MINERAL LEASE WITH OPTIONTO PURCHASE AGREEMENT

BETWEEN[1] (AS TRUSTEE), [2]

AND[3] INC.

THIS MINERAL LEASE AGREEMENT, dated as of this ______ day of January, 200__ (“Effective Date”), is between [1], as Trustee of The [4] Family Revocable Trust under instrument dated ________, 200__ (such Trust became irrevocable on the death of [4] on _______, 200__), and [2] (referred to (together or to either of them, as the context requires) as “Lessors”, and individually as “[1a]” and “[2a]”, respectively) and [3] Inc., a Nevada corporation (referred to as “Lessee”). [1a], [2a], and the Lessee are each sometimes referred to individually as “Party” and collectively as “Parties.” Unless an initial or original Party (i.e., the Parties named above originally executing this instrument) is specified, a Party includes successors of a party; such successors are treated as Parties of the same type (Lessor or Lessee) as the Party to which they are the successor. Notwithstanding anything in this Agreement to the contrary, the rights (except to terminate this Agreement, which right is subject to Section 10.02) and the obligations of each of the Lessors shall be strictly several and allocated between them in proportion to their interests in the Property, which interests are presently 75% to [1a] and 25% to [2a]. Such rights and obligations shall be enforceable as provided in this Agreement by and against each Lessor (or a Lessor’s successors) separately, and not jointly and severally.

RECITALS

Lessors own or control Six (6) unpatented lode mining claims located in __ County, State of Nevada. The mining claims are more particularly described in the attached Exhibit A (called the “Original Property”).

Lessors may from time to time acquire certain Additional Property, as such term is defined in this Agreement.

Lessors are desirous of leasing the Original Property and any Additional Property to Lessee for the purpose of Lessee Exploring, Developing, and Mining the same. (The “Original Property” and any such “Additional Property” are collectively referred to as the “Property”).

Lessee is desirous of leasing the Property for such purposes.

TERMS AND CONDITIONS

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In consideration of the Recitals, which along with the introductory paragraph are an integral part of this Agreement, and the payment on execution of this Agreement of the sum of Twenty-five Thousand Dollars ($25,000), paid by Lessee proportionately to Lessors as the Rent for the year commencing as of the Effective Date, the receipt and sufficiency of which are acknowledged, and in consideration of the mutual covenants and agreements of the Parties contained below, Lessors and Lessee agree as follows:

ARTICLE IDEFINITIONS

In addition to other terms defined elsewhere in this Agreement, for purposes of this Agreement, certain terms and provisions are defined as follows:

1.00 “Additional Property” is as defined in Section 2.04.

1.01 “Affiliate” means, with respect to any Party, any person, partnership, joint venture, corporation, or other form of enterprise which directly or indirectly Controls, is Controlled by, or is under common Control with, a Party.

1.02 “Agreement” means this Mineral Lease Agreement, as it may be amended, together with Exhibits A – Original Property and B – Production Royalty.

1.03 “Agreement Year” shall mean the twelve-month period of time commencing upon the Effective Date of this Agreement or annually thereafter on the Anniversary Date of the Effective Date, as the case may be, and continuing through the last day prior to the next occurring Anniversary Date.

1.04 “Anniversary Date” shall mean the same day in the month as the Effective Date occurring in each year subsequent to the Effective Date of this Agreement, so long as this Agreement shall continue in force and effect.

1.05 “Commencement of Commercial Production” means the first day following the first period of ninety (90) consecutive days during which Products are produced from the Property at an average rate equal to at least sixty percent (60%) of the reasonable design capacity of the production facilities established by Lessee for producing Products from the Property where such design capacity has been identified to Lessors in writing, or if the foregoing does not apply or if Products are produced from the Property using a third party’s facilities, then “Commencement of Commercial Production” means the first day following the period of thirty (30) consecutive days during which Products are produced and shipped from the Property.

1.06 “Control” means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contracts, voting trusts, or otherwise. Grammatical variations of “Control” have a like meaning.

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1.07 “Development” means all preparation for the removal of Ore for the commercial recovery of Products from such Ore, including surveying, development drilling and geological, geochemical, and engineering analysis of the Ore or of any mine or facilities for Mining, sampling of, prestripping and stripping, the construction or installation of a mill or any other improvements to be used for the Mining, handling, milling, processing, or other beneficiation of Products. The active pursuit of obtaining any federal, state, or local authorization or permit related to any of the foregoing activities included in this definition shall also be considered to be an act of Development. Grammatical variations of “Development” have a like meaning.

1.08 “Effective Date” means the date more particularly described in Section 15.18 of this Agreement.

1.09 “Exploration” means all activities directed toward ascertaining the existence, location, quantity, or quality of a commercial deposit of Ore on, in, or under the Property, which activities are conducted prior to the commencement of Development of such deposit. Such activities include but are not limited to investigating, prospecting, surveying, sampling, and drilling. The active pursuit of obtaining any federal, state, or local authorization or permit related to any of the foregoing activities included in this definition shall also be considered to be an act of Exploration. Grammatical variations of “Exploration” have a like meaning.

1.10 “Mining” means the extraction of Ore and associated waste rock from the Property. Grammatical variations of “Mining” have a like meaning.

1.11 “Options” means the exclusive options to purchase the Property, Production Royalty, or both, as more particularly described in Section 14.01.

1.12 “Ore” means any and all metallic and nonmetallic minerals of every kind (excluding only oil, gas, casinghead gas, and associated liquid and gaseous hydrocarbon substances), including, without limitation, deposits, concentrates, and solutions containing such minerals in all forms in which such minerals may be found, extracted, or produced, as well as any by-products of them.

1.13 “Original Property” means all right, title, and interest of Lessors, as such right, title, and interest are represented and warranted (if at all) in this Agreement, in and to the surface estate and the mineral estate (specifically including any and all subsurface rights) of the lands described in Exhibit A, attached and by this reference made a part of this Agreement.

1.14 “Production Royalty” means the royalty provided for in Section 4.02.

1.15 “Products” means all commercial minerals produced from the Ore Mined from the Property.

1.16 “Property” means the Original Property and any Additional Property.

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1.17 “Property Purchase Price” means the purchase price for the Property provided for in Section 14.01.

1.18 “Rent” means the annual lease payment provided for in Section 4.01.

1.19 “Royalty Purchase Price” means the purchase price for the Production Royalty provided for in Section 14.01.

1.20 “Lessors” includes all heirs, executors, administrators, and successors to the Lessors.

ARTICLE IIGRANT OF AGREEMENT

2.01 Lease of the Property. Subject to the terms and conditions contained in this Agreement, Lessors lease exclusively unto Lessee, its successors and assigns, the Property. The leasehold rights granted to Lessee by Lessors include all of Lessors’ rights and privileges (including but not limited to easements, rights-of-way, licenses, options, and contracts), whether now owned or later acquired, that are appurtenant to the Property, to the extent any such rights or privileges exist or come to exist. The Property is leased to Lessee for the purpose of Exploring, Developing, Mining, producing, processing, consuming, transporting, and marketing all grades and types of Ore and their constituent Products and all other substances associated or commingled with them, by any method or methods deemed desirable by Lessee, whether the same is now or later becomes known to Lessee.

2.02 Mining Rights. The rights leased exclusively to Lessee pursuant to this Article II expressly include, without limitation, the following:

(a) the right to Mine the Ore and remove waste rock by open pit, underground, auger, borehole, drilling, combustion, in-situ solution methods, or any other method now known or later developed;

(b) the right to store, save, and stockpile Ore and Products;

(c) the right to mill, concentrate, refine, and otherwise beneficiate Ore;

(d) the right to transport and market Ore and Products; and

(e) the right to construct, use, maintain, repair, replace, and relocate any and all facilities and structures on and under the Property as may be necessary, useful, or convenient in connection with Lessee’s operations on the Property or operations on other lands owned (in whole or in part), controlled, leased, or operated by Lessee; such facilities and structures include, but are not limited to, buildings, roads, railroads, shafts, inclines, tunnels, adits, winzes, drifts, pits, tailings ponds, leach pads, piles of waste, earth, waste dumps, ditches, drains, pumping stations, boreholes, drill holes, tanks, dams, wells, reservoirs, ponds or other alterations, Ore stockpiles, pipelines, {00037071.DOC /}

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telephone lines, utility lines, power lines, processing facilities, plants, shops, and transportation facilities and other utilities, and the maintenance of them;

(f) all rights-of-way, easements, and servitudes as may be necessary, useful, or convenient for the purposes set forth in (a) through (e) above, and the right of ingress and egress for such purposes;

(g) the right to use or consume so much of the surface and subsurface of the Property as may be found necessary, useful, convenient, or incidental to carrying out the purposes of this Agreement, in accordance with the methods adopted by Lessee, such right to be carried out in Lessee’s sole discretion without any requirement to leave or provide subjacent or lateral support for the overlying strata or surface or anything on the surface, in the strata, or under the surface; Lessors waive and release all surface damages arising from all operations in and the removal of Ore and waste rock from the Property by Lessee, its successors, or assigns, or arising from any and all physical conditions now present or which may later develop in or upon the Property;

(h) the right to possess and use all or any part of the Property and any or all structures, facilities, tunnels, adits, winzes, shafts, pits, openings, ditches, roads, haulageways, and other improvements or appurtenances existing on or under the Property to Explore, Develop, Mine, produce, stockpile, store, market, and transport Ore, Products, rock, waste, water, or materials from all or any portion of the Property or from other properties, whether contiguous or not, owned (in whole or in part), controlled, leased, or operated by Lessee, and for all other reasonably related purposes, including, but not limited to, all rights-of-way, easements, and servitudes as may be necessary, useful, or convenient for such purposes, and rights of ingress to and egress from such other properties which Lessee, in its sole discretion, determines to be necessary, useful, or convenient for Exploration, Development, Mining, or production operations on such other properties;

(i) the right to use the surface of the Property, during the term of this Agreement, for access across, and facilities related to, any lands in which Lessee has an interest and which lands are being explored, developed, or mined by Lessee or by an agent, partner, or joint venturer of Lessee, as well as to use the surface of the Property for any other purposes related to such exploration, development, or mining activities being conducted on such other lands;

(j) the right to use and consume, in compliance with applicable laws, all water rights (if any) relating to water within, upon, or under the Property and all water rights, the point of diversion or place of use of which is on the Property; and

(k) the right to commingle (for all purposes including, but not limited to, Mining, storing, transporting, marketing, or selling) any Ore or Products produced from the Property or any portion of the Property with any material or ore produced from any other lands which are owned (in whole or in part), controlled, operated, or leased by Lessee, so long as proper records of the source of Ore or Products are maintained.

