AUY Yamana Gold Inc

DESCRIPTION OF SECURITIES

Common Shares

        The authorized share capital of the Corporation consists of an unlimited number of Common Shares and 8,000,000 Preference Shares. As of the date of this Prospectus, there are an aggregate of 951,647,134 Common Shares and no Preference Shares issued and outstanding. The Common Shares may be offered separately or together with other Securities, as the case may be.

        Holders of Common Shares are entitled to receive notice of any meetings of shareholders of the Corporation, to attend and to cast one vote per Common Share at all such meetings. Holders of Common Shares do not have cumulative voting rights with respect to the election of directors and, accordingly, holders of a majority of the Common Shares entitled to vote in any election of directors may elect all directors standing for election. Holders of Common Shares are entitled to receive on a pro rata basis such dividends, if any, as and when declared by the Corporation's Board of Directors at its discretion from funds legally available therefor and upon the liquidation, dissolution or winding up of the Corporation, are entitled to receive on a pro rata basis the net assets of the Corporation after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority to or on a pro rata basis with the holders of Common Shares with respect to dividends or liquidation. Although the articles of the Corporation provide for the potential issuance of Preference Shares, there is currently no other series or class of shares outstanding which ranks senior in priority to the Common Shares. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights, nor do they contain any sinking or purchase fund provisions. The Common Shares do not carry any provisions permitting or restricting the issuance of additional securities or other material restrictions, nor do they contain any provisions requiring a securityholder to contribute additional capital.

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Preference Shares

        The Preference Shares may be offered separately or together with other Securities, as the case may be. Upon a consolidation, merger, or amalgamation of the Corporation with or into any other corporation, holders of Preference Shares who have not exercised their right of conversion at the date of the consolidation, merger, or amalgamation are entitled to receive upon the exercise of their conversion right, after the effective date of the consolidation, merger, or amalgamation, the aggregate number of shares or securities or property of the Corporation resulting from the consolidation, merger, or amalgamation, the holder would have been entitled to receive if they had at the effective date of the consolidation, been the registered holder of such number of Common Shares. Holders of Preference Shares are also entitled to receive, in the event of liquidation, dissolution or winding up of the Corporation, an amount equal to C$0.125 in respect of each of Preference Share held and all unpaid cumulative dividends before any distribution of the assets of the Corporation among holders of the Common Shares or any other class of shares. Holders of Preference Shares are not entitled to receive notice of or to attend meetings of the shareholders of the Corporation nor do they have any voting rights for the election of directors or for any other purpose (except where the holders of a specified class are entitled to vote separately as a class).

Debt Securities

        In this section, references to the "Corporation" refer only to Yamana Gold Inc. and not to any of the Corporation's subsidiaries. The following description sets forth certain general terms and provisions of Debt Securities that may be issued hereunder and is not intended to be complete. The Debt Securities may be offered separately or together with other Securities, as the case may be. The specific terms of Debt Securities, including the extent to which the general terms described in this section apply to those Debt Securities, will be set forth in the applicable Prospectus Supplement.

        The Debt Securities will be issued in one or more series under the indenture (the "Indenture"), dated as of June 30, 2014, among the Corporation, Wilmington Trust, National Association, a national banking association, as trustee (the "Trustee") and Citibank, N.A., a national association, as paying agent, registrar and authenticating agent (the "Securities Administrator"). The Indenture will be subject to and governed by the United States Trust Indenture Act of 1939, as amended. A copy of the Indenture has been filed with the SEC as an exhibit to the Registration Statement of which this Prospectus forms a part and has been filed with the securities commissions or similar authorities in each of the provinces and territories of Canada. The description of certain provisions of the Indenture in this section do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the provisions of the Indenture. Terms used in this summary that are not otherwise defined herein have the meaning ascribed to them in the Indenture.

        The Corporation may issue Debt Securities and incur additional Indebtedness other than through the offering of Debt Securities pursuant to this Prospectus.

General

        The Indenture does not limit the aggregate principal amount of Debt Securities (which may include debentures, notes or other evidences of Indebtedness) which may be issued thereunder. It will provide that Debt Securities may be issued from time to time in one or more series and may be denominated and payable in foreign currencies. Unless otherwise indicated in the applicable Prospectus Supplement, the Indenture also permits the Corporation to increase the principal amount of any series of Debt Securities previously issued and to issue Debt Securities of such increased principal amount.

        The terms of the Debt Securities the Corporation may offer may differ from the general information provided below. In particular, certain covenants described below may not apply to certain Debt Securities the Corporation may offer under the Indenture. The Corporation may issue Debt Securities with terms different from those of Debt Securities previously issued under the Indenture.

        The applicable Prospectus Supplement will set forth the specific terms relating to the Debt Securities of the series being offered and may include, without limitation, any of the following:

•

the specific designation of the offered Debt Securities;

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•

the aggregate principal amount of the offered Debt Securities;



•

the extent and manner, if any, to which payment on or in respect of the offered Debt Securities will be senior or will be subordinated to the prior payment of Yamana's other liabilities and obligations;



•

the percentage or percentages of principal amount at which the offered Debt Securities will be issued;



•

the date or dates on which the offered Debt Securities will mature and the portion (if less than all of the principal amount) of the offered Debt Securities to be payable upon declaration of acceleration of maturity;



•

the rate or rates per annum (which may be fixed or variable) at which the offered Debt Securities will bear interest, if any, the date or dates from which any such interest will accrue (or the method by which such date or dates will be determined) and the dates on which any such interest will be payable and the regular record dates for any interest payable on the offered Debt Securities;



•

any mandatory or optional redemption or sinking fund or analogous provisions, including the period or periods within which, the price or prices at which and the terms and conditions upon which the offered Debt Securities may be redeemed or purchased at the option of the Corporation or otherwise;



•

if the offered Debt Securities will be issuable in whole or in part in the form of one or more registered global securities ("registered global securities") the identity of the depositary for such registered global securities;



•

the denominations in which registered Debt Securities ("registered securities") will be issuable, if other than denominations of US$2,000 and any integral multiple of US$1,000 in excess thereof;



•

each place where the principal of and any premium and interest on the offered Debt Securities will be payable and each place where the offered Debt Securities may be presented for registration of transfer or exchange;



•

if other than U.S. dollars, the foreign currency or the units based on or relating to foreign currencies in which the offered Debt Securities are denominated and/or in which the payment of the principal of and any premium and interest on the offered Debt Securities will or may be payable;



•

any index formula or other method pursuant to which the amount of payments of principal of, and any premium and interest on, the offered Debt Securities will or may be determined;



•

the terms and conditions, if any, on which the offered Debt Securities may be convertible into or exchangeable for any other of the Corporation's securities or securities of other entities;



•

if the payment of the offered Debt Securities will be guaranteed by any other person, the terms of any such guarantees;



•

if the offered Debt Securities will have the benefit of any security interest created pursuant to the terms of the Indenture; and



•

any other terms of the offered Debt Securities, including covenants and events of default which apply solely to the offered Debt Securities, or any covenants or events of default generally applicable to the Debt Securities, which are not to apply to the offered Debt Securities.

