HOUSTON LAKE MINING INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TAKE NOTICE that the Annual Meeting of the Shareholders of Houston Lake Mining Inc. (the "Corporation") will be held on February 15, 2007 at the offices of Houston Lake Mining Inc., 2892 White Street, Val Caron, Ontario, at 2:00 p.m. (Sudbury time) for the purposes of:

(a) receiving and considering the audited financial statements of the Corporation for the year ended March 31, 2006, and the report of its auditors;

(b) electing the directors for the ensuing year;

(c) appointing auditors for the ensuing year and authorizing the directors to fix their remuneration;

(d) transacting such other business as may properly come before the said meeting or any adjournment thereof.

Specific details of the matters to be addressed at the Meeting are contained in the Management Information Circular addressed to the Shareholders of the Corporation which, together with a form of proxy, accompany this Notice, are a part hereof, and must be read in conjunction herewith.

A shareholder who does not expect to be able to attend the Meeting in person and who wishes to ensure that his common shares will be voted at the Meeting, is requested to complete, sign and date the enclosed form of proxy solicited by management of the Corporation in accordance with the instructions set out therein. All proxies must be deposited at the office of the Corporation, Houston Lake Mining Inc., 2892 White Street, Val Caron, Ontario, P3N 1B2, not late than 4:30PM., on February 14, 2007. The Corporation may refuse to recognize any proxy received after said time.

DATED: January 11, 2007
By Order of the Board of Directors
signed "E. Grayme Anthony"
E. Grayme Anthony
Director and President

HOUSTON LAKE MINING INC. MANAGEMENT INFORMATION CIRCULAR SOLICITATION OF PROXIES

This management information circular (the “Management Information Circular”) is furnished in connection with the solicitation of proxies by the management (the “Management”) of Houston Lake Mining Inc. (the “Corporation”) for use at the annual meeting (the “Meeting”) of holders (the “Shareholders”) of common shares of the Corporation (the “Common Shares” or the “shares”) to be held at the time and place and for the purposes set forth in the attached notice of annual meeting (the “Notice of Meeting”). The information contained herein is given as of the date hereof, unless otherwise noted herein. It is expected that the solicitation of proxies will be primarily by mail; however, proxies may also be solicited by telephone, facsimile or in person by employees of the Corporation. The cost of solicitation will be borne by the Corporation.

The Corporation will pay the reasonable costs incurred by persons who are the registered but not beneficial owners of shares (such as brokers, dealers and other registrants under applicable securities law and nominees and custodians) in sending or delivering copies of the Notice of Meeting, the Management Information Circular, the form of proxy and the financial statement request form to the beneficial owners of shares which are registered in the names of such persons. Payments will be made upon receipt of an appropriate invoice. The Corporation will furnish to such persons, upon request to the Secretary of the Corporation, 2892 White Street, Val Caron, Ontario, P3N 1B2 (facsimile: 1-705-897-7618) and without additional cost, additional copies of the Notice of Meeting, Management Information Circular, financial statements, financial statement request form and form of proxy.

PROXIES AND VOTING

Shareholders who are unable to attend the Meeting in person and who wish to have their shares voted at the Meeting are requested to date, sign and return, in the envelope provided for that purpose, the enclosed form of proxy. Proxies must be deposited with the Corporation’s transfer agent and registrar, Computershare Investor Services, on or before the close of business on February 14, 2007 or 24 hours prior to the commencement of the Meeting, if the Meeting is adjourned, or (ii) with the Chairman of the Meeting prior to the commencement of the Meeting or any adjournment thereof, in order for the shares represented thereby to be voted at the Meeting or any adjournment thereof.

The shares represented by any proxy in favour of the nominees of Management named therein will be voted for, against or withheld from voting with respect to the matters described herein in accordance with the instructions provided in any such proxy.

In the absence of any specification, such proxies will be voted FOR the election of directors, FOR the appointment of the auditor, all as specified in this Management Information Circular.

The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments to matters identified in the Notice of Meeting or other matters that may properly come before the Meeting. Management knows of no other matters to come before the Meeting other than matters referred to in the Notice of Meeting. If any matters which are not now known should properly come before the Meeting or if any amendments or variations to the matters referred to in the Notice of Meeting are presented for consideration at the Meeting, the forms of proxy will be voted on such matters, amendments and variations in accordance with the best judgment of the person voting the proxy.

