ASSIGNMENT AGREEMENT

 

THIS AGREEMENT dated as of February 28, 2006.

 

BETWEEN:

 

PRIMECAP RESOURCES INC. a Colorado, U.S.A resident company having an office
located at 412 – 848 North Rainbow Boulevard, Las Vegas, Nevada, U.S.A., 89107 –
1103

 

(the "Assignor")

 

OF THE FIRST PART

AND:

 

TAO MINERALS INC., a Nevada, U.S.A. resident company having an office located at
80 South Court Road, Thunder Bay, Ontario, Canada P7B 2X4

 

(the "Assignee")

 

OF THE SECOND PART

 

WHEREAS:

 

A.    The Assignor has been granted, by way of Heads of Agreement dated August
23, 2004 (the “HOA”), the option to acquire a 100% interest in certain
exploration and mining concessions in Columbia, South America known as the
Risaralda-La Golondrina, which is identified as an Exploitation Concession,
Title No. D14-082 comprising 94,676 Hectares (the “Property”);

B.    The Assignor has agreed to assign the option to the Assignee, subject to
the terms and conditions contained hereinafter;

C.    The Assignor and the Assignee entered into a Letter Agreement dated
February 1, 2006 (the "Letter Agreement"); and

D.    The Assignor and the Assignee now wish to restate and clarify their
respective rights and obligations under the aforesaid Letter Agreement such that
this Agreement replaces and supersedes all earlier agreements respecting the
rights and obligations of the Assignor and the Assignee relating to the subject
matter hereof.

 

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of
$10.00 now paid by each party to each of the other parties, and for other good
and valuable consideration (the receipt and adequacy of which are hereby
acknowledged), the parties agree as follows:

 

 

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1.

DEFINITIONS

1.1.

Definitions - In this Agreement:

 

(a)

"Exploration Expenditures" means all cash, expenses, obligations and liabilities
of whatever kind or nature spent directly or indirectly by the Operator, without
duplication, in connection with the Exploration and Development of the Property,
including without limiting the generality of the foregoing, all monies expended
in maintaining the Property in good standing by doing and filing assessment
work, in doing geophysical, geochemical and geological surveys, drilling,
assaying and metallurgical testing, in acquiring facilities, in payment of the
fees, wages, salaries, travelling expenses and fringe benefits (whether or not
required by law) of all persons engaged in work with respect to and for the
benefit of the Property, in paying for the food, lodging and other reasonable
needs of such persons, and in supervision of management of all work done with
respect to such persons and for the benefit of the Property;

 

(b)

"Exploration and Development" means, without duplication, all direct and
indirect work (including without limitation Property preparation, analysis,
administration and filing, and all activities incidental thereto) conducted or
incurred by the Operator at its instruction or on its behalf, for the purpose of
determining the existence of Product on the Property;

 

(c)

"Gold Equivalent" means Gold + Silver x Silver Recovery x Silver Price divided
by Gold Price x Gold Recovery and is more particularly described in Paragraph 8
of the HOA;

 

(d)

“Heads of Agreement” means the agreement dated August 23, 2004, executed between
the Assignor, Minera San Jorge S.A. de C.V., Geosermin S.A. and Nueva California
S.A.;

 

(e)

"Operator" means the person who is, pursuant to Section 7.1, responsible for
carrying out the Exploration and Development of the Property;

 

(f)

"Option" means the option to acquire a 100% undivided interest in and to the
Property as provided in this Agreement;

 

(g)

"Option Period" means the period from the date this Agreement is duly executed
and appropriate regulatory approvals have been obtained to and including the
earlier of the date the Assignee acquires a vested interest in the Property
pursuant to this Agreement or the termination of this Agreement in accordance
with the terms hereof;

 

(h)

"Property" means the mineral claims described in Schedule "A" hereto, and the
interest of the Assignor in such mineral claims and all mining leases and other

 

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mining interests derived from any such claims or incorporated into the Property
by the terms of this Agreement;

 

(i)

"Property Rights" means all licenses, permits, easements, rights-of-way,
certificates and other approvals obtained by either of the parties, either
before or after the date of this Agreement, that are necessary for the
exploration and development of the Property or for the purpose of placing the
Property into production or continuing production therefrom; and

 

(j)

"Royalty" means the 1% net smelter return royalty, calculated and payable in
accordance with Schedule “D” of the HOA on any metal production from the
Property following commencement of commercial production, which royalty is more
particularly described in Paragraph 3 hereof.

