Disclosure Policy

If you have any questions regarding the contents of this disclosure policy and how it applies to you or you are unsure whether or not you may trade in a given circumstance, you should contact the Chief Financial Officer or President and Chief Executive Officer for assistance.

Objective and Scope

The objective of this disclosure policy is to ensure that communications to the investing public about the Company are:

• timely, factual and accurate; and
• broadly disseminated in accordance with all applicable legal and regulatory requirements.

This disclosure policy confirms in writing our existing disclosure policies and practices. Its goal is to raise awareness of the Company’s approach to disclosure among the board of directors, senior management, employees and consultants.

This disclosure policy extends to all employees, consultants and the boards of directors of the Company, and its subsidiaries and those individuals authorised to speak on behalf of the Company and its subsidiaries (collectively referred to as the “Policy Participants “). It covers disclosures in documents filed (with the securities regulators and written statements made in the Company’s annual and quarterly reports, news releases, letters to shareholders, presentations by senior management and information contained on the Company’s Web site and other electronic communications. It extends to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as speeches, press conferences and conference calls.

Disclosure Policy Committee

The board of directors has established a Disclosure Committee (“Committee”) responsible for overseeing the Company’s disclosure practices. The Disclosure Committee shall consist of The Chief Executive Officer, the Chief Financial Officer, the Chief Legal Officer and Head of Public Relations & Communications.

The Committee will set benchmarks for a preliminary assessment of materiality and will determine when developments justify public disclosure. The Committee will meet as conditions dictate. It is essential that the Committee be kept fully apprised of all pending material developments relating to the Company in order to evaluate and discuss those events and to determine the appropriateness and timing for public release of information. If it is deemed that the information should remain confidential, the Committee will determine how that inside information will be controlled.

The Committee will review and update, if necessary, this disclosure policy on an annual basis or as needed to ensure compliance with changing regulatory requirements. The Committee will report to the board of directors as requested.

Principles of Disclosure of Material Information

Material information is any information relating to the business and affairs of the Company. A “material fact” is a fact that might have an effect on the value or market price of the Company’s securities.

In complying with the requirement to disclose forthwith all material information under applicable laws and stock exchange rules, the Company will adhere to the following basic disclosure principles:

1. Material information will be publicly disclosed immediately via news release. Examples of potentially material information include the following:
   • Changes in Corporate Structure
     • changes in share ownership that may affect control of the Company
     • major reorganizations, amalgamations, or mergers
     • take-over bids, issuer bids, or insider bids
   • Changes in Capital Structure
     • the public or private sale of additional securities
     • planned repurchases or redemptions of securities
     • planned splits of common shares or offerings of warrants or rights to buy shares
     • any share consolidation, share exchange, or stock dividend
     • changes in a company’s dividend payments or policies
     • the possible initiation of a proxy fight
     • material modifications to rights of security holders
   • Changes in Financial Results
     • a significant increase or decrease in near-term earnings prospects
     • unexpected changes in the financial results for any periods
     • shifts in financial circumstances, such as cash flow reductions, major asset write-offs or write-downs
     • changes in the value or composition of the company’s assets
     • any material change in the company’s accounting policy
   • Changes in Business and Operations
     • significant drilling results (whether positive or negative)
     • a significant change in capital investment plans or corporate objectives
     • major labour disputes or disputes with a major contractors or suppliers
     • significant new contracts, significant losses of contracts or business
     • changes to the board of directors or executive management, including the departure of the company’s President and Chief Executive Officer, Chief Financial Officer, or Chief Operating Officer (or persons in equivalent positions)
     • the commencement of, or developments in, material legal proceedings or regulatory matters
     • waivers of corporate ethics and conduct rules for officers, directors, and other key employees
     • any notice that reliance on a prior audit is no longer permissible
     • de-listing of the company’s securities or their movement from one quotation system or exchange to another
   • Acquisitions and Dispositions
     • significant acquisitions or dispositions of assets, property or joint venture interests
     • acquisitions of other companies, including a take-over bid for, or merger with, another company
   • Changes in Credit Arrangement
     • the borrowing or lending of a significant amount of money
     • any mortgaging or encumbering of the company’s assets
     • defaults under debt obligations, agreements to restructure debt, or planned enforcement procedures by a bank or any other creditors
     • changes in rating agency decisions
     • significant new credit arrangements

   An immediate statement containing the major points of the material information is the first objective. Additional details may follow in a further news release. When several significant actions are resolved or occur at one time, disclosure of all should be released immediately so that the full implications may be assessed by the public.

