EXHIBIT 10.1

ACQUISITION AGREEMENT
 
THIS AGREEMENT dated for reference the 28th day of October, 2009
 
BETWEEN:

Ironwood Gold Corp. 7047 E. Greenway Parkway #250
Scottsdale, AZ 85254
 
(the "Acquiror")
 
AND:
 
Kingsmere Mining Ltd., 73460 Desert Greens Drive
Palm Desert, CA 92260
 
("Kingsmere")
 
AND:
 
Ironwood Mining Corp. 73460 Desert Greens Drive
Palm Desert, CA  92260
 
(“Ironwood”)
 
WHEREAS:
 
A.                  Gold Canyon Partners, LLP (“Gold Canyon”) and Kingsmere
entered into an option agreement dated January 31, 2009, attached hereto as
Exhibit “A” (the “Option Agreement”) wherein Kingsmere acquired an exclusive
option to acquire from Gold Canyon an undivided 100% right, title and interest
in and to certain mineral claims known as the Cobalt Canyon Gold Project, in the
Chief District, located in Lincoln County, Nevada as set out in Schedule “A” of
the Option Agreement (the “Property”);
 
B.                   Kingsmere assigned to Ironwood Mining Corp. all of
Kingsmere's right, title and interest in and to the Option Agreement and the
Property in accordance with the terms of an assignment  agreement dated April
15, 2009 attached hereto as Exhibit “B” (the “Assignment Agreement”); and
 
C.                   The parties to the Option Agreement and the Assignment
Agreement consent to the acquisition by Ironwood Gold Corp. of such Agreements
in accordance with the terms of this Agreement.
 
NOW THEREFORE, in consideration of the sum of $10.00 now paid by Ironwood Gold
Corp. to the other parties (the receipt and sufficiency of which are hereby
acknowledged by the such parties), the parties to this Agreement covenant and
agree as follows:
 

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THE ASSIGNMENT AND ACCEPTANCE
 
1.                   Kingsmere hereby unconditionally forever assigns and
transfers to Ironwood Mining Corp. all of Kingsmere’s right, title and interest
in and to the Option Agreement and the Property and all benefits and advantages
to be derived therefrom.
 
2.                    Ironwood Mining Corp. hereby unconditionally forever
assigns and transfers to Ironwood Gold Corp. all of Ironwood Mining Corp.’s
right, title and interest in and to the Assignment Agreement and the Property
and all benefits and advantages to be derived therefrom.
 
3.                   Kingsmere and Ironwood Mining Corp. shall have obtained the
consent of Gold Canyon to the assignment and transfer of the Option Agreement
and Assignment Agreement.
 
THE CONSIDERATION
 
The consideration payable by the respective parties shall consist of:
 
4.
Ironwood Gold Corp. hereby agrees to issue 15,000,000 restricted shares of
common stock of Ironwood Gold Corp. (the “Consideration Shares”) to Ironwood
Mining Corp.

 
5.
Ironwood Gold Corp. hereby agrees to issue 1,000,000 restricted shares of common
stock of Ironwood Gold Corp. to each of each of Kingsmere and Gold Canyon for an
aggregate of 2,000,000 shares, which such parties acknowledge has been issued
prior to the date hereof.

 
6.
In consideration for the Assignment, Ironwood Gold Corp. hereby agrees to pay to
the Hogle Family Trust, owners of the claims comprising the Property, the
following amounts on or before the dates specified below:

 
 
(a)
$15,000 on or before May 1, 2009 (which has been paid and is to be reimbursed by
Ironwood Gold Corp. to the payor);

 
 
(b)
$20,000 on or before December 1, 2009;

 
 
(c)
$40,000 on or before December 1, 2010; and

 
 
(d)
$50,000 on or before December 1, 2011.

 
7.
In consideration for this Agreement, Ironwood Gold Corp. hereby agrees to pay to
Ironwood Mining Corp. $100,000 upon execution of this Agreement.

 
In addition to the foregoing payment, and also in consideration for this
Agreement, Ironwood Gold Corp. hereby agrees to pay to Ironwood Mining Corp.
$350,000 on or before December 15, 2009.
 
8.                   Upon receipt of the amounts specified in section 7 above,
Ironwood Mining Corp. shall within five (5) business day of receipt, pay such
amounts to Kingsmere.
 

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9.                    The parties hereby covenant and agree with each other that
the consideration payable in this Agreement shall replace all consideration
payable and any share issuances required in the Option Agreement or Assignment
Agreement, other than the required property expenditures under Section 4 of the
Option Agreement, which are hereby assumed by Ironwood Gold Corp.
 
10.                 Ironwood Gold Corp. agrees to all terms and conditions of
the Option Agreement and Assignment Agreement, except as modified by this
Agreement. This includes agreeing to make all royalty payments to Gold Canyon
and all required property expenditures as set out in the Option Agreement. 
 
