ANTI-MONEY LAUNDERING AND ANTI-TERRORIST FINANCING POLICY

Patagonia Gold Corp and its subsidiaries (“Patagonia”) is committed to ensuring that its business operations are not used by others to bring funds generated by illegal activities into legitimate commerce (money laundering).

Although Patagonia is not a financial institution, anti-money laundering (“AML”) requirements are applicable to our business. Money laundering also represents several risks for non-financial companies such as Patagonia, including: reputational damage; operational losses resulting from inadequate or failed internal processes, people and systems, or from external events; legal liabilities due to any of these risks resulting in the failure to comply with applicable laws which could have a negative legal impact on Patagonia; and financial losses due to any of these risks  resulting in a negative financial impact for Patagonia.

It is therefore important to understand and comply with all AML regulations including: screening and monitoring requirements, “Know Your Customer” (KYC) procedures, sanction lists, record keeping requirements, reporting of suspicious circumstances and/or certain transactions in accordance with relevant laws, as well as AML training, if required.

PURPOSE 

This Policy provides guidance for compliance with AML and counter terrorist financing laws. It intends to educate all Patagonia employees to detect red flags for being misused for money laundering, terrorist financing or other financial crimes purposes.

Patagonia will take the necessary measures not to be used in the channeling of resources from acts of corruption, money laundering or the financing of terrorism.

SCOPE

This Policy applies to Patagonia’s directors, officers, and employees, including any individual working for, on behalf of Patagonia worldwide regardless of the place where Patagonia operates or conducts business. Ignorance or misunderstanding of the rules is no excuse for violations.

DEFINITIONS

“Money Laundering” means the process of transforming the profits of serious crime, such as corruption, drug trafficking and terrorism activities into ostensibly ‘legitimate’ assets.

“Terrorist Financing” means the provision or collection of funds or resources of any kind, by any means, directly or indirectly, with the intention to use them or in the knowledge that they may be used, in full or in part, for terrorist purposes.

“Politically Exposed Person” (PEP) means an individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognized that many PEPs can be potentially abused for the purpose of committing Money Laundering offences and related predicate offences, including corruption and bribery as well as conducting activities related to Terrorist Financing. This definition includes PEP´s family members and close associates.

“Ultimate Beneficial Owner” (UBO) generally means the person or group of persons that:

1. By means of another person or any act, obtains the benefit derived therefrom and who, ultimately, exercises the rights of use, enjoy, benefit or dispose of a good or service, or
2. Exercises the control of the legal entity that carries out acts or transactions with Patagonia, as well as the persons on behalf of which Patagonia enters into any of such acts or transactions.

PROVISIONS

I. Know Your Customer (KYC)

1. Patagonia will perform due diligence on counterparties as required by local laws in order to make a formal identification of the Ultimate Beneficial Owners. Patagonia might conduct enhanced due diligence on high risk counterparties.
2. Patagonia will undertake on-going monitoring of its business relationships with counterparties.
3. Patagonia will retain relevant due diligence records for the period of time as required by applicable local laws.
4. Patagonia will annually carry out a cross-check of its counterparties against international sanction lists (for example, OFAC List, UN Terrorists, FBI Most Wanted, etc.). In case of a positive match, further investigation will be conducted and appropriate action, including up to termination will be undertaken.

II. Suspicious Operations

1. The following should be considered red flags which may be related to Money Laundering or Terrorism Financing activities:
   • Use of shell-companies;
   • Payments through accounts in shell banks;
   • Use of nominees, trusts, family member or third party accounts;
   • Difficulty to verify the identity of UBOs or reluctance to provide relevant details;
   • Disconnected customer/suppliers/third parties sharing common address;
   • The level of activity is not consistent with Patagonia’s understanding of the customer/supplier/
     third party’s business or level of legitimate income;
   • Customers/suppliers/third parties based in countries where production of drugs or drug trafficking is prevalent;
   • Business transactions involving countries where there is a high risk of Money Laundering and/or the Financing of Terrorism;
   • Funds are sent or received via international transfers from or to higher-risk locations or offshore accounts;
   • Cash intense businesses; and
   • Requests to inflate invoices.
2. Patagonia will refrain from executing any operation when there is a suspicion of Money Laundering until further investigation has been completed. Patagonia will not execute any transaction on which there is evidence or certainty that is related to Money Laundering, even before making the communication to the competent authorities.

III. Politically Exposed Persons (PEPs)

1. When applicable, Patagonia will obtain the required authorization from relevant governmental authorities before entering into a transaction with any PEP.
2. Patagonia will undertake enhanced due diligence for all PEPs. Such enhanced due diligence shall include approval at a higher level than the one required for non-PEP counterparties.

IV. Reporting Suspicious, Relevant or Unusual Operations

1. Any employee who becomes aware of any suspicious operation or reasonably suspects that Money Laundering or Terrorism Financing may occur, shall immediately report it to Patagonia’s Legal Affairs Manager and refrain from continuing with the transaction until approval is granted.
2. Whenever a suspicious transaction or activity is to be communicated to Patagonia’s Legal Affairs Manager or the competent authorities for appropriate investigation, it is forbidden to disclose information about the issue to the person to whom the suspicion refers to, another person or organization.
3. Patagonia will cooperate with the national and international AML competent authorities or its supporting bodies, facilitating at all times, in accordance with current applicable legal provisions in each jurisdiction, the documentation and information required by such authorities.

REPORTING A CONCERN

Because we all have a stake in Patagonia´s success, it is in all of our interest to help ensure that our business is conducted to the highest ethical standards, and that our reputation remains untarnished. For this reason, we strongly encourage you to report any situation you know or suspect about that may involve illegal, unethical or otherwise improper business activity, as well as all instances of employee violations of this or any other of the Patagonia policies. Doing so will allow the company to address the issue and take appropriate corrective action.

If you have a good-faith belief or concern related to improper or illegal conduct, you should immediately contact Patagonia’s Legal Affairs Manager at the contact details below:

Email:  margarate@patagoniagold.com
Phone: +54 11 52786950.

Patagonia will not tolerate retaliation against you due to your report or participation in any internal investigations, as long as you have acted in good faith and believe what you reported to be true.

Retaliation may be grounds for discipline up to and including dismissal, subject applicable local laws. Patagonia will treat any good-faith reports or discussions in confidence consistent with legal requirements and subject to the need to conduct a thorough investigation where appropriate. In certain cases, and consistent with applicable laws, information may be shared with local law enforcement or other authorities.

COMMUNICATION

This Policy and any standards and procedures adopted thereunder shall be communicated to all our directors, officers and employees and contractors, and other parties as appropriate.

AMENDMENTS AND WAIVERS

The Audit Committee will review this Policy on a periodic basis, evaluate its effectiveness, and update or amend this Policy as necessary.

As at September 25, 2019

CODE OF BUSINESS CONDUCT AND ETHICS

This Code of Business Conduct and Ethics (“Code”) applies to every Director, Officer (including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”)), contractor and employee of Patagonia Gold Corp. or its subsidiaries (collectively the “Company”).  For the purposes of this Code, the term “employee” includes contractors and any individual who is paid on the Company’s payroll.