   Certain developments will require disclosure at the proposal stage or before an event actually occurs if the proposal gives rise to material information at that stage. Announcement of an intention to proceed with a transaction or activity giving rise to material information should be made when a decision has been made to proceed by the board of directors or senior management with the expectation of concurrence from the board of directors. Updates should be announced every 30 days unless the original announcement indicated that an update would be disclosed on a specific date. In addition, prompt disclosure is required of any material change to the proposed transaction or to the previously disclosed information.

   While it is the responsibility of the Committee to determine what information is material in the context of the Company’s business, the Committee may consult with market surveillance of the TSX when in doubt as to whether disclosure should be made.

2. In certain circumstances, the Committee may determine that such disclosure may be unduly detrimental to the Company (for example if release of the information would prejudice negotiations in a corporate transaction), in which case the information will be immediately brought to the attention of the board of directors and will be kept confidential until the Committee determines it is appropriate to publicly disclose.( In such circumstances, the Committee will cause a confidential material change report to be filed with the applicable securities regulators, and will periodically (at least every 5 days) review its decision to keep the information confidential (also see “Rumours”). The Committee will only withhold material information from public disclosure where there is a reasonable basis to do so and when the basis for maintaining confidentiality ceases to exist, shall promptly disclose such material information to the public.

   At any time when material information is withheld from the public, the Company is under a duty to take precautions to keep such information completely confidential. Such information should not be disclosed to any officers, consultants, employees or advisors of the Company except in the necessary course of business. The Company shall also make sure that there is no selective disclosure of confidential information to third parties. The Company should ensure that when such information is disclosed in the necessary course of business all recipients are aware that it must be kept confidential. If the material information being treated as confidential becomes disclosed in some manner, the Company shall promptly disclose the material information publicly in the proper manner.

3. Disclosure must include any information, the omission of which would make the rest of the disclosure misleading (half truths are misleading).

4. Unfavourable material information must be disclosed as promptly and completely as favourable information. The guiding principle should be to communicate clearly and accurately the nature of the information, without including unnecessary details, exaggerated reports or editorial commentary designed to colour the investment community’s perception of the announcement one way or the other.

5. No selective disclosure. Previously undisclosed material information must not be disclosed to selected individuals (for example, in an interview with an analyst or in a telephone conversation with an investor). If previously undisclosed material information has been inadvertently disclosed to an analyst or any other person not bound by an express confidentiality obligation, such information must be broadly disclosed immediately via news release.

6. Disclosure on the Company’s web site alone does not constitute adequate disclosure of material information.

7. Disclosure must be corrected immediately if the Company subsequently learns that earlier disclosure by the Company contained a material error at the time it was given.

Trading Restrictions

It is illegal for anyone to purchase or sell securities of any public company with knowledge of material information affecting that company that has not been publicly disclosed. Except in the necessary course of business, it is also illegal for anyone to inform any other person of material non-public information. Therefore, Policy Participants with knowledge of confidential or material information about the Company or counter-parties in negotiations of material potential transactions, are prohibited from trading shares in the Company or any counter-party until the information has been fully disclosed and a reasonable period of time has passed for the information to be widely disseminated.

All employees shall comply with the Policy and Guidelines Regarding Confidential Information and Insider Trading from time to time issued by the Company. In addition, all Directors and officers, those employees directly engaged in New Venture activities and such other senior employees/consultants nominated by the Chief Executive Officer from time to time shall be prohibited in trading in the Company’s securities without prior approval from the Chief Executive Officer. Requests to trade by such persons shall be directed to the Chief Legal Officer.

Designated Spokespersons

The Company designates a limited number of spokespersons responsible for communication with the investment community, regulators or the media. The President and Chief Executive Officer, the Chief Financial Officer and the Head of Public Relations & Communications shall be the official spokespersons for the Company. Individuals holding these offices may, from time to time, designate others within the Company to speak on behalf of the Company as back-ups or to respond to specific inquiries.

