Disclosure Policy

 

General

All Personnel Members are required to comply with securities laws and the disclosure, confidentiality and Insider Trading rules set out in Auxico’s policies and Code. This Policy supplements those provisions and is intended to raise awareness of our approach to disclosure among Personnel Members.

The objectives of this Policy are to:

• ensure that Material Information about Auxico is disclosed in a timely, consistent and appropriate manner, in accordance with applicable law; and

• prevent the improper use or disclosure of Material Information or Confidential Information about Auxico.

This Policy relates to all types of disclosure by Auxico, namely to regulators, investors, lenders, the investment community, the media, industry counterparts, partners, governments and other stakeholders.

The CEO and the CFO are ultimately responsible for the design and effectiveness of disclosure controls and procedures. To assist the CEO and CFO in fulfilling this mandate, an Audit Committee has been established with responsibility for:

1. determining whether information is Material Information; 

2. ensuring the timely disclosure of Material Information in accordance with applicable law; 

3. overseeing the disclosure procedures and practices of the company; and 

4. monitoring the effectiveness of and compliance with this Policy.

 

Material Information

Information relating to Auxico is considered to be material if: 

1. such information results in or would reasonably be expected to result in, a significant change in the market price or value of Auxico’s securities; or

2. there is a substantial likelihood that a reasonable investor would consider it important while making an investment decision. 

In other terms, there must be a substantial probability that the information would be viewed by a reasonable investor as having significantly altered the information available in the market concerning Auxico.

Information about the following matters could be material, depending on the circumstances:

• earnings, results or projections;

• unexpected operational developments, including with respect to cybersecurity;

• acquisitions, divestitures, amalgamations or mergers;

• changes in the value of assets;

• significant borrowing, lending or financings;

• defaults regarding significant agreements or entering into significant agreements;

• failure or alleged failure to comply with terms of licenses or relevant law or regulation;

• the occurrence of high risk safety events or fatalities;

• litigation or regulatory enforcement action, whether actual, pending or threatened;

• labor disputes, whether actual, pending or threatened;

• changes to distribution policies or payments;

• public or private sales of securities;

• plans to repurchase or redeem securities;

• changes in capital or corporate structure;

• changes to accounting policies or disagreements with auditors;

• a change of control;

• changes in management or in the Board of Directors; or

• a credit rating downgrade or upgrade.

Note that this list is not exhaustive, these are only examples.

 

Disclosure of Material Information

The Audit Committee must be informed about events and developments that may be material. If any Personnel Member becomes aware of events or developments that may constitute Material Information about Auxico, they must promptly contact the CEO or, in his or her absence, the CFO. 

For clarity, Personnel Members are not responsible for making a determination as to whether an event or development constitutes Material Information. Their responsibility is to recognize events or developments that might constitute Material Information and report such information promptly. The Audit Committee, or a designated member thereof, is responsible for making the determination of whether or not the reported events or developments, considered together with the totality of the other information in the possession of the Audit Committee, is Material Information.

Also, if a Personnel Member becomes aware of an error or omission in any of Auxico’s publicly disclosed information, whether in regulatory filings, news releases or otherwise, they must promptly contact the CEO or, in his or her absence, the CFO. 

Material Information about Auxico will be promptly disclosed in a news release, regulatory filing, or other permitted electronic means (to the extent permitted under applicable law), unless it is determined by the Audit Committee, or a designated member thereof, that the information must remain confidential.

No news release will be publicly disseminated by Auxico until it has been reviewed and approved by the Audit Committee, or a designated member thereof.

 

Securities laws considerations

Personnel Members who have Material Information about Auxico are not permitted to buy or sell securities (or any financial instruments) of Auxico until after the information has been generally disclosed to the public by way of a news release or other disclosure document filed with a securities regulator, and sufficient time has passed so the information may be considered to be broadly disseminated. 

These obligations also apply if Personnel Members have Material Information regarding any other entity, regardless of whether it is an Auxico-related entity and whether they obtained the information through Auxico. 

If Personnel Members are not sure whether information is undisclosed Material Information, they must consult internal legal counsel before engaging in a transaction. 

Personnel Members are also prohibited by law from communicating undisclosed Material Information about Auxico or an entity with which it does business or that it has invested in to other people (except in the necessary course of business), such as relatives or friends, who may trade on the basis of the information or disclose this information to others. 

Securities laws prohibit trades made on the basis of these “tips”. 

