Montana Tunnels Mining, Inc.
P.O. Box 176
Jefferson City, Montana 59638

January 8, 2007

Via E-Mail and FedEx

Elkhorn Tunnels, LLC
320 West Main Street
Aspen, Colorado 81611
Attention: Patrick Imeson, Managing Director

 
Re:
Third Amendment to Mine Development and Operating Agreement (“Third Amendment”)

Dear Pat:

This letter will confirm the agreement reached between Elkhorn Tunnels, LLC
(“Elkhorn”) and Montana Tunnels Mining, Inc. (“MTM”) to amend, effective as of
December 31, 2006, certain provisions of that Mine Development and Operating
Agreement between MTM and Elkhorn dated July 28, 2006, as amended by that letter
agreement dated October 6, 2006, and further amended by that letter agreement
dated November 30, 2006 (collectively, the “Mine Development Agreement”), with
respect to the timing of Elkhorn’s funding of its Initial Contribution and the
completion of that Initial Contribution (as defined in the Mine Development
Agreement). Elkhorn has informed MTM that it will complete the full funding of
its Initial Contribution, and the parties desire to confirm that obligation by
amending the Mine Development Agreement and by Elkhorn executing a promissory
note to evidence its obligation to complete the full funding of its Initial
Contribution, all as set forth below.
 
1.  The parties hereby agree that, pursuant to cash contributions made prior to
December 31, 2006, and by execution and delivery of the Note (as defined in
paragraph 3 below), Elkhorn has made its full Initial Contribution. The parties
hereby confirm and agree that as of the effective date of this Third Amendment,
Elkhorn had funded a total of $9,270,000 towards its Initial Contribution.
Subsequent to December 31, 2006, Elkhorn funded an additional $1,730,000 towards
its Initial Contribution. The parties hereby agree that notwithstanding any of
the provisions of the Mine Development Agreement to the contrary, Elkhorn shall
not have the option to terminate the Mine Development Agreement pursuant to
Subsection 5.2(a), or to elect to reduce its Initial Contribution pursuant to
Subsection 5.2(c), but instead agrees to fully fund its Initial Contribution.
Notwithstanding the fact that Elkhorn has made its full Initial Contribution,
Elkhorn and MTM agree that the Earn-In Period shall continue and MTM shall have
no obligation to make any of the conveyances described in Section 3.4 of the
Mine Development Agreement until such time as Elkhorn has fully funded its
Initial Contribution as set forth in this Third Amendment.
 

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Elkhorn Tunnels, LLC
Attention: Patrick Imeson, Managing Director
January 8, 2007
Page 2 
 
2.  Elkhorn agrees that, notwithstanding the provisions of the Mine Development
Agreement that require it to fully fund its Initial Contribution not later than
January 31, 2007, it shall fully fund its Initial Contribution, in accordance
with the procedures set forth in the Mine Development Agreement, as amended
hereby, not later than 5:00 p.m. Mountain time on January 17, 2007. In addition,
Elkhorn agrees that it shall pay to MTM all amounts of principal and interest
owed to MTM under the November 30, 2006 letter agreement not later than 5:00
p.m. Mountain time on January 17, 2007. 
 
3.  To evidence Elkhorn’s obligation to fully fund its Initial Contribution not
later than 5:00 p.m. Mountain time on January 17, 2007, Elkhorn agrees,
simultaneously with the execution of this Third Amendment, to execute a
promissory note in favor of MTM, in the form set forth as Exhibit A attached
hereto (the “Note”).
 
4.  Elkhorn and MTM agree that if Elkhorn fails to fully fund its Initial
Contribution by 5:00 p.m. Mountain time on January 17, 2007, then, in addition
to any remedies provided for in the Note and this Third Amendment, and
notwithstanding the provisions of Article XI of the Mine Development Agreement,
or any other provisions of the Mine Development Agreement, to the contrary,
Elkhorn shall not be entitled to any distributions of Net Cash Flow or Products,
until such time as it has paid in full all principal and interest due under the
Note.
 
5.  Elkhorn and MTM agree that if Elkhorn fails to pay all amounts of principal
and interest due under the Note by 5:00 p.m. Mountain time on February 17, 2007,
then the provisions of Section 11.1(b) of the Mine Development Agreement shall
be amended as of 5:00 p.m. Mountain time or February 17, 2007, without any
further action being required by either party, so that Elkhorn shall no longer
be entitled to a disproportionate share of Net Cash Flow as provided therein,
but shall only be entitled to fifty percent (50%) of such cash flow, only after
it has fully paid all principal and interest due under the Note.
 