        Unless otherwise provided in the applicable Prospectus Supplement, any guarantee in respect of Debt Securities would fully and unconditionally guarantee the payment of the principal of, and interest and premium, if any, on, such Debt Securities when such amounts become due and payable, whether at maturity thereof or by acceleration, notice of redemption or otherwise. The Corporation expects any guarantee provided in respect of Debt Securities would be from a subsidiary, affiliate or associate of the Corporation and would constitute a senior, unsecured obligation of the applicable guarantor. Other Debt Securities that the Corporation may issue also may be guaranteed and the terms of such guarantees (including any subordination) would be described in the applicable Prospectus Supplement.

        Unless otherwise indicated in the applicable Prospectus Supplement, the Indenture does not afford the holders the right to tender Debt Securities to the Corporation for repurchase or provide for any increase in the

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rate or rates of interest at which the Debt Securities will bear interest in the event the Corporation should become involved in a highly leveraged transaction or in the event of a change in control of the Corporation.

        Debt Securities may be issued under the Indenture bearing no interest or interest at a rate below the prevailing market rate at the time of issuance, to be offered and sold at a discount below their stated principal amount. The Canadian and United States federal income tax consequences and other special considerations applicable to any such discounted Debt Securities or other Debt Securities offered and sold at par which are treated as having been issued at a discount for Canadian and/or United States federal income tax purposes will be described in the Prospectus Supplement relating thereto.

Ranking and Other Indebtedness

        Except as indicated herein or in the applicable Prospectus Supplement, the Debt Securities and any guarantees in respect of such Debt Securities will be unsecured obligations of the Corporation and any applicable guarantor, respectively, and will rank equally with all of the Corporation's and any applicable guarantor's other unsecured and unsubordinated Indebtedness (as defined below under "— Certain Covenants") from time to time outstanding. The Debt Securities will be effectively subordinated to all Indebtedness and other liabilities of the Corporation's subsidiaries (other than any applicable guarantor, for so long as its guarantee remains in effect) and subordinated to all secured Indebtedness and other secured liabilities of the Corporation, any applicable guarantor and the Corporation's subsidiaries to the extent of the assets securing such Indebtedness and other liabilities.

Registered Definitive Securities

        Unless otherwise indicated in the applicable Prospectus Supplement, the registered securities of a particular series may be issued in the form of definitive securities without coupons and in denominations of US$2,000 and any integral multiple of US$1,000 in excess thereof. Debt securities may be presented for exchange and registered securities may be presented for registration of transfer in the manner, at the places and, subject to the restrictions set forth in the Indenture and in the applicable Prospectus Supplement, without service charge, but upon payment of any taxes or other governmental charges due in connection therewith. The Corporation has appointed the Securities Administrator as security registrar.

        Unless otherwise indicated in the applicable Prospectus Supplement, where registered securities are issued in definitive form, payment of the principal of and any premium and interest on such securities will be made at the office or agency of the Securities Administrator.

Registered Global Securities

        The registered securities of a particular series may be issued in the form of one or more registered global securities which will be registered in the name of and be deposited with a depositary, or its nominee, each of which will be identified in the Prospectus Supplement relating to such series. Unless and until exchanged, in whole or in part, for Debt Securities in definitive registered form, a registered global security may not be transferred except as a whole by the depositary for such registered global security to a nominee of such depositary, by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee of such successor.

        The specific terms of the depositary arrangement with respect to any portion of a particular series of offered Debt Securities to be represented by a registered global security will be described in the Prospectus Supplement relating to such series. The Corporation anticipates that the following provisions will apply to all depositary arrangements.

        Upon the issuance of a registered global security, the depositary therefor or its nominee will credit, on its book entry and registration system, the respective principal amounts of the Debt Securities represented by such registered global security to the accounts of such persons having accounts with such depositary or its nominee ("participants") as will be designated by the underwriters, investment dealers or agents participating in the distribution of such Debt Securities, or by the Corporation if such Debt Securities are offered and sold directly by the Corporation. Ownership of beneficial interests in a registered global security will be limited to

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participants or persons that may hold beneficial interests through participants. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of such ownership will be effected only through, records maintained by the depositary therefor or its nominee (with respect to beneficial interests of participants) or by participants or persons that hold through participants (with respect to interests of persons other than participants).

        So long as the depositary for a registered global security or its nominee is the registered owner thereof, such depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by such registered global security for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a registered global security will not be entitled to have Debt Securities of the series represented by such registered global security registered in their names, will not receive or be entitled to receive physical delivery of Debt Securities of such series in definitive form and will not be considered the owners or holders thereof under the Indenture.

        Principal, premium, if any, and interest payments on a registered global security registered in the name of a depositary or its nominee will be made to such depositary or nominee, as the case may be, as the registered owner of such registered global security. None of the Corporation, the Trustee or any paying agent for Debt Securities of the series represented by such registered global security will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in such registered global security or for maintaining, supervising or reviewing any records relating to such beneficial interests.

        The Corporation expects that the depositary for a registered global security or its nominee, upon receipt of any payment of principal, premium or interest, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such registered global security as shown on the records of such depositary or its nominee. The Corporation also expects that payments by participants to owners of beneficial interests in such registered global security held through such participants will be governed by standing instructions and customary practices, as is now the case with Debt Securities held for the accounts of customers registered in "street name", and will be the responsibility of such participants.

        If the depositary for a registered global security representing Debt Securities of a particular series is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Exchange Act and no successor depositary is appointed within 90 days after the Corporation receives notice or becomes aware of such condition, the Corporation will issue registered securities of such series in definitive form in exchange for such registered global security. If there is an event of default with respect to a particular series of Debt Securities, the depositary for the registered global securities of such series may exchange such registered global securities for registered securities of such series in definitive form and distribute those registered securities in definitive form to participants. In addition, the Corporation may at any time and in its sole discretion determine not to have the Debt Securities of a particular series represented by one or more registered global securities and, in such event, will issue registered securities of such series in definitive form in exchange for all of the registered global securities representing Debt Securities of such series.

Certain Covenants

        Set forth below is a summary of certain of the defined terms used in the Indenture. The Corporation urges you to read the Indenture for the full definition of all such terms.

        "Consolidated Net Tangible Assets" means the aggregate amount of assets after deducting therefrom (1) all current liabilities (excluding current maturities of long-term Indebtedness); (2) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles; and (3) appropriate adjustments on account of minority interests, all as set forth on the most recent consolidated balance sheet of Yamana and computed in accordance with IFRS (as defined below).

        "IFRS" means International Financial Reporting Standards as issued by the International Accounting Standards Board in effect from time to time or, if different and then used by the Corporation for its public financial reporting purposes in Canada, generally accepted accounting principles in Canada or the United States.

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        "Indebtedness" means all obligations for borrowed money represented by notes, bonds, debentures or similar evidence of indebtedness and obligations for borrowed money evidenced by credit, loan or other like agreements.

        "Lien" means any deed of trust, mortgage, charge, hypothec, assignment, pledge, lien, vendor's privilege, vendor's right of reclamation or other security interest or encumbrance of any kind incurred or assumed in order to secure payment of Indebtedness.