To further the Company’s values of integrity, creativity, commitment, development of employees and teamwork, we have established this Code. Our Code strives to deter wrongdoing and promote the following objectives:

• Honest and ethical conduct, including ethical interactions with government officials and the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
• Full, fair, accurate, timely, understandable and transparent disclosure in periodic reports and documents required to be filed by the Company and in other public communications made by the Company;
• Compliance with the applicable exchange, government and self-regulatory organization laws, rules and regulations;
• Prompt internal reporting of Code violations; and
• Accountability for compliance with the Code.

Below, we discuss situations that require application of our fundamental principles and promotion of our objectives. If there is a conflict between this Code and a specific procedure, you should consult the CEO or the General Counsel for guidance. In the event of a conflict between this Code and any such procedure, or for any other guidance in respect of this Code absent a specific referral herein, the CEO or the General Counsel , as the case may be, should consult the Chair of the Audit Committee of the Board of Directors.

Accountability for Compliance with the Code

Each of the Company’s directors, officers and employees is expected to:

• The Company expects you to understand the requirements of your position including Company expectations and laws, rules and regulations that apply to your position.
• The Company expects you to comply with this Code and all applicable laws, rules and regulations.
• The Company expects you to report any violation of this Code of which you become aware.
• Be Accountable. The Company holds you accountable for complying with this Code.

Table of Contents

Accounting Policies
Commitment
Compliance with Laws, Rules and Regulations
Computer and Information Systems
Confidential Information Belonging to Others
Confidential and Proprietary Information
Conflicts of Interest
Corporate Opportunities and Use and Protection of Company Assets
Disclosure Policies and Controls
Fair Dealing with Others
Filing of Government Reports
Bribery
Foreign Corrupt Practices Act
Health, Safety, Environment & Corporate Social Responsibility
Political Contributions
Prohibited Substances
Relations, Respect and Contribution
Reporting of Code Violations
Non-Retaliation for Reporting
Anonymous Reporting
Waivers
Amendments and Modifications of this Code
Conclusion
Discipline for Noncompliance with this Code

Accounting Policies

The Company and each of its subsidiaries will make and keep books, records and accounts which, in reasonable detail, accurately and fairly present the transactions and disposition of the assets of the Company.

All directors, officers and employees are prohibited from directly or indirectly falsifying or causing to be false or misleading any financial or accounting book, record or account. You and others are expressly prohibited from directly or indirectly manipulating an audit, and from destroying or tampering with any record, document or tangible object with the intent to obstruct a pending or contemplated audit, review or investigation. The commission of, or participation in, one of these prohibited activities or other illegal conduct will subject you to penalties under applicable laws and regulations, as well as disciplinary action, including termination of employment.

No director, officer or employee of the Company may directly or indirectly;

• Make or cause to be made a materially false or misleading statement, or
• Omit to state, or cause another person to omit to state, any material fact necessary to make statements made not misleading

in connection with the audit of financial statements by independent accountants, the preparation of any required reports whether by independent or internal accountants, or any other work which involves or relates to the filing of a document with the applicable Canadian or other international securities regulatory authorities.

Commitment

To demonstrate our determination and commitment, the Company asks each director, officer and employee to review the Code periodically throughout the year.  Take the opportunity to discuss with management any circumstances that may have arisen that could be an actual or potential violation of these ethical standards of conduct.

Compliance with Laws, Rules and Regulations

The Company’s goal and intention is to comply with the laws, rules and regulations by which we are governed. In fact, we strive to comply not only with requirements of the law but also with recognized compliance practices. All illegal activities or illegal conduct by or on behalf of the Company are prohibited whether or not they are specifically identified in this Code. Where law does not govern a situation or where the law is unclear or conflicting, you should discuss the situation with your supervisor and management should seek advice from the CEO or General Counsel. Business should always be conducted in a fair and forthright manner. Directors, officers and employees are expected to act according to high ethical standards.

Computer and Information Systems

For business purposes, officers and employees are provided telephones, tablets, mobile devices and computers and software, including network access to computing systems such as the Internet and e-mail, to improve personal productivity and to efficiently manage proprietary information in a secure and reliable manner. As with other equipment and assets of the Company, we are each responsible for the appropriate use of these assets. Except for limited personal use of the Company’s telephones, tablets, mobile devices and computers, such equipment may be used only for business purposes. Officers and employees should not expect a right to privacy of their e-mail, Internet or network use. All communications, e-mails or Internet use on Company equipment or networks may be subject to monitoring by the Company for legitimate business purposes.

Confidential Information Belonging to Others

You must respect the confidentiality of information, including, but not limited to, trade secrets and other information given in confidence by others, including but not limited to partners, suppliers, contractors, competitors, customers or acquisition or investment targets, just as we protect our own confidential information. However, certain restrictions arising in relation to the information of others may place an unfair or inappropriate burden on the Company’s future business. For that reason, directors, officers and employees should coordinate with the CEO or General Counsel to ensure appropriate agreements are in place prior to receiving any confidential third-party information. These agreements must reflect a balance between the value of the information received on the one hand and the logistical and financial costs of maintaining confidentiality of the information and, if applicable, limiting the Company’s business opportunities on the other. In addition, any confidential information that you may possess from an outside source, such as a previous employer, must not, so long as such information remains confidential, be disclosed to or used by the Company. Unsolicited confidential information submitted to the Company should be refused, returned to the sender where possible and deleted, if received via the Internet.

Confidential and Proprietary Information

It is the Company’s policy to ensure that all operations, activities and business affairs of the Company are kept confidential to the greatest extent possible. Confidential information includes all non-public information that might be of use to competitors, or that might be harmful to the Company or its customers if disclosed. Confidential and proprietary information about the Company belongs to the Company, must be treated with strictest confidence and is not to be disclosed or discussed with others.

Unless otherwise agreed to in writing, confidential and proprietary information includes any and all non-public information, methods, inventions, improvements or discoveries, whether or not patentable or copyrightable, and any other information of a similar nature disclosed to the directors, officers or employees of the Company or otherwise made known to the Company as a consequence of or through employment or association with the Company (including information originated by the director, officer or employee). This can include, but is not limited to, information regarding the Company’s business, products, processes, and services. It also can include information relating to research, development, inventions, trade secrets, intellectual property of any type or description, data, business plans, marketing strategies, engineering, contract negotiations and business methods or practices.

The following are examples of information that are not considered confidential:

• Information that is in the public domain to the extent it is readily available;
• Information that becomes generally known to the public other than by disclosure by the Company or a director, officer or employee; or
• Information you receive from a party that is under no legal obligation of confidentiality with the Company with respect to such information.

We have exclusive property rights to all confidential and proprietary information regarding the Company. The unauthorized disclosure of this information could destroy its value to the Company and give others an unfair advantage. You are responsible for safeguarding Company information and complying with established security controls and procedures. All documents, records, notebooks, notes, memoranda and similar repositories of information containing information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company or our operations and activities made or compiled by the director, officer or employee or made available to you prior to or during the term of your association with the Company, including any copies thereof, unless otherwise agreed to in writing, belong to the Company and shall be held by you in trust solely for the benefit of the Company, and shall be delivered to the Company by you on the termination of your association with us or at any other time we request.