If you receive any inquiry relating to the Company from the media, a securities analyst, or an investor, you should refer the inquiry to the Chief Executive Officer, the Chief Financial Officer, the Chief Legal Officer, or the Head of Public Relations & Communications.

Press Releases

Once the Committee determines that a development is material, it will authorize the issuance of a press release, unless/he Committee determines that such developments must remain confidential for the time being, in which case appropriate confidential filings will be made and control of that inside information is instituted. Should a material statement inadvertently be made in a selective forum, the Company will immediately issue a press release in order to fully disclose that information.

If the TSX is open for trading at the time of a proposed announcement, prior notice of a press release announcing material information must be provided to the market surveillance department to enable a trading halt, if deemed necessary by the TSX. If a press release announcing material information is issued outside of trading hours, market surveillance must be notified before the market opens.

The Company shall issue from time to time its Policy and Guidelines regarding Press Releases which shall apply to all press releases.

Annual and interim financial results will be publicly released as soon as practicable following board approval or review.

Press releases will be disseminated through an approved news wire service that provides simultaneous national and/or international distribution. Press releases will be transmitted to all stock exchange members, relevant regulatory bodies, major business wires, national financial media and, at the option of the Company, the local media in areas where the Company has its headquarters or operations.

Press releases will be posted on the Company’s web site immediately after release over the news wire. The press release page of the web site shall include a notice that advises the reader that the information posted was accurate at the time of posting, but may be superseded by subsequent news releases.

Conference Calls

Conference calls may be held for quarterly earnings and major corporate developments, whereby discussion of key aspects is accessible simultaneously to all interested parties, some as participants by telephone and others in a listen-only mode by telephone or via a webcast over the internet. The call will be preceded by a press release containing all relevant material information. At the beginning of the call, a Company spokesperson will provide appropriate cautionary language with respect to any forward-looking information and direct participants to publicly available documents containing the assumptions, sensitivities and a full discussion of the risks and uncertainties.

The Company will provide advance notice of the conference call and webcast by issuing a press release announcing the date and time and providing information on how interested parties may access the call and webcast. In addition, the Company may send invitations to analysts, institutional investors, the media and others invited to participate. Any non-material supplemental information provided to participants will also be posted to the Web site for others to view. A tape recording of the conference call and/or an archived audio webcast on the Internet will be made available following the call for a minimum of 30 days, for anyone interested in listening to a replay.

The Committee will hold a debriefing meeting immediately after the conference call and if such debriefing uncovers selective disclosure of previously undisclosed material information, the Company will immediately disclose such information broadly via press release.

Rumours

The Company generally does not comment, affirmatively or negatively, on rumours. This also applies to rumours on the internet. The Company’s spokespersons will respond consistently to those rumours, saying, “It is our policy not to comment on market rumours or speculation.” Should the stock exchange request that the Company make a definitive statement in response to a market rumour that is causing significant volatility in the stock, the Committee will consider the matter and decide whether to make a policy exception.

Contacts with Analysts, Investors and the Media

Disclosure in individual or group meetings does not constitute adequate disclosure of information that is considered material non-public information. If the Company intends to announce material information at an analyst or shareholder meeting or a press conference or conference call, the announcement must be preceded by a press release.

The Company recognizes that meetings with analysts and significant investors are an important element of the Company’s investor relations program. The Company will meet with analysts and investors on an individual or small group basis as needed and will initiate contacts or respond to analyst and investor calls in a timely, consistent and accurate fashion in accordance with this disclosure policy.

The Company will provide only non-material information through individual and group meetings, in addition to regular publicly disclosed information, recognizing that an analyst or investor may construct this information into a mosaic that could result in material information. The Company cannot alter the materiality of information by breaking down the information into smaller, non-material components.

The Company may maintain a “frequently asked questions” section on its web site and will provide the same sort of detailed, non-material information to individual investors or reporters that it has provided to analysts and institutional investors.