        "Non-Recourse Debt" means Indebtedness to finance the creation, development, construction or acquisition of properties or assets and any increases in or extensions, renewals or refinancings of such Indebtedness, provided that the recourse of the lender thereof (including any agent, trustee, receiver or other person (as defined below) acting on behalf of such entity) in respect of such Indebtedness is limited in all circumstances to the properties or assets created, developed, constructed or acquired in respect of which such Indebtedness has been incurred, to the capital stock and Debt Securities of the Restricted Subsidiary (as defined below) that acquires or owns such properties or assets and to the receivables, inventory, equipment, chattels, contracts, intangibles and other assets, rights or collateral connected with the properties or assets created, developed, constructed or acquired.

        "Permitted Lien" means:

(1)

any Lien on property, shares of stock or Indebtedness of any person existing at the time such person becomes a Restricted Subsidiary or created, incurred, issued or assumed in connection with the acquisition of any such person;



(2)

any Lien on any Principal Property created, incurred, issued or assumed at or prior to the time such property became a Principal Property or existing at the time of acquisition of such Principal Property by Yamana or a Restricted Subsidiary, whether or not assumed by Yamana or such Restricted Subsidiary; provided that no such Lien will extend to any other Principal Property of Yamana or any Restricted Subsidiary;



(3)

any Lien on any Principal Property of any Restricted Subsidiary to secure Indebtedness owing by it to Yamana or to another Restricted Subsidiary;



(4)

any Lien on any Principal Property of Yamana to secure Indebtedness owing by it to a Restricted Subsidiary;



(5)

any Lien on any Principal Property or other assets of Yamana or any Restricted Subsidiary existing on the date of the Indenture, or arising thereafter pursuant to contractual commitments entered into prior to the date of the Indenture;



(6)

any Lien on all or any part of any Principal Property (including any improvements or additions to improvements on a Principal Property), or on any shares of stock or Indebtedness of any Restricted Subsidiary directly or indirectly owning or operating such Principal Property, where such Principal Property is hereafter acquired, developed, expanded or constructed by Yamana or any Subsidiary, to secure the payment of all or any part of the purchase price, cost of acquisition or any cost of development, expansion or construction of such Principal Property or of improvements or additions to improvements thereon (or to secure any Indebtedness incurred by Yamana or a Subsidiary for the purpose of financing all or any part of the purchase price, cost of acquisition or cost of development, expansion or construction thereof or of improvements or additions to improvements thereon), in each case including interest thereon and fees and expenses, including premiums, associated therewith, created prior to, at the time of, or within 365 days after the later of, the acquisition, development, expansion or completion of construction (including construction of improvements or additions to improvements thereon), or commencement of full operation of such Principal Property; provided that no such Lien will extend to any other Principal Property of Yamana or a Restricted Subsidiary other than in the case of any such construction, improvement, development, expansion or addition to improvement, all or any part of any other Principal Property on which the Principal Property so constructed, developed or expanded, or the improvement or addition to improvement, is located;

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(7)

any Lien on any Principal Property or other assets of Yamana or any Restricted Subsidiary created for the sole purpose of extending, renewing, altering or refunding any of the foregoing Liens; provided that the Indebtedness secured thereby will not exceed the principal amount of Indebtedness so secured at the time of such extension, renewal, alteration or refunding, plus an amount necessary to pay fees and expenses, including premiums, related to such extensions, renewals, alterations or refundings, and that such extension, renewal, alteration or refunding Lien will be limited to all or any part of the same Principal Property and improvements and additions to improvements thereon and/or shares of stock and Indebtedness of a Restricted Subsidiary which secured the Lien extended, renewed, altered or refunded;



(8)

any Lien in connection with Indebtedness which by its terms is Non-Recourse Debt; and



(9)

any Lien on any Principal Property or on any shares of stock or Indebtedness of any Restricted Subsidiary created, incurred, issued or assumed to secure Indebtedness of Yamana or any Restricted Subsidiary which would otherwise be subject to the foregoing restrictions, in an aggregate amount which, together with the aggregate principal amount of other Indebtedness secured by Liens on any Principal Property or on any shares of stock or Indebtedness of any Restricted Subsidiary then outstanding (excluding Liens permitted under the foregoing exceptions) would not then exceed 10% of Consolidated Net Tangible Assets.

        "person" means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

        "Principal Property" means the interest of Yamana or any Restricted Subsidiary in any (a) mineral property or (b) processing facility, building or other facility, together with the land upon which it is erected and fixtures comprising a part thereof, whether owned as of the date of the Indenture or thereafter acquired or constructed by Yamana or any Restricted Subsidiary, the net book value of which interest, in each case, on the date as of which the determination is being made, is an amount that exceeds 7% of Consolidated Net Tangible Assets, except any such mineral property, processing facility, building or other facility or any portion thereof, together with the land upon which it is erected and fixtures comprising a part thereof, (i) acquired or constructed principally for the purpose of controlling or abating atmospheric pollutants or contaminants, or water, noise, odor or other pollution or (ii) which the board of directors of Yamana by resolution declares is not of material importance to the total business conducted by Yamana and its Restricted Subsidiaries considered as one enterprise. Yamana or any Restricted Subsidiary shall not be deemed to have an interest in a Principal Property if such interest is not held directly by Yamana or a Restricted Subsidiary.

        "Restricted Subsidiary" means any Subsidiary of Yamana that owns or leases a Principal Property or is engaged primarily in the business of owning or holding capital stock of one or more Restricted Subsidiaries. "Restricted Subsidiary," however, does not include (1) any Subsidiary whose primary business consists of (A) financing operations in connection with leasing and conditional sale transactions on behalf of Yamana and its Subsidiaries, (B) purchasing accounts receivable or making loans secured by accounts receivable or inventory or (C) being a finance company or (2) any Subsidiary which the Board of Directors of Yamana has determined by resolution does not maintain a substantial portion of its fixed assets within Canada or the United States.

        "Subsidiary" means, at any relevant time, any person of which the voting shares or other interests carrying more than 50% of the outstanding voting rights attached to all outstanding voting shares or other interests are owned, directly or indirectly, by a person and/or one or more subsidiaries of such person.

Limitation on Liens

        For so long as any Debt Securities under the Indenture are outstanding, the Corporation will not, and will not permit any Restricted Subsidiary to, create, incur, issue, assume or otherwise have outstanding any Lien on any Principal Property now owned or hereafter acquired by Yamana or a Restricted Subsidiary, or on shares of stock or Indebtedness of any Restricted Subsidiary now owned or hereafter acquired by Yamana or a Restricted Subsidiary, in each case other than Permitted Liens, unless at the time thereof or prior thereto the Debt Securities then outstanding under the Indenture (together with, if and to the extent the Corporation so

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determines, any other Indebtedness then existing or thereafter created) are secured (but only to the extent of any Lien that is not a Permitted Lien) equally and ratably with (or prior to) any and all Indebtedness that is secured by such Lien for so long as such Indebtedness is so secured by such Lien that is not a Permitted Lien.

