deemed exercise of the Special Warrants, it is anticipated that evidence of ownership representing the Qualifying Shares will be issued on an NCI basis and registered to CDS or its nominee and deposited with CDS. Other than in respect of certain United States subscribers, no certificates evidencing Qualifying Shares will be issued to subscribers and registration will be made through the depository services of CDS. Holders of such Qualifying Shares will receive only a customer confirmation from the registered dealer who is a CDS participant and from or through whom a beneficial interest in the Qualifying Shares is acquired. See “Plan of Distribution”.

The head and registered office of the Corporation is located at 70 University Avenue, 14th Floor, Toronto, Ontario M5J 2M4.

Each of Shaun Day, a director of the Corporation, and Corey Doust, Vice President Operations – Plutonic Gold Mine, resides outside of Canada. Mr. Day has appointed Stikeman Elliott LLP, 5300 Commerce Court West, 199 Bay Street, Toronto, Ontario, M5L 1B9 as agent for service of process. In addition, each of the authors of the Technical Report named herein resides outside of Canada and has appointed AMC Mining Consultants (Canada) Ltd., 202-200 Granville Street, Vancouver, British Columbia, V6C 1S4 as their agent for service of process.

Investors are advised that it may not be possible to enforce judgments obtained in Canada against any person that resides outside of Canada even if the party has appointed an agent for service of process.

There is currently no market through which the Treasury Shares and Qualifying Shares may be sold and purchasers may not be able to resell such shares. This may affect the pricing of such shares in the secondary market, the transparency and availability of trading prices, the liquidity of such shares and the extent of issuer regulation. Investing in the shares qualified by this prospectus involves significant risks inherent in the Corporation’s business. An investment in such shares is suitable only for those purchasers who are willing to risk a loss of all of their investment and who can afford to lose all of their investment. Investors should carefully consider the risks described under the heading “Risk Factors” of this prospectus. TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING EXECUTIVE COMPENSATION ...... 89 FORWARD-LOOKING INFORMATION ..... i INDEBTEDNESS OF DIRECTORS AND CURRENCY PRESENTATION AND EXECUTIVE OFFICERS ...... 96 EXCHANGE RATE INFORMATION ...... iii AUDIT COMMITTEE ...... 96 ACCOUNTING PRINCIPLES ...... iii CORPORATE GOVERNANCE ...... 97 SCIENTIFIC AND TECHNICAL INFORMATION ...... iii PLAN OF DISTRIBUTION ...... 100 NON-IFRS FINANCIAL MEASURES ...... v RISK FACTORS ...... 104 MARKETING MATERIALS ...... v CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS ...... 117 SUMMARY ...... vii ELIGIBILITY FOR INVESTMENT ...... 120 GLOSSARY OF TERMS ...... 1 PROMOTER ...... 120 LIST OF ABBREVIATIONS ...... 7 LEGAL PROCEEDINGS AND REGULATORY CORPORATE STRUCTURE ...... 8 ACTIONS ...... 120 BUSINESS OF THE CORPORATION ...... 8 INTEREST OF MANAGEMENT AND OTHERS THE PLUTONIC GOLD OPERATIONS ...... 20 IN MATERIAL TRANSACTIONS ...... 121 USE OF PROCEEDS ...... 60 AUDITORS ...... 121 DIVIDEND POLICY ...... 62 REGISTRAR AND TRANSFER AGENT ...... 121 SELECTED FINANCIAL INFORMATION ..... 62 MATERIAL CONTRACTS ...... 121 MANAGEMENT’S DISCUSSION AND INTEREST OF EXPERTS ...... 122 ANALYSIS OF THE CORPORATION ...... 63 PURCHASERS’ STATUTORY RIGHTS ...... 122 MANAGEMENT’S DISCUSSION AND CONTRACTUAL RIGHT OF ACTION FOR ANALYSIS OF THE PLUTONIC GOLD RESCISSION ...... 122 OPERATIONS ...... 71 SCHEDULE “A” SUPERIOR GOLD INC. DESCRIPTION OF THE SECURITIES AUDIT COMMITTEE CHARTER ...... A-1 DISTRIBUTED ...... 80 SCHEDULE “B” SUPERIOR GOLD INC. CONSOLIDATED CAPITALIZATION ...... 81 MANDATE OF THE BOARD OF PRIOR SALES ...... 81 DIRECTORS ...... B-1 ESCROWED SECURITIES AND SECURITIES INDEX TO FINANCIAL STATEMENTS ...... F-1 SUBJECT TO CONTRACTUAL CERTIFICATE OF THE CORPORATION ..... C-1 RESTRICTION ON TRANSFER ...... 83 CERTIFICATE OF THE PROMOTER ...... C-2 PRINCIPAL SHAREHOLDERS ...... 85 CERTIFICATE OF THE AGENTS ...... C-3 DIRECTORS AND EXECUTIVE OFFICERS .... 86 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This prospectus contains forward-looking information, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation (collectively, “forward-looking information”), which reflects management’s expectations regarding the Corporation’s future growth, results from operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking information. Such forward-looking information includes, without limitation, statements with respect to Mineral Reserve and Mineral Resource estimates; targeting additional Mineral Resources and expansion of deposits; the Corporation’s dependency on the Plutonic Gold Operations for operating revenue and cash flows in the near term; the Corporation’s ability to extend the life of the Plutonic Gold Operations; the capital and operating cost estimates and the economic analyses from the Technical Report; the Corporation’s expectations, strategies and plans for the Plutonic Gold Operations, including the Corporation’s planned exploration, development and production activities at the Plutonic Gold Mine, Hermes and Bryah Basin; the results of future exploration and drilling at the Plutonic Gold Mine’s Timor Extension; satisfying the minimum amounts required for the Corporation to maintain its interest in the Bryah Basin joint venture; successfully adding or upgrading resources and successfully developing new deposits; the timing, receipt and approval of the transfer of certain tenements and pastoral leases from Northern Star in connection with the Acquisition; the outcome of the Gingirana aboriginal claim under the Native Title Act related to certain tenement applications; future financial or operating performance and condition of the Corporation and its business, operations and properties; the intended use of the net proceeds of the Offering to support successful completion of the proposed optimization and exploration of the Plutonic Gold Operations; the Corporation’s ability to adequately account for potential mine closure and remediation costs; the Corporation’s adoption of and expectations regarding new accounting standards and interpretations, including amendments to IAS 12, and the introduction of IFRS 9, IFRS 15, and IFRS 16; and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management, in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this prospectus including, without limitation, assumptions about: favourable equity and debt capital markets; the ability to raise any necessary additional capital on reasonable terms to advance the development of the Plutonic Gold Operations and pursue planned exploration; future prices of gold; the timing and results of exploration and drilling programs; the accuracy of Mineral Reserve and Mineral Resource estimates; the geology and geophysical data of the Plutonic Gold Operations being as described in the Technical Report; production costs; the accuracy of budgeted exploration and development costs and expenditures; the price of other commodities such as fuel; future currency exchange rates and interest rates; operating conditions being favourable, including whereby the Corporation is able to operate in a safe, efficient and effective manner; political and regulatory stability; the receipt of governmental and third party approvals and Permits on favourable terms; obtaining required renewals for existing approvals and Permits and obtaining all other required approvals and Permits on favourable terms; sustained labour stability; stability in capital goods markets; and the availability of equipment. While the Corporation considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks, uncertainties, contingencies and other factors that could cause actual actions, events, conditions, results, performance or achievements to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Corporation and there is no assurance they will prove to be correct.

Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Corporation to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. Such risks include, without limitation: general business, social, economic, political, regulatory and competitive uncertainties associated with conducting business in a foreign country; differences in size, grade, continuity, geometry or location of mineralization from that

i predicted by geological modelling and the subjective and interpretative nature of the geological modelling process; the speculative nature of mineral exploration and development, including the risk of diminishing quantities or grades of mineralization and the inherent riskiness of Inferred Mineral Resources; a material decline in the price of gold; a failure to achieve commercial viability, despite an acceptable gold price, or the presence of cost overruns which render the Plutonic Gold Operations uneconomic; geological, hydrological and climactic events which may adversely affect infrastructure, operations and development plans, and the inability to effectively mitigate or predict with certainty the occurrence of such events; credit and liquidity risks associated with the Corporation’s financing activities; delays in connection with the Plutonic Gold Operations resulting from delays in the performance of the obligations of the Corporation’s contractors and consultants, the receipt of Permits in a timely manner or the completion and successful operation of mining and processing components; the Corporation’s failure to accurately model and budget future capital and operating costs associated with the development and operation of the Plutonic Gold Operations; the Corporation’s failure to develop or supply adequate infrastructure to sustain the operation of the Plutonic Gold Operations, including the provision of reliable sources of electrical power, water, and transportation; adverse fluctuations in the market prices and availability of commodities and equipment affecting the Corporation’s business and operations; the Corporation’s management being unable to successfully attract and retain highly skilled personnel; the cyclical nature of the mining industry and increasing prices and competition for resources and personnel during mining cycle peaks; the Corporation’s failure to comply with existing Permits and agreements, and the Corporation’s inability to renew existing Permits and agreements or obtain required new Permits and agreements on timelines required to support operational plans; the Corporation’s failure to comply with Australia’s environmental regulations, the tendency of such regulations to become more strict over time and the costs associated with maintaining and monitoring compliance with such regulations; adverse outcomes in aboriginal claims; the adverse influence of third party stakeholders including social and environmental non-governmental organizations; the adverse impact of competitive conditions in the mineral exploration and mining businesses; the Corporation’s failure to maintain satisfactory labour relations and the risk of labour disruptions or changes in legislation relating to labour; failure by the Corporation to use the proceeds of the Offering in the manner specified in this prospectus; limits of insurance coverage and uninsurable risk; the adverse effect of currency fluctuations on the Corporation’s financial performance; conflicts of interest; the dilutive effect and inherent risks and costs of future acquisitions, investments or divestitures and the failure of future acquisitions to deliver the benefits anticipated; the costs associated with legal proceedings should the Corporation become the subject of litigation or regulatory proceedings; the costs associated with complying with public company regulatory reporting requirements; and other risks involved in the exploration, development and mining business generally, including, without limitation, environmental risks and hazards, cave-ins, flooding, rock bursts and other acts of God or natural disasters or unfavourable operating conditions and losses. Although the Corporation has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended. See “Risk Factors” for a discussion of certain factors investors should carefully consider before deciding to invest in the Common Shares.

The Corporation cautions that the foregoing lists of important assumptions and risks, uncertainties and other factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking information contained herein. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information.

In addition, please note that statements relating to “Mineral Reserves” or “Mineral Resources” are deemed to be forward-looking information as they involve the implied assessment, based on certain estimates and assumptions that the Mineral Reserves and Mineral Resources described can be profitably mined in the future.

Forward-looking information contained herein is made as of the date of this prospectus and the Corporation disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.

ii CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

Unless otherwise noted, references in this prospectus to “$” are to Canadian dollars, references in this prospectus to “US$” are to United States (“U.S.”) dollars and references in this prospectus to “A$” are to Australian dollars. The consolidated financial statements of the Corporation included herein are reported in U.S. dollars. The carve-out financial statements of the Plutonic Gold Operations included herein are reported in Australian dollars.

The following tables reflect the high and low rates of exchange in U.S. dollars for one Canadian dollar and in Australian dollars for one Canadian dollar, respectively, during the periods noted, the average rate of exchange during such periods and the rates of exchange at the end of such periods, based on the Bank of Canada noon spot rate of exchange on the date or for the period specified.

U.S. dollars per Canadian dollar

End of 12 month period ended December 31 High Low Average Period 2016 ...... 0.7972 0.6854 0.7548 0.7448 2015 ...... 0.8527 0.7148 0.7820 0.7225

Australian dollar per Canadian dollar

End of 12 month period ended December 31 High Low Average Period 2016 ...... 1.0676 0.9697 1.0150 1.0302 2015 ...... 1.0893 0.9889 1.0413 0.9918

On February 14, 2017, the business day prior to the date of this prospectus, the Bank of Canada noon spot rate of exchange for the purchase of one Canadian dollar using U.S. dollars was 0.7638 (US$1.00 = $1.3093). On February 14, 2017, the Bank of Canada noon spot rate of exchange for the purchase of one Canadian dollar using Australian dollars was 0.9998 (A$1.00 = $1.0002).

For purposes of the Technical Report all costs were estimated in A$ and thereafter converted to US$ for consistency. Such cost related information derived or extracted from the Technical Report and included in this prospectus has been presented in this prospectus on the same basis. An exchange rate of A$1.00 = US$0.74 has been assumed for such conversion. The exchange rate assumption is in line with consensus figures and the Corporation considers it to be reasonable.

ACCOUNTING PRINCIPLES

The financial statements and financial data derived therefrom contained herein have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”).

SCIENTIFIC AND TECHNICAL INFORMATION

Scientific and technical information relating to the Plutonic Gold Operations contained in this prospectus is derived from, and in some instances is a direct extract from, and based on the assumptions, qualifications and procedures set out in, the Technical Report. Reference should be made to the full text of the Technical Report, which is available for review under the Corporation’s profile on SEDAR at www.sedar.com.

CIM Definition Standards The Mineral Reserves and Mineral Resources for the Plutonic Gold Mine and Hermes (including as used in the Technical Report) have been estimated in accordance with the CIM Definition Standards, which are incorporated by reference in NI 43-101. For purposes of the historical carve-out financial information, financial statements and

iii Management’s Discussion and Analysis of the Plutonic Gold Operations included in this prospectus, references to estimated “Mineral Resources” and “Ore Reserves” are to such terms as calculated in accordance with the Joint Ore Reserves Committee (“JORC”) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Following the completion of the Acquisition, the Corporation has transitioned to using CIM Definition Standards for the Plutonic Gold Operations. The following definitions are reproduced from the CIM Definition Standards:

“Indicated Mineral Resource” means that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors as described below in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

“Inferred Mineral Resource” means that part of a Mineral Resource for which quantity, grade or quality is estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

“Measured Mineral Resource” means that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.

“Mineral Reserve” means the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the mill, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a Mineral Reserve must be demonstrated by a pre-feasibility study or feasibility study.

“Mineral Resource” means a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

“Modifying Factors” are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.

“Probable Mineral Reserve” means the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.

“Proven Mineral Reserve” means the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.

iv NON-IFRS FINANCIAL MEASURES

“Total cash costs per gold ounce” is a common financial performance measure in the gold mining industry but with no standard meaning under IFRS. Superior reports total cash costs on a sales basis. The Corporation believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Corporation’s performance and ability to generate liquidity through operating cash flow to fund future capital expenditures and working capital needs. Superior believes that this measure, along with sales, is a key indicator of the Corporation’s ability to generate operating earnings and cash flow from its mining operations.

Total cash costs are calculated in accordance with a standard developed by The Gold Institute, a worldwide association of suppliers of gold and gold products that ceased operations in 2002. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. Total cash costs include mine site operating costs such as mining, processing and administration costs, royalties, production taxes and realized gains and losses on fuel contracts, but are exclusive of amortization, reclamation, capital and exploration costs and net of by-product sales. Total cash costs are then divided by gold ounces sold to arrive at the total cash costs per ounce sold.

Total cash costs are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS. Further details regarding historical total cash costs and a reconciliation to the nearest IFRS measures are provided elsewhere in this prospectus. See “Management’s Discussion and Analysis of the Plutonic Gold Operations.”

“All-in sustaining costs per gold ounce” is a non-IFRS measure based on guidance announced by the WGC in June 2013. The WGC is a non-profit association of the world’s leading gold mining companies established in 1987 to promote the use of gold to industry, consumers and investors. The WGC is not a regulatory body and does not have the authority to develop accounting standards or disclosure requirements. The WGC has worked with its member companies to develop a measure that expands on IFRS measures such as operating expenses to provide visibility into the economics of a gold mining company. Current IFRS measures used in the gold industry, such as operating expenses, do not capture all of the expenditures incurred to discover, develop and sustain gold production. Superior believes the all-in sustaining costs measure provides further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the Corporation in assessing its operating performance and its overall value.

All-in sustaining costs per gold ounce is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS. Further details regarding historical all-in sustaining costs and a reconciliation to the nearest IFRS measures are provided elsewhere in this prospectus. See “Management’s Discussion and Analysis of the Plutonic Gold Operations.”

MARKETING MATERIALS

A “template version” of the following “marketing materials” (as such terms are defined in National Instrument 41- 101 – General Prospectus Requirements) has been filed with the securities commission or similar regulatory authority in each of the provinces of Canada, other than Quebec, and is specifically incorporated by reference into this prospectus: 1. An indicative term sheet filed on SEDAR on January 16, 2017; 2. The investor presentation filed on SEDAR on January 16, 2017 (the “January 16 Presentation”); and 3. The investor presentation re-filed on SEDAR on January 17, 2017 (the “January 17 Presentation”).

The indicative term sheet, the January 16 Presentation and the January 17 Presentation are available under the Corporation’s profile on SEDAR at www.sedar.com.

v This prospectus modifies statements of material facts included in the initial template version of the indicative term sheet and the January 17 Presentation with respect to the size of the Offering, the consideration payable to Northern Star under the Acquisition Agreement, the contemplated use of proceeds of the Offering, the status of the application of the Corporation to list the Common Shares on the Exchange and the number of Offering Broker Warrants issuable to the Agents. The Corporation has filed revised template versions of the indicative term sheet and the January 17 Presentation, which have been blacklined to reflect the modified statements. The foregoing summary of modifications to the indicative term sheet and the January 17 Presentation is not exhaustive and is qualified by the information contained in the revised template versions of the indicative term sheet and the January 17 Presentation which have been filed with the securities commission or similar authority in each of the provinces of Canada, other than Quebec and can be viewed under the Corporation’s profile on SEDAR at www.sedar.com.

In addition, any template version of any marketing materials filed with the securities commission or similar regulatory authority in each of the provinces of Canada, other than Quebec, in connection with the Offering after the date hereof, but prior to the termination of the distribution of the Treasury Shares under this prospectus (including any amendments to, or an amended version of, any template version of any marketing materials), is deemed to be incorporated by reference herein. Any template version of any marketing materials that are utilized by the Agents in connection with the Offering are not part of this prospectus to the extent that the contents of the template version of the marketing materials have been modified or superseded by a statement contained in this prospectus.

vi SUMMARY

The following is a summary of the principal features of this distribution and should be read together with, and is qualified in its entirety by, the more detailed information and financial data and statements contained elsewhere in this prospectus. Readers are directed to carefully review this prospectus in its entirety.

Certain terms used in this summary have the meanings set forth under the heading “Glossary of Terms” commencing at page 1. All dollar amounts referenced, unless otherwise indicated, are expressed in Canadian dollars. References to the Corporation also include the Corporation’s subsidiary, as the context requires.

Business of the Corporation The Corporation was incorporated under the Business Corporations Act (Ontario) on July 4, 2016 under the name 2525908 Ontario Inc. On December 14, 2016, the Corporation changed its name to Superior Gold Inc. The Corporation’s principal business objectives are the acquisition, exploration, development and operation of gold resource properties. The Corporation’s principal asset is the Plutonic gold operations (the “Plutonic Gold Operations”) located in Australia, which it acquired from Northern Star Resources Ltd. (“Northern Star”) on October 12, 2016. The Plutonic Gold Operations include the Plutonic gold mine (the “Plutonic Gold Mine”), which is a producing underground operation with a central mill, the Hermes open pit development project (“Hermes”), and an interest in the Bryah Basin joint venture (“Bryah Basin”) with Alchemy Resources Limited (“ALY”), each as described further below. In total the Corporation holds interests in approximately 64,374 hectares (644km2). This comprises 35,700 hectares (357km2) surrounding the Plutonic Gold Mine, 7,000 hectares (70km2) surrounding the Hermes project and 21,660 hectares (217km2) within the Bryah Basin joint venture, offering numerous open pit and underground exploration targets.

Superior’s Landholdings – Plutonic Gold Operations:

Northern Star originally acquired the Plutonic Gold Mine from Barrick Gold Corporation in February 2014 and subsequently acquired Hermes and the interest in the Bryah Basin from ALY in February 2015. The transition to Northern Star ownership facilitated a reduction in corporate overheads, improved geological controls, as well as right sizing the operational workforce to better reflect prevailing production levels. Non-essential services were removed and a strong focus on unit operating costs led to a reduction in prevailing operating costs compared to previous years. See “Business of the Corporation – Overview” for further details.

vii The Plutonic Gold Operations are isolated from major towns and cities and operate on a self-sufficient basis with material and goods shipped via the Great Northern Highway. The current workforce, comprised of 176 full-time employees and 73 contractors, operates on a fly-in, fly-out roster out of Perth, with accommodation at a mine site camp that can host approximately 450 people at any time. Electricity is generated on-site by means of a gas-powered generating station which supplies all power requirements within the camp and the mill.

For the three month period ending September 30, 2016, the Plutonic Gold Operations produced 18,662 oz of gold and sold 18,614 oz of gold. Total cash costs for the period were A$1,331 per oz of gold sold versus an average price received of A$1,724 per oz of gold. For the three month period ending September 30, 2016, the Plutonic Gold Operations generated operating cash flow of A$3.75 million. For October and November 2016, the Plutonic Gold Operations produced 13,652 oz of gold and sold 12,468 oz of gold at a cash cost of approximately A$1,145 per oz of gold sold versus an average price received of A$1,650 per oz of gold, generating net cash of approximately A$4 million for the period.

The Plutonic Gold Operations currently have Mineral Reserves of 189,000 oz of gold at an average grade of 2.4 g/t, Measured and Indicated Mineral Resources of 890,000 oz of gold at an average grade of 3.7 g/t and Inferred Mineral Resources of 800,000 oz of gold at an average grade of 4.2 g/t. Mineral Reserves are estimated at a cut-off grade of 2.0 g/t Au for the Plutonic Gold Mine and 0.63 g/t Au for Hermes. Mineral Resources are estimated at a cut- off grade from 2.45 g/t Au to 3.26 g/t Au for the Plutonic Gold Mine and of 1.0 g/t Au for Hermes. See “The Plutonic Gold Operations – Mineral Resource and Mineral Reserve Estimates” for further details.

Plutonic Gold Mine The Plutonic Gold Mine is located approximately 800km northeast of Perth, Western Australia. The Plutonic Gold Mine began production in 1990 and has produced in excess of 5 Moz of gold from continued operations from both open pit and underground operations.

Open Pit / Surface Production Underground Production Cumulative Production 350 7.0 Cumulative Production (Mozs) 300 6.0

250 5.0

200 4.0

150 3.0

100 2.0

Annual Production (kozs) 50 1.0

0 0.0 2015 2014 2016 1990 1991 1993 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007 2008 2009 2010 2011 2013 1992 1994 1995 2006 2012

The Plutonic Gold Mine is one of the largest gold mines in Western Australia in terms of cumulative production but is still relatively young compared to some of the other mines and districts in the State of Western Australia that have been in production, or have produced, for over 30 years.

viii Major Gold Mines in Western Australia:

Estimated Production Total Commenced Period Production Mine Production (years) (oz of gold) Kalgoorlie Golden Mile ...... 1893 123 53,000,000 Norseman (to 2013) ...... 1935 78 6,000,000 Telfer ...... 1977 39 6,000,000 Jundee ...... 1995 21 6,000,000 Boddington ...... 1987 29 5,700,000 Plutonic ...... 1990 26 5,500,000 St Ives ...... 2000 16 5,500,000 Kanowna Belle ...... 1993 23 5,300,000 Sunrise Dam ...... 1998 18 5,000,000 Granny Smith ...... 1996 20 4,500,000 Paddington ...... 1985 31 3,500,000 Agnew ...... 1980 36 2,500,000 Darlot ...... 1998 18 2,000,000 Kundana ...... 1985 31 1,750,000 Gwalia ...... 1997 19 1,200,000 Higginsville ...... 1997 19 750,000 Red October ...... 1999 17 750,000 Paulsens ...... 2004 12 700,000

Based on production between January 2016 and September 2016, the Plutonic Gold Mine produces at an annualized rate of approximately 65,000 to 70,000 oz of gold (inclusive of stockpiles). Access to the Plutonic Gold Mine is via five declines, four of which are located in the Plutonic Gold Mine main open pit (the “Main Pit”) and the fifth is located about 5 km east of the Main Pit at Plutonic East.

Surface Infrastructure at Plutonic Gold Mine:

ix Mineralization occurs in a shallowly plunging mafic unit and occurs in a number of zones as illustrated below.

The Plutonic Gold Mine has eight active mining zones. Seven of these mining zones are well-established having been active for a number of years. The eighth zone, Baltic Extension, is a new mining zone. The Plutonic Gold Mine is capable of producing at a rate of up to 1,400ktpa, but in recent years has stabilized at approximately 800ktpa.

All mineral ore processing is carried out by a conventional plant with a three stage crushing circuit feeding a semi-autogenous grinding (“SAG”) mill and two ball mills. The mill is capable of operating at a capacity of 1,400 ktpa. For the 12 month period ended June 30, 2016, the mill processed 934,507 tonnes. Performance has been evaluated for the past four years and indicates reasonable performance, with recoveries ranging from 71% to 90%, with the average recovery over the four-year period at 83%. The capacity of the mill exceeds the Plutonic Gold Operations’ current and planned production capacity, and if suitable opportunities can be identified, the potential exists to toll-treat material from other sources in the region. See “The Plutonic Gold Operations – Processing and Recovery” for further details.

x Hermes Hermes is a greenfields open pit development project, located approximately 60 km south-west of the Plutonic Gold Mine. The pre-stripping operations at Hermes are scheduled to commence in mid-2017. The Hermes deposit is expected to be mined as a conventional open pit excavator-truck mining operation with ore being processed at the Plutonic Gold Mine mill. To date, significant progress has been made in advancing mining and environmental approvals. A mining proposal and mine closure plan was submitted to the Western Australian Department of Mines and Petroleum (the “DMP”) on August 26, 2016, with subsequent submissions made on November 23, 2016. Approval of the mining proposal and the mine closure plan was received on December 15, 2016.

The Plutonic Gold Mine and Hermes Mineral Resources as at September 30, 2016 are summarized in the table below.

Mineral Resources

Measured Indicated Measured+Indicated Inferred Gold Gold Gold Gold grade Cont. grade Cont. grade Cont. grade Cont. Tonnes (Au gold Tonnes (Au gold Tonnes (Au gold Tonnes (Au gold Category (000’s) g/t) (koz) (000’s) g/t) (koz) (000’s) g/t) (koz) (000’s) g/t) (koz) Hermes ...... — — — 3,700 2.2 260 3,700 2.2 260 610 2.5 49 Plutonic Gold Mine ..... — — — 3,500 5.5 620 3,500 5.5 620 5,200 4.4 750 Stockpiles ...... 2 2.3 0.1 330 0.6 6.4 330 0.6 6.5 — — — Total ...... 2 2.3 0.1 7,500 3.7 890 7,500 3.7 890 5,800 4.2 800

(1) Mineral Resources are quoted inclusive of those Mineral Resources converted to Mineral Reserves. (2) The reporting standard adopted for the reporting of the Mineral Resource estimate uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014) as required by NI 43-101. (3) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. (4) Mineral Resources are estimated at a cut-off grade of 1.00 g/t Au for Hermes and reported within an optimised pit. (5) Mineral Resources are estimated at a cut-off grade from 2.45 g/t Au to 3.26 g/t Au for the Plutonic Gold Mine, depending on the resource area. (6) Mineral Resources are estimated using an average gold price of US$1,258 per ounce. (7) See “The Plutonic Gold Operations – Mineral Resource and Mineral Reserve Estimates” for other assumptions and considerations relating to these estimates.

The Plutonic Gold Mine and Hermes Mineral Reserves as at September 30, 2016 are summarized in the table below. Stockpiles of ore accumulated from previous mining operations are included in the Proven and Probable Mineral Reserves.

Mineral Reserves

Proven Probable Total Reserves Gold Cont. Gold Cont. Gold Cont. Tonnes grade gold Tonnes grade gold Tonnes grade gold Category (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) Hermes ...... — — — 1,570 2.0 101 1,570 2.0 101 Plutonic Gold Mine ...... — — — 550 4.6 82 550 4.6 82 Stockpiles ...... 2 2.3 0.1 330 0.6 6 330 0.6 6 Total ...... 2 2.3 0.1 2,450 2.4 189 2,450 2.4 189

(1) Mineral Reserves for Hermes are estimated at a cut-off grade of 0.63 g/t Au. (2) Mineral Reserves for the Plutonic Gold Mine are estimated at a cut-off grade of 2 g/t Au.

xi (3) Mineral Reserve economics are estimated using an average long term gold price of US$1,250 per ounce in 2017, and US$1,300 post-2017 for the Plutonic Gold Mine. Optimization at Hermes was conducted using metal prices of US$1,110 per oz of gold. The pit shell used as the basis for the final design metal prices of US$943.50 per oz of gold. (4) Bulk density estimated as 2.9 t/m3. (5) All figures are rounded and use significant figures. Subtotals, totals and weighted averages are calculated from quantities before rounding and significant figures. (6) See “The Plutonic Gold Operations – Mineral Resource and Mineral Reserve Estimates” for other assumptions and considerations relating to these estimates.

Bryah Basin The tenements encompassing the Bryah Basin joint venture are located approximately 60 km south-west of the Plutonic Gold Mine mill and cover an area of approximately 21,660 hectares (217km2). The Corporation’s interest in the joint venture is an earn-in option, which is achieved by spending A$1.2 million (US$888,000) over the course of three years beginning April 2015, of which A$553,551 (US$409,627) was spent by Northern Star as of October 11, 2016, being the date immediately prior to the date of the Acquisition. The earn-in expenditure must be incurred at a rate of not less than A$400,000 (US$296,000) per year and the failure to meet the minimum annual expenditure, or the total earn-in expenditure within the earn-in period, results in termination of the joint venture agreement and all rights are divested by the Corporation. Upon completion of the earn-in, the Corporation will hold up to an 80% interest in the mineral rights in the tenements (or blocks thereof) that are subject to the Bryah Basin joint venture.

Reserve Mine Plan The Reserve Mine Plan includes the mining of Mineral Reserves only, under which a life of mine of three years is forecasted.

Based on the Reserve Mine Plan, using a gold price of US$1,250/oz in 2017 and US$1,300/oz from 2018 onwards, the Plutonic Gold Operations yield the following financial results: • Cumulative gross cashflow of US$17 million; • Cumulative net cashflow of US$16 million (after tax); and • Net present value (NPV @ 6%) of US$15 million (after tax).

For details regarding net present value sensitivity for the Reserve Mine Plan to changes in gold prices and costs, see “Risk Factors – Risks Relating to the Business and Operations of the Corporation – Economic Viability”.

A summary of the capital and operating cost estimates for the Reserve Mine Plan is shown in the table below.

RLOM RLOM Total AISC RLOM Total RLOM Total (excluding Total AISC Total RLOM TOTAL SITE Total Sustaining project Project Operating Unit Operating AISC Unit COSTS (pre-tax) Operating Capital capital) Capital Unit Cost Cost Unit Cost Cost US$/t US$/t US$/oz US$/oz Units US$M US$M US$M US$M RoM RoM recovered recovered Plutonic Gold Mine ...... 49 9 58 — 88 104 639 691 Stockpiles ...... 1 — 1 — 2 2 Hermes ...... 60 — 60 12 39 39 Processing and TSF ...... 37 2 39 — 15 16 217 229 General, admin & infrastructure ..... 8 — 8 — 3 3 49 49 Royalties ...... 6 — 6 — 3 3 37 37 Total (excluding closure) ...... 162 11 173 12 66 70 942 1,006 Closure ...... — — — 20 — — — —

xii The Reserve Mine Plan includes the mining and processing of a total of 2,450 kt at 2.4 g/t Au for a total of 189,000 oz of gold mined and a total of 172,000 oz of gold recovered from the mill.

Reserve Mine Plan Production and AISC Profile

150 $1,500 Ounces mill recovered 140 $1,400 Cost per oz (Hermes project capex + AISC) 130 $1,300

120 Cost per oz (AISC) $1,200

110 $1,100 ounce)

100 $1,000

90 $900

80 $800

70 $700

60 $600

50 $500

40 $400 Total site mill recovered (koz) year per recovered ounces mill site Total 30 60 66 $300 20 46 $200 Total site costs per mill recovered / (US$ ounces recovered mill per costs site Total 10 $100

0 - 2017 2018 2019 2020 2021 Calendar Year

Extended Mine Plan The Extended Mine Plan includes the mining of Indicated Mineral Resources and Inferred Mineral Resources, under which a life of mine of five years is forecasted. The Extended Mine Plan is separate and distinct from the Reserve Mine Plan and excludes the mining of the Plutonic Gold Mine Mineral Reserves, Hermes and the Plutonic Gold Mine stockpiles. The Extended Mine Plan is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. It is the Corporation’s view that there is a reasonable basis for disclosing the Extended Mine Plan based on Mineral Resources contained in extensions to the Plutonic Gold Mine. There are no development designs supporting the Extended Mine Plan and additional capital costs are required to access and develop the Mineral Resources, which includes new declines and inclines. There is no certainty that the following life- of-mine schedules and economic assessments will be realized. See “Risk Factors” for further details.

As an indication of the historical significance of production from material not included in the Plutonic Gold Mine Mineral Reserves, over the last ten years between 50% and 60% of the annual gold production has been sourced from the mine plan (being primarily Mineral Reserves), with approximately 30% being sourced from converting Mineral Resources directly into production and the remainder being sourced from converting previously unclassified material directly into production.

Based on the Extended Mine Plan, using a gold price of US$1,250/oz in 2017 and US$1,300/oz from 2018 onwards, the Plutonic Gold Operations yield the following financial results: • Cumulative gross cashflow of US$85 million; • Cumulative net cashflow of US$57 million (after tax); and • Net present value (NPV @ 6%) of US$50 million (after tax).

xiii A summary of the capital and operating cost estimates for the Extended Mine Plan is shown in the table below. These estimates include capital costs for development to access the Mineral Resources, including those found within the Baltic Extension, Plutonic East UG and Area 4 UG of the Plutonic Gold Mine. The Extended Mine Plan includes the mining and processing of a total of 2,200 kt at 4.2 g/t Au for a total of 300,000 oz of gold mined and a total of 260,000 oz of gold recovered from the mill.

ELOM TOTAL SITE ELOM ELOM ELOM ELOM ELOM ELOM ELOM COSTS Total Total Total Operating Total Operating Total (pre-tax) Operating Capital Cost Unit Cost Unit Cost Unit Cost Unit Cost US$/oz US$/oz US$/t US$/t Au Au Units US$M US$M US$M RoM RoM recovered recovered Plutonic Gold Mine ...... 177 23 200 80 90 680 769 Processing and TSF ...... 32 1 33 14 15 121 126 General, admin & infrastructure ...... 7 — 7 3 3 28 28 Royalties ...... 12 — 12 5 5 45 45 Total (excluding closure) ...... 228 24 252 103 114 875 969 Closure ...... — — — — — — —

Extended Mine Plan Production and Total Cost per Ounce

150 $1,500 ELOM Ounces (mill recovered) 140 $1,400

130 Total cost per ounce including capital development $1,300

120 $1,200

110 $1,100

100 $1,000

90 $900

80 $800

70 $700

60 $600

50 $500

40 $400

ELOM mill recovered ounces per year (koz) 63 $300 30 52 59 51 $200 20 35 ELOM Costs per mill recovered ounces (US$ /ounce) 10 $100

0 - 2017 2018 2019 2020 2021 Calendar Year

See “The Plutonic Gold Operations – Reserve Mine Plan and Extended Mine Plan” for further details.

Corporate Objectives Beyond the Reserve Mine Plan and Extended Mine Plan The Corporation’s objective is to extend the life of mine beyond five years by (i) successfully converting Mineral Resources to Mineral Reserves, (ii) conducting in mine exploration of existing target areas, (iii) conducting near mine exploration activities close to the current mine workings, and (iv) conducting regional exploration.

An annual expenditure of approximately US$7.4 million is envisaged for 2017. Subject to results, this amount may be varied as required. It is anticipated that, from 2018 onwards, the level of exploration expenditure will average approximately US$3.7 million per annum. See “The Plutonic Gold Operations – Recommendations” for further details.

The Corporation is committed to doing the work necessary to convert a portion of the current Measured and Indicated Mineral Resources of 890,000 oz of gold and Inferred Mineral Resources of 800,000 oz of gold into Mineral Reserves with additional drilling, which may result in a mine life that meets or exceeds what is forecasted in the Extended Mine Plan.

xiv Recent in-fill drilling by Northern Star has returned numerous high grade intersections in a number of in mine target areas. Such results confirm that additional detailed drilling could provide the confidence to convert existing Mineral Resources into Mineral Reserves.

New Drilling Intercept Location Plan

In 2017, the Corporation intends to focus on a number of priority in mine target areas, including Indian West, Indian Tier 2, Caribbean, and Baltic Extension. Additionally, high grade drilling results in Area 134, Timor and Caspian will be scheduled for follow up.

Indian West: Open for >500m along strike, westward trend of existing mineralized zones Indian Tier 2: Open down-dip Caribbean: Continuation of mineralized zones to the east Baltic Extension: Resource expansion down-plunge from existing resources Area 134: Follow up of 2016 exploration drilling results Timor: Follow up of 2016 exploration drilling results Caspian: Follow up of 2016 exploration drilling results

xv Priority near mine exploration targets for 2017 are Timor Extension, Plutonic West, Reservoir, Zone 114 and Big Fish along with a re-evaluation of historic open pits.

Location Map for Near Mine Underground Exploration Targets:

xvi Location Map for Historic Open Pit Exploration Targets:

The Timor Extension lies within the broader Timor resource area and is truncated by a fault. The broader Timor resource area has historically been characterized by higher metallurgical recoveries and generally higher average grades than elsewhere in the Plutonic Gold Mine. The regional target is an interpreted offset of the zone to the northwest of the fault.

3D Section of the Timor Mining Area Looking North

Notes: The greyed-out area represents the Zone 114 Fault Zone, located at the northern limit of Timor mineralization. The dark pink surface represents the Granite Overthrust extending southwards from the Zone 114 Fault Zone as modeled from extensive surface drilling targeting Timor. The lighter pink surface represents the Granite Overthrust extending northwards from the Zone 114 Fault Zone as derived from gravity inversion modeling. Offset of the Granite Overthrust across the Zone 114 Fault Zone, and therefore, the potential offset of Timor mineralization, lies between the two end-members: ~250m dextral strike-slip and ~300m dip-slip (north block down).

xvii The Plutonic West target is 1,200 metres south-west of the Main Pit. Historic drilling has intersected the prospective mine mafic unit, which hosts the Plutonic gold system, with a number of significant intersections including 56.8 g/t Au over 6.8 metres, and 11.1 g/t Au over 3.9 metres. Zone 114 lies to the north of the Pacific resource area and has been explored in a limited fashion only to date.

The Big Fish target area lies to the east of the Plutonic East pit and north of the Perch Pit in an area with no underground workings and wide spaced deep drilling within favorable rock units.

Big Fish Target Cross-Section Looking North:

The Plutonic tenement group encompasses nine historic open pits including the Main Pit and Area 4/ Plutonic East pit. These pits produced a combined 1,909,170 oz of gold with production from the Main Pit dominating at 1,418,150 oz of gold. With a re-assessment of the existing drilling it may be possible to identify either remnant mineralization that may be of interest at current gold prices or to identify mineralized trends that warrant follow up exploration.

At the nearby satellite Hermes deposit, there is also an opportunity to increase the Mineral Resource in the vicinity of the proposed pits and along prospective mineralized corridors. The Corporation also intends to continue drilling in the Bryah Basin to earn-in up to 80% of that property.

Hermes Area Exploration Target Zones

xviii The Corporation intends to systematically continue to evaluate mineralization potential of its extensive 64,374 hectares (644km2) landholdings, with the goal of finding additional Mineral Resources. Within the Plutonic Marymia Greenstone Belt, which hosts the Plutonic Gold Mine, drilling has predominantly only reached 50m below surface. Large areas of the Plutonic Gold Mine tenements have not been systematically drill tested and drilling to 200m below surface has only occurred within the specific Mineral Resources developed to date, which suggests the potential for the tenements to yield further discoveries.

See “Business of the Corporation” and “The Plutonic Gold Operations” for further details.

The Offering

Issuer Superior Gold Inc.

Offering This prospectus qualifies the distribution of up to 28,450,000 Treasury Shares (excluding any Treasury Shares issuable on the exercise of the Over-Allotment Option). This prospectus also qualifies the grant of the Offering Broker Warrants.

Offering Size Up to $28,450,000.

Offering Price $1.00 per Treasury Share.

Agents GMP, BMO Nesbitt Burns Inc., Cormark Securities Inc., Haywood Securities Inc., TD Securities Inc. and Sprott Private Wealth LP.

Over-Allotment Option The Corporation has granted to the Agents the Over-Allotment Option, which is exercisable in whole or in part in the sole discretion of the Agents at any time after the Closing Date until the date which is 30 days following the Closing Date, to purchase additional Treasury Shares, in an amount that is up to 15% of the number of Treasury Shares sold under the Offering, at the Offering Price. If the Over-Allotment Option is exercised in full, the total Offering Price, Agents’ Fee and Proceeds to the Corporation (excluding expenses of the Offering) would be $32,717,500, $1,963,050 and $30,754,450, respectively. This prospectus qualifies the grant of the Over-Allotment Option and the distribution of the Treasury Shares issuable upon the exercise of the Over-Allotment Option. See “Plan of Distribution” for further details.

xix Agents’ Fee The Corporation has agreed to pay the Agents a cash commission equal to 6.0% of the gross proceeds received by the Corporation from the Offering. The Corporation has also agreed to issue to the Agents broker warrants of the Corporation (the “Offering Broker Warrants”) entitling the Agents to acquire at the Offering Price up to that number of Common Shares (the “Offering Broker Shares”) as is equal to 3.0% of the total number of Treasury Shares sold under the Offering, including under the Over-Allotment Option, but excluding such number of Treasury Shares equal to the quotient obtained by dividing the Consideration Payment by the Offering Price, at any time and from time to time for up to 24 months from the Closing Date.

Use of Proceeds The estimated net proceeds to be received by the Corporation from the Offering, after deducting expenses of the Offering (estimated at $1,500,000) and the Agents’ Fee, are expected to be $25,243,000 assuming that the Over-Allotment Option is not exercised.

The net proceeds of the Offering are anticipated to be used as follows:

Expenditure Estimates Contained in the Technical Report Use Net Proceeds (US$) Plutonic Gold Mine Exploration ...... $ 8,000,000(2) $ 6,290,000 Plutonic Gold Mine Extended Mine Plan Development ...... $ 500,000(2) $ 2,000,000 Hermes development/pre-stripping operations(1) ...... $ 1,850,000(2) $11,800,000 Hermes resource drilling ...... $ 493,000(2) $ 688,000 Bryah Basin(3) ...... $ 650,000 $ 488,000 Zenith Guarantee ...... $ 3,250,000(4)(5) — Consideration Payment ...... $10,000,000(6) — General corporate purposes ...... $ 500,000 — Total: ...... $25,243,000

(1) The primary initial development costs for Hermes will be the construction of a direct private haul road of approximately 65km in length from Hermes to the Plutonic Gold Mine mill at a cost of US$6.5 million and the pre-stripping operations at a cost of US$5.3 million. (2) Any differences between net proceeds and amounts contained in the Technical Report will be financed through cash generated by the Plutonic Gold Operations. (3) Funds to be advanced in connection with the ongoing earn-in expenditure for the Bryah Basin joint venture. (4) As the net proceeds from the Offering are expected to exceed $15 million (net of the Agents’ Fee and other expenses), the Corporation will be required to provide a replacement bank guarantee of A$3.25 million in connection with the Zenith power contract. See “Business of the Corporation – Three Year History and the Acquisition of the Plutonic Gold Operations”. The amount indicated here assumes an exchange rate of A$1.00:$1.00 at the time that the replacement occurs. (5) The minimum amount of gross proceeds that the Corporation must raise in order to provide the replacement guarantee for the Zenith power contract and still be able to allocate the use of proceeds as described above is $17.82 million (other than in respect of the Consideration Payment). (6) The Consideration Payment noted here assumes the maximum Offering of $28.45 million. In the event that gross proceeds from the Offering are less than $17.82 million, no Consideration Payment will be payable.

While the Corporation intends to use the proceeds of the Offering as stated above, there may be circumstances where, for sound business reasons, a re-allocation of funds may be necessary. See “Risk Factors” for further details. If the Over-Allotment Option is exercised the Corporation will use the proceeds thereof for general working capital and corporate purposes.

Because the Offering is on a “best efforts” agency basis, the Corporation has outlined various potential scenarios for the use of proceeds in the event that the Corporation is

xx unable to raise a minimum of $17.82 million in gross proceeds. The Corporation has also summarized the anticipated use of proceeds and the related timelines and milestones in connection therewith. See “Use of Proceeds” for further details.

Closing Date On or about February 23, 2017, or on such other date as the Corporation and Agents may agree.

The Acquisition On August 12, 2016, the Corporation entered into a sale and purchase agreement (the “Acquisition Agreement”) with Billabong Gold Pty Ltd (“Billabong”), a wholly- owned subsidiary of the Corporation (as the buyer), Northern Star (as the vendor) and Northern Star Mining Services Pty Ltd., relating to the acquisition (the “Acquisition”) of the Plutonic Gold Operations. In connection with the Acquisition, on October 12, 2016, the Corporation made an initial payment to Northern Star of A$12.5 million and further agreed to issue on or about the closing of the Offering to Northern Star such number of Common Shares (the “Consideration Shares”) equal to the greater of (i) the value of A$25 million at a deemed issue price equal to the “go public” issue price, being the Offering Price; and (ii) 33.0% of the total number of Common Shares outstanding immediately following closing of the Offering, on a non-diluted basis (which total number, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over-Allotment Option after the Closing Date).

On February 9, 2017, the Corporation, Billabong, Northern Star and Northern Star Mining Services Pty Ltd. entered into an amendment to the Acquisition Agreement (the “Amendment”). The Amendment provides that in the event gross proceeds from the Offering are greater than $14.5 million, the Corporation may elect, at its sole option, and in lieu of issuing to Northern Star the number of Consideration Shares that would otherwise be issuable pursuant to the Acquisition Agreement, to issue and pay to Northern Star the following: (A) such number of Consideration Shares equal to no less than 20% of the total number of Common Shares outstanding immediately following closing of the Offering, on a non-diluted basis (which total number, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over- Allotment Option after the Closing Date); and (B) an amount in cash (the “Consideration Payment”) equal to the market value, calculated using the Offering Price, of the difference in the number of the Consideration Shares that Northern Star will actually receive on closing of the Offering and the number of Consideration Shares that Northern Star would have received if not for the Amendment. The Corporation will not elect to make a Consideration Payment which prohibits it from allocating the use of proceeds as described herein. Assuming the full amount of the Offering is raised, the Corporation intends to issue to Northern Star 18,859,041 Consideration Shares and pay to Northern Star a Consideration Payment of $10,000,000.

Under the Acquisition Agreement and the Amendment, the Corporation also agreed to issue to Northern Star on or about the closing of the Offering Common Share purchase warrants (the “Consideration Warrants”) to acquire additional Common Shares (the “Consideration Warrant Shares”), the number of Consideration Warrants to be issued to be equal to one-half of the number of the Consideration Shares that Northern Star would be eligible to receive if the Consideration Payment were to equal $0. Assuming the gross proceeds from the Offering are greater than or equal to $14.5 million, Northern Star will receive 14,429,521 Consideration Warrants. Each Consideration Warrant will entitle Northern Star to purchase one Consideration Warrant Share at an exercise price in U.S. dollars equal to a 100% premium to the Offering Price, determined using the Bank of Canada exchange noon spot rate for U.S. and Canadian dollars on the day immediately prior to the Listing Date, for a period of five years following the Closing Date. If the Corporation does not complete a listing of its Common Shares on the Exchange, or other such stock exchange acceptable to Northern

xxi Star, within six months from the Acquisition Closing Date, the Corporation is required to pay Northern Star an additional A$25 million in cash (the “Cash Payment”). None of the Consideration Shares, the Consideration Warrants or the Consideration Warrant Shares are qualified by this prospectus and will be issued on a private placement basis.

As additional consideration for the Acquisition, Northern Star has retained a 2% net smelter return royalty (the “Northern Star Royalty”) on future gold recovered from the Plutonic Gold Operations in excess of 300,000 oz pursuant to the terms of a Royalty Deed dated October 11, 2016 between Northern Star and Billabong (the “Northern Star Royalty Deed”). The royalty terminates upon the earlier of (i) the date that A$10 million is paid to Northern Star under the royalty, or (ii) gold in excess of 600,000 oz being produced. Alternatively, the Corporation may buy the royalty from Northern Star for a purchase price of A$6.5 million at any time before the expiry of 30 days after the date the royalty first becomes payable. The Corporation will also pay to Northern Star certain milestone payments (the “Milestone Payments”) of A$2.5 million for every 250,000 oz of gold that are NI 43-101 compliant Measured or Indicated Mineral Resources identified at the Plutonic Gold Operations in excess of the 1,717,000 oz of gold that are JORC compliant measured, indicated and inferred mineral resources identified with respect to the Plutonic Gold Operations as at June 30, 2016. The aggregate of the Milestone Payments is capped at A$10 million. In addition, Northern Star is eligible, and has agreed, to nominate one director to the Corporation’s board of directors (the “Board”). Mr. Shaun Day, the current Chief Financial Officer of Northern Star, will serve on the Board as the Northern Star nominee. See “Business of the Corporation – Three Year History and Acquisition of the Plutonic Gold Operations” for further details.

The Private Placement On September 29, 2016, the Corporation issued 32,600,000 subscription receipts of the Corporation (the “Subscription Receipts”) at a price of $0.50 per Subscription Receipt by way of private placement (the “Private Placement”) for net proceeds of approximately $15,473,240 after deducting the cash commission to GMP (the “Private Placement Agent”) of $615,000 and the expenses of the Private Placement of approximately $211,760. The Corporation used the net proceeds from the Private Placement to fund part of the cash portion of the purchase price of the Acquisition and for general working capital requirements.

In connection with the closing of the Acquisition on October 12, 2016, each Subscription Receipt was automatically exercised for one special warrant of the Corporation (collectively, the “Special Warrants”). This prospectus also qualifies the distribution of 32,600,000 Common Shares (the “Qualifying Shares”) issuable (for no additional consideration) upon the deemed exercise of the previously issued Special Warrants.

As part of the consideration of the services rendered by Private Placement Agent in connection with the Private Placement, the Corporation issued to the Private Placement Agent an aggregate of 1,230,000 broker warrants of the Corporation (the “Broker Warrants”). Each Broker Warrant entitles the Private Placement Agent to acquire one Common Share (a “Broker Share”) at $0.50 (being the subscription price of the Private Placement) at any time or from time to time in whole or in part for a period ending the earlier of (a) September 29, 2021; and (b) two years following the Corporation completing an initial public offering of Common Shares in Canada (“IPO”).

Risk Factors An investment in the Common Shares is considered to be speculative due to the nature of the Corporation’s business. In particular, an investment in the securities qualified hereunder is subject to the following risks relevant to the Corporation’s business and operations, which could materially affect the Corporation’s operating results, financial performance and the value of the Common Shares. Prospective investors should

xxii carefully consider their personal circumstances and consult their broker, lawyer, accountant or other professional adviser before making an investment decision. These risk factors which are summarized below, together with all of the other information contained in this prospectus, including information contained in the section entitled “Cautionary Statement Regarding Forward-Looking Information”, should be carefully reviewed and considered before an investment in the Common Shares is made. The risks summarised below do not purport to be an exhaustive summary of the risks the Corporation faces:

Risks Relating to the Business and Operations of the Corporation:

• The Corporation is currently allocating substantially all of its financial resources and efforts on operating and developing a single property and any adverse conditions or events affecting the property could materially and adversely affect the Corporation’s potential profitability. • Mineral Reserves are sufficient to support mining operations at the Plutonic Gold Operations for the next three years. There can be no assurance that any of the Corporation’s planned exploration and development activities for the Plutonic Gold Operations will succeed in establishing additional Mineral Reserves and increasing the life of the mine under the Reserve Mine Plan or the Extended Mine Plan. • Assuming only the Mineral Reserves are converted into production, the Plutonic Gold Operations may be uneconomic. For example, under the Reserve Mine Plan, the Plutonic Gold Operations’ net present value is sensitive to a 10% reduction in gold price (or gold grade) or a 10% increase in costs, either of which would lead to a negative net present value. • The Corporation has prepared estimates of future gold production, which include Mineral Resources. The Corporation cannot give any assurance that such estimates will be achieved. Failure to achieve production estimates could have an adverse impact on the Corporation’s future cash flows, profitability, results of operations and financial conditions. • The proposed transfer of tenements and pastoral leases that the Corporation acquired pursuant to the Acquisition are subject to regulatory processes that are, in part, out of the Corporation’s control. The costs and delays that may be associated with the proposed transfers may have an adverse effect on the Corporation. • Native title claims and aboriginal heritage issues may affect the ability of the Corporation to pursue exploration, development and mining on its properties. Certain Plutonic Gold Operation tenement transfers are subject of the Gingirana Native Title application lodged with the Western Australian Government. There is a risk that the tenement transfers are delayed or rejected, which may adversely impact the Corporation’s ability to develop the Plutonic Gold Operations and expand its production. • The Corporation has only recently acquired the Plutonic Gold Operations. While management is not aware of any significant liabilities related to the Acquisition, there may be undisclosed liabilities of which management is currently unaware. If any such liabilities are material, this may adversely affect the Corporation. • The Corporation’s operations require Permits and there can be no assurance that such Permits will be obtained and that they will be renewed upon expiry. In particular, the Corporation has not yet received all required clearing permits in connection with Hermes. • An investment in the Corporation is speculative and may result in the loss of an investor’s entire investment.

xxiii • The Corporation’s implementation of potential strategic acquisitions, investments or divestitures could adversely affect its financial condition, future performance and growth prospects.

• The Corporation’s profitability depends on a number of factors, some of which are beyond its direct control and there can be no assurance that the Corporation’s business and strategy will enable it to become profitable or sustain profitability in future periods.

• The Corporation is conducting its mining activities principally in Australia; therefore its operations are subject to the risks associated with conducting business in a foreign country.

• The Corporation’s business operations are exposed to a high degree of risk inherent in the mining sector and related, in part, to the volatility in gold prices.

• The process of estimating Mineral Resources and Mineral Reserves is a subjective process with numerous uncertainties and the Corporation may not achieve its production estimates. Although the Corporation believes that the estimates of Mineral Resources and Mineral Reserves set out in this prospectus have been carefully prepared and that the methods of estimating these are reliable, no assurance can be given that the stated Mineral Resources and Mineral Reserves are present in the quantities stated, or that gold will be produced in the quantities expected. Actual Mineral Reserves may not conform to geological, metallurgical or other expectations, and the volume and grade of ore recovered may differ from estimated levels. If the Corporation’s actual Mineral Reserves and Mineral Resources are less than current estimates, its results of operations or financial condition may be materially and adversely affected.

• A reduction in the amount of or a change in the timing of the gold production estimate for the Corporation may have a material adverse impact on the Corporation’s future cash flows.

• Development of the Baltic Extension and Hermes has not yet commenced and may not commence in a timely fashion. Failure to develop the Baltic Extension and Hermes in a timely fashion may cause delays in the production from the Baltic Extension and Hermes, as contemplated by the Reserve Mine Plan and the Extended Mine Plan or otherwise.

• The Corporation’s interest in the Bryah Basin joint venture requires that the Corporation fund certain minimum earn-in expenditures. The failure to meet these expenditures may result in a divestment by the Corporation of its rights under the joint venture agreement.

• Any increase in the price of production inputs or shortages in these inputs could adversely affect the Corporation’s business, financial condition and results from operations.

• The Corporation may not be able to obtain the necessary financing to obtain additional capital which may adversely affect its ability to expand its business.

• Certain employees of the Corporation are subject to a legacy collective agreement, which may increase the likelihood of labour disruptions or work stoppages and may cause the Corporation to incur additional liabilities related to wages and benefits.

• The Corporation’s insurance coverage has limitations on liability and it may not provide adequate coverage.

xxiv • The mine closure cost estimates for the Plutonic Gold Mine and Hermes may prove to be inaccurate. In the event that actual closure costs are higher than estimates, it may materially and adversely impact the Corporation. • The Plutonic Gold Mine mining leases are listed as known or suspected contaminated sites in relation to historical and current mining operations. Contaminated land remediation has been considered in the mine closure planning, but if such remediation costs are higher than estimates, it may materially and adversely impact the Corporation. • The Corporation is not currently subject to litigation, but the Corporation could become involved in legal claims or other proceedings that have a material adverse impact on the Corporation’s financial condition, cash flow and results from operations. • If the Corporation is not successful in retaining or attracting key personnel, the Corporation’s business may be adversely affected. • Deficient or negligent work by consultants, engineers, contractors or other parties which the Corporation relies on could have a material adverse effect on the Corporation. • The Corporation may be subject to foreign investment, tax or other laws which could have a negative impact on the financial results of the Corporation. • Foreign currency fluctuations may have a material adverse effect on the Corporation’s financial position and net income. • Investors should not anticipate that dividends will be declared or paid by the Corporation in the foreseeable future. • There is no guarantee that limitations won’t be enforced on the repatriation of earnings from any foreign jurisdiction in which the Corporation may operate. • There can be no assurance that market volatility will not affect the price of the Corporation’s securities in the future and that the price of the Common Shares will not decrease after the Offering. • There is currently no public market for the Corporation’s securities and there is no assurance that one will develop. • Assuming the full amount of the Offering is raised (excluding any proceeds raised from the exercise of the Over-Allotment Option), it is contemplated that Northern Star will hold approximately 20% of the issued and outstanding Common Shares following the closing of the Offering on a non-diluted basis and will also hold Consideration Warrants. As a result, Northern Star may have significant influence over all matters requiring shareholder approval. Northern Star is a publicly traded company, is widely held and its ownership and control may undergo substantial changes without the Corporation’s knowledge. As a significant shareholder, such changes may have unforeseen consequences on the Corporation. • Northern Star has not reviewed the disclosure contained in this prospectus relating to the Plutonic Gold Operations and has not represented that the disclosure represents full, true and plain disclosure and does not contain a misrepresentation. Northern Star will have no liability to investors in the Offering if the disclosure contained in this prospectus relating to the Plutonic Gold Operations contains a misrepresentation. Pursuant to the terms of the Acquisition Agreement, Northern Star’s maximum liability in connection with any claim, demand or cause of action arising in relation to any provision of the Acquisition Agreement or any other matter connected with the Plutonic Gold Operations is capped at A$12.5 million.

xxv • Directors involved in the mining industry could find their interests in conflict with those of the Corporation. • Inadequate internal controls or disclosure controls over financial reporting could result in material misstatement in the Corporation’s financial statements and related public disclosures which could materially and adversely affect the Corporation. • The Corporation’s business is subject to evolving corporate governance and public disclosure regulations that may from time to time increase both the Corporation’s compliance costs and the risk of non-compliance, which could adversely impact the price of the Common Shares. • The acquisition of Common Shares may be subject to Australia’s foreign investment regime. Investors should seek their own independent advice. • The failure by the Corporation to use the proceeds of the Offering in the manner specified in the prospectus.

Risks Related to the Industry: • Price declines in the market value of gold could cause the Corporation’s operations to be rendered uneconomic. • Mining operations generally involve a degree of risk. The Corporation’s operations are subject to all of the hazards and risks normally encountered in the exploration, development and production of precious metals. • The Corporation’s operations are contingent on the adequate and timely supply of critical supplies. • There is no guarantee that future changes in environmental regulation will not adversely affect the Corporation’s operations and that the Corporation will not be liable for losses associated with environmental hazards. • The Corporation is exposed to health and safety risks and liabilities inherent to the natural resource industry. • The Corporation’s operations are currently carried out in accordance with all laws and regulations, but there is no guarantee that new laws and regulations will not be enacted or that existing laws and regulations will not be applied in a way which could limit or curtail production. • There can be no guarantee that the interest of the Corporation in its properties is free from title defects or that material contracts between the Corporation and the relevant governments will not be substantially modified to the detriment of the Corporation or revoked. • There is no assurance that the Corporation will be able to compete effectively with other Mineral Resource companies to obtain better future business opportunities. • The Corporation relies on adequate infrastructure for its operations and a failure of such could adversely affect the Corporation’s operations, financial condition and results of operations. • The Corporation’s operations may be subject to unpredictable weather conditions that have an adverse effect on mining and exploration activities.

See “Risk Factors” for further details.

xxvi Summary of Selected The following table sets forth selected carve-out financial information of the Plutonic Carve-Out Financial Gold Operations for the years ended June 30, 2016 and June 30, 2015 and the three Information of the month interim periods ended September 30, 2016 and September 30, 2015. This Plutonic Gold summary financial information should be read in conjunction with the carve-out Operations financial statements of the Plutonic Gold Operations and related notes as well as the “Management’s Discussion and Analysis of the Plutonic Gold Operations” included elsewhere in this prospectus. The carve-out financial information is presented in Australian dollars. Plutonic Gold Operations Three month Three month Year ended Year ended period ended period ended June 30, 2016 June 30, 2015 Sept 30, 2016 Sept 30, 2015 (A$000’s) (A$000’s) (A$000’s) (A$000’s) Revenue ...... 102,744 117,631 32,119 25,207 Total comprehensive profit/(loss) for the period ...... (18,876) (25,066) 1,809 (5,757) Net cash flows provided by operating activities ...... 19,473 21,300 3,754 7,122 Net cash flows used in investing activities ...... (15,162) (35,103) (2,779) (6,063) Net cash flows from financing activities ...... (4,311) 13,803 (975) (1,059) Plutonic Gold Operations As at As at As at June 30, 2016 June 30, 2015 Sept 30, 2016 (A$000’s) (A$000’s) (A$000’s) Total assets ...... 54,567 65,650 51,296 Total liabilities ...... 46,731 60,084 44,455 Total equity ...... 7,836 5,566 6,841 Summary of Selected The following table sets forth selected audited financial information of the Corporation Financial Information of for the period from the date of incorporation on July 4, 2016 to December 31, 2016. the Corporation This summary financial information should be read in conjunction with the consolidated financial statements of the Corporation and related notes as well as the “Management’s Discussion and Analysis of the Corporation” included elsewhere in this prospectus. The financial information of the Corporation is presented in United States dollars. Superior Gold Inc. Period ended Dec 31, 2016 (US$) Revenue ...... 24,749,595 Comprehensive income for the period ...... 8,172,248 Net cash flows provided by operating activities ...... 8,664,720 Net cash flows used in investing activities ...... (14,347,775) Net cash flows from financing activities ...... 12,333,750

Superior Gold Inc. As at Dec 31, 2016 (US$) Total assets ...... 75,456,800 Total liabilities ...... 55,262,048 Total equity ...... 20,194,752

xxvii Summary of Selected Pro The following table sets forth selected unaudited pro forma financial information of the Forma Financial Corporation as at December 31, 2016 and the six month period ended December 31, Information of the 2016. This summary financial information should be read in conjunction with the Corporation Corporation’s unaudited pro forma consolidated financial statements and related notes included elsewhere in this prospectus. The pro forma financial information of the Corporation is presented in United States dollars.

Unaudited Pro Forma Consolidated Statement of Financial Position

Superior Gold Inc. As at Dec 31, Pro Forma Pro Forma 2016 Adjustments Consolidated (US$000’s) Total current assets ...... 20,316 12,467 32,783 Total current liabilities ...... 33,499 (18,090) 15,409 Total equity ...... 20,195 30,352 50,547

Unaudited Pro Forma Consolidated Statement of Operations

Plutonic Gold Superior Gold Operations Inc. Three month Period ended period ended Pro Forma Pro Forma Dec 31, 2016 Sept 30, 2016 Adjustments Consolidated (US$000’s) Revenue ...... 24,750 24,360 — 49,110 Net income ...... 8,902 1,372 459 10,733 Basic and diluted earnings and (loss) per share ...... 0.35 0.15

xxviii GLOSSARY OF TERMS

In this prospectus, the following capitalized terms have the following meanings, in addition to other terms defined elsewhere in this prospectus. Words importing the singular number only, include the plural and vice versa, and words importing any gender include all genders.

“AAS” has the meaning ascribed thereto under “The Plutonic Gold Operations – Sampling, Analysis and Security – Plutonic Gold Mine”.

“Acquisition Agreement” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Acquisition Closing Date” means October 12, 2016.

“Acquisition” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Agency Agreement” means the agency agreement dated February 15, 2017 by and among the Corporation and the Agents.

“Agents” means GMP, BMO Nesbitt Burns Inc., Cormark Securities Inc., Haywood Securities Inc., TD Securities Inc. and Sprott Private Wealth LP.

“Agents’ Fee” means a cash commission equal to 6.0% of the gross proceeds received by the Corporation from the Offering, pursuant to the terms of the Agency Agreement.

“allowable capital loss” has the meaning ascribed thereto under “Certain Canadian Federal Income Tax Considerations – Taxation of Resident Holders”.

“ALY” has the meaning ascribed thereto under “Summary – Business of the Corporation”.

“AMC” means AMC Consultants Pty Ltd.

“Amendment” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“APT” means APT Goldfields Pty Ltd.

“Audit Committee” has the meaning ascribed thereto under “Audit Committee”.

“Awards” has the meaning ascribed thereto under “Executive Compensation – Incentive Plan Awards”.

“Billabong” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Board Mandate” has the meaning ascribed thereto under “Corporate Governance – Board of Directors – Board Mandate”.

“Board” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Broker Share” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“Broker Warrants” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“Bryah Basin” has the meaning ascribed thereto under “Summary – Bryah Basin”.

“Cash Payment” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“CDS” means CDS Clearing and Depositary Services Inc.