A Shareholder has the right to appoint a person (who needs not be a shareholder) as proxy holder to attend and act on his or her behalf at the Meeting other than the representatives of Management designated in the enclosed form of proxy. The Shareholder may exercise this right by inserting the name of the nominee in the space provided in the enclosed form of proxy or may complete another appropriate form of proxy, and in each case delivering the completed proxy in the manner set forth above.

NON-REGISTERED HOLDERS

Only registered holders of Common Shares or the person(s) they appoint as their proxyholder are permitted to vote at the Meeting. However, in many cases, shares of the Corporation beneficially owned by a holder (a “Non-Registered Holder”) are not registered in the name of the holder but are rather registered either (a) in the name of an intermediary (an “Intermediary”) that the Non-Registered Holder deals with in respect of the shares or (b) in the name of a clearing agency (such as The Canadian Depository for Securities Limited (“CDS”) of which the Intermediary is a participant (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSP’s, RRIF’s, RESP’s and similar plans). In accordance with the requirements of National Instrument 54-101 of the Canadian Securities Administrators, the Corporation has distributed copies of the Notice of Meeting, this Management Information Circular, a form of proxy and a financial statement request form (collectively the “Meeting Materials”) to the clearing agencies and Intermediaries for onward distribution to Non-Registered Holders.

Intermediaries are required to forward the Meeting Materials to Non-Registered Holders unless a Non-Registered Holder has waived the right to receive them. Very often, Intermediaries will use service companies to forward the Meeting Materials to Non-Registered Holders. Generally Non-Registered Holders who have not waived the right to receive Meeting Materials will either:

(a) be given a form of proxy which is not signed by the Intermediary and which, when properly completed and signed by the Non-Registered Holder and returned to the Intermediary or its service company, will constitute voting instructions (often called a “voting instruction form” or a “proxy authorization form”) which the Intermediary must follow. Typically, the Non-Registered Holder will also be given a page of instructions which contains a removable label containing a bar code and other information. In order for the form of proxy to be validly constituted, the Non-Registered Holder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and submit it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company; or

(b) less typically, be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of shares beneficially owned by the Non-Registered Holder but which is otherwise not completed. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Non-Registered Holder when submitting the proxy. In this case, the Non-Registered Holder who wishes to submit a proxy should otherwise properly complete the form of proxy and deliver it to Computershare Investor Services as provided under “Proxies and Voting” above.
In either case, the purpose of this procedure is to permit Non-Registered Holders to direct the voting of the shares of the Corporation which they beneficially own. Should a Non-Registered Holder who receives either form of proxy wish to vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should strike out the names of the persons named in the proxy and insert the Non-Registered Holder’s (or such other persons’) name in the blank space provided. In either case, Non-Registered Holders should carefully follow the instructions of their Intermediary, including those regarding when and where the form of proxy is to be delivered.

REVOCATION OF PROXIES

Any Shareholder who has given a proxy may revoke it by depositing an instrument in writing executed by him or her or by his or her attorney authorized in writing at the principal office of the Corporation, 2892 White Street, Val Caron, Ontario, P3N 1B2, to the attention of the Secretary, on or before the last business day preceding the day of the Meeting or any adjournment thereof or, as to any matter upon which a vote has not already been cast pursuant to the authority conferred by such proxy, with the Chairman of the Meeting on the day of the Meeting or any adjournment thereof, or by any other manner permitted by law.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Corporation has fixed the close of business on January 12, 2007 (the “Record Date”) as the record date for the purposes of determining Shareholders entitled to receive the Notice of Meeting and vote at the Meeting. The Corporation is authorized to issue an unlimited number of Common Shares, of which 23,280,234 Common Shares were issued and outstanding as at the Record Date. In accordance with the provisions of the Business Corporations Act (Alberta), the Corporation has prepared a list of the Shareholders on the Record Date. At the Meeting, each Shareholder named on the list will be entitled to one vote for each Common Share shown opposite his, her or its name.

