ARGONAUT GOLD INC. NOTICE OF THE ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS

Transcription

1 ARGONAUT GOLD INC. NOTICE OF THE ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS NOTICE is hereby given that the annual general and special meeting (the "Meeting") of the shareholders of Argonaut Gold Inc. (the "Corporation") will be held in the Canada C and D board rooms at the offices of Bennett Jones LLP, 3400 One First Canadian Place, 100 King Street West, P.O. Box 130, Toronto, Ontario, Canada, M5X 1A4, on May 3, 2016 at 10:00 a.m. (Eastern Daylight Time), for the following purposes: 1. to receive the Corporation's audited consolidated financial statements for the year ended December 31, 2015 and the independent auditors' report thereon; 2. to elect directors to the Corporation's board of directors (the "Board of Directors" or the "Board"); 3. to appoint PricewaterhouseCoopers LLP, Chartered Professional Accountants ("PwC") as the Corporation's independent auditors until the close of the next annual meeting of shareholders of the Corporation and to authorize the directors to fix their remuneration; 4. to consider, and if thought advisable, to approve an ordinary resolution confirming and re-authorizing the Corporation s share incentive plan (the Share Incentive Plan ) including certain amendments to, among other things, increase the number of shares issuable under the Share Incentive Plan from 6% to 7.25% of the number of common shares of the Corporation issued and outstanding from time to time, as more particularly described in the Circular; 5. to have a shareholder advisory vote on the Corporation s report on executive compensation ( Say on Pay ), as more particularly described in the Circular; and 6. to transact such further and other business as may properly be brought before the Meeting or any adjournment thereof. A shareholder wishing to be represented by proxy at the Meeting or any adjournment thereof must deposit his or her duly executed form of proxy with the Corporation's transfer agent and registrar, Computershare Investor Services Inc. ("Computershare"), 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, Attention: Proxy Department, or by facsimile to (416) or (866) not later than 10:00 a.m. (Eastern Daylight Time) on April 29, 2016 or, if the Meeting is adjourned, 48 hours (excluding Saturdays and holidays) before any adjournment of the Meeting. A shareholder may also vote by telephone or via the internet by following the instructions on the form of proxy. If a shareholder votes by telephone or via the internet, completion or return of the proxy form is not needed. The directors of the Corporation have fixed the close of business on March 31, 2016 as the record date for the determination of the shareholders of the Corporation entitled to receive notice of the Meeting. This notice of meeting (the "Notice") is accompanied by: (a) the Management Information Circular dated April 6, 2016 (the "Circular"); and (b) either a form of proxy for registered shareholders or a voting instruction form for beneficial shareholders. The Management Information Circular accompanying this Notice is incorporated into and shall be deemed to form part of this Notice. DATED the 6 th of April, 2016 By Order of the Board /s/ James E. Kofman James E. Kofman Chairman

2 ARGONAUT GOLD INC. MANAGEMENT INFORMATION CIRCULAR PART ONE VOTING INFORMATION April 6, 2016 SOLICITATION OF PROXIES This Management Information Circular (the "Circular") is furnished in connection with the solicitation by management of Argonaut Gold Inc. (the "Corporation") of proxies to be used at the annual general and special meeting (the "Meeting") of shareholders of the Corporation to be held on May 3, 2016, at the time and place and for the purposes set forth in the accompanying Notice of Meeting (the "Notice"). It is expected that the solicitation of proxies will be made primarily by mail, but proxies may also be solicited personally or by telephone, fax or other electronic means by directors, officers, employees or agents of the Corporation. The Corporation will also retain the services of other parties to solicit proxies, in particular D.F. King Canada. Costs related to the Proxy Solicitation Agent, which are estimated at approximately C$25,000, and the printing and mailing this Circular in connection with the Meeting, which are expected to be nominal, will be borne by the Corporation. APPOINTMENT AND REVOCATION OF PROXIES The persons named in the enclosed form of proxy are directors, nominees for the Board of Directors and officers of the Corporation. A shareholder desiring to appoint some other person (who need not be a shareholder) to represent the shareholder at the Meeting may do so either by inserting such person's name in the blank space provided in the applicable form of proxy or by completing another proper form of proxy and, in either case, depositing his or her duly executed form of proxy with the Corporation's transfer agent and registrar, Computershare Investor Services Inc., 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, Attention: Proxy Department, or by facsimile to (416) or (866) not later than 10:00 a.m. (Eastern Daylight Time) on April 29, 2016 or, if the Meeting is adjourned, 48 hours (excluding Saturdays and holidays) before any adjournment of the Meeting. The time limit for deposit of proxies may be waived by the Chairman of the meeting in his sole discretion without notice. You may also vote by telephone or via the internet by following the instructions on the form of proxy. If you vote by telephone or via the internet, do not complete or return the proxy form. In addition to revocation in any other manner permitted by law, a proxy may be revoked by instrument in writing executed by the shareholder or by his attorney authorized in writing and deposited either at the registered office of the Corporation at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, at which the proxy is to be used or with the Chairman of the Meeting on the day of the Meeting, or adjournment thereof, and upon either of such deposits the proxy is revoked. EXERCISE OF DISCRETION BY PROXIES The person named in the enclosed form of proxy will vote or withhold from voting the common shares in the capital of the Corporation ("Common Shares") in respect of which he is appointed in accordance with the direction of the shareholder appointing him. If the shareholder specifies a choice with respect to any matter to be acted upon, the shares will be voted accordingly. In the absence of any direction to the contrary, all Common Shares represented by proxy will be voted FOR or IN FAVOUR of the matters to be voted upon. The enclosed form of proxy confers discretionary authority upon the person named therein with respect to amendments or variations to matters identified in the Notice and with respect to other matters which may properly come before the Meeting. At the time of printing of this Circular, management of the Corporation knows of no such amendments, variations or other matters to come before the Meeting. However, if any such amendment, variation or other matter properly comes before the Meeting, it is the intention of the person named in the accompanying form of proxy to vote on such other business in accordance with his best judgment.