6.   In the event of any inconsistency between the terms and conditions of the
Mine Development Agreement and the terms and conditions of this Third Amendment,
the terms and conditions of this Third Amendment shall prevail. Any capitalized
terms used but not defined herein shall have the meaning ascribed to them in the
Mine Development Agreement.
 
7.  Elkhorn and MTM agree that, amended as set forth above, all of the terms and
conditions of the Mine Development Agreement remain in full force and effect;
provided that a default under the Note shall not reduce or impair the rights of
Elkhorn as a Participant except as expressly set forth herein, and provided
further that by its execution and delivery of this Third Amendment, MTM does not
waive any of its rights and remedies under the terms and conditions of the
November 30, 2006 letter agreement.
 

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Elkhorn Tunnels, LLC
Attention: Patrick Imeson, Managing Director
January 8, 2007
Page 3

To confirm Elkhorn’s agreement with the foregoing, please arrange for the
execution of duplicate originals of this letter agreement in the space provided
below, and return one fully executed original to me
 
Yours very truly,

____________________________
R. David Russell
President
Montana Tunnels Mining, Inc.

Accepted and agreed to on this
8th day of January, 2007 by
Elkhorn Tunnels, LLC

By: __________________________________
              Patrick J. Imeson
              Managing Director

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Exhibit A

PROMISSORY NOTE

US$3,730,000
Effective December 31, 2006

FOR VALUE RECEIVED, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, ELKHORN TUNNELS, LLC (“Borrower”), whose address
is 320 West Main Street, Aspen, Colorado 81611, promises to pay to the order of
MONTANA TUNNELS MINING, INC. (“MTM”), whose address is P.O. Box 176, Jefferson
City, Missouri 59638, in accordance with the terms and conditions of that Mine
Development and Operating Agreement between Borrower and MTM dated July 28,
2006, as amended by (i) that letter agreement dated October 6, 2006, (ii) that
letter agreement dated November 30, 2006, and (iii) that letter agreement (the
"Letter Agreement") effective as of December 31, 2006 (collectively, the “Mine
Development Agreement”), the principal sum of Three Million Seven Hundred Thirty
Thousand Dollars ($3,730,000.00), less any amounts advanced by Borrower
subsequent to December 31, 2006 towards the Initial Contribution as described in
the Letter Agreement, with interest thereon payable as specified in this Note.

Principal and Interest. Interest shall accrue on the unpaid principal balance
from and after 5:00 p.m. Mountain time on January 17, 2007 at an annual rate of
twenty-four percent (24.0%) (the "Interest Rate"), and shall be calculated on
the actual days outstanding over a 365-day year.
 
Payment and Maturity Dates. Principal and interest shall be payable, without
deduction or offset of any kind, and without notice, as follows:
 
The principal amount shall be reduced by the amount of any payments made by
Borrower to MTM pursuant to the provisions of Subsection 5.1(b)(i) of the Mine
Development Agreement on or before January 17, 2007. The entire amount of unpaid
principal shall be payable to MTM in accordance with the provisions of the Mine
Development Agreement, and shall be paid not later than 5:00 p.m. Mountain time
on January 17, 2007. Interest shall begin accruing and become payable only if
any of the principal remains unpaid as of 5:00 p.m. Mountain time on January 17,
2007.
 
All payments of principal and interest of this Note are payable only in lawful
money of the United States of America, at such place as the holder hereof may
designate in writing from time to time. Upon written request of MTM, Borrower
agrees to make all payments by electronic transfer of funds or other form of
currently available funds acceptable to MTM. Payments made by check will not be
deemed made until good funds for such check are received by MTM or the servicing
agent.

Prepayment. Pursuant to and in accordance with the terms and conditions of the
Mine Development Agreement only, Borrower may prepay this Note without premium,
penalty, or other charge or cost. Any such prepayment shall not postpone the due
date of any subsequent payments or change the amount of such payments.
 