Conflicts of Interest

Conflicts of interest can arise in virtually every area of our operations. A “conflict of interest” exists whenever an individual’s personal interests interfere or conflict with the interests of the Company. We must strive to handle in an ethical and practical manner actual or apparent conflicts of interest between personal and professional relationships. We must each make decisions in the best interest of the Company. Business, financial or other relationships with suppliers, customers or competitors that might impair or appear to impair the exercise of our judgment should be avoided.

Here are some examples of potential conflicts of interest:

Family Members. Actions of family members may create a conflict of interest. For example, gifts to family members by a supplier of the Company are considered gifts to you and should be reported if they involve more than ordinary social amenity or are of more than nominal value from any organization doing or seeking to do business with the Company. Doing business for the Company with organizations where your family members are employed or that are partially or fully owned by your family members or close friends may create a conflict or the appearance of a conflict of interest. For purposes of the Code “family members” include any child, stepchild, grandchild, parent, stepparent, grandparent, spouse (including a common-law spouse), sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, and adoptive relationships.

Gifts, Entertainment, Loans, or Other Favors. Directors, officers and employees shall not seek or accept gifts, entertainment, loans, or other favors for personal gain if it is more than ordinary social amenity or of more than nominal value from anyone soliciting business from, or doing business with the Company, or from any person or entity in competition with us. Other than common business courtesies, directors, officers, and employees must not offer or provide anything to any person or organization for the purpose of influencing the person or organization in their business relationship with us.  Additional restrictions apply when providing anything of value to a government official or employee, employee or agent of a state-owned or controlled enterprise, employee or agent of a public international organization, political party or official thereof or any candidate for a political office.  Please refer to the sections of this Code on Bribery and the Foreign Corrupt Practices Act and the Corruption of Foreign Public Officials Act for more information.

Directors, officers and employees are expected to deal with advisors or suppliers who best serve the needs of the Company as to price, quality and service in making decisions concerning the use or purchase of materials, equipment, property or services. Directors, officers and employees who use the company’s advisors, suppliers or contractors in a personal capacity are expected to pay market value for materials and services provided.

Outside Employment. Officers and employees may not participate in outside employment, self-employment, or serve as officers, directors, partners or consultants for outside organizations, if such activity:

• reduces work efficiency;
• interferes with your ability to act conscientiously in our best interest;
• requires you to utilize our proprietary or confidential procedures, plans or techniques; or
• negatively impacts the reputation of the Company.

You must inform your supervisor of any outside employment, including the employer’s name and expected work hours.

You should report any actual or potential conflict of interest involving yourself or others of which you become aware to your supervisor or the CEO or General Counsel. Officers and Directors should report any actual or potential conflict of interest involving yourself or another officer or director of which you become aware to the Chair of the Audit Committee of the Board of Directors.

Corporate Opportunities and Use and Protection of Company Assets

You are prohibited from:

• taking for yourself, personally, opportunities that are discovered through the use of Company property, information or position;
• using Company property, information or position for personal gain; or
• competing with the Company.

You have a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

You are personally responsible and accountable for the proper expenditure of Company funds, including money spent for travel expenses or for business entertainment. You are also responsible for the proper use of property over which you have control, including both Company property and funds and property that has been entrusted to your custody. Company assets must be used only for proper purposes.

Company property should not be misused. Company property may not be sold, loaned or given away regardless of condition or value, without proper authorization. Each director, officer and employee should protect our assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. Company assets should be used only for legitimate business purposes.

Disclosure Policies and Controls

The continuing excellence of the Company’s reputation depends on our full and complete disclosure of important information about the Company that is used in the securities marketplace. Our financial and non-financial disclosures and filings with the applicable Canadian securities regulatory authorities and SEC must be accurate and timely. Proper reporting of reliable, truthful and accurate information is a complex process involving cooperation among many of us. We must all work together to ensure that reliable, truthful and accurate information is disclosed to the public.

The Company must disclose to the applicable Canadian or international securities regulatory authorities, current security holders and the investing public, information that is required, and any additional information that may be necessary to ensure the required disclosures are not misleading or inaccurate. The Company requires you to participate in the disclosure process, which is designed to record, process, summarize and report material information as required by all applicable laws, rules and regulations. Participation in the disclosure process is a requirement of a public company, and full cooperation in the disclosure process is a requirement of this Code.

Officers and employees must fully comply with their disclosure responsibilities in an accurate and timely manner (within the guidelines of applicable securities regulatory authorities) or be subject to discipline of up to and including termination of employment.

Fair Dealing with Others

No director, officer or employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice.

Filing of Government Reports

Any reports or information provided by the Company, or on our behalf, to federal, provincial, territorial, state, local or foreign governments must be true and accurate.  You are required to assist the Company in providing true and accurate reports and information.  Any omission, misstatement or lack of attention to detail could result in a violation of the reporting laws, rules and regulations.

Bribery

You are strictly forbidden from, directly or indirectly, offering, promising or giving money, gifts, loans, rewards, favors or anything of value to any government official or employee, employee or agent of a state-owned or controlled enterprise, employee or agent of a public international organization, political party or official thereof or any candidate for a political office, including any agent or other intermediary, including a close family member or household member, of any of the above, in connection with the business of the Company.

Those paying a bribe may subject the Company and themselves to civil and criminal penalties. When dealing with government representatives or officials and private parties, no improper payments will be tolerated. If you become aware of or receive any solicitation for, or offer of, money or a gift, that is intended to influence an official decision or business decision inside or outside of the Company, it should be reported to your supervisor, the General Counsel or the CEO immediately.

The Company prohibits improper payments in all of its activities, whether these activities are with governments or in the private sector. Please refer to the Company’s Anti-Bribery and Anti-Corruption Policy for more information.

Foreign Corrupt Practices Act and the Corruption of Foreign Public Officials Act

The United States Foreign Corrupt Practices Act (“FCPA”) and the Corruption of Foreign Public Officials Act (Canada) (“CFPOA”) contain certain prohibitions with respect to giving anything of value, directly or indirectly, to foreign government officials or certain other individuals in order to obtain, retain or direct business for or to any person. Accordingly, corporate funds, property or anything of value may not be, directly or indirectly, offered or given by you or an agent acting on our behalf, to a government official or employee, employee or agent of a state-owned or controlled enterprise, employee or agent of a public international organization, political party or official thereof or any candidate for a political office, including any agent or other intermediary, including a close family member or household member, of any of the above for the purpose of influencing any act or decision of such party or person or inducing such party or person to use its or his influence, or to otherwise secure any improper advantage, in order to assist in obtaining or retaining business for, or directing business to, any person.

You are also prohibited from offering or paying anything of value to any person if it is known or there is a reason to know that all or part of such payment will be used for the above-described prohibited actions. This provision includes situations when intermediaries, such as affiliates, or agents, are used to channel payments to government officials.