Personnel Members are also prohibited from encouraging or recommending that anyone purchase or sell securities of Auxico or an entity with which it does business or has invested in while in possession of relevant undisclosed Material Information. Auxico imposes trading Blackout Periods on those people who have access to Material Information which has not been disclosed and during periods when financial statements are being prepared but results have not yet been publicly released. 

Auxico’s Insider Trading Policy has more information on these matters.

 

Confidentiality

If Personnel Members are privy to Confidential Information (regardless of whether such information is also Material Information), they are prohibited from communicating that information to anyone other than authorized personnel who have a legitimate need to know such information in connection with their duties and who have been advised of the confidential nature of such information.

No one in possession of Confidential Information should disclose that information to any outside party, unless required to do so in the necessary course of business.

The following are examples of circumstances that could require disclosure of Confidential Information with outside parties in the necessary course of business:

• communications with Auxico’s vendors, suppliers, or strategic partners regarding its needs or preferences;

• communications with Auxico’s lenders, legal counsel, auditors, underwriters, and financial and all other professional advisors;

• communications during negotiations with counterparties;

• communications with labour unions, industry associations, government agencies, regulators and stakeholders about Auxico’s interests or business; and

• communications with credit rating agencies (provided that the information is disclosed for the purpose of assisting the agency to formulate a credit rating and the agency’s ratings generally are or will be publicly available).

Where practical, outside parties who are given Confidential Information about the company will be asked to confirm their commitment to non-disclosure in the form of a written confidentiality agreement.

When Personnel Members are unsure about whether the information they have is confidential or whether they are permitted to disclose it to an outside party, they must consult internal legal counsel.

 

In order to prevent the misuse or inadvertent disclosure of Confidential Information, Personnel Members are invited to respect the following guidelines: 

• do not discuss confidential matters in public places or in a manner where the discussion may be overheard; 

• do not read confidential documents in public places or discard them where others may retrieve them; 

• keep confidential documents in a safe place (inside as well as outside the office) with access restricted to individuals who “need to know”; 

• only transmit confidential documents by electronic means if it is reasonably believed that transmission can be made and received securely; and 

• use passwords to protect confidential electronic data and use code names in communications and within confidential documents as appropriate in the circumstances.

 

Auxico’s communications

Auxico designates a limited number of persons who are authorized to communicate with the media or the investment community (which includes investors, potential investors, analysts and brokers) on its behalf. 

Auxico’s Authorized Spokespersons are the: (i) Chairman; (ii) CEO; (iii) CFO; (iv) Director, Investor Relations; (v) Chairman Emeritus.

These Authorized Spokespersons may, from time to time, designate others to speak on behalf of the company as back-ups or to respond to specific inquiries from the investment community or the media.

Only Authorized Spokesperson may respond to inquiries about Auxico from the investment community or the media, whether regarding Material Information or otherwise. Anyone who is not an Authorized Spokesperson must refer any request they receive to an Authorized Spokesperson.

The Board of Directors (or a committee thereof) will review and approve the following disclosures in advance of their public release by the company: (i) earnings guidance; and (ii) news releases containing material financial information based on the company's financial statements prior to the release of such statements. When the Board of Directors (or a committee thereof) has reviewed and approved disclosures, such disclosures will include a reference to this review.

In addition to otherwise publicly disclosed information, Auxico will only provide, through its Authorized Spokespersons, non-Material Information in any meetings or communications with the investment community and the media. Acceptable topics of discussion may, depending on the circumstances, include the Auxico’s general prospects, the business environment, management’s philosophy and long-term strategy. Auxico will, upon request, provide the same sort of information that is not Material Information to individual investors or reporters that it has provided to analysts and institutional investors.

 

Inadvertent disclosure and errors in disclosure

If inadvertent disclosure of Material Information is made in a selective forum, such as a meeting with analysts or institutional investors, Auxico will promptly issue a news release in order to ensure that such information is broadly disseminated. 

If inadvertent disclosure or an error in disclosure occurs, Auxico shall take appropriate remedial action which may include notification of the appropriate regulator of the inadvertent error, the making of broad public disclosure of the information or correction of the information through a press release or a filing with the securities regulators.

 

Analyst reports

Auxico shall, upon request, review analysts’ draft research reports or models. Auxico will review the report or model for the purpose of pointing out errors in fact based on publicly disclosed information.

Auxico will limit its comments in responding to these types of inquiries to the correction of factual errors based on publicly disclosed information. Auxico will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with the analyst’s model and earnings estimates.