        For purposes of the foregoing, the giving of a guarantee that is secured by a Lien on any Principal Property or on any shares of stock or Indebtedness of any Restricted Subsidiary, and the creation of a Lien on any Principal Property or on any shares of stock or Indebtedness of any Restricted Subsidiary to secure Indebtedness that existed prior to the creation of such Lien, will be deemed to involve the creation of Indebtedness in an amount equal to the principal amount guaranteed or secured by such Lien but the amount of Indebtedness secured by Liens on any Principal Property and shares of stock and Indebtedness of Restricted Subsidiaries will be computed without cumulating the underlying Indebtedness with any guarantee thereof or Lien securing the same.

        For the avoidance of doubt, (i) the sale or other transfer of any minerals in place for a period of time until the purchaser will realize therefrom a specified amount of money (however determined) or a specified amount of such minerals; (ii) the sale or other transfer of any minerals in an amount such that the purchaser will realize therefrom a specified amount of money (however determined); (iii) the sale or other transfer of any other interest in property of a character commonly referred to as a "production payment;" (iv) any acquisition of any property or assets by the Corporation or its Restricted Subsidiaries that is subject to any reservation that creates or reserves for the seller an interest in any metals or minerals in place or the proceeds from their sale; (v) any conveyance or assignment in which the Corporation or its Restricted Subsidiaries convey or assign an interest in any metals or minerals in place or the proceeds from their sale; or (vi) any lien upon any of the Corporation's or its Restricted Subsidiaries' wholly-owned or partially-owned or leased property or assets to secure the payment of the Corporation or its Restricted Subsidiaries' proportionate part of the development or operating expenses in realizing the metal or mineral resources of such property, shall not constitute the incurrence of Indebtedness secured by a Lien.

Consolidation, Amalgamation and Merger and Sale of Assets

        The Indenture provides that the Corporation may not consolidate or amalgamate with or merge into or enter into any statutory arrangement with any other person, or, directly or indirectly, convey, transfer or lease all or substantially all the Corporation's properties and assets to any person, unless:

•

the person formed by or continuing from such consolidation or amalgamation or into which the Corporation is merged or with which the Corporation enters into such statutory arrangement or the person which acquires or leases all or substantially all of the Corporation's properties and assets is organized and existing under the laws of the United States, any state thereof or the District of Columbia or the laws of Canada or any province or territory thereof or any member nation of the Organization for Economic Co-Operation and Development;



•

the successor person expressly assumes or assumes by operation of law all of the Corporation's obligations under the Corporation's Debt Securities and under the Indenture;



•

immediately before and after giving effect to such transaction, no event of default and no event which, after notice or lapse of time or both, would become an event of default, will have happened and be continuing; and



•

certain other conditions are met.

        If, as a result of any such transaction, any of the Corporation's Principal Properties become subject to a Lien, then, unless such Lien could be created pursuant to the Indenture provisions described under "— Limitation on Liens" above without equally and ratably securing the Debt Securities under the Indenture, the Corporation, simultaneously with or prior to such transaction, will cause the Debt Securities to be secured equally and ratably with or prior to the Indebtedness secured by such Lien.

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Payment of Additional Amounts

        Unless otherwise specified in the applicable Prospectus Supplement, all payments made by the Corporation or on its behalf under or with respect to the any series of the Corporation's Debt Securities issued under the Indenture will be made free and clear of, and without withholding or deduction for or on account of, any present or future tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and other liabilities related thereto) (collectively "Taxes") imposed or levied by or on behalf of the Government of Canada or any province or territory thereof or by any other authority or agency in or outside of Canada having power to tax (each a "Relevant Taxing Jurisdiction"), unless the Corporation is required to withhold or deduct Taxes by law or by the interpretation or administration thereof by the Relevant Taxing Jurisdiction.

        If any amount for or on account of such Taxes is required by any Relevant Taxing Jurisdiction to be withheld or deducted from any payment made under or with respect to the Debt Securities issued under the Indenture, the Corporation will pay to each holder of such Debt Securities as additional interest such additional amounts ("Additional Amounts") as may be necessary so that the net amount received by each such holder after such withholding or deduction (and after deducting any Taxes on such Additional Amounts) will not be less than the amount such holder would have received if such Taxes had not been required to be withheld or deducted; provided, however, that the foregoing obligation to pay Additional Amounts shall not apply to:

(1)

any Taxes that would not have been so imposed but for the existence of any present or former connection between the relevant holder (or between a fiduciary, settlor, beneficiary, partner, member or shareholder of the relevant holder, if the relevant holder is an estate, nominee, trust, partnership, limited liability company or corporation) and the Relevant Taxing Jurisdiction other than the receipt of such payment or the ownership or holding of or the execution, delivery, registration or enforcement of such Debt Security;



(2)

any payment made by the Corporation under or with respect to such Debt Securities to a holder where such holder did not deal at arm's length with the Corporation (within the meaning of the Income Tax Act (Canada)) (the "Tax Act") at the time of the relevant payment;



(3)

any Taxes that are assessed or imposed by reason of the holder being a "specified shareholder," as defined in subsection 18(5) of the Tax Act, of the payer of the payments or not dealing at arm's length (within the meaning of the Tax Act) with a "specified shareholder" of such payer;



(4)

any estate, inheritance, gift, sales, excise, transfer, personal property Tax or similar Tax, assessment or governmental charge;



(5)

any Taxes that are payable otherwise than by deduction or withholding from a payment of principal, premium, interest or Additional Amounts on such Debt Securities;



(6)

any Taxes that would not have been so imposed but for the presentation of such Debt Securities (where presentation is required) for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever is later, except to the extent that the holder thereof would have been entitled to Additional Amounts had the Debt Securities been presented for payment on the last date during such 30 day period;



(7)

any Taxes that would not have been so imposed or would have been imposed at a lower rate if the holder of such Debt Securities had provided to the Corporation any information, certification, documentation or evidence required under applicable law, rules, regulations or generally published administrative practice of the Relevant Taxing Jurisdiction for such Taxes not to be imposed or to be imposed at a lower rate; provided that such information, certification, documentation or evidence is required by the applicable law, rules, regulations or generally published administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from or reduction in the requirement to deduct or withhold all or part of such Taxes and such information, certification, documentation or evidence is reasonably requested upon reasonable notice by the applicable payor;



(8)

any Taxes that were imposed on a fiduciary, partnership or other entity that is not the sole beneficial owner of the payment, if the laws of the Relevant Taxing Jurisdiction require the payment to be

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included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts had it been the holder; or

(9)

any Taxes that would not have been so imposed but for any combination of the foregoing.

        In any event, no Additional Amounts will be payable under the provisions described above in respect of any Debt Securities in excess of the Additional Amounts which would be required if, at all relevant times, the holder of such Debt Securities were a resident of the United States and a qualifying person for purposes of the Convention Between the United States of America and Canada with Respect to Taxes on Income and on Capital (1980), as amended, including any protocols thereto. As a result of the limitation on the payment of Additional Amounts discussed in the preceding sentence, the Additional Amounts received by certain holders of the Corporation's Debt Securities will be less than the amount of Taxes withheld or deducted, and, accordingly, the net amount received by such holders will be less than the amount such holders would have received had there been no such withholding or deduction in respect of Taxes.

