EX-10.3 4 ex103.htm ASSET PURCHASE AGREEMENT WITH MEGADEPOSIT EXPLORERS LIMITED

Exhibit 10.3

THE SECURITIES TO BE ISSUED BY DOUGLAS LAKE MINERALS INC. PURSUANT TO THIS
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO A "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE 1933 ACT)
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

THE TRANSFER OF THE SAID SECURITIES IS PROHIBITED EXCEPT (I) IN ACCORDANCE WITH
THE PROVISIONS OF REGULATION S (RULE 901 THROUGH RULE 905, AND PRELIMINARY
NOTES), PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED; (II) PURSUANT
TO REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED; OR (III) PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING
THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT OF 1933, AS AMENDED.

 

 

ASSET SALE AND PURCHASE AGREEMENT

 

BETWEEN

 

MEGADEPOSIT EXPLORERS LIMITED, THE VENDOR

AND

DOUGLAS LAKE MINERALS INC., THE PURCHASER

 

DATED

AUGUST 4, 2005

 

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TABLE OF CONTENTS

1.

INTERPRETATION

4

1.1

Definitions

4

1.2

Currency

6

1.3

Best Efforts

6

1.4

Appendices and Schedules

6

2.

SALE AND PURCHASE OF ASSETS

6

2.1

Assets to be Transferred

6

2.2

Purchased Assets Only

7

2.3

Title to Purchased Assets

7

2.4

No Liabilities Assumed

7

2.5

Purchase Price

7

2.6

No Registration of the Purchaser Shares; Legend

7

3.

CLOSING

8

3.1

Time and Place

8

3.2

Transfer of Possession

8

3.3

Procedure for Delivery of Purchaser Shares

8

3.4

Delivery of Investment Letter

8

3.5

Additional Deliveries at Closing by the Purchaser

8

3.6

Additional Deliveries at Closing by the Vendor

9

3.7

Closing and General Conveyance Documents

9

3.8

Cost of Registration

9

3.9

Circulation of Conveyance Documents

9

3.10

Subordination of Auxiliary Documents

9

3.11

Cooperation of Filings

9

4.

CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER TO CLOSE

10

4.1

Governmental and Other Approvals

10

4.2

Favourable Legal Opinions

10

4.3

Concurrent Closing of Other Prospecting Licences

10

4.4

Satisfactory Due Diligence

10

4.5

Material Compliance By Vendor

11

4.6

Delivery of Conveyance Documents

11

4.7

No Action or Proceeding

11

4.8

Representations and Warranties

11

4.9

Performance of Covenants

11

4.10

Waiver of Conditions

11

5.

CONDITIONS PRECEDENT TO THE OBLIGATION OF VENDOR TO CLOSE

12

5.1

Representations and Warranties

12

5.2

Performance of Covenants

12

6.

REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE PURCHASER

12

6.1

Capitalization

12

6.2

Purchaser's Public Filings

12

6.3

Authority to Execute Agreement

12

7.

REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE VENDOR

13

7.1

Existence, Power and Conduct of Business

13

7.2

Corporate Power, Authorization and Enforceable Obligations

13

7.3

Title to Purchased Assets

14

7.4

Mining Property

14

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7.5

Investment Intent

15

7.6

Non-US Person

15

7.7

No Other Agreements to Purchase

16

7.8

Full Disclosure

16

7.9

Litigation

16

7.10

No Approvals Required

16

7.11

No Violations

17

7.12

Finder's Fees

17

7.13

No Knowledge

17

8.

ADDITIONAL COVENANTS OF THE PARTIES

17

8.1

Cooperation; Consents

17

8.2

Publicity

17

8.3

No Solicitation or Negotiation

18

9.

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

18

9.1

As to the Parties

18

9.2

Indemnification

18

10.

NO MERGER

18

11.

TERMINATION; REMEDIES

18

11.1

Termination Without Default

18

11.2

Termination Upon Default

19

11.3

Specific Performance

19

12.

MISCELLANEOUS

19

12.1

Entire Agreement

19

12.2

Binding Agreement

20

12.3

Independent Legal Advice

20

12.4

Currency

20

12.5

Severability

20

12.6

Governing Law

21

12.7

Notices

21

12.8

Time of Essence

21

12.9

Authority

22

12.10

Counterparts and Facsimiles

22

 

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THE SECURITIES TO BE ISSUED BY DOUGLAS LAKE MINERALS INC. PURSUANT TO THIS
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO A "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE 1933 ACT)
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

THE TRANSFER OF THE SAID SECURITIES IS PROHIBITED EXCEPT (I) IN ACCORDANCE WITH
THE PROVISIONS OF REGULATION S (RULE 901 THROUGH RULE 905, AND PRELIMINARY
NOTES), PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED; (II) PURSUANT
TO REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED; OR (III) PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING
THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT OF 1933, AS AMENDED.

ASSET SALE AND PURCHASE AGREEMENT

This ASSET SALE AND PURCHASE AGREEMENT (the "Agreement") is entered into on this
4th day of August, 2005 by and between Megadeposit Explorers Limited (the
"Vendor"), a limited liability company registered under the laws of the United
Republic of Tanzania ("Tanzania"), and Douglas Lake Minerals Inc. (the
"Purchaser"), a Nevada corporation.

WHEREAS the Vendor wishes to sell to the Purchaser, and the Purchaser wishes to
purchase from the Vendor, those certain mining concession assets in Tanzania
described herein.

IN CONSIDERATION of the covenants and agreements herein contained and for other
good and valuable consideration (the receipt and sufficiency is hereby
acknowledged by each of the parties), the parties covenant and agree as follows:

1. INTERPRETATION

1.1 Definitions

When used in this Agreement, the following terms shall have the respective
meanings set forth below:

(a) "Affiliate" means with respect to any Person (i) a Person directly or
indirectly controlling, controlled by or under common control with such Person;
or (ii) an officer, director, member or partner of such Person. For these
purposes, control means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether its the ownership of voting securities, by contract or otherwise.

(b) "Agreement" means this Asset Purchase Agreement, including all exhibits and
schedules thereto, as the same may hereafter be amended, modified or
supplemented from time to time.

(c) "Applicable Law" means, with respect to any Person, any statute, law,
regulation, order, injunction, judgment, decree or other requirement of any
Authority applicable to such Person or any of its Affiliates or any of their
respective properties, and assets.

(d) "Authority" means any governmental, regulatory or administrative body,
agency or authority, any court of judicial authority, any arbitrator or any
public, private or industry regulatory authority.

(e) "Closing" means the consummation of the transactions contemplated in this
Agreement.

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(f) "Closing Date" means the date upon which the Closing occurs.

(g) "Conveyance Documents" means the documents described in subsection 3.7
required to complete the transfer and assignment of the Purchased Assets.

(h) "Due Diligence Completion Date" means the date as described in subsection
4.4.

(i) "Effective Time" means 12:01 a.m. Vancouver time on the Closing Date.

(j) "General Conveyances" means the documents as required in accordance with
subsection 3.5.

(k) "Investment Letter" means the investment letter in the forms attached hereto
as Appendixes "1" and "2".

(l) "Knowledge" means, with respect to the Vendor, the actual knowledge of each
of its directors, executive officers and key employees and the knowledge that
each such Person would have acquired upon diligent inquiry.

(m) "Licence" means the Tanzanian Prospecting Licence Renewal No. 2957/2005
known as "Green Hills South East", a complete copy of the said licence is
attached hereto as Schedule "A".

(n) "Lien" means any lien, pledge, mortgage, security interest, lease, charge,
conditional sales contract, option, restriction, right of first refusal, or any
other claim or right whatsoever.

(o) "Other Prospecting Licences" means PLR 2683/2004, PL 3117/2005, PL 3118/2005
and PLR 2810/2004.

(p) "Order" means any decree, order, judgment, writ, award, injunction, rule or
consent of or by an Authority.

(q) "Person" means any entity, corporation, company, association, joint venture,
joint stock company, partnership, trust, organization, individual (including
personal representatives, executors and heirs of a deceased individual), or
government (including agencies, departments, bureaus, boards, divisions and
instrumentalities thereof).

(r) "Purchase Price" has the meaning specified at section 2.5.

(s) "Purchased Assets" means the Licence.

(t) "Purchaser Documents" means this Agreement and all other agreements,
instruments and certificates to be executed and delivered by the Purchaser in
connection with this Agreement.

(u) "Purchaser Shares" means the shares of common stock of the Purchaser being
issued by the Purchaser as payment of the Purchase Price.

(v) "Required Contractual Consents" means those consents required to be obtained
in order to consummate the transactions contemplated by this Agreement.

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(w) "Required Governmental Approvals" means those filings, notices or approvals
required to be obtained in order to consummate the transactions contemplated by
this Agreement.

(x) "Securities Act" means the United States Securities Act of 1933, as amended.

(y) "Vendor Documents" means this Agreement and all other agreements,
instruments and certificates to be executed by the Vendor in connection with
this Agreement.

1.2 Currency

All monies which are referred to in this Agreement are, unless expressly stated
otherwise, expressed in lawful money of United States of America.

1.3 Best Efforts

The parties acknowledge and agree that, for all purposes of this Agreement, an
obligation on the part of any party to use its best efforts to obtain any
waiver, consent, approval, permit, license or other document shall not require
such party to make any payment to any person for the purpose of procuring the
same, other than payments for amounts due and payable to such person under the
terms of any agreement as it stood prior to the date of this Agreement, payments
for incidental expenses incurred by such person and payments required by any
applicable law or regulation, nor permit the Vendor without the consent of the
Purchaser, which consent may be arbitrarily withheld, to change any contractual
rights or obligations in any contracts included in the Purchased Assets.