Auxico regards an analyst’s report as proprietary information belonging to the analyst’s firm. In addition, re-circulating a report by an analyst may be viewed as Auxico’s endorsement of the report. For these reasons, analysts’ reports must not be circulated to persons outside of Auxico, other than in response to requests from regulatory authorities or to outside advisors or consultants to Auxico.

 

Electronic media

Personnel Members are prohibited from participating in discussions on Internet chat rooms or otherwise communicating via electronic media on matters pertaining to Auxico’s activities or its securities. 

If a Personnel Member encounters a discussion or posting on electronic media pertaining to Auxico that they deem significant or troubling, they must advise the department of human resources and/or their supervisor.

Generally, Auxico’s policy is to neither confirm nor deny rumours (whether in the media, on the internet or otherwise) when asked to comment. However, when authorized by the Audit Committee, Authorized Spokespersons may make exceptions and respond as prescribed by the Audit Committee.

 

Access to this Policy and consequences of non-compliance

Upon commencement of employment, each Personnel Member will be provided with a copy of this Policy. The version of this Policy available on the intranet may be more current and up-to-date and supersedes any paper copies, should there be any discrepancy between paper copies and what is posted online.

Anyone subject to this Policy who violates it may face Reprisals up to and including termination of his or her employment for cause and without notice. A violation of this Policy may also constitute a violation of certain securities laws. If Auxico discovers a violation of any securities laws, it may refer the matter to the appropriate regulatory authorities, which could lead to penalties, fines or imprisonment and other liability.

 

Approval of this Policy

This Policy has been approved by the Board of Directors. Any future revisions to this Policy will be approved by the Board of Directors and made available to all Personnel Members.

 

 

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Insider Trading Policy

 

General

The objectives of this Policy are to:

• educate Auxico’s Personnel Members about their legal obligations with respect to Insider Trading and Tipping;

• facilitate compliance with applicable laws to prevent transactions by Personnel Members that would not be in full compliance with applicable legal requirements;

• help satisfy Auxico’s obligations to prevent Insider Trading and Tipping and to help Personnel Members avoid the severe consequences associated with violations of securities laws; and

• help protect against Auxico violating securities laws related to selective disclosure.

 

Insider Reports and Insider Trading

The legislation governing Auxico’s Insiders includes but is not limited to the Canadian Business Corporation Act, Quebec Business Corporations Act, the Quebec Securities Act, Regulation 45-106 Respecting Prospectus Exemptions and the securities legislation of the other provinces of Canada. 

Insiders must, within 10 days of becoming an Insider, file an Insider Report through SEDI on www.sedi.com in the required form effective the date on which the person became an Insider disclosing any direct or indirect beneficial ownership or control or direction over Auxico’s securities (however that it is not necessary for an individual who has become an Insider to file a "nil" Insider Report). 

In addition, Insiders must file an Insider Report disclosing a change in such Insider’s securities holdings (including the grant or exercise of stock options). Insider Reports disclosing changes in an Insider's securities holdings must be filed through SEDI on www.sedi.com within 10 days after the date of a trade, or within such shorter period as may be prescribed. 

Under applicable securities laws and Auxico policy, Reporting Insiders are required to file a report with securities regulators any time they trade in shares, debt securities, options (including the grant and exercise of options), deferred share units or restricted stock units or other Auxico securities. Reporting Insiders must file an Insider Report electronically through SEDI on www.sedi.com within 5 days after each trade. 

 

Insider Trading and Tipping

Securities legislation prohibits anyone from trading in Auxico securities with knowledge of a Material Fact or Material Change that has not been disclosed to the general public. This prohibited activity is commonly known as Insider Trading. 

Securities legislation also prohibits anyone from trading in the securities of any public company other than Auxico when he or she has knowledge of an undisclosed Material Fact or Material Change regarding Auxico that may affect the other public company.

Securities legislation prohibits any person from informing any other person of a Material Fact or Material Change before the Material Fact or Material Change has been generally disclosed. This prohibited activity is commonly known as Tipping. Both the person who provides the information and the person who receives the information could be liable under securities laws if the person who receives the information trades in securities based on the provided non-public information. 

 

Obligations on all Personnel Members

Auxico’s Personnel Members cannot trade in securities of Auxico, including exercising stock options, while in possession of Material Information with respect to Auxico that has not yet been generally disclosed.