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2.03 Lessors’ Information and Data. On written request from Lessee after execution of this Agreement, Lessors shall each deliver to Lessee (i) any records, data, and information in their possession or reasonably available to them relating to title in the Property, and (ii) any maps, surveys, technical reports, drill logs, mine, mill, and smelter records, and all metallurgical, geological, geophysical, geochemical, and other technical data pertaining to the Property in their possession or reasonably available to them for a period prior to the Effective Date with respect to the Original Property and for a period prior to the acquisition or discovery of any Additional Interest with respect to such Additional Interest. Neither Lessor presently has or knows of any of the matters described in (ii) above.

2.04 Title to After-Acquired and Additional Interests. This Agreement will cover and extend to any further or additional right, title, interest, or estate earlier or later acquired by Lessors in or to the Original Property or any part of it. Any such further or additional matter is referred to as an “Additional Interest.” Unless an Additional Interest clearly is held or acquired by Lessors in some proportion different from their proportionate interests in the Original Property, such Additional Interests shall be deemed held or acquired by Lessors in the same proportion as they hold the Original Property as described in this Agreement.

2.05 Lessors’ Cooperation with Lessee. Lessors recognize that Lessee may, among other things, apply for zoning and land use changes, enlarge existing roads, construct new roads, or facilities, file environmental assessment or impact statements or similar documents with local, state, and federal governmental agencies, and perform all other actions necessary to carry out Lessee’s Exploration, Development, or Mining operations on the Property. Lessors agree that they will reasonably cooperate with Lessee and they will not file opposition or objections with any governmental entity regarding Lessee’s Exploration, Development, or Mining of the Property pursuant to this Agreement. Nothing in this Section 2.05 limits rights otherwise granted to Lessee under this Agreement.

ARTICLE IIITERM

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3.01 Term. The initial term of this Agreement shall be for four (4) years, beginning on the Effective Date, and may be renewed at the election of the Lessee upon notice to the Lessors prior to the expiration of the then existing term, for up to two successive four (4) year terms, unless sooner terminated or surrendered as provided in this Agreement; AND, subject only to termination for default by Lessee, this Agreement shall remain in effect for a continuous term after the expiration of the initial term, even if during any additional renewal term, without the need for any notice of renewal, as soon as and FOR SO LONG THEREAFTER as Exploration, Development, or Mining operations shall be conducted on the Property and Lessee continues to pay the Rent and Production Royalty (to the extent Production Royalty is payable) and other amounts payable under this Agreement, and this Agreement is not terminated for default by Lessee. Any such continuous term shall end when any substantial Exploration, Development, or Mining operations cease (other than for Force Majeure as described in Article XII) for a continuous period of at least 12 months. This Agreement shall terminate at the end of any such continuous term which may have become effective unless otherwise agreed between Lessee and the same proportion of Lessors as would be needed to terminate this Agreement (see Section 10.02(e)). A reference to the term of this Agreement includes any additional renewal term which has become effective or the continuous term if it has become effective.

3.02 Waiver of Implied Obligations. Lessee shall have no obligation to begin or perform prospecting, Exploration, Development, Mining, processing, transporting, milling, or other operations on the Property, nor to Mine and remove all or any portion of the Ore on, in, or under the Property, nor is there any implied covenant to do so. Lessors expressly acknowledge and agree that no Mining of Ore need occur which would entitle Lessors to receive payment of Production Royalty and Lessors further acknowledge and agree that Lessee, to an extent commercially reasonable in the mining industry subject to Lessee’s standard of operations set forth in Section 5.01, may waste or consume reasonable portions of any Ore, and Lessee and shall not be required to pay any Production Royalty on any such Ore which may be so wasted or consumed. Lessors expressly acknowledge and agree that, absent a required level of production under this Agreement, the consideration for the grant of this Agreement and the Rent provided for in this Agreement may therefore constitute the sole consideration for all rights of Lessee under this Agreement, and that the same constitutes full, reasonable, fair, and adequate consideration for the rights granted to Lessee by Lessors for the entire term of this Agreement. If Lessee shall conduct Exploration, Development, Mining, processing, transporting, milling, and other operations or activities under this Agreement, such operations and activities shall be performed only to the extent, at such times and locations, and by or with such methods as Lessee, in Lessee’s sole discretion, shall deem desirable. Lessee shall not be required to Mine or protect in its Mining operations any Ore which cannot be Mined, processed, shipped, and marketed at a reasonable profit to Lessee at the time encountered as determined in the reasonable judgment of Lessee.

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ARTICLE IVRENT AND PRODUCTION ROYALTIES

4.01 Rent. Lessee shall pay to Lessors for all of the rights granted to Lessee by Lessors under this Agreement an annual rent payment (the “Rent”) of the initial sum of TWENTY-FIVE THOUSANDS DOLLARS ($25,000) per year, payable on execution of this Agreement for the year commencing with the Effective Date, then annually on each Anniversary Date of the lease for the first four (4) years of the term of this Agreement. The Lessee will initially pay Twenty-Five percent (25%) of the Rent to [2a] (or successors), and Seventy-Five percent (75%) of the Rent to [1a] (or successors) by separate checks or allowed forms of payment (see Section 4.03). Upon the expiry of the initial term of four (4) years, the Rent will increase for any successive four (4) year renewal term or for any such four-year period during any continuous term by FIVE THOUSANDS DOLLAR ($5,000) every four (4) years, and the Lessee will divide and pay the Rent to the Lessors in the same proportions as set out immediately above, for so long as this Agreement continues in force and effect.

4.02 Production Royalty. In addition to Rent, beginning with the Commencement of Commercial Production and continuing after that, Lessee shall pay to Lessors a royalty as provided in Exhibit   B , attached to and incorporated by this reference (the “Production Royalty”). The Lessee will pay any Production Royalty to the Lessors in the same proportions as Rent (i.e., initially 25% to [2a] and 75% to [1a]) by separate checks or allowed forms of payment. No Production Royalty shall be due with regard to samples of Ore which Lessee deems reasonably necessary to test or evaluate the technical or economic feasibility of extraction, milling, or processing methods which may be used to enjoy the benefits and rights granted under this Agreement. Lessee shall have the right to remove such samples free of any Production Royalty whatsoever.

4.03 Manner of Payment. All payments of Rent or Production Royalty due or payable to Lessors under this Article IV may be made by check or banker’s draft mailed three (3) days before the due date or delivered on or before the due date to Lessors in the name of the person designated and at the address provided in Section 15.06 below. Payment may also be made by wire transfer on or before the due date, if desired and arranged by Lessee.

ARTICLE VLESSEE’S OPERATIONS

5.01 Standard of Care. Lessee shall perform or cause to be performed its Exploration, Development, and Mining and other operations upon the Property and under this Agreement in a good and workmanlike manner and in accordance with sound mining and engineering practices.

5.02 Compliance with Law. All work performed or caused to be performed by Lessee upon the Property shall be in compliance with all applicable federal, state, and local laws, rules, and regulations. With regard to reclamation, Lessee shall reclaim, in accordance with local, state, and federal laws, rules, and regulations, any disturbance on the Property caused by its operations under {00037071.DOC /}

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this Agreement; provided, however, Lessee assumes no responsibility or obligation to reclaim or otherwise cure disturbances of the Property made before the Effective Date of this Agreement, except that Lessee agrees to be responsible for such antecedent disturbances to the extent such disturbed lands are further disturbed during its operations under this Agreement.

5.03 Books. Lessee shall keep accurate books and records on the accrual basis in accordance with United States generally accepted accounting principles. Lessors’ sole inspection and audit rights as to Lessee’s books and records are as set forth in Exhibit B.

5.04 Reports. Lessee shall furnish to Lessors, within sixty (60) days following the effective date of termination of this Agreement, copies of all factual, noninterpretative geologic data produced by Lessee with respect to the Property. LESSEE MAKES NO REPRESEN-TATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS OR ACCURACY OF ANY INFORMATION OR DATA MADE AVAILABLE TO LESSORS UNDER THIS SECTION 5.04 OR TO THE FITNESS OR SUITABILITY OF SUCH INFORMATION OR DATA FOR ANY PURPOSE, EXCEPT THAT SUCH INFORMATION SHALL NOT BE KNOWN TO LESSEE TO BE FALSE OR INCOMPLETE.

