EXHIBIT 10.3
 
TERMINATION OF OPTION AGREEMENT
 
THIS TERMINATION OF OPTION AGREEMENT (this “Agreement”), dated as of December
12, 2007 (the “Effective Date”), by and among SSC Mandarin Group Limited
(“SSC”), China Global Mining Resources Limited, a British Virgin Islands company
(“CGMR BVI”), China Global Mining Resources Limited, a Hong Kong company (“CGMR
HK,” and together with CGMR BVI, “CGMR”), SSC Mandarin Financial Services
Limited (“SSCM FS”), SSC - Sino Gold Consulting Co. Ltd. (“SINO”), and Wits
Basin Precious Minerals, Inc. (“WITS”), is made with respect to the
relinquishment of WITS rights conferred by an Option Agreement, executed in
March 2007, by and among WITS, SSCM FS and SINO (the “Option Agreement”).
 
WHEREAS, the parties hereto (the “Parties”) wish to terminate the Option
Agreement.
 
NOW, THEREFORE, in consideration of the mutual undertakings expressed in this
Agreement and for good and valuable consideration, the receipt and sufficiency
are hereby acknowledged, the Parties hereby agree that the Option Agreement
shall be superseded and replaced in its entirety by this Agreement, and the
Parties further agree as follows:
 
1.  As of the Effective Date, the Option Agreement shall be terminated and WITS
shall relinquish its option to buy shares in SINO (representing a 60% ownership
interest in SINO).
 
2.  As of the Effective Date, WITS shall be deemed to have 100% legal ownership
and control of CGMR as set forth in the Sale of Shares and Claims Agreement,
executed in March 2007, by and between WITS, SSC and CGMR BVI ("BVI Agreement")
and the Sale of Shares and Claims Agreement, executed in March 2007, by and
between WITS, SSC and CGMR HK ("HK Agreement," and together with BVI Agreement,
"CGMR Agreements"); and the Maanshan WFOE and the Hubei WFOE. In connection
therewith, SSC shall transfer to WITS free from any debt or incumberance the
applicable share certificates, constituting 100% of the outstanding shares of
CGMR, corporate documents, company seals, company chops, due diligence documents
of such entities and reasonably assist WITS in taking all applicable steps to
effect the necessary resignation from, and appointment of, directors and
managers to such entities.
 

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3.  WITS shall pay SSC (via wire transfer to the bank account to be designated
by SSC) within 60 days from the Effective Date:
 
3.1  (i) HKD 925,000 on account of fees paid to Mr. Qin of China Sun Fund
Management Limited for the Maanshan WFOE financing and (ii) HKD 925,000 on
account of fees as a fee for establishing the Maanshan WFOE; and
 
3.2  HKD 2,000,000 on account of fees paid for the Hubei WFOE capitalization in
connection with CGMR on behalf of WITS.
 
4.  WITS shall further pay SSC within 90 days from the later of (i) the
Effective Date and (ii) the completion of final due diligence of title and
permits relating to the Maanshan WFOE and the Hubei WFOE USD $2,250,000 that SSC
has contributed to the Maanshan WFOE in connection with CGMR on behalf of WITS;
provided that WITS may offset such payment against the expenses (limited to
direct expenses for third party professionals) incurred by WITS and SINO on
behalf of SSCM FS in connection with the Gold Project, as set forth in Exhibit B
attached hereto. WITS shall further be entitled to offset such payment against
the payment obligations of SSC to WITS pursuant to Section 5 below.
 
5.  SSC shall pay WITS within 90 days from the later of (i) the Effective Date
and (ii) the completion of final due diligence of title and permits relating to
the Maanshan WFOE and the Hubei WFOE, the sum of USD $1,750,000 that WITS has
paid to SSC in connection with SINO; provided that SSC may offset such payment
against the expenses (limited to direct expenses for third party) incurred by
SSC with respect to CGMR in connection with the Iron Ore Project and the Nickel
Project as set forth in Exhibit C attached hereto. SSC shall further be entitled
to offset such payment against the payment obligations of WITS to SSC pursuant
to Section 4 above.
 
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6.  Each of the Parties (the “Releasing Party”) does hereby forever release,
discharge and acquit the other Party, and their respective parents,
subsidiaries, predecessors, directors, officers, shareholders, agents,
employees, successors, assigns, affiliates, heirs, executors, and administrators
(the “Released Party”) from any and all manner of action or actions, cause or
causes of action whether class, derivative or individual in nature, in law or in
equity for indemnity or otherwise, suits, debts, liens, commitments, contracts,
agreements, obligations, promises, liabilities, claims, demands, damages,
losses, costs, or expenses, of any kind or nature whatsoever, known or unknown,
liquidated or unliquidated, disputed or undisputed, suspected or unsuspected,
fixed or contingent or based on contract, tort, state or federal statutes or
other legal or equitable theory of recovery (“Claims”), that such Releasing
Party may have had, may presently have or in the future may have based upon,
arising from, or in any way connected with or related to the CGMR Agreements or
the Option Agreement; provided, however, that the foregoing release shall not
constitute a release with respect to any claims arising out of the obligations
set forth in this Agreement and/or any fraud perpetrated by one or more of the
Parties to this Agreement.
 
7.  This Agreement is the complete and exclusive statement of the agreement
between the Parties, which supersedes all prior or concurrent proposals and
understandings, whether oral or written, and all other communications between
the Parties relating to the subject matter of this Agreement. SSC, SSCM FS and
Robin Lee shall be required to maintain strict confidentiality at all times and
shall not be permitted to discuss or reveal any terms or facts relating to this
Agreement or matters relating to WITS without WITS' prior written consent,
except to the extent pursuant to applicable laws, rules, regulations or
government requirement or court order.
 
8.  This Agreement shall be governed by, construed and interpreted in accordance
with the laws of the Hong Kong Special Administrative Region and any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
termination or invalidity thereof, shall be settled by arbitration in accordance
with the UNCITRAL Arbitration Rules as at present in force and as may be amended
by the rest of this clause. The appointing authority shall be the Hong Kong
International Arbitration Centre. The place of arbitration shall be in Hong Kong
at Hong Kong International Arbitration Centre (HKIAC). There shall be only one
arbitrator.
 
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9.  This Agreement is prepared and executed by duly authorized officers of each
Party.
 
10.  This Agreement may be executed by facsimile or “.pdf” file and in
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
 
(Remainder of Page Intentionally Left Blank; Signature Page Follows)
 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

SSC Mandarin Group Limited
   
By:
/s/ Robin Lee
Name:
Robin Lee
Title:
Director

 

SSC Mandarin Financial Services Limited
   
By:
/s/ Robin Lee
Name:
Robin Lee
Title:
Director

 
China Global Mining Resources Limited, a British Virgin Islands company
   
By:
/s/ Robin Lee
Name:
Robin Lee
Title:
Director

 
China Global Mining Resources Limited, a Hong Kong company
   
By:
/s/ Robin Lee
Name:
Robin Lee
Title:
Director

 

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SSC – Sino Gold Consulting Co. Ltd.
   
By:
/s/ Robin Lee
Name:
Robin Lee
Title:
Managing Director

 
Wits Basin Precious Minerals, Inc.
   
By:
/s/ Stephen D. king
Name:
Stephen D. king
Title:
Chief Executive Officer

 

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