Likewise, Auxico’s Personnel Members cannot trade in securities of another public company while in possession of Material Information with respect to Auxico that has not yet been generally disclosed and that would affect such other public company.

Auxico’s Personnel Members cannot inform other people of Material Information regarding Auxico or any other public company before that Material Information has been generally disclosed.

The provisions of this section and the following section also apply to all family members of a Personnel Member who reside with said member.

 

Guidelines for trading Auxico securities

No Insider may trade, sell, purchase or otherwise monetize Auxico securities if such person has knowledge of Material Information that has not been disclosed to the general public. In general, this will require waiting for 48 hours after release of the information by Auxico. 

No Insider shall pass on Material Information to other people before the Material Fact or Material Change has been generally disclosed. There is an exception from this restriction on Tipping which applies if Material Information is provided to another person “in the necessary course of business”. 

Such circumstances would include disclosure of Material Information to Auxico’s bankers, counsel and other persons having a business association with Auxico where it is necessary to make such disclosure.

No Insider shall trade, without prior clearance by the CEO, during any period designated as a Blackout Period.

In situations not related to the above, it will generally be appropriate for Insiders only during the period commencing two full business days after a release of quarterly or annual results, which includes adequate comment on new developments during the period (particularly if results have been mailed to shareholders), and ending on the date that is one month preceding the release of quarterly results or two months preceding the release of annual results; provided that the trading or dealing is reported to the CEO, or, in his or her absence, the CFO.

 

Blackout Periods

All of Auxico’s Personnel Members in possession of Material Information which has not been generally disclosed, including Restricted Insiders, are prohibited from trading in securities of Auxico, including exercising Auxico stock options, during an applicable Blackout Period.

Notwithstanding the foregoing, Auxico’s Personnel Members (Insiders or not) are prohibited from trading in securities of Auxico, even during the applicable trading timeframe while such Personnel Members possess Material Information which has not been generally disclosed.

When Material Information is deemed worthy of a Blackout Period or anticipated to have an impact (e.g., when significant merger & acquisition discussions are ongoing, a significant financing is contemplated), either positive or negative, on the price of Auxico shares after review by the designated persons, a Blackout Period will be instituted for Personnel Members.

No one may disclose to any outside third party or any other Personnel Member who is not subject to the Blackout Period, that a Blackout Period has been instituted. 

To provide assistance in preventing inadvertent violations and avoiding even the appearance of an improper transaction, the procedures set forth below must be followed by Auxico’s Personnel Members (and certain other people as determined by the Audit Committee from time to time) who may have access to Material Information which has not been generally disclosed (Restricted Insiders). 

At no time may any Restricted Insider, directly or indirectly, trade in Auxico’s securities unless such person obtains the prior approval of the Audit Committee (or its designated representative). Pre-clearance requirements also apply to trades by a Restricted Insider’s coworkers. 

Pre-clearance requests, which should outline the trading request (i.e., purchase or sale, possible level of securities to be traded, if any automatic trading plan is to be instituted as a result) are to be sent by email to Auxico’s CEO. 

Pre-clearance also applies to sales of Auxico stock in connection with exercises of stock options.

Auxico’s policy will be to err on the side of caution in granting or denying trading clearance, in recognition of the fact that trades which create notoriety, even if they are ultimately found to be proper, may tarnish Auxico’s goodwill and reputation.

If the CEO denies trading clearance to a Restricted Insider, Auxico will immediately impose a Blackout Period and the Restricted Insider must keep the matter confidential.

Clearance for a transaction is valid only for a 48-hour period. If the transaction order is not placed within that 48-hour period, clearance for the transaction must be re-requested. If clearance is denied, then the fact of such denial of clearance must be kept confidential by the Restricted Insider.

Trading restrictions during Blackout Periods will normally not be applicable when Auxico’s Personnel Member has entered into a plan allowing him or her to purchase or sell Auxico securities on an automatic basis according to a pre-established set of instructions with respect to timing and price, regardless of whether a Blackout Period may be in effect and regardless of whether the Personnel Member may be in possession of undisclosed Material Information about Auxico at the time of such purchase or sale.

These plans must be preapproved by the CEO, acting in its sole discretion, and must meet the following conditions:

• at the time the plan is entered into, Auxico’s Personnel Member is not in possession of any undisclosed Material Information relating to Auxico;

• trading parameters are clearly documented in writing at the time the plan is established;

• the plan contains meaningful restrictions on the ability of the Personnel Member to profit from material undisclosed information by varying, suspending, or terminating the plan;

• the plan provides that the broker may not consult with the Personnel Member regarding any sales under the plan and that the Personnel Member cannot disclose information to the broker that might influence the broker’s execution of the plan; and

• the plan is entered into in good faith.