11.                 Ironwood Gold Corp. represents and warrants to each of Gold
Canyon, Kingsmere and Ironwood, with the knowledge that they rely upon same in
entering into this Agreement, that:

 
 
(a)
it is duly incorporated and in good standing in its jurisdiction of
incorporation;

 
 
(b)
it has all requisite power and capacity, and has duly obtained all requisite
authorizations and performed all requisite acts, to enter into and perform its
obligations hereunder, it has duly executed and delivered this Agreement and
such constitutes a legal, valid and binding obligation of it enforceable against
it in accordance with the Agreement's terms, and the entering into of this
Agreement and the performance of their obligations hereunder does not and will
not result in a breach of, default under or conflict with any of the terms and
provisions of any of its constituting documents, any resolutions of their
partners, any indenture, agreement or other instrument to which they are a party
or by which they are bound or may be subject, or any statute, order, judgment or
other law or ruling of any competent authority;

 
 
(c)
the Consideration Shares to be issued to Ironwood Mining Corp. upon execution of
this Agreement will, upon issuance, have been duly and validly authorized and,
when issued, will be duly and validly issued, fully paid and non-assessable.

 
 
(d)
no proceedings are pending for, and Ironwood Gold Corp. is unaware of any basis
for, the institution of any proceedings leading to the placing of Ironwood Gold
Corp. in bankruptcy or subject to any other laws governing the affairs of
insolvent parties;

 
 
(e)
Ironwood Gold Corp. has completed such due diligence on the Property, the Option
Agreement and the Assignment Agreement as they have deemed necessary;

 
 
(f)
Ironwood Gold Corp. has furnished or made available to the other parties hereto
a true and complete copy of each report, schedule, registration statement and
proxy statement filed by Ironwood Gold Corp. with the SEC (collectively, and as
such documents have since the time of their filing been amended, the “Ironwood
Gold Corp. SEC Documents”). As of their respective dates, Ironwood Gold Corp.
SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933, or the Securities and Exchange Act of 1934, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Acquiror SEC Documents.  Ironwood Gold Corp. SEC Documents constitute all of the
documents and reports that Ironwood Gold Corp. was required to file with the SEC
pursuant to the Exchange Act and the rules and regulations promulgated there
under by the SEC;

 

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(g)
Ironwood Gold Corp.’s shares of common stock are currently quoted on the OTC
Bulletin Board and it has not, in the 12 months preceding the date hereof,
received any notice from the OTC Bulletin Board or FINRA or any trading market
on which Ironwood Gold Corp.’s common stock is or has been listed or quoted to
the effect that Ironwood Gold Corp. is not in compliance with the quoting,
listing or maintenance requirements of the OTCBB or such other trading market;
and

 
 
(h)
To the best knowledge of Ironwood Gold Corp., there is no claim, charge,
arbitration, grievance, action, suit, investigation or proceeding by or before
any court, arbiter, administrative agency or other governmental authority now
pending or, to the best knowledge of Ironwood Gold Corp., threatened against
Ironwood Gold Corp. which involves any of the business, or the properties or
assets of Ironwood Gold Corp. that, if adversely resolved or determined, would
have a material adverse effect on the business, operations, assets, properties,
prospects or conditions of Ironwood Gold Corp. taken as a whole (a “Acquiror
Material Adverse Effect”).  There is no reasonable basis for any claim or action
that, based upon the likelihood of its being asserted and its success if
asserted, would have such a Acquiror Material Adverse Effect.

 
12.                  Kingsmere and Ironwood Mining Corp., severally and not
jointly, represent and warrant to Ironwood Gold Corp., with the knowledge that
Ironwood Gold Corp. relies upon same in entering into this Agreement, that:
 
 
(a)
the mineral claims comprising the Property (as defined therein), the Option
Agreement, the Assignment Agreement, and the mineral agreements in respect
thereof have been, to the best of their knowledge and belief after due inquiry,
duly and validly located, granted, entered into and recorded, as the case may
be, pursuant to the laws of the jurisdiction in which the Property is situate
and are in each case in good standing with respect to all filings, fees,
rentals, taxes, assessments, work commitments and other obligations and
conditions on the date hereof and until the dates set opposite the respective
names;

 
 
(b)
they have all requisite power and capacity, and has duly obtained all requisite
authorizations and performed all requisite acts, to enter into and perform their
obligations hereunder, they have duly executed and delivered this Agreement and
such constitutes a legal, valid and binding obligation of them enforceable
against them in accordance with the Agreement's terms, and the entering into of
this Agreement and the performance of their obligations hereunder does not and
will not result in a breach of, default under or conflict with any of the terms
and provisions of any of their constituting documents, any resolutions of their
partners, any indenture, agreement or other instrument to which they are a party
or by which they are bound or the Property may be subject, or any statute,
order, judgment or other law or ruling of any competent authority;

 

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(c)
there are neither any adverse claims or challenges against, or to the ownership
or title to, any of the mineral claims comprising the Property or to the
validity or enforceability of any of the mineral agreements in respect thereof,
nor to the knowledge of the Assignors after due inquiry is there any basis
therefor, and there are no outstanding agreements, options or other rights and
interests to acquire or purchase the Property or any portion thereof or any
interest therein, and no person has any royalty or other interest whatsoever in
the production from any of the mineral claims comprising the Property or
otherwise;

 
 
(d)
the Option Agreement and Assignment Agreement are in good standing as at the
date hereof and no default has occurred therein that has not been cured;

 
 
(e)
the Assignors have the legal capacity and competence to enter into and execute
this Agreement and to take all actions required pursuant hereto and they are
duly incorporated and validly subsisting under the laws of its jurisdiction of
incorporation and all necessary approvals by their directors, shareholders and
others have been obtained to authorize execution and performance of this
Agreement on behalf of the Assignors; and

 
 
(f)
have furnished or made available to Ironwood Gold Corp. true and complete copies
of all mineral agreements, title reports, title insurance policies, personal
property filings, financing statements, real property filings, claims filings,
documents, agreements, memoranda, claims and reports that relate to the Property
and the mining claims thereon that are in their possession or control.

