NGEX Resources Inc. · The “ Company”, ... are to United States dollars and all references to “ Swedish krona ” and “ SEK ” are to Swedish krona. Unless otherwise stated,

NGEX Resources Inc.

Admission to trading on Nasdaq Stockholm of

additional common shares

NGEx RESOURCES INC. | Important information 1

IMPORTANT INFORMATION This prospectus has been prepared in conjunction with the contemplated admission to trading of up to 8 million new common shares in NGEx Resources Inc.

(the “New Shares”) on the main market operated by NASDAQ OMX Stockholm AB (“Nasdaq Stockholm”). The “Company”, “NGEx” or “NGEx Resources”

means NGEx Resources Inc. (corporation number 425318-3) and/or one or more or all of its subsidiaries, as it may apply. In this prospectus, unless otherwise

specified or the context otherwise requires, all references to “Canadian dollars” and “CAD” are to Canadian dollars, all references to “U.S. dollars” and “USD”

are to United States dollars and all references to “Swedish krona” and “SEK” are to Swedish krona. Unless otherwise stated, the financial statements and

other financial information as of, and for the years ended, December 31, 2015, December 31, 2014 and December 31, 2013 and for the nine months ended

September 30, 2016 are in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the

International Accounting Standards Board. Certain amounts and percentages stated in this prospectus have been rounded off and may therefore not add up

correctly. Other than what is expressly stated herein, no information in this prospectus has been examined or audited by the Company’s auditors.

This prospectus has been prepared in accordance with the provisions of the Swedish Financial Instruments Trading Act (1991:980) and European Commission

Regulation (EC) No 809/2004 implementing Directive 2003/71/EC of the European Parliament and the Council. The prospectus has been approved and

registered by the Swedish Financial Supervisory Authority in accordance with the provisions of Chapter 2, Sections 25 and 26 of the Swedish Financial

Instruments Trading Act (1991:980). Approval and registration of the prospectus does not imply a guarantee by the Financial Supervisory Authority that the

facts presented in the prospectus are correct or complete.

This prospectus does not comprise any offer to purchase, subscribe for or acquire shares or other financial instruments issued by NGEx Resources. This

prospectus has been prepared only in conjunction with the admission to trading of the New Shares on Nasdaq Stockholm. The prospectus may not be

distributed, directly or indirectly, in any other country where such distribution requires additional registration or other measures than those provided for under

Swedish law or that contravene applicable regulations in such country. The Company’s shares (the “Shares”) have not been and will not be registered under

the United States Securities Act of 1933 (”Securities Act”), as amended, or under any equivalent statute in any individual state or province of the United States

of America (the “U.S.”).

No person has been authorized to give any information or to make any representation not contained in this prospectus and, if given or made, such information

or representation not contained herein must not be relied upon as having been authorized by the Company. In the event of any material changes to the

prospectus during the period from the date of the announcement to the first day of trading of the New Shares, such changes will be announced pursuant to

the rules in the Swedish Financial Instruments Trading Act (1991:980), which governs the publication of the prospectus supplements.

Any dispute concerning or relating to this prospectus shall be resolved in accordance with Swedish law and exclusively by a Swedish court of law. The

prospectus is available in paper form at NGEx Resources’ head office and in electronic form on NGEx Resources’ website, www .ngexresources.com, as well as

on the website of the Swedish Financial Supervisory Authority, www .fi.se.

In this prospectus, the terms “Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” have the meanings ascribed to those terms

by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”), as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted

by CIM Council, as amended.

The technical disclosure for the Company’s project included in this prospectus, with the exception of the technical disclosure related to ongoing engineering

studies, has been derived from the results of a National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant technical

report with an effective date of February 12, 2016 and titled "Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaría Deposit,

Argentina NI 43-101 Technical Report on Preliminary Economic Assessment" prepared by Amec Foster Wheeler International Ingeniería y Construcción

Limitada ("AMEC").

FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” concerning results and developments in our operations in future periods, planned exploration

activities, the adequacy of our financial resources and other events or conditions that may occur in the future. These forward-looking statements may include

statements regarding perceived merit of properties, exploration results and budgets, mineral resource estimates, work programs, capital expenditures,

operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project, timelines, strategic plans,

including our plans and expectations relating to the Project Constellation (as defined below), completion of transactions, market prices for precious and base

metals, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future

results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral resource estimates may also be deemed

to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if Project Constellation is

developed.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future

events or performance (often, but not always, identified by words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”,

“estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events,

conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar

expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are based on the then-current

expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates and are subject

to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company

to be materially different from those expressed or implied by such forward-looking information including, but not limited to, risks and uncertainties relating to,

among other things, changes in commodity prices, currency fluctuation, financing, unanticipated variations in Mineral Resource grades or tonnages,

infrastructure, results of exploration activities, cost overruns, availability of materials and equipment, timeliness of government approvals, taxation, political

risk and related economic risk and unanticipated environmental impact on operations and other risks and uncertainties described under the heading “Risks

Factors” in this prospectus and under the heading “Risk Factors” in the Company’s annual information form and management’s discussion and analysis for the

year ended December 31, 2015, which are available under the Company’s profile at www .sedar.com. These factors are not exhaustive. Although the Company

has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking

statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The forward-looking statements

contained in this prospectus are based on the beliefs, expectations and opinions of management as of the date hereof. There can be no assurance that

forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers and investors should not place undue reliance on forward-looking statements. NGEx Resources does not intend to update forward-looking

statements, except as required by law.

NGEx RESOURCES INC. | Table of contents 2

TABLE OF CONTENTS Summary ................................................................................................................................................................. 3

Sammanfattning .................................................................................................................................................... 18

Risk factors ............................................................................................................................................................ 33

Background ........................................................................................................................................................... 43

Industry overview ................................................................................................................................................. 45

Operations of NGEx Resources ............................................................................................................................. 51

The Constellation Project ...................................................................................................................................... 51

Other information about NGEx Resources ............................................................................................................ 70

Selected financial information .............................................................................................................................. 75

Comments to the financial statements ................................................................................................................. 78

Capital structure, indebtedness and related information .................................................................................... 81

Board of directors, executive officers and auditor ............................................................................................... 85

Corporate governance .......................................................................................................................................... 98

Share capital and related issues .......................................................................................................................... 102

Legal and supplementary information ................................................................................................................ 105

Tax matters ......................................................................................................................................................... 110

Summary of shareholder rights........................................................................................................................... 113

Definitions ........................................................................................................................................................... 126

Documents incorporated by reference ............................................................................................................... 129

Addresses ............................................................................................................................................................ 130

Certificate of continuance and by-laws of NGEx Resources ............................................................................... 131

NGEx RESOURCES INC. | Summary 3

SUMMARY Summaries are made up of disclosure requirements (hereinafter referred to as “Elements”). The Elements are

numbered in Sections A – E (A.1 – E.7).

This summary contains all the Elements required to be included in a summary for this type of security and

issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering

sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of security and

issuer, it is possible that no relevant information can be given regarding the Element. In this case a short

description of the Element is included in the summary with the mention of not applicable (“N/A”).

Section A – Introduction and warnings

A.1 Introduction

and warnings This summary should be read as introduction to the prospectus. Any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor. Where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the European Union, have to bear the costs of translating the prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Financial

intermediaries

N/A; the admission to trading of the New Shares does not include any financial

intermediaries.

Section B – Issuer

B.1 Legal and

commercial

name

The legal and commercial name of the Company is NGEx Resources Inc. (the

“Company”, “NGEx Resources” or “NGEx”).

B.2 Legal context The Company is registered and continued under the Canada Business Corporations Act

(“CBCA”) as a public company, with corporation no. 425318-3. The registered office of

the Company is Suite 2200, 885 West Georgia Street, Vancouver, British Columbia V6C

3E8.

B.3 Operations NGEx is a Canadian mineral exploration company with exploration projects in Chile and

Argentina. The Company's focus is on advancing its Project Constellation which

contemplates the integrated development of two large copper-gold deposits, the Los

Helados and the Josemaria deposits, located in Chile's Region III and adjacent San Juan

Province, Argentina.

The Company’s strategy is to create value for its shareholders by expanding and


increasing the quality of its mineral resources as well as by advancing the engineering

and other studies that are required to prepare its projects for eventual development

by the Company and its partners or by third parties. The Company intends to increase

shareholder value through successful exploration and to eventually convert its

exploration successes into tomorrow’s development projects positioning the Company

as a top tier copper industry investment.

B.4a Tendencies The copper mining industry has seen significant changes over the past decade and

many of these trends are expected to continue to constrain the copper supply:

• Declining ore grades are increasing unit costs;

• Increasing depth of mineral deposits necessitating higher cost mining methods;

• Recent massive capital expenditure overruns have limited the appetite for

investment;

• Scarcity of water and energy resources is increasing costs;

• Taxation and royalty regimes are taking a larger portion of the economic benefits

– increasing risks for producers;

• Labor productivity has been decreasing; and

• Resource nationalism and political risk remain significant issues.

Additionally, future production forecasts are often optimistic as they do not account

for slower than expected ramp up of projects, pit wall failures, mechanical or other

failures, aggressive production estimates, extended equipment lead time, weather and

climate delays, legislative or environmental delays, project capital deferral, validity and

stability of fiscal policies, etc.

B.5 Group NGEx Resources Inc. is the Canadian parent company in a group of companies, which

consists of thirteen (13) subsidiaries incorporated in Argentina, Bermuda, Canada,

Chile, Uruguay and Peru.

B.6 Largest

shareholders

To the knowledge of the directors and officers of the Company, shareholders carrying

10 per cent or more of the voting rights attached to all outstanding Shares as of

30 September 2016 were:

Name Number of Shares(2)

% of Shares

Lorito Holdings S.à r.l.(1)

18,000,000 8.76%

Zebra Holdings and

Investments S.à r.l.(1)

21,762,539 10.59%

39,762,539 19.35%

(1) Lorito Holdings S.à r.l. and Zebra Holdings and Investments S.à r.l, who report their security

holdings as joint actors, are private corporations owned by a trust whose settler is the Estate of

Adolf H. Lundin. Zebra also holds a US$525,000 Debenture facility issued by NGEx.

(2) This information was obtained from publicly disclosed information and has not been

independently verified by the Company.


B.7 Financial

summary NGEx Resources The selected financial information set out below for the nine-month periods ended

Sept 30, 2016 and Sept 30, 2015 has been extracted from the Company’s unaudited

interim condensed consolidated financial statements for the nine-month period ended

Sept 30, 2016. The selected financial information set out below for the financial years

2015, 2014, and 2013 has been extracted from the Company’s audited consolidated

financial statements for the same years. These consolidated financial statements have

been prepared in compliance with IFRS.

Income statements

CAD thousands Unaudited Unaudited Audited Audited Audited Jan-Sept

2016 Jan-Sept

2015Jan-Dec

2015Jan-Dec

2014Jan-Dec

2013

Revenues - - - - -

Exploration and project investigation 5,207 17,098 19,837 19,258 22,698

Salaries and benefits 582 589 757 1,412 1,068

Share-based compensation 598 934 713 1,060 1,038

Management fees 250 329 407 540 540

Professional fees 675 212 344 354 369

Travel 37 154 172 247 172

Promotion and public relations 150 224 248 419 356

Donation - - - - 340

Office and general 379 334 385 626 321

General and Administration 2,671 2,776 3,026 4,658 4,204

Operating loss 7,878 19,874 22,863 23,916 26,902

Interest income (31) (28) (30) (65) (235)

Foreign exchange loss (gain) 184 (452) (268) (888) (148)

Other expenses 184 422 220 284 93

Gain on spin-off transaction (30,032) - - - -

Gain on disposition / exchange of investments (588) - - - (180)

Gain on disposition of mineral property interests - (165) (1,552) - -

Unrealized loss on investments - 25 144 105 660

Write-down of mineral property interests 77 - - - 1,196

Other (income) expenses (30,206) (198) (1,486) (564) 1,386

Net (income) loss from continuing operations (22,328) 19,676 21,377 23,352 28,288

Net loss from discontinued operations - - - - 84

Net (income) loss (22,328) 19,676 21,377 23,352 28,372

of which is attributable to shareholders of the

Company (22,328) 19,676 21,377 23,352 28,372

of which is attributable to non-controlling interest - - - - -


Balance sheets

CAD thousands Unaudited Unaudited Audited Audited Audited

30 Sept 2016

30 Sept 2015

31 Dec 2015

31 Dec 2014

31 Dec 2013

ASSETS

Cash and cash equivalents 1,454 3,956 2,113 28,480 21,260

Due from related party 123 - - - -

Investments 1,108 218 652 353 326

Receivables and other assets 278 757 467 1,537 1,118

Current assets 2,963 4,931 3,232 30,370 22,704

Share consideration receivable 973 - 861 - -

Equipment 110 159 137 164 247

Mineral properties 6,178 15,348 12,770 18,129 10,439

Other non-current assets 8 8 8 8 8

Non-current assets 7,269 15,515 13,776 18,301 10,694

TOTAL ASSETS 10,232 20,446 17,008 48,671 33,398

EQUITY & LIABILITIES

Total equity 8,062 18,092 13,830 36,050 24,622

Trade payables and accrued liabilities 1,268 1,501 2,262 5,769 4,328

Due to related party 99 - - - 28

Due to joint exploration partners - - 40 6,852 4,101

Current liabilities 1,367 1,501 2,302 12,621 8,457

Other non-current liabilities 803 853 876 - 319

Non-current liabilities 803 853 876 - 319

TOTAL EQUITY & LIABILITIES 10,232 20,446 17,008 48,671 33,398

equity attributable to shareholders of the

Company 8,062 18,092 13,830 36,050 24,622

equity attributable to non-controlling

interest - - - - -

Cash flow statements


Jan-Sept 2016

Jan-Sept 2015

Jan-Dec 2015

Jan-Dec 2014

Jan-Dec 2013

Cash flow, operating activities before changes

in working capital (7,490) (18,882) (22,068) (22,637) (25,270)

Cash flow from changes in working capital (1,120) (6,687) (5,434) (394) (760)

Cash flow, operating activities after changes

in working capital (8,610) (25,569) (27,502) (23,031) (26,030)

Cash flow from financing activities 7,613 - - 34,309 33,377

Cash flow from investing activities 436 (467) (214) (4,625) (1,402)

Exchange rate effect on cash and cash

equivalents

(98) 1,512 1,349 567 (1,982)

Change in cash and cash equivalents (659) (24,524) (26,367) 7,220 3,963

Cash and cash equivalents, beginning of

period

2,113 28,480 28,480 21,260 17,297

Cash and cash equivalents, end of period 1,454 3,956 2,113 28,480 21,260


Key ratios

Unaudited Unaudited Audited Audited Audited

Jan-Sept

2016

Jan-Sept

2015

Jan-Dec

2015

Jan-Dec

2014

Jan-Dec

2013

Basic and diluted net (income)

loss from continuing operations

(per share)(1)

(0.11) 0.10 0.11 0.13 0.17

Basic and diluted (income) net

loss (per share)(1)

(0.11) 0.10 0.11 0.13 0.17

Equity ratio end of period(2)

79% 88% 81% 74% 74%

Weighted average basic Shares

outstanding(1)

201,435,444 187,712,994 187,712,994 178,528,152 167,833,348

Dividend paid per share(1)

0 0 0 0 0

(1) The key ratio is defined in accordance with IFRS and is audited by the Company’s auditor for the financial

years 2015, 2014 and 2013 and unaudited for the period ending 30 September 2016 and 2015.

(2) The key ratio is not defined in accordance with IFRS and is not audited by the Company’s auditor.

Definitions of key ratios which are defined in accordance with IFRS

Key ratio Definition

Basic and diluted (income) loss per share

Net income/loss divided by the weighted average number of shares outstanding

Weighted average shares outstanding

Number of average shares outstanding during the period

Dividend paid per share Total dividend paid divided by the number of shares outstanding

Definitions of key ratios which are not defined in accordance with IFRS

Key ratio Definition Reason for inclusion

Equity ratio end of period

Total equity of period divided by “total assets of

period”

The equity ratio shows the proportion of total assets represented by shareholders’ equity and

has been included for investors to be able to understand the Company’s capital structure.

Reconciliation of alternative performance measures

Equity ratio end of period CAD thousands Unaudited Unaudited Audited Audited Audited

30 Sept 2016 30 Sept 2015 31 Dec 2015 31 Dec 2014 31 Dec 2013

Total equity 8,062 18,092 13,830 36,050 24,622

Total assets 10,232 20,446 17,008 48,671 33,398

Equity ratio end of period 79% 88% 81% 74% 74%

The Company’s key developments and activities during the period 1 January 2013 to


30 September 2016 are as follows:

Period Description

Fiscal 2013 Subsequent to the CAD $34 million private placement financing in

January 2013, the Company completed a large exploration

program for its Los Helados Project, the Josemaria project and the

Filo del Sol Project during the period. Total cash spent on

operating activities during fiscal 2013 was CAD $26 million. As at

December 31, 2013, the Company had cash and working capital of

CAD $21 million and CAD $14 million, respectively.

Fiscal 2014 The Company successfully reported the results of a preliminary

economic assessment (“PEA”) on its 60% owned Los Helados

project located in Chile during fiscal 2014, with the focus on

evaluating the potential for a combined Los Helados-Josemaria

operation through a scoping level study. This was the year in

which the Company commenced trading on Nasdaq Stockholm as

a secondary listing issuer and financing proceeds totaling CAD $35

million were subsequently raised.

Prior to the end of the year, the Company acquired the remaining

40% interest in the Filo del Sol Project held by its partner Pan

Pacific Copper Co., Ltd. ("PPC") for total cash consideration of

US$7.0 million. The Company believed that the Filo del Sol Project

has excellent exploration potential and has the potential to grow

into a significant asset.

Total cash spent on operating activities during fiscal 2014 was

CAD $23 million. As at December 31, 2014, the Company had

cash and working capital of CAD $28 million and CAD $18 million,

respectively.

Fiscal 2015 The Company continued to focus on adding value to its South

American projects through contemplating a combined

development model for its Los Helados and Josemaría deposits

(“Integrated PEA”). This Integrated PEA incorporates an

optimized conceptual mine plan for the Los Helados deposit

which includes several improvements over the standalone Los

Helados PEA, and its Integrated PEA results were announced

subsequent to the fiscal 2015 year-end on January 7, 2016.

On October 2015, the Company completed a sale of its respective

interest in the GJ project, which is consistent with the Company’s

continued effort to rationalize its portfolio and to realize value

from its non-core projects.

The Company expended CAD $28 million on operating activities

during the year. Majority of the operating costs incurred related

to funds required to complete the exploration program on its core

South American copper-gold projects including Los Helados,

Josemaria, and Filo del Sol

There were no financing activities during fiscal 2015.

As at December 31, 2015, the Company had cash and working


capital of CAD $2 million and CAD $1 million, respectively.

Nine months

ended Sept 30,

2016

In addition to announcing the results of the Integrated PEA for the

combined Los Helados and Josemaria deposits (“Project

Constellation”), the Company completed private placement

financings totaling CAD $11 million during the first quarter of

2016.

The key focus for the fiscal 2016 year was the execution and

completion of the spin out of Filo del Sol Project through a plan of

arrangement under the Canada Business Corporation Act,

pursuant to which NGEx transferred its wholly owned subsidiaries

that directly or indirectly hold the Filo del Sol Project including

CAD $3 million in cash to Filo Mining Corp. (“Filo Mining”) in

exchange for all of the common shares of Filo Mining and

subsequently distributed the shares of Filo Mining to the

shareholders as a return of capital. The spinout was completed

on August 16, 2016 and Filo Mining became a dual listed company

on the Toronto Stock Venture Exchange and Nasdaq First North

during the third quarter of 2016.

Significant changes to NGEx Resources’ financial condition and operating results after

30 September 2016

There has been no significant change to the Company’s financial condition and

operating results after 30 September 2016.

B.8 Selected pro

forma financial

information

N/A; the prospectus does not include any pro forma financial information.

B.9 Financial

forecast

N/A; the prospectus does not include any financial forecast or calculation of expected

profit.

B.10 Auditor’s

remarks N/A; there are no auditor’s remarks.

B.11 Insufficient

working capital

of the issuer

In the opinion of the Company, as at the date hereof, the Company’s current working

capital is not sufficient for the planned business for the next twelve months. On this

basis, the Company will need additional financing by January 2017 in order to maintain

a positive working capital position for the planned exploration program for the 2016-

2017 season. The Company needs to raise additional funds of at least approximately

CAD $6 million of additional working capital in order to meet its working capital needs

for the planned exploration program. On 1 December 2016, the Company announced

that the books in the Offering were closed on CAD $10 million which the Company

expects to receive and which is sufficient to meet the Company’s working capital

needs for the planned business for the next twelve months. The completion of the

Offering is subject to certain conditions being met, such as the approval of this

prospectus, all of which are expected to occur on or around the date of this

prospectus. Should the Offering not be completed for some reason, the Company

would consider different alternatives, such as tailoring the Company’s exploration

programs in order to reduce the working capital needs or seek additional funding from

other equity financing, joint ventures or disposition of mineral properties and

investments. Should none of these alternative ways of reducing the working capital

needs or of securing additional working capital be successful, there is a risk that the

Company will be subject to a partial or complete reorganization, or that the Company

is declared bankrupt.


As the Company is an exploration company and has no sources of revenue, additional

funding from equity financing, joint ventures or disposition of mineral properties and

investments may be required to fund further exploration and corporate expenses.

Such financing may not at all times be available to the Company in the amount

required at any time or for any period or, if available, it may not be obtained on terms

which are satisfactory to the Company.

Section C – Securities

C.1 Securities being

admitted to

trading

It is intended that the New Shares are listed on the Toronto Stock Exchange (“TSX”)

and on Nasdaq Stockholm, with ISIN code CA65339B1004. All Shares traded on Nasdaq

Stockholm will be affiliated to Euroclear Sweden and will not be represented by

physical share certificates.

C.2 Denomination The Shares are denominated in CAD.

C.3 Total number

of shares in the

Company

The authorized share capital is an unlimited number of common Shares without par

value. As of 30 September 2016, NGEx had 205,240,630 issued, outstanding and fully

paid common Shares.

C.4 Rights

pertaining to

the shares

The holders of Shares of the Company are entitled to receive notice of and attend all

meetings of shareholders with each Share held entitling the holder to one vote on any

resolution to be passed at such shareholder meetings. The holders of Shares are

entitled to dividends, if as and when, declared by NGEx Resources’ Board. The Shares

are entitled upon liquidation, dissolution or winding up of the Company to receive the

remaining assets of the Company available for distribution to shareholders. The

articles of continuance of NGEx Resources do not contain any pre-emption rights for

the holders of Shares.

C.5 Limitations to

the free

transferability

N/A; there are no limitations to the free transferability of the Shares other than

holders of Shares issued in conjunction with the Offering will be subject to a statutory

hold period that extends four (4) months plus one (1) day from the closing date in

respect of re-sales to residents of Canada and/or over the facilities of the TSX. During

and after this hold period, the Shares are freely transferable on Nasdaq Stockholm.

C.6 Trading in the

shares

The Shares are listed on the TSX and Nasdaq Stockholm under the symbol “NGQ”. It is

furthermore anticipated that the New Shares will be admitted to trading on TSX and

Nasdaq Stockholm.

C.7 Dividend policy There are no restrictions that prevent the Company from paying dividends. Excluding

the spin-out arrangement of Filo del Sol whereby the shares of Filo Mining Corp. were

considered to have been distributed as dividend in kind to shareholders, the Company

has not paid dividends as of the date of this prospectus on its Shares and has no plans

to pay dividends in the near future. Any decision to pay dividends in the future will be

based on the Company’s earnings and financial requirements and other factors that its

Board may consider appropriate in the circumstances.

Section D – Risks

D.1 Risks related to

the issuer and The Company’s operations and the sectors in which it operates are subject to several

risks that are completely or partly outside NGEx’s control and which could materially


industry adversely impact the Company’s business, financial condition and results of operations

and prospects. The risk factors listed below are the risk factors which are deemed as

the key risk factors, however, they should not be construed as exhaustive nor are

these risk factors ranked according to degree of importance. The Company’s business,

operating results or financial position may also be materially adversely affected by

other risks and uncertainties which are currently unknown to the Company, or which

are currently not viewed as material.

Exploration and Development Risk - The Company’s properties are in early exploration

stages and are without a known body of commercial ore. Exploration for Mineral

Resources involves a high degree of risk and few properties that are explored are

ultimately developed into producing mines. Discovery of mineral deposits is

dependent upon several factors, not the least of which are the technical skills of the

exploration personnel involved and the capital required for the programs. The cost of

conducting programs may be substantial and the likelihood of success is difficult to

assess. There is a risk that the Company’s mineral exploration activities will not result

in any discoveries of new bodies of commercial ore. There is also a risk that even if

commercial quantities of ore are discovered that a new ore body will not be developed

and brought into commercial production. The commercial viability of a mineral

deposit once discovered is also dependent upon a number of factors, some of which

are the particular attributes of the deposit. Most of the above factors are beyond the

control of the Company.

Mineral Resource Estimates - The Company’s reported Mineral Resources are only

estimates. There is a risk that the estimated Mineral Resources will not be recovered.

By their nature Mineral Resource estimates are imprecise and depend, to a certain

extent, upon statistical inferences which may ultimately prove unreliable because,

among other factors, they are based on limited sampling, and, consequently, are

uncertain because the samples may not be representative. Mineral Resource estimates

may require revision (either up or down). Market fluctuations in the price of metals, as

well as increases in estimated production costs or reductions in estimated recovery

rates, may render certain Mineral Resources uneconomic and may ultimately result in

a restatement of estimated resources.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic

viability and there is a risk that they will never be mined or processed profitably.

Title Risk - Other parties may dispute the title to a property or the property may be

subject to prior unregistered agreements or liens and transfers or land claims by

aboriginal, native, or indigenous peoples. The title may be affected by undetected

encumbrances or defects or governmental actions. The Company has not conducted

surveys of all of its properties, and the precise area and location of claims or the

properties may be challenged and there is a risk that there are title defects affecting

such properties. The rules governing mining concessions in Chile and Argentina are

complex and any failure by the Company to meet requirements would have a material

adverse effect on the Company. Any defects in the title to the Company’s properties

could have a material and adverse effect on the Company.

Applicable governments may revoke or significantly alter the conditions of the

applicable exploration and mining authorizations or such exploration and mining

authorizations may be challenged or impugned by third parties. There is a risk that the

Company may have problems with renewing its licenses in the future. Inability to

renew a license could result in the loss of any project located within that license.

Foreign Operations Risk - The Company conducts exploration activities in foreign

countries, including Argentina and Chile. Each of these countries exposes the

Company to risks that may not otherwise be experienced if all operations were located

in Canada. The risks vary from country to country and can include, but are not limited

to, civil unrest or war, terrorism, illegal mining, changing political conditions,


fluctuations in currency exchange rates, expropriation or nationalization without

adequate compensation, changes to royalty and tax regimes, high rates of inflation,

labour unrest and difficulty in understanding and complying with the regulatory and

legal framework respecting ownership and maintenance of mineral properties.

Changes in mining or investment policies or shifts in political attitudes may also

adversely affect Company’s existing assets and operations. Real and perceived

political risk may also affect Company’s ability to finance exploration programs and

attract joint venture or option partners, and future mine development opportunities.

Surface Access - From time to time, a land possessor may dispute the Company’s

surface access rights, and as a result the Company may be barred from its legal

temporary occupation rights. Surface access issues have the potential to result in the

delay of planned exploration programs, and these delays may be significant. Such

delays may have a material adverse effect on the Company.

Metal Price Risk - The Company’s portfolios of properties and investments have

exposure to predominantly copper, gold, and silver. Commodity prices fluctuate widely

and are affected by numerous factors beyond the Company’s control, such as the sale

or purchase of metals by various central banks and financial institutions, interest rates,

exchange rates, inflation or deflation, fluctuation in the value of the United States

dollar and foreign currencies, global and regional supply and demand, and the political

and economic conditions of major metals-producing and metals-consuming countries

throughout the world. The prices of these metals greatly affect the value of the

Company, the price of the common shares of the Company and the potential value of

its properties and investments. This, in turn, greatly affects its ability to form joint

ventures, option agreements and the structure of any joint ventures formed. This is

due, at least in part, to the underlying value of the Company’s assets at different

metals prices.

Environmental and Socio-Political Risks - The Company seeks to operate within

environmental protection standards that meet or exceed existing requirements in the

countries in which the Company conducts activities. The Company also aims to

conduct its activities in accordance with high corporate social responsibility principles.

Present or future laws and regulations, however, may affect the Company’s

operations. Future environmental costs may increase due to changing requirements

or costs associated with exploration and the developing, operating and closing of

mines. The Company is subject to environmental regulation in the various jurisdictions

in which it operates. Failure to comply with these laws, regulations and permitting

requirements may result in enforcement actions, 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. Parties engaged in mining operations or in the

exploration or development of mineral properties may also be required to compensate

those suffering loss or damage by reason of the mining activities and may have civil or

criminal fines or penalties imposed for violations of applicable laws or regulations.

Furthermore, environmental hazards may exist on the properties on which the

Company holds interests which are unknown to the Company at present and which

have been caused by previous or existing owners or operators of the properties.

Uncertainty of Funding - The exploration and development of mineral properties

requires a substantial amount of capital and may depend on the Company’s ability to

obtain financing through joint ventures, debt financing, equity financing or other

means. General market conditions, volatile metals prices, a claim against the

Company, a significant disruption to the Company’s business, or other factors may

make it difficult to secure the necessary financing. There is a risk that the Company will

not be successful in obtaining required financing as and when needed on acceptable

terms. Failure to obtain any necessary additional financing may result in delaying or

indefinite postponement of exploration or development or even a loss of property


interest. If the Company needs to raise additional funds, such financing may

substantially dilute the interests of shareholders of the Company and reduce the value

of their investment.

Indigenous Peoples - The Company operates in some areas including parts of the Los

Helados area presently or previously inhabited or used by indigenous peoples. Various

international and national laws, codes, resolutions, conventions, guidelines, and other

material relate to the rights of indigenous peoples. Many of these materials impose

obligations on government to respect the rights of indigenous people. Some mandate

that government consult with indigenous people regarding government actions which

may affect indigenous people, including actions to approve or grant mining rights or

permits. ILO Convention 169, which has been ratified by Argentina and Chile, is an

example of such an international convention. The Company’s current and future

operations are subject to a risk that one or more groups of indigenous people may

oppose continued operation, further development, or new development of the

Company’s projects or operations. Such opposition may be directed through legal or

administrative proceedings or expressed in manifestations such as protests, roadblocks

or other forms of public expression against the Company’s activities. Opposition by

indigenous people to the Company’s operations may require modification of, or

preclude operation or development of, the Company’s projects or may require the

Company to enter into agreements with indigenous people with respect to the

Company’s projects.

Economic and Political Instability in Argentina - The Josemaría Project is located in

San Juan Province, Argentina. There are risks relating to an uncertain or unpredictable

political and economic environment in Argentina, especially as there is social

opposition to mining operations in certain parts of the country. During an economic

crisis in 2001 to 2003 and again in 2014, Argentina defaulted on foreign debt

repayments and on the repayment on a number of official loans to multinational

organizations. In addition, the government has renegotiated or defaulted on

contractual arrangements. The previous Argentinean government placed currency

controls on the ability of companies and its citizens to obtain United States dollars, in

each case requiring Central Bank approval (resulting in, at times, a limitation on the

ability of multi-national companies to distribute dividends abroad in United States

dollars) and revoked exemptions previously granted to companies in the oil and gas

and mining sectors from the obligation to repatriate 100% of their export revenues to

Argentina for conversion in the local foreign exchange markets, prior to transferring

funds locally or overseas. Similarly, the government adopted a requirement that

importers provide notice to the government and obtain approval for importation

before placing orders for certain goods. These measures have been lifted by the new

government that took office in December 2015. However the past actions indicate

that the Argentinean government may from time to time alter or impose additional

requirements or policies that may adversely affect the Company’s activities in

Argentina or in its ability to attract joint venture partners or obtain financing for its

projects in the future.

Infrastructure - Development and exploration activities depend, to one degree or

another, on adequate infrastructure. Reliable roads, bridges, power and water supplies

are important determinants that affect costs. Power and water are currently in short

supply throughout Northern Chile and this may adversely affect the ability of the

Company to explore and develop its Chilean projects. Establishing such infrastructure

will require significant resources, identification of adequate sources of raw materials

and supplies and necessary cooperation from national and regional governments,

none of which can be assured. There is a risk that the Company will not be able to

secure these power, water and access rights going forward or on reasonable terms.

Current Global Financial Condition - Market events and conditions have caused

significant volatility to commodity prices. Notwithstanding various actions by


governments, concerns about the general condition of the capital markets, financial

instruments, banks, investment banks, insurers and other financial institutions caused

the broader credit markets to further deteriorate and stock markets to decline

substantially. Increased levels of volatility can adversely affect the Company’s

operations and the value and price of the Shares. The Company is dependent on the

equity markets as its main source of operating working capital and the Company’s

capital resources are largely determined by the strength of the resource markets and

by the status of the Company’s projects in relation to these markets, and its ability to

compete for the investor support of its projects. Access to public financing has been

negatively impacted by concerns over global growth rates and conditions.

Consequently, equity financing may not be available to the Company in the amount

required at any time or for any period or, if available, it may not be obtained on terms

satisfactory to the Company.

Currency Risk - The Company will transact business in a number of currencies including

but not limited to the US Dollar, the Argentine Peso and the Chilean Peso. The

Argentine Peso in particular has had significant fluctuations in value relative to the US

and Canadian dollars. Ongoing economic uncertainty in Argentina as well as

unpredictable changes to foreign exchange rules may result in fluctuations in the value

of the Argentine Peso that are greater than those experienced in the recent past.

Fluctuations in exchange rates may have a significant effect on the cash flows of the

Company. Future changes in exchange rates could materially affect the Company’s

results in either a positive or negative direction. The Company does not currently

engage in foreign currency hedging activities.

Joint Exploration Properties - Certain of the Company’s properties including the Los

Helados Project, the Josemaría Project, and the La Chola Properties are subject to joint

exploration agreements. The Company is the operator of the these joint projects but

they are nonetheless subject to the risks normally associated with the conduct of joint

exploration partners, such as (i) disagreement with joint exploration partners

regarding how to explore, develop, and operate the projects efficiently; (ii) inability to

exert influence over certain strategic decisions made; and (iii) inability of joint

exploration partners to meet their obligations (iv) litigation between joint exploration

partners regarding joint exploration matters. The existence of any of these

circumstances may have a material adverse impact on the Company.

Corruption and Bribery - The Company is required to comply with anti-corruption and

anti-bribery laws, including the Extractive Sector Transparency Measures Act, the

Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign Corrupt

Practices Act, as well as similar laws in the countries in which the Company conducts

its business. If the Company finds itself subject to an enforcement action or is found to

be in violation of such laws, this may result in significant penalties, fines and/or

sanctions imposed on the Company resulting in a material adverse effect on the

Company.

Competition - There is aggressive competition within the mining industry for the

discovery and acquisition of properties considered to have commercial potential, as

well as the necessary labour and supplies required to develop such properties. The

Company competes with other exploration and mining companies, many of which

have greater financial resources, operational experience and technical capabilities than

the Company, for the acquisition of mineral claims, leases and other mineral interests

as well as for the recruitment and retention of qualified employees and other

personnel. The Company may not be able to maintain or acquire attractive mining

properties on terms it considers acceptable, or at all. Consequently, its financial

condition could be materially adversely affected.

Dependence on Key Personnel - The Company’s success will largely depend on the

efforts and abilities of certain senior officers and key employees. Certain of these

individuals have significant experience in the mining industry and, in particular the


mining industry in South America. If for any reason such officers and key employees

will not remain with the Company, the Company could be adversely affected. The

Company has not purchased key man life insurance for any of these individuals why

the Company could suffer economic loss if any of these individuals passed away.

Uninsurable Risks - Exploration, development and production operations on mineral

properties involve numerous risks, including unexpected or unusual geological

operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and other

environmental occurrences, as well as political and social instability. It is not always

possible to obtain insurance against all such risks and the Company may decide not to

insure against certain risks because of high premiums or other reasons. Should such

liabilities arise, they could reduce or eliminate any further profitability and result in

increasing costs and a decline in the value of the securities of the Company. The

Company does not maintain insurance against political risks.

Tax - The Company runs its business in different countries and strives to run its

business in as tax efficient a manner as possible. The tax systems in certain of these

countries are complicated and subject to changes. For this reason, future negative

effects on the result of the Company due to changes in tax regulations cannot be

excluded. Repatriation of earnings to Canada from other countries may be subject to

withholding taxes. The Company has no control over withholding tax rates.

D.3 Risks related to

the shares Market Price of Shares - Securities of mining companies have experienced substantial

volatility in the past, often based on factors unrelated to the financial performance or

prospects of the companies involved. These factors include macroeconomic conditions

in North America and globally, and market perceptions of the attractiveness of

particular industries. The price of the Company’s securities is also likely to be

significantly affected by short-term changes in commodity prices, other mineral prices,

currency exchange fluctuation, or in its financial condition or results of exploration on

its projects. Other factors unrelated to the performance of the Company that may

have an effect on the price of the securities of the Company include the following: the

extent of analytical coverage available to investors concerning the business of the

Company may be limited if investment banks with research capabilities do not follow

the Company’s securities; lessening in trading volume and general market interest in

the Company’s securities may affect an investor's ability to trade significant numbers

of securities of the Company; the size of the Company’s public float and its inclusion in

market indices may limit the ability of some institutions to invest in the Company's

securities; and a substantial decline in the price of the securities of the Company that

persists for a significant period of time could cause the Company's securities to be

delisted from an exchange, further reducing market liquidity. If an active market for

the securities of the Company does not continue, the liquidity of an investor's

investment may be limited and the price of the securities of the Company may decline.

If an active market does not exist, investors may lose their entire investment in the

Company. As a result of any of these factors, the market price of the securities of the

Company at any given point in time may not accurately reflect the long-term value of

the Company. Securities class-action litigation often has been brought against

companies following periods of volatility in the market price of their securities. The

Company may in the future be the target of similar litigation. Securities litigation could

result in substantial costs and damages and divert management's attention and

resources.

Risks related to the stock market – A prospective investor should be aware that an

investment in the Company’s Shares is associated with a high degree of risk, and that

the price of the Shares may not develop favorably.

Risks related to illiquid trading and the secondary listing – It is not possible to

anticipate the degree to which investors’ interest in NGEx will lead to active trading in


its Shares or how trading in the Shares will function in the future. Should active and

liquid trading not be sustained, holders of Shares may experience difficulties in selling

Shares, either momentarily, or completely.

Risks related to dividends – The mining and exploration industry is capital intensive

and the Company’s profits may need to be accumulated and used to reinvest in the

Company’s operations. Hence, the Company may not pay dividends to its shareholders

in the future.

Exchange rate fluctuations – Should the Company pay dividends in respect of the

Shares, such dividends will be paid in CAD. However, holders of Shares registered with

Euroclear will receive dividend distributions in SEK. Any depreciation of CAD in relation

to SEK could reduce the value of the investment or of any dividends.

Future offerings of debt or equity securities – NGEx may require additional funds to

finance further exploration, development and production activities, or to take

advantage of unanticipated opportunities. If NGEx raises additional funds by issuing

additional equity securities, such financing would dilute the economic and voting rights

of the Company’s shareholders.

Section E – Offer

E.1 Issue amount

and costs

N/A; this prospectus is being issued in conjunction with the admission to trading of

additional Shares on Nasdaq Stockholm and there is no offer by NGEx to acquire

Shares.