Other capitalized terms used in this Agreement will have the meanings ascribed
to them herein.

2.

ASSIGNMENT

2.1.

Assignment - The Assignor hereby assigns to the Assignee its exclusive and
irrevocable right and option to acquire, from Nueva California S.A. (Costa
Rica), a one hundred percent (100%) undivided interest in and to the Property,
free and clear of all liens, charges, encumbrances and adverse claims, except
for the Net Smelter Return Royalty in favor of Minera San Jorge S.A. (“Minera”),
and/or Geosermin S.A. (“Geosermin”), more particularly described in the HOA (the
"Option").

2.2.

Cash and Share Consideration

As consideration for the Assignment, the Assignee will:

 

(a)

pay to the Assignor $150,000.00, on or before March 15, 2006: and

 

(b)

issue to the Assignor, or to its nominee(s), 2,500,000 shares in its capital,
which shares will be issued contemporaneous with the payment of the $150,000.00
described in Subparagraph 2.2(a) of this Agreement, or within 14 days of the
execution of this Agreement, whichever is the later.

2.3.

Obligations of the Assignee - Subject to the terms of this Agreement, the
Assignee, as further consideration for the Assignment, will honor the payment
obligations required to be made by the Assignor pursuant to the provisions of
the HOA, as follows:

(i)

Payment Obligations

The Assignee will pay, to Nueva, the following:

 

 

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(a)

US$30,000.00 upon execution of the HOA, which amount has been paid;

 

 

(b)

US$20,000.00 on or before August 23, 2005, which amount has been paid;

 

(c)

US$32,000.00 on or before August 23, 2006;

 

 

(d)

US$40,000.00 on or before August 23, 32007;

 

 

(e)

US$48,000.00 on or before August 23, 2008; and

 

 

(f)

US$160,000.00 on or before August 23, 2009.

 

2.4          Obligations of the Assignor – Subject to the terms of this
Agreement, the Assignor, as consideration for the Assignment, will honor the
share issuances required to be made pursuant to the provisions of the HOA, as
follows:

(ii)

Share Issuances

The Assignor will ensure that the following share issuances, to Minera and/or
Geosermin, are completed:

 

(a)

200,000 shares of the Assignor, as of August 23, 2004, which issuance has been
completed;

 

(b)

200,000 shares of the Assignor, as of August 23, 2005, which issuance has been
completed;

 

(c)

300,000 shares of the Assignor, as of August 23, 2006;

 

(d)

300,000 shares of the Assignor, as of August 23, 2007.

In addition, the Assignor will issue the shares in its capital to Nueva
California S.A., (Costa Rica) required to be issued by Subparagraph 6(c) of the
HOA.

 

3.

ROYALTY

Pursuant to the provisions of the HOA, Minera and/or Geosermin will retain the
right to a 1% net smelter return royalty (the “Royalty”), calculated and payable
in accordance with Schedule “D” of the HOA, on any metal production from the
Property following commencement of commercial production. The Royalty will be
increased in the event project financing is arranged for commercial production
based on a bankable feasibility study demonstrating a Gold Equivalent Resource,
as that term is defined at Paragraph 8 0f the HOA, in excess of 1 million ounce
discovered within the Property, as follows:

 

(a)

for open pit production with a recovered Gold Equivalent grade of 2.5 to 3.5
g/t, the Royalty will be increased from 1% to 2%, and with a Gold Equivalent
grade above 3.5 g/t the Royalty will be increased from 25 to 3%; and

 

 

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(b)

for underground production with a recovered Gold Equivalent grade of 10g/t, the
Royalty will b e increased from 1% to 2%, and with a recovered Gold Equivalent
grade above 12g/t, the Royalty will be increased from 2% to 3%.

The Gold Equivalent, and the prices of gold and silver at any given time, will
be calculated in accordance with Paragraph 8 of the HOA.

 

4.