Spokespersons will keep notes of telephone conversations with analysts and investors and where practicable more than one Company representative will be present at all individual and group meetings. A debriefing will be held after such meetings and if such debriefing uncovers selective disclosure of previously undisclosed material information, the Company will immediately take steps to ensure that a full public announcement is made. Such steps will include contacting the market surveillance of the stock exchange on which the Company’s shares are traded and requesting that trading be halted pending the issuance of a news release and pending such issuance of the news release notifying all parties who have knowledge of the information that such information is material and that it has not been generally disclosed.

Reviewing Analyst Draft Reports and Models

It is the Company’s policy to review, upon request, analysts’ draft research reports or models. The Company will review the report or model for the purpose of pointing out errors in fact based on publicly disclosed information. It is the Company’s policy, when an analyst inquires with respect to his/her estimates, to question an analysts’ assumptions if the estimate is significantly outside of the range of “Street” estimates and/or the Company’s published earnings guidance. The Company will limit its comments in responding to such inquiries to non-material information. The Company will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with the analyst’s model and earning estimates.

In order to avoid appearing to “endorse” an analyst’s report or model, the Company will provide its comments orally or will attach a disclaimer to written comments to indicate the report was reviewed only for factual accuracy.

Distributing Analyst Reports

Analyst reports are proprietary products of the analyst’s firm. Re-circulating a report by an analyst may be viewed as an endorsement by the Company of the report. For these reasons, the Company will not provide analyst reports through any means to persons outside of the Company or to Policy Participants of the Company, including posting such information on its web site. The Company may post on its web site a complete list, regardless of the recommendation, of all the investment firms and analysts who provide research coverage on the Company. If provided, such list will not include links to the analysts’ or any other third party Web site or publications.

Forward-Looking Information

Generally, the Company should not disclose forward looking information (“FLI”) unless required by law to do so, or unless the Company believes such disclosure will enhance a reasonable investor’s investment decision, whether positively or negatively.

Should the Company determine it has a reasonable basis and elects to disclose forward-looking information in continuous disclosure documents, speeches, conference calls, etc., the following guidelines will be observed.

1. FLI, if deemed material, will be broadly disseminated via news release, in accordance with this disclosure policy.

2. The FLI will be clearly identified as forward looking.

3. The Company will identify all material assumptions and factors used in the preparation of the FLI.

4. The FLI will be accompanied by a reasonable, meaningful cautionary statement that identifies, in very specific terms, the risks, uncertainties and material factors that may cause the actual results to differ materially from those projected in the statement.

5. The FLI will be accompanied by a statement that disclaims the Company’s intention or obligation to update or revise the FLI, whether as a result of new information, future events or otherwise. Notwithstanding this disclaimer, should subsequent events prove past statements about current trends to be materially off target, the Company may choose to issue a news release explaining the reasons for the difference. In this case, the Company will update its guidance on the anticipated impact on revenue and earnings (or other key metrics).

6. Any oral FLI (such as those made in conference calls, analyst interviews or “road shows”) must be accompanied by a statement:

   1. that the statement is “forward-looking;”
   2. that actual results may differ materially from those projected in the forward looking statement; and
   3. that additional information concerning factors that could cause actual results to differ from those projected is contained in an identified, readily available written document (such as one of the Company’s SEC periodic reports).

    

If the Company has issued a forecast or projection in connection with an offering document covered by National Policy 48, the Company will update that forecast or projection periodically, as required by National Policy 48.

Managing Expectations

The Company will try to ensure, through its regular public dissemination of quantitative and qualitative information, that analysts’ estimates are in line with the Company’s own expectations. The Company will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with analysts’ models and earnings estimates.

If the Company has determined that it will be reporting results materially below or above publicly held expectations, it will disclose this information in a news release in order to enable discussion without risk of selective disclosure.

Quiet Periods

In order to avoid the potential for selective disclosure or even the perception or appearance of selective disclosure, the Company will observe a quarterly quiet period, during which the Company will not initiate or participate in any meetings or telephone contacts with analysts and investors and no earnings guidance will be provided to anyone, other than responding to unsolicited inquiries concerning factual matters. The quiet period commences on the first day of the month following the end of a quarter and ends with the issuance of a news release disclosing quarterly results.