Plans of this nature include automatic securities purchase plans, dividend reinvestment plans and automatic pre-arranged sales plans structured in compliance with applicable securities laws. It should be noted that the Insider reporting obligations discussed above continue to apply in respect to trades made pursuant to these plans.

 

No Speculating

Purchases of securities of Auxico should be for investment purposes only and not short-term speculation. This includes all dealings in puts and calls, all short sales and all buying or selling on the market with the intention of quickly re-selling or buying back at a profit. In addition, there should be no trading in securities of other companies with the knowledge that Auxico is contemplating or engaged in acquiring such company or its securities or negotiating significant business arrangements. Auxico also strongly discourages Personnel Members from making purchases using “margin loans” in order to remove the risk of their being put into a difficult situation as a result of a margin loan shortfall (margin call).

 

No Hedging

Insiders are not permitted to enter into any transaction that has the direct or indirect effect of offsetting the economic value of any such Insider’s interest in any security of Auxico. This includes the purchase of financial instruments such as prepaid variable forward contracts, equity swaps, collars or units of exchange funds that are designed to hedge or offset a decrease in the market value of securities granted to such Insiders as compensation or otherwise held directly or indirectly by such Insiders.

 

Discretionary Account

If any Personnel Member has a discretionary account with a broker or other investment manager (i.e. the broker or other investment manager has a certain amount of discretion to buy and sell stock on behalf of the Personnel Member), they must be advised in writing that there are to be no purchases or sales of Auxico shares in the discretionary account without first discussing it with such Personnel Member, in order to ensure compliance with this Policy and applicable securities laws.

 

Confidentiality

In the course of conducting business, Personnel Members may be in possession of information which may be of a market sensitive nature. Access to such information must be limited strictly to those persons who require it in order to perform the duties expected of them. Precautions must be adopted by each Personnel Member to ensure that sensitive information within their department is not available or accessible to individuals inside or outside of Auxico who have no requirement for such information. Personnel Members are reminded to review Auxico’s Disclosure Policy for further information.

 

Penalties

The consequences of prohibited Insider Trading or Tipping where required on a timely basis can be severe and may include dismissal, fines, as well as civil and criminal sanctions. 

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Whistleblower Policy

 

General

The purpose of this Policy is to establish the procedure for reporting of concerns about illegal activities or other Wrongdoings by Auxico’s Personnel Members or business partners. 

This Policy applies to all Personnel Members, suppliers, and customers of Auxico.

Auxico is committed to providing a work environment where Personnel Members are dedicated to working with integrity and supporting ethical behavior.

Through this Policy, Auxico provides a confidential and anonymous avenue for Personnel Members to report concerns that may lead to an Accounting Irregularity, illegal activity, or a violation of Auxico’s policies.

 

Responsibilities and procedure

All Personnel Members must immediately report any Incident that they believe constitutes Wrongdoing to the Audit Committee, following the procedure set out in the following section.

The Personnel Member, the Discloser, must keep any information relating to the process strictly confidential. This Policy protects any Personnel Member who in good faith submits any complaint to the Audit Committee regarding any Wrongdoing, included but not limited to financial statements disclosures, accounting, internal accounting controls, auditing matters or violations to the Code or any of Auxico’s policies, in accordance with the procedures set out herein. 

Upon receiving a complaint, the Audit Committee will promptly conduct a thorough investigation on the matter. The Audit Committee shall notify the Board of Directors and the CEO of all investigations, and it is the obligation of all Personnel Members to cooperate in all investigations. Those responsible for an investigation will maintain the confidentiality of the allegations of the complaint and the identity of the persons involved, subject to the need to conduct a full and impartial investigation, remedy any violations of Auxico’s policies, or monitor compliance with or administer Auxico’s policies. 

The investigation will generally include, but will not be limited to, discussion with the complainant (unless the complaint was submitted on an anonymous basis), the party against whom allegations have been made, and witnesses, as deemed appropriate. 

In the event an investigation establishes that a Personnel Member has engaged in conduct or actions constituting a Wrongdoing, Auxico will take immediate and appropriate corrective action up to and including termination of a Personnel Member’s employment or contract. 