1 “CGU” has the meaning ascribed thereto under “Management’s Discussion and Analysis of the Plutonic Gold Operations – Critical Accounting Estimates – Impairment of property, plant and equipment and mine properties”.

“Closing Date” means February 23, 2017 or such other date as the Corporation and the Agents may agree.

“Code” has the meaning ascribed thereto under “Corporate Governance – Ethical Business Conduct”.

“Common Shares” means the common shares in the capital of the Corporation.

“Compensation and Nominating Committee” has the meaning ascribed thereto under “Corporate Governance – Compensation and Nominating Committee”.

“Consideration Payment” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Consideration Shares” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Consideration Warrant Shares” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Consideration Warrants” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Corporation”or“Superior” means Superior Gold Inc. (formerly 2525908 Ontario Inc.) and/or Billabong Gold Pty Ltd., as the context may require.

“CRA” means the Canada Revenue Agency.

“DBAs” means database administrators.

“Deemed Exercise Date” has the meaning ascribed thereto under “Prior Sales”.

“DER” means the Department of Environment Regulation.

“DMP” has the meaning ascribed thereto under “Summary – Hermes”.

“DoW” means the Department of Water.

“DSUs” means deferred share units issued under the Omnibus Equity Plan.

“Eligible Person” has the meaning ascribed thereto under “Executive Compensation – Incentive Plan Awards”.

“Escrowed Proceeds” means the proceeds from the sale of the Subscription Receipts pursuant to the Private Placement that were deposited in escrow, pending satisfaction of escrow release conditions, pursuant to the Subscription Receipt Agreement.

“Exchange” means the TSX Venture Exchange.

“Extended Mine Plan”or“ELOM” means the mine plan developed under and subject to the assumptions of the preliminary economic assessment as set out in section 24 of the Technical Report.

“Freshwater Royalty” has the meaning ascribed thereto under “The Plutonic Gold Operations – Royalties – Plutonic Gold Mine”.

“Gingirana Objection” has the meaning ascribed thereto under “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations – Native Title”.

“GMP” means GMP Securities L.P.

2 “Hermes” has the meaning ascribed thereto under “Summary – Business of the Corporation”.

“Holder” has the meaning ascribed thereto under “Certain Canadian Income Tax Considerations – General”.

“IASB” has the meaning ascribed thereto under “Accounting Principles”.

“IFRS” has the meaning ascribed thereto under “Accounting Principles”.

“IGO” means Independence Group NL.

“Initial Payment” has the meaning ascribed thereto under “Business of the Corporation – Three Year History and Acquisition of Plutonic Gold Operations”.

“IPO” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“Jackson” means Jackson Minerals Pty Ltd.

“Joint Tenements” has the meaning ascribed thereto under “The Plutonic Gold Operations – Mineral Tenure – Bryah Basin”.

“JORC” has the meaning ascribed thereto under “Scientific and Technical Information – CIM Definition Standards”.

“Listing Date” means the date the Common Shares are listed for trading on the Exchange.

“Main Pit” has the meaning ascribed thereto under “Summary – Plutonic Gold Mine”.

“MD&A” means Management’s Discussion and Analysis.

“Milestone Payments” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Mine Closure Plan” has the meaning ascribed thereto under “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations – Environmental Liabilities”.

“Mining Act” means Mining Act 1978 (WA).

“Minlabs” has the meaning ascribed thereto under “The Plutonic Gold Operations – Sampling, Analysis and Security – Plutonic Gold Mine”.

“MRF” means the Mining Rehabilitation Fund.

“Named Executive Officers”or“NEOs” has the meaning ascribed thereto under “Executive Compensation”.

“NCI” means the non-certificated inventory system of CDS.

“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

“NI 52-110” means National Instrument 52-110 – Audit Committees.

“Northern Star Royalty” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Northern Star Royalty Deed” has the meaning ascribed thereto under “Summary – The Offering – The Acquisition”.

“Northern Star” has the meaning ascribed thereto under “Summary – Business of the Corporation”.

“Non-Resident Holder” has the meaning ascribed thereto under “Certain Canadian Income Tax Considerations – Taxation of Non-Resident Holders”.

3 “NP 46-201” means National Policy 46-201 – Escrow for Initial Public Offerings.

“NTA” has the meaning ascribed thereto under “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations – Native Title”.

“Offering” means the issuance and sale of up to 28,450,000 Treasury Shares at the Offering Price.

“Offering Broker Shares” has the meaning ascribed thereto under “Summary – The Offering – Agents’ Fee”.

“Offering Broker Warrants” has the meaning ascribed thereto under “Summary – The Offering – Agents’ Fee”.

“Offering Price” means a price of $1.00 per Treasury Share.

“Office of State Revenue” means the Office of State Revenue of Western Australia.

“Omnibus Equity Plan” has the meaning ascribed thereto under “Executive Compensation – Incentive Plan Awards”.

“Order” has the meaning ascribed thereto under “Directors and Executive Officers – Cease Trade Orders, Bankruptcies, Penalties or Sanctions and Conflicts Of Interest – Cease Trade Orders”.

“Over-Allotment Option” has the meaning ascribed thereto under “Plan of Distribution”.

“PepinNini” has the meaning ascribed thereto under “The Plutonic Gold Operations – Mineral Tenure – Bryah Basin”.

“Performance Shares” means performance shares issued under the Omnibus Equity Plan.

“Permits” means permits, certificates, licences, approvals, consents, registrations and other authorizations from various governmental authorities.

“person” includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative.

“Perth Mint” means the Western Australian Mint in Perth.

“Plutonic brown-lode” has the meaning ascribed thereto under “The Plutonic Gold Operations – Property Geology – Plutonic Gold Mine”.

“Plutonic Gold Mine” has the meaning ascribed thereto under “Summary – Business of the Corporation”.

“Plutonic Gold Operations” has the meaning ascribed thereto under “Summary – Business of the Corporation”.

“Policy 5.4” has the meaning ascribed thereto under “Escrowed Securities and Securities Subject to Contractual Restriction on Transfer – Escrow Securities – Principals”.

“PP1” has the meaning ascribed thereto under “The Plutonic Gold Operations – Processing and Recovery”.

“PP2” has the meaning ascribed thereto under “The Plutonic Gold Operations – Processing and Recovery”.

“Principals” has the meaning ascribed thereto under “Escrowed Securities and Securities Subject to Contractual Restrictions on Transfer – Escrow Securities – Principals”.

“Private Placement” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“Private Placement Agency Agreement” means the agency agreement dated September 29, 2016 between the Corporation and the Private Placement Agent.

“Private Placement Agent” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

4 “Promoter” means Christopher Bradbrook.

“Proposed Amendments” has the meaning ascribed thereto under “Certain Canadian Income Tax Considerations – General”.

“PSUs” means performance share units issued under the Omnibus Equity Plan.

“Qualifying Shares” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“RAB” means rotary air blast.

“RC” means reverse circulation.

“Registered Plan” has the meaning ascribed thereto under “Eligibility for Investment”.

“Reserve Mine Plan”or“RLOM” means the mine plan developed under and subject to the assumptions of the economic analysis as set out in section 22 of the Technical Report.

“Resident Holder” has the meaning ascribed thereto under “Certain Canadian Income Tax Considerations – Taxation of Resident Holders”.

“Restricted Shares” means restricted shares issued under the Omnibus Equity Plan.

“RSUs” means restricted share units issued under the Omnibus Equity Plan.

“RRIF” has the meaning ascribed thereto under “Eligibility for Investment”.

“RRSP” has the meaning ascribed thereto under “Eligibility for Investment”.

“SAG” means semi-autogenous grinding.

“SEDAR” means the System for Electronic Document Analysis and Retrieval, accessible at www.sedar.com.

“Seed Shares” has the meaning ascribed thereto under “Escrowed Securities and Securities Subject to Contractual Restrictions on Transfer”.

“Seed Shareholders” has the meaning ascribed thereto under “Business of the Corporation – Three Year History and Acquisition of Plutonic Gold Operations”.

“Special Warrant Indenture” means the special warrant indenture dated September 29, 2016 between the Corporation and TSX Trust Company, as special warrant agent.

“Special Warrants” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“Stock Options” has the meaning ascribed thereto under “Executive Compensation – Incentive Plan Awards”.

“Subscription Receipt Agreement” means the subscription receipt agreement dated September 29, 2016 by and among the Corporation, the Private Placement Agent and TSX Trust Company, as subscription receipt agent.

“Subscription Receipts” has the meaning ascribed thereto under “Summary – The Offering – The Private Placement”.

“Supplemental Indenture” means the first supplemental indenture to the Special Warrant Indenture dated January 30, 2017 between the Corporation and TSX Trust Company, as special warrant agent.

“Tax Act” means the Income Tax Act (Canada).

5 “taxable capital gain” has the meaning ascribed thereto under “Certain Canadian Federal Income Tax Considerations – Taxation of Resident Holders”.

“Technical Report” has the meaning ascribed thereto under “The Plutonic Gold Operations – Current Technical Report”.

“TFSA” has the meaning ascribed thereto under “Eligibility for Investment”.

“Three Rivers” has the meaning ascribed thereto under “The Plutonic Gold Operations – Mineral Tenure – Bryah Basin”.

“Treasury Shares” means the up to 28,450,000 Common Shares to be issued and sold pursuant to the Offering at the Offering Price.

“U.S.”or“United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

“Western Australian State Government Royalty” has the meaning ascribed thereto under “The Plutonic Gold Operations – Royalties – Plutonic Gold Mine”.

“WGC” means the World Gold Council.

“Zenith” means Zenith Pacific (NSR) Pty Ltd.

6 LIST OF ABBREVIATIONS

°C degree Celsius ktpa kilotonne per annum AISC all-in sustaining cost m metre Au gold M mega (million) bcm bank cubic metre m3 cubic metre cm centimetre mm millimetre g gram Moz millions of troy ounces g/t gram per metric tonne MW megawatt ha hectare oz troy ounce (31.1035g) km kilometre ppm parts per million km2 square kilometre RL relative elevation koz thousands of troy ounces t metric tonne kg kilogram t/m3 metric tonne per cubic metre kt kilotonne

7 CORPORATE STRUCTURE

Name, address and incorporation The Corporation was incorporated on July 4, 2016, under the Business Corporations Act (Ontario), under the name 2525908 Ontario Inc. and subsequently changed its name to Superior Gold Inc. on December 14, 2016. The Corporation’s head and registered office is located at 70 University Avenue, 14th Floor, Toronto, Ontario M5J 2M4.

Intercorporate relationships The Corporation has one wholly-owned subsidiary, Billabong, an Australian corporation which acquired the Plutonic Gold Operations from Northern Star on October 12, 2016. The following is a chart which reflects the organizational structure of the Corporation and its subsidiary.

Superior Gold Canada Inc. (ON)

100%

Billabong Gold Australia Pty Ltd (Aus)

100%

The Plutonic Gold Operations

The words “Superior” and “the Corporation” are used interchangeably throughout this document and in each case refer, as the context may require, to all or any of Superior Gold Inc. and Billabong Gold Pty Ltd.

BUSINESS OF THE CORPORATION

Overview The Corporation is a Canadian-based gold mining and exploration and development company with its principal asset being the Plutonic Gold Operations located in Australia, which includes the Plutonic Gold Mine, which is a producing underground operation with a central mill, Hermes, an open pit development project, and an interest in the Bryah Basin joint venture with ALY. The Corporation’s principal business objectives are the acquisition, exploration, development and operation of gold resource properties.

The Corporation purchased the Plutonic Gold Operations from Northern Star. Northern Star originally acquired the Plutonic Gold Mine from Barrick Gold Corporation in February 2014 and subsequently acquired Hermes and the interest in the Bryah Basin from ALY in February 2015. The transition to Northern Star ownership facilitated a reduction in corporate overheads, improved geological controls, as well as right sizing the operational workforce to better reflect prevailing production levels. Non-essential services were removed and a strong focus on unit operating costs led to a reduction in prevailing operating costs compared to previous years.

8 For the three month period ending September 30, 2016, the Plutonic Gold Operations produced 18,662 oz of gold and sold 18,614 oz of gold. Total cash costs for the period were A$1,331 per oz of gold sold versus an average price received of A$1,724 per oz of gold. For the three month period ending September 30, 2016, the Plutonic Gold Operations generated operating cash flow of A$3.75 million. For October and November 2016, the Plutonic Gold Operations produced 13,652 oz of gold and sold 12,468 oz of gold at a cash cost of approximately A$1,145 per oz of gold sold versus an average price received of A$1,650 per oz of gold, generating net cash of approximately A$4 million for the period.

The Plutonic Gold Operations currently have Mineral Reserves of 189,000 oz of gold at an average grade of 2.4 g/t, Measured and Indicated Mineral Resources of 890,000 oz of gold at an average grade of 3.7 g/t and Inferred Mineral Resources of 800,000 oz of gold at an average grade of 4.2 g/t. See “The Plutonic Gold Operations – Mineral Resource and Mineral Reserve Estimates” for further information.

The Plutonic Gold Mine is a mechanized access, underground mine that has been in continuous operation since 1995 and has produced in excess of 5 million oz from continued operations from both open pit and underground operations. It is capable of producing at a rate of up to 1,400 ktpa but in recent years has stabilized at approximately 800 ktpa. The Plutonic Gold Mine has produced 64,857 oz of gold for the year ended June 30, 2016 and, based on production between January 2016 and September 2016, it produces at an annualized rate of approximately 65,000 to 70,000 oz of gold (inclusive of stockpiles). See “Management’s Discussion and Analysis of the Corporation” for further information.

Hermes is a greenfields open pit development project, located approximately 60 km south-west of the Plutonic Gold Mine. The pre-stripping operations at Hermes are scheduled to commence in mid-2017. The Hermes deposit is expected to be mined as a conventional open pit excavator-truck mining operation with ore being processed at the Plutonic Gold Mine mill. To date, significant progress has been made in advancing mining and environmental approvals.

The tenements encompassing the Bryah Basin joint venture are located approximately 60km south-west of the Plutonic Gold Mine mill and cover an area of approximately 21,660 hectares (217km2). The Corporation’s interest in the joint venture is an earn-in option, which is achieved by spending A$1.2 million (US$888,000) over the course of three years beginning April 2015, of which A$553,551 (US$409,627) was spent by Northern Star as of October 11, 2016, being the date immediately prior to the date of the Acquisition. The earn-in expenditure must be incurred at a rate of not less than A$400,000 (US$296,000) per year and the failure to meet the minimum annual expenditure, or the total earn-in expenditure within the earn-in period, results in termination of the joint venture agreement and all rights are divested by the Corporation. Upon completion of the earn-in, the Corporation will hold up to an 80% interest in the mineral rights in the tenements (or blocks thereof) that are subject to the Bryah Basin joint venture.

Three Year History and the Acquisition of the Plutonic Gold Operations The Corporation was incorporated on July 4, 2016 for the purpose of acquiring the Plutonic Gold Operations from Northern Star. Between the date of incorporation and September 28, 2016, the Corporation issued an aggregate of 11,492,599 Common Shares to certain holders (the “Seed Shareholders”) at subscription prices ranging between $0.01 and $0.33 per Common Share. The proceeds raised from the issuance of shares to the Seed Shareholders were used to fund the preliminary expenses related to the Acquisition. Certain of the Seed Shareholders will be subject to an escrow regime upon completion of the Offering pursuant to the policies of the Exchange. See “Prior Sales” and “Escrowed Securities and Securities Subject to a Contractual Restriction on Transfer.”

9 On August 12, 2016, the Corporation entered into the Acquisition Agreement pertaining to the acquisition of the Plutonic Gold Operations from Northern Star. The Acquisition was completed on October 12, 2016 with the financial benefit of the operations accruing to the Corporation effective from October 1, 2016. The rationale for the Acquisition and related transactions, from Northern Star’s perspective, was to maximize the value of the Plutonic Gold Operations and to receive North American market exposure. As consideration for the Acquisition, the Corporation paid Northern Star A$12.5 million (the “Initial Payment”). Under the terms of the Acquisition Agreement, if within six months from the Acquisition Closing Date the Common Shares are listed on the Exchange, or other stock exchange acceptable to Northern Star, the Corporation shall issue to Northern Star Consideration Shares equal to the greater of (i) the value of A$25 million at a deemed issue price equal to the “go public” issue price, being the Offering Price; and (ii) 33.0% of the total number of Common Shares outstanding immediately following closing of the Offering, on a non-diluted basis (which, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over-Allotment Option after the Closing Date).

On February 9, 2017, the Corporation, Billabong, Northern Star and Northern Star Mining Services Pty Ltd. entered into the Amendment. The Amendment provides that in the event gross proceeds from the Offering are greater than $14.5 million, the Corporation may elect, at its sole option, and in lieu of issuing to Northern Star the number of Consideration Shares that would otherwise be issuable pursuant to the Acquisition Agreement, to issue and pay to Northern Star the following: (A) such number of Consideration Shares equal to no less than 20% of the total number of Common Shares outstanding immediately following closing of the Offering, on a non-diluted basis (which total number, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over-Allotment Option after the Closing Date); and (B) the Consideration Payment. The Corporation will not elect to make a Consideration Payment which prohibits it from allocating the use of proceeds as described herein. Assuming the full amount of the Offering is raised, the Corporation intends to issue to Northern Star 18,859,041 Consideration Shares and pay to Northern Star a Consideration Payment of $10,000,000.

Under the Acquisition Agreement and the Amendment, the Corporation also agreed to issue to Northern Star on or about the closing of the Offering, Consideration Warrants to acquire Consideration Warrant Shares, the number of Consideration Warrants to be issued to be equal to one-half of the number of the Consideration Shares that Northern Star would be eligible to receive if the Consideration Payment were to equal $0. Assuming the gross proceeds from the Offering are greater than or equal to $14.5 million, Northern Star will receive 14,429,521 Consideration Warrants. Each Consideration Warrant will entitle Northern Star to purchase one Consideration Warrant Share at an exercise price in U.S. dollars equal to a 100% premium to the Offering Price, determined using the Bank of Canada exchange noon spot rate for U.S. and Canadian dollars on the day immediately prior to the Listing Date, and will be exercisable for a period of five years following closing of the Offering. If the Corporation does not complete such a listing of its Common Shares within six months from the Acquisition Closing Date, the Corporation is required to pay Northern Star the Cash Payment. As further consideration for the Acquisition, Northern Star also receives, pursuant to the Northern Star Royalty Deed, a 2% net smelter return royalty on future gold recovered from the Plutonic Gold Operations in excess of 300,000 oz. The royalty terminates upon the earlier of (i) the date that A$10 million is paid to Northern Star under the royalty, or (ii) gold in excess of 600,000 oz being produced. Alternatively, the Corporation may buy the royalty from Northern Star for a purchase price of A$6.5 million at any time before the expiry of 30 days after the date the royalty first becomes payable. The Corporation will also pay to Northern Star certain Milestone Payments of A$2.5 million for every 250,000 oz of gold that are NI 43-101 compliant Measured or Indicated Mineral Resources identified at the Plutonic Gold Operations in excess of the 1,717,000 oz of gold that are JORC compliant measured, indicated and inferred mineral resources identified with respect to the Plutonic Gold Operations as at June 30, 2016. The aggregate of the Milestone Payments is capped at A$10 million.

The maximum aggregate amount recoverable by the Corporation from Northern Star in relation to any claim, demand or cause of action arising in relation to any provision of the Acquisition Agreement or any other matter connected with the Plutonic Gold Operations is A$12.5 million.

Northern Star is also eligible to nominate one director to the Corporation’s Board in the event the Consideration Shares are issued. Mr. Shaun Day, the current Chief Financial Officer of Northern Star, will serve on the Board as the Northern Star nominee. See “Directors and Executive Officers.”

On September 29, 2016, by way of a private placement, the Corporation sold and issued 32,600,000 Subscription Receipts. The Subscription Receipts were sold to subscribers at a price of $0.50 per Subscription Receipt for aggregate

10 gross proceeds of $16,300,000 in accordance with the terms of the Private Placement Agency Agreement. On October 11, 2016, each of the Subscription Receipts was automatically exercised into one Special Warrant concurrently with the satisfaction of certain escrow release conditions including the completion of all material conditions precedent to the Acquisition. The proceeds from the Subscription Receipts were used to pay the Initial Payment to Northern Star and for general working capital requirements.

In connection with the Acquisition, the Corporation agreed and/or entered into certain ancillary agreements with Northern Star including: (i) a transition services agreement, (ii) a working capital loan facility in the amount of A$10 million available to the Corporation following closing of the Acquisition until (a) the first day of public trading of the Common Shares, or (b) six months following the Acquisition Closing Date, and (iii) a general security agreement and specific security agreement providing Northern Star with security over all of the Plutonic Gold Operations as well as a security interest in the shares of Billabong to secure the issue of the Consideration Shares, the amount payable under the Cash Payment and any outstanding indebtedness (if any) under the working capital loan facility. The Corporation also agreed to a working capital adjustment, as required under the Acquisition Agreement, to be paid in the amount of A$4.6 million payable over a three month period ending December 31, 2016. The A$4.6 million working capital adjustment has been fully paid to Northern Star as at December 31, 2016.

Upon completion of the Acquisition, the Corporation provided bank guarantees to certain suppliers totalling approximately A$2.2 million. The bank guarantees provided were: (i) A$1.1 million for the benefit of Goldfields Gas Transmission Pty Ltd to secure approximately six months of costs for gas transportation services to supply gas to the Plutonic Gold Operations, (ii) A$1.0 million to Zenith, to secure a portion of the Corporation’s operating and potential buyout obligations under a power contract with Zenith required for the supply of power to the Plutonic Gold Operations, and (iii) A$50,000 to APT, to secure approximately three months of fees under a pipeline operating agreement with APT. The bank guarantees were cash collateralized. A bank guarantee of A$3.25 million is required if the total size of the Offering exceeds $15 million (net of the Agents’ Fee and other expenses). This bank guarantee would replace a guarantee provided by Northern Star to Zenith as security for a portion of the termination and/or buyout provisions under the Corporation’s power contract with Zenith. As the total size of the Offering is expected to exceed $15 million (net of the Agents’ Fee and other expenses), the Corporation will be required to provide the replacement bank guarantee. See “Use of Proceeds.”

Growth Strategy The Corporation’s principal business objectives are, and will continue to be, the acquisition, exploration, development and operation of gold resource properties.

In the near term, the Corporation intends to focus on re-establishing the Plutonic Gold Mine as a stable gold producer capable of producing 100,000 oz of gold annually. To achieve this goal, the Corporation intends to focus on quality high-grade ounces, optimizing recoveries, increasing incremental production from open pit and underground sources and resource expansion at both underground and open pit targets through a property wide exploration program. The Plutonic Gold Mine has a history of Mineral Reserve replacement and the Corporation believes that it can maintain this through targeted drilling programs on areas with good exploration potential.

Exploration will be focused on converting Mineral Resources to Mineral Reserves in areas proximal to the current underground working areas of the Plutonic Gold Mine, targeting projections of mineralized structures in the Caribbean and Baltic Extension areas, testing for a high-grade extension of the Timor historical production area that is believed to be truncated by an easterly trending off-setting fault zone and Bryah Basin infill and extensional drilling to test historically identified trends and other regional work. All continued exploration work will be dependent on results.

In the medium to long term, the Corporation intends to transition from being a single asset junior gold producer to an intermediate gold producer through expansions at the Plutonic Gold Mine, further exploration and development at the Plutonic Gold Operations and if appropriate, the acquisition of precious metal properties in established mining areas including Australia and Canada.

In total the Corporation holds interests in approximately 64,374 hectares (644km2). This comprises 35,700 hectares (357km2) surrounding the Plutonic Gold Mine, 7,000 hectares (70km2) surrounding the Hermes project and 21,660 hectares (217km2) within the Bryah Basin joint venture, offering numerous open pit and underground exploration targets.

11 Superior’s Landholdings — Plutonic Gold Operations

Exploration The Corporation’s management is committed to a significant exploration program that will seek to identify additional Mineral Reserves and Mineral Resources, which can be processed using the existing mill capacity, to extend mine life. In particular, the Corporation is committed to doing the work necessary to convert a portion of the current Measured and Indicated Mineral Resources of 890,000 oz of gold and Inferred Mineral Resources of 800,000 oz of gold into Mineral Reserves with additional drilling, which may result in a mine life that meets or exceeds what is forecasted in the Extended Mine Plan. Accordingly, the determination of the fair value of the Plutonic Gold Operations may be based on a life of mine schedule different than what is forecasted under the Extended Mine Plan.

The objectives of the Plutonic Gold Operations exploration program are to increase the Mineral Resource base and convert Mineral Resources to Mineral Reserves by targeting areas from both underground and from the surface.

An annual exploration expenditure of approximately US$7.4 million is envisaged for 2017. Subject to the exploration results, this amount may be varied as required. A proportion of the exploration budget will be used to increase Inferred Mineral Resources (extensions to known Mineral Resources distal to the current Plutonic Gold Mine area).

The planned initial exploration program budgets are summarised below. Dependent on results these programs may be either expanded or modified.

Bryah Areas Plutonic Gold Mine Hermes Basin Total Caribbean & Generative, Baltic Timor Resource resource Unit cost Extension Extension drilling drilling Targets (US$) (US$) (US$) (US$) (US$) (US$) Drilling (DD) ...... 133.20/m 3,297,000 1,279,000 — — 4,575,000 Drilling (RC) ...... 33.30/m — — 333,000 167,000 500,000 Assays ...... 18.50/sample 46,000 18,000 148,000 130,000 341,000 Tenement rents ...... — 253,000 — 62,000 104,000 419,000 Overheads ...... — 1,003,000 389,000 148,000 85,000 1,625,000 Total ...... — 4,588,000 1,702,000 688,000 488,000 7,400,000

Note: Original budget was in A$ and converted into US$. Numbers may not add due to rounding.

12 Plutonic Gold Mine The Corporation intends to conduct in-mine and near mine exploration activities at the Plutonic Gold Mine in order to potentially increase the life of mine beyond that of the Extended Mine Plan and to expand production. Recent in-fill drilling by Northern Star has returned numerous high grade intersections in a number of in mine target areas. Such results confirm that additional detailed drilling could provide the confidence to convert existing Mineral Resources into Mineral Reserves.

In-Mine Exploration The Plutonic Gold Mine consists of 400 km of underground development, covering an area of 2.4km2. This extensive network of declines and development drives affords the opportunity to test some less well explored areas of the mine. In 2017, the Corporation intends to focus on a number of priority in mine target areas, including: • Indian West: Open for >500m along strike, westward trend of existing mineralized zones • Indian Tier 2: Open down-dip • Caribbean: Continuation of mineralized zones to the east • Baltic Extension: Resource expansion down-plunge from existing resources

Additionally, high grade drilling results in Area 134, Timor and Caspian will be scheduled for follow up: • Area 134: Follow up of 2016 exploration drilling results • Timor: Follow up of 2016 exploration drilling results • Caspian: Follow up of 2016 exploration drilling results

Oblique View from above of Plutonic Gold Mine In-Mine Exploration Targets

Near Mine Exploration In 2017, the Corporation intends to conduct exploration work on a number of near mine target areas, including those listed below, along with a re-evaluation of historic open pits. • Timor Extension: Testing for off-set extensions of the historically significant Timor lodes • Plutonic West: Follow up of significant intersections

13 • Zone 114: Resource expansion • Reservoir: Generation of targets from database • Big Fish: Generation of targets from database

Location Map for Near Mine Underground Exploration Targets

Location Map for Historic Open Pit Exploration Targets

14 Timor Extension The Timor Extension lies within the broader Timor resource area and is truncated by a fault. The broader Timor resource area has historically been characterized by higher metallurgical recoveries and generally higher average grades than elsewhere in the Plutonic Gold Mine. The regional target is an interpreted offset of the zone to the northwest of the fault. The Timor Extension target area is located west-northwest of the Timor underground workings. The objective of the Timor Extension generative exploration project is to test the conceptual model that the Spur-Timor mineralized trend is offset to the northwest across the Zone 114 North Fault.

3D Section of the Timor Resource Area Looking North

Notes: The greyed-out area represents the Zone 114 Fault Zone, located at the northern limit of Timor mineralization. The dark pink surface represents the Granite Overthrust extending southwards from the Zone 114 Fault Zone as modeled from extensive surface drilling targeting Timor. The lighter pink surface represents the Granite Overthrust extending northwards from the Zone 114 Fault Zone as derived from gravity inversion modeling. Offset of the Granite Overthrust across the Zone 114 Fault Zone, and therefore, the potential offset of Timor mineralization, lies between the two end-members: ~250m dextral strike-slip and ~300m dip-slip (north block down).

Plutonic West The Plutonic West target is 1,200 metres south-west of the Main Pit. Historic drilling has intersected the prospective mine mafic unit, which hosts the Plutonic gold system, with a number of significant intersections including:

Est. True From To Interval Thickness Grade Hole ID (m) (m) (m) (m) (g/t Au) PWRC0014 ...... 224 231 7 6.8 56.8 PWRC0035 ...... 230 234 4 3.9 11.1 PWRC0034 ...... 236 239 3 2.8 9.31

Zone 114 Zone 114 lies to the north of the Pacific resource area and has been explored in a limited fashion only to date. The geology of Zone 114 consists of stratigraphy typical of the Plutonic Gold Mine. The initial drill results, which include PEDD0214 for 0.75 m at 6.36 g/t Au and PEDD0113 for 1 m at 1.5 g/t Au; 1 m at 8.22 g/t Au and 1m at 2.0 g/t Au, are supportive of additional exploration initiatives.

15 Reservoir The Corporation intends to use previous drill results to generate prospective exploration targets within Reservoir.

Big Fish The Big Fish target area lies to the east of the Plutonic East pit and north of the Perch Pit in an area with no underground workings and wide spaced deep drilling within favorable rock units.

Big Fish Target Cross-Section Looking North

Open Pits The Plutonic tenement group encompasses nine historic open pits including the Main Pit and Area 4/Plutonic East pit. These pits produced a combined 1,909,170 oz of gold with production from the Main Pit dominating at 1,418,150 oz of gold. With a re-assessment of the existing drilling it may be possible to identify either remnant mineralization that may be of interest at current gold prices or to identify mineralized trends that warrant follow up exploration.

Hermes At the nearby satellite Hermes deposit, there is also an opportunity to increase the Mineral Resource in the vicinity of the proposed pits and along prospective mineralized corridors. As a result of previous exploration work, an analysis of Hermes indicated Mineral Reserves of 101,000 oz of gold at 2.0 g/t Au. In conjunction with development studies and permitting, the requirement for additional drilling was identified for de-risking early stage open pit operations. Exploration at Hermes will comprise additional drilling to explore the strike extensions of the existing Mineral Resources. In addition, exploration is planned to define possible lode repeats within the immediate mine area and exploration opportunities have been identified that may increase the Hermes resource in the vicinity of the proposed pits and along prospective mineralized corridors.

16 Hermes Area Exploration Target Zones

Bryah Basin The Corporation intends to continue drilling in the Bryah Basin to earn-in up to 80% of that property. Exploration at Bryah Basin will be comprised of further infill and extension geochemical drilling as well as initial aircore and RC drilling traverses to test anomalous trends identified historically. An aerial topographic survey over the Wilgeena prospect area is also being planned for early 2017 to establish a current surface topography in preparation for additional resource drilling.

Other Regional Activity The Corporation intends to systematically continue to evaluate mineralization potential of its extensive 64,374 hectares (644km2) landholdings, with the goal of finding additional Mineral Resources. A prospectivity analysis by a third party of the Plutonic Marymia Greenstone Belt, which hosts the Plutonic Gold Mine, revealed that drilling to 2010 predominantly only reached to 50m below the surface and that large areas of the Plutonic Gold Mine tenements have not been systematically drill tested. Drilling to 200m below the surface has only occurred within the specific Mineral Resources developed to date, which suggests the potential for the tenements to yield further discoveries. Target generation based on a complete review of the existing databases is planned by the Corporation.

17 Strengths and Competitive Advantages The Corporation is led by a management team and Board with significant capital markets experience and a track record of creating shareholder value through acquisition, exploration, permitting, and development.

Experienced Management Team Christopher Bradbrook, President and Chief Executive Officer of the Corporation, is a mining professional whose career has spanned more than 35 years, and has generated a unique combination of experience and expertise. His principal roles have encompassed many aspects of the mining industry including financing, strategic planning, exploration, mine development, corporate development work, financial analysis, investor relations and marketing. Among his most significant roles, he was founder of Crocodile Gold Corp. (now Kirkland Lake Gold Ltd.), founder and former President of New Gold Inc., and former Vice President, Corporate Development of Goldcorp Inc. He was also involved in the discovery and development of the Williams Mine in Hemlo, Ontario. He has been personally involved in raising more than $1.1 billion in public and private equity markets. Mr. Bradbrook has both an M.Sc. and B.Sc. in Geology.

Paul Olmsted, Chief Financial Officer and Corporate Secretary, has been an executive in the gold mining industry for the past 15 years and has been active in the mining industry for 30 years. Most recently he served as Senior Vice President of Corporate Development at IAMGOLD Corporation where he was responsible for the company’s acquisition and divestiture program to achieve strategic growth objectives. He led teams responsible for the technical reviews, financial analyses, valuation, structuring and executing on numerous transactions. Mr. Olmsted holds a B.Sc. in Mining Engineering and an MBA.

Mark Wellings, Chairman of the Board, is a mining professional with over 25 years international experience in both the mining industry and mining finance sector. From 1988 to 1994 Mr. Wellings worked in the mining industry both in Canada and Australia with a variety of companies and roles acquiring valuable, relevant experience in exploration, development and production. In 1996, Mr. Wellings joined the investment dealer GMP Securities L.P. where he co-founded the firm’s corporate finance mining practice. During his 18 years at GMP, Mr. Wellings was responsible for, and advised on, some of the Canadian mining industry’s largest transactions, both in equity financing and M&A. Mr. Wellings is a Professional Engineer and holds a Bachelor of Applied Science degree in Geological Engineering from the University of Windsor and an MBA degree.

Experienced Operating Team As part of the transaction to acquire the Plutonic Gold Operations, the Corporation retained certain members of the management team that previously operated the Plutonic Gold Mine, including key mining, processing and operational personnel.

18 Corey Doust, Vice President Operations, Plutonic Gold Mine is an accomplished mining engineer with 20 years’ of experience in management positions of narrow vein gold mines through to large scale open pit iron ore operations in Western Australia. He has a strong background in the management of underground hard rock gold mines including as General Manager of Norseman, Wiluna and most recently with Northern Star at their Paulsens Gold Mine. Mr. Doust has a Bachelor of Engineering (Mining) from the Western Australian School of Mines and holds a Western Australia First Class Mine Manager’s Certificate.

Simon Lawson (Geology Manager) is a professional geologist with extensive experience in underground mining, specialising in narrow vein gold, complex structural interpretation and Mineral Resource/Mineral Reserve conversion. Mr. Lawson most recently held senior positions with Northern Star and Silver Lake Resources where he led teams in discovering and defining more than 2 Moz of gold.

Environmental, Permitting and Social Considerations Other than as disclosed elsewhere in this prospectus, the Corporation believes that it holds all necessary Permits under applicable laws and regulation in respect of the Plutonic Gold Mine, but the Corporation expects that additional Permits will be required for its Hermes open pit and for it to carry out its business in the ordinary course. See “The Plutonic Gold Operations – Mineral Tenure” and “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations” for further information.

Employees A workforce comprised of 176 full-time employees and 73 contractors is currently employed at the Plutonic Gold Operations. The workforce operates on a fly-in, fly-out roster out of Perth, with accommodation at a mine site camp. The number of employees and contractors of the Corporation is expected to increase in 2017 and reach approximately 350 employees (combined full-time and contractor) upon commencement of production at Hermes. The Corporation is committed to, where possible, providing employment opportunities to members of local communities.

As part of the Acquisition, the Corporation assumed a liability in the amount of A$6 million for the Plutonic Gold Operations employee’s statutory entitlements and all entitlements required to be reflected are reflected in the consolidated financial statements of the Corporation. These entitlements include entitlements to employees for annual leave (also known as holiday pay) and long service leave that have accrued at the time of the Acquisition Closing Date.

Markets The Plutonic Gold Operations produce a gold doré, containing varying gold and other metal contents, depending upon the relative grades of the mineralisation processed. Doré is transported from site to the Perth Mint. At the Perth Mint, the doré bars are weighed and melted and a sample is taken to determine the exact amount of gold and other metals present. The Corporation then receives a statement indicating the weight of the doré bar. The Corporation may then sell this pure gold and silver to the Perth Mint for cash and the doré bar becomes the property of the Perth Mint.

19 THE PLUTONIC GOLD OPERATIONS

Current Technical Report Unless otherwise stated, the information that follows in this section relating to the Plutonic Gold Operations is derived from, and in some instances is an extract from, the technical report entitled “Technical Report (Amended), Plutonic Gold Mine Mineral Resources and Mineral Reserves” dated February 13, 2017 (the “Technical Report”) and having an effective date of September 30, 2016 by AMC in respect of the Plutonic Gold Operation. The Technical Report was prepared for the Corporation by Mr. R D Carlson, Mr. D Kahler and Mr. G Williamson, each of whom reviewed and approved the scientific and technical information contained in this prospectus and is a “qualified person” and “independent” within the meanings of NI 43-101.

The following information is based on the assumptions, qualifications and procedures which are set out in the Technical Report and are not fully described herein. The following information does not purport to be a complete summary of the Technical Report. Reference should be made to the full text of the Technical Report which has been filed with certain Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review under the Corporation’s profile on SEDAR at www.sedar.com.

Project Description, Location and Access The Plutonic Gold Operations are located at latitude 26°15’S longitude 119°36’E in the Peak Hill Mineral Field of the eastern Gascoyne Region of central Western Australia. The Plutonic Gold Mine lies 175 km northeast of the township of Meekatharra and 800km northeast of Perth.

The Plutonic Gold Operations are isolated from major towns and cities and operates on a self-sufficient basis with material and goods shipped in via the Great Northern Highway. Mine personnel work on a fly-in/fly-out basis out of Perth, with accommodation at a mine site camp that can host approximately 450 people at any time. An airstrip is adjacent to the Plutonic Gold Mine and is a 2,000 m long runway. From Perth, the flight time is approximately 1 1⁄2 to two hours.

20 Location of the Plutonic Gold Operations within Australia

The Plutonic Gold Mine began production in 1990 and has produced in excess of 5 Moz of gold from continued operations from both open pit and underground operations.

Open Pit / Surface Production Underground Production Cumulative Production 350 7.0 Cumulative Production (Mozs) 300 6.0

250 5.0

200 4.0

150 3.0

100 2.0

Annual Production (kozs) 50 1.0

0 0.0 2015 2014 2016 1990 1991 1993 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007 2008 2009 2010 2011 2013 1992 1994 1995 2006 2012

It is one of the largest gold mines in Western Australia in terms of cumulative production but is still relatively young compared to some of the other mines and districts in the State of Western Australia that have been in production, or have produced, for over 30 years.

21 Major Gold Mines in Western Australia

Estimated Production Total Commenced Period Production Mine Production (years) (oz of gold) Kalgoorlie Golden Mile ...... 1893 123 53,000,000 Norseman (to 2013) ...... 1935 78 6,000,000 Telfer ...... 1977 39 6,000,000 Jundee ...... 1995 21 6,000,000 Boddington ...... 1987 29 5,700,000 Plutonic ...... 1990 26 5,500,000 St Ives ...... 2000 16 5,500,000 Kanowna Belle ...... 1993 23 5,300,000 Sunrise Dam ...... 1998 18 5,000,000 Granny Smith ...... 1996 20 4,500,000 Paddington ...... 1985 31 3,500,000 Agnew ...... 1980 36 2,500,000 Darlot ...... 1998 18 2,000,000 Kundana ...... 1985 31 1,750,000 Gwalia ...... 1997 19 1,200,000 Higginsville ...... 1997 19 750,000 Red October ...... 1999 17 750,000 Paulsens ...... 2004 12 700,000

Historical mining operations at the Plutonic Gold Mine have been comprised of an open pit operation, including mining at the Main Pit, and an underground mining operation. The underground mining operation is now the only active operation, aside from stockpile rehandling, and based on production between January 2016 and September 2016, the Plutonic Gold Mine produces at an annualized rate of approximately 65,000 to 70,000 oz of gold (inclusive of stockpiles). Access to the Plutonic Gold Mine is via five declines, four of which are located in the Main Pit and the fifth is located about 5km east of the Main Pit at Plutonic East. The current mining depth of the Plutonic Gold Mine is between 150 m – 650 m. The Plutonic Gold Mine has eight active mining zones as shown in the figure below. Seven of these mining zones are well-established having been active for a number of years. The eighth zone, Baltic Extension, is a new mining zone. Mineralization occurs in a shallowly plunging mafic unit and occurs in a number of zones as illustrated below.

22 Hermes is a greenfields open pit mining project, located approximately 60km south-west of the Plutonic Gold Mine. The resource at Hermes is comprised of five main groups of defined mineralized zones, being Trapper, Hawkeye, Klinger, Winchester and Blake. The tenements encompassing the Bryah Basin joint venture are located approximately 60km south-west of the Plutonic Gold Mine mill.

Mineral Tenure The Plutonic Gold Operations encompasses 72 tenements divided into three groups namely the Plutonic Gold Mine, Hermes and the tenements comprising the Bryah Basin joint venture. The Plutonic Gold Operations area extends over 60 km, with two centers, one around the Plutonic Gold Mine in the northeast and one at the Hermes project in the southwest. The Plutonic Gold Mine area is located on parts of the Marymia, Three Rivers, Bryah and Mt Padbury pastoral leases and the Doolgunna-Mooloogool conservation block. The Plutonic Gold Mine tenement group includes 36 granted exploration, mining or miscellaneous tenements covering approximately 35,700 hectares (357km2). The Hermes project comprises ten granted tenements with a total area of approximately 7,000 hectares (70km2). The Bryah Basin tenement group comprises 26 granted exploration, mining or miscellaneous tenements of approximately 37,000 hectares (370km2), however of the total Bryah Basin tenements, the Corporation has an earn-in option covering 21,660 hectares (217km2) under its joint venture with ALY. The total exploration and mining tenure held by the Corporation or as part of a joint venture earn in is approximately 64,374 hectares (644km2).

The following figure illustrates the pastoral and tenement boundaries of the Plutonic Gold Mine, Hermes and Bryah Basin.

23 Plutonic Gold Mine The Plutonic Gold Mine group of tenements are listed in the chart below.

Area Expiry Commitment Lease Beneficial Owner(1) (ha) Grant date date (US$) E52/3189 ...... Billabong 18,377 (66 Blocks) 07/04/16 06/04/21 48,840 L52/40 ...... Billabong 58.17 27/09/89 26/09/19 Nil L52/41 ...... Billabong 1194 27/09/89 26/09/19 Nil L52/48 ...... Billabong 472 10/09/91 09/09/21 Nil L52/52 ...... Billabong 210 16/01/92 15/01/22(2) Nil L52/54 ...... Billabong 110 13/05/92 12/05/17 Nil L52/55 ...... Billabong 234.5 15/04/92 14/04/17 Nil L52/56 ...... Billabong 31.54 13/05/92 12/05/17 Nil L52/70 ...... Billabong 292 31/01/97 30/01/22(2) Nil L52/71 ...... Billabong 191 23/06/97 22/06/17 Nil L52/74 ...... Billabong 20.6 16/09/99 15/09/19 Nil M52/148 ...... Billabong 448.05 14/03/89 13/03/31 33,226 M52/149 ...... Billabong 449.9 14/03/89 13/03/31 33,300 M52/150 ...... Billabong 567.3 14/03/89 13/03/31 42,032 M52/170 ...... Billabong 540.6 9/10/89 08/10/31 40,034 M52/171 ...... Billabong 777.4 9/10/89 08/10/31 57,572 M52/222 ...... Billabong 621.9 4/02/91 03/02/33 46,028 M52/223 ...... Billabong 840.45 4/02/91 03/02/33 62,234 M52/253 ...... Billabong 840.7 11/09/91(2) 10/09/33 62,234 M52/263 ...... Billabong 360.2 4/11/91 03/11/33 26,714 M52/264 ...... Billabong 816.3 4/11/91 03/11/33 60,458 M52/289 ...... Billabong 919.45 20/03/92 19/03/34 68,894 M52/295 ...... Billabong 647.8 17/03/92 16/03/34 47,952 M52/296 ...... Billabong 732.6 17/03/92 16/03/34 54,242 M52/300 ...... Billabong 928.15 17/03/92 16/03/34(2) 68,746 M52/301 ...... Billabong 991 17/03/92 16/03/34(2) 73,334 M52/308 ...... Billabong 725.05 3/09/92 02/09/34 53,724 M52/309 ...... Billabong 701.95 3/09/92 02/09/34 51,948 M52/395 ...... Billabong 840.1 10/08/93 09/08/35 62,160 M52/590 ...... Billabong 626.55 27/09/96 26/09/17 46,324 M52/591 ...... Billabong 950.1 27/09/96 26/09/17 70,374 M52/592 ...... Billabong 836.45 27/09/96 26/09/17 61,938 M52/670 ...... Billabong 309.20 03/07/98 02/07/19 22,940 M52/671 ...... Billabong 621.60 03/07/98 02/07/19 46,028 M52/672 ...... Billabong 934.80 03/07/98 02/07/19 69,190 P52/1394 ...... Billabong 104 2/03/12 01/03/20 3,078

(1) Billabong holds beneficial title (with Northern Star holding legal title) in these tenements until regulatory consent to the proposed transfer has been obtained. Following receipt of regulatory consent, Billabong will be the full legal title holder. See “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations” for further details. (2) Certain expiry dates have been updated for renewals which occurred subsequent to the date of the Technical Report.

24 Hermes The Hermes group of tenements located within the mineralized zones are listed in the chart below.

Area Commitment Lease Beneficial Owner(1) (ha) Grant date Expiry date (US$) E52/2361 ...... Billabong 4204 (19 Blocks) 17/04/09 16/04/19 51,800 E52/3322 ...... Billabong 6185 (20 Blocks) Application — — G52/291 ...... Billabong 85.8 16/09/16 15/09/37 Nil L52/116 ...... Billabong 253 09/07/10 08/07/31 Nil L52/117 ...... Billabong 53 09/07/10 08/07/31 Nil L52/118 ...... Billabong 159 09/07/10 08/07/31 Nil L52/164 ...... Billabong 1336 18/07/16 17/07/37 Nil L52/165(2) ...... Billabong 387.9 Application — — L52/166(2) ...... Billabong 167.8 Application — — M52/685 ...... Billabong 988.7 12/01/09 11/01/30 73,186 M52/753 ...... Billabong 73.1 13/01/09 12/01/30 7,400 M52/796 ...... Billabong 779 13/01/09 12/01/30 57,646 M52/797 ...... Billabong 999 13/01/09 12/01/30 73,926

(1) Billabong holds beneficial title (with Northern Star holding legal title) in these tenements until regulatory consent to the proposed transfer has been obtained. Following receipt of regulatory consent, Billabong will be the full legal title holder. See “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations” for further details. (2) Tenements L52/165 and L52/166 are subject to a regulatory process under the NTA. See “The Plutonic Gold Operations – Environmental, Permitting and Social Considerations – Native Title” for further details.

Bryah Basin The Bryah Basin joint venture is between the Corporation and Alchemy Resources (Three Rivers) Pty Ltd. (“Three Rivers”), a wholly owned subsidiary of ALY.

The Corporation’s interest in the joint venture is an earn-in option, which is achieved by spending a total of A$1.2 million (US$888,000) on exploration during the three-year earn-in period beginning April 2015. The earn-in expenditure must be incurred at a rate of not less than A$400,000 (US$296,000) per year. As of October 11, 2016, the date immediately prior to the date of the Acquisition, A$553,551 (US$409,627) was spent by Northern Star towards the total required earn-in expenditure. Failure to meet the minimum annual expenditure, or the total earn-in expenditure within the earn-in period results in termination of the joint venture agreement and all rights would be divested by the Corporation.

The Bryah Basin earn-in is composed of two parts: • The right by the Corporation to earn an 80% interest in all minerals in those tenements 100% held by Three Rivers, with the exception of any tenement that is part of a prior and separate earn-in agreement between Three Rivers and IGO; and • The right by the Corporation to earn a 70% interest in all minerals in those tenements that Three Rivers and Jackson hold jointly (in such jointly held tenements, Three Rivers holds an 80% interest and Jackson holds a 20% interest).

Tenements are comprised of several blocks. The Bryah Basin joint venture allows the Corporation to earn blocks of certain tenements held by Three Rivers in which other blocks are subject to the prior and separate earn-in agreement between Three Rivers and IGO (the “Joint Tenements”). The Corporation’s joint venture agreement with Three Rivers and IGO’s earn-in agreement with Three Rivers are applicable to separate blocks within the same tenements so that the Corporation and IGO interests will not overlap. However, rents and rates are determined on a tenement by tenement basis. In this regard, IGO manages and pays rents and rates for tenements that are Joint Tenements with the Corporation where the area managed by IGO is greater than the Corporation’s area. IGO then invoices the Corporation for the Corporation’s portion of rents and rates. Similarly, the Corporation manages and pays rents and rates for tenements that are Joint Tenements with IGO where the area managed by the Corporation is greater than IGO’s area and then invoices IGO for its portion of rents and rates.

25 The respective earn-in interests are illustrated in greater detail in the chart below.

26 The Bryah Basin group of tenements are listed in the chart below.

Area Grant Commitment Lease Beneficial Owner(1) (ha) date Expiry date (US$) E52/1668 ...... ALY80%JAK20% 12669 (41 Blocks) 23/02/04 22/02/17 91,020 E52/1678 ...... ALY80%JAK20% 3709 (12 Blocks) 23/02/04 22/02/17 51,800 E52/1723 ...... ALY100%(2) 5599 (20 Blocks) 01/12/04 30/11/16 51,800 Renewal lodged 25/11/16 E52/1730 ...... ALY80%JAK20% 2986 (13 Blocks) 01/12/04 30/11/16 51,800 Renewal lodged 25/11/16 E52/1731 ...... ALY100% 649.7 (5 Blocks) 30/01/09 29/01/18 37,000 E52/1852 ...... ALY100% 1020 (4 Blocks) 14/06/05 13/06/17 37,000 E52/2362 ...... ALY100% 3919 (13 Blocks) 17/04/09 16/04/19 51,800 E52/3405 ...... ALY100% 378 (4 Blocks) 22/04/16 21/04/21 11,100 E52/3406 ...... ALY100% 854 (3 Blocks) 22/04/16 21/04/21 11,100 E52/3408 ...... ALY100% 807 (3 Blocks) 22/04/16 21/04/21 11,100 M52/1049 ...... ALY100% 997 23/09/10 22/09/31 73,852 M52/722 ...... ALY100% 927 16/01/09 15/01/30 68,598 M52/723 ...... ALY100% 618 16/01/09 15/01/30 45,732 M52/737 ...... ALY100% 383 16/01/09 15/01/30 28,342 M52/795 ...... ALY100% 927 13/01/09 12/01/30 68,598 P52/1195 ...... ALY80%JAK20% 140 08/01/09 07/01/17 4,144 P52/1196 ...... ALY80%JAK20% 82 08/01/09 07/01/17 2,427 P52/1314 ...... ALY100% 95.19 13/08/09 12/08/17 2,841 P52/1315 ...... ALY100% 24.32 13/08/09 12/08/17 1,480 P52/1316 ...... ALY100% 73.31 13/08/09 12/08/17 2,190 P52/1321 ...... ALY100% 22.68 13/08/09 12/08/17 1,480 P52/1322 ...... ALY100% 24.49 13/08/09 12/08/17 1,480 P52/1327 ...... ALY100% 24 12/08/09 11/08/17 1,480 P52/1365 ...... ALY100% 25.64 03/06/10 02/06/18 1,480 P52/1429 ...... ALY100% 50.05 26/07/12 25/07/20 1,509

(1) ALY’s ownership of the Bryah Basin group of tenements is through Three Rivers, a wholly owned subsidiary of ALY. (2) Under a Deed Relating to Transfer of an Interest in Exploration Licence 52/1723-I among Three Rivers, PepinNini Robinson Range Pty Ltd (“PepinNini”) and Northern Star, among others, dated March 29, 2016, PepinNini agreed to transfer their 50% registered legal interest in this tenement to Three Rivers and to relinquish the mineral rights held therein. The transfer of the 50% interest remains subject to a stamp duty assessment. Following the determination and satisfaction of such assessment, Three Rivers will hold a 100% interest in the tenement. Accordingly, through its earn-in, the Corporation will have the right to earn an 80% interest in all minerals in this tenement.

Royalties Plutonic Gold Mine Royalties applicable to the Plutonic Gold Mine include: (i) 2.5% of the royalty value of the gold metal produced to the Western Australian State Government on all production above 2,500 oz of gold in each financial year (the “Western Australian State Government Royalty”). The royalty value of gold metal produced is calculated for each month in the relevant quarter by multiplying the total gold metal produced during that month by the average of the gold spot prices for that month; (ii) a royalty applicable to the Plutonic Gold Mine tenements M52/295, M52/296, M52/300 and M52/301 (the “Freshwater Royalty”); and (iii) the Northern Star Royalty.

27 The Freshwater Royalty is a sliding scale royalty based on ore feed type and head grade of the mill feed. An example for underground ore is included in the below table. No listed Mineral Resources held by the Corporation are impacted by this royalty.

Head grade range of mill feed Royalty payable (Au g/t) A$/t (US$/t) <1.5 Nil 1.5–2.99 0.50 (0.37) 3.0–3.99 0.80 (0.59) 4.0–4.99 1.00 (0.74) 5.0–5.99 1.20 (0.89) 6.0–6.99 2.15 (1.59) 7.0–7.99 4.50 (3.33) 8.0–8.99 5.50 (4.07)

Hermes Royalties applicable to Hermes include: (i) the Western Australian State Government Royalty; (ii) a 1% royalty on net smelter return payable to Three Rivers applicable to tenements E52/2361, M52/685, M52/753, M52/796, M52/797, L52/116, L52/117 and L52/118, where gold production is between 70,000 and 90,000 oz of gold only; (iii) a 0.25%-0.5% royalty payable to a third party and applicable to gold produced from certain Hermes tenements for the duration of any productive mining (being the period during which the Corporation is required to pay the Western Australian State Government royalty); and (iv) the Northern Star Royalty. The aforementioned royalties impact all current Mineral Resources and Mineral Reserves at Hermes.

Accessibility Vehicular access to the Plutonic Gold Operations is through a 12 km unsealed road leading off the Great Northern Highway. The Great Northern Highway connects Perth and Wyndham, the northernmost port in Western Australia. An airstrip adjacent to the Plutonic Gold Mine is used for charter aircraft to move crews between the Plutonic Gold Operations and Perth.

Access to the Hermes site is through the well maintained unsealed Ashburton Downs road which connects with the Great Northern Highway approximately 70 km north of Meekatharra, and then through the Peak Hill Road, with access beyond the old Peak Hill town site off the Peak Hill-Doolgunna Road and unserviced station tracks. The construction of a direct private haul road of approximately 65 km in length from Hermes to the Plutonic Gold Mine is planned as part of the proposed Hermes mining development.

Climate The region surrounding the Plutonic Gold Operations experiences an arid climate with long-term average rainfall of 234 mm per annum. Biannual rainfall events are the result of summer cyclone activity and northward moving depressions bringing rain in winter. Summer rains are commonly of higher intensity and shorter duration, whilst winter falls tend to be more frequent, but of lower intensity. Maximum temperatures frequently exceed 40°C between December and March and drop to an average low of 6°C during July. The average January temperature range is 24°C to 39°C, while the average July temperature range is 15°C to 21°C.

Averages for evaporation at the Meekatharra Weather Station, rainfall at the Plutonic Gold Operations administration office, and temperature at Three Rivers Weather Station are presented in the table below.

Rainfall, Evaporation and Temperature Averages – Plutonic Gold Operations

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Rainfall (mm) ...... 27.4 34.7 27.5 21.3 24.5 32.6 22 11.8 4.7 6.1 11.4 12 Evaporation (mm) ..... 479.9 365.9 350 243.2 168.3 120.6 128 172.7 238.5 328.7 405.6 455.5 Temperature (°C) ..... 39.6 37.5 35.5 30.3 25.0 21.3 22.9 27.8 31.9 35.1 37.7 39.6

28 Local Resources and Infrastructure Local resources The Plutonic Gold Operations are isolated from major towns and cities and operate on a self-sufficient basis with material and goods shipped in via the Great Northern Highway. Mine personnel work on a fly-in/fly-out basis out of Perth. A number of aboriginal settlements are also found nearby.

Infrastructure The Plutonic Gold Mine is a well-established mine which has services and infrastructure consistent with an isolated area operating mine. The Plutonic Gold Mine can be accessed by aircraft or by road. The airstrip is adjacent to the Plutonic Gold Mine and there is an aircraft fuel tank and fueling facility at the airstrip. Freight is brought to the site by transport trucks using the Great Northern Highway. Electricity is generated on-site by means of a gas-powered generating station which supplies all power requirements within the vicinity of the Plutonic Gold Mine and the mill. Gas is supplied by a pipeline spur from the Goldfields Gas Pipeline. A backup diesel power station is also maintained. Water requirements for dust suppression and road maintenance during mining activities are supplied from water sources in the existing Salmon pit or the Main Pit. Potable water requirements are provided on-site using a reverse osmosis system installed at the mill. The Plutonic Gold Mine site has a communication network of telephones and licensed ultra high frequency radio repeaters within the main mining area and village facilities. Outside of these areas, communication is by means of radio or satellite phone only.

The mill, mine camp, power plant, and office infrastructure are located in the vicinity of the Main Pit, approximately 12 km from the Great Northern Highway. The facilities are spread over an area of several kilometers and are connected by gravel roads.

Physiography and Regional Geology The Plutonic Gold Mine is located within the Archaean Plutonic Marymia Greenstone Belt, an elongated northeast trending belt within the Marymia Inlier. The Marymia Inlier is an Archaean basement remnant within the Proterozoic Capricorn Orogen comprising two mineralized greenstone belts (Plutonic Well and Baumgarten), with surrounding granite and gneissic complexes. Hermes to the southwest lies within the Marymia Inlier which consists mainly of granite and gneiss with enclaves of meta-greenstone (including mafic and ultramafic igneous rocks, banded iron formation and sedimentary rock precursors) metamorphosed at upper amphibolite to granulite facies.

29 Local Geology The local geology of the Plutonic Gold Operations is illustrated below.

Plutonic Gold Mine The Plutonic Marymia Greenstone Belt is approximately 60 km long and 10 km wide, trending northeast- southwest, located in the central portion of the Marymia Inlier. The Plutonic Marymia Greenstone Belt is sub-divided into two volcano-sedimentary sequences, consisting of mafic and ultramafic units which are overlain by predominately felsic volcaniclastic and sedimentary rocks. These units have been subjected to greenschist and amphibolite facies metamorphism, deformed by polyphase folding, shearing, faulting and intruded by felsic porphyry and granitoid bodies. This has resulted in a strong northeast trending fabric which is paralleled by multiple low-angle thrust faults which occur throughout and are intimately associated with the known gold mineralization.

The historical Plutonic Gold Mine area is comprised of 39 known gold deposits mined throughout the history of the mine, including in areas of the Marymia.

Hermes The Hermes project area lies 60 km to the southwest of the Plutonic Gold Mine and covers the southwest portion of the Archaean Marymia Inlier near its southern contact with the Proterozoic Bryah Basin. Mesothermal style gold deposits of the Peak Hill area occur in the Archaean Peak Hill Schist and the Proterozoic Naracoota Formation and associated formations of the Bryah Group. The largest gold production (650,000 oz) came from the Peak Hill mine. Although most of the deposits are confined to various stratigraphic units, mineralisation is generally structurally controlled.

30 Property Geology Plutonic Gold Mine The Plutonic Gold Mine property geology is summarized below.

Geology Unit Type (organized from the bottom to the top of the rock formation) Description Lower Basal Mafic unit ...... Banded garnetiferous carbonate-altered amphibolite Basal Sediment unit ...... Asequence of metasediments of varying thickness, comprised of garnetiferous siltstone and minor graphitic shale Upper Basal Mafic unit ...... Same as Lower Basal Mafic unit Footwall Ultramafic unit ...... Adownward-facing komatiite sequence Mine Mafic unit (host lithology for the Plutonic Gold Mine) ...... Asequence of fine to medium grained amphibolites with relict pillow textures and narrow graphitic shale marker horizons Overthrust Mafic Sequence ...... Aseries of highly magnetic, strongly sheared mafic rocks with intercalated minor sediment and talc-chlorite (ultramafic derived) schist

The Mine Mafic unit is the host lithology for the Plutonic Gold Mine and is comprised of multiple volcanic flows, separated into two sub units, the mineralized Upper Mine Mafic unit dominated by a coarse hornblende-rich high- Magnesium amphibolite at the top with intercalated high-iron tholeiites, underlain by multiple volcanic flows of the Lower Mine Mafic unit comprised of only high-iron tholeiites.

The main style of gold mineralization (the “Plutonic brown-lode”) typically occurs as thin (approximately 1 to 3 m wide) lodes that consist predominantly of quartz-biotite-amphibole-titanite-epidote-carbonate-tourmaline- arsenopyrite-pyrrhotite ± chalcopyrite ± scheelite ± gold. Visible gold is considered to have occurred at a late-stage during the evolution of the deposit as it is largely undeformed and overprints most, if not all, of the minerals and fabrics.

Other styles of gold mineralization, making up only a small percentage of the total gold mineralization, also occur at the Plutonic Gold Mine and include: sub-economic to marginally-economic gold grades in apparently-unaltered metabasalt, shear-controlled lodes that mineralogically resemble Plutonic brown lode but are hosted within structures (e.g. shears that cross-cut the foliation); and late-stage quartz-carbonate-pyrrhotite ± chalcopyrite ± gold veins.

Hermes The Hermes gold resource, consisting of the Hawkeye, Trapper, Klinger, Winchester and Blake deposits, are parallel, northeast trending, mineralized zones separated by mostly barren amphibolite. Mineralization is generally associated with quartz veins at or near the contact of sheared mafic amphibolite and quartz-biotite-sericite schists.

Mineralization Plutonic Gold Mine The Plutonic Gold Mine Mineral Resources lie with a surface area of approximately 10 km east-west by 5 km north-south. The Main Pit is approximately 1.5 km long by 800 m wide by 200 m deep. Current areas being mined underground at the Plutonic Gold Mine including the Main Pit, Indian, Indian Extension, Baltic and Baltic Extension lie in a semi-continuous mineralized trend that extends from the base of the open pit 1.7 km down plunge (880 m in elevation) and mineralization is 1-3 m thick but individual mineralized pods have a short range (generally <30 m). The Cortez-Area 134-Timor zone extends approximately 1.2 km north-south, by 1.0 km east-west.

31 Mineralization at the Plutonic Gold Mine is separated into four distinct styles:

Lode Type Characteristics Lode Image Replacement “brown” or “Plutonic” The Plutonic “Brown lodes” are lodes (which contain the bulk of characterized by a series of moderately- the gold) dipping to very flat-lying, stacked, banded replacement-style lodes, individually up to five metres wide, that are hosted within ductile mylonitic shear zones, oriented slightly oblique to the main stratigraphic contacts. Replacement “green lodes” The Plutonic “Green lodes” are characterized by an amphibole-quartz- titanite-plagioclase-arsenopyrite-pyrite- visible gold-scheelite assemblage, generally confined to the upper portion of the Mine Mafic unit and commonly spatially associated with the Plutonic style “Brown” lodes. “Invisible lodes” Plutonic “Hard To See Lodes” are less common than the Plutonic Brown and Green lodes. There are more abundant in the Zone 19 area. They do not occur within ductile shear zones, but are developed predominantly within the upper five metres of the Upper Mine Mafic unit within the hornblende amphibolite. Dilational high angle quartz veins Quartz vein hosted mineralization is the least abundant form of mineralization and is mainly located close to the Quartz Hill Thrust or proximal to high angle dolerite dykes where the dykes cut replacement lodes.

32 Hermes At Hermes the Hawkeye, Trapper, Klinger, Winchester and Blake deposits are sub-parallel, northeast trending, mineralized zones. Mineralization at all deposits is typically associated with quartz veins at or near the sheared contact of mafic amphibolite footwall and hangingwall quartz-biotite-sericite schists. Graphitic schist occurs to a minor extent on the hangingwall and footwall sides of the mineralization at Trapper, Klinger and Blake. The base of strong oxidation varies from 20m to 30m vertically below surface at Hawkeye and Winchester, and from 25m to 45m at Trapper, Klinger and Blake. Transition to fresh rock occurs at approximately 30m to 50m and 40m to 65m respectively.

In general, the mineralized quartz veins, foliation and relict bedding are steeply NW-dipping to sub-vertical in both the Hawkeye and Trapper deposits and high grade shoots are interpreted to plunge shallowly to the north within the mineralized plane.

The relative location of each of the mineralized zones is evident in the chart below.

Deposit Types The Plutonic Gold Mine deposits are Archean Greenstone gold deposits. The gold mineralization is predominately structurally controlled occurring in a variety of stratigraphic settings, mainly associated with replacement-style lodes and stockwork veining within a wide variety of host rocks ranging from ultramafic and mafic volcanic rocks, metasediments, felsic intrusive, volcanoclastic units, and banded iron formations.

In Hermes and Bryah Basin there are two broad mineralization styles referred to as the Peak Hill Type and the Bryah Type.