3 NON-REGISTERED HOLDERS Only registered shareholders of the Corporation or the persons they appoint as their proxies are permitted to vote at the Meeting. However, in many cases, Common Shares beneficially owned by a person (a "Non-Registered Holder") are registered either: (i) in the name of an intermediary (an "Intermediary") with whom the Non- Registered Holder deals in respect of the Common Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a clearing agency (such as The Canadian Depository for Securities Limited ("CDS")) of which the Intermediary is a participant. In accordance with the requirements of National Instrument Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI "), the Corporation has distributed copies of the Notice, this Circular and the form of proxy (collectively, the "Meeting Materials") to the clearing agencies and Intermediaries for onward distribution to Non-Registered Holders unless the Non-Registered Holders have waived the right to receive them. Non-Registered Holders who have not waived the right to receive meeting materials will receive either a voting instruction form or, less frequently, a form of proxy. The purpose of these forms is to permit Non-Registered Holders to direct the voting of the shares they beneficially own. Non-Registered Holders should follow the procedures set out below, depending on which type of form they receive. (A) (B) Voting Instruction Form. In most cases, a Non-Registered Holder will receive, as part of the Meeting Materials, a voting instruction form. If the Non-Registered Holder does not wish to attend and vote at the Meeting in person (or have another person attend and vote on the Non-Registered Holder's behalf), the voting instruction form must be completed, signed and returned in accordance with the directions on the form. Voting instruction forms in some cases permit the completion of the voting instruction form by telephone or through the internet. If a Non-Registered Holder wishes to attend and vote at the meeting in person (or have another person attend and vote on the Non- Registered Holder's behalf), the Non-Registered Holder must complete, sign and return the voting instruction form in accordance with the directions provided and a form of proxy giving the right to attend and vote will be forwarded to the Non-Registered Holder. Form of Proxy. Less frequently, a Non-Registered Holder will receive, as part of the Meeting Materials, a form of proxy that has already been signed by the Intermediary (typically by a facsimile, stamped signature) which is restricted as to the number of shares beneficially owned by the Non- Registered Holder but which is otherwise uncompleted. If the Non-Registered Holder does not wish to attend and vote at the meeting in person (or have another person attend and vote on the Non- Registered Holder's behalf), the Non-Registered Holder must complete the form of proxy and deposit it with the Secretary of the Corporation c/o Computershare Investor Services Inc., Attention: Proxy Department, 8th Floor, 100 University Avenue, Toronto, Ontario, Canada, M5J 2Y1 or by facsimile to (416) or (866) or vote by telephone or internet as described above. If a Non- Registered Holder wishes to attend and vote at the meeting in person (or have another person attend and vote on the Non-Registered Holder's behalf), the Non-Registered Holder must strike out the names of the persons named in the proxy and insert the Non-Registered Holder's (or such other person's) name in the blank space provided. Non-Registered Holders should follow the instructions on the forms they receive and contact their Intermediaries promptly if they require assistance. VOTING SECURITIES The authorized capital of the Corporation consists of an unlimited number of Common Shares. As of March 31, 2016, the Corporation had outstanding an aggregate of 156,751,245 Common Shares, each carrying the right to one vote per share. The record date for the determination of shareholders entitled to receive notice of the Meeting has been fixed as March 31, In accordance with the provisions of the Business Corporations Act (Ontario) ("OBCA"), the

4 Corporation will prepare a list of holders of Common Shares on such record date. Each holder of Common Shares named in the list will be entitled to one vote per Common Share shown opposite his name on the list at the Meeting. A quorum for the transaction of business at the Meeting is the presence of two or more shareholders of the Corporation, present in person or represented by proxy, holding at least 25% of the outstanding Common Shares. INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON None of the directors or officers of the Corporation, nor any associate or affiliate of any such person or proposed nominee for election as director of the Corporation, has any direct or indirect material interest, in respect to matters to be acted upon other than the election of directors, the appointment of auditors, the authorization of the Share Incentive Plan and the Say on Pay resolution. INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS Unless as otherwise disclosed, none of the directors or officers of the Corporation, nor any proposed nominees for election as directors, nor any associate or affiliate of any such person, has or has had any direct or indirect material interest, in respect of any matter since the commencement of the Corporation's most recently completed financial year which has materially affected or will materially affect the Corporation or any of its subsidiaries. PRINCIPAL HOLDERS OF VOTING SECURITIES To the knowledge of the directors and senior officers of the Corporation as at the date hereof, no persons or companies beneficially own or exercise control or direction over 10% or more of the votes attached to the Common Shares. 1. ANNUAL FINANCIAL STATEMENTS PART TWO BUSINESS OF THE MEETING The consolidated financial statements of the Corporation for the year ended December 31, 2015 and the auditors' report thereon will be placed before the shareholders of the Corporation at the Meeting. The consolidated financial statements are also available on SEDAR at 2. ELECTION OF DIRECTORS The Articles of the Corporation provide that the Corporation shall have no more than 10 directors elected annually. Seven directors are proposed for election at the Meeting. The directors are to be elected in accordance with the Corporation's majority voting policy. For more information, please see Part Six Statement of Corporate Governance Practices. Each director will hold office until the next annual meeting or until a successor is duly elected or appointed, unless his office is earlier vacated in accordance with the Corporation's By-laws (the "Bylaws"). The following table and the notes thereto disclose: (i) the name of each individual the Board of Directors has proposed as a nominee for election as a director; (ii) all other positions and offices with the Corporation now held by the nominee; (iii) the nominee s principal occupation; (iv) the nominee s period of service as a director of the Corporation; and (v) the approximate number of Common Shares beneficially owned by the nominee or over which is exercisable, directly or indirectly, or under control or direction as at March 31, Proxies in favour of management nominees will be voted FOR the election of the proposed nominees in the absence of directions to the contrary from the shareholders appointing them. Management does not contemplate that any of the nominees will be unable to serve as a director, but if that should occur for any reason prior to the Meeting, the person named in the enclosed form of proxy reserves the right to vote for another nominee in his discretion. All of the nominees currently serve as directors of the Corporation, with the exception of two new nominees, and their terms of office are to expire upon the termination of the Meeting. The information below as to the number of

5 Common Shares owned by nominees for election as directors is not within the knowledge of management and has been furnished by the nominees themselves. Name Office Held Work Experience PETER C. DOUGHERTY Nevada, USA President, Chief Executive Officer and Director President & CEO of the Corporation; formerly Vice- President Finance & CFO and Corporate Secretary, Meridian Gold Inc. Date First Elected / Appointed December 2009 Number of Common Shares 1,982,239 JAMES E. KOFMAN (1)(2) Ontario, Canada Chairman of the Board Vice-Chairman, Cormark Securities Inc.; formerly President, Zenn Motor Company; President, JEK Capital Advice January ,062 CHRISTOPHER R. (1) (2) (3) LATTANZI Ontario, Canada Director Mining Engineer, Consultant; Director of Teranga Gold Corporation and Spanish Mountain Gold Ltd. December ,425 PETER MORDAUNT (2)(3) Arizona, USA Director Professional Geoscientist, Director of Ethos Gold Corp; formerly Chairman and CEO of Stingray Copper Inc. January ,854 DALE C. PENIUK (1)(2) British Columbia, Canada Director CPA, CA (Chartered Professional Accountant) and Corporate Director of a number of publicly traded companies (currently Lundin Mining Corporation and Capstone Mining Corp. in addition to the Corporation); formerly Assurance Partner, KPMG LLP December ,425 AUDRA B. WALSH (4) Virginia, USA Director CEO of Minas de Aguas Tenidas S.A.U (MATSA); President and CEO, A2Z Mining Inc.; Director, Orvana Minerals Corp.; formerly President and CEO, Sierra Metals Inc., Minera S.A. April IAN ATKINSON (5) Texas, USA Nominee Director of Kinross Gold Corporation and Globex Mining Enterprises Inc.; formerly Director, President and CEO of Centerra Gold Inc. May Notes: (1) Member of the Audit Committee. (2) Member of the Nominating, Compensation and Governance Committee. (3) Member of the Safety, Health, Environment, Sustainability and Technical Committee. (4) Ms. Walsh was appointed to the Corporation s Board of Directors effective April (5) Mr. Atkinson has been nominated for election as a Director at the Meeting.

