RELATED PARTY TRANSACTIONS

The following transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Nine months ended August 31, 2014

The directors were compensated as per their consulting agreements with the Company. The Company expensed a total of $186,597 as management fees to its two directors and expensed a total of $5,400 as automobile allowance.

The Company expensed $20,840 for services provided by the CFO of the Company and $169,968 for services provided by a corporation in which the Chief Operating Officer has an interest.

The Company reimbursed $83,543 to directors and officers for travel and entertainment expenses incurred for the Company.

On May 9, 2014, the board of directors granted options to one director to acquire a total of 600,000 common shares. These options were issued at an exercise price of $0.32 (CAD $0.35) per share and vest immediately with an expiry term of five years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black- Scholes option pricing model. The Company expensed $140,573 as compensation expense.

Nine months ended August 31, 2013

The directors were compensated as per their consulting agreements with the Company. The Company expensed a total of $233,400 as management fees to its three directors and expensed a total of $5,400 as automobile allowance.

The Company expensed $34,730 for services provided by the CFO of the Company and $180,000 for services provided by a corporation in which the Chief Operating Officer has an interest.

The Company reimbursed $92,735 to directors and officers for travel and entertainment expenses incurred for the Company.

On March 4, the board of directors granted 100,000 warrants as an incentive to a director who provided a working capital loan of $94,970 (CAD $100,000). These warrants were issued at an exercise price of $0.50 per share and vest immediately with an expiry term of two years. The Company expensed $15,637 as compensation expense. In addition the Company has accrued interest of $8,811 till August 31, 2013.