On November 29, 2016 the Company announced that it had offered by way of a non-

brokered private placement basis, an aggregate of up to 8 million New Shares of the

Company at a price of CAD $1.25 per Share, for gross proceeds of up to CAD $10

million (the “Offering”). A 4.00% finders' fee may be payable on all or a portion of the

Offering. On December 1, 2016 the Company announced that the books in the

Offering were closed on CAD $10 million. The closing of the Offering is conditional

upon the approval and registration with the Swedish Financial Supervisory Authority

of this prospectus (and the subsequent publication of the prospectus), regarding the

admission to trading of the New Shares on Nasdaq Stockholm.

E.2a Reasons for the

offer and use of

proceeds



Shares.

The net proceeds to the Company from the Offering will be used towards ongoing

work programs in Chile and Argentina as well as for general corporate purposes.

E.3 Background

and terms and

conditions



Shares.

The New Shares were offered by way of a non-brokered private placement in all

provinces and territories of Canada and in the United States and other jurisdictions

outside of Canada on an exempt basis.

E.4 Conflicts of N/A; this prospectus is being issued in conjunction with the admission to trading of


interest etc. additional Shares on Nasdaq Stockholm and there is no offer by NGEx to acquire

Shares.

As far as the members of the Board are aware, no physical or legal persons involved in

the admission to trading of the New Shares on Nasdaq Stockholm have financial or

other relevant interests that are of importance to the admission to trading, other than

as described herein.

E.5 Lock-up

agreement



Shares.

E.6 Dilution N/A; this prospectus is being issued in conjunction with the admission to trading of


Shares.

On November 29, 2016, the Company had 205,473,963 Shares issued and outstanding.

Following completion of the Offering, there will be an additional 8,000,000 Shares

outstanding, representing a dilution of approximately 3.9 percent as compared to the

number of Shares issued and outstanding on November 29, 2016.

E.7 Costs for the

investor



Shares.

NGEx RESOURCES INC. | Sammanfattning 18

SAMMANFATTNING Nedanstående text är en översättning av den engelska originaltexten ovan.

Denna sammanfattning omfattar information som måste offentliggöras (s.k. ”Moduler”). Modulerna är

numrerade i avsnitt A – E (A.1 – E.7).

Denna sammanfattning inkluderar alla Moduler som krävs i en sammanfattning för denna typ av värdepapper

och emittent. Eftersom inte samtliga Moduler behöver vara inkluderade kan finnas luckor i numreringen av

Modulerna.

Även om det på grund av värdepapperstyp och emittent kan krävas att en viss Modul redovisas i

sammanfattningen så är det möjligt att det inte finns någon relevant information att redovisa avseende den

ifrågavarande Modulen. I sådant fall inkluderas i sammanfattningen en kort beskrivning av Modulen ifråga med

kommentaren ”Ej tillämplig”.

Avsnitt A – Introduktion och varningar

A.1 Introduktion

och varningar Denna sammanfattning bör betraktas som en introduktion till prospektet.

Varje beslut om att investera i värdepapperen ska baseras på en bedömning av

prospektet i dess helhet från investerarens sida.

Om yrkande avseende uppgifterna i prospektet anförs vid domstol, kan den

investerare som är kärande, i enlighet med europeiska unionens medlemstaters

nationella lagstiftning bli tvungen att svara för kostnaderna för översättning av

prospektet innan de rättsliga förfarandena inleds.

Civilrättsligt ansvar kan endast åläggas de personer som sammanställt

sammanfattningen, inklusive översättningar därav, men endast om sammanfattningen

är vilseledande, felaktig eller oförenlig med de andra delarna av prospektet eller om

den, tillsammans med de andra delarna av prospektet, inte ger nyckelinformation för

att hjälpa investerare när de överväger att investera i sådana värdepapper.

A.2 Finansiella

mellanhänder

Ej tillämplig; upptagandet till handel av de Nya Aktierna omfattas inte av finansiella

mellanhänder.

Avsnitt B – Emittent

B.1 Registrerad

firma och

handels-

beteckning

Bolagets firma och handelsbeteckning är NGEx Resources Inc. (”Bolaget”, ”NGEx Resources” eller ”NGEx”).

B.2 Säte, bolags-

form etc. Bolaget är ett publikt aktiebolag registrerat i enlighet med Canada Business

Corporations Act (”CBCA”). Bolagets organisationsnummer är 425318-3. Bolagets

registrerade kontorsadress är Suite 2200, 885 West Georgia Street, Vancouver, British

Columbia V6C 3E8.

B.3 Huvudsaklig

verksamhet NGEx Resources är ett kanadensiskt mineralprospekteringsbolag med


prospekteringsprojekt i Chile and Argentina. Bolaget fokuserar på att utveckla sitt

Project Constellation som omfattar den integrerade utvecklingen av två stora

kopparguldfyndigheter, Los Helados- och Josemaría-fyndigheterna, som ligger i Chiles

region III och angränsande San Juan-provinsen, Argentina.

Bolagets strategi är att skapa värde för sina aktieägare genom att expandera och öka

kvalitén på sina resurser, samt att utveckla den teknik och de studier som krävs för att

förbereda Bolagets projekt för utveckling, antingen av Bolaget och dess partners eller

av utomstående tredje parter. Bolaget avser att öka värdet för sina aktieägare genom

framgångsrik prospektering och genom att i framtiden konvertera fyndigheter till

morgondagens utvecklingsprojekt för att positionera Bolaget till en förstklassig

investering inom kopparindustrin.

B.4a Tendenser Marknaden för brytning och prospektering av koppar har väsentligen förändrats under

det senaste decenniet och många av dessa trender förväntas fortsätta begränsa

koppartillförseln:

• malmkvaliteten sjunker och detta ökar enhetskostnaderna,

• mineralfyndigheterna hittas längre ner i marken och detta kräver

gruvmetoder som är mer kostsamma,

• nya stora kapitalbudgetöverskridanden har begränsat intresset för

investeringar,

• brist på vatten- och energiresurser ökar kostnaderna,

• beskattning- och royaltysystem tar en större del av de ekonomiska fördelarna

– riskerna ökar då för producenterna,

• arbetsproduktiviteten har minskat, och

• patriotismen rörande resurser och politiska risker kvarstår som viktiga frågor.

Vidare är framtida produktionsprognoser ofta optimistiska då de inte tar höjd för en

långsammare uppstart av projekt än som förväntas, gruvväggar som fallerar,

mekaniska och andra fel, aggressiva produktionsestimat, utökade ledtider för

utrustning, fördröjningar på grund av väder och klimat, fördröjningar på grund av

lagstiftning och miljö, uppskov på projektkapital, validitet och stabilitet i den finansiella

politiken, m.m.

B.5 Koncern NGEx Resources är kanadensiskt moderbolag i en koncern som består av tretton (13)

dotterbolag vars säte finns i Argentina, Bermuda, Kanada, Chile, Uruguay och Peru.

B.6 Större aktie-

ägare Enligt Bolagets styrelseledamöters och lednings kännedom, utgör Bolagets aktieägare

som innehar mer än 10 procent eller mer av rösterna och aktierna per den 30

september 2016:

Namn Antal aktier(2)

% av antalet aktier


18 000 000 8,76%

Zebra Holdings and

Investments S.à r.l.(1)

21 762 539 10,59%

39 762 539 19,35% Noter:

(1) Lorito Holdings S.à r.l. och Zebra Holdings och Investmets S.à r.l. rapporterar deras innehav av

värdepapper som en gemensam aktör och de är privat ägda genom en ”trust” grundat av Adolf H. Zebra

innehar också ett förlagslån om USD 525 000 som utfärdats av NGEx. (2)

Denna information kommer från offentligt tillgängliga källor och har inte självständigt verifierats av Bolaget.


B.7 Utvald historisk

information

NGEx Resources

Den finansiella informationen som redovisas i nedanstående tabeller för de

niomånadersperioder som avslutades per den 30 september 2016 och per den 30

september 2015 har hämtats från Bolagets oreviderade konsoliderade delårsrapporter

för den niomånadersperiod som avslutades den 30 september 2016. Den utvalda

finansiella informationen som redovisas i nedanstående tabeller för räkenskapsåren

2015, 2014 och 2013 har hämtats från Bolagets reviderade konsoliderade finansiella

rapporter för samma år. Dessa konsoliderade finansiella rapporter har upprättats i

enlighet med IFRS.

Resultaträkning i sammandrag

CAD tusental Oreviderat Oreviderat Reviderat Reviderat Reviderat jan-sept

2016 jan-sept

2015jan-dec

2015jan-dec

2014 jan-dec

2013

Revenues - - - - -

Prospektering och projektutredning 5 207 17 098 19 837 19 258 22 698

Löner och förmåner 582 589 757 1 412 1 068

Aktierelaterad kompensation 598 934 713 1 060 1 038

Ersättning till ledningen 250 329 407 540 540

Ersättning till övriga nyckelpersoner 675 212 344 354 369

Resekostnader 37 154 172 247 172

Marknadsföring och PR 150 224 248 419 356

Donationer - - - - 340

Kontor och övrigt 379 334 385 626 321

Övrigt och administration 2 671 2 776 3 026 4 658 4 204

Rörelseförlust 7 878 19 874 22 863 23 916 26 902

Ränteintäkter (31) (28) (30) (65) (235)

Valutakursförlust (vinst) 184 (452) (268) (888) (148)

Övriga utgifter 184 422 220 284 93

Vinst på spin-off transaktion (30 032) - - - -

Vinst från disposition / utbyte av investeringar (588) - - - (180)

Vinst från disposition av mineraltillgångar - (165) (1 552) - -

Orealiserade förlustinvesteringar - 25 144 105 660

Nedskrivning av mineralegendomsintressen 77 - - - 1 196

Övriga (inkomster) utgifter (30 206) (198) (1 486) (564) 1 386

Nettoförlust (inkomster) från pågående verksamhet (22 328) 19 676 21 377 23 352 28 288

Nettoförlust från avyttrad verksamhet - - - - 84

Nettoförlust (inkomst) (22 328) 19 676 21 377 23 352 28 372

av vilket är hänförligt till aktieägarna i Bolaget (22 328) 19 676 21 377 23 352 28 372

av vilket är hänförligt till innehav utan bestämmande

inflytande -

--

- -


Balansräkning i sammandrag

CAD tusental Oreviderat Oreviderat Reviderat Reviderat Reviderat

30 sept 2016

30 sept 2015

31 dec 2015

31 dec 2014

31 dec 2013

Tillgångar

Likvida medel 1 454 3 956 2 113 28 480 21 260

Hänförligt till närstående parter 123 - - - -

Investeringar 1 108 218 652 353 326

Fordringar och andra tillgångar 278 757 467 1 537 1 118

Omsättningstillgångar 2 963 4 931 3 232 30 370 22 704

Erhållen aktieersättning 973 - 861 - -

Inventarier 110 159 137 164 247

Mineraltillgångar 6 178 15 348 12 770 18 129 10 439

Övriga anläggningstillgångar 8 8 8 8 8

Anläggningstillgångar 7 269 15 515 13 776 18 301 10 694

Totala tillgångar 10 232 20 446 17 008 48 671 33 398

Eget kapital och skulder

Totalt eget kapital 8 062 18 092 13 830 36 050 24 622

Leverantörsskulder och upplupna skulder 1 268 1 501 2 262 5 769 4 328

Hänförligt till närstående parter 99 - - - 28

Hänförligt till partners i samriskprojekt - - 40 6 852 4 101

Kortfristiga skulder 1 367 1 501 2 302 12 621 8 457

Övriga långfristiga skulder 803 853 876 - 319

Långfristiga skulder 803 853 876 - 319

TOTALT EGET KAPITAL OCH SKULDER 10 232 20 446 17 008 48 671 33 398

Eget kapital hänförligt till aktieägarna i

Bolaget 8 062 18 092 13 830 36 050 24 622

Eget kapital hänförligt till innehav utan

bestämmande inflytande - - - - -

Kassaflödesanalyser

CAD tusental Oreviderat Oreviderat Reviderat Reviderat Reviderat

jan-sept 2016

jan-sept 2015

jan-dec 2015

jan-dec 2014

jan-dec 2013

Kasseflöde, löpande verksamhet innan

förändringar i rörelsekapital (7 490) (18 882) (22 068) (22 637) (25 270)

Kasseflöde från förändringar i rörelsekapital (1 120) (6 687) (5 434) (394) (760)

Kassaflöde, löpande verksamhet efter

förändringar i rörelsekapital (8 610) (25 569) (27 502) (23 031) (26 030)

Kassaflöde från finansieringsverksamhet 7 613 - - 34 309 33 377

Kassaflöde från investeringsverksamhet 436 (467) (214) (4 625) (1 402)

Valutaeffekt på likvida medel (98) 1 512 1 349 567 (1 982)

Förändring av likvida medel (659) (24 524) (26 367) 7 220 3 963

Likvida medel vid periodens början 2 113 28 480 28 480 21 260 17 297

Likvida medel vid periodens slut 1 454 3 956 2 113 28 480 21 260


Nyckeltal

Oreviderat Oreviderat Oreviderat Reviderat Reviderat

jan-sept

2016

jan-sept

2015

jan-dec

2015

jan-dec

2014

jan-dec

2013

Nettoförlust (intäkt) från

pågående verksamhet före och

efter utspädning (per aktie)(1)

(0,11) 0,10 0,11 0,13 0,17

Nettoförlust (intäkt) före och

efter utspädning (per aktie)(1)

(0,11) 0,10 0,11 0,13 0,17

Soliditet vid periodens slut(2)

79% 88% 81% 74% 74%

Genomsnittligt antal

utestående aktier före

utspädning(1)

201 435 444 187 712 994 187 712 994 178 528 152 167 833 348

Betald utdelning per aktie(1)

0 0 0 0 0

(1) Nyckeltalen definieras i enlighet med IFRS och har reviderats av Bolagets revisor avseende

räkenskapsåren 2015, 2014 och 2013 och de är oreviderade rörande perioderna som slutar

30 september 2016 och 2015. (2)

Nyckeltalen är inte definierade i enlighet med IFRS och har inte reviderats av Bolagets revisor.

Definitioner av nyckeltal vilka är definierade i enlighet med IFRS

Nyckeltal Definition

Nettoförlust (intäkt) före och efter

utspädning per aktie

Nettointäkt/förlust dividerat med genomsnittligt antal

utestående aktier

Genomsnittligt antal utestående aktier före utspädning

Antalet utstående aktier under perioden

Betald utdelning per aktie Total betald utdelning dividerat med antalet utstående aktier

Definitioner av nyckeltal vilka inte är definierade i enlighet med IFRS

Nyckeltal Definition Motivering

Soliditet vid periodens slut

Totalt eget kapital under perioden dividerat med totala tillgångar under

perioden

Soliditeten visar andelen av de totala tillgångarna som utgörs av eget kapital och inkluderas för att investerare ska förstå Bolagets

kapitalstruktur.

Avstämning av alternativa resultatmått

Eget kapital vid periodens slut CAD tusental Oreviderat Oreviderat Reviderat Reviderat Reviderat

30 sept 2016 30 sept 2015 31 dec 2015 31 dec 2014 31 dec 2013

Totalt eget kapital 8 062 18 092 13 830 36 050 24 622

Totala tillgångar 10 232 20 446 17 008 48 671 33 398

Eget kapital vid periodens slut 79% 88% 81% 74% 74%


Bolagets viktigaste utveckling och aktiviteter under perioden 1 januari 2013 till

30 september 2016 är följande:

Period Beskrivning

Verksamhetsår

2013

Efter den privata finansieringen om 34 miljoner CAD i januari 2013

har Bolaget under perioden slutfört ett stort

prospekteringsprogram för Los Helados-projektet, Josemaría-

projektet och Filo del Sol-projektet. Totalt har under

verksamhetsåret 2013 26 miljoner CAD spenderats på den

löpande verksamheten. Per den 31 december 2013 hade Bolaget

likvida medel om 21 miljoner CAD och ett rörelsekapital om

14 miljoner CAD.

Verksamhetsår

2014

Bolaget rapporterade under verksamhetsåret 2014 ett

framgångsrikt resultat av en preliminär ekonomisk bedömning

(”PEA”) på Bolagets till 60 procent ägda Los Helados-projektet

beläget i Chile. Fokus var att utvärdera möjligheten kombinera Los

Helados-projektet och Josemaría-projektet. Under året upptogs

även Bolagets aktier till handel på Nasdaq Stockholm genom en

sekundärnotering och kapital om totalt 35 miljoner CAD

anskaffades därefter.

Innan årets slut förvärvades resterande 40 procent i Filo del Sol-

projektet vilket ägdes av dess partner Pan Pacific Copper Co., Ltd.,

för en köpeskilling om totalt sju miljoner USD. Bolaget bedömde

att Filo del Sol-projektet har utmärkt potential för prospektering

och att det har betydande potential att utvecklas till en

betydande tillgång.

Totalt har under verksamhetsåret 2014 23 miljoner CAD

spenderats på den löpande verksamheten. Per den 31 december

2014 hade Bolaget likvida medel om 28 miljoner CAD och ett

rörelsekapital om 18 miljoner CAD.

Verksamhetsår

2015

Bolaget har fortsatt att fokusera på att höja värdet på sina

Sydamerikanska projekt och överväger en kombinerad utveckling

för sina projekt Los Helados och Josemaría (”Integrerad PEA”).

Den Integrerade PEA innefattar en optimerad konceptuell

gruvplan för Los Helados-fyndigheten som innehåller flera

förbättringar jämfört med ett fristående Los Helados. Resultaten

av den Integrerade PEA för verksamhetsåret 2015 offentliggjordes

den 7 januari 2016.

Under oktober 2015 slutfördes försäljningen av Bolagets intresse i

GJ-projektet. Försäljningen är i linje med Bolagets strävan att

rationalisera sin portfölj samt realisera värden från projekt som

inte är kärnprojekt.

Bolaget har under året spenderat 28 miljoner CAD på den löpande

verksamheten. Majoriteten av de operativa kostnaderna är

hänförliga till medel som krävts för att slutföra

prospekteringsprogrammet i Sydamerika avseende koppar och

guld inklusive Los Helados, Josemaría och Filo del Sol.

Ingen finansieringsverksamhet ägde rum under 2015.

Per den 31 december 2015 hade Bolaget likvida medel om två

miljoner CAD och ett rörelsekapital om en miljon CAD.


Niomånader

med slut 30

sept 2016

Utöver offentliggörandet av resultaten för den Integrerade PEA

rörande det kombinerade Los Helados- och Josemaría-projektet

avslutade Bolaget finansieringar genom riktade emissioner om

totalt elva miljoner CAD under det första kvartalet 2016.

Verksamhetens huvudfokus har under 2016 varit genomförandet

och slutförandet av Filo del Sol-projektet genom ett ”plan of

arrangement” i enlighet med Canada Business Corporation Act,

enligt vilken NGEx överfört sina helägda dotterbolag vilka direkt

eller indirekt äger Filo del Sol-projektet inklusive tre miljoner CAD

i kontanta medel till Filo Mining Corp. (”Filo Mining”) i utbyte mot

stamaktier i Filo Mining. Stamaktierna i Filo Mining delades

därefter ut till aktieägarna i Bolaget som en avkastning på kapital.

Avknoppningen avslutades den 16 augusti 2016 och Filo Mining

noterades på Toronto Stock Venture Exchange och Nasdaq North

under tredje kvartalet 2016.

Väsentliga ändringar i NGEx Resources finansiella ställning och rörelseresultat efter

den 30 september 2016.

Det har inte skett några väsentliga ändringar i Bolagets finansiella ställning och

rörelseresultat efter den 30 september 2016.

B.8 Utvald

proforma-

redovisning

Ej tillämplig; prospektet innehåller ingen proforma redovisning.

B.9 Resultat-

prognos

Ej tillämplig; prospektet innehåller ingen resultatprognos eller beräkning av förväntad

vinst.

B.10 Revisors

anmärkningar Ej tillämplig; det finns inga revisorsanmärkningar.

B.11 Rörelsekapital Bolagets bedömning är att, per denna dag, Bolagets nuvarande rörelsekapital inte är

tillräckligt för den planerade verksamheten för de kommande tolv månaderna. Bolaget

bedömer att Bolaget kommer att behöva ytterligare finansering i januari 2017 för att

bibehålla en positiv rörelsekapitalssituation för det planerade prospekterings-

programmet för 2016-2017-säsongen. Bolaget behöver anskaffa ytterligare medel om

minst ca 6 miljoner CAD av ytterligare rörelsekapital för att möte sitt

rörelsekapitalsbehov för det planerade prospekteringsprogrammet. Den 1 december

2016 offentliggjorde Bolaget att böckerna stängts i erbjudandet om 10 miljoner CAD

vilket Bolaget förväntar sig att erhålla och vilket är tillräckligt för att möta Bolagets

rörelsekapitalsbehov för den planerade verksamheten de nästkommande tolv

månaderna. Slutförandet av erbjudandet är föremål för vissa villkor, såsom att detta

prospekt godkänns, vilka samtliga förväntas uppfyllas på eller runt datumet för detta

prospekt. Skulle inte erbjudandet fullföljas av någon anledning, kommer Bolaget att

bedöma olika alternativ såsom att anpassa Bolagets prospekteringsprogram för att

minska rörelsekapitalsbehovet, eller att söka ytterligare finansering från annan eget

kapital-finansiering, joint ventures eller avyttring av mineralfyndigheter och

investeringar. Skulle inget av dessa alternativ för att antingen minska

rörelsekapitalsbehovet eller säkra ytterligare finansiering lyckas finns det en risk att

Bolaget helt eller delvis skulle behöva omorganiseras, eller att Bolaget skulle sättas i

konkurs.

Eftersom Bolaget är ett prospekteringsbolag och inte har några intäktskällor, kan

ytterligare finansering genom eget kapital-finansieringar, joint ventures eller avyttring

av mineralfyndigheter och investeringar komma att vara nödvändigt för att finansiera

ytterligare prospektering och bolagskostnader. Sådan finansiering är inte alltid

tillgänglig för Bolaget i det belopp som krävs vid den tidpunkten eller på


tillfredställande villkor.

Avsnitt C – Värdepapper

C.1 Värdepapper

som upptas till

handel

Avsikten är att de nya aktierna noteras på Toronto Stock Exchange ("TSX") och på

NASDAQ Stockholm, med ISIN-kod CA65339B1004. Samtliga aktier som handlas på

Nasdaq Stockholm kommer att anslutas till Euroclear Sweden och kommer inte att

representeras av fysiska aktiebrev.

C.2 Denominering Aktierna är denominerade i CAD.

C.3 Antal aktier Det auktoriserade aktiekapitalet är ett obegränsat antal stamaktier utan nominellt

värde. Från och med den 30 september 2016 hade NGEx 205 240 630 utfärdade,

utstående och fullt betalda stamaktier.

C.4 Rättigheter

som

sammanhänger

med aktierna

Aktieägarna i bolaget har rätt att få information om och delta i alla bolagsstämmor.

Varje aktie berättigar till en röst på de beslut som behandlas på dessa bolagsstämmor.

Innehavare av aktier är berättigade till utdelning, om och när, som anges av NGEx

Resources styrelse. Vid likvidation, upplösning eller avveckling av Bolaget ger aktierna

rätt till de återstående tillgångarna i bolaget vilka är tillgängliga för utdelning till

aktieägarna. Bolagets s.k. “articles of continuance” (vilket kan sägas motsvaras av ett

svenskt aktiebolags bolagsordning) innehåller inga bestämmelser om företrädesrätt för

innehavare av aktier i Bolaget.

C.5 Inskränkningar

i rätten att fritt

överlåta

aktierna

N/A; det finns inga inskränkningar i rätten att fritt överlåta aktierna förutom för

innehavare av aktier i samband med den riktade emissionen kommer att omfattas av

en lagstadgad s.k ”hold period” som sträcker sig fyra månader plus en dag från

slutdatum avseende återförsäljning till invånare i Kanada och/eller genom överlåtelser

på TSX. Under och efter denna hold period kan aktierna fritt överlåtas på Nasdaq

Stockholm.

C.6 Notering av

aktierna Aktierna är noterade på TSX och Nasdaq Stockholm under ”NGQ”. Vidare förutsätts att

de nya aktierna kommer att tas upp till handel på TSX och Nasdaq Stockholm.

C.7 Utdelnings-

politik

Det finns inga restriktioner som hindrar Bolaget från att betala utdelning. Förutom

avknoppningen av Filo Del Sol i vilken aktierna i Filo Mining delades ut genom

utdelning till aktieägare i Bolaget har ingen utdelning skett, per dagen för detta

prospekt avseende aktierna och Bolaget planerar inte att betala någon utdelning inom

den närmaste framtiden. Beslut om utdelning i framtiden kommer att baseras på

Bolagets resultat och finansiella behov samt andra omständigheter som Bolagets

styrelse anser påverkar frågan om utdelning.

Avsnitt D – Risker

D.1 Risker

relaterade till

emittenten

Bolagets verksamhet och de sektorer där Bolaget är verksamt är föremål för ett antal

risker som är helt eller delvis utanför NGEx kontroll och som kan väsentligt negativt

påverka bolagets verksamhet, finansiella ställning och resultat och framtidsutsikter. De

riskfaktorer som anges nedan är de risker som anses vara de huvudsakliga riskerna, de

ska dock inte tolkas som uttömmande, inte heller är dessa riskfaktorer rangordnade

efter grad av betydelse. Bolagets verksamhet, rörelseresultat eller finansiella ställning

kan också väsentligen försvåras av andra risker och osäkerheter som för närvarande är


okända för bolaget, eller som för närvarande inte betraktas som väsentliga.

Prospektering- och utvecklingsrisk – Bolagets marker/markområden är i ett tidigt

skede av prospektering och det är fortfarande okänt om det finns kommersiell malm.

Prospektering efter mineraltillgångar innebär en hög grad av risk och få av de marker

som prospekteras är optimalt utvecklade för gruvproduktion. Upptäckten av

mineralfyndigheter är beroende av flera faktorer, framför allt av den tekniska

kompetensen hos de som arbetar med prospektering samt att det finns kapital för att

genomföra dessa program. Kostnaden att genomföra dessa kan vara betydande och

sannolikheten att göra framgångsrika upptäckter är svår att bedöma. Det finns en risk

att Bolagets mineralprospekteringsverksamhet inte leder till några nya upptäcker av

kommersiell malm. Det finns också en risk för att även om kommersiella kvantiteter av

malm upptäcks att dessa inte kan utvecklas och sättas i en kommersiell produktion. En

mineralfyndighets kommersiella bärkraft är också beroende av ett antal faktorer, varav

några särskilt tillhör mineralfyndigheten. De flesta av ovanstående faktorer är utanför

Bolagets kontroll.

Uppskattning av mineraltillgång – Bolagets redovisade mineraltillgångar är endast

uppskattningar. Det finns en risk att de uppskattade mineraltillgångarna inte kommer

att utvinnas. Uppskattningar av mineraltillgångar är till sin natur oprecisa och beror, till

viss del, på statistiska slutsatser vilka kan vara otillförlitliga eftersom dessa baseras på

en begränsad provtagning och därför kan vara osäkra eftersom proverna inte

nödvändigtvis är representativa. Uppskattningar av mineraltillgångar kan behöva

revideras (antingen uppåt eller neråt). Svängningar på marknaden avseende priset på

metaller samt ökade uppskattade produktionskostnader eller minskningar i

uppskattade utvinningsnivåer kan leda till att vissa mineraltillgångar blir oekonomiska,

vilket i slutändan kan resultera i upprepning av uppskattade tillgångar.

Mineraltillgångar som inte är malmreserver har inte visat ekonomisk lönsamhet och

det finns en risk att dessa aldrig kommer att brytas eller kunna bearbetas lönsamt.

Rättighetsrisker – Andra parter kan bestrida rätten till ett markområde eller ett

markområde kan vara föremål för tidigare oregistrerade avtal eller panträtter och

överföringar kan leda till krav från ursprungsbefolkningar. Äganderätten kan påverkas

oupptäckta inteckningar eller defekter eller av statliga åtgärder. Bolaget har inte

genomfört undersökningar av samtliga markområden som Bolaget äger, och det

särskilda området, placeringen eller marken kan ifrågasättas och det finns en risk att

äganderätten påverkar sådana markområden. Reglerna rörande godkännande för

gruvbrytning i Chile och Argentina är komplexa och om Bolaget misslyckas med att

följa dessa krav kan det ha en väsentligt negativ påverkan på Bolaget. Eventuella

brister i äganderätten av Bolagets markområden kan ha en väsentligt negativ påverkan

på Bolaget.

Risker relaterade till utländsk verksamhet – Bolaget bedriver

prospekteringsverksamhet i utlandet, bland annat i Argentina och Chile. Var och en av

dessa länder utsätter Bolaget för risker som inte skulle uppstå om all verksamhet var

belägen i Kanada. Riskerna varierar från land till land och kan innefatta, men är inte

begränsat till, oroligheter, krig, terrorism, illegal gruvdrift, ändrade politiska

förhållandena, svängningar i valutakurser, expropriation eller förstatligande utan

tillräcklig ersättning, ändringar i avgifts- eller skattesystem, hög inflation, oro på

arbetsmarknaden och rättsliga ramverk avseende ägande och underhåll av mineraler.

Förändringar i gruv- eller investeringspolitik eller förändringar i politiska attityder kan

ha en väsentligt negativ påverkan på Bolagets befintliga tillgångar och verksamhet.

Verklig och upplevd politisk risk kan också påverka Bolagets möjligheter att finansiera

prospekteringsprogram och att locka samarbete eller alternativa partners och framtida

möjligheter till malmutveckling.

Ytåtkomst – Från tid till annan, kan innehavaren av mark bestrida Bolagets tillgång till

en viss yta och som ett resultat av detta kan Bolaget bli hindrade från sin juridiska


tillfälliga besittningsrätt. Problem med åtkomst till viss yta kan resultera i en försening

av planerade prospekteringsprogram och dessa förseningar kan vara betydande.

Sådana förseningar kan ha en väsentligt negativ påverkan på Bolaget.

Metallprisrisk – Bolagets portföljer av markområden och investeringar har

framträdande exponering mot koppar, guld och silver. Råvarupriser svänger kraftigt

och påverkas av ett flertal faktorer vilka är utanför Bolagets kontroll, så som försäljning

eller köp av metaller av olika centralbanker och finansinstitut, räntor, växelkurser,

inflation eller deflation, svängningar i värdet på den amerikanska dollarn och utländska

valutor, globalt och regionalt utbud och efterfrågan samt politiska och ekonomiska

villkor för länder som är större metallproducenter och metallkonsumenter. Priset på

dessa metaller påverkar i hög grad värdet på Bolaget och priset på aktierna i Bolaget

och det potentiella värdet av dess markområden och investeringar. Detta i sin tur

påverkar Bolagets förmåga att bilda joint ventures, ingå optionsavtal samt strukturen

för redan bildade joint ventures. Detta beror, åtminstone delvis, på att det

underliggande värdet av Bolagets tillgångar påverkas av skilda metallpriser.

Miljömässiga och sociopolitiska risker – Bolaget strävar efter att verka inom de

miljöskyddsstandarder som uppfyller eller överträffar de befintliga kraven i de land i

vilket Bolaget bedriver sin verksamhet. Bolaget strävar också efter att bedriva sin

verksamhet i enlighet med höga CSR-principer. Nuvarande eller framtida lagar och

regler kan, trots detta, påverka Bolagets verksamhet. Framtida miljökostnader kan öka

på grund av ändrade krav eller kostnader i samband med prospektering och utveckling,

drift och stängning av gruvor. Bolaget är föremål för miljölagstiftning i olika

jurisdiktioner i vilka Bolaget bedriver verksamhet. Underlåtenhet att följa dessa lagar,

regler och tillståndskrav kan resultera i tvångsåtgärder, inklusive krav utfärdade av

regulatoriska eller rättsliga myndigheter vilket orsakar att verksamheten upphör eller

begränsas och kan innefatta åtgärder vilka kräver investeringar, installation av

ytterligare utrustning eller andra korrigerande åtgärder. Parter involverade i gruvdrift

eller i prospektering eller utveckling av mineraltillgångar kan krävas att kompensera de

som drabbas av förlust eller skada på grund av gruvdriften och kan ådömas civila- eller

straffrättsliga böter/skadestånd eller annat straff eller har civila- eller straffrättsliga

böter eller andra sanktioner på grund av överträdelse mot tillämpliga lagar eller regler.

Därutöver kan miljörisker på markområden vilka Bolaget har ett intresse av som för

närvarande är okända för Bolaget ha drabbats av skada från tidigare eller nuvarande

ägare eller av verksamhetsdrivare på dessa marker.

Osäkerhet om finansiering – Prospektering och utveckling av mineraltillgångar kräver

ett avsevärt kapital och är beroende av Bolagets möjlighet att erhålla finansiering

genom joint ventures, skuldfinansiering, eget kapital eller på annat sätt. Allmänna

marknadsförhållanden, instabila metallpriser, krav mot Bolaget, betydande störningar i

Bolagets verksamhet eller andra faktorer kan försvåra för Bolaget att säkra en

tillräcklig finansiering. Det finns en risk att Bolaget inte lyckas få den finansiering som

krävs när det behövs på marknadsmässiga villkor. Misslyckas Bolaget med att erhålla

nödvändig finansiering kan detta resultera i förseningar eller ett obestämt

uppskjutande av prospektering eller utveckling, eller till och med en förlust av

markområden. Om Bolaget behöver tillförskaffa ytterligare kapital, kan sådan

finansiering väsentliga späda ut aktieägarnas intresse i Bolaget och minska värdet på

deras investering.

Ursprungsbefolkningar – Bolaget verkar i vissa områden, bland annat delar av Los

Helados, som för närvarande är eller tidigare har varit bebodda eller varit nyttjade av

ursprungsbefolkningar. Olika internationella och nationella lagar, bestämmelser,

resolutioner, konventioner, riktlinjer och andra bestämmelser reglerar

ursprungsbefolkningars rättigheter. Flera av dessa regelverk uppställer en skyldighet

för respektive regering att respektera ursprungsbefolkningarnas rättigheter. Vissa avtal

kräver att regeringen samråder med ursprungsbefolkningen innan några statliga

åtgärder kan vidtas vilka kan påverka ursprungsbefolkningen, inklusive åtgärder för att


godkänna eller bevilja en rätt eller tillstånd att driva gruva. ILO-konventionen 169

vilken har ratificerats av Argentina och Chile är ett exempel på en sådan konvention.

Bolagets nuvarande och framtida verksamhet är föremål för en risk att en eller flera

grupper av ursprungsbefolkningar motsätter sig en fortsatt drift, fortsatt utveckling

eller en ny utveckling av Bolagets projekt eller verksamhet. En sådan motsättning kan

ske direkt genom legala eller administrativa processer eller kan uttryckas genom

manifestationer så som protester, vägblockader eller andra former av offentliga

uttryck mot Bolagets verksamhet. Motstånd från ursprungsbefolkning mot Bolagets

verksamhet kan kräva modifikationer av, eller hindra en verksamhet eller en utveckling

av Bolagets projekt eller ställa krav på att Bolaget ingår avtal med

ursprungsbefolkningen i förhållande till Bolagets projekt.

Ekonomisk och politisk instabilitet i Argentina – Josemaría-projektet sker i San Juan-

provinsen i Argentina. Det finns risker i samband med en osäker och oförutsebar

politisk och ekonomisk miljö i Argentina, särskilt eftersom det, i vissa delar av landet,

finns ett motstånd mot gruvdrift. Under en ekonomisk kris mellan 2001–2003 och

återigen under 2014 har Argentina misslyckats med att återbetala utländska skulder

samt med att återbetala ett antal officiella lån till multinationella organisationer.

Dessutom har regeringen omförhandlat eller misslyckats med flera av sina

kontraktuella åtaganden. Den tidigare argentinska regeringen gjorde sin valutakontroll

beroende av bolag och dess medborgare och för att erhålla USD. I varje enskilt fall

krävdes centralbankens godkännande (vilket resulterade i, i vissa fall, en begräsning i

möjligheten för multinationella företag att lämna utdelning utomlands i USD) och

återkallade undantag vilket garanterat företag i olja-, gas- och gruvsektorn från

skyldigheten att ta hem 100% av deras exportinkomster till Argentina för omvandling

till de lokala valutamarknaderna, före omvandling lokalt eller utomlands. På liknande

sätt införde regeringen ett krav att importörer innan de utfärdade orders på vissa

typer av varor skulle underrätta regeringen och erhålla ett godkännande. Dessa

åtgärder har släppts av den nya regeringen som tillträdde i december 2015. Tidigare

vidtagna åtgärder indikerar att den argentinska regeringen kan, från tid till annan,

ändra eller ställa ytterligare krav eller policys vilka kan ha en väsentligt negativ

påverkan på Bolagets verksamhet i Argentina eller på dess förmåga att ingå i joint

ventures eller erhålla finansiering för projekt i framtiden.

Infrastruktur – Utveckling och prospekteringsverksamhet beror till en viss grad på en

utvecklad infrastruktur. Tillförlitliga vägar, broar, kraft- och vattenförsörjning är viktiga

faktorer vilka påverkar kostnaderna. El och vatten är för tillfället en bristvara i hela

norra Chile och detta kan ha en väsentligt negativ påverkan på Bolagets möjlighet att

utforska och utveckla sina chilenska projekt. Att upprätta en utvecklad infrastruktur

kommer att kräva betydande resurser, identifiering av lämpliga källor och råmaterial

samt ett tillhandahållande och nödvändigt samarbete från nationella och regionala

myndigheter av vilket inget kan tas för givet. Det finns en risk för att Bolaget inte

kommer kunna säkra energi, vatten och nyttjanderätter på marknadsmässiga villkor.

Nuvarande globalt finansiellt skick – Förhållanden och händelser på marknaden har

orsakat betydande volatilitet på råvarupriser. Trots skilda åtgärder från regeringar har

oro skapats rörande kapitalmarknaden och för finansiella instrument, banker,

investmentbanker, försäkringsbolag och andra finansiella institutioner och att dessa

ska försämras ytterligare och att börsen ska sjunka kraftigt. Ökad volatilitet kan

väsentligt negativt påverka Bolagets verksamhet och värdet på dess aktier. Bolaget är

beroende av aktiemarknader som dess huvudsakliga källa för rörelsekapital och

Bolagets kapitalbas bestäms till stor del av styrkan av tillgången på marknaden och

statusen på Bolagets projekt i förhållande till dessa marknader samt dess förmåga att

konkurrera om investerarna att stödja deras projekt. Tillgången till offentlig

finansiering har påverkats negativt av oron för den globala tillväxten och villkoren för

denna. Följaktligen kan kapitalfinansiering inte vara tillgängligt för Bolaget i den mängd

som krävs under en viss period eller att kapitalfinansiering inte tillhandahålls på för


Bolaget fördelaktiga villkor.

Valutarisk – Bolaget kommer att göra affärer i ett antal valutor inklusive, men inte

begränsat till USD, den argentinska peson och den chilienska peson. Den argentinska

peson har haft betydande värdesvängningar i förhållande till den amerikanska och

kanadensiska dollarn. Rådande ekonomiska osäkerhet i Argentina likväl som

oförutsebara förändringar i regler rörande utländska valutor kan leda till att

svängningar i den argentinska peson är större än tidigare. Svängningar i utländska

valutor kan få betydande effekt på Bolagets kassaflöde. Framtida förändringar i

utländska valutakurser kan väsentligen påverka Bolagets resultat antingen i positiv

eller negativ riktning. Bolaget vidtar för närvarande inte några valutasäkringsåtgärder.