6 Peter C. Dougherty, President and Chief Executive Officer, Director Mr. Dougherty is currently President and Chief Executive Officer ("CEO") of Argonaut Gold Inc. and formerly served as the Vice-President of Finance and Chief Financial Officer of Meridian Gold Inc. from 2002 to Mr. Dougherty has also served as: Chief Accounting Officer and Corporate Controller of Meridian Gold Company from 1997 to 2002; IBS Financial Manager of the Chemicals Group of FMC Corporation from 1994 to 1997; Group Financial Analyst of the Chemicals Group of FMC Corporation from 1993 to 1994 and the Controller of Paradise Peak Mine, FMC Gold Company from 1990 to Mr. Dougherty holds a Bachelor of Science in Accounting from Southern Oregon State College, Ashland, Oregon and a Masters of Business Administration (MBA) from Drexel University, Philadelphia, Pennsylvania, United States of America. James E. Kofman, Chairman of the Board Mr. Kofman was appointed the role of Chairman of the Board of Argonaut Gold Inc. in December 2015, upon the retirement of Mr. Brian J. Kennedy. Mr. Kofman is Vice-Chairman of Cormark Securities Inc. He was previously President of JEK Capital Advice, an independent financial advisory firm. From 1996 to November 2009 he was the Managing Director and Vice-Chairman of UBS Securities Canada Inc. Prior to investment banking he was a partner at the law firm of Osler, Hoskin & Harcourt focusing on international corporate finance and mergers and acquisitions. Mr. Kofman is a frequent speaker and panelist on topics of markets, economy, financing and merger and acquisition activity and has been involved in many of Canada's largest transactions. He has a Bachelor of Laws (LLB) and a Bachelor of Commerce (Honours) from Queen's University in Kingston, Ontario, Canada. Mr. Kofman served as Chairman and Interim CEO of Zenn Motor Company from March 2011 until May Christopher R. Lattanzi, Director Mr. Lattanzi is a Professional Mining Engineer with more than 50 years of experience in the mineral industry, initially in the planning and supervision of mining operations, and since 1969 as a consultant. He was president of Micon International Limited, an independent mineral consultancy, from its founding in 1988 until He was a director of Meridian Gold Inc. from 1999 to 2007 and from 2004 to 2006 he served as Chairman of that company. He also serves on the board of directors of Spanish Mountain Gold Ltd., a Canadian junior exploration company and Teranga Gold Corporation, which produces gold from a mine in Senegal. Mr. Lattanzi has a Bachelor of Engineering (Mining) from the University in Melbourne, Australia. He continues to maintain an active consulting practice. Peter Mordaunt, Director Mr. Mordaunt is a Registered Professional Geoscientist (P Geo.) in the Province of Ontario with over 30 years of experience in mining, mine development and advanced exploration. Mr. Mordaunt retired from his role as Chairman and CEO of Stingray Copper Inc., which he founded, managed and merged with Mercator Minerals Ltd. Previously, he was the Chairman and CEO of Corner Bay Silver Inc. which he also founded, managed and later merged with Pan American Silver Inc. Mr. Mordaunt's business and technical skills have focused predominately on advanced project development related to gold, silver and copper leading to bankable feasibility studies, finance, plus mergers and acquisitions for more than 20 years. Mr. Mordaunt graduated from the University of Guelph in Ontario, Canada. He is a member of the Institute of Corporate Directors and has the Professional Certification as ICD.D. Mr. Mordaunt is currently a director of Ethos Gold Corp, Remo Resources Inc. and advisor to a number of gold exploration companies. He was also a director of Pediment Gold Inc. prior to merging with Argonaut in Dale C. Peniuk, Director Mr. Peniuk is a Chartered Professional Accountant, CPA, CA ("CPA, CA") and corporate director. Mr. Peniuk obtained a Bachelor of Commerce from the University of British Columbia in Vancouver, British Columbia, Canada, in 1982 and his Chartered Accountant designation from the Institute of Chartered Accountants of British Columbia ("ICABC") in Mr. Peniuk spent more than 20 years with KPMG LLP ("KPMG"), Chartered Accountants and predecessor firms, including being an assurance partner from 1996 to 2006 and was the leader of KPMG's British Columbia mining practice. Mr. Peniuk has also served on the ICABC's (now CPA, BC s) Public

7 Company Forum since 2000 and continues to serve as the Chairman of that forum. He also currently serves on the board and as the audit committee chairman of Lundin Mining Corporation and Capstone Mining Corp. Audra B. Walsh, Director Ms. Walsh is a Professional Engineer with over 20 years of technical, operating, management and board experience in the mining industry. She is CEO of Minas de Aguas Tenidas S.A.U (MATSA), a privately held company owned by Trifigura and Mubadala, located in the Huelva Province, Spain. She currently serves as a member of the Board of Directors of Orvana Minerals Corp, and is Chair of their Technical, Safety, Health, Environment and Sustainability Committee. She serves as President and CEO of A2Z Mining Inc., a privately held company and was formerly President and CEO of Sierra Metals Inc. and Minera S.A. She has also held senior positions with Barrick Gold Corporation and Newmont Mining Corporation. Ms. Walsh is a graduate with a Bachelor of Science (Mine Engineering) from the South Dakota School of Mines and Technology in Rapid City, South Dakota, United States of America. She is a registered member of the Society of Mining, Metallurgy and Exploration. Ian Atkinson, Director Ian Atkinson is a Professional Geologist, and currently serves as Director of Kinross Gold Corporation and Globex Mining Enterprises Inc. Mr. Atkinson was previously Director, President and CEO of Centerra Gold Inc. He has more than 40 years of experience in the mining industry with extensive background in exploration, project development, operations, and mergers and acquisitions. Prior to his ten-year tenure at Centerra Gold Inc., Mr. Atkinson held various senior leadership positions with Hecla Mining Company, Battle Mountain Gold Inc., Hemlo Gold Mines Inc. and Noranda Inc. Mr. Atkinson has contributed to the discovery of several major mineral deposits and been involved in a number of large global mining projects in his career. Mr. Atkinson holds a Bachelor of Science (Geology) from King s College, University of London and a Master s Degree in Geophysics from the Royal School of Mines, University of London, United Kingdom. Cease Trade Orders, Bankruptcies, Penalties and Sanctions None of the nominees for election as a director of the Corporation are, or were within the 10 years prior to the date hereof, a director, chief executive officer or chief financial officer of any company that was subject to a cease trade order, an order similar to a cease trade order, or an order that denied such company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days, and that was issued while that person was acting in such capacity, or that was issued after that person ceased to act in such capacity, and which resulted from an event that occurred which that person was acting in such capacity. None of the nominees for election as a director of the Corporation are, or were within the 10 years prior to the date hereof, a director or executive officer of any company that, while that person was acting in such capacity, or within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. None of the nominees for election as director of the Corporation have within the 10 years prior to the date hereof become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. None of the nominees for election as director of the Corporation have been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

