FAQ

The following is intended to answer certain key questions concerning the Meeting and the Arrangement and is qualified in its entirety by the more detailed information appearing in the Management Information Circular. Capitalized terms used in this summary and not otherwise defined have the meanings given to them under “Glossary of Terms” in the Circular.

Why did I receive the Circular?
When and where will the Guyana Goldfields Meeting be held?
What is the Arrangement?
What will I receive for my Guyana Goldfields Shares under the Arrangement?
When will I receive the consideration payable to me under the Arrangement for my Guyana Goldfields Shares?
What do I do with my Guyana Goldfields Share certificate(s) once I receive the Letter of Transmittal?
Does the Board of Directors of Guyana Goldfields support the Arrangement?
Why is the Board of Directors of Guyana Goldfields making the recommendation to vote in favour of the Arrangement?
What is 12049163 Canada Inc. and its purpose?
Why is now the right time for this deal?
Did Guyana Goldfields’ receive independent fairness opinions in regard to the transaction?
What is required to complete the Arrangement?
When does Guyana Goldfields expect the Arrangement to become effective?
What will happen to Guyana Goldfields if the Arrangement is completed?
Are there any risks I should consider in connection with the Arrangement?
What will happen if the Arrangement Resolution is not approved or the Arrangement is not completed for any reason?
What are the Canadian federal income tax consequences of the Arrangement?
What are the U.S. federal income tax consequences of the Arrangement?
Are Guyana Goldfields Shareholders entitled to Dissent Rights?
How do I vote?
If my Guyana Goldfields Shares are held by an Intermediary, will they vote my Company Shares for me?
Who is soliciting my proxy?
Who is eligible to vote?
Does any Guyana Goldfields Shareholder beneficially own 10% or more of the Guyana Goldfields Shares?
What if I acquire ownership of Guyana Goldfields Shares after the Record Date?
What approvals are required by Guyana Goldfields Shareholders to pass the Arrangement Resolution at the Meeting?
Should I send in my proxy now?
Can I revoke my vote after I have voted by proxy?
Who can I contact if I have additional questions or need assistance?

Why did I receive the Circular?

You received the Circular because you and other Shareholders will be asked to approve, by a special resolution, the Arrangement involving Guyana Goldfields, the Purchaser and Zijin under section 192 of the CBCA, pursuant to which the Purchaser will acquire all of the outstanding Company Shares not already owned by Zijin. In connection therewith, you and other Shareholders will be asked to approve, by a special resolution, a reduction in the stated capital of the Company Shares in order to satisfy the requirements of section 192(2) of the CBCA in respect of the Arrangement. Additionally, Shareholders will be asked to consider the annual business matters referred to in the Notice of Meeting. See Paragraphs 1 to 6 of the Notice of Meeting in the Circular.

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When and where will the Guyana Goldfields Meeting be held?

The Meeting will be held on July 27, 2020 at 10:30 a.m. (Toronto time) in a virtual only format that will be conducted via live webcast online accessible at https://web.lumiagm.com/275264504. There is no physical location for the Meeting.

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What is the Arrangement?

On June 11, 2020, Guyana Goldfields, the Purchaser and Zijin entered into the Arrangement Agreement, pursuant to which the Purchaser will, among other things, acquire all of the outstanding Company Shares not owned by Zijin in exchange for cash pursuant to the Plan of Arrangement. Upon completion of the Arrangement, Guyana Goldfields will become a wholly-owned subsidiary of the Purchaser and current shareholders will cease to hold their shares and receive a cash payment.

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What will I receive for my Guyana Goldfields Shares under the Arrangement?

Under the terms of the Arrangement, each holder of Company Shares will receive for each Company Share held, C$1.85 in cash. The consideration of C$1.85 per Company Share represents a 427% premium to the 20-day volume weighted average price of Guyana Goldfields as of the close of trading on April 24, 2020 (the last day prior to the public announcement of the Company entering into an arrangement agreement with Silvercorp) and a premium of approximately 35% to the implied value of the consideration offered pursuant to the arrangement agreement previously entered by the Company with Silvercorp (based on the closing price of the common shares of Silvercorp on the TSX as of June 3, 2020), which the Company terminated as of June 11, 2020 in accordance with its terms to enter into this Arrangement.

