AuKing Mining Limited Prospectus

AuKing Mining Limited Solicitor’s Report on Tenements HopgoodGanim Lawyers Page 6 of 46 in relation to P80/1802 and P80/1803 and are scheduled for hearing on 18 March 2021. P80/1802 and P80/1803 are also subject to amalgamation applications (see paragraph 3.3) but the forfeiture applications will likely be determined before the amalgamation applications are determined. Under the Earn-in Agreement, AAR will be responsible for payment of any fine issued as this non-compliance relates to the Prior Tenement Year. (d) E80/4766 was under-expended for the year ending 12 June 2020. AAR applied for exemption from the expenditure condition for the year ending 12 June 2020 but the application was refused. Ministerial forfeiture applications were commenced in relation to E80/4766, resulting in a fine which has been paid by AAR. 3.21 The Tenements are not currently subject to any third party forfeiture proceedings. As per paragraph 4.37, an application by a third party for forfeiture against a tenement holder may be made during the expenditure year in relation to which the requirement is not complied with or within eight months thereafter. If a third party lodged a forfeiture application it may result in a fine or, if the non-compliance determined by the Warden to be of sufficient gravity, forfeiture of the tenement. 3.22 In determining whether the non-compliance with the expenditure condition is of sufficient gravity to justify forfeiture, the Warden will consider the facts bearing upon the non- compliance, the events leading up to the non-compliance, the conduct of the parties and the actual and potential consequences of the non-compliance and the forfeiture sought, including future plans for the tenement, past refusals of exemption applications and aggregate expenditure on the tenement. Certain Precious Metals Tenements have had one or two refusals of exemption applications. If a third party lodges a forfeiture application against a Precious Metals Tenement where there has been non-compliance with the expenditure condition (e.g. refusal of an exemption application), there is a risk that the applicable Precious Metals Tenement will be forfeited. That risk is likely to be greater where the expenditure condition has not been complied with in more than one tenement year. 3.23 Under the Earn-in Agreement, AKN Sub will be solely responsible for expenditure incurred in connection with Joint Venture activities 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), during the Second Earn-in period, as part of AKN’s sole funding obligations. 3.24 After the Sole Funding Period (as defined in the Earn-in Agreement) AKN Sub and AAR Sub will become responsible for Joint Venture expenditure in proportion to their respective percentage participating interests in the Joint Venture. 3.25 By Side Deed No. 2 dated 17 February 2021, the Company has agreed to meet the unsatisfied portion of the expenditure commitments for E80/4960 and E80/4766 for the years ending 23 March 2021 and 11 August 2021 respectively and fund an exploration program sufficient to satisfy the expenditure condition for each of those Tenements, which will be a deduction from the First Earn-In expenditure amount under the Earn-in Agreement. If the expenditure conditions for E80/4960 and E80/4766 for the years ending 23 March 2021 and 11 August 2021 respectively are not satisfied, the Company has agreed to pay any fine issued. 3.26 All Tenements are part of the Koongie Park combined reporting group (C166/2006). AuKing Mining Limited | PROSPECTUS 161