8 Committees of the Board of Directors The Board of Directors has an audit committee (the "Audit Committee"), a nominating, compensation and governance committee (the "Nominating, Compensation and Governance Committee") and a safety, health, environment, sustainability and technical committee (the "Safety, Health, Environment, Sustainability and Technical Committee"). The current members of the Audit Committee include the chairman of the committee, Dale C. Peniuk (independent), Christopher R. Lattanzi (independent) and James E. Kofman (independent). See Part Five Audit Committee Information. The current members of the Nominating, Compensation and Governance Committee include the chairman of the committee, Christopher Lattanzi (independent), James E. Kofman (independent), Peter Mordaunt (independent), Dale C. Peniuk (independent) and David H. Watkins (independent). See Part Six Statement of Corporate Governance Practices. The current members of the Safety, Health, Environment, Sustainability and Technical Committee include the chairman of the committee, Peter Mordaunt (independent), Christopher R. Lattanzi (independent) and David H. Watkins (independent). Mr. Watkins has provided the Corporation notice that he is retiring from the Board of Directors, the Nominating, Compensation and Governance Committee, and the Safety, Health, Environment, Sustainability and Technical Committee, and is not up for re-election as a Director at the Meeting. 3. APPOINTMENT OF AUDITORS Proxies received in favour of management will be voted IN FAVOUR of the appointment of PricewaterhouseCoopers LLP, Chartered Professional Accountants ( PwC ), as auditors of the Corporation to hold office until the next annual meeting of shareholders and the authorization of the directors to fix their remuneration unless the shareholder has specified in the proxy that his shares are to be withheld from voting in respect thereof. PwC was first appointed as auditors of the Corporation effective December 30, In order to be effective, the appointment of PwC must be approved by a majority of the votes cast at the Meeting by shareholders voting in person or by proxy. The Board of Directors believes that the appointment of PwC as auditors is in the best interests of the Corporation and therefore unanimously recommends that the shareholders of the Corporation vote IN FAVOUR of this resolution. 4. APPROVAL OF SHARE INCENTIVE PLAN In 2013, the directors of the Corporation resolved to approve amendments to the original share incentive plan that had been adopted and approved by the shareholders in 2010 (the Share Incentive Plan ). At the 2013 Annual and Special Meeting of Shareholders held on May 7, 2013, the shareholders approved the amended and restated Share Incentive Plan. The purpose of the Share Incentive Plan is to attract, retain and motivate eligible employees, directors and consultants, to compensate them for their contributions to the Corporation s long-term growth and development, and to encourage them to acquire a proprietary interest in the success of the Corporation. The Share Incentive Plan allows for the granting by the Corporation of options, as well as other awards, including share appreciation rights, restricted shares, restricted share units, performance shares, performance share units and other equity-based awards (collectively, "Awards"). In accordance with the rules of the Toronto Stock Exchange, shareholder approval is being sought to re-authorize the Share Incentive Plan and to ratify and approve the amendments to the Share Incentive Plan to (i) increase the number of Common Shares issuable under the Share Incentive Plan from 6% to 7.25% of the number of Common Shares issued and outstanding from time to time, of which 5.0% shall be issuable as Awards (increased from 1.2% issuable as Awards prior to the amendments); (ii) limit the number of Common Shares that may be issued pursuant to the Share Incentive Plan (together with Common Shares issuable under other share compensation arrangements of the Corporation) to independent directors of the Corporation to 1.0% of the number of Common Shares issued and outstanding from time to time; (iii) limit the award value of all awards (together with the award value of all other rights granted under any security based compensation arrangement) to independent directors in total to no greater than C$150,000 per year per independent director, of which the value of options shall not exceed C$100,000 per year per independent director; (iv) increase the aggregate number of Common Shares issuable under the Share Incentive Plan and any other share compensation arrangement of the Corporation to insiders of the Corporation from

9 6% to 7.25% of the number of Common Shares then outstanding; and (v) increase the number of Common Shares issuable within any one year period to insiders of the Corporation under the Share Incentive Plan and any other share compensation arrangement of the Corporation from 6% to 7.25% of the number of Common Shares then outstanding. In the Information Circular, unless otherwise stated, all references to "US$" refer to US dollars and all references to "C$" refer to Canadian dollars. A summary of the terms of the Share Incentive Plan is set out under the heading "Statement of Executive Compensation - Compensation Discussion and Analysis - Elements of Compensation" and the full text of the Share Incentive Plan is attached hereto as Schedule A. At the Meeting, shareholders will be asked to consider and, if thought advisable, approve, with or without amendment, a resolution (the Share Incentive Plan Resolution ) re-authorizing the Share Incentive Plan and approving such amendments. Based on the number of issued and outstanding Common Shares as at the date hereof, being 156,751,245 Common Shares, if the Share Incentive Plan Resolution is adopted at the Meeting, an additional 1,959,391 Common Shares would be issuable under the Share Incentive Plan. There are currently 6,059,219 options and 1,877,570 restricted shares outstanding, representing 3.9% and 1.2% of the number of issued and outstanding Common Shares as at the date hereof, respectively. No other Awards have been issued under the Share Incentive Plan. The directors of the Corporation have determined that it is in the best interest of the Corporation to recommend to the shareholders to approve the re-authorization of the Share Incentive Plan. To be effective the resolution set forth below must be approved by a majority of the votes cast at the Meeting in person or by proxy by shareholders of the Corporation. The form of the Share Incentive Plan Resolution to be presented at the Meeting is as follows: "WHEREAS: 1. the Board of Directors of the Corporation adopted on May 7, 2013 the amended and restated Share Incentive Plan which has a 6% rolling reserve; 2. the shareholders of the Corporation approved the Share Incentive Plan, by a majority of votes cast, on May 7, 2013; RESOLVED THAT: 1. the Amended and Restated 2010 Share Incentive Plan, dated May 3, 2016, as set out in Schedule A, to the Circular of the Corporation, which has a 7.25% rolling reserve, of which 5.0% shall be issuable as Awards, is authorized, approved and adopted, together with such additions, deletions, or changes thereto as may be required by any applicable securities regulatory authority or stock exchange; 2. the increase in the aggregate number of Common Shares issuable under the Share Incentive Plan from 6% to 7.25% of the number of Common Shares then outstanding is authorized and approved; 3. the increase in the aggregate number of Common Shares issuable under the Share Incentive Plan pursuant to Awards from 1.2% to 5.0% of the number of Common Shares then outstanding is authorized and approved; 4. the increase in the aggregate number of Common Shares issuable under the Share Incentive Plan and any other share compensation arrangement of the Corporation to insiders of the Corporation from 6% to 7.25% of the number of Common Shares then outstanding is authorized and approved;

10 5. the Amended and Restated 2010 Share Incentive Plan, dated May 3, 2016 supersedes and replaces any former share incentive plans of the Corporation; 6. all unallocated options, rights and other entitlements pursuant to the Share Incentive Plan be and are hereby approved; 7. the Corporation may continue to grant options and other entitlements under the Amended and Restated Share Incentive Plan, dated May 3, 2016, until May 3, 2019, which is the date that is three years from the date of the Meeting at which this shareholder approval is being sought; and 8. any officer or director of the Corporation is hereby authorized and directed for and on behalf of the Corporation to execute and deliver or cause to be executed and delivered, all such documents, agreements and instruments as are necessary or desirable to give effect to the foregoing resolutions, and to perform or cause to be performed all such other acts and things as in such person's opinion may be necessary or desirable to give full effect to the foregoing resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such acts or things in order to implement the Amended and Restated Share Incentive Plan, dated May 3, The Board of Directors recommends that shareholders vote in favour of the Share Incentive Plan Resolution. In order to be effective, the Share Incentive Plan Resolution must be approved by a majority of the votes cast by Shareholders present, or represented by proxy, at the Meeting. Unless instructed otherwise, the officers of the Corporation named in the accompanying form of proxy intend to vote the Common Shares represented by proxies FOR and in favour of the Share Incentive Plan Resolution, as it may be amended at the Meeting, to reconfirm the Share Incentive Plan. 5. HAVE A SAY ON PAY The Board believes that the compensation program must be competitive within its designated peer group, provide a strong incentive to its named executives to achieve the Corporation's goals and ensure that interests of management and the Corporation s Shareholders are aligned. A detailed discussion of the Corporation's executive compensation is more fully described under the heading "Statement of Executive Compensation Compensation Discussion and Analysis" in this Circular. Under such section, you will find discussions on the Corporation's executive compensation philosophy, objectives, policies and practices and provides information on the key elements of the executive compensation program of the Corporation. Advisory Resolution on Executive Compensation Approach BE IT RESOLVED, AS AN ADVISORY RESOLUTION THAT: 1. on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, the Corporation s Shareholders accept the approach to executive compensation disclosed in the Corporation's Circular dated April 6, 2016 delivered in advance of the annual and special meeting of shareholders of the Corporation on May 3, 2016; 2. as this in an advisory vote, the Board of Directors and the Nominating, Compensation and Governance Committee will not be bound by the results of the vote. However, the Board of Directors will take the results into account, together with feedback received from shareholders, when considering its approach to executive compensation in the future; and 3. results of the vote will be disclosed in the report of voting results. The Corporation s Board recommends that the Corporation s Shareholders indicate their support for the Corporation's approach to executive compensation disclosed in the Circular by voting FOR the Advisory