33 History of the Plutonic Gold Operations Ownership and Production History Overview The following provides a summary of the historical ownership and production history of the Plutonic Gold Operations. • The Plutonic Gold Mine opened, with open-pit production from the Main Pit, in 1990. • In 1991, Plutonic Resources Ltd. and Great Central Mines Ltd purchased the adjacent “Freshwater” property from Horseshoe Gold Mine Pty Ltd and commenced RC drilling of previously identified targets and a regional geochemical program. • In 1992, mining started in the Marymia K1 and K2 open pits. • Joint venture partners Resolute Resources Ltd. and Titan Resources NL purchased certain mining leases in the area from Battle Mountain Australia in 1993. • Marymia Triple P open-pit production started in 1993 with treatment at the Marymia Plant. • Plutonic Gold Mine underground development started in 1995 with production commencing in 1997. • In 1998, Homestake Mining Company acquired Plutonic Resources Ltd, and Homestake Gold of Australia Limited bought all of the Marymia property and assets from Resolute Samantha. • Homestake Mining Company (USA) merged with Barrick Gold Corporation in 2001. • In August 2002, open pit mining at Triple P – B Zone commenced and completed by August 2003. • The Plutonic Main Pit closed in 2005. • The Plutonic Gold Mine was acquired by Northern Star in February 2014 from entities within the Barrick Gold Corporation. • Hermes and the earn-in interest in the Bryah Basin tenements was acquired by Northern Star in February 2015 from ALY • The Plutonic Gold Operations were acquired by the Corporation in October 2016 from Northern Star.

Production History Since 1990, a total of 2.5 Moz of contained gold has been mined from 36 open pits and surface stockpiles. The underground development, which is accessed via portals in the Main Pit, was commissioned in December 1995. As of October 2016, approximately 3.3 Moz of contained gold has been mined from the Plutonic Gold Mine underground mine. In total, over 5.8 Moz of contained gold has been mined from the Plutonic Gold Mine (including both the underground operations and the Main Pit) over 26 years with an average recovery of approximately 86% achieved, resulting in approximately 5.0 Moz of gold produced. A summary of this production is illustrated below.

34 Surface Mining production Underground Mining production Tonnes Head grade Produced Au Tonnes Head grade Produced Au Year (t) (g/t Au) (oz) (t) (g/t Au) (oz) 1990 ...... 516,567 7.53 125,036 — — — 1991 ...... 1,649,953 3.54 187,648 — — — 1992 ...... 1,674,961 3.09 166,576 — — — 1993 ...... 1,761,261 3.16 179,003 — — — 1994 ...... 1,832,896 2.94 173,252 — — — 1995 ...... 1,830,931 2.74 161,520 40,514 4.04 4,416 1996 ...... 1,751,989 2.57 144,529 263,319 5.80 39,159 1997 ...... 2,583,935 2.45 203,775 496,496 5.31 70,832 1998 ...... 2,428,846 2.00 156,060 581,632 6.50 104,059 1999 ...... 2,289,757 1.24 91,024 743,977 7.31 145,414 2000 ...... 2,232,798 1.42 101,885 802,500 6.75 151,934 2001 ...... 2,445,061 1.48 116,149 726,186 7.41 173,035 2002 ...... 2,213,503 1.29 91,701 977,298 6.86 215,688 2003 ...... 1,520,512 1.59 77,713 1,173,103 7.63 256,222 2004 ...... 1,055,829 1.50 50,863 1,358,991 6.44 253,542 2005 ...... 533,563 1.48 25,321 1,284,013 6.08 225,474 2006 ...... — — — 1,331,250 5.83 249,528 2007 ...... — — — 1,381,507 4.65 206,556 2008 ...... — — — 970,170 4.39 136,983 2009 ...... — — — 938,708 4.83 145,772 2010 ...... — — — 887,312 4.65 132,793 2011 ...... — — — 772,086 4.59 113,819 2012 ...... — — — 747,622 4.68 112,484 2013 ...... — — — 1,397,443 2.92 113,950 2014 ...... — — — 938,704 3.60 89,494 2015 ...... — — — 781,011 3.60 71,676 2016 (as at September 30) ...... — — — 912,108 2.13 50,123 Total ...... 28,322,362 2.25 2,052,055 19,505,950 5.25 3,062,953

35 The cumulative gold production from both open pit and underground operations at the Plutonic Gold Mine is illustrated below.

Drilling Plutonic Gold Mine Modern exploration on the Plutonic Gold Mine began in 1986, and surface drilling began in 1987. Drilling campaigns have included diamond drilling with various core diameters, RC drilling, RAB drilling, and other minor types.

The Plutonic Gold Mine Mineral Resources and Mineral Reserves are based, primarily, on diamond drill data. Current Mineral Resource estimates, for the most part, are based on a 20 m by 20 m drill pattern or occasionally 10 m by 10 m, depending on geological complexity and mining method. Early estimates of Indicated Mineral Resources used a 40 m by 40 m pattern. Underground drilling is used to assist in the upgrade of existing Mineral Resources to Mineral Reserves and to find new additional Mineral Reserves by focusing on existing, known areas of mineralization and expanding to the immediate favourable surrounding areas.

36 Plutonic Gold Mine – Summary of Drilling by Year

Surface Underground Face Diamond Diamond RC RC RAB RAB Diamond Diamond Sludge Sludge samples Total No. No. No. of of of No. of No. of No. of Year holes Metres holes Metres holes Metres holes Metres holes Metres Number holes Metres Pre-2002 ...... 1,280 443,968 8,361 599,467 3,867 175,817 2,285 291,730 0 0 15,793 1,510,982 2002 ...... 86 61,048 86 12,978 0 0 679 50,177 — — — 851 124,203 2003 ...... 22 19,068 258 20,296 179 9,120 542 36,430 — — — 1,001 84,914 2004 ...... 32 12,163 298 39,708 0 0 761 49,571 — — — 1,091 101,442 2005 ...... 9 4,767 27 1,698 0 0 1284 72,140 — — — 1,320 78,605 2006 ...... 9 863 221 16,580 0 0 1232 72,905 18 226 — 1,480 90,574 2007 ...... 2 259 0 0 0 0 1283 68,694 — — — 1,285 68,953 2008 ...... 0 0 0 0 0 0 861 52,292 — — — 861 52,292 2009 ...... 11 4,437 0 0 0 0 779 45,233 54 768 — 844 50,438 2010 ...... 8 2,925 14 992 0 0 877 58,762 — — — 899 62,679 2011 ...... 35 9,581 0 0 0 0 942 66,842 — — — 977 76,423 2012 ...... 22 8,562 0 0 0 0 997 65,543 18 202 — 1,037 74,307 2013 ...... 4 1,683 0 0 0 0 945 50,787 — — 21,993(1) 949 52,470 2014 ...... 4 1,473 0 0 0 0 1,128 74,501 39 800 3432(2) 1,171 76,774 2015 ...... 56 23,552 8 1,693 0 0 1,538 120,629 45 777 15,101 1,647 146,651 2016 ...... 0 0 0 0 0 0 1,096 65,561 18 328 10,506 1,114 65,889 Total ...... 1,580 594,349 9,273 693,412 4,046 184,937 17,229 1,241,797 192 3,101 51,032 32,320 2,717,596

Note: For the purposes of summary tabulation, drillholes with no date recorded in the database are summed up in pre-2002. No RAB/air core or sludge drilling data is used in any resource estimate.

37 Drilling at the Plutonic Gold Mine is on-going as at September 2016. A summary of the grade control holes significant intercepts greater than 1 m and greater than 20 gold gram metres are summarized in the table below. The holes are all drilled from underground and the results are influencing grade control decisions to mine within the Caribbean, Indian, Caspian, Timor and Area 134 areas.

Drillhole Azimuth Estimated Easting Northing collar RL (degrees, End of Downhole Au true Drillhole (mine (mine (mine Dip mine hole Downhole Downhole intersection (gpt) thickness number grid) grid) grid) (degrees) grid) depth (m) from (m) to (m) (m) uncut (m) UDD18421 4,730 11,839 1,168 –59 233 65.8 41.1 48.8 7.7 10.0 5.4 UDD18427 4,730 11,839 1,168 –39 209 59.7 47.5 53.9 6.4 19.4 4.5 UDD18428 4,730 11,839 1,168 –31 210 73.1 59.5 62.7 3.3 26.8 2.3 UDD18431 4,740 11,837 1,169 –31 209 62.4 49.5 53.7 4.2 10.4 2.9 UDD18374 4,377 11,438 1,146 –28 186 53.8 32.9 42.1 9.2 22.1 6.4 UDD18377 4,378 11,438 1,146 –48 174 59.6 43.2 50.5 7.3 16.2 5.1 UDD18382 4,372 11,418 1,145 –26 209 28.3 19.0 21.3 2.3 54.7 1.6 UDD18384 4,358 11,446 1,145 –65 208 74.8 40.3 42.4 2.2 32.3 1.5 UDD18391 4,378 11,438 1,146 –31 179 55.9 42.0 44.7 2.7 42.7 1.9 UDD18392 4,371 11,437 1,145 –50 187 77.6 29.1 35.1 6.0 25.0 4.2 UDD18417 4,308 11,370 1,138 –15 15 136.8 86.5 88.4 1.9 23.8 1.3 UDD18417 4,308 11,370 1,138 –15 15 136.8 103.7 105.3 1.6 84.8 1.1 UDD18393 4,499 11,190 1,247 20 60 68.3 50.0 52.1 2.1 19.5 1.5 UDD18400 4,457 11,200 1,251 –3 61 59.0 10.2 14.2 4.0 21.2 2.8 UDD18400 4,457 11,200 1,251 –3 61 59.0 24.5 27.9 3.4 9.6 2.4 UDD18402 4,456 11,201 1,250 –10 55 83.3 58.4 61.4 3.1 23.1 2.1 UDD18400 4,457 11,200 1,251 –3 61 59.0 10.2 14.2 4.0 21.2 2.8 UDD18400 4,457 11,200 1,251 –3 61 59.0 24.5 27.9 3.4 9.6 2.4 UDD18467 4,448 11,259 1,251 –44 100 57.9 47.2 52.5 5.3 13.7 3.7 UDD17874 4,317 13,201 1,362 –7 72 47.6 13.3 16.5 3.2 11.6 2.2 UDD17875 4,317 13,201 1,361 –21 72 53.9 25.4 29.1 3.7 30.5 2.6 UDD17876 4,317 13,201 1,361 –23 57 42.9 24.3 29.9 5.6 19.0 3.9 UDD18489 4,369 12,817 1,013 44 225 24.9 21.9 24.1 2.2 14.9 1.5 UDD18532 4,882 12,612 1,121 80 293 29 13.30 15.50 2.20 17.0 1.5 UDD18516 4,275 10,944 1,340 2 46 62 2.25 3.80 1.55 34.5 1.1 UDD18518 4,337 10,942 1,333 –6 26 40 7.95 10.15 2.20 30.5 1.5 UDD18538 4,871 12,644 1,137 –50 342 29 12.05 14.05 2.00 14.8 1.4 UDD18550 4,856 12,678 1,126 –22 257 34 20.00 24.30 4.30 17.3 3.0 UDD18579 4,441 11,510 1,216 –4 182 52 42.00 46.00 4.00 35.8 2.8 UDD18581 4,440 11,510 1,215 –2 201 64 20.90 26.30 5.40 32.7 3.8 UDD18585 4,750 11,836 1,172 –13 191 56 45.10 50.80 5.70 5.7 4.0 UDD18559 4,173 11,570 1,080 53 10 32 24.00 27.20 3.20 58.6 2.2 UDD18589 4,763 11,834 1,173 –10 181 50 5.80 8.90 3.10 16.4 2.2 UDD18618 4,204 11,257 1,148 6 193 33 30.35 33.00 2.65 18.7 1.9 UDD18710 4,365 11,389 1,170 –40 169 32 3.05 8.00 4.95 9.1 3.5 UDD18697 4,320 13,227 1,337 25 131 48 33.20 35.55 2.35 16.0 1.6 UDD18703 4,321 13,230 1,339 62 36 27 7.30 12.80 5.50 7.5 3.9

38 AMC has reviewed the significant recent drilling intercepts and understands that the results are typical of grade control drilling with narrow high grade intercepts. These results confirm that detailed drilling and face sampling are required to provide the confidence to convert the Mineral Resources at the Plutonic Gold Mine into Mineral Reserves.

Hermes Hermes drilling commenced at the Hawkeye and Trapper prospects through a series of RAB and RC drilling programs during 1996. The early drilling at the Hawkeye deposit intersected 15 m at 9.76 g/t Au. The RC (233 holes for 23,274.5 m) and diamond drilling (4 holes for 521.0 m) further defined the mineralization trends. Between 1997 and 2003, a series of exploration drilling programs were undertaken regionally across the tenements. In 2003, Barrick Mining Ltd. reviewed the Trapper and Hawkeye mineralization, and undertook investigations, as part of an acquisition/ offtake review study, concluding that the mineralization was uneconomic at the time.

ALY acquired Hermes in 2009 and undertook a number of drilling programs in 2009, 2010 and 2011, where a total of 100 RC holes for 10,274 m were drilled and a total of 10 diamond tails for 1,080 m were drilled targeting and testing the deposits to a vertical depth of approximately 150m. An additional 133 aircore holes were drilled for 5,473 m for sterilization purposes. In February 2015, Northern Star purchased Hermes and the interest in the Bryah Basin from ALY. Northern Star then completed two major phases of detailed in-fill RC drilling at Hermes to define new open pit resources in the Hawkeye, Trapper and Klinger areas.

Overall, at Hermes, successive episodic campaigns by various companies resulted in a detailed drilling phase by Northern Star in 2016 that led to definition of the most recent Mineral Resources. The Hermes Mineral Resources and Mineral Reserves are based, primarily, on RC drill data. Current Mineral Resource estimates, for the most part, are based on a 20 m by 20 m drill pattern.

39 Hermes — Summary of Drilling by Year

Reverse Reverse Rotary air Rotary air Drill type Diamond Diamond circulation circulation blast/aircore blast/aircore Year No. of holes Metres No. of holes Metres No. of holes Metres ~1995 (Troy) ...... — — — — 954 47,624 1996 – 1998 (Troy) ...... 4 521 233 23,275 5 237 2003 (Barrick) ...... 2 231 — — — — 2009 – 2011 (Alchemy) ...... 10 1,080 117 13,616 214 8,830 2015 (Northern Star) ...... 16 1,573 113 13,091 — — 2016 (Northern Star) ...... — — 368 31,904 — — 2016 (Northern Star) water bores ...... — — 16 1,358 — — Total ...... 32 3,405 847 83,244 1,173 56,691

Sampling, Analysis and Security Plutonic Gold Mine All sampling and sample dispatch activities are supervised by the project or mine geologist. The on-going nature of the Plutonic Gold Operations reduces the risk of sample tampering.

RC Samples RC sampling methods have varied between the previous operators of the Plutonic Gold Mine.

Operator Collection Laboratory Sampling Procedure Barrick Gold A cyclone at one metre intervals and passed Minlabs Assay Samples were assayed using an aqua regia Corporation through a riffle splitter to produce a two kg to Laboratories in digestion with an atomic absorption four kg assay sample Perth (“Minlabs”) spectrophotometry (“AAS”) finish, to a detection limit of 0.01 g/t Au Resolute A cyclone at one metre intervals and passed Minlabs and Genalysis Minlabs – Same as above Resources Ltd. through a riffle splitter to produce a two kg to (to re-test samples Genalysis- Fire assayed, with an AAS finish, to four kg assay sample and by taking four metre previously tested by a detection limit of 0.01 g/t Au composites in known waste zones Minlabs) Homestake Mining Face hammers and were sampled at one metre Minlabs Fire assayed using an AAS finish to a detection Company and down hole intervals. For each metre drilled, the limit of 0.01 ppm Au Plutonic sample was passed through a cyclone and Resources Ltd. collected into calico bags and the remaining un- sampled material dropped into a catchment sump Diamond Core Samples Sample preparation and assaying as per the following flow charts, and show the flow from site based processing to submission to sample preparation at ALS Global (NATA/ISO accredited in Perth).

40 Northern Star Site-Based Sample Processing

Sample Preparation at ALS Malaga Facility

41 Fire Assay of Northern Star at ALS Malaga Facility

Gold concentration was determined by ICP-AAS, after conventional lead fusion and aqua regia digestion of a 40g charge sample, with at least 170g of litharge based flux at the ALS Perth facility.

The Plutonic Gold Mine diamond drill samples taken by Billabong involve a custody chain managed by Billabong personnel. Samples are stored on site in polywoven bags secured with zip lock ties prior to pick-up by McMahon’s Burnett freight for delivery to McMahon’s Burnett depot in Perth, and then to the assay laboratory in Perth.

Face Samples Face rock chip/channel samples are collected from all (nominal) development faces. The data is incorporated into resource estimates. The sampling is completed by geologists and underground sampling assistants. All face samples are prepared and assayed at the on-site Plutonic Gold Operations laboratory.

Hermes Hermes samples taken by Northern Star, based primarily of RC drill holes, involve the same protocols as the Plutonic Gold Mine diamond core samples described above.

Qualified Person Opinion In the opinion of Mr. R. D. Carlson, sample preparation, security and analytical procedures are adequate for the purposes of quoting a Mineral Resource for the Plutonic Gold Operations.

Sample Tracking and Data Verification Sample Tracking The Plutonic Gold Operations assay laboratory operates an automated sample tracking system called LABMAN. LABMAN organizes the samples into batches and samples are tracked based on batch number until the prill is created. Prills are tracked according to their numerical order from the batch print out, which is directly proportionate to the test tube rack layout. An AAS machine is connected to the LABMAN network with assay values either being entered automatically or manually (manual operation is the more common method used as multiple readings are taken until the operator is satisfied with a constant result). Upon completion, the data is exported in a .txt format to the database

42 administrators (DBAs). Upon receiving the digital file for the assay data, the DBAs import the file into the master acQuire database. This data is not accessible for assessment until it is validated as complete and correct by a qualified geologist and the DBAs. Face data is received in the same format but is entered into the fusion database instead.

Data Verification Surface and underground drill hole data is validated to produce a digital database free of detected errors. This is undertaken by passing data through embedded macros and queries of the drill hole database software by table (collar, assay, lithology, survey, and grout). Crosschecks are also undertaken to ensure that each drill hole has data from collar, assays, lithology, survey, and grout files. By undertaking the above procedures, all drill hole and face data is rigorously checked, verified, and corrected where necessary to ensure limited failures.

Verification by Qualified Person AMC’s qualified persons visited Plutonic Gold Operations on October 27, 2016 to inspect operation and exploration activities and to meet relevant site based personnel. During the site visit personnel were interviewed to discuss their understanding of site procedures and protocols. Core and RC samples were inspected from the Plutonic Gold Mine and Hermes. No independent sampling was completed based on the fact that the Plutonic Gold Mine is in operation and reconciliation reviews do not indicate any unexpected variances from expected results.

Data from drilling and face samples were imported and inspected to confirm interpretations match with those incorporated into published Mineral Resources and Mineral Reserves. Independent checking of resource estimation methodologies and resulting block model reporting was conducted to confirm quoted tabulations. Mineral Reserve modifying factors were examined for reasonableness and models tested for methodology and reporting results.

Qualified Person Opinion In the opinion of Mr. R. D. Carlson, the data verification systems are adequate for Mineral Resource estimation.

Mineral Resource and Mineral Reserve Estimates Plutonic Gold Operations The Plutonic Gold Mine and Hermes Mineral Resources as at September 30, 2016 are summarized in the table below.

Mineral Resources

Measured Indicated Measured+Indicated Inferred Gold Cont. Gold Cont. Gold Cont. Gold Cont. Tonnes grade gold Tonnes grade gold Tonnes grade gold Tonnes grade gold Category (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) Hermes ...... — — — 3,700 2.2 260 3,700 2.2 260 610 2.5 49 Plutonic Gold Mine ..... — — — 3,500 5.5 620 3,500 5.5 620 5,200 4.4 750 Stockpiles ...... 2 2.3 0.1 330 0.6 6.4 330 0.6 6.5 — — — Total ...... 2 2.3 0.1 7,500 3.7 890 7,500 3.7 890 5,800 4.2 800

(1) Mineral Resources are quoted inclusive of those Mineral Resources converted to Mineral Reserves. (2) The reporting standard adopted for the reporting of the Mineral Resource estimate uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014) as required by NI 43-101. (3) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. (4) Mineral Resources are estimated at a cut-off grade of 1.00 g/t Au for Hermes and reported within an optimised pit. (5) Mineral Resources are estimated at a cut-off grade from 2.45 g/t Au to 3.26 g/t Au for the Plutonic Gold Mine, depending on the resource area. (6) Mineral Resources are estimated using an average gold price of US$1,258 per ounce.

43 The Plutonic Gold Mine and Hermes Mineral Reserves as at September 30, 2016 are summarized in the table below. Stockpiles of ore accumulated from previous mining operations are included in the Proven and Probable Mineral Reserves.

Mineral Reserves

Proven Probable Total Reserves Gold Cont. Gold Cont. Gold Cont. Tonnes grade gold Tonnes grade gold Tonnes grade gold Category (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) (000’s) (Au g/t) (koz) Hermes ...... — — — 1,570 2.0 101 1,570 2.0 101 Plutonic Gold Mine ...... — — — 550 4.6 82 550 4.6 82 Stockpiles ...... 2 2.3 0.1 330 0.6 6 330 0.6 6 Total ...... 2 2.3 0.1 2,450 2.4 189 2,450 2.4 189

(1) Mineral Reserves for Hermes are estimated at a cut-off grade of 0.63 g/t Au. (2) Mineral Reserves for the Plutonic Gold Mine are estimated at a cut-off grade of 2 g/t Au. (3) Mineral Reserve economics are estimated using an average long term gold price of US$1,250 per ounce in 2017, and US$1,300 post-2017 for the Plutonic Gold Mine. Optimization at Hermes was conducted using metal prices of US$1,110 per oz of gold. The pit shell used as the basis for the final design metal prices of US$943.50 per oz of gold. (4) Bulk density estimated as 2.9 t/m3. (5) All figures are rounded and use significant figures. Subtotals, totals and weighted averages are calculated from quantities before rounding and significant figures.

Mineral Reserve Estimation Process Plutonic Gold Mine The geology and mineralization in the Plutonic Gold Mine is complex. In the established areas of the Plutonic Gold Mine (being those areas other than the Baltic Extension), all stopes are designed using a 2.0 g/t cut-off. Stopes are manually designed. For longhole stopes, dilution is added to the stope designs at 15% with a mining recovery of 91%. A small proportion of the mining inventory is from airleg stopes (approximately 1% of the tonnes in the Mineral Reserves). This material is diluted at 5% of the design with a mining recovery of 95%. The Baltic Extension has been designed using cut-offs in the following manner: • Generate different designs of the Baltic Extension at different cut-offs using automated stope design software. The automated stope designs are inclusive of applying a minimum mining width (1.5 m), and designed dilution (fall-off on walls of stope). For the Baltic Extension, the designed dilution is approximately 1.5 m of fall-off (total of hangingwall and footwall true width). The average stope width is approximately 6.7 m (including designed dilution), and therefore the average designed dilution is approximately 18%. • The different stope designs are examined for potential ore continuity and to determine the development extents. After examining the different designs for the Baltic Extension, the 2.5 g/t cut-off stope design was selected. • After selecting the design, all stopes within the development extent and above a 2.0 g/t cut-off (after applying undesigned dilution) are included in the potential mining inventory. • The automated stope designs are manually adjusted to better reflect the practicalities of mining, including removal of isolated stopes and filling in holes in the automated stope shapes. • The Baltic Extension is economically assessed on a standalone basis to see if it adds value. The economic assessment is exclusive of fixed costs.

44 The 2.0 g/t stope cut-off used in all areas of the Plutonic Gold Mine was calculated based on: (i) a metallurgical recovery of 78.0%, (ii) a gold price of A$1,500 (US$1,110) per oz, (iii) a royalty of 2.5%, (iv) variable operating cost estimates which include a portion of the administration costs, a portion of the milling costs, all stoping costs, all backfilling costs and the equipment financing costs for trucks and loaders, and (v) excluding the following from the calculations to determine the 2.0 g/t stope cut-off grade – operating development costs, capital development costs and diamond drilling costs.

Material that must be mined as part of the development designs and is above 1.5 g/t cut-off is included in the Mineral Reserves. For all areas of the Plutonic Gold Mine, the Mineral Reserves are created on the following basis: • Development tonnes and grade are evaluated. The stope tonnes and grade are then evaluated exclusive of development tonnes. The stope tonnes and development tonnes are then added together to create a single tonnes and grade. • A basic economic analysis is carried out on each stope/level to ensure that the stope/level is economic to mine. • Within each stope/level, the proportion of contained gold in Measured, Indicated, and Inferred Mineral Resources is calculated. • The stope/level might contain unclassified material as dilution (tonnes at zero grade). These unclassified tonnes (at zero grade) are apportioned to the Measured, Indicated and Inferred Mineral Resources based on the proportion of contained metal. • Stopes are excluded if they include more than 30% of the contained metal as Inferred Mineral Resource category material. • For the remaining stopes, all Inferred Mineral Resources (tonnes and grade) are excluded. The apportioned unclassified material (at zero grade) is waste dilution and left in the Mineral Reserve estimate. • All remaining Measured Mineral Resources (and the apportioned unclassified waste dilution) is converted to Proven Mineral Reserves. All remaining Indicated Mineral Resources (and the apportioned unclassified waste dilution) is converted to Probable Mineral Reserves.

Hermes Final and staged pit limits for the Hermes deposits were defined by Entech Pty Ltd (Entech) using the Lerch- Grossman algorithm in Datamine’s NPV Scheduler software. This is an industry standard approach to determining open pit limits, which identifies the highest value pit from the geological model, pit slope parameters, operating costs, metallurgical recoveries, and metal prices. A series of pit shells is developed, by varying the gold price at various percentages above and below the reference price for a given set of costs, and evaluated at the reference price. Each shell represents the maximum undiscounted cash surplus for a set of economic parameters.

Lerch-Grossman optimization for the Hermes deposits was completed on the Mineral Resource model, which used a block size of 5 m x 5 m x 2.5 m and ordinary kriging for grade estimation. Blocks were coded in the resource block model with an alteration code, as oxide, transition, or fresh based on surfaces generated from drilling information. A resource classification code was used to identify Measured and Indicated Mineral Resource blocks, with Inferred or unclassified Mineral Resource blocks assigned as waste. An average bulk density of 1.8 t/bcm was assigned for oxide, 2.1 t/bcm for transition, 2.75 t/bcm for fresh psammite, and 2.9 t/bcm for fresh amphibolite.

45 The operating costs and parameters used to derive the cut-off grade for open pit Mineral Reserve reporting is presented in the table below.

Hermes Open Pit Optimization Input Parameters Cut-off Grade Assumptions Units Inputs Gold price ...... US$/oz 1,110 WA State Govt. royalty ...... % 2.5 Treatment cost ...... US$/t 12.58 Haulage cost ...... US$/t 5.92 Metallurgical recovery ...... % 95 Mining costs ore ...... US$/bcm 2.89–10.82 Mining costs waste ...... US$/bcm 2.85–10.79 Waste dilution ...... % 10 Mining recovery ...... % 98 Cut-off grade ...... g/t 0.63

The pit optimization identified three distinct pit zones, named Trapper, Hawkeye, and Klinger. The Hermes economic evaluation included capital costs of US$6.5 million, comprising US$2.3 million of mine development costs and US$4.2 million for supporting infrastructure (principally the gravel haul road to the Plutonic Gold Mine) and determined that the cash flow from mining the Hermes Mineral Reserves was positive.

Opinion It is considered by AMC that the Mineral Reserve estimates are based on processes considered reasonable for the style of mineralization and the mining methods employed. There is substantial history and knowledge of the deposit and mining methods that provide confidence in the ability to convert the Mineral Reserves into production.

Mineral Reserve estimates must be supported by a study at feasibility or pre-feasibility level which includes an economically viable mine plan based only on Mineral Reserves. Assuming only the Mineral Reserves are included in the economic evaluation, a positive cash flow from the Plutonic Gold Operations is sensitive to the assumed gold prices, exchange rates and costs, whereby minor negative movements away from them may make production from the Mineral Reserves uneconomic.

The following information and studies support the economically viable mine plan based only on Mineral Reserves: • Hermes: By a pre-feasibility level study. • Plutonic Gold Mine Baltic Extension (new mining area): By a pre-feasibility level study. • Plutonic Gold Mine (existing mining areas): The Plutonic Gold Mine has been in continuous operation since 1995. The well-established long-term and short-term planning and design systems form the basis of the Mineral Reserves and the Reserve Mine Plan for the Plutonic Gold Mine. Data used in the Reserve Mine Plan is based on recent actual performance and actual costs. As an operating mine, the Plutonic Gold Mine is supported by information that exceeds the accuracy expected from a feasibility study.

Mining Operations The Plutonic Gold Mine has eight active mining zones. Seven of these mining zones are well-established having been active for a number of years. The eighth zone, Baltic Extension, is a new mining zone. Mill feed during 2016 was from mining operations at either the Plutonic Gold Mine or the stockpiles near the Plutonic Gold Mine. The Reserve Mine Plan anticipates continued ore feed from these mining operations and additional ore feed commencing during calendar year 2017 from a new mining operation at Hermes and the Baltic Extension in the Plutonic Gold Mine. The figure below shows the relationship between the mill, mining operations, and mining zones feeding the mill, with items shown in brown being the new mining areas.

46 Plutonic Mill Mill

Mining operations Plutonic Plutonic Hermes Stockpiles Underground Open pit

Baltic Indian Caribbean Baltic Extension Mining zones Hermes

Spur Timor Caspian Cortez

Plutonic Gold Mine The Plutonic Gold Mine is a mechanized access, underground mine that has been in continuous operation since 1995. The Plutonic Gold Mine is capable of producing at a rate of up to 1,400 ktpa, but in recent years has stabilized at approximately 800 ktpa.

Underground mining at the Plutonic Gold Mine takes place from five declines, four of which are located in the Main Pit and the fifth is located about five kilometres east of the Main Pit at Plutonic East. The underground workings are extensive with a number of internal ramps in place to access the mining zones. The ramps are typically 5.5m high by 5.5m wide, however, some of the older ramps are smaller.

There are three general mining methods used at the Plutonic Gold Mine: (i) long hole retreat stoping; (ii) jumbo stripping (slashing); and (iii) airleg (jackleg) mining.

Mine design planning commences with the generation of a preliminary block model which is based on the resource block model and modified to reflect localized geological features, and any infill drilling. Development designs are based upon the preliminary block model. Stope designs are prepared based upon the measured resource model. The stope design is compiled in a mine instruction which includes all aspects of the stope design such as development, mining method, ventilation, ground support, long hole drill layouts (if needed) and backfill. The mine instruction is circulated for approval before the work commences.

Long hole retreat stoping is the most common mining method used at the Plutonic Gold Mine and there are a number of variations in the stope designs to address the variations in orientation, shape and size of the stopes. Stope dimensions are variable from six metres to 15m high. Stopes vary from narrow vertical stopes to wedge shaped stopes where the footwall is blasted at an angle such that the broken material will roll down the footwall and the load-haul- dump vehicle can operate out to the footwall limit of the stope when mucking. The blast holes are drilled using electric hydraulic long hole rigs.

Long hole stopes are mucked (bogged) with tele-remote load-haul-dump units. The load-haul-dump units generally muck from the stopes to a stockpile on tele-remote. The ore is moved to the surface by underground trucks that are loaded manually by a load-haul-dump unit. Ore is hauled to the portal where it is stockpiled before being moved by surface haul trucks to the run of mine pile.

Where deposits are horizontal or shallow dipping and do not extend for a significant distance into the wall of a heading the stope is mined by slashing with a development jumbo. For very narrow zones and small raises, the stope is mined using airleg/jackleg drills. In thin lenses the stope is mucked with a scraper to bring the ore from the heading to an ore drive from where it is mucked with a load-haul-dump unit for haulage to surface. This method has much lower productivity compared to longhole stoping, but has significantly lower dilution. This method is generally reserved for narrow moderately to gently dipping high grade zones.

47 Hermes An overview of the proposed Hermes site layout is as follows:

The pre-stripping operations at Hermes are scheduled to commence in mid-2017. The Hermes deposits of Hawkeye, Trapper and Klinger will be mined as a conventional open pit excavator-truck mining operation. The largest pit, Trapper, is suitable to mine in a series of phases, while the size of the smaller pits, Hawkeye and Klinger restrict mining to a single phase. A mining contractor will be engaged for drilling, blasting, loading, hauling, and dumping, as well as civil services for general site maintenance works.

Haul trucks with a load capacity of 100 t will be used in conjunction with 120 t class hydraulic excavators in a backhoe configuration to achieve the required waste extraction ratio and selectively mine the ore. In general, five metre benches will be mined on two 2.5 to 3.5 m fitches (allowing for heave after blasting). In harder material, where extensive heaving of blasts is likely to occur, it may be necessary to mine the heave separately down to bench level, followed by two 2.5 m fitches to minimize ore dilution. Ancillary services to support the production fleet include graders and water trucks for haul road maintenance and dozers for maintenance of pit benches, preparation of blasted benches, along with waste dump management.

48 The mining operation will excavate and load ore and waste in accordance with marked ore and waste boundaries to ensure minimum dilution and maximum recovery of ore, with a geologist present during all ore mining. Standard practice to minimize dilution will include mining along the strike of ore blocks, mining from hanging wall to footwall contacts, and grader or dozer clean-ups restricted to along strike in the ore zones. Ore and waste boundaries will be delineated based on grade control sampling results and bench and face mapping.

The material mined from each pit will be stockpiled adjacent to each pit exit on stockpiles according to grade and rock type. Highway-style side-tipping road trains with a nominal payload of 220 t will be loaded with ore from stockpiles at Hermes for transportation via the proposed haul road to the Plutonic run of mine pad and stockpiled separately by rock type and grade. Construction of a new haul road from the Plutonic Gold Mine to Hermes is expected to take three months. There will be a sufficient stockpiled ore at Hermes by month three for ore haulage to commence. The Reserve Mine Plan anticipates that the Hermes ore mined will be processed at the Plutonic Gold Mine mill.

Opinion In AMC’s opinion, the existing site infrastructure is capable of supporting the mine plans envisaged. Historically the site has successfully operated at production rates significantly higher than those envisaged. Hermes will require new infrastructure, but this new infrastructure and its estimated cost, is common within the industry.

Processing and Recovery

Metallurgical Testing The Plutonic Gold Mine has been in operation since 1990 and metallurgical response of the various ore types is predominantly based on historical operating data. As new areas are identified, testing is conducted to assess whether the metallurgical response will vary significantly for the anticipated responses. During 2009, ore characterization, classification, and recovery test work was conducted on material from five underground zones. At the Plutonic Gold Mine, no further significant testwork has been conducted on material from the deposits mined during the past several years.

The decision to develop the Hermes deposit has resulted in a testwork programme to provide confirmation that the existing processing circuit is suitable to also treat the Hermes material. Based on the gold recovery achieved during the testwork, a recovery of 95% was used for all the ore types (oxides, transitional and weathered) for the pit optimisation and economic modelling.

Mineral Processing and Recovery The Corporation considers the mill within the Plutonic Gold Operations to be a strategic asset as there are no other gold milling operations in the region. The Corporation believes that the mill is strategically located and offers numerous opportunities for potential toll milling arrangements and may allow for the acquisition of additional land and exploration properties in the vicinity of the mill. There are no gold processing facilities within a 120 km radius of the mill and the capacity of the mill exceeds the Plutonic Gold Operations’ current and planned production capacity.

49 The original process plant (“PP1”) for the Plutonic Gold Operations consisted of an open circuit jaw crusher, coarse ore stockpile, SAG mill and ball mills, two leach tanks, and six carbon adsorption tanks. A three-stage hard rock crushing circuit was incorporated in 1994 which included a fine ore bin and an additional ball mill. A second process plant (“PP2”) was added in 1996 utilizing the original PP1 jaw crusher and coarse ore stockpile and adding SAG and ball mills, two additional leach tanks and six additional carbon adsorption tanks. A 16 MW gas power station was added in 1997.

PP1 was designed for the treatment of primary ore while PP2 was designed to process oxide ore. At the end of June 2004, oxide ore sources were exhausted and the crushing and milling components of PP2 were shutdown. However, the leach and carbon adsorption circuit of PP2 was run in parallel with the PP1 leach/adsorption circuit. In April 2008 the PP2 leach and carbon adsorption circuit was emptied, cleaned, and placed into care and maintenance as part of a strategy to reduce the site power load and power consumption due to power restrictions caused by the June 2008 gas supply crisis. The four tanks in the PP2 leach and carbon adsorption circuit that were re-commissioned in June 2010, but were shut down in 2012.

The mill is capable of operating at a capacity of 1,400 ktpa. As illustrated below, performance has been evaluated for the past four years and indicates reasonable performance, with recoveries ranging from 71% to 90%, with the average recovery over the four-year period at 83%.

Mill Process Recoveries vs. Performance 160,000 100.00%

140,000 90.00% 80.00% 120,000 70.00% 100,000 60.00% 80,000 50.00%

60,000 40.00% 30.00% Au Recovery (%) Ore milled (tpm) Ore 40,000 20.00% 20,000 10.00% 0 0.00%

Jan-13 Jul-15 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Dec-15 May-16 Oct-16

Total dry ore milled (dry t) Recovery (%)

Historical process operating costs have varied between US$11.10/t ore treated to US$28.86/t, with an average processing cost of US$17.76/t for the past four years. However, costs over the six months from March 2016 to August 2016 reduced to US$14.06/t (average all-in sustaining cost).

The current mill design has been evaluated in comparison with testwork results for the Hermes deposit, which is planned for development. The review did not reveal any significant issues and it is expected that the mill will continue to perform reasonably well when processing the Hermes ore.

Reserve Mine Plan and Extended Mine Plan The Reserve Mine Plan of the Plutonic Gold Operations, which includes the mining of Mineral Reserves only, forecasts a life of mine of three years. The Extended Mine Plan of the Plutonic Gold Operations, which includes the mining of Indicated Mineral Resources and Inferred Mineral Resources, forecasts a life of mine of five years. The

50 Extended Mine Plan is preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves and Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There are no development designs supporting the Extended Mine Plan and additional capital costs are required to access and develop the Mineral Resources contained in extensions to the Plutonic Gold Mine, which includes new declines and inclines. Overall, there is no certainty that the Extended Mine Plan will be realized. See “Risk Factors”. However, there is a potentially significant economic impact that might result from realization of the Extended Mine Plan.

The Reserve Mine Plan is separate and distinct from the Extended Mine Plan, whereby the Extended Mine Plan excludes the mining of the Plutonic Gold Mine Mineral Reserves, Hermes and the Plutonic Gold Mine stockpiles. An overview of the differences between the Reserve Mine Plan and the Extended Mine Plan is provided below.

Description RLOM ELOM Indicated Mineral Resources and Inferred Material Included ...... Mineral Reserves only Mineral Resources Forecasted life of mine ...... 3years 5 years Pre-Tax Gross Cash Flow ...... US$17million US$85 million After-Tax Net Cash Flow ...... US$16million US$57 million Net Present Value at 6% (after tax) ...... US$15 million US$50 million

The production schedules and the resulting economic analysis set forth in the Reserve Mine Plan below reflect calendar years starting 2017 for the purpose of concise reporting. However, the production schedules include all Mineral Reserves as at September 30, 2016; they have not been depleted for the period September 30, 2016 to January 1, 2017. As such, the applicable start date of the production schedules is more correctly expressed as October 1, 2016.

Reserve Mine Plan The Reserve Mine Plan includes the mining of Mineral Reserves only, which are sufficient to support mining operations for the next three years. The Reserve Mine Plan includes the mining and processing of a total of 2,450 kt at 2.4 g/t Au for a total of 189,000 oz of gold mined and a total of 172,000 oz of gold recovered from the mill.

Under the Reserve Mine Plan, using a gold price of US$1,250/oz in 2017 and US$1,300/oz from 2018 onwards, the Plutonic Gold Operations yield the following financial results: • Cumulative gross cashflow of US$17 million; • Cumulative net cashflow of US$16 million (after tax); and • Net present value (NPV @ 6%) of US$15 million (after tax).

Reserve Mine Plan Production and AISC Profile

150 $1,500 Ounces mill recovered 140 $1,400 Cost per oz (Hermes project capex + AISC) 130 $1,300

120 Cost per oz (AISC) $1,200

110 $1,100 ounce)

100 $1,000

90 $900

80 $800

70 $700

60 $600

50 $500

40 $400 Total site mill recovered (koz) year per recovered ounces mill site Total 30 60 66 $300 20 46 $200 Total site costs per mill recovered / (US$ ounces recovered mill per costs site Total 10 $100

0 - 2017 2018 2019 2020 2021 Calendar Year

51 Plutonic Gold Mine Production

The Plutonic Gold Mine life of mine plan is created using methods that are common to the industry. The resource models are overlain with the designed stope shapes to calculate tonnes and grade. The stope shapes are evaluated to ensure that the shape is mineable and that the proposed stope block will generate a profit. The economic stope shapes are then scheduled using industry standard software and then adjusted to only include Mineral Reserves. As illustrated by the chart below, the Plutonic Gold Mine production falls sharply in the second quarter of 2017. This is primarily due to a lack of developed stoping areas that are classified as Mineral Reserves. The Baltic Extension is scheduled to start development immediately. This new mining area requires approximately three months of capital development prior to initial ore production, and a further six months of ramping up to a sustainable production rate. Plutonic Gold Mine – Ore Tonnes and Grade Schedule

130 Stope tonnes 6.5

120 Development tonnes 6.0 Grade (Au g/t) 110 5.5

100 5.0

90 4.5

80 4.0

70 3.5

60 3.0

50 2.5

40 2.0

Plutonic Underground Mined Tonnes ('000's) 30 1.5 Plutonic Underground Mined Grade (Au g/t) (Au Underground MinedGradePlutonic 20 1.0

10 0.5

- - Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Calendar Quarters

Hermes Production

Mining operations at Hermes are expected to supplement production from the Plutonic Gold Mine beginning in 2017. The Hermes open pit production schedule was prepared on a monthly basis for the life of mine plan. A ramp-up period was included to allow for development of stockpiles and the waste rock dumps. The following figures illustrate the planned ore and waste tonnes mined on a monthly basis, the monthly ore tonnes and grade and the monthly contained gold mined.

Hermes – Monthly Ore and Waste Mining Tonnes

52 Hermes – Monthly Ore Tonnes and Grade

Hermes – Monthly Contained Gold Mined

A summary of the Reserve Mine Plan capital and operating cost estimates is shown in the table below.

Reserve Mine Plan Capital and Operating Cost Estimates

RLOM RLOM RLOM Total AISC RLOM Total TOTAL SITE RLOM Total (excluding Total AISC Total COSTS Total Sustaining project Project Operating Unit Operating AISC Unit (pre-tax) Operating Capital capital) Capital Unit Cost Cost Unit Cost Cost US$/t US$/t US$/oz US$/oz Units US$M US$M US$M US$M RoM RoM recovered recovered Plutonic Gold Mine ...... 49 9 58 — 88 104 639 691 Stockpiles ...... 1 — 1 — 2 2 Hermes ...... 60 — 60 12 39 39 Processing and TSF ...... 37 2 39 — 15 16 217 229 General, admin & infrastructure ...... 8 — 8 — 3 3 49 49 Royalties ...... 6 — 6 — 3 3 37 37 Total (excluding closure) ...... 162 11 173 12 66 70 942 1,006 Closure ...... — — — 20 — — — —

The table below shows the net present value sensitivity to gold price (or gold grade) and total costs for the Reserve Mine Plan. The values of 0% include the base case assumptions for total costs, including project capital (Hermes open pit capital), all-in-sustaining costs, royalties, taxes and closure costs.

Reserve Mine Plan Plutonic Gold Operations Sensitivity Analysis

Net Present Value (US$ millions) Total Cost Sensitivity -20% -10% 0% 10% 20% -20% $13 -$ 5 -$23 -$40 -$59 Gold Price -10% $32 $15 -$ 3 -$21 -$39 or 0% $51 $33 $15 -$ 3 -$21 Grade 10% $66 $48 $29 $11 -$ 8 Sensitivity 20% $81 $62 $43 $24 $ 5

53 Extended Mine Plan This section reports the results of the Extended Mine Plan which has been carried out on extensions to the Plutonic Gold Mine, and in a manner regarded as reasonable based on the historical and ongoing performance of the deposits and operation. While the Extended Mine Plan is preliminary in nature, there is a potentially significant economic impact that might result from realization of the Extended Mine Plan. While there is no certainty that the life of mine schedules and economic assessments included in this section will be realized, the Plutonic Gold Mine has a long history of successfully converting Mineral Resources directly into mine production.

The Plutonic Gold Mine, like many underground mining operations, has historically generated mill feed from material not included in Mineral Reserves through drilling evaluation and normal operations. This requires a flexible mine plan, but historically at the Plutonic Gold Mine, the material milled and not in Mineral Reserves at the inception of any given plan has been significant.

Production plans for underground mining operations might include material not in Mineral Reserves because Mineral Reserves generally require significant amounts of diamond drilling in advance of production, but often the diamond drilling can only happen in a limited time period prior to that production. This limited time period might be because of access restrictions, geological complexity or limited resources. The Plutonic Gold Mine has all of these constraints on diamond drilling for Mineral Reserve conversion, and therefore may have amounts of material outside of Mineral Reserves. This forms the basis of the Extended Mine Plan projection.

As an indication of the historical significance of production from material not included in the Plutonic Gold Mine Mineral Reserves, over the last ten years between 50% and 60% of the annual gold production has been sourced from the mine plan (being primarily Mineral Reserves), with approximately 30% being sourced from converting Mineral Resources directly into production and the remainder being sourced from converting previously unclassified material directly into production.

The conversion of Mineral Resources into Mineral Reserves or direct production of Mineral Resources is a continuing objective of the Corporation to attempt to meet or exceed the Extended Mine Plan life of mine.

The Extended Mine Plan includes the mining of Indicated Mineral Resources and Inferred Mineral Resources, which may be sufficient to support mining operations for the next five years. The Extended Mine Plan is separate and distinct from the Reserve Mine Plan and excludes the mining of the Plutonic Gold Mine Mineral Reserves, Hermes and the Plutonic Gold Mine stockpiles. The Extended Mine Plan includes the mining and processing of a total of 2,200 kt at 4.2 g/t Au for a total of 300,000 oz of gold mined and a total of 260,000 oz of gold recovered from the mill.

Under the Extended Mine Plan, using a gold price of US$1,250/oz in 2017 and US$1,300/oz from 2018 onwards, the Plutonic Gold Operations yield the following financial results: • Cumulative gross cashflow of US$85 million; • Cumulative net cashflow of US$57 million (after tax); and • Net present value (NPV @ 6%) of US$50 million (after tax).

54 Extended Mine Plan Production and Total Cost per Ounce

150 $1,500 ELOM Ounces (mill recovered) 140 $1,400

130 Total cost per ounce including capital development $1,300

120 $1,200

110 $1,100

100 $1,000

90 $900

80 $800

70 $700

60 $600

50 $500

40 $400

ELOM mill recovered ounces per year (koz) 63 $300 30 52 59 51 $200 20 35 ELOM Costs per mill recovered ounces (US$ /ounce) 10 $100

0 - 2017 2018 2019 2020 2021 Calendar Year

The Extended Mine Plan production schedule is shown below.

Extended Mine Plan Annual Production Schedule – Mill-Feed Tonnes and Grades

1,000 5.0

900 4.5

800 4.0

700 3.5 Mineral Resource Tonnes included in ELOM 600 3.0 Mineral Resource Grade included in ELOM

500 2.5

400 2.0

300 1.5

200 1.0 Mineral Resource Tonnes in the ELOM ('000s) Tonnes Mineral Resource Mineral Resource in ELOM Mined Grade (Au g/t)

100 0.5

- - 2017 2018 2019 2020 2021 Calendar Year

55 A summary of the Extended Mine Plan capital and operating cost estimates is shown in the table below. These estimates include capital costs for development to access the Mineral Resources, including those found within the Baltic Extension, Plutonic East UG and Area 4 UG of the Plutonic Gold Mine.

Extended Mine Plan Capital and Operating Cost Estimates

ELOM ELOM ELOM ELOM ELOM ELOM ELOM Total Total Total Operating Total Operating Total ELOM TOTAL SITE COSTS (pre-tax) Operating Capital Cost Unit Cost Unit Cost Unit Cost Unit Cost US$/oz US$/oz US$/t US$/t Au Au Units US$M US$M US$M RoM RoM recovered recovered Plutonic Gold Mine ...... 177 23 200 80 90 680 769 Processing and TSF ...... 32 1 33 14 15 121 126 General, admin & infrastructure ...... 7 — 7 3 3 28 28 Royalties ...... 12 — 12 5 5 45 45 Total (excluding closure) ...... 228 24 252 103 114 875 969 Closure ...... — — — — — — —

Note: The US$24 million of total capital costs reflected in the table above includes US$2 million of capital costs allocated toward underground access development for 2017.

The table below shows the net present value sensitivity to gold price (or gold grade) and total costs for the Extended Mine Plan. The values of 0% include the base case assumptions for total costs, including, capital development costs, royalties and taxes.

The Extended Mine Plan net present value is slightly more sensitive to costs than gold price (or gold grade).

Extended Mine Plan Plutonic Gold Operations Sensitivity Analysis Net Present Value (US$ millions) Total Cost Sensitivity -20% -10% 0% 10% 20% -20% $ 57 $ 36 $15 -$ 6 -$27 Gold Price -10% $ 76 $ 54 $32 $ 10 -$12 or 0% $ 96 $ 73 $50 $ 27 $ 4 Grade 10% $118 $ 94 $70 $ 47 $ 23 Sensitivity 20% $140 $115 $90 $ 66 $ 41

Environmental, Permitting and Social Considerations The primary mining and environmental approvals for a mining project in Western Australia typically include: • Mining leases, miscellaneous licenses and an approved mining proposal under the Mining Act. • Environmental assessment under the Environmental Protection Act 1986 (WA) (if required). • Approval under the Environment Protection and Biodiversity Act 1999 (Cwlth) (if required). • Works approvals and operations licence under the Environmental Protection Act 1986 (WA). • Permit to clear native vegetation under the Environmental Protection Act 1986 (WA). • Permits and licenses for water bores under the Rights in Water and Irrigation Act 1914 (WA). • Approvals under the Aboriginal Heritage Act 1972 (WA).

56 Plutonic Gold Mine The following approvals were in place during construction, or are currently in place for operation, for the Plutonic Gold Mine: • Operational Licence L6868/1989/12 under the Environmental Protection Act 1986 (WA) (valid 18/09/2014 – 17/09/2024) • Plutonic Gold Project Notice of Intent (valid 7/08/1989 onwards) • Plutonic Gold Project Notice of Intent for the development of the Area 4 Underground Project (October 1996) (valid 13/05/1997 onwards) • Plutonic Gold Project Notice of Intent for the development of the Zone 550 Project (valid May 1996 onwards) • Plutonic Gold Project Tailings Dam (TSF2) Works Approval (valid 16/09/1991 onwards) • Plutonic Gold Project Notice of Intent/ Works approval for TSF3 (valid 07/01/1998 onwards)

In addition, the Corporation holds three groundwater licences which permit it to abstract production and potable water from Borefields 1 and 2 located 30km and 15km west of the Plutonic Gold Mine mill. The water extracted pursuant to the licences (being GWL 183063(2), GWL 151450(7) and GWL 182889(3)) is permitted to be used for mineral ore processing and other mining purposes, mining camp purposes, earthworks and construction purposes, including dust suppression and mine dewatering from open pit and underground.

The Corporation also holds a beneficial interest in petroleum pipeline licence PL35 granted under the Petroleum Pipelines Act 1969 (WA) for operation of the pipeline for the use of natural gas for power generation purposes at the Plutonic Gold Operations.

Ministerial consent for the proposed transfer of petroleum pipeline licence PL35 is underway. The DMP requested further information from the Corporation which has now been provided.

Hermes The status of mining and environmental approvals for Hermes is as follows: • The mining proposal and mine closure plan was submitted to DMP on August 26, 2016, with subsequent submissions made on November 23, 2016. Approval of the mining proposal and the mine closure plan was received on December 15, 2016. • Clearing permits have been approved and issued by DMP, excluding L52/165 and L52/166 (clearing permit number CPS 7249/1). • Works approval (Dewatering) was finalized and is to be signed off by DMP (W5988_2016_1). • Operating Licence application (Dewatering) has been completed and submitted to DMP for prescribed premises. • DoW groundwater licenses for the mine and haul road have been granted. • DoW construction and altering wells licenses for the mine and haul road have been granted. However, these cannot be transferred into the Corporation from Northern Star and the Corporation must submit a new application.

Compliance Monitoring programs are conducted so as to satisfy key license components. The Corporation operates under the Department of Environment Regulation Licence L6868/1989/12 in accordance with the Environmental Protection Act 1986 (WA), which was transferred to the Corporation from Northern Star.

57 Transfer of Tenements and Pastoral Leases The transfer of tenements from Northern Star to the Corporation in connection with the Acquisition is underway. The Acquisition Agreement is currently with the Office of State Revenue for a stamp duty assessment. The Office of State Revenue has requested that the Corporation provide additional information regarding the Acquisition, including asset valuation information, by February 28, 2017. The valuation process is underway, but the tenement transfer forms can only be lodged with the DMP for registration once the forms have been stamped, which will occur as part of the stamping of the Acquisition Agreement. The Corporation expects to complete the valuation process in due course and does not foresee any issues with completing the tenement transfer.

Ministerial consent and cabinet approval is required for the transfer of the Three Rivers and Bryah Basin pastoral leases and this process is also underway. The Corporation anticipates that it will receive final approval for the transfer of the pastoral leases, but it is anticipated to be a lengthy process.

Billabong currently holds beneficial title in the tenements and the pastoral leases. However, legal title currently remains in the name of Northern Star until the valuation and stamping process (in respect of the tenements) and ministerial consent and cabinet approval (in respect of the pastoral leases) has been obtained, in each case as discussed further above. Once these approvals are obtained and processes have been cleared, legal title will be registered in the name of Billabong.

Native Title Matters The Native Title Act 1993 (Cth) (“NTA”) provides for the recognition and protection of native title rights and interests on land, other than where these rights and interests have been extinguished (e.g. by most grants of freehold title). The NTA validates certain past acts that might otherwise be invalid because of native title. The NTA also establishes ways in which ‘future acts’ (i.e. generally any act done after January 1, 1994 which affects native title) may proceed by the provision of procedural rights to native title holders and claimants, including rights to compensation, as well as a ‘right to negotiate’ procedure that provides negotiation and consultation rights for native title holders and claimants in relation to certain future acts, such as the grant of mining tenements.

The Corporation is progressing the application for tenements L52/165 and L52/166, which it intends to use for the purposes of a new haul road from Hermes to the Plutonic Gold Mine mill. These tenements are within the registered native title claim area of the Gingirana People. The DMP had advised that the Gingirana People objected to the grant of L52/165 and L52/166 (the “Gingirana Objection”). The DMP requires a 3-month consultation period and if an agreement cannot be reached in that period, the Gingirana People may request that the matter is referred to an “independent person” for consideration.

The Gingirana People and the Corporation were unable to come to an agreement within the consultation period and the Gingirana Objection was referred to an independent person on November 10, 2016. A claim meeting was held on November 28, 2016 regarding the withdrawal of the Gingirana Objection in relation to L52/165 and L52/166. On December 22, 2016, the Gingirana People agreed to withdraw their objections, subject to certain pre-conditions, including but not limited to the Corporation agreeing to further consultation for the purposes of exploring employment opportunities for members of the Gingirana People.

While the Corporation is of the view that the pre-conditions are likely to be met and satisfied, there can be no assurance that this will occur in a timely fashion, if at all. The Corporation also expects that current and future tenure applications will likely follow similar legal procedures, which can take extended periods of time to resolve and may result in higher costs in the process for obtaining tenements. See “Risk Factors – Risks Relating to the Business and Operations of the Corporation – Aboriginal Claims”.

Environmental Liabilities With limited exceptions, all tenement holders in Western Australia are required to contribute to the MRF established under the Mining Rehabilitation Fund Act 2012 (WA). The MRF is a pooled fund used to rehabilitate abandoned mine sites in Western Australia. This involves reporting disturbance data and contributing an annual levy to the fund based on a “rehabilitation liability estimate” for the disturbance caused by mining activities carried out on a tenement. The specific tenements that have reported site disturbance are: L52/40, L52/41, L52/48, L52/52, L52/54, L52/55, L52/70, L52/71, L52/74, M52/148, M52/149, M52/150, M52/170, M52/171, M52/295, M52/296, M52/300, M52/301 and M52/308.

58 Tenements with a rehabilitation liability estimate below a threshold of A$50,000 (US$37,000) must report disturbance data but are not required to pay into the MRF. The MRF has replaced the need to provide an environmental security bond in Western Australia. Money in the MRF is available to rehabilitate abandoned mines in Western Australia in circumstances where the tenement holder or operator fails to meet rehabilitation obligations and every other effort has been used to recover funds from the tenement holder or operator. The introduction of the MRF does not absolve tenement holders or operators of their legal obligations to carry out rehabilitation works on a tenement. AMC considers that the current MRF liabilities are not material for the purposes of mine planning, as on-going rehabilitation can reduce the liabilities as they occur. The 2016 liability for the MRF for the Plutonic Gold Mine is approximately A$187,053 (US$138,419).

Plutonic Gold Mine A mine closure plan has been prepared for the Plutonic Gold Mine (the “Mine Closure Plan”). The Mine Closure Plan was approved by DMP in November 2015. The Plutonic Gold Mine has an estimated closure cost of approximately US $18 million (A$24 million) with a relinquishment date of ten years from the date of closure.

Hermes A mine closure plan has been prepared for the Hermes project and submitted to DMP. Approval of the mining proposal and the mine closure plan was received on December 15, 2016. An amended mine closure plan will incorporate a new haul road (following the grant of tenure) and will be submitted to the DMP in 2018. A mine closure cost estimate for Hermes of US$0.7 million has been included for rehabilitation of the Hermes site. The Technical Report recommends that the Hermes mine closure cost estimate be re-evaluated as part of further studies. See also “Risk Factors – Risks Relating to the Business and Operations of the Corporation – Mine Closure Estimates and Remediation”.

Recommendations The objectives of the exploration programs are to increase the resource base and convert Mineral Resources to Mineral Reserves through targeted exploration on both underground and surface areas.

An annual expenditure of approximately US$7.4 million is envisaged for 2017. Subject to results, this amount may be varied as required. It is anticipated that, from 2018 onwards, the level of exploration expenditure will average approximately US$3.7 million per annum.

A proportion of the exploration budget will be used for increasing Inferred Resources (extensions to known resources distal to the current Plutonic Gold Mine area).

The exploration program is divided into three main sections:

Exploration Type Targeted Area In-Mine Exploration Within the Plutonic Gold Mine system and targeted from underground access points Near-Mine Exploration In the vicinity of Plutonic Gold Mine and targeted from surface access points Regional Exploration Distant from the Plutonic Gold Mine and targeted from surface access points

Additional exploration work is also planned at Hermes and the Bryah Basin. The recommended initial exploration program budget is summarized in the table below. Dependent on results this program may be either expanded or modified.

59 2017 Exploration Plan Recommended Budget

Bryah Areas Plutonic Gold Mine Hermes Basin Total Caribbean & Generative, Baltic Timor Resource resource Unit cost Extension Extension drilling drilling Targets (US$) (US$) (US$) (US$) (US$) (US$) Drilling (DD) ...... 133.20/m 3,297,000 1,279,000 — — 4,575,000 Drilling (RC) ...... 33.30/m — — 333,000 167,000 500,000 Assays ...... 18.50/sample 46,000 18,000 148,000 130,000 341,000 Tenement rents ...... — 253,000 — 62,000 104,000 419,000 Overheads ...... — 1,003,000 389,000 148,000 85,000 1,625,000 Total ...... 4,588,000 1,702,000 688,000 488,000 7,400,000

Note: Original budget was in A$ and converted into US$. Numbers may not add due to rounding.

USE OF PROCEEDS

The estimated net proceeds to be received by the Corporation from the Offering, after deducting expenses of the Offering (estimated at $1,500,000) and the Agents’ Fee, are expected to be $25,243,000, assuming that the Over- Allotment Option is not exercised.

The net proceeds of the Offering are anticipated to be used as follows:

Expenditure Estimates Contained in the Technical Report Use Net Proceeds (US$) Plutonic Gold Mine Exploration ...... $ 8,000,000(2) $ 6,290,000 Plutonic Gold Mine Extended Mine Plan Development ...... $ 500,000(2) $ 2,000,000 Hermes development/pre-stripping operations(1) ...... $ 1,850,000(2) $11,800,000 Hermes resource drilling ...... $ 493,000(2) $ 688,000 Bryah Basin(3) ...... $ 650,000 $ 488,000 Zenith Guarantee ...... $ 3,250,000(4)(5) — Consideration Payment ...... $10,000,000(6) — General corporate purposes ...... $ 500,000 — Total ...... $25,243,000

(1) The primary initial development costs for Hermes will be the construction of a direct private haul road of approximately 65km in length from Hermes to the Plutonic Gold Mine mill at a cost of US$6.5 million and the pre-stripping operations at a cost of US$5.3 million. (2) Any differences between net proceeds and amounts contained in the Technical Report will be financed through cash generated by the Plutonic Gold Operations. (3) Funds to be advanced in connection with the ongoing earn-in expenditure for the Bryah Basin joint venture. (4) As the net proceeds from the Offering are expected to exceed $15 million (net of the Agents’ Fee and other expenses), the Corporation will be required to provide a replacement bank guarantee of A$3.25 million in connection with the Zenith power contract. See “Business of the Corporation – Three Year History and the Acquisition of the Plutonic Gold Operations”. The amount indicated here assumes an exchange rate of A$1.00:$1.00 at the time that the replacement occurs. (5) The minimum amount of gross proceeds that the Corporation must raise in order to provide the replacement guarantee for the Zenith power contract and still be able to allocate the use of proceeds as described above is $17.82 million (other than in respect of the Consideration Payment). (6) The Consideration Payment noted here assumes the maximum Offering of $28.45 million. In the event that gross proceeds from the Offering are less than $17.82 million, no Consideration Payment will be payable.

While the Corporation intends to use the proceeds of the Offering as stated above, there may be circumstances where, for sound business reasons, a re-allocation of funds may be necessary. See “Risk Factors”. If the Over- Allotment Option is exercised the Corporation will use the proceeds thereof for general working capital and corporate purposes.

60 The Corporation’s business strategy is to grow both through internal exploration and strategic acquisitions. The proceeds raised from the Offering will finance further exploration work performed at the Plutonic Gold Operations to allow the Corporation to increase its gold production and the development necessary for the Extended Mine Plan and of Hermes. See “Business of the Corporation – Growth Strategy”. It is the Corporation’s view that there is a reasonable basis for disclosing the Extended Mine Plan based on Mineral Resources contained in extensions to the Plutonic Gold Mine.

The net proceeds to the Corporation from the Private Placement were approximately $15,473,240 after deducting the cash commission to the Private Placement Agent of $615,000 and the expenses of the Private Placement of approximately $211,760. The Corporation used the net proceeds from the Private Placement to fund part of the cash portion of the purchase price of the Acquisition and for general working capital requirements.

Because the Offering is on a “best efforts” agency basis, the Corporation may be unable to raise gross proceeds of at least $17.82 million, being the minimum amount required to provide the replacement guarantee for the Zenith power contract and be able to allocate the use of proceeds as described herein (other than in respect of the Consideration Payment). In such case, the size of the Offering will be reduced such that gross proceeds do not in any event exceed $14.5 million, the result of which will be that neither the Zenith guarantee nor the Consideration Payment will be required.

The table below outlines certain potential scenarios in the event that the Corporation is unable to raise gross proceeds of at least $14.5 million:

Expenditure Estimates Contained Use Net Proceeds(1) in the Technical Report (US$) $8,000,000(2) $10,000,000(2) Plutonic Gold Mine Exploration ...... $4,250,000 $ 6,250,000 $ 6,290,000 Plutonic Gold Mine Extended Mine Plan Development . . $ 500,000 $ 500,000 $ 2,000,000 Hermes development/pre-stripping operations ...... $1,850,000 $ 1,850,000 $11,800,000 Hermes resource drilling ...... $ 250,000 $ 250,000 $ 688,000 Bryah Basin ...... $ 650,000 $ 650,000 $ 488,000 General corporate purposes ...... $ 500,000 $ 500,000 —

(1) Any differences between net proceeds and amounts contained in the Technical Report will be financed through cash generated by the Plutonic Gold Operations. (2) After deducting the Agents’ Fee, equal to 6.0% of the gross proceeds received by the Corporation from the Offering, and the expenses of the Offering, which are estimated to be $1,500,000.

The table below summarizes the Corporation’s anticipated use of proceeds (other than the Zenith guarantee and the Consideration Payment) and the related timelines and milestones in connection therewith:

Use Timing Milestone Plutonic Gold Mine Exploration Over 12 months Continued expenditure commitments are dependent on results Plutonic Gold Mine Extended Mine Plan Development Over 12 months Expenditures are required to meet the Extended Mine Plan Hermes development/pre-stripping operations Over 12 months Expenditures are required to develop Hermes according to the Reserve Mine Plan Hermes resource drilling Over 12 months Continued expenditure commitments are dependent on results Bryah Basin Over 16 months Required to meet earn-in obligations and maintain the Bryah Basin JV General corporate purposes Over 12 months —

61 DIVIDEND POLICY

The Corporation has not, since the date of its incorporation, declared or paid any dividends on the Common Shares, and does not currently have a policy with respect to the payment of dividends. For the foreseeable future, the Corporation anticipates that it will retain future earnings and other cash resources for the operation and development of its business. As such, there are no plans to pay dividends in the foreseeable future. The payment of dividends in the future, if any, will be determined by the Board in their sole discretion on the basis of the earnings and financial requirements of the Corporation as well as other conditions existing at such time.