 
13.                  Ironwood Mining Corp. represents and warrants to Ironwood
Gold Corp., with the knowledge that Ironwood Gold Corp. relies upon same in
entering into this Agreement, that:
 
 
(a)
Ironwood Mining Corp.  is acquiring the Consideration Shares for Ironwood Mining
Corp.’s own account, and not directly or indirectly for the account of any other
person.  Ironwood Mining Corp.  is acquiring the Consideration Shares for
investment purposes only and not with a view to distribution or resale thereof
except in compliance with the Securities Act of 1933, as amended (the “Act”) and
any applicable state laws regulating securities;

 
 
(b)
Ironwood Mining Corp. has had the opportunity to ask questions of, and to
receive answers from, appropriate executive officers of Ironwood Gold Corp. with
respect to the terms and conditions of the acquisition of the Consideration
Shares contemplated hereby and with respect to the business, affairs, financial
condition and results of operations of Ironwood Gold Corp.  Ironwood Mining
Corp. has had access to such financial and other information as is necessary in
order for Ironwood to make a fully informed decision as to investment in
Ironwood Gold Corp., and has had the opportunity to obtain any additional
information necessary to verify any of such information to which Ironwood has
had access.

 

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(c)
Ironwood Mining Corp. understands that its acquisition of the Consideration
Shares is highly speculative in nature and is subject to a high degree of risk
of loss in whole or in part;

 
 
(d)
Ironwood Mining Corp. has either (i) a pre-existing relationship with Ironwood
Gold Corp. or one or more of its officers or directors consisting of personal or
business contacts of a nature and duration which enable it to be aware of the
character, business acumen and general business and financial circumstances of
Ironwood Gold Corp. or any such officer or director with whom such relationship
exists or (ii) such business or financial expertise as to be able to protect its
own interests in connection with the acquisition of the Consideration Shares.

 
 
(e)
Ironwood Mining Corp. understands and acknowledges that the Consideration Shares
are not registered under the Act, and that under the Act and other applicable
laws Ironwood Mining Corp. may be required to hold the Consideration Shares for
an indefinite period of time.  Each stock certificate representing the
Consideration Shares shall bear the following legend, as well as any other
legend that Ironwood Gold Corp. may reasonably determine is necessary or
appropriate:

 
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE
CORPORATION HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
 
14.                 The parties acknowledge that the transfer and sale of the
Option Agreement, and the transfer of the rights and obligations contained
therein, remains subject to the ratification of this Agreement by Gold Canyon,
which is to occur as soon as reasonably practicable, but in any event must occur
prior to December 1, 2009.  In the event Gold Canyon does not ratify this
Agreement by December 1, 2009, then this Agreement shall be automatically
terminated, all sums paid by Ironwood Gold Corp. shall be refunded, any and all
documents provided by a party shall be returned to that party, and the parties
shall have no further obligations under this Agreement.
 
15.                  The parties will at all times hereafter execute and
deliver, at the request of another party, all such further documents, deeds and
instruments, and will do and perform all such acts as may be necessary or
desirable to give full effect to the intent and meaning of this
Agreement.  Without limiting the generality of the foregoing, the Assignors will
execute such financing statements, financing change statements, notices or
directions as may be necessary or advisable to cause all pertinent offices of
public record to amend their records to show the interests of Ironwood Gold
Corp. in the Option Agreement and Assignment.
 
16.                  Each of the parties to this Agreement acknowledges that
such party has read this document and fully understands the terms of this
Agreement, and acknowledges that this Agreement has been executed voluntarily
after either receiving independent legal advice, or having been advised to
obtain independent legal advice and having elected not to do so
 

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17.                  This Agreement will enure to the benefit of the parties and
their respective successors and assigns, and will be binding upon the parties
and their successors and assigns.
 
18.                  This Agreement will be governed by and construed in
accordance with the laws in force in the State of Nevada and the parties submit
to the non-exclusive jurisdiction of the courts of State of Nevada in any
proceedings pertaining to the Assignment or this Agreement.
 
19.                 This Agreement may be executed in any number of counterparts
with the same effect as if all parties hereto had all signed the same
document.  All counterparts will be construed together and will constitute one
and the same agreement.
 
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.

Ironwood Mining Corp.
   
Per:
   
Authorized Signatory
   
Ironwood Gold Corp.
   
Per:
   
Authorized Signatory
   
Kingsmere Mining Ltd
   
Per:
   
Authorized Signatory

 
 

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Exhibit A

 
OPTION AGREEMENT
 
THIS AGREEMENT made effective as of the 31st day of January, 2009
 
BETWEEN:
 
Gold Canyon Partners, LLP, with an office at 75 – 5608 Hienaloli Road, #20
Kailua Kona, HI 96740
(the "Optionor")
 
OF THE FIRST PART
 
AND:
 
Kingsmere Mining Ltd., a company with an office at 73460 Desert Greens Drive,
Palm Desert, CA 92260
(the "Optionee")
OF THE SECOND PART
 
WHEREAS:
 
A.           The Optionor entered in to a letter of intent with the Optionee
dated January 5, 2009, pursuant to which the Optionee has the exclusive option
to acquire an undivided 100% right, title and interest in and to certain mineral
claims known as the Cobalt Canyon Gold Project, in the Chief District, located
in Lincoln County, Nevada (the "Property") as more particularly set out in
Schedule "A" hereto, subject only to the Royalty, on the terms and conditions
hereinafter set forth;
 