1.4 Appendices and Schedules

The following appendices and schedules are attached to and incorporated in this
Agreement by this reference and deemed to form a part hereof:

(a) Appendix "1" - Investment Letter to be provided by the Vendor and/or its
designees who are non-residents of United States, to whom the Purchaser Shares
are to be registered.

(b) Appendix "2" - Investment Letter to be provided by the Vendor and/or its
designees who are residents of United States, to whom the Purchaser Shares are
to be registered.

(c) Schedule "A" - A copy of Prospecting Licence Renewal No. 2957/2005 known as
"Green Hills South East".

2. SALE AND PURCHASE OF ASSETS

2.1 Assets to be Transferred

Subject to the terms and conditions set forth in this Agreement and in reliance
upon the representations and warranties of the Vendor and Purchaser herein set
forth, at the Closing, the Vendor shall sell, transfer, convey, assign and
deliver to the Purchaser, by appropriate deeds, assignments and other
instruments satisfactory to the Purchaser, and the Purchaser shall purchase from
the Vendor, all of the Vendor's right, title and interest, as of the Effective
Time, in and to the Purchased Assets.

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2.2 Purchased Assets Only

Unless specifically included in the definition of Purchased Assets, all of the
other property and assets of Vendor shall be excluded from the purchase and sale
provided for in this Agreement.

2.3 Title to Purchased Assets

The Purchased Assets shall be conveyed free and clear of all liabilities,
obligations and Liens.

2.4 No Liabilities Assumed

The Purchaser shall not assume or be liable for any liabilities or obligations
of the Vendor, direct or indirect, fixed, contingent or otherwise, known or
unknown, which exist at the Effective Time or which arise thereafter as a result
of any act, omission or circumstance taking place prior to the Effective Time.

2.5 Purchase Price

The purchase price (the "Purchase Price") for all of the Purchased Assets shall
be shares of the common stock of the Purchaser (the "Purchaser Shares")
consisting of 2,600,000 Shares to be delivered at Closing.

2.6 No Registration of the Purchaser Shares; Legend

None of the Purchaser Shares issued pursuant to this Agreement shall, at the
time of Closing, be registered under US federal or state securities laws but,
rather, shall be issued pursuant to an exemption therefrom and shall be
considered "restricted stock" within the meaning of Rule 144 promulgated under
the US Securities Act of 1933, as amended (the "Securities Act"). The Purchaser
Shares so issued shall bear a legend worded substantially as follows:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED STOCK" AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO THE EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY."

Or:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR OTHER APPLICABLE
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
S, RULE 901 THROUGH RULE 905, AND PRELIMINARY NOTES UNDER THE 1933 ACT OR (2)
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE 1933 ACT."

The Purchaser shall annotate its records, or cause to be annotated its records,
to reflect the restrictions on transfer embodied in the legend set forth above.

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3. CLOSING

3.1 Time and Place

The Closing of this Agreement (the "Closing") shall take place within 10
business days of completion of the Due Diligence Completion Date (the "Closing
Date") or such other date as mutually agreed upon between the Purchaser and the
Vendor. The parties agree and acknowledge that the Purchaser's solicitors,
Fraser and Company LLP, and the Purchaser's Tanzanian legal counsel, Maajar,
Rwechungura, Nguluma & Makani, will handle the preparation and filings, where
applicable, of all the Conveyance Documents. All documents shall be executed and
delivered in escrow and execution and delivery of Closing documents shall be
deemed to be concurrent requirements and it is specifically agreed that nothing
will be complete at the Closing until everything required to complete the
Closing has been executed, delivered, fully registered or issued, as the case
may be. All of the parties to this Agreement hereby agree that if the Purchaser
and Vendor agree to extend the Closing, the Closing will be on such day that
they agree to in writing and all parties hereto are bound to close on such day.

3.2 Transfer of Possession

Title and possession of the Purchased Assets will pass from Vendor to Purchaser
on the Closing Date and, for all other purposes, if Closing occurs, the transfer
and assignment of the Purchased Assets from Vendor to Purchaser will be
effective as of the Effective Time.

3.3 Procedure for Delivery of Purchaser Shares

At the Closing,

(a) once the Purchaser's Tanzanian legal counsel has filed with the Tanzanian
Commissioner for Mineral Rights those Conveyance Documents duly signed by the
Vendor that effect the transfer of the Licence into the name of the Purchaser;
and

(b) the Purchaser's Tanzanian legal counsel has received an Acknowledgement of
Transfer from the said Commissioner; and

(c) the Purchaser's Tanzanian legal counsel is in a position to provide the
title opinions described in subsection 4.2; and

(d) the Purchaser has received the Investment Letters described in subsection
3.4; then

(e) the Purchaser shall deliver or cause to be delivered to the Vendor the
Purchaser Shares by delivering a treasury order, duly executed by the Purchaser,
to the Purchaser's transfer agent who will create the share certificates in the
name of the Vendor or its designees.

3.4 Delivery of Investment Letter

At the Closing, the Vendor shall deliver or cause to be delivered to the
Purchaser, the Investment Letter, executed by the Vendor or its designees to
whom the Purchaser Shares are to be registered.

3.5 Additional Deliveries at Closing by the Purchaser

At the Closing, the Purchaser shall deliver or cause to be delivered to the
Vendor:

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(a) a copy of the consent of the Purchaser's board of directors approving the
terms of this Agreement and the transactions contemplated herein and authorizing
the Purchaser to take the necessary steps toward Closing the transactions
described by this Agreement.

3.6 Additional Deliveries at Closing by the Vendor

At the Closing, the Vendor shall deliver or cause to be delivered to the
Purchaser:

(a) a copy of a consent of the Vendor's board of directors approving the terms
of this Agreement and the transactions contemplated herein and authorizing the
Vendor to take the necessary steps toward closing the transactions described by
this Agreement;

(b) copies of all licences, permits, encumbrances, right of w (a) a copy of a
consent of the Vendor's board of directors approving the terms of this Agreement
and the transactions contemplated herein and authorizing the Vendor to take the
necessary steps toward closing the transactions described by this Agreement;ays
and any other documents that evidence a right of any party in the property
covered by the Licence; and

(c) all documentation relating to the Purchased Assets.

3.7 Closing and General Conveyance Documents

Vendor shall execute and deliver to Purchaser and Purchaser shall prepare,
execute and deliver to Vendor on the Closing Date, a General Conveyances of the
Purchased Assets in the form acceptable to the Purchaser's solicitors, in
registrable form to the extent applicable, respecting the Purchased Assets, as
may be reasonably required by the Purchaser, to complete the transfer of the
Purchased Assets.

3.8 Cost of Registration

Purchaser shall bear all costs incurred in registering all Conveyance Documents
relating to the Purchased Assets and all costs of preparing and registering any
further Conveyance Documents Purchaser may reasonably require following Closing,
including any fees or penalties which are levied, to the Purchaser or Vendor,
due to the late or incorrect filing by the Purchaser. Vendor shall bear all
costs of registering discharges of security interests registered against
Vendor's interest in the Purchased Assets.

3.9 Circulation of Conveyance Documents

The Purchaser shall be responsible for promptly providing the Vendor with all
such Conveyance Documents relating to the transfer of the Purchased Assets. The
Vendor shall promptly arrange for the said Conveyance Documents to be executed
or cause to be executed by the appropriate parties to effect the said transfer
of the Purchased Assets.

3.10 Subordination of Auxiliary Documents

All documents executed by the Parties and delivered pursuant to the provisions
of this section 3, or otherwise pursuant to this Agreement, are subordinate to
the provisions hereof and the provisions hereof shall govern and prevail in the
event of conflict.

3.11 Cooperation of Filings

The Vendor shall, on request and without further consideration, co-operate with
the Purchaser by furnishing or using the Vendor's best efforts to cause others
to furnish any additional information and/or executing and delivering or using
the Vendor's best efforts to cause others to execute and deliver any additional
documents and/or instruments, and doing or using the Vendor's best efforts to
cause others to

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do any and all such other things as may be reasonably required by the Purchaser
or its counsel to consummate or otherwise implement the transactions
contemplated by this Agreement.

4. CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER TO CLOSE

The obligations of the Purchaser to consummate the transactions contemplated
herein shall be subject to the fulfillment, at or prior to the Closing of all of
the conditions set forth below in this section 4.

4.1 Governmental and Other Approvals

All Required Governmental Approvals and all Required Contractual Consents shall
have been obtained without the imposition of any conditions. All Required
Governmental Approvals and Required Contractual Consents shall be in effect and
all conditions and requirements prescribed by any of the same to be satisfied on
or prior to the Closing Date shall have been satisfied.

4.2 Favourable Legal Opinions

The Purchaser shall have received:

(a) a favourable legal opinion from the Purchaser's Tanzanian counsel addressed
to the Purchaser and Purchaser's solicitors, in form and substance satisfactory
to the Purchaser and its counsel and dated the Closing Date with respect to the
compliance of all laws in connection with the corporate status of the Vendor;
and

(b) a favourable legal opinion from the Purchaser's Tanzanian counsel addressed
to the Purchaser, in form and substance satisfactory to the Purchaser and its
legal counsel and dated the Closing Date that the Licence has been duly
registered in the name of the Purchaser, is legally valid under the Applicable
Laws of Tanzania and is in good standing with respect to its filing
requirements, that all required payments have been made to the government of
Tanzania, that foreign companies can directly own 100% of the Licence, the
mining licenses that the Purchaser owns or has an interest in are renewal for
one or two additional periods of two years each, that renewal is a formality if
the mining licences are in good standing, that the granting of a Prospecting
Licence in Tanzania includes the right to drill on the land, that the government
of Tanzania only has a 3% royalty interest in the Licence, and that there are no
Liens registered against the Licence.