SELECTED FINANCIAL INFORMATION

The following table sets forth selected carve-out financial information of the Plutonic Gold Operations for the years ended June 30, 2016 and June 30, 2015 and the three month interim periods ended September 30, 2016 and September 30, 2015. This summary financial information should be read in conjunction with the carve-out financial statements of the Plutonic Gold Operations and related notes as well as the “Management’s Discussion and Analysis of the Plutonic Gold Operations” included elsewhere in this prospectus. The carve-out financial information is presented in Australian dollars.

Plutonic Gold Operations Three month Three month Year ended Year ended period ended period ended June 30, 2016 June 30, 2015 Sept 30, 2016 Sept 30, 2015 (A$000’s) (A$000’s) (A$000’s) (A$000’s) Revenue ...... 102,744 117,631 32,119 25,207 Total comprehensive profit/(loss) for the period ...... (18,876) (25,066) 1,809 (5,757) Net cash flows provided by operating activities ...... 19,473 21,300 3,754 7,122 Net cash flows used in investing activities ...... (15,162) (35,103) (2,779) (6,063) Net cash flows from financing activities ...... (4,311) 13,803 (975) (1,059)

Plutonic Gold Operations As at As at As at June 30, 2016 June 30, 2015 Sept 30, 2016 (A$000’s) (A$000’s) (A$000’s) Total assets ...... 54,567 65,650 51,296 Total liabilities ...... 46,731 60,084 44,455 Total equity ...... 7,836 5,566 6,841

The following table sets forth selected audited financial information of the Corporation for the period from the date of incorporation on July 4, 2016 to December 31, 2016. This summary financial information should be read in conjunction with the consolidated financial statements of the Corporation and related notes as well as the “Management’s Discussion and Analysis of the Corporation” included elsewhere in this prospectus. The financial information of the Corporation is presented in United States dollars.

Superior Gold Inc. Period ended Dec 31, 2016 (US$) Revenue ...... 24,749,595 Comprehensive income for the period ...... 8,172,248 Net cash flows provided by operating activities ...... 8,664,720 Net cash flows used in investing activities ...... (14,347,775) Net cash flows from financing activities ...... 12,333,750

62 Superior Gold Inc. As at Dec 31, 2016 (US$) Total assets ...... 75,456,800 Total liabilities ...... 55,262,048 Total equity ...... 20,194,752

The following table sets forth selected unaudited pro forma financial information of the Corporation as at December 31, 2016 and for the 6 month period ended December 31, 2016. This summary financial information should be read in conjunction with the Corporation’s unaudited pro forma consolidated financial statements and related notes included elsewhere in this prospectus. The pro forma financial information of the Corporation is presented in United States dollars.

Unaudited Pro Forma Consolidated Statement of Financial Position

Superior Gold Inc. As at Dec 31, Pro Forma Pro Forma 2016 Adjustments Consolidated (US$000’s) Total current assets ...... 20,316 12,467 32,783 Total current liabilities ...... 33,499 (18,090) 15,409 Total equity ...... 20,195 30,352 50,547

Unaudited Pro Forma Consolidated Statement of Operations

Plutonic Gold Superior Gold Operations Inc. Three month Period ended period ended Pro Forma Pro Forma Dec 31, 2016 Sept 30, 2016 Adjustments Consolidated (US$000’s) Revenue ...... 24,750 24,360 — 49,110 Net income ...... 8,902 1,372 459 10,733 Basic and diluted earnings and (loss) per share ...... 0.35 0.15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE CORPORATION

The following MD&A of the financial condition and results of operations to assist readers in reviewing the financial condition and results of operations of the Corporation for the period from the date of incorporation on July 4, 2016 to December 31, 2016 appearing elsewhere in this prospectus. This information is presented in thousands of U.S. dollars, except per share and per ounce amounts and unless otherwise noted. The following is intended to supplement and complement the audited consolidated financial statements and notes thereto of the Corporation for the period from the date of incorporation on July 4, 2016 to December 31, 2016. In addition the financial results from the Plutonic Gold Operations carve-out financial statements for the three month period ended September 30, 2016 is provided to assist readers in comparing the results of operations of the Corporation.

The following discussion contains forward-looking information that involves numerous risks and uncertainties. Actual results of the Corporation could differ materially from those discussed in such forward-looking information as a result of these risks and uncertainties, including those set forth in this prospectus under “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors”.

63 Background The Corporation was incorporated under the Business Corporations Act (Ontario) on July 4, 2016 as 2525908 Ontario Inc. On December 14, 2016, the Corporation changed its name to Superior Gold Inc. The Corporation is engaged in the acquisition, exploration, development and operation of gold resource properties. The Corporation is entirely dependent upon the successful development and operation of the Plutonic Gold Operations in Australia, which it acquired from Northern Star pursuant to the Acquisition Agreement. The Acquisition was subject to satisfaction of conditions including Foreign Investment Review Board approval, Ministerial consents, third party consents in respect of non-material rights over the Plutonic tenements, the Corporation securing financing for the Initial Payment and Northern Star achieving minimum production levels within certain cash operating costs for June, July and August 2016. As consideration for the Acquisition, the Corporation agreed to: • Pay to Northern Star, a pre-closing deposit of A$1 million, which was subsequently refunded to the Corporation, and upon completion of the Acquisition (which occurred on October 12, 2016), the Initial Payment of A$12.5 million cash. • A working capital adjustment, as required under the transaction, to be paid in the amount of A$4.6 million payable over a three month period ending December 31, 2016. The A$4.6 million working capital adjustment has been fully paid to Northern Star as at December 31, 2016. • If within six months from the Acquisition Closing Date its Common Shares are listed on the Exchange, or other stock exchange acceptable to Northern Star, the Corporation shall issue to Northern Star Consideration Shares equal to the greater of (i) the value of A$25 million at a deemed issue price equal to the “go public” issue price, being the Offering Price; and (ii) 33.0% of the total number of Common Shares outstanding immediately following closing of the Offering, on a non-diluted basis. On February 9, 2017, the Corporation, Billabong, Northern Star and Northern Star Mining Services Pty Ltd. entered into the Amendment. The Amendment provides that in the event gross proceeds from the Offering are greater than C$14.5 million, the Corporation may elect, at its sole option, and in lieu of issuing to Northern Star the number of Consideration Shares that would otherwise be issuable pursuant to the Acquisition Agreement, to issue and pay to Northern Star the following: (A) such number of Consideration Shares equal to no less than 20% of the total number of Common Shares outstanding immediately following closing of the Offering, on a non-diluted basis (which total number, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over-Allotment Option after the Closing Date); and (B) the Consideration Payment. The Corporation will not elect to make a Consideration Payment which prohibits it from allocating the use of proceeds as described herein. Assuming the full amount of the Offering is raised, the Corporation intends to issue to Northern Star 18,859,041 Consideration Shares and pay to Northern Star a Consideration Payment of C$10,000,000. • Under the Acquisition Agreement and the Amendment, the Corporation also agreed to issue to Northern Star Consideration Warrants to acquire Consideration Warrant Shares, the number of Consideration Warrants to be issued to be equal to one-half of the number of the Consideration Shares that Northern Star would be eligible to receive if the Consideration Payment were to equal C$0. Assuming the gross proceeds from the Offering are greater than or equal to C$14.5 million, Northern Star will receive 14,429,521 Consideration Warrants. • If the Corporation does not complete such a listing of its Common Shares by April 12, 2017, being the date that is six months from the Acquisition Closing Date, the Corporation is required to pay Northern Star the Cash Payment of A$25 million. • As further consideration for the Acquisition, Northern Star also received the Northern Star Royalty. • The Corporation maintains the right to purchase the Northern Star Royalty back from Northern Star for a purchase price of A$6.5 million at any time before the expiry of 30 days after the date the royalty first becomes payable. • The Corporation will also pay to Northern Star certain Milestone Payments, the aggregate of which is capped at A$10 million. • In addition, Northern Star is eligible, and has agreed to nominate one director to the Board, such director being Mr. Shaun Day, the current Chief Financial Officer of Northern Star. See “Directors and Executive Officers.”

64 Upon completion of the Offering and assuming the full Offering of C$28.45 million is raised, the contingent payment to Northern Star of $18,100 will be satisfied through the Consideration Payment of $7,400 the issuance to Northern Star of 18,859,041 Consideration Shares and the issuance of 14,429,521 Consideration Warrants. Based on the Offering Price of C$1.00 per Common Share, the value of the Consideration Shares is $14,000 and the value of the Consideration Warrants is $1,700, representing total aggregate consideration to Northern Star of $23,100 (inclusive of the Consideration Payment).

Overall Performance and Results of Operations The following table sets forth summary financial information for the Corporation for the period from incorporation on July 4, 2016 to December 31, 2016. This information has been summarized from the Corporation’s audited consolidated financial statements for the period from incorporation on July 4, 2016 to December 31, 2016.

For the period from incorporation on July 4, 2016 to December 31, 2016 (audited) Total comprehensive income ...... 8,172 Earnings per share ...... 0.35 As at December 31, 2016 (audited) Total assets ...... 75,457 Total liabilities ...... 55,262

Production Statistics The below table presents an excerpt of the production statistics of the Plutonic Gold Operations:

Prior to Acquisition Corporation Three month period ended Three month period ended September 30, 2016 December 31, 2016 Total Material Mined (t) ...... 191,187 214,243 Total Material Milled (t) ...... 352,199 408,233 Head Grade (g/t) ...... 2.0 2.1 Gold Recovery (%) ...... 82 82 Gold Produced (oz) ...... 18,662 22,994

The Plutonic Gold Mine produced 22,994 oz of gold in the three month period ending December 31, 2016 compared to 18,662 oz of gold in three month period ending September 30, 2016. Total material mined increased by 12% to 214,243 tonnes while total material milled increased by 16% to 408,233 tonnes. The 23% increase in gold produced was the result of a higher mill throughput and a slightly higher head grade of material processed. Recovery rates remained consistent over the two periods.

Review of Financial Results The below table provides a summary of the financial results derived from the unaudited pro forma consolidated statement of operations for the six month period ended December 31, 2016 included elsewhere in this prospectus and the results for the three months ended December 31, 2016 of the Corporation.

The information presented for the three month period ended September 30, 2016 is derived from the unaudited statement of operations and comprehensive income of the carve-out financial statements of the Plutonic Gold Operations as at September 30, 2016. The information presented for the three month period ended December 31, 2016 was derived by calculating the difference between the audited statement of operations and comprehensive income of the Corporation for the period from incorporation on July 4, 2016 to December 31, 2016 and the audited statement of operations and comprehensive income of the Corporation for the period from incorporation on July 4, 2016 to

65 September 30, 2016. Although the Corporation has included the following financial and other information to assist a reader in assessing and understanding the Corporation’s operations, readers are cautioned that the financial information below may not be comparable due to any potentially different accounting policies used to determine such information for the periods presented and in particular the inclusion of an allocation of Northern Star’s corporate overhead costs in the preparation of the carve-out financial information of the Plutonic Gold Operations.

Three month Three month period ended period ended September 30, 2016(1) December 31, 2016 Gold sold (oz) ...... 18,614 20,352 All in sustaining costs ($/oz) ...... 1,138 869 Realized price ($/oz) ...... 1,306 1,214 Revenue ...... 24,360 24,750 Cost of sales ...... 23,133 19,727 Profit before taxes ...... 915 9,714 Profit after taxes ...... 1,372 9,433

(1) These statistics and information derived from the unaudited statement of operations and comprehensive income of the carve-out financial statements of the Plutonic Gold Operations as at September 30, 2016, other than gold sold, has been translated from Australian dollars to U.S. dollars using an exchange rate of A$1.3185:US$1.00, being the Reserve Bank of Australia average rate of exchange for the three months ended September 30, 2016.

Revenues For the three months ended December 31, 2016, gold revenues totaled $24,750 from the sale of 20,352 oz of gold, up from $24,360 from the sale of 18,614 oz of gold for the three months ended September 30, 2016. The marginal increase in gold revenues resulted from 1,738 more ounces sold during the three months ended December 31, 2016, which was partly offset by a decrease in the realized gold price from $1,306 to $1,214.

Cost of Sales Cost of sales were $19,727 for the three months ended December 31, 2016, which was a decrease of $3,406, or 14.7%, from $23,133 for the three months ended September 30, 2016. Cost of sales includes mine production costs, processing costs, site services, royalties, depreciation and amortization as well as inventory movements. Cost of sales were lower in the December quarter as a result of management’s focus on cost control in all areas by eliminating waste, recycling and reusing the available stock and equipment. Mining costs were lower by $315 primarily due to a reduction in meters of diamond drilling. Salaries and wages were also lower by $409 due to a reduction in the number of employees. The credit for inventory movement increased by $1,531 in the three months ended December 31, 2016.

There was a reduction in depreciation and amortization expense in the amount of $262 for the three months ended December 31, 2016. The Plutonic Gold Operations uses the unit-of-production basis when depreciating and amortizing mine specific assets which results in a depreciation and amortization charge proportional to the depletion of the anticipated remaining life of mine which is based on the estimated Mineral Reserves and Mineral Resources of the property to which the assets relate. Following the Acquisition, the property plant and equipment and mineral properties have been recognized at fair value and the Mineral Reserves have been updated resulting in an increase in Mineral Reserves and Mineral Resources and therefore a lower per ounce depreciation charge. This was partially offset by a higher number of gold ounces sold.

Corporate Costs Corporate costs as disclosed in the Plutonic unaudited carve-out financial statements for the three months ended September 30, 2016 represent a notional charge from the predecessor parent company to the Plutonic Gold Operations and totaled $181. Corporate costs in the three month period ended December 31, 2016 were $609 comprising primarily management fees of $135, professional fees of $132, office and insurance costs of $328.

Other Expenses (Income) Other expenses (income) for the three months ended December 31, 2016 were primarily made up of the bargain purchase gain on the acquisition of the Plutonic Gold Operations of $9,268, partially offset by costs incurred to

66 complete the Acquisition of $3,864 and net finance costs of $520 which were made up of foreign exchange losses and accretion charges related to the rehabilitation provision. For the three months ended September 30, 2016 net finance costs were $131, which primarily included accretion expenses related to rehabilitation provisions.

Dividends The Corporation has neither declared nor paid any dividends on its Common Shares. The Corporation intends to retain its earnings, if any, to finance growth and expand its operations and does not anticipate paying any dividends on its Common Shares in the foreseeable future.

Net Income for the Period from July 4, 2016 to December 31, 2016 The total net income of $8,902 resulted primarily from the bargain purchase gain on the Acquisition equal to $9,268 as well as earnings before income taxes and other expenses (income) of $4,283, offset by net finance cost of $520 and business acquisition costs of $3,864.

Financial Position as at December 31, 2016 As at December 31, 2016, the Corporation’s current assets totaled $20,316 and current liabilities amounted to $33,499 for a net working capital deficit of $13,183. The majority of the current assets pertained to cash and cash equivalents of $6,096 and inventories held at the Plutonic Gold Operations of $10,016. The working capital deficit is the result of the contingent payable to Northern Star of $18,090 (A$25,000), which is payable in cash in the event the Corporation does not complete a listing of its Common Shares within six months from the Acquisition Closing Date of October 12, 2016.

Share capital consisted of capital stock of $1,471 and Subscription Receipts, net of issue costs, of $10,552. No further shares have been issued since September 29, 2016. See “Prior Sales”.

Cash from Operating Activities During the period from inception to December 31, 2016, the Corporation obtained cash from the Plutonic Gold Operations less corporate costs, after the change in restricted cash and adjustments for items not affecting cash and net changes in non-cash working capital items of $8,665.

Cash used in Investing Activities Cash used in investing activities comprised the proceeds used to acquire the Plutonic Gold Operations of $13,001 and expenditures on mine interests, property, plant and equipment of $1,347.

Cash from Financing Activities Cash from financing activities comprised proceeds derived from the issuance of 11,492,599 Common Shares for gross proceeds of $1,471, the issuance of Subscription Receipts, net of issue costs, for proceeds of $10,703, funds obtained from a short-term loan of $944, partially offset by repayments of the short-term loan and finance lease obligations.

Liquidity and Capital Resources As at December 31, 2016 the Corporation had a working capital deficit of approximately $13,183 with current assets of approximately $20,316 and current liabilities of approximately $33,499. The deficit is the result of the contingent payable to Northern Star of $18,090 (A$25,000), which is payable in cash in the event the Corporation does not complete a listing of its Common Shares within six months from the Acquisition Closing Date. It is uncertain whether the cash flows from the Plutonic Gold Operations will be sufficient to meet the Corporation’s ongoing obligations over the next 12 months, which include making the Cash Payment to Northern Star should the Corporation fail to complete a public offering by April 12, 2017. In the event that the Corporation fails to complete a public offering within the requisite timeframe, the Corporation’s ability to raise funds through other means in order to meet the Cash Payment represents a material uncertainty which may cast significant doubt as to the appropriateness of the use of accounting applicable to a going concern.

67 Off Balance Sheet Arrangements The Corporation has no off balance sheet arrangements.

Commitments Capital expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows:

December 31, 2016 Property, plant and equipment ...... $28

Transactions with Related Parties The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

Period from incorporation on July 4, 2016 to December 31, 2016 Management service fees to key employees ...... $273 $273

The Corporation paid $8 (period from incorporation on July 4, 2016 to December 31, 2016) to a company owned by a Director of a subsidiary of the Corporation for reimbursement of expenses incurred on behalf of the Corporation.

The Corporation paid $82 (period from incorporation on July 4, 2016 to December 31, 2016) to a company owned by the Chief Executive Officer of the Corporation for reimbursement of expenses incurred on behalf of the Corporation.

The Corporation paid $21 (period from incorporation on July 4, 2016 to December 31, 2016) to the Chief Financial Officer of the Corporation for reimbursement of expenses incurred on behalf of the Corporation.

The balance included accounts payable and accrued liabilities as at December 31, 2016 was $55 to these related parties.

Disclosure of Outstanding Share Data As of December 31, 2016, the Corporation had one class of authorized shares, being Common Shares without par value, of which 11,492,599 were issued and outstanding.

Critical Accounting Policies and the Use of Estimates A detailed summary of the Corporation’s significant accounting policies, including business combinations and goodwill and management judgements and key sources of estimation uncertainty, is included in the Corporation’s audited consolidated financial statements for the period from incorporation on July 4, 2016 to December 31, 2016.

Financial Instruments The Corporation’s significant accounting policies regarding its financial instruments are set out in the Corporation’s audited consolidated financial statements included in this prospectus. The Corporation is of the opinion that it is not exposed to significant interest, currency or credit risks arising from outstanding financial instruments.

New Accounting Standards and Interpretations Standards issued but not yet effective up to the date of issuance of the Corporation’s consolidated financial statements are listed below. This listing is of standards and interpretations issued, which the Corporation reasonably expects to be applicable at a future date. The Corporation intends to adopt those standards when they become effective. The Corporation does not expect the impact of such changes on the consolidated financial statements to be material.

68 IAS 12 Income Taxes (Amendment) On January 19, 2016, the IASB issued Recognition of Deferred Tax Assets for Unrealized Losses (Amendments to IAS 12). The amendments apply retrospectively for annual periods beginning on or after January 1, 2017. Earlier application is permitted. The amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset. The amendments also clarify the methodology to determine the future taxable profits used for assessing the utilization of deductible temporary differences. The Corporation intends to adopt the amendments to IAS 12 in its consolidated financial statements for the annual period beginning on January 1, 2017. The Corporation does not expect the amendments to have a material impact on the consolidated financial statements.

IFRS 9 Financial Instruments: Classification and Measurement IFRS 9 Financial instruments replaces the existing guidance in IAS 39 Financial instruments recognition and measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carried forward the guidance on recognition and de-recognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Corporation has not yet determined the impact of adopting IFRS 9 on the financial statements.

IFRS 15 Revenue from Contracts with Customers IFRS 15 Revenue from contracts with customers will replace IAS 18 Revenue, IAS 11 Construction contracts, and some revenue-related interpretations. The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. The Corporation intends to adopt IFRS 15 in its consolidated financial statements for the annual period beginning on January 1, 2018. The Corporation has not yet determined the impact of adopting IFRS 15 on the financial statements.

IFRS 16 Leases On January 13, 2016, the IASB issued IFRS 16 Leases. The new standard is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial adoption of IFRS 16. IFRS 16 will replace IAS 17 Leases. This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. This standard substantially carries forward the lessor accounting requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have been impacted, including the definition of a lease. Transitional provisions have been provided. The Corporation intends to adopt IFRS 16 in its consolidated financial statements for the annual period beginning on January 1, 2019. The Corporation has not yet determined the impact of adopting IFRS 16 on the financial statements.

IFRIC 22 - Foreign Currency Transactions and Advance Consideration In December 2016, the IASB issued IFRIC Interpretation 22, Foreign Currency Transactions and Advance Consideration. The Interpretation clarifies which date should be used for translation when a foreign currency transaction involves an advance payment or receipt. The Interpretation is applicable for annual periods beginning on or after January 1, 2018. Earlier application is permitted. The Corporation has not yet determined the impact of adopting IFRIC 22 on the financial statements.

69 Non-IFRS Performance Measures Total cash costs per gold ounce and all in sustaining costs per gold ounce are non-IFRS performance measures, do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. In addition to conventional measures prepared in accordance with IFRS, certain investors may use these measures to evaluate the Plutonic Gold Operation’s performance. Accordingly, these measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Cash costs and all in sustaining costs reconciled to cost of sales as follows:

Three months ended Three months ended (in thousands of dollars, except oz or per oz amounts) September 30, 2016 (1) December 31, 2016 Gold sold (oz) ...... 18,614 20,352 Cost of Sales ...... 23,133 19,727 Adjustments for items affecting cash costs: Depreciation and Amortization ...... (4,864) (4,601) Non-cash Inventory Movements ...... 559 619 Silver Credits ...... (52) (48) Interest income ...... — (1) Revenue-other ...... 7 — Revenue-scrap ...... 7 — Cash Costs ...... 18,790 15,696 Total Cash Costs (per gold oz) ...... 1,009 771 Adjustments for items affecting all-in sustaining cash costs: Sustaining Capital Expenditure ...... 2,103 1,020 Corporate, General and Administration ...... 181 740 Reclamation and Remediation ...... 102 235 All-in Sustaining Cost ...... 21,176 17,691 All-in Sustaining Cost (per gold oz) ...... 1,138 869

(1) The calculation of cash costs and all-in sustaining costs for the three months ended September 30, 2016 has been constructed from the unaudited carve-out financial statements of the Plutonic Gold Operations included elsewhere in this prospectus. The unaudited statement of operations and comprehensive income of the Plutonic Gold Operations as at September 30, 2016 has been translated from Australian dollars to U.S. dollars using an exchange rate of A$1.3185:US$1.00, being the Reserve Bank of Australia average rate of exchange for the three months ended September 30, 2016.

70 MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE PLUTONIC GOLD OPERATIONS

The following is MD&A of the financial condition and results of operations to assist readers in reviewing the financial condition and results of operations of the Plutonic Gold Operations for the years ended June 30, 2016 and June 30, 2015 together with the three months ended September 30, 2016 and September 30, 2015. The following is intended to supplement and complement the carve-out financial statements and notes thereto of the Plutonic Gold Operations for the years ended June 30, 2016 and June 30, 2015 and the three months ended September 30, 2016 and September 30, 2015.

The following discussion contains forward-looking information that involves numerous risks and uncertainties. Actual results of the Corporation could differ materially from those discussed in such forward-looking information as a result of these risks and uncertainties, including those set forth in this prospectus under “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors”.

The extracts from the Plutonic Gold Operations carve-out financial statements contained in this MD&A have been prepared in accordance with IFRS as issued by the IASB. The accounting policies have been consistently applied in the preparation of all periods presented. The carve-out financial statements have been derived from the Northern Star financial statements, which are prepared in accordance with IFRS as issued by the IASB.

2016 Year in Review During the years ended June 30, 2016 and June 30, 2015, the Plutonic Gold Operations realized the following:

Year ended June 30, 2016 Year ended June 30, 2015 Production (oz) ...... 64,857 78,709 All-in sustaining cost (A$/oz) ...... 1,710 1,578 Realized Price (A$/oz) ...... 1,598 1,466 Net Loss (A$) ...... 18.9 million 25.1 million Operating Cash Flow (A$) ...... 19.5 million 21.3 million

Note: Other than for several months during the year ended June 30, 2015 the Plutonic Gold Operations did not utilize its own bank account, with expenditures and income being paid and received, respectively, through Northern Star. Accordingly the operating cash flows are calculated on the basis that the Plutonic Gold Operations only funded its net investing and financing activities during the periods under review.

Production Statistics

The below table presents an excerpt of the production statistics of the Plutonic Gold Operations:

Year ended Year ended Three month period ended Three month period ended June 30, 2016 June 30, 2015 September 30, 2016 September 30, 2015 Total Material Mined (t) ...... 639,742 810,467 191,187 159,172 Total Material Milled (t) ...... 934,507 836,682 352,199 175,640 Head Grade (g/t) ...... 2.8 3.6 2.0 3.7 Gold Recovery (%) ...... 78 81 82 77 Gold Produced (oz) ...... 64,857 78,709 18,662 16,147

Review of Operations

The Plutonic Gold Mine produced 64,857 oz of gold in 2016 compared to 78,709 oz of gold in 2015. Total material mined decreased by 21% to 639,742 tonnes. All in sustaining costs increased by 8.4% to A$1,710 per oz sold in 2016 from A$1,578 per oz sold in 2015. The increase was the result of several factors, including the lower head grade of processed ore at 2.8 g/t in 2016 versus 3.6 g/t for 2015 and a decrease in the average recovery rate to 78% in 2016 from 81% in 2015.

71 In the year ended June 30, 2016, the Caribbean zone became the primary source of ore for the Plutonic Gold Mine. Production from the Caribbean zone was supplemented by ore from several other zones and, specifically in the latter half of the year, from the low grade stockpiles located outside of the Plutonic Gold Mine.

In the year ended June 30, 2015, the Plutonic Gold Mine experienced significant capital investment to facilitate access to new ore zones and to transfer mining activity away from remnant zones. The acquisition of Hermes was also completed during the course of the year.

Exploration In the year ended June 30, 2016, drilling at the Plutonic Gold Operations focused predominantly on grade control and resource drilling. Exploration work undertaken during the 2016 fiscal year focused on extending the existing Mineral Resources within the Caribbean, Timor, Indian, Caspian and Baltic zones of the Plutonic Gold Mine. Exploration drilling programs within the Trout, Cod, MMR, Zone 114 and Plutonic West zones were also completed. In addition, target generation programs in the Timor and Zone 114 zones were completed to assist with drill targeting.

Resource drilling of Hermes continued with success and the mining plans were finalized during the course of the year. It is anticipated that the eventual mining at Hermes will serve to complement the production out of the Plutonic Gold Mine and better utilize the processing facility within the Plutonic Gold Operations.

In the year ended June 30, 2015, drilling at the Plutonic Gold Operations focused predominantly on grade control and resource drilling. Exploration work focused on extending the existing Mineral Resources within the Caribbean, Timor, Spur and Pacific East zones, with further drilling occurring within the Big Fish, Zone 114 and Plutonic West zones. A 3D seismic survey of the Big Fish zone was also completed to assist with drill targeting.

Review of Financial Results The below table provides a summary of the financial results and certain financial production measures for the years ended June 30, 2016 and June 30, 2015 and for the three month period ended September 30, 2016 and September 30, 2015 related to the Plutonic Gold Operations.

Three month Three month Year ended Year ended period ended period ended June 30, 2016 June 30, 2015 September 30, 2016 September 30, 2015 (A$ 000’s) (A$ 000’s) (A$ 000’s) (A$ 000’s) Gold Sold (oz) ...... 64,180 80,141 18,614 16,365 All in sustaining costs (A$/oz) ...... 1,710 1,578 1,500 1,799 Realized Price (A$/oz) ...... 1,598 1,466 1,724 1,538 Revenue ...... 102,744 117,631 32,119 25,207 Cost of Sales ...... 120,592 138,525 30,501 29,812 Profit or (Loss) before Taxes ...... (20,041) (23,062) 1,207 (5,115) Profit or (Loss) after Taxes ...... (18,876) (25,066) 1,809 (5,757)

Net Profit / Loss For the year ended June 30, 2016, the Plutonic Gold Operations net loss after tax was A$18.9 million compared to a net loss after tax of A$25.1 million for the year ended June 30, 2015. The reduction in net loss after tax was primarily the result of a reduction in cost of sales in the amount of A$17.9 million and an increase in income tax recovery in the amount of A$3.2 million, partially offset by lower revenue received during the period.

For the three month period ended September 30, 2016, the Plutonic Gold Operations net income after tax was A$1.8 million compared to a net loss after tax of A$5.8 million for the three month period ended September 30, 2015. The swing to profit from loss, equal to an aggregate difference of A$7.6 million, resulted primarily from higher revenue in the amount of A$6.9 million, partially offset by an increase in cost of sales in the amount of A$0.7 million.

72 Revenues For the year ended June 30, 2016, gold revenues totaled A$102.7 million from the sale of 64,180 oz of gold, down from A$117.6 million from the sale of 80,141 oz of gold for the year ended June 30, 2015. The 12.6% decrease in gold revenues resulted from fewer oz of gold sold, which was partly offset by higher realized gold prices during the 2016 fiscal year.

For the three month period ended September 30, 2016, gold revenues totaled A$32.1 million, from the sale of 18,614 oz of gold, up from A$25.2 million from the sale of 16,365 oz of gold for the three month period ended September 30, 2015. The 27.4% increase in gold revenues resulted from higher oz of gold sold combined with higher realized gold prices during the three month period ended September 30, 2016.

Cost of Sales Cost of sales were A$120.6 million for the year ended June 30, 2016, which was a decrease of A$17.9 million, or 12.9%, from A$138.5 million for the year ended June 30, 2015. Cost of sales includes mine production costs, processing costs, site services, royalties, depreciation and amortization as well as inventory movements. The majority of the decrease in cost of sales relates to A$9.6 million of lower mine production costs from the decreased tonnes of ore mined, lower depreciation and amortization in the amount of A$2.4 million and a A$1.3 million increase in inventories during the 2016 fiscal year as opposed to a A$2.9 million decrease in inventories during the 2015 fiscal year.

In the three month period ended September 30, 2016 cost of sales of A$30.5 million increased by A$0.7 million, or 2.3% over the three month period ended September 30, 2015. The increase in cost of sales relates to an increase in processing costs of A$2.3 million which resulted from a 100% increase in tonnes milled and slightly offset by a A$0.9 million decrease in mining costs and a A$0.5 million reduction in site administration costs.

The Plutonic Gold Operations uses the unit-of-production basis when depreciating and amortizing mine specific assets which results in a depreciation and amortization charge proportional to the depletion of the anticipated remaining life of mine which is referenced to the estimated economic Ore Reserves and Mineral Resources of the property to which the assets relate. Lower gold production in the year ended June 30, 2016 resulted in lower depreciation and amortization compared to the year ended June 30, 2015. Higher gold production in the three month period ended September 30, 2016 resulted in higher depreciation and amortization compared to the three month period ended September 30, 2015.

Corporate Costs Corporate costs, representing a notional charge from the respective parent company to the Plutonic Gold Operations, totaled A$0.95 million in the year ended June 30, 2016, up 3.0% compared to the year ended June 30, 2015. Corporate costs in the three month period ended September 30, 2016 totaled A$0.24 million, up 3.0% compared to the three month period ended September 30, 2015.

Financing Expenses Financing expenses include accretion expenses related to rehabilitation provisions, as well as finance charges related to assets held under finance lease and totaled A$0.5 million in the year ended June 30, 2016 compared to A$1.2 million in the year ended June 30, 2015, a decrease of 58% which was primarily attributable to a reduction in the rehabilitation provision accretion. Financing expenses totaled A$0.2 million in the three month period ended September 30, 2016, compared to A$0.3 million for the three month period ended September 30, 2015.

Impairment of Exploration Assets Exploration impairment expenditures of A$0.8 million were impaired in the year ended June 30, 2016, compared to $nil in the previous year, and A$nil were impaired in the three month period to September 30, 2016, unchanged from A$nil for the three month period to September 30, 2015.

73 Statement of Financial Position

As at As at As at June 30, 2016 June 30, 2015 September 30, 2016 (A$ 000’s) (A$ 000’s) (A$ 000’s) Total assets ...... 54,567 65,650 51,296 Total liabilities ...... 46,731 60,084 44,455

Trade and Other Receivables Trade and other receivables were A$1.5 million at September 30, 2016 and A$0.8 million at June 30, 2016, compared to A$1.4 million at June 30, 2015. These balances consist of trade receivables, sundry debtors, goods and services tax recoverable and prepayments.

Inventories Inventories were A$13.9 million at September 30, 2016 and A$14.1 million at June 30, 2016, compared to A$13.1 million at June 30, 2015. These balances consist of consumable stores, ore stockpiles, gold in circuit, and dore.

Mine Properties and Amortization Mine properties were A$16.0 million at September 30, 2016 and A$19.9 million at June 30, 2016, compared to A$22.9 million at June 30, 2015. These balances consist of mine development costs, including capitalized drilling and mineral interests.

Amortization expense was A$4.9 million for the three months ended September 30, 2016 and A$17.5 million for the year ended June 30, 2016, which was an increase from A$16.7 million for the year ended June 30, 2015.

Exploration and Evaluation Exploration and evaluation assets were A$8.0 million at September 30, 2016 and A$7.7 million at June 30, 2016, compared to A$8.9 million at June 30, 2015. An impairment expense was booked in the year ending June 30, 2016.

Property, Plant and Equipment Property, plant and equipment was A$12.0 million at September 30, 2016 and A$12.0 million at June 30, 2016, compared to A$19.5 million at June 30, 2015. These balances consist of land and buildings, plant and equipment, motor vehicles, office furniture and capital work in progress.

Depreciation expense was A$1.6 million for the three months ended September 30, 2016 and A$6.7 million for the year ended June 30, 2016, which was a decrease compared to A$9.9 million for the year ended June 30, 2015.

Trade and Other Payables Trade and other payables were A$11.2 million at September 30, 2016 and A$11.2 million at June 30, 2016, compared to A$17.4 million at June 30, 2015. These balances consist of trade creditors and accruals.

Borrowings Borrowings were A$2.8 million at September 30, 2016 and A$3.8 million at June 30, 2016, compared to A$8.8 million at June 30, 2015. These balances represent the outstanding liabilities on leased assets.

Provisions Provisions were A$29.5 million at September 30, 2016 and A$30.3 million at June 30, 2016, compared to A$31.2 million at June 30, 2015. These balances represent provisions for employee entitlements and rehabilitation.

74 Northern Star’s Contribution Northern Star contributions were A$51.2 million at September 30, 2016 and A$54.0 million at June 30, 2016, compared to A$32.9 million at June 30, 2015. These amounts represent the contribution to the Plutonic Gold Operations by Northern Star prior to the Acquisition by the Corporation.

Statement of Cash Flows Other than for several months during the year ended June 30, 2015, the Plutonic Gold Operations did not utilize its own bank account, with expenditures and income being paid and received, respectively, through Northern Star. Accordingly the operating cash flows are calculated on the basis that the Plutonic Gold Operations only funded its net investing and financing activities during the periods under review.

Summary of Cash Flows

Year ended Year ended Three month period ended Three month period ended June 30, 2016 June 30, 2015 September 30, 2016 September 30, 2015 (A$ 000’s) (A$ 000’s) (A$ 000’s) (A$ 000’s) Operating Activities ...... 19,473 21,300 3,754 7,122 Investing Activities ...... (15,162) (35,103) (2,779) (6,063) Financing Activities ...... (4,311) 13,803 (975) (1,059)

Financial Instruments and Related Risks The Plutonic Gold Operations activities expose it to credit risk, market risk (including interest rate risk, foreign exchange risk and price risk), and liquidity risk. This note presents qualitative and quantitative information about the Plutonic Gold Operation’s exposure to each of these risks, and its objectives, policies and procedures for managing such risk.

Credit Risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Plutonic Gold Operations. Credit risk arises from credit exposures to gold sales counterparties and financial counterparties.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. In determining the recoverability of trade and other receivables a risk analysis considering the type and age of the outstanding receivable and the creditworthiness of the counterparty is performed. If appropriate, an impairment loss is recognized in profit or loss.

Liquidity Risk Liquidity risk is the risk that the Plutonic Gold Operations will encounter difficulty in meeting obligations associated with financial liabilities. Detailed budgets and forecasts are prepared to determine the funding requirements for operations, capital expenditure programs and expansion programs. In the past, any financial support required by the Plutonic Gold Operations was provided by Northern Star. On a going forward basis, the Plutonic Gold Operations is expected to be the sole source of revenue for the Corporation and, outside of obtaining additional third party financing, will be operated on a self-sufficient basis.

Market Risk Market risk represents the potential loss that can be caused by a change in the market value of financial instruments. The Plutonic Gold Operations’ exposure to market risk is determined by a number of factors, including foreign exchange rates and commodity prices.

75 Cash Flow and Fair Value Interest Rate Risk The Plutonic Gold Operations have minimal exposure to interest rate risk. Borrowings relate to the purchases of plant and equipment under finance lease arrangements which have fixed interest rates over their term and are therefore not subject to interest rate risk as defined in IFRS 7.

Foreign Exchange Risk The Plutonic Gold Operations are located within Australia and material expenses are denominated in Australian dollars, the Corporation’s functional currency. Sales are denominated and settled by the Perth Mint in Australian dollars at the Australian dollar spot price.

Price Risk The Plutonic Gold Operations are exposed to the risk of fluctuations in the prevailing market prices for the gold and silver produced from its operations. The Plutonic Gold Operations’ profitability depends on the price of gold, which is affected by numerous factors, such as the sale or purchase of gold by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation in the value of the U.S. dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of the world’s major gold-producing countries.

Historically, price risk was managed through the use of gold forward contracts. These contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered into the contract. The physical gold delivery contracts are considered a contract to sell a non-financial item and therefore do not fall within the scope of IFRS 139 Financial Instruments: Recognition and Measurement.

The ability of the Corporation to implement successful hedging strategies going forward will depend, in part, on its creditworthiness with various financial institutions. At this stage of its development, and without having yet produced a full year of audited consolidated financial statements, it is unlikely that financial institutions would be willing to allow the Corporation to enter into hedging instruments. While the Corporation expects to be able to consider hedging strategies more fully in 2017, there can be no assurance that it will be able to do so successfully, if at all.

The costs in relation to the Plutonic Gold Operations’ production, development and exploration activities vary depending on the market prices of certain mining consumables. Electricity is supplied by way of a power station on site secured by means of an operating lease with a minimum term of seven years beginning in July 2014.

Capital Resources For the year ended June 30, 2016, Northern Star invested A$15.2 million in property, plant and equipment, mine properties, and exploration and evaluation. Capital expenditure contracted for as at June 30, 2016 was A$4.3 million.

Northern Star entered into an operating lease for the operation and maintenance of a power station for the Plutonic Gold Operations and this lease was inherited by the Corporation in connection with the Acquisition. The lease term is seven years and commenced in July 2014. Commitments for minimum lease payments in relation to this non- cancellable operating lease (excluding variable per kilowatt hour charges) are as follows:

Year ended Year ended June 30, 2016 June 30, 2015 Commitments Due (A$ 000’s) (A$ 000’s) Within one year ...... 1,969 1,969 Between one and five years ...... 7,876 7,876 Later than five years ...... — 1,969 Total ...... 9,845 11,814

At June 30, 2016 and June 30, 2015, the Plutonic Gold Operations had cash and cash equivalents of A$nil given that cash receipts and payments at those dates were managed through Northern Star’s corporate bank accounts.

76 Off-Balance Sheet Arrangement The Plutonic Gold Operations have no off balance sheet arrangements.

Critical Accounting Estimates The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and related notes. These judgments, estimates and assumptions are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from those estimates. Information about areas of judgment and key sources of uncertainty and estimation is contained in the description of the accounting policies and/or the notes to the audited financial statements.

Judgments, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised.

The key areas where judgments, estimates and assumptions have been made in the reporting period or that have a significant risk of causing a material adjustment to the amounts recognized in the financial statements are summarized below.

Rehabilitation Provision The Plutonic Gold Operations assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on the life of mine and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known.

Exploration and Evaluation Expenditure Exploration and evaluation expenditure include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation expenditure acquired in a business combination. Exploration and evaluation expenditure is capitalized on an area of interest basis. Costs incurred before the Plutonic Gold Operations has obtained the legal rights to explore an area are recognized in the statement of profit or loss and other comprehensive income.

Exploration and evaluation expenditure are only recognized if the rights of the area of interest are current and either, the expenditures are expected to be recouped through successful development and exploitation of the area of interest or activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable Ore Reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Once a development decision has been made all past exploration and evaluation expenditure in respect of an area of interest that has been capitalized is transferred to mine properties where it is amortized over the life of the area of interest to which it relates on a unit-of-production basis. No amortization is charged during the exploration and evaluation phase.

The application of the above accounting policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of Ore Reserves will be found. Any such estimates and assumptions may change as new information becomes available, which may require adjustments to the carrying value of expenditure. Capitalized exploration and evaluation expenditure is assessed for impairment when an indicator of impairment exists, and capitalized expenditure are written off where required.

77 Determination of Mineral Resources and Ore Reserves For purposes of the historical carve-out financial information, financial statements and Management’s Discussion and Analysis of the Plutonic Gold Operations included in this prospectus, references to estimated “Mineral Resources” and “Ore Reserves” are to such terms as calculated in accordance with the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Following the completion of the Acquisition, the Corporation has transitioned to using CIM Definition Standards for the Plutonic Gold Operations.

There are numerous uncertainties inherent in estimating Mineral Resources and Ore Reserves. Assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of Ore Reserves and may, ultimately, result in the Ore Reserves being restated. Such changes may impact asset carrying values, depreciation and amortization rates, deferred development costs and provisions for restoration.

Depreciation / Amortization Method Items of property, plant and equipment and mine properties are depreciated and amortized over their useful lives. The Plutonic Gold Operations uses the unit-of-production basis when depreciating and amortizing mine specific assets which results in a depreciation and amortization charge proportional to the depletion of the anticipated remaining life of mine which is referenced to the estimated economic Mineral Resources and Ore Reserves of the property to which the assets relate. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable Mineral Resources and Ore Reserves of the mine property at which it is located. Depreciation of non-mine specific property, plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term. Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Impairment of Property, Plant and Equipment and Mine Properties Judgment is involved in assessing whether there are any indications that an asset or cash generating unit (“CGU”) may be impaired. This assessment is made based on an analysis of, amongst other factors, changes in the market or business environment, events that have transpired that have impacted the asset or CGU and information from internal reporting.

For the purpose of determining the recoverable amount of an asset or CGU, if indicators of impairment exist, operating results and net cash flow forecasts are determined by estimating the expected future revenues and costs, including the future costs of production, capital expenditures, site closure and environmental rehabilitation. These include net cash flows expected to be realized from the extraction, processing and sale of Mineral Resources that do not currently qualify for inclusion in proven and probable Ore Reserves when there is a high degree of confidence in the economic extraction of such non-reserve material. This expectation is usually based on preliminary drilling and sampling of areas of mineralization that are contiguous with existing Mineral Resources and Ore Reserves. If no cash flows from extraction, processing and sale of Mineral Resources are expected, then the expected proceeds on the sale of the existing assets and infrastructure is used for impairment test purposes. Judgment is also required in estimating the discount rate applied and future commodity prices used for impairment testing. The long-term commodity prices are derived from forward prices and analysts’ commodity price forecasts. These assessments often differ from current price levels and are updated periodically. Impairment testing is done at the CGU level which is deemed to be the Plutonic Gold Operations. The Plutonic Gold Operations may have multiple possible mining areas and management must exercise judgment in determining what constitutes a CGU and the degree of aggregation of various assets. These factors impact the impairment analysis performed as the results of the impairment analysis might differ based on the composition of the various CGUs.

Changes in Accounting Policies The accounting policies adopted in the preparation of the audited carve-out financial statements for the year ended June 30, 2016 are consistent with those adopted for the financial year ended June 30, 2015. The accounting policies adopted in the preparation of the unaudited interim condensed carve-out financial statements for the three months ended September 30, 2016 are consistent with those adopted for the three months ended September 30, 2015.

78 Transactions with Related Parties Following the Acquisition and the consideration granted in relation thereto, Northern Star became a related party to the Corporation. The transactions with Northern Star and its subsidiaries are as follows:

Year ended Year ended Three months ended Three months ended June 30, 2016 June 30, 2015 September 30, 2016 September 30, 2015 (A$ 000’s) (A$ 000’s) (A$ 000’s) (A$ 000’s) Balance at the beginning of the period ...... 32,876 27,745 54,022 32,876 Northern Star recharges and cost allocations ..... 20,195 (792) (3,042) 12,354 Northern Star cash contribution ...... — 5,000 — — Corporate costs ...... 951 923 238 231 Balance at the end of the period ...... 54,022 32,876 51,218 45,461

The operating results of the Plutonic Gold Operations have been specifically identified based on Northern Star’s organizational structure up to and including September 30, 2016. Certain expenses and expenditures presented in the carve-out financial statements represent estimates of the cost of services previously incurred by Northern Star which would be required to operate the Plutonic Gold Operations. These estimates were based on methodologies that management believes to be reasonable and include administrative and corporate costs.

Other Risks and Uncertainties The Plutonic Gold Operations are subject to various financial and operational risks and uncertainties that could have a significant impact on profitability and levels of operating cash flow. These risks and uncertainties include, but are not limited to: fluctuations in metal prices (principally the price of gold), capital and operating cost estimates, borrowing risks, production estimates, uncertainty in the estimation of Mineral Resources and Ore Reserves, the inherent danger of mining, a lack of asset diversification, infrastructure risk, hedging activities, insured and uninsured risks, environmental risks and regulations, government regulation, ability to obtain and renew Permits, foreign operations risks, title to properties, competition, dependence on key personnel, currency, repatriation of earnings and stock exchange price fluctuations.

Non-IFRS Performance Measures Total cash costs per gold ounce and all in sustaining costs per gold ounce are non-IFRS performance measures, do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. In addition to conventional measures prepared in accordance with IFRS, certain investors may use these measures to evaluate the Plutonic Gold Operation’s performance. Accordingly, these measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

79 Cash costs and all in sustaining costs reconciled to cost of sales as follows:

(in thousands of Australian dollars, except oz Year ended Year ended Three months ended Three months ended or per oz amounts) June 30, 2016 June 30, 2015 September 30, 2016 September 30, 2015 Gold sold (oz) ...... 64,180 80,141 18,614 16,365 Cost of Sales ...... 120,592 138,525 30,501 29,812 Less: Depreciation and Amortization ...... 24,169 26,567 6,413 6,130 Less: Non-cash Inventory Movements ...... (428) 215 (737) 231 Less: Exploration Write Off ...... — 447 — 367 Less: Silver Credits ...... 172 183 68 40 Less: Stock adjustments ...... 651 — — — Less: Interest income ...... — (59) — — Less: Loss on disposal of assets ...... 203 692 — — Less: Revenue-other ...... — (41) (9) — Less: Revenue-scrap ...... (30) (41) (9) (6) Cash Costs ...... 95,855 110,563 24,775 23,050 Total Cash Costs (per gold oz) ...... 1,494 1,380 1,331 1,408 Less: Capital Expenditure ...... (12,734) (14,072) (2,773) (5,921) Less: Corporate, General and Administration . . . (951) (923) (238) (231) Less: Reclamation and Remediation ...... (223) (878) (135) (234) All-in Sustaining Cost ...... 109,763 126,436 27,921 29,436 All-in Sustaining Cost (per gold oz) ...... 1,710 1,578 1,500 1,799

DESCRIPTION OF THE SECURITIES DISTRIBUTED

The Corporation is authorized to issue an unlimited amount of number of Common Shares without nominal or par value. As of the date hereof, 11,492,599 Common Shares are issued and outstanding as fully paid and non-assessable. Holders of Common Shares are entitled to receive notice of, attend and vote at, all meetings of the shareholders of the Corporation (except with respect to matters requiring the vote of a specified class or series voting separately as a class or series) and are entitled to one vote for each Common Share on all matters to be voted on by shareholders at meetings of the shareholders of the Corporation. Holders of Common Shares are entitled to receive such dividends, if, as and when declared by the Board, in their sole discretion. All dividends which the Board may declare shall be declared and paid in equal amounts per Common Share on all Common Shares at the time outstanding. On liquidation, dissolution or winding up of the Corporation, the holders of Common Shares will be entitled to receive the property of the Corporation remaining after payment of all outstanding debts on a pro rata basis, but subject to the rights, privileges, restrictions and conditions of any other class of shares issued by the Corporation. There are no pre-emptive, redemption or conversion rights attached to the Common Shares. All Common Shares, when issued, are and will be issued as fully paid and non-assessable Common Shares without liability for further calls or to assessment.

Assuming the exercise of each Special Warrant for one Qualifying Share as contemplated in this prospectus, the issuance of 28,450,000 Treasury Shares (excluding the Treasury Shares issuable on the exercise of the Over-Allotment Option), and the issuance of 18,859,041 Consideration Shares, it is expected that there will be 91,401,640 Common Shares issued and outstanding following the closing of the Offering (on a non-diluted basis).

80 CONSOLIDATED CAPITALIZATION

The following table summarizes the Corporation’s consolidated capitalization as at December 31, 2016 before and after giving effect to the Offering, the deemed exercise of the Special Warrants, and the issuance of Consideration Shares and Consideration Warrants. The table should be read in conjunction with the financial statements, including the notes thereto, included elsewhere in this prospectus.

As at December 31, 2016 After Giving Effect to the Offering, the deemed exercise of the Special Warrants, and the As at issuance of Consideration December 31, 2016 Shares and Consideration (Audited) Warrants Description (US$000’s) (US$000’s) Indebtedness • Short Term Debt and current portion of finance Lease Obligations ...... 2,102 2,102 • Finance Lease Obligations ...... 27 27 Equity • Issued Capital ...... 1,471 45,776 • Special Warrants ...... 10,552 Nil • Consideration Warrants ...... Nil 1,741 • Accumulated other comprehensive loss ...... (730) (730) • Retained Earnings ...... 8,902 3,760 Total Capitalization ...... 22,324 52,676

PRIOR SALES

On September 29, 2016, the Corporation issued 32,600,000 Subscription Receipts at a price of $0.50 per Subscription Receipt by way of the Private Placement for net proceeds of approximately $15,473,240 after deducting the cash commission to the Private Placement Agent of $615,000 and the expenses of the Private Placement of approximately $211,760. The Corporation used the net proceeds from the Private Placement to fund part of the cash portion of the purchase price of the Acquisition and for general working capital requirements.

The Subscription Receipts were created and issued pursuant to, and their terms and conditions were governed by, the Subscription Receipt Agreement. In connection with the closing of the Acquisition on October 12, 2016, each Subscription Receipt was automatically exercised for one Special Warrant. This prospectus also qualifies the distribution of 32,600,000 Qualifying Shares issuable (for no additional consideration) upon the deemed exercise of the previously issued Special Warrants. See “Plan of Distribution”.

As part of the consideration of the services rendered by the Private Placement Agent in connection with the Private Placement, the Corporation issued the Private Placement Agent an aggregate of 1,230,000 Broker Warrants. Each Broker Warrant entitles the Private Placement Agent to acquire a Broker Share at $0.50 (being the subscription price of the Private Placement) at any time or from time to time in whole or in part for a period ending the earlier of (a) September 29, 2021; and (b) two years following the Corporation completing an IPO. See “Plan of Distribution”.

The Special Warrants were created and issued pursuant to, and their terms and conditions are governed by, the Special Warrant Indenture. Each Special Warrant entitles the holder thereof, upon deemed exercise (for no additional consideration), to acquire one Qualifying Share, subject to adjustment in certain circumstances in accordance with the

81 Special Warrant Indenture, at 5:00 p.m. (Toronto time) on the earlier of (i) the third business day after the date that a final receipt has been issued with respect to a final prospectus qualifying the distribution of the Qualifying Shares in at least each of the provinces of Canada, except Quebec, such as this prospectus, provided that in the event that the Corporation is completing an IPO by way of such prospectus, such as pursuant to this prospectus, such time and date will instead be the time and date of completion of such IPO; and (ii) January 30, 2017 (such earlier date, the “Deemed Exercise Date”).

On January 30, 2017, the Corporation and TSX Trust Company, as special warrant agent, entered into the Supplemental Indenture pursuant to which the outside date for the Deemed Exercise Date was amended from January 30, 2017 to February 28, 2017. The Supplemental Indenture was executed following receipt of an extraordinary resolution of special warrantholders (being a written resolution carried by special warrantholders holding not less than 66 2/3% of the total outstanding amount of Special Warrants) approving the amendment to the Deemed Exercise Date.

The following table summarizes issuances of securities within the twelve months prior to the date of this prospectus. In addition to the below, it is anticipated that Northern Star will be issued an aggregate of 18,859,041 Consideration Shares and 14,429,521 Consideration Warrants pursuant to the terms of the Acquisition Agreement concurrently with the closing of the Offering.

Date Number/Type of Securities Issue/Exercise Price per Security July 4, 2016 ...... 5,000,000 Common Shares(1) $0.01 July 4, 2016 ...... 100Common Shares $0.25 July 14, 2016 ...... 2,144,000 Common Shares $0.25 July 14, 2016 ...... 2,519,711 Common Shares $0.33 July 25, 2016 ...... 500,000 Common Shares $0.25 July 25, 2016 ...... 528,788 Common Shares $0.33 August 24, 2016 ...... 400,000 Common Shares $0.25 September 26, 2016 ...... 400,000 Common Shares $0.25 September 29, 2016 ...... 32,600,000 Subscription Receipts(2) $0.50 September 29, 2016 ...... 1,230,000 Broker Warrants(3) $0.50 October 11, 2016 ...... 32,600,000 Special Warrants(4) N/A

(1) Common Shares initially issued to Christopher Bradbrook of which 1,500,000 were to be held in trust for the benefit of certain holders and later allocated among four individuals who are employees and/or officers of the Corporation. (2) Subscription Receipts issued pursuant to the Private Placement. (3) Broker Warrants issued to the Private Placement Agent as partial consideration for the services rendered by the Private Placement Agent in connection with the Private Placement. (4) Special Warrants issued for no additional consideration on the automatic exercise of the Subscription Receipts in connection with the completion of the Acquisition.

82 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER

Under the terms of the Agency Agreement, the Corporation has agreed to use its commercially reasonable efforts to cause its directors and officers and Northern Star to enter into lock-up agreements in favour of the Agents, pursuant to which each such individual and company will agree that, for a period of six months from the Closing Date, each will not, among other things and subject to certain limited exceptions, directly or indirectly, offer, sell, contract to sell, grant any option to purchase, make any short sale, or otherwise dispose of, or transfer, or announce any intention to do so, any Common Shares or securities convertible into or exercisable or exchangeable for Common Shares, whether owned directly or indirectly, or under their control or direction, or with respect to which each has beneficial ownership (including for certainty in relation to Northern Star, all Consideration Shares and Consideration Warrants to be issued to Northern Star). See “Plan of Distribution”.

To the Corporation’s knowledge as at the date of this prospectus, the number of securities which are anticipated to be held following completion of the Offering by directors, executive officers and securityholders holding in excess of 10% of the outstanding Common Shares and which are anticipated to be subject to escrow requirements or which are anticipated following completion of the Offering to be subject to lock-up agreements are set out below:

Escrow Securities – Principals

Percentage of Class after Giving effect to the Offering, the Number of securities held in deemed exercise of the Special escrow or subject to a Warrants and the issuance of contractual restriction on the Consideration Shares and Class of Security transfer Consideration Warrants(2) Common Shares ...... 27,040,959(1) 29.6% Stock Options ...... 5,400,000(3) 81.2% Consideration Warrants ...... 14,429,521(4) 100%

(1) Of the noted Common Shares, an aggregate of 8,181,918 will be held by directors and officers of the Corporation and Billabong, including 500,000 Qualifying Shares to be issued to Mr. Bradbrook and 1,400,000 Qualifying Shares to be issued to Mr. Wellings, respectively, upon the deemed exercise of the Special Warrants, and subject to escrow in accordance with NP 46-201. The noted Common Shares also include the 18,859,041 Consideration Shares anticipated to be issued to Northern Star, which will also be subject to escrow in accordance with NP 46-201. All of the noted Common shares will be subject to lock-up agreements anticipated to expire on August 23, 2017. (2) On a non-diluted basis and assuming no exercise of the Over-Allotment Option. (3) All the noted Stock Options will be subject to escrow in accordance with NP 46-201. All of the noted Stock Options will also be subject to lock-up agreements anticipated to expire on August 23, 2017. (4) All of the noted Consideration Warrants will be subject to escrow in accordance with NP 46-201 and will be subject to a lock-up agreement anticipated to expire on August 23, 2017.

In accordance with Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions of the Exchange’s Corporate Finance Manual (“Policy 5.4”) and NP 46-201, 27,040,959 Common Shares, 5,400,000 Stock Options and 14,429,521 Consideration Warrants, issued to principals under NP 46-201, will be escrowed pursuant to NP 46-201. The Corporation will be categorized as an “established issuer” under NP 46-201 and as a result, the above noted securities will be subject to an 18 month escrow period and be released from escrow as follows:

Percentage of Escrowed Securities Released from Escrow Date

1/4 of the Escrowed Securities Listing Date of the Common Shares 1/3 of the remaining Escrowed Securities 6 months after the Listing Date 1/2 of the remaining Escrowed Securities 12 months after the Listing Date All of the remaining Escrowed Securities 18 months after the Listing Date

The securities to be escrowed noted above may not be sold, assigned, transferred, redeemed, surrendered or otherwise dealt with in any manner except as provided by NP 46-201 and the terms of the escrow agreements to be entered into by and among the Corporation, the holders of such securities, and TSX Trust Company, as escrow agent, which will be in the form required by NP 46-201.

83 Escrow Securities – Seed Shares “Seed Shares” are Common Shares or other securities that were issued to persons prior to the completion of the Offering. Depending on the price at which such securities were issued (relative to the Offering Price), the Exchange imposes its own escrow requirements pursuant to Policy 5.4 that are independent of NP 46-201. Upon completion of the Offering, the following securities are anticipated to be held in escrow subject to the applicable seed share resale restrictions of the Exchange.

Percentage of Class after Giving effect to the Offering, the Number of securities held in escrow deemed exercise of the Special or subject to a contractual Warrants and the issuance of Class of Security restriction on transfer the Consideration Shares Common Shares ...... 5,210,681 Common Shares(2)(3) 5.70%(1)

(1) On a non-diluted basis and assuming no exercise of the Over-Allotment Option. (2) 11,492,599 Common Shares are considered ‘Seed Shares’. Due to the fact that 6,281,918 of these Common Shares are held by directors and officers and are already subject to an escrow agreement under NP 46-201, the remaining 5,210,681 Common Shares will be subject to the seed share resale restrictions. (3) For greater certainty, shareholders who acquire Qualifying Shares in connection with the deemed exercise of the Special Warrants will not be subject to any seed share resale restrictions.

The securities to be escrowed noted above may not be sold, assigned, transferred, redeemed, surrendered or otherwise dealt with in any manner except as provided by Policy 5.4 and the terms of the escrow agreements to be entered into by and among the Corporation, the holders of such securities, and TSX Trust Company, as escrow agent, which will be in the form required by Policy 5.4.

Shareholders that acquired their Common Shares at $0.01 and that are not otherwise subject to the principal escrow regime described above (totaling an aggregate of 250,000 Common Shares) will be subject to the applicable Exchange seed share resale restrictions, and their Common Shares shall be held in escrow and released as follows: 25% will be released on the Listing Date and 25% will be released every six months thereafter (for a total escrow period of 18 months).

Shareholders that acquired their Common Shares at $0.25 or $0.33 will also be subject to the applicable Exchange seed share resale restrictions, but their Common Shares shall be held in escrow and released as follows: 20% will be released on the Listing Date and 20% will be released every month thereafter (for a total escrow period of 4 months).

84 PRINCIPAL SHAREHOLDERS

The following table sets forth, to the best of the Corporation’s knowledge, as of the date of this prospectus, the only persons or companies who beneficially own, directly or indirectly, or exercise control or direction over, directly or indirectly, 10% or more of the issued and outstanding Common Shares after giving effect to the Offering (assuming no exercise of the Over-Allotment Option), the deemed exercise of the Special Warrants and the issuance of the Consideration Shares.

Number and Percentage of Common Shares after giving effect to the Number and Offering (assuming no Percentage of Common Shares exercise of the Over- prior to giving effect to the Allotment Option), the Offering, the deemed exercise of deemed exercise of the Name of the Special Warrants and Special Warrants and Shareholder and Type of the issuance of the Consideration the issuance of the Jurisdiction of Residence Ownership Shares(2) Consideration Shares(3) Northern Star Resources Ltd. Perth, Australia(1) .... Beneficial and of Record Nil / 0% 18,859,041/20.63%

(1) It is anticipated that Northern Star will receive an aggregate of 18,859,041 Consideration Shares (assuming a Consideration Payment of $10,000,000) and 14,429,521 Consideration Warrants as a portion of the purchase price payable in connection with the Acquisition. (2) Expressed on a non-diluted basis. (3) Expressed on a non-diluted basis. On a fully-diluted basis, the number and percentage of Common Shares owned, controlled or directed by Northern Star is 33,288,562 and 29.13%. This fully-diluted calculation includes the exercise of the 14,429,521 Consideration Warrants anticipated to be issued to Northern Star, the exercise of the 1,230,000 Broker Warrants, the exercise of the 553,500 Offering Broker Warrants and the exercise of 6,650,000 Stock Options, but excludes the exercise of the Over-Allotment Option granted to the Agents.

85 DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the name, province and country of residence, position held with the Corporation, principal occupation during the preceding five years, date on which they were first appointed as a director of the Corporation (if applicable), and the number of Common Shares beneficially owned by each person who is a director and/or an executive officer of the Corporation.

As of the date of this prospectus, the Corporation’s Board of Directors consists of Christopher Bradbrook, Mark Wellings, Tamara Brown and Shaun Day. Following the closing of the Offering, the Corporation will appoint one additional director. This additional director has not yet been named, but the Corporation will appoint him or her as soon as reasonably practicable following the closing of the Offering. Directors will be elected annually and they are expected to hold office until the Corporation’s next annual meeting of shareholders, at which time they may be re- elected or replaced.

Common Shares Held After Giving Effect to the Offering Common Shares Held (excluding the Prior to Giving Effect purchase of any to the Offering and Treasury Shares) the Deemed Exercise and the Deemed Position(s) with the First Appointed as of the Special Exercise of the Name and Province of Residence Corporation(1) Director Warrants Special Warrants Christopher Bradbrook, ...... President, Chief July 4, 2016 4,203,130(2) 4,703,130 Ontario, Canada Executive Officer and Director Paul Olmsted, ...... Chief Financial N/A 650,000 650,000 Ontario, Canada Officer and Corporate Secretary Mark Wellings, ...... Chairman of the December 20, 678,788(4) 2,078,788 Ontario, Canada(3) Board and Director 2016 Tamara Brown, ...... Director December 20, —— Ontario, Canada(3) 2016 Shaun Day, Perth, ...... Director December 20, —— Australia(3)(5) 2016 Corey Doust ...... Vice President N/A 500,000(6) 500,000 Perth, Australia Operations, Plutonic Gold Mine

(1) The composition of the Compensation and Nominating Committee has not yet been finalized, although it is expected that the director to be named following the closing of the Offering will be the chair of such committee. (2) In addition to this number, Mr. Bradbrook is also currently the registered holder of 500,000 Special Warrants. (3) Member of the Audit Committee. Mr. Day is chair of the Audit Committee. (4) In addition to this number, Mr. Wellings is also currently the beneficial holder of 1,400,000 Special Warrants. (5) Mr. Day is the nominee director of Northern Star who is entitled to a nominee pursuant to the terms of the Acquisition Agreement. See “Business of the Corporation – Three Year History and Acquisition of the Plutonic Gold Operations”. (6) These Common Shares are issued to Mr. Doust subject to his continued employment with Billabong for a period of 12 consecutive months. In the event his employment is terminated for any reason in the next 12 months, the Common Shares will be forfeited and purchased by the Corporation for cancellation.

The principal occupations of each of the Corporation’s directors and executive officers within the past five years are disclosed in the brief biographies set forth below.

Christopher Bradbrook: Mr. Bradbrook, President and Chief Executive Officer of the Corporation, is a mining professional whose career has spanned more than 35 years, and has generated a unique combination of experience and expertise. His principal roles have encompassed many aspects of the mining industry including financing, strategic planning, exploration, mine development, corporate development work, financial analysis, investor relations and

86 marketing. Among his most significant roles, he was founder of Crocodile Gold Corp. (now Kirkland Lake Gold Ltd.), founder and former President of New Gold Inc., and former Vice President, Corporate Development of Goldcorp Inc. He was also involved in the discovery and development of the Williams Mine in Hemlo, Ontario. He has been personally involved in raising more than $1.1 billion in public and private equity markets. Mr. Bradbrook has both an M.Sc. and B.Sc. in Geology.

Paul Olmsted: Mr. Olmsted, Chief Financial Officer and Corporate Secretary, has been an executive in the gold mining industry for the past 15 years and has been active in the mining industry for 30 years. Most recently he served as Senior Vice President of Corporate Development at IAMGOLD Corporation where he was responsible for the company’s acquisition and divestiture program to achieve strategic growth objectives. He led teams responsible for the technical reviews, financial analyses, valuation, structuring and executing on numerous transactions. Mr. Olmsted holds a B.Sc. in Mining Engineering and an MBA.