BONUS PAYMENTS

In the event a project financing is arranged for commercial production from the
Property, based on a bankable feasibility study, for a Gold Equivalent Resource
of in excess of 2 Million ounces, the Assignor will, as a bonus payment, arrange
for the issuance, to Minera and/or Geosermin, or their nominees, of an
additional 1,000,000 shares in its capital

In the event a project financing is arranged for commercial production from the
Property, based on a bankable feasibility study, for a Gold Equivalent resource
on excess of 3 Million ounces, the Assignor will, as a bonus payment, arrange
for the issuance, to Minera and/or Geosermin, of an additional 1,000,000 shares
in its capital, for a total of 2,000,000 shares in the aggregate.

 

5.

EXPLORATION OF THE PROPERTY

 

5.1

Operator – The Assignee will be the Operator of the Property.

5.2          Vesting of Option - Upon the payment of the amounts required by
this Agreement, the Option will be deemed to have been exercised, with no
further action of the Assignee being required, and at that time the Assignor
will cause a transfer of an undivided 100% interest in the Property to be
transferred to the Assignee.

5.3          Dropping Claims - The Assignee will have the right to drop Claims
if, acting reasonably, it determines that they are of insufficient value to keep
them in good standing, having regard to all factors considered by it to be
relevant, including the level of funding to be provided hereunder.

 

6.

DEFAULT AND TERMINATION

6.1          Termination by Assignee - The Assignee may, at any time, upon 30
days prior written notice to the Assignor, before title to the Property has
vested in the Assignee pursuant to this Agreement, terminate this Agreement.

6.2          Termination by Assignor - If, at any time during the Option Period,
the Assignee fails to perform any obligation required to be performed by it
hereunder, the Assignor may

 

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terminate this Agreement, provided that it will have given to the Assignee a
written notice of default containing particulars of the obligation which the
Assignee has not performed and provided that the Assignee has not cured such
default within 30 days of having received notice of the default.

6.3          Obligations of Assignee upon Termination - If this Agreement is
terminated in accordance with section 5.1 or 5.2 of this Agreement, the Assignee
will have no further interest in and to the Property or this Agreement except
that the Assignee will:

(a)

deliver at no cost to the Assignor within 30 days of such termination, originals
and all copies of all reports, maps, assay results and other relevant technical
data in the possession of the Assignee with respect to the Property; and

(b)

deliver to the Assignor an acknowledgment of abandonment and release of any
interest in the Property or under this Agreement.

6.4          Survival - The obligations and rights of the Assignee under section
5.3 will survive the termination of this Agreement.

6.5          Non-Refundable Payment - For greater certainty, any money paid by
the Assignee pursuant to Article 2 will be non-refundable.

 

7

EVENTS DURING THE OPTION PERIOD – OPERATOR

7.1          Operator - The Assignee will be the Operator of the Property during
the Option Period and will be responsible for carrying out all Exploration and
Development on the Property.

7.2          Subcontracting - The Assignee will be entitled to subcontract any
or all of the Exploration and Development activities.

7.3          Program - Upon request of the Management Committee the Assignee
will prepare a Program and submit it to the Management Committee.

7.4          Exploration Expenditures - The Assignee will only expend the funds
on Exploration Expenditures.

7.5          Additional Expenditures - Notwithstanding Section 7.4, the Assignee
may expend funds on non-Exploration Expenditures as long as the expenses are for
the benefit  of the Property.

7.6          Report of Expenditures - Within sixty (60) days of the end of each
  calendar year during which the payment obligations described in Section 2.3
remain outstanding, the Assignee will provide a report detailing how the funds
were spent in the preceding calendar year.

 

 

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8.

EVENTS DURING THE OPTION PERIOD - NEW CLAIMS

8.1

Area of Interest - For the purpose of Section 8.2:

 

(a)          "Area of Mutual Interest" means any mineral properties or land
located within five (5) kilometers of any of the mineral claims comprising the
Property; and

(b)          "Staked" means staking by or on behalf of any party to this
Agreement or any of their directors, officers or controlling shareholders.

8.2          New Claims - If, as a direct result of any geophysical till
sampling performed pursuant to a Program, new ground, inside or outside the Area
of Mutual Interest, is Staked or, if as a direct result of any other Exploration
and Development conducted on the Property, new ground within the Area of
Interest is Staked (in either case called the "New Ground"), then:

(a)           the Assignee will be the registered owner of the mineral claims on
the New Ground; and

(b)          the New Ground will be considered to form part of the Property and
will be subject to the terms of this Agreement, provided that where the terms of
the Agreement are inconsistent with this Article 9, then this Article 9 will
govern the New Ground.