B.           Pursuant to the terms of the LOI, the Optionee will enter into an
agreement with Rodney Blakestad  to appoint Rodney Blakestad to the Optionee’s
board of directors and issue to Mr. Blakestad 50,000 shares in the capital stock
of the Optionee as soon as practicable following the effective date of this
Agreement and issue an additional 50,000 shares in the capital stock of the
Optionee on or before the second year anniversary of appointment to the board;
and
 
C.           Pursuant to the terms of the LOI, the Optionee will enter into an
agreement with Benjamin I. Collins to appoint Benjamin I. Collins to the
Optionee’s advisory board and issue to Mr. Collins 25,000 shares in the capital
stock of the Optionee as soon as practicable following the effective date of
this Agreement and issue an additional 25,000 shares in the capital stock of the
Optionee on or before the second year anniversary of appointment to the advisory
board;
 
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of
$10.00 now paid by the Optionee to the Optionor (the receipt and sufficiency of
which is hereby acknowledged), the parties agree as follows:
 

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1.
DEFINITIONS.  For the purposes of this Agreement the following words and phrases
shall have the following meanings, namely:

 
 
(a)
"Commencement of Commercial Production" means:

 
 
(i)
if a mill is located on the Property, the last day of a period of 40 consecutive
days in which, for not less than 30 days, the mill processed ore from the
Property at 60% of its rated concentrating capacity; or

 
 
(ii)
if a mill is not located on the Property, the last day of a period of 30
consecutive days during which ore, dore, or a product of mineral beneficiation
has been shipped from the Property on a reasonably regular basis for the purpose
of earning revenues,

 
but any period of time during which ore or concentrate is shipped from the
Property for testing purposes, or during which milling operations are undertaken
as initial tune-up, shall not be taken into account in determining the date of
Commencement of Commercial Production;
 
 
(b)
"Option" means the option to acquire an undivided 100% right, title and interest
in and to the Property as provided in this Agreement;

 
 
(c)
"Option Period" means the period from the date of this Agreement to and
including the date of exercise or termination of the Option;

 
 
(d)
"Property" means the mineral claims located in the Chief District, Lincoln
County, Nevada as more particularly set out in Schedule "A" hereto, including
any replacement or successor claims, and all mineral/mining leases and other
mining interests derived from any such claims.  Any reference herein to any
mineral claim comprising the Property includes any mineral/mining leases or
other interests into which such mineral claim may have been replaced or
converted;

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

 
 
(f)
"Royalty" means a royalty of 3.5% net smelter returns payable to the Optionor,
as more particularly set out in Schedule "B" hereto;

 
 
(g)
"Shares" means the common shares in the capital of the Optionee, as constituted
on the date hereof, to be issued to the Optionor pursuant to the exercise of the
Option.

 

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2.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONOR.

 
 
(a)
The Optionor represents and warrants to and covenants with the Optionee, with
the knowledge that the Optionee relies upon same in entering into this
Agreement, that:

 
 
(i)
it has been duly formed and validly exists in good standing with respect to the
filing of annual reports under the laws of its jurisdiction of formation;

 
 
(ii)
no proceedings are pending for, and it is unaware of any basis for the
institution of any proceedings leading to, its dissolution or winding up or
being placed into bankruptcy;

 
 
(iii)
it has all requisite power and capacity, and has duly obtained all requisite
authorizations and performed all requisite acts, to enter into and perform its
obligations hereunder, it has duly executed and delivered this Agreement and
such constitutes a legal, valid and binding obligation of it enforceable against
it in accordance with the Agreement's terms, and the entering into of this
Agreement and the performance of its obligations hereunder does not and will not
result in a breach of, default under or conflict with any of the terms and
provisions of any of its constituting documents, any resolutions of its
partners, any indenture, agreement or other instrument to which it is a party or
by which it is bound or the Property may be subject, or any statute, order,
judgment or other law or ruling of any competent authority;

 
 
(iv)
it is legally entitled to hold the Property and the Property Rights and will
remain so entitled until and always to the extent such is required for the due
transfer to the Optionee of its requisite interest in and to the Property
pursuant to and upon the exercise of the Option;

 
 
(v)
it is, and at the time of each transfer to the Optionee of an interest in and to
the Property pursuant to and upon the exercise of the Option it will be, the
beneficial owner of all right, title and interest in and to such transferred
interest, free and clear of all liens, charges, claims, liabilities and adverse
interests of any nature or kind, and no taxes or rentals are or will be due in
respect of the Property;

 
 
(vi)
the mineral claims comprising the Property and the mineral agreements in respect
thereof have been, to the best of the Optionor's knowledge and belief after due
inquiry, duly and validly located, granted, entered into and recorded, as the
case may be, pursuant to the laws of the jurisdiction in which the Property is
situate and are in each case in good standing with respect to all filings, fees,
rentals, taxes, assessments, work commitments and other obligations and
conditions on the date hereof and until the dates set opposite the respective
names thereof in Schedule "A" hereto;

 

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(vii)
there are neither any adverse claims or challenges against, or to the ownership
or title to, any of the mineral claims comprising the Property or to the
validity or enforceability of any of the mineral agreements in respect thereof,
nor to the knowledge of the Optionor after due inquiry is there any basis
therefor, and there are no outstanding agreements, options or other rights and
interests to acquire or purchase the Property or any portion thereof or any
interest therein, and no person has any royalty or other interest whatsoever in
the production from any of the mineral claims comprising the Property or
otherwise;

 
 
(viii)
it holds all surface rights in respect of the Property which are necessary or
desirable to conduct the exploration and development thereof, including but not
limited to the activities contemplated in Section 6 hereof; and

 
 
(ix)
the Property is not the whole or substantially the whole of the undertaking of
the Optionor.