5.05 Inspections. Lessee shall allow Lessors, as well as qualified engineers or geologists representing Lessors, to enter into any adits, winzes, and shafts or upon the surface excavations and appurtenant structures operated by or on behalf of Lessee, at reasonable times and hours, for the purpose of visually inspecting the operations pertaining to this Agreement, upon at least five (5) days’ written notice; provided, however, the affected Lessor shall indemnify and hold Lessee harmless, and such representatives shall execute, if requested by Lessee, written waivers releasing Lessee from liability for personal injury or property damage while in or upon the Property, resulting otherwise than by the sole negligence of Lessee, its employees, contractors, and agents. Whether or not a written waiver is executed by such Lessor or its representatives, such Lessor shall indemnify and hold Lessee harmless from liability while such Lessor or its representatives are in or upon the Property.

5.06 Assessment Work and Claim Maintenance Payments. Commencing with the assessment year ending at noon on September 1, 2008, Lessee shall perform all necessary assessment work upon any unpatented mining claims held as Property and shall file in the name of Lessors all proofs of labor required by law; provided, however, Lessee shall not be required to perform assessment work upon unpatented mining claims for any assessment year if notice of termination, as provided below in Article X, is given prior to June 1 of any year. Work performed by Lessee prior to termination of this Agreement may be used by Lessors in complying with its assessment requirements for the assessment year in which such work was done. Lessee shall, as soon as practicable, provide a copy of the county recorded and Bureau of Land Management date-stamped affidavit evidencing completion of any required annual assessment work performed by Lessee. Lessee shall have the right to perform assessment work pursuant to a common plan of exploration, development, or mining whether performed on or off the Property. Lessee shall not be liable to Lessors if any court or governmental agency finds that the effects of work performed by Lessee do not constitute the required assessment work or occupancy for preserving or maintaining ownership of the Property, provided that the type and amount of assessment work performed by {00037071.DOC /}

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Lessee is work generally recognized in the mining industry as sufficient to maintain occupancy or as proper assessment work. If changes in the law pertaining to the performance of assessment work shall become effective during the term of this Agreement, and such changes affect or eliminate the requirement to perform assessment work as contemplated in this Section 5.06, then Lessee’s compliance with any such change in the law shall be deemed complete and satisfactory performance of its obligations under this Section 5.06. Lessee shall not be required to make any payments in lieu of assessment work for any assessment year if notice of termination, as provided below in Article X, is given at least sixty (60) days prior to the date such claim maintenance payment is due.

5.07 Amendments, Relocations, Patenting. Lessee shall have the right, but not the obligation, during the term of this Agreement to amend any unpatented mining claims included in the Property or, to relocate them in the name of Lessors (specifically including any amendment or relocation pursuant to changes in the mining law), and to apply for patent of the unpatented mining claims in Lessors’ names, all without liability to Lessors for any act or omission in connection with any amendment, relocation, or patent application so long as Lessee shall act in accordance with standards generally recognized in the mining industry. Lessors agree to execute all necessary documents in connection therewith and to reasonably cooperate with and support Lessee in all other ways in all such amendments, relocation procedures, and patent proceedings. All expenses undertaken by Lessee in connection with such amendments, relocations, and or patent proceedings, except such expenses arising pursuant to Section 6.03, shall be borne by Lessee. The rights of Lessee and Lessors under this Agreement shall extend to all amended locations, reconfigurations required by changes in the mining law, relocations, or patented mining claims related to any unpatented mining claims and that currently comprise the Property.

ARTICLE VIREPRESENTATIONS AND WARRANTIES OF LESSORS

6.01 Representations and Warranties. Each of Lessors separately represents and warrants to Lessee as follows:

(a) this Agreement has been duly authorized by all necessary corporate or organizational action (if applicable) on the part of such Lessor and has been duly executed and delivered by such Lessor;

(b) Lessor has full power and legal authority to enter into this Agreement and to perform the transactions contemplated by it. This Agreement and the provisions of it constitute legal and binding obligations of Lessor enforceable in accordance with its terms. To the best of such Lessor’s knowledge, after due investigation, neither the execution and delivery of this Agreement nor compliance by Lessor with any of its provisions conflict or will conflict with or result or will result in, with or without notice or lapse of time or both notice and lapse of time, a breach, or default, or result in any encumbrance upon, or any lien, charge, or adverse claim against, the Original Property, under any of the terms, conditions, or provisions of any agreement or instrument to which such Lessor is a party or by which its property is bound, or judgment, order, law, or governmental or administrative regulation or restriction applicable to such Lessor;

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(c) there are no actions, suits, claims, proceedings, litigation or investigations pending or, to the best of such Lessor’s knowledge after due investigation, threatened, or judgments outstanding and unsatisfied against or affecting Lessor, any part of or all of the Original Property or this Agreement at law or in equity, or in arbitration, or before or by any federal, state, local, or other governmental instrumentality. Lessor is not aware of any facts or circumstances upon which any such action, suit, claim, proceeding, litigation, or investigation could be based. Lessor knows of no requirements of federal, state, or local law which could materially and adversely affect Lessee’s ability to Explore or Develop the Original Property as contemplated by this Agreement;

(d) Lessor is the owner of the Original Property in its proportionate share as described in this Agreement, free and clear of all liens, charges, encumbrances, claims, defects, or objections arising by, through, or under such Lessor (in its fiduciary capacity, where Lessor is a fiduciary as disclosed under this Agreement), and (without investigation of any kind) Lessor has no knowledge that any other person or entity is claiming an interest in the Original Property; no other title warranty of any kind with respect to the Property is provided by a Lessor; there are no known water rights associated with the Original Property; no warranty is provided as to the physical condition of any part of the Original Property;

(e) if the Original Property includes any unpatented mining claims, Lessor (without investigation of any kind) believes that such mining claims are in good standing under appropriate federal and state laws and the regulations under them (together the “Act and Regulations”), which good standing includes but is not limited to the following matters as to which Lessor has no knowledge of facts to the contrary:

(i) Such claims were properly surveyed, staked, and monumented;

(ii) All required location and validation work was properly performed;

(iii) All location notices or certificates were properly recorded and filed with appropriate governmental agencies;

(iv) All assessment work required to hold the claims comprising the Original Property has been performed through the assessment year ending September 1, 2007;

(v) All affidavits of assessment work and other filings required to maintain the claims in good standing through September 1, 2007, have been properly and timely recorded or filed with the appropriate governmental agencies;

(vi) There are no other conflicting claims; and

(vii) All rental fees have been paid to the Bureau of Land Management as required by H.R. 5503 (enacted October 5, 1992).

(f) there has been no act or omission by Lessor which could result by notice or lapse of time, or by both notice and lapse of time, in the breach, termination, abandonment, {00037071.DOC /}

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forfeiture, relinquishment, or other premature termination of the rights of Lessors in and to the Original Property;

(g) there are no known royalties, fees, or monies payable or required to be paid to any other person or entity with regard to the Original Property and there are no known outstanding agreements, options or purchase rights to acquire any part of or all the Original Property;

(h) Lessor has not engaged or employed any broker or finder in connection with the negotiation, execution, or delivery of this Agreement or the Property; and

(i) Lessor has not made any assignment for the benefit of creditors, filed any petition in bankruptcy, been adjudicated insolvent or bankrupt, petitioned or applied to any tribunal for any receiver, conservator, or trustee of it under any creditors’ arrangement, readjustment of debt, conservation, dissolution, or liquidation law or statue of any jurisdiction, and no such action or proceeding has been commenced against Lessor by any creditor, claimant, governmental agency, or other person and Lessor has no present plans or intentions to undertake any of the foregoing;

(j) at such time as any mining claim or other real property interest acquired by Lessor becomes Additional Property under this Agreement, the representations and warranties set out in subparagraphs (b) through (i), of this Section 6.01, inclusive, insofar as they apply to the Original Property, shall be deemed to have been given by Lessor to Lessee with respect to such Additional Property, except as disclosed in writing to Lessee at or before the later of (i) the time when the mining claim or other real property interest becomes Additional Property or (ii) thirty (30) days after Lessor learns that any such interest become Additional Property.

(k) Lessor is not aware of any material facts or circumstances not disclosed in writing to Lessee, the disclosure of which is necessary to prevent the representations and warranties in this Article VI from being materially misleading.

6.02 Survival. The representations and warranties contained in Section 6.01 shall survive the execution and delivery of this Agreement.

6.03 Lesser Interest. If Lessors’ title is less than the full undivided title to the Property as represented and warranted in Section 6.01 and if Lessee in its sole discretion elects not to cure any such lesser title or, having commenced curing the title, elects to abandon such curative action, Lessee shall have, in addition to such other rights and remedies it may have in law, at equity or under this Agreement, the right to elect to accept such lesser title by giving written notice of such election to Lessors, in which event the Rent payments set forth in Article IV shall be reduced to the same proportion as the undivided title actually owned by Lessors bears to the undivided title described under this Agreement. For purposes of proportional payment reduction, the surface and mineral estates shall constitute one estate and any lesser interests in either the surface estate or the mineral estate shall reduce payments in proportion to whichever estate (mineral or surface) is owned in the lowest percentage of ownership as compared to the title warranted in this Agreement.

