Corporate Governance

Corporate Government Practices

Composition of the Board of Directors and Board Independence

Pursuant to NI 58-101, a director is independent if the director has no direct or indirect material relationship with the issuer which could, in the view of the issuer’s Board, be reasonably expected to interfere with the exercise of a member’s independent judgment. Certain directors are deemed to have a material relationship with the issuer by virtue of their position or relationship with the Company.

The Board is currently comprised of five members, three of whom the Board has determined are independent. In assessing whether a director is independent for these purposes, the circumstances of each director have been examined in relation to a number of factors.

Messrs. Rowley, Katti and Malpenga are independent directors. Mr. Frewin is not considered an independent director as he is the former Chief Executive Officer of the Company. Mr. Borshoff is not considered an independent director as he is the President and Chief Executive Officer of the Company.

Since a majority vote is necessary to approve matters before the Board, the support of at least one independent director is required.

The following table sets out details of directorships held by each director or nominee in other public issuers:

The Board supervises the management of the business and affairs of the Company and is mandated to act with a view to the best interests of the Company. The Board holds regular meetings to review the business and affairs of the Company and to make any decisions relating thereto. The Board believes that it functions independently of management. To enhance its ability to act independently of management, the Board reviews its procedures on an ongoing basis to ensure that it can function independently of management. The Board is comprised of two non-independent and three independent directors including the Chairman and meets, as required, without management present. If conflicts arise, interested parties would be precluded from voting on matters in which they may have an interest. In light of the suggestions contained in NI 58-101, the Board would convene meetings, as deemed necessary, of the independent directors, at which non-independent directors and members of management would not be in attendance.

The Chairman of the Board, Martin Rowley, is an independent director. Currently, the Board is satisfied that it exercises its responsibilities for independent oversight of management. The independent Chairman and the ability to establish ad hoc committees comprised solely of independent directors provides the Board with the ability to meet independently of management whenever deemed necessary or appropriate and the chair of each such ad hoc committee provides the leadership for such committee.

Board of Directors’ Mandate

The Board supervises the management of the business and affairs of the Company. The frequency of the meetings of the Board, as well as the nature of agenda items, changes depending upon the state of the Company’s affairs and in light of opportunities which arise or risks which the Company faces. A minimum of four meetings of the Board are held in each financial year. The Board has responsibility for overseeing a strategic planning process, reviewing and approving the Company’s strategic plan developed and proposed by management and monitoring performance against the plan.

The Board is responsible for evaluating the principal business risks of the Company and oversees the implementation of appropriate systems to manage these risks. The Board, through its Audit Committee, is also responsible for developing, adopting and reviewing the adequacy of policies and procedures to ensure the integrity of the internal controls and management information systems of the Company. Matters that require Board approval include, among other things: (i) the approval of the quarterly and annual financial statements, management’s discussion and analysis and the Annual Information Form; (ii) the issuance of securities; (iii) the approval of acquisitions and divestitures; (iv) the approval of all other material contracts and business transactions; (v) the approval of the Company’s strategic plan and annual financial budget; (vi) the approval of all borrowing and other financing; and (vii) the approval of any other matters as appropriate.

Position Descriptions

The Board has developed a written position description for each of the Chairman, the Chief Executive Officer and the Chief Financial Officer. The charter of each Board committee sets out the role of the committee’s chairman.

The Board appoints the CEO of the Company and approves the appointment of other members of senior management. The Board reviews the Company’s succession plan and the annual performance of senior management.

The positions of the Chairman and the CEO are separate. The Chairman is independent of management. The Board is currently of the view that the respective corporate governance role of the Board and management, as represented by the Chairman and the CEO, are clear and that the limits to the responsibility and authority of the Chairman and CEO are reasonably well understood.

Orientation and Education

The Board reviews its own composition on an annual basis. The Board expect that a prospective candidate will fully understand the role of the Board and the contribution expected of him or her. The Company does not have a formal written process of orientation for new directors. However, the Board conducts a discussion of the business of the Company at its Board meetings to ensure new directors are provided with an overview of the Board’s role and the Company’s operations. From time to time, corporate officers and legal, financial and other experts are invited to attend Board meetings to provide detailed presentations to the Board on significant developments and topics within their area of expertise.