To the knowledge of the directors and senior officers of the Corporation, as at the date of this management information circular, the only persons who beneficially own, directly or indirectly, or exercise control or direction over voting securities of the Corporation carrying more than 10% of the voting rights of the total issued and outstanding Common Shares as at the Record Date are as follows:

EXECUTIVE COMPENSATION AND MANAGEMENT CONTRACTS

Summary Compensation Table

The following table is a summary of the compensation paid by the Corporation to E. Grayme Anthony during the financial years ended March 31, 2004, 2005 and 2006. E. Grayme Anthony has been the President, Chief Executive Officer, Chief Financial Officer and Secretary-Treasurer of the Corporation since October 15, 1997.
Mr. E Grayme Anthony is the only “executive officer” of the Corporation within the meaning of the Securities Act (Alberta) whose compensation must be disclosed for the financial years ended March 31, 2004, 2005 and 2006.

The following table is a summary of the compensation paid by the Corporation to E. Grayme Anthony during the financial years ended March 31, 2004, 2005 and 2006. E. Grayme Anthony has been the President, Chief Executive Officer, Chief Financial Officer and Secretary-Treasurer of the Corporation since October 15, 1997.
Mr. E Grayme Anthony is the only “executive officer” of the Corporation within the meaning of the Securities Act (Alberta) whose compensation must be disclosed for the financial years ended March 31, 2004, 2005 and 2006.

(1) E. Grayme Anthony is the only Executive officer of the Corporation. With respect to his compensation, please see below under the heading “Compensation Arrangements”.
Long-term Incentive Plan Awards during the Financial Year ended March 31, 2006
No long-term incentive plan awards were made to the Named Executive Officers during the financial year ended March 31, 2006.
Option Grants during the Financial Year ended March 31, 2006
During the financial year ended March 31, 2006, 250,000 options were granted to Named Executive Officers pursuant to the Stock Option Plan.
During the financial year ended March 31, 2006, an aggregate of 746,732 options to purchase an aggregate of 746,732 Common Shares were granted to persons other than the Named Executive Officers. Of these options 396,732 were granted to the Investor Relations firm, A. Schwab & Associates and are awaiting regulatory approval. Reginald F. Walker, chairman, and John G. Kelly, director of the Corporation received the remaining 350,000 options. As of the date hereof there are 1,829,232 options outstanding and 473,791 options remain available for grant under the Stock Option Plan.
Aggregated Option Exercises during the Financial Year ended March 31, 2006 and Financial Year-end Option Values
The following table sets out the financial year-end value of options held by E. Grayme Anthony, being the only options granted to Named Executive Officers that remain outstanding:

Note:
(1) The closing price of the Common Shares on the TSX Venture Exchange (the “TSXV”) on March 31, 2006 was $0.50 per Common Share.
(2) The options held by E. Grayme Anthony are comprised of: 82,500 exercisable at $0.40 per Common Share, 100,000 exercisable at $0.34 per Common Share and 250,000 exercisable at $0.27 per Common Share.
(3) There were no non-Named Executive Officer option exercises during the period. 

Compensation Agreements and Management Contracts
There was no written employment, consulting, management or other compensation agreement entered into by the Corporation and a Named Executive Officer during the financial year ended December 31, 2005. Effective March 31, 2002, the board of directors of the Corporation commenced paying Timber Wolf Explorations Inc., a private corporation owned by E. Grayme Anthony, an annualized rate of $90,000 per year in respect of the services provided by Mr. Anthony, and expects to pay this annualized rate throughout the current fiscal year.

Compensation of Directors
During the financial year ended March 31, 2006, no cash compensation was paid to the directors of the Corporation for acting in their capacity as directors; however, directors were reimbursed for expenses incurred in connection therewith.

Other Compensation
Through the financial year ended March 31, 2006 the Corporation was charged, and will continue to be charged, office rent of $750 per month by G.D. Drilling Supplies Ltd., a company owned by Reginald F. (Rick) Walker, a director of the Corporation.
After the financial year ended March 31, 2006 the Corporation was charged $92,592.31 for bulk sample related expenses incurred by Consbec Inc., a company owned by Reginald F. Walker. This work was charged at cost and involved site preparation, rock excavation drilling, blasting, mucking and haulage expenses.
The aggregate value of all other compensation not described in this Information Circular paid or payable by the Corporation to the executive officers of the Corporation was nil.

INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
No director or senior officer of the Corporation or proposed management nominee for election as a director of the Corporation, nor any associate of any such director, officer or proposed management nominee, is or has been indebted to the Corporation at any time during the financial year ended March 31, 2006.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Except as set out herein, no insider (as such term is defined in the Securities Act (Ontario)) or proposed nominee for election as a director of the Corporation nor any associate or affiliate of the foregoing has any interest, direct or indirect, in any material transactions in which the Corporation has participated since March 31, 2006 or in any proposed transaction which has materially affected or will materially affect the Corporation.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of the date hereof regarding the number of Common Shares to be issued upon the exercise of outstanding options and the weighted-average exercise price of the outstanding options in connection with the Corporation’s stock option plan. The Corporation does not have any equity compensation plans that have not been approved by shareholders.

(1) Members of the Audit and Executive Compensation Committees
The following paragraphs describe the qualifications and the experience of the management nominees to the board of directors of the Corporation:

Reginald F. (Rick) Walker
Val Caron, Ontario
Mr. Walker has been the operator/owner of Consbec Inc. since 1975, one of the largest private drilling and blasting contractor in North America. Mr. Walker has extensive experience in open pit mining and quarrying including Hemlo, and North American Palladium, large and small diameter pipeline, road construction and civil projects. His open pit experience involves pit design, government regulatory requirements, wall control and drainage control. He also owns G.D. Drilling Supplies Ltd. which is a Gardner-Denver distributorship and D.B.C. Aggregates Ltd. which is involved in quarry exploration and development. Mr. Walker was Chairman of the Board of the Corporation from April, 1995 to June, 1996 and from December, 1997 to present. He is a member of the International Society of Explosive Engineers and the Canadian Institute of Mining and Metallurgy.

E. Grayme Anthony P.Geo. F.G.A.C. M.B.A.
Sudbury, Ontario
Mr. Anthony has been involved in the exploration for precious and base metal deposits in Canada, South America, Africa, and Asia since 1983. He has experience with such companies as Amoco Petroleum Co. Ltd. - Mining Division, Echo Bay Mines Ltd., Canhorn Mining Ltd. and United Reef Petroleum Co. Ltd. In 1990 Mr. Anthony formed his own geological consulting proprietorship which has provided exploration project management and geological services to such clientele as Ontario Geological Survey, Paterson Grant & Watson Ltd., Noramco Exploration Co. Ltd., Citadel Gold Mines Ltd., and Consolidated NRD Ltd. In June of 1994 Mr. Anthony joined Norcan Resources Ltd. (Norcan) as Senior Geologist. In September of 1994 he was promoted to the position of Vice President, Exploration with Norcan where he was instrumental in setting up and directing Norcan’s business interests in West Africa and South America and in assembling a portfolio of properties in Ontario. Mr. Anthony reestablished his exploration consulting business in October of 1996 and his clientele included AMI Resources Inc., Norcan Resources Ltd., and Quincunx Gold Exploration Ltd. He has been the President and a Director of Houston Lake Mining since October of 1997.

Mr. Anthony graduated with a Bachelor of Science Degree (Honours) in Geology from Concordia University in Montreal in 1983 and received a Masters Degree of Business Administration from The University of Western Ontario in 1986. Mr. Anthony earned his Professional Geoscientist (P. Geo.) designation in British Columbia in 1995 (accredited in Ontario in 2003) and was awarded the designation of Fellow of the Geological Association of Canada (F.G.A.C.) in 1997. He is a member of the Canadian Institute of Mining and Metallurgy, and the Prospectors and Developers Association of Canada.

John G. Kelly B.Sc. P.Eng.
Sudbury, Ontario
Mr. Kelly has been with Inco Ltd. of Sudbury since 1970. In 1989 Mr. Kelly was named Vice President of Maintenance and Engineering and in 1991 he was appointed Vice President of Mining, Ontario Division. After retiring in 1998 he became President of JGK Mining Services, a mining consultancy based in Sudbury, Ontario. Mr. Kelly is a Professional Engineer and a member of the Canadian Institute of Mining and Metallurgy. He currently serves on the Board of Governors of Cambrian College and on the Board of NORCAT, the Northern Centre for Advanced Technology.