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ARTICLE VIIREPRESENTATIONS AND WARRANTIES OF LESSEE

7.01 Representations and Warranties. Lessee represents and warrants to each of the Lessors as follows:

(a) Lessee is incorporated under the laws of the State of Nevada, and represents that it exists and is in good standing in that State, including with respect to the filing of its annual reports; further, Lessee represents that its nominees or agents will be qualified to do business in Nevada;

(b) this Agreement has been duly authorized by all necessary corporate action on the part of Lessee and has been duly executed and delivered by Lessee;

(c) Lessee has full power and authority to enter into this Agreement and to perform the transactions contemplated by it. This Agreement and the provisions of it constitute legal and binding obligations of Lessee enforceable in accordance with their terms. To the best of Lessee’s knowledge, after due investigation, neither the execution and delivery of this Agreement nor compliance by Lessee with any of its provisions conflict or will conflict with or result or will result in, with or without notice or lapse of time or both notice and lapse of time, a breach, or default, or result in any encumbrance upon or any lien, charge, or adverse claim against the Original Property, under any of the terms, conditions, or provisions of Lessee’s articles or bylaws, or of any directors’ or shareholders’ resolution of Lessee, or of any agreement or instrument to which Lessee is a party or by which its property is bound, or of any judgment, order, law, or governmental or administrative regulation or restriction applicable to it;

(d) Lessee has not engaged or employed any broker or finder in connection with the negotiation, execution, or delivery of this Agreement or the Property;

(e) Lessee has not made any assignment for the benefit of creditors, filed any petition in bankruptcy, been adjudicated insolvent or bankrupt, petitioned or applied to any tribunal for any receiver, conservator, or trustee of it under any reorganization arrangement, readjustment of debt, conservation, dissolution or liquidation law or statue of any jurisdiction, and no such action or proceeding has been commenced against Lessee by any creditor, claimant, governmental agency, or other person and Lessee has no present plans or intentions to undertake any of the foregoing; and

(f) Lessee is not aware of any material facts or circumstances not disclosed in writing to Lessee, the disclosure of which is necessary to prevent the representations and warranties in this Article VII from being materially misleading.

7.02 Survival. The representations and warranties contained in Section 7.01 shall survive the execution and delivery of this Agreement.

ARTICLE VIIITAXES

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8.01 Taxes Paid by Lessee. Lessee agrees to pay the following:

(a) all taxes levied and assessed on improvements placed upon the Property by Lessee during the term of this Agreement; and

(b) any additional tax or any increase in tax levied upon the interest of Lessors in the Property during the term of this Agreement, including ad valorem taxes, to the extent that such increase is attributable to Lessee’s operations or activities upon the Property.

Lessee’s obligation to pay such taxes shall commence with taxes payable for the year of execution of this Agreement. Lessee agrees to make payment of such taxes, as required by federal, state, and local statutes, rules, and regulations, so that no default in taxes upon the interest of Lessors shall occur; provided, however, that Lessee shall have the right to contest by judicial proceeding or otherwise the validity of any assessment or levy of any of such taxes and to take such action as Lessee deems necessary or desirable to secure cancellation, reduction, adjustment, or equalization of them before Lessee shall be required to pay and discharge the same, so long as no tax lien or encumbrance is or becomes subject to tax sale, foreclosure, or other right of enforcement prejudicial to the rights of Lessors in or to the Property. Lessors shall reasonably cooperate and assist Lessee, at Lessee’s expense, as necessary in any judicial or other proceeding contesting the validity of any assessment or levy of any of such taxes.

Lessee may require that taxes be assessed to Lessors in care of Lessee in order that it may assure itself that the taxes are timely paid. Lessee shall within ten (10) days of the request, deliver duplicates of any tax receipts for payments made if requested to do so by either of the Lessors. It is agreed that should Lessors receive tax bills or claims that are the responsibility of Lessee, the same shall be promptly forwarded to Lessee for appropriate action and if not so forwarded, Lessee shall not be responsible for any delinquent payment charges or interest charges resulting from the late payment of such taxes.

Lessee shall not be obligated to pay any tax imposed upon any payment it makes to Lessors under this Agreement, nor shall Lessee be compelled to discharge any tax liens upon the Property not arising by reason of its activities under this Agreement or by, through, or under Lessee, or by reason of any tax payment obligation of Lessee under this Agreement.

8.02 Taxes Paid by Lessors. During the term of this Agreement, except as otherwise specifically set forth in Section 8.01, Lessors shall pay when due all general ad valorem taxes and assessments assessed against the Property, and all other lawful public taxes and assessments, whether general, specific, or otherwise, assessed and levied upon or against the Property and any tax imposed upon any payment Lessee makes to Lessors under this Agreement.

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LIABILITY AND INSURANCE

9.01 Liens. Lessee shall promptly pay all wages due its workmen and employees and pay for all materials and supplies or the use of equipment or facilities furnished for its operations and shall defend and protect Lessors from and against all claims, liens, and liabilities which may arise as a result of Lessee’s failure so to do. In the event that any mechanic’s, materialmen’s, or laborer’s liens or similar encumbrance may arise and are filed or become effective against the Property as a result of Lessee’s operations, Lessee shall take all steps to obtain the timely discharge of them, without any sale, foreclosure, or exercise of any other enforcement right prejudicial to the rights of Lessors in or to the Property.

9.02 Insurance. Lessee shall maintain at all times during the term of this Agreement insurance of the type and in an amount adequate to satisfy employer’s liability and workers’ compensation obligations under applicable federal, state, and local laws; provided, however, that Lessee may self-insure against such liability to the extent so permitted by applicable law.

9.03 Liability. Lessee shall, at its sole expense, provide public liability insurance in an amount consistent with its operations and commensurate with reasonable general practice in the mining industry and shall save, protect, and hold each of the Lessors harmless against any and all claims, demands, or judgments whatsoever for loss or damage to personal property and death or injury to persons arising out of Lessee’s activities or operations on the Property (whether directly or through any agent, subcontractor, or otherwise), except those claims of Lessors, its assigns, contractors, employees, successors, or agents which are barred by the provision of Section 5.05. Lessee’s responsibilities under this Section 9.03 shall not terminate upon termination of this Agreement, but shall continue to apply to occurrences occurring or causes of action accruing before the date of termination, or occurring or accruing on or after the date of termination from any continued operations, which occur, or which are required under this Agreement, including any reclamation, removal of items from the Property, and so on.

ARTICLE XTERMINATION; REMEDIES

10.01 Termination by Lessee. Until the continuous term becomes effective, Lessee may terminate this Agreement as to all or any portion of the Property at any time upon giving written notice to Lessors by no later than June 1 of any Agreement Year, and after that Lessee shall have no continuing liability (specifically including Rent payments) to Lessors under or in relation to this Agreement, except as provided in Section 10.04. Any partial termination of this Agreement by Lessee shall not reduce the Rent provided for in this Agreement.

10.02 Default

(a) Defaults as to Rent, Tax, and Other Payments. If Lessee fails to pay Rent, Production Royalty, taxes, or amounts required to be paid by Lessee pursuant to Article IX, provided that such failure does not fall within the provisions of Article XII, Lessors may give

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written notice of the failure to Lessee specifying the particulars of such failure. Within thirty (30) days after delivery of the notice, Lessee may:

(i) remedy the failure, or in the case of a failure which cannot be remedied within the thirty (30) day period, promptly commence with the 30 days and afterwards diligently proceed in good faith with action to remedy the failure; or

(ii) pay to Lessors the amounts required to be paid by Lessee that are the subject of Lessors’ written notice; failing either of the above, any Lessor may exercise any right or remedy available at law or in equity, or Lessors may (subject to Section 10.02(e) below) terminate this Agreement by further written notice to Lessee, and upon such termination, Lessee shall have no liability to Lessors under or in relation to this Agreement except (i) as provided in Section 10.04, or (ii) for any accrued but unpaid liability or amounts, (iii) Rent for the remainder of the then existing term, and (iv) Production Royalty with respect to Products produced on or removed from the Property.

(b) Other Defaults - In the event Lessors believe Lessee to be in default in the observance or performance of any of Lessee‘s covenants, agreements, or obligations under this Agreement, other than the default, which are to be handled in accordance with Section 10.02(a) above, Lessors may give written notice of such alleged default, specifying the details of the same. Lessee shall have thirty (30) days following that notice within which to remedy any such default, or if a remedy cannot reasonably occur within such 30 days, to promptly within the 30 days commence and afterwards diligently pursue action in good faith to remedy such default. Unless Lessee shall so comply or commence to comply, any Lessor may exercise any right or remedy available at law or in equity, or this Agreement may be terminated at the option of Lessors (subject to Section 10.02(e) below) by further written notice to Lessee, with such termination having the same effect as described for a termination under Section 10.02(a) above.

In the event Lessee believes that it is not in such default, Lessee may give written notice to Lessors within the thirty (30) day period setting forth such fact. The dispute shall then be subject to arbitration as described in this Agreement, and to be effective, any termination of this Agreement by Lessors must be allowed as a provisional or final remedy by the arbitration panel. This Agreement shall not be so terminable by Lessors, however, if Lessee shall (i) satisfy any allowed claim under any provisional or final award within thirty (30) days following the date of the award and (ii) reimburse Lessors for all of its reasonable costs and expenses of enforcement and in obtaining such award, including attorney’s fees and other professional fees. Further, Lessors shall not be entitled to terminate this Agreement for any such default which by its nature is not retro-actively curable but which does not prejudice the rights of Lessors in and to the Property, if no other uncured default exists and either Lessee has used its reasonable efforts to cure such a default and has cured it to the extent then practicable or Lessee has fully paid Lessors’ damages for Lessee’s default where damages are an appropriate remedy, including all costs and expenses of enforcement, including attorney’s fees or other professional fees. Any damages are subject to Section 10.05.