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When will I receive the consideration payable to me under the Arrangement for my Guyana Goldfields Shares?

You will receive the consideration due to you under the Arrangement as soon as practicable after the Arrangement becomes effective. If you are a Registered Shareholder, in order to receive your consideration you must complete and send a Letter of Transmittal and the certificate(s) representing your Company Shares and all other required documents to the Depositary. Beneficial Shareholders will receive their consideration through the facilities of The Canadian Depository for Securities Limited or the Depository Trust Company and their financial intermediary members with no further action required. Subject to the satisfaction of all conditions precedent to completion of the Arrangement (including receipt of Shareholder Approval, the Final Order and the Key Regulatory Approvals), completion of the Arrangement is anticipated to occur in August 2020. See “Information Concerning the Arrangement – Effective Date of the Arrangement”.

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What do I do with my Guyana Goldfields Share certificate(s) once I receive the Letter of Transmittal?

Once the Letter of Transmittal has been mailed by TSX Trust Company as transfer agent to Registered Shareholders as of the Record Date, all Registered Shareholders must complete, sign and return the Letter of Transmittal with the accompanying share certificate(s) representing the Company Shares to the Depositary at the address provided on the Letter of Transmittal.

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Does the Board of Directors of Guyana Goldfields support the Arrangement?

Yes. The Board has unanimously determined that the Arrangement is in the best interest of Guyana Goldfields and fair to the Shareholders and recommends that Shareholders vote in favour of the Arrangement.

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Why is the Board of Directors of Guyana Goldfields making the recommendation to vote in favour of the Arrangement?

In the course of its evaluation of the Arrangement, the Board consulted with Guyana Goldfields’ management, its financial and legal advisors, and considered a number of factors, including the following:

  • The Arrangement is superior to the Silvercorp Arrangement. The Board, after consultation with its financial and legal advisors, determined that the Arrangement is superior to the Silvercorp Arrangement, which the Company terminated as of June 11, 2020 in accordance with the terms of the Silvercorp Arrangement Agreement to enter into the Arrangement Agreement.
  • Significant premium. The consideration of C$1.85 per Company Share represents a (i) 427% premium to the volume weighted average price of the Company Shares on the TSX for the 20 trading days ended April 24, 2020 (the last trading day prior to the date that the Company announced that it had entered into the Silvercorp Arrangement Agreement), and (ii) 35% premium to the implied value of the consideration offered pursuant to the Silvercorp Arrangement (based on the closing price of the common shares of Silvercorp on the TSX as of June 3, 2020, the date that the Company announced that the Zijin Revised Proposal constituted a Superior Proposal (as defined under the Silvercorp Arrangement Agreement)).
  • Certainty of value: The cash consideration payable to Shareholders under the Arrangement provides for certainty of value and immediate liquidity.
  • Credibility of Zijin. The Purchaser’s obligations, including its obligation to pay the Consideration, have been guaranteed by Zijin. Zijin is credit worthy, committed, has a track record of completing transactions, including in the Canadian capital markets, and has the ability to complete the Arrangement.
  • No financing condition: The Arrangement is not subject to a financing condition and the Purchaser, as guaranteed by Zijin, has the financial capacity to consummate the Arrangement.
  • A strong financial position: Zijin has a strong balance sheet and a robust cash flow profile which provides access to capital and for the funding needed for the development of the next phase of the Aurora Gold Mine avoiding the need for the Company to raise significant capital.
  • Loan Agreement. The Loan Agreement allows the Company to fund ongoing operations at the Aurora Gold Mine, including costs related to temporary care and maintenance, as well as for certain working capital and general corporate purposes.
  • Fairness opinions. The Board has received fairness opinions from each of the Financial Advisors to the effect that, as at the date of their respective fairness opinions, and subject to the assumptions, limitations and qualifications set out therein, the consideration under the Arrangement is fair, from a financial point of view, to Shareholders (other than Zijin).
  • Support of Guyana Goldfields directors and officers. All of the directors and officers of the Company have entered into the Company Support & Voting Agreements pursuant to which they have agreed, among other things, to vote their Company Shares in favour of the Arrangement Resolution and the Stated Capital Resolution. As of the date of the Arrangement Agreement, such directors and officers collectively beneficially owned or exercised control or direction over an aggregate of approximately 0.23% of the outstanding Company Shares.
  • Other factors. The Board also considered the Arrangement with reference to the financial condition and results of operations of the Company, as well as its prospects, strategic alternatives and competitive position, including the risks involved in achieving those prospects and pursuing those alternatives in light of current market conditions and the Company’s financial position.

