AuKing Mining Limited Prospectus

AuKing Mining Limited Solicitor’s Report on Tenements HopgoodGanim Lawyers Page 4 of 46 the purpose of exploration or mining activities on the tenement area. PM Holder has the right to lodge a consent caveat against each of the Precious Metals Tenements after AAR Sub becomes registered holder of the Precious Metals Tenements. Rent 3.12 All of the rental payments which are due for the current tenement year for each Tenement have been paid in full. Please refer to the Tenement Schedule for the dates rent is due for each Tenement. 3.13 Under the Earn-in Agreement, AKN Sub is solely responsible for payment of rent during: (a) the First Earn-in period (being 24 months from the Joint Venture Commencement Date); and (b) if AKN Sub elects to earn the Second Earn-In interest (for a total 75% beneficial interest in the Tenements) during the Second Earn-In period (being 12 months after electing to proceed with the Second Earn-In), the Second Earn-in period, as part of AKN’s sole funding obligations. After the Sole Funding Period (as defined in the Earn-in Agreement) the Joint Venture participants will become responsible for rent as part of Joint Venture expenditure in proportion to their respective percentage participating interests in the Joint Venture. 3.14 As part of its sole funding obligations, AKN Sub must reimburse AAR for all rent (and other outgoings) prepaid by AAR in respect of the period commencing on 22 November 2020 (notwithstanding that the Joint Venture Commencement Date has not occurred). 3.15 See below at paragraph 4.47 in relation to rent requirements on tenements generally. Expenditure 3.16 AAR has met the minimum expenditure conditions in the 2020 tenement year for the Balance Tenements (M80/276 and M80/277) and E80/4960 (one of the Precious Metals Tenements). 3.17 There are current expenditure issues for the Precious Metals Tenements as set out in paragraph 3.20 below, except for E80/4960. 3.18 If the expenditure condition (also known as the minimum expenditure commitment) has not been complied with, a tenement holder can seek exemption from the expenditure requirement. Refusal of an exemption application may lead to Ministerial forfeiture proceedings or forfeiture proceedings brought by a third party, which may result in a fine being imposed or, if the non- compliance is of sufficient gravity, forfeiture of the tenement. Refer to paragraphs 4.34 to 4.39 below for further detail of expenditure conditions and consequences of under-expenditure. 3.19 The consequences of under-expenditure of the Precious Metals Tenements are dealt with in the Earn-In Agreement, as follows: (a) The party responsible for payment of fines relating to non-compliance with the expenditure conditions on the Precious Metals Tenements, depends on whether the fines relate to the Commencement Tenement Year (being the tenement year during which 22 November 2020 falls) ( Commencement Tenement Year ) or the Prior Tenement Year (the tenement year immediately prior to the Commencement Tenement Year) ( Prior Tenement Year ). AAR will be solely responsible for paying fines in relation to non-compliance with expenditure obligations relating to a Prior Tenement Year. If there are fines in relation to non-compliance with expenditure obligations relating to a Commencement Tenement Year, then AKN Sub will be responsible for paying the fine on behalf of the Joint Venture as part of its sole funding AuKing Mining Limited | PROSPECTUS 159