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(c) Disputes Not to Interrupt Operations. Subject to Lessors’ right to terminate this Agreement as set forth in this Section 10.02, disputes or differences between the parties shall not interrupt performance of or the continuation of operations under this Agreement. With regard to Rent, Production Royalties, Purchase Price, Property Purchase Price, or Royalty Purchase Price, or any other sums payable under this Agreement or any part of such sums, Lessee shall have the right to escrow the portion of any such payment that is in dispute as provided in Section 10.02(d) below. In the event of any dispute or difference, operations may be continued in the same manner as prior to such dispute or difference, until the matters in dispute have been finally determined between the parties, so long as this may be done without prejudice to the rights of Lessors in or to the Property. Upon final determination, such payments or restitutions shall be made as may be required under the terms of the settlement or final determination of the dispute.

(d) Escrow Deposit . In the event of dispute as to the amount payable of Rent, Production Royalties, Purchase Price, Property Purchase Price, or Royalty Purchase Price or any other sums payable under this Agreement or any part of such sums, the disputed amount of any such Rent, Production Royalties, Purchase Price, Property Purchase Price, or Royalty Purchase Price, or other payments may be deposited in escrow and, if ordered by the arbitration panel, such amounts together with an additional 20% of such amounts (to cover interest, enforcement costs, etc.) shall be deposited in escrow, with a depository bank selected by Lessee, unless the arbitration panel selects some other escrow agent, to be held in an interest-bearing account until such dispute is finally resolved or terminated, unless otherwise ordered by the arbitration panel. An arbitration panel may specify the terms of any escrow if not otherwise agreed between the parties to the dispute. Any sums so deposited in escrow by Lessee shall be deemed payment of Rent, Production Royalties, Purchase Price, Property Purchase Price, or Royalty Purchase Price, or other sums due under this Agreement for purposes of compliance by Lessee with its obligations under this Agreement.

(e) Condition of Lessor Termination . Lessors shall only terminate this Agreement with the consent of the then holders of not less than 85% of all of the Lessors’ interest (including successors to the initial Lessors) under this Agreement, determined by their proportionate shares of the Property and thus of the Rent, Production Royalty, and related amounts payable under this Agreement. Any Lessor may alone exercise any other right or remedy.

10.03 Termination by Either Party. This Agreement may not be terminated by either party except as expressly provided in Sections 10.01 or 10.02.

10.04 Obligations upon Termination.

(a) Upon Termination of the Agreement. If this Agreement is terminated under Sections 10.01 or 10.02:

(i) Lessee shall comply with the provisions of Section 5.02 regarding reclamation of the Property;

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(ii) Lessee shall comply with the provisions of Section 5.06 regarding assessment work and Claim Maintenance Payments and shall remain liable as set forth in Section 5.07 regarding expenses incurred with respect to amendments, relocations, and patent applications;

(iii) Lessee shall pay, as set forth in Sections 9.01 and 9.02, and shall remain liable to Lessors for the matters described in those sections, including wages to workmen and Lessee’s employees and payments for materials and supplies provided to Lessee for its operations on the Property;

(iv) Lessee shall, as set forth in Section 9.03, pay and remain liable to Lessors for the matters described in that section, including causes of action as described in that section;

(v) Lessee shall remain liable to Lessors for the payment of any Production Royalties;

(vi) The duty to arbitrate as set forth in this Agreement shall survive termination of this Agreement;

(vii) Lessee shall deliver promptly to Lessors executed, recordable transfer documents transferring its interest in and to the Property to Lessors free and clear of any claims of those claiming by, through, or under Lessee; and

(viii) Lessee shall have the right for a reasonable period not exceeding one (1) year to remove its buildings, structures, machinery, casings, tools, equipment, and other personal property, permanent improvements, and fixtures erected or placed upon the Property by Lessee, except only track, pipe, timber, shaft guides, sheave wheels, air gates, ventilation ducts, chutes, and ladders in place and protective devices (fences, caps, plugs, or otherwise), which Lessee shall leave in good condition for safety and underground support and entry. All such buildings, structures, machinery, casings, tools, equipment, or other personal property, permanent improve-ments, and fixtures not timely removed following the termination of this Agreement shall then, at the election of the same proportion of Lessors as would be necessary to terminate this Agreement (see Section 10.02(3)) by written notice to Lessee, be deemed affixed to the Property and shall become and remain the sole property of Lessors, but if such election notice is not given, Lessee shall be liable to Lessors for the costs of removal and for any damage related to such removal, including for any inability to lease or use the Property or any reduction in its rental value.

(ix) Nothing in this Section 10.06 shall relieve Lessor of the obligations to comply with the law, to conduct its remaining operations in accordance with the standards applicable at law or under this Agreement, and to otherwise be responsible as provided under this Agreement for any of its remaining operations, including for their costs or effects, or for the Property, during the period of any remaining operations, or shall relieve Lessor of any earlier obligations or the results of any default.

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(x) all terms of this Agreement survive any termination to the extent necessary to adjust the rights and obligations of the Parties prior to or as the result of the termination.

(b) Upon Termination of Part of the Property. If part of the Property is being released from the terms of this Agreement under Section 10.01, the provisions of this Agreement continue to apply, subject to these modifications:

(i) Lessee shall comply with the provisions of Section 5.02 regarding reclamation of the part of the Property that is being released from the terms of this Agreement;

(ii) Lessee shall, with regard to unpatented mining claims comprising all or part of the Property that are being released from the terms of this Agreement, comply with the provisions of Section 5.06 regarding assessment work and Claim Maintenance Payments and shall remain liable as set forth in Section 5.07 regarding expenses incurred with respect to amendments, relocations, and patent applications;

(iii) Lessor shall remain liable as set forth in Sections 9.01, 9.02, or 9.03 for any continuing or concluding operations on the portion of the Property being released;

(iv) Lessee shall remain liable to Lessors for the payment of any Production Royalties which accrue and are payable as to production from that part of the Property that is being released from the terms of this Agreement;

(v) Lessee shall promptly deliver to Lessors executed, recordable transfer documents transferring to Lessors that part of the Property that is being released from the terms of this Agreement, free and clear of any claims of those claiming by, through, or under Lessee; and

(vi) Lessee shall have the right for a reasonable period not exceeding one (1) year to remove its buildings, structures, machinery, casings, tools, equipment, and other personal property, permanent improvements, and fixtures erected or placed by Lessee upon the part of the Property that is being released from the terms of this Agreement except only track, pipe, timber, shaft guides, sheave wheels, air gates, ventilation ducts, chutes, and ladders in place and protective devices (fences, caps, plugs, or otherwise), which Lessee shall leave in good condition for safety and underground support and entry. All such buildings, structures, machinery, casings, tools, equipment, or other personal property, permanent improvements, and fixtures not timely removed shall then, at the election of the same proportion of Lessors as would be necessary to terminate this Agreement (see Section 10.02(e)) by written notice to Lessee, be deemed affixed to the Property and shall become the sole property of Lessors, but if such election notice is not given, Lessee shall be liable to Lessors for the costs of removal and for any damage related to such removal, including for any inability to lease or use that portion of the Property or any reduction in its rental value.

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(c) Cumulative Remedies. No remedy of any Party is exclusive, but each remedy is cumulative with all other remedies to the extent allowable at law or in equity.

(d) Cross Indemnities. Upon termination of this Agreement, Lessee and Lessors shall continue to have the indemnity responsibilities set forth in Section 15.04.

10.05 Limitation of Liability. Each Party expressly agrees that each other Party shall not be liable for any incidental, consequential, or punitive damages, except for any punitive damages arising by reason of intentional fraud, intentional conversion of the property of another, or other independent intentional tort for which punitive damages are otherwise available at law.

ARTICLE XITRANSFER RIGHTS AND RESTRICTIONS

11.01 Lessee’s Rights as to Lessors’ Sale Transfers . If a Lessor (a) receives a bona fide offer from a person or entity with whom Lessor deals at arm’s length to purchase all or any part of its right, title, and interest in and to the Property as represented in this Agreement or in and to this Agreement (collectively the “Interest”), which Lessor is willing to accept, or (b) intends to make an offer to a person or entity with whom Lessor deals at arms length to sell all or any part of its Interest (both instances of which are referred to as the “Offer”) except by one Lessor to another Lessor or as allowed under Section 11.03, then if there is then no existing uncured default on the part of Lessee, Lessor shall promptly deliver, after receipt of an offer to purchase or before making an offer to sell, as the case may be, to Lessee written notice (the “Offer Notice”) of the offer to purchase or intended offer to sell, as the case may be, accompanied by a copy of the Offer and all information in the possession of such Lessor regarding the person or entity (the “Offeror”) from whom the Offer, if an offer to purchase, was received, or to whom the Offer, if an intended offer to sell, is intended to be given. If the Offer is for a price payable wholly in money, the Offer Notice will constitute an offer by Lessor to Lessee to sell Lessors’ Interest or the part of it included in the Offer, as the case may be (the “Offered Interest”) to Lessee at the same price and on the same terms and conditions as are specified in the Offer and Lessee may accept the offer constituted by the Offer Notice by giving to Lessors written notice (the “Acceptance Notice”) of Lessee’s acceptance within twenty (20) days after the delivery of the Offer Notice.

