Corporate governance practice

Statement of Corporate Governance Practices Niobay Metals Inc. (the “Corporation”)

The Corporation seeks to attain high standards of corporate governance. The Board of Directors has carefully considered the Corporate Governance Guidelines set forth in National Policy 58-201. A description of the Company’s corporate governance practices is set out below in response to the requirements of National Instrument 58-101 “Disclosure of Corporate Governance Practices” and in the form set forth in Form 58-101F1 “Corporate Governance Disclosure”.

(a) Disclose the identity of directors who are independent.

The Board of Directors is currently composed of six persons. Of those six persons, Serge Savard, Jean-Sebastien David, Raymond Legault, Jacques Bonneau and Jean Rainville are independent. These directors are independent as none of them has a direct or indirect material relationship with the Corporation.

(b) Disclose the identity of directors who are not independent, and describe the basis for that determination.

Claude Dufresne is not independent as he hold position as executive officer of the Corporation.

(c) Disclose whether or not a majority of directors are independent. If a majority of directors are not independent, describe what the board of directors (the board) does to facilitate its exercise of independent judgement in carrying out its responsibilities.

A majority of the Company’s directors are independent.

(d) If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.

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(e) Disclose whether or not the independent directors hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held since the beginning of the issuer’s most recently completed financial year. If the independent directors do not hold such meetings, describe what the board does to facilitate open and candid discussion among its independent directors.

Regularly at the end of Board of Directors meetings, the independent directors hold a meeting at which non-independent directors and members of management are not in attendance. During the last financial year, the independent directors held six meetings at which nonindependent directors and members of management were not in attendance.

(f) Disclose whether or not the chair of the board is an independent director. If the board has a chair or lead director who is an independent director, disclose the identity of the independent chair or lead director, and describe his or her role and responsibilities. If the board has neither a chair that is independent nor a lead director that is independent, describe what the board does to provide leadership for its independent directors.

The Chairman of the Board, Serge Savard is an independent director. While the Board of Directors does not have in place formal structures and procedures to function independently of management, the independent directors meet separately, when needed, to discuss particular corporate matters.

(g) Disclose the attendance record of each director for all board meetings held since the beginning of the issuer’s most recently completed financial year.

All directors attended all Board of Directors’ meetings.

 

 

Disclose the text of the board’s written mandate. If the board does not have a written mandate, describe how the board delineates its role and responsibilities.

The text of the board’s written mandate reproduced in the Company’s Annual Information Form available on SEDAR atwww.sedar.com

(a) Disclose whether or not the board has developed written position descriptions for the chair and the chair of each board committee. If the board has not developed written position descriptions for the chair and/or the chair of each board committee, briefly describe how the board delineates the role and responsibilities of each such position.

The Board has established a written position description for its Chairman and for the Chairman of each committee of the board.

(b) Disclose whether or not the board and CEO have developed a written position description for the CEO. If the board and CEO have not developed such a position description, briefly describe how the board delineates the role and responsibilities of the CEO.

The Board has established a written position description for its Chief Executive Officer.

(a) Briefly describe what measures the board takes to orient new directors regarding

       (i) the role of the board, its committees and its directors, and

       (ii) the nature and operation of the issuer’s business.

Orientation and education of directors is an ongoing matter. As such, ongoing informal discussions between management and members of the Board is encouraged and formal presentations by management throughout the year in addition to visits to the Company’s operations are organized.

(b) Briefly describe what measures, if any, the board takes to provide continuing education for its directors. If the board does not provide continuing education, describe how the board ensures that its directors maintain the skill and knowledge necessary to meet their obligations as directors.

Orientation and education of directors is an ongoing matter. As such, ongoing informal discussions between management and members of the Board are encouraged and formal presentations by management throughout the year in addition visits to the Company’s operations are organized.

(a) Disclose whether or not the board has adopted a written code for the directors, officers and employees. If the board has adopted a written code:

The Corporation has not adopted a written code for its officers and employees.

(i) disclose how a person or company may obtain a copy of the code;

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(ii) describe how the board monitors compliance with its code, or if the board does not monitor compliance, explain whether and how the board satisfies itself regarding compliance with its code; and

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(iii) provide a cross-reference to any material change report filed since the beginning of the issuer’s most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the code.

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(b) Describe any steps the board takes to ensure directors exercise independent judgement in considering transactions and agreements in respect of which a director or executive officer has a material interest.