 
 
(b)
The representations and warranties contained in this section are provided for
the exclusive benefit of the Optionee, and a breach of any one or more thereof
may be waived by the Optionee in whole or in part at any time without prejudice
to its rights in respect of any other breach of the same or any other
representation or warranty, and the representations and warranties contained in
this section shall survive the execution and performance of this Agreement and
of any transfers, assignments, deeds or further documents or acts of the parties
respecting the Property.

 
3.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONEE.

 
 
(a)
The Optionee represents and warrants to and covenants with the Optionor, with
the knowledge that the Optionor relies upon same in entering into this
Agreement, that:

 
 
(i)
it has been duly incorporated, amalgamated or continued and validly exists as a
corporation in good standing with respect to the filing of annual reports under
the laws of its jurisdiction of incorporation, amalgamation or continuation;

 
 
(ii)
no proceedings are pending for, and it is unaware of any basis for the
institution of any proceedings leading to, its dissolution or winding up or
being placed into bankruptcy or subject to any other laws governing the affairs
of insolvent corporations;

 
 
(iii)
it has all requisite corporate power and capacity, and has duly obtained all
requisite corporate authorizations and performed all requisite corporate acts,
to enter into and perform its obligations hereunder, it has duly executed and
delivered this Agreement and such constitutes a legal, valid and binding
obligation of it enforceable against it in accordance with the Agreement's
terms, and the entering into of this Agreement and the performance of its
obligations hereunder does not and will not result in a breach of, default under
or conflict with any of the terms and provisions of any of its constituting
documents, any resolutions of its shareholders or directors, any indenture,
agreement or other instrument to which it is a party or by which it is bound or
the Property may be subject, or any statute, order, judgment or other law or
ruling of any competent authority applicable to it; and

 

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(iv)
it is lawfully authorized to hold mineral claims and real property under the
laws of the jurisdiction in which the Property is situate.

 
 
(b)
The representations and warranties contained in this section are provided for
the exclusive benefit of the Optionor, and a breach of any one or more thereof
may be waived by the Optionor in whole or in part at any time without prejudice
to its rights in respect of any other breach of the same or any other
representation or warranty, and the representations and warranties contained in
this section shall survive the execution hereof.

 
4.
GRANT AND EXERCISE OF OPTION.

 
 
(a)
The Optionor hereby grants to the Optionee the sole and exclusive right and
option to acquire up to an undivided 100% right, title and interest in and to
the Property, free and clear of all charges, encumbrances, claims, liabilities
and adverse interests of any nature or kind, except for the Royalty.

 
 
(b)
The Option shall be in good standing and exercisable by the Optionee by paying
the following amounts on or before the dates specified in the following
schedule:

 
 
(i)
paying the Optionor $45,000USD upon the execution of this Agreement and issuing
to the Optionor 1,000,000 shares in the capital stock of the Optionee as soon as
practicable following the effective date of the Agreement;

 
 
(ii)
paying the Optionor $30,000USD on or before the first anniversary of the
execution of this Agreement;

 
 
(iii)
paying the Optionor $40,000USD on or before the second anniversary of the
execution of this Agreement;

 
 
(iv)
paying the Optionor $50,000USD on or before the third anniversary of the
execution of this Agreement;

 
 
(v)
paying the Optionor $75,000USD on or before the fourth anniversary of the
execution of this Agreement;

 
 
(vi)
paying the Optionor $75,000USD on or before each subsequent anniversary of the
execution of this Agreement for so long as the option is good standing, with
such payments being treated as advance royalty payments to be applied against
any Royalty payable; and

 

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(vii)
paying all property payments, including the federal unpatented claims and
patented claims.

 
 
(c)
The Optionee shall use commercially reasonable efforts to incur the following
annual work commitments as currently recommended and agreed to by the parties:

 
 
(i)
exploration expenditures on the Property of $250,000USD on or before the first
anniversary of the execution of this Agreement;

 
 
(ii)
exploration expenditures on the Property of $350,000USD on or before the second
anniversary of the execution of this Agreement;

 
 
(iii)
exploration expenditures on the Property of $400,000USD on or before the third
anniversary of the execution of this Agreement; and

 
 
(iv)
exploration expenditures on the Property of a minimum of $250,000USD on or
before the fourth through the tenth anniversaries of the execution of this
Agreement.

 
In the event that the Optionee spends, in any period, more than the specified
sum, the excess shall be carried forward and applied to the exploration
expenditures to be incurred in the succeeding period.
 
 
(d)
The Optionor acknowledges and agrees that the Shares will be subject to hold
periods and restrictions on resale in accordance with applicable securities laws
and it is the Optionor's responsibility to determine what those hold periods and
restrictions are before selling or otherwise transferring any Shares.