 

9.

REGISTRATION AND ESCROW HOLDER

9.1          Registration of Agreement - Upon request of the Assignee and at the
expense of the Assignee, the Assignor will assist the Assignee to record this
Agreement with the appropriate mining records office or other regulatory
authority.

9.2          Escrow Holder - As soon as conveniently possible after the
execution of this Agreement the Assignor will execute such transfer documents as
the Assignee and its counsel may reasonably deem necessary to assign, transfer
and assure to the Assignee good, safe holding and marketable title to an
undivided one hundred percent (100%) interest in and to the Property, and as
soon as conveniently possible after the execution of this Agreement the Assignee
will execute such discharge documents as the Assignor and its counsel may
reasonably deem necessary to discharge this Agreement with the appropriate
mining recorder's office (together called the "Transfer Documents"). The
Transfer Documents together with a copy of this Agreement will be delivered to
the Assignee’s British Columbia lawyer, who agrees to be bound by the provisions
of this section 8.2, and who is acceptable to both parties, acting reasonably
(hereinafter called the "Escrow Holder"). The Escrow Holder will:

 

 

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(a)

deliver the Transfer Documents to such party as both the Assignor and the
Assignee may jointly direct;

 

(b)

deliver the Transfer Documents to the Assignee at the written request of the
assignor;

 

(c)

deliver the Transfer Documents to the Assignee upon receipt of a statutory
declaration sworn by an officer of the Assignee certifying that the Assignee
entitled to delivery of the Transfer Documents, together with proof satisfactory
to the Escrow Holder that at least thirty (30) days' written notice was given to
the Assignor of the Assignee's intention to request delivery of the Transfer
Documents, unless prevented by Order of a Court of competent jurisdiction;

 

(d)

deliver the Transfer Documents to the Assignor at the request of the Assignee;
or

 

(e)

deliver the Transfer Documents to the Assignor upon receipt of a statutory
declaration sworn by an officer of the Assignor certifying that the Assignor is
entitled to delivery of the Transfer Documents, together with proof satisfactory
to the Escrow Holder that at least thirty (30) days' written notice was given to
the Assignee of the Assignor's intention to request delivery of the Transfer
Documents, unless prevented by Order of a Court of competent jurisdiction;

9.3          Indemnity - The Assignor and the Assignee each agree to jointly and
severally hold harmless the Escrow Holder from all claims, actions and damages
arising out of its acting pursuant to the above instructions.

10

EVENTS AFTER VESTING OF OPTION

10.1       Vesting of title - If and when the Assignee has done everything
required to exercise the Option, a 100% undivided right, title and interest in
and to the Property will vest in the Assignee, subject only to the Royalty.

11

ASSIGNMENTS AND TRANSFERS

11.1       Prohibition - Save and except as provided herein, no Party may sell,
assign, pledge or mortgage or otherwise encumber all or any part of its interest
herein or to the Property without the prior written consent of the other Party,
such consent not to be unreasonably withheld, provided that any Party may at any
time at its sole discretion and without prior approval of the other Party assign
and transfer its interest to any wholly owned subsidiary, subject at all times
to the requirement that any such subsidiary remain wholly owned by the Party
failing which any such interest must be immediately transferred back to such
Party hereto, and provided further that any transfer of all or any part of a
Party's interest herein to

 

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its wholly owned subsidiary will be accompanied by the written agreement of any
such subsidiary to assume the obligations of such Party hereunder and to be
bound by the terms and conditions hereof.

11.2       Transfers - Subject to section 10.4, the Assignee may at any time
during the Option Period, with the prior consent of the Assignor, which consent
may not be unreasonably withheld, sell, transfer or otherwise dispose of all of
its interest in and to the Property and this Agreement; provided that it will
not be unreasonable for the Assignor to withhold its consent if the proposed
transferee cannot demonstrate its financial ability to comply with the
obligations of the Assignee hereunder.

11.3       Conditions to Granting Consent - It is a condition of the Assignor
granting consent under section 12.2 that any transferee will have first
delivered to the Assignor an agreement in writing regarding this Agreement and
the Property, in a form satisfactory to the Assignor, containing:

 

(a)

a covenant by such transferee to perform all the obligations of the Assignee to
be performed under this Agreement in respect of the interest to be acquired by
it from the Assignee to the same extent as if this Agreement had been originally
executed by such transferee; and

 

(b)

a provision subjecting any further sale, transfer or other disposition of such
interest in the Property and this Agreement or any portion thereof to the
restrictions contained in this Article 12.