In addition to complying with the FCPA and CFPOA, you are required to comply with local anti-bribery and anti-corruption laws in the jurisdictions in which the Company conducts business.

Each officer, director and employee is also expected to comply with our additional policies and standards related to anti-corruption compliance.  Please refer to the Company’s Anti-Bribery and Anti-Corruption Policy for more information.

Health, Safety, Environment & Corporate Social Responsibility

The Company is committed to managing and operating our assets in a manner that is protective of human health and safety and the environment, respects human rights and involves active engagement with host communities. It is our policy to comply, in all material respects, with applicable health, safety and environmental laws and regulations. Each employee is also expected to comply with our policies, programs, standards and procedures relating to health, safety, the environment, human rights, community engagement and corporate social responsibility.

Political Contributions

You must refrain from making any use of Company, personal or other funds or resources on behalf of the Company, or which may be attributed to or associated with the Company, for political or other purposes which are improper or prohibited by the applicable federal, provincial, territorial, state, local or foreign laws, rules or regulations. Company contributions, or those which may be associated with the Company, or expenditures in connection with election campaigns may be permitted only to the extent allowed by federal, provincial, territorial, state, local or foreign election laws, rules and regulations and require the approval of the CEO.

You are encouraged to participate actively in the political process in your personal capacity, but not on behalf of the Company. We believe that individual participation is a continuing responsibility of those who live in a free country.

Prohibited Substances

You are prohibited from using cannabis, alcohol, illegal drugs or other prohibited items, including unauthorized legal drugs which affect the ability to perform your work duties, while on Company premises. You are also prohibited from the possession or use of alcoholic beverages, firearms, weapons or explosives on our premises. You are also prohibited from reporting to work while under the influence of alcohol, cannabis or illegal drugs.

Relations, Respect and Contribution

We function as a team. Your success as part of this team depends on your contribution and ability to inspire the trust and confidence of your coworkers and supervisors. Respect for the rights and dignity of others and a dedication to the good of our Company are essential.

A cornerstone of our success is the teamwork of our directors, officers and employees. We must each respect the rights of others while working as a team to fulfill our objectives. To best function as part of a team, you must be trustworthy and dedicated to high standards of performance. The relationships between business groups also require teamwork.

To facilitate respect and contribution among employees, we have implemented the following employment policies:

• To hire, pay and assign work on the basis of qualifications and performance;
• Not to discriminate on the basis of race, religion, ethnicity, national origin, color, gender, age, sexual orientation, citizenship, veteran’s status, marital status or disability;
• To attract and retain a highly talented workforce;
• To encourage skill growth through training and education and promotional opportunities;
• To encourage an open discussion between all levels of employees and to provide an opportunity for feedback from the top to the bottom and from the bottom to the top;
• To prohibit harassment (including sexual, physical, verbal) by others while an employee is on the job;
• To make the safety and security of our employees while at Company facilities a priority;
• To recognize and reward additional efforts that go beyond our expectations; and
• To respect all workers’ rights to dignity and personal privacy by not disclosing employee information, including protected health information, unnecessarily.

Reporting of Code Violations

You should be alert and sensitive to situations that could result in actions that might violate federal, state, or local laws or the standards of conduct set forth in this Code. If you believe your own conduct or that of an employee, director or officer may have violated any such laws or this Code, you have an obligation to report the matter in accordance with this Code.

Generally, you should raise such matters first with an immediate supervisor. However, if you are not comfortable bringing the matter up with your immediate supervisor, or do not believe the supervisor has dealt with the matter properly, then you should raise the matter with the CEO or General Counsel. The most important point is that possible violations should be reported and we support all means of reporting them.

Directors and officers should report any potential violations of this Code involving directors or officers to the Chair of the Audit Committee of the Board of Directors.

Non-Retaliation for Reporting

In no event will the Company take or threaten any action against you as a reprisal or retaliation for making a complaint in good faith in accordance with this Code. However, if a reporting individual was involved in improper activity the individual may be appropriately disciplined even if he or she was the one who disclosed the matter to the Company. In these circumstances, we may consider the conduct of the reporting individual in reporting the information as a mitigating factor in any disciplinary decision.

We will not allow retaliation against a reporting individual for reporting, in good faith, a concern regarding compliance with this Code in accordance with this Code. Retaliation for reporting an offense may be illegal under applicable law and prohibited under this Code. Retaliation for reporting any violation of a law, rule or regulation or a provision of this Code or the Company’s policies and procedures is prohibited. Retaliation will result in discipline up to and including termination of employment and may also result in criminal prosecution.

Anonymous Reporting

If you wish to report a suspected violation of this Code anonymously, you may do so in accordance with this Code. You do not have to reveal your identity in order to make a report. If you do reveal your identity, it will not be disclosed by the Chair of the Audit Committee unless disclosure is unavoidable during an investigation.

Waivers

There shall be no waiver of any part of this Code for any director or executive officer (being the CEO, the CFO, the Chief Operating Officer, each Executive Vice President and each Vice President) except by a vote of the Board of Directors or a designated Board committee that will ascertain whether a waiver is appropriate under all the circumstances. If a waiver (or implicit waiver) is granted to a director or executive officer, notice of such waiver will be disclosed to the extent required by applicable law or stock exchange rules. For these purposes, the term “waiver” means the approval by the Company of a material departure from a provision of the Code, and the term “implicit waiver” means a failure of the Company to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an executive officer.  Any notices of waiver posted on our website shall remain there for a period of 12 months and shall be retained in our files as required by applicable law.

A waiver for a specific event arising under this Code may be granted to an employee that is not a director or executive officer on the approval of two of the following: the CEO, any Executive Vice President, and any director. No other waivers of this Code are permitted.

Amendments and Modifications of this Code

There shall be no amendment or modification to this Code except by a vote of the Board of Directors or a designated Board committee that will ascertain whether an amendment or modification is appropriate.

In case of any amendment or modification of this Code that applies to an officer or director of the Company, the amendment or modification shall be posted on the Company’s website within five days of the Board vote or shall be otherwise disclosed as required by applicable law or applicable exchange rules. Notice posted on the website shall remain there for a period of 12 months and shall be retained in the Company’s files as required by law.

Conclusion

This Code is an attempt to point all of us at the Company in the right direction, but no document can achieve the level of principled compliance that we are seeking. In reality, each of us must strive every day to maintain our awareness of these issues and to comply with the Code’s principles to the best of our abilities. Before we take an action, we must always ask ourselves:

• Does it feel right?
• Is this action ethical in every way?
• Is this action in compliance with the law?
• Could my action create an appearance of impropriety?

Am I trying to fool anyone, including myself, about the propriety of this action?

If an action would elicit the wrong answer to any of these questions, do not take it. We cannot expect perfection, but we do expect good faith. If you act in bad faith or fail to report illegal or unethical behavior, then you will be subject to disciplinary procedures. We hope that you agree that the best course of action is to be honest, forthright and loyal at all times.

Discipline for Noncompliance with this Code

Disciplinary actions for violations of this Code can include oral or written reprimands, suspension or termination of employment or a potential civil lawsuit against you.

The violation of laws, rules or regulations, which can subject the Company to fines and other penalties, may result in your criminal prosecution.