4.3 Concurrent Closing of Other Prospecting Licences

The Closing is conditional upon the Purchaser concurrently closing on
acquisition of the Other Prospecting Licences.

4.4 Satisfactory Due Diligence

The consummation of the transactions described in this Agreement shall be
subject to the completion of the due diligence satisfactory to the Purchaser in
its sole and absolute discretion. Upon completion of the Purchaser's due
diligence review, the Purchaser shall provide written notice to the Vendor that
the Purchaser has completed and is satisfied with its due diligence review, such
date is hereinafter referred to as the "Due Diligence Completion Date". The Due
Diligence Completion Date shall occur on or before the 120th day following the
date this Agreement is made. The Purchaser may, in

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its sole discretion, provide written notice to the Vendor that the Purchaser has
waived its due diligence review and notifies the Vendor of the Due Diligence
Completion Date.

If the Purchaser is not satisfied with its due diligence review, the Purchaser
may by written notice to the Vendor, terminate this Agreement.

The Purchaser shall have satisfied itself that all transactions contemplated by
this Agreement shall be legal and binding under applicable laws.

4.5 Material Compliance By Vendor

The Vendor shall have performed or complied with, in all material respects, the
terms and conditions of this Agreement to the extent they are to be performed at
or prior to the Closing Date.

4.6 Delivery of Conveyance Documents

The Vendor shall have executed and delivered to the Purchaser the Conveyance
Documents.

4.7 No Action or Proceeding

The consummation of the transactions contemplated herein shall not violate any
Applicable Law. Further, no legal restraint preventing the consummation of the
transactions contemplated herein, or imposing material damages in respect
thereof, shall be in effect, nor shall there be any action or proceeding pending
or threatened by any Person which seeks any of the foregoing.

4.8 Representations and Warranties

The representations and warranties of the Vendor contained in this Agreement and
in each other Vendor Document shall have been true and correct when made and
shall be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date.

4.9 Performance of Covenants

Each obligation of the Vendor to be performed by it on or before the Closing
Date pursuant to the terms of this Agreement and each other Vendor Document
shall have been duly performed on or before the Closing Date.

4.10 Waiver of Conditions

The foregoing conditions are for the exclusive benefit of the respective
benefiting parties and may be waived by the respective benefiting parties in
writing or in part on or before the Closing Date by delivery of a written waiver
to that effect, signed by the benefiting party. Notwithstanding any such waiver,
completion of the transactions contemplated by this Agreement shall not
prejudice or affect in any way the rights of the benefiting party in respect of
the warranties and representations of the other party set forth in this
Agreement.

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5. CONDITIONS PRECEDENT TO THE OBLIGATION OF VENDOR TO CLOSE

The obligation of the Vendor to consummate the transactions contemplated herein
shall be subject to the fulfillment, at or before the Closing Date, of all the
conditions set forth below in this section 5.

5.1 Representations and Warranties

The representations and warranties of the Purchaser contained in this Agreement
and in each other Purchaser Document shall have been true and correct when made
and shall be true and correct in all material respects on and as of the Closing
Date with the same force and effect as though made on and as of the Closing
Date.

5.2 Performance of Covenants

Each of the obligations of Purchaser to be performed by it on or before the
Closing Date pursuant to the terms of this Agreement and each other Purchaser
Document shall have been duly performed in all material respects on or before
the Closing Date.

6. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE PURCHASER

The Purchaser represents, warrants and covenants to the Vendor, as
representations, warranties and covenants that are true and correct as of the
date hereof and that will be true on the Closing Date, as follows, and hereby
acknowledges that the Vendor is relying on such representations, warranties and
covenants in entering into this Agreement:

6.1 Capitalization

The Purchaser's issued and outstanding shares immediately prior to the Closing
Date is 4,058,400 common shares.

6.2 Purchaser's Public Filings

The Purchaser has filed all the reports required to be filed under section 13 of
the Securities Exchange Act of 1934.

6.3 Authority to Execute Agreement

The board of directors of the Purchaser, pursuant to the power and authority
legally vested in it, has duly authorized the execution and delivery by the
Purchaser of this Agreement, and has duly agreed to each of the transactions
hereby contemplated. the Purchaser has the power and authority to execute and
deliver this Agreement, to approve the transactions hereby contemplated and to
take all other actions required to be taken by it pursuant to the provisions
hereof. The Purchaser has taken all actions required by law, its constating
documents, as amended, or otherwise to authorize the execution and delivery of
this Agreement. This Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and constitutes a legal, valid and binding obligation
of the Purchaser enforceable against the Purchaser. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will constitute a violation or breach of the constating documents, of the
Purchaser, or of any agreement, injunction, law, rule or regulation applicable
to the Purchaser.

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7. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE VENDOR

The Vendor represents, warrants and covenants to the Purchaser, as
representations, warranties and covenants that are true and correct as of the
date hereof and that will be true on the Closing Date, as follows, and hereby
acknowledges that the Purchaser is relying on such representations, warranties
and covenants in entering into this Agreement:

7.1 Existence, Power and Conduct of Business

The Vendor is a corporation duly organized, validly existing and in good
standing under the Applicable Laws of Tanzania, is up to date in all corporate
filings required under the Applicable Laws of Tanzania, has the requisite power
and authority and all material governmental licenses, authorizations, consents
and approvals necessary to own, operate and lease its properties and assets and
to conduct its businesses in which it is presently engaged, and is duly
qualified to conduct its businesses in all jurisdictions where the nature of its
assets or its businesses makes such qualification necessary except in
jurisdictions where failure to register does not have a Material Adverse Effect.

"Material Adverse Effect" means, with respect to any party, any condition, event
or development which is or would reasonably be expected to have a material
adverse effect on:

(a) the business, affairs, properties, capitalization, prospects or financial
condition of that party and its subsidiaries taken as a whole; or

(b) the ability of that party to perform and discharge its obligations under
this Agreement or any of the other documents incorporated herein.

7.2 Corporate Power, Authorization and Enforceable Obligations

The execution, delivery and performance by the Vendor of this Agreement and all
of the other Vendor Documents, and the transfer of Purchased Assets contemplated
herein and therein: (1) are within the corporate power of the Vendor, (2) have
been duly authorized by all necessary or proper corporate or other action; (3)
are not in contravention of, and will not conflict with or violate, any
provision of the articles or by-laws of the Vendor; (4) will not contravene,
conflict with or violate any Applicable Laws; (5) will not conflict with or
result in the breach or termination of or result in the loss of any material
benefit under, constitute a default under, or give to others any rights of
termination or cancellation of, or accelerate any performance required by or
accelerate the maturity of, any indenture, mortgage, deed of trust, lease,
agreement, contractual obligation, material agreement or other material
instrument to which the Vendor may be a party or by which the Vendor or any of
its assets or property is bound (or would be bound but for such default); (6)
will not result in the creation or imposition of any mortgage, charge, lien,
hypothec, trust, encumbrance, charge, pledge, assignment, security interest,
title retention, deposit, trust or any other security arrangement of whatsoever
nature or kind upon any of the assets or property of the Vendor, where such
creation or imposition could have a Material Adverse Effect; and (7) do not
require the consent or approval of any governmental authority or any other
person except to the extent that such consents have been obtained and delivered
to the Purchaser, and this Agreement constitutes a legal, valid and binding
obligation of the Vendor, enforceable in accordance with their terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors' rights
generally; and (ii) as limited by equitable principles generally.

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7.3 Title to Purchased Assets

The Vendor has good and marketable title to each of the Purchased Assets free
and clear of all Liens. The delivery to Purchaser of the instruments of transfer
of ownership contemplated by this Agreement will at the Effective Time vest good
and marketable title to, or the valid and enforceable right to receive and/or
use, each such Purchased Asset in Purchaser, free and clear of all Liens.

7.4 Mining Property

(a) The Vendor is the legal and beneficial owner of a 100% undivided interest in
Prospecting Licence Renewal No. 2957/2005 known as "Green Hills South East".

(b) There are no other agreements, adverse interests or options to acquire or
purchase the Licence or any portion thereof. No person has any proprietary or
possessory interest in the Licence. Other than the 3% royalty held by the
government of Tanzania, no person is entitled to any royalty or other payment in
the nature of rent or royalty on any minerals, metals or concentrates or any
other such products removed or produced from the Licence.

(c) The Licence is accurately described in Schedule "A" and is free and clear of
all Encumbrances (as defined below) subject only to the permitted Encumbrances
described in Schedule "A". The Licence has been properly registered in the
applicable Tanzanian land registry office. The Licence has been properly staked,
tagged, located and recorded in accordance with the applicable Tanzania mining
laws.

(d) There are no outstanding work orders or actions required or reasonably
anticipated to be required to be taken in respect of the rehabilitation or
restoration of the property covered by the Licence or relating to environmental
matters in respect of the Licence including without limitation, waste disposal
and storage or any operations thereon nor has the registered owners of the
Licence received notice of same. There are no temporarily suspended mining
operations, abandoned projects or projects which could be considered abandoned
which would require closure plans or site rehabilitation in respect of the
property covered by the Licence or operations thereon. There is no mining
operation on the property covered by the Licence. There has never been a mining
operation on the property covered by the Licence.

(e) All taxes, rates, duties, fees and assessments imposed, levied or charged
upon or against the Licence are paid in full. The Licence is in good standing in
accordance with the mining laws of Tanzania.

(f) Conditions on and relating to the property covered by the Licence including
with respect to all past and current operations thereon are in compliance with
all applicable laws, regulations and orders including without limitation,
environmental laws.