Gemensamma gruvmarker – Vissa av Bolagets markområden, inklusive Los Helados-

projektet, Josemaría-projektet och La Chola-marken, är föremål för gemensam

prospektering. Bolaget är driftsledare för dessa gemensamma projekt, men de är ändå

föremål för risker som normalt är förknippade med genomförandet av gemensamma

prospekteringsprojekt, såsom (i) oenighet mellan prospekteringsparterna hur man ska

utforska, utveckla och driva projekten effektivt, (ii) oförmåga att utöva inflytande över

strategiska beslut som fattas, (iii) oförmåga att få prospekteringspartnerna att uppfylla

deras skyldigheter och (iv) tvister mellan prospekteringsparterna rörande

prospekteringsfrågor. Förekomsten utav någon av dessa omständigheter kan ha en

väsentlig negativ inverkan på Bolaget.

Korruption och mutor – Bolaget är skyldig att följa lagar avseende anti-korruption och

mutor, inklusive Extractive Transparency Measures Act, Canadian Corruption of

Foreign Public Officials Act och U.S Foreign Corrupt Practices Act, liksom lagar i de

länder i vilka Bolaget bedriver sin verksamhet. Om Bolaget är föremål för en

verkställighetsåtgärd eller visar sig vara i strid med sådana lagar, kan detta leda till

betydande påföljder, böter och/eller sanktioner mot Bolaget vilket kan resultera i en

väsentligt negativ effekt på Bolaget.

Konkurrens – Det är hård konkurrens inom gruvindustrin för att upptäcka och förvärva

marker vilka anses ha kommersiell potential, liksom för det arbete och den tillgång

som krävs för att utveckla sådana marker. Bolaget konkurrerar med andra

prospekterings- och gruvbolag av vilka många har större finansiella resurser, operativ

erfarenhet och teknisk kapacitet än Bolaget att förvärva malmfordringar, leasing och

andra malmintressen samt för att rekrytera och behålla kvalificerade medarbetare och

annan personal. Det kan hända att Bolaget inte lyckas med att behålla eller förvärva

gruvmarker på marknadsmässiga villkor eller inte alls. Det kan leda till att Bolagets

finansiella ställning väsentligt påverkas negativt.

Beroendet av nyckelpersoner – Bolagets framgång beror till stor del på ansträngningar

och förmågan hos vissa ledande befattningshavare och nyckelpersoner. Vissa av dessa

individer har betydande erfarenhet inom gruvindustrin och i synnerhet gruvindustrin i

Sydamerika. Om, av någon anledning, sådana ledande befattningshavare och

nyckelpersoner inte stannar inom Bolaget kan Bolaget påverkas negativt. Bolaget har

inte någon livförsäkring för någon av dessa personer varför Bolaget kan orsakas

ekonomisk skada för det fall någon av dessa personer skulle avlida.

Försäkringsrisker – Prospektering, utveckling och produktionsverksamhet på mineraler

innehåller ett flertal risker, inklusive oförutsedda och ovanliga geologiska förhållanden

som stenbrott, gruvkollaps, bränder, floder, jordbävningar och andra miljöhändelser,

samt politisk och social instabilitet. Det är inte alltid möjligt att erhålla försäkring mot

sådana risker och Bolaget kan besluta sig för att inte försäkra sig mot vissa risker på

grund av höga försäkringspriser eller av andra skäl. Skulle sådana skyldigheter uppstå

kan dessa reducera eller eliminera ytterligare lönsamhet i Bolaget och leda till ökade

kostnader och en nedgång i värdet på Bolagets värdepapper. Bolaget har inte någon

försäkring mot politiska risker.

Skatt – Bolaget bedriver verksamhet i olika länder och strävar efter att driva sin


verksamhet på ett så skatteeffektivt sätt som möjligt. Skattesystemen i vissa av dessa

länder är komplicerade och kan ändras. Av denna anledning kan framtida negativa

effekter på Bolagets resultat på grund av förändringar i skatteregler inte uteslutas.

Repatriering av resultatet till Kanada från andra länder kan vara föremål för källskatt.

Bolaget har ingen kontroll över källskatteavdrag.

D.3 Risker

relaterade till

aktierna

Börskursen för aktier - Värdepapper i gruvbolag har upplevt betydande volatilitet i det

förflutna, ofta baserat på faktorer som inte är relaterade till ekonomiskt resultat eller

utsikterna för de berörda företagen. Dessa faktorer inkluderar makroekonomiska

förhållanden i Nordamerika och globalt, och marknadens uppfattning om vissa

branschers lönsamhet. Priset på Bolagets värdepapper påverkas sannolikt väsentligt av

kortsiktiga förändringar i råvarupriser, andra mineralpriser, svängningar i valutakurser

eller i dess finansiella ställning eller resultat av prospektering i sina projekt. Andra

faktorer som inte hör samman med Bolagets utförande men som kan ha en effekt på

priset på Bolagets värdepapper inkluderar följande: investerares möjlighet att göra en

analys av Bolagets verksamhet kan vara begränsad om investmentbanker med

begränsade undersökningsmöjligheter inte följer Bolagets värdepapper, minskningar i

handelsvolymen och i marknadsintresset avseende Bolagets värdepapper kan påverka

investerares möjlighet att handla i ett betydande antal av Bolagets värdepapper,

storleken på Bolagets utestående aktier och dess införande på marknaden kan

begränsa möjligheten för vissa institutioner att investera i Bolagets värdepapper och

en betydande nedgång i priset på Bolaget vilken kan kvarstå under en längre tid och

kan då leda till att Bolagets värdepapper avnoteras från en börs, vilket ytterligare

reducerar marknadslikviditeten. Om det inte fortsätter att finnas en aktiv marknad för

Bolagets värdepapper kan likviditeten av en investerares investering begränsas och

priset på Bolagets värdepapper kan sjunka. Om det inte finns en aktiv marknad kan

investerare förlora hela dess investering i Bolaget. Som ett resultat av dessa faktorer

kan marknadspriset på Bolagets värdepapper vid varje given tidpunkt inte återspegla

det exakta långsiktiga värdet av Bolaget. Värdepapperstvister har ofta förts mot bolag

som en följd av perioder med svängningar på marknaden avseende priset på

värdepapper. Bolaget kan i framtiden bli föremål för liknande tvister.

Värdepapperstvister kan resultera i betydande kostnader och skadestånd samt avleda

ledningens uppmärksamhet och resurser.

Risker relaterade till aktiemarknaden – En potentiell investerare bör vara medveten

om att en investering i Bolagets aktier är förknippad med en hög grad av risk, och att

priset på aktierna kan utvecklas ogynnsamt.

Risker i samband med illikvid handel och sekundärnotering – Det är inte möjligt att

förutse i vilken utsträckning investerarnas intresse för NGEx kommer att leda till en

aktiv handel i dess aktier eller hur handeln i aktier kommer att fungera i framtiden. Om

aktiv och likvid handel inte upprätthålls, kan innehavare av aktier uppleva svårigheter

att sälja sina aktier, antingen tillfälligt eller helt.

Risker relaterade till utdelning – Gruv- och prospekteringsindustrin är kapitalintensiv

och Bolagets vinst kan behöva ackumuleras och användas för att återinvestera i

Bolagets verksamhet. Bolaget kan därför komma att inte betala utdelning till sina

aktieägare i framtiden.

Valutakursförändringar – Skulle bolaget betala utdelning avseende aktier, kommer

sådan utdelning att betalas i CAD. Innehavare av aktier registrerade hos Euroclear får

dock utdelningar i SEK. Eventuella avskrivningar av CAD gentemot SEK kan minska

värdet på investeringen eller på utdelning.

Framtida utbud av skuldvärdepapper eller aktier – NGEx kan kräva ytterligare medel

för att finansiera ytterligare prospektering, utbyggnad och produktionsverksamhet,

eller för att kunna nyttja oväntade möjligheter. Om NGEx tillförskaffar ytterligare

medel genom att emittera aktier, skulle en sådan finansiering späda ut det ekonomiska


värdet och röstvärdet för Bolagets aktieägare.

Avsnitt E – Erbjudande

E.1 Emissions-

belopp och

emissions-

kostnader

Ej tillämplig; detta prospekt ges ut i samband med upptagande till handel av

ytterligare aktier på Nasdaq Stockholm och det finns inget erbjudande av NGEx att

förvärva aktier.

Den 29 november 2016 offentliggjorde Bolaget att ett erbjudande, på icke-mäklad

basis, riktats till vissa investerare om ett totalt belopp om sammanlagt 8 miljoner nya

aktier i bolaget till en kurs om 1,25 CAD per aktie för bruttointäkter på upp till

10 miljoner CAD (”Erbjudandet”). En avgift om 4% får tas ut på hela eller delar av

Erbjudandet. Den 1 december 2016 offentliggjorde bolaget att böckerna i Erbjudandet

stängts på 10 miljoner CAD. Slutförandet av Erbjudandet är villkorat av godkännande

och registrering av Finansinspektionen av detta prospekt (och det efterföljande

offentliggörandet av prospektet) avseende upptagande till handel av de nya aktierna

på Nasdaq Stockholm.

E.2a Motiv till

erbjudandet

och användning

av medel



förvärva aktier.

Nettointäkterna från Erbjudandet kommer att användas mot pågående arbetsprogram

i Chile och Argentina samt för allmänna företagsändamål.

E.3 Erbjudandets

former och

villkor



förvärva aktier.

De nya aktierna erbjöds genom en icke-mäklad riktad emission i alla provinser och

territorier i Kanada, och i USA och andra länder utanför Kanada under vissa

förutsättningar.

E.4 Intresse-

konflikter etc.



förvärva aktier.

Styrelseledamöterna känner inte till några fysiska eller juridiska personer som är

inblandade i upptagandet till handel av de nya aktierna på Nasdaq Stockholm som har

ekonomiska eller andra relevanta intressen som är av betydelse för upptagande till

handel.

E.5 Lock-up-avtal Ej tillämplig; detta prospekt ges ut i samband med upptagande till handel av


förvärva aktier.

E.6 Utspädning Ej tillämplig; detta prospekt ges ut i samband med upptagande till handel av


förvärva aktier.

Den 29 november 2016 hade bolaget 205 473 963 utestående aktier. Efter

slutförandet av Erbjudandet, kommer det att finnas ytterligare 8 000 000 utestående

aktier, vilket motsvarar en utspädning om cirka 3,9 procent jämfört med antalet

utgivna aktier och utestående den 29 november 2016.


E.7 Kostnader för

investerare



förvärva aktier.

NGEx RESOURCES INC. | Risk factors 33

RISK FACTORS An investment in securities involves a significant degree of risk. The Company’s business, operating results or

financial position may be adversely affected by a number of risk factors which are beyond the control of the

Company. The Company is exposed to a number of risks inherent in mining exploration and development. Risk

factors deemed to be of particular significance to the future prospects of the Company are described below. The

risk factors described below are not exhaustive. The Company’s business, operating results and financial

position may also be materially adversely affected by other risks and uncertainties which are currently unknown

to the Company, or which are currently not viewed as material. Further, risks are not ranked according to

degree of importance. Nor do they indicate how significant the impact could be on the Company’s operations.

Risks relating to NGEx Resources and the industry The operations of the Company are speculative due to the high risk nature of its business. Material risk factors

and uncertainties, which should be taken into account in assessing the Company’s activities, include, but are

not necessarily limited to, those set out below. Any one or more of these risks and others could have a material

adverse effect on the Company.

Exploration and Development Risk

The Company’s properties are in early exploration stages and are without a known body of commercial ore.

Exploration for Mineral Resources involves a high degree of risk and few properties that are explored are

ultimately developed into producing mines. The risks and uncertainties inherent in exploration activities

include but are not limited to: legal and political risk arising from operating in certain developing countries, civil

unrest, general economic, market and business conditions, the regulatory process and actions, failure to obtain

necessary permits and approvals, technical issues, new legislation, competitive and general economic factors

and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of

unexpected events and management’s capacity to execute and implement its future plans. Discovery of

mineral deposits is dependent upon several factors, not the least of which are the technical skills of the

exploration personnel involved and the capital required for the programs. The cost of conducting programs

may be substantial and the likelihood of success is difficult to assess. There is assurance risk that the

Company’s mineral exploration activities will not result in any discoveries of new bodies of commercial ore.

There is also a risk that even if commercial quantities of ore are discovered that a new ore body would not be

developed and brought into commercial production. The commercial viability of a mineral deposit once

discovered is also dependent upon a number of factors, some of which are the particular attributes of the

deposit (such as size, grade, metallurgy and proximity to infrastructure and labour), the interpretation of

geological data obtained from drilling and sampling, feasibility studies, the cost of water and power;

anticipated climatic conditions; cyclical metal prices; fluctuations in inflation and currency exchange rates;

higher input commodity and labour costs, commodity prices, government regulations, including regulations

relating to prices, taxes, royalties, land tenure and use, allowable production, importing and exporting of

minerals, and environmental protection. Most of the above factors are beyond the control of the Company.

Development projects will also be subject to the successful completion of final feasibility studies, issuance of

necessary permits and other governmental approvals and receipt of adequate financing. The exact effect of

these factors cannot be accurately predicted, but the combination of any of these factors may adversely affect

the Company’s business. The Company attempts to mitigate its exploration risk by maintaining a diversified

portfolio that includes several metal commodity targets in a number of geologic and political environments.

Management also balances the exploration risks through joint ventures and option agreements with other

companies.


Mineral Resource Estimates

The Company’s reported Mineral Resources are only estimates. There is a risk that the estimated Mineral

Resources will not be recovered. By their nature Mineral Resource estimates are imprecise and depend, to a

certain extent, upon statistical inferences which may ultimately prove unreliable because, among other factors,

they are based on limited sampling, and, consequently, are uncertain because the samples may not be

representative. Mineral Resource estimates may require revision (either up or down). Market fluctuations in

the price of metals, as well as increases in estimated production costs or reductions in estimated recovery

rates, may render certain Mineral Resources uneconomic and may ultimately result in a restatement of

estimated resources.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and there is a

risk that that they will never be mined or processed profitably. Due to the uncertainty which may attach to

Mineral Resources, there is a risk that all or any part of Measured or Indicated Mineral Resources will never be

converted into Mineral Reserves; and a risk that all or any part of an Inferred Mineral Resources will not exist,

or is economically or legally mineable.

Title Risk

The Company has investigated its right to explore and exploit its properties and, to the best of its knowledge,

those rights are in good standing except for anti-mining legislation affecting all mineral exploration in Mendoza

and La Rioja provinces in Argentina. The results of the Company’s investigations should not be construed as a

guarantee of title. Other parties may dispute the title to a property or the property may be subject to prior

unregistered agreements or liens and transfers or land claims by aboriginal, native, or indigenous peoples. The

title may be affected by undetected encumbrances or defects or governmental actions. The Company has not

conducted surveys of all of its properties, and the precise area and location of claims or the properties may be

challenged and there is a risk that there are title defects affecting such properties. The rules governing mining

concessions in Chile and Argentina are complex and any failure by the Company to meet requirements would

have a material adverse effect on the Company. Any defects in the title to the Company’s properties could

have a material and adverse effect on the Company.

Applicable governments may revoke or significantly alter the conditions of the applicable exploration and

mining authorizations nor that such exploration and mining authorizations will not be challenged or impugned

by third parties. There is a risk that the Company may have problems with renewing its licenses. Inability to

renew a license could result in the loss of any project located within that license.

The Company is earning an interest in certain of its properties through option agreements and acquisition of

title to the properties is completed only when the option conditions have been met. These conditions include

making property payments, incurring exploration expenditures on the properties and satisfactory completion

of certain pre-feasibility studies and third party agreements.

If the Company does not satisfactorily complete these option conditions in the time frame laid out in the option

agreements, the Company’s title to the related property will not vest and the Company will have to write down

its previously capitalized costs related to that property.

Foreign Operations Risk

The Company conducts exploration activities in foreign countries, including Argentina and Chile. Each of these

countries exposes the Company to risks that may not otherwise be experienced if all operations were located in

Canada. The risks vary from country to country and can include, but are not limited to, civil unrest or war,

terrorism, illegal mining, changing political conditions, fluctuations in currency exchange rates, expropriation or

nationalization without adequate compensation, changes to royalty and tax regimes, high rates of inflation,

labour unrest and difficulty in understanding and complying with the regulatory and legal framework

respecting ownership and maintenance of mineral properties. Changes in mining or investment policies or

shifts in political attitudes may also adversely affect Company’s existing assets and operations. Real and


perceived political risk may also affect the Company’s ability to finance exploration programs and attract joint

venture or option partners, and future mine development opportunities.

Numerous countries have introduced changes to mining regimes that reflect increased government control or

participation in the mining sector, including, but not limited to, changes of law affecting foreign ownership,

mandatory government participation, taxation and royalties, exploration licensing, export duties, and

repatriation of income or return of capital. There is a risk that industries which are deemed of national or

strategic importance in countries in which the Company has assets, including mineral exploration, will be

nationalized. The risk exists that further government limitations, restrictions or requirements, not presently

foreseen, will be implemented. Changes in policy that alter laws regulating the mining industry could have a

material adverse effect on the Company. There is a risk that the Company’s assets in these countries will be

subject to nationalization, requisition or confiscation, whether legitimate or not, by an authority or body.

In addition, in the event of a dispute arising from foreign operations, the Company may be subject to the

exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction

of courts in Canada. The Company may also be hindered or prevented from enforcing its rights with respect to

a governmental instrumentality because of the doctrine of sovereign immunity. Since it is not possible for the

Company to accurately predict such developments or changes in laws or policy or to what extent any such

developments or changes may have a material adverse effect on the Company there is a risk that the Company

will be materially adversely affected.

Surface Access

The Company does not own any surface rights at the Los Helados Project. Surface rights in the area of the Los

Helados project are held by a local community “Comunidad Civil Ex Estancia Pulido”. In August 2016, the

Company signed a life of project lease agreement for 20,000 hectares covering the Los Helados Project area to

secure the surface rights needed for all infrastructure and access required for future exploration, development

and mining.

The Company has surface access rights, but does not own any surface rights at Josemaría. The owners of the

surface rights are in agreement with Deprominsa conducting exploration activities on their ground.

From time to time, a land possessor may dispute the Company’s surface access rights, and as a result the

Company may be barred from its legal temporary occupation rights. Surface access issues have the potential to

result in the delay of planned exploration programs, and these delays may be significant. Such delays may have

a material adverse effect on the Company.

The Company may require additional surface rights and property interests to further develop or exploit the

resources on its properties, which will require negotiations with private landowners for the additional

ownership and/or surface rights for the Company to fully operate. Surface rights may also be regulated and

restricted by applicable law. There is a risk that the Company will not be able to obtain the required surface

rights or negotiate successfully with private landowners to allow it to develop its properties and establish

commercial mining operations on a timely basis. To the extent additional surface rights are available, they may

only be acquired at significantly increased prices, potentially adversely impacting financial performance of the

Company.

Metal Price Risk

The Company’s portfolios of properties and investments have exposure to predominantly copper, gold, and

silver. Commodity prices fluctuate widely and are affected by numerous factors beyond the Company’s control,

such as the sale or purchase of metals by various central banks and financial institutions, interest rates,

exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies,

global and regional supply and demand, and the political and economic conditions of major metals-producing

and metals-consuming countries throughout the world. The prices of these metals greatly affect the value of

the Company, the price of the common shares of the Company and the potential value of its properties and


investments. This, in turn, greatly affects its ability to form joint ventures, option agreements and the structure

of any joint ventures formed. This is due, at least in part, to the underlying value of the Company’s assets at

different metals prices.

Environmental and Socio-Political Risks

The Company seeks to operate within environmental protection standards that meet or exceed existing

requirements in the countries in which the Company conducts activities. The Company also aims to conduct its

activities in accordance with high corporate social responsibility principles. Present or future laws and

regulations, however, may affect the Company’s operations. Future environmental costs may increase due to

changing requirements or costs associated with exploration and the developing, operating and closing of

mines. The Company is subject to environmental regulation in the various jurisdictions in which it operates.

Failure to comply with these laws, regulations and permitting requirements may result in enforcement actions,

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. Parties engaged in mining operations or in the exploration or development of mineral

properties may also be required to compensate those suffering loss or damage by reason of the mining

activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or

regulations. Furthermore, environmental hazards may exist on the properties on which the Company holds

interests which are unknown to the Company at present and which have been caused by previous or existing

owners or operators of the properties.

Programs may also be delayed or prohibited in some areas due to technical factors, new legislative constraints,

social opposition or local government capacity or willingness to issue permits to explore in a timely manner.

In parts of Argentina, there is significant environmental opposition to both mineral exploration and mining.

This has affected properties in some of the provinces where the Company works, in particular in Mendoza

where the Company has a drill ready project that is is unable to work on. In certain other Argentine provinces,

including La Rioja, there is a significant degree of anti-mining sentiment which affects the risk of successfully

exploring and developing the Company’s assets in those provinces.

The Argentine Congress has passed legislation designed to protect the country’s glaciers. This law would

restrict development on and around glaciers. The detailed regulations that will govern implementation of the

law have not yet been written but this legislation could affect the Company’s ability to develop parts of the

Company’s properties in Argentina including the Josemaría Project. The Chilean Congress is also considering

legislation designed to protect the country’s glaciers. This legislation has not yet been approved but depending

on its final language could affect the Company’s ability to develop the Los Helados Project.

Uncertainty of Funding

The exploration and development of mineral properties requires a substantial amount of capital and may

depend on the Company’s ability to obtain financing through joint ventures, debt financing, equity financing or

other means. General market conditions, volatile metals prices, a claim against the Company, a significant

disruption to the Company’s business, or other factors may make it difficult to secure the necessary financing.

There is a risk that the Company will not be successful in obtaining required financing as and when needed on

acceptable terms. Failure to obtain any necessary additional financing may result in delaying or indefinite

postponement of exploration or development or even a loss of property interest. If the Company needs to

raise additional funds, such financing may substantially dilute the interests of shareholders of the Company and

reduce the value of their investment.

Indigenous Peoples

The Company operates in some areas including parts of the Los Helados area presently or previously inhabited

or used by indigenous peoples. Various international and national laws, codes, resolutions, conventions,

guidelines, and other material relate to the rights of indigenous peoples. Many of these materials impose


obligations on government to respect the rights of indigenous people. Some mandate that government consult

with indigenous people regarding government actions which may affect indigenous people, including actions to

approve or grant mining rights or permits. ILO Convention 169, which has been ratified by Argentina and Chile,

is an example of such an international convention. The obligations of government and private parties under the

various international and national materials pertaining to indigenous people continue to evolve and be defined.

Examples of recent developments in this area include the United Nations Declaration of the Rights of

Indigenous People and the International Finance Corporation’s revised Performance Standard 7 which requires

governments to obtain the free, prior, and informed consent of indigenous peoples who may be affected by

government action, such as the granting of mining concessions or approval of mine permits. The Company’s

current and future operations are subject to a risk that one or more groups of indigenous people may oppose

continued operation, further development, or new development of the Company’s projects or operations. Such

opposition may be directed through legal or administrative proceedings or expressed in manifestations such as

protests, roadblocks or other forms of public expression against the Company’s activities. Opposition by

indigenous people to the Company’s operations may require modification of, or preclude operation or

development of, the Company’s projects or may require the Company to enter into agreements with

indigenous people with respect to the Company’s projects.

Economic and Political Instability in Argentina

The Josemaría Project is located in San Juan Province, Argentina. There are risks relating to an uncertain or

unpredictable political and economic environment in Argentina, especially as there is social opposition to

mining operations in certain parts of the country. During an economic crisis in 2001 to 2003 and again in 2014,

Argentina defaulted on foreign debt repayments and on the repayment on a number of official loans to

multinational organizations. In addition, the government has renegotiated or defaulted on contractual

arrangements. The previous Argentinean government placed currency controls on the ability of companies and

its citizens to obtain United States dollars, in each case requiring Central Bank approval (resulting in, at times, a

limitation on the ability of multi-national companies to distribute dividends abroad in United States dollars) and

revoked exemptions previously granted to companies in the oil and gas and mining sectors from the obligation

to repatriate 100% of their export revenues to Argentina for conversion in the local foreign exchange markets,

prior to transferring funds locally or overseas. Similarly, the government adopted a requirement that importers

provide notice to the government and obtain approval for importation before placing orders for certain goods.

These measures have been lifted by the new government that took office in December 2015. However, the

past actions indicate that the Argentinean government may from time to time alter or impose additional

requirements or policies that may adversely affect the Company’s activities in Argentina or in its ability to

attract joint venture partners or obtain financing for its projects in the future.

Infrastructure

Development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable

roads, bridges, power and water supplies are important determinants that affect costs. The Company’s ability

to obtain a secure supply of power and water at a reasonable cost depends on many factors, including: global

and regional supply and demand; political and economic conditions; problems that can affect local supplies;

delivery; and relevant regulatory regimes. Power and water are currently in short supply throughout Northern

Chile and this may adversely affect the ability of the Company to explore and develop its Chilean projects.

Unusual or infrequent weather phenomena, sabotage or government, and other interference in the

maintenance or provision of such infrastructure could adversely affect the activities and profitability of the

Company.

Establishing such infrastructure will require significant resources, identification of adequate sources of raw

materials and supplies and necessary cooperation from national and regional governments, none of which can

be assured. There is a risk that the Company will not be able to secure these power, water and access rights

going forward or on reasonable terms.


Current Global Financial Condition

Market events and conditions have caused significant volatility to commodity prices. Notwithstanding various

actions by governments, concerns about the general condition of the capital markets, financial instruments,

banks, investment banks, insurers and other financial institutions caused the broader credit markets to further

deteriorate and stock markets to decline substantially. Increased levels of volatility can adversely affect the

Company’s operations and the value and price of the Shares. The Company is dependent on the equity markets

as its main source of operating working capital and the Company’s capital resources are largely determined by

the strength of the resource markets and by the status of the Company’s projects in relation to these markets,

and its ability to compete for the investor support of its projects. Access to public financing has been negatively

impacted by concerns over global growth rates and conditions. Consequently, equity financing may not be

available to the Company in the amount required at any time or for any period or, if available, it may not be

obtained on terms satisfactory to the Company.

Currency Risk

The Company will transact business in a number of currencies including but not limited to the US Dollar, the

Argentine Peso and the Chilean Peso. The Argentine Peso in particular has had significant fluctuations in value

relative to the US and Canadian dollars. Ongoing economic uncertainty in Argentina as well as unpredictable

changes to foreign exchange rules may result in fluctuations in the value of the Argentine Peso that are greater

than those experienced in the recent past. Fluctuations in exchange rates may have a significant effect on the

cash flows of the Company. Future changes in exchange rates could materially affect the Company’s results in

either a positive or negative direction. The Company does not currently engage in foreign currency hedging

activities.

Joint Exploration Properties

Certain of the Company’s properties including the Los Helados Project, the Josemaría Project, and the La Chola

Properties are subject to joint exploration agreements. The Company is the operator of the these joint projects

but they are nonetheless subject to the risks normally associated with the conduct of joint exploration

partners, such as (i) disagreement with joint exploration partners regarding how to explore, develop, and

operate the projects efficiently; (ii) inability to exert influence over certain strategic decisions made; and (iii)

inability of joint exploration partners to meet their obligations (iv) litigation between joint exploration partners

regarding joint exploration matters. The existence of any of these circumstances may have a material adverse

impact on the Company.

Internal Controls

Internal controls over financial reporting are procedures designed to provide reasonable assurance that

transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and

transactions are properly recorded and reported. A control system, no matter how well designed and operated,

can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and

financial statement preparation.

Corruption and Bribery

The Company is required to comply with anti-corruption and anti-bribery laws, including the Extractive Sector

Transparency Measures Act, the Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign

Corrupt Practices Act, as well as similar laws in the countries in which the Company conducts its business. If the

Company finds itself subject to an enforcement action or is found to be in violation of such laws, this may result

in significant penalties, fines and/or sanctions imposed on the Company resulting in a material adverse effect

on the Company.


Competition

There is aggressive competition within the mining industry for the discovery and acquisition of properties

considered to have commercial potential, as well as the necessary labour and supplies required to develop such

properties. The Company competes with other exploration and mining companies, many of which have greater

financial resources, operational experience and technical capabilities than the Company, for the acquisition of

mineral claims, leases and other mineral interests as well as for the recruitment and retention of qualified

employees and other personnel. The Company may not be able to maintain or acquire attractive mining

properties on terms it considers acceptable, or at all. Consequently, its financial condition could be materially

adversely affected.

Dependence on Key Personnel

The Company’s success will largely depend on the efforts and abilities of certain senior officers and key

employees. Certain of these individuals have significant experience in the mining industry and, in particular the

mining industry in South America. While the Company does not foresee any reason why such officers and key

employees will not remain with the Company, if for any reason they do not, the Company could be adversely

affected. The Company has not purchased key man life insurance for any of these individuals why the Company

could suffer economic loss if any of these individuals passed away.

Uninsurable Risks

Exploration, development and production operations on mineral properties involve numerous risks, including

unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and

other environmental occurrences, as well as political and social instability. It is not always possible to obtain

insurance against all such risks and the Company may decide not to insure against certain risks because of high

premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any further profitability

and result in increasing costs and a decline in the value of the securities of the Company. The Company does

not maintain insurance against political risks.

Tax

The Company runs its business in different countries and strives to run its business in as tax efficient a manner

as possible. The tax systems in certain of these countries are complicated and subject to changes. For this

reason, future negative effects on the result of the Company due to changes in tax regulations cannot be

excluded. Repatriation of earnings to Canada from other countries may be subject to withholding taxes. The

Company has no control over withholding tax rates.

Conflicts of Interest

Some of the directors of the Company are also directors of other companies that are similarly engaged in the

business of acquiring, exploring and developing natural resource properties. Such associations may give rise to

conflicts of interest from time to time. In particular, one of the consequences will be that corporate

opportunities presented to a director of the Company may be offered to another corporation or companies

with which the director is associated, and may not be presented or made available to the Company. The

directors of the Company are required by law to act honestly and in good faith with a view to the best interests

of the Company, to disclose any interest which they may have in any project or opportunity of the Company,

and to abstain from voting on such matter. Conflicts of interest that arise will be subject to and governed by

the procedures prescribed by the Company’s Code of Business Conduct and Ethics and the CBCA.

Derivative Instruments

The Company may, from time to time, manage exposure to foreign exchange rates by entering into derivative

instruments approved by the Company’s board of directors. The Company does not hold or issue derivative

instruments for speculation or trading purposes. These derivative instruments are marked-to-market at the


end of each period and may not necessarily be indicative of the amounts the Company might pay or receive as

the contracts are settled.

Risks relating to the Shares

Market Price of Shares

Securities of mining companies have experienced substantial volatility in the past, often based on factors

unrelated to the financial performance or prospects of the companies involved. These factors include

macroeconomic conditions in North America and globally, and market perceptions of the attractiveness of

particular industries. The price of the Company’s securities is also likely to be significantly affected by short-

term changes in commodity prices, other mineral prices, currency exchange fluctuation, or in its financial

condition or results of exploration on its projects. Other factors unrelated to the performance of the Company

that may have an effect on the price of the securities of the Company include the following: the extent of

analytical coverage available to investors concerning the business of the Company may be limited if investment

banks with research capabilities do not follow the Company's securities; lessening in trading volume and

general market interest in the Company's securities may affect an investor's ability to trade significant numbers

of securities of the Company; the size of the Company's public float and its inclusion in market indices may limit

the ability of some institutions to invest in the Company's securities; and a substantial decline in the price of

the securities of the Company that persists for a significant period of time could cause the Company's securities

to be delisted from an exchange, further reducing market liquidity. If an active market for the securities of the

Company does not continue, the liquidity of an investor's investment may be limited and the price of the

securities of the Company may decline. If an active market does not exist, investors may lose their entire

investment in the Company. Because of any of these factors, the market price of the securities of the Company

at any given point in time may not accurately reflect the long-term value of the Company. Securities class-

action litigation often has been brought against companies following periods of volatility in the market price of

their securities. The Company may in the future be the target of similar litigation. Securities litigation could

result in substantial costs and damages and divert management's attention and resources.

Future offerings of debt or equity securities

The Company may require additional funds to finance further exploration, development and production

activities, or to take advantage of unanticipated opportunities. If the Company raises additional funds by

issuing additional equity securities, such financing would dilute the economic and voting rights of the

Company’s shareholders. Since the Company’s capital needs depend on market conditions and other factors

beyond its control, it cannot predict or estimate the amount, timing or nature of any such future offering of

securities. Thus, holders of common shares of the Company bear the risk of any future offerings reducing the

market price of the common shares and diluting their shareholdings in the Company.

Risks related to the stock market

A prospective investor should be aware that an investment in the Company’s Shares is associated with a high

degree of risk, and that the price of the Shares may not develop favorably.

Risks related to illiquid trading and the secondary listing

It is not possible to anticipate the degree to which investors’ interest in NGEx will lead to active trading in its

Shares or how trading in the Shares will function in the future. Should active and liquid trading not be

sustained, holders of Shares may experience difficulties in selling Shares, either momentarily, or completely.

Risks related to dividends


The mining and exploration industry is capital intensive and the Company’s profits may need to be

accumulated and used to reinvest in the Company’s operations. Hence, the Company may not pay dividends to

its shareholders in the future.


Exchange rate fluctuations

Should the Company pay dividends in respect of the Shares, such dividends will be paid in CAD. However,

holders of Shares registered with Euroclear will receive dividend distributions in SEK. Any depreciation of CAD

in relation to SEK could reduce the value of the investment or of any dividends.

NGEx RESOURCES INC. | Background 43

BACKGROUND

Background and reasons for the admission to trading of

the New Shares on Nasdaq Stockholm The Shares are listed on the TSX with a secondary listing on Nasdaq Stockholm under the symbol “NGQ” and

ISIN code CA65339B1004.

On November 29, 2016 the Company announced that it had offered by way of a non-brokered private

placement basis, an aggregate of up to 8 million New Shares of the Company at a price of CAD $1.25 per Share,

for gross proceeds of up to CAD $10 million (the “Offering”). A 4.00% finders' fee may be payable on all or a

portion of the Offering.

The net proceeds to the Company from the Offering will be used towards ongoing work programs in Chile and

Argentina as well as for general corporate purposes (see “NGEx” and “Recommendations, Ongoing and Future

Investments” for information on the first phase program).

The New Shares were offered by way of a non-brokered private placement in all provinces and territories of

Canada and in the United States and other jurisdictions outside of Canada on an exempt basis.

On December 1, 2016 the Company announced that the books in the Offering were closed on CAD $10 million.

The closing of the Offering is conditional upon the approval and registration with the Swedish Financial

Supervisory Authority of this prospectus (and the subsequent publication of the prospectus), regarding the

admission to trading of the New Shares on Nasdaq Stockholm.

On November 29, 2016, the Company had 205,473,963 Shares issued and outstanding. Following completion of

the Offering, there will be an additional 8,000,000 Shares outstanding, representing a dilution of approximately

3.9 percent as compared to the number of Shares issued and outstanding on November 29, 2016.

Note that this prospectus does not comprise an offer to purchase, subscribe for or sell Shares in NGEx.

Registration with Euroclear Only Shares registered in the local central securities depositary system with Euroclear will be subject to trading

on Nasdaq Stockholm following the admission to trading of the New Shares. Holders of Shares listed on the TSX

are entitled to register those Shares in the depositary system at Euroclear to trade their securities on Nasdaq

Stockholm and vice versa. To trade Shares on Nasdaq Stockholm, holders of Shares are advised to contact their

nominees or their bank. No physical share certificates in NGEx are or will be issued to holders through the

Euroclear System. All Shares traded on Nasdaq Stockholm will be affiliated to Euroclear and will not be

represented by physical share certificates.

Conditions for the admission to trading of additional Shares The admission to trading of the New Shares on Nasdaq Stockholm is conditional upon the approval and

registration with the Swedish Financial Supervising Authority of this prospectus, and the subsequent

publication of the prospectus. The new Shares are expected to be able to be traded on Nasdaq Stockholm on or

around 22 December 2016.

Other As far as the members of the Board are aware, no physical or legal persons involved in the admission to trading

of the New Shares on Nasdaq Stockholm have financial or other relevant interests that are of importance to the

admission to trading, other than as described herein.

NGEx RESOURCES INC. | Background 44

Responsibility for the prospectus The Board of NGEx Resources is responsible for the contents of this prospectus. The Board hereby declares that,

having taken all reasonable care to ensure that such is the case, the information contained in this prospectus is,

to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

The board of directors of NGEx Resources Inc.

Vancouver, British Columbia, Canada

20 December 2016

NGEx RESOURCES INC. | Industry overview 45

INDUSTRY OVERVIEW The following industry overview describes the Company’s market in terms of size, development and prospects

for future growth. The information contained in the Section below originates from NGEx, unless expressly stated

otherwise. The Company has obtained this information from several sources, including industry publications and

market surveys from third parties as well as publicly available information. The information obtained from third

parties has been accurately reproduced, and as far as NGEx Resources is aware and is able to ascertain from

information published by such third parties, no facts have been omitted which would render the reproduced

information inaccurate or misleading.

NGEx is engaged in the acquisition, exploration and development of precious and base metal properties

located principally in South America. The Company’s primary asset, Project Constellation, is a copper-gold-

silver project that straddles the international border between San Juan Province, Argentina and Region III, Chile

and is comprised of adjacent mineral titles in Chile and Argentina.

Currently, the Company’s main projects are predominantly copper-rich deposits. While these deposits contain

a significant quantity of precious metals, it is anticipated that the bulk of any future economic benefit to the

Company would be driven by the primary refined copper market. Accordingly, this section focuses on the

global copper market.

The Company’s long term view of the copper market is positive, with the expectation that over time tightening

mine supply and growing demand especially from developing countries will contribute to stronger prices and

will require development of new greenfields mining projects. The following section describes the Company’s

market in term of development, size, supply & demand, and prospects for future growth.

Introduction to copper

EXPLORATION

The geology and chemistry of metals within the Earth’s crust forms the basis of mining. Exploration geologists

play a crucial role in searching for anomalies that would indicate the presence of a mineral deposit. Prospective

targets are tested using a variety of methods to drill and sample these rocks to understand the geology and

mineralization. The discovery and development of mineral deposits is a complex and highly uncertain process

and success depends on numerous geological, economic, environmental, legal, and other conditions, which

must be met before mining can proceed.

MINING & PROCESSING

Primary copper production starts with the extraction of copper-bearing ores. This typically occurs through

either surface or underground mining. Open-pit surface mining accounts for the majority of mining production

in the world. After the ore has been mined, it is crushed and ground followed by concentration and flotation.

The obtained copper concentrate typically contains around 20 to 40 per cent copper with various by-products

such as gold, silver, and molybdenum.


Mining involving the concentration of sulphide ores drives the vast majority of mined copper production (~80%)

Source: Company Reports

Traditionally, this copper concentrate is shipped to a smelting and refining facility where copper is transformed

through roasting into a molten matte containing 50 to 70 per cent copper. This matte is further processed to

improve the purity of the copper – first to copper blister (~98.5 to 99.5 per cent) and again to refined copper

which assays over 99.99 per cent copper. Copper is then shipped to fabricators mainly as cathode, wire rod,

billet, slabs or ingots.

Alternatively, there is a hydrometallurgical processing route, whereby copper is extracted from mostly oxide

ores and subjected to a leaching process called solvent extraction (“SX”). The copper pregnant leach solution is

sent to a tank house where it undergoes an electrowinning (“EW”) process to produce refined copper cathode.

This SX-EW process produces the same product as the traditional smelting route and according to the

International Copper Study Group (“ICSG”), approximately 21 per cent of the world’s total refined production

in 2013 was produced through SX-EW. New copper production from mining methods is referred to as primary

copper.

Copper is one of the most heavily recycled of all metals. Copper scrap, or secondary copper, is easily

reprocessed for reuse in the refined copper market.

Refined copper and copper-based alloys are shipped and consumed by fabricators who then further process

the raw material through extrusion, drawing, rolling, forging, melting, electrolysis or atomization to form wire,

rod, tube, sheet, plate, strip, castings, powder and other shapes. These products are typically sold for end use.

