EXHIBIT 10.2

September 14, 2006

 
Mr. Clyde Smith
#106-1680 56th Street
Delta, B.C. V4L 2L6
Canada

Dear Mr. Smith:

On behalf of Wits Basin Precious Minerals Inc., (the “Company”), I am pleased to
extend an offer of employment to you in the position of President.
 
This letter (the “Letter”) shall confirm our understanding as to the terms of
your employment with the Company.
 
1. This Letter is being provided to you as an offer to begin work on September
14, 2006, with an effective date being your date of acceptance written below
(the “Effective Date”), limited to the provisions of Section 8, as an employee
of the Company and receive an annual base salary of U.S. $120,000, payable to
you at U.S. $10,000 per month on the last day of each month, for professional
services as a U.S. citizen in accordance with the Company’s regular payroll
practices. You will be eligible for an annual bonus, based on personal
performance, as determined by the Company’s Board (the “Board”). The personal
performance criteria are to be defined by the Board on an annual basis.

2. You shall be entitled to receive stock options to purchase 1,500,000 shares
of the Company’s Common Stock at a per share price equal to the closing sale
price of the Company’s Common Stock on the OTC Bulletin Board on the Effective
Date (the “Standard Options”) (subject to adjustment for splits and/or other
capital restructuring), such Standard Options to vest ratably, at 300,000 shares
per year, over a five year period commencing on the Effective Date.

You shall also be entitled to receive stock options to purchase an additional
500,000 shares (the “Performance Based Stock Options” and together with the
Standard
Options, the “Options”) of the Company’s Common Stock at a per share price equal
to the closing sale price of the Company’s Common Stock on the OTC Bulletin
Board, on the Effective Date (subject to adjustment for splits and/or other
capital restructuring), such Performance Based Stock Options to vest, at 100,000
shares per year on the anniversary of the Effective Date, over a five year
period based on objective criteria determined by the Board from time to time
prior to the commencement of each year.

All terms of the Options will be issued pursuant to the Company’s 1999 Stock
Option Plan. Options will only vest if you are an employee of the Company on the
applicable vesting date. Upon the termination of your employment with the
Company (for any reason), the unvested portions of all Options will be deemed
expired.

 
 

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3. You shall be reimbursed for all of your out-of-pocket expenses incurred in
connection with the Company’s business in accordance with Company policy.

4. Your employment with the Company will be for an indefinite term and nothing
in this Letter modifies at at-will employment relationship with the Company.

5. Your title at the Company shall be President.

6. You represent to the Company that your employment with the Company will not
constitute a breach or other violation of any agreement or contract under which
you are bound or any other obligation that you owe to any third party. You
further represent that no approvals or consents are required in order for you to
be employed by the Company as contemplated by this letter. The Company
acknowledges that you have current consulting obligations to two other companies
and that you will continue to meet those obligations.

7. Your employment with the Company will also be subject to our established
policies and procedures, including executing the Company’s form of
Confidentiality Agreement.

8. This offer for employment is valid until September 22, 2006. If the Company
does not receive a response by you as of this date, the offer will expire.
 
If you find the foregoing arrangement acceptable and believe that the foregoing
accurately summarizes our understanding, please kindly so indicate by executing
and dating the attached copy of this letter in the space provided and returning
a copy to me.

        Very Truly Yours,       Wits Basin Precious Minerals Inc.  
   
   
    By:   /s/ H. Vance White  

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H. Vance White   Its: CEO

 
Agreed to and accepted
This -15 day of September, 2006 (the Effective Date)

/s/ Clyde L. Smith

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Clyde Smith