(g) No Hazardous Substance (as defined below) has been placed, held located,
used or disposed of, on, under or at the property covered by the Licence and no
part of such property has been used as a dump site or storage site for any
Hazardous Substance. No claim has ever been asserted and there are no present
circumstances which could reasonably form the basis for the assertion of any
claim against the owners of the Licence for loss, liability, damages, injury,
costs or expenses of any kind as a direct or indirect result of the presence on
or under the escape, seepage, leakage, spillage, discharge, emission or release
from the Property of any Hazardous Substance.

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(h) There are no outstanding, pending or threatened, actions, suits or claims,
affecting all or any part of the Licence nor is there currently any basis
therefor. There have been and presently are, no claims or disputes threatened,
proposed, alleged or contemplated which may in any way affect the registered
owners of the Licence's right or ability to have access to the property covered
by the Licence to conduct its work thereon or which may in any way affect the
market value or ownership of the Licence or any portion thereof.

(i) The registered owners of the Licence are not insolvent, have not proposed a
compromise or arrangement to its creditors generally, have not taken any
proceeding with respect to a compromise or arrangement, have not taken any
proceeding to have themselves declared bankrupt or wound-up and has not taken
any proceeding to have a receiver appointed of any part of its assets and at
present, no encumbrancer or receiver has taken possession of any of its property
and no execution or distress is enforceable or levied upon any of its property
and no petition for a receiving order in bankruptcy is filed against any of
them.

(j) The Vendor has made available, or cause to be made available, to the
Purchaser all material information in its possession or control relating to the
Licence and shall continue to make available, or cause to be made available, to
the Purchaser all information in its possession or control relating to work done
on or with respect to the Licence which could possibly be considered significant
in indicating that the property covered by the Licence might or might not have
potential economic mineralization.

"Encumbrances" means any and all liens, charges, encumbrances, contractual
obligations and claims of others, recorded and unrecorded, registered and
unregistered.

"Hazardous Substance" means any hazardous substance or pollutant, contaminant,
toxic or dangerous waste, substance or material, as defined or regulated by any
applicable law, regulation or governmental authority from time to time.

7.5 Investment Intent

The Vendor is acquiring the Purchaser Shares for investment purposes only and
not with a view towards resale or redistribution in violation of securities
laws, including United States state and federal securities laws. The Vendor
agrees to comply with the provisions of applicable securities laws including but
not limited the securities law of British Columbia, the United States and the
jurisdiction of residence of the Vendor.

7.6 Non-US Person

The Vendor is not a U.S. person ("U.S. Person") as that term is defined in
Regulation S of the Securities Act. A "U.S. Person" is defined by Regulation S
to be any person who is:

(a) any natural person resident in the United States;

(b) any partnership or corporation organized or incorporated under the laws of
the United States;

(c) any estate of which any executor or administrator is a U.S. person;

(d) any trust of which any trustee is a U.S. person;

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(e) any agency or branch of a foreign entity located in the United States;

(f) any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporate, or (if an
individual) resident in the United States; and

(g) any partnership or corporation if:

(i) organized or incorporated under the laws of any foreign jurisdiction; and

(ii) formed by a U.S. person principally for the purpose of investing in
securities not registered under the 1933 Act, unless it is organized or
incorporated, and owned, by accredited investors [as defined in Section
230.501(a) of the 1933 Act] who are not natural persons, estates or trusts.

7.7 No Other Agreements to Purchase

No person other than the Purchaser has any written or oral agreement or option
or any right or privilege (whether by law, pre-emptive or contractual) capable
of becoming an agreement or option for the purchase or acquisition from the
Vendor of any of the Purchased Assets or any interest thereof.

7.8 Full Disclosure

The Vendor warrants that the information contained in this Agreement as of this
date does not, contain any untrue statement of a material fact, and this
Agreement does not omit to state any material fact necessary to make any
statements, in light of the circumstances under which such statements were made,
not misleading.

7.9 Litigation

There are no outstanding orders, judgements, injunctions, awards or decrees of
any court, governmental or regulatory body or arbitration tribunal against the
Vendor or the Purchased Assets. There are no actions, suits or proceedings
pending, or, to the knowledge of the Vendor, threatened against or affecting the
Vendor or any of its officers or directors relating to their positions as such,
or any of their properties, at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, in connection with the business,
operations or affairs of the Vendor, which might result in any material adverse
change in the operations or financial condition of the Vendor.

7.10 No Approvals Required

No further registration, qualification, designation, declaration or filing
order, permit, filing, consent, licence, decree, authorization or approval of,
from or with any governmental authority on the part of the Vendor is necessary
or advisable in order to ensure the legality, validity, binding effect and
enforceability of this Agreement, the transfer of the Purchased Assets to the
Purchaser or in connection with the consummation of the transactions
contemplated by this Agreement, except for (a) compliance with the applicable
securities regulations; and (b) compliance with the requirements of the
Applicable Laws of Tanzania.

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7.11 No Violations

The Vendor is not (a) in violation of its charter, by-laws or other
organizational document or of any law, administrative regulation, ordinance,
order, judgment or decree of any court or governmental agency, arbitration panel
or authority applicable thereto, except for violations which, individually or in
the aggregate, would not have a Material Adverse Effect; and (b) in default in
any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust, or any other agreement
or instrument to which it is a party or by which it is bound or by which its
properties are bound or affected, except for violations which, individually or
in the aggregate, would not have a Material Adverse Effect, and there exists no
condition which, with the passage of time or otherwise, would constitute a
material default under any such document or instrument or result in the
imposition of any material penalty or the acceleration of any material
indebtedness.

7.12 Finder's Fees

The Vendor has not incurred any liability, contingent or otherwise, for brokers'
or finders' fees in respect of this transaction for which the Purchaser shall
have any obligation or liability.

7.13 No Knowledge

To the knowledge of the Vendor, there exist no facts which, if known to the
Purchaser, might reasonably be expected to deter the Purchaser from completing
the transactions herein contemplated.

8. ADDITIONAL COVENANTS OF THE PARTIES

8.1 Cooperation; Consents

Prior to the Closing Date, each party shall cooperate with the other to the end
that the parties shall (i) in a timely manner make all necessary filings with,
and conduct negotiations with, all Authorities and other Persons the consent or
approval of which, or a license or permit from which, is required for the
consummation of the transactions contemplated herein and (ii) provide to each
other party such information as the other party may reasonably request in order
to enable it to prepare such filings and to conduct such negotiations. The
parties shall also use their respective best efforts to expedite the review
process and to obtain all such necessary consents, approvals, licenses and
permits as promptly as practicable. To the extent permitted by Applicable Law,
the parties shall request that each Authority or other Person whose review,
consent or approval is requested treat as confidential all information which is
submitted to it. The Vendor and Purchaser shall bear their own costs and
expenses incurred or fees paid to Authorities to obtain any governmental
approvals and contractual consents. Each Party shall bear its own costs and
expenses (including fees paid to authorities) incurred to obtain such consents,
approvals, licenses or permits.

8.2 Publicity

The Purchaser may publish any press releases or disseminate any news regarding
this Agreement or transaction contemplated herein prior or after the Closing.
Prior to Closing, all news releases with respect to the transactions
contemplated by this Agreement shall be reviewed by the Vendor and comments that
may be by the Vendor shall be incorporated into the release.

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8.3 No Solicitation or Negotiation

Unless and until this Agreement is terminated, the Vendor shall not, nor shall
it cause, suffer or permit the directors, officers, employees, representatives,
agents, investment bankers, advisors, accountants or attorneys of the Vendor to,
initiate or solicit, directly or indirectly, any inquiries or the making of any
proposal that constitutes or could be reasonably expected to lead to the
transfer of one or more of the Purchased Assets, or an interest in the Purchased
Assets, from any Person, or engage in any discussions or negotiations relating
thereto, or accept any such acquisition or otherwise facilitate, attempt to seek
or continue any of the foregoing.

9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1 As to the Parties

The representations, warranties and covenants of the parties contained herein
shall survive the execution and delivery of this Agreement, the Closing and the
consummation of the transactions called for by this Agreement for a period of
six years from the Closing Date.

9.2 Indemnification

After the Closing Date, each party to this Agreement (the "Indemnifying Party")
will indemnify the other parties against any and all debts, losses, claims,
demands, costs and expenses whatsoever, whether absolute or contingent,
including solicitors fees, on a solicitor and own client basis, resulting from,
arising out of or in any manner whatsoever occasioned by:

(a) any breach of any covenant or agreement of the Indemnifying Party as set
forth in this Agreement;

(b) any untruth, inaccuracy or incompleteness of any representation of the
Indemnifying Party set forth in this Agreement; or

(c) any non-fulfilment or non-performance of any agreement or condition on the
part of the Indemnifying Party under this Agreement.

10. NO MERGER

The representations and warranties set forth in sections 6 and 7 and the
indemnity set forth in subsection 9.2 and the covenants in section 8.3 shall be
deemed to apply to all assignments, transfers and other Conveyance Documents and
there shall not be any merger of any representation, warranty, indemnity or
covenant in such assignments, transfers or other Conveyance Documents, before,
on or after the Closing, notwithstanding any rule of law, equity or statute to
the contrary and all such rules are hereby waived.

11. TERMINATION; REMEDIES

11.1 Termination Without Default

Anything herein to the contrary notwithstanding, this Agreement and the
transaction contemplated by this Agreement may otherwise be terminated before
the First Closing only as follows (and in no other manner), except as specified
in subsection 11.2:

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(a) Mutual Consent. By the mutual consent in writing of the parties.

(b) Conditions to Purchaser's Performance Impossible. By the Purchaser upon
written notice to the Vendor if any event occurs which would render impossible
the satisfaction of one or more conditions to the obligations of the Purchaser
set forth in section 4.