TRADE

Copper products across the value chain are traded internationally. Often, countries where upstream copper

production capacity exceeds downstream production capacity will import raw materials needed to meet their

production needs and vice versa. Like any other merchandise, copper is traded between producers and

consumers. Major product categories of copper traded internationally include:


• Copper Concentrates / Matte

• Copper Blister / Anode

• Copper Cathode and Ingots

• Copper Scrap

• Copper Semis

The flow of copper

Source: International Copper Study Group (ICSG)

END USES

Copper is used extensively for electricity transmission in power cables across all voltage applications. Copper is

used in electrical applications, electronics and communications, construction and building materials,

transportation, industrial machinery and equipment, as well as general consumer products.

EXCHANGES

Producers sell their present or future production to clients, who transform the metal into the various end use

products as described above. One of the most important factors in trading copper is the settlement price

(either spot or future). The commodity exchange provides transparancy and facilitates the process of settling

prices. The London Metal Exchange (“LME”), the Commodity Exchange Division of the New York Mercantile

Exchange (“COMEX”/”NYMEX”) and the Shanghai Futures Exchange (“SHFE”) are major global copper

exchanges. In these exchanges, copper contracts are settled by bid and offer which reflect the market’s

perception of supply and demand on a given day. Exchanges also provide for the trading of futures and options

contracts allowing producers and consumers to fix a price in the future thus hedging against price fluctuations.

Exchanges also act as a clearing house warehousing facility that enables market participants to make or take

physical delivery of copper in accordance with each exchange’s criteria.


The copper market

SUPPLY & DEMAND

Since 1900, when world production was less than 500,000 tonnes, world copper supply has grown by an

average of 3.2 per cent per year.

Copper price development (LME cash USD/lb); 1970-2016ytd (November 2016)

Source: Macrotrends.net

World copper mine production, 1900-2012 (in thousand metric tonnes)

Source: ICSG, 2015


According to KPMG, global mined copper production rose by about 4 per cent in 2015 to a total of 15.2 million

tonnes. Geographically, Chile remained as the world’s largest copper producer, and Peru overtook China to

become the world’s second largest producer. World copper refined production increased by 0.7 per cent in

2015 to 22.3 million tonnes.

Copper production by country (2015) and estimated growth in per cent, 2015-2020

Source: Wood Mackenzie

Wood Mackenzie estimate of global demand growth was 2.3 per cent in 2015 and is anticipated to

average 1.6 per cent through 2035.

Source: Wood Mackenzie

TRENDS AND DRIVERS

The copper mining industry has seen significant changes over the past decade and many of these trends are

expected to continue to constrain the copper supply:





• Taxation and royalty regimes are taking a larger portion of the economic benefits – increasing risks for

producers;



Additionally, future production forecasts are often optimistic as they do not account for slower than expected

ramp up of projects, pit wall failures, mechanical or other failures, aggressive production estimates, extended

equipment lead time, weather and climate delays, legislative or environmental delays, project capital deferral,

validity and stability of fiscal policies, etc.

Competition The global copper market is characterized by the presence of large, internationally diversified companies with

highly vertical integrated operations throughout mineral exploration, processing, refining, transportation and

marketing. The Company competes with other exploration and mining companies, many of which have greater

financial resources, operational experience and technical capabilities than itself. These companies appear as

both buyers and sellers within different stages of the industry. High fixed costs and scarcity of mineral

resources leads to a highly competitive business within the market.

Leading copper producers rely on the scale of their operations to reduce costs and enhance profitability which

allow them to spend time and resources searching for the next major discovery or development project.

Additionally, these companies can absorb the holding costs for large land positions effectively blocking access

to others. Permission to extract national resources is generally given by national governments, and obtaining it

may be a lengthy process with many issues relating to tax and environmental regulation.

Industry Data and Information from Third Parties This prospectus contains historical market data and industry forecasts relating to the market in which the

Company operates. The Company has obtained this information from several sources, including industry

publications and market surveys from third parties as well as publicly available information. Although the

industry publications state that they are based on information obtained from several different sources and

using various methods that may be deemed reliable, the information may not be correct and complete.

Industry forecasts are by their nature subject to considerable uncertainty, and may prove to be incorrect.

Information from third parties has been correctly reproduced and, as far as the Board is aware and can

ascertain through comparisons with other information published by the third party concerned, no information

has been omitted in a way that would make the reproduced information incorrect or misleading.

NGEx RESOURCES INC. | Operations of NGEx Resources 51

OPERATIONS OF NGEX RESOURCES

Summary NGEx is a Canadian mineral exploration company with exploration projects in Chile and Argentina. The

Company's focus is on advancing its Project Constellation, which contemplates the integrated development of

two large copper-gold deposits, the Los Helados and the Josemaría deposits, located in Chile's Region III and

adjacent San Juan Province, Argentina respectively.

Los Helados is part of a joint venture in which the Company holds approximately a 61.17% interest and Pan

Pacific Copper Co., Ltd. (“Pan Pacific Copper” or “PPC”) holds approximately a 38.83% interest. Josemaría is

part of a joint venture in which the Company holds 60% and Japan Oil, Gas, and Metals National Corporation

(“JOGMEC”) owns 40%.

THE CONSTELLATION PROJECT

The information detailed below of a scientific or technical nature regarding Project Constellation is derived

from the NI 43-101 compliant technical report prepared by Alfonso Ovalle, RM CMC1; Cristian Quiñones, RM

CMC1; Cristian Quezada, RM CMC

1; David Frost, FAusIMM

1; and Vikram Khera, P.Eng.

2, all of whom are with

Amec Foster Wheeler International Ingeniería y Construcción Limitada; and by Gino Zandonai, RM CMC33

, of

DGCS SA, titled "Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaria Deposit,

Argentina NI 43-101 Technical Report on Preliminary Economic Assessment" with an effective date of February

12, 2016 (the “Project Constellation PEA”). Alfonso Ovalle, RM CMC; Cristian Quiñones, RM CMC; Cristian

Quezada, RM CMC; David Frost, FAusIMM, Vikram Khera, P.Eng. and Gino Zandonai, RM CMC are Qualified

Persons as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”)

and independent of the Company as independence is described by Section 1.5 of NI 43–101. Please see more

information in the Project Constellation PEA which is incorporated by reference into this prospectus.

The Project Constellation PEA has been filed with the securities regulatory authorities in British Columbia,

Alberta, Ontario and Quebec.

Readers should read this summary in conjunction with entire Project Constellation PEA, together with its

illustrations, figures, footnotes, bibliography, etc., which is incorporated into this prospectus by reference and

is also available for review under the Company’s profile on SEDAR www .sedar.com.

NGEx Resources Inc. commissioned AMEC International Ingeniería y Construcción Limitada (“Amec Foster

Wheeler”) to compile an independent NI 43-101 Technical Report on the results of a preliminary economic

assessment of an integrated mining operation that incorporated the Josemaría deposit and the Los Helados

deposit (collectively termed “Project Constellation”). The Technical Report also included an updated Mineral

Resource estimate for the Josemaría deposit. Mineral Resource estimates for Josemaría and Los Helados, are

reported using the 2014 CIM Definition Standards.

1 Business address: Amec Foster Wheeler International Ingeniería y Construcción Limitada, Av. Apoquindo

3846, Piso 15, Las Condes, Santiago, Chile. 2 Business address: Amec Foster Wheeler Americas Ltd, 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H

6X7. 3 Business address: Mr Gino Zandonai, Av. La Dehesa 1201, Oficina 408, Torre Norte, CP 7690277 Lo Barnechea,

Santiago, Chile.

NGEx RESOURCES INC. | The Constellation Project 52

Summary of Project Constellation Economic Results

Pre-Tax NPV (8%) & IRR $4.43 billion NPV

20.7% IRR

After-Tax NPV (8%) & IRR $2.61 billion NPV

16.6% IRR

Payback Period

(undiscounted, after-tax cash flow) 3.6 Years

Metals Prices Assumed $3.00/lb Cu

$1,275/oz Au

$20.00/oz Ag

Initial Capital Expenditures $3.08 billion

LOM Sustaining Capital Expenditures $4.36 billion

LOM C-1 Cash Costs

(net of by-product credits) $1.05/lb Cu payable

Nominal Mill Capacity 150,000 t/d

Mine Life 48 years

Average Annual Metal Production (rounded) Life of Mine First 5 years

150,000 t Cu

180,000 oz Au

1,180,000 oz Ag

185,000 t Cu

345,000 oz Au

1,310,000 oz Ag

LOM Average Process Recovery 88.3% Cu

72.7% Au

61.4% Ag

Note: All figures reported are in 2015 US dollars and on a 100% Project and 100% equity basis valuation.

Project Constellation is preliminary in nature and includes the use of Inferred Mineral Resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves and there is no certainty that PEA results will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Project Constellation contemplates sequential production from an open pit mine at Josemaría followed by an

underground block cave mine at Los Helados. The two deposits are located approximately 10 km apart, and

material from both deposits will be processed at a centralized facility.

Including pre-stripping, Project Constellation would be in operation for 50 years. The active mine life, excluding

pre-stripping is 48 years. Initial development would target the highest-grade portion of the Josemaría deposit,

which is a near-surface zone of supergene-enriched mineralization. As the higher-grade material at Josemaría

is depleted, production will transition to the high-grade core of the Los Helados deposit. Compared to either

deposit when considered as a stand-alone operation, Project Constellation’s shared facilities help improve

capital efficiency, reduce overall environmental impacts, and dramatically improve project economics.

A central processing facility is planned to be located in Argentina. Material from Josemaría will be transported

via a series of three surface conveyors (including two transfer stations) totalling 4.9 km in length, to a stockpile

that will be located near the process plant. Material from Los Helados will be transported via an 8.1 km long

underground conveyor tunnel and a 2.8 km long surface conveyor which will tie into the existing Josemaría

surface conveyor system at the first transfer station. Concentrate will be transported by truck to a port facility

in Caldera, on the Chilean coast.

Groundwater will be supplied from a nearby well field in Argentina through an 8 km pipeline to the plant site,

and power will be supplied via 250 km of power line construction to connect to the Argentina national grid.

Processing will be by conventional sulphide flotation, following comminution by a high pressure grinding roll

(HPGR) circuit at a rate that varies between 150,000 t/d and 120,000 t/d depending on the hardness


characteristics of the material being processed. This is expected to produce a concentrate containing a life-of-

mine average of 29.0% Cu, 10.4 g/t Au and 70.3 g/t Ag and deleterious elements which are expected to be well

below penalty levels. Metallurgical recoveries are forecast to average 88.3% Cu, 72.7% Au and 61.4% Ag.

The base case scenario, which combines Josemaría and Los Helados mineralized material, uses an 8% discount

rate. The resulting after-tax project NPV (discounted at 8%) is US$2.61 billion and the internal rate of return

(IRR) is 16.6%. The cumulative, undiscounted, cash flow value for Project Constellation is US$15.95 billion. The

initial capital investment for the Project is estimated to be $3.08 billion. Average operating costs are estimated

at US$9.34/t, with cash costs, net of by-product credits, of US$1.05/lb Cu produced.


Project Description, Location and Access

Project Location

Project Constellation is located about 135 km southeast of the city of Copiapó. The Los Helados deposit is

centred at 28.3408º S, 69.5857º W in Chile, and the Josemaría deposit is 10 km to the southeast, centred at

28.4359º S, 69.5486º W in Argentina.

Ownership

NGEx holds an indirect 60% interest in the Josemaría deposit through its Argentine subsidiary Deprominsa SA

(DPM). Josemaría is subject to a Joint Exploration Agreement with Japan Oil, Gas and Metals National

Corporation (JOGMEC) which holds the remaining 40%.

NGEx holds an indirect approximately 61.17% interest in the Los Helados deposit through its Chilean subsidiary,

Minera Frontera del Oro S.C.M (MFDO). Los Helados is subject to a Joint Exploration Agreement with Pan

Pacific Copper Co., Ltd. which holds the remaining approximately 38.83%.

NGEx acts as the operator of both agreements and, in each case, both parties are required to contribute their

pro-rata share of expenditures or dilute their interest in the Project.

For the purposes of this prospectus, the NGEx parent and subsidiary companies are referred to interchangeably

as “NGEx”.

Mineral Tenure and Surface Rights

In Argentina, NGEx holds 10 exploitation licences (minas) and two exploration licences (cateos). Total holdings

cover an area of approximately 21,400 ha.

NGEx has an occupancy easement for the Batidero Camp at Josemaría, and a road right-of-way, which provides

access to the work area. Part of the road right-of-way is within private property. The remainder of the road,

and the camp fall within the multiple usage area of the San Guillermo Provincial Reserve. Multiple usage allows

mining activities.

In Chile, NGEx is the holder of 30 exploitation mining concessions, 103 exploration mining concessions and

three unilateral and irrevocable options to purchase seven exploitation concessions in the Los Helados area.

The actual surface area covered by the titles is approximately 18,480 ha.

The Company does not own any surface rights at the Los Helados Project. Surface rights in the area of the Los

Helados project are held by a local community “Comunidad Civil Ex Estancia Pulido”. In August 2016, the

Company negotiated a life of project lease agreement for 20,000 hectares covering the Los Helados Project

area to secure the surface rights needed for all infrastructure and access required for future exploration,

development and mining.

Agreements

The Project is subject to two underlying agreements in Argentina, the Lirio Agreement and the Batidero

Agreement, and two separate option agreements for small claim groups within the overall property perimeter

in Chile.

The Project benefits from a Protocol “Proyecto de Prospección Minera Vicuña” (Vicuña Mining Prospection

Project) under the "Tratado entre la República de Chile y la República Argentina sobre Integración y

Complementación Minera" (Mining Integration and Complementation Treaty between Chile and Argentina),

dated January 6, 2006. The Protocol provides a legal framework to facilitate the development of mining

projects located in the border area of both countries.


Royalties

In Argentina, the Lirio property is subject to a US$2 million payment within six months of the completion of the

second full year of mine operations and a modified 0.5% net smelter return (NSR) less costs, payable over 10

years. The Batidero property is subject to a 7% net profit interest. There is a NSR royalty payable to the

Province of San Juan which is typically 3%, but can be reduced in certain circumstances. The subset of the

Josemaría resource contained in the Project Constellation PEA production plan is entirely within the Lirio

property.

There are no royalties payable on the Los Helados deposit. The Government of Chile levies a mining tax that is

a tax on operational mining income, applied on a sliding-scale rate basis of between 5% and 14% depending on

operating margins.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Project Constellation is in the Andes Mountains, straddling the Chile–Argentina border. Elevations range from

approximately 3,000 m to 5,300 m at the pass between Josemaría and Los Helados. Topography is quite

rugged on the Chilean (western) slope of the mountains, and more subdued on the Argentine (eastern) slope

which is typically comprised of broad, flat-bottomed valleys with moderately steep slopes.

The best access to the Project is from Copiapó, a driving distance of about 170 km, or three hours. Alternate

access from the city of San Juan, Argentina is possible by major provincial highways north through San Jose de

Jachal to the town of Guandacol (in La Rioja Province) and from there by approximately 150 km of regional

unpaved roads and trails. Total driving time from San Juan is approximately 10 hours.

The climate in the Project area is dry to arid and the temperatures are moderate to cold. Annual precipitation

is about 250 mm, with snow at higher altitudes in the winter. Exploration fieldwork is generally possible from

mid-October to early May. It is anticipated that mining operations will be conducted year round.

Project Constellation will be a greenfields development. The most important logistics centre in the region is

Copiapó. Copiapó has a population of approximately 150,000 people, an airport with daily scheduled flights to

Santiago and Antofagasta, and companies that offer mining and exploration services. While farther away, San

Juan, Argentina, is also a major mining centre with good mining services available.

History

There is no record of significant exploration activity at Josemaría or Los Helados prior to NGEx’s interest. There

are no historical Mineral Resource estimates, and no reported production from the area.

Geological Setting and Mineralization

Based on geological features and location, the Josemaría and Los Helados deposits are classified as examples of

Cu–Au porphyry systems.

The Cu–Au mineralization at Josemaría is mostly hosted by a Miocene porphyry system which forms an

elongated body with minimum dimensions of 800 to 900 m north–south, 600 to 700 m east–west and 600 to

700 m vertically. A well-developed leached cap partially overlies the Josemaría deposit, and is related to

oxidation at and below the modern-day surface. The leached cap ranges from 0–20 m in thickness.

Mineral zones within the Josemaría deposit were defined by the relative abundance of chalcopyrite, pyrite and

chalcocite, as well as the mode of occurrence of chalcocite (hypogene or supergene) and level of oxidation.

Chalcopyrite and pyrite are disseminated through the potassic zone, with minor bornite. Quartz–magnetite ±

chalcopyrite veining occurs through much of the main mineralized zone, as discrete veins and locally as a more

intense stockwork.


The Josemaría deposit remains open to the south, beneath a thickening cover of post-mineral volcanic rocks,

and also at depth.

Mineralization at Los Helados is primarily hosted by a Miocene magmatic–hydrothermal breccia that forms a

roughly circular, pipe-like body with minimum dimensions of 1,100 m east–west, 1,200 m north–south, and at

least 1,500 m vertically. The breccia body is surrounded by a broad halo of moderate to low grade Cu–Au

mineralization which diminishes in grade with increasing distance from the breccia contact. The mineralization

is dated at 13.13 ± 0.32 Ma. The breccia limits have been established by drilling to the west, east and south;

however, the northern limit of the breccia body has not yet been identified. The system also remains open at

depth, and the lateral extent of the breccia at depth is poorly constrained by the current drilling.

Four mineral zones are recognized within the deposit based on sulphide occurrence. In order of increasing

depth, the zones are: pyrite only, pyrite>chalcopyrite, chalcopyrite>pyrite and chalcopyrite only. This sulphide

zoning sequence reflects a progressive downward increase in the amount of chalcopyrite relative to pyrite.

Recent internal NGEx studies have suggested the presence of a discrete, higher-grade breccia phase occurring

along the western and southwestern margins of the magmatic–hydrothermal breccia. This high-grade breccia

zone has not been fully delineated, and remains open for further extension.

The knowledge of the Josemaría and Los Helados deposit settings, lithologies, mineralization, and alteration

controls on copper grade are sufficient to support Mineral Resource estimation and can support preliminary

mine planning at the Project Constellation PEA level.

Exploration

Work programs conducted by NGEx include geological mapping; soil, rock-chip and talus sampling; a number of

geophysical surveys including induced polarization (IP)–resistivity, magnetometer, and Mount Isa Mine’s

Distributed Acquisition System methodology (MIMDAS) surveys; reverse circulation (RC) and core drilling, and

Mineral Resource estimation. Several environmental baseline studies have been undertaken. A preliminary

economic assessment of the potential development of the Los Helados deposit as a stand-alone operation was

completed in 2014; that assessment is superseded by the results of the Project Constellation PEA.

The exploration programs completed to date are appropriate to the style of the Josemaría and Los Helados

deposits.

Drilling

Nine drilling campaigns have been carried out at the Josemaría deposit, from 2003 to 2014. Drilling at the

Josemaría deposit to date totals 61,100 m in 142 drill holes, of which 48 holes (17,535 m) are RC holes, and 94

holes (43,565 m) are core holes.

Eight drilling campaigns have been carried out at the Los Helados deposit, from 2006 to 2015. Drilling to date

totals 75,634 m in 95 drill holes, of which five holes (1,366 m) are RC and 90 holes (74,268 m) are core. The

core drilling produced 33,936 m of NQ (47.6 mm diameter) core and 40,332 m of HQ size (63.5 mm) core.

Core was photographed, logged for detailed lithology, alteration and mineralization features, and rock quality

designation (RQD) and recovery data were collected. Several of the drill holes were also logged for

geotechnical information.

Core recovery data were not systematically collected on holes drilled before the 2010–2011 campaign. Core

recovery from holes drilled at Josemaría between 2011 and 2014 averages 94%. Core recovery from holes

drilled at Los Helados between 2012 and 2015 averages 97%.


Collar locations were surveyed using a differential global positioning system (GPS) instrument. Down-hole

surveys were carried out at 50 m intervals on average, using a Reflex multi-shot instrument up to the 2011–

2012 drilling campaign. For the 2012–2013 drilling, a SRG-gyroscope survey was completed for each drill hole

by Comprobe Limitada. On average, measurements were collected at 30 m intervals down the hole.

Drill hole orientations are generally appropriate for the mineralization style. The Josemaría and Los Helados

deposits are porphyry systems with disseminated mineralization. Reported and described interval thicknesses

are considered true thicknesses.

The quantity and quality of the lithological, collar and down-hole survey data collected in the exploration and

infill drill programs completed are sufficient to support Mineral Resource estimation and preliminary mine

planning at the Project Constellation PEA level.

Sampling and Analysis

Drill holes were typically sampled on 2 m intervals.

A total of 11,754 core samples were systematically measured at Josemaría for specific gravity (SG), by NGEx

technicians using the water displacement method.

A total of 25,158 core samples were systematically measured at Los Helados, beginning with the 2010–2011

drilling program. SG was measured by NGEx technicians using the water immersion method.

Prior to 2009, ALS Chemex (ALS) in Chile was used as the primary analytical laboratory and the analytical

package used was a 27-element inductively-coupled plasma atomic emission spectrometry method (ICP-AES)

following a four-acid digestion, Au fire-assay atomic absorption (AA) finish and trace mercury by cold vapor/AA.

Beginning in 2009, all samples were analyzed by ACME Analytical Laboratories Ltd. (ACME) in Santiago, Chile

following sample preparation at ACME’s sample preparation laboratory in Copiapo, Chile (Los Helados) or

Mendoza, Argentina (Josemaría).

Sample preparation for core and RC chips from the Josemaría deposit and core from the Los Helados deposit

included drying, crushing to better than 85% passing 10 mesh and pulverizing to 95% passing 200 mesh.

Sample digestion was done by a multi-acid attack. Gold was determined by fire assay with an atomic

absorption spectroscopy (AAS) finish based on a 30 g sample. A suite of 37 elements, including Cu, was

determined by ICP-emission spectroscopy (ES) analyses. Samples analyzed before the 2010–2011 campaign

had Cu re-assayed by AAS only if the ICP result exceeded the detection upper limit of 10,000 ppm. Beginning in

2010–2011, all samples with copper grades over 5,000 ppm Cu were re-assayed by AAS. Starting in 2011–2012,

Cu determinations in all samples were done by both ICP and AAS. Mercury concentration was determined by

cold vapour/AA in all samples up to 2010–2011.

Prior to 2009, quality control was limited to the preparation and analysis of field duplicates from the drill

samples.

A rigorous quality control (QC) protocol was implemented in 2009–2010, beginning with drill holes LHDH05

(Los Helados) and JMDH08 (Josemaría), and has been followed since then with minor variations. Quality

assurance and quality control (QA/QC) includes insertion of standard reference materials (SRMs), coarse blank

samples and duplicate samples. A set of 183 coarse rejects from the 2012 drill campaign at Josemaría were

selected for re-assaying at SGS Laboratories. A set of 522 pulps, representing 3.5% of total samples for the

2012–2013 drilling campaign at Los Helados, were selected for a second analysis round at ALS in Chile.

Sample collection, preparation, analysis and security for the core drill programs are in line with industry-

standard methods for porphyry deposits. The QPs are of the opinion that the quality of the copper and gold


analytical data from these programs is sufficiently reliable to support Mineral Resource estimation without

limitations on Mineral Resource confidence categories.

Data Verification

Data verification has been conducted by independent consultants in support of technical reports on the

Project. This work has included field visits (drill collar monumenting; location checks for selected drill collars);

witness sampling; QA/QC data reviews; spot checks of the assay database against assay certificates; reviews of

the lithology and alteration information in drill core against drill logs; reviews of collar elevations in the

database against collar elevations in the digital elevation model provided by NGEx; downhole survey deviation

reviews; reviews of QA/QC data including standard, blank and duplicate sample performances; and a review of

check sampling on pulps completed by a check laboratory.

A reasonable level of verification has been completed during the work conducted to date, and no material

issues have been identified from the verification programs undertaken. The data verification programs

undertaken on the data collected from the Project adequately reflect deposit dimensions, true widths of

mineralization, and the style of the deposit, and adequately support the geological interpretations, and the

analytical and database quality. The resulting data can be used to support Mineral Resource estimates and in

preliminary mine planning at the Project Constellation PEA level.

Metallurgical Testwork

A two phase metallurgical test work program for each deposit was conducted at SGS Minerals S.A. (SGS)

laboratories in Santiago, Chile under the supervision of Amec Foster Wheeler. Vendor testing was also

conducted by Thyssenkrupp on selected samples from the Los Helados deposit.

The main activities completed during the metallurgical test program carried out were:

• Sample selection for the metallurgical test programs

• Chemical characterization including mineralogical analysis

• Physical characterization

• Gold recovery using gravity processing techniques

• Leaching of the Cu and Au oxide ore types (Josemaría deposit only)

• Copper, gold and silver recovery using conventional sulphide flotation practices

• Settling testwork

The data obtained from the metallurgical test programs were used to develop a relationship between Cu head

grade and final Cu recovery to concentrate. This relationship between Cu recovery and Cu head grade was

determined from the results of both the open and locked cycle tests and reported a good correlation.

For Josemaría, this relationship was applied to each of the lithologies studied. The copper recoveries are

bound by the lower 10th and upper 90th percentile with respect to Cu feed grade, except in the case of the

Supergene lithology where a fixed recovery of 85.3% of the feed Cu content was considered. Copper

recoveries range from 81.1% to 96.7%, Au and Ag recoveries were fixed for each lithology. Fixed Au recoveries

range from 59.2% to 72.6%; fixed Ag recoveries range from 52.9% to 74.9%.

At Los Helados, Cu recoveries range from 84.2% to 93.9%. A fixed global Au recovery estimate of 76% of the

feed Au content has been used. Silver recovery is also fixed, at 60% of the feed Au content.

The weighted average, life-of-mine recoveries are forecast to be 88.3% for Cu, 72.7% for Au and 61.4% for Ag.

The Josemaría concentrates showed no major deleterious elements. However, mill feed blending strategies

should be employed to generate flotation concentrates that have high Cu grades whilst maintaining minimal

deleterious element levels.


No major deleterious elements were noted in the concentrates produced from the testwork completed on Los

Helados mineralization. The concentrates are considered to be marketable without incurring penalties for

deleterious elements.

Mineral Resource Estimates

The Josemaría Mineral Resource estimate update is based on data from 116 drill holes totalling 52,725 m of

drilling, of which 34 holes (13,164 m) are reverse circulation (RC) and 82 holes (39,561 m) are core holes. The

total length of assayed intervals is 51,092 m and there are 27,344 assays.

The Mineral Resource estimate at Los Helados is unchanged from the previous technical report, and is

supported by 74 drill holes (five RC and 69 core), and 35,629 assay results.

For each deposit, a two-dimensional (2D) interpretation based on logged data was completed by NGEx

geologists on east–west oriented sections spaced 100 m apart. Two-dimensional lines were then exported

from GEMS and imported into the Leapfrog geological modelling software and the final three-dimensional (3D)

wireframe solids were constructed.

Statistical analyses were performed for Cu, Au, Ag, S, Fe, and As by lithological domain at Josemaría, and for Cu,

Au, Ag, Mo, S, Fe and As and SG samples at Los Helados.

The drill hole assays were composited to 2 m intervals. No capping was applied at Josemaría. Depending on

the domain, copper grade caps at Los Helados ranged from 2–3%, though most domains were not capped.

Gold was capped at 2 g/t Au and Ag at 20 g/t Ag.

Ordinary kriging (“OK”) and inverse distance squared (“ID2”) weighting interpolation was done in a single pass.

All elements (Cu, Au, Ag, Mo, As, S and Fe) were interpolated using OK. The ID2 weighting method and nearest

neighbour (“NN”) method were performed only for Cu and Au for validation and checking purposes of the

global bias. A minimum of two and a maximum of 50 composites, with maximum 15 composites from the

same hole were used for the interpolation, to allow maximum spread of the data used to estimate blocks. For

estimation of the kriging and block variance, a 3 x 3 x 3 discretization of the block was selected. The major,

semi-major and minor axes of the search ellipse were set to the corresponding radius defined by the omni-

directional variograms.

Model validation was carried out using visual comparison of blocks and sample grades in plan and section

views; statistical comparison of the block and composite grade distributions; and swath plots to compare OK,

ID2 and NN estimates.

The classification of the Mineral Resources was done as a two-step process. An initial step which considered

the geostatistical analysis of Cu grades in the deposit was modified by a final revision to ensure consistency in

the classification.

The following parameters were used to initially classify the resources into Indicated and Inferred:

• Indicated: the distance to the nearest drill hole from the centre of the block was less than or equal to

75 m and there were at least three drill holes used for the grade interpolation and the kriging

efficiency estimation was more than 0.33.

• Inferred: the distance to the nearest drill hole from the block was 75 to 150 m, there were at least

two drill holes used for the grade interpolation, and the kriging efficiency estimation was less than

0.33.

The final step was taken in order to avoid having isolated areas of one classification encapsulated within the

other (‘spotted dog’ effect). Two smoothed buffer wireframes were created in Leapfrog, one at 75 m and one

at 150 m. Inferred blocks inside the 75 m wireframe were re-classified as Indicated, while any Indicated blocks

outside of the 75 m buffer but within the 150 m buffer were re-classified as Inferred. A final phase of visual

inspection of the resulting classification was performed for validation purposes.

In order to evaluate the potential for reasonable prospects of eventual economic extraction for Josemaría, a

Whittle pit shell was generated using the following parameters:

• Cu price: US$3.00/lb

• Mining cost: US$2.20/t

• Process cost (including G&A): US$7.40/t processed


• Copper selling cost: US$0.35/lb

• Over-all slope angle: 42º.

The analysis was done based on the copper equivalent (CuEq) grades in the block model. CuEq was calculated

using metal prices of US$3.00/lb copper, US$1,400/oz gold and US$23/oz Ag. Mineral Resources for Josemaría

are reported at a 0.2% CuEq grade for the sulphide material.

Block cave shapes were generated for Los Helados by using different diluted copper equivalent (CuEq) cutoff

grades and calculating a conceptual NPV for each shape. These mining shapes were generated using the

following assumptions:

• Cu price: US$3.00/lb

• Au price: US$1,300/oz

• Ag price: US$23/oz

• Operating cost (incl. general and administrative (G&A) costs): US$13.07/t

• Capital cost: Provisional, based on production rate

• Metallurgical recoveries: variable, based on recovery formulae

• Dilution: Laubscher’s model

A CuEq grade was calculated using US$3.00/lb Cu, US$1,300/oz Au and US$23/oz Ag, and includes a provision

for selling costs and metallurgical recoveries corresponding to the three metallurgical zones defined by depth

below surface. Note that these metal prices and sales costs are not the same as those used in the financial

model; these assumptions were only used for the purposes of establishing appropriate copper equivalency

formulae. The base-case diluted cutoff grade of 0.33% CuEq was determined as the lowest cutoff grade which

produced a positive NPV, and the base case Mineral Resource estimate is the sum of all the blocks within this

block cave.

Mineral Resource Statement

Mineral Resource estimates for Josemaría and Los Helados, are reported using the 2014 CIM Definition

Standards. Indicated and Inferred classifications only have been estimated; no Measured Mineral Resources

were classified.

The Mineral Resource estimates were prepared by Mr Gino Zandonai, RM CMC. The Josemaría estimate has an

effective date of 7 August, 2015 and the Los Helados estimate has an effective date of 19 September, 2014.

Mineral Resource estimates for Josemaría and for Los Helados are included in the following tables. Mineral

Resources that are not Mineral Reserves do not have demonstrated economic viability.


Mineral Resource Estimate (Sulphide) for Josemaría (basecase is highlighted)

Josemaría Indicated Mineral Resources (sulphide)

Tonnage Grade Contained Metal

Cutoff (CuEq) (Mt) Cu (%) Au (g/t) Ag (g/t) CuEq (%) Cu

(B lbs)

Au

(M oz)

Ag

(M oz)

0.60 148 0.56 0.38 1.5 0.76 1.8 1.8 6.9

0.50 295 0.47 0.34 1.3 0.65 3.0 3.2 12.6

0.40 559 0.40 0.29 1.2 0.55 4.9 5.2 21.8

0.30 835 0.35 0.25 1.1 0.49 6.5 6.6 29.7

0.20 1,066 0.31 0.22 1.0 0.44 7.4 7.4 34.5

Josemaría Inferred Mineral Resources (sulphide)


Cutoff (CuEq*) (Mt) Cu (%) Au (g/t) Ag (g/t) CuEq (%) Cu

(billion lbs)

Au

(million oz)

Ag

(million oz)

0.50 9 0.37 0.28 1.1 0.52 0.1 0.1 0.3

0.40 85 0.31 0.23 1.0 0.45 0.6 0.6 2.7

0.30 236 0.28 0.19 0.9 0.38 1.4 1.4 6.8

0.20 404 0.24 0.15 0.8 0.33 2.0 2.0 10.8

Mineral Resource Estimate (Oxide) for Josemaría (basecase is highlighted)

Josemaría Indicated Mineral Resources (oxide)


Cutoff

(Au g/t) (Mt)

Cu

(%)

Au

(g/t)

Ag

(g/t)

Au

(k oz)

Ag

(k oz)

0.40 10 0.18 0.46 1.4 150 460

0.30 23 0.16 0.40 1.3 290 950

0.20 43 0.15 0.32 1.2 450 1,610

0.10 77 0.13 0.25 1.0 610 2,520

Josemaría Inferred Mineral Resources (oxide)


Cutoff

(Au g/t) (million tonnes) Cu (%) Au (g/t) Ag (g/t)

Au

(k oz)

Ag

(k oz)

0.40 2 0.00 0.43 1.2 27 73

0.30 3 0.00 0.40 1.1 37 102

0.20 4 0.00 0.34 1.0 48 145

0.10 7 0.02 0.26 0.9 62 214

Notes to accompany Josemaría Mineral Resource tables: 1. Mineral Resources have an effective date of 7 August, 2015. The Qualified Person for the estimate is Mr Gino Zandonai,

RM CMC.

2. Sulphide Mineral Resources are reported using a copper equivalent (CuEq) cutoff grade. CuEq was calculated using

US$3.00/lb copper, US$ 1,400/oz gold and US$23/oz Ag and was based on copper, gold and silver recoveries obtained

in metallurgical testwork on four composite samples representing the rhyolite, tonalite, porphyry and supergene zones.

Copper recoveries for the rhyolite, tonalite and porphyry zones were calculated as a function of copper grade, ranging

from a low of 81% to a high of 97%. Copper recovery in the supergene zone was fixed at 85%. Gold recoveries were

fixed between 62% and 73% and silver recoveries were fixed between 53% and 75% depending on the zone.

3. Mineral Resources are reported within a conceptual Whittle pit that uses the following input parameters: Cu price of

US$3.00/lb; mining cost of US$2.20/t; process cost (including G&A) of US$7.40/t processed; copper selling cost of

US$0.35/lb and over-all pit slope angle of 42º. The oxide resource was treated as waste for the Whittle run, however

preliminary testwork has shown good recovery of gold through cyanide leaching and there is a reasonable prospect of

eventual economic extraction of gold and silver using this method.

4. Mineral Resources (sulphide) have a base case estimate using a 0.2% CuEq cutoff grade; Mineral Resources (oxide) are

reported using a 0.2 g/t Au cutoff grade.

5. Details of the Josemaria Mineral Resource estimate are contained in the NI 43-101 technical report titled “Constellation

Project – Incorporating the Los Helados Deposit, Chile and the Josemaría Deposit, Argentina, NI 43-101 Report on

Preliminary Economic Assessment” dated February 12, 2016.

6. Totals may not sum due to rounding as required by reporting guidelines.


Mineral Resource Estimate for Los Helados (basecase is highlighted)

Los Helados Indicated Mineral Resource

Tonnage Resource Grade Contained Metal

Cutoff

(CuEq) (million tonnes) Cu (%) Au (g/t) Ag (g/t)

CuEq

(%)

Cu

(billion lbs)

Au

(million oz)

Ag

(million oz)

0.58 531 0.50 0.21 1.66 0.65 5.9 3.6 28.3

0.50 981 0.45 0.18 1.56 0.58 9.7 5.7 49.2

0.44 1,395 0.42 0.16 1.52 0.54 12.9 7.2 68.2

0.40 1,733 0.40 0.15 1.45 0.51 15.3 8.4 80.8

0.33 2,099 0.38 0.15 1.37 0.48 17.6 10.1 92.5

Los Helados Inferred Mineral Resource

Tonnage Resource Grade Contained Metal

Cutoff

(CuEq) (million tonnes) Cu (%) Au (g/t) Ag (g/t) CuEq (%)

Cu

(billion lbs)

Au

(million oz)

Ag

(million oz)

0.58 There are no Inferred Mineral Resources inside the mining shape at this cutoff grade

0.50 41 0.41 0.13 1.78 0.51 0.4 0.2 2.3

0.44 176 0.37 0.11 1.61 0.45 1.4 0.6 9.1

0.40 399 0.35 0.10 1.47 0.43 3.1 1.3 18.9

0.33 827 0.32 0.10 1.32 0.39 5.8 2.7 35.1

Notes to accompany Los Helados Mineral Resource table 1. Mineral Resources have an effective date of 19 September, 2014. The Qualified Person for the estimate is Mr Gino

Zandonai, RM CMC.

2. Mineral Resources are reported using a copper equivalent (CuEq) cutoff grade. Copper equivalent is calculated using US$3.00/lb copper, US$ 1,300/oz gold and US$23/oz Ag, and includes a provision for selling costs and metallurgical recoveries corresponding to three zones defined by depth below surface. The formulas used are: CuEq% = Cu% +

0.6264*Au (g/t) + 0.0047*Ag (g/t) for the Upper Zone (surface to ~ 250 m); Cu% + 0.6366*Au (g/t) + 0.0077*Ag (g/t) for the Intermediate Zone (~250 m to ~600 m); Cu% + 0.6337*Au (g/t) + 0.0096*Ag (g/t) for the Deep Zone (> ~600 m)

3. Cutoff grades refer to diluted cutoff grades used to generate the corresponding block cave shapes. For each cutoff grade, the tonnes and grade represent the total Indicated or Inferred undiluted material within each of these shapes.

4. Mineral Resources are reported within block cave underground mining shapes based on diluted CuEq grades,

US$13.07/t operating costs and include a provision for capital expenditure. The base case cutoff grade of 0.33% CuEq was derived through an economic evaluation of several block cave shapes developed over a range of different cutoff grades and is the cutoff grade which results in a zero net present value

5. Totals may not sum due to rounding as required by reporting guidelines

Mine Plan

The Project Constellation PEA mine design basis is two mining operations feeding a central process plant. The

combined mining and processing operation is collectively called Project Constellation. Mineralization at

Josemaría will be mined using conventional open pit methods, whereas the Los Helados deposit will be mined

using block caving, with mill feed material from both mines sent to a process plant to be located in Argentina.

Material included in the mine plan is a subset of the estimated Mineral Resources.

The mine plan for Josemaría assumes a two-year pre-strip period, and a five-month ramp-up, during which

production will increase in stages from 20% to 100%. Full production will extend over a six-year period at 150

kt/d. There is a six-year production ramp-up period for Los Helados and in year 14 of the mining operation, Los

Helados will reach peak production of 120 kt/d. Project Constellation will be in operation for 50 years,

including the two year pre-stripping period.

Geotechnical Considerations

Various rock mechanics studies have been undertaken to support mine design parameter selections for both

deposits.

For Josemaría, inter-ramp slope stability was assessed using empirical methods. For a proposed inter-ramp

depth of 105 m, maximum inter-ramp angles (IRAs) of 45º and 47º are recommended for the east and west

walls, respectively.