11 Resolution on Executive Compensation Approach. The persons whose names appear in the attached form of proxy intend to VOTE FOR the Advisory Resolution on Executive Compensation Approach. PART THREE STATEMENT OF EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Compensation Governance The executive compensation program of the Corporation is administered by the Board of Directors with the assistance of the Nominating, Compensation and Governance Committee. The Board of Directors, with the assistance of the Nominating, Compensation and Governance Committee review and make decisions in respect of compensation matters relating to the executive officers, employees, consultants and directors of the Corporation, ensuring consistent application of matters relating to remuneration and ensuring that executive remuneration is consistent with industry standards. The Board of Directors believes that the Corporation should provide a compensation package that is competitive and motivating, that will attract, hold and inspire qualified executives, that will encourage performance by executives to enhance the growth and development of the Corporation and that will balance the interests of the executives and the shareholders of the Corporation. Achievement of these objectives is expected to contribute to an increase in long-term shareholder value. When compensation policies are evaluated the Nominating, Compensation and Governance Committee takes into account industry specific risk, industry standards and potential impact to shareholders. Risks are identified through the help of external consultants and specific employment needs and challenges. These risks are mitigated by seeking a compensation structure that rewards not only operational excellence but shareholder performance against a peer group and corporate growth objectives. The Nominating, Compensation and Governance Committee directs the efforts of management through appropriate weighting of all of the aforementioned objectives, thereby reducing over exposure to any single factor. The Nominating, Compensation and Governance Committee pays particular attention to ensure that performance metrics include effective risk management and regulatory compliance, as well as weighting of compensation to ensure long-term objectives of the Corporation. The Nominating, Compensation and Governance Committee also seeks to ensure that compensation policies address the range of risks to the Corporation identified in its Annual Information Form, including, but not limited to, environmental risks and hazards, safety and security, attracting and retaining talented personnel. The responsibilities of the Nominating, Compensation and Governance Committee include assisting the Board of Directors with respect to, among other things: (a) the establishment of key human resources and compensation policies, including all incentive and equity-based compensation plans; (b) the establishment of corporate goals and objectives relevant to the Chief Executive Officer's compensation; (c) the recommendation to the Board of Directors of the evaluation of the Chief Executive Officer's performance and determination of the Chief Executive Officer's and the senior executives' compensation; (d) the evaluation of the performance of the senior management; and (e) the compensation of directors. In particular, the Nominating, Compensation and Governance Committee, among other things: reviews and makes recommendations to the Board of Directors with respect to the overall compensation strategy and policies for directors, officers and employees of the Corporation; reviews and makes recommendations to the independent members of the Board of Directors with respect to the corporate goals and objectives relevant to the compensation of the Chief Executive Officer, and evaluates the performance of the Chief Executive Officer in light of those goals and objectives; makes recommendations to the independent members of the Board of Directors with respect to the compensation of the Chief Executive Officer based on the above-mentioned evaluation; reviews and makes recommendations to the independent members of the Board of Directors with respect to the compensation of the Chairman of the Board of Directors;

12 reviews and approves the annual compensation of all other senior executive officers of the Corporation, as recommended by the Chief Executive Officer; reviews and makes recommendations to the Board of Directors, as appropriate, in connection with the Corporation's succession plan with respect to the Chief Executive Officer and other senior executive officers; oversees and approves certain awards under the Corporation's long-term incentive plan; makes recommendations to the Board of Directors with respect to the Corporation's incentive compensation and equity-based plans that are subject to the Board of Directors approval; reviews and approves the annual disclosure relating to executive compensation contained in the Circular; reviews and assesses the Corporation's corporate governance policies and practices and conducts an annual review of the Corporation's corporate governance guidelines; reviews and assesses the independence of each of the directors; evaluates the function of the Board of Directors, its committees (including the Nominating, Compensation and Governance Committee) and individual directors on an annual basis; reviews and approves the annual disclosure of the Corporation's corporate governance practices in compliance with the requirements of the Canadian Securities Administrators; reviews candidates for election as directors and annually recommends nominees to the Board of Directors for approval by the Board of Directors and election by the shareholders; recommends to the Board of Directors nominees to fill vacancies on the Board of Directors; makes recommendations to the Board of Directors from time to time as to changes in the size of the Board of Directors; makes recommendations to the Board of Directors as to the composition of the committees of the Board of Directors (including the Nominating, Compensation and Governance Committee); reviews the Corporation's orientation and education program with respect to new directors; reports regularly to the Board of Directors; reviews and assesses its mandate and recommends any proposed changes to the Board of Directors on an annual basis; and evaluates the function of the Nominating, Compensation and Governance Committee on an annual basis. The members of the Nominating, Compensation and Governance Committee are currently Christopher R. Lattanzi (Chairman), James E. Kofman, Peter Mordaunt, Dale C. Peniuk and David H. Watkins, each of whom is independent. The committee members were recommended based on their collective experience of managing, directing and working with various businesses with an emphasis on experience with mining companies. Their experience coupled with external compensation reports, as appropriate, provides the foundation of the necessary skills and knowledge to make informed and educated decisions regarding executive compensation policies and practices. In 2015, the Corporation participated in an executive survey focused on the mining industry in the United States and Canada. The survey and report were produced by Mercer LLC ( Mercer ). The Corporation paid C$8,520 to receive the results of this report, and the results of this report were used in reviewing compensation for the executive officers of the Corporation.

13 Compensation Discussion and Analysis The Corporation's principal goal is to create long-term value for its shareholders. The Corporation believes that directors, officers and employees should have their benefits aligned with both the short-term and long-term interests of the shareholders. The Nominating, Compensation and Governance Committee reviews, for approval by the Board of Directors, the design and competitiveness of the Corporation's executive compensation package. The objectives of the executive compensation package for the executive officers of the Corporation are to: set levels of annual salary and bonus compensation that will attract and retain superior executives in the highly competitive environment of global mining companies; provide annual bonus compensation for executive officers that vary with the Corporation's financial performance, the Corporation's stock price as well as an individual's contribution so as to reflect the executive officer's individual contribution to the Corporation's success; provide long-term compensation that is tied to the Corporation's overall success so as to focus the attention of the executive officer on managing the Corporation from the perspective of an owner over a long-term period; emphasize performance-based compensation, through annual bonus compensation and long-term compensation, over fixed compensation; and encourage performance in non-financial matters of importance to the Corporation, such as promoting safety, environmental protection and diversity in the work-place, positioning the Corporation for long-term success, promoting the development of management, and maintaining and enhancing the Corporation's compliance with legal requirements. The compensation of the executive officers is comprised of three components: base salary, annual cash bonus and long-term incentives in the form of options, restricted share awards, and/or cash awards. It is structured to be competitive with a select group of peer companies as set out below. Annual cash bonuses, options and awards are directly related to the Corporation's performance and the individual's contribution. The Corporation believes strongly that annual incentives, options and awards play an important role in increasing shareholder value. Outstanding options and awards are not taken into account when determining whether and how many new options or awards should be awarded. Named Executive Officers ("NEOs"), as defined in the Summary Compensation Table Section, and directors, are not permitted by the Corporation to purchase financial instruments, including prepaid variable forward contracts, equity swaps, collars or units of exchange funds that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held directly or indirectly by the NEO or director.