12

ARBITRATION

12.1       Arbitration - The parties agree that all questions or matters in
dispute with respect to this Agreement or as required by this Agreement, will be
settled by arbitration, and will be submitted to arbitration pursuant to the
terms hereof.

12.2       Notice - It will be a condition precedent to the right of any party
to submit any matter to arbitration pursuant to the provisions hereof that such
party must have given not less than 10 days' prior notice of its intention to do
so to the other party, together with particulars of the matter in dispute. On
the expiration of such 10 days, the party who gave such notice may proceed to
refer the dispute to arbitration as provided in section 13.3.

12.3       Appointment of Arbitrators - The party desiring arbitration will
appoint one arbitrator and will notify the other party of such appointment. The
other party will, within 15 days after receiving such notice, either consent to
the appointment of such arbitrator or appoint a second arbitrator. If the other
party will fail to appoint an arbitrator within 15 days after receiving notice
of the appointment of the first arbitrator or does not consent to the
appointment of the first arbitrator by the party desiring arbitration, then the
first arbitrator will be the only arbitrator.

 

 

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12.4      Appointment of Chairman - Where two arbitrators are named, those
arbitrators will, within 10 days of the appointment of the second arbitrator and
before proceeding to act, unanimously agree on the appointment of a third
arbitrator to act with them and be chairman of the arbitration. If the two
arbitrators are unable to agree on the appointment of the chairman, the chairman
will be appointed under the provisions of the Commercial Arbitration Act
(British Columbia) or any successor legislation.

12.5       Arbitration Procedure - The chairman or the single arbitrator, if
only one arbitrator is appointed, will fix a time and place in Vancouver,
British Columbia, for the purpose of hearing the evidence and representations of
the parties. The chairman will preside over the arbitration and determine all
questions of procedure not provided for under the Commercial Arbitration Act or
this section. Except as specifically otherwise provided in this section, the
arbitration herein provided for will be conducted in accordance with the
Commercial Arbitration Act.

12.6      Award - After hearing any evidence and representations that the
parties may submit, the single arbitrator or the arbitrators, as the case may
be, will make an award in writing and will deliver one copy to each of the
parties. The parties agree that the award of a majority of the arbitrators, or
in the case of a single arbitrator, of such arbitrator, .will be final and
binding upon each of them. The expense of the arbitration will be paid as
specified in the award.

 

13

REPRESENTATIONS AND WARRANTIES

13.1       Representations of the Assignor - The Assignor represents and
warrants to the Assignee that:

 

(a)

the Property is comprised of the mineral claims described in Schedule "A"
attached hereto and that the Assignor validly holds an option to acquire an
undivided 100% interest in the Property;

 

(b)

to the best of the knowledge, information and belief of the Assignor the mineral
claims comprising the Property have been duly and validly located and recorded
pursuant to the laws of the jurisdiction in which the Property is situate and,
as of the date hereof are in good standing with respect to all filings, fees,
taxes, assessments, work commitments or other requirements under the laws, and
regulations of that jurisdiction;

 

(c)

the Assignor or its nominee is and will be during the term of this Agreement and
at the time of the transfer to the Assignee of the option to acquire an
undivided one hundred percent (100%) interest in the Property, the recorded
holder of the mineral claims comprising the Property free and clear of all
liens, charges and claims of others, other than the Royalty;

 

(d)

other than as may be set out in Schedule "A" or elsewhere in this Agreement, to
the best of the knowledge, information and belief of the Assignor:

 

 

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(i)           there is no adverse claim or challenge to the ownership of or
title to the mineral claims comprising the Property or which may impede
development, nor to the knowledge, information and belief of the Assignor is
there any basis therefor, other than potential aboriginal land claims which may
exist from time to time;

(ii)          there are no outstanding agreements or options to acquire or
purchase the Property or any portion thereof; and

(iii)         no person has any royalty or other interest whatsoever in
production from the mineral claim comprising the Property except as disclosed in
this Agreement;

 

(e)

the Assignor has been duly incorporated and validly exists as a corporation in
good standing under the laws of the state of Nevada, U.S.A. and is in good
standing with respect to the filing of annual returns and reports;