Based on empirical methods, caving of the Los Helados rock mass can be achieved with a minimum hydraulic

radius (HR) of 39. This equates to a cave initiation footprint approximately 135 x 185 m. Cave initiation can be

successfully achieved at Los Helados given the rock mass conditions and proposed mining footprints although

the rock mass characteristics suggest that unassisted cave propagation may be an issue with a planned lift

height of 1,000 m. The proposed height/width ratios of the cave are 0.56 to 2.75, depending on which side of


the cave is considered. This indicates that there could be a risk of cave-stalling, depending on the initiation

strategy. The proposed single lift of more than 800 m over the full footprint area is greater than what has

currently been done in other existing traditional block cave operations. Only one panel cave mine to date,

Cadia East, has been developed a lift height greater than 800 m using advance preconditioning techniques.

With appropriate cave initiation and propagation studies in further project stages, and the proposed use of full

column hydraulic fracturing (HF) preconditioning, it is considered that the risks of cave-stalling can be

mitigated.

The results of the primary fragmentation analysis indicate that in-situ block sizes alone are not viable for

efficient cave mining, and that the effects of secondary fragmentation will need to be considered. Draw

heights of around 100 m are required before adequate/productive fragment size distributions are produced

through secondary fragmentation. The use of confined blasting (CB) preconditioning of the first 100 m of

columns is recommended.

Based on empirical analyses, the likely cave angle at Los Helados will be around 75°. The predicted mean

caving angle of 75° from the empirical analysis is comparable to data from benchmarking studies from similar

block cave mines in porphyry copper systems. A maximum subsidence angle of 60° has been estimated for Los

Helados.

Pit Design

The 15 years of open pit life at Josemaría, including two years of pre-stripping, are divided into six conceptual

phases, each having a minimum operational width of 150 m, to facilitate the early extraction of the most

profitable material, and to defer or minimize waste stripping. Smoothing the pit designs involved redefining

the optimized pit shells to provide equipment access, and to ensure that wall slopes are designed in

accordance with the recommended slope angles. The final pit design incorporates two main ramps with an exit

point at the 4400 level on the north side of the pit; the exit point will be in close proximity to the planned

primary crusher location.

Overall loss and dilution was estimated to be less than 1%, and has been incorporated into the block model.

The final strip ratio for the designed pit is 0.98:1.

A maximum mining rate of 115 Mt/a is required to provide the nominal 150 kt/d of concentrator feed. The

sinking rate, considering each phase separately, is limited to eight mined benches per year, with six benches

mined during the first year.

The Josemaría pre-stripping will mine higher, smaller benches for phases 1, 3, 4, 5 and 6 during year -2. The

mine plan stockpiles this pre-stripping material in year -1; and it will be reclaimed and fed to the mill in year 1.

An elevated cutoff grade strategy was used to develop the Project Constellation PEA mine plan for Josemaría.

Cave Design

The block cave mine design is based on a 1,174,000 m2 footprint area. The footprint area contains two

production lifts, an upper lift (Lift 1), the smaller of the two lifts and a lower lift (Lift 2).

Lift 1 has its undercutting level (UCL-1) at elevation 3,630 metres above sea level (masl), 90 m above the UCL of

Lift 2. It will have a 194,000 m2 footprint, and was designed with a rectangular shape (200 m wide north–

south, 970 m long east–west). Mining assumes block caving with load-haul-dump (LHD) equipment for

extraction.

Lift 2 has its undercutting level (UCL-2) at elevation 3,540 masl. The lift will have a 980,000 m2 footprint, and

be mined by block caving using LHD equipment.

Intensive pre-conditioning of the whole rock mass was incorporated in the design and will use both HF and

fracturing by CB methods. To achieve HF, two hydrofracturing levels were included, the upper hydrofracturing

level at 4,120 masl. (HFL-1), 280 m above the lower hydrofracturing level at 3,840 masl (HFL-2), which in turn is

210 m above Lift 1 and 300 m above Lift 2.

The ventilation system design assumes three main intake shafts and three main exhaust shafts.

A 12 km long tunnel (Tunnel 12) is planned to access Los Helados from Chile, with a second tunnel,

approximately 8 km in length (Tunnel 8), used to convey mill feed material from the Los Helados mine to the

process plant in Argentina.


Recovery Plan

The plant will treat material from the Josemaría open pit for the first seven years of operation. In year 8, mill

feed material from the underground operation at Los Helados will be introduced to the plant, and blended with

Josemaría open pit material. The blended feed will continue for a six-year period. During year 13 of

operations, mining from the Josemaría open pit ceases, and for the remaining 35 years of mine life, only

underground feed from Los Helados will be processed.

For the Josemaría mill feed material, run-of-mine (ROM) material will be trucked to a primary crusher, crushed,

and then sent to the process plant. ROM material from Los Helados will be primary crushed underground, and

conveyed to the process plant. The base case comminution circuit design considers a conventional high

pressure grind roll (HPGR) crushing circuit followed by conventional ball mill grinding. Conventional sulphide

flotation will follow the comminution stage. The tails will go to the tailings storage facility where

approximately 20% of the contained water in the tailings will be recovered and sent back to the process plant.

The plant is designed to process 120 kt/d of Los Helados mill feed and 150 kt/d of Josemaría material, which is

softer. Additional flotation residence time is required for the Josemaría mill feed.

Project Infrastructure

Logistics

A new 57 km long, two-lane dirt access road is planned to branch off from highway RN 76 to access the

proposed Josemaría mine and the process plant. From that intersection, the Pircas Negras border pass is about

22 km away on the existing road. In Chile, an existing 20 km long single-lane dirt road will be upgraded to a

two-way road to access the Los Helados mine from Chilean public road C-35.

The Candelaria port at the city of Caldera was selected for Project Constellation PEA study purposes. The port

is about 380 km by road from the Josemaría plant site. Port facilities at Caldera are owned and operated by

Minera Candelaria. Project Constellation would require additional port facilities to be constructed to support

concentrate export, adjacent to the port owner’s existing buildings. Concentrates will be trucked from the

plant to the port.

Waste Rock and Tailings Storage

The Josemaría open pit operations will generate a total of 517 Mt of waste material that is proposed to be

placed about 1 km south of the open pit.

Tailings will be transported from the process plant, located at an elevation of 4,127 masl, to the tailings storage

facility (TSF) site at an elevation of 4,000 masl at an initial rate of 5,508 m3/h. A two-stage process will be

required, because although the selected site is topographically 100 m lower than the process plant site, there

are two ridges that are 200–300 m higher than the plant site that must be crossed. Tailings, thickened to 65%,

will be pumped to an intermediate point located 4 km from the plant at 4,150 masl, and then flow by gravity

inside a tunnel for 8.1 km to the TSF. Tailings will be deposited by end-discharge, with occasional spigotting, to

form smooth tailing beaches. The final dam will be about 180 m high, 1.3 km long, and store approximately

1,900 Mm3 of tailings.

Site Infrastructure

The Project Constellation PEA design assumes most support facilities will be located in Argentina.

Key infrastructure at Josemaría will include the open pit, process plant, filter plant, ancillary administrative

buildings, construction and operations camp, truck-shop, electrical distribution system, water and emergency

ponds, and site security.

The major infrastructure at Los Helados will include the block cave mine, explosives magazine, warehouse,

administration areas, construction and operations camp, mining contractor facilities, and first aid station.

Accommodations camps will be required at both Josemaría and Los Helados. Both camp designs assume 4,000

person capacities during construction. As construction demand decreases, parts of the camps will be

reassigned to operations personnel and operations offices. During operations, it is expected that the Josemaría

camp will accommodate about 750 people, and the Los Helados camp about 2,400 people.


A number of tunnels are required, including the access portal to Los Helados, a water diversion tunnel to divert

the Los Helados creek around the Los Helados operation, a conveyor tunnel from Los Helados to Josemaría, and

a tailings tunnel from the process plant to the TSF.

Water Management

Limited studies have been conducted for water management at Josemaría. The Project Constellation PEA

assumes that diversion channels will be constructed along the west, south, and east walls of the open pit to

convey the diverted surface runoff toward the main basin at the north side of the pit. Ground water will be

captured in the ditches included in the road design inside the pit, collected, and then pumped out of the pit

zone. The contact water will be collected below the waste rock facility or in a dedicated pond. No allowance

for a water treatment plant has been considered at this time.

Mine water at Los Helados will be sourced from dewatering activities associated with development and

operations. About 100 L/s is expected (on average), based on the deposit setting and lithologies present.

The industrial water make-up requirement for the process plant is estimated to be 500 L/s (on average), or

0.5 m3/s. Nearby valley aquifers within Argentina were considered the most likely water source for Project

Constellation PEA purposes; the selected site is located 8 km from the proposed plant site. It was assumed that

the selected aquifer could support the full 500 L/s process plant requirements.

Power

Power for the site is assumed to be supplied through a 250 km long, 220 kV, single-circuit transmission line

connected to the El Rodeo substation in San Juan Province, Argentina. Average consumption is estimated to be

160 MW. A price assumption of $0.078/kWh was used for long-term power supply. Power supply alternatives

from Chile were also considered; however, the lower power costs in Argentina led to significant operating costs

savings over the life of the operations. For Project Constellation PEA purposes, the power infrastructure will

include:

• A 220 kV overhead transmission line from El Rodeo

• A main power substation beside the process plant.

Power will be distributed at 33 kV via localized mine grid. A back-up generator will also be located on site to

support key facilities in an emergency.

Marketing

No formal marketing studies have been conducted for Project Constellation. No contracts are currently in

place for any production from the Project.

Metallurgical testwork completed to date indicates that contained Cu, Au and Ag will be payable in the

concentrates produced. The testwork also indicates that the concentrate product will be precious-metals rich

and low in deleterious elements. For the purposes of the Project Constellation PEA, it was assumed that long-

term contracts would be established with Asian smelters. Market terms were established based on

benchmarking against similar operations from publicly-available information. Opportunities exist for NGEx to

receive premium terms for its concentrates. This would need to be explored during future project-specific

marketing studies.

Environmental, Permitting and Social Licence

NGEx retained Asesoria Ambiental (AA), based in Argentina and BGC Engineering (BGC) based in Chile to assist

with the preliminary environmental baseline studies. Extensive regional field programs were carried out by AA

and by BGC during the 2013–2014 and 2014–2015 seasons. Publicly-available information has also been

reviewed in depth. Based on the initial assessments, environmental sensitivities are understood to be related

chiefly to ARD geochemistry and its effects on water quality, glacial and periglacial cryoforms, atmospheric dust

emissions, effects on terrestrial and aquatic biota, and the human and political environment. These

sensitivities are typical for a new mine development. However, additional work should be focused on potential

effects on these environmental components, and design of the Project to minimize the potential environmental

impacts and risks.


A detailed social impact assessment should be completed during future comprehensive studies. It is

understood that NGEx maintains community relations and consultation programs that are ongoing and support

Project Constellation development plans.

Project development will require submission of a full Environmental Impact Assessment (EIA) study. Following

the receipt of environmental approvals, additional permits, licences, authorizations, and certificates will be

necessary to proceed to Project construction. During the next study phase, when more information is available

on the site and mine layout, the process for obtaining such approvals should commence in parallel with the EIA

approval process.

Based on previous similar experience, closure costs of US$148.7 million have been allocated to the project.

Costs are assumed to be incurred at the end of mining operation. These amounts represent about 5% of the

total Project initial capital costs.

Capital Cost Estimate

Initial capital costs total approximately US$3.08 billion (including pre-stripping costs), sustaining capital costs

total about US$4.36 billion, for a total LOM capital cost estimate of approximately US$7.44 billion. Details of

the LOM capital cost estimate are as follows:

Capital Cost Estimate (US$ Billion)

Open pit mine 0.20

Pre-stripping 0.14

Underground mine 0.09

Plant and processing 0.87

Infrastructure 0.55

Total Direct Costs 1.85

Indirect costs 0.48

Owner’s costs 0.13

Contingency 0.62

Total Initial Capital Costs 3.08

Sustaining capital costs 4.36

Life-of-mine capital cost estimate 7.44

Note: Numbers prepared by Amec Foster Wheeler.

Operating Cost Estimate

Over the life of mine, the operating costs will average US$9.34/t processed with cash costs, net of by-product

credits, of US$1.05/lb Cu produced, and total US$19.6 billion. Details of the LOM operating cost estimate are

as follows:

Life of Mine Operating Costs (US$t)

Estimated Operating Costs Josemaría

(US$/t)

Los Helados

(US$/t)

Life of Mine

(US$/t)

Mining (mineralization processed) 3.91 4.43 4.23

Processing 3.60 4.26 4.09

General & Administration 0.80 0.80 0.80

Pumping 0.02 0.02 0.02

Tailings 0.07 0.07 0.07

Other (roads, port, closure, etc.) 0.30 0.06 0.13

Total 8.70 9.64 9.34


Financial Analysis

The Project has been valued using a discounted cash flow (DCF) approach. Estimates have been prepared for

all the individual elements of cash revenue and cash expenditures for ongoing operations. The base case

economic analysis assumes 100% equity financing and is reported on a 100% Project ownership basis.


Capital cost estimates have been prepared for initial development and construction of the Project, starting in

year minus three (year -3). In addition to initial capital cost, sustaining capital was included from year one (year

1).

The resulting net annual cash flows are discounted back to the date of valuation of start-of-year, year -3,

because the actual starting calendar year has not been determined. The currency used to document the cash

flow is US$ at Q3 2015, considering that the estimation was developed during the third quarter of 2015. The

IRR is calculated as the discount rate that yields a zero NPV. The payback period is calculated as the time

needed to recover the initial capital costs.

Below is a summary of the cashflow analysis and a chart to illustrate the after-tax cash flow projection over the

life of the mine:

Cashflow Summary Table (base case is highlighted)

Unit Value

Payback (undiscounted; post-tax) Years 3.6

Cumulative net cash flow (post-tax) US$ billion 15.95

NPV 5% (post-tax) US$ billion 4.99



IRR (post tax) % 16.6%


Projected Life-Of-Mine Cash flow

Note: Figure prepared by Amec Foster Wheeler. X-axis shows Project years.

(1 500)

(1 000)

(500)

0

500

1 000

1 500

(5 000)

0

5 000

10 000

15 000

20 000

-3 -1 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50

An

nu

al (

US$

mill

ion

)

Cu

mu

lati

ve (

US$

mill

ion

)

Cash Flow & Cumulative Cash Flow (After Tax)

Cash Flow


Sensitivity Analysis

A sensitivity analysis was performed taking into account variations in metal prices (which emulates metal

grades and recoveries), operating costs and capital costs. The Project is most sensitive to (in order from

highest to lowest) metal prices, initial capital cost and operating cost. The results of the sensitivity analysis are

as follows:

Sensitivity Analysis

Note: Figure prepared by Amec Foster Wheeler.

Risks and Opportunities

The main opportunities identified for the Project include:

• Higher metals pricing: The Project has significant leverage to copper prices

• Changes to royalty or tax regimes that may improve the Project’s economics.

• Delineation of additional mineralization, in particular higher-grade material, through further

exploration

• Potential to heap-leach oxide gold mineralization at Josemaría

• Optimization of the combined mine plan

• Optimization of the block cave assumptions

• Improvements in process plant throughput, concentrate grades, and metallurgical recoveries through

additional testwork

• Determining a more cost-effective power supply option

• Potential for regional synergies with other mining operations

Risks noted with the Project Constellation PEA assumptions include:

• Long-term depressed metals prices and fluctuations with metals pricing

• Political risks and uncertainties affecting legislation, regulatory requirements or general business

climate in Chile and Argentina

• Inflation and increased prices for infrastructure, equipment and consumables, resulting in changes to

operating and capital cost estimates

• Implementation of additional monetary controls or restrictions on imports by the Argentinean

government

• Obtaining sufficient surface and water rights on both sides of the border to support the envisaged

operation

• Obtaining the appropriate permits to support Project construction and operation

• Timely completion of the environmental permitting process


• Environmental concerns that may be raised due to proximity concerns: the proximity of the El Potro

glacial area, rock glaciers in the broader periglacial environment, and cultural heritage sites

• Uncertainties in long term management of acid rock drainage and metal leaching from mine, waste

and tailings

• Continuity and effectiveness of community relations programs.

Conclusions

Project Constellation shows positive a financial return and supports the declaration of the economic analysis

based on Mineral Resources.

Should the NGEx Board make such a decision, there is sufficient support from the PEA for progression to more

detailed technical studies.

Recommendations, Ongoing and Future Investments

The Project Constellation PEA recommended a two-phase work program to progress the project to the next

stage of development study. The first phase consists of a number of drill and data collection programs in

addition to continued environmental baseline studies.

The second phase will use the drill program results to update engineering designs and supporting assumptions

and culminate in sufficient data and data support to allow completion of a pre-feasibility study (“PFS”)

document. This second phase will also entail the development of a licencing strategy that considers the

regulatory framework, social context and environmental sensitivities of the Project. The second phase

programs recommended would support completion of a PFS on the Project. The NGEx board of directors has

not made a final decision to proceed to a PFS and the timing of such a decision will depend on several factors

including but not limited to market conditions and availability of financing to complete the studies.

The first phase program is estimated at $7 million which includes required G&A spending along with some

minor regional exploration. The first phase program is estimated to be funded by the net proceeds from the

Offering (see “Background and Conditions” for information on the Offering).

The Company is an exploration and development stage company and typically has negative cash flow from

operating activities. The Company had negative operating cash flow for the nine months ended Sept 30, 2016

and expects to continue to have negative operating cash flow in the future or until commercial production is

achieved at Project Constellation. Consequently, the Company will require additional financing in order to meet

its business objectives and there is a risk that such financing sources will not be available as and when needed.

NGEx RESOURCES INC. | Other information about NGEx Resources 70

OTHER INFORMATION ABOUT NGEX RESOURCES

Business concept and strategy NGEx is an exploration company and has no source of revenue and relies on the equity markets for all the

funding required to operate the Company and to explore its projects. The Company’s strategy is to create value

for its shareholders by expanding and increasing the quality of its resources as well as by advancing the

engineering and other studies that are required to prepare its projects for eventual development by the

Company and its partners or by third parties. The Company intends to increase shareholder value through

successful exploration and to eventually convert its exploration successes into tomorrow’s development

projects positioning the Company as a top tier copper industry investment.

NGEx seeks to acquire precious and base metal properties and discover mineral resources within these

properties. The Company then adds value to these properties by defining or de-risking the resources through

drilling, engineering and other studies. The value is expected to be eventually realized through the construction

and operation of a mine or another value creating transaction such as e.g. a spin-out, sale or joint venture, etc.

History of the Company

Operational Background The Company was originally incorporated under the Company Act (British Columbia) on 3 February 1983 under

the name Curator Resources Ltd. Between 1983 to 2004, the Company carried out exploration on a number of

mineral properties that have since been divested. The Company was continued under the Canada Business

Corporations Act (“CBCA”) on August 20, 2004 with an authorized capital comprised of an unlimited number of

Shares.

Eight drilling campaigns have been carried out at the Los Helados deposit, from 2006 to 2015. No drilling was

conducted during the 2013/2014 season. Drilling to date totals 75,634 m in 95 drill holes, of which five holes

(1,366 m) are RC and 90 holes (74,268 m) are core. The core drilling produced 33,936 m of NQ (47.6 mm

diameter) core and 40,332 m of HQ size (63.5 mm) core.

Nine drilling campaigns have been carried out at the Josemaría deposit, from 2003 to 2014. Drilling at the

Josemaría deposit to date totals 61,100 m in 142 drill holes, of which 48 holes (17,535 m) are RC hole, and 94

holes (43,565 m) are core holes.

RECENT MILESTONES

2014

• On April 29, 2014, the Company announced the application of a secondary listing of its common

shares in Sweden on Nasdaq Stockholm. Pareto Securities AB was appointed as the Company’s

financial adviser in conjunction with the listing.

• On June 16, 2014, the Company completed a private placement consisting of 17,412,935 common

shares of the Company at a price of approximately $2.01 (SEK 12.20) per common share for gross

proceeds of approximately $35 milion (SEK 212,481,500) to Swedish investors. Pareto Securities AB

acted as sole bookrunner and lead manager, and Skandinaviska Enskilda Banken AB was co-manager in

connection with the private placement. The net proceeds of the private placement were used to fund

the Company’s ongoing exploration programs in Chile and Argentina as well as for corporate

development and general working capital purposes. Two insiders of the Company, directly or

indirectly, purchased a total of 3,500,000 common shares of this private placement.

• On June 19, 2014 the Company’s shares commenced trading on Nasdaq Stockholm under the symbol

“NGQ”.


• On September 1, 2014, the Company acquired the remaining 40% interest in the Filo del Sol Project

held by PPC for total consideration of US$7.0 million. The Company paid US$3.5 million in November

2014, with the remaining US$3.5 million payable by the earlier of November 1, 2015 or upon

completion of an administrative restructuring of certain exploration licenses. Therefore, as of

September 1, 2014, the Company held a 100% interest in the Filo del Sol Project.

• On November 25, 2014, the Company filed a NI 43-101 technical report entitled “Los Helados Cu-Au

Deposit, Atacama Region III Chile, NI 43-101 Technical Report on Preliminary Economic Assessment"

with an effective date of October 1, 2014.

• On December 2, 2014, the Company announced the initial mineral resource estimate for the Filo del

Sol Project. The results confirmed a large resource with a significant oxide component and distinct

high grade silver and copper zones.

2015

• On April 10, 2015, the Company completed the sale of its 60% interest in the Assean Lake claims in

Manitoba to VMS Ventures Inc. (“VMS”) for a cash payment of CAD $15,000 and an initial tranche of

600,000 common shares of VMS. An additional 1,200,000 shares are receivable upon achievement of

project milestones. The Company’s interest in the Assean Lake claims was written off to nil in the

Company’s financial statements in previous years.

• On November 3, 2015, NGEx completed the sale of its respective interest (NGEx had a 49% interest) in

the GJ copper-gold project (the "GJ Project") located in northwest British Columbia, Canada to Skeena

Resources Limited ("Skeena").

• Pursuant to the terms of the Filo del Sol Purchase and Sale Agreement between PPC and the

Company, in lieu of payment of US$3.5 million by NGEx, PPC as of November 2, 2015 was deemed to

have funded US$3.5 million of exploration expenditures in respect of the La Chola Properties and such

deemed amount shall be set-off against any then current or future funding obligations of PPC.

• On November 23, 2015, the Company announced an updated mineral resource estimate for the Filo

del Sol Project.

2016

• On January 7, 2016, the Company announced positive results of a preliminary economic assessment

that evaluated the development of Project Constellation.

• On January 26, 2016, the Company secured a US$525,000 credit facility evidenced by a debenture to

provide additional financial flexibility to fund general corporate purposes. At the date of this

prospectus, there is no outstanding balance drawn on the facility, which has not been subsequently

settled.

• On February 3, 2016, the Company announced the appointment of Joyce Ngo as the Company’s

Interim Chief Financial Officer, replacing Mr. Chester See who had been the Company’s CFO since

August 2013. Ms. Ngo had previously held the position of Corporate Controller of the Company since

March 2012.

• On February 19, 2016, the Company reported that it had closed the private placement announced on

January 26, 2016, selling an aggregate of aggregate of 13,333,333 common shares (the "Common

Shares") at a price of CAD $0.60 per common share for gross proceeds of CAD $8 million to Canadian

and international investors (the "Private Placement"). The net proceeds raised from the financing

would be used towards ongoing work programs in Chile and Argentina as well as for general corporate

purposes. A 5.00% finders' fee was payable on a portion of the Private Placement. Two insiders of

the Company, directly or indirectly, purchased a total of 10,083,333 Common Shares under the Private

Placement.

• On February 22, 2016, the Company announced that, subsequent to the initial results of the Project

Constellation PEA announced on January 7, 2016, the Argentine government had removed a tax on

copper concentrate exports. This increased Project Constellation's estimated after-tax NPV(8%) from

$2.09 billion to US$2.61 billion; and increased the after-tax IRR from 14.5% to 16.6%. The updated

summary of the economic results after the Argentine tax changes were published on February 22,


2016 and a National Instrument 43-101 Technical Report with an effective date of February 12, 2016

titled "Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaria Deposit,

Argentina NI 43-101 Technical Report on Preliminary Economic Assessment", prepared by Amec Foster

Wheeler International Ingeniería y Construcción Limitada ("AMEC"), was filed under the Company’s

profile on SEDAR on February 22, 2016.

• On March 22, 2016, the Company completed a non-brokered, private placement of 4,000,000

common shares at a price of CAD $0.73 per share for gross proceeds of CAD $2.92 million. A 2.5%

finders’ fee was payable on all of the private placement.

• On June 13, 2016, the Company announced its intention to spin out its wholly owned Filo del Sol

property (the "Filo del Sol Project") into a wholly owned subsidiary of NGEx, Filo Mining Corp. ("Filo

Mining"), through a Plan of Arrangement under the Canada Business Corporations Act (the

"Arrangement"). The Arrangement was designed to deliver greater value to shareholders by unlocking

the value of the Filo del Sol Project and minimize dilution of the Constellation Project. The Filo del Sol

Project is a silver-copper-gold deposit that straddles the international border between San Juan

Province, Argentina and Region III, Chile and is comprised of adjacent mineral titles in Chile and

Argentina.

• On August 16, 2016, the Company announced the Company had obtained the final order approving

the Arrangement from the Supreme Court of British Columbia on August 15, 2016, and that the

Arrangement became effective at 12:01 a.m. (Vancouver time) on August 16, 2016. Pursuant to the

Arrangement, NGEx distributed 100% of the common shares of Filo Mining (the "Filo Common

Shares") it received under the Arrangement to holders ("NGEx Shareholders") of common shares of

NGEx (the "NGEx Common Shares") on a pro rata basis, such that NGEx Shareholders received one Filo

Common Share for every four NGEx Common Shares held as of the effective date of the Arrangement.

Filo Common Shares began trading on the TSX Venture Exchange on August 26, 2016 and on the

Nasdaq First North Exchange on September 1, 2016 under the trading symbol “FIL”.

• On November 10, 2016, Ms. Ngo was appointed to the position of Chief Financial Officer following a

period of Interim Chief Financial Officer since February 3, 2016.


Legal structure A significant portion of the Company’s business is carried on through its various subsidiaries. The following

chart illustrates, as at 30 September 2016, the Company’s significant subsidiaries, including their respective

jurisdiction of incorporation and the percentage of voting securities in each that are held by the Company

either directly or indirectly:

Management organizational chart NGEx’s management team is set out as follows:

Wojtek Wodzicki

President & CEO

Joyce Ngo

Chief Financial Officer

Bob Carmichael

Vice President Exploration

Alfredo Vitaller

General Manager, South America

Jamie Beck

Director, Corporate Development


Employees and contractors The composition of employees of the Company by geographic locations are summarized as follows:

Overview of number of employees: December 31, 2015 December 31, 2014 December 31, 2013

Canada 5 6 4

Argentina 21 21 21

Chile 6 5 5

Number of employees 32 32 30

Effective August 16, 2016, the Company completed the spin out of the Filo del Sol property into Filo Mining

Corp. through the Plan of Arrangement under the Canada Business Corporations Act. A cost sharing

arrangement with Filo Mining Corp, a related party that provides key personnel services to the Company was

formalized, whereby the Company relies on and engages consultants on a contract basis to assist the Company

to carry on its administrative and exploration activities subsequent to the spin out.

On-going and future investments On August 25, 2016, the Company successfully reached an agreement with owners of the surface rights

covering the Los Helados Project. The agreement contemplates annual payments of between US $0.5 million

and US $0.8 million depending on the amount of surface disturbance. The annual payment will increase to

US$1 million in 2024 and to US$1.5 million from 2025 onwards. A one-time payment of US $6 million is due

upon approval of the environmental impact study (“EIS”) and an annual payment of US $1.5 million is payable

upon commercial production of Project Constellation. The Company may terminate the agreement at any time

by making a one-time termination payment equal to the amount of the most recent annual payment. The first

payment of US $0.5 million was made upon signing of the agreement.

Payment due period USD thousands < 1 year 1 -3 years 3 – 5 years > 5 years* Total

Land access rights payments 500 1,500 1,500 1,500 5,000

The Company is expected to fund this commitment through a combination of financing proceeds and

disposition of its investment portfolio if existing working capital is not sufficient to meet the obligation.

As of the date of this prospectus, the Company has not resolved upon, or committed to make, any other

investments than what is stated above.

NGEx RESOURCES INC. | Selected financial information 75

SELECTED FINANCIAL INFORMATION These consolidated financial statements have been prepared in compliance with IFRS.

This information should be read together with sections “Comments to the financial statements” and “Capital

structure, indebtedness and related information”, the Company's audited financial statements for the years

2015, 2014 and 2013 and the unaudited interim financial statements for the nine-month period ending on

30 September, 2016. These financial statements have been incorporated into this prospectus by reference (see

Section “Documents incorporated by reference”). Other than what is expressly stated herein, no information in

this prospectus has been examined or audited by the Company’s auditors.

This section provides a summary of the Company's financial performance and position. The financial

information presented below has been derived from the Company’s audited annual financial statements for

the specific reporting periods.

Income statements


Jan-Sept 2016

Jan-Sept 2015

Jan-Dec2015

Jan-Dec2014

Jan-Dec 2013

Revenues - - - - -

Exploration and project investigation 5,207 17,098 19,837 19,258 22,698

Salaries and benefits 582 589 757 1,412 1,068

Share-based compensation 598 934 713 1,060 1,038

Management fees 250 329 407 540 540

Professional fees 675 212 344 354 369

Travel 37 154 172 247 172

Promotion and public relations 150 224 248 419 356

Donation - - - - 340

Office and general 379 334 385 626 321

General and Administration 2,671 2,776 3,026 4,658 4,204

Operating loss 7,878 19,874 22,863 23,916 26,902

Interest income (31) (28) (30) (65) (235)

Foreign exchange loss (gain) 184 (452) (268) (888) (148)

Other expenses 184 422 220 284 93

Gain on spin-off transaction (30,032) - - - -

Gain on disposition / exchange of investments (588) - - - (180)

Gain on disposition of mineral property interests - (165) (1,552) - -

Unrealized loss on investments - 25 144 105 660

Write-down of mineral property interests 77 - - - 1,196

Other (income) expenses (30,206) (198) (1,486) (564) 1,386

Net (income) loss from continuing operations (22,328) 19,676 21,377 23,352 28,288

Net loss from discontinued operations - - - - 84

Net (income) loss (22,328) 19,676 21,377 23,352 28,372

of which is attributable to shareholders of the

Company (22,328) 19,676 21,377 23,352 28,372

of which is attributable to non-controlling interest - - - - -


Balance sheets


30 Sept 2016

30 Sept 2015

31 Dec 2015

31 Dec 2014

31 Dec 2013

ASSETS

Cash and cash equivalents 1,454 3,956 2,113 28,480 21,260

Due from related party 123 - - - -

Investments 1,108 218 652 353 326

Receivables and other assets 278 757 467 1,537 1,118

Current assets 2,963 4,931 3,232 30,370 22,704

Share consideration receivable 973 - 861 - -

Equipment 110 159 137 164 247

Mineral properties 6,178 15,348 12,770 18,129 10,439

Other non-current assets 8 8 8 8 8

Non-current assets 7,269 15,515 13,776 18,301 10,694

TOTAL ASSETS 10,232 20,446 17,008 48,671 33,398

EQUITY & LIABILITIES

Total equity 8,062 18,092 13,830 36,050 24,622

Trade payables and accrued liabilities 1,268 1,501 2,262 5,769 4,328

Due to related party 99 - - - 28

Due to joint exploration partners - - 40 6,852 4,101

Current liabilities 1,367 1,501 2,302 12,621 8,457

Other non-current liabilities 803 853 876 - 319

Non-current liabilities 803 853 876 - 319

TOTAL EQUITY & LIABILITIES 10,232 20,446 17,008 48,671 33,398

equity attributable to shareholders of the

Company 8,062 18,092 13,830 36,050 24,622

equity attributable to non-controlling interest - - - - -

Cash flow statements


Jan-Sept 2016

Jan-Sept 2015

Jan-Dec 2015

Jan-Dec 2014

Jan-Dec 2013

Cash flow, operating activities before changes in

working capital (7,490) (18,882) (22,068) (22,637) (25,270)

Cash flow from changes in working capital (1,120) (6,687) (5,434) (394) (760)

Cash flow, operating activities after changes in

working capital (8,610) (25,569) (27,502) (23,031) (26,030)

Cash flow from financing activities 7,613 - - 34,309 33,377

Cash flow from investing activities 436 (467) (214) (4,625) (1,402)

Exchange rate effect on cash and cash equivalents (98) 1,512 1,349 567 (1,982)

Change in cash and cash equivalents (659) (24,524) (26,367) 7,220 3,963

Cash and cash equivalents, beginning of period 2,113 28,480 28,480 21,260 17,297

Cash and cash equivalents, end of period 1,454 3,956 2,113 28,480 21,260


Key ratios

Unaudited Unaudited Audited Audited Audited

Jan-Sept 2016 Jan-Sept

2015 Jan-Dec 2015 Jan-Dec 2014 Jan-Dec 2013

Basic and diluted net (income)

loss from continuing operations

(per share) (1)

(0.11) 0.10 0.11 0.13 0.17

Basic and diluted (income) net

loss (per share) (1)

(0.11) 0.10 0.11 0.13 0.17

Equity ratio end of period(2)

79% 88% 81% 74% 74%

Weighted average basic Shares

outstanding(1)

201,435,444 187,712,994 187,712,994 178,528,152 167,833,348

Dividend paid per share(1)

0 0 0 0 0

(1) The key ratio is defined in accordance with IFRS and is audited by the Company’s auditor for the financials years 2015,

2014 and 2013 and unaudited for the periods ending 30 September 2016 and 2015.

(2) The key ratio is not defined in accordance with IFRS and is not audited by the Company’s auditor.

DEFINITIONS OF KEY RATIOS WHICH ARE DEFINED IN ACCORDANCE WITH IFRS

Key ratio Definition

Basic and diluted (income) loss per share Net income/loss divided by the weighted average number of shares

outstanding

Weighted average shares outstanding Number of average shares outstanding during the period

Dividend paid per share Total dividend paid divided by the number of shares outstanding

DEFINITIONS OF KEY RATIOS WHICH ARE NOT DEFINED IN ACCORDANCE WITH

IFRS

Key ratio Definition Reason for inclusion

Equity ratio end of period Total equity of period divided by “total

assets of period”

The equity ratio shows the

proportion of total assets

represented by shareholders’ equity

and has been included for investors

to be able to understand the

company’s capital structure.

RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES

Equity ratio end of period


30 Sept 2016

30 Sept 2015

31 Dec 2015

31 Dec 2014

31 Dec 2013

Total equity 8,062 18,092 13,830 36,050 24,622

Total assets 10,232 20,446 17,008 48,671 33,398

Equity ratio end of period 79% 88% 81% 74% 74%

NGEx RESOURCES INC. | Comments to the financial statements 78

COMMENTS TO THE FINANCIAL STATEMENTS This information should be read together with sections “Selected financial information” and “Capital structure,

indebtedness and related information”, the Company's audited financial statements for the years 2015, 2014

and 2013 and the unaudited interim financial statements for the nine-month period ending on 30 September

2016. These aforementioned financial statements have been incorporated into this prospectus by reference, see

Section “Documents incorporated by reference” below.

Operating loss The operating losses reflect the Company's status as a non-revenue producing mineral exploration company. As

the Company has no main source of income, losses are expected to continue.

Exploration and project investigation expenditures January-September 2016 compared to January-September 2015

Due to minimal exploration activities at Project Constellation following the completion of the Integrated

Preliminary Economic Assessment (“PEA”) in February 2016, exploration and project investigation costs totaled

CAD $5.2 million for the nine months ended September 30, 2016 compared to CAD $17.1 million for the nine

months ended September 30, 2015.

January – December 2015 compared to January – December 2014

Due to additional costs incurred on the Filo del Sol Project, in which it has a 100% interest effective September

2014, exploration and project investigation costs totaled CAD $19.8 million in 2015 compared to CAD $19.3

million in 2014. Exploration expenditures for the Los Helados Project and the Josemaría Project were generally

consistent for both periods.


Due to a decrease in exploration activities at the Los Helados Project and the Josemaría Project, the Company

incurred lower exploration and project investigation costs of CAD $19.3 million in 2014 compared to CAD $22.7

million in 2013. The reason for the decreased exploration and project investigation costs was reduced drilling

activity at Los Helados and Josemaría offset by costs relating to conceptual studies at these properties and the

commencement of drilling at Filo del Sol.

Net loss for the period January-September 2016 compared to January-September 2015

The Company’s net income for the nine months ended September 30, 2016 was $22.3 million or CAD 0.11 per

share as compared to a net loss of CAD $19.7 million or CAD $0.10 per share for the nine months ended

September 30, 2015.

As a result of the CAD $30 million gain on the spin-off of Filo del Sol which was completed on August 16, 2016,

a reduction in exploration expenditures, and a $0.5 million realized gain on the disposition of its investment,

the Company reported a net income during the first nine months of 2016. The CAD $19.7 million net loss

reported for the nine months ended September 30, 2015 relate primarily to costs incurred on exploration

activities.


The Company's net loss for the year ended December 31 2015 was CAD $21.4 million or CAD $0.11 per share as

compared to a loss of CAD $23.3 million or CAD $0.13 per share for the year ended December 31 2014.


The decrease in net loss of CAD $1.9 million for the year ended December 31 2015 was primarily due to a

reduction in corporate overhead costs including incurring lower stock based compensation charges. The

overhead savings were realized through paying lower management fees and aligning certain compensation

costs with existing market conditions during the year. The decrease in net loss was also attributable to lower

promotion costs as management conducted fewer promotional and travel activities in 2015 and the recognition

of a gain on disposition of certain mineral properties.


The Company’s net loss for the year ended December 31, 2014 was CAD $23.4 million or CAD $0.13 per share

as compared to a loss of CAD $28.4 million or CAD $0.17 share for the year ended December 31, 2013.

The decrease in net loss from continuing operations of CAD $4.9 million for the year ended December 31, 2014

was primarily due to a reduction in exploration expenditures during fiscal 2014, a one-time write-down of

mineral property interests in 2013 of $1.2 million and a unrealized loss on investments in 2013 of $0.7 million

in respect of investments at fair value based upon quoted market prices.

The net loss from discontinued operations for the year ended December 31, 2013 resulted from the Company’s

decision to divest its non-core African properties and the eventual sale of the Hambok mineral property to

Bisha Mining Company in 2012.

Cash flow January-September 2016 compared to January-September 2015

At September 30, 2016, the Company had cash and working capital of CAD $1.5 million and CAD 1.6 million,

respectively, as compared to cash and working capital of CAD $3.9 million and CAD $3.4 million, respectively, at

September 30, 2015. The decrease in cash and working capital is primarily a result of exploration and general

and administration expenses incurred during the period.

Net cash used in operating activities was CAD $8.6 million for the nine months ended September 30, 2016,

compared to CAD $25.6 million for the nine months ended September 30, 2015, and consisted primarily of the

loss from operations, which included exploration and project investigation expenditures and was adjusted for

the impact of non-cash items and changes in non-cash working capital.

Net cash proceeds from investing activities for the nine months ended September 30, 2016 amounted to CAD

$0.4 million compared to net cash used in investing activities of CAD $0.4 million for the nine months ended

September 30, 2015. This consisted primarily of proceeds received from the disposition of investments during

the 2016 period, compared to the cash spent on mineral property option payments during the 2015 period.

Cash flows from financing activities were CAD $7.6 million for the nine months ended September 30, 2016. The

increase in cash flow from financing activities is attributable to proceeds from the non-brokered private

placement completed in the first quarter of 2016. There was no such similar financing completed during the

nine months ended September 30, 2015.


At December 31, 2015, the Company had cash and working capital of CAD $2.1 million and CAD $0.9 million,

respectively, as compared to cash and working capital of CAD $28.5 million and CAD $17.7 million, respectively,

at December 31, 2014. The decrease in cash and working capital is primarily a result of exploration

expenditures incurred and general and administrative expenses.