Disclosure Record

The Chief Financial Officer will maintain a five year file containing all public information about the Company, including continuous disclosure documents, news releases, analysts’ reports, transcripts or tape recordings of conference calls, debriefing notes, notes from meetings and telephone conversations with analysts and investors, and newspaper articles.

Responsibility for Electronic Communications

This disclosure policy also applies to electronic communications. Accordingly, officers and personnel responsible for written and oral public disclosures shall also be responsible for electronic communications.

The Chief Financial Officer is responsible for updating the investor relations section of the Company’s web site and is responsible, along with the Head of Public Relations & Communications, for monitoring all Company information placed on the web site to ensure it is accurate, complete, up-to-date and in compliance with relevant securities laws.

Investor relations material shall be contained within a separate section of the Company’s web site and shall include a notice that advises the reader that the information posted was accurate at the time of posting, but may be superceded by subsequent disclosures. All data posted to the web site, including text and audiovisual material, shall show the date such material was issued. Any material changes in information must be updated immediately. The Head of Public Relations & Communications will maintain a log indicating the date that material information is posted and/or removed from the investor relations web site. The minimum retention period for material corporate information on the web site shall be two years.

Disclosure on the Company’s web site alone does not constitute adequate disclosure of information that is considered material non-public information. Any disclosures of material information on its web site will be preceded by the issuance of a news release.

The Head of Public Relations & Communications shall also be responsible for responses to electronic inquiries. Only public information or information which could otherwise be disclosed in accordance with this disclosure policy shall be utilized in responding to electronic inquires.

In order to ensure that no material undisclosed information is inadvertently disclosed, Policy Participants are prohibited from participating in Internet chat rooms or newsgroup discussions on matters pertaining to the Company’s activities or its securities. Policy Participants who encounter a discussion pertaining to the Company should advise the President and Chief Executive Officer immediately, so the discussion may be monitored.

Liability to Investors in the Secondary Market

Legislation gives investors in the secondary market the right to sue any public company and key related people for making public misrepresentations about the company or for failing to make timely disclosure as required by law.

This legislation provides secondary market investors with limited right of action against an issuer of securities, its directors, responsible senior officers, “influential persons” (ie. large shareholders with influence over disclosure), auditors and other responsible experts. Secondary market investors would have the right to seek limited compensation for damages suffered at a time when the issuer had made, and not corrected, public disclosure (either written or oral) that contained an untrue statement of a material fact or failed to make required material disclosure.

Investors have the right to sue whether or not they actually relied on the misrepresentation or failure to make timely disclosure.

The issuer and other possible defendants have varying defences based on the responsibility for the disclosure. For some types of disclosure, a person has a defence if that person conducted due diligence. For other types of disclosure, the person is not liable unless the plaintiff proves that the person knew about the misrepresentation, deliberately avoided acquiring knowledge or was guilty of gross misconduct in making the misrepresentation.

In order to limit potential exposure, the Committee will conduct or cause to be conducted a reasonable investigation of the disclosure to be released such that the Committee would be satisfied that there would be no reasonable grounds to believe that the document or oral statement contains any misrepresentation. Similarly the Committee will conduct or cause to be conducted a reasonable investigation to ensure that there would be no reasonable grounds to believe that a failure to make timely disclosure would occur.

Strict adherence to the Company’s disclosure policy will minimize exposure to potential liabilities under current and proposed legislation.

Communication and Enforcement

New directors, officers, consultants and employees will be provided with a copy of this disclosure policy and will be directed to review the disclosure policy. This disclosure policy will be circulated to all Policy Participants on an annual basis and whenever changes are made.

If you have any questions regarding the contents of this disclosure policy and how it applies to you or you are unsure whether or not you may trade in a given circumstance, you should contact the President and Chief Executive Officer, Chief Financial Officer, Chief Legal Officer or Head of Public Relations & Communications for assistance.

All Policy Participants who violate this disclosure policy may face disciplinary action up to and including termination of his or her employment or relationship with the Company without notice. The violation of this disclosure policy may also violate certain securities laws. If it appears that a Policy Participant may have violated such securities laws, the Company may refer the matter to the appropriate regulatory authorities, which could lead to penalties, fines or imprisonment.