See “Information Concerning the Arrangement - Reasons for the Arrangement” in the Circular.

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What is 12049163 Canada Inc. and its purpose?

12049163 Canada Inc. is a corporation existing under the laws of Canada and a wholly-owned subsidiary of Zijin. The subsidiary was formed for the purpose of acquiring the Company Shares and consummating the transactions contemplated by the Arrangement Agreement.

Zijin has provided an unconditional and irrevocable guarantee in favour of the Company, as principal and not as surety, due and punctual performance by 12049163 Canada Inc., in respect of 12049163 Canada Inc.’s obligations and liabilities under the Arrangement Agreement.

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Why is now the right time for this deal?

With the Company requiring new sources of financing to continue with the next phase of open pit waste stripping and the underground development of the Aurora Gold Mine, the Board accelerated a process to consider a number of funding options and strategic alternatives. In the course of its evaluation, the Board initially unanimously determined that the Silvercorp Arrangement was in the best interest of Guyana Goldfields and fair to the Shareholders. Subsequent to the announcement of the entering into of the Silvercorp Arrangement Agreement, Zijin made an offer to the Company that the Board determined constituted a Superior Proposal. As a result, Silvercorp was provided with a right to match Zijin’s offer but elected not to do so. The Company then terminated the Silvercorp Arrangement Agreement in accordance with its terms and entered into the Arrangement.

For a complete description of the process leading to the Arrangement, see “Information Concerning the Arrangement - Background to the Arrangement” in the Circular.

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Did Guyana Goldfields’ receive independent fairness opinions in regard to the transaction?

The Board has received fairness opinions from each of RBC Dominion Securities Inc. and Stifel Nicolaus Canada Inc. which state that the Consideration under the Arrangement is fair from a financial point of view, to Shareholders (other than Zijin).

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What is required to complete the Arrangement?

The respective obligations of the Purchaser, Zijin and Guyana Goldfields to complete the Arrangement are subject to a number of conditions which must be satisfied or waived by the mutual consent of each of the Parties in order for the Arrangement to become effective, including:

  • the Arrangement Resolution will have been approved by the Shareholders at the Meeting in accordance with the Interim Order;
  • each of the Interim Order and Final Order will have been obtained on terms consistent with the Arrangement Agreement, and will not have been set aside or modified in any manner unacceptable to either Guyana Goldfields or the Purchaser, each acting reasonably, on appeal or otherwise;
  • each of the Key Regulatory Approvals will have been made, given or obtained, and each such Key Regulatory Approval will be in force and not modified in any material respect;
  • the Articles of Arrangement to be sent to the Director under the CBCA in accordance with the Arrangement Agreement, will be in form and content satisfactory to Guyana Goldfields and the Purchaser, acting reasonably; and
  • no Law in effect that makes the completion of the Arrangement illegal or otherwise prohibits or enjoins Guyana Goldfields or the Purchaser from completing the Arrangement. will have been enacted, issued, promulgated, enforced, made, entered, issued or applied.

See “Information Concerning the Arrangement - The Arrangement Agreement - Conditions to Closing” in the Circular.

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When does Guyana Goldfields expect the Arrangement to become effective?

Subject to the satisfaction of all conditions precedent to completion of the Arrangement (including receipt of Shareholder Approval, the Final Order and the Key Regulatory Approvals), completion of the Arrangement is anticipated to occur in August 2020. See “Information Concerning the Arrangement – The Arrangement Agreement - Effective Date of the Arrangement”.

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What will happen to Guyana Goldfields if the Arrangement is completed?

Upon completion of the Arrangement:

  • the Purchaser will own all of the Company Shares;
  • all of the Company Options will be assigned and transferred to the Company in exchange for a cash payment from the Company equal to the amount (if any) by which the Consideration exceeds the exercise price of such Company Option, the Company DSUs and Company RSUs will be deemed to be cancelled in exchange for a cash payment from the Company and the Company Stock Option Plan, the Company DSU Plans and the Company RSU Plans will be terminated; and
  • the Company Shares will be de-listed from the TSX and the Company will cease to be a reporting issuer.