Net cash used in operating activities was CAD $27.5 million for the year ended December 31, 2015, compared

to CAD $23.0 million for the year ended December 31, 2014, and consisted primarily of the loss from


operations of CAD $21.4 million, which included exploration expenditures of CAD $19.8 million and was

adjusted for the impact of non-cash items and changes in non-cash working capital items.

Net cash used in investing activities for the year ended December 31, 2015, amounted to CAD $0.2 million

compared to net cash used in investing activities for the year ended December 31, 2014, which amounted to

CAD $4.6 million. The decrease in net cash used in investing activities is mainly attributable to net cash used to

acquire the remaining interest in Filo del Sol in 2014.

There were no cash flows from financing activities for the year ended December 31, 2015, compared to CAD

$34.3 million of cash received for the year ended December 31, 2014. The cash flow from financing activities

during fiscal 2014 is attributable to proceeds from the non-brokered private placement completed and the

exercise of stock options.


At December 31, 2014, the Company had cash and working capital of CAD $28.5 million and CAD $17.7 million,

respectively, as compared to cash and working capital of CAD $21.3 million and CAD $14.2 million, respectively,

at December 31, 2013. The increase in cash and working capital is primarily a result of additional proceeds from

exercise of stock options during the fiscal 2014 year.

Net cash used in operating activities was CAD $23.0 million for the year ended December 31, 2014, compared

to CAD $26.0 million for the year ended December 31, 2013, and consisted primarily of the loss from

operations of CAD $23.4 million, which included exploration expenditures of CAD $19.3 million and was

adjusted for the impact of non-cash items and changes in non-cash working capital items. The decrease in net

cash used in operating activities is mainly attributable to lower exploration expenditures incurred for the Los

Helados and Josemaría projects, offset by higher costs of conducting exploration activities on the Filo del Sol

project, as the Company is responsible for 100% of the costs of the project subsequent to its acquisition of the

remaining interest in the Filo del Sol project in September 2014.

Net cash used in investing activities was CAD $4.6 million for the year ended December 31, 2014, compared to

CAD $1.4 million for the year ended December 31, 2013. The increase in net cash used in investing activities is

mainly attributable to CAD $3.9 million spent on the acquisition of the remaining Filo del Sol interest from its

joint exploration partner offset by lower expenditures relating to mineral property option payments.

Cash flow from financing activities for the year ended December 31, 2014 was CAD $34.3 million, which

comprised of proceeds from the common share issues and exercise of stock options, compared to CAD $33.4

million for the year ended December 31, 2013. The increase in cash flow from financing activities is primarily

attributable to higher proceeds received from the exercise of stock options during the fiscal 2014 year.

NGEx RESOURCES INC. | Capital structure, indebtedness and related information 81

CAPITAL STRUCTURE, INDEBTEDNESS AND

RELATED INFORMATION This information should be read together with Sections “Selected financial information” and “Comments to the

financial statements”, the Company's audited financial statement for the years 2013, 2014 and 2015, and the

unaudited interim financial statements for the nine-month period ending on 30 September 2016. The

Company's audited financial statement for the years 2013, 2014 and 2015, and the unaudited interim financial

statements for the nine-month period ending on 30 September 2016 have been incorporated into this

prospectus by reference, see Section "Documents incorporated by reference” below.

This Section breaks down the Company's financial position and provides related information. The information

provided is primarily based on the Company’s unaudited financial statements for the nine-month period ended

30 September 2016.

Financial position On 30 September 2016, the Company had nil interest bearing liabilities. The Company’s cash and cash

equivalents amounted to CAD $1.45 million.

Total shareholders’ equity on 30 September 2016 was CAD $8.1 million. The equity ratio end of period (defined

under the Key ratios table above) was 79%.

Capitalisation and net indebtedness

Shareholders’ equity and debt capital as at 30 September 2016 CAD thousand

Guaranteed and secured -

Unguaranteed/unsecured -

Total current debt -

Guaranteed and secured -

Unguaranteed/unsecured -

Total non-current debt -

Share capital 221,771

Contributed surplus 9,775

Accumulated other comprehensive income (7,951)

Retained earnings (215,533)

Total shareholders’ equity 8,062

TOTAL EQUITY AND DEBT 8,062


Net interest-bearing indebtedness

Net financial debt or net financial assets as at 30 September 2016 CAD thousand

A. Cash 1,454

B. Cash equivalents -

C. Trading securities 1,108

D. Liquidity (A + B + C) 2,562

E. Current financial receivables -

F. Current bank debt -

G. Current portion of non-current debt -

H. Other current financial debt -

I. Total current financial debt (F + G + H) -

J. Net current financial indebtedness (I − E − D) -2,562

K. Non-current bank loans -

L. Bonds issued -

M. Other non-current loans -

N. Non-current financial indebtedness (K + L + M) -

O. Net financial indebtedness (J + N) -2,562

Working capital In the opinion of the Company, as at the date hereof, the Company’s current working capital is not sufficient

for the planned business for the next twelve months. On this basis, the Company will need additional financing

by January 2017 in order to maintain a positive working capital position for the planned exploration program

for the 2016-2017 season. The Company needs to raise additional funds of at least approximately CAD

$6 million of additional working capital in order to meet its working capital needs for the planned exploration

program. On 1 December 2016, the Company announced that the books in the Offering were closed on CAD

$10 million which the Company expects to receive and which is sufficient to meet the Company’s working

capital needs for the planned business for the next twelve months. The completion of the Offering is subject to

certain conditions being met, such as the approval of this prospectus, all of which are expected to occur on or

around the date of this prospectus. Should the Offering not be completed for some reason, the Company

would consider different alternatives, such as tailoring the Company’s exploration programs in order to reduce

the working capital needs or seek additional funding from other equity financing, joint ventures or disposition

of mineral properties and investments. Should none of these alternative ways of reducing the working capital

needs or of securing additional working capital be successful, there is a risk that the Company will be subject to

a partial or complete reorganization, or that the Company is declared bankrupt.

As the Company is an exploration company and has no sources of revenue, additional funding from equity

financing, joint ventures or disposition of mineral properties and investments may be required to fund further

exploration and corporate expenses. Such financing may not at all times be available to the Company in the

amount required at any time or for any period or, if available, it may not be obtained on terms which are

satisfactory to the Company.


Property, plant and equipment

CAD thousands as at 30 September 2016 Cost

Accumulated depletion and

depreciation Net book value

Mineral Properties

South America - Los Helados Joint Exploration Agreement 3,315 - 3,315

South America - Josemaría Joint Exploration Agreement 2,863 - 2,863

6,178 - 6,178

Equipment

South America 233 213 20

Corporate 183 93 90

416 306 110

The Company actively explores its mineral properties and has adopted the policy of capitalizing significant

acquisition costs for property rights, including payments for exploration rights and estimated fair value of

exploration properties acquired as part of a business acquisition.

Mineral exploration costs and maintenance payments are expensed prior to the determination that a property

has economically recoverable ore reserves. When it has been established that a mineral property is considered

to be sufficiently advanced and an economic analysis has been completed, all further expenditures are

capitalized as incurred. To date, none of the Company’s properties have established economically recoverable

ore reserves.

Corporate equipment consists primarily of office equipment and leasehold improvements while South America

equipment consists primarily of field equipment and vehicles. These assets are stated at cost less accumulated

depreciation. Depreciation of these corporate assets is calculated using a straight-line basis. The Company’s

fixed assets are not leased and not subject to any encumbrances.

Tendencies The copper mining industry has seen significant changes over the past decade and many of these trends are

expected to continue to constrain the copper supply:



• Recent massive capital expenditure overruns have limited the appetite for investment;


• Taxation and royalty regimes are taking a larger portion of the economic benefits – increasing risks for

producers;



Additionally, future production forecasts are often optimistic as they do not account for slower than expected

ramp up of projects, pit wall failures, mechanical or other failures, aggressive production estimates, extended

equipment lead time, weather and climate delays, legislative or environmental delays, project capital deferral,

validity and stability of fiscal policies, etc.

Financial instruments The Company classifies its financial instruments as either held-to-maturity, available-for-sale, held for trading,

loans and receivables or other financial liabilities. The Company’s financial instruments consist of cash and cash


equivalents, receivables and others, investments, due from joint exploration partners, trade payable and

accrued liabilities, due to related parties and due to joint exploration partners. With the exception of

investments, the carrying value of its financial investments approximates their fair value due to their

immediate or short-term maturity. The fair value of investments is determined directly by reference to quoted

market prices in active markets.

Financial risk management

FOREIGN CURRENCY

The Company is exposed to currency risks as its operations are primarily conducted in Argentina and Chile.

Exploration and project investigation costs are primarily denominated in Argentina pesos, Chilean pesos and

USD. As the Company’s functional and presentation currency is CAD, significant changes in these foreign

exchange rates would have a direct impact to the Company’s results of operations, financial position and cash

flow. While the Company has not used any hedging strategies to manage its exposure to currency fluctuations,

management strives to minimize and manage currency risks by sourcing certain operations domestically as well

as utilizing other corporate strategies to minimize such exposure. The Company also tries to maintain most of

its cash in CAD or USD and sends funds to foreign subsidiaries on an as-needed basis.

CREDIT

Credit risks associated with cash and cash equivalents are minimal as the Company deposits the majority of its

cash with a large Canadian financial institution that have been accorded strong investment grade ratings by a

primary rating agency. In addition, as the majority of the Company’s receivables and other assets relate to

value added taxes and taxes recoverable from governments, the Company’s credit risks associated with

receivables and other assets are inherently managed and exposure to potential loss is assessed as minimal.

LIQUIDITY

Liquidity risks associated with the Company’s inability to meet obligations as they become due is minimized

through the management of the Company’s capital structure and by maintaining good relationships with the

Company’s bankers. The Company closely monitors and reviews costs to date and actual cash flows on a

monthly basis. In addition, the Company prepares annual expenditures budgets that are updated as necessary

depending on various factors, including successful capital deployment and general industry conditions. The

annual and updated budgets are approved by the Board.

Other information As of the date of this prospectus, the Company is not aware of any measures, such as public, tax policies,

monetary policies or other political and/or policy measures which, directly or indirectly, has had or could have

a material effect on the Company’s business.

There has been no significant change to the Company’s financial condition and operating results after 30

September 2016.

NGEx RESOURCES INC. | Board of directors, executive officers and auditor 85

BOARD OF DIRECTORS, EXECUTIVE OFFICERS

AND AUDITOR

Board of directors At the date hereof, the Board of the Company is comprised of six directors. Each director holds office until the

next annual meeting of shareholders or until his successor is duly elected unless his office is earlier vacated in

accordance with the by-laws of the Company. The table below sets out information on the directors’ name,

date of appointment to the Board, position, and the members of each of the three committees of the Board,

Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee:

Name

Director since Position

Lukas H. Lundin(2)

23 June 1995 Non-Executive Chairman of the

Board and Director

Wojtek A. Wodzicki

17 April 2009 President, Chief Executive Officer

and Director

William A. Rand(1)(2)(3)

23 June 1995 Lead Director

David F. Mullen(1) (2) (3)

16 November 2010 Director

Cheri L. Pedersen(1)(3)

10 November 2016 Director

Jack O. A. Lundin 10 November 2016 Director

Notes:

(1) Members of the Audit Committee. William Rand is Chair of the Audit Committee.

(2) Members of the Compensation Committee. William Rand is Chair of the Compensation Committee.

(3) Members of the Corporate Governance and Nominating Committee. David F. Mullen is Chair of the Corporate

Governance and Nominating Committee.

The Company adopted a majority voting policy on 11 March 2013, as amended 5 May 2014 with respect to the

election of directors. Pursuant to the majority voting policy, each director must, subject to the provisions

below, be elected by the vote of a majority of the Shares, represented in person or by proxy, at any meeting for

the election of directors other than at contested meetings. Forms of proxy for the election of directors will

permit a shareholder of the Company to vote in favour of, or to withhold from voting, separately for each

director nominee. The Chair of the Board will ensure that the number of Shares voted in favour or withheld

from voting for each director nominee is recorded and promptly made public after the meeting. If any nominee

for director receives, from the Shares voted at the meeting in person or by proxy, a greater number of Shares

withheld than Shares voted in favour of his or her election, the director must immediately tender his or her

resignation to the Board following the meeting to take effect upon acceptance by the Board. The Board shall

accept the resignation absent exceptional circumstances, and such resignation will be effective when accepted

by the Board. To assist the Board in making a determination with regard to exceptional circumstances, the

Board will refer the resignation to the Corporate Governance and Nominating Committee who will

expeditiously consider whether to recommend that the Board accept such director’s resignation. In making this

recommendation, the Corporate Governance and Nominating Committee may consider such extenuating

circumstances as it deems appropriate including without limitation circumstances relating to the composition

of the Board or the voting results. The Board shall determine whether or not to accept the resignation within

90 days after the date of the relevant security holders' meeting and promptly announce that decision (and the

reasons for rejecting the resignation, if applicable) by way of a news release, a copy of which shall be provided

to the TSX. Any director who tenders a resignation pursuant to the policy will not participate in any meeting of


the Board or any sub-committee of the Board at which the resignation is considered. The majority voting policy

applies only to uncontested elections, where the number of nominees as director is equal to the number of

directors to be elected. If the director fails to tender his or her resignation as contemplated in the majority

voting policy, the Board will not re-nominate the director. Subject to any corporate law restrictions, and in

accordance with the Company’s articles and by-laws, where the Board accepts the offer of resignation of a

director and that director resigns, the Board may exercise its discretion with respect to the resulting vacancy

and may, without limitation, leave the resultant vacancy unfilled until the next annual meeting of shareholders,

fill the vacancy through the appointment of a new director whom the Board considers to merit the confidence

of the shareholders, or call a special meeting of shareholders to elect a new nominee to fill the vacant position.

Please see below for the Board members biographies.

Lukas H. Lundin, Non-Executive Chairman and member of the Board

Business/mining executive; director and officer of a number of publicly traded resource-based companies,

including Lucara Diamond Corp., Lundin Mining Corporation, Lundin Gold Inc., Denison Mines Corp., Lundin

Petroleum S.A., and Filo Mining Corp. Mr. Lundin is known for recognizing value and superior global

investment opportunities in the natural resource sector. His uninhibited pursuit of highly prospective

properties around the world has resulted in numerous resource discoveries, including the multi-million ounce

Veladero gold discovery. Mr. Lundin has also led several companies through highly profitable business

acquisitions and mergers such as Lundin Mining's $3.3 billion merger with EuroZinc Mining, the $2 billion sale

of Tanganyika Oil Company Ltd. and most recently the $9.2 billion sale of Red Back Mining Inc. Mr. Lundin is a

graduate of the New Mexico Institute of Mining and Technology.

Mr. Lundin is currently a director and/officer of the following companies:

• Lucara Diamond Corp.,

• Lundin Mining Corporation,

• Lundin Gold Inc.,

• Denison Mines Corp.,

• Lundin Petroleum SA, and

• Filo Mining Corp.

During the past five years, Mr. Lundin has been, but is no longer a director and/or officer of the following

companies:

• Sirocco Mining Inc.,

• Vostok Nafta Investment Ltd.,

• Red Back Mining Inc.,

• Kinross Gold Corporation., and

• Newmarket Gold Inc.

Dr. Wojtek Wodzicki, member of the Board

Dr. Wodzicki has worked in the international mining industry since 1987 and has managed exploration

programs on five continents. He is a geologist by training and has a doctorate in Geosciences from the

University of Arizona. He previously served as Vice President of Strategic Partnerships for Lundin Mining

Corporation and President, CEO and Director of Sanu Resources Ltd. Prior to joining the Lundin Group Dr.

Wodzicki was with Teck Cominco Ltd. in a variety of roles that included managing exploration offices in Bolivia,

Peru, Chile, and Argentina. He finished his career with Teck Cominco as General Manager of Exploration for

North America and Europe-Africa.


Dr. Wodzicki is currently a director and/officer of the following companies:

• Filo Mining Corporation

During the past five years, Dr. Wodzicki has been, but is no longer a director and/or officer of the following

company:

• Lara Exploration Ltd.

• Newstrike Capital Inc. and

• Horn Petroleum Corporation.

William Rand, member of the Board

Mr. William A. Rand received a Bachelor of Commerce degree (Honors Economics) from McGill University, a

law degree from Dalhousie University and a Master of Laws degree in international law from the London School

of Economics. Mr. Rand practiced securities law in Vancouver, British Columbia, for nearly 25 years before

retiring in October 1992 to establish Rand Edgar Capital Corp., an investment/banking, venture capital

company. Mr. Rand is a director of a number of publicly-traded resource-based companies.

Mr. Rand is currently a director of the following companies:

• Denison Mines Corp.,

• New West Energy Services Inc., and

• Lundin Mining Corporation.

Mr. Rand is also a member of the Audit and Human Resources and Compensation Committees of Lundin

Mining Corporation; and member of the Audit and Compensation Committees of Denison Mines Corp.

During the past five years, Mr. Rand has been, but is no longer a director and/or officer of the following

companies:

• Vostok Nafta Investment Ltd., and

• Rand Edgar Investment Corp.

• Lundin Petroleum AB

Cheri Pedersen, member of the Board

Ms. Cheri Pedersen holds a Bachelor of Commerce degree and a Bachelor of Laws degree, both from the

University of British Columbia. She practiced corporate, securities and natural resources law in Vancouver,

British Columbia for over 30 years, with a focus on mining, corporate finance, mergers and acquisitions, and

corporate governance, retiring from law practice in 2016.

Ms. Pedersen currently has no other board positions.

During the past five years, Ms. Pedersen has been, but is no longer an officer of the following companies:

• Callinan Royalties Corporation

• Callinex Mines Inc.

David Mullen, member of the Board

Mr. Mullen has more than 30 years' experience in the merchant banking and investment industry. He is a

Managing Director of Graycliff Partners and formerly Managing Partner and Chair of Fulcrum Capital Partners

Inc. Both firms were previously the merchant banking subsidiaries of HSBC, and were part of a management


buyout in 2011 led by Mr. Mullen. Previously, Mr. Mullen was the CEO of HSBC Capital and managed merchant

banking operations in Canada, U.S., and Latin America with capital commitments in excess of CAD 2 billion. Mr.

Mullen serves as a director to a number of public and private boards, including over 18 years in the resource-

based sector with companies such as Eurozinc, Gold-Ore Resources, Lundin Mining, and now NGEx Resources.

He received a Bachelor of Commerce degree from the University of British Columbia and his MBA from the

Richard Ivey School of Business at the University of Western Ontario.

Mr. Mullen is currently a director and/or officer of the following companies:

• Parkit Enterprise Inc.;

• Managing Director of Graycliff Partners (USA).

During the past five years, Mr. Mullen has been, but is no longer a director and/or officer of the following

companies:

• Elgin Mining Inc.;

• Gold Ore Resources Ltd.,

• Fulcrum Capital Partners Inc. (Canada), and

• Private Equity North America for HSBC Bank (HSBC Capital Canada and HSBC Capital USA).

Jack O.A. Lundin, member of the Board

Mr. Lundin received a Bachelor of Science degree in Business Administration from Chapman University and a

Master of Engineering degree in Mineral Resource Engineering from the University of Arizona. Mr. Lundin has

been involved in the natural resource industry his entire life through exposure to the various Lundin Group

companies and mentorship under Messrs. Lukas, Ian and the late Adolf Lundin. He began his career in the

sector working prospecting jobs and as a field technician in the summers since 2007 on projects around the

world including Russia, Canada, Ireland and Portugal. In 2012 he started working as an analyst in the

commercial department for Lundin Norway AS., a subsidiary of Lundin Petroleum AB. As of June 2016, he has

been employed with Lundin Gold Inc. on the construction of the world class Fruta del Norte gold project in

Ecuador.

Mr. Lundin currently has no other board positions.

During the past five years, Mr. Lundin has not been a director or officer of any other company.


The table below sets out information on each director’s specific interests in the Company, including options, as

at the date of this prospectus:

Name Shares held Options

Exercise Price CAD($)

Lukas H. Lundin 1,751,844 150,000(1)

200,000(2)

150,000(3)

1.80

0.89

0.61

Wojtek A. Wodzicki 753,200 375,000(1)

500,000(2)

400,000(3)

1.80

0.89

0.61

William A. Rand 394,098 150,000(1)

200,000(2)

150,000(3)

1.80

0.89

0.61

David F. Mullen

35,000 150,000(1)

200,000(2)

150,000(3)

1.80

0.89

0.61

Cheri L. Pedersen Nil Nil n/a

Jack O. A. Lundin 150,000 Nil n/a

Note:

(1) These options are fully vested and expire on 7 May, 2017.


(3) These options are fully vested and expire on 24 February, 2019.

Executive officers

The management team of NGEx Resources currently consists of three executives, whose biographies are set

out below. The table below sets out information on the executive’s name, date of appointment and position.

Name

Date of Appointment Position

Wojtek A. Wodzicki 17 April 2009 President and Chief Executive

Officer

Joyce Ngo 10 November 2016 Chief Financial Officer

Robert Carmichael 01 September 2011 Vice President Exploration

Dr. Wojtek Wodzicki, President and Chief Executive Officer

For the biography of Dr. Wodzicki, please see Section “Board of Directors” above.

Joyce Ngo, Chief Financial Officer

On November 10, 2016, Ms. Ngo was appointed to the position of Chief Financial Officer following a period of

being Interim Chief Financial Officer since February 3, 2016. Ms. Ngo began her employment with the

Company as Corporate Controller in March, 2012 and has thirteen years of professional experience in both

public practice and in public companies. Ms. Ngo spent five years in public accounting with KPMG LLP and is a

graduate of Simon Fraser University with a Bachelor of Business Administration, majoring in Accounting and

Finance with a minor in Economics. Ms. Ngo is a member of the Institute of Chartered Professional Accountants

of British Columbia.

Ms. Ngo currently has no other board positions nor is Ms. Ngo an officer in any other company.


During the past five years, Ms. Ngo has not been a director or officer of any other company.

Robert Carmichael, Vice President Exploration

Mr. Carmichael joined NGEx from the UK office of Lundin Mining Corporation, where he was General Manager,

Resource Exploration with oversight of all near-mine and resource definition exploration activities. Prior to

joining Lundin Mining Corporation, Mr. Carmichael acted as Vice President, Exploration for EuroZinc Mining

Corporation and held executive positions and directorships for several other Canadian exploration companies

operating internationally. He has also been a director and first Vice President of the Association for Mineral

Exploration British Columbia (AME BC) and sat on the technical committee for Geoscience BC.

Mr. Carmichael is a registered Professional Engineer in the province of British Columbia, holds a Bachelor of

Applied Science degree from the University of British Columbia and has 29 years of experience in public

company management and international mineral exploration.

Mr. Carmichael is currently a director and/officer of Filo Mining Corporation.

Mr. Carmichael currently has no other board positions. During the past five years, Mr. Carmichael has not been

a director or officer of any other company.

The table below sets out information on each executive officer’s specific interests in the Company, including

options as at 30 September 2016:

Name Shares held Options

Exercise Price CAD

Wojtek A. Wodzicki 753,200 375,000(1)

500,000(2)

400,000(3)

1.80

0.89

0.61

Joyce Ngo NIL 15,000(1)

40,000(2)

150,000 (4)

50,000(3)

1.80

0.89

0.79

0.61

Robert Carmichael 40,000 175,000(1)

250,000(2)

200,000(3)

1.80

0.89

0.61 Note:



(3) These options are fully vested and expire on 24 February, 2019.

(4) These options are fully vested and expire on November 25, 2018.

Other information regarding the board of directors and

executive officers

CONTACT INFORMATION

All members of the Board and executive officers have their business address at Suite 2000 – 885 West Georgia

Street, Vancouver, British Columbia, Canada V6C 3E8 with the exception of:

• Mr. Lukas Lundin, whose business address is Office - 6, rue de Rive, 1204 Geneva Switzerland;

• Mr. William Rand, whose business address is Suite 2200, 885 West Georgia Street, Vancouver, British

Columbia, Canada V6C 3E8; and


• Mr. David Mullen, whose business address is Suite 1508, 999 West Hastings Street, Vancouver, British

Columbia, Canada V6C 2W2.

Mr. Jack O. A. Lundin is the son of Mr. Lukas Lundin. There are no family ties between any other members of

the Board or executive officers of NGEx.

INSIDER HOLDINGS

As at the date of this prospectus, the directors and executive officers of the Company, beneficially owns, or

control or direct, directly or indirectly, an aggregate of 3,124,142 Shares of the Company, representing

approximately 2 per cent of the issued and outstanding Shares of the Company (excluding securities issuable

on exercise of stock options).

As of 30 November, 2016, the following insiders held Shares and options in NGEx:

Insider Common Shares Options

Zebra Holdings and Investments S.à.r.l. 21,762,539 -

Lorito Holdings S.à.r.l. 18,000,000 -

Lukas Lundin 1,751,844 500,000

Wojtek Wodzicki 753,200 1,275,000

William Rand 394,098 500,000

Jack O.A. Lundin 150,000 -

Pablo Mir 82,500 132,500

David Mullen 35,000 500,000

Alfredo Vitaller 79,500 655,000

Robert Carmichael 40,000 625,000

Cheri Pedersen - -

Joyce Ngo - 255,000

Julie A. Stokke Kemp - 150,000

CEASE TRADE ORDERS, BANKRUPTCIES

Other than as disclosed below, no director or executive officer of the Company, is, or has been during the ten

years preceding the date of this prospectus, a director, chief executive officer or chief financial officer of any

company (including the Company) that:

a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the

relevant company access to any exemption under securities legislation, for a period of more than 30

consecutive days (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

b) 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.

Mr. Rand is currently and was a director of New West Energy Services Inc. when, on 5 September 2006, a cease

trade order was issued against that company by the British Columbia Securities Commission for failure to file its

financial statements within the prescribed time. The default was rectified and the order was rescinded on

9 November 2006.

Other than as disclosed below, no director or executive officer of the Company, or a shareholder holding a

sufficient number of securities of the Company to affect materially the control of the Company:

(a) is at the date hereof, or has been within the ten years preceding the date of this prospectus, a director

or executive officer of any company (including the Company) that, while that person was acting in that

capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, been

liquidated, 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

(b) has, within the ten years before the date of this prospectus, become bankrupt, made a proposal under

any legislation relating to bankruptcy or insolvency, or 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 that person.

Mr. Carmichael was a director of Redcorp Ventures Ltd. which sought court protection under the Companies’

Creditors Arrangement Act and was granted such protection by an order of the Supreme Court of British

Columbia on March 4, 2009. On June 29, 2009, Redcorp Ventures Ltd. was assigned into bankruptcy and

Abakhan & Associates Inc. was appointed as Trustee of the Estates.

Mr. Lukas Lundin was a director of Sirocco Mining Inc. (“Sirocco”). Mr. Lundin resigned as director of Sirocco on

January 31, 2014, at which time Sirocco was a public-traded company and financially solvent. Pursuant to a

Plan of Arrangement completed on January 31, 2014, Canada Lithium Corp. (“Canada Lithium”) acquired

Sirocco. The final step in the transaction was the amalgamation of Canada Lithium and Sirocco to form RB

Energy Inc. ("RBI"). On October 13, 2014, RBI announced that, among other things, RBI’s then Board of

Directors had approved the filing of an Initial Order (the “Order”) for creditor protection under the Companies'

Creditors Arrangement Act (the "CCAA"). The Quebec Superior Court issued the requested Order in respect of

RBI and its Canadian subsidiaries on October 14, 2014. RBI was then put under the protection of the Court and

KPMG LLP was appointed monitor under the Order. The TSX delisted RBI’s common shares effective at the

close of business on November 24, 2014 for failure to meet its continued listing requirements. Since that time,

RBI’s common shares have been suspended from trading. On May 8, 2015, the Court appointed Duff & Phelps

Canada Restructuring Inc. as receiver of RBI and its subsidiaries to administer and realize upon the assets of

RBI. Although Mr. Lundin was never a director or officer or control person of RBI, he was a director of Sirocco

within the 12 month period prior to RBI filing for protection under the CCAA.

INDIVIDUAL BANKRUPTCIES

To the best of management’s knowledge, no director or executive officer of the Company has, within the ten

years prior to the date of this prospectus, become bankrupt or made a proposal under any legislation relating

to bankruptcy or insolvency, or 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 that individual.

PENALTIES OF SANCTIONS

No director or executive officer of the Company or a shareholder holding a sufficient number of securities of

the Company to affect materially the control of the Company, has been subject to:

(a) 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

(b) any other penalties or sanctions, relating to fraud or other offenses, imposed by a court or

regulatory body that would likely be considered important to a reasonable investor making an

investment decision.

CONFLICTS OF INTEREST

To the best of the Company’s knowledge, and other than as disclosed in this prospectus and in the Company’s

filings on www .sedar.com, there are no known existing or potential conflicts of interest between the Company

and any director or officer of the Company. The Company’s directors and officers may serve as directors or

officers of other companies or have significant shareholdings in other resource companies and, to the extent

that such other companies may participate in ventures in which the Company may participate, the directors of

the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such

participation. In the event that such a conflict of interest arises at a meeting of the Company’s directors, a


director who has such a conflict will abstain from voting for or against the approval of such participation or the

terms of such participation. From time to time, several companies may participate in the acquisition,

exploration and development of natural resource properties, thereby allowing for their participation in larger

programs, the involvement in a greater number of programs or a reduction in financial exposure in respect of

any one program. It may also occur that a particular company will assign all or a portion of its interest in a

particular program to another of these companies due to the financial position of the company making the

assignment. In accordance with the laws of Canada, the directors or the Company are required to act honestly,

in good faith and in the best interests of the Company. In determining whether or not the Company will

participate in a particular program and the interest therein to be acquired by it, the directors will primarily

consider the degree of risk to which the Company may be exposed and the financial position at that time.

The directors and officers of the Company are aware of the existence of laws governing the accountability of

directors and officers for corporate opportunity and requiring disclosure by the directors of conflicts of interest

and the Company will rely upon such laws in respect of any directors’ and officers’ conflicts of interest or in

respect of any breaches of duty by any of its directors and officers. All such conflicts will be disclosed by such

directors or officers in accordance with the CBCA and they will govern themselves in respect thereof to the best

of their ability in accordance with the obligations imposed upon them by law. Other than as disclosed above,

the directors and officers of the Company are not aware of any such conflicts of interest in any existing or

contemplated contracts with or transactions involving the Company. For further information see Section “Risk

Factors - Conflicts of Interest” above.

INTEREST OF MANAGEMENT AND OTHER IN MATERIAL TRANSACTIONS

Other than as set out below, to the best of the Company’s knowledge, no director, executive officer or person

or company that beneficially owns or controls or directs, directly or indirectly, more than 10 per cent of any

class or series of the Company’s outstanding voting securities, or any associate or affiliate of any of the

foregoing, has had any material interest, direct or indirect, in any transaction within the three most recently

completed financial years or during the most recently completed financial year, that has materially affected or

is reasonably expected to materially affect the Company.

Together, Lorito Holdings S.à r.l. (“Lorito”) and Zebra Holdings & Investments S.à r.l. (“Zebra”), each a company

owned by a trust whose settlor was the late Adolf H. Lundin, and are joint actors, currently hold more than

10 per cent of the Shares of the Company.

During the financial year ended 31 December 2013, the Company completed a private placement on a non-

brokered basis, of 10,000,000 common shares at a price of CAD 3.40 per common share, of which, Lorito

purchased 1,000,000 common shares and Zebra purchased 1,000,000 common shares at a price of CAD

3.40 per common share.

During the financial year ended 31 December 2014, the Company completed a private placement consisting of

17,412,935 common shares of the Company at a price of approximately $2.01 (SEK 12.20) per common share

for gross proceeds of approximately $35 milion (SEK 212,481,500), of which Lorito purchased 1,750,000

common shares and Zebra purchased 1,750,000 common shares at a price of approximately $2.01 (SEK 12.20)

per common share.

On January 26, 2016, the Company secured a US$525,000 credit facility evidenced by a debenture from Zebra

to provide additional financial flexibility to fund general corporate purposes.

On February 19, 2016, the Company completed a private placement of 13,333,333 common shares (the

"Common Shares") at a price of $0.60 per common share for gross proceeds of $8 million, of which Lorito

purchased 2,973,771 common shares and Zebra purchased 7,109,562 common shares at a price of $0.60 per

common share.


As at 30 September, 2016, Lorito and Zebra had control of or direction over an aggregate of approximately

39,762,539 common Shares of the Company, or 19.35 per cent of the issued and outstanding Shares of the

Company. In connection with the Offering, Lorito and Zebra has subscribed for 5.6 million New Shares subject

to completion of the Offering.

Auditors PricewaterhouseCoopers LLP, Chartered Accountants, (“PwC”) have prepared the Independent Auditors’

Report in respect of the Company’s consolidated audited financial statements for the years ended

31 December 2015, 2014 and 2013. PricewaterhouseCoopers LLP have advised the Company that they are

independent in accordance with the rules of professional conduct of the Institute of Chartered Accountants of

British Columbia.

PwC have served as auditor of the Company for more than ten years. The responsible partner of PwC with

respect to the audit of the consolidated financial statements of NGEx is Mr. Craig McMillan. Mr. McMillan has

been responsible for the audit of the financial statements of the Company since 2012. Prior, to 2012, Mr.

Lenard F. Boggio was the responsible partner of PwC with respect to the audit of the consolidated financial

statements of NGEx.

For information regarding the Company’s Audit Committee, please see Section “Corporate Governance” below.


Compensation, pension and benefits

EXECUTIVE SUMMARY COMPENSATION TABLE

The following table sets forth a summary of the total compensation paid to, or earned by the Company’s

Executive Officers during the three most recently completed fiscal periods.

Name and

Principal

Position

Year

Salary

($)

Share-based

awards ($)

Option-based

Awards ($)

(1)

Non-equity Incentive Plan Compensation

($)

Pension value ($)

(2)

All other Compensation

($)

Total Compensation

($)

Annual incentive

plans

Long-term

incentive plans

Wojtek A. Wodzicki

(3)

President and

CEO

2015

2014

2013

346,750(4)

333,850

323,750

Nil

Nil

Nil

147,596

267,870

Nil

Nil (5)

Nil

275,000(6)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

494,346

601,720

598,750

Chester See(7)

CFO

2015

2014

2013

30,833(7)

185,000(8)

56,250

Nil

Nil

Nil

4,920

107,148

180,107

Nil(5)

Nil

30,000(10)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

35,753

292,148

266,357

Robert Carmichael

VP Exploration

2015

2014

2013

238,917(11)

232,683

225,833

Nil

Nil

Nil

73,798

125,006

21,613

Nil(5)

Nil

115,000(12)

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

312,715

357,689

362,446

Joyce Ngo (13)

CFO

2015

2014

2013

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Notes:

(1) The Company used the Black-Scholes option pricing model for determining the fair value of stock options issued at

grant date. The Company selected the Black-Scholes model given its prevalence of use within North America. The key

assumptions used for this determination for 2015 are: a) average risk-free rate of 0.67%; b) expected life of 2.5; c) the

price of the stock on the grant date; d) expected volatility of 49.5%; and d) no expected dividend payments. For the

2014 assumptions, please refer to the Company’s management information circulars for the respective years. The

amount presented in the table represents the fair value of the vested and unvested portion of the options granted in

the period. It should be recognized that the actual future value will be based on the difference between the market

value at time of exercise and the exercise price. Therefore, the value attributed to the stock options under the Black-

Scholes model does not necessarily correspond to the actual future value that will be realized.

(2) The Company does not have any pension, retirement or deferred compensation plans, including defined contribution

plans.

(3) Mr. Wodzicki is also a director and does not receive any additional compensation in his role as a director.

(4) In May 2015, an increase in the base salary was granted to Mr. Wodzicki and accordingly, Mr. Wodzicki’s annual base

salary was increased by approximately 5.1% from $336,600 to $354,000, effective June 1, 2015.

(5) The Board, on the recommendation of the Compensation Committee, determined not to pay at this time any bonuses

to NEO’s in connection with the fiscal year ended December 31, 2015. This may be reviewed, as appropriate, later in

2016.

(6) Mr. Wodzicki was awarded a bonus of $275,000 for the 2013 fiscal period, which amount was paid to Mr. Wodzicki in

the 2014 financial year. This amount was not previously reported in Mr. Wodzicki’s 2013 compensation, and is now

reflected in 2013 compensation in the table above. See “Annual Incentive Plans”.

(7) Mr. See was appointed Chief Financial Officer on August 16, 2013 and his services were provided pursuant to an

employment agreement with the Company dated August 13, 2013, as amended January 1, 2014 (the “See

Employment Agreement”) up until February 28, 2015. Effective February 28, 2015, the See Employment Agreement

was terminated and effective March 1, 2015, the executive services of Mr. See as Chief Financial Officer were


provided through Lundin Gold Inc., a company in which Mr. See was also an officer, pursuant to which the Company

incurred consulting fees of $35,438. Subsequent to the financial year ended December 31, 2015, Mr. See resigned as

Chief Financial Officer and the Company’s Corporate Controller, Ms. Joyce Ngo, was appointed as Interim Chief

Financial Officer effective as of February 3, 2016 and became the Company’s Chief Financial Officer effective

November 10, 2016.

(8) During the financial year ended December 31, 2015, a portion of Mr. See’s time was allocated to Lundin Gold Inc. and

an aggregate of $29,000 was reimbursed to the Company by Lundin Gold Inc. for such executive services attributable

to Mr. See.

(9) During the financial year ended December 31, 2014, a portion of Mr. See’s time was allocated to Lundin Gold Inc. and

an aggregate of $52,875 was reimbursed to the Company by Lundin Gold Inc. for such executive services attributable

to Mr. See.

(10) Mr. See was awarded a bonus of $30,000 for the 2013 fiscal period, which amount was paid to Mr. See in the 2014

financial year. This amount was not previously reported in Mr. See’s 2013 compensation, and is now reflected in 2013

compensation in the table above. See “Annual Incentive Plans”.

(11) In May 2015, an increase in the base salary was granted to Mr. Carmichael and accordingly, Mr. Carmichael’s annual

base salary was increased by approximately 3.1% from $234,600 to $242,000, effective June 1, 2015.

(12)

Mr. Carmichael was awarded a bonus of $115,000 for the 2013 fiscal period, which amount was paid to Mr.

Carmichael in the 2014 financial year. This amount was not previously reported in Mr. Carmichael’s 2013

compensation, and is now reflected in 2013 compensation in the table above. See “Annual Incentive Plans”.

(13)

Ms. Ngo was appointed to the position of Chief Financial Officer on November 10, 2016 following a period as Interim

Chief Financial Officer since February 3, 2016. Prior to that, Ms. Ngo was the Corporate Controller of the Company.

DIRECTOR SUMMARY COMPENSATION TABLE

The following table sets forth all amounts of compensation provided to directors during the three most

recently completed fiscal periods:

Name and

Principal

Position

Year

Salary

($)

Share-based

awards ($)

Option-based

Awards ($)

(1)

Non-equity Incentive Plan Compensation

($)

Pension value

($)

All other Compensation

($)

Total Compensation

($)

Annual incentive

plans

Long-term

incentive plans

Lukas H. Lundin

(2)

2015

2014

2013

15,000(1)

15,000(1)

15,000(1)

Nil

Nil

Nil

59,038

107,148

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

74,038

122,148

15,000

William A. Rand

(3)

2015

2014

2013

21,000(1)

21,000(1)

21,000(1)

Nil

Nil

Nil

59,038

107,148

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

80,038

128,148

21,000

Paul K. Conibear

(2)

2015

2014

2013

15,000(1)

15,000(1)

15,000(1)

NIL

Nil

Nil

59,038

107,148

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

74,038

122,148

15,000

David F. Mullen

(4)

2015

2014

2013

16,000(1)

16,000(1)

16,000(1)

Nil

Nil

Nil

59,038

107,148

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

75,038

123,148

16,000

Notes:

(1) The Company used the Black-Scholes option pricing model for determining the fair value of stock options issued at

grant date. The Company selected the Black-Scholes model given its prevalence of use within North America. The key

assumptions used for this determination are: a) average risk-free rate of 0.67%; b) expected life of 2.5; c) the price of

the stock on the grant date; d) expected volatility of 49.5%; and d) no expected dividend payments. For the 2014

assumptions, please refer to the Company’s management information circulars for the respective years. The amount


presented in the table represents the fair value of the vested and unvested portion of the options granted in the

period. It should be recognized that the actual future value will be based on the difference between the market value

at time of exercise and the exercise price. Therefore, the value attributed to the stock options under the Black-

Scholes model does not necessarily correspond to the actual future value that will be realized.