        The Corporation will (i) make such withholding or deduction of Taxes as is required under applicable law or the interpretation or administration thereof by the Relevant Taxing Jurisdiction, (ii) remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable law and (iii) furnish to the Trustee and the Securities Administrator reasonable evidence of the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes.

        If the Corporation is obligated to pay Additional Amounts with respect to any payment under or with respect to the Debt Securities, the Corporation will deliver to the Trustee and the Securities Administrator, as the paying agent, an officer's certificate stating the fact that such Additional Amounts will be payable and the amounts so payable and will set forth such other information necessary to enable the payment of such Additional Amounts to holders of Debt Securities on the payment date. Each such officer's certificate shall be relied upon until receipt of a new officer's certificate addressing such matters. To the extent permitted by law, neither the Trustee nor the Securities Administrator shall have any obligation to determine or obtain knowledge of when Additional Amounts are paid or owed.

        Wherever in the Indenture there is mentioned, in any context, the payment of principal (and premium, if any), interest or any other amount payable under or with respect to a Debt Security, such mention will be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

Tax Redemption

        Unless otherwise specified in the applicable Prospectus Supplement, a series of the Corporation's Debt Securities will be subject to redemption at any time, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof together with accrued and unpaid interest to, but not including, the date fixed for redemption, upon the giving of a notice as described below, if the Corporation determines that:

•

as a result of (A) any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction, or (B) any change in the application or interpretation of such laws, regulations or rulings by any legislative body, court, governmental agency or regulatory authority (including a holding by a court of competent jurisdiction) of a Relevant Taxing Jurisdiction, which change or amendment is announced or becomes effective on or after the date of the applicable Prospectus Supplement, the Corporation or a successor, as applicable, has or will become obligated to pay, on the next succeeding date on which interest is due, Additional Amounts with respect to any Debt Security of such series; or



•

on or after the date of the applicable Prospectus Supplement, any action has been taken by any taxing authority of, or any decision has been rendered by a court of competent jurisdiction in a Relevant Taxing Jurisdiction, including any of those actions specified in the first bullet, whether or not such action was taken or such decision was rendered with respect to the Corporation or a successor, as applicable, or any change, amendment, application or interpretation will be officially proposed, which, in any such case, in the written opinion of the Corporation's legal counsel, will result in the Corporation, or a successor, as

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applicable, becoming obligated to pay, on the next succeeding date on which interest is due, Additional Amounts with respect to any Debt Security of such series; and

in any such case, the Corporation, in its business judgment, determines that the payment of Additional Amounts cannot be avoided by the use of reasonable measures available to the Corporation (which shall not include the substitution of an obligor in respect of the Debt Securities).

        In the event that the Corporation elects to redeem a series of its Debt Securities pursuant to the provisions set forth in the preceding paragraph, the Corporation will deliver to the Trustee and the Securities Administrator an officer's certificate stating that the Corporation is entitled to redeem such series of Debt Securities pursuant to their terms.

        Notice of intention to redeem such series of Debt Securities as provided above will be given not more than 60 nor less than 10 days prior to the date fixed for redemption and will specify the date fixed for redemption.

Provision of Financial Information

        The Corporation will file with the Trustee and the Securities Administrator, within 30 days after such reports or information are filed with the SEC, copies, which may be in electronic format, of the Corporation's annual report and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Corporation files with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Corporation is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and does not otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Corporation will continue to provide the Trustee and the Securities Administrator (i) within 90 days of the end of each fiscal year, audited consolidated financial statements of the Corporation for the preceding fiscal year, and a corresponding management's discussion and analysis of such audited consolidated financial statements and (ii) within 60 days of the end of the first three fiscal quarters of each fiscal year, unaudited financial statements of the Corporation for the preceding fiscal quarter, and a corresponding management's discussion and analysis of such unaudited consolidated financial statements. Any documents filed by the Corporation with the SEC via the SEC's EDGAR system will be deemed filed with the Trustee and the Securities Administrator as of the time such documents are filed via the SEC's EDGAR system. Neither the Trustee nor the Securities Administrator will have any duty to monitor any filings made with the SEC's EDGAR system.

Events of Default

        Each of the following constitute events of default under the Indenture with respect to Debt Securities of any series:

•

default in the payment of the principal of any Debt Securities of that series when it becomes due and payable;



•

default in the payment of any interest on any Debt Securities of that series when such interest becomes due and payable, and such default is continued for 30 days;



•

default in the performance, or breach, of any other covenant of Yamana in the Indenture for the benefit of holders of any Debt Securities of that series, and such default or breach is continued for 60 days after written notice to the Corporation as provided in the Indenture;



•

default by Yamana or any Guarantor in the payment of Indebtedness of US$100,000,000 or more in principal amount outstanding when due after the expiration of any applicable grace period, or default under Indebtedness of Yamana or any Guarantor of US$100,000,000 or more in principal amount resulting in acceleration of such Indebtedness, but only if such Indebtedness is not discharged or such acceleration is not rescinded or annulled;



•

certain events of bankruptcy, insolvency or reorganization occur involving Yamana or any Guarantor; and



•

any other event of default provided with respect to Debt Securities of that series.

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        If an acceleration is in an amount less than US$100,000,000 of any of the Corporation's Indebtedness or that of any Guarantor, the holders of the Debt Securities will not have the right to accelerate the maturity of their Debt Securities even though in some such cases other creditors may have that right.

        Subject to certain exceptions, the Indenture provides that the Trustee must give notice of a default of which it has actual knowledge to the registered holders of the Debt Securities of the relevant series within 90 days of occurrence.

        If an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs, the principal of and interest on all the Debt Securities will become immediately due and payable without any action on the part of the Trustee or any holder. If any other event of default for the Debt Securities occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the outstanding Debt Securities of all series issued under the Indenture and affected by the event of default (voting as a single class) may declare the principal of and all accrued and unpaid interest on the Debt Securities immediately due and payable. The holders of a majority in principal amount of the outstanding Debt Securities of all series issued under the Indenture and affected by the event of default may in some cases rescind this accelerated payment requirement.

        A holder of Debt Securities of any series may pursue any remedy under the Indenture only if:

•

such holder gives the Trustee written notice of a continuing event of default;



•

the holders of at least 25% in principal amount of the outstanding Debt Securities of all series issued under the Indenture and affected by the event of default make a written request to the Trustee to pursue the remedy;



•

such holder offers to the Trustee an indemnity or security satisfactory to the Trustee;



•

the Trustee fails to act for a period of 60 days after receipt of the request and offer of indemnity; and



•

during that 60-day period, the holders of a majority in principal amount of the outstanding Debt Securities of all series issued under the Indenture and affected by the event of default do not give the Trustee a direction inconsistent with the request.

        This provision does not, however, affect the right of a holder of a Debt Security to sue for enforcement of any overdue payment.