Mark Wellings: Mr. Wellings is a mining professional with over 25 years international experience in both the mining industry and mining finance sector. From 1988 to 1994 Mr. Wellings worked in the mining industry both in Canada and Australia with a variety of companies and roles acquiring valuable, relevant experience in exploration, development and production. In 1996, Mr. Wellings joined the investment dealer GMP Securities L.P. where he co- founded the firm’s corporate finance mining practice. During his 18 years at GMP, Mr. Wellings was responsible for, and advised on, some of the Canadian mining industry’s largest transactions, both in equity financing and M&A. Mr. Wellings is a Professional Engineer and holds a Bachelor of Applied Science degree in Geological Engineering from the University of Windsor and an MBA degree.

Tamara Brown: Ms. Brown is a mining industry professional with over 20 years’ experience in the mining and financial sectors. She is currently the Vice President of Corporate Development of Primero Mining Corp. and was previously Vice President, Investor Relations for Primero from 2010 to 2015. From 2009 to 2010, Ms. Brown was Director of Investor Relations for IAMGOLD Corporation. Previously, Ms. Brown was an investor relations consultant for several junior exploration companies, partner of a boutique investment banking firm and a professional engineer in the mining industry. She graduated with a Bachelor of Engineering degree from Curtin University in Australia and has completed the Chartered Business Valuator course at York University.

Shaun Day: Mr. Day is the Chief Financial Officer of Northern Star. Mr. Day has extensive financial and commercial experience spanning over 20 years. Prior to joining Northern Star, Mr. Day was the Chief Financial Officer of Sakari Resources Limited ahead of its takeover by PTT PLC. Previously he performed the Chief Financial Officer and Treasury roles in ASX listed mining and telecommunications infrastructure companies. Mr. Day has professional experience in a range of multinational business and investment banking roles, with particular focus on the mining sector and in-depth exposure to a number of debt and equity market transactions. He obtained a Bachelor of Commerce from University of Western Australia, is a Fellow of the Institute of Chartered Accountants of Australia, a Fellow of the Financial Services Institute of Australasia and a graduate of the Governance Institute of Australia (Chartered Company Secretary).

Corey Doust: Mr. Doust is the Vice President, Operations of the Plutonic Gold Mine. He is an accomplished mining engineer with 20 years’ of experience in management positions of narrow vein gold mines through to large scale open pit iron ore operations in Western Australia. He has a strong background in the management of underground hard rock gold mines including as General Manager of Norseman, Wiluna and most recently with Northern Star at their Paulsens Gold Mine. Mr. Doust has a Bachelor of Engineering (Mining) from the Western Australian School of Mines and holds a Western Australia First Class Mine Manager’s Certificate.

As at the date of this prospectus, the directors or executive officers of the Corporation, as a group, beneficially own, directly or indirectly, or exercise control or direction over, 6,031,918 Common Shares, representing approximately 52.5% of the total number of Common Shares outstanding before giving effect to the exercise of Stock Options and Awards to purchase Common Shares and the deemed exercise of the Special Warrants held by such directors and executive officers. Upon completion of the Offering (without giving effect to the exercise of the Over- Allotment Option and excluding the purchase of any Treasury Shares), the deemed exercise of the Special Warrants and the issuance of the Consideration Shares, but before giving effect to the exercise of Stock Options and Awards to purchase Common Shares held by such directors and executive officers, the directors and executive officers of the Corporation, as a group, are expected to beneficially own, directly or indirectly, or exercise control or direction over,

87 7,931,918 Common Shares, representing approximately 8.68% of the total number of Common Shares outstanding. The statements as to the number of Common Shares beneficially owned, directly or indirectly, or over which control or direction is exercised by the directors and executive officers of the Corporation as a group are based upon information furnished by the directors and executive officers.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions and Conflicts Of Interest Cease Trade Orders To the knowledge of the Corporation, no director (including the individuals who are not currently directors but will serve as the Corporation’s directors effective immediately following completion of the Offering) or executive officer of the Corporation (nor any personal holding corporation of any of such persons) is, as of the date of this prospectus, or was within 10 years before the date of this prospectus, a director, chief executive officer or chief financial officer of any corporation (including the Corporation), that: (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant corporation access to any exemption under securities legislation, in each case that was in effect for a period of more than 30 consecutive days (collectively, an “Order”), that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) was subject to an Order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Bankruptcies No director (including the individuals who are not currently directors but will serve as the Corporation’s directors effective immediately following completion of the Offering) or executive officer of the Corporation (nor any personal holding corporation of any of such persons), or shareholder holding a sufficient number of securities of the Corporation to affect materially the control of the Corporation, (i) is as of the date of this prospectus or has been within 10 years before the date of this prospectus, a director or executive officer of a corporation (including the Corporation) that while that person was acting in such capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) has within the 10 years before the date of this prospectus become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or has been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such director, executive officer or shareholder.

Penalties or Sanctions To the knowledge of the Corporation, no director (including the individuals who are not currently directors but will serve as the Corporation’s directors effective immediately following completion of the Offering) or executive officer of the Corporation (nor any personal holding corporation of any of such persons), or shareholder holding a sufficient number of securities of the Corporation to affect materially the control of the Corporation, has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest To the knowledge of the Corporation, there are no known existing or potential conflicts of interest between the Corporation and its directors (including the individuals who are not currently directors but will serve as the Corporation’s directors effective immediately following completion of the Offering) or officers as a result of their outside business interests except that certain of the Corporation’s directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to the Corporation and their duties as a director or officer of such other companies.

88 EXECUTIVE COMPENSATION

The following discussion describes the significant elements of the Corporation’s executive compensation program, with particular emphasis on the process for determining compensation payable to the Chief Executive Officer and the Chief Financial Officer and, other than the Chief Executive Officer and the Chief Financial Officer, the most highly compensated executive officer, or the most highly compensated individual acting in a similar capacity (collectively, the “Named Executive Officers”or“NEOs”). The NEOs are: • Christopher Bradbrook, President and Chief Executive Officer • Paul Olmsted, Chief Financial Officer • Corey Doust, Vice President Operations, Plutonic Gold Mine

Overview and Compensation Governance The Corporation’s compensation practices will be designed to retain, motivate and reward its executive officers for their performance and contribution to the Corporation’s long-term success. Based on recommendations from the Compensation and Nominating Committee, the Board will make decisions regarding executive compensation. The Board will seek to compensate the Corporation’s executive officers by combining short and long-term cash and equity incentives. It will also seek to reward the achievement of corporate and individual performance objectives, and to align executive officers’ incentives with shareholder value creation. The Board will seek to tie individual goals to the area of the executive officer’s primary responsibility. These goals may include the achievement of specific financial or business development goals. The Board will also seek to set corporation performance goals that reach across all business areas and include achievements in finance/business development and corporate development.

In assessing the compensation of its executive officers, the Corporation will not have in place formal objectives, criteria or analysis; instead, it will rely mainly on discussions between the Compensation and Nominating Committee and the Board. Meetings of the Compensation and Nominating Committee will be held periodically, but in any case at least twice per year, to review compensation policies and to consider the overall compensation to be paid by the Corporation to its employees, executive officers and directors. Following review of data and discussion by members of the Compensation and Nominating Committee, recommendations will be made to the Board. In making compensation recommendations, the Compensation and Nominating Committee will consider each executive’s performance and other relevant factors, including the scope of each executive’s position and responsibilities, the achievement of corporate goals, the current business environment and anticipated changes, and executive retention and recruitment considerations.

Comparator Group(s) Following the closing of the Offering, the Compensation and Nominating Committee, in conjunction with the Board, expect to establish an appropriate comparator group for purposes of setting the future compensation of the NEOs.

Compensation Components The Corporation’s compensation is expected to consist primarily of three elements: base salary, annual bonus and long term equity incentives. Each element of compensation is described below in more detail.

Base Salary Base salaries for the Corporation’s executive officers are to be established based on the scope of their responsibilities and their prior relevant experience, taking into account competitive market compensation paid by other companies in Superior’s industry for similar positions and the overall market demand for such executives at the time of hire. An executive officer’s base salary will also be determined by reviewing the executive officer’s other compensation to ensure that the executive officer’s total compensation is in line with the Corporation’s overall compensation philosophy.

89 Base salaries are to be reviewed annually and increased for merit reasons, based on the executive officers’ success in meeting or exceeding individual objectives, and taking into account prevailing market conditions. Additionally, the Corporation will adjust base salaries as warranted throughout the year for promotions or significant changes in the scope or breadth of an executive officer’s role or responsibilities.

Annual Bonus The Corporation’s compensation program will include eligibility for an annual incentive cash bonus. Annual incentive cash bonuses are discretionary and are not awarded pursuant to a formal plan. The Board will assess the level of the executive officer’s achievement of meeting individual goals, as well as that executive officer’s contribution towards corporation-wide goals. The amount of the cash bonus is expected to depend on the level of achievement of the individual performance goals, with a target bonus generally to be set as a percentage of base salary and based on profitability measures.

Long Term Equity Incentives The Corporation believes that equity-based awards will allow it to reward executive officers for their sustained contributions to the Corporation. The Corporation also believes that equity awards reward continued employment by an executive officer, with an associated benefit to the Corporation of employee continuity and retention. The Board believes that incentive stock options and other equity incentive awards provide management with a strong link to long- term corporate performance and the creation of shareholder value. The Omnibus Equity Plan will allow the Corporation the opportunity to grant stock options to purchase Common Shares as well as various other awards. The Board will not issue stock options or awards according to a prescribed formula or target but will take into account the individual’s position, scope of responsibility, ability to affect profits and the individual’s historic and recent performance and the value of the awards in relation to other elements of the executive’s total compensation. The Board will take previous grants of stock options and awards into consideration when considering new grants of stock options and awards under the Omnibus Equity Plan.

Summary Compensation Table The following table sets out information concerning the expected fiscal 2017 compensation to be paid to each of the Corporation’s NEOs, excluding any Stock Options, Awards or other compensation security.

Table of Compensation excluding Compensation Securities Committee Value of All other Total Name and Salary Bonus or meeting perquisites compensation compensation principal position ($) ($) fees ($) ($) ($) ($) Christopher Bradbrook ...... 500,000 375,000 — 24,000 — 899,000 Director, President and Chief Executive Officer(1) Paul Olmsted, ...... 350,000 175,000 — 16,000 — 541,000 Chief Financial Officer Corey Doust, ...... 325,065(2) 75,015(2) — 8,302(2) 25,005(2) 433,387(2) Vice President Operations, Plutonic Gold Mine

(1) Mr. Bradbrook is also a director of the Corporation, but is not entitled to any compensation in connection with his service as a director. (2) Mr. Doust’s salary (A$325,000), bonus (A$75,000), value of perquisites (A$8,300) and other compensation (A$25,000) presented here are payable in Australian dollars. The Canadian dollar values of the same presented here are based on the Bank of Canada noon spot rate of exchange on February 14, 2017 for the purchase of one Canadian dollar using Australian dollars, which was 0.9998 (A$1.00 = $1.0002).

Incentive Plan Awards Prior to the closing of the Offering, the Corporation intends to grant stock options to purchase Common Shares under an omnibus equity incentive plan (the “Omnibus Equity Plan”). The Omnibus Equity Plan will be approved by the Board pursuant to the rules of the Exchange, and will be presented to shareholders of the Corporation at the first annual general meeting of shareholders. The Omnibus Equity Plan permits the granting of incentive stock options (“Stock Options”) to the Corporation’s employees, officers, directors and consultants for the purpose of developing

90 the interest of the participants in the growth and development of the Corporation and to better enable the Corporation to attract and retain persons of desired experience and ability. Each Stock Option is subject to the underlying option agreement and the Omnibus Equity Plan. Pursuant to the Omnibus Equity Plan, the Board or the committee appointed to administer the Omnibus Equity Plan may, from time to time, also grant Restricted Shares and/or RSUs, DSUs, Performance Shares and PSUs, and other share-based awards (collectively, “Awards”) to Employees, Non-Employee Directors and Consultants of the Corporation, each as defined in the Omnibus Equity Plan (the “Eligible Persons”), in such amounts and upon such terms as the Board shall determine, subject to the applicable rules and regulations of the Exchange.

The Omnibus Equity Plan provides that the aggregate number of Common Shares issuable pursuant to Stock Options granted under the Omnibus Equity Plan and under any other security based compensation arrangement, if any, within any one year period and, issuable to insiders, shall in either case, not exceed 10% of the issued and outstanding Common Shares at the time of the grant of any Stock Option. In addition, the Omnibus Equity Plan provides that the aggregate number of Common Shares issuable pursuant to Awards granted under the Omnibus Equity Plan and under any other security based compensation arrangement, if any, within any one year period and, issuable to insiders, shall in either case, not exceed 10% of the Common Shares as of the Closing Date. In aggregate, the maximum number of Common Shares issuable pursuant to Stock Options and Awards granted shall not at any time exceed 20% of the aggregate number of issued and outstanding Common Shares as of the Closing Date.

The Omnibus Equity Plan will require disinterested shareholder approval at the first annual general meeting of shareholders following the Closing Date to ratify the terms thereof. Provided there is no change to the fixed number of Common Shares that may be issued pursuant to the granting of Awards, the Omnibus Equity Plan will require ordinary shareholder approval thereafter. Notwithstanding the foregoing, unless the Corporation has received disinterested shareholder approval, the maximum number of Common Shares that may be issued to any individual in any 12 month period as Stock Options or Awards may be no more than 5% of the issued Common Shares.

The Omnibus Equity Plan states that the exercise price shall be determined by the Board or a committee appointed to administer the Omnibus Equity Plan, provided that the exercise price will be no less than the Discounted Market Price (as defined in the Omnibus Equity Plan).

The Omnibus Equity Plan also provides for the extension of the expiry date of any Stock Option which would otherwise expire during a “black-out period” or within 5 business days of the end of a “black-out period” for 10 business days from the date that any “black-out period” ends and for a general amendment provision which is in compliance with the requirements of the Exchange.

The Board may make, without further approval of shareholders, amendments to fix typographical errors, amendments to the vesting provisions of the Omnibus Equity Plan and any Stock Option or Award thereunder, and other amendments to clarify existing provisions of the Omnibus Equity Plan that do not have the effect of altering the scope, nature and intent of such provisions, or amendments as necessary to comply with applicable legal, regulatory or Exchange requirements. Disinterested shareholder approval will be required for (a) any amendment to the Stock Options or Awards held by insiders that would have the effect of decreasing the exercise price of Stock Options; (b) any individual Stock Option or Award grant that would exceed 20% of the aggregate number of issued and outstanding Common Shares; (c) where the grant to insiders, within a 12 month period, of an aggregate number of Stock Options exceeds 10% of the issued Common Shares, calculated at the date a Stock Option is granted to any insider; or (d) where any individual Stock Option or Award grant would result in the number of Common Shares issued to any individual, in any 12 month period, exceeding 5% of the issued Common Shares of the Corporation.

The approval of shareholders will be required for future amendments to the Omnibus Equity Plan which (a) materially amend the persons eligible to be granted Stock Options or Awards under the Omnibus Equity Plan; (b) increase the maximum number of Common Shares that may be issuable pursuant to Stock Options granted under the Omnibus Equity Plan; (c) reduce the exercise price of a Stock Option, cancel and reissue Stock Options, extend the expiry date of a Stock Option or substitute Stock Options with cash or other Awards on terms that are more favorable to the participant; or (d) extend the expiry date of a Stock Option held by an insider.

91 Stock Options Stock Options may be granted for a term not exceeding five years and no Stock Option will expire in a period greater than one year following the date on which the participant ceases to be an Eligible Person, other than as otherwise permitted in relation to a “black-out period”. The Common Shares to be purchased upon exercise of each Stock Option must be paid for in full by the grantee at the time of exercise. No “cashless exercise” mechanism is permitted under the Omnibus Equity Plan.

Pursuant to the Omnibus Equity Plan, the following additional limitations apply to grants of Stock Options: (i) the aggregate number of Stock Options granted to any one Consultant (as defined in the Omnibus Equity Plan) in a 12 month period must not exceed 2% of the issued Common Shares, calculated at the date a Stock Option is granted to the Consultant; (ii) the aggregate number of Stock Options granted to all persons retained to provide investor relations activities must not exceed 2% of the issued Common Shares in any 12 month period, calculated at the date a Stock Option is granted to any such person; and (iii) for Stock Options granted to Eligible Persons, the Corporation and the optionee are responsible for ensuring and confirming that the optionee is a bona fide Eligible Person.

The Board or the committee appointed to administer the Omnibus Equity Plan will have complete discretion to set the terms of the vesting schedule for each Stock Option granted, except that Stock Options issued to Eligible Persons retained to provide investor relations services must vest in stages over a period of not less than 12 months and no more than 25% of such Stock Options can vest in any three month period. Upon exercise in accordance with the terms thereof, each Stock Option will entitle the holder thereof to acquire one Common Share.

Except as may otherwise be set forth in an underlying employment agreement, if the optionee ceases to be an Eligible Person in the event of retirement, each vested Stock Option held by that person will cease to be exercisable on the earlier of the original expiry date and six months after the termination date. In the case of the optionee being terminated, each vested Stock Option will cease to be exercisable on the earlier of the original expiry date and three months after the termination date. In the event of death of an optionee, the legal representative may exercise the vested Stock Options for a period until the earlier of the original expiry date and 12 months after the date of death. In all cases, any unvested Stock Options held by the optionee shall terminate and become void on the date of termination, retirement or death, as applicable.

Restricted Shares and RSUs The Board will have complete discretion to set the terms and/or restrictions on any Restricted Shares or RSUs granted, including, a requirement that Eligible Persons pay a stipulated purchase price, restrictions based upon the achievement of specific performance criteria, time-based restrictions on vesting following the attainment of the performance criteria, time-based restrictions, restrictions under applicable laws or under the requirements of the Exchange, or holding requirements or sale restrictions placed on the Common Shares by the Corporation upon vesting of such Restricted Shares or RSUs.

Restricted Shares will become freely transferable by the Eligible Person after all conditions and restrictions applicable to the Restricted Shares have been satisfied or have lapsed. Unless otherwise determined by the Board, no RSU shall vest later than three years after the date of the grant. RSUs will be settled through payment in Common Shares.

As required by law, Eligible Persons holding Restricted Shares will have the right to exercise full voting rights with respect to those Restricted Shares during the period of restriction. Eligible Persons will have no voting rights with respect to any RSUs held.

If the holder of Restricted Shares or RSUs ceases to be an Eligible Person for any reason, other than death, disability or retirement, any RSUs held by the participant that have vested before the termination date will be paid to the participant, provided that all unvested RSUs and Restricted Shares held at the termination date shall be immediately cancelled and forfeited on the termination date. Unless otherwise approved by the Board, unvested RSUs previously credited to the participant’s account will vest immediately in the event that the participant dies and will continue to vest, pursuant to the terms of the Omnibus Equity Plan, in the event that the participant retires or is disabled, subject to the adjustment provisions in the Omnibus Equity Plan in the event the participant is disabled. RSUs and Restricted Shares that have vested at the termination date will be paid to the participant, or the participant’s estate, as applicable.

92 Performance Shares and PSUs Each Performance Share and PSU shall have an initial value equal to the fair market value of a Common Share on the date of the grant. A Performance Share and PSU participant’s grant agreement will describe the performance criteria established by the Board that must be achieved for Performance Shares and PSUs to vest to the Eligible Person.

Subject to the terms of the Omnibus Equity Plan, the Board will pay earned Performance Shares/PSUs (which are determined as a function of the extent to which the corresponding performance criteria has been achieved by the participant) in the form of Common Shares issued from treasury equal to the value of the earned Performance Shares/ PSUs at the end of the applicable performance period. Any Common Shares granted may be subject to any restrictions deemed appropriate by the Board.

Unless otherwise determined by the Board, unvested Performance Shares and PSUs previously credited to the participant’s account will be immediately cancelled and forfeited to the Corporation on the termination date in the event that the participant is terminated for any reason other than death, disability or retirement. Unvested PSUs previously credited to the participant’s account will vest immediately in the event that the participant dies and will continue to vest pursuant to the Omnibus Equity Plan in the event that the participant retires or is disabled, subject to the adjustment provisions in the Omnibus Equity Plan in the event the participant is disabled. PSUs and Performance Shares that have vested at the termination date will be paid to the participant, or the participant’s estate, as applicable.

DSUs Each DSU grant will be evidenced by an award agreement that specifies the number of DSUs granted, the settlement date for DSUs, and any other provisions as the Board or the committee appointed to administer the Omnibus Equity Plan shall determine, including, but not limited to a requirement that Eligible Persons pay a stipulated purchase price for each DSU, restrictions based upon the achievement of specific performance criteria, time-based restrictions, restrictions under applicable laws or under the requirements of any stock exchange or market upon which the Common Shares are listed or traded, or holding requirements or sale restrictions placed on the Common Shares by the Corporation upon vesting of such DSUs.

Pursuant to the Omnibus Equity Plan, and as otherwise provided in an award agreement, the DSUs granted may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated. All rights with respect to the DSUs granted to an Eligible Person will be available during such Eligible Person’s lifetime only, except as otherwise provided in the award agreement at the time of grant or thereafter by the Board or the committee appointed to administer the Omnibus Equity Plan.

Each award agreement will provide the extent to which the Eligible Person will have the right to retain DSUs following termination of the Eligible Person’s employment or other relationship with the Corporation. Such provisions shall be determined in the sole discretion of the Board or the committee appointed to administer the Omnibus Equity Plan, and need not be uniform among all DSUs issued pursuant to the Omnibus Equity Plan.

Outstanding Stock Options and Awards The Corporation has granted Stock Options and other Awards under its Omnibus Equity Plan to certain directors, officers, employees and consultants of the Corporation in accordance with the table set out below, subject to required regulatory approval and completion of the transactions contemplated by this prospectus.

As at the closing of the Offering, Stock Options and other Awards to acquire an aggregate of 6,650,000 Common Shares at an exercise price of $1.00 per Common Share will be outstanding, having been granted by the Corporation to certain directors, officers, employees and consultants of the Corporation. Assuming the deemed exercise of each Special Warrant for one Qualifying Share as contemplated in this prospectus, the full issuance of the Treasury Shares contemplated by the Offering (other than those Treasury Shares issuable on the exercise of the Over-Allotment Option) and the issuance of the Consideration Shares, the number of Common Shares underlying such Stock Options and other Awards will represent in the aggregate 7.28% of the outstanding Common Shares, there will be 18,280,328 Common Shares authorized for issuance under the Omnibus Equity Plan and there will remain for issuance Stock Options and other Awards to acquire an aggregate of 11,630,328 Common Shares.

93 The following table sets forth the Stock Options and other Awards that will be outstanding as at the closing of the Offering, subject to required regulatory approval and completion of the transactions contemplated by this prospectus.

Compensation Securities Market Value Market Value of Common Number of Date of of Common Shares on Stock Issue or Shares on December 31, Name and principal position Options(1) Grant Exercise Price Date of Grant 2016(2) Expiry Date Christopher Bradbrook, ...... 1,500,000 January 30, Equal to the $1.00 N/A January 30, Director, President and Chief 2017 Offering Price 2022 Executive Officer Paul Olmsted, ...... 1,500,000 January 30, Equal to the $1.00 N/A January 30, Chief Financial Officer 2017 Offering Price 2022 Cory Doust, ...... 1,250,000 January 30, Equal to the $1.00 N/A January 30, Vice President Operations, 2017 Offering Price 2022 Plutonic Gold Mine Mark Wellings, ...... 200,000 January 30, Equal to the $1.00 N/A January 30, Director 2017 Offering Price 2022 Tamara Brown, ...... 200,000 January 30, Equal to the $1.00 N/A January 30, Director 2017 Offering Price 2022 Employees as a group (3 persons) ...... 750,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 750,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 100,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 Consultants as a group (4 persons) ...... 250,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 50,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 50,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 50,000 January 30, Equal to the $1.00 N/A January 30, 2017 Offering Price 2022 Total ...... 6,650,000

Notes: (1) Assuming that the maximum amount of the Offering is raised (and further assuming no exercise of the Over-Allotment Option). (2) As the Common Shares were not listed and posted for trading on December 31, 2016, a market value has not been provided.

Pension Benefits The Corporation does not have a pension plan that provides for payments or benefits to the Named Executive Officers at, following, or in connection with retirement.

Employment Agreements, Termination and Change of Control Benefits Superior has entered into executive employment agreements with each of Christopher Bradbrook and Paul Olmsted, or personal holding companies with each of such officers. In addition, Corey Doust currently has an employment contract with Billabong. The general terms of the employment agreements with the named executive officers are set out below.

94 These agreements provide for, among other things, the continuation of the executive’s employment for an indeterminate term in accordance with applicable law, as well as their base salary and bonus entitlement. The expected compensation in fiscal year 2017, pursuant to these executive employment agreements, for Christopher Bradbrook, Paul Olmsted and Corey Doust is set out above under “Executive Compensation – Summary Compensation Table”.

In the event that Mr. Bradbrook’s or Mr. Olmsted’s employment is terminated without cause at any time, the Corporation shall pay (in addition to basic entitlements for unpaid base salary to the date of termination, accrued and outstanding vacation pay and reimbursement for properly incurred business expenses) an amount in cash equal to two times their respective then current base salary plus their respective average bonus in the two preceding years of the year in which they were terminated via lump sum payment. In the event Mr. Bradbrook is terminated within the first year of his employment, the first and second years of his bonus will be deemed to be a target of 75% of his annual base salary. In the event Mr. Olmsted is terminated within the first year of his employment, the first and second years of his bonus will be deemed to be a target of 50% of his annual base salary. Based on these estimates, the termination and change of control payments would be $1.75 million for Mr. Bradbrook and $1.05 million for Mr. Olmsted (which takes into account an annual salary of $500,000 for Mr. Bradbrook and $350,000 for Mr. Olmsted). The bonus targets for Messrs. Bradbrook and Olmsted noted above may be revised, subject to annual review by the Compensation and Nominating Committee, but in all instances termination and change of control payments will be capped at two times annual base salary plus annual average bonus for the two preceding years.

The Corporation shall also continue to pay premiums to provide all benefits (as existed on the date of termination) for a period of 24 months following the date of termination. All Stock Options held by Mr. Bradbrook or Mr. Olmsted will immediately vest and will expire in accordance with the terms and conditions of the Stock Options. Any unvested Awards will immediately vest and all Awards shall be paid out to Mr. Bradbrook or Mr. Olmsted, respectively. In the event Mr. Bradbrook or Mr. Olmsted is terminated without cause or resigns for good reason within 12 months following a change of control, they shall also be entitled to the amounts set forth above.

In the event that Mr. Doust’s employment is terminated without cause at any time, the Corporation shall pay his basic entitlements for unpaid base salary to the date of termination, accrued and outstanding vacation pay and other benefits, accrued or otherwise, to which Mr. Doust is entitled under his employment agreement. In addition, Mr. Doust shall be entitled to superannuation up to the date of his termination. Mr. Doust’s employment agreement does not include a change of control provision. All Stock Options held by Mr. Doust that are exercisable at the termination date continue to be exercisable until the earlier of (i) the date that is three months after the termination date; and (ii) the date on which the exercise period of the particular Stock Option expires. Any Stock Options held by Mr. Doust that are not yet vested at the termination date immediately expire and are cancelled and forfeited to the Corporation. Any Awards held by Mr. Doust that have vested before the termination date shall be paid out. Any Awards that are not yet vested at the termination date will be immediately cancelled and forfeited to the Corporation.

Director Compensation No compensation is currently paid to the Corporation’s directors. Following the closing of the Offering, the directors, other than Christopher Bradbrook, are expected to receive an annual cash retainer of $35,000. The Chair of the Board and the chair of the Audit Committee are expected to receive an additional chair fee of $10,000. Directors will also be reimbursed for their out-of-pocket expenses incurred in connection with rendering services to the Corporation.

The Corporation has granted Stock Options and other Awards under its Omnibus Equity Plan to certain directors subject to certain conditions as set out above under “Executive Compensation – Outstanding Stock Options and Awards”. Directors will also be eligible to receive an annual grant of Stock Options as determined from time to time by the Compensation and Nominating Committee under the Omnibus Equity Plan, at an exercise price determined in accordance with the Omnibus Equity Plan (which exercise price cannot be lower than the volume weighted average trading price of the Common Shares as reported on the Exchange for the five trading days immediately preceding the day on which the Stock Option is granted), and vesting in accordance with the terms of the Omnibus Equity Plan.

95 INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

As of the date hereof, there was no indebtedness owing to the Corporation from any of its directors or executive officers or any associate of such person, including in respect of indebtedness to others where the indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement provided by the Corporation or its subsidiary.

AUDIT COMMITTEE

The Audit Committee’s Charter In accordance with applicable Canadian securities legislation and, in particular, NI 52-110, information with respect to the Corporation’s Audit Committee is contained below. The full draft text of the Audit Committee Charter, which will be approved by the Board prior to the closing of the Offering, is attached to this prospectus as Schedule “A”.

The Audit Committee will be responsible for overseeing the integrity of the Corporation’s financial statements, reviewing financial reports and other financial information, recommending the appointment and reviewing and appraising the audit efforts of the Corporation’s external auditors, overseeing and monitoring the Corporation’s financial reporting processes and internal controls, the Corporation’s processes to manage business and financial risk and its compliance with legal, ethical and regulatory requirements and encouraging improvement of, and adherence to, the Corporation’s policies, procedures and practices.

Composition of the Audit Committee The Audit Committee is comprised of Shaun Day (Chair), Tamara Brown and Mark Wellings. A majority of the members of the Audit Committee will be considered “independent” within the meaning of NI 52-110. Each of the members of the Audit Committee will be considered “financially literate” within the meaning of NI 52-110. For the purposes of NI 52-110, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the issuer’s financial statements. All members of the Audit Committee will have experience reviewing financial statements and dealing with related accounting and auditing issues. Set out below is a description of the education and experience of each audit committee member that is relevant to the performance of his or her responsibilities as an audit committee member.

Audit Committee Member Relevant Education and Experience Shaun Day Current CFO of Northern Star. Previously CFO of Sakari Resources Limited and other ASX listed mining and telecommunications infrastructure companies. Holds a Bachelor of Commerce from University of Western Australia and is a Fellow of the Institute of Chartered Accountants of Australia. Tamara Brown Current Vice President of Corporate Development of Primero Mining Corp. Previously an investor relations consultant for several junior exploration companies and partner of a boutique investment banking firm. Graduated with a Bachelor of Engineering degree from Curtin University in Australia and completed the Chartered Business Valuator course at York University. Mark Wellings Mining professional with over 25 years’ international experience in both the mining industry and mining finance sector. Co-founded the corporate finance mining practice at GMP Securities L.P. Holds an MBA degree and a Bachelor of Applied Science degree in Geological Engineering from the University of Windsor.

Pre-Approval Policies and Procedures The Corporation has not yet adopted any specific policies or procedures for the engagement of non-audit services. Such matters are the subject of review and pre-approval by the Audit Committee.

96 External Auditor Service Fees The approximate aggregate fees expected to be billed by the Corporation’s external auditors for the period from incorporation on July 4, 2016 to the period ended December 31, 2016 are as follows:

Tax All Other Audit Fees Fees(3) Fees(4) Total KPMG ...... $295,000(1) $20,000 Nil $315,000 Deloitte ...... $200,000(2) Nil Nil $200,000

Notes: (1) “Audit Fees -KPMG”are the fees necessary to perform the audit of the Corporation’s financial statements for the period ended December 31, 2016, including accounting consultations, a review of matters reflected in the financial statements and audit or other services required by legislation or regulation, such as comfort letters, consents and reviews of securities filings. Audit fees also include assistance to the Corporation in connection with the pro-forma financial statements which are included elsewhere in this prospectus. (2) “Audit Fees -Deloitte” are the fees necessary to perform the audit of the carve-out financial statements of the Plutonic Gold Operations for the years ended June 30, 2016 and 2015 and the review of the quarterly financial statements for the periods ended September 30, 2016 and 2015. Fees also included accounting consultations, a review of matters reflected in financial statements and audit or other services required by legislation or regulation, such as comfort letters, consents and reviews of securities filings. (3) “Tax Fees” are fees other than those included in Audit Fees for tax services, including a review of the Corporation’s Omnibus Equity Plan as it pertained to tax, tax planning and tax advice with respect to the Acquisition. (4) “All Other Fees” include all other non-audit services

CORPORATE GOVERNANCE

Board of Directors As of the date of this prospectus, the Board consists of Christopher Bradbrook, Mark Wellings, Tamara Brown and Shaun Day. Following closing of the Offering, the Corporation will appoint one additional director, such that there will be a total of five directors. This additional director has not yet been named, but the Corporation will appoint him or her as soon as reasonably practicable following closing of the Offering.

Following closing of the Offering, the Board will be composed of five directors, three of whom are considered to be independent of the Corporation within the meaning of NI 52-110. For the purposes of NI 52-110, a director is considered “independent” if he or she has no direct or indirect material relationship with the issuer. A material relationship is one which could, in the view of the issuer’s Board, be reasonably expected to interfere with the exercise of a member’s independent judgment. Christopher Bradbrook is not considered to be an independent director on the basis of his position as President and Chief Executive Officer of the Corporation. Shaun Day is not considered to be an independent director on the basis of his position as Chief Financial Officer of Northern Star, a principal securityholder.

The following director of the Corporation is also a director of other reporting issuers:

Director Name of Other Reporting Issuer and Exchange Mark Wellings ...... Eurotin Inc. (TSXV); Gran Colombia Gold Corp. (TSXV); Adventus Zinc Corporation (TSXV)

Board Mandate The Board is responsible for managing the business and affairs of the Corporation and, in doing so, must act honestly and in good faith with a view to the best interests of the Corporation. Prior to the closing of the Offering, the Board will adopt a written mandate (the “Board Mandate”), a draft copy of which is attached to this prospectus as Schedule “B”, which includes approving long-term goals and objectives for the Corporation, ensuring the plans and strategies necessary to achieve those objectives are in place and supervising senior management who are responsible for the implementation of long-term strategies and day-to-day management of the Corporation. The Compensation and Nominating Committee will review and assess the adequacy of the Board Mandate at least annually or otherwise, as it deems appropriate, and make any necessary changes. The Board retains a supervisory role and ultimate responsibility for all matters relating to the Corporation and its business. The Board discharges its responsibilities both directly and through its Audit Committee and Compensation and Nominating Committee. The Board may also appoint ad hoc committees periodically to address issues of a more short-term nature.

97 Position Descriptions The Board has developed position descriptions for the Chief Executive Officer and the Chairman of the Board. The Board has determined that given the size of the board of directors, the stage of development of the Corporation and the fact that each committee has a comprehensive written charter, a written position description for the chair of each committee is not required at this time.

Ethical Business Conduct The Board will adopt a Code of Business Conduct (the “Code”) outlining the principles of ethical conduct to which the Corporation’s directors, officers and employees are expected to adhere and establishing mechanisms to report unethical conduct. The objective of the Code is to provide guidelines for maintaining the integrity, reputation, honesty, objectivity and impartiality of the Corporation, its subsidiaries and business units. The Code addresses conflicts of interest, protecting the Corporation’s assets, confidentiality, fair dealing with security holders, customers, suppliers, competitors and employees, insider trading, compliance with laws and reporting any illegal or unethical behaviour. As part of the Code, any person subject to the Code is required to avoid interests or relationships that are harmful or detrimental to the Corporation’s best interests or that may give rise to real, potential or the appearance of conflicts of interest and to annually certify compliance with the Code. The Corporation is committed to operating in a responsible manner that complies with applicable laws, rules and regulations, and providing full, fair, accurate, timely and understandable disclosure in reports and documents filed with any governing body or publicly disclosed. A copy of the Code will be provided to each director, officer and employee on an annual basis and such person will be required to sign an acknowledgement form under which they acknowledge they have received and read the Code, and that they agree to adhere to the standards set forth in the Code. A copy of the Code will be available on SEDAR at www.sedar.com.

Compensation and Nominating Committee The composition of the Compensation and Nominating Committee has not yet been finalized, although it is expected that the director to be named following closing of the Offering will be the chair of such committee. The Compensation and Nominating Committee will identify and review candidates for appointment or nomination to the Board based upon an assessment of the independence, skills, qualifications and experience of the candidate, and will make recommendations to the Board for consideration.

Annually, the Compensation and Nominating Committee will be responsible for providing the Board with a recommendation regarding the compensation levels for the Corporation’s directors, Chief Executive Officer and Chief Financial Officer, as well as reviewing the Chief Executive Officer’s recommendations for the senior executives’ compensation. While the Board is responsible for determining all forms of compensation to be awarded to the directors, Chief Executive Officer, Chief Financial Officer and senior executives, the Compensation and Nominating Committee will annually review the Corporation’s compensation philosophy, policies, plans and guidelines and recommend any changes to the Board.

Orientation and Continuing Education The composition of the Board will consist of directors who are familiar with the industry, or who bring particular expertise to the Board from their professional experience. New directors will receive an orientation to the Corporation. The Board is responsible for ensuring that all new directors receive a comprehensive orientation, that they fully understand the role of the Board and its committees and that they understand the nature and operation of Corporation’s business. In addition, the Board is responsible for providing continuing education opportunities designed to maintain or enhance the skills and abilities of the Corporation’s directors and to ensure that their knowledge and understanding of Superior’s business remains current. All directors receive a record of public information about the Corporation, as well as other relevant corporate and business information. Senior management will make regular presentations to the Board on the main areas of the business and the directors will have the opportunity to ask questions. Additionally, the Compensation and Nominating Committee, in conjunction with the Corporation’s executive officers, will ensure the directors are provided with all of the information, policies, codes, and all other relevant information about the Corporation.

98 Assessments The Compensation and Nominating Committee will be responsible for establishing and implementing procedures to assess and evaluate the effectiveness and contribution of the Board, its committees and individual directors annually. The Compensation and Nominating Committee will also take reasonable steps to evaluate and assess, on an annual basis, directors’ performance and effectiveness of the Board, committees of the Board, individual Board members, and the Chair of the Board. The assessments will be conducted through interviews with each director individually to discuss his or her contribution, as well as the contribution of other directors. The assessment will address, among other things, individual director independence, individual director and overall Board skills, and individual director financial literacy. The Board will receive and consider the recommendations from the Compensation and Nominating Committee regarding the results of the evaluation of the performance and effectiveness of the Board, committees of the Board, individual Board members, and the Chair of the Board. Following such review, the Board shall implement the appropriate measures, and make any necessary changes to the composition, structure or charter of the Board.

99 PLAN OF DISTRIBUTION

This prospectus qualifies the distribution of the Treasury Shares. The Corporation has engaged the Agents pursuant to the Agency Agreement to offer for sale to the public on a “best efforts” agency basis, and the Corporation has agreed to issue and sell, on the Closing Date, up to 28,450,000 Treasury Shares offered hereunder at a price of $1.00 per Treasury Share payable in cash to the Corporation against delivery of the Treasury Shares, subject to the terms and conditions of the Agency Agreement. The aggregate gross proceeds of the Offering will be up to $28,450,000. The Offering Price was determined by negotiation between the Corporation and GMP, on behalf of the Agents, in the context of the market.

The Agents will receive a cash commission of 6.0% of the gross proceeds of the Offering. The Agents will also receive Offering Broker Warrants entitling them to acquire at the Offering Price up to that number of Offering Broker Shares as is equal to 3.0% of the total number of Treasury Shares sold under the Offering, including under the Over- Allotment Option, but excluding such number of Treasury Shares equal to the quotient obtained by dividing the Consideration Payment by the Offering Price, at any time and from time to time for up to 24 months from the Closing Date.

The obligations of the Agents under the Agency Agreement are several, and not joint nor joint and several, are conditional and may be terminated at their discretion on the basis of “market out”, “due diligence out”, “material change out”, “disaster out” and “breach out” conditions and may also be terminated upon the occurrence of certain stated events. While the Agents have agreed to use their best efforts to sell the Treasury Shares, the Agents are not obligated to purchase any Treasury Shares which are not sold.

The Corporation has granted to the Agents the Over-Allotment Option to offer for sale an amount of additional Treasury Shares representing up to 15% of the number of Treasury Shares sold under the Offering, to cover over- allotments, if any, and for market stabilization purposes. The Agents may exercise the Over-Allotment Option in whole or in part at any time after the Closing Date until the close of business on the 30th day following the closing of the Offering. To the extent that the Over-Allotment Option is exercised, the additional Treasury Shares will be offered for sale by the Agents at the Offering Price and the Agents will be entitled to a cash commission equal to the commission payable on the Treasury Shares sold under the Offering and, as described above, additional Offering Broker Warrants. This prospectus qualifies the grant of the Over-Allotment Option and the distribution of the Treasury Shares issuable upon the exercise of the Over-Allotment Option. This prospectus also qualifies the grant of the Offering Broker Warrants. A purchaser that acquires Treasury Shares forming part of the Agents’ over-allocation position acquires the Treasury Shares under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or through secondary market purchases.

No minimum amount of funds must be raised under the Offering. This means that the Corporation could complete the Offering after raising only a small proportion of the offering amount set out above.

Pursuant to policy statements of certain securities commissions and the Universal Market Integrity Rules, the Agents may not, throughout the period of distribution, bid for or purchase Common Shares. The foregoing restriction is subject to exceptions, on the condition that the bid or purchase is not engaged in for the purpose of creating actual or apparent active trading in, or raising the price of, the Common Shares. These include certain exceptions for market stabilization and passive market-making activities and a bid or purchase made for and on behalf of a customer where the order was not solicited during the period of distribution or was unsolicited. In accordance with the aforementioned exceptions, in connection with the Offering, the Agents may over-allot or effect transactions which stabilize or maintain the market price of the Common Shares at levels other than those that might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.

Pursuant to the Agency Agreement, the Corporation has agreed to indemnify and save harmless the Agents and their affiliates, and each of their directors, officers, employees, unitholders and agents, against certain liabilities, including liabilities under Canadian provincial securities legislation in certain circumstances, or to contribute to any payments the Agents may be required to make because of such liabilities.

Pursuant to the Agency Agreement, the Corporation has also agreed to not issue or sell any of its Common Shares or financial instruments convertible or exchangeable into Common Shares, other than in connection with (i) the Over-Allotment Option; (ii) for purposes of director or employee Stock Options; or (iii) to satisfy existing instruments

100 and agreements of the Corporation already issued or entered into as of the date of the engagement of GMP (including for certainty, any issuance to Northern Star pursuant to existing obligations in connection with the acquisition of the Plutonic Gold Operations), for a period of 90 days from the Closing Date, without the prior consent of GMP, on behalf of the Agents, such consent not to be unreasonably withheld.

In addition, the Corporation has agreed to use its commercially reasonable efforts to cause its directors and officers and Northern Star to enter into lock-up agreements in favour of the Agents, pursuant to which each such individual and company will agree that, for a period of six months from the Closing Date, each will not, directly or indirectly, offer, sell, contract to sell, grant any option to purchase, make any short sale, or otherwise dispose of, or transfer, or announce any intention to do so, any Common Shares or securities convertible into or exercisable or exchangeable for Common Shares, whether owned directly or indirectly, or under their control or direction, or with respect to which each has beneficial ownership (including for certainty in relation to Northern Star, all Consideration Shares and Consideration Warrants to be issued to Northern Star), or enter into any transaction or arrangement that has the effect of transferring, in whole or in part, any of the economic consequences of ownership of Common Shares, whether such transaction is settled by the delivery of Common Shares, other securities, cash or otherwise other than (i) pursuant to a take-over bid or any other similar transaction made generally to all of the shareholders of the Corporation; or (ii) in connection with estate planning, which shall only include transfers or dispositions to non-arms length third parties. The delivery of such lock-up agreements will also be a condition to closing of the Offering in favour of the Agents.

Subscriptions for Treasury Shares offered hereunder will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is expected that the closing of the Offering will take place on or about February 23, 2017 or on such other date as the Corporation and the Agents may agree. Pending closing of the Offering, all subscription funds will be deposited and held by the Agents in trust pursuant to the terms and conditions of the Agency Agreement. If the Closing Date does not occur within 90 days from the date a receipt is issued for this prospectus or such other time as may be permitted by applicable securities legislation and consented to by persons or companies who subscribed within that period and the Agents, the Offering will be discontinued and all subscription monies will be returned to subscribers without interest, set-off or deduction.

On the Closing Date, registration of interest in and transfers of Treasury Shares held through CDS or its nominee will be made electronically in the NCI system of CDS. On the Closing Date, the Corporation, via its transfer agent, will electronically deliver the Treasury Shares registered to CDS or its nominee. Common Shares held in CDS must be purchased, transferred and surrendered for redemption through a CDS participant, which includes securities brokers and dealers, banks and trust companies. All rights of shareholders who hold Common Shares in CDS must be exercised through, and all payments or other property to which such shareholders are entitled will be made or delivered by CDS or the CDS participant through which the shareholder holds such Common Shares. A holder of a Treasury Share participating in the NCI system will not be entitled to a certificate or other instrument from the Corporation or the Corporation’s transfer agent evidencing that person’s interest in or ownership of Treasury Shares, nor, to the extent applicable, will such holder be shown on the records maintained by CDS, except through an agent who is a CDS participant.

The ability of a beneficial owner of Treasury Shares to pledge such Treasury Shares or otherwise take action with respect to such shareholder’s interest in such Treasury Shares (other than through a CDS participant) may be limited due to the lack of a physical certificate.

The Treasury Shares have not been and will not be registered under the U.S. Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. The Agents have agreed that they will not offer, sell or deliver the Treasury Shares within the United States except to “qualified institutional buyers” within the meaning of Rule 144A under the U.S. Securities Act, in accordance with Rule 506 of Regulation D under the U.S. Securities Act and in compliance with applicable state securities laws. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Treasury Shares in the United States. In addition, until 40 days after the commencement of the Offering, an offer or sale of Common Shares within the United States by any dealer or agent (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act if such offer or sale is made other than in accordance with an exemption from the registration requirements of the U.S. Securities Act and in compliance with applicable state securities laws.

101 The Treasury Shares are being offered for sale in all of the provinces of Canada, other than Quebec, by way of this prospectus and in the United States and internationally by way of private placement, pursuant to available exemptions.

The Agents may offer selling group participation, in the normal course of the brokerage business, to selling groups of other licensed broker dealers, brokers and investment dealers, who may or may not be offered part of the commission or other compensation derived from the Offering.

Except as disclosed in this prospectus, the Corporation has not made nor will it make any payments in cash, securities or other consideration to a promoter, finder or any other person or company in connection with the Offering. The directors, officers and other insiders of the Corporation may participate in the Offering.

This prospectus also qualifies the distribution of the Qualifying Shares issuable upon the deemed exercise of the Special Warrants issued on the automatic exercise of previously issued Subscription Receipts. Pursuant to the terms of the Private Placement Agency Agreement, the Corporation issued an aggregate of 32,600,000 Subscription Receipts on a private placement basis in accordance with subscription agreements entered into between the Corporation and subscribers. The Subscription Receipts were sold to subscribers at a price of $0.50 per Subscription Receipt for aggregate gross proceeds of $16,300,000, which amount, less certain expenses of the Corporation and the Private Placement Agent, was deposited into escrow pursuant to the terms of the Subscription Receipt Agreement pending satisfaction of certain escrow release conditions, including completion of all material conditions precedent to the Acquisition. On October 11, 2016, upon satisfaction of such escrow release conditions, the Escrowed Proceeds (including interest thereon), less the cash commission payable to the Private Placement Agent (and interest thereon), were released to the Corporation (or as directed by the Corporation) from escrow and the Subscription Receipts were automatically exercised into Special Warrants.

The Corporation used the net proceeds of the Private Placement released from the Escrowed Proceeds to fund part of the cash portion of the purchase price of the Acquisition and for general working capital requirements. See “Use of Proceeds”. The terms of the Private Placement, including the offering price of the Subscription Receipts, were determined by negotiation between the Corporation and the Private Placement Agent.

In consideration of the services rendered by the Private Placement Agent in connection with the Private Placement, the Private Placement Agent received a cash commission equal to 6.0% of the gross proceeds received by the Corporation from the Private Placement, excluding for purposes of this determination the proceeds raised from the sale of Subscription Receipts to subscribers agreed upon by the Corporation and the Private Placement Agent and excluding interest on the Escrowed Proceeds.

As part of the consideration for the services rendered by the Private Placement Agent in connection with the Private Placement, the Corporation issued the Private Placement Agent an aggregate of 1,230,000 Broker Warrants. Each Broker Warrant entitles the Private Placement Agent to acquire one Broker Share at $0.50 (being the subscription price of the Private Placement) at any time or from time to time in whole or in part for a period ending the earlier of (i) September 29, 2021; and (ii) two years following the Corporation completing an IPO.

Pursuant to the terms of the Supplemental Indenture, each Special Warrant entitles the holder thereof, upon deemed exercise (for no additional consideration), to acquire one Qualifying Share, subject to adjustment in certain circumstances in accordance with the Special Warrant Indenture, at 5:00 p.m. (Toronto time) on the earlier of (i) the third business day after the date that a final receipt has been issued with respect to a final prospectus qualifying the distribution of the Qualifying Shares in at least each of the provinces of Canada, except Quebec, such as this prospectus, provided that in the event that the Corporation is completing an IPO by way of such prospectus, such as pursuant to this prospectus, such time and date will instead be the time and date of completion of such IPO; and (ii) February 28, 2017.

Other than in respect of certain United States subscribers who received physical certificates, the Subscription Receipts issued under the Private Placement (and the Special Warrants that were issued on the conversion of the Subscription Receipts) were issued on an NCI basis through CDS. Upon the deemed exercise of the Special Warrants, it is anticipated that evidence of ownership representing the Qualifying Shares will be issued on an NCI basis and registered to CDS or its nominee and deposited with CDS. Other than in respect of certain United States subscribers, no

102 certificates evidencing Qualifying Shares will be issued to subscribers and registration will be made through the depository services of CDS. Holders of such Qualifying Shares will receive only a customer confirmation from the registered dealer who is a CDS participant and from or through whom a beneficial interest in the Qualifying Shares is acquired.

The Exchange has conditionally approved the listing of the Common Shares (including the Treasury Shares, Qualifying Shares, Offering Broker Shares and Broker Shares) under the stock symbol “SGI”, subject to the Corporation fulfilling all of the requirements of the Exchange on or before April 8, 2017.

At the date of this prospectus, the Corporation does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside Canada and the United States of America.

103 RISK FACTORS

The Corporation has identified the following risks relevant to its business and operations, which could materially affect the Corporation’s operating results, financial performance and the value of the Common Shares. Prospective investors should carefully consider their personal circumstances and consult their broker, lawyer, accountant or other professional adviser before making an investment decision. The information below does not purport to be an exhaustive summary of the risks affecting the Corporation and additional risks and uncertainties not currently known to the officers or directors of the Corporation or not currently perceived as being material may have an adverse effect on the business of the Corporation.

Risks Relating to the Business and Operations of the Corporation Single Property Focus The Corporation is currently allocating substantially all of its financial resources and efforts on exploring, developing and operating the Plutonic Gold Operations. While the Corporation may acquire additional mining and exploration projects in the future, the Plutonic Gold Operations will likely be the Corporation’s only producing mining project for the near term, thereby generating almost all of the Corporation’s operating revenue and cash flows. Therefore, any adverse conditions or events affecting the Plutonic Gold Operations could materially and adversely affect the Corporation’s potential profitability, financial performance and operational results.

Moreover, the Corporation’s business and operations could be materially and adversely affected by any events which cause the Plutonic Gold Operations to function at less than optimal capacity, including among other things, equipment failure or shortages, adverse weather, serious environmental and safety issues, any permitting or licensing issues and any failure of the operations to produce the expected amounts of gold.

Life of the Plutonic Gold Operations Given that mines have limited lives based on Proven Mineral Reserves and Probable Mineral Reserves, the Corporation must continually replace and expand its Mineral Reserves at its gold mines and discover, develop, or acquire Mineral Reserves for production. Mineral Reserves are sufficient to support mining operations at the Plutonic Gold Operations for the next three years. Although management anticipates extending the life of the mine by successfully converting Mineral Resources to Mineral Reserves and by conducting further exploration, there can be no assurances that they will be successful in doing so. The Corporation’s ability to maintain or increase its annual production of gold at the Plutonic Gold Operations in the future will be dependent, in significant part, on its ability to expand the Mineral Resources and Mineral Reserves of the Plutonic Gold Operations through exploration or other means. There can be no assurance that any of the Corporation’s planned exploration and development activities for the Plutonic Gold Operations will succeed in establishing additional Mineral Reserves and increasing the life of the mine. Overall, both the Reserve Mine Plan and Extended Mine Plan included in this prospectus may not prove to be accurate. The Extended Mine Plan is preliminary and conceptual in nature and is the result of a study that is based on Mineral Resources which include some Inferred Mineral Resources. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Further, there is no certainty that historic percentages of materials mined that are not included in Mineral Reserves will be realized in the future. Inferred Mineral Resources are also considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Accordingly, there is no certainty that the life of mine schedules and economic assessments under the Extended Mine Plan will be realized.

Economic Viability Mineral Reserves at the Plutonic Gold Operations are sufficient to support mining operations only for the next three years. The conversion of Mineral Resources into Mineral Reserves or direct production of Mineral Resources is a continuing objective of the Corporation to attempt to meet or exceed the Extended Mine Plan life of mine. There is no certainty that this will be realized and therefore determination of the value of the Plutonic Gold Operations may be based on a life of mine that is different than the Extended Mine Plan. Assuming only the Mineral Reserves are converted into production in accordance with the Reserve Mine Plan, the Plutonic Gold Operations generate negative cash flow in 2017. The positive life of mine cash flow under the Reserve Mine Plan is sensitive to the assumed gold

104 prices, exchange rates and costs, whereby minor negative movements away from them may make the operation uneconomic. For example, under the Reserve Mine Plan, the Plutonic Gold Operations’ net present value is sensitive to a 10% reduction in gold price (or gold grade) or a 10% increase in costs, either of which would lead to a negative net present value.

Production Estimates The Corporation has prepared estimates of future gold production. The Corporation cannot give any assurance that such estimates will be achieved. Failure to achieve production estimates could have an adverse impact on the Corporation’s future cash flows, profitability, results of operations and financial conditions. The realization of production estimates are dependent on, among other things, the accuracy of Mineral Reserve and Mineral Resource estimates, the accuracy of assumptions regarding ore grades and recovery rates, ground conditions (including hydrology), the physical characteristics of ores, the presence or absence of particular metallurgical characteristics, and the accuracy of the estimated rates and costs of mining, ore haulage and processing. Actual production may vary from estimates for a variety of reasons, including the actual ore mined varying from estimates of grade or tonnage; dilution and metallurgical and other characteristics (whether based on representative samples of ore or not); short-term operating factors such as the processing of new or adjacent ore grades from those planned; mine failures or slope failures; industrial accidents; natural phenomena such as inclement weather conditions, floods, droughts, rock slides and earthquakes; encountering unusual or unexpected geological conditions; changes in power costs and potential power shortages; shortages of principal supplies needed for mining operations, including explosives, fuels, chemical reagents, water, equipment parts and lubricants; plant and equipment failure; the inability to process certain types of ores; labour shortages or strikes; and restrictions or regulations imposed by government agencies or other changes in the regulatory environment. Such occurrences could also result in damage to mineral properties or mines, interruptions in production, injury or death to persons, damage to property of the Corporation or others, monetary losses and legal liabilities in addition to adversely affecting mineral production. In addition, mill performance will require careful monitoring to confirm that improved recoveries are actually achieved, as failure to achieve recoveries of above 90% could negatively impact overall performance of the Plutonic Gold Operations. These factors may cause a mineral deposit that has been mined profitably in the past to become unprofitable, forcing the Corporation to cease production.

Pending Transfers and Approvals The transfer of the assets for the Plutonic Gold Operations is subject to stamp duty in Western Australia. The Corporation is currently in the process of making submissions to the Office of State Revenue in relation to the stamping of the Acquisition Agreement. Valuations are being obtained for this purpose. The assets the subject of the Acquisition Agreement are the same assets the subject of an earlier sale transaction that was recently stamped by the Office of State Revenue (being the acquisition of the Plutonic Gold Mine by Northern Star from Barrick Gold Corporation). The Corporation therefore expects broadly similar treatment of this transaction, noting that the Corporation’s valuations may be different and that there is nonetheless a risk that the Office of State Revenue will disagree with and challenge the valuations the Corporation puts forward. While the Corporation expects to complete the transfer process in the ordinary course, no assurance can be made in this regard.

The Plutonic Gold Mine and Hermes tenement transfer forms can only be lodged with the DMP for registration once the forms have been stamped by the Office of State Revenue. The Corporation expects to complete the valuation process in due course and does not foresee any issues with completing the tenement transfer. The Corporation has received Ministerial consent for the transfer of the tenements.

Ministerial consent and cabinet approval is required for the transfer of the pastoral leases and this process is underway. The Corporation anticipates that it will receive final consent and approval for the transfer of the pastoral leases (which is anticipated to be a lengthy process), and while there is a risk that consent and approval will not be given, the Corporation is not aware of any reason why consent and approval will not be given in due course.

Aboriginal Claims Native title claims and aboriginal heritage issues may affect the ability of the Corporation to pursue exploration, development and mining on its properties. The resolution of native title and aboriginal heritage issues is an integral part of exploration, development and mining operations in Australia and the Corporation is committed to managing any issues that may arise effectively. However, in view of the inherent legal and factual uncertainties relating to such issues, no assurance can be given that material adverse consequences will not arise.

105 Certain of the Plutonic Gold Operations’ tenements are subject to the “future act” regime under which the Gingirana aboriginal group have registered a native title application. The DMP had advised that the Gingirana objected to the grant of certain tenements to the Corporation. As a result, a 3-month consultation period was imposed to attempt to resolve the Gingirana aboriginal claim. The Gingirana People and the Corporation were unable to come to an agreement within the consultation period and the Gingirana Objection was referred to an independent person on November 10, 2016. A claim meeting was held on November 28, 2016 regarding the withdrawal of the Gingirana Objection. On December 22, 2016, the Gingirana People agreed to withdraw their objections, subject to certain pre- conditions, including but not limited to the Corporation agreeing to further consultation for the purposes of exploring employment opportunities for members of the Gingirana People.

While the Corporation is of the view that the pre-conditions are likely to be met and satisfied, there can be no assurance that this will occur in a timely fashion, if at all. The Corporation also expects that current and future tenure applications will likely follow similar legal procedures, which can take extended periods of time to resolve and result in higher costs in the process for obtaining tenements. If the Gingirana Objection proves to be successful in relation to the existing tenement applications (which is unlikely in the Corporation’s view) it may adversely impact the construction of a new haul road from Hermes to the Plutonic Gold Mine mill as the two tenements in question are located along the proposed route for this road.

Undisclosed Liabilities The Corporation has only recently acquired the Plutonic Gold Operations. While management is not aware of any significant liabilities related to the Acquisition or the Plutonic Gold Operations that have not been disclosed, there may be undisclosed liabilities of which management is currently unaware. If any such liabilities are material, this may adversely affect the Corporation.

Licences and Permits The Corporation requires Permits from various governmental authorities to conduct its business and its operations. Other than as disclosed elsewhere in this prospectus, the Corporation believes that it holds all necessary Permits under applicable laws and regulation in respect of the Plutonic Gold Mine, but the Corporation expects that additional Permits will be required for its Hermes open pit and for it to carry out its business in the ordinary course. In particular, the Corporation has not yet received all required clearing Permits in connection with Hermes. There is a risk that the necessary Permits may not be obtained and there can be no assurance that current Permits will be renewed upon expiry. To the extent such Permits required are not obtained, the Corporation may be curtailed from continuing its mining operations.

Loss of Entire Investment A positive return on an investment in the Common Shares is not guaranteed. An investment in the Common Shares is speculative and may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in the Common Shares. An investment in the Common Shares involves a high degree of risk and should be undertaken only by investors whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment.

Risk of Acquisitions, Investments and/or Divestitures The Corporation may consider making strategic acquisitions, investments or divestitures as a means of pursuing its business strategy. It is possible that the Corporation may not identify suitable opportunities or, if it does identify suitable opportunities, that it may not complete those transactions successfully, which may adversely affect its financial condition, future performance and growth prospects. The Corporation is actively evaluating the acquisition of exploration, development or production assets and joint ventures on additional assets. The Corporation is currently engaged in discussions with respect to such possible opportunities. At any given time, discussions and activities can be in process on a number of initiatives, each at different stages of development. Although the Corporation may from time to time be a party to a number of letters of intent in respect of certain acquisitions and joint venture opportunities, the Corporation currently does not have any binding agreements or binding commitments to enter into any such

106 transactions. There is no assurance that any potential transaction will be successfully completed. Acquisitions or investments may be completed in whole or in part by way of the issue of securities of the Corporation, which may have the effect of diluting shareholders’ interests in the Corporation. Acquisitions or investments also have innate risks, which include accurately valuing the strengths, weaknesses, contingent and other liabilities and potential profitability of the acquisition or investment. In addition, the Corporation may face difficulty in achieving the identified and anticipated operating and financial synergies and fail to successfully integrate the acquisition into its operations. The Corporation may also realize a decline in the value of the acquired properties, companies or securities. There may be a diversion of management from the existing business of the Corporation as a result of potential acquisitions, investments or divestitures. In addition, there is a potential for loss of key employees of any acquired business. In the event the Corporation successfully completes a divestiture, there can be no guarantee that the Corporation will obtain benefits for such divestiture. Such difficulties associated with acquisitions, investments or divestitures could disrupt the Corporation’s ongoing operations, distract its management and employees and create unanticipated costs, any of which could have a material adverse effect on the Corporation’s business and results from operations.

Profitability of the Corporation There can be no assurance that the Corporation’s business and strategy will enable it to become profitable or sustain profitability in future periods. The Corporation’s future operating results will depend on various factors, many of which are beyond the Corporation’s direct control, including the Corporation’s ability to develop its mining projects and commercialize Mineral Reserves, its ability to control its costs, the demand and price for gold and general economic conditions. If the Corporation is unable to generate profits in the future, the market price of the Common Shares could decline.

The Corporation’s Mining Activities are situated in One Country The Corporation is conducting its mining activities principally in Australia; therefore its operations are subject to the risks normally associated with conducting business in a foreign country. While the Corporation believes that the government of Australia supports the development of natural resources, there is no guarantee that future political and economic conditions in Australia will not result in the creation of different policies and attitudes respecting the development and ownership of Mineral Resources. Therefore, changes in policies and attitudes may result in changes in laws and regulations affecting environmental requirements, prices, foreign investment, ownership of assets, land tenure and mineral concessions, taxation, royalties, currency exchange and inflation rates, labour relations, expropriation of property interests, licensing and permitting, income repatriation and capital recovery, which may have a material adverse effect on the Corporation.

Risks in the Mining Sector The Corporation’s business operations are exposed to a high degree of risk inherent in the mining sector. Risks which may occur during the development of mineral deposits include environmental hazards, industrial accidents, equipment failure, import/customs delays, shortage or delays in installing and commissioning plant and equipment, metallurgical and other processing problems, seismic activity, unusual or unexpected formations, formation pressures, rock bursts, wall failure, cave ins or slides, burst dam banks, flooding, fires, explosions, power outages, opposition with respect to mining activities from individuals, communities, governmental agencies and non-governmental organizations, interruption to or the increase in costs of services, cave-ins and interruption due to inclement or hazardous weather conditions. Such occurrences could cause damage to, or destruction of properties, personal injury or death, environmental damage, pollution, delays, increased production costs, monetary losses and potential legal liabilities. Moreover, these factors may result in a mineral deposit, which has been mined profitably in the past to become unprofitable, causing the termination of production. They are also applicable to sites not yet in production and to expanded operations. Successful mining operations will be reliant upon the availability of processing and refining facilities and secure transportation infrastructure at the rate of duty over which the Corporation may have limited or no control.

Reliability of Resource and Reserve Estimates Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Corporation’s Mineral Resources and Mineral Reserves described in the Technical Report are only estimates and no assurance can be given that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realized or

107 that Mineral Reserves will be mined or processed profitably. The process of estimating Mineral Resources and Mineral Reserves is a subjective process with numerous inherent uncertainties including many factors beyond the Corporation’s control. There is no assurance that any of the Mineral Resources or Mineral Reserves described in the Technical Report will be attained.

Mineral Reserves may not conform to geological, metallurgical or other expectations, and the volume and grade of ore recovered may differ from estimated levels. There are numerous uncertainties inherent in estimating Mineral Reserves and Mineral Resources, including many factors beyond the Corporation’s control. The accuracy of any Mineral Reserve or Mineral Resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Short-term operating factors relating to the Mineral Reserves, such as the need for orderly development of the ore bodies or the processing of new or different ore grades, may cause the mining operation to be unprofitable in any particular accounting period. In addition, there can be no assurance that gold recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production. The category of Inferred Mineral Resource is the least reliable Mineral Resource category and is subject to the most variability. Due to the uncertainty which may attach to Inferred Mineral Resources, there is no assurance that Inferred Mineral Resources will be upgraded to Proven Mineral Reserves and Probable Mineral Reserves as a result of continued exploration.

Mineral Resource and Mineral Reserve estimates may require downward adjustments or revisions based on gold price fluctuations, grades, further development activity, increased production costs or reduced recovery rates, new information or modelling adjustments, changes to laws and regulations affecting operating costs and the fiscal environment. Additionally, the quantity and/or economic viability of Mineral Resources or Mineral Reserves may differ depending on, among other things, Permit regulations and requirements, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions.

A reduction in estimated Mineral Resources and Mineral Reserves as a result could require material write downs in the investment in the Plutonic Gold Operations and increased depreciation and amortization, as well as reclamation and closure costs. If the Corporation’s actual Mineral Reserves and Mineral Resources are less than current estimates, its results of operations or financial condition may be materially and adversely affected.

