AIF - Sprott Resource Corp.

Stonegate Agricom’s operations in Peru may be adversely affected by economic uncertainty characteristic of developing
countries. Operations may be affected in varying degrees by government regulations with respect to restrictions on
production, price controls, export controls, currency remittance, income taxes, expropriation of property, foreign
investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and safety
factors. Any such changes could have a material adverse effect on Stonegate Agricom’s results of operations and
financial condition.
Peru has no limitation on profit or capital remittances to foreign shareholders provided that all applicable Peruvian taxes
have been paid. However, there can be no assurance that additional restrictions on the repatriation of earnings in Peru
will not be imposed in the future.
Risks Relating to the Retention of the Mantaro Project
Stonegate Agricom’s continuing right to maintain its ownership of the Mantaro Project will be dependent upon compliance
with applicable laws and the acquisition agreement it entered into with the previous owners of the project (the “Mantaro
Vendors”). Stonegate Agricom had financial commitments to the Mantaro Vendors to pay up to US$4 million, subject to
successful permitting and conversion of the concessions to non-metallic concessions. The Mantaro Vendors received
US$2.5 million in 2010 and will receive a final payment of US$1.5 million once all approvals are in place, including
community agreements, to develop a mine on certain lands comprising part of the Mantaro Project. Failure to make the
required payments could result in a loss of ownership of the Mantaro Project. There is no assurance that Stonegate
Agricom will be able to obtain and/or maintain all required claim conversions, approvals, authorizations, permits and
licenses required to carry on its operations. Additional expenditures will be required by Stonegate Agricom to maintain its
ownership of the Mantaro Project. These additional expenditures will be required to conduct a feasibility study to prove an
economic ore body and to bring it into production. See “Risk Factors - Risks Relating to Interest in Stonegate Agricom -
Uncertainty of Additional Capital”.
Risks Relating to the Retention of the Paris Hills Project
Stonegate Agricom’s continuing right to maintain its ownership of the Paris Hills Project will be dependent upon
compliance with applicable laws and payment of all lease and option payments with respect to the mining claims and fee
parcels comprising the Paris Hills Project. Failure to make the required payments could result in a loss of the Paris Hills
Project. There is no assurance that Stonegate Agricom will be able to obtain and/or maintain all required permits and
licenses to carry on its operations.
Expiration of Leases and Permits for the Paris Hills Project
The Paris Hills Project is held in the form of leases and permits. If Stonegate Agricom fails to meet certain requirements of
a lease or permit, the lease or permit may terminate or expire. There can be no assurance that all of the obligations
required to maintain each lease or permit will be met. The termination or expiration of Stonegate Agricom’s leases or
permits may have a material adverse effect on Stonegate Agricom’s business.
Land Title
The acquisition of title to mineral properties is a very detailed and time-consuming process. Title to, and the area of,
mineral concessions may be disputed. Although Stonegate Agricom believes it has taken reasonable measures to ensure
proper title to its properties, there is no guarantee that title to any of its properties will not be challenged or impaired. Third
parties may have valid claims underlying portions of Stonegate Agricom’s interests, including prior unregistered liens,
agreements, transfers or claims, including native land claims, and title may be affected by, among other things,
undetected defects. If title defects do exist, it is possible that Stonegate Agricom may lose all or a portion of its right, title,
estate and interest in the Mantaro Project or the Paris Hills Project. Title insurance is generally not available for mining
claims in Peru and Stonegate Agricom’s ability to ensure that it has a secure claim to individual mineral properties may be
constrained. Stonegate Agricom has not surveyed the boundaries of any of its properties and consequently the
boundaries may be disputed. In addition, Stonegate Agricom may be unable to operate its properties as permitted or to
enforce its rights with respect to its properties.
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