Nothing contained in this Policy limits Personnel Members’ ability to file a charge or complaint with a governmental regulatory agency and nothing herein limits their ability to communicate with any such agencies or otherwise participate in any investigation or proceeding that may be conducted by any such agency, including providing documents or other information, without notice to Auxico.

 

The Audit Committee’s procedure

The Audit Committee has adopted the following procedure: 

1. any of Auxico’s Personnel Members may submit, on a confidential or anonymous basis if they so desire, any concerns regarding a Wrongdoing. All such concerns shall be set forth in writing and forwarded in a sealed envelope to the Chairman of the Audit Committee labeled with a legend such as “To be opened by the Audit Committee only, being submitted pursuant to the Whistleblower Policy.” If the Discloser would like to discuss any matter with the Audit Committee, he or she should indicate this in the submission and include a telephone number at which he or she might be contacted if the Audit Committee deems it appropriate. If management receives any such envelope, it shall be forwarded promptly and unopened to the Chairman of the Audit Committee; 

The Chairman of the Audit Committee can be reached as follows: 

 

PRIVATE AND CONFIDENTIAL NOTICE

AUXICO RESOURCES CANADA INC. 

201 NOTRE-DAME STREET WEST, SUITE 500, MONTREAL, QUEBEC, H2Y 1T4

WWW.AUXICORESOURCES.COM                  

Attn: Mark Billings, Chairman of the Board and Chairman of Audit Committee -  mb@auxicoresources.com

 

1. following the receipt of any complaints submitted hereunder, the Audit Committee will investigate each matter so reported and take corrective and disciplinary actions where appropriate, which may include, alone or in combination, a warning or letter of reprimand, demotion, loss of merit increase, bonus or stock options, suspension without pay or termination of employment. The Audit Committee shall notify the Board of Directors and the CEO of such investigations.

 

During investigations, the Audit Committee shall endeavour to act in a prudent and reasonable manner, with minimal disruption to Auxico’s business and affairs and with sensitivity to the personal circumstances of the individual being investigated. 

In circumstances of impropriety alleged against the Board of Directors, as a whole or any member thereof, the CEO shall be responsible to investigate such allegations and the CEO shall report his or her findings to the Board of Directors. 

The Audit Committee may enlist Auxico’s Personnel Members and/or counsel, accounting or other advisors, as appropriate, to conduct any investigation of complaints regarding a Wrongdoing. In conducting any investigation, the Audit Committee shall use reasonable efforts to protect the confidentiality and anonymity of the Discloser. 

The Audit Committee shall retain as a part of the records of the Audit Committee any such complaints or concerns for a period of no less than six (6) years. 

The Audit Committee will review and evaluate this Policy on an annual basis to determine whether it is effective in providing appropriate procedures to report violations or complaints regarding Auxico’s policies. The Audit Committee will submit recommended changes to the Board for approval.

 

Auxico’s commitment

Auxico is committed to investigating and dealing with all concerns, complaints, or Incidents of Wrongdoings in a fair and timely manner while respecting the confidences and sensitivities of all persons involved; except where disclosure is required to investigate the Incident or to take appropriate action, including disciplinary measures.

Auxico will inform the Discloser of the investigation results and will take appropriate remedial or disciplinary action up to and including termination of Personnel Member who is in breach of applicable human rights legislation, federal or provincial laws and/or company policies.

Allegations that are not made in good faith will be viewed as a serious offence and may be subject to discipline up to and including termination.

Auxico will not permit any Personnel Members to harass, retaliate or discriminate against Disclosers, who, in good faith, report an Incident. Retaliation in any form will not be tolerated.

 

 

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Board of Directors Mandate

 

General

The purpose of this mandate of Auxico’s Board of Directors is to provide guidance to Board members as to their duties and responsibilities. The power and authority of the Board is subject to the provisions of applicable law and its constitutive documents.

The Board is responsible for the stewardship of Auxico. This requires the Board to oversee the conduct of Auxico’s business and affairs. The Board discharges some of its responsibilities directly while others are discharged through committees of the Board. The Board is not responsible for the day-to-day management and operation of Auxico's business, as this responsibility has been delegated to management. The Board is, however, responsible for supervising management in carrying out this responsibility.

 

Directors

The Board consists of Directors elected by the shareholders as provided for in Auxico's constitutive documents, and in accordance with applicable law and any policies adopted from time to time by the Board. 

Each member of the Board must act with honesty and in good faith with a view to Auxico’s best interests, and must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Directors have many roles and responsibilities regarding the Board’s affairs, and they are also responsible for other duties as they arise in the Director's role itself.