The Corporation May Not Meet Cost Estimates A reduction in the amount of or a change in the timing of the gold production estimate for the Corporation may have a material adverse impact on the Corporation’s future cash flows. The actual effect of such a reduction of the Corporation’s cash flow from operations would depend on the timing of any changes in production and on actual prices and costs. A change in the timing of these projected cash flows due to production shortfalls or labour disruptions would result in delays in receipt of such cash flows and in using such cash to fund operating activities and, as applicable, reduce debt levels. This could result in additional loans to finance capital expenditures in the future.

The level of production and capital and operating cost estimates which are used for determining and obtaining financing and other purposes are based on certain assumptions and are fundamentally subject to considerable uncertainties. It is very likely that actual results for the Plutonic Gold Operations will differ from its current estimates and assumptions, and these differences may be significant. Moreover, experience from actual mining or processing operations may identify new or unexpected conditions that could decrease production below, and/or increase capital and/or operating costs above, the current estimates. If actual results are less favourable than the Corporation currently estimates, the Corporation’s business, results from operations, financial condition and liquidity could be materially adversely affected.

Ability to Satisfy Earn-In Requirements The Corporation’s interest in the Bryah Basin joint venture is an earn-in option, which is achieved by spending a total of A$1.2 million (US$888,000) on exploration during the three-year earn-in period beginning April 2015. The earn-in expenditure must be incurred at a rate of not less than A$400,000 (US$296,000) per year. As of October 11, 2016, the date immediately prior to the Acquisition, Northern Star had spent an aggregate of A$553,551 (US$409,627) towards this earn-in expenditure. The failure to meet the minimum annual expenditure or the total earn-in expenditure within the earn-in period will result in termination of the joint venture agreement and all rights will subsequently be

108 divested by the Corporation. While management does not foresee any issues satisfying the minimum amounts required to maintain its interest in the Bryah Basin joint venture, there can be no assurance that this will occur and losing its rights under the Bryah Basin joint venture may have a material adverse effect on the Corporation.

Failure to Develop the Baltic Extension and Hermes The Plutonic Gold Mine has eight active mining zones. Seven of these mining zones are well-established having been active for a number of years. The eighth zone, Baltic Extension, is a new mining zone. As a new area, development of the Baltic Extension has not yet commenced and may not commence in a timely fashion. Hermes is a greenfields open pit mining project, located approximately 60km south-west of the Plutonic Gold Mine. Mining operations at Hermes are expected to supplement production from the Plutonic Gold Mine beginning in 2017. Failure to develop the Baltic Extension and Hermes in a timely fashion may cause delays in the production from the Baltic Extension and Hermes, as contemplated by the Reserve Mine Plan and the Extended Mine Plan or otherwise.

Availability and Costs of Key Inputs The Corporation’s competitive position is reliant on its ability to control operating costs. Input costs can be impacted by changes in factors including market conditions, government policies, exchange rates and inflation rates, which are unpredictable and outside the control of the Corporation. Any increase in the price of production inputs, including labour, power, mine consumables or other inputs could materially and adversely affect the Corporation’s business, financial condition and results from operations. Shortages in these inputs may also cause unanticipated cost increases and delays in delivery times, thus impacting operating costs, capital expenditures and production schedules.

Labour Risks In connection with the Acquisition, certain employees of the Corporation are subject to a legacy collective agreement. While no labour stoppages or work disruptions have occurred as a result of the collective agreement, there can be no assurance that there will be no labour disruptions or work stoppages in the future. Additionally, any significant increases in wages or benefits paid to employees subject to the collective agreement, labour disruptions or stoppages as a result of the collective agreement could have an adverse effect on the Corporation’s ability to maintain positive labour relations and may adversely affect the results of operations or financial condition of the Corporation.

Financing Risks Mining operations involve significant financial risk and capital investment. The Corporation may require additional funding to expand its business. The Corporation may need to seek funding from third parties if internally generated cash resources and available credit facilities are insufficient to finance these activities. There can be no assurance that the Corporation will be able to obtain the necessary financing in a timely manner, on acceptable terms or at all.

The success and the pricing of any such capital raising and/or debt financing will be dependent upon the current market conditions at that time, the availability of funds from lenders and other factors. If additional capital is raised by an issue of securities, this may have the effect of diluting shareholders’ interests in the Corporation. Debt financing, if available, may involve financial covenants and the granting of further security over the Corporation’s assets, which may restrict the Corporation’s operations. The principal amounts under any debt financing arrangements entered into by the Corporation may become immediately due and payable if the Corporation fails to meet certain restrictive covenants. If the Corporation cannot obtain such additional capital, it may not be able to complete the expansion of the resource base of the Plutonic Gold Operations, which may adversely affect its business, operating results and financial condition. There can be no assurance that funding will be available to the Corporation or available on terms that do not adversely affect the projected economic return from the expansion of the Plutonic Gold Operations.

109 Insurance and Uninsured Risks The Corporation is exposed to risks inherent in the mining industry, including adverse environmental conditions and pollution, personal injury or death, labour disputes, unusual or unexpected geological conditions, legal liability, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena, property damage, floods, earthquakes, delays in mining and monetary losses and dust storms.

While the Corporation has obtained insurance to address certain risks in such amounts as it considers being reasonable, such insurance has limitations on liability that may not be able to cover all the potential liabilities and the insurance may not continue to be available or may not be adequate to cover any resulting liability. Moreover, such risks may not be insurable in all instances or, in certain instances, the Corporation may elect not to insure against certain risks because of high premiums associated with such insurance or other reasons. The payment of such uninsured liabilities would reduce the funds available to the Corporation and the occurrence of an event in which the Corporation is not fully insured against, could have a material adverse effect upon its business, operating results and financial condition.

Mine Closure Estimates and Remediation The mine closure cost estimate for the Plutonic Gold Mine was estimated at approximately US$18 million (A$24 million). A mine closure cost estimate for Hermes of US$0.7 million has been included for rehabilitation of the Hermes site. These estimates are viewed by management to be based on reasonable assumptions. However, these estimates may ultimately prove to be inaccurate. Among the many uncertainties that impact the Corporation’s estimates are the necessary regulatory approvals for, and potential modification of, the Corporation’s environmental remediation plans, the limited amount of data available upon initial assessment of the impact of soil or water contamination, changes in costs associated with environmental remediation services and equipment, the possibility of legal claims in relation to environmental remediation and changes in laws and regulations related to environmental remediation. In the event that actual mine closure costs vary significantly from estimated amounts, it may materially and adversely impact the Corporation.

A significant number of areas within the land comprising the Plutonic Gold Operations have been identified as contaminated. The DER has classified a number of those sites as “possibly contaminated – investigation required”. Further sites may be formally classified as contaminated in the future. The carrying out of some forms of development on classified land requires advice from DER before approval can be obtained for the development. Some of the possible contamination is related to waste materials, including laboratory waste, being disposed of in unlined facilities. Other possible contamination relates to hydrocarbons and metals present in soils which may be impacting groundwater. Investigations, including soil and groundwater assessments, are required to determine the contaminated status of the sites. The Corporation has assumed responsibility for any remediation of the land upon which the Plutonic Gold Operations are situated which arises from any contamination caused by, or which emanates from, the mining operations. This is subject to an indemnity provided by Northern Star in relation to costs incurred by the Corporation within 6 months of the Acquisition Closing Date arising out of a requirement to remediate or make good any contamination. The indemnity does not extend to expenditure which is less than $50,000 or is in relation to contamination arising after the Acquisition Closing Date. Costs that may be incurred by the Corporation for any remediation of the land that are not indemnified are not able to be quantified at this stage but may materially and adversely impact the Corporation.

Litigation All industries, including the mining industry, are subject to legal claims, with and without merit. Legal proceedings may arise from time to time in the course of the Corporation’s business. Such litigation may be brought from time to time in the future against the Corporation. Defense and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Other than as disclosed elsewhere in this prospectus, the Corporation is not currently subject to material litigation nor has the Corporation received an indication that any material claims are forthcoming. However, due to the inherent uncertainty of the litigation process, the Corporation could become involved in material legal claims or other proceedings with other parties in the future. The results of litigation or any other proceedings cannot be predicted with certainty. The cost of defending such claims may take away from management’s time and effort and if the Corporation is incapable of resolving such disputes favourably, the resultant litigation could have a material adverse impact on the Corporation’s financial condition, cash flow and results from operations.

110 Dependence on Key Personnel The Corporation’s success depends to a large degree upon its ability to attract, retain and train key management personnel, as well as other technical personnel, both in Canada and in Australia. If the Corporation is not successful in retaining or attracting such personnel, the Corporation’s business may be adversely affected. Furthermore, the loss of the Corporation’s key management personnel could materially and adversely affect the Corporation’s business and operations.

As the Corporation’s business becomes more established, it will also be required to recruit additional qualified key financial, administrative, operations and marketing personnel. There will be no guarantee that the Corporation will be able to attract and keep such qualified personnel and if the Corporation is not successful, it could have a material and adverse effect on the Corporation’s business and results from operations.

Dependence on Outside Parties The Corporation has relied upon consultants, engineers, contractors and other parties and intends to rely on these parties for exploration, development, construction and operating expertise. Substantial expenditures are required to construct mines, to establish Mineral Reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract metal from ore and, in the case of new properties, to develop the exploration and mineral processing infrastructure at any particular site. Deficient or negligent work or work not completed in a timely manner could have a material adverse effect on the Corporation.

Foreign Mining Tax Regimes Mining tax regimes in foreign jurisdictions are subject to differing interpretations and are subject to constant change. The Corporation’s interpretation of taxation law as applied to its transactions and activities may not coincide with that of the tax authorities. As a result, transactions may be challenged by tax authorities and the Corporation’s operations may be assessed, which could result in significant additional taxes, penalties and interest. In addition, proposed changes to mining tax regimes in foreign jurisdictions could result in significant additional taxes payable by the Corporation, which would have a negative impact on the financial results of the Corporation.

Foreign Currency Fluctuations Foreign currency fluctuations may have a material adverse effect on the Corporation’s financial position and net income. The price of gold is denominated in U.S. dollars and therefore, the Corporation’s expected future revenue, if any, will be realized and reported in U.S. dollars. Also, future capital raised by the Corporation from public offerings of securities may be in Canadian or U.S. dollars. However, most of the Corporation’s capital costs and operational costs are in Australian dollars. The use of these different currencies exposes the Corporation to the risk of foreign currency fluctuations, which are affected by a number of factors that are beyond the control of the Corporation. These factors include economic conditions in the relevant country and elsewhere and the outlook for interest rates, inflation and other economic factors. The Corporation has not hedged against fluctuations in exchange rates; however, it may do so at a later date.

No Dividends The Corporation has not paid dividends on its Common Shares to date. Payment of any future dividends will be at the discretion of the Board after taking into consideration many factors, including, but not limited to, the Corporation’s operating results, financial condition and current and anticipated cash needs. At this time however, all of the Corporation’s available funds are anticipated to be invested to finance further growth of the Corporation’s business and therefore investors cannot expect and should not anticipate receiving a dividend on the Common Shares in the foreseeable future.

Repatriation of Earnings There is no guarantee that the Government of Australia or any other foreign country in which the Corporation may operate in the future will not impose restrictions on the repatriation of earnings to foreign entities.

111 Stock Exchange Prices The market price of a publicly traded stock is affected by many variables, including the availability and attractiveness of alternative investments and the breadth of public market for the stock. In recent years, the securities markets have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that such variations will not affect the price of the Corporation’s securities in the future and that the price of the Common Shares will not decrease after the Offering.

Market for the Corporation’s Securities There has been no public trading market for the Common Shares. While the Corporation has received conditional approval to list the Common Shares on the Exchange, listing is subject to the Corporation fulfilling all the requirements of the Exchange. There can be no guarantee that an active and liquid trading market will develop or be maintained, the failure of which may have a material adverse effect on the value of the Common Shares and the ability of a purchaser to dispose of the Common Shares in a timely manner, or at all. In addition, the market price of the securities of the Corporation at any given point in time may not accurately reflect the long-term value of the Corporation.

Furthermore, responding to any events or circumstances resulting from the risk factors described herein could result in substantial costs as well as divert management’s attention and resources. Other factors unrelated to the performance of the Corporation that may have an effect on the price and liquidity of the Corporation’s securities include, among other things: the extent of analyst coverage of the Corporation’s securities, the trading volume and general market interest in the Corporation’s securities, the size of the Corporation’s public float and/or any event resulting in a de-listing of the Corporation’s securities.

Presence of a Significant Shareholder Assuming the full amount of the Offering is raised (excluding any proceeds raised from the exercise of the Over- Allotment Option), it is contemplated that Northern Star will hold approximately 20% of the issued and outstanding Common Shares following closing of the Offering on a non-diluted basis and will also hold Consideration Warrants. As a result, Northern Star will have significant influence over all matters requiring shareholder approval. Circumstances may occur in which the interests of Northern Star could be in conflict with the interests of other holders of Common Shares. In addition, Northern Star is a publicly traded company, is widely held and its ownership and control may undergo substantial changes without the Corporation’s knowledge. While Northern Star is providing strong sponsorship to the Corporation, there is no assurance that the interests of Northern Star will always be aligned with the Corporation’s interests and those of the Corporation’s other shareholders, and there is no assurance that the board of directors and management team of Northern Star would not make decisions with regard to its holdings of Common Shares or how it votes those Common Shares in a manner that is adverse to the Corporation or the Corporation’s other shareholders. While Northern Star will be subject to a contractual lock-up agreement with the Agents, this may not prevent Northern Star from selling some or all of its Common Shares in the future. If Northern Star disposes of a significant number of Common Shares after completion of the lock-up agreement, the market price of the Common Shares may be negatively impacted by the resulting additional trading volume.

Limited Liability of Northern Star Northern Star has not reviewed the disclosure contained in this prospectus relating to the Plutonic Gold Operations and has not represented that the disclosure represents full, true and plain disclosure and does not contain a misrepresentation. Northern Star will have no liability to investors in the Offering if the disclosure contained in this prospectus relating to the Plutonic Gold Operations contains a misrepresentation. Pursuant to the terms of the Acquisition Agreement, Northern Star’s maximum liability in connection with any claim, demand or cause of action arising in relation to any provision of the Acquisition Agreement or any other matter connected with the Plutonic Gold Operations is capped at A$12.5 million.

112 Potential Conflicts of Interest The Corporation may be subject to potential conflicts of interests, as certain directors of the Corporation are, and may continue to be, engaged in the mining industry through their participation in corporations, partnerships or joint ventures, which are potential competitors of the Corporation. Situations may occur in relation to potential transactions or investments where the other interests of these directors may conflict with the interests of the Corporation.

Less Stringent Requirements for Internal Controls The Corporation has received conditional approval to list the Common Shares on the Exchange, whereby listing is subject to the Corporation fulfilling all the requirements of the Exchange. Assuming that the Corporation is and thereafter remains listed on the Exchange, the Corporation will not be required under National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings to include representations relating to the establishment and maintenance of disclosure controls and internal control over financial reporting when filing its financial statement certifications. While the Corporation will strive to ensure that adequate internal controls are followed at all times, it is unlikely that the Corporation will implement a robust and formal internal control policy for the foreseeable future. Inadequate internal controls or disclosure controls over financial reporting could result in a material misstatement in the Corporation’s financial statements and related public disclosures. Inadequate controls could also result in inappropriate decisions based on non-current internal financial information, fraud, or the inability to continue the Corporation’s business operations for a period of time, each of which could materially and adversely affect the Corporation.

Obligations as a Public Company The Corporation’s business is subject to evolving corporate governance and public disclosure regulations that may from time to time increase both the Corporation’s compliance costs and the risk of non-compliance, which could adversely impact the price of the Common Shares.

The Corporation is subject to changing rules and regulations promulgated by a number of governmental and self- regulated organizations, including, but not limited to, the Canadian Securities Administrators, the Exchange, and the IASB. These rules and regulations continue to evolve in scope and complexity creating many new requirements. For example, the Government of Canada proclaimed into force the Extractive Sector Transparency Measures Act on June 1, 2015, which mandates the public disclosure of payments made by mining companies to all levels of domestic and foreign governments starting in 2017 for the year ended December 31, 2016. The Corporation’s efforts to comply with such legislation could result in significant general and administration expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Australian Foreign Investment Law As the Plutonic Gold Operations are located in Australia, the acquisition of Common Shares by an investor may be subject to Australia’s foreign investment regime. For example, if Billabong is an “Australian land corporation” for the purposes of the Foreign Acquisitions and Takeovers Act 1975 (Cth) then the acquisition of Common Shares by a “foreign person” may require prior notification to the Foreign Investment Review Board. Certain exemptions apply, including the acquisition of an interest of less than 10% in the Corporation.

Different rules apply to “foreign government investors”. The scope of the concept of a foreign government investor for the purposes of the Foreign Acquisitions and Takeovers Act 1975 (Cth) is very broad. Investors should seek their own independent advice regarding whether the acquisition of Common Shares by them will require prior notification to the Foreign Investment Review Board under Australia’s foreign investment regime.

Use of Proceeds The Corporation currently intends to use the net proceeds received from the Offering as described under “Use of Proceeds”. However, the Board and/or management will have discretion in the actual application of the net proceeds, and may elect to allocate net proceeds differently from that described under “Use of Proceeds” if they believe it would be in the Corporation’s best interests to do so. Shareholders may not agree with the manner in which the Board and/or

113 management chooses to allocate and spend the net proceeds. The failure by the Board and/or management to apply these funds effectively could have a material adverse effect on the Corporations’ business, financial condition, results of operations, cash flows or prospects.

Risks Related to the Industry Fluctuations in Gold Prices The Corporation’s operations may be significantly impacted by changes in the price of gold. The price of gold has historically fluctuated widely, and is dependent upon various factors beyond the Corporation’s control, including without limitation, exchange rates, inflation rates, sales and purchases of gold, price and availability of substitutes, forward sales of gold by producers and speculators, expectations with respect to the rate of inflation, world supply of gold, stability of exchange rates (the strength of the U.S. dollar and other currencies), global and regional political and economic conditions or events, industrial and retail demand, sales by central banks and other holders, interest rates, production, and cost levels in major gold-producing regions, and speculator as well as producer responses to any of the foregoing factors.

Price declines in the market value of gold could cause the Plutonic Gold Operations to be rendered uneconomic, thereby forcing the Corporation to discontinue production, development or exploration or to lose its interest in or sell the operations. There is no assurance that the market price of gold will remain at current levels or that such price will improve and there is no assurance that even as commercial quantities of gold are produced that a profitable market exists for them.

Historically, price risk for the Plutonic Gold Operations was managed through the use of gold forward contracts. The ability of the Corporation to implement successful hedging strategies will depend, in part, on its creditworthiness with various financial institutions. At this stage of its development, and without having yet produced a full year of audited consolidated financial statements, it is unlikely that financial institutions would be willing to allow the Corporation to enter into hedging instruments. While the Corporation expects to be able to consider hedging strategies more fully in 2017, there can be no assurance that they will be able to do so successfully, if at all.

Exploration, Development and Operating Risks Mining operations generally involve a degree of risk. The Corporation’s operations are subject to all of the hazards and risks normally encountered in the exploration, development and production of precious metals, including, without limitation, unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, personal injury or loss of life and damage to property and environmental damage, all of which may result in possible legal liability. Although the Corporation expects that adequate precautions to minimize risk will be taken, mining operations are subject to hazards such as fire, rock falls, geo-mechanical issues, equipment failure or failure of retaining dams around tailings disposal areas which may result in environmental pollution and consequent liability. The occurrence of any of these events could result in a prolonged interruption of the Corporation’s operations that would have a material adverse effect on its business, financial condition, results of operations and prospects.

The exploration for and development of mineral deposits involves significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish Mineral Reserves, to develop metallurgical processes and to construct mining and processing facilities and infrastructure at a particular site. It is impossible to ensure that the exploration or development programs planned by the Corporation will result in a profitable commercial mining operation. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure, metal prices that are highly cyclical, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Corporation not receiving an adequate return on invested capital. There is no certainty that the expenditures made towards the search and evaluation of mineral deposits will result in discoveries or development of commercial quantities of ore.

114 Development projects have no operating history upon which to base estimates of future capital and operating costs. For development projects, such as Hermes, Mineral Resource estimates and estimates of operating costs are, to a large extent, based upon the interpretation of geologic data obtained from drill holes and other sampling techniques, and feasibility studies, which derive estimates of capital and operating costs based upon anticipated tonnage and grades of ore to be mined and processed, ground conditions, the configuration of the ore body, expected recovery rates of minerals from ore, estimated operating costs, and other factors. As a result, actual production, cash operating costs and economic returns could differ significantly from those estimated. It is not unusual for new mining operations to experience problems during the start-up phase, and delays in the commencement of production can often occur.

Mineral exploration is highly speculative in nature. There is no assurance that exploration efforts will be successful. Even when mineralization is discovered, it may take several years until production is possible, during which time the economic feasibility of production may change. Because of these uncertainties, no assurance can be given that exploration programs will result in the establishment or expansion of Mineral Resources or Mineral Reserves.

Critical Supplies The Corporation’s mining operations are dependent on the adequate and timely supply of water, electricity or other power supply, chemicals and other critical supplies. If the Corporation is unable to obtain the requisite critical supplies in time and at commercially acceptable prices or if there are significant disruptions in the supply of electricity, water or other inputs to the mine site, the performance of the Corporation’s business and results from operations may experience material adverse effects.

Environmental Risks and Regulations The Corporation’s operations are subject to environmental regulation in Australia. These regulations mandate, including other things, the maintenance of air and water quality standards and land reclamation and the prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry activities and operations. They also set limitations on the generation, transportation, storage and disposal of solid and hazardous waste.

Environmental legislation is evolving in a manner which will necessitate stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and an increased degree of responsibility for companies and their officers, directors and employees. There is no guarantee that future changes in environmental regulation, if any, will not adversely affect the Corporation’s operations.

In addition, presently undiscovered environmental hazards may exist at or adjacent to the site of the Plutonic Gold Operations. The Corporation may be liable for losses associated with such hazards, or may be forced to undertake extensive remedial clean-up action or to pay for governmental remedial clean-up actions, even in cases where such hazards have been caused by previous or existing owners of or operations on project land, by past or present owners of adjacent properties or natural conditions. The costs of such clean-up actions may have a material adverse impact on the Corporation’s operations and profitability.

Health & Safety Mining, like many other extractive natural resource industries, is subject to potential risks and liabilities due to accidents that could result in serious injury or death. The impact of such accidents could affect the profitability of the operations, cause an interruption to operations, lead to a loss of licenses, affect the reputation of the Corporation and its ability to obtain further licenses, damage community relations and reduce the perceived appeal of the Corporation as an employer.

There is no assurance that the Corporation has been or will at all times be in full compliance with all laws and regulations or hold, and be in full compliance with, all required health and safety Permits. The potential costs and delays associated with compliance with such laws, regulations and Permits could prevent the Corporation from proceeding with the development of a project or the operation or further development of a project, and any non- compliance therewith may adversely affect the Corporation’s business, financial condition and results of operations.

115 Amendments to current laws, regulations and Permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Corporation and cause increases in exploration expenses, capital expenditures or production costs, reduction in levels of production at producing properties, or abandonment or delays in development of new mining properties.

Government Regulation The Corporation’s mining operations are subject to various laws and regulations governing development, production, taxes, labour standards and occupational health, mine safety, protection of endangered and protected species, toxic substances and explosives use, reclamation, exports, price controls, waste disposal and use, water use, forestry, land claims of local people, and other matters. This includes periodic review and inspection of the Plutonic Gold Operations that may be conducted by applicable regulatory authorities. The Plutonic Gold Mine mill for example currently has to go through certain immaterial modifications due to such an inspection previously conducted. No issues were identified that presented as an imminent failure risk or would require immediate cessation of work or access to any areas of the mill. The modifications are currently in progress and Northern Star has indemnified the Corporation for the amount estimated to complete these modifications.

Although the Plutonic Gold Operations are currently carried out in accordance with all applicable laws and regulations, there is no guarantee that new laws and regulations will not be enacted or that existing laws and regulations will not be applied in a way which could limit or curtail production. New laws and regulations or amendments to current laws and regulations governing the operations and activities of mining or more stringent implementation of existing laws and regulations could have a material adverse effect on the Corporation and cause increases in capital expenditures or production costs, or reduction in levels of production.

Failure to comply with applicable laws and regulations, even if inadvertent, may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. The Corporation may also be required to reimburse any parties affected by loss or damage caused by the Corporation’s mining activities and may have civil or criminal fines and/or penalties imposed against the Corporation for infringement of applicable laws or regulations.

Title to Properties The Corporation has taken all reasonable steps to ensure it has proper title to its properties. However, there can be no guarantee that the interest of the Corporation in its properties is free from title defects, as title to mineral rights involves certain intrinsic risks due to the potential problems arising from the unclear conveyance history characteristic of many mining projects. There is also the risk that material contracts between the Corporation and the relevant governments will be substantially modified to the detriment of the Corporation or revoked. There can be no assurance that the Corporation’s rights and title interests will not be challenged or impugned by third parties.

Additionally, certain tenements currently held by Northern Star are in the process of being transferred to the Corporation. While the Corporation does not anticipate any issue in receiving such tenements and has received customary title opinions satisfying itself as to the status of such tenements, unforeseen circumstances may arise where the right to such tenements is challenged.

Competition The mining industry is extremely competitive. The Corporation competes with other companies, some which have greater financial, operational expertise, technical capabilities and other resources than the Corporation and, as a result, may be in a better position to compete for future business opportunities. The Corporation may encounter increasing competition from other mining companies in its efforts to hire and retain skilled personnel. There can be no assurance that the Corporation will be able to compete effectively with these companies.

116 Infrastructure Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges and power sources are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Corporation’s operations, financial condition and results of operations.

Climate Change During the wet season, the Plutonic Gold Operations may be subject to unpredictable weather conditions such as heavy rains and torrential downpours. No assurance can be given that the unpredictable weather conditions will not adversely affect mining, development and exploration activities. In particular, mining, drilling and exploration activities may be suspended due to poor ground conditions, ore haulage activities may be slowed or delayed as roads may be temporarily flooded, and deposits may have to be mined or processed at slower than anticipated rates.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

General In the opinion of Stikeman Elliott LLP, counsel to the Corporation, and Cassels Brock & Blackwell LLP, counsel to the Agents, the following is a general summary, as of the date hereof, of the principal Canadian federal income tax considerations under the Tax Act generally applicable to a holder who acquires, as beneficial owner, Treasury Shares pursuant to the Offering, and Qualifying Shares upon the deemed exercise of the Special Warrants, and who, for purposes of the Tax Act and at all relevant times, holds Treasury Shares and Qualifying Shares as capital property and deals at arm’s length with the Corporation, the Agents and any subsequent purchaser of such securities. A holder who meets all of the foregoing requirements is referred to as a “Holder” herein, and this summary only addresses such Holders.

This summary is not applicable to a Holder (i) that is a “financial institution”, as defined in the Tax Act for purposes of the mark-to-market rules in the Tax Act, (ii) that is a “specified financial institution”, as defined in the Tax Act, (iii) an interest in which is a “tax shelter investment” as defined in the Tax Act, (iv) that has elected to report its Canadian tax results in a currency other than the Canadian currency, or (v) that has entered into or will enter into a “derivative forward agreement”, as that term is defined in the Tax Act, with respect to the Treasury Shares or Qualifying Shares. Any such Holders should consult their own tax advisors.

Additional considerations, not discussed herein, may be applicable to a Resident Holder that is a corporation that is, or becomes, or does not deal at arm’s length for purposes of the Tax Act with a corporation resident in Canada that is or becomes, as part of a transaction or series of transactions or events that includes the acquisition of the Treasury Shares or the Qualifying Shares, controlled by a non-resident corporation for the purposes of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act. Any such Resident Holder should consult its own tax advisor with respect to an investment in Common Shares.

This summary is based on the provisions of the Tax Act in force as of the date hereof, all specific proposals to amend the Tax Act that have been publicly and officially announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and our understanding of the current administrative policies and assessing practices of the CRA published in writing prior to the date hereof. This summary assumes the Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that the Proposed Amendments will be enacted in their current form, or at all. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not take into account or anticipate any changes in the law or any changes in the CRA’s administrative and assessing policies or practices, whether by legislative, governmental or judicial action or decision, nor does it take into account or anticipate any other federal or any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. Any particular Holder should consult their own tax advisors with respect to provincial, territorial or foreign tax considerations.

117 This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder, and no representations with respect to the income tax consequences to any Holder are made. Consequently, Holders should consult their own tax advisors with respect to the tax consequences applicable to them, having regard to their own particular circumstances. The discussion below is qualified accordingly.

Taxation of Resident Holders The following portion of this summary applies to Holders who, for the purposes of the Tax Act, are or are deemed to be resident in Canada at all relevant times (herein, “Resident Holders”) and this portion of the summary only addresses such Resident Holders. Certain Resident Holders who might not otherwise be considered to hold their Treasury Shares or Qualifying Shares as capital property may be entitled, in certain circumstances, to treat their Treasury Shares or Qualifying Shares as capital property by making an irrevocable election under subsection 39(4) of the Tax Act. A Resident Holder should consult its own tax advisor with respect to whether the election is available and advisable in its particular circumstances.

Taxation of Dividends A Resident Holder will be required to include in computing income for a taxation year any dividends received, or deemed to be received, in the year by the Resident Holder on the Treasury Shares or Qualifying Shares. In the case of a Resident Holder that is an individual (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable under the Tax Act to taxable dividends received from taxable Canadian corporations, including the enhanced gross-up and dividend tax credit provisions where the Corporation designates the dividend as an “eligible dividend” in accordance with the provisions of the Tax Act. There may be restrictions on the ability of the Corporation to designate any dividend as an “eligible dividend”, and the Corporation has made no commitments in this regard.

A dividend received or deemed to be received by a Resident Holder that is a corporation must be included in computing its income but will generally be deductible in computing the corporation’s taxable income, subject to all of the rules and restrictions under the Tax Act in that regard. In certain circumstances subsection 55(2) of the Tax Act will treat a taxable dividend received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain. A corporation that is a “private corporation” (as defined in the Tax Act) or any other corporation controlled (whether because of a beneficial interest in one or more trusts or otherwise) by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts), generally will be liable to pay an additional tax (refundable under certain circumstances) under Part IV of the Tax Act on dividends received or deemed to be received on the Treasury Shares or Qualifying Shares in a year to the extent such dividends are deductible in computing taxable income for the year.

Disposition of Treasury Shares and Qualifying Shares A Resident Holder who disposes, or is deemed to dispose of, a Treasury Share or a Qualifying Share generally will realize a capital gain (or capital loss) equal to the amount, if any, by which the proceeds of disposition, net of any reasonable costs of disposition, are greater (or are less) than the adjusted cost base to the Resident Holder of such Treasury Shares or Qualifying Shares, as the case may be, immediately before the disposition or deemed disposition. The taxation of capital gains and losses is generally described below under the heading “Certain Canadian Federal Income Tax Considerations – Taxation of Resident Holders – Capital Gains and Capital Losses”.

Capital Gains and Capital Losses Generally, a Resident Holder is required to include in computing income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized by the Resident Holder in such taxation year. Subject to and in accordance with the rules contained in the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a particular taxation year against taxable capital gains realized by the Resident Holder in the year. Allowable capital losses not so deductible in a particular taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances described in the Tax Act.

118 The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition or deemed disposition of a Treasury Share or Qualifying Share may be reduced by the amount of any dividends received or deemed to have been received by such Resident Holder on such shares, to the extent and under the circumstances described in the Tax Act. Similar rules apply where a corporation is a member of a partnership or a beneficiary of a trust that owns Treasury Shares or Qualifying Shares, directly or indirectly. Corporations to whom these rules may be relevant should consult their own tax advisors.

A Resident Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation” (as defined in the Tax Act) may be liable to pay an additional tax (refundable in certain circumstances) on certain investment income, including taxable capital gains. Such Resident Holders should consult their own tax advisors.

Alternative Minimum Tax Capital gains realized and dividends received or deemed to be received by a Resident Holder that is an individual or a trust, other than certain specified trusts, may give rise to alternative minimum tax under the Tax Act. Resident Holders should consult their own tax advisors in this regard.

Taxation of Non-Resident Holders The following portion of this summary is generally applicable to Holders (as defined above) who, for the purposes of the Tax Act and at all relevant times: (i) are not resident or deemed to be resident in Canada, and (ii) do not use or hold Treasury Shares or Qualifying Shares in carrying on a business in Canada. Holders who meet all of the foregoing requirements are referred to herein as “Non-Resident Holders”, and this portion of the summary only addresses such Non-Resident Holders. Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere. Such Non-Resident Holders should consult their own tax advisors.

Receipt of Dividends Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder by the Corporation are subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividend unless reduced by the terms of an applicable tax treaty between Canada and the Non-Resident Holder’s jurisdiction of residence. Non-Resident Holders should consult their own tax advisors in this regard.

Disposition of Treasury Shares and Qualifying Shares A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a Treasury Share or a Qualifying Share unless such Treasury Share or Qualifying Share, as the case may be, constitutes “taxable Canadian property” (as defined in the Tax Act) to the Non- Resident Holder at the time of disposition and the gain is not exempt from tax pursuant to the terms of an applicable tax treaty between Canada and the Non-Resident Holder’s jurisdiction of residence.

Provided the Treasury Shares and Qualifying Shares are listed on a “designated stock exchange”, as defined in the Tax Act (which currently includes Tiers 1 and 2 of the Exchange) at the time of disposition, the Treasury Shares and Qualifying Shares will generally not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60-month period immediately preceding the disposition the following two conditions are satisfied: (i) (a) the Non-Resident Holder; (b) persons with whom the Non-Resident Holder did not deal at arm’s length; (c) partnerships in which the Non-Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; or (d) any combination of the persons and partnerships described in (a) through (c), owned 25% or more of the issued shares of any class or series of shares of the Corporation; and

(ii) More than 50% of the fair market value of the Treasury Shares or Qualifying Shares, as applicable, was derived directly or indirectly from one or any combination of: real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” (each as defined in the Tax Act), and options in respect of, or interests in or for civil law rights in, such properties.

119 Non-Resident Holders who may hold Treasury Shares or Qualifying Shares as taxable Canadian property should consult their own tax advisors.

The above summary is not intended to constitute a complete analysis of all Canadian tax considerations applicable to holder with the ownership, exercise or disposition of Treasury Shares and Qualifying Shares. Holders should consult their own tax advisors as to the tax considerations applicable to them in their particular circumstances.

ELIGIBILITY FOR INVESTMENT

In the opinion of Stikeman Elliott LLP, counsel to the Corporation, and Cassels Brock & Blackwell LLP, counsel to the Agents, based on the current provisions of the Tax Act, the Treasury Shares and Qualifying Shares, as applicable, if issued on the date hereof, will be “qualified investments” under the Tax Act for a trust governed by a registered retirement savings plan (“RRSP”), a registered retirement income fund (“RRIF”), a deferred profit sharing plan, a registered education savings plan, a registered disability savings plan, and a tax-free savings account (“TFSA”) (each, a “Registered Plan”) provided that such shares are listed on a “designated stock exchange” (which currently includes Tiers 1 and 2 of the Exchange) as defined in the Tax Act.

Notwithstanding that the Treasury Shares and Qualifying Shares may be “qualified investments” for a Registered Plan, if the Treasury Shares or Qualifying Shares are a “prohibited investment” within the meaning of the Tax Act for a Registered Plan, the holder or annuitant of the Registered Plan, as the case may be, will be subject to penalty taxes as set out in the Tax Act. The Treasury Shares and Qualifying Shares will generally not be a prohibited investment for a Registered Plan if the holder or annuitant, as the case may be, (a) deals at arm’s length with the Corporation for the purposes of the Tax Act, and (b) does not have a “significant interest” (as defined for purposes of the prohibited investment rules in the Tax Act) in the Corporation. In addition, the Treasury Shares and Qualifying Shares will not be a prohibited investment if such securities are “excluded property” (as defined in the Tax Act for purposes of the prohibited investment rules) for a Registered Plan.

Prospective purchasers who intend to invest through a Registered Plan should consult their own tax advisers with respect to whether the Treasury Shares and Qualifying Shares would be a prohibited investment having regard to their particular circumstances.

PROMOTER

Christopher Bradbrook, the Promoter, may be considered to be the promoter of the Corporation in that he directly took the initiative in founding and organizing the Corporation. To the Corporation’s knowledge, as at the date of this prospectus, the Promoter beneficially holds, controls or directs, directly or indirectly, 4,203,130 Common Shares, representing approximately 36.6% of the outstanding Common Shares on a non-diluted basis prior to giving effect to the Offering, the deemed exercise of the Special Warrants and the issuance of the Consideration Shares. After giving effect to the Offering (assuming no exercise of the Over- Allotment Option and excluding the purchase of any Treasury Shares), the deemed exercise of the Special Warrants and the issuance of the Consideration Shares, it is anticipated that the Promoter will beneficially hold, control or direct, directly or indirectly, 4,703,130 Common Shares, representing approximately 5.15% of the outstanding Common Shares on a non-diluted basis.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

Other than as disclosed elsewhere in this prospectus, there are no legal proceedings material to the Corporation to which the Corporation is or was a party, or of which any of its properties is or was the subject matter, since the date of the Corporation’s incorporation and the Corporation knows of no such proceedings to be currently contemplated.

There have been no penalties or sanctions imposed against the Corporation by a court or regulatory body, and the Corporation has not entered into any settlement agreements before any court relating to provincial or territorial securities legislation or with any securities regulatory authority, as of the date of this prospectus or since its incorporation.

120 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as disclosed elsewhere in this prospectus, no director, executive officer or principal shareholder or any of their respective associates or affiliates, has any material interest, direct or indirect, in any transaction within the three year period before the date of this prospectus, or in any proposed transaction, which has materially affected or is reasonably expected to materially affect the Corporation or any of its subsidiaries.

On February 1, 2014, Northern Star acquired the Plutonic Gold Mine from Barrick Gold Corporation. An independent appraisal of the assets and liabilities of the Plutonic Gold Mine was commissioned by Northern Star and completed during the year ended June 30, 2015. Total assets of A$62,472,000 were acquired for total consideration paid by Northern Star of A$25 million in cash, the assumption of current liabilities totalling A$15,879,000 and the assumption of long term provisions for rehabilitation in the amount of A$21,593,000. These details as to the acquisition of the Plutonic Gold Mine by Northern Star from Barrick Gold Corporation are based on Northern Star’s public disclosure.

AUDITORS

The auditors of the Corporation are KPMG LLP, having its address at the Bay Adelaide Centre, 333 Bay Street, Suite 4600, Toronto, Ontario M5H 2S5.

REGISTRAR AND TRANSFER AGENT

The registrar and transfer agent of the Corporation is TSX Trust Company at its principal office in Toronto, Ontario.

MATERIAL CONTRACTS

Except for contracts entered into in the ordinary course of business, the only material contracts which the Corporation has entered into since its incorporation before the date of this prospectus or to which the Corporation will become a party on or prior to the Closing are: • the Acquisition Agreement (including the Amendment); • the Northern Star Royalty Deed; • the Agency Agreement; • the Subscription Receipt Agreement; • the Special Warrant Indenture (including the Supplemental Indenture); and • the Private Placement Agency Agreement.

Copies of the above-noted material contracts will be available for inspection at the offices of the Corporation’s Canadian counsel, Stikeman Elliott LLP (5300 Commerce Court West, 199 Bay Street, Toronto, Ontario M5L 1B9), during normal business hours during the distribution of the Qualifying Shares and the Treasury Shares and for a period of thirty days thereafter. Copies of these material contracts will also be available under the Corporation’s profile on SEDAR at www.sedar.com.

121 INTEREST OF EXPERTS

The legal matters relating to the securities offered hereby will be passed upon by Stikeman Elliott LLP, on behalf of the Corporation, and by Cassels Brock & Blackwell LLP, on behalf of the Private Placement Agent and the Agents. Partners and associates of each of Stikeman Elliott LLP, as a group, and Cassels Brock & Blackwell LLP, as a group, beneficially own, directly or indirectly, less than 1% of the securities of the Corporation as of the date of this prospectus.

KPMG LLP, the auditors of the Corporation, have advised the Corporation that they are independent of the Corporation in accordance with the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.

Deloitte Touche Tohmatsu, the auditors of the carve-out financial statements of the Plutonic Gold Operations, have advised the Corporation that they are independent of the Corporation in accordance with the Code of Ethics for Professional Accountants issued by the International Federation of Accountants.

Certain information in this prospectus relating to the Plutonic Gold Operations is summarized or extracted from the Technical Report, which was prepared for the Corporation by Mr. R D Carlson, Mr. D Kahler and Mr. G Williamson, each of whom is a “qualified person” and “independent” as defined in NI 43-101. To the best knowledge of the Corporation, as at the date hereof, the aforementioned persons beneficially own, directly or indirectly, in the aggregate, less than 1% of the securities of the Corporation.

PURCHASERS’ STATUTORY RIGHTS

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces of Canada, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal adviser.

CONTRACTUAL RIGHT OF ACTION FOR RESCISSION

Pursuant to the terms of the Special Warrant Indenture, the Corporation has granted to each holder of a Special Warrant a contractual right of rescission of the prospectus-exempt transaction under which the Special Warrant was initially acquired. The contractual right of rescission provides that if a holder of a Special Warrant who acquires a Qualifying Share on the deemed exercise of the Special Warrant as provided for in this prospectus is, or becomes, entitled under securities legislation of a jurisdiction to the remedy of rescission because this prospectus or an amendment to this prospectus contains a misrepresentation: (a) the holder is entitled to rescission of both the holder’s deemed exercise of its Special Warrant and the private placement transaction under which the Special Warrant was initially acquired; (b) the holder is entitled in connection with the rescission to a full refund of all consideration paid to the Private Placement Agent or the Corporation, as applicable, in connection with the acquisition of the Special Warrant; and (c) if the holder is a permitted assignee of the interest of the original Special Warrant subscriber, the holder is entitled to exercise the rights of rescission and refund as if the holder was the original subscriber.

The contractual rights of action described above are in addition to and without derogation from any other right or remedy that a subscriber of Special Warrants may have at law.

122 Schedule “A” SUPERIOR GOLD INC. AUDIT COMMITTEE CHARTER

This charter (the “Charter”) sets forth the purpose, composition, responsibilities and authority of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Superior Gold Inc. (the “Company”).

1.0 Purpose The purpose of the Committee is to assist the Board in fulfilling its oversight responsibilities with respect to: • financial reporting and disclosure requirements; • the implementation of risk management and internal control over financial reporting and disclosure controls and procedures; and • external and internal audit processes.

2.0 Composition and Membership (a) The Board will appoint the members (“Members”) of the Committee. The Members will be appointed to hold office until the next annual general meeting of shareholders of the Company or until their successors are appointed. The Board may remove a Member at any time and may fill any vacancy occurring on the Committee. A Member may resign at any time and a Member will automatically cease to be a Member upon ceasing to be a director. (b) The Committee will consist of at least three directors. A majority of Members will meet the criteria for independence and financial literacy established by applicable laws and the rules of any stock exchanges upon which the Company’s securities are listed, including National Instrument 52-110 – Audit Committees. (c) The Board will designate one of the Members to act as the Chair of the Committee (the “Chair”). The corporate secretary of the Company (the “Secretary”) will be the secretary of all meetings and will maintain minutes of all meetings and deliberations of the Committee. If the Secretary is not in attendance at any meeting, the Committee will appoint another person who may, but need not, be a Member to act as the secretary of that meeting.

3.0 Meetings (a) Meetings of the Committee will be held at such times and places as the Chair may determine, but in any event not less than four (4) times per year. Twenty-four (24) hours advance notice of each meeting will be given to each Member orally, by telephone, by facsimile or email, unless all Members are present and waive notice, or if those absent waive notice before or after a meeting. Members may attend all meetings either in person or by telephone. (b) At the request of the external auditors of the Company, the Chief Executive Officer or the Chief Financial Officer of the Company or any Member, the Chair will convene a meeting of the Committee. Any such request will set out in reasonable detail the business proposed to be conducted at the meeting so requested. (c) The Chair, if present, will act as the Chair of meetings of the Committee. If the Chair is not present at a meeting of the Committee the Members in attendance may select one of their number to act as Chair of the meeting. (d) A majority of Members will constitute a quorum for a meeting of the Committee. Each Member will have one vote and decisions of the Committee will be made by an affirmative vote of the majority. The Chair will not have a deciding or casting vote in the case of an equality of votes. Powers of the Committee may also be exercised by written resolutions signed by all Members. (e) The Committee may invite from time to time such persons as it sees fit to attend its meetings and to take part in the discussion and consideration of the affairs of the Committee. The Committee will meet in camera without members of management in attendance for a portion of each meeting of the Committee.

A-1 (f) In advance of every regular meeting of the Committee, the Chair, with the assistance of the Secretary, will prepare and distribute to the Members and others as deemed appropriate by the Chair, an agenda of matters to be addressed at the meeting together with appropriate briefing materials. The Committee may require officers and employees of the Company to produce such information and reports as the Committee may deem appropriate in order for it to fulfill its duties.

4.0 Duties and Responsibilities The duties and responsibilities of the Committee as they relate to the following matters, are as follows:

4.1 Financial Reporting and Disclosure (a) review and recommend to the Board for approval, the audited annual financial statements, including the auditors’ report thereon, the quarterly financial statements, management discussion and analysis, financial reports, and other applicable financial disclosure, prior to the public disclosure of such information; (b) review and recommend to the Board for approval, where appropriate, financial information contained in any prospectuses, annual information forms, annual report to shareholders, management proxy circular, material change disclosures of a financial nature and similar disclosure documents prior to the public disclosure of such information; (c) review with management of the Company, and with external auditors, significant accounting principles and disclosure issues and alternative treatments under Canadian generally accepted accounting principles (“GAAP”) and International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), as applicable, all with a view to gaining reasonable assurance that financial statements are accurate, complete and present fairly the Company’s financial position and the results of its operations in accordance with Canadian GAAP or IFRS, as applicable; (d) seek to ensure that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements, periodically assess the adequacy of those procedures and recommend any proposed changes to the Board for consideration;

4.2 Internal Controls and Audit (a) review the adequacy and effectiveness of the Company’s system of internal control and management information systems through discussions with management and the external auditor to ensure that the Company maintains: (i) the necessary books, records and accounts in sufficient detail to accurately and fairly reflect the Company’s transactions; (ii) effective internal control systems; and (iii) adequate processes for assessing the risk of material misstatement of the financial statement and for detecting control weaknesses or fraud. From time to time the Committee will assess whether it is necessary or desirable to establish a formal internal audit department having regard to the size and stage of development of the Company at any particular time; (b) satisfy itself that management has established adequate procedures for the review of the Company’s disclosure of financial information extracted or derived directly from the Company’s financial statements; (c) satisfy itself, through discussion with management, that the adequacy of internal controls, systems and procedures has been periodically assessed in order to ensure compliance with regulatory requirements and recommendations; (d) review and make recommendations regarding the Company’s major financial risk exposures and the steps taken to monitor and control such exposures, including the use of any financial derivatives and hedging activities; (e) review, and in the Committee’s discretion make recommendations to the Board regarding, the adequacy of the Company’s risk management policies and procedures with regard to identification of the Company’s principal risks and implementation of appropriate systems to manage such risks including an assessment of the adequacy of insurance coverage maintained by the Company; (f) recommend the appointment, or if necessary, the dismissal of the head of the Company’s internal audit process;

A-2 4.3 External Audit (a) recommend to the Board a firm of external auditors to be nominated for appointment as the external auditor of the Company; (b) ensure the external auditors report directly to the Committee on a regular basis; (c) review the independence of the external auditors; (d) review and recommend to the Board the fee, scope and timing of the audit and other related services rendered by the external auditors; (e) review the audit plan of the external auditors prior to the commencement of the audit; (f) establish and maintain a direct line of communication with the Company’s external and internal auditors; (g) meet in camera with only the auditors, with only management, and with only the members of the Committee at every Committee meeting where, and to the extent that, such parties are present; (h) oversee the work of the external auditors of the Company with respect to preparing and issuing an audit report or performing other audit or review services for the Company, including the resolution of issues between management of the Company and the external auditors; (i) review the results of the external audit and the report thereon including, without limitation, a discussion with the external auditors as to the quality of accounting principles used, any alternative treatments of financial information that have been discussed with management of the Company, and any other matters; (j) Review any material written communications between management of the Company and the external auditors and any significant disagreements between management and the external auditors; (k) discuss with the external auditors their perception of the Company’s financial and accounting personnel, records and systems, the cooperation which the external auditors received during their course of their review and availability of records, data and other requested information and any recommendations with respect thereto; (l) review the reasons for any proposed change in the external auditors which is not initiated by the Committee or Board and any other significant issues related to the change, including the response of the incumbent auditors, and enquire as to the qualifications of the proposed auditors before making its recommendations to the Board; (m) review annually a report from the external auditors in respect of their internal quality-control procedures, any material issues raised by the most recent internal quality-control review, or peer review of the external auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the external auditors, and any steps taken to address any such issues;

4.4 Associated Responsibilities (a) monitor and periodically review the Whistleblower Policy and associated procedures for: (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; (ii) the confidential, anonymous submission by directors, officers and employees of the Company of concerns regarding questionable accounting or auditing matters; (iii) if applicable, any violations of any applicable law, rule or regulation that relates to corporate reporting and disclosure, or violations of the Company’s Code of Business Conduct & Ethics; and (b) review and approve the Company’s hiring policies regarding employees and partners, and former employees and partners, of the present and former external auditors of the Company; and

4.5 Non-Audit Services (a) pre-approve all non-audit services to be provided to the Company or any subsidiary entities by its external auditors or by the external auditors of such subsidiary entities. The Committee may delegate to one or more

A-3 of its members the authority to pre-approve non-audit services but pre-approval by such member or members so delegated shall be presented to the full Committee at its first scheduled meeting following such pre- approval.

5.0 Oversight Function While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate or comply with GAAP or IFRS, as applicable, and other applicable requirements. These are the responsibilities of Management and the external auditors. The Committee, the Chair and any Members identified as having accounting or related financial expertise are members of the Board, appointed to the Committee to provide broad oversight of the financial, risk and control related activities of the Company, and are specifically not accountable or responsible for the day to day operation or performance of such activities. Although the designation of a Member as having accounting or related financial expertise for disclosure purposes is based on that individual’s education and experience, which that individual will bring to bear in carrying out his or her duties on the Committee, such designation does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Committee and Board in the absence of such designation. Rather, the role of a Member who is identified as having accounting or related financial expertise, like the role of all Members, is to oversee the process, not to certify or guarantee the internal or external audit of the Company’s financial information or public disclosure.

6.0 Reporting The Chair will report to the Board at each Board meeting on the Committee’s activities since the last Board meeting. The Committee will annually review and approve the Committee’s report for inclusion in the Annual Information Form. The Secretary will circulate the minutes of each meeting of the Committee to the members of the Board.

7.0 Access to Information and Authority The Committee will be granted unrestricted access to all information regarding the Company that is necessary or desirable to fulfill its duties and all directors, officers and employees will be directed to cooperate as requested by Members. The Committee has the authority to retain, at the Company’s expense, independent legal, financial and other advisors, consultants and experts, to assist the Committee in fulfilling its duties and responsibilities, including sole authority to retain and to approve their fees without prior approval of the Board. The Committee also has the authority to communicate directly with internal and external auditors.

8.0 Review of Charter The Committee will annually review and assess the adequacy of this Charter and recommend any proposed changes to the Board for consideration.

Dated: January 30, 2017 Approved by: Audit Committee Board of Directors

A-4 Schedule “B” SUPERIOR GOLD INC. MANDATE OF THE BOARD OF DIRECTORS

Introduction The board of directors (the “Board”) of Superior Gold Inc. (the “Company”) is elected by the shareholders of the Company and is responsible for the stewardship of the Company. The purpose of this mandate is to describe the principal duties and responsibilities of the Board, as well as some of the policies and procedures that apply to the Board in discharging its duties and responsibilities.

Chair of the Board The chair of the Board (“Chair”) will be appointed by the Board, after considering the recommendation of the Compensation and Nominating Committee, for such term as the Board may determine.

Independence Where the Chair is not independent, the independent directors will select one of their number to be appointed lead director of the Board for such term as the independent directors may determine. If the Company has a non-executive Chair, then the role of the lead director will be filled by the non-executive Chair. The lead director or non-executive Chair will chair regular meetings of the independent directors and assume other responsibilities that the independent directors as a whole have designated.

Role and Responsibilities of the Board The role of the Board is to represent the shareholders of the Company, enhance and maximize shareholder value and conduct the business and affairs of the Company ethically and in accordance with the highest standards of corporate governance. The Board is ultimately accountable and responsible for providing independent, effective leadership in supervising the management of the business and affairs of the Company. The responsibilities of the Board include: • adopting a strategic planning process; • risk identification and ensuring that procedures are in place for the management of those risks; • review and approve annual operating plans and budgets; • corporate social responsibility, ethics and integrity; • succession planning, including the appointment, training and supervision of management; • delegations and general approval guidelines for management; • monitoring financial reporting and management; • monitoring internal control and management information systems; • corporate disclosure and communications; • adopting measures for receiving feedback from stakeholders; and • adopting key corporate policies designed to ensure that the Company, its directors, officers and employees comply with all applicable laws, rules and regulations and conduct their business ethically and with honesty and integrity.

Meetings of the Board will be held at least quarterly, with additional meetings to be held depending on the state of the Company’s affairs and in light of opportunities or risks which the Company faces. In addition, separate, regularly scheduled meetings of the independent directors of the Board will be held at which members of management are not present.

The Board will delegate responsibility for the day-to-day management of the Company’s business and affairs to the Company’s senior officers and will supervise such senior officers appropriately.

B-1 The Board may delegate certain matters it is responsible for to Board committees, presently consisting of the Audit Committee and Compensation and Nominating Committee. The Board will, however, retain its oversight function and ultimate responsibility for these matters and all delegated responsibilities.

Strategic Planning Process and Risk Management The Board will adopt a strategic planning process to establish objectives and goals for the Company’s business and will review, approve and modify as appropriate the strategies proposed by senior management to achieve such objectives and goals. The Board will review and approve, at least on an annual basis, a strategic plan which takes into account, among other things, the opportunities and risks of the Company’s business and affairs. The Board, in conjunction with management, will identify the principal risks of the Company’s business and oversee management’s implementation of appropriate systems to effectively monitor, manage and mitigate the impact of such risks.

Corporate Social Responsibility, Ethics and Integrity The Board will provide leadership to the Company in support of its commitment to Corporate Social Responsibility, set the ethical tone for the Company and its management and foster ethical and responsible decision- making by management. The Board will take all reasonable steps to satisfy itself of the integrity of the Chief Executive Officer and management and satisfy itself that the Chief Executive Officer and management create a culture of integrity throughout the organization.

Succession Planning, Appointment and Supervision of Management The Board will approve the succession plan for the Company, including the selection, appointment, supervision and evaluation of the Chief Executive Officer and the other senior officers of the Company, and will also approve the compensation of the Chief Executive Officer and the other senior officers of the Company.

Delegations and Approval Authorities The Board will delegate to the Chief Executive Officer and senior management authority over the day-to-day management of the business and affairs of the Company. This delegation of authority will be subject to specified financial limits and any transactions or arrangements in excess of general authority guidelines will be reviewed by and subject to the prior approval of the Board.

Monitoring of Financial Reporting and Management The Board will approve all regulatory filings, including the annual audited financial statements, interim financial statements, the notes and management discussion and analysis accompanying such financial statements, quarterly and annual reports, management proxy circulars, annual information forms, prospectuses, and all capital investments, equity financings, borrowings and all annual operating plans and budgets. The Board will adopt procedures that seek to: ensure the integrity of internal controls and management information systems; ensure compliance with all applicable laws, rules and regulations; and prevent violations of applicable laws, rules and regulations relating to financial reporting and disclosure, violation of the Company’s code of business conduct and ethics and fraud against shareholders.

Corporate Disclosure and Communications The Board will seek to ensure that all corporate disclosure complies with all applicable laws, rules and regulations and the rules and regulations of the stock exchanges upon which the Company’s securities are listed. In addition, the Board will adopt procedures that seek to ensure the Board receives feedback from security holders on material issues.

Corporate Policies The Board will adopt and annually review policies and procedures designed to ensure that the Company, its directors, officers and employees comply with all applicable laws, rules and regulations and conduct the Company’s business ethically and with honesty and integrity. Principal policies consist of: • Code of Business Conduct and Ethics; • Corporate Disclosure Policy;

B-2 • Corporate Governance Guidelines; • Insider Trading Policy; and • Whistleblower Policy.

Review of Mandate The Compensation and Nominating Committee will annually review and assess the adequacy of this mandate and recommend any proposed changes to the Board for consideration.

Dated: January 30, 2017 Approved by: Board of Directors

B-3 INDEX TO FINANCIAL STATEMENTS

Plutonic Gold Operations: Audited Carve-out Financial Statements for the years ended June 30, 2016 and 2015 ...... F-2 Plutonic Gold Operations: Unaudited Interim Condensed Carve-out Financial Statements for the three month periods ended September 30, 2016 and 2015 ...... F-24 Superior Gold Inc.: Audited Financial Statements for the period from Incorporation on July 4, 2016 to December 31, 2016 ...... F-37 Superior Gold Inc.: Unaudited Pro Forma Consolidated Financial Statements ...... F-60

F-1 Plutonic Gold Operations

Audited Carve-out Financial Statements

For the periods:

Year ended 30 June 2016 Year ended 30 June 2015

(Expressed in Australian dollars, except where otherwise indicated)

F-2 Deloitte Touche Tohmatsu ABN 74 490 121 060

Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 (0) 9365 7001 www.deloitte.com.au

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF SUPERIOR GOLD INC.

We have audited the accompanying carve-out financial statements of the Plutonic Gold Operations, which comprise the carve-out statements of financial position as at 30 June 2015 and 30 June 2016, the carve-out statements of profit or loss and other comprehensive income, the carve-out statements of cash flows and the carve-out statements of changes in equity for the year ended 30 June 2015 and the year ended 30 June 2016, notes comprising a summary of significant accounting policies and other explanatory information, as set out on pages F-5 to F-23.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of the carve-out financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determine is necessary to enable the preparation and fair presentation of the carve-out financial statements that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on the carve-out financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the carve-out financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the carve-out financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the carve-out financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the carve-out financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the carve-out financial statements of the Plutonic Gold Operations present fairly, in all material respects, the carve-out financial position of the Plutonic Gold Operations as at 30 June 2015 and 30 June 2016 and its carve-out financial performance for the year ended 30 June 2015 and the year ended 30 June 2016, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

F-3 Emphasis of Matter Without modifying our opinion, we draw attention to Note 2 to the carve-out financial statements which describes the basis of preparation used in the carve-out financial statements. The carve-out financial statements are prepared for inclusion in an initial public offering prospectus of common shares of Superior Gold Inc.

Without modifying our opinion, we draw attention to Note 2 to the carve-out financial statements, which details the existence of conditions that indicate a material uncertainty that may cast significant doubt about the ability of the Plutonic Gold Operations to continue as a going concern and therefore, the Plutonic Gold Operations may be unable to realise its assets and discharge its liabilities in the normal course of business.

/s/ Deloitte Touche Tohmatsu

DELOITTE TOUCHE TOHMATSU

/s/ David Newman

David Newman Partner Chartered Accountants Perth, Australia 15 February 2017

F-4 PLUTONIC GOLD OPERATIONS CARVE-OUT STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 30 June 2016 and 30 June 2015

Year ended Year ended 30 June 2016 30 June 2015 Notes AUD’000 AUD’000 Revenue from continuing operations Revenue ...... 4 102,744 117,631 102,744 117,631 Expenses Cost of sales ...... 5 (120,592) (138,525) Corporate costs ...... (951) (923) Finance costs ...... 6 (483) (1,218) Exploration and evaluation expenditure written off ...... 11 (759) (27) Loss before income tax for the year ...... (20,041) (23,062) Income tax benefit / (expense) ...... 7 1,165 (2,004) Net loss and comprehensive loss for the year ...... (18,876) (25,066)

The accompanying notes form an integral part of these Carve-out Financial Statements.

F-5 PLUTONIC GOLD OPERATIONS CARVE-OUT STATEMENT OF FINANCIAL POSITION as at 30 June 2016 and 30 June 2015

30 June 2016 30 June 2015 Notes AUD’000 AUD’000 Current assets Cash and cash equivalents ...... 17(b) — — Trade and other receivables ...... 8 812 1,365 Inventories ...... 9 14,131 13,068 Total current assets ...... 14,943 14,433 Non-current assets Mine properties ...... 10 19,872 22,853 Exploration and evaluation ...... 11 7,704 8,899 Property, plant and equipment ...... 12 12,048 19,465 Total non-current assets ...... 39,624 51,217 Total assets ...... 54,567 65,650 Current liabilities Trade and other payables ...... 13 11,169 17,395 Borrowings ...... 14 3,396 4,310 Provisions ...... 15 6,127 7,056 Total current liabilities ...... 20,692 28,761 Non-current liabilities Borrowings ...... 14 413 4,492 Provisions ...... 15 24,148 24,188 Deferred tax ...... 16 1,478 2,643 Total non-current liabilities ...... 26,039 31,323 Total liabilities ...... 46,731 60,084 Net assets ...... 7,836 5,566 Equity Parent’s contribution ...... 22,24 54,022 32,876 Accumulated losses ...... (46,186) (27,310) Total equity ...... 7,836 5,566

Approved on behalf of the board of directors

/s/ CHRISTOPHER BRADBROOK /s/ TAMARA BROWN Director Director

The accompanying notes form an integral part of these Carve-out Financial Statements.

F-6 PLUTONIC GOLD OPERATIONS CARVE-OUT STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2016 and 30 June 2015

Parent’s Accumulated contribution losses Total Notes AUD’000 AUD’000 AUD’000 Balance as at 1 July 2014 ...... 27,745 (2,244) 25,501 Parent contribution ...... 22 5,131 — 5,131 Net loss for the year ...... — (25,066) (25,066) Balance as at 30 June 2015 ...... 32,876 (27,310) 5,566 Parent contribution ...... 22 21,146 — 21,146 Net loss for the year ...... — (18,876) (18,876) Balance as at 30 June 2016 ...... 54,022 (46,186) 7,836

The accompanying notes form an integral part of these Carve-out Financial Statements.

F-7 PLUTONIC GOLD OPERATIONS CARVE-OUT STATEMENT OF CASH FLOWS for the year ended 30 June 2016 and 30 June 2015

Year ended Year ended 30 June 2016 30 June 2015 Notes AUD’000 AUD’000 Cash flows from operating activities Receipts from customers ...... 102,744 117,631 Payments to suppliers and employees ...... (83,011) (95,992) Finance costs ...... (260) (339) Net cash flows provided by operating activities ...... 17(a) 19,473 21,300 Cash flows from investing activities Payments for mine properties ...... 10 (7,473) (13,287) Payments for exploration and evaluation ...... 11 (6,566) (8,798) Payments for acquisition of property, plant and equipment ...... 12 (1,123) (13,818) Proceeds from sale of property, plant and equipment ...... — 800 Net cash flows used in investing activities ...... (15,162) (35,103) Cash flows from financing activities Receipt of borrowings ...... — 11,759 Repayment of borrowings ...... (4,311) (2,956) Parent’s cash contribution ...... 22 — 5,000 Net cash (outflows) / inflows from financing activities ...... (4,311) 13,803 Net increase in cash and cash equivalents ...... — — Cash and cash equivalents at the beginning of the year ...... — — Cash and cash equivalents at the end of the year ...... 17(c) — —

The accompanying notes form an integral part of these Carve-out Financial Statements.

F-8 PLUTONIC GOLD OPERATIONS NOTES TO THE PLUTONIC GOLD OPERATIONS CARVE-OUT FINANCIAL STATEMENTS for the year ended 30 June 2016 and 30 June 2015

1. Background Pursuant to a legally-binding conditional sale and purchase agreement (“SPA”) dated August 12, 2016 with Northern Star Resources Limited (“Northern Star”), Billabong Gold Pty Ltd (“Billabong”) agreed to buy the Plutonic Gold Operations (“Plutonic”) as a going concern subject to satisfaction of conditions including Foreign Investment Review Board approval, Ministerial consents, third party consents in respect of non-material rights over the Plutonic tenements, adequate financing for the completion of the cash payment to Northern Star and Northern Star achieving minimum production levels within certain cash operating costs for June, July and August 2016. Billabong will pay Northern Star: • $12.5 million cash payment at completion of the SPA. This payment was made by Billabong on October 12, 2016. • if Billabong’s parent Superior Gold Inc. (“Parent Entity”) is listed on the TSX or TSX-V at completion or lists up to six months after completion of the SPA, it will issue shares to Northern Star to the value of $25 million at the “Go Public” issue price, or, shares delivering a 33% interest in the Parent Entity to Northern Star (whichever is greater). Northern Star will also be entitled to one board seat; • if the Parent Entity is listed on the TSX or TSX-V at completion or lists up to six months after completion of the SPA, one 10 year warrant for every two shares issued to Northern Star exercisable at a 100% premium to the “Go Public” issue price, noting that the TSX-V listing rules limit the term of any warrant issued to a maximum of 5 years; • if the Parent Entity is not listed on the TSX or TSX-V within six months of completion, a cash payment of $25 million will be paid in lieu of the shares and warrants; • Milestone payments capped at $10 million in aggregate where $2.5 million is payable for each additional 250,000 ounces of NI 43-101 compliant indicated resources (or better) identified by Billabong on the Plutonic tenements as at 30 June 2016 in excess of the 1,717,000oz JORC 2012 measured, indicated or inferred Mineral Resources; and • a 2% net smelter royalty on production between 300,000oz and 600,000oz of refined gold generated from the Project, capped at $10 million. Billabong will be entitled to buy the royalty earlier for $6.5 million. Please refer to the subsequent events note 21 for the detail of the completion of the sale following the satisfaction of the conditions precedent.