Robert J. McLean C.H.R.P.
Sudbury, Ontario
Mr. McLean has been involved in underground mining and administration since 1963. Mr. McLean has worked with Kerr Addison Gold Mines, Rio Algom Mines Ltd., Denison Mines, Gould Copper Mines Ltd., Canadian Mines Services and McBeau Minerals Inc. in varying capacities including underground miner, development and production supervisor, captain and superintendent. Mr. McLean is presently employed as Director, Safety & Human Resources with The Moran Group of companies in Sudbury Ontario. Mr. McLean is President of Gould Copper Mines Ltd., and Vice President and Director of McBeau Minerals Inc. Mr. McLean brings 35 years of mining experience and 15 years of experience in labour relations, personnel management and administration to Houston Lake. He earned the appellation of Certified Human Resource Professional in 1991 and is a member of the Canadian Institute of Mining and Metallurgy and chairman of the Ontario Mining Contractors.
COMMON SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED IN FAVOUR OF SUCH RESOLUTION UNLESS SUCH PROXIES SPECIFY THAT THE COMMON SHARES REPRESENTED THEREBY SHALL BE WITHHELD FROM VOTING.

2. Appointment of Auditor
Management proposes to nominate Sievert & Sawrantschuk LLP, Chartered Accountants, Toronto, Ontario, as auditor of the Corporation to hold office until the next annual meeting of Shareholders at remuneration to be fixed by the board of directors of the Corporation. An affirmative vote of a majority of the votes cast at the Meeting is sufficient for the appointment of auditor.

COMMON SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED IN FAVOUR OF SUCH RESOLUTION UNLESS SUCH PROXIES SPECIFY THAT THE COMMON SHARES REPRESENTED THEREBY SHALL BE WITHHELD FROM VOTING. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Except in so far as they may be Shareholders and unless otherwise disclosed in this management information circular, no person who has been a director or senior officer of the Corporation at any time or proposed nominee for election as a director of the Corporation, nor any associate or affiliate of the foregoing persons has any substantial interest, direct or indirect, by way of beneficial ownership or otherwise, in any matters to be acted upon at the Meeting.

OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
Management knows of no matters to come before the Meeting other than as set forth in the Notice of Meeting. HOWEVER, IF OTHER MATTERS WHICH ARE NOT KNOWN TO MANAGEMENT SHOULD PROPERLY COME BEFORE THE MEETING, THE ACCOMPANYING PROXY WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGEMENT OF THE PERSONS VOTING THE PROXY.
ADDITIONAL INFORMATION

Additional information relating to the Corporation is available on SEDAR at www.sedar.com. Copies of the Corporation’s comparative financial statements and accompanying Management’s Discussion and Analysis for the fiscal year ended March 31, 2006 are available on SEDAR or Shareholders may request copies to be sent to them without charge by contacting the Secretary of the Corporation, 2892 White Street, Val Caron, Ontario, P3N 1B2 (facsimile: 1-705-897-7622). Financial information with respect to the Corporation is provided in the Corporation’s comparative financial statements and accompanying Management’s Discussion and Analysis for the most recently completed financial year.

APPROVAL OF BOARD OF DIRECTORS
The contents of this management information circular and the sending of it to each director of the Corporation, to the auditor of the Corporation, to the Shareholders and to the appropriate governmental agencies, have been approved by the directors of the Corporation.

DATED at Sudbury, Ontario, January 16, 2007.