All members of the Board must have suitable experience and skills given Auxico’s nature and its businesses and have a proven record of sound judgment. Directors must possess characteristics and traits that reflect:

• high ethical standards and integrity in their personal and professional dealings;

• the ability to provide thoughtful and experienced counsel on a broad range of issues and to develop a depth of knowledge of Auxico’s businesses in order to understand and assess the assumptions on which Auxico’s strategic and business plans are based;

• the ability to form an independent judgment with respect to the appropriateness and probability of achieving such plans, all in Auxico’s best interest;

• the ability to monitor and evaluate Auxico’s financial performance; and

• an openness for the opinions of others and the willingness to listen, as well as the ability to communicate effectively and to raise tough questions in a manner that encourages open and frank discussion.

 

Directors are expected to commit the time and resources necessary to properly carry out their duties. Among other matters, Directors are expected to adequately prepare for and attend all regularly scheduled Board meetings. New Directors are expected to understand fully the role of the Board, the role of the committees of the Board and the contribution individual Directors are expected to make.

Members of the Board shall carry out their responsibilities objectively, honestly and in good faith with a view to Auxico’s best interests. Directors are expected to conduct themselves according to the highest standards of personal and professional integrity. Directors are also expected to set the standard for ethical conduct and ensure ethical behaviour and compliance with laws and regulations. If an actual or potential conflict of interest arises, a Director shall promptly inform the Chairman or Vice Chairman and shall refrain from voting or participating in discussion of the matter in respect of which he has an actual or potential conflict of interest. If it is determined that a significant conflict of interest exists and cannot be resolved, the Director should resign.

Directors are expected to act in accordance with applicable law, Auxico’s constitutive documents, its Code and all other policies applicable to Directors as are adopted from time to time, namely the Disclosure Policy, the Insider Trading Policy, the Whistleblower Policy and the Environmental Health and Safety Policy.

 

Board Meetings

The Board shall meet in accordance with a schedule established each year by the Board, and at such other times as the Board may determine. Meeting agendas shall be developed in consultation with the Chairman or Vice Chairman. Board members may propose agenda items though communication with the Chairman, Vice Chairman or the Personnel Member assisting the Chairman in drafting the Board meeting agenda and related documents. The Chairman is responsible for ensuring that a suitably comprehensive information package is sent to each Director in advance of each meeting. At the discretion of the Board, members of management and others may attend Board meetings, except for separate meetings of the independent Directors of the Board.

Directors are expected to be fully prepared for each Board meeting, which requires them, at a minimum, to have read the material provided to them prior to the meeting. At Board meetings, each Director is expected to take an active role in discussion and decision-making. To facilitate this, the Chairman is responsible for fostering an atmosphere conducive to open discussion and debate.

Where applicable, independent Directors shall have the opportunity to meet at appropriate times without management present at regularly scheduled meetings. The Chairman shall be responsible for presiding over meetings of the independent Directors. Independent Directors may propose agenda items for meetings of independent Directors members through communication with the Chairman or Vice Chairman.

 

The Board’s responsibilities

The Board is responsible for approving Auxico’s goals, objectives and strategies. The Board is also responsible for overseeing the implementation of appropriate risk assessment systems to identify and manage principal risks of Auxico’s business.

In addition to the other matters provided in its mandate, including the matters delegated to Board committees, the Board is also responsible for the following specific matters:

• review and approve management's strategic plans;

• review and approve Auxico’s financial objectives, business plans and budgets, including material capital expenditures;

• monitor corporate performance against the strategic plans and business, operating and capital budgets;

• management succession planning, including appointing and monitoring the CEO;

• assess its own effectiveness in fulfilling its responsibilities, including monitoring the effectiveness of individual Directors;

• ensure the integrity of Auxico’s internal control system and management information systems;

• develop Auxico’s approach to corporate governance, including developing a set of corporate governance principles and guidelines; and

• satisfy itself that appropriate policies and procedures are in place regarding public disclosure and restricted trading by Insiders, including the review and approval of Auxico’s corporate Disclosure Policy and confirmation that a process is in place to disclose all Material Information in compliance with Auxico’s timely disclosure obligations and to prevent selective disclosure of Material Information to analysts, institutional investors, market professionals and others.

A Director has an important and positive role as an Auxico representative. A Director is also expected to participate in outside activities that enhance Auxico’s image to investors, Employees, customers and the public.