2. Basis of preparation of financial report (a) Statement of Compliance The Audited Plutonic Carve-out Financial Statements have been prepared for inclusion in an initial public offering of the shares of the Parent Entity and are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The accounting policies have been consistently applied in the preparation of all periods presented. The audited carve out financial statements have been derived from the Northern Star financial statements, which are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The following new accounting standards and interpretations have been published that are not mandatory for the June 30, 2016 reporting period. The potential effect of the revised Standards and Interpretations on the financial report has not yet been determined.

Standard Effective for the annual reporting periods beginning on or after IAS 1 Disclosure Initiative (Amendments to IAS 1) ...... 1January 2016 IFRS 9 ‘Financial Instruments’ and the relevant amending standards ...... 1January 2018 IFRS 15 Revenue from Contracts with Customers ...... 1January 2018 IFRS 16 Leases ...... 1January 2019 The board of directors of the Parent Entity approved these Audited Carve-out Financial Statements on December 29, 2016.

(b) Basis of presentation The Audited Carve-out Financial Statements have been prepared on the historical cost basis, except for financial instruments that are measured at fair value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Plutonic Audited Carve-out Financial Statements have been derived from the accounting records of Northern Star on a carve-out basis. The Plutonic Audited Carve-out Financial Statements do not necessarily reflect what the operations, financial position or cash flows would have been had Plutonic been a separate entity or future results of Plutonic as it exists within Billabong. The operating results of Plutonic are based on the operating results attributable to the assets and liabilities transferred to Billabong. Certain expenses and expenditures presented in the Plutonic Audited Carve-out Financial Statements represent allocations of the cost of services previously incurred by Northern Star which would be required to operate Plutonic. Management believes these allocations reasonably reflect the expenses for Plutonic which have been incurred during the periods presented, including administrative and corporate costs. However, due to the inherent limitations of carving out the assets, liabilities, operations and cash flows from Northern Star, the Plutonic Audited Carve-out Financial Statements may not reflect the results of operations, financial position or cash flows for future periods, nor do they necessarily reflect the financial position, its performance and cash flow that would have been realized had Plutonic been a separate entity or future results of Plutonic as it exists within Billabong.

F-9 Income taxes have been calculated as if Plutonic had been a separate tax paying legal entity, with the exception of deferred tax assets on assessed losses, which are only recognized to the extent that they are available to Plutonic and have not been previously utilized within the Northern Star consolidated tax group. The calculation of income taxes is based on a number of assumptions, allocations and estimates. Amounts in the financial statements have been rounded off to the nearest thousand dollars unless stated otherwise. The Audited Carve-out Financial Statements are presented in Australian Dollars, which is also its functional currency.

(c) Going concern The audited carve-out financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. Plutonic incurred a loss of $18,876,000 for the year ended June 30, 2016 (2015: loss $25,066,000). As at June 30, 2016 Plutonic had a net current liability position of $5,749,000 (June 30, 2015: net current liabilities of $14,328,000). For the quarter ended September 30, 2016 Plutonic generated a profit after tax of $1,809,000. As at October 1, 2016, being the effective date of acquisition of Plutonic by Billabong, Plutonic did not have sufficient funds available from existing cash on hand to fund its operations, including maintaining its mine properties, exploration and evaluation assets, and property, plant and equipment. This can be attributed to Plutonic not utilizing its own bank account other than for several months during the year ended June 30, 2015, with expenditures and income being paid and received, respectively, through Northern Star. Plutonic’s future operations were dependent upon its ability to obtain sufficient funding from either its Parent Entity or external sources of financing, or from cash generated from Plutonic’s operations, in order to fund its continued operations. Plutonic’s management has prepared a monthly cash flow forecast which covers a period of at least 12 months from the date of approval of the audited carve-out financial statements. The cash flow forecast is based on the life of mine model, which has been assessed by independent experts and determined to be in compliance with the NI 43-101 Standards of Disclosure for Mineral Projects. Based on the cash flow forecast, Plutonic is forecast to generate sufficient cash to sustain its ongoing operations. Superior Gold Inc., as Billabong’s ultimate parent company, is currently undertaking a process to list its common shares on the TSX Venture Exchange, which would represent Superior’s initial public offering (“IPO”) of its common shares. It is a requirement of Superior Gold Inc. in connection with the acquisition of Plutonic to complete an IPO or other going public transaction within 6 months of the acquisition date, and if this is not completed, Superior Gold Inc. is required to make a cash payment of $25 million to Northern Star. While Plutonic is forecast to generate sufficient cash flows from its operations to sustain its ongoing operations, the extent to which these cash flows will be required by the Parent Entity is uncertain, should Superior Gold Inc. be unable to complete a going public transaction or raise sufficient funds through private placements sufficient to meet the $25 million payment. A material uncertainty therefore exists, which may cast significant doubt as to the ability of Plutonic to continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business. The audited carve-out financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should Plutonic not continue as a going concern.

(d) Use of estimates and judgements The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year and judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the audited carve-out financial statements, are:

(i) Rehabilitation provision Plutonic assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known.

(ii) Exploration and evaluation expenditure Exploration and evaluation assets include the costs of acquiring licences, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditure is capitalised on an area of interest basis. Costs incurred before Plutonic has obtained the legal rights to explore an area are recognised in cost of sales. Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: i. the expenditures are expected to be recouped through successful development and exploitation of the area of interest, or

F-10 ii. activities in the area of interest have not at the reporting date; reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable Ore Reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Once a development decision has been made all past exploration and evaluation expenditure in respect of an area of interest that has been capitalised is transferred to mine properties where it is amortised over the life of the area of interest to which it relates on a unit-of-production basis. No amortisation is charged during the exploration and evaluation phase.

The application of the above accounting policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of Ore Reserves will be found. Any such estimates and assumptions may change as new information becomes available, which may require adjustments to the carrying value of assets. Capitalised exploration and evaluation expenditure is assessed for impairment when an indicator of impairment exists, and capitalised assets are written off where required.

(iii) Determination of Mineral Resources and Ore Reserves

Mineral Resources and Ore Reserves are calculated in accordance with the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves - the JORC Code. The information on Mineral Resources and Ore Reserves is prepared by Competent Persons as defined by the JORC Code.

There are numerous uncertainties inherent in estimating Mineral Resources and Ore Reserves. Assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of Ore Reserves and may, ultimately, result in the Ore Reserves being restated. Such changes may impact asset carrying values, depreciation and amortisation rates, deferred development costs and provisions for restoration.

(iv) Depreciation / amortisation method

Items of property, plant and equipment and mine properties are depreciated / amortised over their useful lives. Plutonic uses the unit-of- production basis when depreciating / amortising mine specific assets which results in a depreciation / amortisation charge proportional to the depletion of the anticipated remaining life of mine which is referenced to the estimated economic Ore Reserve and Mineral Resources of the property to which the assets relate. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable Ore Reserves and Mineral Resources of the mine property at which it is located. Depreciation of non-mine specific property, plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:

– Land and buildings ...... 5–20years – Plant and equipment ...... 2–20years – Motor Vehicles ...... 4 – 10 years – Office equipment ...... 2 – 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(v) Impairment of property, plant and equipment and mine properties

Judgment is involved in assessing whether there are any indications that an asset or cash generating unit (“CGU”) may be impaired. This assessment is made based on an analysis of, amongst other factors, changes in the market or business environment, events that have transpired that have impacted the asset or CGU and information from internal reporting.

For determining the recoverable amount of an asset or CGU, if indicators of impairment exist, operating results and net cash flow forecasts are determined by estimating the expected future revenues and costs, including the future cash costs of production, capital expenditures, site closure and environmental rehabilitation. These include net cash flows expected to be realized from the extraction, processing and sale of Mineral Resources that do not currently qualify for inclusion in proven and probable Ore Reserves when there is a high degree of confidence in the economic extraction of such non-reserve material. This expectation is usually based on preliminary drilling and sampling of areas of mineralization that are contiguous with existing Ore Reserves and Mineral Resources. Judgment is also required in estimating the discount rate applied and future commodity prices used for impairment testing. The long-term commodity prices are derived from forward prices and analysts’ commodity price forecasts. These assessments often differ from current price levels and are updated periodically. Impairment testing is done at the CGU level which is deemed to be Plutonic . Plutonic may have multiple possible mining areas and management must exercise judgment in determining what constitutes a CGU and the degree of aggregation of various assets. These factors impact the impairment analysis performed as the results of the impairment analysis might differ based on the composition of the various CGUs.

3. Summary of significant accounting policies

(a) Royalties

Royalties under existing royalty regimes are payable on sales and are therefore recognised in cost of sales as the sale occurs.

F-11 (b) Inventories Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost and net realisable value. Cost represents the weighted average cost and includes direct purchase costs and an appropriate portion of fixed and variable production overhead expenditure, including depreciation and amortisation, incurred in converting materials into finished goods. Materials and supplies are valued at the lower of cost and net realisable value. Any allowance for obsolescence is determined by reference to specific stock items identified. A regular and on-going review is undertaken to establish the extent of surplus items and an allowance is made for any potential loss on their disposal. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(c) Leased assets Leases of property, plant and equipment where Plutonic, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the lease property, or, if lower, the present value of the minimum lease payments. The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that Plutonic will obtain ownership at the end of the lease term.

(d) Property, plant and equipment Property, plant and equipment is carried at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Plutonic and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

(e) Foreign currency translation Items included in the audited carve-out financial statements are measured using the currency of the primary economic environment in which Plutonic operates (‘the functional currency’) which is the Australian dollar. The audited carve-out financial statements are presented in Australian dollars.

(f) Mine properties Mine properties include aggregate expenditure in relation to mine construction, mine development, exploration and evaluation expenditure where a development decision has been made and acquired mineral interests. Expenditure incurred in constructing a mine by, or on behalf of, Plutonic is accumulated separately for each area of interest in which economically recoverable Ore Reserves and Mineral Resources have been identified. This expenditure includes direct costs of construction, drilling costs and removal of overburden to gain access to the ore, borrowing costs capitalised during construction and an appropriate allocation of attributable overheads. Mine development represents expenditure in respect of exploration and evaluation, overburden removal and construction costs and development incurred by or on behalf of Plutonic previously accumulated and carried forward in relation to properties in which mining has now commenced. Such expenditure comprises direct costs and an appropriate allocation of directly related overhead expenditure. All expenditure incurred prior to commencement of production from each development property is carried forward to the extent to which recoupment out of future revenue from the sale of production, or from the sale of the property, is reasonably assured. When further development expenditure is incurred in respect of a mine property after commencement of commercial production, such expenditure is carried forward as part of the cost of the mine property only when future economic benefits are reasonably assured, otherwise the expenditure is classified as part of the cost of production and expensed as incurred. Such capitalised development expenditure is added to the total carrying value of mine development being amortised. Mine development costs (as transferred from exploration and evaluation and / or mines under construction) are amortised on a units-of- production basis over the life of mine to which they relate. In applying the units of production method, amortisation is calculated using the expected total contained ounces as determined by the life of mine plan. For development expenditure undertaken during production, the amortisation rate is based on the ratio of total development expenditure (incurred and anticipated) over the expected total contained ounces as estimated by the life of mine plan to achieve a consistent amortisation rate per ounce. The rate per ounce is typically updated annually as the life of mine plan is revised. Mineral interests comprise identifiable exploration and evaluation assets, Mineral Resources and Ore Reserves, which are acquired as part of a business combination or joint venture acquisition and are recognised at fair value at the date of acquisition. Where possible, mineral interests are attributable to specific areas of interest and are classified within mine properties.

(g) Income taxes The income tax expense for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

F-12 The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in Australia, where Plutonic operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the audited carve-out financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Current and deferred tax is recognised in profit or loss.

(h) Provisions Provisions are recognised when Plutonic has a present legal or constructive obligation because of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of managements best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

– Rehabilitation provision Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology. Rehabilitation costs are recognised in full at present value as a non-current liability. An equivalent amount is capitalised as part of the cost of the asset when an obligation arises to decommission or restore a site to a certain condition after abandonment as a result of bringing the assets to its present location. The capitalised cost is amortised over the life of the project and the provision is accreted periodically as the discounting of the liability unwinds. The unwinding of the discount is recorded as a finance cost. Any changes in the estimates for the costs or other assumptions against the cost of relevant assets are accounted for on a prospective basis. In determining the costs of site restoration there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.

– Long service leave The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows to be made by Plutonic for those employees with greater than 5 years’ service up to the reporting date. Long- term benefits not expected to be settled within 12 months are discounted using the rates attaching to high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. In determining the liability for these long-term employee benefits, consideration has been given to expected future increases in wage and salary rates, management’s experience with staff departures and periods of service. Related on-costs are also included in the liability.

(i) Trade and other receivables Trade and other receivables are initially stated at fair value and subsequently measured at amortised cost, less impairment losses. Trade receivables comprise amounts due from customers for metal sales in the ordinary course of business. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment is established when there is objective evidence that Plutonic will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the impairment loss is recognised within other expenses in the statement of profit or loss and other comprehensive income. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of profit or loss and other comprehensive income.

(j) Impairment of assets At each reporting date Plutonic reviews the carrying amounts of its tangible and other intangible assets to determine whether there is any indication that those assets might be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any) which is the amount by which the assets carrying value exceeds its recoverable amount. Where the asset does not generate cash in-flows that are independent from other assets, Plutonic estimates the recoverable amount of the cash- generating unit (“CGU”) to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

F-13 If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.

Where an impairment loss subsequently reverses for assets other than goodwill, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or CGU) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately.

(k) Goods and Services Tax (“GST”)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Statement of Financial Position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(l) Revenue

Revenue is recognised to the extent that it is probable that the economic benefit will flow to Plutonic and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

Revenue is recognised when there has been a transfer of risks and rewards from Plutonic to an external party, no further processing is required by Plutonic, quality and quantity of the goods has been determined with reasonable accuracy, the selling price is fixed or determinable and collectability is probable. The point at which risk and rewards passes for the majority of Plutonic’s commodity sales is upon delivery of the gold bullion to the refiner or its agent. Adjustments are made for variations in commodity price, assay and weight between the time of dispatch and the time of final settlement.

(m) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.

Leases of property, plant and equipment where Plutonic, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised under plant and equipment at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings.

Borrowings are classified as current liabilities unless Plutonic has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(n) Trade and other payables

Trade and other payables are initially stated at fair value and subsequently measured at amortised cost. The amounts are unsecured, non-interest bearing and usually paid within 60 days of recognition.

(o) Equity

Northern Star’s investment in Plutonic is presented as equity in the Plutonic Carve-out Financial Statements and is comprised of the parent’s contributions and accumulated losses.

4. Revenue

Year ended Year ended 30 June 2016 30 June 2015 AUD’000 AUD’000 Sale of gold ...... 102,572 117,448 Sale of silver ...... 172 183 102,744 117,631

Gold sales revenue is derived from the sales of 64,180oz (2015: 80,140oz) at an average price of $1,598/oz (2015: $1,466/oz).

F-14 5. Cost of sales

Year ended Year ended 30 June 2016 30 June 2015 AUD’000 AUD’000 Mining ...... (67,385) (76,947) Processing ...... (20,968) (21,725) Depreciation and amortisation ...... (24,169) (26,567) Site services ...... (6,053) (6,530) Gold royalty ...... (2,489) (2,850) Change in inventories ...... 1,293 (2,910) Other ...... (821) (996) (120,592) (138,525)

6. Other expenses

Finance costs Accretion ...... (223) (879) Lease finance charges ...... (260) (339) (483) (1,218)

Rental expenses relating to operating leases Non-cancellable operating leases ...... 3,073 2,514 3,073 2,514

7. Income tax

Numerical reconciliation of income tax benefit to prima facie tax expense / benefit: Loss before income tax ...... (20,041) (23,062) Prima facie income tax benefit on pre-tax loss at the Australian income tax rate of 30% (2015: 30%) ...... 6,012 6,919 6,012 6,919 Current year tax losses not brought to account ...... (4,847) (8,923) Income tax benefit / (expense) ...... 1,165 (2,004) Income tax expense comprises:

Deferred tax ...... 1,165 (2,004) 1,165 (2,004) Deferred income tax benefit / (expense) included in income tax ...... Benefit / (expense) comprises: Decrease / (increase) in net deferred tax liabilities ...... 1,455 (2,278) (Decrease) / increase in net deferred tax assets ...... (290) 274 1,165 (2,004)

Current and prior year tax losses have not been brought to account on the assumption they have been utilised by Plutonic’s parent entity, Northern Star. Plutonic was included in the Northern Star consolidated tax group in Australia until the date of its disposal to Billabong. Under Australian tax law, the tax losses relating to Plutonic are able to be utilised against the taxable income of other operations within the tax group.

8. Trade and other receivables

30 June 2016 30 June 2015 AUD’000 AUD’000 Current Trade receivables ...... 7 19 Sundry debtors ...... 95 97 Goods and services tax recoverable ...... 641 1,004 Prepayments ...... 69 245 812 1,365

Exposure to trade and other receivables is set out in Note 23.

F-15 9. Inventories

Current Consumable stores ...... 8,526 8,757 Ore stockpiles ...... 756 311 Gold in circuit ...... 3,987 4,000 Dore on hand ...... 862 — 14,131 13,068

Write-downs of inventories to net realisable value amounted to $4.3 million (2015 – $Nil). These were recognised as an expense during the year ended 30 June 2016 and included in ‘cost of sales’ in Statement of profit or loss and other comprehensive income.

10. Mine development properties

30 June 2016 30 June 2015 AUD’000 AUD’000 Cost Balance at beginning of year ...... 47,283 33,996 Transfer from exploration and evaluation ...... 7,002 — Capitalised during the year ...... 7,473 13,287 Balance at end of year ...... 61,758 47,283 Accumulated amortisation Balance at beginning of year ...... 24,430 7,728 Amortisation ...... 17,456 16,702 Balance at end of year ...... 41,886 24,430 Carrying amount at beginning of year ...... 22,853 26,268 Carrying amount at end of year ...... 19,872 22,853

Amortisation is included in cost of sales in the statement of profit or loss and other comprehensive income.

(i) Impairment

An impairment indicator assessment was undertaken at both the 30 June 2015 and 30 June 2016 balance dates. The reviews concluded that for Plutonic an impairment indicator did exist at each balance date given the high cost of production and the loss incurred during the respective years.

a) 30 June 2016

During the year ended 30 June 2016 Northern Star announced its intention to conduct a sale process for Plutonic, and consequently Plutonic has been classified as held for sale as at 30 June 2016 in the Northern Star financial statements. An impairment assessment was undertaken prior to the reclassification to held for sale, with the recoverable amount being referenced to an offer from Billabong as set out in Note 1. This offer was considered the best evidence of fair value less costs to sell in accordance with IAS 36 Impairment of Assets given that it was a result of a competitive sales process participated in by a number of willing, able and knowledgeable participants. Subsequent to year end Northern Star executed a legally-binding conditional Sale and Purchase Agreement for Plutonic with Billabong. Based on the estimate of the fair value of the consideration offered, the recoverable amount exceeded the carrying value of the associated assets of Plutonic and therefore no impairment loss was charged to the statement of profit or loss and other comprehensive income for the year ended 30 June 2016.

b) 30 June 2015

As directed under IAS 36 Impairment of Assets, the recoverable amount of assets associated with Plutonic as at 30 June 2015 was estimated using a fair value less cost to sell approach through a discounted cash flow model. The discounted cash flow model used to estimate the recoverable amount was constructed using information from the most recent Plutonic Life of Mine model and under the guidance of IFRS 13 Fair Value Measurement. The recoverable amount estimate, which included operating cost efficiencies which had been planned, initiated and/or already implemented as at 30 June 2015, exceeded the carrying value of the associated assets of Plutonic and therefore no impairment loss was charged to the profit or loss for the year ended 30 June 2015.

F-16 11. Exploration and evaluation

30 June 30 June 2016 2015 AUD’000 AUD’000 Cost at beginning of year ...... 8,899 128 Additions ...... 6,566 8,798 Expenditure written off ...... (759) (27) Transfer to mine properties ...... (7,002) — Cost at end of year ...... 7,704 8,899

(a) Impairment At both the 30 June 2015 and 30 June 2016 reporting dates, an assessment is undertaken of the carrying amount of its exploration and evaluation assets. During each year Northern Star identified indicators of impairment on certain exploration and evaluation assets under IFRS 6 Exploration for and Evaluation of Mineral Resources. As a result of this review, an impairment loss of $759,000 (2015: $27,000) has been recognised in the statement of profit or loss and other comprehensive income in relation to the carrying value of areas of interest where no future exploration and evaluation activities are expected.

12. Property plant and equipment

Land Capital and Plant and Motor Office work in buildings equipment vehicles equipment progress Total AUD’000 AUD’000 AUD’000 AUD’000 AUD’000 AUD’000 Cost: 1 July 2015 ...... 2,756 28,316 473 35 591 32,171 Additions ...... — 135 — — 988 1,123 Disposals ...... — (2,908) — — — (2,908) Transfer from capital work in progress ...... 348 267 134 85 (834) — 30 June 2016 ...... 3,104 25,810 607 120 745 30,386 Accumulated depreciation: 1 July 2015 ...... 739 11,718 214 35 — 12,706 Depreciation charge ...... 194 6,396 103 20 — 6,713 Disposals ...... — (1,081) — — — (1,081) 30 June 2016 ...... 933 17,033 317 55 — 18,338 Carrying amount at beginning of year ...... 2,017 16,598 259 — 591 19,465 Carrying amount at end of year ...... 2,171 8,777 290 65 745 12,048 Cost: 1 July 2014 ...... 2,756 15,886 473 35 1.074 20,224 Additions ...... — 11,823 — — 1,995 13,818 Disposals ...... — (1,871) — — — (1,871) Transfer from capital work in progress ...... — 2,478 (2,478) — 30 June 2015 ...... 2,756 28,316 473 35 591 32,171 Accumulated depreciation: 1 July 2014 ...... 248 2,886 72 14 — 3,220 Depreciation charge ...... 491 9,211 142 21 — 9,865 Disposals ...... — (379) — — — (379) 30 June 2015 ...... 739 11,718 214 35 — 12,706 Carrying amount at beginning of year ...... 2,508 13,000 401 21 1,074 17,004 Carrying amount at end of year ...... 2,017 16,598 259 — 591 19,465

Depreciation is included in cost of sales in the statement of profit or loss and other comprehensive income.

(i) Leased assets Leases of property, plant and equipment where Plutonic, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the lease property, or, if lower, the present value of the minimum lease payments. The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that Plutonic will obtain ownership at the end of the lease term.

F-17 Plant and equipment includes the following amounts where Plutonic is a lessee under a finance lease:

30 June 30 June 2016 2015 AUD’000 AUD’000 Cost ...... 10,190 11,768 Accumulated depreciation ...... (6,543) (2,722) Net book amount ...... 3,647 9,046

13. Trade and other payables

30 June 30 June 2016 2015 AUD’000 AUD’000 Current Trade payables ...... 6,917 11,083 Accruals ...... 4,252 6,312 11,169 17,395

Exposure to liquidity risk is set out in Note 23.

14. Borrowings

30 June 30 June 2016 2015 AUD’000 AUD’000 Current Lease liabilities ...... 3,396 4,310 3,396 4,310 Non-current Lease liabilities ...... 413 4,492 413 4,492

(a) Secured liabilities and assets pledged as security

Lease liabilities are effectively secured as the rights to the leased assets recognised in the audited carve-out financial statements revert to the lessor in the event of default.

(b) Finance leases

Plutonic has entered into various loan agreements for the purchase of mobile equipment. The interest rates are fixed and payable over a period of up to 36 months from the inception of the lease.

30 June 30 June 2016 2015 AUD’000 AUD’000 Commitments in relation to finance leases are payable as follows: Within one year ...... 3,484 4,613 Late than one year but not later than five years ...... 416 4,603 Minimum lease payments ...... 3,900 9,216 Future finance charges ...... (91) (414) Lease liabilities ...... 3,809 8,802 Representing lease liabilities: ...... Current ...... 3,396 4,310 Non-current ...... 413 4,492 3,809 8,802

F-18 15. Provisions

30 June 30 June 2016 2015 AUD’000 AUD’000 Current Employee entitlements ...... 6,127 7,056 6,127 7,056 Non-current Employee entitlements ...... 1,094 1,357 Rehabilitation ...... 23,054 22,831 24,148 24,188 Rehabilitation provision Balance at beginning of the year ...... 22,831 21,952 Accretion ...... 223 879 Balance at end of the year ...... 23,054 22,831

Information about individual provisions and significant estimates is provided below:

(i) Employee entitlements

Leave obligations cover Plutonic’s liability for long service leave and annual leave. The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service leave where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount of the annual leave provision is presented as current, since Plutonic does not have an unconditional right to defer settlement for any of these obligations. Based on past experience, Plutonic does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows to be made by Plutonic for those employees with greater than 5 years’ service up to the reporting date. Long-term benefits not expected to be settled within 12 months are discounted using the rates attaching to high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. In determining the liability for these long-term employee benefits, consideration has been given to expected future increases in wage and salary rates, Plutonic’s experience with staff departures and periods of service. Related on-costs are also included in the liability. Current employee entitlements also include provisions for bonus and Fringe Benefits tax.

(ii) Rehabilitation provision

Plutonic assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known.

16. Deferred tax

30 June 30 June 2016 2015 AUD’000 AUD’000 Non-current Deferred tax liability ...... 1,478 2,643 1,478 2,643

F-19 Current and prior year tax losses have not been brought to account on the assumption they have been utilised by Plutonic’s parent entity, Northern Star. The following deferred tax assets and liabilities have been brought to account and netted off in the statement of financial position.

30 June 30 June 2016 2015 AUD’000 AUD’000 Deferred tax asset Provisions ...... 9,084 9,374 9,084 9,374 Deferred tax liability Inventories ...... 2,558 2,627 Exploration and evaluation ...... 2,310 2,669 Mine properties ...... 5,694 6,721 10,562 12,017 Net deferred tax liability ...... 1,478 2,643

A reconciliation of the movement in the deferred tax liability is a follows:

Exploration and Mine evaluation properties Inventories Provisions Total AUD’000 AUD’000 AUD’000 AUD’000 AUD’000 June 2016 Balance at start of year ...... (2,669) (6,721) (2,627) 9,374 (2,643) (Charged) / credited to profit or loss ...... 359 1,027 69 (290) 1,165 Balance at end of year ...... (2,310) (5,694) (2,558) 9,084 (1,478) June 2015 Balance at start of year ...... (38) (7,056) (2,645) 9,100 (639) (Charged) / credited to profit or loss ...... (2,631) 335 18 274 (2,004) Balance at end of year ...... (2,669) (6,721) (2,627) 9,374 (2,643)

17. Reconciliation of (loss) after income tax to net cash flows used in operating activities (a) Cash flows generated from operating activities

Year ended Year ended 30 June 2016 30 June 2015 AUD’000 AUD’000 Loss for the year after tax ...... (18,876) (25,066) Adjustment for non-cash items Loss on disposal of property, plant and equipment ...... 1,827 692 Depreciation and amortization ...... 24,169 26,567 Corporate cost recharges ...... 951 923 Impairment charge – exploration and evaluation asset ...... 759 27 Parent entity recharges and cost allocations ...... 20,195 (792) Changes in assets and liabilities: Decrease in receivables ...... 553 211 (Decrease) / increase in payables ...... (6,227) 12,815 (Decrease) / increase in provisions ...... (968) 912 (Decrease) / increase in borrowings ...... (683) — (Decrease) / increase in deferred tax liabilities ...... (1,165) 2,004 (Increase) / decrease in inventories ...... (1,062) 3,007 Net cash inflows from operating activities ...... 19,473 21,300

(b) Reconciliation of cash and cash equivalents

Cash at bank and at call ...... — —

Plutonic’s exposure to interest rate risk is discussed in Note 23.

F-20 (c) Cash management

Other than for the period November 2014 to May 2015 Plutonic did not operate a bank account, with income and expenditure being managed through the Northern Star bank accounts.

18. Segment information

Plutonic operates in one geographic location, Western Australia, and in one industry, mining. Accordingly, Plutonic has one segment and, therefore, segmented information is not presented.

19. Contingent assets and liabilities

There are no material contingent liabilities or contingent assets at June 30, 2015 or June 30, 2016.

20. Commitments

(i) Capital commitments

Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

30 June 30 June 2016 2015 AUD’000 AUD’000 Property, plant and equipment ...... 483 391

(ii) Non-cancellable operating leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to Plutonic as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

Plutonic has entered into an operating lease for the operation and maintenance of a power station for the Plutonic mine site. The lease term is 7 years commencing July 2014. Commitments for minimum lease payments in relation to this non-cancellable operating lease (excluding variable per kilowatt hour charges) are as follows:

30 June 30 June 2016 2015 AUD’000 AUD’000 Within one year ...... 1,969 1,969 Later than one but not later than five years ...... 7,876 7,876 Later than five years ...... — 1,969 9,845 11,814

21. Subsequent events

The acquisition of Plutonic by Billabong from Northern Star as set out in Note 1 was completed on October 12, 2016.

Other than this, no matter or circumstance has arisen since June 30, 2016 that in the opinion of the directors of the Parent Entity necessitate adjustment to Audited Carve-out Financial Statements at that date.

22. Related Party Disclosures

Northern Star is a related party as a result of its ultimate ownership interest in Plutonic. The transactions with Northern Star and its subsidiaries are as follows:

30 June 30 June 2016 2015 AUD’000 AUD’000 Accumulated advances at the beginning of the period ...... 32,876 27,745 Parent entity recharges and cost allocations ...... 20,195 (792) Parent entity cash contribution ...... — 5,000 Corporate costs ...... 951 923 Accumulated advances at the end of the period ...... 54,022 32,876

F-21 23. Financial risk management Plutonic’s activities expose it to credit risk, market risk (including interest rate risk, foreign exchange risk and price risk), and liquidity risk. This note presents qualitative and quantitative information about the exposure to each of the above risks, and its objectives, policies and procedures for managing risk.

(a) Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to Plutonic. Credit risk arises from credit exposures to gold sales counterparties and financial counterparties. Plutonic has adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Permitted instruments by which Plutonic hedges gold price risk are entered into with financial counterparties with a minimum credit rating of A (or equivalent). The majority of unhedged gold and silver are sold to a single counterparty with settlement terms of no more than 2 days. Plutonic does not have any other significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. In determining the recoverability of trade and other receivables a risk analysis considering the type and age of the outstanding receivable is performed and the creditworthiness of the counterparty. If appropriate, an impairment loss is recognised in profit or loss. Plutonic’s maximum exposure to credit risk at the reporting dates was:

30 June 30 June 2016 2015 AUD’000 AUD’000 Carrying amount: Trade and other receivables ...... 812 1,365 812 1,365

No amounts are past due or impaired at June 30, 2016 or June 30, 2015.

(b) Liquidity risk The table below analyses financial liabilities at balance date into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Between Between Within 6 6-12 1 and 2 2 and 5 Total months months years years AUD’000 AUD’000 AUD’000 AUD’000 AUD’000 At 30 June 2016 Trade and other payables ...... 11,169 11,169 — — — Finance lease liabilities ...... 3,900 2,025 1,458 417 — 15,069 13,194 1,458 417 —

AUD’000 AUD’000 AUD’000 AUD’000 AUD’000 At 30 June 2015 Trade and other payables ...... 17,395 17,395 — — — Finance lease liabilities ...... 9,216 2,306 2,306 4,046 558 26,611 19,701 2,306 4,046 558

(c) Market risk (i) Cash flow and fair value interest rate risk At reporting date Plutonic has minimal exposure to interest rate risk. Borrowings relate to the purchases of plant and equipment under finance lease arrangements which have fixed interest rates over their term and therefore not subject to interest rate risk as defined in IFRS 7. The effective interest rates of financial assets and financial liabilities with interest obligations at the reporting date are as follows:

Weighted Weighted average average Fixed rate interest Fixed rate interest instruments rate June instruments rate June June 2016 2016 June 2015 2015 AUD’000 AUD’000 AUD’000 AUD’000 Financial liabilities: Borrowings ...... 3,809 4.7% 8,802 4.8%

F-22 (ii) Foreign exchange risk The operations are located within Australia and material expenses are denominated in Australian Dollars, Plutonic’s functional currency. Sales are denominated and settled by the Perth Mint in Australian Dollars at the Australian Dollar spot price. Northern Star mitigates this risk by contracting gold forwards, which locks in an Australian Dollar denominated gold forward price.

(iii) Price risk Plutonic is exposed to the risk of fluctuations in the prevailing market prices for the gold and silver produced from its operations. This risk is managed through the use of gold forward contracts. These contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered into the contract. The physical gold delivery contracts are considered a contract to sell a non-financial item and therefore do not fall within the scope of IAS 39 Financial Instruments: Recognition and Measurement. Northern Star has hedged this risk based on forecasted production for the Northern Star group and therefore details for ounces hedged and weighted average contracted sale price for Plutonic are not available on a stand-alone basis.

Sensitivity The table below summarises the impact of increases / decreases in the gold price on Plutonic’s pre-tax loss for the years under review. The analysis is based on the assumption that the gold price had increased / decreased by AUD$100 per ounce for both periods with all other variables held constant.

Year ended Year ended 30 June 30 June 2016 2015 AUD’000 AUD’000 Gold price increase – A $100 per ounce ...... 6,418 8,014 Gold price decrease – A $100 per ounce ...... (6,418) (8,014)

(d) Fair values IFRS 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1), (b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3). The carrying values of amounts receivable and accounts payable and accrued liabilities reflected in the Statement of Financial Position approximate fair value because of the short-term maturity of these financial instruments and are classified as Level 1 in accordance with the fair value hierarchy. The following table presents Plutonic’s financial liabilities measured and recognised at fair value. There were no financial assets measured and recognised at fair value at June 30, 2016 or June 30, 2015.

Level 1 Level 2 Level 3 Total AUD’000 AUD’000 AUD’000 AUD’000 30 June 2016 Financial liabilities Borrowings ...... 3,809 — — — 3,809 — — —

Level 1 Level 2 Level 3 Total AUD’000 AUD’000 AUD’000 AUD’000 30 June 2015 Financial liabilities Borrowings ...... 8,802 — — — 8,802 — — —

24. Parent’s equity Northern Star’s investment in Plutonic is presented as equity in the Plutonic Audited Carve-out Financial Statements and is comprised of the parent’s contributions and accumulated losses.

F-23 Plutonic Gold Operations Unaudited Interim Condensed Carve-out Financial Statements For the periods: 3 months ended 30 September 2016 3 months ended 30 September 2015 (Expressed in Australian dollars, except where otherwise indicated)

F-24 PLUTONIC GOLD OPERATIONS CONDENSED CARVE-OUT STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the 3 months ended 30 September 2016 and 30 September 2015

Three months ended Three months ended 30 Sept 2016 30 Sept 2015 Notes AUD’000 AUD’000 Revenue from continuing Operations Revenue ...... 32,119 25,207 32,119 25,207 Expenses Cost of sales ...... 3 (30,501) (29,812) Corporate costs ...... (238) (231) Finance costs ...... (173) (279) Profit / (loss) before income tax for the period ...... 1,207 (5,115) Income tax benefit / (expense) ...... 602 (642) Net profit / (loss) and comprehensive profit / (loss) for the period . . 1,809 (5,757)

The accompanying notes form an integral part of these unaudited interim condensed carve-out financial statements.

F-25 PLUTONIC GOLD OPERATIONS CONDENSED CARVE-OUT STATEMENT OF FINANCIAL POSITION as at 30 September 2016 and 30 June 2016

30 Sept 30 June 2016 2016 Notes AUD’000 AUD’000 Current assets Cash and cash equivalents ...... — — Trade and other receivables ...... 1,504 812 Inventories ...... 13,863 14,131 Total current assets ...... 15,367 14,943 Non-current assets Mine properties ...... 15,965 19,872 Exploration and evaluation ...... 7,990 7,704 Property, plant and equipment ...... 4 11,974 12,048 Total non-current assets ...... 35,929 39,624 Total assets ...... 51,296 54,567 Current liabilities Trade and other payables ...... 11,233 11,169 Borrowings ...... 2,688 3,396 Provisions ...... 11 5,447 6,127 Current tax liability ...... 363 — Total current liabilities ...... 19,731 20,692 Non-current liabilities Borrowings ...... 146 413 Provisions ...... 11 24,064 24,148 Deferred tax liability ...... 514 1,478 Total non-current liabilities ...... 24,724 26,039 Total liabilities ...... 44,455 46,731 Net assets ...... 6,841 7,836 Equity Parent’s contribution ...... 7,9 51,218 54,022 Accumulated losses ...... (44,377) (46,186) Total equity ...... 6,841 7,836

The accompanying notes form an integral part of these unaudited interim condensed carve-out financial statements.

F-26 PLUTONIC GOLD OPERATIONS CONDENSED CARVE-OUT STATEMENT OF CHANGES IN EQUITY for the 3 months ended 30 September 2016 and 30 September 2015

Parent’s Accumulated contribution losses Total Notes AUD’000 AUD’000 AUD’000 Balance as at 1 July 2016 ...... 54,022 (46,186) 7,836 Parent contribution ...... 7 (2,804) — (2,804) Net profit for the period ...... — 1,809 1,809 Balance as at 30 Sept 2016 ...... 51,218 (44,377) 6,841 Balance as at 1 July 2015 ...... 32,876 (27,310) 5,566 Parent contribution ...... 7 12,585 — 12,585 Net loss for the period ...... — (5,757) (5,757) Balance as at 30 Sept 2015 ...... 45,461 (33,067) 12,394

The accompanying notes form an integral part of these unaudited interim condensed carve-out financial statements.

F-27 PLUTONIC GOLD OPERATIONS CONDENSED CARVE-OUT STATEMENT OF CASH FLOWS for the 3 months ended 30 September 2016 and 30 September 2015

Three months ended Three months ended 30 Sept 2016 30 Sept 2015 AUD’000 AUD’000 Cash flow from operating activities Receipts from customers ...... 32,119 25,207 Payments to suppliers and employees ...... (28,327) (18,040) Finance costs ...... (38) (45) Net cash flows provided by operating activities ...... 3,754 7,122 Cash flows from investing activities Payments for mine properties ...... (944) (4,589) Payments for exploration and evaluation ...... (286) (1,198) Payments for acquisition of property, plant and equipment ...... (1,549) (276) Net cash flows used in investing activities ...... (2,779) (6,063) Cash flows from financing activities Repayment of borrowings ...... (975) (1,059) Net cash flows outflows from financing activities ...... (975) (1,059) Net increase in cash and cash equivalents ...... — — Cash and cash equivalents at the beginning of the period ...... — — Cash and cash equivalents at the end of the period ...... — —

Plutonic did not operate a bank account during the periods under review, with income and expenditure being managed through the Northern Star bank accounts.

The accompanying notes form an integral part of these unaudited interim condensed carve-out financial statements.

F-28 PLUTONIC GOLD OPERATIONS NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS for the 3 months ended 30 September 2016 and 30 September 2015

1. Background Pursuant to a legally-binding conditional sale and purchase agreement (“SPA”) dated August 12, 2016 with Northern Star Resources Limited (“Northern Star”), Billabong Gold Pty Ltd (“Billabong”) agreed to buy the Plutonic Gold Operations (“Plutonic”) as a going concern subject to satisfaction of conditions including Foreign Investment Review Board approval, Ministerial consents, third party consents in respect of non-material rights over the Plutonic tenements, adequate financing for the completion of the cash payment to Northern Star and Northern Star achieving minimum production levels within certain cash operating costs for June, July and August 2016. Billabong will pay Northern Star: • $12.5 million cash payment at completion of the SPA. This payment was made by Billabong on October 12, 2016. • if Billabong’s parent Superior Gold Inc. (“Parent Entity”) is listed on the TSX or TSX-V at completion or lists up to six months after completion of the SPA, it will issue shares to Northern Star to the value of $25 million at the “Go Public” issue price, or, shares delivering a 33% interest in the Parent Entity to Northern Star (whichever is greater). Northern Star will also be entitled to one board seat; • if the Parent Entity is listed on the TSX or TSX-V at completion or lists up to six months after completion of the SPA, one 10 year warrant for every two shares issued to Northern Star exercisable at a 100% premium to the “Go Public” issue price, noting that the TSX-V listing rules limit the term of any warrant issued to a maximum of 5 years; • if the Parent Entity is not listed on the TSX or TSX-V within six months of completion, a cash payment of $25 million will be paid in lieu of the shares and warrants; • Milestone payments capped at $10 million in aggregate where $2.5 million is payable for each additional 250,000 ounces of NI 43-101 compliant indicated resources (or better) identified by Billabong on the Plutonic tenements as at 30 June 2016 in excess of the 1,717,000oz JORC 2012 measured, indicated or inferred Mineral Resources; and • a 2% net smelter royalty on production between 300,000oz and 600,000oz of refined gold generated from the Project, capped at $10 million. Billabong will be entitled to buy the royalty earlier for $6.5 million.

2. Basis of preparation of financial report (a) Statement of Compliance These unaudited interim condensed financial statements have been prepared in accordance with the requirements of the International Accounting Standard IAS 34: “Interim Financial Reporting”. It does not include all of the information required in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the carve out financial performance, carve out financial position and carve out cash flows of Plutonic as in Plutonic’s audited Carve-out Financial Statements as at and for the year ending June 30, 2016. It is recommended that these unaudited interim condensed financial statements be read in conjunction with Plutonic’s audited Carve-out Financial Statements as at and for the year ended 30 June 2016. Northern Star prepares its financial statements, from which these carve out financial statements have been derived, in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The Plutonic unaudited interim condensed carve-out financial statements have been prepared for inclusion in an initial public offering of the shares of the Parent Entity and therefore have been prepared in accordance with the requirements of the International Accounting Standard IAS 34: “Interim Financial Reporting”. The accounting policies have been consistently applied in the preparation of all periods presented. The following new accounting standards and interpretations have been published that are not mandatory for the September 30, 2016 reporting period. The potential effect of the revised Standards and Interpretations on the financial report has not yet been determined.

Standard Effective for the annual reporting periods beginning on or after IAS 1 Disclosure Initiative (Amendments to IAS 1) ...... 1January 2016 IFRS 9 ‘Financial Instruments’ and the relevant amending standards ...... 1January 2018 IFRS 15 Revenue from Contracts with Customers ...... 1January 2018 IFRS 16 Leases ...... 1January 2019 The board of directors of the Parent Entity approved these unaudited interim condensed carve out financial statements on December 29, 2016.

(b) Basis of presentation The unaudited interim condensed carve-out financial statements have been prepared on the historical cost basis, except for financial instruments that are measured at fair value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Plutonic Carve-out Financial Statements have been derived from the accounting records of Northern Star on a carve-out basis. The Plutonic Carve-out Financial Statements do not necessarily reflect what the operations, financial position or cash flows would have been had Plutonic been a separate entity or future results of Plutonic as it exists within Billabong. The operating results of Plutonic are based on the operating results attributable to the assets and liabilities transferred to Billabong. Certain expenses and expenditures presented in the Plutonic Carve-out Financial Statements represent allocations of the cost of services previously incurred by Northern Star which would be required to operate Plutonic. Management believes these allocations reasonably reflect the expenses for Plutonic which have been incurred during the periods

F-29 presented, including administrative and corporate costs. However, due to the inherent limitations of carving out the assets, liabilities, operations and cash flows from Northern Star, the Plutonic Carve-out Financial Statements may not reflect the results of operations, financial position or cash flows for future periods, nor do they necessarily reflect the financial position, its performance and cash flow that would have been realized had Plutonic been a separate entity or future results of Plutonic as it exists within Billabong. Income taxes have been calculated as if Plutonic had been a separate tax paying legal entity. The calculation of income taxes is based on a number of assumptions, allocations and estimates. In the period ended September 30, 2016 Plutonic has reviewed all of the new and revised Standards and Interpretations issued by the IASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2016. As a result of this review it has been determined that there is no change necessary to accounting policies for the periods presented. The accounting policies applied by Plutonic in these unaudited interim condensed carve-out financial statements are the same as those applied by Plutonic in its audited Carve-out Financial Statements as at and for the year ended 30 June 2016. Amounts in the financial statements have been rounded off to the nearest thousand dollars unless stated otherwise. The Carve-out Financial Statements are presented in Australian Dollars, which is also its functional currency.

(c) Going concern The unaudited interim condensed carve-out financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. Plutonic reported a profit of $1,809,000 for the three months ended September 30, 2016 (the three months ended September 30, 2015: loss $5,757,000). As at September 30, 2016 Plutonic had a net current liability position of $4,364,000 (June 30, 2016: net current liabilities of $5,749,000). As at October 1, 2016, being the effective date of acquisition of Plutonic by Billabong, Plutonic did not have sufficient funds available from existing cash on hand to fund its operations, including maintaining its mine properties, exploration and evaluation assets, and property, plant and equipment. This can be attributed to Plutonic not utilizing its own bank account other than for several months during the year ended June 30, 2015, with expenditures and income being paid and received, respectively, through Northern Star. Plutonic’s future operations were dependent upon its ability to obtain sufficient funding from either its Parent Entity or external sources of financing, or from cash generated from Plutonic’s operations, in order to fund its continued operations. Plutonic’s management has prepared a monthly cash flow forecast which covers a period of at least 12 months from the date of approval of the unaudited interim condensed carve-out financial statements. The cash flow forecast is based on the life of mine model, which has been assessed by independent experts and determined to be in compliance with the NI 43-101 Standards of Disclosure for Mineral Projects. Based on the cash flow forecast, Plutonic is forecast to generate sufficient cash to sustain its ongoing operations. Superior Gold Inc., as Billabong’s ultimate parent company, is currently undertaking a process to list its common shares on the TSX Venture Exchange, which would represent Superior’s initial public offering (“IPO”) of its common shares. It is a requirement of Superior Gold Inc. in connection with the acquisition of Plutonic to complete an IPO or other going public transaction within 6 months of the acquisition date, and if this is not completed, Superior Gold Inc. is required to make a cash payment of $25 million to Northern Star. While Plutonic is forecast to generate sufficient cash flows from its operations to sustain its ongoing operations, the extent to which these cash flows will be required by the parent entity is uncertain, should Superior Gold Inc. be unable to complete a going public transaction or raise sufficient funds through private placements sufficient to meet the $25 million payment. A material uncertainty therefore exists, which may cast significant doubt as to the ability of Plutonic to continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business. The unaudited interim condensed carve-out financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should Plutonic not continue as a going concern.

(d) Use of estimates and judgements The preparation of the unaudited interim condensed carve out financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year and judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements, are:

(i) Rehabilitation provision Plutonic assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known.

F-30 (ii) Exploration and evaluation expenditure

Exploration and evaluation assets include the costs of acquiring licences, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditure is capitalised on an area of interest basis. Costs incurred before Plutonic has obtained the legal rights to explore an area are recognised in cost of sales.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: i. the expenditures are expected to be recouped through successful development and exploitation of the area of interest, or ii. activities in the area of interest have not at the reporting date; reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable Ore Reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Once a development decision has been made all past exploration and evaluation expenditure in respect of an area of interest that has been capitalised is transferred to mine properties where it is amortised over the life of the area of interest to which it relates on a unit-of-production basis. No amortisation is charged during the exploration and evaluation phase.

The application of the above accounting policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of Ore Reserves will be found. Any such estimates and assumptions may change as new information becomes available, which may require adjustments to the carrying value of assets. Capitalised exploration and evaluation expenditure is assessed for impairment when an indicator of impairment exists, and capitalised assets are written off where required.

(iii) Determination of Mineral Resources and Ore Reserves

Mineral Resources and Ore Reserves are calculated in accordance with the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – the JORC Code. The information on Mineral Resources and Ore Reserves is prepared by Competent Persons as defined by the JORC Code.

There are numerous uncertainties inherent in estimating Mineral Resources and Ore Reserves. Assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of Ore Reserves and may, ultimately, result in the Ore Reserves being restated. Such changes may impact asset carrying values, depreciation and amortisation rates, deferred development costs and provisions for restoration.

(iv) Depreciation / amortisation method

Items of property, plant and equipment and mine properties are depreciated / amortised over their useful lives. Plutonic uses the unit-of- production basis when depreciating / amortising mine specific assets which results in a depreciation / amortisation charge proportional to the depletion of the anticipated remaining life of mine which is referenced to the estimated economic Ore Reserve and Mineral Resources of the property to which the assets relate. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable Ore Reserves and Mineral Resources of the mine property at which it is located. Depreciation of non-mine specific property, plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:

– Land and buildings ...... 5–20years – Plant and equipment ...... 2–20years – Motor Vehicles ...... 4–10years – Office equipment ...... 2–10years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(v) Recovery of deferred taxes

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets, including those arising from unutilised tax losses (where applicable), require management to assess the likelihood that Plutonic will comply with the relevant tax legislation and will generate sufficient taxable earnings in future years in order to recognise and utilise those deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and existing tax laws in each jurisdiction. These assessments require the use of estimates and assumptions such as exchange rates, commodity prices and operating performance over the life of the assets. To the extent that cash flows and taxable income differ significantly from estimates, the ability of Plutonic to realise the deferred tax assets reported at the reporting date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which Plutonic operates could limit the ability of Plutonic to obtain tax deductions in future years.

(vi) Impairment of property, plant and equipment and mine properties

Judgment is involved in assessing whether there are any indications that an asset or cash generating unit (“CGU”) may be impaired. This assessment is made based on an analysis of, amongst other factors, changes in the market or business environment, events that have transpired that have impacted the asset or CGU and information from internal reporting.

F-31 For the purpose of determining the recoverable amount of an asset or CGU, if indicators of impairment exist, operating results and net cash flow forecasts are determined by estimating the expected future revenues and costs, including the future cash costs of production, capital expenditures, site closure and environmental rehabilitation. These include net cash flows expected to be realized from the extraction, processing and sale of Mineral Resources that do not currently qualify for inclusion in proven and probable Ore Reserves when there is a high degree of confidence in the economic extraction of such non-reserve material. This expectation is usually based on preliminary drilling and sampling of areas of mineralization that are contiguous with existing Ore Reserves and Mineral Resources. Judgment is also required in estimating the discount rate applied and future commodity prices used for impairment testing. The long-term commodity prices are derived from forward prices and analysts’ commodity price forecasts. These assessments often differ from current price levels and are updated periodically. Impairment testing is done at the CGU level which is deemed to be Plutonic. Plutonic may have multiple possible mining areas and management must exercise judgment in determining what constitutes a CGU and the degree of aggregation of various assets. These factors impact the impairment analysis performed as the results of the impairment analysis might differ based on the composition of the various CGUs.

3. Cost of sales

Three Three months months ending ending 30 Sept 30 Sept 2016 2015 Mining ...... (15,373) (16,255) Processing ...... (6,726) (4,413) Depreciation and amortisation ...... (6,413) (6,129) Site services ...... (1,341) (1,864) Gold royalty ...... (753) (510) Change in inventories ...... 92 (280) Other ...... 13 (361) (30,501) (29,812)

4. Property plant and equipment

Land and Plant and Motor Office Capital work buildings equipment vehicles equipment in progress Total AUD‘000 AUD‘000 AUD’000 AUD’000 AUD’000 AUD‘000 Cost: 1 July 2016 ...... 3,104 25,810 607 120 745 30,386 Additions ...... — 1,549 — — — 1,549 Disposals ...... (12) (165) — — — (177) 30 September 2016 ...... 3,092 27,194 607 120 745 31,758 Accumulated depreciation: 1 July 2016 ...... 933 17,033 317 55 — 18,338 Depreciation charge ...... 55 1,473 27 6 — 1,561 Disposals ...... (9) (106) — — — (115) 30 September 2016 ...... 979 18,400 344 61 — 19,784 Carrying amount at beginning of period .... 2,171 8,777 290 65 745 12,048 Carrying amount at end of period ...... 2,113 8,794 263 59 745 11,974 Cost: 1 July 2015 ...... 2,756 28,316 473 35 591 32,171 Additions ...... — 135 — — 988 1,123 Disposals ...... — (2,908) — — — (2,908) Transfer from capital work in progress ..... 348 267 134 85 (834) — 30 June 2016 ...... 3,104 25,810 607 120 745 30,386 Accumulated depreciation: 1 July 2015 ...... 739 11,718 214 35 — 12,706 Depreciation charge ...... 194 6,396 103 20 — 6,713 Disposals ...... — (1,081) — — — (1,081) 30 June 2016 ...... 933 17,033 317 55 — 18,338 Carrying amount at beginning of year ..... 2,017 16,598 259 — 591 19,465 Carrying amount at end of year ...... 2,171 8,777 290 65 745 12,048

Depreciation is included in cost of sales in the statement of profit or loss and other comprehensive income.

F-32 (i) Leased assets

Leases of property, plant and equipment where Plutonic, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the lease property, or, if lower, the present value of the minimum lease payments. The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that Plutonic will obtain ownership at the end of the lease term.

Plant and equipment includes the following amounts where Plutonic is a lessee under a finance lease:

30 Sept 30 June 2016 2016 AUD’000 AUD’000 Cost ...... 10,190 10,190 Accumulated depreciation ...... (7,473) (6,543) Net book amount ...... 2,717 3,647

5. Contingent assets and liabilities

There are no material contingent liabilities or contingent assets at September 30, 2016 or June 30, 2016.

6. Commitments

(i) Capital commitments

Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

30 Sept 30 June 2016 2016 AUD’000 AUD’000 Property, plant and equipment ...... 907 483

(ii) Non-cancellable operating leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to Plutonic as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

Plutonic has entered into an operating lease for the operation and maintenance of a power station for the Plutonic mine site. The lease term is 7 years commencing July 2014. Commitments for minimum lease payments in relation to this non-cancellable operating lease (excluding variable per kilowatt hour charges) are as follows:

30 Sept 2016 30 June 2016 AUD’000 AUD’000 Within one year ...... 1,969 1,969 Later than one but not later than five years ...... 7,384 7,876

9,353 9,845

7. Related Party Disclosures

Northern Star is a related party as a result of its ultimate ownership interest in Plutonic in the periods covered by the unaudited interim condensed carve out financial statements. The transactions with Northern Star and its subsidiaries are as follows:

Three months ending Three months ending 30 Sept 2016 30 Sept 2015 AUD ‘000 AUD‘000 Balance at the beginning of the period ...... 54,022 32,876 Parent entity recharges and cost allocations ...... (3,042) 12,354 Corporate costs ...... 238 231 Balance at the end of the period ...... 51,218 45,461

F-33 8. Financial risk management Plutonic’s activities expose it to credit risk, market risk (including interest rate risk, foreign exchange risk and price risk), and liquidity risk. This note presents qualitative and quantitative information about the exposure to each of the above risks, and its objectives, policies and procedures for managing risk.

(a) Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to Plutonic. Credit risk arises from credit exposures to gold sales counterparties and financial counterparties. Plutonic has adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Permitted instruments by which Plutonic hedges gold price risk are entered into with financial counterparties with a minimum credit rating of A (or equivalent). The majority of unhedged gold and silver are sold to a single counterparty with settlement terms of no more than 2 days. Plutonic does not have any other significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. In determining the recoverability of trade and other receivables a risk analysis considering the type and age of the outstanding receivable is performed and the creditworthiness of the counterparty. If appropriate, an impairment loss is recognised in profit or loss. Plutonic’s maximum exposure to credit risk at the reporting dates was:

30 Sept 30 June 2016 2016 AUD’000 AUD’000 Carrying amount: Trade and other receivables ...... 1,504 812 1,504 812

No amounts are past due or impaired at September 30, 2016 or June 30, 2016.

(b) Liquidity risk The table below analyses financial liabilities at balance date into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Between Within 6 6-12 1 and 2 Total months months years AUD’000 AUD’000 AUD’000 AUD$000 At 30 September 2016 Trade and other payables ...... 11,233 11,233 — — Finance lease liabilities ...... 2,888 2,025 715 148 14,121 13,258 715 148 At 30 June 2016 Trade and other payables ...... 11,169 11,169 — — Finance lease liabilities ...... 3,900 2,025 1,458 417 15,069 13,194 1,458 417

(c) Market risk (i) Cash flow and fair value interest rate risk At reporting date Plutonic has minimal exposure to interest rate risk. Borrowings relate to the purchases of plant and equipment under finance lease arrangements which have fixed interest rates over their term and therefore not subject to interest rate risk as defined in IFRS 7. The effective interest rates of financial assets and financial liabilities with interest obligations at the reporting date are as follows:

Weighted Weighted average average Fixed rate interest Fixed rate interest instruments rate instruments rate Sept 2016 Sept 2016 June 2016 June 2016 AUD’000 AUD’000 AUD’000 AUD’000 Financial liabilities: Borrowings ...... 2,834 4.7% 3,809 4.7%

F-34 (ii) Foreign exchange risk The operations are located within Australia and material expenses are denominated in Australian Dollars, Plutonic’s functional currency. Sales are denominated and settled by the Perth Mint in Australian Dollars at the Australian Dollar spot price. Northern Star mitigates this risk by contracting gold forwards, which locks in an Australian Dollar denominated gold forward price.

(iii) Price risk Plutonic is exposed to the risk of fluctuations in the prevailing market prices for the gold and silver produced from its operations. This risk is managed through the use of gold forward contracts. These contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered into the contract. The physical gold delivery contracts are considered a contract to sell a non-financial item and therefore do not fall within the scope of IAS 39 Financial Instruments: Recognition and Measurement. Northern Star has hedged this risk based on forecasted production for the Northern Star group and therefore details for ounces hedged and weighted average contracted sale price for Plutonic are not available on a stand-alone basis.

Sensitivity The table below summarises the impact of increases / decreases in the gold price on Plutonic’s pre-tax loss for the periods under review. The analysis is based on the assumption that the gold price had increased / decreased by AUD$100 per ounce for both periods with all other variables held constant.

3 mths 3 mths ended ended 30 Sept 30 Sept 2016 2015 AUD’000 AUD’000 Gold price increase – A$100 per ounce ...... 1,962 1,637 Gold price decrease – A$100 per ounce ...... (1,962) (1,637)

(d) Fair values IFRS 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1), b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3). The following table presents Plutonic’s financial liabilities measured and recognised at amortised cost. There were no financial assets measured and recognised at fair value at September 30, 2016 or June 30, 2016.

Level 1 Level 2 Level 3 Total 30 September 2016 AUD’000 AUD’000 AUD’000 AUD’000 Financial liabilities Borrowings ...... 2,834 — — — 2,834 — — —

Level 1 Level 2 Level 3 Total 30 June 2016 AUD’000 AUD’000 AUD’000 AUD’000 Financial liabilities Borrowings ...... 3,809 — — — 3,809 — — —

9. Parent’s equity Northern Star’s investment in Plutonic is presented as equity in the Plutonic unaudited interim condensed carve-out financial statements and is comprised of the parent’s contributions and accumulated losses.

10. Impairment An impairment indicator assessment was undertaken at 30 June 2016 and 30 September 2016 balance dates. The reviews concluded that for Plutonic an impairment indicator did exist at each balance date given the high cost of production and the loss incurred during the respective periods.

F-35 During the year ended 30 June 2016 Northern Star announced its intention to conduct a sale process for Plutonic, and consequently Plutonic has been classified as held for sale as at 30 June 2016 in the Northern Star financial statements. An impairment assessment was undertaken prior to the reclassification to held for sale, with the recoverable amount being referenced to an offer from Billabong as set out in Note 1. This offer was considered the best evidence of fair value less costs to sell in accordance with IAS 36 Impairment of Assets given that it was a result of a competitive sales process participated in by a number of willing, able and knowledgeable participants. Subsequent to year end Northern Star executed a legally-binding conditional Sale and Purchase Agreement for Plutonic with Billabong. As disclosed in note 12, the sale was completed on October 12, 2016. Based on the estimate of the fair value of the consideration offered, the recoverable amount exceeded the carrying value of the associated assets of Plutonic and therefore no impairment loss was charged to the statement of profit or loss and other comprehensive income for the year ended 30 June 2016, or the 3 months ended 30 September 2016.

11. Provisions

30 Sept 30 June 2016 2016 AUD’000 AUD’000 Current Employee entitlements ...... 5,447 6,127 5,447 6,127 Non-current Employee entitlements ...... 875 1,094 Rehabilitation ...... 23,189 23,054 24,064 24,148

Information about individual provisions and significant estimates is provided below:

(i) Employee entitlements

Leave obligations cover Plutonic’s liability for long service leave and annual leave. The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service leave where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount of the annual leave provision is presented as current, since Plutonic does not have an unconditional right to defer settlement for any of these obligations. Based on past experience, Plutonic does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows to be made by Plutonic for those employees with greater than 5 years’ service up to the reporting date. Long-term benefits not expected to be settled within 12 months are discounted using the rates attaching to high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. In determining the liability for these long-term employee benefits, consideration has been given to expected future increases in wage and salary rates, Plutonic’s experience with staff departures and periods of service. Related on-costs are also included in the liability. Current employee entitlements also include provisions for bonus and Fringe Benefits tax.

(ii) Rehabilitation provision

Plutonic assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known.

12. Subsequent events

The acquisition of Plutonic by Billabong from Northern Star as set out in Note 1 was completed on October 12, 2016. Other than this, no matter or circumstance has arisen since June 30, 2016 that in the opinion of the directors of the Parent Entity necessitate an adjustment to the Carve-out Financial Statements at that date.

13. Segment information

Plutonic operates in one geographic location, Western Australia, and in one industry, mining. Accordingly, Plutonic has one segment and, therefore, segmented information is not presented.

F-36 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.)

Consolidated Financial Statements (Expressed in United States dollars) Period from Incorporation on July 4, 2016 to December 31, 2016

F-37 INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Superior Gold Inc.

We have audited the accompanying consolidated financial statements of Superior Gold Inc., which comprise the consolidated statement of financial position as at December 31, 2016, the consolidated statements of comprehensive income, changes in equity and cash flows for the period from incorporation on July 4, 2016 to December 31, 2016, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Superior Gold Inc. as at December 31, 2016, and its consolidated statements of comprehensive financial performance and its consolidated cash flows for the period from incorporation on July 4, 2016 to December 31, 2016 in accordance with International Financial Reporting Standards.

Emphasis of Matter Without modifying our opinion, we draw attention to Note 1 in the consolidated financial statements which indicates if Superior Gold Inc. does not complete an initial public offering by April 12, 2017, the Corporation will be required to make a cash payment of AUD$25 million to Northern Star Resources Ltd. in connection with the acquisition of the Plutonic Gold Operations. This condition, along with other matters as set forth in Note 1 in the consolidated financial statements, indicate the existence of a material uncertainty which may cast significant doubt about Superior Gold Inc.’s ability to continue as a going concern.

/s/ KPMG LLP

Chartered Professional Accountants, Licensed Public Accountants

February 15, 2017

Toronto, Canada

F-38 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.) Consolidated Statement of Financial Position (Expressed in United States Dollars)

December 31, As at 2016 ASSETS Current assets Cash and cash equivalents ...... $ 6,096,225 Restricted cash (note 8) ...... 1,748,700 Receivables and other assets (note 9) ...... 2,455,387 Inventories (note 10) ...... 10,015,745 Total current assets ...... 20,316,057 Mining interests and property, plant and equipment (note 11) ...... 55,140,743 TOTAL ASSETS ...... $75,456,800 LIABILITIES Current liabilities Accounts payable and accrued liabilities (note 12) ...... $ 8,928,763 Income taxes payable ...... 233,466 Short-term loan (note 13) ...... 566,470 Contingent payable to Northern Star Resources (note 21) ...... 18,090,000 Current portion of finance lease obligation (note 14) ...... 1,535,006 Current portion of provisions (note 15) ...... 4,145,653 33,499,358 Non-current liabilities Finance lease obligation (note 14) ...... 26,543 Provisions (note 15) ...... 18,596,788 Warrant liability (note 18(c)) ...... 151,151 Deferred tax liability (note 20) ...... 2,988,208 Total non-current liabilities ...... 21,762,690 TOTAL LIABILITIES ...... 55,262,048 SHAREHOLDERS’ EQUITY Share capital (note 18(a)) ...... $ 1,470,770 Subscription receipts (note 18(b)) ...... 10,551,734 Accumulated other comprehensive loss ...... (729,464) Retained earnings ...... 8,901,712 TOTAL EQUITY ...... $20,194,752 TOTAL EQUITY AND LIABILITIES ...... $75,456,800

Nature and continuance of operations (note 1)

The accompanying notes are an integral part of these consolidated financial statements.

They are signed on the Corporation’s behalf by:

/s/ Christopher Bradbrook, Director /s/ Tamara Brown, Director

F-39 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.) Consolidated Statement of Comprehensive Income (Expressed in United States Dollars)

For the period from incorporation on July 4, 2016 to December 31, 2016 REVENUES Metal sales (note 5) ...... $24,749,595 EXPENSES Cost of sales (note 6) ...... 19,727,301 Corporate costs ...... 740,072 4,282,222 OTHER EXPENSES (INCOME) Net finance cost (note 7) ...... 519,703 Business acquisition costs ...... 3,864,400 Gain on change in valuation of warrant liability (note 18)) ...... (16,292) Bargain purchase gain on acquisition of Plutonic Gold Operations (note 21) ...... (9,267,958) NET INCOME BEFORE TAXES ...... 9,182,369 Income and mining tax expense (note 20) ...... 280,657 NET INCOME FOR THE PERIOD FROM INCORPORTION ON JULY 4, 2016 TO DECEMBER 31, 2016 ...... $ 8,901,712 OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation difference on foreign operations ...... (729,464) COMPRESHENSIVE INCOME FOR THE PERIOD FROM INCORPORATION ON JULY 4, 2016 TO DECEMBER 30, 2016 ...... $ 8,172,248

Earnings per share (note 18(d)): Basic earnings per share ...... $ 0.35 Diluted earnings per share ...... 0.35 Weighted average number of common shares outstanding (basic) ...... 25,302,368 Weighted average number of common shares outstanding (diluted) ...... 25,302,368

The accompanying notes are an integral part of these consolidated financial statements.