(2) Fees earned include $15,000 in annual fees.

(3) Fees earned include $15,000 in annual fees and $6,000 in fees for serving as the Chair of the Audit Committee and

the Chair of the Compensation Committee.

(4) Fees earned include $15,000 in annual fees and $1,000 in fees for serving as the Chair of the Corporate Governance

and Nominating Committee.

COMPENSATION

The key management personnel have authority and responsibility for overseeing, planning, directing and

controlling the Company’s activities and consist of the Board and members of the executive management

team. Total compensation expense for key management personnel, and the composition thereof, is as follows:

(All amounts expressed in Canadian Dollars, unless otherwise indicated.)

Year ended 31 December

2015 Year ended 31 December

2014

Salaries 651,938 1,171,533

Employee benefits 37,910 43,169

Director fees 67,000 67,000

Share-based compensation 572,728 775,652

1,329,576 2,057,354

INCENTIVE PROGRAMS

As of the date of this prospectus, the Company had 6,375,000 stock options outstanding under its stock-based

incentive plan. For specification of the holders of the stock options, please see Section “Insider holdings”.

PENSIONS AND BENEFITS

The Company does not have any defined pension plan benefits or deferred compensation plans, including

defined contribution plans, nor are there any agreements in force relating to benefits which are granted to any

executive officer upon termination of his or her employment with the Company.

NGEx RESOURCES INC. | Corporate governance 98

CORPORATE GOVERNANCE

Canadian corporate governance code The Company discloses its corporate governance practices pursuant to the disclosure requirements in National

Instrument 58-101 – Disclosure of Corporate Governance Practices (the “Governance Disclosure Rule”) that

apply to issuers listed on the TSX. The Company’s governance practices are made with reference to National

Policy 58-201, Corporate Governance Guidelines (the “Governance Guidelines”). The Governance Disclosure

Rule and the Governance Guidelines are initiatives of the Canadian Securities Administrators (“CSA”).

The Governance Guidelines are not intended to be prescriptive, but are to be used as guidelines in developing

corporate governance practices. The Governance Guidelines deal with matters such as the constitution and

independence of corporate boards, their functions, the effectiveness and education of board members and

other items dealing with sound corporate governance practices. The Governance Disclosure Rule requires that,

if management of an issuer solicits proxies from its Shareholders for the purpose of electing directors, specified

disclosure of its corporate governance practices must be included in its management information circular.

The Board recognizes the importance of corporate governance to the effective management of the Company

and to the protection of its employees and Shareholders. The Company’s approach to significant issues of

corporate governance is designed with a view to ensuring that the business and affairs of the Company are

effectively managed so as to enhance Shareholder value. The Board fulfills its mandate directly and through its

committees at regularly scheduled meetings or as required. Frequency of meetings may be increased and the

nature of the agenda items may be changed depending upon the state of the Company's affairs and in light of

opportunities or risks which may arise.

The Company believes that its corporate governance practices have been, and continue to be, in compliance

with applicable Canadian requirements. The Company continues to monitor developments in Canada with a

view to further revising its governance policies and practices, as appropriate.

Further details regarding rules in relation to corporate governance are set forth in Section “Summary of

shareholder rights”.

Board structure and function The Board shall be constituted at all times of a majority of independent directors in accordance with the

Governance Guidelines. The Chairman of the Board should also be independent or alternatively the Board will

appoint an independent lead director.

The Board is currently comprised of six directors, five of whom are independent directors. Mr. Wodzicki is not

considered to be independent as he is President and Chief Executive Officer of the Company.

NGEx Resources does not have a formal policy limiting the number of outside directorships or the number of

directors that can sit on the same board outside of the Company.

The Board is responsible for the stewardship of the business and affairs of the Company. The Board seeks to

discharge this responsibility by reviewing, discussing and approving the Company’s strategic planning and

organizational structure and supervising management to oversee that the long-term operational and financial

goals and organizational structure enhance and preserve the business of the Company and the underlying value

of the Company.

The Board discharges its responsibility for overseeing the management of the Company’s business by

delegating to the Company’s senior officers the responsibility for day-to-day management of the Company. The


Board discharges its responsibilities both directly and through its standing committees; namely, the Audit

Committee, the Corporate Governance and Nominating Committee and the Compensation Committee. In

addition to these regular committees, the Board may appoint ad hoc committees periodically to address issues

of a more short-term nature. The Board's primary roles are overseeing corporate performance and providing

quality, depth and continuity of management to meet the Company’s strategic objectives. Other principal

duties include, but are not limited to, the following categories: (i) appointment of management; (ii) board

organization; (iii) strategic planning; (iv) monitoring of financial performance and other financial reporting

matters; (v) risk management; (vi) environmental oversight; (vii) policies and procedures; and (viii)

communications and reporting.

Standing committees of NGEx There are currently three standing committees of the Board; the Audit Committee, the Compensation

Committee and the Corporate Governance and Nominating Committee. The following table identifies the

members of each of these Committees as at the date of this prospectus:

Audit Committee Compensation Committee Corporate Governance and

Nominating Committee

William A. Rand

Cheri Pedersen

David F. Mullen

Lukas H. Lundin

William A. Rand

David F. Mullen

David F. Mullen

William A. Rand

Cheri Pedersen

Audit committee NGEx Resources has an Audit Committee comprised of William Rand (Chair), Cheri Pedersen and David Mullen,

each of whom is independent and financially literate1 within the meaning of National Instrument 52-110 (“NI

52-110”). This Committee is primarily responsible for overseeing the accounting and financial reporting

processes of the Company and its subsidiaries and all audits and external reviews of the financial statements of

the Company on behalf of the Board, and has general responsibility for oversight of internal controls,

accounting and auditing activities of the Company and its subsidiaries. The Audit Committee has adopted

specific policies and procedures for the engagement of non-audit services, which are further elaborated on in

the Audit Committee’s charter.

The Audit Committee oversees the accounting and financial reporting processes of the Company and its

subsidiaries and all audits and external reviews of the financial statements of the Company on behalf of the

Board, and has general responsibility for oversight of internal controls, accounting and auditing activities of the

Company and its subsidiaries. All auditing services and non-audit services to be provided to the Company by

the Company’s auditors shall, to the extent and in the manner required by applicable law or regulation, be pre-

approved by the Audit Committee. The Audit Committee reviews, on a continuous basis, any reports prepared

by the Company’s external auditors relating to the Company’s accounting policies and procedures, as well as

internal control procedures and systems. The Audit Committee is also responsible for examining all financial

information, including annual and quarterly financial statements and management’s discussion and analysis,

prepared for securities commissions and similar regulatory bodies prior to filing or delivery of the same and

annual and interim press releases relating to financial results prior to public disclosure of such information. The

1 For the purposes of NI 52-110, an individual is financial 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.


Audit Committee also oversees the annual audit process, quarterly review engagements, if any, the Company’s

internal accounting controls, Code of Business Conduct and Ethics, any complaints and concerns regarding

accounting, internal controls or auditing matters and the resolution of issues identified by the Company’s

external auditors. The Audit Committee recommends to the Board the firm of independent auditors to be

nominated for appointment by the shareholders and the compensation of the auditors. The Audit Committee

meets a minimum of four times per year. The Audit Committee met four times in 2015.

Below are the details of each Audit Committee member, including his name, whether he is independent and

financially literate as such terms are defined under NI 52-110 and his education and experience as it relates to

the performance of his duties as an audit committee member. The qualifications and independence of each

member is discussed below and in the Company’s management information circular, dated 6 May 2016,

prepared in connection with the Company’s annual and special meeting of shareholders held on 16 June 2016,

a copy of which is available under the Company’s profile on the SEDAR website at www .sedar.com.

Member Name Independent(1)

Financially

Literate(2)

Education and Experience Relevant to Performance

of Audit Committee Duties

William A. Rand

(Chair)

Yes Yes Mr. Rand is a retired corporate and securities lawyer

and mining executive with a LLM from the London

School of Economics, a LLB from Dalhousie

University and a B.Comm. from McGill University

(Honours in Economics and Major in Accounting).

Mr. Rand has been a member of a number of boards

and audit committees of public companies for over

30 years. Through this education and experience,

Mr. Rand has experience overseeing and assessing

the performance of companies and public

accountants with respect to the preparation,

auditing and evaluation of financial statements.

Cheri L. Pedersen Yes Yes Ms. Cheri Pedersen holds a Bachelor of Commerce

degree and a Bachelor of Laws degree, both from

the University of British Columbia. She practiced

corporate, securities and natural resources law in

Vancouver, British Columbia for over 30 years, with a

focus on mining, corporate finance, mergers and

acquisitions, and corporate governance, retiring

from law practice in 2016.

Through this education and experience, Ms.

Pedersen has experience overseeing and assessing

the performance of companies and public

accountants with respect to the preparation,

auditing and evaluation of financial statements

David Mullen Yes Yes Mr. Mullen is currently Managing Director of

Graycliff Partners; Prior, Mr. Mullen was Managing

Partner and Chair of Fulcrum Capital Partners Inc.

(Canada). Mr. Mullen was formerly, Chief Executive

Officer and Head of Private Equity of North America

for HSBC Bank (HSBC Capital Canada and HSBC


Capital USA). Mr. Mullen has also served as a

director and audit committee member of several

public resource based companies. Mr. Mullen holds

an MBA from the Richard Ivey School of Business at

the University of Western Ontario and a Bachelor of

Commerce degree from the University of British

Columbia.

(1) Independent within the meaning of NI 52-110.

(2) An individual is financially literate within the meaning of NI 52-110 if he has the ability to read and understand a set of

financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues and can reasonably be expected to be raised by the Company’s financial statements.

Compensation committee The Board has formed a compensation committee comprised of Lukas H. Lundin, William A. Rand (Chair) and

Dave F. Mullen, all of whom are independent within the meaning set out in the Governance Guidelines. The

compensation committee annually reviews and recommends to the Board the form and adequacy of

compensation for directors, the Chief Executive Officer and other senior officers.

The compensation committee is responsible for implementing and overseeing the Company's compensation

policies and programs as approved by the Board, including among other things: recommending compensation

policies and guidelines to the Board; ensuring that the Company has in place programs to attract and develop

executive officers of the highest calibre and a process to provide for the orderly succession of executive

officers; and reviewing and approving corporate goals and objectives relevant to the compensation of

executive officers and, in light of those goals and objectives, recommending to the Board the annual salary,

bonus and other benefits, direct and indirect, of executive officers.

The Company reimburses its directors for reasonable expenses incurred by them in the exercise of their duties.

Corporate governance and nominating committee The Board has formed a Corporate Governance and Nominating Committee (“CGNC”) comprised of David F.

Mullen, William A. Rand, and Cheri Pedersen, each of whom is independent within the meaning set out in the

Governance Guidelines. The CGNC is responsible for developing and monitoring the Company’s approach to

corporate governance issues and has primary responsibility for identifying prospective Board members. The

CGNC, among other things, oversees the effective functioning of the Board and oversees the relationship

between the Board and management. The CGNC has been mandated to annually review and make

recommendations to the Board with respect to: (i) the size and composition of the Board; (ii) the

appropriateness of the committees of the Board; and (iii) the contribution of individual directors. The

Committee is required to meet at least annually and to report to the Board following its meetings. The CGNC

has the authority to engage and compensate any outside advisor that it determines to be necessary to permit it

to carry out its duties.

NGEx RESOURCES INC. | Share capital and related issues 102

SHARE CAPITAL AND RELATED ISSUES

Description of the share capital The authorized share capital of the Company consists of an unlimited number of common shares without par

value, which have been created under the legislation of Canada. All of the issued common shares are fully paid

and non-assessable. Shares affiliated with Euroclear will be registered in Euroclear’s securities depository

system and no physical share certificates in NGEx are or will be issued for such Shares. The Shares are

denominated in CAD. Shares ISIN code is: CA65339B1004. The Shares are traded on TSX and Nasdaq Stockholm.

As of 30 November 2016, the Company had an aggregate of 205,473,963 common shares issued and

outstanding and 6,375,000 share options outstanding under its stock-based incentive plans. As of 30

November 2016, the Company held no Shares on its own account.

The holders of Shares are entitled to receive notice of, and to one vote per Share at, every meeting of

shareholders of the Company, to receive such dividends as the Board of Directors declares and to share equally

in the assets of the Company remaining upon the liquidation, dissolution or winding up of the Company after

the creditors of Company have been satisfied. The articles of continuance of NGEx Resources do not contain

any pre-emption rights for the holders of Shares.

The Company has a share option plan (the “Plan”) available to directors, officers, employees, consultants and

such other eligible persons. Under the Plan, the aggregate maximum number of common shares available for

issuance under the Plan and all other security based compensation arrangements at any given time is 10 per

cent of the issued and outstanding Shares. The Board will establish the exercise price of an option at the time

each option is granted provided that such price shall not be less than the closing price of the Shares on the TSX

(or, if such Shares are not then listed and posted for trading on the TSX, on such other stock exchange on which

the Shares are listed and posted for trading as may be selected by the Board) on the last business day

immediately preceding the date of grant of such option. If there is no trading on that date, the exercise price

shall not be less than the weighted average of the bid and ask prices on the five consecutive trading days

preceding the date of the grant. The term of options granted under the Plan shall not exceed 10 years from the

date of grant. Vesting under the Plan is at the discretion of the Board. Based on the current outstanding Share

and option balance as of the date of the prospectus, the Shares of the Company would be diluted by

approximately 3% if all of the outstanding options were exercised.

There are no limitations to the free transferability of the Shares other than holders of Shares issued in

conjunction with the Offering will be subject to a statutory hold period that extends four (4) months plus one

(1) day from the closing date in respect of re-sales to residents of Canada and/or over the facilities of the TSX.

During and after this hold period, the Shares are freely transferable on Nasdaq Stockholm.

To the best of the Company’s knowledge, the Shares are not subject to any offer made due to a mandatory bid

obligation, redemption right or redemption obligation, nor have the Shares been subject to a public takeover

offer during the current or the past financial year. The Shares are not subject to any restrictions on their

transferability.


Historic share capital The changes in the Company’s share capital from 1 January 2013 to the date of the prospectus are outlined in

the table below.

Date Event Issued Common

Shares

Attributed

value

CAD$

1 January 2013 Balance as at 1 January 2013 158,582,393

1 January 2013 to 31

December 2013 Issued for exercise of stock options at CAD 0.70 122,500 85,750





30 January 2013 Shares issued from treasury at CAD 3.40 10,000,000 34,000,000

31 December 2013 Balance as at 31 December 2013 168,714,559



December 2014 Issued for exercise of stock options at CAD 0.70 1,360,500 952,350





19 June 2014 Shares issued from treasury at CAD 1.98 17,412,935 34,412,514





1 February 2016 to 29

February 2016 Shares issued as debenture financing consideration at CAD 0.60 17,406 10,444

19 February 2016 Shares issued from treasury at CAD 0.60 13,333,333 8,000,000

22 March 2016 Shares issued from treasury at CAD 0.73 4,000,000 2,920,000

9 August 2016 Previously reserved shares issued from treasury 20,230


November 2016 Shares issued from treasury at CAD 0.61 175,000 106,750


November 2016 Shares issued from treasury at CAD 0.89 215,000 191,350

30 November 2016 Balance as at 30 November 2016 205,473,963


Significant share ownership To the knowledge of the directors and officers of the Company, shareholders carrying 10 per cent or more of

the voting rights attached to all outstanding Shares as of 30 September 2016 were:

Shareholder Common Shares(2)

Percentage of votes

Zebra Holdings and Investments S.à r.l.(1)

21,762,539 10.59


18,000,000 8.76

39,762,539 19.35%

(1) Lorito and Zebra, who report their security holdings as joint actors, are private corporations owned by a trust whose settlor was the late

Adolf H. Lundin. Together, Lorito and Zebra hold a total of 39,762,539 common shares, which represents approximately 19.36 per cent of

the current outstanding common shares.

(2) This information was obtained from publicly disclosed information and has not been independently verified by the Company.

Dividend policy There are no restrictions that prevent the Company from paying dividends. The Company has not paid

dividends to date on its common shares and has no plans to pay dividends in the near future. Any decision to

pay dividends in the future will be based on the Company’s earnings and financial requirements and other

factors that its Board may consider appropriate in the circumstances.

NGEx RESOURCES INC. | Legal and supplementary information 105

LEGAL AND SUPPLEMENTARY INFORMATION

Incorporation and legal form of business NGEx Resources Inc. is a public limited liability company continued under the CBCA and extra-provincially

registered in British Columbia. The Company’s Shares are traded on the TSX under the symbol “NGQ”. The

corporation number of NGEx Resources is 425318-3. The legal and commercial name of the Company is NGEx

Resources Inc.

The Company’s registered and records office is located at Suite 2200, 885 West Georgia Street, Vancouver,

British Columbia, V6C 3E8. The Company’s head office is located at Suite 2000, 885 West Georgia Street,

Vancouver, British Columbia, V6C 3E8.

Legal History of the company and its shares The Company was originally incorporated under the Company Act (British Columbia) on 3 February 1983 under

the name Curator Resources Ltd. as having an authorized capital consisting of 300,000,000 shares divided into

(a) 100,000,000 common shares without par value, (b) 100,000,000 Class “A” Preference shares with a par

value of CAD 10.00 each, and (c) 100,000,000 Class ”B” Preference shares with a par value of CAD 50.00 each.

Effective 8 October 1985, the issued and authorized common shares of the Company were consolidated on a

three-for-one basis, the name was changed from Curator Resources Ltd. to International Curator Resources

Ltd., and the authorized capital of the Company was increased from 33,333,333-1/3 post-consolidation

common shares to 100,000,000 common shares. Effective 2 May 2000, the authorized capital of the Company

was increased by the creation of 50,000,000 additional common shares without par value.

Effective 23 December 2003, the issued and authorized capital of the Company was increased to include

500,000,000 common shares and then altered by consolidating all of the 500,000,000 common shares on a

five-for-one basis; the name of the Company was changed from International Curator Resources Ltd. to

Canadian Gold Hunter Corp.

The Company was continued under the CBCA on 20 August 2004 with an authorized capital comprised of an

unlimited number of common shares.

Effective 17 April 2009, the Company acquired all of the issued and outstanding common shares of Suramina

Resources Inc. (“Suramina”) by way of Plan of Arrangement under the CBCA, following which Suramina became

a wholly-owned subsidiary of the Company. Effective 20 August 2009, the Company acquired all of the issued

and outstanding common shares of Sanu Resources Ltd. (“Sanu”) by way of Plan of Arrangement under the

CBCA, following which Sanu became a wholly-owned subsidiary of the Company. On 15 September 2009,

following completion of the arrangements with Suramina and Sanu, the Company changed its name to “NGEx

Resources Inc.”

On 30 April 2013, the Board approved certain amendments to the Company’s By-Law No. 1 to add an advance

notice requirement for nominations of directors by shareholders in certain circumstances. The amendment of

the By-Law No. 1 was confirmed by the shareholders at the annual and special meeting of the shareholders

held on 19 June 2013. Among other things, the advance notice provisions fixes a deadline by which holders of

record of common shares of the Company must submit director nominations to the Company prior to any

annual or special meeting of shareholders and sets forth the information that a shareholder must include in the

notice to the Company for the nomination notice to be in proper written form. In the case of an annual

meeting of shareholders, notice to the Company must be provided not less than 40 days nor more than 65 days

prior to the date of the annual meeting. In the case of a special meeting of shareholders (which is not also an

annual meeting) called for the purpose of electing directors (whether or not called for other purposes), notice


to the Company must be provided not later than the close of business on the 15th day following the day on

which the first public announcement of the date of the special meeting of shareholder was made.

On August 16, 2016, the Company spun out its wholly-owned Filo del Sol property (the "Filo del Sol Project")

into a wholly-owned subsidiary of NGEx by way of a Plan of Arrangement under the Canada Business

Corporations Act (the "Arrangement"). Pursuant to the Arrangement, NGEx distributed 100% of the common

shares of Filo Mining Corp. (the "Filo Common Shares") it received under the Arrangement to holders ("NGEx

Shareholders") of common shares of NGEx (the "NGEx Common Shares") on a pro rata basis, such that NGEx

Shareholders received one Filo Common Share for every four NGEx Common Shares held as of the effective

date of the Arrangement. In addition to the transfer of the Filo del Sol Project, the Arrangement included the

transfer of CAD $3 million in cash to Filo Mining. There was no change in shareholders’ holdings in NGEx as a

result of the Arrangement. In addition, each outstanding stock option of NGEx was deemed to be exchanged

for a fully-vested replacement stock option of NGEx (an "NGEx Replacement Option") and one quarter of one

fully-vested stock option of Filo Mining (a "Filo Option"), and the exercise prices for the NGEx Replacement

Options and the Filo Options were adjusted to reflect the relative value of the shares. Subsequent to the

Arrangement, Filo Mining Corp. was listed for trading on the TSX Venture Exchange and Nasdaq First North

Exchange under the trading symbol “FIL”.

Related party transactions Effective August 16, 2016, the Company has a cost sharing arrangement with Filo Mining Corp, a related party

by way of providing key management personnel services to the Company. Under the terms of this

arrangement, NGEx also recovers certain of its support and administration costs from Filo Mining Corp.

The transactions between the related parties pertain to the provision of administrative services to Filo Mining

Corp and the receiving of key management personnel services from Filo Mining Corp. since the completion of

the spin-off on August 16, 2016.

• The administrative services provided by the Company to Filo Mining Corp. for the nine months ended

September 30, 2016 totaled CAD $122,930.

• The management and personnel services provided by Filo Mining Corp. to the Company for the nine

months ended September 30, 2016 totaled CAD $98,512.

All balances owing between the related parties for the rendering and receipt of services are outstanding as at

September 30, 2016.

To the knowledge of the Company’s Board and Executive officers, all the transactions above have been carried

out on terms which are on arm’s length.

Project related agreements and financial agreements

AGREEMENTS RELATING TO NGEX’S PROJECTS

Josemaría Joint Exploration Agreement

Exploration on the Josemaría Project described below is conducted under the JOGMEC Josemaría JEA, pursuant

to which JOGMEC earned a 40 per cent interest in the Josemaría Project by having made a cash payment of

USD 1 million and funded total work expenditures of USD 6.13 million. JOGMEC earned its 40 per cent interest

during the fourth quarter of 2011. The Company is the operator of exploration programs conducted under the

JOGMEC Josemaría JEA.

The JOGMEC Josemaría JEA is subject to two underlying agreements: one covering the Lirio Property and a

separate agreement covering the adjacent Batidero Property. The Lirio Property (other than a portion that is

governed by the PPC JEA) and Batidero Property are collectively referred to herein as the Josemaría Project.


• Lirio Property: The Company (60 per cent) and JOGMEC (40 per cent) jointly hold a 100 per cent

interest in the Lirio Property subject to a 0.5 per cent net smelter return royalty and an additional USD

2 million payment within 6 months following the second complete year of mine operations due to the

underlying owner of the Lirio Property. The portion of the Lirio Property governed by the JOGMEC

Josemaría JEA contains the Josemaría Mineral Resource. A 1-3 per cent net smelter return royalty will

be due to the province of San Juan.

• Batidero Property: The Company (60 per cent) and JOGMEC (40 per cent) jointly hold a 100 per cent

participating interest in the Batidero Property and the Northern Properties, (subject to cash royalty of

7 per cent of net profits).

Los Helados

The Los Helados Project is subject to the PPC JEA in which the Company holds approximately 61.17% interest

and Pan Pacific Copper holds approximately 38.83% interest. Each party funds its pro-rata share of exploration

expenditures.

The owner of the Los Helados Property, and also operator of the project is MFDO, a 100 per cent-owned

subsidiary of the Company. Other than noted below, the Los Helados Property was acquired by staking, and is

100 per cent owned by MFDO.

The Los Helados Property includes two separate option agreements for small claim groups within the overall

property perimeter as described below.

By public deed dated 14 August 2012, before the Copiapó notary public of Mr. Luis Contreras, Mr. Guillenno

Borchert Poblete and Mrs. Judith Perla Bilik Folatre granted to MFDO, two separate unilateral and irrevocable

options to purchase the exploitation concessions ”Los Helados 1 al 5” and “Odilia 1 al 20” respectively (the

“Borchert Option Agreements”). MFDO may exercise the Borchert Option Agreements within the period of

5 years from the date of the Borchert Option Agreements. There are no work commitments.

By a public deed dated 28 February 2013, before the Santiago notary public Mrs. Antonieta Mendoza Escalas,

Sociedad Contractual Minera Borchert Billik granted to MFDO, a unilateral and irrevocable option to purchase

the exploitation mining concessions “El Rancho 1 al 60”, “El Rancho III 1 al 60” and “Napoleón II 1 al 10”, and to

purchase the exploitation mining concessions in process of being granted “Evelyn 1 al 10” and “Andrea 1 al 10”

(the “Billik Option Agreements”). MFDO may exercise the Billik Option Agreement within a period of 4 years

from the date of the Billik Option Agreement. There are no work commitments.

Los Helados Surface Access

On August 25, 2016, the Company successfully reached an agreement with owners of the surface rights

covering the Los Helados Project. The agreement contemplates annual payments of between US $0.5 million

and US $0.8 million depending on the amount of surface disturbance. The annual payment will increase to

US $1 million in 2024 and to US $1.5 million from 2025 onwards. A one-time payment of US $6 million is due

upon approval of the environmental impact study (“EIS”) and an annual payment of US $1.5 million is payable

upon commercial production of Project Constellation. The Company may terminate the agreement at any time

by making a one-time termination payment equal to the amount of the most recent annual payment. The first

payment of US $0.5 million was made upon signing of the agreement.

Water Rights

The Company has agreements in place to provide access to sufficient water for exploration purposes.

Other agreements

Except as set forth below, and other than as disclosed in this prospectus, there were no other contracts other

than those entered into in the ordinary course of business, that were material to the Company and that were

entered into between 1 January 2016 (being the commencement of the Company’s most recently completed


financial year) and up to the date of this prospectus or that were entered into prior to 1 January 2016 and

remain in effect during 2016, except for:

i. Joint exploration agreement for exploration of minerals at the Josemaría Project et al in the Republic

of Argentina made as of March 16, 2009 among the Company’s subsidiary, Suramina Resources Inc.

(“Suramina”), Japan Oil, Gas and Metals National Corporation (“JOGMEC”), Frontera Holdings

(Bermuda) I Ltd., Frontera Holdings (Bermuda) II Ltd., and Desarollo de Prospectos Mineros S.A.

(“Deprominsa”) described under the heading “Mineral Projects - Josemaría Project, Argentina.

ii. Joint exploration agreement made as of February 1, 2008 among Suramina Resources Inc., JOGMEC,

Frontera Holdings (Bermuda) II Ltd., Deprominsa and Minera Frontera Del Oro S.C.M. (“MFDO”)

described under the heading “Mineral Projects – Los Helados Project, Chile”. In September 2012,

JOGMEC exercised its right under the agreement and assigned and transferred all of its rights, title and

interests under the agreement to a nominated Japanese company, Pan Pacific Copper.

Other agreements or applications Apart from the agreements specified under Section “Project related agreements and financial agreements”

above, NGEx Resources has not within the last financial year entered into any other agreements or

applications, other than those entered into in the ordinary course of business, that were material to the

Company, nor are there any such agreements entered into before the last financial year that are still in effect.

Licenses The Company is dependent on acquiring and maintaining its exploration licenses in order to conduct its

business. For information regarding the licenses under which the Company operates, please see Subsection

“Project related agreements and financial agreements” and Section “Risk Factors” above.

The Company is not dependent on any licenses other than what is stated above, nor is the Company dependent

on any patents or new manufacturing processes.

Bankruptcy, reorganizations and similar procedures There are no bankruptcy, receivership or similar proceedings against the Company, nor is the Company aware

of any such pending or threatened proceedings. There have not been any voluntary bankruptcy, receivership or

similar proceedings by the Company within the three most recently completed financial years or completed or

currently proposed for the current financial year.

The Company successfully completed the spin-out of the Company’s wholly-owned Filo del Sol property into

Filo Mining Corp. through a Plan of Arrangement under the Canada Business Corporations Act on August 16,

2016. Filo Mining Corp. common shares began trading on the TSX Venture Exchange and the Nasdaq First

North Exchange on August 26, 2016 and September 6, 2016, respectively under the trading symbol “FIL”.

Legal proceedings and regulatory actions

LEGAL PROCEEDINGS

NGEx Resources has not in the past 12 months been involved in any governmental, legal or arbitrational

proceedings which have had, or may have, significant effect on NGEx Resources’ financial position or

profitability, nor is NGEx Resources aware of any such pending or threatened proceeding.

REGULATORY ACTIONS

No penalties or sanctions were imposed by a court relating to securities legislation or by a securities regulatory

authority during the Company’s recently completed financial year, nor were there any other penalties or

sanctions imposed by a court or regulatory body against the Company that would likely be considered

important to a reasonable investor in making an investment decision, nor were any settlement agreements


entered into before a court relating to securities legislation or with a securities regulatory authority during the

Company’s recently completed financial year.

The Company is, from time to time, involved in various claims, legal proceedings and complaints arising in the

ordinary course of business. The Company cannot reasonably predict the likelihood or outcome of these

actions. The Company does not believe that adverse decisions in any other pending or threatened proceedings

related to any matter, or any amount which may be required to be paid by reason therein, will have a material

effect on the financial condition or future results of operations of the Company.

Environmental protection All phases of the Company’s operations are subject to environmental regulation in the jurisdictions in which it

operates. Environmental legislation is evolving in a manner which requires stricter standards and enforcement,

increased fines and penalties for non-compliance, more stringent environmental assessments of proposed

projects and a heightened degree of responsibility for companies and their officers, directors and employees.

Regulation governing development of mining operations with the potential to affect glaciers continues to

evolve in both Chile and Argentina. The Argentine Congress has passed legislation designed to protect the

country’s glaciers. This law would restrict development on and around glaciers. The detailed regulations that

will govern implementation of the law have not yet been written but this legislation could affect the Company’s

ability to develop parts of the Company’s properties in Argentina, including the Josemaría Project. A proposal

that would oblige all future mining operations to use seawater or desalinated seawater has been presented to

the Chilean Congress. If passed into law this legislation would affect the Company’s Chilean projects including

the Los Helados Project. Future changes in environmental regulation, if any, could adversely affect the

Company’s operations. Regulatory and environmental approvals may not be obtained on a timely basis, or at

all. The cost of compliance with changes in governmental regulations has the potential to reduce the

profitability of operations or to preclude entirely the economic development of a property. Environmental

hazards may exist on the properties which are unknown to the Company at present which have been caused by

previous or existing owners or operators of the properties. The Company is currently engaged in exploration

with limited environmental impact. The cost of compliance with changes in governmental regulations has a

potential to reduce the viability or profitability of operations.

Environmental issues There are currently no outstanding proceedings relating to environmental issues to which the Company is a

part.

NGEx RESOURCES INC. | Tax matters 110

TAX MATTERS The following is a summary of certain tax issues that may arise as a result of holding Shares in the Company.

The summary is based on Swedish tax legislation currently in force and is intended only as general information

for shareholders, who are resident or domiciled in Sweden for tax purposes, if not otherwise stated.

The summary does not deal comprehensively with all tax consequences that may occur for shareholders. For

instance, it does not cover situations where shares are held as current assets in business operations or by a

partnership. Furthermore, the summary does not cover special regulations governing tax exempt capital gains

(including non-deductible capital losses), shareholding in companies that are, or have previously been, closely

held companies or on shares acquired on the basis of such holdings, shares held through a life insurance (Sw.

kapitalförsäkring) or an investment savings account (Sw. investeringssparkonto) or other specific situations and

rules. The summary also does not cover tax issues related to holdings in unlisted shares. The summary is not

applicable to shareholders that have ever been resident in Canada for Canadian tax purposes, carried on

business or maintained a permanent establishment in Canada or performed independent personal services in

Canada from a fixed base situated in Canada, each as defined in the Sweden-Canada Income Tax Convention

(1996). Each shareholder is recommended to consult a tax adviser for information on the specific tax

consequences that may arise, in each individual case, as a result of holding Shares in the Company, including

the applicability and effect of foreign or other rules, tax treaties or from foreign exchange rate fluctuations

between currencies which may be applicable.

INDIVIDUALS

Capital gains taxation

Individuals who sell their Shares, are subject to capital gains tax. The current tax rate is 30 per cent on the

capital gain.

The capital gain or loss is calculated to equal the difference between the sales proceeds, after deduction for

sales expenses, and the shares' acquisition cost for tax purposes. The acquisition cost is determined according

to the average cost method (Sw. genomsnittsmetoden). This means that the costs for all shares of the same

type and class are added together and determined collectively, with respect to changes to the holding. For

listed shares, such as Shares in the Company, the acquisition cost may, as an alternative, be determined equal

to 20 per cent of the net sales price under the standard rule (Sw. schablonmetoden). Capital losses on listed

shares and listed securities that are taxed in the same manner as shares (except for shares in mutual funds

containing only Swedish receivables (Sw. räntefonder)), are fully deductible against taxable capital gains on

such assets or non-listed shares in Swedish limited liability companies and foreign legal entities. A capital loss in

excess of the above mentioned gains is deductible with 70 per cent against any other taxable income from

capital.

If a deficit arises in the income from capital category, a reduction of the tax on income from employment and

from business, as well as the tax on real estate, is allowed. The tax reduction allowed amounts to 30 per cent of

any deficit not exceeding SEK 100,000 and 21 per cent of any deficit in excess of SEK 100,000. Deficits may not

be carried forward to a later fiscal year.

An individual tax resident in Sweden for the purposes of the tax treaty between Sweden and Canada is not

subject to any Canadian capital gains taxation from the sale of Shares.


Dividend taxation

In general, dividends, if any, on Shares are taxed in Sweden at a rate of 30 per cent as income from capital for

individuals. A preliminary tax of 30 per cent is generally withheld on dividends paid to individuals resident in

Sweden. The preliminary tax is withheld by Euroclear Sweden or, regarding nominee-registered shares, by the

nominee.

The Company assumes responsibility for deducting tax in relation to the dividends where required. The

Company is required to withhold the tax on the dividends when repatriated and to pay this over to the CRA on

behalf of the non-resident.

Since the dividend is generally taxable in both Sweden and Canada, double taxation may occur (see Section

“Canadian withholding tax”). However, Canadian withholding tax levied can be credited from Swedish tax to

the extent Swedish tax is attributable to foreign income (overall credit).

If the foreign tax should exceed the Swedish tax attributable to foreign income one year, the credit may,

subject to certain limitations, be carried forward for up to five years. Alternatively, the foreign tax may be

deducted as a cost for the recipient.

LIMITED LIABILITY COMPANIES

Capital gains

Swedish limited liability companies (Sw. aktiebolag) are taxed on all income as income from business activities

at a flat rate of 22 per cent. Regarding the calculation of a capital gain or loss and the acquisition cost, see

Section “Individuals”.

A capital loss on shares incurred by a corporate shareholder may be offset only against gains on shares or other

securities that are taxed in the same manner as shares. Such capital losses may, under certain circumstances,

also be deductible against capital gains on such securities within the same group of companies, provided the

requirements for group contributions (tax consolidation) are met. Capital losses on shares or other such

securities that are taxed in the same manner as shares, which have not been deducted from capital gains

within a certain year, may be carried forward and be offset against similar capital gains in future years without

any limitation in time.


Dividend taxation

In general, dividends, if any, on Shares to limited liability companies are taxed in Sweden at a rate of 22 per

cent as ordinary income from business activities.

The Company assumes responsibility for deducting tax in relation to the dividends where required. The

Company is required to withhold the tax on the dividends when repatriated and to pay this over to the CRA on

behalf of the non-resident.

Since the dividend is generally taxable in both Sweden and Canada, double taxation may occur (see Section

“Canadian withholding tax”). However, Canadian withholding tax levied can be credited from Swedish tax to

the extent Swedish tax is attributable to foreign income (overall credit).

If the foreign tax should exceed the Swedish tax attributable to foreign income one year, the credit may,

subject to certain limitations, be carried forward for up to five years. Alternatively, the foreign tax may be

deducted as a cost for the recipient.

CERTAIN TAX ISSUES FOR SHAREHOLDERS WHO ARE NOT TAX RESIDENT IN

SWEDEN

Individual shareholders who are not resident or domiciled in Sweden for Swedish tax purposes, and do not

carry on business operations from a permanent establishment in Sweden, are generally not subject to Swedish

taxation on a sale of Shares. Shareholders may, however, be subject to taxation in their country of domicile and

elsewhere. However, under a domestic Swedish tax provision, capital gains on the sale of shares may be

subject to Swedish tax if the individual has been resident or permanently lived in Sweden at any time during

the calendar year of the sale or at any time during any of the ten preceding calendar years. The applicability of

this provision may, however, be limited by an applicable tax treaty between Sweden and other countries.

Foreign legal entities are not liable to Swedish tax on dividends or capital gains upon a sale or other disposal of

Shares, provided that the shares are not pertaining to a permanent establishment in Sweden.

CANADIAN WITHHOLDING TAX

Since NGEx Resources is a Canadian company, dividends, if any, paid or credited (or which are deemed to be

paid or credited) to a non-resident Canadian holder will be subject to a Canadian withholding tax of 25 per

cent. When the beneficial owner of such dividends is a resident of Sweden, according to the Canada – Sweden

Tax Treaty, the withholding tax rate will generally be reduced to 15 per cent. Where the beneficial owner is a

corporation that directly controls at least ten per cent of the votes or holds directly at least 25 per cent of the

capital in the Company, the withholding tax rate will be reduced to five per cent. Unless the dividend is tax-free

for the Swedish shareholder, the Canadian tax withheld can generally be credited against Swedish income tax

and real estate tax. In order to benefit from the tax credit, legal entities must apply for a tax credit from the

Swedish Tax Agency. Individuals will automatically benefit from the tax credit, since the Swedish preliminary

tax withheld will be limited to 15 per cent to reach the normal 30 per cent.

NGEx RESOURCES INC. | Summary of shareholder rights 113

SUMMARY OF SHAREHOLDER RIGHTS The following is a summary of the rights of shareholders in NGEx Resources based upon current Canadian

legislation, and the Company’s current articles of continuance and by-laws. It also sets out certain differences

between Canadian corporate law and Canadian corporate governance principles compared to Swedish

corporate law (in those parts applicable on companies whose shares are subject to trading on a regulated

market) and Swedish corporate governance principles. As noted in the section “Corporate Governance”, the

Company is not required to comply with Swedish corporate governance rules.

The summary is of a general nature only. It is not an exhaustive account of the aforementioned corporate

documents. It is neither an exhaustive review of the aforementioned corporate documents nor of all potentially

relevant differences between Canadian and Swedish law or corporate governance requirements, material or

not.

The business of NGEx Resources

CANADA

The articles of incorporation do not restrict the business that the Company conducts, meaning that the

Company may carry on its current business.

SWEDEN

Under the Swedish Companies Act, the objectives of a Swedish company must be set out in the articles of

association. These objectives set out the limits within which a company can operate.