14 Elements of Compensation Base Salary To ensure that the Corporation is capable of attracting, motivating and retaining individuals with exceptional executive skills, cash compensation will be reviewed and adjusted annually, based primarily on individual and corporate performance, as well as compensation practices of similar mining companies. During 2015, a compensation review was completed with Mercer based on the previous 2014 year data to compare the Corporation s CEO compensation against similar companies within the mining industry. The Corporation further completed an analysis against the peer companies that were approved by the Board of Directors at the beginning of the year. The peer companies that were approved were Alacer Gold Corp., Beadell Resources Ltd., Dundee Precious Metals Inc., Kirkland Lake Gold Inc., Klondex Mines Ltd., Lake Shore Gold Corp., McEwen Mining, Primero Mining Corp., Richmont Mines Inc., Teranga Gold Corporation and Timmins Gold Corp (the Peers ). The results of this compensation analysis are indicative that the Corporation s CEO pay during 2015 was within industry averages for this position, in comparison with other companies with similar revenues and numbers of employees in the mining industry, and amongst the Corporation s set of Peers. CEO Avg Base Salary Bonus % Avg STI Avg LTI Avg Total Compensation Mercer Comp Report EE $ 513,900 71% $ 282,200 $ 714,600 $ 1,510,700 Mercer Comp Report Rev. $100 $300m $ 468,500 75% $ 321,200 $ 734,800 $ 1,524,500 Peer Group $ 470,979 82% $ 383,925 $ 759,884 $ 1,614,788 Argonaut Actual $ 375,000 75% $ 72,468 $ 737,211 $ 1,184,679 All Comparator Averages $ 484,460 76% $ 329,108 $ 736,428 $ 1,549,996 Difference $ (109,460) $ (256,640) $ 783 $ (365,317) Variance 23% 78% 0% 24% The Board of Directors approved salaries and a bonus plan (the "Bonus Plan") for the executive officers of the Corporation for the 2015 financial year based on the Board of Directors' own determination and discussion, the recommendations of management and the Nominating, Compensation and Governance Committee (which recommendations were endorsed by the Board of Directors), which in turn were based on enumerated and weighted objectives for each executive officer. In all such discussions, Mr. Dougherty absented himself from the Board of Directors' determination of compensation of the Corporation's President and Chief Executive Officer. Annual Bonus Executives and select employees are eligible to receive an annual bonus in the form of cash, providing certain predetermined corporate and individual bonus objectives are met. The annual bonus target for the CEO in 2015 was 75% of his base salary, while the other NEO's bonus targets were 50% of their base salaries. Performance-based targets are agreed upon by the Board of Directors at the beginning of each year. A portion of the annual cash bonus (70% for the NEOs) is directly related to overall performance of the Corporation and 30% related to individual performance. In 2015, 25% of the corporate objectives were related to share price performance against the Corporation s select group of Peers. An additional 50% of the corporate objectives were based on operational performance measures regarding safety, production, cash costs and capital costs. The remaining 25% of the corporate objectives were based on executing strategic initiatives agreed upon by management and the Board of Directors. There is no guarantee of payment and the Board of Directors reserves the right to adjust or rescind the Bonus Plan at its discretion. Certain bonus objectives were met by the executive team, however due to the difficult market conditions, the Board of Directors reduced the overall bonuses paid out by 50% for the 2015 financial year (2014 reduced overall bonuses paid out by 67%).

15 The detailed assessment of performance indicators considered in relation to management are presented in the following summary calculation in relation to the 2015 bonus payment to Mr. Dougherty: Corporate and Strategic Objectives Corporate Operations TARGET Stock Performance -Performance versus Peers and Gold Price Growth -Advance development projects Operations -Safety -Environmental -Production -Cash Cost -Capital Cost RESULT Stock performance overall lower versus peers or gold Magino - Drill campaign completed, PFS study prepared San Agustin - Completed PEA, permits submitted, optimization of projects to reduce capital costs and achieved synergies with El Castillo Higher safety indice versus goal Met target Production of 139k GEO ounces, met guidance and increased over previous year production Cash costs reduced year over year (Non-IFRS measure) Met guidance Peter C. Dougherty - CEO Individual Performance TARGET Target Payout (as % of Salary) Payout Awarded (as % of Salary) Corporate 26% 5% Operations 26% 16% Individual 23% 20% Board Adjustment (21%) Total 75% 21% Option-based and Share-based Awards The Corporation has established the Share Incentive Plan, as amended, which was adopted by the Board of Directors on February 12, 2010 and approved by shareholders at the 2010 Annual and Special Meeting of Shareholders held on May 10, 2010, was re-approved by shareholders at the 2013 Annual and Special Meeting of Shareholders on May 7, 2013, and which is being put to shareholders for re-authorization at the Meeting (see "Business of the Meeting - Approval of the Share Incentive Plan") and the full text of the Share Incentive Plan attached hereto as Schedule A ). Participants Directors, officers, employees, service providers and consultants of the Corporation and subsidiaries of the Corporation (individually a "Participant" and collectively "Participants") are entitled to participate in awards under the Share Incentive Plan. Purpose The purpose of the Corporation's Share Incentive Plan is to develop the interest and incentive of Participants in the Corporation's growth and development by granting restricted shares of the Corporation's stock and/or providing an opportunity to purchase Common Shares through options, thereby advancing the interests of the Corporation, enhancing the value of the Common Shares for the benefit of all shareholders and increasing the ability of the Corporation to attract and retain skilled and motivated individuals. Share Incentive Plan Limits The Share Incentive Plan provided that the maximum number of Common Shares available as options or Awards was 6% of the total number of Common Shares then issued and outstanding, of which a maximum of 1.2% of the total number of Common Shares then issued and outstanding was issuable pursuant to Awards. The total number of Common Shares issuable pursuant to options and restricted shares was 9,405,075 (being 6% of the issued and outstanding Common Shares as at March 31, 2016) of which options were

