Convertible Debenture dated July 26, 2013 issued by the Company to Jonathan C. Clay

Upon and subject to the provisions and conditions of this Article:

the Holder shall have the right, at their option, at any time, and from time to time, on any business day prior to the Close of Business on the Maturity Date (or such later date as may be agreed upon by the Company and the Holder and approved by the TSX or such other stock exchange upon which the Shares may be listed from time to time) (the "Time of Expiry"), to convert; and

if not converted by the Holder on or prior to the business day immediately preceding the Maturity Date, the Issuer shall have the right to convert,

in either case the full, but not less than the full, Principal Amount into Shares at the Conversion Price in effect on the Date of Conversion (as defined in subsection 2.2(b)).

The Conversion Price shall be subject to adjustment as provided in Section 2.3.

Such right of conversion shall extend only to the maximum number of whole Shares into which the aggregate principal amount of this Debenture surrendered for conversion at any one time by the Holder may be converted in accordance with the foregoing provisions of this Section, except that where the number of Shares to be issued on conversion of this Debenture by the Holder would exceed the Insider Participation Limit without Disinterested Shareholder Approval having been obtained by the Issuer prior to such conversion, then:

the Company shall issue the number of Shares equal to the Insider Participation Limit;

shall promptly call a meeting of its shareholders, to be held no later than 60 calendar days of the Date of Conversion for the purpose of obtaining the Disinterested Shareholder Approval;

if Disinterested Shareholder Approval is obtained at the meeting called pursuant to subsection 2(c)(ii) above, then the Company shall issue the remaining shares issuable upon conversion of the Debenture pursuant to this Section 2.1 that have not previously been issued pursuant to subsection 2(c)(i); and

if Disinterested Shareholder Approval is not obtained at the meeting called pursuant to subsection 2(c)(ii) above, then the Company shall pay the unconverted principal amount of this Debenture and all accrued and unpaid interest on the Maturity Date.

If the Holder desires to convert this Debenture into Shares, the Holder shall, prior to the Time of Expiry, surrender this Debenture to the Company at its offices specified in Section 6.3 hereof together with a written notice of conversion, substantially in the form of Exhibit "A" hereto, duly executed by the Holder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Company, exercising the right of the Holder to convert this Debenture in accordance with the provisions of this Article. Thereupon, the Holder or his nominee(s) or assignee(s) shall be entitled to be entered in the books of the Company as at the Date of Conversion as the registered holder of the number of Shares into which this Debenture is convertible in accordance with the provisions of this Article and, as soon as practicable thereafter, the Company shall deliver to the Holder or his nominee(s) or assignee(s), certificates representing such Shares.

For the purposes of this Article, this Debenture shall be deemed to be surrendered for conversion on the first business date (herein called the "Date of Conversion") on or immediately following the day which this Debenture is received by the Company in accordance with the provisions of this Article.

Upon the surrender of this Debenture for conversion in accordance with this Article, the Holder shall be entitled to receive accrued and unpaid interest in respect thereof up to the Date of Conversion of the Debenture, and the Shares issued upon such conversion shall rank only in respect of dividends declared in favour of Shareholders of record on and after the Date of Conversion, from which applicable date such Shares will for all purposes be and be deemed to be issued and outstanding as fully paid and non-assessable Shares.

The conversion of this Debenture by the Holder pursuant to this Article shall extinguish, satisfy or relieve the Company of its obligation to pay the Holder the Principal Amount of this Debenture so converted and surrendered.

Share Subdivision, Consolidation and Stock Dividend: If and whenever at any time prior to the Time of Expiry, the Company shall (i) subdivide or redivide the outstanding Shares into a greater number of Shares, (ii) reduce, combine or consolidate the outstanding Shares into a smaller number of Shares, or (iii) issue Shares, or securities convertible into or exchangeable for Shares, to the holders of all or substantially all of the outstanding Shares by way of stock dividend other than a dividend paid in the ordinary course, the Conversion Price in effect on the effective date of such subdivision, redivision, reduction, combination or consolidation or on the record date for such issue of Shares, or securities convertible into or exchangeable for Shares, by way of a stock dividend, as the case may be, shall in the case of the events referred to in clauses (i) and (iii) above, be decreased in proportion to the number of outstanding Shares resulting from such subdivision, redivision or dividend (including, in the case where securities convertible into or exchangeable for Shares are issued, the number of Shares that would have been outstanding had such securities been converted into or exchanged for Shares on such record date) or shall, in the case of the events referred to in clause (ii) above, be increased in proportion to the number of outstanding Shares resulting from such reduction, combination or consolidation, in each such case so that upon a subsequent conversion of this Debenture in accordance with the terms hereof the Holder shall receive the same number of Shares which he would have owned immediately following such event if he had converted the Debenture immediately prior to such event. Such adjustment shall be made successively whenever any event referred to in this subsection (a) shall occur, any such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend shall be deemed to have been made on the record date for the stock dividend for the purpose of calculating the number of outstanding Shares under subsections (b) and (c) of this Section 2.3; to the extent that any such securities convertible into or exchangeable for Shares are not converted into or exchanged for Shares prior to the expiration of the conversion or exchange right, the Conversion Price shall be readjusted effective as at the date of such expiration to the Conversion Price which would then be in effect based upon the number of Shares actually issued on the exercise of such conversion or exchange right.

