Corporate governance relates to activities of the Board of Directors, the members of which are elected by and are accountable to the shareholders, and take into account the role of the individual members of management who are appointed by the Board of Directors and who are charged with the day to day management of the company. The Board of Directors is committed to sound corporate governance practices which are both in the interest of its shareholders and contribute to effective and efficient decision making. National Instrument 58-101 requires that each reporting company disclose its corporate governance practices on an annual basis.

Board of Directors

Applying the definition set out in National Instrument 52-110, four of the six members of the Board of Directors are “independent”.  The members who are considered independent are Richard Jordens, Bruce Hamilton, Glen MacDonald and Ernest Peters.  Allan Fabbro is not considered independent by virtue of the fact that he is an executive officer of the Company (Mr. Fabbro is the President of the Company).  Mr. Clarke is also not considered to be an independent Director by virtue of the fact that he is an executive officer of the Company (Mr. Clarke is the Chief Executive Officer and Chairman of the Company).

In order to facilitate its exercise of independent judgment in carrying out the responsibilities of the Board of Directors, the Board of Directors ensures that a majority of independent directors are in attendance at all Board of Directors’ meetings.

Ethical Business Conduct

The company, together with its management, is committed to conducting its business in an ethical manner. This is accomplished by management actively doing the following in its administration and conduct of the Company’s business:

1. promoting integrity and deterrence of wrongdoing;
2. promoting honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;
3. promoting avoidance or absence of conflicts of interest;
4. promoting full, fair, accurate, timely and understandable disclosure in public communications made by the company;
5. promoting compliance with applicable governmental laws, rules and regulations; and
6. helping foster a culture of integrity, honesty and accountability throughout the company.

Audit Committee

The company’s Audit Committee has been structured to comply with the requirements of National Instrument 52-110 – Audit Committees (NI 52-110) of the Canadian Securities Administrators. The company’s Board of Directors has determined that the Audit Committee members have the appropriate level of financial understanding and industry specific knowledge to be able to perform the duties of the position and, in particular, are ‘‘financially literate’’ as defined in NI 52-110.

The Board of Directors has adopted a written charter for the Audit Committee.  In accordance with its charter, the Audit Committee shall, as permitted by, and in accordance with, the requirements of the Business Corporations Act (British Columbia) and the company’s articles and any legal or regulatory authority having jurisdiction, periodically assess the adequacy of procedures for the public disclosure of financial information and review on behalf of the Board of Directors, and report to the Board of Directors, the results of its review and its recommendations regarding all material matters of a financial reporting and audit nature, including, but not limited to the following main subject areas:

1. financial statements, including management’s discussion and analysis thereof;
2. financial information in any annual information form, management proxy circular, prospectus or other offering document, material change report or business acquisition report;
3. reports to shareholders and others;
4. annual and interim press releases regarding financial results or containing earnings guidance;
5. internal controls;
6. audits and reviews of the company’s financial statements; and
7. filings to securities regulators containing financial information.

The Audit Committee shall ensure satisfactory procedures for receipt, retention and treatment of complaints and for the confidential, anonymous submission by employees regarding any accounting, internal accounting controls or auditing matters. The company’s Board of Directors will be kept informed of the Audit Committee’s activities by reports delivered to the Board of Directors.

At least annually, the Audit Committee shall review the qualifications and performance of the lead partners of the company’s external auditors and determine whether it is appropriate to adopt or continue a policy of rotating the lead partner of the external auditors. In addition, the Audit Committee shall review and approve the company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditors.

The Audit Committee will meet as many times per year as necessary to carry out its responsibilities.

The Audit Committee consists of the following members of the Company’s Board of Directors:

Allan Fabbro	Not independent(1)	Financially literate(1)
Bruce Hamilton	Independent(1)	Financially literate(1)
Ernest Peters	Independent(1)	Financially literate(1)

⁽¹⁾ As defined by NI 52-110

Audit Committee Charter

Forward-Looking Statements

This web site contains forward-looking statements, including but not limited to comments regarding predictions and projections.  Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties.  Actual results may differ materially from those currently anticipated in such statements.