Reviewed and approved by the Board as of September 25, 2019.

DISCLOSURE POLICY

Purpose

Patagonia Gold Corp. (the “Corporation”) has adopted this disclosure policy (this “Policy”) to guide us when we possess confidential information relating to the business and affairs of the Corporation, such that any communication of such confidential information to the public is timely, factual, accurate, balanced and broadly disseminated in accordance with applicable securities laws, instruments, rules, policies and regulatory requirements (collectively “Applicable Laws”).

Scope

This Policy limits the discretion of the directors, officers and other employees of the Corporation, any other person authorized to speak on behalf of the Corporation and all consultants and contractors of the Corporation (collectively “Applicable Persons”) who possess Confidential Information (as defined below).

All forms of communication are subject to this Policy. This includes all financial and non-financial disclosure in documents filed with applicable securities regulatory authorities, including the Corporation’s annual information form, annual and quarterly financial statements and management’s discussion and analysis, press releases and letters to shareholders, as well as presentations by senior officers of the Corporation, information contained in the website of the Corporation and other electronic communications by the Corporation, including social media. This Policy extends to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media, speeches, press conferences and conference calls.

Policy Statements

A decision as to whether or not any information relating to the business and affairs of the Corporation is to be disclosed is only to be made by the Disclosure Committee (the “Committee”) as described below. The members of the Committee should understand Applicable Laws and the business and affairs of the Corporation so that they can make appropriate decisions as to whether or not to publicly disclose such confidential information. The key question to be considered by the Committee when deciding whether or not to disclose information is whether or not the information would be considered material by investors. If the answer is yes, then Applicable Laws require that such information be publicly released immediately, unless the Committee determines that the release of the information would be unduly detrimental to the interests of the Corporation. If the Committee is unsure whether the information is material, the Committee should consult legal counsel and, if appropriate, the Market Surveillance Division of the Investment Industry Regulatory Organization of Canada (“Market Surveillance”).

Any information relating to the business and affairs of the Corporation should be communicated factually, accurately and in a balanced manner, without including unnecessary details, exaggerated reports or any other commentary which is designed to influence the public’s perception of the information, either positively or negatively.

All investors are entitled to equal access to information relating to the business and affairs of the Corporation that is released by the Corporation and that may affect their investment decisions. “Equal access” can only be achieved by a press release issued through a national wire service, with all relevant information contained, or a reference to where all relevant information can be found, contained in the press release. Preventing “unequal access” requires the Corporation to establish procedures to control material confidential information relating to the business and affairs of the Corporation (“Confidential Information”) so that Confidential Information is not:

1. intentionally disclosed to some people and not others by an Applicable Person who did not understand that the information was material and confidential; and
2. unintentionally released, for example through overheard conversations or carelessly placed documents.

If these procedures are not successful and an unauthorized disclosure of Confidential Information occurs, the Chief Executive Officer (“CEO”), the Chief Operating Officer (“COO”), the Chief Financial Officer (“CFO”), the General Counsel and the Vice-President, Investor Relations (“VP Investor Relations”), if any, must be notified immediately. If the Confidential Information is material, the Corporation should issue a press release as soon as possible (and file a material change report, if required) and any Confidential Information that is required by Applicable Laws to be publicly disclosed should also be made available through the website of the Corporation.

Material Information

Material information is any information relating to the business and affairs of the Corporation that has a significant effect, or would reasonably be expected to have a significant effect, on the market price or value of the securities of the Corporation. In determining whether information is material, the Committee should consider whether a reasonable investor would likely consider the information important in making an investment with respect to the Corporation. The following are examples of information that the Corporation is required to publicly disclose:

1. changes in the ownership of securities that may affect control of the Corporation;
2. changes in the corporate structure of the Corporation, such as a reorganization or amalgamation;
3. take-over bids or issuer bids involving the Corporation;
4. material acquisitions or dispositions by the Corporation;
5. material changes in the capital structure of the Corporation;
6. borrowing or establishing a facility which allows the borrowing of a material amount of funds by the Corporation;
7. a public or private sale of a material number of additional securities of the Corporation;
8. material changes in the reserves or resources of the Corporation or a material exploration discovery;
9. firm evidence of a material increase or decrease in the near-term earnings prospects of the Corporation;
10. changes in the capital investment plans or corporate objectives of the Corporation;
11. material changes in the management of the Corporation;
12. litigation which may have a material impact on the Corporation;
13. major labour disputes involving, or disputes with major contractors or suppliers of, the Corporation;
14. material changes to the financial results of the Corporation;
15. any material criminal indictment or material governmental investigation of the Corporation;
16. material changes in the accounting policies of the Corporation;
17. the bankruptcy or insolvency of the Corporation;
18. the occurrence of a material event of default under any material financing or other agreement to which the Corporation is a party;
19. material deviations from previously announced development costs or timing;
20. achieving significant milestones (for example, commercial production); and
21. any other matter relating to the business or affairs of the Corporation that would reasonably be expected to significantly affect the market price or value of any of the securities of the Corporation or that would reasonably be expected to have a significant influence on a reasonable investor’s investment decisions.

Accountability

The Board of Directors (the “Board”) of the Corporation (or the appropriate committee of the Board) will review prior to disseminating any press release containing any earnings guidance and any press release containing financial information based on the Corporation’s financial statements and management’s discussion and analysis that have not previously been released.

The Committee will be composed of the CEO, the COO, the CFO, the General Counsel, and the VP Investor Relations, if any. The CEO shall be the Chair of the Committee (the “Chair”), the General Counsel shall be the Secretary and the Corporate Disclosure Manager. All matters to be reviewed and/or authorized by the Committee shall require the approval of at least a majority of its members, as then constituted.  In the event of an equality of votes for and against, the matter shall be referred to the Board of Directors.  In the interim, if the matter includes the determination as to whether to impose a Blackout Period (defined below), a Blackout Period will be imposed until a determination on the matter is concluded.

The Committee will:

1. establish procedures to control Confidential Information;
2. set benchmarks for the preliminary assessment of whether information is material;
3. meet as required and keep minutes of all meetings;
4. determine when information should be publicly disclosed and determine what information should be disclosed and, if there is uncertainty as to whether certain information is material, the Committee should consult with legal counsel and, in appropriate circumstances, with Market Surveillance;
5. determine when blackout periods (“Blackout Periods”) should be imposed, due to material developments which may arise, during which directors, officers and other employees of the Corporation may not trade in the securities of the Corporation;
6. approve press releases of the Corporation before distribution;
7. determine if information should remain confidential, how that information will be controlled and, if applicable, cause a confidential material change report to be filed with applicable securities regulatory authorities, and periodically (and in any event at least every ten days) review its decision to keep the information confidential and advise the applicable securities regulatory authorities of this decision;
8. assure that all Applicable Persons have adequate training and understand this Policy; and
9. keep the stock exchanges on which securities of the Corporation are listed informed of the current contact information for the spokespersons of the Corporation.