Rights Offering: If and whenever at any time prior to the Time of Expiry the Company (i) shall fix a record date for the issuance of rights, options or warrants to all or substantially all the holders of its outstanding Shares entitling them, for a period expiring not more than 45 days after such record date, to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) or (ii) the Company agrees in any manner whatsoever to issue Shares (or securities convertible into or exchangeable for Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Market Price of a Share on such record date or the date of any such agreement, as the case may be, the Conversion Price shall be adjusted immediately after such record date or date of such agreement so that it shall equal the price determined by multiplying the Conversion Price in effect on such record date or date of such agreement by a fraction, of which the numerator shall be the total number of Shares outstanding on such record date or date of such agreement plus a number of Shares equal to the number arrived at by dividing the aggregate price of the total number of additional Shares offered for subscription or purchase (or the aggregate conversion or exchange price of the securities convertible into or exchangeable for Shares so offered) by such Market Price per Share, and of which the denominator shall be the total number of Shares outstanding on such record date or date of such agreement plus the total number of additional Shares offered for subscription or purchase (or into which the securities convertible into or exchangeable for Shares so offered are convertible or exchangeable); any Shares owned by or held for the account of the Company shall be deemed not to be outstanding for the purpose of any such computation; such adjustment shall be made successively whenever such a record date is fixed or such agreement is entered into; to the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect if such record date had not been fixed or, effective as at the date of such expiration, to the Conversion Price which would then be in effect based upon the number of Shares (or securities convertible into or exchangeable for Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

Other Distributions to Shareholders: If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the making of a distribution to all or substantially all the holders of its outstanding Shares of (i) shares of any class other than Shares (or other securities convertible into or exchangeable for Shares) or (ii) rights, options or warrants (other than rights, options or warrants referred to in subsection 2.3(b) and rights, options or warrants to subscribe for or purchase Shares, or other securities convertible into or exchangeable for Shares, for a period of not more than 45 days after such record date at a price per Share, or having a conversion or exchange price per Share, not less than 95% of the Market Price of a Share on such record date), (iii) evidences of its indebtedness, or (iv) any assets, then, in each such case, the Conversion Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Conversion Price in effect on such record date by a fraction, of which the numerator shall be the total number of Shares outstanding on such record date multiplied by the Market Price per Share on such record date, less the fair market value (as determined by the directors of the Company, which determination shall be conclusive, subject to TSX approval) of such shares or rights, options or warrants or evidences of indebtedness or assets so distributed, and of which the denominator shall be the total number of Shares outstanding on such record date multiplied by such Market Price per Share; any Shares owned by or held for the account of the Company shall be deemed not to be outstanding for the purpose of any such computation; such adjustment shall be made successively whenever such a record date is fixed, to the extent that such distribution is not so made, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect if such record date had not been fixed or to the Conversion Price which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or actually distributed, as the case may be. The Company shall not make a distribution to holders of Shares as described in this subsection 2.3(c) where the fair market value (as determined by the Auditors of the Company, which determination shall be conclusive) of the Shares or rights, options or warrants or evidences of indebtedness or assets distributed exceeds the product of the Market Price per Share on the record date for such distribution and the total number of Shares outstanding on such record date unless the Holder is permitted to participate in such distribution as though and to the same effect as if it had converted this Debenture into Shares immediately prior to the applicable record date.

Other Changes to Shares: In the case of any reclassification of, or other change in, the outstanding Shares of the Company other than subdivision, reduction, combination or consolidation, the Conversion Price shall be adjusted in such manner, if any, and at such time, as the directors determine to be appropriate on a basis consistent with this Section 2.3.