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Are there any risks I should consider in connection with the Arrangement?

Shareholders should carefully consider all of the information disclosed or referred to in the Circular prior to voting on the matters being put before them at the Meeting. In addition to the other information presented in the Circular, the following risk factors should be given special consideration:

  • the Arrangement Agreement may be terminated in certain circumstances;
  • there can be no certainty that all conditions precedent to the Arrangement will be satisfied, including receipt of the Key Regulatory Approvals;
  • Guyana Goldfields will incur costs and may have to pay the Termination Amount if the Arrangement Agreement is terminated in certain circumstances;
  • Guyana Goldfields may have to pay the Expense Reimbursement Amount if the Arrangement Agreement is terminated in certain circumstances;
  • Guyana Goldfields directors and executive officers may have interests in the Arrangement that are different from those of the Shareholders;
  • Shareholder approval of the Arrangement Resolution and the Stated Capital Resolution may not be obtained; and
  • the disposition of Company Shares under the Arrangement may be subject to Canadian income tax or other income tax.

See “Informational Concerning the Arrangement – Risks Associated with the Arrangement” in the Circular.

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What will happen if the Arrangement Resolution is not approved or the Arrangement is not completed for any reason?

If the Arrangement is not completed, Guyana Goldfields will continue to operate as a standalone entity and will face many of the risks that it currently faces with respect to liquidity and financing its business and other business risks. It should be noted that if the Arrangement is not approved or completed for any reason, the stock price for the Company may fall back to pre-announcement levels or lower as the Company would face liquidity and financing risks similar to those that existed prior to the Arrangement. The Company would have 120 days in which to seek refinancing of the loan facility provided by Zijin and secure sufficient financing to fund ongoing working capital and development capital for the underground development project.

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What are the Canadian federal income tax consequences of the Arrangement?

For a summary of certain Canadian federal income tax consequences of the Arrangement applicable to a Shareholder, see “Certain Canadian Federal Income Tax Considerations” in the Circular. Such summary is not intended to be legal or tax advice. Shareholders should consult their own tax advisors as to the tax consequences of the Arrangement to them with respect to their particular circumstances.

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What are the U.S. federal income tax consequences of the Arrangement?

For a summary of certain U.S. federal income tax consequences of the Arrangement applicable to a U.S. Holder, see “Certain United States Federal Income Tax Considerations” in the Circular. Such summary is not intended to be legal or tax advice. Shareholders should consult their own tax advisors as to the tax consequences of the Arrangement to them with respect to their particular circumstances.

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Are Guyana Goldfields Shareholders entitled to Dissent Rights?

Yes. Registered Shareholders are entitled to dissent from the Arrangement Resolution in the manner provided in section 190 of the CBCA, as modified by the Interim Order, the Plan of Arrangement and the Final Order.

Anyone who is a beneficial owner of Company Shares registered in the name of an Intermediary and who wishes to dissent should be aware that only Registered Shareholders are entitled to exercise Dissent Rights. A Registered Shareholder who holds Company Shares as an Intermediary for one or more beneficial owners, one or more of whom wish to exercise Dissent Rights, must exercise such Dissent Rights on behalf of such holder(s). All Dissent Notices must be received by Guyana Goldfields at its office located at Suite 802, 375 University Avenue, Toronto, Ontario, Canada, M5G 2J5 not later than 5:00 p.m. (Toronto time) on the Business Day which is two Business Days prior to the date of the Meeting (as it may be adjourned or postponed from time to time).

It is important that Shareholders strictly comply with this requirement, which is different from the statutory dissent provisions of the CBCA which would permit a Dissent Notice to be provided at or prior to the Meeting.

A Non-Registered Shareholder who wishes to exercise Dissent Rights should immediately contact the Intermediary with whom the beneficial owner deals in respect of its Company Shares and either (a) instruct the Intermediary to exercise the Dissent Rights on the beneficial owner's behalf (which, if the Company Shares are registered in the name of CDS or another clearing agency, would require that the Company Shares first be re-registered in the name of the Intermediary); or (b) instruct the Intermediary to request that the Company Shares be registered in the name of the beneficial owner, in which case such holder would have to exercise the Dissent Rights directly (that is, the Intermediary would not be exercising the Dissent Rights on such holder's behalf).