        Subject to certain limitations, conditions and restrictions, the holders of a majority in principal amount of the outstanding Debt Securities of all series issued under the Indenture and affected by the event of default may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee and exercising any trust or power conferred on the Trustee with respect to the Debt Securities of all series affected by such event of default. The Trustee, however, may refuse to follow any such direction that conflicts with law or the Indenture. In addition, prior to acting at the direction of holders, the Trustee will be entitled to be indemnified by those holders against any loss and expenses caused thereby.

        The Indenture requires the Corporation to deliver each year to the Trustee and the Securities Administrator a written statement as to the Corporation's compliance with the covenants contained in the Indenture.

Trustee

        If an event of default occurs under the Indenture and is continuing, the Trustee will be required to use the degree of care and skill of a prudent person in the conduct of that person's own affairs. If an event of default occurs and is continuing under the Indenture, the Trustee will become obligated to exercise any of its powers under the Indenture at the written request of any of the holders of any Debt Securities only after such holders have offered the Trustee indemnity and/or security satisfactory to it.

        The Indenture contains limitations on the right of the Trustee, if it becomes the Corporation's creditor, to obtain payment of claims or to realize on certain property received for any such claim, as security or otherwise. The Trustee is permitted to engage in other transactions with the Corporation. If, however, it acquires any conflicting interest, it must eliminate that conflict or resign within 90 days after ascertaining that it has a

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conflicting interest and after the occurrence of a default under the Indenture, unless the default has been cured, waived or otherwise eliminated within the 90-day period.

Securities Administrator

        The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be compensated and indemnified, are extended to, and shall, to the extent they are applicable to the Securities Administrator in the performance of its respective capacities provided for in the Indenture, be enforceable by the Securities Administrator, in each of its respective capacities hereunder, including its capacity as paying agent, registrar and authenticating agent.

Modification and Waiver

        The Indenture may be amended or supplemented or any provision of the Indenture may be waived without the consent of any holders of Debt Securities in certain circumstances, including:

•

to provide for the assumption of the Corporation's obligations under the Indenture by a successor;



•

to add covenants that would benefit the holders of any Debt Securities or to surrender any rights the Corporation has under the Indenture;



•

to add events of default with respect to any Debt Securities;



•

to provide for uncertificated Debt Securities in addition to or in place of certificated Debt Securities or to provide for bearer Debt Securities;



•

to make any change that does not adversely affect any outstanding Debt Securities of any series issued under the Indenture in any material respect; provided, that any change made solely to conform the provisions of the Indenture to a description of Debt Securities in an offering circular or prospectus supplement will be deemed not to adversely affect any outstanding Debt Securities of any series issued under the Indenture in any material respect, as provided in an officer's certificate;



•

to provide any security for, any guarantees of or any additional obligors on any series of Debt Securities;



•

to provide for the appointment of a successor trustee or securities administrator;



•

to comply with any requirement to effect or maintain the qualification of the Indenture under the Trust Indenture Act;



•

to establish the form and terms of Debt Securities of any series or to authorize the issuance of additional Debt Securities of a series previously authorized; and



•

to cure any ambiguity, omission, defect or inconsistency.

        The Indenture may be amended or supplemented with the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of all series affected by such amendment or supplement. Without the consent of the holder of each Debt Security issued under the Indenture and affected thereby, however, no modification to the Indenture may:

•

change the stated maturity of the principal of, or any installment of interest or additional amounts on, any Debt Security;



•

reduce the principal of any Debt Security or any premium payable on the redemption of any Debt Security or reduce the amount of any installment of interest or additional amounts payable on any Debt Security;



•

change the place of payment or make payments on any Debt Security payable in currency other than as originally stated in such Debt Security;



•

impair the holder's right to institute suit for the enforcement of any payment on any Debt Security;



•

reduce the amount of Debt Securities whose holders must consent to an amendment, supplement or waiver; or

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•

make any change in the percentage of principal amount of Debt Securities necessary to waive compliance with certain provisions of the Indenture or to make any change in the provision related to modification.

        The holders of a majority in principal amount of the outstanding Debt Securities of all series affected by the waiver may on behalf of the holders of all Debt Securities of such series waive compliance by the Corporation with certain restrictive provisions of the Indenture. The holders of a majority in principal amount of the outstanding Debt Securities of all series affected by such default may waive any past default under the Indenture with respect to such Debt Securities, except a default in the payment of the principal of (or premium, if any) and interest, if any, on any Debt Securities or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Debt Security of such series.

Defeasance and Covenant Defeasance

        The Indenture provides that, at the Corporation's option, the Corporation will be discharged from any and all obligations in respect of the outstanding Debt Securities of any series upon irrevocable deposit with the Trustee or the Securities Administrator, in trust, of money and/or U.S. government securities which will provide money in an amount sufficient without consideration of reinvestment in the opinion of a nationally recognized firm of financial advisers or independent chartered accountants as evidenced by a certificate of officers of Yamana delivered to the Trustee and the Securities Administrator to pay the principal of (and premium, if any) and interest, if any, on the outstanding Debt Securities of such series (hereinafter referred to as a "defeasance") (except with respect to the authentication, transfer, exchange or replacement of the Corporation's Debt Securities or the maintenance of a place of payment and certain other obligations set forth in the Indenture). Such trust may only be established if, among other things:

•

the Corporation has delivered to the Trustee and the Securities Administrator an opinion of counsel in the United States stating that (i) the Corporation has received from, or there has been published by, the United States Internal Revenue Service a ruling, or (ii) since the date of execution of the Indenture, there has been a change in the applicable United States federal income tax law, in either case to the effect that the holders of the outstanding Debt Securities of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;



•

the Corporation has delivered to the Trustee and the Securities Administrator an opinion of counsel in Canada or a ruling from the Canada Revenue Agency to the effect that the holders of the outstanding Debt Securities of such series will not recognize income, gain or loss for Canadian federal, provincial or territorial income or other Canadian tax purposes as a result of such defeasance and will be subject to Canadian federal, provincial or territorial income and other Canadian tax on the same amounts, in the same manner and at the same times as would have been the case had such defeasance not occurred (and for the purposes of such opinion, such Canadian counsel will assume that holders of the outstanding Debt Securities of such series include holders who are not resident in Canada);



•

no event of default or event that, with the passing of time or the giving of notice, or both, will constitute an event of default with respect to that series of Debt Securities will have occurred and be continuing on the date of such deposit;



•

the Corporation is not an "insolvent person" within the meaning of the Bankruptcy and Insolvency Act (Canada) on the date of such deposit and after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; and



•

other customary conditions precedent are satisfied.

        The Corporation may exercise its defeasance option notwithstanding the Corporation's prior exercise of its covenant defeasance option described in the following paragraph if the Corporation meets the conditions described in the preceding paragraph at the time the Corporation exercises the defeasance option.