Information on committee charters and corporate governance policies, is provided to new directors. Given the size of the Company and the in-depth experience of the current directors, there has been no formal continuing education program. Board members are entitled to attend seminars that they determine necessary to keep themselves up-to-date with current issues relevant to their services as directors of the Company.

Shareholder Feedback and Concerns

The Company manages a shareholder relations program under the direction of its Chief Executive Officer. The program involves meetings with a broad spectrum of investors, including briefing sessions for analysts, investment fund managers and the public to discuss financial results and announcements by the Company. Shareholders, other stakeholders and the public are informed of developments in the Company by the issuance of news releases, all of which are approved by the Board Chairman and in most cases by the Board.

Management of the Company is available routinely to shareholders to respond to questions and concerns. Shareholder concerns are dealt with on an individual basis. The responses will depend on the kind of information requested. Significant concerns are brought to the attention of the Company or the Board.

Ethical Business Conduct

The Board has approved a code of ethical business conduct for directors, officers and employees of the Company. In circumstances where a director or executive officer has a material interest in a transaction or agreement which the Company is considering entering into, the individual is required to fully disclose his or her interest therein and an ad hoc committee of disinterested directors is appointed for review purposes to confirm, among other things, that such transaction or agreement, as applicable, is being entered into on arm’s length commercially reasonable terms. Such committee has the right to obtain advice from the Company’s counsel and other professional advisors and/or appoint independent counsel and/or advisors.

Assessments

Based upon the Company’s size, its current state of development and the number of individuals on the Board, the Board considers a formal process for assessing regularly the effectiveness and contribution of the Board, as a whole, its committee or individual directors to be unnecessary at this time. In light of the fact that the Board and its committees meet on numerous occasions and engage in informal discussions amongst themselves during each year, each director has significant opportunity to assess other directors to ensure that the Board as a whole, and its individual directors, are performing effectively.

Term Limits

The Company has not adopted term limits for directors because the risk profile of the Company makes it more difficult for the Company to attract and to retain highly qualified board members than other companies. The Company seeks to avoid losing the services of a qualified director with knowledge of its business through the imposition of an arbitrary term limit.

Representation of Women

Policies regarding the representation of women on the Board

The Company has not adopted written policies relating to the identification and nomination of women directors and the representation of women on the Company’s Board. However, at the Company’s current stage of development, while gender diversity is taken into account, the primary focus of the Company’s Board and its Nomination and Governance Committee (Committee) is the identification and selection of directors who have the expertise and required skills necessary for a uranium development company.

Due to the current size and scale of the Company’s activities, the Board does not foresee the adoption of policies relating to the identification and nomination of women directors in the near future. As the size and scale of the Company grows, the Board will adopt policies to achieve gender diversity as director positions become vacant and appropriately qualified candidates become available.

Consideration of the representation of women in the director identification and selection process

The Committee, while conducting its mandate, has the responsibility to take gender into consideration as part of its overall recruitment and selection process. While gender diversity is taken into account, the primary focus of the Committee is the identification and selection of directors who have the expertise and required skills necessary for a uranium development company.

Consideration of the representation of women in executive officer appointments

While gender diversity is taken into account, the Company’s primary focus is the identification and selection of executive officers with the industry knowledge, experience, expertise and required skills necessary for a uranium development company.

Company’s targets for women on the Board

The Company has not adopted targets regarding the representation of women on the Board. While gender diversity is taken into account, the primary focus of the Board and the Committee is the identification and selection of directors who have the expertise and required skills necessary for a uranium development company.

Company’s targets for women in executive officer positions

The Company has not adopted targets for women in executive officer positions. Due to the current size and scale of the Company’s activities, the Board does not foresee the adoption of targets in the near future. As the size and scale of the Company grows, the Board will adopt policies to achieve gender diversity as new employee positions are created or become vacant and appropriately qualified candidates become available. In addition, the Company’s risk profile and amount of resources limits its ability to make appointments on any basis other than finding, often on short notice, the most qualified person who is willing to accept the risks inherent in the Company’s current stage of development.

Number and proportion of women on the Company’s Board and in executive officer positions

As at the date hereof, there are no women on the Company’s Board or in executive officer positions.