If the Offer is for a price payable in whole or in part by way of securities or other property, the Offer Notice shall be accompanied by an opinion of a reputable investment banker in the United States of America of the cash equivalent value of the securities or other property and the Offer Notice will constitute an offer by Lessors to sell to Lessee the Offered Interest at a price payable in cash equal to the cash portion, if any, of the price specified in the Offer plus the value of the securities or other property and otherwise on the same terms and conditions as set out in the Offer. Lessee may, if it agrees with the opinion of the investment banker, accept the offer constituted by the Offer Notice by an Acceptance Notice to Lessors within twenty (20) days after the delivery of the Offer Notice and the value of the securities or other property shall be the value determined by the opinion of the investment banker. If Lessee disputes the value of the securities or other property as determined by the opinion of the investment banker, Lessee may give to Lessors written notice accepting the Offer but disputing some portion of the value of the securities {00037071.DOC /}

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(the “Dispute Notice”) within twenty (20) days after delivery of the Offer Notice stating the basis upon which it disputes the opinion of the investment banker, in which case the undisputed amount shall be paid to Lessor, the disputed amount shall be deposited in escrow with a bank selected by Lessor, and the transaction shall close, all in accordance with the terms of the Offer and this Agreement. The final value of the securities or other property shall be determined by written agreement between Lessee and Lessors or, failing agreement within twenty (20) days after the delivery of the Dispute Notice, at any time after that on request by either Lessee or the Lessor, by arbitration pursuant to this Agreement.

The delivery by Lessee to Lessor of an Acceptance Notice or Dispute Notice will constitute a binding agreement between Lessee and Lessor for the purchase and sale of the Offered Interest at the price and on the terms and conditions specified in the Offer, as modified by agreement or arbitration with respect to the value of the securities or other property and the provisions of Section 11.10. If there is any conflict or inconsistency between the terms and conditions set out in the Offer and those set out in Section 11.10, the terms and conditions of Section 11.10 will prevail.

11.02 Lessee’s Failure to Accept Offer. If an Acceptance Notice is not given by Lessee within the time provided for in Section 11.01, Lessors may for a period of one hundred and eighty (180) days after the expiration of that time transfer the Offered Interest to the Offeror at the price and on the terms and conditions set out in the Offer, provided that:

(a) Pending such transfer, Lessor shall not transfer all or any part of the Offered Interest to any person or entity not allowable under Section 11.01 or 11.03, unless Lessee has given its prior written approval to the transfer to that person or entity, such approval not to be withheld or delayed unreasonably;

(b) Lessor shall not sell the Offered Interest at a price less than that specified in the Offer or on terms and conditions materially more favorable to a purchaser than those specified in the Offer;

(c) Lessor shall not sell the Offered Interest to the Offeror except subject to this Agreement; if the Offeror enters into an agreement with Lessee under which the Offeror shall be bound by and have the benefit of this Agreement to the same extent and with the same rights and obligations as Lessor, then Lessor shall be released from any further obligations under this Agreement; and

(d) if Lessors have not transferred the Offered Interest within the one hundred and eighty day period, then the provisions of Section 11.01 shall again become applicable to any sale or transfer of the Offered Interest.

11.03 Transfers to Affiliates and Related Parties. A Lessor may transfer to any of its Affiliates (as defined in Article I) all or any part of its Interest, whether for consideration or otherwise, without complying with Sections 11.01 and 11.02, provided that Lessor and the Affiliate to which all or a portion of the Interest is transferred have entered into an agreement with Lessee {00037071.DOC /}

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which provides that the Affiliate will be bound by and have the benefit of this Agreement as if it had been an original signatory to this Agreement for so long as it holds all or any part of the Interest. A Lessor may transfer any of its Interest without consideration without being subject to Sections 11.01 and 11.02. If a Lessor is a fiduciary of a trust or the estate of a decedent or incapacitated person, any transfer by the Lessor to any beneficiary, whether with or without consideration, shall not be subject to Sections 11.01 and 11.02, and shall to the extent of the transfer relieve the fiduciary Lessor of any further obligation under this Agreement and the beneficiary shall automatically on receipt of the interest be bound by and benefit by the terms of this Agreement as a Lessor.

11.04 No Release of Liability. If a Party transfers its rights under this Agreement to any person, including as permitted under this Article XI, the transferring Party shall not be released from its liability under this Agreement unless specifically provided in this Agreement, for or with respect to any breach or nonobservance of any covenant, condition, or term of this Agreement by any direct or indirect transferee except if and to the extent expressly agreed to in writing by another Party to this Agreement.

11.05 Representations of Transferee. Any transferee from a Party that becomes a party to and bound by this Agreement shall be deemed to have given to the other Parties the representations and warranties, as to itself, set out in Section 6.01(a) or 7.01(a) (except that the business corporations act shall be as to Offeror’s or Affiliate’s applicable state of incorporation), and Section 6.01(b), (c) and (e) through (m), and Section 7.01(b) through (f), as applicable to that Party, as of the date on which it becomes a party to and bound by this Agreement.

11.06 Joint and Several Liability. If an Interest is at any time held by Lessors and any one or more direct or indirect transferees of Lessors, Lessors and all parties holding a portion of their respective Interest shall not be jointly and severally liable with respect to any obligations of Lessors, but shall be separately responsible in the proportion that person’s Interest bears to the aggregate of all Interests of all Lessors. Any transferees from Lessee shall be jointly and severally liable for all of Lessee’s obligations, except to the extent otherwise provided by an instrument executed by the Lessor to be bound by such instrument.

11.07 Closing for Sale of Interest. Any agreement between the parties for the purchase and sale of an Interest pursuant to the exercise of the rights under this Article XI shall be completed as set forth in the Offer, or to the extent not set forth, at 11:00 a.m. on the thirtieth (30th) business day after a binding agreement for the purchase and sale of the Interest has come into effect. Completion shall take place in Reno, Nevada, at the offices of Lessee if it has an office there, otherwise, at a reasonable location there specified by Lessee. At the time scheduled for completion, Lessee shall deliver to Lessor a certified check or bank draft in payment of the Purchase Price for the Interest being purchased by Lessee, and the transferring Lessor shall deliver to Lessee executed transfer documents of the Interest, or portion of it, being purchased by Lessee in form and substance reasonably satisfactory to Lessee and its attorneys. The Interest being purchased by Lessee shall be transferred by Lessor to Lessee free and clear of all liens, claims, charges, and encumbrances arising by, through, or under the transferring Lessor, and if Lessor is unable to do so,

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Lessee may make payment to the holder of the lien, claim, charge, or encumbrance, which payment shall be deemed to be payment to the Lessor and shall be applied in reduction of the unpaid balance of the Purchase Price for the Interest being purchased by Lessee.

11.08 Breach of Article XI. Lessors acknowledge that a breach by it of this Article XI would result in loss to Lessee for which Lessee could not be adequately compensated in damages by a monetary award. Accordingly, each Lessor agrees that in the event of any breach by it of this Article XI, Lessee shall, in addition to all remedies available to Lessee at law or in equity, be entitled as a matter of right pending arbitration of any dispute to apply to a court of competent and equitable jurisdiction for such interim relief by way of restraining order, injunction (including an interim injunction), or otherwise, as may be appropriate to ensure compliance with the provisions of this Article XI.

11.09 Assignment. Subject to Lessee’s rights set forth in Section 11.01 through 11.03 above, the rights and obligations of the Parties under this Agreement may be assigned in whole or in part and the provisions of this Agreement shall extend to and be binding upon the successors and assigns of the respective Parties. No sale or assignment by Lessors shall be binding upon Lessee for purposes of the giving and receiving of notices, payments, and reports until thirty (30) days after such person or entity acquiring any interest has furnished Lessee with an instrument or instruments or certified copies of them documenting such transferee’s chain of title from an original Lessor.

11.10 Notice of Lessee. Lessee shall notify Lessors of any successive four (4) year renewal of the term of the lease in writing, and will also notify the Lessors of any assignment or sublease of all or any portion or portions of the Property, which notice shall include the name and address of the assignee or sublessee, as the case may be.

ARTICLE XII FORCE MAJEURE

12.01 Force Majeure. All obligations of Lessee and all conditions with respect to the continuation of this Agreement, except for (i) the payment of taxes pursuant to Section 8.01, (ii) the payment of Rent for the then existing term and for the first year of any succeeding term, or (iii) Production Royalties, which amounts shall continue to be payable as set out in Sections 8.01, 4.01, or 4.02, and except for the obligation to pay any amounts related to Lessee’s actual operations, shall be suspended and Lessee shall not be deemed in default or liable for damages or other legal or equitable remedies while, but only as long as, Lessee is prevented from complying with such obligations or conditions in whole or in part by actions of environmental pressure groups, strikes, lockouts, labor slowdowns or disturbances, acts of God, war, explosion, flood, epidemics, unavoidable accidents, uncontrollable delays in transportation, inability to obtain necessary ma-terials or services in the open market, factors which, in Lessee’s discretion, render the continued Exploration, Development, or Mining of the Property uneconomic, unusually severe weather, inadequate facilities for the transportation of materials, any local, state, or federal law, regulation, or order, or any other matters beyond the reasonable control of Lessee, whether similar to the matters specifically enumerated or not (“Force Majeure”). The time or times specified for compliance by Lessee with all obligations and conditions under this Agreement, shall thereafter be extended for a {00037071.DOC /}

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period or periods equal to the duration of the Force Majeure provided, however, that performance shall be resumed within a reasonable time after such Force Majeure has ceased to exist; and provided, further, that Lessee shall not be required to compromise or settle any labor disputes or to question the validity or to refrain from judicially testing the validity of any local, state, or federal order, regulation, or law. Without limitation of the above general provision, if Lessee is or becomes subject, at any time, to environmental regulations or governmental restrictions (“environmental regulations or governmental restrictions” shall include any law, rule, regulation, order, judgment, policy, proposal, action or inaction, or restriction relating to air pollution, water pollution, surface or subsurface Exploration or Mining, and surface or subsurface effects of Mining or land use) which prohibit or materially affect any operations under this Agreement or planned to be carried out under this Agreement, Lessee shall have the right to declare the existence of a condition of Force Majeure during the period in which Lessee is in good faith seeking a feasible method to comply with, be exempted from, modify, obtain necessary permits or licenses under or prevent the enactment, promulgation, or enforcement of such environmental regulations or governmental restrictions. Lessors agree to reasonably cooperate with Lessee in prosecuting any such actions. During such a period of Force Majeure, the term of this Agreement may be continued for additional terms, so long as the Rent for the first year of any such additional term is paid, even though other Rent obligations may be suspended by reason of the Force Majeure.