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        The Indenture provides that, at the Corporation's option, unless and until the Corporation has exercised its defeasance option described above with respect to Debt Securities of the same series, the Corporation may omit to comply with the covenants described under "— Certain Covenants — Limitation on Liens," certain aspects of the covenant described under "— Certain Covenants — Consolidation, Amalgamation, Merger and Sale of Assets" and certain other covenants, and such omission will not be deemed to be an event of default under the Indenture and the outstanding Debt Securities upon irrevocable deposit with the Trustee or the Securities Administrator, in trust, of money and/or U.S. government securities which will provide money in an amount sufficient without consideration of reinvestment in the opinion of a nationally recognized firm of financial advisers or independent chartered accountants as evidenced by a certificate of officers of Yamana delivered to the Trustee and the Securities Administrator to pay the principal of (and premium, if any) and interest, if any, on the outstanding Debt Securities (hereinafter referred to as "covenant defeasance"). If the Corporation exercises its covenant defeasance option, the obligations under the Indenture other than with respect to such covenants and the events of default other than with respect to such covenants will remain in full force and effect. Such trust may only be established if, among other things:

•

the Corporation has delivered to the Trustee and the Securities Administrator an opinion of counsel in the United States to the effect that the holders of the outstanding Debt Securities will not recognize income, gain or loss for United States federal income tax purposes as a result of such covenant defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;



•

the Corporation has delivered to the Trustee and the Securities Administrator an opinion of counsel in Canada or a ruling from the Canada Revenue Agency to the effect that the holders of the outstanding Debt Securities will not recognize income, gain or loss for Canadian federal, provincial or territorial income or other Canadian tax purposes as a result of such covenant defeasance and will be subject to Canadian federal, provincial or territorial income and other Canadian tax on the same amounts, in the same manner and at the same times as would have been the case had such covenant defeasance not occurred (and for the purposes of such opinion, such Canadian counsel will assume that holders of the outstanding Debt Securities include holders who are not resident in Canada);



•

no event of default or event that, with the passing of time or the giving of notice, or both, will constitute an event of default with respect to that series of Debt Securities will have occurred and be continuing on the date of such deposit;



•

the Corporation is not an "insolvent person" within the meaning of the Bankruptcy and Insolvency Act (Canada) on the date of such deposit and after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; and



•

other customary conditions precedent are satisfied.

Discharge of the Indenture

        The Corporation may satisfy and discharge its obligations under the Indenture with respect to the Debt Securities by delivering to the Securities Administrator for cancellation all the outstanding Debt Securities or by depositing with the Trustee or the Securities Administrator, as the paying agent, after such Debt Securities have become due and payable or will become due and payable within one year, whether at stated maturity, on any redemption date or otherwise, cash sufficient to pay all of the outstanding Debt Securities and pay all other sums payable under the Indenture by the Corporation.

Governing Law

        The Indenture and the Debt Securities will be governed by and construed in accordance with the laws of the State of New York.

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Consent to Service

        Under the Indenture, the Corporation has irrevocably appointed C T Corporation System, 111 — 8^th Avenue, New York, New York 10011-5201, as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the Indenture or the Debt Securities that may be instituted in any federal or New York state court located in the Borough of Manhattan, in The City of New York, or brought by the Trustee or the Securities Administrator (whether in its individual capacity or in its capacity as Trustee or Securities Administrator, as applicable, under the Indenture), and will irrevocably submit to the non-exclusive jurisdiction of such courts.

Enforceability of Judgments

        Since a substantial portion of the assets of the Corporation are outside the United States, any judgment obtained in the United States against the Corporation may need to be satisfied by seeking enforcement of such judgment in a court located outside of the United States from the Corporation's assets. The Corporation has been advised by its Canadian counsel, Cassels Brock & Blackwell LLP, that there is doubt as to the enforceability in Canada by a court in original actions, or in actions to enforce judgments of United States courts, of civil liabilities predicated upon United States federal securities laws.

Subscription Receipts

        The following description sets forth certain general terms and provisions of Subscription Receipts that may be issued hereunder and is not intended to be complete. Subscription Receipts may be issued at various times which will entitle holders thereof to receive, upon satisfaction of certain release conditions and for no additional consideration, Common Shares, Debt Securities, Warrants, Units or any combination thereof. The Subscription Receipts may be offered separately or together with other Securities, as the case may be. Subscription Receipts will be issued pursuant to one or more subscription receipt agreements (each, a "Subscription Receipt Agreement"), each to be entered into between the Corporation and an escrow agent (the "Escrow Agent") that will be named in the relevant Prospectus Supplement. Each Escrow Agent will be a financial institution organized under the laws of Canada or a province thereof and authorized to carry on business as a trustee. If underwriters or agents are used in the sale of any Subscription Receipts, one or more of such underwriters or agents may also be a party to the Subscription Receipt Agreement governing the subscription receipts sold to or through such underwriter or agent.

        The statements made in this Prospectus relating to any Subscription Receipt Agreement and Subscription Receipts to be issued under this Prospectus are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the provisions of the applicable Subscription Receipt Agreement. You should refer to the Subscription Receipt Agreement relating to the specific Subscription Receipts being offered for the complete terms of the Subscription Receipts. A copy of any Subscription Receipt Agreement relating to an offering or Subscription Receipts will be filed by the Corporation with the securities regulatory authorities in applicable Canadian offering jurisdictions and the United States after the Corporation has entered into it.

        The particular terms of each issue of Subscription Receipts will be described in the related Prospectus Supplement. This description may include, but may not be limited to, any of the following, if applicable:

•

the designation and aggregate number of such Subscription Receipts being offered;



•

the price at which such Subscription Receipts will be offered;



•

the designation, number and terms of the Common Shares, Debt Securities, Warrants, Units or any combination thereof to be received by the holders of such Subscription Receipts upon satisfaction of the release conditions, and any procedures that will result in the adjustment of those numbers;



•

the conditions (the "Release Conditions") that must be met in order for holders of such Subscription Receipts to receive, for no additional consideration, Common Shares, Debt Securities, Warrants, Units or any combination thereof;

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•

the procedures for the issuance and delivery of the Common Shares, Debt Securities, Warrants, Units or any combination thereof to holders of such Subscription Receipts upon satisfaction of the Release Conditions;



•

whether any payments will be made to holders of such Subscription Receipts upon delivery of the Common Shares, Debt Securities, Warrants, Units or any combination thereof upon satisfaction of the Release Conditions;



•

the identity of the Escrow Agent;



•

the terms and conditions under which the Escrow Agent will hold all or a portion of the gross proceeds from the sale of such Subscription Receipts, together with interest and income earned thereon (collectively, the "Escrowed Funds"), pending satisfaction of the Release Conditions;



•

the terms and conditions under which the Escrow Agent will release all or a portion of the Escrowed Funds to the Corporation upon satisfaction of the Release Conditions and if the Subscription Receipts are sold to or through underwriters or agents, the terms and conditions under which the Escrow Agent will release a portion of the Escrowed Funds to such underwriters or agents in payment of all or a portion of their fees or commissions in connection with the sale of the Subscription Receipts;



•

procedures for the refund by the Escrow Agent to holders of such Subscription Receipts of all or a portion of the subscription price of their Subscription Receipts, plus any pro rata entitlement to interest earned or income generated on such amount, if the Release Conditions are not satisfied;