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Default, Acceleration, and Foreclosure. Time is of the essence of this Note.
Upon failure to (a) pay any sum on or before the date such sum becomes due, or
(b) to perform or comply with any of the covenants or agreements contained
herein or in any instrument securing payment of this Note, which failure in any
event continues beyond the expiration of any applicable notice, cure or grace
period, then such shall constitute a default under this Note ("Default"), and,
at the option of the holder hereof, the entire debt then remaining unpaid at
once shall become due and payable without notice and MTM may pursue all rights
and remedies available under this Note, subject to and consistent with the terms
and conditions set forth in the Mine Development Agreement, or any instrument
securing payment of this Note, at law or in equity. A default hereunder shall be
a general obligation of the Borrower and shall not reduce or impair the status
of or rights and obligations of the Borrower as a Participant (as defined in the
Mine Development Agreement) except as set forth in the Letter Agreement.
 
Default. In the event of Default, Borrower promises to pay interest on the
remaining principal balance of this Note together with all sums due and owing
under the Note then outstanding at the Interest Rate, and any interest so
accruing shall be paid at the time of and as a condition precedent to the curing
of any default under any statutory right to cure.
 
Remedies Cumulative. The rights or remedies of MTM as provided in this Note and
any instrument securing payment of this Note shall be cumulative and concurrent
and may be pursued singly, successively, or together against the Borrower, at
the sole discretion of MTM. The failure to exercise any such right or remedy
shall in no event be construed as a waiver or release of such rights or remedies
or the right to exercise them at any later time.
 
Forbearance. Any forbearance of MTM in exercising any right or remedy under this
Note, or otherwise afforded by applicable law, shall not be a waiver of or
preclude the exercise of any right or remedy. The acceptance by MTM of payment
of any sum payable hereunder after the due date of such payment shall not be a
waiver of MTM's right to either to require prompt payment when due of all other
sums payable hereunder or to declare a default for failure to make prompt
payment. No delay or omission on the part of MTM in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note.
 
Borrower's Waivers. Borrower and any sureties, guarantors and endorsers
(severally each called a "Surety") waive all requirements as to diligence,
notice, demand, presentment for payment, protest and notice of dishonor, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time without in any way affecting the liability of the Borrower and each
Surety hereof.
 
Preferential Payment. Borrower agrees that to the extent Borrower or any Surety
makes any payment to MTM in connection with the indebtedness evidenced by this
Note, and all or any part of such payment is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid by MTM or
paid over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then the indebtedness of Borrower under this Note shall
continue or shall be reinstated, as the case may be, and, to the extent of such
payment or repayment by MTM, the indebtedness evidenced by this Note or part
thereof intended to be satisfied by such Preferential Payment shall be revived
and continued in full force and effect as if said Preferential Payment had not
been made.
 
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Governing Law; Jurisdiction. This Note is to be governed by and construed and
interpreted in accordance with the laws of Colorado, without giving effect to
principles of conflict. Without limiting the right of MTM to bring any action or
proceeding against Borrower or any Surety or against any property of Borrower or
any Surety (an "Action") arising out of or relating to this Note or any
indebtedness evidenced hereby in the courts of other jurisdictions, Borrower and
each Surety hereby irrevocably submit to the jurisdiction, process and venue of
any Colorado State or Federal court sitting in Denver, Colorado, and hereby
irrevocably agree that any Action may be heard and determined in such Colorado
State court or in such Federal court. Borrower and all Sureties each hereby
irrevocably waives, to the fullest extent it may effectively do so, the defenses
of lack of jurisdiction over any person, inconvenient forum or improper venue,
to the maintenance of any Action in any jurisdiction.
 
Binding Effect. This Note shall be binding upon Borrower and its successors and
assigns and shall inure to the benefit of MTM, and any subsequent holders of
this Note, and their successors and assigns.
 
Attorneys' Fees and Costs. Borrower promises to pay all reasonable attorneys'
fees and costs incurred by MTM in connection with any Default hereunder and in
any proceeding brought to enforce any of the provisions of this Note.
 
Interpretation and Incorporation. As used in this Note, the term "MTM" shall
include each subsequent transferee and/or owner of this Note, whether taking by
endorsement or otherwise. As used in this Note, the word "include(s)" means
"include(s), without limitation," and the word "including" means "including, but
not limited to."
 
IN WITNESS WHEREOF, Borrower has duly executed this Note effective as of the day
and year first above written.

ELKHORN TUNNELS, LLC

By: _______________________________ 
Name:  Patrick J. Imeson
Title:    Managing Director

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