(c) Conditions to Vendor's Performance Impossible. By the Vendor upon written
notice to the Purchaser if any event occurs which would render impossible the
satisfaction of one or more conditions to the obligations of the Vendor set
forth in section 5.

11.2 Termination Upon Default

Either party may terminate this Agreement by giving notice to the other on or
prior to the First Closing Date, without prejudice to any rights or obligations
it may have, if (i) after written notice of the default and the passage of (A)
ten (10) days, in the case of a default which is by its nature incapable of
being cured, or (B) thirty (30) Days, or such shorter period as may end upon the
scheduled First Closing Date, in the case of a default which by its nature is
capable of being cured, the other party has failed in the due and timely
performance of any of its covenants or agreements herein contained or there
shall have been a breach of the other's warranties or representations herein
contained, and (ii) such failure or breach could reasonably be expected to give
the non-defaulting party grounds not to close pursuant to sections 4 or 5, as
the case may be. In any such event the party who is not guilty of the breach
may, in addition to all of its other rights and remedies, recover all losses
incurred by it from the party responsible for the breach.

11.3 Specific Performance

The parties acknowledge that the Purchased Assets are unique and cannot be
obtained by the Purchaser except from the Vendor and for that reason, among
others, the Purchaser will be irreparably damaged in the absence of the
consummation of this Agreement. Therefore, in the event of any breach by the
Vendor of this Agreement, the Purchaser shall have the right, at its election
and without prejudice to any of its other rights and remedies, to obtain an
order for specific performance of this Agreement, without the need to post a
bond or other security, to prove any actual damage or to prove that money
damages would not provide an adequate remedy.

12. MISCELLANEOUS

12.1 Entire Agreement

In and for the purposes of this Agreement:

(a) words importing the singular include the plural and vice versa, and words
importing gender include all genders;

(b) the provisions of headings and the division of this Agreement into sections,
subsections and paragraphs is for the convenience of reference only and shall
not affect the interpretation of this Agreement;

(c) unless otherwise stated, all references in this Agreement to a designated
"section", "subsection" or other subdivision is to the designated section,
subsection or other subdivision of this Agreement;

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(d) no supplement, amendment, modification, waiver or termination of this
Agreement will be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement will be deemed or
will constitute a waiver of any other provision (whether or not similar) or will
such waiver constitute a continuing waiver unless otherwise expressly provided;
and

(e) this Agreement and all schedules attached hereto, together with any other
documents to be delivered pursuant hereto, constitute the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussion whether oral or
written, of the parties and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein.

12.2 Binding Agreement

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns; provided, that neither this Agreement nor any right hereunder
shall be assignable by the Purchaser, or the Vendor without the prior written
consent of the other parties.

12.3 Independent Legal Advice

The Vendor acknowledges and agrees that Fraser and Company LLP is the legal
counsel for only the Purchaser. David Smalley, a partner at Fraser and Company
LLP is a shareholder of the Purchaser, and as a consequence, the directors of
the Purchaser has been advised to seek independent legal advice prior to signing
this Agreement. In the event of a dispute between any of the parties, Fraser and
Company LLP will not represent any party in any such dispute.

The Vendor, by signing this Agreement, hereby represents and warrants to the
Purchaser and Fraser and Company LLP that the Vendor has had the opportunity to
seek, and was not prevented nor discouraged by the Purchaser or Fraser and
Company LLP from seeking independent legal advice prior to the execution and
delivery of this Agreement and that, in the event that the Vendor did not avail
itself of that opportunity prior to signing this Agreement, the Vendor did so
voluntarily without any undue pressure and agrees that failure to obtain
independent legal advice shall not be used as a defence to the enforcement of
obligations under this Agreement.

12.4 Currency

All monies which are referred to in this Agreement are, unless expressly stated
otherwise, expressed in lawful money of United States of America.

12.5 Severability

If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.

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12.6 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia which shall be deemed to be the proper law
hereof and in so doing the Courts of British Columbia shall have jurisdiction
(but not exclusive jurisdiction) to:

(a) entertain and determine all disputes and claims, whether for specific
performance, injunction, declaration, or otherwise howsoever both at law and in
equity, arising out of or in any way connected with the construction, breach, or
alleged, threatened, or anticipated breach of this Agreement; and

(b) hear and determine all questions concerning validity, existence, or
enforceability thereof.

12.7 Notices

All notices or other communications required hereunder shall be in writing and
shall be sufficient in all respects and shall be deemed delivered, if sent via
registered or certified mail, postage prepaid and properly addressed, 15 days
following the date of mailing; if sent by a courier service (e.g. FedEx), the
fourth business day following dispatch; if transmitted by facsimile, one (1)
business day after the time of facsimile transmission; or if by personal
delivery, on the date of physical delivery:

To the Purchaser:

Douglas Lake Minerals Inc.
Suite 520 - 470 Granville Street
Vancouver, British Columbia
Canada V6C 1V5
Attention: President
Fax no.: (604) 687-7179

With a copy to:

Fraser and Company LLP
Suite 1200 - 999 West Hastings Street
Vancouver, British Columbia
Canada V6C 2W2
Attention: David Smalley
Fax no.: (604) 669-5791

To the Vendor

:

Megadeposit Explorers Limited
P.O. Box 75092
Dar es Salaam, Tanzania
Fax no.: (255) (22) 2134185
Attention: President

12.8 Time of Essence

Time shall be of the essence of this Agreement.

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12.9 Authority

The parties executing this Agreement on behalf of the Vendor and Purchaser
represent and warrant that they have been authorized by their respective company
to enter into this Agreement and to bind their respective company to all the
provisions of this Agreement.

12.10 Counterparts and Facsimiles

This Agreement may be executed by the parties hereto in as many counterparts as
may be necessary, and each such agreement so executed shall be deemed to be an
original and, provided that all of the parties have executed a counterpart, such
counterparts together shall constitute a valid and binding agreement, and
notwithstanding the date of execution shall be deemed to bear the date as set
forth above. Such executed copy may be transmitted by telecopied facsimile or
other electronic method of transmission, and the reproduction of signatures by
facsimile or other electronic method of transmission will be treated as binding
as if originals.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

DOUGLAS LAKE MINERALS INC.

Per:    /s/ Laurence Stephenson                
          Laurence Stephenson, President  

MEGADEPOSIT EXPLORERS LIMITED

per:    /s/ Kulvinder Kal Matharu                   
          Kulvinder Kal Matharu, President

 

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Appendix "1"

INVESTMENT LETTER FROM NON-RESIDENTS OF UNITED STATES

Douglas Lake Minerals Inc.
Suite 520 - 470 Granville Street
Vancouver, British Columbia
Canada V6C 1V5

Attention: President

Dear Sir:

In connection with the acquisition of _______________ shares of the common stock
(the "Securities") of Douglas Lake Minerals Inc. (the "Company") pursuant to an
asset sale and purchase agreement dated the 4th of August, 2005 between
Megadeposit Explorers Limited and the Company, the undersigned (the
"Undersigned"), hereby makes the following acknowledgements, representations and
warranties:

1. US Offshore Transaction. The Undersigned acknowledges and agrees that the
offer was not made to the Undersigned when the Undersigned was in the United
States and that:

(a) the Undersigned is not a U.S. Person;

(b) the Securities are not being acquired directly or indirectly, for the
account or benefit of a U.S. Person or a person in the United States and the
Undersigned does not have any agreement or understanding (either written or
oral) with any U.S. Person or a person in the United States respecting:

(i) the transfer or assignment of any rights or interest in any of the
Securities;

(ii) the division of profits, losses, fees, commissions, or any financial stake
in connection with this subscription; or

(iii) the voting of the Securities;

(c) the Undersigned will not engage in any Directed Selling Efforts, as that
term is defined in Regulation S of the Securities Act of 1933, as amended, (the
"1933 Act") in respect of the Securities;

(d) the Undersigned agrees not the resell the Securities in the United States or
to a U.S. Person during the distribution compliance period, which is one year
from the Closing Date;

(e) the Undersigned acknowledges that there are restrictions on the resale of
the Securities, agrees not to resell or distribute the Securities to the public
and agrees to comply with the securities laws of the United States and the
securities laws of the residence of the Undersigned. The Undersigned agrees not
to engage in hedging transactions with regard to the Securities prior to the
expiration of the one-year distribution compliance period unless in compliance
with the 1933 Act; and

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(f) the Undersigned acknowledges that the Company shall refuse to register any
transfer of the Securities not made in accordance with the provisions of
Regulation S, pursuant to registration under the 1933 Act, or pursuant to an
available exemption from registration under the 1933 Act; provided, however,
that if the Securities are in bearer form or foreign law prevents the Company
from refusing to register securities transfers, other reasonable procedures are
implemented to prevent any transfer of the Securities not made in accordance
with the provisions of Regulation S.

2. Definition of U.S. Person. A "U.S. Person" is defined by Regulation S to be
any person who is:

(a) any natural person resident in the United States;

(b) any partnership or corporation organized or incorporated under the laws of
the United States;

(c) any estate of which any executor or administrator is a U.S. person;

(d) any trust of which any trustee is a U.S. person;

(e) any agency or branch of a foreign entity located in the United States;

(f) any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporate, or (if an
individual) resident in the United States; and

(g) any partnership or corporation if:

(h) organized or incorporated under the laws of any foreign jurisdiction; and

(i) formed by a U.S. person principally for the purpose of investing in
securities not registered under the 1933 Act, unless it is organized or
incorporated, and owned, by accredited investors [as defined in Section
230.501(a) of the 1933 Act] who are not natural persons, estates or trusts.