16 outstanding for the purchase of 6,059,219 Common Shares (being 3.9% of the Common Shares issued and outstanding as at March 31, 2016) and restricted shares were available for awards of 1,877,570 Common Shares (being 1.2% of the Common Shares issued and outstanding as at March 31, 2016), for a total of 7,936,789 Common Shares issuable pursuant to the Share Incentive Plan (being 5.1% of the Common Shares issued and outstanding as at March 31, 2016). Options in the amount of 2,019,462 have been exercised pursuant to the Share Incentive Plan. The Share Incentive Plan provided that (i) the aggregate number of Common Shares issuable under such plan and any other share compensation arrangement to insiders shall not exceed 6% of the Common Shares then outstanding; and (ii) insiders shall not be issued, pursuant to the Share Incentive Plan or any other share compensation arrangements, within any one year period, a number of Common Shares that exceeds 6% of the number of Common Shares then outstanding. At the Meeting, shareholder approval is being sought to re-authorize the Share Incentive Plan and to ratify and approve the amendments to the Share Incentive Plan to (i) increase the number of Common Shares issuable under the Share Incentive Plan from 6% to 7.25% of the number of Common Shares issued and outstanding from time to time, of which 5.0% shall be issuable as Awards (increased from 1.2% issuable as Awards prior to the amendments); (ii) limit the number of Common Shares that may be issued pursuant to the Share Incentive Plan (together with Common Shares issuable under other share compensation arrangements of the Corporation) to independent directors of the Corporation to 1.0% of the number of Common Shares of the Corporation issued and outstanding from time to time; (iii) limit the award value of all awards (together with the award value of all other rights granted under any security based compensation arrangement) to independent directors in total to no greater than C$150,000 per year per independent director, of which the value of options shall not exceed C$100,000 per year per independent director; (iv) increase the aggregate number of Common Shares issuable under the Share Incentive Plan and any other share compensation arrangement of the Corporation to insiders of the Corporation from 6% to 7.25% of the number of Common Shares then outstanding; and (v) increase the number of Common Shares issuable within any one year period to insiders of the Corporation under the Share Incentive Plan and any other share compensation arrangement of the Corporation from 6% to 7.25% of the number of Common Shares then outstanding. On March 31, 2016, 7.25% of the total number of issued and outstanding Common Shares, and therefore the total number of Common Shares issuable pursuant to options and Awards, is 11,364,465. The 'number of Common Shares then outstanding' refers to the number of Common Shares outstanding on a nondiluted basis immediately prior to the proposed grant of the applicable option or Award as the case may be. As a result, should the Corporation issue additional Common Shares in the future, the number of Common Shares issuable under the Share Incentive Plan will increase accordingly. The Share Incentive Plan of the Corporation is considered an "evergreen" plan, since the shares of the Corporation issuable pursuant to the Share Incentive Plan will increase as the number of issued and outstanding Common Shares increases and any shares issued under the Share Incentive Plan will become available for further grant. Exercise Price Option and share-based awards are granted subject to an exercise price that is not less than the current Market Price (as defined in the Corporation's Share Incentive Plan) of the Common Shares. The Market Price is defined as the volume weighted average trading price of a Common Share for the five trading days immediately preceding the valuation date. The Board of Directors is not permitted to set an exercise price that is less than the current Market Price. Any amendment to reduce the exercise price of any option or share-based award held by an insider requires shareholder approval. Other Awards In addition to options, the Share Incentive Plan permits the granting of other Awards (including share appreciation rights, restricted shares, restricted share units, performance shares, performance share units and other equity-based awards). The description of such awards is set forth in the text of the Share Incentive Plan attached hereto as Schedule "A". The Share Incentive Plan as approved by shareholders in 2013 allowed for 1.2% of the outstanding Common Shares to be issuable pursuant to Awards. If the Share Incentive Plan Resolution is approved at the Meeting, up to 5.0% of issued and outstanding Common Shares will be issuable pursuant to Awards. Attributes Option and share-based awards are assignable only with approval of the Board of Directors and terminate: (i) within the shorter of the remaining vesting period and 90 days from the termination date, if termination is other than by reason of retirement, death or disability; and (ii) within the shorter of the remaining vesting or exercise period and 12 months following such termination. The options and shares are subject to vesting provisions with one-third vesting annually. The term of any option or share-based award is not to exceed 10 years.

17 Administration The Nominating, Compensation and Governance Committee is responsible for advising the Board of Directors regarding potential grants pursuant to the Share Incentive Plan as well as the administration of the Share Incentive Plan as a whole. Previous grants of option or share-based awards are not taken into account by the Nominating, Compensation and Corporate Governance Committee when considering new grants. Amendments The Nominating, Compensation and Governance Committee may: (a) (b) (c) amend, suspend or terminate the Share Incentive Plan at any time, provided that no such amendment, suspension or termination may: (i) be made without obtaining any required regulatory approvals; or (ii) adversely affect the rights of any optionee or holder of an award who holds an option or award at the time of any such amendment, without the consent of the optionee or award holder. from time to time, in the absolute discretion of the Nominating, Compensation and Governance Committee and without shareholder approval, make the following amendments to the Share Incentive Plan or any option or award granted under the Share Incentive Plan: (i) an amendment to the purchase price of any option or award, unless the amendment is a reduction in the purchase price of an option or award held by an insider; (ii) an amendment to the date upon which an option or award may expire, unless the amendment extends the expiry of an option or award held by an insider; (iii) an amendment to the vesting provisions of the share option plan and other awards plan and any option agreement or award agreement granted under the Share Incentive Plan; (iv) an amendment to provide a cashless exercise feature to an option or the Share Incentive Plan, provided that such amendment ensures the full deduction of the number of underlying Common Shares from the total number of Common Shares subject to the Share Incentive Plan; (v) an addition to, deletion from or alteration of the Share Incentive Plan or an option or award that is necessary to comply with applicable law or the requirements of any regulatory authority or the Toronto Stock Exchange; (vi) any amendment of a "housekeeping" nature, including, without limitation, amending the wording of any provision of this Share Incentive Plan for the purpose of clarifying the meaning of existing provisions or to correct or supplement any provision of this Share Incentive Plan that is inconsistent with any other provision of this Share Incentive Plan, correcting grammatical or typographical errors and amending the definitions contained within this Share Incentive Plan respecting the administration of the Share Incentive Plan, (vii) any amendment respecting the administration of this Share Incentive Plan, and (viii) any other amendment that does not require shareholder approval under Section (c) below. Shareholder approval will be required for the following amendments to the Share Incentive Plan: (i) any increase in the maximum number of Common Shares issuable as a fixed percentage of the Corporation's outstanding Common Shares; (ii) to remove or exceed the insider or eligible director participation limits; (iii) to an amending provision within the Share Incentive Plan or other awards plan; (iv) any reduction in the purchase price or the extension of the expiry of an option or award; (v) any change which would materially modify the requirements as to eligibility for participation in the Share Incentive Plan; and (vi) any change which would permit options granted under the Share Incentive Plan to be transferable or assignable other than for normal estate settlement purposes.