The Board recognizes the importance of having procedures in place to ensure the effective and independent operation of the Board. In addition to the policies and procedures provided elsewhere in their mandate and in the position descriptions of the Chairman of the Board and the Vice Chairman of the Board, the Board has adopted the following procedures:

• the Board has complete access to Auxico’s management;

• the Board requires timely and accurate reporting from management and shall regularly review the quality of management's reports;

• subject to the approval of the Board, individual Directors may engage an external advisor at Auxico’s expense, in appropriate circumstances;

• the Chairman of the Board shall monitor the nature and timeliness of the information requested by and provided by management to the Board to determine if the Board can be more effective in identifying problems and opportunities for Auxico; and

• the Chairman, together with the CEO, shall develop a position description for the CEO, which shall be approved by the Board.

 

Subject to limits on delegation contained in corporate law applicable to Auxico, the Board has the authority to establish and carry out its duties through committees and to appoint Directors to be members of these committees. The Board assesses the matters to be delegated to committees of the Board and the constitution of such committees annually or more frequently, as circumstances require. From time to time the Board may create ad hoc committees to examine specific issues on behalf of the Board.

 

Board committees

The Board has established the Audit Committee, which can be reached at the following address:

AUXICO RESOURCES CANADA INC. 

201 NOTRE-DAME STREET WEST, SUITE 500, MONTREAL, QUEBEC, H2Y 1T4

WWW.AUXICORESOURCES.COM                  

Attn: Mark Billings, Chairman of the Board and Chairman of Audit Committee -  mb@auxicoresources.com

 

 

Environmental Health and Safety Policy (EHS)

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Auxico is committed to environmental consciousness, as well as the health and safety of its Personnel Members and communities, which are essential to embodying its corporate values of serving customers, acting with integrity, empowering its Employees and consistently improving itself.

Auxico’s EHS responsibility exists whether in an office or in a transportation vehicle.

Auxico implements its EHS Policy through its management system that guides its actions and tracks key performance indicators to manage risks and solicit continuous improvement. 

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Guided by its values and in accordance with its Code, Auxico ensures the following:

• meet or exceed all applicable EHS regulations and Auxico standards;

• follow established policies, procedures, and share best practices to create safe and compliant workplaces and environmentally responsible operations;

• encourage and empower Personnel Members to identify, understand and mitigate, when possible, the safety risks associated with their roles;

• promote a “speak-up” culture which will ensure that Personnel Members report all potential and actual risks and Incidents and will provide a culture that promotes physical and mental well-being to help our Employees live healthy, full and productive lives.

 

While Auxico is committed to operating responsibly and seeking to reduce adverse environmental impacts from its operations, Personnel Members and key partners have a responsibility to comply with all applicable EHS requirements. To manage its environmental risks, Auxico follows a path of continuous improvement: investigating, assessing, understanding, and improving environmental aspects and impacts.

Auxico uses EHS goal-setting and achievement as a motivator of innovation and sustainable growth within all areas of business. Auxico believes that progress toward its goals should be transparent and accessible to all our stakeholders, including our Employees and the community within which it operates.

Auxico recognizes and rewards EHS performance because it believes engagement, diversity of thought, and active dialogue helps everyone learn, increase transparency, and foster trust among Personnel Members and key partners. 

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CORPORATE STATEMENT ON GENDER, EQUITY, DIVERSITY AND INCLUSION

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AUXICO is committed to building an inclusive working environment, supporting the advancement of women and underrepresented employees in the workforce, and creating a safe and secure workplace for all of its employees regardless of their identity and background.

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AUXICO seeks to maintain a diverse workforce of talented and dedicated management, directors and executives with a broad mix of expertise, experience, skills and backgrounds, reflecting the diverse nature of the business environment in which the Corporation operates. Diversity includes, but is not limited to, business experience, geography, age, gender, and ethnicity and cultural status, including an effort to provide available positions to the appropriate number of women and minorities.

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The Corporation is committed to a merit-based system and considers candidates on merit against objective criteria and having due regard to the benefits of diversity, within a diverse and inclusive culture which solicits multiple perspectives and views and is free of conscious or unconscious bias and discrimination. 

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The Corporation will annually assess the expertise, experience, skills and backgrounds of its management, directors and executives in light of corporate needs, including the extent to which the current composition of AUXICO's workforce reflects a diverse mix of knowledge, experience, skills and backgrounds.

 

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