 

(f)

the Assignor is legally entitled to hold the Property and the Property Rights
under the laws of the jurisdiction in which the Property is situate and will
remain so entitled until the option to acquire the undivided 100% interest in
the Property has been duly transferred to the Assignee as contemplated hereby;

 

(g)

the Assignor has duly obtained all corporate authorizations for the execution of
this Agreement and for the performance of its obligations under this Agreement;

 

(h)

the consummation of the transactions herein contemplated will not conflict with
or result in any breach of any covenants or agreements contained in, or
constitute a default under, or result in the creation of any encumbrance under
the provisions of the Articles or the constating documents of the Assignor or
any shareholders' or directors' resolution, indenture, agreement or other
instrument whatsoever to which the Assignor is a party or by which it is bound
or to which it or the Property may be subject; and

 

(i)

no proceedings are pending for, and the Assignor is unaware of any basis for the
institution of any proceedings leading to, the dissolution or winding up of the
Assignor or the placing of the Assignor in bankruptcy or subject to any other
laws governing the affairs of insolvent corporations.

 

 

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13.2

Representations of the Assignee - The Assignee represents and warrants to the
Assignor that:

(a)          the Assignee has been duly incorporated and validly exists as a
corporation in good standing in the state of Nevada, U.S.A. and is in good
standing with respect to the filing of annual returns and reports;

(b)          the Assignee is legally entitled to hold mineral claims and real
property under the laws of the jurisdiction in which the Property is situate;

(c)          the Assignee has duly obtained all corporate authorizations for the
execution of this Agreement and for the performance of its obligations under
this Agreement;

(d)          the consummation of the transactions herein contemplated will not
conflict with or result in any breach of any covenants or agreements contained
in, or constitute a default under, or result in the creation of any encumbrance
under the provisions of the Articles or the constating documents of the Assignee
or any shareholders' or directors' resolution, indenture, agreement or other
instrument whatsoever to which the Assignee is a party or by which it is bound;

(e)          upon receipt of final acceptance from any applicable securities and
regulatory authorities having jurisdiction, the Assignee will have duly obtained
all regulatory approvals and authorizations necessary to enable it to enter into
this Agreement and to perform its obligations hereunder; and

(f)           no proceedings are pending for, and the Assignee is unaware of any
basis for the institution of any proceedings leading to, the dissolution or
winding up of the Assignee or the placing of the Assignee in bankruptcy or
subject to any other laws governing the affairs of insolvent corporations.

13.3

Survival - The representations and warranties contained in this Article 14 will
survive the execution hereof and the completion of the transactions contemplated
hereby.

13.4

Indemnity - Each party will indemnify and save harmless the other party from and
against all losses, costs, damages, actions and suits arising out of or in
connection with any misrepresentation made by it and contained in this
Agreement.

14

NOTICES

14.1       Notices - Each notice, demand or other communication required or
permitted to be given under this Agreement will be sufficiently given if in
writing and sent by prepaid registered mail deposited in a Post Office in Canada
addressed to the party entitled to

 

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receive the same, or delivered or telecopied to such party at the following
respective addresses for the parties:

 

In the case of the Assignor:

1112 – 848 North Rainbow Blvd

Las Vegas, Nevada

USA 89107-1103

 

                In the case of the Assignee:

80 South Court Road

Thunder Bay, Ontario

Canada, P7B 2X4

14.2       Date of Delivery - The date of delivery of a notice, demand or other
communication made in accordance with section 15.1 will be the date of delivery
thereof if actually delivered to the party or its agent, or if telecopied the
date of delivery will be deemed conclusively to be the first business day
following transmission, or if given by registered mail, the date of delivery
will be deemed conclusively to be the fourth business day after the same will
have been so mailed except in the case of interruption of postal services for
any reason whatever, in which case the date of delivery will be the date on
which the notice, demand or other communication is actually received by the
addressee.

14.3       Notice of Change of Address - Any party may at any time and from time
to time change its address for service by notice given to the other parties in
the manner aforesaid.