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How do I vote?

Registered Shareholders can vote in one of the following ways:

Internet: got to www.voteproxyonline.com. Enter the 12-digit control number printed on the form of proxy and follow the instructions on the screen.

Fax: Enter voting instructions, sign and date the form of proxy and send your completed form of proxy to: TSX Trust Company, Attention: Proxy Department, 1.416.595.9593.

Mail: Enter voting instructions, sign and date the form of proxy and return your completed form of proxy in the enclosed postage paid envelope to:

TSX Trust Company
Attention: Proxy Department
100 Adelaide Street West, Suite 301
Toronto, ON M5H 4H1

Shareholders sending their completed form of proxy via mail should take into account any mail delivery interruptions. It is the responsibility of the Shareholder sending their form of proxy via mail to ensure that the TSX Trust Company receives the completed form of proxy no later than 10:30 a.m. (Toronto time) on July 23, 2020, or if the Meeting is adjourned or postponed, no later than 48 hours (excluding Saturdays, Sundays, and statutory holidays in the City of Toronto, Ontario) prior to the time of such adjourned or postponed Meeting. Late proxies will not be accepted.

Attending the Virtual Meeting: Registered Shareholders can access and vote at the virtual Meeting as follows:

  1. Go to https://web.lumiagm.com/275264504 in a web browser (not a Google search) on a smartphone, tablet or computer 30 minutes prior to the start of the Meeting. The latest versions of Chrome, Safari, Edge and Firefox will be needed. Please ensure the browser being used is compatible by logging in early. You should allow ample time to check into the virtual Meeting to check compatibility and complete the related procedures. PLEASE DO NOT USE INTERNET EXPLORER.
  2. Select “I have a control number” and enter your Control Number (your Control Number is located on your form of proxy) and the password: “GUY2020” (case sensitive).
  3. Follow the instructions to access the Meeting and vote when prompted

See “How to Participate in the Virtual Meeting” in the Circular.

Beneficial Shareholders can vote in one of the following ways:

Internet: Go to www.proxyvote.com. Enter the 16-digit control number printed on the VIF and follow the instructions on screen.

Phone: For Canadian beneficial Shareholders, call 1.800.474.7493 (English) or 1.800.474.7501 (French).

For United States beneficial Shareholders, call 1.800.454.8683.

You will need to enter your 16- digit control number. Follow the interactive voice recording instructions to submit your vote.

Mail: Enter your voting instructions, sign and date the VIF, and return the completed VIF in the enclosed postage paid envelope.

Attending the Virtual Meeting: See “How to Participate in the Virtual Meeting” in the Circular.

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If my Guyana Goldfields Shares are held by an Intermediary, will they vote my Company Shares for me?

No. An Intermediary will vote the Company Shares held by you only if you provide instructions to such Intermediary on how to vote. If you are a beneficial Shareholder, your Intermediary will send you a VIF or proxy form with the Circular. If you fail to give proper instructions, those Company Shares will not be voted on your behalf. Beneficial Shareholders should instruct their Intermediaries to vote their Company Shares on their behalf by following the directions on the VIF or proxy form provided to them by their Intermediaries. Unless your Intermediary gives you its proxy to vote the Company Shares at the Meeting, you cannot vote those Company Shares beneficially owned by you at the Meeting.

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Who is soliciting my proxy?

Your proxy is being solicited on behalf of management of Guyana Goldfields. Management will solicit proxies primarily by mail, but proxies may also be solicited personally by telephone, e-mail, internet or facsimile by directors, officers or employees of Guyana Goldfields, or by such agents as Guyana Goldfields may appoint.

Guyana Goldfields has retained Kingsdale Advisors in connection with the solicitation of proxies. All costs of solicitation by management will be borne by Guyana Goldfields. Guyana Goldfields will reimburse brokers and other entities for costs incurred by them in mailing meeting materials to Shareholders.

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Who is eligible to vote?

Guyana Goldfields Shareholders at the close of business on the Record Date, being June 23, 2020, or their duly appointed proxyholders are eligible to vote at the virtual Meeting.