3. Residency. The Undersigned is resident in the jurisdiction set out under the
address of Undersigned on the signature page below, which address is the
ordinary residence or place of business of the Undersigned, and, if the
Undersigned is a corporate entity, it was not created nor is it used solely for
the purpose of acquiring the Securities.

4. Deemed Statutory Underwriter. The Undersigned acknowledges that if the
Undersigned acquires the Securities and resell them into the United States not
in accordance with the provisions of Regulation S, the Undersigned may be deemed
a statutory underwriter under section 2(11) of the 1933 Act.

5. Not an Underwriter. The Undersigned is not an underwriter of, or dealer in,
the common shares of the Company, nor is the Undersigned participating, pursuant
to a contractual agreement or otherwise, in the distribution of the Securities.

6. Investment Intent. The Undersigned is acquiring the Securities for investment
solely for his own account and not with a present view to any distribution,
transfer or resale to others, including any "distribution" within the meaning of
1933 Act or the securities laws of any state. The

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Undersigned understands that the Securities have not and will not be registered
under the 1933 Act by reason of a specific exemption from the registration
provisions of the 1933 Act, the availability of which depends on, among other
things, the bona fide nature of the investment intent and the accuracy of the
Undersigned's representations made herein.

7. No Intention to Circumvent 1933 Act Registration Requirements. The current
structure of this transaction and all transactions and activities contemplated
hereunder is not a scheme to avoid the registration requirements of the 1933
Act.

8. Financial Ability. The Undersigned is financially able to bear the economic
risks of an investment in the Company and has no need for liquidity in this
investment. Furthermore, the financial capacity of the Undersigned is of such a
proportion that the total cost of the Undersigned's commitment is not material
when compared with his total committed capital. The Undersigned is financially
able to suffer a complete loss of this investment.

9. Experience. The Undersigned acknowledges that he is a sophisticated investor,
having such knowledge and experience in financial and business matters in
general and with respect to investments of a nature similar to that evidenced by
the Securities so as to be capable, by reason of such knowledge and experience,
of evaluating the merits and risks of, and making an informed business decision
with regard to, and protecting his own interests in connection with, the
acquisition of the Securities, and fully understands the speculative nature of
the Securities.

10. Resell Outside U.S. The Undersigned is aware that the Securities may not be
offered or re-sold in the United States without registration under the 1933 Act
or compliance with requirements of an exemption from registration and the
applicable laws of all applicable states and acknowledges that the Company has
no present intention of filing a registration statement under the 1933 Act in
respect of the Securities. The Undersigned undertakes and agrees that it will
not offer or re-sell any of the Securities in the United States unless such
securities are registered under the 1933 Act and the securities laws of all
applicable states of the United States or an exemption from such registration
requirements is available, and pursuant to the applicable securities regulations
of the residence of the Undersigned, or pursuant to an available exemption from
such registration. Further that the Undersigned will not resell the Securities,
except in accordance with the provisions of applicable securities legislation,
regulations, rules, policies and orders and stock exchange rules.

11. Review of Public Documents. The Undersigned has had the opportunity to
review all filings made by the Company with the United States Securities and
Exchange Commission, available at the SEC's web site at www.sec.gov.

12. Limited Public Market. The Undersigned understands that Company's common
shares are quoted on the OTC Bulletin Board and there has been only a limited
public market for the Company's common shares. The Company has made no
assurances that the limited public market will continue. An active trading
market for the Company's common shares may not develop and the Undersigned may
not be able to resell the Securities at prices equal to or greater than the
price paid for the Securities. The market price of the Company's common shares
may decline as the result of announcements by the Company or its competitors,
variations in the Company's results of operations, and market conditions in the
mining industries in general.

13. Restricted Securities. The Undersigned acknowledges that the Securities have
not been registered under the 1933 Act and are "restricted securities" as that
term is defined in Rule 144 promulgated thereunder and may not be offered or
re-sold in the United States unless they are subsequently

3

--------------------------------------------------------------------------------

registered under the 1933 Act or an exemption from such registration is
available. The certificates evidencing the Securities will contain a legend
substantially as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR OTHER APPLICABLE
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
S, RULE 901 THROUGH RULE 905, AND PRELIMINARY NOTES UNDER THE 1933 ACT OR (2)
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE 1933 ACT.

14. Stock Transfer. The Undersigned is aware that stop-transfer instructions may
be given to the transfer agent of the common stock of the Company to prevent any
unauthorized or illegal transfer of the Securities.

15. Reliance for Exemptions. The Undersigned understands that the Securities are
being issued to him pursuant to exemptions from the registration requirements of
federal and applicable state securities laws and acknowledges that the Company
is relying upon the Undersigned's representations made herein as the basis for
such exemptions. By initialling against one of the paragraphs below, the
Undersigned represents, warrants and certifies that he complies with at least
one of the following conditions (if joint investors, both parties must initial):

(a) CAD$97,000 Exemption. The Undersigned is acquiring sufficient Securities so
that the aggregate acquisition cost of the Securities to the Undersigned is not
less than CAD$97,000, is not a corporation, syndicate, partnership or other form
of incorporated or unincorporated entity or organization created solely to
permit the purchase of the Securities (or other similar purchases) by a group of
individuals whose individual share of the aggregate acquisition cost of the
Securities is less than CAD$97,000, is acquiring the Securities as principal for
his own account and not for the benefit of any other person and not with a view
to the resale or distribution of all or any of the Securities, and no commission
or finder's fee is paid to a non-arm's length party in connection with the
issuance of the Securities.

 

OR

(b) BC - Accredited Investor Exemption. The Undersigned is purchasing the
Securities as principal for its own account and not for the benefit of any other
person and not with a view to the resale or distribution of all or any of the
Securities, is an "accredited investor" as defined in Multilateral Instrument
45-103 "Capital Raising Exemptions" published by the Canadian Securities
Administrators, and no commission or finder's fee is paid to a non-arm's length
party in connection with the issuance of the Securities. Specifically, the
Undersigned represents and warrants that the Undersigned qualifies under the
following category or categories of "accredited investor" as indicated by the
Undersigned's initial (SUBSCRIBER MUST INDICATE THE APPLICABLE CATEGORY OR
CATEGORIES BY INITIALING EACH APPLICABLE SPACE BELOW; IF JOINT INVESTORS, BOTH
PARTIES MUST INITIAL):

4

--------------------------------------------------------------------------------

(initial)

________ (i) an individual who, either alone or with a spouse, beneficially
owns, directly or indirectly, financial assets having an aggregate realizable
value that before taxes, but net of any related liabilities, exceeds
CAD$1,000,000;

________ (ii) an individual whose net income before taxes exceeded CAD$200,000
in each of the two most recent years or whose net income before taxes combined
with that of a spouse exceeded CAD$300,000 in each of the two most recent years
and who, in either case, reasonably expects to exceed that net income level in
the current year;

________ (iii) a person or company, other than a mutual fund or non-redeemable
investment fund, that, either alone or with a spouse, has net assets of at least
CAD$5,000,000, and unless the person or company is an individual, that amount is
shown on its most recently prepared financial statements;

________ (iv) a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act (Canada) or under
comparable legislation in a jurisdiction of Canada or a foreign jurisdiction,
trading as a trustee or agent on behalf of a fully managed account;

________ (v) a person or company trading as agent on behalf of a fully managed
account if that person or company is registered or authorized to carry on
business under the securities legislation of a jurisdiction of Canada or a
foreign jurisdiction as a portfolio manager or under an equivalent category of
adviser or is exempt from registration as a portfolio manager or the equivalent
category of adviser;

________ (vi) a person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, except the voting securities
required by law to be owned by directors, are persons or companies that are
accredited investors; or

________ (vii) the Undersigned is another type of "accredited investor" as that
term is defined in MI 45-103, namely __________________________.

OR

(c) BC - Family, Friends and Business Associates Exemption. The Undersigned is
purchasing the Securities as principal for its own account and not for the
benefit of any other person and not with a view to the resale or distribution of
all or any of the Securities, no commission or finder's fee is paid to any
director, officer, founder or control person of the Company or a non-arm's
length party in connection with the issuance of the Securities, and the
Undersigned complies with one or more of the following:

(initial)

_______ (A) the Undersigned is a director, senior officer or control person of
the Company, or of an affiliate of the Company;

________ (B) the Undersigned is a spouse, parent, grandparent, brother, sister
or child of ______________________________________, a director, senior officer
or control person of the Company, or of an affiliate of the Company;

5

--------------------------------------------------------------------------------

 

________ (C) the Undersigned is a parent, grandparent, brother, sister or child
of the spouse of ______________________________________, a director, senior
officer or control person of the Company, or of an affiliate of the Company;

________ (D) the Undersigned is a close personal friend(1) of
_________________________ _________________________, a director, senior officer
or control person of the Company, or of an affiliate of the Company, and has
known the director, senior officer, or control person for a sufficient period of
time to be in a position to assess the capabilities and trustworthiness of the
said person;

________ (E) the Undersigned is a close business associate(2) of
_____________________ ____________________, a director, senior officer or
control person of the Company, or of an affiliate of the Company, and has had
sufficient prior business dealings with the director, senior officer or control
person to be in a position to assess the capabilities and trustworthiness of the
said person;

________ (F) the Undersigned is a founder of the Company or a spouse, parent,
grandparent, brother, sister, child, close personal friend or close business
associate of a founder of the Company;

________ (G) the Undersigned is a parent, grandparent, brother, sister or child
of the spouse of a founder of the Company;

________ (H) the Undersigned is a person or company of which a majority of the
voting securities are beneficially owned by, or a majority of the directors are,
persons or companies described in paragraphs (A) to (G) [also initial
corresponding paragraph]; or

________ (I) the Undersigned is a trust or estate of which all of the
beneficiaries or a majority of the trustees are persons or companies described
in paragraphs (A) to (G) [also initial corresponding paragraph].