•

any contractual right of rescission to be granted to initial purchasers of such Subscription Receipts in the event that this Prospectus, the Prospectus Supplement under which Subscription Receipts are issued or any amendment hereto or thereto contains a misrepresentation;



•

any entitlement of the Corporation to purchase such Subscription Receipts in the open market by private agreement or otherwise;



•

if the Subscription Receipts are issued as a Unit with another Security, the date, if any, on and after which the Subscription Receipts and the other Security will be separately transferable;



•

whether the Corporation will issue such Subscription Receipts as global securities and, if so, the identity of the depository for the global securities;



•

whether the Corporation will issue such Subscription Receipts as bearer securities, as registered securities or both;



•

provisions as to modification, amendment or variation of the Subscription Receipt Agreement or any rights or terms of such Subscription Receipts, including upon any subdivision, consolidation, reclassification or other material change of the Common Shares, Debt Securities, Warrants, Units or other securities, any other reorganization, amalgamation, merger or sale of all or substantially all of the Corporation's assets or any distribution of property or rights to all or substantially all of the holders of Common Shares;



•

whether the Corporation will apply to list such Subscription Receipts on any exchange;



•

material United States and Canadian federal income tax consequences of owning such Subscription Receipts; and



•

any other material terms or conditions of such Subscription Receipts.

Rights of Holders of Subscription Receipts Prior to Satisfaction of Release Conditions

        The holders of Subscription Receipts will not be, and will not have the rights of, shareholders of the Corporation. Holders of Subscription Receipts are entitled only to receive Common Shares, Debt Securities, Warrants, Units or a combination thereof on exchange or conversion of their Subscription Receipts, plus any cash payments, all as provided for under the Subscription Receipt Agreement and only once the Release Conditions have been satisfied.

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Escrow

        The Subscription Receipt Agreement will provide that the Escrowed Funds will be held in escrow by the Escrow Agent, and such Escrowed Funds will be released to the Corporation (and, if the Subscription Receipts are sold to or through underwriters or agents, a portion of the Escrowed Funds may be released to such underwriters or agents in payment of all or a portion of their fees in connection with the sale of the Subscription Receipts) at the time and under the terms specified by the Subscription Receipt Agreement. If the Release Conditions are not satisfied, holders of Subscription Receipts will receive a refund of all or a portion of the subscription price for their Subscription Receipts, plus their pro-rata entitlement to interest earned or income generated on such amount, if provided for in the Subscription Receipt Agreement, in accordance with the terms of the Subscription Receipt Agreement.

Modifications

        The Subscription Receipt Agreement will specify the terms upon which modifications and alterations to the Subscription Receipts issued thereunder may be made by way of a resolution of holders of Subscription Receipts at a meeting of such holders or consent in writing from such holders. The number of holders of Subscription Receipts required to pass such a resolution or execute such a written consent will be specified in the Subscription Receipt Agreement.

        The Subscription Receipt Agreement will also specify that the Corporation may amend the Subscription Receipt Agreement and the Subscription Receipts, without the consent of the holders of the Subscription Receipts, to cure any ambiguity, to cure, correct or supplement any defective or inconsistent provision, or in any other manner that will not materially and adversely affect the interests of the holder of outstanding Subscription Receipts or as otherwise specified in the Subscription Receipt Agreement.

Units

        The following description sets forth certain general terms and provisions of the Units that may be issued hereunder and is not intended to be complete. Units may be issued at various times comprising any combination of the other Securities described in this Prospectus. Each Unit will be issued so that the holder of such Unit is also the holder of each Security composing such Unit. Therefore, the holder of a Unit will have the rights and obligations of a holder of each included Security (except in some cases where the right to transfer an included Security of a Unit may not occur without the transfer of the other included security comprising part of such Unit). The Units may be offered separately or together with other Securities, as the case may be.

        The particular terms of each issue of Units will be described in the related Prospectus Supplement. This description may include, but may not be limited to, any of the following, if applicable:

•

the designation and aggregate number of Units;



•

the price at which the Units will be offered;



•

the designation and terms of the Units and the Securities comprising the Units, including whether and under what circumstances those Securities may be held or transferred separately;



•

any provisions for the issuance, payment, settlement, transfer or exchange of the Units or of the Securities comprising the units;



•

whether the Corporation will apply to list the Units on any exchange;



•

the material United States and Canadian Federal income tax consequences of owning the Units, including how the purchase price paid will be allocated among the Securities comprising the Units; and



•

whether the Units will be issued in fully registered or global form.

Warrants

        The following description sets forth certain general terms and provisions of Warrants for the purchase of Common Shares, Preference Shares, Units or Debt Securities that may be issued hereunder and is not intended

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to be complete. The Warrants may be offered separately or together with other Securities, as the case may be. Warrants may be issued at various times under one or more warrant indenture to be entered into by the Corporation and one or more banks or trust companies acting as warrant agent.

        The statements made in this Prospectus relating to any warrant indenture and Warrants to be issued under this Prospectus are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the provisions of the applicable warrant indenture. You should refer to the warrant indenture relating to the specific Warrants being offered for the complete terms of the Warrants. A copy of any warrant indenture relating to an offering or Warrants will be filed by the Corporation with the securities regulatory authorities in applicable Canadian offering jurisdictions and the United States after the Corporation has entered into it.

        The particular terms of each issue of Warrants will be described in the related Prospectus Supplement. This description may include, but may not be limited to, any of the following, if applicable:

•

the designation and aggregate number of Warrants;



•

the price at which the Warrants will be offered;



•

the designation, number and terms of the Common Shares, Preference Shares, Units or Debt Securities, as applicable, purchasable upon exercise of the Warrants, and procedures that will result in the adjustment of those numbers;



•

the date on which the right to exercise the Warrants will commence and the date on which the right will expire;



•

the exercise price of the Warrants;



•

if the Warrants are issued as a Unit with another Security, the date, if any, on and after which the Warrants and the other Security will be separately transferable;



•

any minimum or maximum amount of Warrants that may be exercised at any one time;



•

any terms, procedures and limitations relating to the transferability, exchange or exercise of the Warrants;



•

whether the Warrants will be subject to redemption or call and, if so, the terms of such redemption or call provisions;



•

provisions as to modification, amendment or variation of the warrant indenture or any rights or terms of such Warrants, including upon any subdivision, consolidation, reclassification or other material change of the Common Shares, Preference Shares, Units, Debt Securities or other securities, any other reorganization, amalgamation, merger or sale of all or substantially all of the Corporation's assets or any distribution of property or rights to all or substantially all of the holders of Common Shares;



•

material United States and Canadian federal income tax consequences of owning the Warrants; and



•

any other material terms or conditions of the Warrants.

        Warrant certificates will be exchangeable for new Warrant certificates of different denominations at the office indicated in the Prospectus Supplement. Prior to the exercise of their Warrants, holders of Warrants will not have any of the rights of holders of the securities subject to the Warrants. The Corporation may amend the warrant indenture(s) and the Warrants, without the consent of the holders of the Warrants, to cure any ambiguity, to cure, correct or supplement any defective or inconsistent provision or in any other manner that will not prejudice the rights of the holders of outstanding Warrants, as a group.

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