ARTICLE XIIICONFIDENTIALITY

13.01 Confidential Information. Lessors shall treat data, reports, records, and information relating to the Property and the activities of Lessee conducted pursuant to this Agreement not otherwise publicly available (“Confidential Information”) as confidential, provided that if Confidential Information becomes generally available to the public without breach of this Section 13.01, it shall no longer be Confidential Information. Subject to Section 13.02, Confidential Information shall not be disclosed to any person or entity not a party to this Agreement, except to auditors, legal counsel, investment bankers, institutional lenders and broker-dealers of Lessors, provided that nonparty use of Confidential Information is strictly limited to those purposes necessary for nonparty users to perform the function for which they were retained by the Lessors.

13.02 Disclosures. Notwithstanding the foregoing, Confidential Information may be disclosed by Lessors to persons other than those set forth above (a) upon the written approval of Lessee, or by Lessors providing to Lessee (i) a copy of the proposed disclosure not less than two (2) working days prior to the planned date of disclosure and (ii) a written determination in good faith by Lessors’ legal counsel that such disclosure is necessary to comply with Lessors’ disclosure obligations under any securities laws, rules ,or regulations, or stock exchange listing agreement, or its obligations in connection with existing or proposed credit arrangements; or (b) to any beneficiary of a fiduciary Lessor; provided further that the proposed disclosure is limited to factual matters and that Lessor shall have reasonably availed itself of the benefits of any laws, rules, regulations, or contractual rights as to disclosure on a confidential basis to which it may be entitled. The provisions of this Article XIII are obligations solely of Lessors, and Lessee shall not be bound by any of these obligations.

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ARTICLE XIVOPTIONS TO PURCHASE

14.01 Grant of Options. Notwithstanding any other provisions of this Agreement, Lessors irrevocably grant to Lessee the exclusive options, but only during the initial term of this Agreement and the next succeeding renewal term of this Agreement (if any) (the “Options”), to purchase:

(a) not less than the entire interest in the Property of all Lessors’, subject to the Production Royalty remaining payable to Lessors, and upon the terms and conditions set forth in this Article XIV, for a total purchase price of ONE MILLION DOLLARS ($1,000,000) (the “Property Purchase Price”); or

(b) any or all of the Production Royalty (but not the Property), upon the terms and conditions set forth in this Article XIV, for a total purchase price of ONE MILLION DOLLARS ($1,000,000.00) per full or any fractional portion of a percentage point (as to both Lessors, so that, for example, a percentage point of Production Royalty shared 75%/25% between initial Lessors is acquired proportionately from each of the Lessors) (the “Royalty Purchase Price”); or

(c) both the Property and all or any portion of the Production Royalty, upon the terms and conditions set forth in this Article XIV, for the Property Purchase Price and for the Royalty Purchase Price for the Production Royalty being purchased.

14.02 Consideration. The Parties agree that the consideration contained in this Agreement shall be sufficient consideration for the grant of these Options.

14.03 Exercise of the Option. So long as there is no uncured default on the part of Lessee, Lessee may exercise the Options, or either of them, or both, at any time during the option period by the delivery of written notice to Lessors of Lessee’s intent to exercise the Options, or either of them, or both, and in the case of an acquisition of only a portion of the Production Royalty, specify the portion being purchased, together with a certified check or money order in payment of the Property Purchase Price or Royalty Purchase Price, or both.

14.04 Approvals. During the term of the Options, Lessee may attempt to obtain from the applicable governmental authorities such permits, approvals, authorizations, licenses, etc. as are necessary or appropriate for Lessee’s intended use of the Property. In connection with the foregoing, Lessors agree to reasonably cooperate with Lessee and to execute and join in all applications, petitions, and other documents and instruments which Lessee reasonably requests of Lessors; provided, however, that Lessors shall not be required to incur any expense in connection with such cooperation.

14.05 Condemnation. Lessors represent and warrant that they have not received any written offer, notice, or communication of a proposed condemnation or taking under the power of eminent domain of all or any part of the Property. Upon receipt of any written offer, notice or {00037071.DOC /}

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communication from any governmental, quasi-governmental body, or private party seeking to take under its power of eminent domain all or any part of the Property, Lessors shall promptly notify Lessee of receipt of same and shall send to Lessee a copy of such offer, notice, or communication.

Lessors and Lessee agree to reasonably cooperate with each other at Lessee’s expense, except to the extent the benefit would inure solely to Lessors (to which extent Lessors will bear their own expense), to obtain the highest and best price for the condemned portion of the Property, whether by litigation or otherwise.

14.06 Lessors’ Covenant. Lessors covenant and agree that during the term of the Options, Lessors shall not commit, approve, consent to, or permit any transfer of any kind relating to an optioned interest, except subject to the option or except with the prior written consent of Lessee. Any transfer not made in accordance with the prior sentence which would diminish or otherwise adversely affect Lessee’s options under this Article XIV or which might prevent Lessors’ full performance of their obligations under this Article XIV shall be ineffective against Lessee or Lessee’s option rights under this Article XIV.

14.07 Covenants Running with the Land; Specific Performance. The covenants and agreements of Lessors under this Article XIV are intended to be and shall be covenants running with the land with respect to the Property and shall be binding upon Lessors and Lessors’ representatives and permitted successors and assigns. The Options shall be specifically enforceable by Lessee and by Lessee’s representatives, successors and assigns.

14.08 Termination of Options. In the event that Lessee does not exercise the Options in the manner provided, then (i) the Options shall, without further action of any party, automatically terminate and thereafter be null and void and of no further force or effect, and (ii) neither Party shall have any further rights or obligations with respect to the Options. On such termination of the Options, Lessee shall provide Lessors, in recordable form, a written acknowledgment that the Options have expired.

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ARTICLE XVGENERAL PROVISIONS

15.01 Competition. This Agreement is, and the rights and obligations of the Parties are, strictly limited to the Property and the Parties shall have the free and unrestricted right to engage in and independently receive the full benefits of any and all business ventures of any sort whatsoever, whether or not competitive with the activities undertaken pursuant hereto, without consulting the other or inviting or allowing the other to participate therein. Neither of the Parties shall be under any fiduciary or other duty to the other which will prevent it from engaging in or enjoying the full benefits of any competing venture or ventures within the general scope of the activities contemplated by this Agreement. Without limiting the generality of the foregoing, neither Party shall be under any duty to disclose to the other Party information and data relating to the Property which it obtains outside the scope of its activities under this Agreement.

15.02 Memorandum for Recording. This Agreement shall not be recorded for, by or on behalf of any Party without the written consent of all Parties. Lessors and Lessee agree to execute and Lessee shall record a notice or memorandum of this Agreement, which shall be in a form reasonably acceptable to all Parties, suitable for recording under the state and local laws of Nevada, specifying that the interests of Lessee and Lessors in the Property are subject to the terms and conditions of this Agreement.

15.03 Governing Law. This Agreement shall be governed and construed according to the laws of Nevada. In addition, this Agreement shall be subject to all applicable laws, rules, and regulations of public bodies having jurisdiction over the development or operation of the Property.

15.04 Not a Partnership. It is not the purpose or intention of this Agreement to create a partnership, mining partnership, commercial partnership, or any other partnership relation between or among the Parties or any of them. Each of the Parties shall be responsible only for its respective obligations and liabilities as set forth in this Agreement, and no Party shall have any authority to act for or to assume any obligations or responsibility on behalf of any other Party.  Nothing contained in this Agreement shall be deemed to constitute any Party the partner of any other or the agent or legal representative of any other or to create any fiduciary relationship between or among any of them.  Each Party agrees to indemnify and hold harmless each other Party, its directors, officers, employees, fiduciaries, beneficiaries, managers, and agents from and against any and all losses, claims, damages, and liabilities arising out of any act taken or made, or purported to be taken or made, by or on behalf of each other Party, its directors, officers, employees, fiduciaries, beneficiaries, managers, or agents under or in relation to this Agreement, except pursuant to authority expressly granted in this Agreement or otherwise agreed to in a signed writing between the affected Parties. The provisions of this Section 15.04 shall survive termination of this Agreement.

15.05 Laws and Regulations. In the conduct of its operations on the Property, Lessee shall be responsible for compliance with all applicable laws and regulations, including laws and regulations related to Exploration, Mining, Development, and reclamation.

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15.06 Manner of Giving Notices. Any notice, election, proposal, objection, or other document, including any proposed public announcement, press release, or other disclosure, required or permitted to be given under this Agreement (“Notices”) shall be in writing addressed to the Parties as follows:

Lessee:

Fax:

with a copy to:

.