The Chair will:

1. report and make recommendations to the Board on disclosure matters;
2. report to the Board regarding the effectiveness of, and compliance with, this Policy;
3. provide any required assistance to the Corporate Disclosure Manager; and
4. be accountable to the Board for the effectiveness of, and compliance with, this Policy.

The CEO, will also provide any required assistance to the Corporate Disclosure Manager.

The Corporate Disclosure Manager will:

1. ensure that the Corporation complies with the continuous disclosure requirements to which the Corporation is subject;
2. oversee and co-ordinate the disclosure of the information of the Corporation to stock exchanges, analysts, shareholders, the media and the public;
3. keep Market Surveillance informed of the contact details for the Corporate Disclosure Manager, the CEO and the CFO;
4. educate the directors, officers and other employees of the Corporation on the disclosure policies and procedures of the Corporation;
5. review all briefings and discussions with analysts to ensure that no previously undisclosed Confidential Information was given to analysts;
6. approve all briefings, presentations and other information disclosed;
7. maintain accurate records of all information that the Corporation discloses, whether the information is material or not; and
8. manage and respond to inquiries from analysts and investors and keep a brief record of the key questions asked and answers given. If there is no [VP Investor Relations], the Chair will carry out or arrange for the foregoing responsibilities to be carried out.

All Applicable Persons will:

1. not disclose Confidential Information unless it is necessary to do so in the necessary course of the business of the Corporation and, if disclosed, ensure that:
   • those persons who receive Confidential Information in the necessary course of business are advised that such information must be kept confidential; and
   • outside parties, such as consultants and contractors, with access to Confidential Information are asked to confirm their commitment to the non-disclosure of the Confidential Information and not to trade in any securities of the Corporation in a written confidentiality agreement;
2. not trade securities of the Corporation based on any Confidential Information;
3. not trade in the securities of the Corporation if you have been advised by the Disclosure Committee that a Blackout Period has been imposed or you become aware that a Blackout Period has been imposed;
4. not disclose to anyone who is not an addressee of a Blackout Period notice that a Blackout Period has been imposed by the Corporation;
5. keep documents and files containing Confidential Information in a safe place to which access is restricted to individuals who “need to know” that Confidential Information in the necessary course of business, and code names should be used when advisable;
6. not discuss confidential matters in places where the discussion may be overheard, such as elevators, hallways, restaurants, airplanes or taxis;
7. not read or display confidential documents in public places and not discard confidential documents where others can retrieve them and, wherever possible, such documents should be shredded;
8. maintain the confidentiality of the Confidential Information in their possession outside of the office as well as at the office;
9. transmit documents by electronic means, such as by fax or directly from one computer to another, only where it is reasonable to believe that the transmission can be made and received under secure conditions;
10. avoid unnecessary copying of documents containing Confidential Information;
11. remove documents containing Confidential Information promptly from conference rooms and work areas after meetings have concluded and shred or otherwise destroy extra copies of confidential documents;
12. restrict access to confidential electronic data through the use of passwords; and
13. report any unauthorized disclosure of Confidential Information to the Corporate Disclosure Manager.

Procedures

Pre-Notification to Stock Exchanges

All material press releases of the Corporation should be provided to Market Surveillance by email, fax or hand delivery. The only individuals authorized to send any such press release are the Corporate Disclosure Manager, the CEO and the CFO or such other appropriate person designated by the Committee. If a material press release is being issued during trading hours, it will generally be necessary for the press release to be provided to Market Surveillance prior to release to allow their staff to determine whether trading of the securities of the Corporation should be halted.

Dissemination of Material Information

The Corporation will release all press releases by a wire service that provides national and simultaneous coverage. Such wire service must meet the following criteria:

1. dissemination of the full text of the press release to the national financial press and to daily newspapers that provide regular coverage of financial news;
2. dissemination to all members of the stock exchanges on which the securities of the Corporation are listed; and
3. dissemination to all relevant regulatory bodies.

The Corporation will maintain a website and make available to investors all documents provided under timely disclosure requirements applicable to the Corporation, such as annual information forms, annual and quarterly financial statements and management’s discussion and analysis, press releases, material change reports and management information circulars, as well as other investor relations information and supplemental information provided by the Corporation at briefings to analysts and institutional investors. All information posted on the website of the Corporation must not be misleading and must be kept up to date and accurate. No material information may be posted on the website of the Corporation or any social media that has not first been publicly disclosed by way of press release. As a general practice, the Corporation should not post any investor relations information on its website or on social media that is prepared by a third party, unless the information was prepared on behalf of the Corporation or is general in nature and not specific to the Corporation. An e-mail link will be provided on the website of the Corporation for investors to communicate directly with the Corporate Disclosure Manager and the website will clearly distinguish between investor relations information and promotional material.

Quiet Period

The Corporation will decline discussions with the investor community relating to financial performance during the two-business day period which precedes the release of any of the quarterly or annual financial information of the Corporation. During such two-business day period, the Corporation may, however, respond to strictly factual questions concerning publicly available and/or non-material information unrelated to the financial information of the Corporation or the financial performance.

Briefing Analysts, Investors and the Media

The Corporation recognizes that analysts are important conduits for disseminating corporate information to the investing public and that analysts play a key role in interpreting and clarifying existing public information and in providing investors with background information and details that cannot practically be included in public documents.

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

In connection with any meetings with analysts, investors or the media:

1. the Corporation recognizes that disclosure in individual or group meetings does not constitute adequate disclosure of information that is considered to be Confidential Information;
2. where possible, the officers of the Corporation who make presentations during a meeting, press conference or conference call will prepare a script in advance of their remarks in order to reduce the risk of inappropriate statements being made, and all presentations must be reviewed and approved by the Committee prior to being made;
3. if the Corporation intends to announce Confidential Information at an analyst or shareholder meeting or a press conference or on a conference call, the announcement must be preceded by a press release as no selective disclosure should be made in advance of the press release;
4. the Corporation will only provide information which has been publicly disclosed and other information that is not Confidential Information in individual and group meetings, recognizing that an analyst or investor may use this information in the analyst’s or investor’s own model;
5. the Corporation should not assume that “tweaking” financial information that has already been widely disseminated in the marketplace does not constitute selective disclosure;
6. where practicable, spokespersons for the Corporation should keep notes of telephone conversations with analysts and investors, if possible more than one representative of the Corporation should be present at all individual and group meetings and a debriefing should be held after each such meeting and, if such debriefing uncovers selective disclosure of previously undisclosed Confidential Information, the Corporation should immediately disclose such information broadly via a press release;
7. the policy of the Corporation is generally not to comment on draft analyst reports and analysts’ reports will not be posted on the website;
8. the Corporation may post on the website a complete listing, regardless of the recommendation, of all of the investment firms and analysts who provide research coverage on the Corporation. If provided, this list will not include links to the analysts’ or any other third-party websites or publications;
9. analysts are free to prepare reports on the Corporation but should do so based on the permanent information record consisting of public disclosure documents filed with the applicable securities’ regulatory authorities and stock exchanges, together with information provided in any quarterly investor information meetings described below; and
10. where analysts or other market professionals are seeking clarification on factual matters from the Corporation, the Corporation should generally provide information in written form to ensure the information is accurate; however, no draft report or model should be retained, if provided by the Corporation. It is very important that the control of this process be centralized through, and that all inquiries from analysts be directed to, the Corporate Disclosure Manager.