BY ORDER OF THE BOARD
“E. Grayme Anthony”
E. Grayme Anthony
President

SCHEDULE “A”
AUDIT COMMITTEE CHARTER

1. PURPOSE
The overall purpose of the Audit Committee (the “Committee”) of Houston Lake Mining Inc. (the “Corporation”) is to monitor the Corporation’s system of internal financial controls, to evaluate and report on the integrity of the financial statements of the Corporation, to enhance the independence of the Corporation’s external auditor and to oversee the financial reporting process of the Corporation.
2. COMPOSITION, PROCEDURES AND ORGANIZATION
2.1 The Committee shall consist of at least three members (each a “Member”) of the board of directors of the Corporation (the “Board”), the majority of whom shall not be employees, Control Persons or officers of the Issuer or any of it Associates or Affiliates (as such terms are defined in the TSX Venture Exchange Corporate Finance Manual (the “TSXV Manual”)), as amended from time to time.
2.2 At least 25% of the members of the Committee (the “Members”) shall be resident Canadians.
2.3 At least one Member shall be “independent” and “financially literate” as such terms are defined under the Securities Act (Ontario) and rules and policies promulgated thereunder, as such requirements may be amended from time to time. For reference, the terms “independent” and “financially literate” are set out in “Multilateral Instrument 52-110 – Audit Committees”, an excerpt of which is attached hereto on Schedule “B”.
2.4 The Board, at its organizational meeting held in conjunction with each annual meeting of shareholders, shall appoint the members of the Committee to hold such office for the ensuing year or until their resignations or their successors are duly elected. The Board may at any time remove or replace any member of the Committee and may fill any vacancy in the Committee. Any member of the Committee ceasing to be a director shall cease to be a member of the Committee.
2.5 Unless the Board shall have appointed a chair of the Committee, the members of the Committee shall elect a chair from amongst their number. The chair shall be an “unrelated” director and shall not have a second, or casting, vote.
2.6 Complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters shall be directed to the chair of the Committee. Once received, the chair will then review them and, if appropriate, seek advice from the Corporation’s legal counsel and/or the external auditors. The chair will then present such complaints to the Committee for discussion in order to determine a course of action. If appropriate, the chair will then notify management of the Corporation to discuss a resolution of such complaints.
2.7 The Corporation, with the assistance of the Committee, shall provide in the Corporation’s employee handbook, if any, a policy to enable employees to submit to the chair of the Committee, on a confidential and anonymous basis, concerns regarding questionable accounting or auditing matters or shall otherwise make known to employees that concerns can be submitted to the chair of the Committee or such basis.
2.8 Notice of every meeting shall be given to the external auditor, who shall, at the expense of the Corporation, be entitled to attend and to be heard thereat.
2.9 Meetings shall be held in accordance with the procedural rules outlined in the “Rules Governing Procedure of the Audit Committee” attached to this Charter as Schedule “A”. In addition, meetings of the Committee shall be conducted as follows:
(a) the Committee shall meet at least four times annually or more frequently as circumstances dictate and at such times and at such locations as the chair of the Committee shall determine;
(b) the Committee or at least its chair should also meet with the external auditor and management quarterly to review the Corporation’s financials in accordance with Article 3 below;
(c) as part of its job to foster open communication, the Committee should meet at least annually with management and the external auditor separately to discuss any matters that the Committee or either of these groups believe should be discussed privately;
(d) the external auditor or any member of the Committee may call a meeting of the Committee;
(e) the external auditor and management employees shall, when required by the Committee, attend any meeting of the Committee; and
(f) the Committee may require any attendee at a meeting who is not an “unrelated” director to excuse himself or herself from any meeting.
2.10 The external auditor may communicate directly with the chair of the Committee and may meet separately with the Committee. The Committee, through its chair, may contact directly any employee in the Corporation as it deems necessary, and any employee may bring before the Committee any matter involving questionable, illegal or improper practices or transactions.
2.11 Compensation to members of the Committee shall be limited to directors’ fees, either in the form of cash or equity, and members shall not accept consulting, advisory or other compensatory fees from the Corporation (other than as members of the Board and/or Board committees).
2.12 The Committee is authorized, at the Corporation’s expense, to retain independent counsel and other advisors as it determines necessary to carry out its duties.
3. DUTIES
3.1 The overall duties of the Committee shall be to:
(a) assist the Board in the discharge of its duties relating to the Corporation’s accounting policies and practices, reporting practices and internal controls;
(b) establish and maintain a direct line of communication with the Corporation’s external auditor and assess their performance;
(c) oversee the work of the external auditor, which shall be responsible to report directly to the Committee, including resolution of disagreements between management and the auditor regarding financial reporting;