(1) Note that the term "close personal friend" means an individual who has known
the director, senior officer, founder or control person of the Company well
enough and for a sufficient period of time to be in a position to assess the
capabilities and trustworthiness of the director, senior officer, founder or
control person. The term close personal friend can include family members not
already listed in the exemption if the family member is in a position to assess
the capabilities and trustworthiness of the director, senior officer, founder or
control person.

An individual is not a close personal friend solely because the individual is a
relative or a member of the same organization, association or religious group.

An individual is not a close personal friend solely because the individual is a
client, customer or former client or customer of the Company. For example, an
individual is not a close personal friend of the Company simply because the
individual is a client or former client of the Company.

The relationship between the investor and the director, senior officer, founder
or control person must be direct. For example, the exemption is not available
for a close personal friend of a close personal friend of the director, senior
officer, founder or control person.

6

--------------------------------------------------------------------------------

(2) Note that the term "close business associate" means an individual who has
had sufficient prior business dealings with the director, senior officer,
founder or control person to be in a position to assess the capabilities and
trustworthiness of the director, senior officer, founder or control person.

A casual business associate or a person introduced or solicited for the purpose
of purchasing securities is not a close business associate.

An individual is not a close business associate solely because the individual is
a client, customer or former client or customer of the Company. For example, an
individual is not a close business associate of the Company solely because the
individual is a client or former client of the Company.

The relationship between the investor and the director, senior officer, founder
or control person must be direct. For example, the exemption is not available
for a close business associate of a close business associate of a director,
senior officer, founder or control person.

OR

(initial)

________       (ii) Employee, Director, Senior Officer and Consultant Exemption.
The Undersigned is an employee, director, senior officer or consultant of the
Company, and:

(A) the Undersigned is acquiring the Securities as principal for his own account
and not for the benefit of any other person and not with a view to the resale or
distribution of all or any of the Securities;

(B) the Undersigned is acquiring the Securities voluntarily;

(C) this acquisition of the Securities does not confer upon or imply in favour
of the Undersigned any right with respect to office, employment or provision of
services with the Company, or interfere in any way with the right of the Company
to lawfully terminate the Undersigned's office, employment or service at any
time pursuant to the arrangements pertaining to same;

(D) if the Undersigned is a consultant, he is providing consulting, technical,
management or other services to the Company under a written contract and, in the
reasonable opinion of the Company, spends a significant amount of time and
attention on the affairs and business of the Company; and

(E) no commission or finder's fee is paid to any director, officer, founder or
control person of the Company or a non-arm's length party in connection with the
issuance of the Securities.

16. Additional Prospectus Exemptions for Offshore (Non-US and Non-Canadian)
Residents. If the Undersigned is resident outside of United States and Canada,
the Undersigned further represents and warrants to the Company (as
representations and warranties that are true as of the date of this Agreement
and as of the Closing Date (which representations and warranties shall survive
the applicable Closing Date), that:

(a) the Undersigned is knowledgeable of, or has been independently advised as to
the applicable securities laws of the securities regulatory authorities (the
"Authorities") having application in the jurisdiction in which the Undersigned
is resident (the

7

--------------------------------------------------------------------------------

"International Jurisdiction") which would apply to the acquisition of the
Securities, if any;

(b) the Undersigned is acquiring the Securities pursuant to exemptions from the
prospectus and registration requirements under the applicable securities laws of
the Authorities in the International Jurisdiction or, if such is not applicable,
the Undersigned is permitted to acquire the Securities under the applicable
securities laws of the Authorities in the International Jurisdiction without the
need to rely on any exemption; and

(c) the applicable securities laws of the Authorities in the International
Jurisdiction do not require the Company to make any filings or seek any
approvals of any nature whatsoever from any Authority of any kind whatsoever in
the International Jurisdiction in connection with the issue and sale or resale
of the Securities.

17. BC's Offshore Resale Policy. If the Undersigned is a resident of British
Columbia, the Undersigned may have an exemption from registration under the BC
Securities Act to resell the Securities if the Undersigned complies with B.C.
Securities Commission's BC Instrument 72-502 "Trade In Securities of U.S.
Registered Issuers".

According to BC Instrument 72-502, a B.C. resident who acquired securities under
a prospectus exemption in a company that is not a reporting issuer under the BC
Securities Act may sell those securities without filing a prospectus under the
BC Securities Act, if all of the following conditions are met:

(a) The securities of the Company are registered under section 12 of the U.S.
Securities Exchange Act of 1934, as amended, or the Company is required to file
reports under section 15(d) of that Act.

(b) The seller's residential address or registered office is in British
Columbia.

(c) A 4-month period has passed since the date the Company issued the securities
to the seller.

(d) If the seller is a control person of the Company, then the seller has held
the securities for at least 6 months.

(e) The number of securities the seller proposes to sell, plus the number of
securities of the Company of the same class that the seller has sold in the
preceding 12-month period, does not exceed 5% of the Company's outstanding
securities of the same class.

(f) The seller sells the securities through a registered investment dealer.

(g) The registered investment dealer executes the trade through an exchange, or
market, outside Canada.

(h) There has been no unusual effort made to prepare the market or create a
demand for the securities.

(i) The seller has not paid any extraordinary commission or other consideration
for the trade.

8

--------------------------------------------------------------------------------

(j) If the seller is an insider of the Company, the seller reasonably believes
that the Company is not in default of the securities legislation (including U.S.
federal and state securities legislation) that governs the Company.

18. Accuracy of Undersigned's Representations. The Undersigned represents that
the information and representations contained in this letter are true, correct
and complete.

Dated: ________________, 2005 [Closing Date]

                                                                 

Signature of Undersigned

                                                                 
Print Name of Undersigned

                                                                 
Address of Undersigned

                                                                 
Telephone no. of Undersigned

9

--------------------------------------------------------------------------------

Appendix "2"

INVESTMENT LETTER FROM RESIDENTS OF UNITED STATES

Douglas Lake Minerals Inc.
Suite 520 - 470 Granville Street
Vancouver, British Columbia
Canada V6C 1V5

Attention: President

Dear Sir:

In connection with the acquisition of _______________ shares of the common stock
(the "Securities") of Douglas Lake Minerals Inc. (the "Company") pursuant to an
asset sale and purchase agreement dated the 4th of August, 2005 between
Megadeposit Explorers Limited and the Company, the undersigned (the
"Undersigned"), hereby makes the following acknowledgements, representations and
warranties:

1. Residency. The Undersigned is resident in the jurisdiction set out under the
address of Undersigned on the signature page below, which address is the
ordinary residence or place of business of the Undersigned, and, if the
Undersigned is a corporate entity, it was not created nor is it used solely for
the purpose of acquiring the Securities.

2. Deemed Statutory Underwriter. The Subscriber acknowledges that if the
Subscriber acquires the Securities with a view to the distribution of the
Securities, or participates or has a direct or indirect participation in any
such undertaking, or participates or has a participation in the direct or
indirect underwriting of any such undertaking, the Subscriber may be deemed a
statutory underwriter under section 2(11) of the Securities Act of 1933, as
amended, (the "1933 Act").

3. Not an Underwriter. The Undersigned is not an underwriter of, or dealer in,
the common shares of the Company, nor is the Undersigned participating, pursuant
to a contractual agreement or otherwise, in the distribution of the Securities.

4. Investment Intent. The Undersigned is acquiring the Securities for investment
solely for his own account and not with a present view to any distribution,
transfer or resale to others, including any "distribution" within the meaning of
1933 Act or the securities laws of any state. The Undersigned understands that
the Securities have not and will not be registered under the 1933 Act by reason
of a specific exemption from the registration provisions of the 1933 Act, the
availability of which depends on, among other things, the bona fide nature of
the investment intent and the accuracy of the Undersigned's representations made
herein.

5. No Intention to Circumvent 1933 Act Registration Requirements. The current
structure of this transaction and all transactions and activities contemplated
hereunder is not a scheme to avoid the registration requirements of the 1933
Act.

6. Financial Ability. The Undersigned is financially able to bear the economic
risks of an investment in the Company and has no need for liquidity in this
investment. Furthermore, the financial capacity of the Undersigned is of such a
proportion that the total cost of the Undersigned's commitment is not material
when compared with his total committed capital. The Undersigned is financially
able to suffer a complete loss of this investment.

1

--------------------------------------------------------------------------------

7. Experience. The Undersigned acknowledges that he is a sophisticated investor,
having such knowledge and experience in financial and business matters in
general and with respect to investments of a nature similar to that evidenced by
the Securities so as to be capable, by reason of such knowledge and experience,
of evaluating the merits and risks of, and making an informed business decision
with regard to, and protecting his own interests in connection with, the
acquisition of the Securities, and fully understands the speculative nature of
the Securities.

8. Resale Restrictions. The Undersigned is aware that the Securities may not be
offered or re-sold in the United States without registration under the 1933 Act
or compliance with requirements of an exemption from registration and the
applicable laws of all applicable states and acknowledges that the Company has
no present intention of filing a registration statement under the 1933 Act in
respect of the Securities. The Undersigned undertakes and agrees that it will
not offer or re-sell any of the Securities to the public unless such securities
are registered under the 1933 Act and the securities laws of all applicable
states of the United States or an exemption from such registration requirements
is available, and pursuant to the applicable securities regulations of the
residence of the Undersigned, or pursuant to an available exemption from such
registration. Further that the Undersigned will not resell the Securities,
except in accordance with the provisions of applicable securities legislation,
regulations, rules, policies and orders and stock exchange rules.