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Does any Guyana Goldfields Shareholder beneficially own 10% or more of the Guyana Goldfields Shares?

Yes. Sentry Investment Management owns 11.6% of the Company Shares.

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What if I acquire ownership of Guyana Goldfields Shares after the Record Date?

You will not be entitled to vote the Company Shares acquired after the Record Date at the virtual Meeting. Only persons owning Company Shares as of the Record Date are entitled to vote at the virtual Meeting. However, if you acquire Company Shares after the Record Date, and the Arrangement is approved and you still hold the Company Shares at the Effective Date, you will be entitled to receive the consideration under the Arrangement.

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What approvals are required by Guyana Goldfields Shareholders to pass the Arrangement Resolution at the Meeting?

The Arrangement must be approved by a special majority vote of at least 66⅔% of the votes cast at the virtual Meeting or by proxy on the Arrangement Resolution by the Shareholders.

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Should I send in my proxy now?

Yes. Once you have carefully read and considered the information in the Circular, you should complete and submit the enclosed VIF or form of proxy. You are encouraged to vote well in advance of the proxy cut-off time at 10:30 a.m. (Toronto time) on July 23, 2020 to ensure your Company Shares are voted at the virtual Meeting. If the Meeting is adjourned or postponed, your proxy must be received not less than 48 hours (excluding Saturdays, Sundays and statutory holidays in the City of Toronto, Ontario) prior to the time of the reconvened Meeting. Late proxies will not be accepted.

To be effective, forms of proxy must be received by TSX Trust Company, Attn: Proxy Department, 301 – 100 Adelaide Street West, Toronto, Ontario, M5H 4H1 (Fax: (416) 595-9593) no later than 10:30 a.m. (Toronto time) on July 23, 2020, or if the Meeting is adjourned or postponed, no later than 48 hours (excluding Saturdays, Sundays, and statutory holidays in the City of Toronto, Ontario) prior to the time of such adjourned or postponed Meeting. Late proxies will not be accepted.

If you are a Non-Registered Shareholder submitting a VIF, the cut-off time for submission will be earlier than the proxy cut-off time.

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Can I revoke my vote after I have voted by proxy?

If you are a Registered Shareholder and submitted a form of proxy, you may revoke it at any time before the Meeting by doing any one of the following:

  • You may send another form of proxy with a later date to our transfer agent, TSX Trust Company, but it must reach the transfer agent no later than 10:30 a.m. (Toronto time) on July 23, 2020 or 48 hours (excluding Saturdays, Sundays and statutory holidays in the City of Toronto, Ontario) before any postponement or adjournment of the Meeting;
  • You may deliver a signed written statement stating that you want to revoke your form of proxy to our transfer agent, TSX Trust Company, by courier to its offices at 301-100 Adelaide Street West, Toronto, Ontario M5H 4H1, Attn: Proxy Department, by fax to 416-595-9593, or by any other electronic means at any time up to and including the last business day preceding the day of the Meeting, or any adjournment or postponement of it, at which the proxy is to be used; or
  • You may revoke your form of proxy in any other manner permitted by law.

If as a Registered Shareholder you are using your Control Number to log into the Meeting, you will be provided the opportunity to vote by online ballot at the appropriate time on the matters put forth at the Meeting. If you have already voted by proxy and you vote again during the online ballot at the Meeting, your online vote during the Meeting will revoke your previously submitted proxy. If you have already voted by proxy and do not wish to revoke your previously submitted proxy, do not vote again during the online ballot vote.

Non-Registered Holders who wish to change their vote must arrange for their respective Intermediaries to revoke the proxy on their behalf. A revocation of a proxy does not affect any matter on which a vote has been taken prior to the revocation.

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Who can I contact if I have additional questions or need assistance?

If you have any questions about the Circular or the matters described in the Circular, please contact your professional advisor. If you would like additional copies, without charge, of the Circular or you have any questions or require assistance with voting your proxy, please contact Guyana Goldfields’ strategic shareholder and communications advisor and proxy solicitation agent, Kingsdale Advisors, at 1.800.775.1986 toll free in North America, or call collect outside North America at +1.416.867.2272 or by e-mail at contactus@kingsdaleadvisors.com.

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