Capital Reorganization, Merger: If and whenever at any time prior to the Time of Expiry there is a capital reorganization, consolidation, merger, arrangement or amalgamation of the Company with or into any other body corporate, trust, partnership or other entity or a sale or conveyance (with the consent of the Holder) whereby all or substantially all of the Company's undertaking and assets would become the property of any body corporate, trust, partnership or other entity and without limitation, the Holder, if he has not exercised his right of conversion under Section 2.1 prior to the effective date of such reorganization, consolidation, merger, arrangement, amalgamation sale, upon any such conversion at any time thereafter, shall be entitled to receive and shall accept, in lieu of the number of Shares to which he was theretofore entitled upon conversion, the aggregate number of Shares or other securities or property of the Company or of the body corporate, trust, partnership or other entity resulting from the reorganization, consolidation, merger, arrangement or amalgamation or to which such sale may be made, as the case may be, that the Holder would have been entitled to receive as a result of such reorganization, consolidation, arrangement, amalgamation or sale if, on the record date or effective date thereof, as the case may be, the Holder had been the registered holder of the number of Shares to which he was theretofore entitled upon conversion.

Equitable Adjustment for Other Actions: If and whenever at any time prior to the Time of Expiry the Company shall take any action affecting its Shares, other than an action described in Section 2.3(a) through (d), that, in the reasonable opinion of the Board of Directors, would materially adversely affect the rights of the Holder, then the number of Shares issuable upon the conversion of the Debenture or the Conversion Price thereof shall, subject to receipt by the Corporation of all required approvals (if any) from any stock exchange on which the Shares are listed, and all applicable securities regulatory authorities, be adjusted in such manner and at such time as the Board of Directors may determine, in their sole discretion, to be equitable in the circumstances. Failure of the Board of Directors to make an adjustment in accordance with this Section 2.3 shall be conclusive evidence that the directors have determined that it is equitable to make no adjustment in the circumstances. In the event that any such adjustment is made, the Corporation shall deliver a notice to the Holder in accordance with Section 2.7.

Effective Date and Procedure for Adjustment: In any case in which this Section 2.3 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Holder, in the case of the Debenture being converted after such record date and before the occurrence of such event, the additional Shares issuable upon such conversion by reason of the adjustment required by such event before giving effect to such adjustment; provided however, that the Company shall deliver to the Holder an appropriate instrument evidencing the Holder's right to receive such additional Shares upon the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Shares declared in favour of holders of record of Shares on and after the Date of Conversion or the date fixed for redemption or such later date as the holders would, but for the provisions of this subsection (g), have become the holder of record of such additional Shares pursuant to subsection 2.3(b).

Adjustments Cumulative: The adjustments provided for in this Section 2.3 are cumulative and shall apply to successive subdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other events resulting in any adjustment under the provisions of this Section. No adjustment of the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided however, that any adjustments which by reason of this subsection (g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

In the event of any question arising with respect to the adjustments provided in this Section 2.3, such question shall be conclusively determined by a firm of chartered accountants or certified managerial accountants appointed by the Company (who may be the Auditors of the Company); such accountants shall have access to all necessary records of the Company and such determination shall be binding upon the Company, and the Holder.

No adjustment in the Conversion Price shall be made in respect of any event described in subsections 2.3(a)(iii), 2.3(b) and 2.3(c) if the Holder is entitled by the Company to and, subject to the consent of the TSX, participates in such event on the same terms mutatis mutandis as if he had converted his Debenture prior to the effective date or record date, as the case may be, of such event.

Notwithstanding anything contained herein, the Conversion Price shall not be adjusted or be subject to adjustment as a result of:

The granting by the Company of options or other rights under any stock option plan, stock purchase plan, phantom stock plan, stock appreciation rights plan, or other deferred, share or incentive compensation plan to officers, directors, employees or consultants of the Company or its affiliates;

The issue by the Company of any Shares or other securities of the Company for valuable consideration to any persons other than as specifically provided for in this Section 2.3 (including without limitation the issue of Shares upon the exercise or conversion of any securities of the Company outstanding as at the Issue Date that are exercisable or convertible into Shares); or

The declaration or payment of any dividends on the Shares in the ordinary course.

If a state of facts shall exist to which the provisions of Section 2.3 are not strictly applicable, or if strictly applicable would not fairly adjust the rights of the Holder against dilution in accordance with the intent and purposes hereof, then the Company shall execute and deliver to the Holder an amendment hereto providing for an adjustment in the application of such provisions so as to adjust such rights as aforesaid. The Holder shall accept the certificate or opinion of a firm of independent chartered accountants (who may be the Company's Auditors) with respect to any such adjustment in the application of such provision, and as to questions of law in connection therewith shall accept an opinion of Counsel.