F-40 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.) Consolidated Statement of Changes in Equity (Expressed in United States Dollars)

Accumulated other Number of Retained comprehensive Note shares issued Share capital earnings (loss) Total Shares issued on incorporation on July 4, 2016 ...... 18 5,000,100 $ 38,911 $ — $ — $ 38,911 Private placements ...... 18 6,492,499 1,431,859 — — 1,431,859 Subscription receipts ...... 18 — 12,396,380 — — 12,396,380 Subscription receipt issue costs ...... 18 — (796,204) — — (796,204) Share issue costs ...... — (1,048,442) — — (1,048,442) Total comprehensive income for the period from incorporation on July 4, 2016 to December 31, 2016 ...... — — 8,901,712 (729,464) 8,172,248 Balance as at December 31, 2016 ... 11,492,599 $12,022,504 $8,901,712 $(729,464) $20,194,752

The accompanying notes are an integral part of these consolidated financial statements.

F-41 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.) Consolidated Statement of Cash Flows (Expressed in United States Dollars)

For the period from incorporation on July 4, 2016 to December 31, 2016 Cash flows provided from (used by): OPERATING ACTIVITIES Net income for the period ...... $ 8,901,712 Adjustments: Depreciation and amortization ...... 4,601,374 Bargain purchase gain on acquisition of Plutonic Gold Operations ...... (9,267,958) Gain on change in valuation of warrant liability ...... (16,292) Net change in employee provisions ...... 272,075 Net finance (income) cost ...... 519,703 Income tax expense ...... 280,657 Net changes in non-cash operating working capital items: Receivables and other assets ...... (2,408,606) Inventories ...... (1,364,723) Accounts payable and accrued liabilities ...... 8,895,478 Increase in restricted cash ...... (1,748,700) 8,664,720

INVESTING ACTIVITIES Acquisition of Plutonic Gold Operations ...... (13,000,617) Expenditures on mineral interests and property, plant and equipment ...... (1,347,158) (14,347,775)

FINANCING ACTIVITIES Issuance of common shares ...... 1,470,770 Issuance of subscription receipts, net of issue costs ...... 10,702,884 Proceeds from short-term loan ...... 943,522 Repayment of short-term loan ...... (377,053) Repayment of finance lease obligation ...... (406,373) 12,333,750 Effect of exchange rates on cash and cash equivalents ...... (554,470) Net increase in cash and cash equivalents, being cash and cash equivalents at December 31, 2016 ...... 6,096,225 Cash paid during the period for interest ...... $ 15,740 Cash paid during the period for income taxes ...... $—

The accompanying notes are an integral part of these consolidated financial statements.

F-42 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.) Notes to the Consolidated Financial Statements for the period from Incorporation on July 4, 2016 to December 31, 2016 (expressed in United States dollars unless otherwise stated)

1. CORPORATE INFORMATION AND CONTINUANCE OF OPERATIONS

Superior Gold Inc. (formerly 2525908 Ontario Inc.) (the “Corporation”) was incorporated under the Business Corporations Act in Ontario on July 4, 2016 and is engaged in the acquisition, exploration, development and operation of gold resource properties. The address and domicile of the Corporation’s registered office and its principal place of business is 70 University Avenue, Suite 1410, Toronto, Ontario M5J 2M4. On October 12, 2016, the Corporation completed the acquisition of the Plutonic Gold Operations from Northern Star Resources Inc. (“Northern Star”) (note 21). The Corporation is in the process of seeking to list its common shares on the Toronto Stock Exchange Venture Exchange which would represent the Corporation’s initial public offering (“Offering”) of its common shares. If the Corporation does not complete an Offering within 6 months of the acquisition date, the Corporation will be required to make a cash payment of $25 million Australian dollars (“AUD$”) to Northern Star in connection with the acquisition. Subsequent to the acquisition of the Plutonic Gold Operations, the Corporation has available cash flows from the Plutonic Gold Operations, however it is uncertain whether those cash flows will be sufficient to meet the Corporation’s ongoing obligations extending over the next 12 months, including the cash payment should the Corporation not complete an Offering by April 12, 2017. The uncertainties related to the completion of the Corporation’s Offering, raising cash flows through private placements and generating cash flows from the Plutonic Gold Operations sufficient to meet the AUD$25 million payment if the Corporation is unsuccessful in completing an Offering represents a material uncertainty which may cast significant doubt as to the appropriateness of the use of accounting applicable to a going concern. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) applicable to a going concern, which assumes that the Corporation will be able to meet its obligations and continue its operations for the foreseeable future. The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary, should the Corporation be unable to continue as a going concern. These adjustments could be material. The consolidated financial statements of the Corporation for the period ended December 31, 2016 were authorized for issue in accordance with a resolution of the board of directors on February 15, 2017.

2. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Outlined below is a summary of the significant accounting polices used in the preparation of these financial statements.

Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis, with the exception of certain financial instruments, warrant liability, and share-based payments, which are measured at fair value.

Basis of consolidation

These consolidated financial statements include the assets, liabilities, and expenses of the Corporation and its 100% owned subsidiary, Billabong Gold Pty. Ltd. Subsidiaries are entities over which the Corporation has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. Subsidiaries are fully consolidated from the date of acquisition, being the date on which Superior Gold Inc. obtains control of the subsidiary, and continues to be consolidated until the date when such control ceases. All intercompany balances and transactions have been eliminated. The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below.

a) Foreign currency translation

The consolidated financial statements are presented in United States dollars, which is the Superior Gold Inc.’s functional currency. Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the financial position reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. For Billabong Gold Pty. Ltd. which has a functional currency of the Australian dollar, foreign financial statements are translated into United States dollars for consolidation. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at average exchange rates throughout the reporting period or at rates that approximate the actual exchange rates. Exchange gains and losses on translation are included in other comprehensive income (“OCI”). The cumulative amount of the exchange differences is presented as a separate component of equity until disposal of the foreign operation.

F-43 b) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and deposits held with banks. Cash and cash equivalents have a term to maturity of three months or less from the date of acquisition. c) Financial instruments

All financial instruments are initially recognized at fair value on the consolidated balance sheet. The Corporation has classified each financial instrument into one of the following categories: fair value through profit or loss; loans and receivables; and other financial liabilities. Subsequent measurement of financial instruments is based on their classification.

Financial assets and liabilities classified as fair value through profit or loss are measured at fair value with changes in those fair values recognized in the consolidated statement of comprehensive income for the period.

Loans and receivables and other financial liabilities are measured at amortized cost using the effective interest method.

The Corporation’s financial assets and liabilities are recorded and measured as follows:

Asset or Liability Category Subsequent Measurement Cash and cash equivalents Fair value through profit or loss Fair value Restricted cash Fair value through profit or loss Fair value Amounts receivable Loans and receivables Amortized cost Accounts payables and accrued liabilities Other financial liability Amortized cost Short-term loan Other financial liability Amortized cost Contingent payable to Northern Star Fair value through profit or loss Fair value Finance lease obligation Other financial liability Amortized cost Warrant liability Fair value through profit or loss Fair value d) Income taxes

The income tax expense or recovery for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Corporation and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts likely to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss.

Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets are recognized for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Current and deferred tax is recognized in the consolidated statement of comprehensive income, except to the extent that it relates to items recognized directly in equity. In this case, the tax is also recognized directly in equity. e) Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effect. f) Earnings per share

Basic earnings per share is calculated using the weighted average number of shares outstanding. The dilutive effect of warrants is calculated using the treasury stock method. The treasury stock method assumes that any proceeds from the exercise of dilutive warrants would be used to repurchase common shares at the average market price during the period, with the incremental number of shares being included in the denominator of the diluted earnings per share calculation to the extent that it is dilutive. g) Royalties

Royalties under existing royalty regimes are payable on sales and are recognized in cost of sales as the sale occurs.

F-44 h) Inventories

Gold dore, gold in circuit and stockpiles are physically measured or estimated and valued at the lower of cost and net realizable value. Cost represents the weighted average cost and includes direct purchase costs and an appropriate portion of fixed and variable production overhead expenditure, including depreciation and amortization, incurred in converting materials into finished goods. Materials and supplies are valued at the lower of cost and net realizable value. Any allowance for obsolescence is determined by reference to specific stock items identified. A regular and on-going review is undertaken to establish the extent of surplus items and an allowance is made for any potential loss on their disposal. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. i) Leased assets

Leases of property, plant and equipment where the Corporation has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s inception at the fair value of the lease property, or, if lower, the present value of the minimum lease payments. Property, plant and equipment acquired under a finance lease is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that the Corporation will obtain ownership at the end of the lease term. j) Property, plant and equipment

Property, plant and equipment is carried at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Corporation and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. Repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. k) Mineral properties

Mineral properties include aggregate expenditures in relation to acquired mineral interests, mine construction, mine development, and exploration and evaluation expenditure where a development decision has been made. Expenditure incurred in constructing a mine is accumulated separately for each area of interest in which economically recoverable Mineral Reserves have been identified. This expenditure includes direct costs of construction, drilling costs and removal of overburden to gain access to the ore, borrowing costs capitalized during construction and an appropriate allocation of attributable overheads. Mine development represents expenditure in respect of exploration and evaluation, overburden removal and construction costs and development accumulated and capitalized in relation to properties in which mining has now commenced. Such expenditure comprises direct costs and an appropriate allocation of directly related overhead expenditure. All expenditure incurred prior to commencement of production is capitalized to the extent to which recovery out of future revenue from the sale of production, or from the sale of the property, is reasonably assured. When further development expenditure is incurred in respect of a mine property after commencement of commercial production, such expenditure is capitalized as part of the cost of the mine property only when future economic benefits are reasonably assured, otherwise the expenditure is classified as part of the cost of production and expensed as incurred. Such capitalized development expenditure is added to the total carrying value of mine development being amortized. Mine development costs are amortized on a units-of-production basis over the life of mine to which they relate. In applying the units of production method, amortization is calculated using the expected total contained ounces as determined by the life of mine plan. The amortization rate is updated annually as the life of mine plan is revised. Mineral interests comprise identifiable exploration and evaluation assets which are acquired as part of a business combination or joint venture acquisition and are recognized at fair value at the date of acquisition. Where possible, mineral interests are attributable to specific areas of interest and are classified within mine properties. l) Provisions

Provisions are recognized when the Corporation has a present legal or constructive obligation because of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

F-45 Rehabilitation provision

Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology. Rehabilitation costs are recognized in full at present value as a non-current liability. An equivalent amount is capitalized as part of the cost of the asset when an obligation arises to decommission or restore a site to a certain condition after abandonment as a result of bringing the assets to its present location. The capitalized cost is amortized over the life of the project and the provision is accreted periodically as the discounting of the liability unwinds. The unwinding of the discount is recorded as a finance cost. Any changes in the estimates for the costs or other assumptions against the cost of relevant assets are accounted for on a prospective basis. In determining the costs of site restoration there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.

Long service leave

The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows to be made by the Corporation for those employees with greater than 5 years’ service up to the reporting date. Long-term benefits not expected to be settled within 12 months are discounted using equivalent rates of high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. In determining the liability for these long-term employee benefits, consideration has been given to expected future increases in wage and salary rates, management’s experience with staff departures and periods of service. Related on-costs are also included in the liability. m) Impairment of assets

At each reporting date the Corporation reviews the carrying amounts of its long life assets to determine whether there is any indication that those assets might be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any) which is the amount by which the assets carrying value exceeds its recoverable amount. Where the asset does not generate cash in-flows that are independent from other assets, the Corporation estimates the recoverable amount of the cash-generating unit (“CGU”) to which the asset belongs. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized in profit or loss immediately. Where an impairment loss subsequently reverses for assets, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized in profit or loss immediately. n) Revenue

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Corporation and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized when there has been a transfer of risks and rewards from the Corporation to an external party, no further processing is required by the Corporation, quality and quantity of the goods has been determined with reasonable accuracy, the selling price is fixed or determinable and collectability is probable. o) Long-term debt

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Leases of property, plant and equipment where the Corporation has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized under plant and equipment at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings. Borrowings are classified as current liabilities unless the Corporation has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. p) Business combinations and goodwill

Business combinations relate to the acquisition of an asset or a group of assets that constitute a business. For an integrated set of activities and assets to be considered a business, it needs to contain inputs and processes. If the set of activities and assets acquired relate to an exploration stage property, the Corporation considers other factors to determine whether the set of activities and assets is a business such as the extent to which the acquired project has resources or reserves, and the extent and nature of the additional work to identify resources or convert resources into reserves. The Corporation also assesses whether the entity acquired has begun planned principal activities, has employees, necessary

F-46 permits for production, intellectual property, and is pursuing a plan to produce outputs and will be able to obtain access to customers that will purchase the outputs. Business combinations are accounted for using the acquisition method of accounting whereby identifiable assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. Mineral rights that can be reliably valued are recognized in the assessment of fair values on acquisition, including amounts attributable to expected economic conversions of resources to reserves. The excess of the purchase price over the fair value of net assets acquired is recorded as goodwill. Acquisition-related costs, other than costs to issue debt or equity securities of the acquirer, are expensed as incurred. The costs to issue equity securities of the Corporation as consideration for the acquisition are reduced from share capital as share issue costs. When the net of the amounts assigned to assets acquired and liabilities assumed exceeds the cost of purchase, the excess is recognized as a bargain purchase gain and recorded in the consolidated statement of comprehensive income at the date of acquisition. If a transaction does not meet the definition of a business under IFRS, the transaction is recorded as an asset acquisition. Accordingly, the net identifiable assets acquired and liabilities assumed are measured at the fair value of the consideration paid, based on their relative fair values at the acquisition date. Acquisition-related costs are included in the consideration paid and capitalized. No goodwill and no deferred tax asset or liability arising from the assets acquired and liabilities assumed are recognized upon the acquisition of assets. q) Management judgments and key sources of estimation uncertainty

The preparation of the Corporation’s financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions, which are based on historical experience and various other factors believed to be reasonable under the given circumstances. These affect the application of accounting policies, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and underlying assumptions are reviewed on an ongoing basis and actual future outcomes could differ from present judgments, estimates and assumptions, potentially having material future effects on the consolidated financial statements. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Impairment

The Corporation assesses each cash generating unit annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs of disposal and value in use. These assessments require the use of estimates and assumptions such as long-term commodity prices, discount rates, future capital requirements, exploration potential and operating performance. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Fair value for mineral assets is generally determined as the present value of estimated future cash flows arising from the continued use of the asset, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management has assessed its cash generating units as being an individual mine site, which is the lowest level for which cash inflows are largely independent of those of other assets.

Business combinations

In a business combination the identifiable assets and liabilities are measured at fair value on the date of acquisition. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management’s judgments and estimates, as of the acquisition date, of the amount of mineral reserves and resources acquired, the exploration potential for areas with no identified mineral reserves and resources, future commodity prices, future operating costs and capital expenditure requirements and discount rates. Any excess of acquisition cost over the fair value of the identifiable net assets is recognized as goodwill and if negative is recorded as a bargain purchase gain in the statement of comprehensive income. The proceeds of acquiring a business may also include contingent consideration based on future events, some of which may be in the Corporation’s control and some that may not be. In accordance with IFRS 3, the Corporation must make a determination of the fair value of that consideration using the guidance in IFRS 13 Fair value measurement. The determination of the fair value of such contingent consideration requires the Corporation to make certain assumptions and estimate in relation to certain future events based on the current understanding of the facts and circumstances known to them. The accounting for future changes in contingent consideration depends on whether the contingent consideration is classified as equity, an asset or a liability on inception. Refer to note 21 for additional disclosure related the Corporation’s acquisition of the Plutonic Gold Operations.

Taxes

The Corporation is subject to income tax in several jurisdictions. Significant judgment is required in determining the provision for income taxes, due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.

Deferred income taxes

The Corporation recognizes the deferred tax benefit related to deferred tax assets to the extent recovery is probable. Assessing the recoverability of deferred tax assets requires management to make significant estimates of future taxable profit. To the extent that future cash flows and taxable profit differ significantly from estimates, the ability of the Corporation to realize the net deferred tax assets recorded on the statement of

F-47 financial position date could be impacted. In addition, future changes in tax laws could limit the ability of the Corporation to obtain tax deductions in future periods from deferred tax assets.

Rehabilitation provision

The Corporation assesses its mine rehabilitation provision annually. Significant judgment is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known.

Exploration and evaluation expenditure

Exploration and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditure is capitalized on an area of interest basis. Costs incurred before the Corporation has obtained the legal rights to explore an area are recognized as exploration expense. Exploration and evaluation assets are only recognized if the rights of the area of interest are current and either: i. the expenditures are expected to be recouped through successful development and exploitation of the area of interest, or ii. activities in the area of interest have not at the reporting date; reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable Mineral Reserves and active and significant operations in, or in relation to, the area of interest are continuing. Once a development decision has been made all past exploration and evaluation expenditure in respect of an area of interest that has been capitalized is transferred to mine properties where it is amortized over the life of the area of interest to which it relates on a unit-of-production basis. No amortization is charged during the exploration and evaluation phase. The application of the above accounting policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether the exploration and evaluation asset is technically feasible and commercially viable. Any such estimates and assumptions may change as new information becomes available, which may require adjustments to the carrying value of assets. Capitalized exploration and evaluation expenditure is assessed for impairment when an indicator of impairment exists.

Determination of Mineral Resources and Mineral Reserves

Mineral reserves and resources have been estimated by qualified persons as defined in accordance with Canadian Securities Administrators’ National Instrument Standards of Disclosure for Mineral Projects requirements. Mineral reserve and resource estimates include numerous uncertainties and depend heavily on geological interpretations and statistical inferences drawn from drilling and other data, and require estimates of the future price for the commodity and the future cost of operations. The mineral reserve and resource estimates are subject to uncertainty and actual results may vary from these estimates. Results from drilling, testing and production, as well as material changes in metal prices and operating costs subsequent to the date of an estimate, may justify revision of such estimates. A number of accounting estimates, as described in the relevant accounting policy notes, are impacted by the Mineral reserves and resources estimates: asset carrying values, depreciation and amortization rates, development costs and provisions for restoration.

Depreciation / amortization method

Items of property, plant and equipment and mine properties are depreciated / amortized over their useful lives. The Corporation uses the unit-of- production basis when depreciating / amortizing mine specific assets which results in a depreciation / amortization charge proportional to the depletion of the anticipated remaining life of mine which is referenced to the estimated economic Mineral Reserve and Mineral Resources of the property to which the assets relate. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable Mineral Reserves and Mineral Resources of the mine property at which it is located. Depreciation of non-mine specific property, plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:

– Land and buildings ...... 5–20years – Plant and equipment ...... 2–20years – Motor Vehicles ...... 4–10years – Office equipment ...... 2–10years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Impairment of property, plant and equipment and mine properties

Judgment is involved in assessing whether there are any indications that an asset or cash generating unit (“CGU”) may be impaired. This assessment is made based on an analysis of, amongst other factors, changes in the market or business environment, events that have transpired that have impacted the asset or CGU and information from internal reporting.

F-48 For determining the recoverable amount of an asset or CGU, if indicators of impairment exist, operating results and net cash flow forecasts are determined by estimating the expected future revenues and costs, including the future cash costs of production, capital expenditures, site closure and environmental rehabilitation. These include net cash flows expected to be realized from the extraction, processing and sale of mineral resources that do not currently qualify for inclusion in proven and probable Mineral Reserves when there is a high degree of confidence in the economic extraction of such non-reserve material. This expectation is usually based on preliminary drilling and sampling of areas of mineralization that are contiguous with existing Mineral Reserves and Mineral Resources. Judgment is also required in estimating the discount rate applied and future commodity prices used for impairment testing. The long-term commodity prices are derived from forward prices and analysts’ commodity price forecasts. These assessments often differ from current price levels and are updated periodically.

3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

Standards issued but not yet effective up to the date of issuance of the Corporation’s consolidated financial statements are listed below. This listing is of standards and interpretations issued, which the Corporation reasonably expects to be applicable at a future date. The Corporation intends to adopt those standards when they become effective. The Corporation does not expect the impact of such changes on the consolidated financial statements to be material.

IAS 12 Income Taxes (Amendment)

On January 19, 2016, the IASB issued Recognition of Deferred Tax Assets for Unrealized Losses (Amendments to IAS 12). The amendments apply retrospectively for annual periods beginning on or after January 1, 2017. Earlier application is permitted. The amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset. The amendments also clarify the methodology to determine the future taxable profits used for assessing the utilization of deductible temporary differences. The Corporation intends to adopt the amendments to IAS 12 in its consolidated financial statements for the annual period beginning on January 1, 2017. The Corporation does not expect the amendments to have a material impact on the consolidated financial statements.

IFRS 9 Financial Instruments: Classification and Measurement

IFRS 9 Financial instruments replaces the existing guidance in IAS 39 Financial instruments recognition and measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carried forward the guidance on recognition and de- recognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Corporation has not yet determined the impact of adopting IFRS 9 on the financial statements.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 Revenue from contracts with customers will replace IAS 18 Revenue, IAS 11 Construction contracts, and some revenue-related interpretations. The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. The Corporation intends to adopt IFRS 15 in its consolidated financial statements for the annual period beginning on January 1, 2018. The Corporation has not yet determined the impact of adopting IFRS 15 on the financial statements.

IFRS 16 Leases

On January 13, 2016, the IASB issued IFRS 16 Leases. The new standard is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial adoption of IFRS 16. IFRS 16 will replace IAS 17 Leases. This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. This standard substantially carries forward the lessor accounting requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have been impacted, including the definition of a lease. Transitional provisions have been provided. The Corporation intends to adopt IFRS 16 in its consolidated financial statements for the annual period beginning on January 1, 2019. The Corporation has not yet determined the impact of adopting IFRS 16 on the financial statements.

IFRIC 22 – Foreign Currency Transactions and Advance Consideration

In December 2016, the IASB issued IFRIC Interpretation 22, Foreign Currency Transactions and Advance Consideration. The Interpretation clarifies which date should be used for translation when a foreign currency transaction involves an advance payment or receipt. The Interpretation is applicable for annual periods beginning on or after January 1, 2018. Earlier application is permitted. The Corporation has not yet determined the impact of adopting IFRIC 22 on the financial statements.

4. CAPITAL MANAGEMENT

The Corporation’s objective when managing capital is to ensure the Corporation continues as a going concern by ensuring it has an appropriate amount of liquidity and that it has an appropriate capital structure. Management monitors the amount of cash, undrawn (or potentially available) financing, equity in the capital structure and adjusts the capital structure, as necessary, to support the operation, development and exploration of its projects.

F-49 In order to ensure there is adequate liquidity and an appropriate capital structure, the Corporation may issue new equity, repay debt, issue new debt, draw on credit facilities or sell assets. The Board of Directors has not established criteria for quantitative return on capital for management, but rather relies on the expertise of management to sustain future development of the business. The Corporation considers its capital to be shareholders’ equity, which amounted to $20,194,752 at December 31, 2016.

5. REVENUE

Period from incorporation on July 4, 2016 to December 31, 2016 Sale of gold ...... $24,701,310 Sale of silver ...... 48,285 $24,749,595

6. COST OF SALES

Period from incorporation on July 4, 2016 to December 31, 2016 Mining ...... $10,263,848 Processing ...... 5,008,512 Depreciation and amortization ...... 4,601,374 Site services ...... 839,703 Gold royalty ...... 614,265 Change in inventories ...... (1,600,401) $19,727,301

7. NET FINANCE (INCOME) COSTS

Period from incorporation on July 4, 2016 to December 31, 2016 Accretion of provisions ...... $234,925 Lease finance charges ...... 15,741 Interest income ...... (1,140) Foreign exchange loss ...... 270,177 $519,703

8. RESTRICTED CASH

The Corporation has provided cash collateralized bank guarantees to certain suppliers totaling $1,748,700. The bank guarantees are short term obligations and consist of: (i) $805,117 for the benefit of Goldfields Gas Transmission Pty Ltd. to secure approximately six months of costs for gas transportation services to supply gas to the Plutonic Gold Operations, (ii) $723,600 to Zenith Pacific (NSR) Pty Ltd (“Zenith”), to secure a portion of the Corporation’s operating and potential buyout obligations under a power contract with Zenith to supply power to the Plutonic Gold Operations, (iii) $36,180 to APT Goldfields Pty Ltd, to secure approximately three months of fees under a pipeline operating agreement with APT, and (iv) $41,254 for an office lease in Perth and general credit. In addition, the Corporation provided security deposits in the aggregate amount of $142,549 to two suppliers to secure services related to supply and delivery of gas for the Plutonic Gold Operations.

9. RECEIVABLES AND OTHER ASSETS

December 31, 2016 Trade receivables ...... $ 396,550 Prepayments ...... 971,476 Sales tax receivable ...... 1,087,361 Trade and other receivables ...... $2,455,387

F-50 10. INVENTORIES

December 31, 2016 Consumable stores ...... $ 6,210,223 Stockpiles ...... 149,519 Gold in circuit ...... 2,385,874 Dore on hand ...... 1,270,129 $10,015,745

Write-downs of inventories to net realizable value amounted to $743,407.

11. MINING INTERESTS AND PROPERTY, PLANT AND EQUIPMENT

Total Cost: July 4, 2016 ...... — Acquisition of Plutonic Gold Operations ...... $60,981,605 Additions ...... 1,347,158 Foreign exchange movement ...... (2,792,801) December 31, 2016 ...... 59,535,962 Accumulated depreciation: July 4, 2016 ...... — Depreciation charge ...... 4,601,374 Foreign exchange movement ...... (206,155) December 31, 2016 ...... 4,395,219 Carrying amount, beginning of period ...... — Carrying amount, end of period ...... $55,140,743

Items comprising mineral interests and property, plant and equipment include mine development properties, exploration and evaluation assets, land and buildings, plant and equipment, motor vehicles, office equipment and capital work in progress. The Corporation will allocate the acquisition cost to these categories upon completion of the purchase price allocation of the Plutonic Gold Operations acquisition.

Mine development properties and exploration and evaluation include the Plutonic Gold Mine, the Hermes development project located south- west of the Plutonic Gold Mine and the Bryah Basin joint venture.

The Bryah Basin joint venture is located south-west of the Plutonic Gold Mine mill and the Corporation has an option to earn up to an 80% interest in the joint venture by spending AUD$1.2 million ($888,000) over three years beginning April 2015. The earn-in expenditure must be incurred at a rate of not less than AUD$400,000 ($296,000) per year and the failure to meet the minimum annual expenditure, or the total earn-in expenditure within the earn-in period, results in termination of the joint venture agreement and all rights are divested by the Corporation.

i) Leased assets

Plant and equipment includes the following amounts where the Corporation is a lessee under a finance lease:

December 31, 2016 Cost ...... $1,965,915 Accumulated depreciation ...... (173,180) Net book amount $1,792,735

12. TRADE AND OTHER PAYABLES

December 31, 2016 Current Trade payables ...... $1,862,979 Accruals ...... 7,065,784 $8,928,763

13. SHORT-TERM LOAN

The short-term loan of $566,470 represents amounts owing to a financial institution which financed the Corporation’s annual insurance premium. The term of loan is 10 months commencing in September 2016 and terminating in June 2017 and bears interest at 2.75%.

F-51 14. FINANCE LEASE OBLIGATION December 31, 2016 Commitments in relation to finance leases are payable as follows: Within one year ...... $1,559,356 Later than one year but not later than five years ...... 26,624 Minimum lease payments ...... 1,585,980 Future finance charges ...... (24,431) Lease liabilities ...... $1,561,549 Representing lease liabilities: ...... Current ...... $1,535,006 Non-current ...... 26,543 $1,561,549

Lease liabilities are secured by the underlying assets which are subject to the finance lease. The Corporation has entered into various loan agreements for the purchase of mobile equipment. The interest rates are fixed and payable over a period of up to 36 months from the inception of the lease (refer to note 17 (b) – Liquidity Risk, for the summary of future payments).

15. PROVISIONS December 31, 2016 Employee entitlements ...... $ 4,569,914 Rehabilitation ...... 18,172,527 Total provisions ...... $22,742,441 Current ...... $ 4,145,653 Non-current ...... 18,596,788 $22,742,441

Employee Total Entitlements Rehabilitation provisions Beginning balance on July 4, 2016 ...... $ — $ — $ — Acquisition of Plutonic Gold Operations ...... 4,510,588 18,793,991 23,304,579 Accretion ...... — 234,924 234,924 Revisions to expected cash flows ...... 681,920 — 681,920 Utilized ...... (409,855) — (409,855) Foreign exchange movement ...... (212,739) (856,388) (1,069,127) Balance, December 31, 2016 ...... 4,569,914 18,172,527 22,742,441 Current ...... 4,145,653 — 4,145,653 Non-current ...... 424,261 18,172,527 18,596,788 Balance, December 31, 2016 ...... $4,569,914 $18,172,527 $22,742,441

(i) Employee entitlements Employee entitlement obligations cover Plutonic’s liability for long service leave and annual leave. The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service leave where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount of the annual leave provision is presented as current, since Plutonic does not have an unconditional right to defer settlement for any of these obligations. The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows to be made by Plutonic for those employees with greater than 5 years’ service up to the reporting date. Long-term benefits not expected to be settled within 12 months are discounted using the equivalent rates of high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. In determining the liability for these long-term employee benefits, consideration has been given to expected future increases in wage and salary rates, Plutonic’s experience with staff departures and periods of service. Current employee entitlements also include provisions for bonus and Fringe Benefits tax.

(ii) Rehabilitation provision The Corporation assesses its mine rehabilitation provision annually. Significant judgment is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences

F-52 will impact the mine rehabilitation provision in the period in which the change becomes known. As at December 31, 2016, the mine rehabilitation provision has been discounted using a discount rate of 5.0% and the cash flows have been inflated using an inflation rate of 2.4%, payable over the years 2019 to 2028. As at December 31, 2016, the total undiscounted estimated reclamation costs are approximately $20,920,000.

16. COMMITMENTS (i) Capital commitments Capital expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows:

December 31, 2016 Property, plant and equipment ...... $27,731

(ii) Non-cancellable operating leases Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Corporation are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease. The Corporation has entered into an operating lease for the operation and maintenance of a power station for the Plutonic mine site. The lease term is 7 years and commenced in July 2014. Commitments for minimum lease payments in relation to this non-cancellable operating lease (excluding variable per kilowatt hour charges) are as follows: December 31, 2016 Within one year ...... $1,424,768 Later than one but not later than five years ...... 4,987,051 $6,411,819

17. FINANCIAL INSTRUMENTS a) Fair value The carrying value of cash and cash equivalents, restricted cash, receivables, accounts payable and accrued liabilities, short-term loan and contingent payable to Northern Star Resources approximate fair value, due to the short-term maturity of these instruments and are classified as Level 1 in accordance with the fair value hierarchy. The carrying value of finance lease obligations approximate fair value due to its short-term maturity and are classified as Level 2 in accordance with the fair value hierarchy. The fair value of financial instruments at December 31, 2016 is summarized as follows:

Carrying amount Fair value Financial Assets Held-for-trading Cash and cash equivalents ...... $ 6,096,225 $ 6,096,225 Restricted cash ...... 1,748,700 1,748,700 Loans and receivables Receivables (excluding HST and GST receivable) ...... 1,368,026 1,368,026 Financial Liabilities Accounts payable and accrued liabilities ...... $ 8,928,763 $ 8,928,763 Short-term loan ...... 566,470 566,470 Finance lease obligations ...... 1,561,549 1,561,549 Contingent payable to Northern Star ...... 18,090,000 18,090,000 Warrant liability (note 18(c)) ...... $ 151,151 $ 151,151

IFRS establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices that are observable for the asset or liability either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3: Inputs that are not based on observable market data.

F-53 b) Financial risk management Credit risk

The Corporation is exposed to credit risk with respect to its cash and cash equivalents and trade and other receivables. Credit risk arises from the non-performance of counterparties of contractual financial obligations. Management believes the risk of loss related to these deposits to be low. The Corporation continually evaluates changes in the status of counterparties. Concentration of credit risk exists with respect to the Corporation’s cash and cash equivalents as the majority of the amounts are held at a single Canadian and Australian financial institution, respectively. In addition, permitted instruments by which the Corporation hedges gold price risk are entered into with financial counterparties with a minimum credit rating of A (or equivalent). No such hedges have been entered into for the period since acquisition to December 31, 2016. All unhedged gold and silver is sold to a single counterparty with settlement terms of no more than 2 days. The Corporation does not have any other significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics. The Corporation’s concentration of credit risk and maximum exposure thereto is as follows: December 31, 2016 Held at a major Canadian financial institution: Cash ...... $ 458,179 Held at a major Australian financial institution: Cash ...... 5,638,046 Restricted cash ...... 1,748,700 Trade and other receivables ...... 1,368,026 $9,212,951

Interest rate risk

The Corporation has cash balances and no variable rate interest-bearing debt. Interest income is not material to the Corporation. The Corporation is not exposed to significant interest rate risk. Borrowings relate to the purchases of plant and equipment under finance lease arrangements which have fixed interest rates over their term and therefore not subject to interest rate risk. The effective interest rates of financial assets and financial liabilities with interest obligations at the reporting date are as follows: Fixed rate Weighted average instruments interest rate December 31, December 31, 2016 2016 Financial liabilities: Short-term loan and Finance lease obligations ...... $2,128,019 4.52%

Foreign currency risk

The Corporation is exposed to currency risk to the extent that monetary assets and liabilities held by the Corporation are not denominated in United States dollars. The Corporation has not entered into any foreign currency contracts to mitigate this risk. Certain of the Corporation’s cash and cash equivalents, and accounts payable and accrued liabilities are held in Canadian (“CAD”) and Australian Dollars (“AUD”); therefore, CAD and AUD amounts are subject to fluctuation against the United States Dollar (USD). The Corporation had the following balances in foreign currency as at December 31, 2016: in CAD in AUD Cash ...... $ 615,197 $ 7,791,662 Restricted cash ...... — 2,416,666 Trade and other receivables ...... 68,133 3,323,167 Accounts payable and accrued liabilities ...... (1,720,929) (10,568,091) Long-term debt ...... — (2,940,877) Contingent payable to Northern Star Resources ...... — (25,000,000) (1,037,599) (24,977,473) Equivalent to USD ...... $ (772,804) $(18,073,699) Rate to convert to U.S. $1.00 ...... $ 0.7448 $ 0.7236

Based on the above net exposure as at December 31, 2016, and assuming that all other variables remain constant, a 10% appreciation or depreciation of the CAD and AUD against the USD would result in a decrease or increase of approximately $77,280 in the Corporation’s net loss and $1,807,370 in Other Comprehensive Income. The Corporation also has transactional currency exposures. Such exposures arise from purchases in currencies other than the respective functional currencies. The Corporation manages this risk by matching receipts and payments in the same currency and monitoring.

F-54 Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, other than those arising from interest rate risk or currency risk. The Corporation is exposed to the risk of fluctuations in the prevailing market prices for the gold and silver produced from its operations.

Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they fall due. The Corporation anticipates that sufficient capital and liquidity will be available to meet liabilities when due upon completion of the Offering which will permit the settlement of the contingent payable to Northern Star Resources in cash and equity instruments (refer to note 1 for going concern discussion). The Corporation maintained sufficient cash and cash equivalents at December 31, 2016 in the amount of $6,096,225 in order to meet short-term business requirements. The table below analyses financial liabilities at balance date into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Between Between Within 6 6-12 1 and 2 2 and 5 Total months months years years At December 31, 2016 Trade and other payables ...... $ 8,928,763 $ 8,928,763 $ — $ — — Finance lease liabilities ...... 1,585,980 1,200,225 359,131 26,624 — $10,514,743 $10,128,988 $359,131 $26,624 —

18. SHARE CAPITAL a) Authorized share capital

Unlimited number of common shares without par value.

b) Issued during the period

On July 4, 2016, the Corporation issued 5,000,100 common shares for gross proceeds of $38,911. The Corporation issued 6,492,499 common shares for aggregate gross proceeds of $1,431,859, in four different tranches dated July 14, July 25, August 24 and September 26. On September 29, 2016, the Corporation issued 32,600,000 Subscription Receipts for gross proceeds of $12,396,380. Each Subscription Receipt is convertible to one Special Warrant for no additional consideration upon satisfaction of certain escrow release conditions, including the completion of all conditions precedent to the completion of the acquisition of the operations of the Plutonic Gold Operations, other than the payment of the purchase price in connection with the Acquisition. Each Special Warrant entitles the holder thereof, upon deemed exercise (for no additional consideration), to acquire one Qualifying Share, subject to adjustment in certain circumstances in accordance with the Special Warrant Indenture, on the earlier of (i) the third business day after the date that a final receipt has been issued with respect to a final prospectus qualifying the distribution of the Qualifying Shares in at least each of the provinces of Canada, except Quebec, provided that in the event that the Corporation is completing an Offering by way of such prospectus, such time and date will instead be the time and date of completion of such Offering; and (ii) February 28, 2017.

c) Warrants

In connection with the Subscription Receipts transaction, the Corporation incurred $628,762 of commissions and fees that have been recorded as share issue costs. As part of the consideration of the services rendered by the Agent in connection with the Private Placement, the Corporation issued to the Agent 1,230,000 Broker Warrants. The 1,230,000 Broker Warrants are exercisable at CAD$0.50 per Broker Warrant up to the earlier of (a) September 29, 2021 and (b) two years following the completion of an initial public offering (or alternative “go-public” event of the Corporation). The Corporation has accounted for the warrants as a financial liability as the strike price of the warrants is in a different currency than Superior Gold Inc.’s functional currency. The Corporation recorded the Broker Warrant liability on September 29, 2016, using the Black- Scholes option pricing model with the following assumption: risk free interest rate of 0.51%, expected annual volatility of 60% based on an expected peer group of companies over the expected life of the warrants, expected life of 2.33 years and expected dividend yield of 0%, which totaled $167,442. For accounting purposes, the Corporation determined the fair value of the Broker Warrants issued on December 31, 2016, using the Black- Scholes option pricing model with the following assumption: risk free interest rate of 0.58%, expected annual volatility of 58% based on an expected peer group of companies over the expected life of the warrants, expected life of 2.11 years and expected dividend yield of 0%, which totaled $151,151 and recorded as a warrant liability within non-current liabilities with the reduction in fair value of $16,292 from the date of issuance, being credited to the consolidated statement of comprehensive income as gain on change in valuation of warrant liability.

F-55 A summary of the status of warrants as of December 31, 2016 and changes for the period from incorporation on July 4, 2016 to December 31, 2016 are as follows: Weighted average exercise Number price outstanding (CAD$) Balance at incorporation, July 4, 2016 ...... — $ — Issued (Note 18b)) ...... 1,230,000 0.50 Balance, December 31, 2016 ...... 1,230,000 $0.50

d) Earnings per share

The calculation of basic earnings per share for the period ended December 31, 2016 was based on the earnings attributable to common shareholders of $8,901,712 and the weighted average number of common shares outstanding of 25,302,368, which included the weighted average of 14,488,889 Special Warrants (refer to note 18(b)). The outstanding broker warrants are not dilutive to earnings per share for the period ended December 31, 2016.

19. RELATED PARTY TRANSACTIONS % of ordinary Country of Principal shares held & Name incorporation activities voting rights Principal subsidiary Billabong Gold Pty Ltd...... Australia Holding company 100% The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

Period from incorporation on July 4, 2016 to December 31, 2016 Management service fees to key employees ...... $ 273,371 $273,371

The Corporation paid $7,517 (period from incorporation on July 4, 2016 to December 31, 2016) to a company owned by a Director of a subsidiary of the Corporation for reimbursement of expenses incurred on behalf of the Corporation. The Corporation paid $82,002 (period from incorporation on July 4, 2016 to December 31, 2016) to a company owned by the Chief Executive Officer of the Corporation for reimbursement of expenses incurred on behalf of the Corporation. The Corporation paid $21,448 (period from incorporation on July 4, 2016 to December 31, 2016) to the Chief Financial Officer of the Corporation for reimbursement of expenses incurred on behalf of the Corporation. The balance included accounts payable and accrued liabilities as at December 31, 2016 was $55,400 to these related parties.

20. TAXES December 31 , 2016 Current tax expense ...... $233,466 Deferred tax expense ...... 47,191 $280,657

The tax expense for the Corporation can be reconciled to the earnings for the period per the Consolidated Statement of Comprehensive Profit / (Loss) as follows:

Net Income before Taxes ...... $9,182,369 Statutory tax rate ...... 26.5% Income tax expense based on combined Canadian federal and provincial statutory rates ...... 2,433,328 Impact of foreign tax rates ...... 342,212 Impact of non-taxable gain on purchase of Plutonic Gold Operations ...... (2,780,387) Change in unrecognized temporary differences ...... 228,153 Impact of foreign exchange ...... 57,351 Income tax expense ...... $ 280,657

F-56 The following deferred tax assets and liabilities have been recognized and offset where they relate to income taxes levied by the same taxation authority and the Corporation has the legal right and intent to offset. The significant components of the Corporation’s deferred tax assets and liabilities are as follows:

December 31, 2016 Deferred tax asset Property, plant and equipment ...... $ 252,703 Provisions ...... 2,407,436 2,660,139 Deferred tax liability Inventories ...... 1,222,401 Mineral interests ...... 4,425,946 5,648,347 Net deferred tax liability ...... $2,988,208

A reconciliation of the movement in the deferred tax liability is a follows:

December 31, 2016 Deferred tax liability, start of period ...... — Acquisition of Plutonic Gold Operations ...... $3,097,639 Expense recognized in net income ...... 47,191 Foreign currency translation ...... (156,622) Deferred tax liability, end of period ...... $2,988,208

At December 31, 2016, the Corporation has unrecognized non-capital losses for Canadian income tax purposes of approximately $508,000 that may be used to offset future taxable income and expire in the 2036 taxation year. Additionally, the corporation has unrecognized deductible temporary differences for Canadian income tax purposes of $1,644,000 and an unrecognized deductible temporary difference for Australian tax purposes of $18,173,000.

21. PLUTONIC GOLD OPERATIONS ACQUISITION

On October 12, 2016 (the “Acquisition Date”), the Corporation completed the acquisition of the Plutonic Gold Operations. The Corporation (as the buyer) entered into an Acquisition Agreement on August 12, 2016 with Northern Star (as the vendor) and Northern Star Mining Services Pty Ltd. relating to the acquisition (the “Acquisition”) of the Plutonic Gold Operations, secured via a refundable deposit of $762,369 (AUD$1 million). The acquisition consideration as outlined in the August 12, 2016 Acquisition Agreement consisted of an initial payment of AUD$12.5 million and the following additional consideration: • if the Corporation completes an Offering on the Toronto Stock Exchange or the TSX Venture Exchange, or other exchange acceptable to Northern Star within six months from the Acquisition Date, the Corporation will issue to Northern Star that number of common shares equal to the greater value of AUD$25 million or 33% of the Corporation’s common shares outstanding following the completion of the Offering (“Consideration Shares”). In addition, Northern Star is eligible to nominate one director to the Corporation’s board of directors in the event the Share Payment is made; • if the Corporation does not complete a going public transaction within six months from completion, the Corporation is required to pay Northern Star AUD$25 million in cash; • a 2% net smelter return royalty on future gold recovered from the Plutonic Gold Operations in excess of 300,000 ounces produced from October 1, 2016. The royalty terminates upon the earlier of (i) the date that AUD$10 million is paid to Northern Star under the royalty, or (ii) gold in excess of 600,000 ounces being produced. Alternatively, the Corporation may buy the royalty for a purchase price of AUD$6.5 million at any time before the expiry of 30 days after the date the royalty first becomes payable; and • milestone payments (“Milestone Payments”) of AUD$2.5 million for every 250,000 ounces of NI 43-101 compliant measured and indicated resources identified at the Plutonic Gold Operations in excess of the 1,717,000 ounces of JORC compliant measured, indicated and inferred resources. The Milestone Payments are capped at AUD$10 million. On February 9, 2017, the Corporation and Northern Star entered into an amendment to the Acquisition Agreement (the “Amendment”). The Amendment provides that in the event gross proceeds from the Offering are greater than C$14.5 million, the Corporation may elect, at its sole option, and in lieu of issuing to Northern Star the Consideration Shares that would otherwise be issuable pursuant to the Acquisition Agreement, to issue and pay to Northern Star the following: • such number of shares (the “Consideration Shares”) equal to no less than 20% of the total number of common shares outstanding immediately following closing of the Offering, on a non-diluted basis (which total number, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over-Allotment Option after the Closing Date); and

F-57 • an amount in cash (the “Consideration Payment”) equal to the market value of the difference in the number of the Consideration Shares that Northern Star will actually receive on closing of the Offering and the number of Consideration Shares that Northern Star would have received if not for the Amendment. Under the Acquisition Agreement and the Amendment, the Corporation also agreed to issue to Northern Star on or about the closing of the Offering common share purchase warrants (the “Consideration Warrants”) to acquire additional common shares. The number of Consideration Warrants to be issued is equal to one-half of the number of the Consideration Shares that Northern Star would be eligible to receive if the Consideration Payment were to be $nil. Each Consideration Warrant will entitle Northern Star to purchase one common share at an exercise price in U.S. dollars equal to a 100% premium to the Offering price, determined using the Bank of Canada exchange noon spot rate for U.S. and Canadian dollars on the day immediately prior to the Offering. The Consideration Warrants expire five years after the Offering date. As part of the Acquisition, Northern Star provided the Corporation with a working capital loan facility in the amount of AUD$10 million. The facility is available to the Corporation until (a) the first day of public trading of the Corporation’s common shares, or (b) six months following the Acquisition Date. In consideration of the working capital loan facility and in order to secure the amount payable under the Share Payment or Cash Payment the Corporation granted Northern Star a security interest over all of the Plutonic Gold Operations as well as a security interest in the shares of Billabong Gold Pty Ltd. The Acquisition also includes the Hermes open pit development project (“Hermes”). Hermes is an open pit development project located south- west of the Plutonic Gold Mine. The acquisition of the Plutonic Gold Mine also included an interest in the Bryah Basin exploration joint venture (the “Bryah Basin”). The Bryah Basin joint venture is located south west of the Plutonic Gold Operations processing plant. In accordance with IFRS 3 Business Combinations, the Corporation has allocated the preliminary purchase price of $32,323,605 to the acquired assets and liabilities of the Plutonic Gold Operations. This price is the sum of cash paid upon deposit, an obligation to reimburse for working capital acquired and pre acquisition expenses of Northern Star. The Corporation has accounted for the fair value of the contingent consideration as follows: • $18,942,500 representing the AUD$25 million payable on the Acquisition Date. The Corporation has considered this to represent an estimate of the fair value of the contingent consideration in connection with the acquisition. The Corporation considered the assessment of completion of an IPO and the associated potential market values which could be considered reasonable for the Corporation upon any potential IPO. On acquisition of the Plutonic Gold Operations, the Corporation considered the likelihood of completion of an IPO to be potentially in the range of 25% to 50%. The Company also considered the minimum amount which would be payable to Northern Star of AUD$25 million ($18,942,500) which would represent a market value of the Corporation of approximately $58 million. As the preliminary total fair value of the net assets acquired amount to approximately $42 million, the Corporation considered that an IPO with a valuation greater than $58 million to be unlikely and has assigned a low probability in the determination of fair value when assessing the total fair value of this component of the contingent consideration. As a result, the Corporation has determined the incremental amount to the fair value of the contingent consideration related to the share and warrant consideration to only have a nominal value. The settlement of this component of the purchase consideration will be recorded at fair value on the date of settlement, with any changes to the consideration being accounted for in the consolidated statement of comprehensive income; • fair value of the Northern Star Royalty was determined to have nil value as it was estimated that the ounces to be recovered, and used in the determination of the fair value of the mining interests, will not be in excess of 300,000 ounces produced from October 1, 2016; and • The fair value of the Milestone Payments was determined to have nil value given the uncertainty as to the timing and the ability of Superior to identify and estimate additional NI 43-101 compliant measured and indicated resources in excess of the 1,717,000 ounces of JORC compliant measured, indicated and inferred resources.

Cash ...... $ 9,471,250 Contingent payable to Northern Star ...... 18,942,500 Obligation to reimburse for working capital on acquisition and pre-acquisition expenses ...... 3,909,855 Aggregate purchase price ...... $32,323,605

The preliminary aggregate purchase price has been allocated to the following identifiable assets acquired and liabilities assumed as assumed in the Acquisition Agreement based on their estimated fair values as of December 31, 2016:

Amounts receivable ...... $ 48,985 Inventory ...... 9,058,705 Mining interests and property, plant and equipment(1) ...... 60,981,605 Trade and other payables ...... (34,851) Current borrowings ...... (1,949,992) Current provisions ...... (3,847,964) Non-current borrowings ...... (110,671) Non-current provisions(1) ...... (19,456,615) Deferred tax liability ...... (3,097,639) Total net identifiable assets acquired ...... 41,591,563 Bargain purchase gain ...... (9,267,958) Total consideration paid ...... $ 32,323,605

(1) Mining interests and non-current provisions include the mine rehabilitation provision of $18,794,060 assumed as part of the Acquisition.

F-58 The Corporation’s has preliminarily determined the fair value of the mining interests and property plant and equipment through a valuation of the value of the property’s reserves, resources and exploration potential. The significant assumptions used in determining the fair value of mining interests were: i) a gold price of US$1,250 per ounce for 2017 and US$1,300 per ounce for 2018 and beyond; ii) an after tax discount rate of 6.5%; and iii) expected operating costs consistent with the operating costs outlined in the NI 43-101 report on the mining property. The fair value of the exploration potential was estimated based on historical and planned expenditures as well as a market value approach for mineral resources through a comparative analysis of appropriate market comparable values. The fair value of property plant and equipment was estimated based on a review of the depreciated value of the assets acquired. These fair value amounts are subject to significant estimation and judgement. Finalization of these amounts are subject to the completion of the analysis of associated expected cash flows and an independent valuation estimate of the property plant and equipment. The fair value of the net assets to be acquired will ultimately be determined based on information which was either known or knowable as of the date of the closing of the Acquisition. The significant component which remain subject to adjustment are mining interests and property, plant and equipment, decommissioning obligations, income taxes and any corresponding bargain purchase gain or goodwill. The finalization of these amounts are subject to the completion of analysis of the associated expected cash flows. The finalization of the purchase price allocation may result in differences between the final determination of fair values and those outlined in the preliminary allocation of the purchase price and those differences may be material.

F-59 SUPERIOR GOLD INC.

Pro Forma Consolidated Financial Statements

(Expressed in thousands of United States dollars) (Unaudited)

F-60 SUPERIOR GOLD INC. Unaudited Pro Forma Consolidated Statement of Financial Position (Expressed in thousands of United States Dollars) December 31, 2016

Superior Gold Pro Forma Adjustments Inc. December 31, Payment to Pro Forma 2016 IPO Northern Star Notes Consolidated Assets Currents assets Cash and cash equivalents ...... 6,096 21,185 — 4a) 16,211 (1,271) — 4a) (2,352) (7,447) 4a), Restricted cash ...... 1,749 2,352 — 4h) 4,101 Trade and other receivables ...... 2,455 — — 2,455 Inventories ...... 10,016 — — 10,016 Total current assets ...... 20,316 19,914 (7,447) 32,783 Non-current assets Mining interests and property, plant and equipment ...... 55,141 — — 55,141 Total assets ...... 75,457 19,914 (7,447) 87,924

Liabilities Current liabilities Accounts payable and accrued liabilities ...... 8,929 — — 8,929 Income taxes payable ...... 233 — — 233 Short-term loan ...... 566 — — 566 Contingent payable to Northern Star Resources ...... 18,090 — (18,090) 4d) — Current portion of finance lease obligation ..... 1,535 — — 1,535 Current portion of provisions ...... 4,146 — — 4,146 Total current liabilities ...... 33,499 — (18,090) 15,409 Non-current liabilities Finance lease obligation ...... 27 — — 27 Provisions ...... 18,597 — — 18,597 Warranty liability ...... 151 205 — 4b) 356 Deferred tax liability ...... 2,988 — 2,988 Total non-current liabilities ...... 21,763 205 — 21,968 Total liabilities ...... 55,262 205 (18,090) 37,377 Shareholders’ equity Share capital ...... 1,471 10,552 14,044 4c),4e) 45,776 21,185 4c) (205) 4c) (1,271) 4c) Subscription receipts ...... 10,552 (10,552) — 4c) — Warrants ...... — — 1,741 4f) 1,741 Accumulated other comprehensive (loss) ...... (730) — — (730) Retained earnings ...... 8,902 — (5,142) 4g) 3,760 Total equity ...... 20,195 19,709 10,643 50,547 Total liabilities and equity ...... 75,457 19,914 (7,447) 87,924

The accompanying notes are an integral part of these pro forma financial statements.

F-61 SUPERIOR GOLD INC. Unaudited Pro Forma Consolidated Statement of Operations (Expressed in thousands of United States Dollars) Six months ended December 31, 2016

Plutonic Gold Pro Forma Pro Forma Superior Gold Inc. Operations Adjustments Notes Consolidated Revenue Metals sales ...... 24,750 24,360 — 49,110 Expenses Cost of sales ...... 19,727 23,133 (656) 4i) 42,204 Corporate costs ...... 740 181 — 921 4,283 1,046 656 5,985 Other expenses Net finance costs ...... 520 131 — 651 Business acquisition costs ...... 3,864 — — 3,864 Gain on change in valuation of warrant liability ...... (16) — — (16) Bargain purchase gain on acquisition of Plutonic Gold Operations ...... (9,268) — — (9,268) Net income before taxes ...... 9,183 915 656 10,754 Income and mining tax expense ...... (281) 457 (197) 4i) (21) Net income ...... 8,902 1,372 459 10,733 Weighted average number of common shares outstanding ...... 25,302,368 72,611,409 Diluted weighted average number of common shares outstanding ...... 25,302,368 72,611,409 Basic earnings per share ...... $ 0.35 $ 0.15 Diluted earnings per share ...... $ 0.35 $ 0.15

The accompanying notes are an integral part of these pro forma financial statements.

F-62 SUPERIOR GOLD INC. (formerly 2525908 Ontario Inc.) Notes to the Unaudited Pro Forma Consolidated Financial Statements (Expressed in thousands of United States Dollars unless otherwise stated)

1. DESCRIPTION OF THE TRANSACTION

These unaudited pro forma consolidated financial statements have been prepared for the purpose of inclusion in the prospectus being filed by Superior Gold Inc. (“Superior Gold” or the “Corporation”) in connection with the acquisition of the Plutonic Gold Operations (“Plutonic”) which was completed on October 12, 2016 On October 12, 2016 (the “Acquisition Date”), the Corporation completed the acquisition of the Plutonic Gold Operations. The Corporation (as the buyer) entered into an Acquisition Agreement on August 12, 2016 with Northern Star (as the vendor) and Northern Star Mining Services Pty Ltd. relating to the acquisition (the “Acquisition”) of the Plutonic Gold Operations, secured via a refundable deposit of $762,369 (AUD$1 million). The acquisition consideration as outlined in the August 12, 2016 Acquisition Agreement consisted of an initial payment of AUD$12.5 million and the following additional consideration: • if the Corporation completes an Offering on the Toronto Stock Exchange or the TSX Venture Exchange, or other exchange acceptable to Northern Star within six months from the Acquisition Date, the Corporation will issue to Northern Star that number of common shares equal to the greater value of AUD$25 million or 33% of the Corporation’s common shares outstanding following the completion of the Offering (“Consideration Shares”). In addition, Northern Star is eligible to nominate one director to the Corporation’s board of directors in the event the Share Payment is made; • if the Corporation does not complete a going public transaction within six months from completion, the Corporation is required to pay Northern Star AUD$25 million in cash; • a 2% net smelter return royalty on future gold recovered from the Plutonic Gold Operations in excess of 300,000 ounces produced from October 1, 2016. The royalty terminates upon the earlier of (i) the date that AUD$10 million is paid to Northern Star under the royalty, or (ii) gold in excess of 600,000 ounces being produced. Alternatively, the Corporation may buy the royalty for a purchase price of AUD$6.5 million at any time before the expiry of 30 days after the date the royalty first becomes payable; and • milestone payments (“Milestone Payments”) of AUD$2.5 million for every 250,000 ounces of NI 43-101 compliant measured and indicated resources identified at the Plutonic Gold Operations in excess of the 1,717,000 ounces of JORC compliant measured, indicated and inferred resources. The Milestone Payments are capped at AUD$10 million. On February 9, 2017, the Corporation and Northern Star entered into an amendment to the Acquisition Agreement (the “Amendment”). The Amendment provides that in the event gross proceeds from the Offering are greater than C$14.5 million, the Corporation may elect, at its sole option, and in lieu of issuing to Northern Star the Consideration Shares that would otherwise be issuable pursuant to the Acquisition Agreement, to issue and pay to Northern Star the following: • such number of shares (the “Consideration Shares”) equal to no less than 20% of the total number of common shares outstanding immediately following closing of the Offering, on a non-diluted basis (which total number, for greater certainty, shall exclude any Treasury Shares issued pursuant to the exercise of the Over-Allotment Option after the Closing Date); and • an amount in cash (the “Consideration Payment”) equal to the market value of the difference in the number of the Consideration Shares that Northern Star will actually receive on closing of the Offering and the number of Consideration Shares that Northern Star would have received if not for the Amendment. Under the Acquisition Agreement and the Amendment, the Corporation also agreed to issue to Northern Star on or about the closing of the Offering common share purchase warrants (the “Consideration Warrants”) to acquire additional common shares. The number of Consideration Warrants to be issued is equal to one-half of the number of the Consideration Shares that Northern Star would be eligible to receive if the Consideration Payment were to be $nil. Each Consideration Warrant will entitle Northern Star to purchase one common share at an exercise price in U.S. dollars equal to a 100% premium to the Offering price, determined using the Bank of Canada exchange noon spot rate for U.S. and Canadian dollars on the day immediately prior to the Offering. The Consideration Warrants expire five years after the Offering date.

2. BASIS OF PREPARATION

The unaudited pro forma consolidated statement of operations for the 6 months ended December 31, 2016 give effect to the Acquisition as if it had occurred on July 4, 2016. The unaudited pro forma consolidated statement of financial position as at December 31, 2016 gives effect to the IPO and the settlement of the acquisition consideration for Northern Star as if they had occurred on December 31, 2016. The pro forma consolidated financial statements have been prepared by management of Superior Gold to give effect to the IPO and the transaction described in note 1 and have been compiled from and include: a) An unaudited pro forma consolidated statement of financial position as at December 31, 2016 based on the audited consolidated statement of financial position of Superior Gold as at December 31, 2016. b) The unaudited pro forma consolidated statement of operations for the six months ended December 31, 2016 based on the audited consolidated statement of comprehensive income of Superior Gold for the period from incorporation on July 4, 2016 to December 31, 2016

F-63 (which includes operation of the Plutonic Gold Operations for the period from October 12, 2016 to December 31, 2016) combined with the unaudited statement of operations and comprehensive income for the three months ended September 30, 2016 of Plutonic, to provide a 6 month operating period for the Plutonic Gold Operations. The unaudited statement of operations and comprehensive income of Plutonic as at September 30, 2016 has been translated from Australian dollars to U.S. dollars using the average Reserve Bank of Australia Australian to U.S. dollar foreign exchange rate for the three months ended September 30, 2016 of AUD$1.3185 to US$1.00. The unaudited pro forma consolidated financial statements should be read in conjunction with the description of the Acquisition and with the historical financial statements and notes of Superior Gold and Plutonic included within this prospectus. Certain reclassifications have been made to the historical financial statements of Plutonic in the preparation of the unaudited pro forma consolidated financial statements to conform to the financial statement presentation adopted by Superior Gold. The historical consolidated financial statements have been adjusted to give effect to pro forma events that are (1) directly attributable to the Acquisition, (2) factually supportable, and (3) with respect to the income statement, expected to have a continuing impact on the consolidated results. The Acquisition is considered to be a business combination under IFRS 3 – Business combinations (“IFRS 3”). The acquisition method of accounting was used to prepare these unaudited pro forma consolidated financial statements. This method utilizes fair value estimates and assumptions as at the acquisition date for the purchase price allocation. These estimates may be materially different than the realized values reported subsequent to the Acquisition taking place. The unaudited pro forma consolidated financial statements have been presented for informational purposes only. In the opinion of Superior Gold’s management, all adjustments considered necessary for a fair presentation have been included. The pro forma information is not necessarily indicative of what the Corporation’s financial position or financial performance actually would have been had the Acquisition been completed as of the dates indicated and does not purport to project the future financial position or operating results of the Corporation. Similarly, these unaudited pro forma condensed consolidated financial statements do not reflect any additional savings or costs that may result from the Acquisition and no amounts have been included in the purchase price allocation for the estimated costs to be incurred to achieve savings or other benefits of the Acquisition.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These unaudited pro forma consolidated financial statements have been compiled using the significant accounting policies as set out in the audited financial statements of the Corporation as at and for the period ended December 31, 2016, prepared in accordance with IFRS. To the extent that the Corporation has not applied or adopted an accounting policy in relation to certain balances or transactions, the Corporation has adopted the accounting policy utilized by Plutonic in the preparation of these pro-forma financial statements in accordance with IFRS.

4. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

The following assumptions and adjustments to the unaudited pro forma consolidated statement of financial position are used to give the effect that the IPO and Payment to Northern Star had occurred on December 31, 2016: a) Adjust for the net cash flows related to the IPO as follows:

Gross proceeds ...... $21,185 Payment of Agent’s commission under the IPO ...... (1,271) Payment to collateralize a bank guarantee previously guaranteed by Northern Star ...... (2,352) Increase in restricted cash to collateralize a bank guarantee previously guaranteed by Northern Star ...... 2,352 Net increase in Superior Gold’s cash and cash equivalents and restricted cash ...... $19,914

b) An increase to the non-current Finance liability of $205 to reflect the fair value of Broker Offering Warrants issued in connection with the IPO. c) Adjust Share capital related to the IPO as follows:

Reclassification of the Subscription receipts to Share capital upon completion of the IPO ...... 10,552 Gross value of the common shares issued under the IPO ...... 21,185 Estimated fair value of the Broker Offering Warrants issued under the IPO ...... (205) Payment of Agent’s commission under the IPO ...... (1,271) Net increase in Superior Gold’s share capital ...... $30,261

d) Reflects the elimination of the Contingent payable to Northern Star on completion of the IPO (see note 1). e) Represents the estimated value of the share issuance to Northern Star for the Acquisition (see note 1). f) Represents the estimated fair value of the common share purchase warrants issued to Northern Star for the Acquisition (see note 1).

F-64 g) The following amounts reflect the impact on the contingent payment to Northern Star as a result of the IPO:

Cash Consideration payment ...... $ 7,447 Common shares ...... 14,044 Common share purchase warrants ...... 1,741 Subtotal ...... $23,232 Settlement of contingent payment to Northern Star ...... (18,090) Loss on settlement of contingent payment to Northern Star ...... $ 5,142

h) Represents the cash payment to Northern Star for the acquisition of Plutonic on completion of the IPO. The following assumptions and adjustments to the unaudited pro forma consolidated statements of comprehensive income are used to give the effect that the Acquisition had occurred on July 4, 2016: i) The associated decrease to amortization and depletion is estimated to be approximately $656 for the six months ended December 31, 2016, which is partially offset by an income tax expense of $197 for the six months ended December 31, 2016.

5. PRO FORMA SHARE CAPITAL

December 31, 2016 Number Amount Common shares outstanding at December 31, 2016 ...... 11,492,599 $ 1,471 Special warrant conversion ...... 32,600,000 10,552 Common shares issued under the IPO ...... 28,450,000 19,709 Common shares issued under the Acquisition ...... 18,859,041 14,044 Pro forma share capital ...... 91,401,640 $45,776

6. PRO FORMA EARNINGS PER SHARE

For the six months ended December 31, 2016 Corporation weighted average number of common shares outstanding – basic ...... 25,302,368 Adjustment for common shares to be issued under the IPO and Acquisition ...... 47,309,041 Pro forma weighted average common shares outstanding ...... 72,611,409 Pro forma earnings / (loss) attributable to common shareholders ...... $ 10,733 Pro forma earnings per share – basic and diluted ...... $ 0.15

F-65 CERTIFICATE OF THE CORPORATION

Dated: February 15, 2017

This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of Canada, other than Québec.

(signed)CHRISTOPHER BRADBROOK (signed)PAUL OLMSTED President and Chief Executive Officer Chief Financial Officer

On behalf of the Board of Directors

(signed)MARK WELLINGS (signed)TAMARA BROWN Director Director

C-1 CERTIFICATE OF THE PROMOTER

Dated: February 15, 2017

This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of Canada, other than Québec.

(signed)CHRISTOPHER BRADBROOK

C-2 CERTIFICATE OF THE AGENTS

Dated: February 15, 2017

To the best of our knowledge, information and belief, this prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of Canada, other than Québec.

GMP SECURITIES L.P.

(signed)DOUGLAS BELL Vice Chairman, Investment Banking

BMO NESBITT BURNS CORMARK HAYWOOD TD SECURITIES INC. INC. SECURITIES INC. SECURITIES INC.

(signed) EGIZIO BIANCHINI (signed)DARREN WALLACE (signed)RYAN MATTHIESEN (signed)RICK MCCREARY Vice Chair & Co-Head, Managing Director Managing Director – Deputy Chair, Global Metals & Mining Investment Banking Investment Banking

SPROTT PRIVATE WEALTH LP

(signed)KIRSTIN MCTAGGART Director & Chief Compliance Officer

C-3