Considering the size of the Company, the Board of Directors did not approve a written code of ethics for its officers and employees.

However, all the directors, officers and employees of the Corporation are expected to act and to hold their office within the best interests of the Corporation. The Corporation expects that all directors shall act in compliance of all laws and regulations applicable to their office as director of the Corporation.

(c) Describe any other steps the board takes to encourage and promote a culture of ethical business conduct

Furthermore, the Company is committed to promote the highest standard of ethic and integrity in the pursuance of all of its activities. Full attendance to Board and committee meetings is expected.Given its stage of development, the Corporation has not established a formal procedure for employees and officers to share their concerns or suspicions in an anonymous way. The Board of Directors relies on its officers and employees to report concerns or suspicions to their supervisor or a person exercising an equivalent position within the Corporation.

(a) Describe the process by which the board identifies new candidates for board nomination.

Currently, the Corporation has no formal process in order to identify new candidates for board nomination. This process is based on discussions between members of the Human Resources, Corporate Governance and Nomination Committee, the Board of Directors and management.
If necessary or desirable, the directors and the President and Chief Executive Officer of the Corporation shall propose to the Human Resources, Corporate Governance and Nomination Committee, whose members are independent, candidates to fill vacancies on the Board of Directors. Such committee shall then examine the qualifications and professional skills, personal qualities and the time that each candidate would be able to devote to the task of director according to the needs of the Corporation. Finally, the committee shall submit the selected candidates to the Board of Directors for discussion and where appropriate, for approval.

(b) Disclose whether or not the board has a nominating committee composed entirely of independent directors. If the board does not have a nominating committee composed entirely of independent directors, describe what steps the board takes to encourage an objective nomination process.

The Company’s Human Resources, Corporate Governance and Nomination Committee seeks out qualified candidates for nomination as directors. The Human Resources, Corporate Governance and Nomination Committee is made up solely of independent directors.

Proposed nominations are subject to review and approval from the Board of directors.

(c) If the board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee.

The Human Resources, Corporate Governance and Nomination Committee has the mandate to

(i) consider and assess all issues that may affect the Company in the area nomination generally;

(ii) recommend actions or measures to the Board to be taken in connection with this area.

The Committee is responsible for recommending to the Board new candidates for directors and to assist the Board in the assessment of the performance of senior officers, of the Board and its committees and of individual directors.

(a) Describe the process by which the board determines the compensation for the issuer’s directors and officers.

The Company’s Human Resources, Corporate Governance and Nomination Committee annually reviews the directors’ remuneration to ensure that it reflects market realities and that it is commensurate with the duties performed by the directors.

The Human Resources, Corporate Governance and Nomination Committee is responsible for reviewing senior management remuneration amounts and methods. The Committee Chairman reports the recommendations of the Committee to the Board of directors.

(b) Disclose whether or not the board has a compensation committee composed entirely of independent directors. If the board does not have a compensation committee composed entirely of independent directors, describe what steps the board takes to ensure an objective process for determining such compensation.

The Human Resources, Corporate Governance and Nomination Committee is made up solely of independent directors.

(c) If the board has a compensation committee, describe the responsibilities, powers and operation of the compensation committee.

The Human Resources, Corporate Governance and Nomination Committee is responsible for examining the compensation of the senior management of the Corporation. It is also responsible for studying the candidacy of the Corporation’s Executive Officers. It reports to the Corporation’s Board of Directors on the aggregate of this compensation, whether payable in cash, in the form of plans or otherwise. The Human Resources, Corporate Governance and Nomination Committee meets when required during the year. This committee is currently comprised of three independent directors of the Corporation.

If the board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function

In addition to the Audit Committee and the Human Resources, Corporate Governance and Nomination Committee, the Board of Directors also created a Health, Safety and Environmental Committee. The Health, Safety and Environment Committee includes three independent directors.

In all jurisdictions, in addition to complying with legislative requirements, the Corporation’s Health, Safety and Environment Committee diligently applies technically proven and economically feasible measures and environmental, health and safety risk management practices to advance protection of the environment throughout exploration, mining, processing, manufacturing and decommissioning activities.

Disclose whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the board satisfies itself that the board, its committees, and its individual directors are performing effectively.

Currently, the Board of Directors has not established a formal evaluation process. However, discussions regarding the effectiveness of the Board of Directors, the Corporation’s committees and the attendance and performance of the directors are held annually and serve as informal assessments.

The directors, the Board of Directors and its committees are assessed in such manner once a year.