Fax: (604) 688-0778

Lessors: [1], Trustee

With a copy to:

[2]For hand delivery:

For post office mailing: Fax:

All Notices shall be given: (a) by personal delivery to Lessee, (b) by electronic communication, with the original Notice sent the same day by registered or certified mail in the United States of America mail, return receipt requested, or (c) by registered or certified mail in the United States of America mail, return receipt requested. All Notices shall be effective and shall be deemed delivered: (a) if by personal delivery, on the date of delivery if delivered during normal business hours, and, if not delivered during normal business hours, on the next business day following delivery, (b) if by electronic communication, on the next business day following receipt of the electronic communication, and (c) if solely by mail, on the next business day after actual receipt. A Party may at any time change its address for future Notices by giving Notice in accordance with this Section 15.06.

15.07 Currency; Interest. All amounts of money expressed or payable hereunder are expressed and shall be paid in dollars of the United States of America. Any amount payable under this Agreement not paid when due, shall bear interest on the unpaid balance from the date due at the rate of ten percent (10%) per annum, compounded monthly.{00037071.DOC /}

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15.08 Representations and Warranties. Except as otherwise provided in this Agreement, no Party has made, and no Party shall be deemed to have made, any representation or warranty, express or implied, as to the completeness or accuracy of any information delivered or made available to any other Party under or in relation to this Agreement or as to the fitness or suitability of such information for any particular purpose, whether or not such purpose has been or is communicated to the disclosing Party. A Party may rely on a representation or warranty only to the extent it is reasonable to do so in light of all other information available to that Party.

15.09 Further Assurances. Each of the Parties covenants and agrees to execute any further and other documents and instruments and to take any further and other actions that may be necessary to confirm, implement, or carry out the intent of this Agreement.

15.10 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. This Agreement shall be binding upon each initial Party which has executed and delivered it, only when it has been executed and delivered by all Parties. There are no third-party beneficiaries of this Agreement not referred to in it.

15.11 Headings; Use of Terms. The articles, sections, titles, and other headings of this Agreement (other than the definitions) are inserted only for convenience of reference and shall not otherwise control or affect the meaning, construction or interpretation of the Agreement or affect its terms and provisions, except that a reference to an Article, section, or other subpart includes all subparts to the Article, section, or other subpart referred to. The word “or” includes both the conjunctive and disjunctive, unless a choice between alternatives is required by the context. The word “includes” or any version of it means “including, but not limited to,” and is not a limitation. The word “person” includes any natural person, corporation, limited liability company, partnership, association, trust, estate, governmental unit, or other form of organization. A “business day” is any day other than a Saturday, Sunday, or legal holiday for banks in Nevada.

15.12 Severability. In the event any provision of this Agreement is, or the operations contemplated by it are, found to be inconsistent with or contrary to any law, rule, or regulation, the latter shall be deemed to control, and this Agreement shall be regarded as modified accordingly and shall continue in full force and effect as so modified.

15.13 Perpetuities. The Parties to this Agreement do not intend that there shall be any violation of the Rule Against Perpetuities or any related rule pertaining to restraints upon alienation. If any such violation should inadvertently exist, it is the intent and desire of the Parties that the appropriate court shall reform such provision or provisions in such a way as to approximate most closely the intent of the Parties within the limits permissible under such Rule or any related rule.

15.14 Waiver, Modification, or Amendment. No failure or delay on the part of either Lessors or Lessee in exercising any of their respective rights upon any failure by the other party to perform or observe any condition, covenant, or provision contained in this Agreement shall operate as a waiver of them, nor shall any single or partial exercise of any of such rights preclude any other {00037071.DOC /}

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or further exercise of them or the exercise of any other right. Neither this Agreement nor any provision of it may be supplemented, changed, waived, or discharged orally, or by any course of dealing or trade usage, but only by an instrument in writing signed by the Party against whom the enforcement of the supplement, change, waiver, or discharge is sought.

15.15 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute but one instrument. Any such counterpart may be executed by one or more of the Parties.

15.16 Advisors to Lessors. Each of the Lessors expressly acknowledge that it has sought (or had the opportunity to seek) the advice of the Lessor’s own advisors, including, but not limited to, legal, tax, financial, geologic, and engineering, to assist each of the Lessors in reviewing this Agreement. Lessors expressly acknowledge that Lessors are not relying on any oral or written statement (not expressly set forth in this Agreement) made by Lessee, its employees, or agents regarding any matters pertaining to this Agreement.

15.17 Entire Agreement. This Agreement (including Exhibits A and B) shall constitute the complete understanding and agreement of the Parties with respect to the Property and the subject matter of this Agreement, all previous agreements or statements (whether oral or written) with respect to that subject matter being expressly superseded, rescinded, and replaced. No prior written or contemporaneous oral promises, representations, or agreements shall be binding upon the Parties.

15.18 Effective Date. For the purposes of this Agreement, the “Effective Date” shall be January ____, 200__.

15.19 Arbitration . All disputes relating to this Agreement shall be resolved exclusively by arbitration pursuant to the rules of the American Arbitration Association and under its administration, upon written demand of any party, which shall reasonably specify the nature of the issue(s) in dispute, the monetary amount involved, and the remedy requested. Unless the parties agree on a single arbitrator, the issues shall be decided by a panel of three neutral arbitrators. Unless otherwise agreed by the parties to the arbitration, all arbitration proceedings shall be conducted in the City of Reno, Nevada. The duty to arbitrate shall survive the cancellation or termination of this Agreement. The arbitration panel shall allocate forum fees and the other costs of arbitration among the parties to the arbitration in accordance with this Agreement, or to the extent not provided in this Agreement, as the panel may in its discretion provide.

15.20 Good Faith . Each Party shall perform its obligations and exercise its rights under this Agreement in accordance with commercial good faith and fair dealing.

The Parties have executed this Agreement as of the date first above written.

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[3], Inc.

By _________________________________[1], Trustee of the Printed Name: ______________________[4] Family Trust Title: PresidentTax ID Number:

[2]Tax ID Number:

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EXHIBIT Ato

MINERAL LEASE AGREEMENTBetween

[1] (as Trustee), [2]and

[3] Inc.

Original Property

Claim Name BLM NMC #

__ County Date of

LocationBook Page

Being six (6) unpatented lode mining claims, located in Section __, T. __ N., R. __ E., MDBM, __ County, Nevada.

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EXHIBIT Bto

MINERAL LEASE AGREEMENTbetween

[1] (as Trustee), [2]and

[3] Inc.

PRODUCTION ROYALTY

1. For the purposes of this Agreement, the term “Production Royalty” means Three Percent (3%) of Net Smelter Returns from the sale of Products from the Property, calculated in accordance with the provisions of this Schedule. “Net Smelter Returns” means all monies realized and actually received by Lessee on the sale of any Ores or Products mined or extracted from the Property as primarily evidenced by its returns or settlement sheets, including any premiums, bonuses, and subsidies, less, if any such Ores or Products require smelting or other processing, all commercially reasonable amounts actually paid on account of:

(a) loading and transportation of the Ores or Products from the Property or any mill erected on or about the Property to the smelter or other purchaser;

(b) smelter treatment charges or other charges levied by the purchaser;

(c) freight allowance and severance taxes or royalties that may be paid to the State of Nevada;

(d) insurance and security costs and charges relating to shipments of Ore or Products;

(e) penalties and other deductions whatsoever paid or payable in relation to the sale of the Ores or Products.

No deductions with respect to overhead or general business operations shall apply.

2. The Production Royalty based on Net Smelter Returns shall be due and payable to Lessors and shall be paid on a quarterly basis within sixty (60) days of each fiscal quarter of Lessee’s fiscal year during which the Property is in commercial production.

3. Within one hundred and forty (140) days after the end of each fiscal year of Lessee during which the Property was in commercial production, the records relating to the calculation of Net Smelter Returns during that fiscal year shall be audited by qualified, independent auditors, and any adjustments shall be made forthwith.  The audited statements shall be delivered to Lessors who shall have ninety (90) days after receipt of such statements to

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question in writing their accuracy and, failing such question, the statements shall be deemed correct.

4. A Lessor or its representative duly appointed in writing shall have the right at all reasonable times, upon written request, to inspect such books and financial or other records of Lessee as are relevant to the determination of Net Smelter Returns and at the Lessor’s own expense to make copies of them. Such books and records or a copy of them, shall be maintained by Lessee in a reasonable location in Nevada for purposes of such inspection and copying.

5. For the purposes of this Exhibit, “commercial production” means the operation of the Pro-perty or any portion of it, after the Commencement of Commercial Production as defined in the Agreement.

6. Lessee shall have the right, at any time and from time to time, at its sole discretion, to commingle Ores from the Property (referred to as “Subject Ore”) with ores mined from mineral properties other than the Property (referred to as “other ore”).  Subject Ore and other ore will be separately weighed, sampled, and analyzed to estimate mineral content.  (“Mineral content” means that portion of the ore which Lessee, at its sole discretion, chooses to recover through beneficiation).  Measurements to estimate the total weight of Subject Ore and other ore mined will be made by weighing or by volumetric measurements or by alternate methods reasonably used in the mining industry, as determined at Lessee’s sole discretion.  All calculations employed to estimate total weight shall be based upon dry weight.  Lessee shall keep records of the total weight and mineral content of all ore mined and beneficiated or processed.

Lessee shall estimate the average percent recovery of the mineral content of all ore beneficiated by dividing the mineral content recovered and credited to Lessee (which figure represents the basis upon which the Net Smelter Returns are calculated) by the total mineral content of all ore mined prior to beneficiation.  Payment of Production Royalties to Lessors shall be based on the mineral content of all Subject Ore multiplied by the average percent recovery.

All sampling, measuring, analyzing, weighing, assaying, and calculating shall be done in accordance with procedures generally accepted in the mining industry.

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