9. Review of Public Documents. The Undersigned has had the opportunity to review
all filings made by the Company with the United States Securities and Exchange
Commission, available at the SEC's web site at www.sec.gov.

10. Limited Public Market. The Undersigned understands that Company's common
shares are quoted on the OTC Bulletin Board and there has been only a limited
public market for the Company's common shares. The Company has made no
assurances that the limited public market will continue. An active trading
market for the Company's common shares may not develop and the Undersigned may
not be able to resell the Securities at prices equal to or greater than the
price paid for the Securities. The market price of the Company's common shares
may decline as the result of announcements by the Company or its competitors,
variations in the Company's results of operations, and market conditions in the
mining industries in general.

11. Restricted Securities. The Undersigned acknowledges that the Securities have
not been registered under the 1933 Act and are "restricted securities" as that
term is defined in Rule 144 promulgated thereunder and may not be offered or
re-sold in the United States unless they are subsequently registered under the
1933 Act or an exemption from such registration is available. The certificates
evidencing the Securities will contain a legend substantially as follows:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED STOCK" AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO THE EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

12. Stock Transfer. The Undersigned is aware that stop-transfer instructions may
be given to the transfer agent of the common stock of the Company to prevent any
unauthorized or illegal transfer of the Securities.

13. Reliance for Exemptions. The Undersigned understands that the Securities are
being issued to him pursuant to exemptions from the registration requirements of
federal and applicable state

2

--------------------------------------------------------------------------------

securities laws and acknowledges that the Company is relying upon the
Undersigned's representations made herein as the basis for such exemptions. By
initialling against one of the paragraphs below, the Undersigned represents,
warrants and certifies that he complies with at least one of the following
conditions (if joint investors, both parties must initial):

(a) Accredited Investor. The Undersigned is an "accredited investor" within the
meaning of Regulation D of 1933 Act. Specifically, the Undersigned represents
and warrants that the Undersigned qualifies under the following category or
categories of "accredited investor" (INVESTOR MUST INDICATE THE APPLICABLE
CATEGORY OR CATEGORIES BY INITIALING EACH APPLICABLE SPACE BELOW; IF JOINT
INVESTORS, BOTH PARTIES MUST INITIAL):

(initial)

________ (i) the Undersigned is a director or executive officer of the Company;

________ (ii) the Undersigned is a natural person whose individual net worth, or
joint net worth with his or her spouse, at the date of the Agreement, exceeds
US$1,000,000;

________ (iii) the Undersigned is a natural person whose individual income
exceeded US$200,000 in each of the two most recent years, or whose joint income
with spouse exceeded US$300,000 in each of those years, and who reasonably
expects to receive at least the same level of income in the current year;

________ (iv) the Undersigned is an organization or entity in which all of the
equity owners consist solely of persons who meet the requirements specified in
(i), (ii) or (iii) above;

________ (v) the Undersigned is a trust, corporation or partnership with total
assets in excess of US$5,000,000 not formed for the specific purpose of
acquiring the Securities; or

________ (vi) the Undersigned is another type of "accredited investor" as that
term is defined in Regulation D, namely ___________________________________.

14. Additional Prospectus Exemptions for Offshore (Non-US and Non-Canadian)
Residents. If the Undersigned is resident outside of United States and Canada,
the Undersigned further represents and warrants to the Company (as
representations and warranties that are true as of the date of this Agreement
and as of the Closing Date (which representations and warranties shall survive
the applicable Closing Date), that:

(a) the Undersigned is knowledgeable of, or has been independently advised as to
the applicable securities laws of the securities regulatory authorities (the
"Authorities") having application in the jurisdiction in which the Undersigned
is resident (the "International Jurisdiction") which would apply to the
acquisition of the Securities, if any;

(b) the Undersigned is acquiring the Securities pursuant to exemptions from the
prospectus and registration requirements under the applicable securities laws of
the Authorities in the International Jurisdiction or, if such is not applicable,
the Undersigned is permitted to

3

--------------------------------------------------------------------------------

acquire the Securities under the applicable securities laws of the Authorities
in the International Jurisdiction without the need to rely on any exemption; and

(c) the applicable securities laws of the Authorities in the International
Jurisdiction do not require the Company to make any filings or seek any
approvals of any nature whatsoever from any Authority of any kind whatsoever in
the International Jurisdiction in connection with the issue and sale or resale
of the Securities.

15. Accuracy of Undersigned's Representations. The Undersigned represents that
the information and representations contained in this letter are true, correct
and complete.

Dated: ________________, 2005 [Closing Date]

                                                                 

Signature of Undersigned

                                                                 
Print Name of Undersigned

                                                                 
Address of Undersigned

                                                                 
Telephone no. of Undersigned

 

4

--------------------------------------------------------------------------------

Schedule "A"

Attached is a copy of Prospecting Licence Renewal No. 2957/2005 (Green Hills
South East)

 

 

--------------------------------------------------------------------------------

THE UNITED REPUBLIC OF TANZANIA

 

PROSPECTING LICENCE NO. PL2957/2005

GRANTED PURSUANT TO
SECTION 29 OF THE MINING ACT, 1998

WHEREAS M/S MEGADEPOSIT EXPLORERS LIMITED of P.O. Box 75092, DAR ES SALAAM has
fulfilled the conditions of grant of Prospecting Licence pursuant to Section 28
of the Mining Act, 1998;

I, Daniel N. Yuna (MP), Minister for Energy and Minerals subject to the
provisions of the Mining Act, 1998 and of the regulations thereunder now in
force, or which may come into force during the continuance of this licence, or
any renewal thereof and pursuant to the powers conferred upon me under Section
29 of the Mining Act, 1998, hereby grant M/S MEGADEPOSIT EXPLORERS LIMITED
(hereinafter called the licensee) Prospecting Licence with a preliminary
reconnaissance period for all minerals other than building materials and
gemstones over an area described in Annex "AR" (hereinafter called the Licence
Area) to carry on such operations and execute such works as are necessary for
that purpose.

This Prospecting Licence, unless sooner cancelled, suspended or surrendered
pursuant to the provisions of the Mining Act, 1998, shall be valid for a period
of twenty four (24) months effective from the date of grant.

Granted this 21 day of December, 2004.

 

 

 

/s/ Daniel N. Yona
Daniel N. Yona (MP)
MINISTER FOR ENERGY AND MINERALS

--------------------------------------------------------------------------------

 

PL 2957/2005

 

 

 

PRELIMINARY RECONNAISSANCE PERIOD

From
Date

To
Date

Prep. Fee
and Rent

ERV
Number

Date

Signature
of CM

21-12-2004

20-12-2005

TSH = 214084 =

20378792

29-11-2004

 

 

INITIAL PERIOD

I HEREBY CONSENT TO THE RENEWAL OF PROSPECTING LICENCE

NO. PL ...... of M/S ............................... of P.O. Box
............................

for the Licence Area described in Annex "A" and Conditions prescribed in

Annex "B" for the initial period of ......months

 

MINISTER FOR ENERGY AND MINERALS.

From
Date

To
Date

Prep. Fee
and Rent

ERV
Number

Date

Signature
of CM

           

 

FIRST RENEWAL

I HEREBY CONSENT TO THE FIRST RENEWAL OF PROSPECTING

LICENCE NO. PL ...... of M/S............................... of P.O. Box
...............

for the Licence Area described in Annex "A1" and Conditions prescribed in

Annex "B" for a period of ......months

MINISTER FOR ENERGY AND MINERALS.

From
Date

To
Date

Prep. Fee
and Rent

ERV
Number

Date

Signature
of CM

           

--------------------------------------------------------------------------------

 

PL 2957/2005

 

 

SECOND RENEWAL

I HEREBY CONSENT TO THE SECOND RENEWAL OF PROSPECTING

LICENCE NO. PL ...... of M/S ............................... of P.O. Box
............................

for the area described in Annex "A2" and Conditions prescribed in

Annex "B" for a period of ......months.

MINISTER FOR ENERGY AND MINERALS.

From
Date

To
Date

Prep. Fee
and Rent

ERV
Number

Date

Signature
of CM

           

--------------------------------------------------------------------------------

 

PL 2957/2005

ANNEX "AR"

 

 

DESCRIPTION OF THE LICENCE AREA

Subject to Section 95 of the Mining Act, 1998 the Licence Area is at M-Kilindi
area in Kiliadi District QDS 147/1 defined by lines of latitude and longitude
having the following corner coordinates:-

 

Corner

Latitude (S)

Longitude (E)

A

05 deg. 40 min. 30 sec

37 deg. 44 min. 00 sec

B

05 deg. 40 min. 30 sec

37 deg. 55 min. 00 sec

C

05 deg. 46 min. 00 sec

37 deg. 55 min. 00 sec

D

05 deg. 46 min. 00 sec

37 deg. 44 min. 00 sec

An area of approximately 206.8 square kilometres

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PL 2957/2005

ANNEX "B"

EMPLOYMENT AND TRAINING

1. The Licensee shall employ Tanzanian personnel with appropriate qualifications
to the maximum extent practicable consistent with efficient operations.

2. Subject to clause 1, the Licensee shall not be restricted in employment,
selection, assignment or discharge of its personnel provided, however, that the
employment and discharge or disciplining of personnel shall be carried in
accordance with the generally applicable laws and regulations of the United
Republic of Tanzania.

3. Subject to paragraph 1 and to the requirement of any law relating to
immigration, the Licensee and its sub-contractors may bring into Tanzania such
expatriate personnel as in the Licensee's judgement, required to carry out
mineral prospecting operations efficiently and successfully and the Government
shall expeditiously provide the necessary work permits and other approvals
required for the employment of such expatriate personnel.

 

 

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