Future Financial Performance 

With respect to questions from the investor community, it is the policy of the Corporation not to respond to detailed questions on financial performance, except in the case of historical performance. Comments on future performance will generally be limited to statements dealing with operating performance, as well as economic conditions such as overall market demand. Any permissible comments on future performance, if made, will not be made in one-on-one meetings unless previously generally disclosed or made in the context of conference calls to which open access is generally permitted. The Corporation should begin conference calls with a caution with respect to any statements that may be made of a forward-looking nature to ensure that participants are fully aware of the risks associated with forward-looking statements in light of the business risks to which the Corporation is subject. This caution must go beyond mere boilerplate and be substantive and tailored to the specific future estimates or opinions that are being made. Advice must also be provided concerning the practice of the Corporation for updating forward-looking statements.

Material Change Reports

In addition to issuing a press release, if the material information constitutes a “material change”, a material change report must be filed with the relevant securities’ regulatory authorities as soon as practicable and in any event, within ten days of the material change. A “material change” includes any change in the business, operations or capital of the Corporation that would reasonably be expected to have a significant effect on the market price or value of the securities of the Corporation. All material change reports shall be reviewed by the Committee, or such other appropriate officer of the Corporation as the Committee may designate or instruct.

Keep a Record of Disclosures

The Corporate Disclosure Manager should maintain a file of all disclosure documents (in physical and/or electronic form), including press releases, material change reports, regulatory filings, annual information forms, annual and quarterly financial statements and management’s discussion and analysis, and management speeches and analyst presentations. In addition, the Corporate Disclosure Manager should keep a file of brief memos-for-the-record of key questions asked and answers given from verbal discussions with the investment community, such as analyst meetings or calls.

Forward-Looking Information

Should the Corporation provide the investment community with any forward-looking information, the Corporation will ensure that such statements, whether oral or written, are identified as forward-looking statements and that they are accompanied by meaningful cautionary language identifying important factors that could cause actual results to differ materially from those projected in any such statement, all in accordance with Applicable Laws. To the extent possible, the Corporation will also endeavor to update forward-looking statements which change materially.

Responsibility for Electronic Communications

This Policy also applies to electronic communications. Accordingly, the directors, officers and other employees of the Corporation responsible for written and oral public disclosures are also responsible for electronic communications.

The Corporate Disclosure Manager is responsible for updating the investor relations section of the website of the Corporation and for monitoring all information placed on the website, the Corporation’s Facebook page(s) and other social media to ensure that it is accurate, complete, up to date and in compliance with Applicable Laws.

Disclosure on the website, the Facebook page(s) or other social media of the Corporation alone does not constitute adequate disclosure of information that is considered Confidential Information. Any disclosure of material information on the website, the Facebook page(s) or other social media of the Corporation will be preceded by the issue of a press release. All continuous disclosure documents as well as all supplemental information provided to analysts, institutional investors and other market professionals will be provided in the Investor Relations section of the website of the Corporation. All information posted, including text and audiovisual material, will show the date the material was issued. Any material changes in any information posted on the website of the Corporation must be updated immediately, following the issue of a press release. The website, the Facebook page(s) or other social media of the Corporation will include a notice that advises the reader that the information was accurate at the time of posting, but may be superseded by subsequent disclosures.

The Corporate Disclosure Manager:

1. should maintain a log indicating the date that material information is posted and removed from the Investor Relations section of the website and ensure that documents filed with securities regulators are maintained on the website of the Corporation for a minimum of two years;
2. must approve all links from the website of the Corporation to third party websites, and the website will include a notice that advises readers that they are leaving the website of the Corporation and that the Corporation is not responsible for the contents of the other website; and
3. is responsible for all responses to all electronic inquiries and ensuring that only public information or information that should otherwise be disclosed in accordance with this Policy shall be used to respond to electronic inquiries.

Certification

When your employment or association with the Corporation begins, you must sign an acknowledgement form confirming that you have read and understand this Policy and agree to abide by its provisions. Requests to make similar acknowledgements will be made on a periodic basis.

Failure to read or understand this Policy, sign any acknowledgement form does not excuse you from compliance with this Policy.

Policy Review

This Policy shall be reviewed, and amendments proposed as necessary, from time to time by the Committee and the Committee shall submit any proposed amendments to the Board of Directors for consideration and if approved, will be brought to the attention of each Applicable Person upon such amendment becoming effective.

Approved: September 25, 2019

INSIDER TRADING POLICY

Purpose

The trading of securities of a public company is governed by extensive and complex securities laws and regulations, the fundamental idea being that everyone investing in securities of a public company should have equal access to information that may affect their investment decisions.

To provide equal access to information, and to ensure that Patagonia Gold Corp. (the “Corporation”) and its directors, officers and other employees comply with applicable securities laws, instruments, rules, policies and regulatory requirements (collectively “Applicable Laws”), the Board of Directors (the “Board”) of the Corporation has approved, and the Corporation has adopted, a Disclosure Policy. One of the purposes of the Disclosure Policy is to ensure that the Corporation makes timely disclosure of material changes affecting the business or affairs of the Corporation in order to prevent disclosure of such material changes being made on a selective basis.

The purpose of this Insider Trading Policy (this “Policy”) is to ensure that the directors, officers and other employees of the Corporation do not trade in the securities of the Corporation while in possession of material information affecting the business or affairs of the Corporation that has not been generally disclosed to the public which would, itself, undermine the principle purpose of Applicable Laws relating to insider trading (as defined below).

This Policy is intended not only to ensure that the directors, officers and other employees of the Corporation act, but also that they are perceived to act, in accordance with Applicable Laws and high standards of ethical and professional behaviour in order to protect the reputation of the Corporation.

Prohibited Trading

Trading While in Possession of Undisclosed Material Information

Applicable Laws prohibit a reporting issuer and any person in a “special relationship” with a reporting issuer (which includes, but is not limited to, directors, officers and other employees) from trading in securities of the reporting issuer (including the granting of stock options) with knowledge of a “material fact” or a “material change” (collectively “material information”) about the reporting issuer that has not been generally disclosed (known as “insider trading”). The definitions of “material fact” and “material change” are based on a market impact test, whereby the fact or change would (or would reasonably be expected to) significantly affect the market price or value of a security. Examples of potentially material information include:

1. changes in the ownership of securities that may affect control of the Corporation;
2. changes in the corporate structure of the Corporation, such as a reorganization or amalgamation;
3. take-over bids or issuer bids involving the Corporation;
4. material acquisitions or dispositions by the Corporation;
5. material changes in the capital structure of the Corporation;
6. borrowing or establishing a facility which allows the borrowing of a material amount of funds by the Corporation;
7. a public or private sale of a material number of additional securities of the Corporation;
8. material changes in the reserves or resources of the Corporation or a material exploration discovery;
9. firm evidence of a material increases or decrease in the near-term earnings prospects of the Corporation;
10. changes in the capital investment plans or corporate objectives of the Corporation;
11. material changes in the management of the Corporation;
12. litigation which may have a material impact on the Corporation;
13. major labour disputes involving, or disputes with major contractors or suppliers of, the Corporation;
14. material changes to the financial results of the Corporation;
15. any material criminal indictment or material governmental investigation of the Corporation;
16. material changes in the accounting policies of the Corporation;
17. the bankruptcy or insolvency of the Corporation;
18. the occurrence of a material event of default under any material financing or other agreement to which the Corporation is a party;
19. material deviations from previously announced development costs or timing;
20. achieving significant milestones (for example, commercial production); and
21. any other matter relating to the business or affairs of the Corporation that would reasonably be expected to significantly affect the market price or value of any of the securities of the Corporation or that would reasonably be expected to have a significant influence on a reasonable investor’s investment decisions.