15

MISCELLANEOUS

15.1       Confidential Information - No information furnished by any party to
the other party to this Agreement in respect of the activities carried out on
the Property, or related to the sale of minerals, are, bullion or other Products
derived from the Property, will be published by the other party without the
prior written consent of the first party, but such consent in respect of the
reporting of factual data will not be unreasonably withheld by the first party,
and will not be withheld in respect of information required to be publicly
disclosed pursuant to applicable securities or corporate laws and regulations.

15.2       No Partnership - The parties have not created a partnership and
nothing contained in this Agreement or in any prior agreements between the
parties will in any manner constitute any party the partner, agent, or legal
representative of any other party, nor' create any fiduciary relationship
between them for any purpose whatsoever. No party will have authority to act
for, or to assume any obligations or responsibility on behalf of, any other
party except as maybe expressly provided herein or except as may be agreed upon
in writing between the parties from time to time.

 

 

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15.3       Entire Agreement - The parties acknowledge that there have been
various discussions, negotiations, understandings and agreements among them
relating to the Property, and it is their intention to terminate and replace all
prior option agreements and amending agreements relating to the Property with
this Agreement. The parties acknowledge that this Agreement, together with all
schedules, sets out the entire agreement among the parties, subject to any
subsequent agreement which may be evidenced in writing.

15.4       Number and Gender - Wherever the neuter and singular are used in this
Agreement it will be deemed to include the plural, masculine and feminine, and
vice versa, as the context requires.

15.5       Agreement References - References to "this Agreement", "hereof” and
similar phrases will mean this Agreement as a whole and not to any particular
section or paragraph hereof.

15.6       Sections and Headings - The division of this Agreement into Parts and
sections, and the use of headings herein, are for convenience of reference only
and will not affect the meaning or interpretation of this Agreement.

15.7       Governing Laws - This Agreement will be governed by and construed in
accordance with the laws of the state of Nevada, U.S.A. and the parties agree to
submit to the jurisdiction of the courts of the state of Nevada with respect to
any legal proceedings arising hereunder, except to the extent that the location
of the Property in Colombia may require reference to the laws or courts of
Colombia.

15.8       Currency – Except where otherwise stated, all references to sums of
money herein will mean lawful currency of Canada.

15.9       Schedules - The following schedules are incorporated into this
Agreement by reference:

Schedule "A" - Description of Property

 

15.10     Severability - If any provision of this Agreement is determined to be
illegal or unenforceable, such provisions will be ineffective to the extent of
such illegality or unenforceability, but will not invalidate or affect the
validity or enforceability of the remaining provisions of this Agreement.

15.11     Waivers - No consent or waiver expressed or implied by either party in
respect of any breach or default by the other in the performance by such other
of its obligations under this Agreement will be deemed or construed to be a
consent to or a waiver of any other breach or default;

15.12     Further Assurances - The parties will promptly execute or cause to be
executed all documents, deeds, conveyances and other instruments of further
assurance and do such further and other acts which may be reasonably necessary
or advisable to carry out fully the

 

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- 15 -

 

 

intent of this Agreement or to record wherever appropriate the respective
interest from time to time of the parties in the Property.

15.13

Time of Essence - Time will be of the essence in this Agreement.

15.14     Successors and Assigns - Subject to any contrary provisions herein,
this Agreement will enure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns.

15.15     Counterparts - This Agreement may be executed in as many counterparts
as may be necessary and each of which will be deemed to be an original and such
counterparts together will constitute one and the same instrument and
notwithstanding the date of execution will be deemed to bear the date set forth
above, and any such counterpart may be delivered by way of facsimile
transmission.

 

IN WITNESS WHEREOF the parties hereto have affixed their common seal in the
presence of their officers duly authorized in that behalf to have effect as of
the day above written.

 

 

 

PRIMECAP RESOURCES INC.

Per:

 

/s/ signed

Authorized Signatory

 

 

 

TAO MINERALS INC.

Per:

 

/s/ signed

Authorized Signatory

 

 

 

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- 16 -

 

 

Schedule “A”

 

DESCRIPTION OF PROPERTY

 

 

CLAIM/CONCESSION

Risaralda – La Golondrina

HECTARES

94,6767

TITLE NUMBER

D14-082

TYPE OF CONCESSION

Exploitation

TITLE HOLDER/REPRESENTATIVE

Jaime Roberto Alvarez

TYPE OF AGREEMENT

OC

 

 

 

 

 

TOTAL: 94,6767

 

 

 

(note: Maps to be sent by courier)