At least 15 days prior to the effective date or record date, as the case may be, of any event that requires or might require an adjustment pursuant to this Section 2.3, the Company shall give notice to the Holder of the particulars of such event and, if determinable, the required adjustment.

In the event that any adjustment for which the notice of adjustment referred to in paragraph (m) above has been given is not then determinable, the Company will give notice to the Holder of the required adjustment promptly after such adjustment is determinable.

If no Event of Default has occurred and is continuing, interest on this Debenture may be paid at the option of the Holder by issuing and delivering fully-paid and non-assessable Shares in lieu of cash at a deemed price equal to Market Price at the time of payment, provided that the Holder shall give written notice of such election to the Company 10 business days prior to the particular Interest Payment Date, failing which the Company shall pay the interest in cash.

If the interest is to be paid by the delivery of Shares,

the Holder or his nominee(s) or assignee(s) shall be entitled to be entered in the books of the Company as at the applicable Interest Payment Date as the registered holder of the number of Shares issued in satisfaction of the interest payment and, on or prior to the Interest Payment Date, the Company shall deliver to the Holder or his nominee(s) or assignee(s), certificates representing such Shares;

certificates representing such Shares shall bear any legend required under applicable securities law; and

the Company shall not issue fractional Shares in satisfaction of any interest payments. The Company shall round the number of Shares down to the nearest whole Share and pay the equivalent dollar value of any fractional Shares that the Holder is otherwise entitled to satisfy interest payment on the applicable Interest Payment Date.

The amount received by the Holder in respect of any interest payable or the entitlement thereto will not be affected by whether the Company elects to satisfy the interest payment with Shares or cash.

The delivery of the Shares (and cash equal to the value of fractional shares, if any) shall fully satisfy the Company's interest payment obligation on the applicable Interest Payment Date.

if the Company does not pay the Principal Amount of this Debenture when the same becomes due and payable under the terms of this Debenture;

if the Company does not make payment of any interest due on this Debenture when the same becomes due and any such default continues for a period of five business days after notice of such default is given to the Company by the Holder.

if a decree or order of a court having jurisdiction in the premises is entered adjudging the Company a bankrupt or insolvent under the Bankruptcy Act (Canada) or any other bankruptcy, insolvency or analogous laws, or issuing sequestration or process of execution against, or against any substantial part of, the property of the Company or appointing a receiver of, or of any substantial part of, the property of the Company or ordering the winding-up or liquidation of its affairs;

if a resolution is passed for the winding-up or liquidation of the Company or if the Company institutes proceedings to be adjudicated a bankrupt or insolvent or consents to the institution of bankruptcy or insolvency proceedings against it under the Bankruptcy Act (Canada) or any other bankruptcy, insolvency or analogous laws, or consents to the filing of any such petition or to the appointment of a receiver of, or of any substantial part of, the property of the Company or makes a general assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any of the aforesaid purposes; or

if an encumbrancer or encumbrancers, whether permitted or otherwise, takes possession of any part of the property of the Company or any execution, distress or other process of any court becomes enforceable against any part of the property of the Company, or a distress or like process is levied upon any of such property;

if to the Company:

Golden Queen Mining Co. Ltd.
6411 Imperial Avenue

West Vancouver, British Columbia, V7W 2J5
Facsimile: (604) 921-9446
Attention: Lutz Klingmann, President

if to the Holder:

Jonathan C. Clay
29 Ridgecroft Road
Bronxville, New York, 10708
Facsimile: (401) 490-0749
Attention: Jonathan C. Clay

the successor corporation shall execute, prior to or contemporaneously with the consummation of any such transaction, an agreement supplemental hereto together with such other instruments as are reasonably satisfactory to the Holder and in the opinion of Counsel are necessary or advisable to evidence the assumption by the successor corporation of the due and punctual payment of the Principal Amount of this Debenture and the interest thereon in accordance with the terms hereof and all other monies payable hereunder and the covenant of the successor corporation to pay the same and its agreement to observe and perform all the covenants and obligations of the Company under this Debenture; and

no condition or event shall exist as to the Company or the successor corporation either at the time of or immediately after the consummation of any such transaction and after giving full effect thereto or immediately after the successor corporation complying with the provisions of clause (a) above which constitutes or would constitute, after notice or lapse of time or both, an Event of Default.