The prohibition on trading applies not only to trading in the securities of the Corporation but also to trading in the securities of another reporting issuer if the person wishing to trade possesses undisclosed material information about that reporting issuer (for example, a reporting issuer that the Corporation is doing business with).

Applicable Laws also prohibit “tipping”, defined as communicating non-public material information, other than in the necessary course of business, to another person. All directors, officers and other employees of the Corporation must ensure that they do not divulge such non-public information to any unauthorized person.

Scheduled Blackout Periods  

Directors, officers and other employees the Corporation are subject to blackout periods surrounding the release by the Corporation of the financial results of the Corporation. No trades shall be carried out from 15 calendar days in advance of the issuance of the relevant earnings news release until two clear trading days following the issuance of the relevant earnings news release. The Corporation will promptly disseminate an e-mail notification to the directors, officers and other employees of the Corporation that are subject to the blackout, notifying such persons of the commencement of the blackout period and of the termination of the blackout period.

Unscheduled Blackout Periods

Additional blackout periods, due to material developments which may arise, as specified by the Disclosure Committee (as defined in the Disclosure Policy) may be imposed from time to time. The Corporation will promptly disseminate an e-mail notification to the directors, officers and other employees of the Corporation that are subject to the blackout, notifying such persons of the commencement of the blackout period and of the termination of the blackout period. All directors, officers and employees of the Corporation with knowledge of such material developments will be covered by the blackout. No trades shall be carried out until the termination of the blackout period which will, if applicable, be two clear trading days following the issuance of the relevant news release regarding the material development.

Trading Procedures

In order to prevent violations of Applicable Laws and to avoid any perception of impropriety, prior notice of the intention to carry out a purchase or sale of the securities of the Corporation or the exercise of any stock option by a director or officer must be provided to one of the Chief Executive Officer or the General Counsel, and no trade shall be carried out without the prior approval of one of them. Any approval granted for any proposed trade will be valid for a period of seven days, unless revoked prior to that time. No trade may be carried out after the expiry of seven days following the receipt of approval, unless such approval is renewed.

In order to avoid the perception of impropriety, the directors, officers and other employees of the Corporation should not speculate in the securities of the Corporation. For the purposes of this Policy, “speculate” means the purchase or sale of the securities of the Corporation with the intention of reselling or buying back such securities in a relatively short period of time, with the expectation of a rise or fall in the market price of the securities. Speculating in the securities of the Corporation for a short-term profit is distinguished from purchasing and selling the securities of the Corporation as part of a long-term investment program. The directors, officers and other employees of the Corporation should not at any time:

1. sell securities of the Corporation if they do not own or have not fully paid for them (a short sale) except for sales of common shares (“Common Shares”) of the Corporation where the individual holds a stock option or any other type of securities convertible into Common Shares of the Corporation and within 10 calendar days after the sale, the individual exercises the option or redeems the right, as the case may be, and delivers the Common Shares so acquired to the purchaser;
2. buy or sell a call or a put on securities of the Corporation or enter into any equity monetization transaction that would have an equivalent effect; or
3. enter into any other financial instrument designed to hedge or offset a decrease in the market value of the securities of the Corporation, including without limitation, pre-paid variable forward contracts, equity swaps, collars or units of exchange funds.

Public Reporting Requirements

Directors and certain officers are required to electronically file insider reports through the System for Electronic Disclosure by Insiders (“SEDI”). Such reports are due within ten calendar days of becoming an insider, disclosing such person’s beneficial ownership of, or control or direction over, securities of the Corporation and within five calendar days of the date on which a change in the ownership, or control or direction, occurs.

A trade includes the grant of equity settled instruments including restricted share rights, performance share rights and options or the voluntary redemption or exercise thereof as well as a change in the nature of the ownership, or control or direction over, the securities of the Corporation (e.g. a disposition to a company controlled, but not wholly-owned, by the insider or a determination that the securities are held in trust for another person).  However, the following trades are not restricted during a blackout period:

1. trades of securities of the Corporation with a company which is wholly owned by the insider or a trust of which the insider is the sole beneficiary; and
2. transfers of securities of the Corporation by an insider from his or her account (solely in his or her name) with a brokerage firm, bank or trust company (a “Broker”) to the insider or to the insider’s account (solely in his or her name) with another Broker.

Failure to file a report on time will result in late fees being levied on the insider (which fees will not be paid or reimbursed by the Corporation) and may cause future regulatory filings by the Corporation to be reviewed or cleared on an untimely basis by securities regulators, thereby potentially impairing its access to capital markets.

Questions & Enforcement

This Policy presents only a general framework of the restrictions imposed by securities legislation. The directors, officers and other employees of the Corporation bear the ultimate responsibility for complying with Applicable Laws and should therefore view this Policy as the minimum criteria for compliance with Applicable Laws and should obtain additional guidance when uncertainty exists regarding a contemplated transaction.

Failure to comply with this Policy or the procedures set out herein may result in disciplinary action, which may include termination of employment. Applicable Laws provide that a breach of the prohibition against trading in securities with knowledge of undisclosed material information or providing undisclosed material information to others, in addition to civil liability for damages, may result in imprisonment for up to five years less a day and/or a fine of up to the greater of (a) $5 million, and (b) an amount equal to three times the profit obtained or loss avoided by reason of the contravention. Penalties may also be levied by Canadian securities regulatory authorities for not complying with the requirement to file insider reports.

Any questions concerning this Policy should be directed to the Chief Executive Officer or the General Counsel of the Corporation.

Violations or suspected violations of this Policy should be reported in accordance with the procedures under the Code of Business Conduct and Ethics of the Corporation.

Certification

When your employment or association with the Corporation begins, you must sign an acknowledgement form confirming that you have read and understand this Policy and agree to abide by its provisions. Requests to make similar acknowledgements will be made on a periodic basis.

Failure to read or understand this Policy, sign any acknowledgement form does not excuse you from compliance with this Policy.

Policy Review

This Policy shall be reviewed, and amendments proposed as necessary, from time to time by the Corporation’s Chief Executive Officer, Chief Financial Officer and General Counsel and any amendments will be submitted to the Board for consideration, and if approved, will be brought to the attention of each director, officer and other employee of the Corporation upon such amendment becoming effective.  

Approved: September 25, 2019