 
5.
TRANSFER OF PROPERTY.

 
 
(a)
Concurrently with the execution of this Agreement, the Optionor shall deliver to
the Optionee duly executed transfers of the appropriate interest in the Property
which shall be acquired by the Optionee upon exercise of the Option.

 
 
(b)
The Optionee shall be entitled to record such transfers at its own cost with the
appropriate government office to effect legal transfer of such interest in the
Property into the name of the Optionee, provided that the Optionee shall hold
such interest in the Property subject to the terms of this Agreement, it being
understood that the transfer of such legal title to the Optionee prior to the
exercise of the Option is for administrative convenience only.

 
6.
RIGHT OF ENTRY.  Throughout the Option Period, the Optionee and its directors,
officers, employees, servants, agents and independent contractors, shall have
the sole and exclusive right in respect of the Property to:

 

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- 14 -
 
 
(a)
enter thereon;

 
 
(b)
have exclusive and quiet possession thereof;

 
 
(c)
do such prospecting, exploration, development and other mining work thereon and
thereunder as the Optionee in its sole discretion may determine advisable;

 
 
(d)
bring upon and erect upon the Property such buildings, plant, machinery and
equipment as the Optionee may deem advisable; and

 
 
(e)
remove therefrom and dispose of reasonable quantities of ores, minerals and
metals for the purposes of obtaining assays or making other tests.

 
7.
OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD.  During the Option Period, the
Optionee shall:

 
 
(a)
maintain in good standing those mineral claims comprising the Property by the
doing and filing of assessment work or the making of payments in lieu thereof,
by the payment of taxes and rentals, and the performance of all other actions
which may be necessary in that regard and in order to keep such mineral claims
free and clear of all liens and other charges arising from the Optionee's
activities thereon except those at the time contested in good faith by the
Optionee;

 
 
(b)
duly record all exploration work carried out on the Property by the Optionee as
assessment work;

 
 
(c)
following commencement of exploration activities, provide the Optionor quarterly
reports on all exploration and drilling work carried out on the Property and
regularly transfer exploration data;

 
 
(d)
permit the partners, employees and designated consultants of the Optionor, at
their own risk and expense, access to the Property at all reasonable times, and
the Optionor agrees to indemnify the Optionee against and to save it harmless
from all costs, claims, liabilities and expenses that the Optionee may incur or
suffer as a result of any injury (including injury causing death) to any
partner, employee or designated consultant of the Optionor while on the
Property;

 
 
(e)
do all work on the Property in a good and workmanlike fashion and in accordance
with all applicable laws, regulations, orders and ordinances of any governmental
authority;

 
 
(f)
indemnify and save the Optionor harmless in respect of any and all costs,
claims, liabilities and expenses arising out of the Optionee's activities on the
Property, but the Optionee shall incur no obligation hereunder in respect of any
such costs, claims, liabilities and expenses arising or damages suffered after
termination of the Option if upon termination of the Option any workings on or
improvements to the Property made by the Optionee are left in a safe condition
and in full compliance with requirements of all environmental laws and
regulations;

 

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- 15 -
 
 
(g)
permit the Optionor, at its own expense, reasonable access to the results of the
work done on the Property during the last completed calendar year;

 
 
(h)
deliver to the Optionor, forthwith upon receipt thereof, copies of all reports,
maps, assay results and other technical data compiled by or prepared at the
direction of the Optionee with respect to the Property.

 
The Optionor acknowledges and agrees that all technical and other information
concerning the Property provided by the Optionee to it, directly or indirectly,
shall be treated as confidential information, and it shall not copy, transmit or
otherwise disclose, disseminate or use such information, including but not
limited to use in violation of insider trading and other provisions of
applicable securities laws, without the express written consent of the Optionee.
 
8.
TERMINATION OF OPTION.

 
 
(a)
The Option shall terminate:

 
 
(i)
subject to paragraph 16 hereof, upon the Optionee failing to make any payment or
issuance of Shares which must be made or issued in exercise of the Option;

 
 
(ii)
subject to paragraph 16 hereof, upon the Optionee failing to remedy a default as
provided therein; or

 
 
(iii)
at any other time, by the Optionee giving a minimum of sixty (60) days notice of
such termination to the Optionor.  In the event that the Optionee provides such
notice less than sixty (60) days prior to September 1st of any year, the
Optionee shall pay all claim maintenance fees and lease payments for such year.

 
 
(b)
If the Option is terminated otherwise than upon the exercise thereof, the
Optionee shall:

 
 
(i)
leave in good standing, for a period of at least 12 months from the termination
of the Option Period, those mineral claims comprising the Property, to the
extent allowable by the laws of the jurisdiction in which the Property is
situate;

 
 
(ii)
deliver or make available at no cost to the Optionor, within 90 days of such
termination, all drill core, copies of all reports, maps, assay results and
other relevant technical data compiled by, prepared at the direction of, or in
the possession of the Optionee with respect to the Property and not theretofore
furnished or made available to the Optionor;

 
 
(iii)
reclaim the Property in accordance with the requirements of all applicable
environmental laws and regulations, but only to the extent that such
requirements result from the Optionee's activities on the Property hereunder.

 

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- 16 -
 
 
(c)
If the Option is terminated otherwise than upon the exercise thereof, the
Optionee shall have the right, within a period of 180 days following the end of
the Option Period, to remove from the Property all buildings, plant, equipment,
machinery, tools, appliances and supplies which have been brought upon the
Property by or on behalf of the Optionee, and any such property not removed
within such 180 day period shall thereafter become the property of the Optionor.