18 Blackout Periods The expiry of any option will be the date fixed unless such date falls within a Blackout Period or within nine business days following expiry of the Blackout Period, in which case the expiry date of the option will be the date that is the 10 business days after the expiry date of the Blackout Period. A "Blackout Period" means any period in which a participant in the Share Inventive Plan cannot trade pursuant to the Corporation's policies respecting restrictions on trading, including such restrictions as may exist under the laws of Mexico, the United States or Canada. Long-Term Incentive Plan The Corporation has a Long-Term Incentive Plan ("LTIP") which is designed to attract, retain and motivate employees and officers of the Corporation. This purpose is achieved by providing an opportunity of Common Shares ownership through stock option grants or by granting restricted shares of the Corporation which advances the interest of the Corporation and enhances the value of the Common Shares for the benefit of all shareholders. The option and share awards are based upon a multiplier of each NEO's base salary. One-third of this value is granted in options and the remaining two-thirds of this value is granted in restricted shares. Of the restricted share grant, onethird of the value may be granted as cash compensation to offset the taxes due on the vesting of the shares granted. These awards, including the cash awards, vest over a three year period. There is no guarantee of participation and the Board of Directors reserves the right to rescind or amend the LTIP at its discretion. During 2014, 2015 and 2016, management reverted back to the executive LTIP levels of the 2012 covered financial year. The Nominating, Compensation and Governance Committee recognized the difficult environment for mining companies, and concluded that the executive LTIP levels should reflect this circumstance. Employment Agreements The Corporation has an employment agreement (the "Dougherty Employment Agreement") with Peter C. Dougherty, the President and Chief Executive Officer of the Corporation. The Dougherty Employment Agreement, provides for both fixed compensation, comprised of base salary, and performance-based variable incentive compensation, comprised of an annual bonus, and long-term incentives in the form of awards under the Share Incentive Plan. The Dougherty Employment Agreement, states that Mr. Dougherty receives a base salary of US$375,000 per year, with the base salary to be reviewed annually by the Board of Directors. Mr. Dougherty is also eligible to receive an annual bonus with a target of 75% of his base salary. The annual bonus may be awarded at the discretion of the Board of Directors, applying such personal and corporate performance measures as they consider appropriate. At the option of the Corporation, Mr. Dougherty's annual bonus may be paid in whole or in part by issuing Common Shares or granting options to purchase Common Shares. Under the Dougherty Employment Agreement, Mr. Dougherty receives all benefits generally provided to senior officers of the Corporation, is entitled to five weeks of paid vacation annually, and is eligible to be granted options and awards under the Share Incentive Plan. The Corporation also has Employment Agreements (the "Employment Agreements") with Thomas H. Burkhart, Vice-President of Exploration (the "Burkhart Employment Agreement"), Richard S. Rhoades, Chief Operating Officer (the "Rhoades Employment Agreement"), Curtis K. Turner, Corporate Development Officer (the "Turner Employment Agreement"), and David A. Ponczoch, Chief Financial Officer (the "Ponczoch Employment Agreement"). The Burkhart, Rhoades, Turner, and Ponczoch Employment Agreements are on the same terms as the Dougherty Employment Agreement, with the following exceptions: The Burkhart Employment Agreement: Mr. Burkhart receives a base salary of US$250,000 and is eligible to receive an annual bonus with a target of 50% of his base salary. Mr. Burkhart is entitled to three weeks of paid vacation annually. The Rhoades Employment Agreement: Mr. Rhoades receives a base salary of US$275,000 and is eligible to receive an annual bonus with a target of 50% of his base salary. Mr. Rhoades is entitled to three weeks of paid vacation annually. The Turner Employment Agreement: Mr. Turner receives a base salary of US$250,000 and is eligible to receive an annual bonus with a target of 50% of his base salary. Mr. Turner is entitled to four weeks of paid vacation annually.

19 The Ponczoch Employment Agreement: Mr. Ponczoch receives a base salary of US$225,000 and is eligible to receive an annual bonus with a target of 50% of his base salary. Mr. Ponczoch is entitled to four weeks of paid vacation annually. Please refer to the section below entitled "Termination and Change of Control Benefits" for information regarding payments and benefits payable to an NEO in circumstances of termination or a change of control. Performance Graph The following graph compares the total cumulative shareholder return for C$100 invested in the Common Shares of the Corporation with the cumulative shareholder return of the S&P/TSX Composite and S&P/TSX Metals and Mining Indexes for the period commencing on December 31, 2010 and ending December 31, The trend shown on the graph below has been reflected through material adjustments of LTIP and bonus awards made to the executive officers during difficult markets. The Board of Directors along with the Nominating, Compensation and Governance Committee approve the design and competiveness of the executive's compensation packages. $400 $300 $200 $100 $0 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Argonaut Gold Inc. S&P/TSX Composite S&P/TSX Global Mining SUMMARY COMPENSATION TABLE Securities legislation requires the disclosure of compensation received by each "Named Executive Officer" or "NEO" of the Corporation for the three most recently completed financial years. "Named Executive Officer" is defined by the legislation to mean (i) each of the Chief Executive Officer and the Chief Financial Officer of the Corporation, (ii) each of the Corporation's three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year and whose total compensation exceeds C$150,000, and (iii) any additional individual for whom disclosure has been provided under (ii) but for the fact that the individual was not serving as an executive officer of the Corporation at the end of the most recently completed financial year end of the Corporation. The following table sets forth a summary of all compensation for services earned during the most recently completed financial year ended on December 31, 2015 by the NEOs.

20 Name and Principal Position (1) Peter Dougherty, Chief Executive Officer Richard Rhoades, Chief Operating Officer Curtis Turner, Chief Development Officer Thomas Burkhart, VP of Exploration David Ponczoch, Chief Financial Officer Fiscal year Salary Share-based awards (2) Option-based awards (3) Non-equity incentive plan compensation Annual incentive plans (4) Long-term incentive plans (5) All other compensation (6) Total compensation (US$) (US$) (US$) (US$) (US$) (US$) (US$) , , ,988 78, ,667 21,105 1,224, , , ,133 72, ,667 20,446 1,184, , , , , ,000 20,260 1,794, , , ,494 39,016 91,667 22, , , , ,023 34,864 91,667 21, , , , , , ,222 21, , , , ,995 31,916 83,333 19, , , , ,566 29,529 83,333 19, , , , , , ,111 19, , , , ,995 32,656 83,333 25, , , , ,566 36,667 83,333 23, , , , , , ,111 24, , , , ,495 33,196 75,000 17, , , , ,862 24,601 75,000 90, , , ,882 83,132 Notes: (1) David A. Ponczoch was appointed Chief Financial Officer effective November 15, Please refer to the "Employment Agreements" section above for the terms of the NEO's Employment Agreements. (2) The share-based awards are calculated using the market price ( Market Price ), which is determined by the volume weighted average trading price of a Common Share for the five trading days immediately preceding the valuation date. The Corporation chose this method of share-based award valuation because the weighted average reduces the risk of a grant being valued based on a single day, which may not be representative as the shares may have traded higher or lower than the average. The five day volume weighted average calculation determines a more accurate fair value for the share-based awards granted. The share-based awards are based on the Market Price of the award (US$2.06 for 2015, US$4.51 and US$3.69 for 2014, and US$9.13 in 2013) on the grant date for the covered financial year. All share-based awards granted to the NEOs vest one-third per year over a three year period. (3) The option-based awards are based on the Market Price of the option on the grant date for the covered financial year based on the Black-Scholes option pricing model. The Corporation chose the Black-Scholes model because it is a widely recognized and utilized model for option pricing. The key assumptions used for the valuation model for the February 3, 2015 grant is a pre-vest forfeiture rate of 5%, a grant life of 10 years, an expected life of 6 years, an expected annual volatility rate of 56.4%, and a risk free rate of 0.80%. The key assumptions for the February 3, 2014 and May 9, 2014 grants are a pre-vest forfeiture rate of 5%, a grant life of 10 years, an expected life of 6 years, an expected annual volatility rate of 45.2% and 44.9%, respectively, and a risk free rate of 1.64% and 1.79%, respectively. The key assumptions used for the valuation model for the February 4, 2013 is a pre-vest forfeiture rate of 5%, a grant life of 10 years, an expected life of 6 years, an expected annual volatility rate of 39.3%, and a risk-free rate of 1.70%. All option-based awards granted to the NEOs vest one-third per year over a three year period. (4) The amounts reported are all cash bonuses awarded under the terms of the Corporation's Bonus Plan for the reported year, but paid to each NEO in February of the following year. Bonuses were reduced by 50% by the Board of Directors for the 2015 financial year (2014 reduced overall bonuses paid out by 67%), from otherwise determined amounts to reflect difficult market conditions. (5) The amounts reported are all cash payments awarded to the NEOs under the terms of the Corporation's LTIP during the year reported, but paid out over a three year vesting period. For the covered financial years of 2014, 2015 and 2016, the NEO s reverted back to the LTIP levels from the 2012 covered financial year. (6) The amounts reported are insurance premiums paid by the Corporation for personal life insurance where the estate of the NEO is the beneficiary, as well as the employer match dollars contributed to each NEO's 401k plan. In the case of Mr. Ponczoch in 2013 and 2014, he received a moving allowance for relocation. During 2013, Mr. Ponczoch received a signing bonus which is included in the total amount of other compensation.