Shares

CANADA

The Shares have been issued in accordance with the CBCA. The capital structure of the Company is composed

of an unlimited number of common shares without par value (referred to as “Shares” in this prospectus).

SWEDEN

Under the Swedish Companies Act, a company may issue different classes of shares only if such share classes

are specified in a company’s articles of association. The articles shall also contain limitations on the minimum

and maximum number of shares and of each share class.

Voting rights

CANADA

Under the CBCA, a corporation is required to prepare a list of shareholders entitled to vote as of the record

date that shows the number of Shares held by each shareholder. A registered shareholder can either attend

the meeting and vote him or herself or appoint someone else to vote his or her shares (a “proxy holder”). A

shareholder appoints a proxy holder to attend and act on the shareholder's behalf at a meeting of shareholders

by giving the proxy holder a completed and executed form of proxy. A proxy holder is required to vote the

shares in accordance with the shareholder's instructions.

A non-registered shareholder has beneficial ownership of the shares, but a bank, trust company, securities

broker or other financial institution (an “intermediary”) is the registered holder that holds the shares on behalf

of the beneficial owner. The intermediary cannot vote the shares registered in its name unless it receives

written voting instructions from the beneficial owner. If the beneficial owner requests and provides an


intermediary with appropriate documentation, the intermediary must appoint the beneficial owner or nominee

of the beneficial owner as proxy holder.

Unless the by-laws otherwise provide, any meeting may be held entirely by means of a telephonic, electronic or

other communication facility, provided the corporation makes available such a communication facility and it is

in accordance with the regulations under the CBCA.

SWEDEN

Under the Swedish Companies Act, all shares carry one vote unless different share classes with different voting

rights are provided for in the articles of association of the company. No share may however have a voting right

which exceeds ten times the voting rights of any other share.

Shareholders registered in the share register as of the record date for a general meeting are entitled to vote at

such general meeting (in person or by appointing a proxy holder). Shareholders with shares registered through

a nominee must request to be temporarily registered as a shareholder of record on the record date in order to

participate in a general meeting. The share register is kept by Euroclear and the record date for a general

meeting shall be the fifth business day prior to the date of the meeting. Shareholders must also, if provided for

in the articles of association, give notice of their intention to attend the shareholders’ meeting.

Shareholder meetings

CANADA

Under the CBCA, the directors of a corporation shall call an annual meeting of shareholders not later than

fifteen months after holding the last preceding annual meeting but no later than six months after the end of

the corporation’s preceding financial year. Meetings of shareholders can be held at any place in Canada, and

may be held at a place outside of Canada if the place is specified in the articles or all shareholders entitled to

vote at the meeting agree that the meeting is to be held at that place.

Special meetings of shareholders may be called by the Board at any time or by a court upon the application of a

director or shareholder entitled to vote at a meeting. The holders of not less than five per cent of the issued

shares may also requisition the directors to call a meeting of the shareholders for the purposes stated in the

requisition and subject to certain exemptions, on receiving the requisition, the directors shall call a meeting of

shareholders. If the directors fail to do so within 21 days, any shareholder who signed the requisition may call

the meeting.

Under the CBCA, shareholder action without a meeting may only be taken by written resolution signed by all

shareholders who would be entitled to vote thereon at a meeting.

SWEDEN

Under the Swedish Companies Act, the board of directors is responsible for convening general meetings but

holders of not less than ten percent of all shares in the company may request that an extraordinary general

meeting is convened. If so requested, the board has two weeks to issue a notice to convene the general

meeting failing which the shareholder can request that the Companies Registration Office convenes the

meeting. General meetings shall be held in the municipality in which the board of directors holds its registered

office or in another municipality in Sweden if specified in the articles of association.

The general meeting shall be opened by the chairman of the board or such person as the board has decided.

Moreover, the Swedish corporate governance code stipulates that the chairman of the board of directors

together with a quorum of directors, as well as the chief executive officer, shall attend general meetings. The

chairman of the general meeting shall be nominated by the nomination committee and elected by the general

meeting.


Minutes from general meetings shall be available on the company’s website no later than two weeks after the

meeting.

Notices

CANADA

At least 21 days prior to the meeting date, the Company is required to mail a notice of the security holder

meeting and a management information circular to all registered shareholders and the beneficial owners who

have requested to receive a copy and who hold shares as at the record date.

SWEDEN

Under the Swedish Companies Act, a general meeting of shareholders must be preceded by a notice. The

notice of the annual general meeting of shareholders must be given no sooner than six weeks and no later than

four weeks before the date of the meeting. In general, notice of extraordinary general meetings must be given

no sooner than six weeks and no later than three weeks before the meeting. The notice shall be announced in a

press release, published in the Swedish Official Gazette and on the company’s website. The company must also

publish in a daily newspaper with nationwide circulation a short form message containing information

regarding the notice and where it can be found. The notice shall include an agenda listing each item that the

meeting is to resolve upon and the main content of the proposed resolutions.

Pursuant to the Swedish corporate governance code, a company shall, as soon as the time and venue of a

general meeting have been decided publish such information on the company’s website. With respect to

annual general meetings, such publication shall be made no later than in conjunction with the third quarterly

report.

Record date

CANADA

The record date for voting or to receive notification of a meeting of shareholders is set by the Board. The

Company is required to file on SEDAR a notice of record date and meeting date at least 25 days before the

record date for the meeting. Under the CBCA, the record date must not be less than 21 days and not more than

60 days before the date of the meeting. Under Canadian Securities laws, the record date for notice of the

meeting shall be no fewer than 30 days and no more than 60 days before the meeting date.

SWEDEN

Under the Swedish Companies Act the record date for a general meeting is the fifth work day (i.e. not a

holiday) prior to the date of the meeting.

Issue of Shares

CANADA

Under the TSX regulations, shareholder approval is required in those instances where the number of securities

issued or issuable exceeds 25 per cent of the number of securities of the issuer which are outstanding, on a

non-diluted basis.

Under the CBCA:

(1) subject to the Company’s articles and by-laws, shares may be issued at such times and to such persons

and for such consideration as the directors may determine;


(2) shares issued by a corporation are non-assessable, and the holders are not liable to the corporation or

to its creditors in respect thereof; and

(3) a share shall not be issued until the consideration for the share is fully paid in money or in property or

past services that are not less in value than the fair equivalent of the money that the company would

have received if the share had been issued for money.

SWEDEN

Under the Swedish Companies Act, resolutions on new share issues are as a main rule passed by the

shareholders at a general meeting. A general meeting may also authorize the board of directors to issue new

shares for period no longer than until the next annual general meeting. Furthermore, the board of directors

may also resolve to issue new shares without such authorization, provided that the resolution is conditioned

upon the shareholders’ approval at a general meeting.

New shares may be issued against payment in cash, in kind or by way of set-off.

When issuing new shares the limitations on maximum number of shares and share capital set out in the

company’s articles of association need to be adhered to, unless a general meeting decides to amend the

articles.

Pre-emption rights

CANADA

Under the CBCA, if the articles of a corporation so provide, no shares of a class are to be issued unless the

shares have first been offered to the shareholders holding shares of that class, and those shareholders have a

pre-emptive right to acquire the offered shares in proportion to their shareholdings of that class, at the price

and on the terms as those shares are to be offered to others. However, despite what is provided for in the

articles, no pre-emptive rights exist in respect of shares issued for consideration other than money, as a share

dividend or pursuant to the exercise of conversion privileges, options or rights previously granted by the

corporation.

The articles of continuance of NGEx Resources do not contain any pre-emption rights.

SWEDEN

Under the Swedish Companies Act, shareholders have pre-emption rights (Sw. företrädesrätt) to subscribe for

new shares issued in proportion to their shareholdings as of a certain record date for the new share issue. Pre-

emption rights to subscribe for new shares do not apply in respect of shares issued for consideration in kind or

shares issued pursuant to convertibles or warrants previously granted by the company. The pre-emption rights

to subscribe for new shares may also be set aside by a resolution passed by two thirds of the votes cast and

shares represented at the general meeting resolving upon the issue. The corresponding majority threshold

applies to a decision by a general meeting to authorize the board to decide upon new share issues with

deviation from shareholders’ pre-emption rights.

Dividends

CANADA

Under the CBCA, a corporation may pay a dividend in money or property or by issuing fully paid shares of the

corporation. A corporation shall not declare or pay a dividend if there are reasonable grounds for believing

that: (a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities and

stated capital of all classes.


SWEDEN

Under the Swedish Companies Act, payments of dividends require a shareholder resolution at a general

meeting. A resolution to pay dividends may, with some exceptions, not exceed the amount recommended by

the board of directors. Dividends may only be made if, after the payment of the dividend, there is sufficient

coverage for the company’s restricted equity and the payment of dividends is justified, taking into

consideration the equity required for the type of operations, the company’s need for consolidation and

liquidity as well as the company’s financial position in general. Each shareholder appearing in share register as

of the record date for the dividend is entitled to receive the dividend distribution. Dividends are normally

distributed to the shareholders through Euroclear.

Distribution of assets on liquidation

CANADA

Under the CBCA, a company may apply to the court to supervise a voluntary liquidation. After the final

accounts have been approved by the court, the liquidator will distribute any remaining property of the

corporation, after the discharge of its obligations, among the shareholders according to their respective rights.

SWEDEN

Under the Swedish Companies Act, a company can enter into voluntary liquidation following a resolution by

simple majority vote among the shareholders at a general meeting. All shares carry equal rights in a liquidation

unless otherwise provided for in articles of association.

The Swedish Companies Act also stipulates that a company shall enter into compulsory liquidation in a capital

deficiency situation and in certain other situations.

Certain extraordinary corporate actions

CANADA

Under the CBCA, certain extraordinary corporate actions, such as certain amalgamations, continuances, and

sales, leases or exchanges of all or substantially all of the property of a corporation other than in the ordinary

course of business, and other extraordinary corporate actions such as liquidations, dissolutions and (if ordered

by a court) arrangements, are required to be approved by special resolution. A special resolution is a resolution

passed at a meeting by not less than two-thirds of the votes cast by the shareholders who voted in respect of

that resolution or a resolution signed by all of the shareholders entitled to vote on that resolution. In certain

cases, a special resolution to approve an extraordinary corporate action is also required to be approved

separately by the holders of a separate class or series of shares.

SWEDEN

Under the Swedish Companies Act, a statutory merger requires a shareholder resolution passed at a general

meeting. The majority requirements for a valid resolution depends on the type of companies involved, however

not less than two-thirds of the votes cast and the shares represented at the meeting. A voluntary liquidation

requires a resolution passed at a shareholders meeting supported by more than half of the votes cast, unless

otherwise provided in the articles of association of the company. A material change of the operations

conducted by the company may require a change of the company’s objects and purposes in the articles of

association, see Section “Amendment to the articles or the by-laws” below.

Restrictions on change of control

CANADA

The Company does not have any shareholder rights plans in effect.


SWEDEN

Not applicable for Swedish companies with shares listed on a regulated market.

Mandatory takeover bids/ squeeze-out rules

CANADA

The CBCA contains the procedural requirements for going-private transactions and Canadian securities laws

govern take-over bids. Under the CBCA, if a take-over bid is accepted by more than ninety per cent of the

shares of any class of shares to which the take-over bid relates (within 120 days after the date of a take-over

bid), other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate, or

associate of the offeror, the offeror is entitled to acquire the shares held by any dissenting offerees.

If the acquiring company elects to proceed by way of take-over bid but fails to acquire the requisite percentage

of the shares to permit a force-out of the minority, the company may elect to squeeze out the minority through

an amalgamation process.

SWEDEN

Under Swedish law an obligation to launch a mandatory take-over bid applies when a party becomes the owner

of 30 percent or more of the votes in a company with shares listed on a regulated market.

Under the Swedish Companies Act, a shareholder holding more than 90 percent of the shares in a company is

entitled, on a compulsory basis, to buy-out the remaining shares from the other shareholders in the company.

On the other hand, a minority shareholder is also, in such situation, entitled to demand that the majority

shareholder purchases his or her shares.

Redemption provisions

CANADA

Under the CBCA, a corporation may liquidate and dissolve by special resolution of the shareholders or, where

the corporation has issued more than one class of shares, by special resolutions of the holders of each class

whether or not they are otherwise entitled to vote.

After giving the appropriate notice and adequately providing for the payment or discharge of all its obligations,

the Company will distribute its remaining property, either in money or in kind, among its shareholders

according to their respective rights.

Subject to the conditions in the CBCA and a corporation’s articles, a corporation may purchase or otherwise

acquire shares issued by it. A corporation shall not make any payment to purchase or otherwise acquire shares

issued by it if there are reasonable grounds for believing that (a) the corporation is, or would after the payment

be, unable to pay its liabilities as they become due; or (b) the realizable value of the corporation’s assets would

after the payment be less than the aggregate of its liabilities and stated capital of all classes. Notwithstanding

this fact, a corporation may purchase or otherwise acquire shares issued by it to, among other things, satisfy

the claim of a shareholder who dissents.

Notwithstanding this, but subject to a corporation’s articles, a corporation may purchase or redeem any

redeemable shares issued by it at prices not exceeding the redemption price thereof stated in the articles or

calculated according to a formula stated in the articles. A corporation shall not make any payment to purchase

or redeem any redeemable shares issued by it if there are reasonable grounds for believing that (a) the

corporation is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the

realizable value of the corporation’s assets would after the payment be less than the aggregate of (i) its

liabilities, and (ii) the amount that would be required to pay the holders of shares that have a right to be paid,


on a redemption or in a liquidation, rateably with or before the holders of the shares to be purchased or

redeemed, to the extent that the amount has not been included in its liabilities.

A listed company on the TSX can file a Notice of Intention to Make a Normal Course Issuer Bid with the TSX

seeking approval for the company to purchase by normal market purchases its listed securities where the

purchases do not, when aggregated with all other purchases by the listed issuer during the same trading day,

aggregate more than the greater of: (i) 25 per cent of the average daily trading volume of the listed securities

of that class; and (ii) 1,000 securities; and (b) over a 12-month period, commencing on the date specified in the

notice of the normal course issuer bid, do not exceed the greater of (i) 10 per cent of the public float on the

date of acceptance of the notice of normal course issuer bid by TSX, or (ii) 5 per cent of such class of securities

issued and outstanding on the date of acceptance of the notice of normal course issuer bid by TSX, excluding

any securities held by or on behalf of the listed issuer on the date of acceptance of the notice of normal course

issuer bid by TSX.

SWEDEN

Under the Swedish Companies Act, a company with shares listed on a regulated market is permitted to

repurchase a maximum of ten percent of all outstanding shares in the company. A resolution to repurchase

shares must be taken either by a qualified majority vote among the shareholders at a general meeting or,

following authorization from the general meeting with same majority vote, by the board of directors.

A general meeting may also resolve upon the redemption of the company’s shares through which the share

capital of the company will be reduced. This is a more formal and complex process, which as a main rule

involves also notice to the company’s creditors.

Dissent provisions

CANADA

In connection with certain transactions, a holder of Shares may dissent. Dissenting shareholders are entitled to

be paid the fair value of their shares in accordance with CBCA. If a dissenting shareholder elects to demand

payment of the fair value of the shares, the offeror may, within twenty days after it has paid the money or

transferred the other consideration apply to a court to fix the fair value of the shares of that dissenting offeree.

Amendments to the articles or by-laws

CANADA

Under the CBCA, any amendment to the articles generally requires approval by special resolution, which is a

resolution passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in

respect of that resolution or a resolution signed by all of the shareholders entitled to vote on that resolution.

The CBCA provides that unless the articles or by-laws, or a unanimous shareholder agreement, otherwise

provide, the directors may, by resolution, make, amend or repeal any by-laws that regulate the business or

affairs of a corporation. Where the directors make, amend or repeal a by-law, they are required under the

CBCA to submit the by-law, amendment or repeal to the shareholders at the next meeting of shareholders, and

the shareholders may confirm, reject or amend the by-law, amendment or repeal by an ordinary resolution,

which is a resolution passed by a majority of the votes cast by shareholders entitled to vote on the resolution.

SWEDEN

Under the Swedish Companies Act, an amendment of the articles of association requires a shareholder

resolution at a general meeting. The majority requirement for a valid resolution depends on the type of

alteration. However, not less than two-thirds of the votes cast and of the shares represented at the meeting


will be required. The board of directors is not allowed to make amendments to the articles of association. Any

amendment to the articles will have to be registered with the Swedish Companies Registration Office.

Directors and the board of directors

NUMBER OF DIRECTORS

Canada

Under the CBCA, a distributing corporation must have no fewer than three directors, at least two of whom are

not officers or employees of the corporation or its affiliates and at least 25 per cent of the directors must be

resident Canadians. However, if a corporation has less than four directors, at least one director must be

resident Canadian. The directors are elected at the annual meeting of NGEx Resources shareholders for a term

expiring at the end of the next annual meeting. Under the CBCA, the directors may also, if the articles so

provide, appoint one or more additional directors, who shall also hold office for a term expiring at the end of

the next annual meeting, provided that the total number of directors so elected shall not exceed one third of

the number of directors elected at the previous annual meeting.

The Articles of Continuance of the Company provide that the Company shall have a minimum of one and a

maximum of ten directors, and that the number of directors may be determined from time to time by

resolution of the Board.

Sweden

Under the Swedish Companies Act, a public company shall have a board of directors consisting of at least three

board members and the chairman of the board may not be the managing director of the company. More than

half of the directors shall be resident within the European Economic Area (unless otherwise approved by the

Swedish Companies Registration Office). The actual number of board members shall be determined by a

shareholders’ meeting, within the limits set out in the company’s articles of association.

Under the Swedish corporate governance code, not more than one director may also be a senior executive of

the relevant company or a subsidiary. In addition, a majority of board members shall be independent of the

company and its management and two of these members shall also be independent of major shareholders in

the company.

NOMINATION, APPOINTMENT AND REMOVAL OF DIRECTORS

Canada

Under the CBCA, the shareholders of a corporation may remove any director or directors from office by an

ordinary resolution which is passed by a majority of the votes cast by the shareholders entitled to vote on the

resolution. However, there are a couple of exceptions. Where the holders of any class or series of shares of a

corporation have an exclusive right to elect one or more of the directors such that a director so elected may

only be removed by an ordinary resolution at a meeting of the shareholders of that class or series. In addition,

where the articles provide for cumulative voting, a director may not be removed if the number of votes cast in

favor of his removal is greater than the product of the number of directors required by the articles and the

number of votes cast against the motion.

The Board has adopted a majority voting policy that provides that each director of the Company must, subject

to certain provisions, be elected by the vote of a majority of the Shares, represented in person or by proxy, at

any meeting for the election of directors. Refer to the Section “Board of directors, executive officers and

auditor” for further details. In addition, the Company has adopted an advanced notice policy. Refer to the

Section “Legal history of the Company and its Shares” for further details.


Sweden

Under Swedish law, the board of directors shall, except for any employee representatives, be elected by a

general meeting of shareholders, usually the annual general meeting, unless the articles of association provide

otherwise. The members of the board of directors are usually elected for the period until the end of the next

annual general meeting of shareholders, unless a longer term of up to four financial years is set out in the

articles of association. It is possible for a board member to be re-elected for a new term of office.

Companies to which the Swedish corporate governance code applies shall have a nomination committee. In

addition to nominating directors, the nomination committee shall nominate the chairman of the board of

directors and the auditors and shall also propose fees to each director and to the auditors. The nomination

committee’s proposals are to be presented in the notice of the general meeting and on the company’s website.

At the same time, the nomination committee is to issue a statement on the company’s website explaining its

proposals and providing more information about the candidates proposed for election or re-election.

Under the Swedish corporate governance code, the annual general meeting of shareholders shall either

appoint the members of a nomination committee or pass a resolution specifying how the members are to be

appointed. The nomination committee shall have at least three members, the majority of which shall be

independent of the company and its management. One of the independent members shall also be independent

of the company. One of the independent members shall also be independent of the largest shareholder. The

chief executive officer and other senior executives may not be members of the nomination committee.

REMUNERATION

Canada

According to the by-laws of the Company, the directors shall be paid such remuneration for their services as

the Board may from time to time determine. The directors shall also be entitled to be reimbursed for

reasonable travelling and other expenses properly incurred by them in attending meetings of the Board or any

committee thereof.

The compensation package for directors is intended to provide a competitive level of remuneration reflective

of the responsibilities, accountability and time commitments of the Board members. Executive officers of the

Company who also act as directors of the Company do not receive any additional compensation for services

rendered in such capacity, other than as paid by the Company to such executive officers in their capacity as

executive officers. There is no formal policy for the granting of options to directors. Options may be granted

from time to time upon the recommendation of the compensation committee. Options are granted in

accordance with the Company’s Plan.

Sweden

Under the Swedish Companies Act, the remuneration to the board of directors shall be determined by the

annual general meeting of shareholders, specifying the amount for each director. For companies complying

with the Swedish corporate governance code, the nomination committee’s proposal to the annual general

meeting of shareholders shall include a proposal regarding the remuneration to each member of the board.

In addition, the board of directors shall, pursuant to the Swedish Companies Act, have a remuneration

committee. The members of the committee may not be employees of the company. At least one member must

be independent and have accounting or auditing proficiency. The committee shall appoint one of its members

as chairperson. The remuneration committee shall, without any impact otherwise on the responsibility and

tasks of the board of directors: (i) monitor the company’s financial reporting and provide recommendations

and proposals to ensure the reliability of the reporting; (ii) in respect of the financial reporting, monitor the

efficiency of the company’s internal controls, internal audits, and risk management; (iii) keep itself informed

regarding audit of the annual report and group accounts as well as regarding the conclusions of the Supervisory


Board of Public Accountants quality controls; (iv) inform the board of directors of the result of the audit and the

way in which the audit contributed to the reliability of the financial reporting, as well as the function filled by

the committee; (v) review and monitor the impartiality and independence of the auditor and, in conjunction

therewith, pay special attention to whether the auditor provides the company with services other than auditing

services; and (vi) assist in conjunction with preparation of proposals to the general meeting’s resolution

regarding election of an auditor.

Powers of the board of directors

CANADA

Directors of corporations governed by the CBCA have fiduciary obligations to the corporation. Under the CBCA,

the duty of care of directors requires directors of a Canadian corporation to act honestly and in good faith with

a view to the best interests of the corporation, and exercise the care, diligence and skill that a reasonably

prudent person would exercise in comparable circumstances.

The Board is responsible for the stewardship of the business and for acting in the best interests of the Company

and its shareholders. The specific duties of the Board are contained in the mandate for the Board of Directors.

SWEDEN

Under the Swedish Companies Act, the board of directors is responsible for the organization of the company

and shall monitor the financial situation of the company and the group. The board shall appoint a managing

director and issue instructions to such director setting out the responsibilities of the board and managing

director. The board shall also issue instructions in reporting obligations in order for the board to fulfill its

duties.

The managing director is responsible for the day-to-day management of the company in accordance with law,

which normally includes appointing the other senior executives. The managing director shall be resident within

the European Economic Area (unless otherwise approved by the companies’ registration office).

Right to indemnification

CANADA

Under the CBCA, a corporation may indemnify a director or officer, a former director or officer, or another

individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a

similar capacity, of another entity (an “Indemnifiable Person”), against all costs, charges and expenses,

including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in

respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is

involved because of that association with the corporation or other entity. The corporation may not indemnify

an individual unless (a) he or she acted honestly and in good faith with a view to the best interests of the

corporation or, as the case may be, to the best interests of the other entity for which the individual acted as

directors or officer or in a similar capacity at the corporation’s request; and (b) in the case of a criminal or

administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable

grounds for believing that the individual’s conduct was lawful.

A corporation may, with the approval of a court, also indemnify an Indemnifiable Person or advance him or her

money in respect of derivative actions—actions by or on behalf of the corporation or entity to procure a

judgment in its favor—to which such person is made a party because of the individual's associations with the

corporation or other entity against all costs, charges and expenses reasonably incurred in connection with the

action if the individual fulfills the conditions set out in (a) and (b) above.


The CBCA also creates a right or entitlement to indemnification, independent of contract. An Indemnifiable

Person is entitled to recover costs of defending an action or proceeding brought against him or her as a result

of that person's association with the corporation or other entity if the individual was not judged by the court or

other competent authority to have committed any fault or omitted to do anything that the individual ought to

have done, and fulfills the conditions set out in (a) and (b) above.

The CBCA also allows a corporation to advance moneys to a director, officer of other individual for the costs,

charges, expenses of a proceeding mentioned above. The individual is required to repay the moneys if the

individual does not fulfill the conditions noted in (a) and (b) above.

SWEDEN

The Swedish Companies Act does not contain any specific provisions requiring that the articles of association

provide for indemnification of board members, officers or other persons. Instead, Swedish companies can have

professional indemnity insurance in place for its board members and officers.

The annual general meeting of shareholders shall resolve on the discharge of the board of directors and

managing director from liability. An action for damages on behalf of the company may be available in certain

circumstances against a founder, board member, managing director, auditor or shareholder of the company.

Such an action may be instituted where at a general meeting of shareholders the majority, or a minority

comprising the owners of at least one-tenth of all shares, has supported the proposal that such an action be

instituted. The action for damages in favor of a company may also be conducted by owners (in their own name)

of at least one-tenth of all shares.

Financial statements, auditor’s reports, auditors and audit

committee

CANADA

Under the CBCA, the directors of the Company must place before the shareholders at every annual meeting (a)

comparative financial statements as prescribed relating separately to the period that began immediately after

the end of the last completed financial year and ended not more than six months before the annual meeting,

and the immediately preceding financial year; (b) the report of the auditor, if any, and (c) any further

information respecting the financial position of the Company and the results of its operations required by the

articles, the by-laws or any unanimous shareholder agreement.

Reporting issuers that are listed on the TSX are required to prepare and file on SEDAR its annual financial

statements and annual management discussion and analysis along with the report of the auditor, if any, within

90 days of financial year-end. Reporting issuers that are listed on the TSX are required to prepare and file on

SEDAR its quarterly financial statements and interim management discussion and analysis within 45 days of the

end of the first, second and third financial quarter.

The Audit Committee is appointed by the Board pursuant to provisions of the CBCA and the bylaws of the

Company. The primary responsibility for the Company’s financial reporting, accounting systems and internal

controls is vested in senior management and is overseen by the Board. The Audit Committee is a standing

committee of the Board established to assist it in fulfilling its responsibilities in this regard. The Audit

Committee shall have responsibility for overseeing management reporting on internal controls. While it is

management’s responsibility to design and implement an effective system of internal control, it is the

responsibility of the Audit Committee to ensure that management has done so.


SWEDEN

Under the Swedish Companies Act, the annual general meeting shall adopt the balance sheet and the profit

and loss statement. Further, it makes decisions in respect of the disposition of the company’s profit or loss

(such as payment of dividends). Swedish companies with shares listed on a regulated market are required to

make their annual reports public not later than four months after the end of each financial year.

The annual report, together with the auditor’s report, must be presented at the annual general meeting which

according to the Swedish Companies Act is to be held within six months after the end of the financial year.

Auditors are appointed by a general meeting of shareholders, whereby a registered accounting firm may be

appointed as auditor. The Swedish corporate governance code requires that the board of directors shall at least

once annually meet the company’s auditor without any member of the executive management present.

Companies with shares listed on a regulated market must have an audit committee, see more information

above in the Section “Remuneration”.

Corporate governance reports and website

CANADA

Companies listed on the TSX must provide corporate governance information in the management information

circular (usually referred to as a proxy circular). The circular is distributed together with the Company’s notice

of annual shareholders’ meeting and is filed on SEDAR. There is no requirement to include the management

information circular on the Company’s website, or to have the management information circular reviewed by

the Company’s auditors. The content of the management information circular is regulated by Canadian

securities laws, and the circular must, among other things include a discussion of the Company’s compliance

with the Canadian corporate governance principles. Although there are no legal requirements regarding the

information on the Company’s website, the Company does include information useful to investors.

SWEDEN

Swedish companies with shares listed on a regulated market are obliged by law to prepare an annual corporate

governance report, with information about, among other things, the key elements of the internal control

systems, information about major shareholders, information about the board of directors and its committees

and any mandates for the board of directors to issue new shares or acquire treasury shares.

The Swedish corporate governance code requires that the company states which rules of the Swedish

corporate governance code it has not complied with and to explain the reasons for each case of non-

compliance, and describe the solution it has adopted instead. The company must also have a section on its

website devoted to corporate governance matters, where the company’s ten most recent corporate

governance reports are to be posted, together with, among other things, the articles of association,

information about upcoming shareholders’ meetings and minutes from general meetings held during the past

three years.

Company’s obligation to disclose changes in its share capital

CANADA

The Company is required to file a report with the TSX within ten days of the end of each month in which any

change to the number of outstanding or reserved listed securities has occurred (including a reduction in such

number that results from a cancellation or redemption of securities).


SWEDEN

The Company is required, under Swedish law, to report any changes in the number of shares or votes. Such

disclosure shall be made on the last trading day of the calendar month in which the increase or decrease of

shares or votes occurred.

Distribution of information to the Canadian and Swedish

markets The content and format of the disclosure obligations of Canadian reporting issuers is mandated under National

Instrument 51-102 – Continuous Disclosure Obligations and other regulations under Canadian securities laws,

as well as the regulations applicable to TSX-listed issuers. The Canadian Securities Administrators have

implemented National Policy 51-201 – Disclosure Standards to provide guidance on “best disclosure” practices

in order that everyone investing in securities will have equal access to information that may affect their

investment decisions. Canadian securities legislation prohibits a reporting issuer from selective disclosure or

informing any person or company in a special relationship with a reporting issuer, other than in the necessary

course of business, of a material fact or a material change before that material information has been generally

disclosed. Securities legislation also prohibits anyone in a special relationship with a reporting issuer from

purchasing or selling securities of the reporting issuer with knowledge of a material fact or material change

about the issuer that has not been generally disclosed.

The Company maintains a disclosure policy to ensure that communications to the investing public about the

Company are (i) timely, factual and accurate and (ii) broadly disseminated in accordance with all applicable

legal and regulatory requirements. The disclosure policy extends to all employees, consultants and the Board of

the Company and its subsidiaries and those individuals authorized to speak on behalf of the Company or its

subsidiaries.

The Company is subject to the rules on disclosure of the Nasdaq Rulebook for Issuers. Financial reports and

press releases will be published on the Company’s website at www .ngexresources.com and by its news

distributors. Financial reports and press releases are also filed on SEDAR at www .sedar.com. The information

will be in English only.

Swedish insider reporting rules In addition to any reporting requirements under applicable Canadian laws, persons discharging managerial

responsibilities in NGEx and persons closely associated to such persons are required to report their holdings of

Shares and other financial instruments to the Swedish Financial Supervisory Authority (the “SFSA”) as well as to

NGEx Resources. Such reporting shall be made in accordance with the Regulation (EU) no 596/2014 of the

European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and

repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives

2003/124/EC, 2003/125/EC and 2004/72/EC (“MAR”). In addition, MAR stipulates a trading ban for persons

discharging managerial responsibilities in NGEx during a closed period of 30 calendar days before the

announcement of an interim financial report or a year-end report.

Furthermore, following the Listing, the Company must publish information on any acquisitions or transfers

resulting in the portion of the Shares or votes in the Company held by the Company itself reaching, exceeding

or falling below 5, 10, 15, 20, 25, 30, 50, 66�

�, or 90 percent of the aggregate number of Shares or voting rights

in the Company. The Company will also be subject to additional disclosure rules of Nasdaq Stockholm.

NGEx RESOURCES INC. | Definitions 126

DEFINITIONS In this prospectus all units are SI metric unless otherwise noted. Abbreviations are as defined below unless the

context otherwise indicates:

“Ag” means silver

“Au” means gold

“Board” means the board of directors of the Company, as constituted from

time to time

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

“CAD” means Canadian dollar

“CAGR” means compounded annual growth rate

“CBCA” means Canadian Business Corporations Act

“CIM” means the Canadian Institute of Mining, Metallurgy and Petroleum

“Company”, “NGEx” or “NGEx Resources”

means NGEx Resources Inc., corporation number 425318-3 and/or

any of its subsidiaries as applicable

“Cu” means copper

“CuEq” means copper equivalent. Copper Equivalent is calculated by

converting the payable gold and silver content into a copper content

which would provide equivalent revenue taking into account metal

prices and metallurgical recoveries.

“Deprominsa” means Desarollo de Prospectos Mineros S.A., a fully owned

subsidiary of the Company

“Euroclear” means Euroclear Sweden AB, Swedish Reg. No. 556112-8074

“g/t” means grams per tonne

“GAAP” means Canadian Generally Accepted Accounting Principles prior to

the adoption of IFRS

“ha” means hectare

“IFRS” means Canadian GAAP after the adoption of International Financial

Reporting Standards

“Indicated Mineral Resources” means that part of a Mineral Resource for which quantity, grade or

quality, densities, shape and physical characteristics, can be

estimated with a level of confidence sufficient to allow the

appropriate application of technical and economic parameters, to

support mine planning and evaluation of the economic viability of

the deposit. The estimate is based on detailed and reliable

exploration and testing information gathered through appropriate

techniques from locations such as outcrops, trenches, pits, workings

and drill holes that are spaced closely enough for geological and

grade continuity to be reasonably assumed

“Inferred Mineral Resources” means that part of a Mineral Resource for which quantity and grade


or quality can be estimated on the basis of geological evidence and

limited sampling and reasonably assumed, but not verified,

geological and grade continuity. The estimate is based on limited

information and sampling gathered through appropriate techniques

from locations such as outcrops, trenches, pits, workings and drill

holes

“JOGMEC” means Japan Oil, Gas and Metals National Corporation

“km” means kilometer

“Lorito” means Lorito Holdings S.à.r.l. a private corporation owned by a trust

whose settlor was the late Adolf H. Lundin

“m” means meter

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

operations and financial condition of the Company for the fiscal year

ended 31 December 2013, dated 28 March 2014

“MFDO” means Minera Frontera del Oro SPA, a fully owned subsidiary of the

Company

“Mineral Resources“ means a concentration or occurrence of diamonds, natural solid

inorganic material, or natural solid fossilized organic material

including base and precious metals, coal, and industrial minerals in

or on the Earth’s crust in such form and quantity and of such a grade

or quality that it has reasonable prospects for economic extraction.

The location, quantity, grade, geological characteristics and

continuity of a Mineral Resource are known, estimated or

interpreted from specific geological evidence and knowledge

“National Instrument 43-101” or

“NI 43-101”

means National Instrument 43-101 “Standards of Disclosure for

Mineral Projects” adopted by the Canadian Securities

Administrators

“Nasdaq Stockholm” means the main market operated by NASDAQ OMX Stockholm AB

“New Shares” means up to 8 million common shares in NGEx Resources Inc.

“Offering” means a non-brokered private placement basis of an aggregate of

up to 8 million New Shares of the Company at a price of CAD $1.25

per Share, for gross proceeds of up to CAD $10 million.

“Oz” means ounces

“Pan Pacific Copper” or “PPC” means Pan Pacific Copper Co., Ltd

“Pareto” means Pareto Securities AB, Swedish reg. no. 556206-8956

“QA/QC” means quality assurance / quality control

“PPC JEA” means the joint exploration agreement made as of 1 February 2008

among JOGMEC, Suramina, Frontera Holdings (Bermuda) II Ltd.,

Deprominsa, and MFDO that covers the Los Helados Project (as

defined herein) and the Filo del Sol Project (as defined herein) and

consent, novation and agreement to be bound made as of

7 September 2012, among JOGMEC, Suramina, Frontera Holdings

(Bermuda) II Ltd., Deprominsa, MFDO and Pan Pacific Copper, with

effect as at 7 September 2012, pursuant to which Pan Pacific Copper

assumed JOGMEC’s rights and responsibilities under the joint

exploration agreement as though it were a party to the joint


exploration agreement in substitution for JOGMEC

“Qualified Person” means a qualified person within the meaning of National Instrument

43-101

“SEDAR” means the System for Electronic Document Analysis and Retrieval

(SEDAR), a filing system developed for the Canadian Securities

Administrators which is available on www .sedar.com

“SEK” means Swedish kronor

“SFSA” means the Swedish Financial Supervisory Authority

“Shares” means the common shares of NGEx Resources Inc.

“SI“ means International System of Units

“Suramina” means Suramina Resources Inc., a wholly-owned subsidiary of the

Company

“TSX” means Toronto Stock Exchange

“USD” means U.S. dollar

“U.S.” means The United States of America

“Zebra” means Zebra Holdings and Investments S.à.r.l., Luxembourg

CONVERSION TABLE

In this prospectus, metric units may be used with respect to NGEx’s various mineral properties. Conversion

rates from imperial measures to metric units and from metric units to imperial measures are provided in the

table set out below.

Imperial Measure = Metric Unit Metric Unit = Imperial Measure

2.47 acres 1 hectare 0.4047 hectares 1 acre

3.28 feet 1 meter 0.3048 meters 1 foot

0.62 miles

2.2 pounds

1 kilometer

1 kilogram

1.609 kilometers

0.454 kilograms

1 mile

1 pound

0.032 ounces

(troy)

1 gram 31.1 grams 1 ounce (troy)

2,204.60 pounds 1 tonne 1 tonne 2,204.60 pounds

NGEx RESOURCES INC. | Documents incorporated by reference 129

DOCUMENTS INCORPORATED BY REFERENCE The following documents form part of the prospectus and are incorporated by reference:

• Audited consolidated financial statements for the financial year ended 31 December, 2013.



• Unaudited consolidated interim financial statements for the nine-month period ended 30 September

2016.

• The Company’s annual information form for the financial year 2015.

• NGEx Resources Inc., management’s discussion and analysis 31 December 2013.



• NGEx Resources Inc., management’s discussion and analysis 30 September 2016.

• Project Constellation PEA, the technical report with an effective date of February 12, 2016 and titled

"Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaria Deposit,

Argentina NI 43-101 Technical Report on Preliminary Economic Assessment", prepared by Amec Foster

Wheeler International Ingeniería y Construcción Limitada ("AMEC").

The above financial statements have been prepared in compliance with IFRS.

All of the above-listed documents are available in electronic format at www.ngexresources.com and on SEDAR

at www.sedar.com.

Other than what is expressly stated herein, no information in this prospectus has been examined or audited by

the Company’s auditors.

DOCUMENTS AVAILABLE FOR INSPECTION

The following documents are also available for inspection by physical means at the Company’s office (see

Section “Addresses”).

• the Company’s memorandum;

• the Company’s articles of continuance, certificate of continuance and by-laws;

• all documents incorporated by reference herein;

• historical financial information for the Company’s subsidiaries for each of the two financial years

preceding the publication of the prospectus; and

• documents relating to corporate governance issues.

NGEx RESOURCES INC. | Addresses 130

ADDRESSES

The Company NGEx Resources Inc.

Suite 2000 - 885 West Georgia Street

Vancouver, British Columbia

Canada V6C 3E8

+1 (604) 689-7842

External auditor PricewaterhouseCoopers LLP

PricewaterhouseCoopers Place

250 Howe Street, Suite 700, Vancouver, British

Columbia

Canada V6C 3S7

Swedish legal counsel

Gernandt & Danielsson Advokatbyrå KB

Hamngatan 2

P.O. Box 5747

114 87 Stockholm

Sweden

Central securities depositories

Euroclear Sweden AB

P.O. Box 191

Klarabergsviadukten 63

Stockholm 101 23

Sweden

Transfer agent Computershare Investor Services Inc.

3rd Floor, 510 Burrard Street, Vancouver,

British Columbia, Canada

V6C 3B9

NGEx RESOURCES INC. | Certificate of continuance and by-laws of NGEx Resources 131

CERTIFICATE OF CONTINUANCE AND BY-LAWS

OF NGEX RESOURCES

The Company’s Certificate of Continuance and by-laws are incorporated on the following pages