(d) establish and maintain a direct line of communication with the Corporation’s external auditor and assess their performance;
(e) oversee the work of the external auditor, which shall be responsible to report directly to the Committee, including resolution of disagreements between management and the auditor regarding financial reporting;
(f) ensure that management of the Corporation has designed, implemented and is maintaining an effective system of internal controls and disclosure controls and procedures;
(g) monitor the credibility and objectivity of the Corporation’s financial reports;
(h) report regularly to the Board on the fulfillment of the Committee’s duties;
(i) assist, with the assistance of the Corporation’s legal counsel, the Board in the discharge of its duties relating to the Corporation’s compliance with legal and regulatory requirements; and
(j) assist the Board in the discharge of its duties relating to risk assessment and risk management.
3.2 The duties of the Committee as they relate to the external auditor shall be to:
(a) review management’s recommendations for the appointment of external auditor, and in particular its qualifications and independence, and to recommend to the Board a firm of external auditor to be engaged;
(b) review the performance of the external auditor and make recommendations to the Board regarding the appointment or termination of the external auditor;
(c) review, where there is to be a change of external auditor, all issues related to the change, including the information to be included in the notice of change of auditor called for under National Instrument 51-102 or any successor legislation, and the planned steps for an orderly transition;
(d) review all reportable events, including disagreements, unresolved issues and consultations, as defined in National Instrument 51-102 or any successor legislation, on a routine basis, whether or not there is to be a change of external auditor;
(e) review and approve, in advance, the engagement letters of the external auditor, both for audit and permissible non-audit services, including the fees to be paid for such services;
(f) review the performance, including the fee, scope and timing of the audit and other related services and any non-audit services provided by the external auditor; and
(g) review the nature of and fees for any non-audit services performed for the Corporation by the external auditor and consider whether the nature and extent of such services could detract from the firm’s independence in carrying out the audit function.

3.3 The duties of the Committee as they relate to audits and financial reporting shall be to:
(a) review the audit plan with the external auditor and management;
(b) review with the external auditor and management all critical accounting policies and practices of the Corporation, including any proposed changes in accounting policies, the presentation of the impact of significant risks and uncertainties, all material alternative accounting treatments that the external auditor has discussed with management, other material written communications between the external auditor and management, and key estimates and judgments of management that may in any such case be material to financial reporting;
(c) review the contents of the audit report;
(d) question the external auditor and management regarding significant financial reporting issues discussed during the fiscal period and the method of resolution;
(e) review the scope and quality of the audit work performed;
(f) review the adequacy of the Corporation’s financial and auditing personnel;
(g) review the co-operation received by the external auditor from the Corporation’s personnel during the audit, any problems encountered by the external auditor and any restrictions on the external auditor’s work;
(h) review the internal resources used;
(i) review the evaluation of internal controls by the internal auditor (or persons performing the internal audit function) and the external auditor, together with management’s response to the recommendations, including subsequent follow-up of any identified weaknesses;
(j) review the appointments of the chief financial officer, internal auditor (or persons performing the internal audit function) and any key financial executives involved in the financial reporting process;
(k) review with management and the external auditor and approve the Corporation’s annual audited financial statements in conjunction with the report of the external auditor thereon, and obtain an explanation from management of all significant variances between comparative reporting periods before release to the public;
(l) review with management and the external auditor and approve the Corporation’s interim unaudited financial statements, and obtain an explanation from management of all significant variances between comparative reporting periods before release to the public; and
(m) review the terms of reference for an internal auditor or internal audit function.
3.4 The duties of the Committee as they relate to accounting and disclosure policies and practices shall be to:
(a) review the effect of regulatory and accounting initiatives and changes to accounting principles of the Canadian Institute of Chartered Accountants which would have a significant impact on the Corporation’s financial reporting as reported to the Committee by management and the external auditor;
(b) review the appropriateness of the accounting policies used in the preparation of the Corporation’s financial statements and consider recommendations for any material change to such policies;
(c) review the status of material contingent liabilities as reported to the Committee by management;
(d) review the status of income tax returns and potentially significant tax problems as reported to the Committee by management;
(e) review any errors or omissions in the current or prior years’ financial statements;
(f) review and approve before their release all public disclosure documents containing audited or unaudited financial information, including all press releases, prospectuses, annual reports to share holders, annual information forms and management’s discussion and analysis; and
(g) oversee and review all financial information and earnings guidance provided to analysts.
3.5 The other duties of the Committee shall include:
(a) reviewing and reassessing, at least annually, the adequacy of this Charter and making recommendations to the Board, as conditions dictate, to update this Charter;
(b) reviewing any inquiries, investigations or audits of a financial nature by governmental, regulatory or taxing authorities;
(c) formulating a policy restricting the Corporation from hiring employees or former employees of the Corporation’s external auditor without the prior approval of the Committee;
(d) reviewing annual operating and capital budgets;
(e) reviewing the funding and administration of the Corporation’s compensation and pension plans;
(f) reviewing and reporting to the Board on difficulties and problems with regulatory agencies which are likely to have a significant financial impact;
(g) inquiring of management and the external auditor as to any activities that may be or may appear to be illegal or unethical; and
any other questions referred to it by the Board.