 
9.
ROYALTY.

 
 
(a)
Upon the Commencement of Commercial Production, the Optionee shall pay to the
Optionor the NSR Royalty, being equal to 3.5% of Net Smelter Returns, on the
terms and conditions as set out in this paragraph and in Schedule "B" hereto.

 
 
(b)
Installments of the NSR Royalty payable shall be paid by the Optionee to the
Optionor immediately upon the receipt by the Optionee of the payment from the
smelter, refinery or other place of treatment of the proceeds of sale of the
minerals, ore, concentrates or other product from the Property.

 
 
(c)
Within 120 days after the end of each fiscal year, commencing with the year in
which Commencement of Commercial Production occurs, the accounts of the Optionee
relating to operations on the Property and the statement of operations, which
shall include the statement of calculation of NSR Royalty for the year last
completed, shall be audited by the auditors of the Optionee at its expense.  The
Optionor shall have 45 days after receipt of such statements to question the
accuracy thereof in writing and, failing such objection, the statements shall be
deemed to be correct and unimpeachable thereafter.

 
 
(d)
If such audited financial statements disclose any overpayment of NSR Royalty by
the Optionee during the fiscal year, the amount of the overpayment shall be
deducted from future installments of NSR Royalty payable.

 
 
(e)
If such audited financial statements disclose any underpayment of NSR Royalty by
the Optionee during the year, the amount thereof shall be paid to the Optionor
forthwith after determination thereof.

 
 
(f)
The Optionee agrees to maintain for each mining operation on the Property,
up-to-date and complete records relating to the production and sale of minerals,
ore, bullion and other product from the Property, including accounts, records,
statements and returns relating to treatment and smelting arrangements of such
product, and the Optionor or its agents shall have the right at all reasonable
times, including for a period of 12 months following the expiration or
termination of this Agreement, to inspect such records, statements and returns
and make copies thereof at its own expense for the purpose of verifying the
amount of NSR Royalty payments to be made by the Optionee to the Optionor
pursuant hereto.  The Optionor shall have the right to have such accounts
audited by independent auditors at its own expense once each fiscal year.

 

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- 17 -
 
 
(g)
On or before four (4) years from date of execution of this Agreement, the
Optionee can acquire up to one and one-half percent (1.5%) of the NSR Royalty
from the Optionor for $500,000 per one-half percent (0.5%).

 
10.
POWER TO CHARGE PROPERTY.  The Optionor shall not grant or permit to exist any
liens, charges or mortgages (collectively referred to as an "encumbrance") upon
the property or any portion thereof.  At any time after the Optionee has
exercised the Option, in whole or in part, the Optionee may grant encumbrances
upon the Property or any portion thereof, upon any mill or other fixed assets
located thereon, and upon any or all of the tangible personal property located
on or used in connection with the Property, to secure financing for the
development of the Property, always provided that, unless otherwise agreed to by
the Optionor, it shall be a term of each encumbrance that the encumbrance or
other person acquiring title to the Property upon enforcement of the encumbrance
shall hold the same subject to the Royalty as if the encumbrance or such other
person had executed this Agreement.

 
11.
TRANSFERS.  The Optionee may at any time either during the Option Period or
thereafter, sell, transfer or otherwise dispose of all or any portion of its
interest in and to the Property and this Agreement provided that any purchaser,
transferee or recipient of any such interest shall have first delivered to the
Optionor a written agreement to be bound by the terms of this Agreement.

 
12.
SURRENDER OF PROPERTY INTERESTS PRIOR TO TERMINATION OF AGREEMENT.  The Optionee
may at any time during the Option Period elect to abandon any one or more of the
mineral claims comprised in the Property by giving notice to the Optionor of
such intention.  Any claims so abandoned shall be in good standing under the
laws of the jurisdiction in which they are situate for at least 12 months from
the date of abandonment.  Upon any such abandonment, the mineral claims so
abandoned shall for all purposes of this Agreement cease to form part of the
Property and, if title to such claims has been transferred to the Optionee, the
Optionee shall retransfer such title to the Optionor at the Optionee's expense.

 
13.
FORCE MAJEURE.

 
 
(a)
If the Optionee is at any time either during the Option Period or thereafter
prevented or delayed in complying with any provisions of this Agreement by
reason of strikes, lock-outs, labour shortages, power shortages, fuel shortages,
fires, wars, acts of God, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons, other than lack of
funds, beyond the control of the Optionee, the time limited for the performance
by the Optionee of its obligations hereunder shall be extended by a period of
time equal in length to the period of each such prevention or delay, but nothing
herein shall discharge the Optionee from its obligations hereunder to maintain
the Property in good standing;

 

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- 18 -
 
 
(b)
The Optionee shall give prompt notice to the Optionor of each event of force
majeure and upon cessation of such event shall furnish to the Optionor with
notice to that effect together with particulars of the number of days by which
the obligations of the Optionee hereunder have been extended by virtue of such
event of force majeure and all preceding events of force majeure.

 
 
(c)
After the Commencement of Commercial Production, the Optionee shall work, mine
and operate the Property during such time or times as the Optionee in its sole
judgment considers such operations to be profitable. The Optionee may suspend or
curtail operations, both before and after Commencement of Commercial Production,
during periods when the products derived from the Property cannot be profitably
sold at prevailing prices or if an unreasonable inventory thereof, in the
Optionee's sole judgment, has accumulated or would otherwise accumulate.

 
14.
CONFIDENTIAL INFORMATION.  No information furnished by the Optionee to the
Optionor hereunder in respect of the activities carried out on the Property by
the Optionee, or related to the sale of minerals, ore, bullion or other product
derived from the Property, shall be published or disclosed by the Optionor
without the prior written consent of the Optionee, but such consent in respect
of the reporting of factual data shall not be unreasonably withheld, and shall
not be withheld in respect of information required to be publicly disclosed
pursuant to applicable securities or corporation laws, regulations or policies.

 
15.
ARBITRATION.

 
 
(a)
All questions or matters in dispute under this Agreement shall be submitted to
arbitration pursuant to the terms hereof.

 
 
(b)
It shall be a condition precedent to the right of any party to submit any matter
to arbitration pursuant to the provisions hereof, that any party intending to
refer any matter to arbitration shall have given not less than 10 days' prior
notice of its intention to do so to the other party, together with particulars
of the matter in dispute.  On the expiration of such 10 days, the party who gave
such notice may proceed to refer the dispute to arbitration as provided in
paragraph (c).

 
 
(c)
The party desiring arbitration shall appoint one arbitrator, and shall notify
the other party of such appointment, and the other party shall, within 15 days
after receiving such notice, either consent to the appointment of such
arbitrator which shall then carry out the arbitration or appoint an arbitrator,
and the two arbitrators so named, before proceeding to act, shall, within 30
days of the appointment of the last appointed arbitrator, unanimously agree on
the appointment of a third arbitrator to act with them and be chairman of the
arbitration herein provided for. If the other party shall fail to appoint an
arbitrator within 15 days after receiving notice of the appointment of the first
arbitrator, the first arbitrator shall be the only arbitrator.  If the two
arbitrators appointed by the parties shall be unable to agree on the appointment
of the chairman, the chairman shall be appointed under the provisions of the
Commercial Arbitration Act of British Columbia.  Except as specifically
otherwise provided in this section, the arbitration herein provided for shall be
conducted in accordance with such Act.  The chairman, or in the case where only
one arbitrator is appointed, the single arbitrator, shall fix a time and place
in Vancouver, British Columbia, for the purpose of hearing the evidence and
representations of the parties, and he shall preside over the arbitration and
determine all questions of procedure not provided for under such Act or this
section.  After hearing any evidence and representations that the parties may
submit, the single arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing, and deliver one copy thereof to
each of the parties.  The expense of the arbitration shall be paid as specified
in the award.

 

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- 19 -
 
 
(d)
The parties agree that the award of a majority of the arbitrators, or in the
case of a single arbitrator, of such arbitrator, shall be final and binding upon
each of them.

 
16.
DEFAULT.  If at any time during the Option Period, the Optionee is in default of
any material provision in this Agreement, the Optionor may terminate this
Agreement, but only if:

 
 
(a)
it shall have first given to the Optionee a notice of default containing
particulars of the obligation which the Optionee has not performed, or the
warranty breached; and

 
 
(b)
the Optionee has not, within 60 days following delivery of such notice of
default, cured such default or commenced proceedings to cure such default by
appropriate payment or performance, the Optionee hereby agreeing that should it
so commence to cure any default it will prosecute the same to completion without
undue delay.

 
Should the Optionee fail to comply with the provision of subparagraph (b), the
Optionor may thereafter terminate this Agreement by giving notice thereof to the
Optionee, always provided that the default in question has not been cured or
substantially cured at the time of the Optionee giving such notice of
termination.
 
17.
NOTICES.  Each notice, demand or other communication required or permitted to be
given under this Agreement shall be in writing and shall be delivered or
telecopied to such party at the address for such party specified above.  The
date of receipt of such notice, demand or other communication shall be the date
of delivery thereof if delivered or, if given by telecopier (with electronic
confirmed receipt), shall be deemed conclusively to be the next business
day.  Either party may at any time and from time to time notify the other party
in writing of a change of address and the new address to which notice shall be
given to it thereafter until further change.

 
18.
GENERAL.

 
 
(a)
This Agreement shall supersede and replace any other agreement or arrangement,
whether oral or written, heretofore existing between the parties in respect of
the subject matter of this Agreement.

 

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- 20 -
 
 
(b)
No consent or waiver expressed or implied by either party in respect of any
breach or default by the other in the performance by such other of its
obligations hereunder shall be deemed or construed to be a consent to or a
waiver of any other breach or default.

 
 
(c)
The parties shall promptly execute or cause to be executed all documents, deeds,
conveyances and other instruments of further assurance and do such further and
other acts which may be reasonably necessary or advisable to carry out fully the
intent of this Agreement or to record wherever appropriate the respective
interest from time to time of the parties in the Property.

 
 
(d)
This Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns.

 
 
(e)
This Agreement shall be governed by and construed in accordance with the laws of
British Columbia.

 
 
(f)
Time shall be of the essence in this Agreement.

 
 
(g)
Wherever the neuter and singular is used in this Agreement it shall be deemed to
include the plural, masculine and feminine, as the case may be.

 
19.
AREA OF MUTUAL INTEREST.

 
 
(a)
The parties hereby agree that each and every mineral claim (including internal
fractions) or interest therein which they may stake or otherwise acquire during
the currency of this Agreement and which lies in whole or in part within one
mile from the outside perimeter of the Property, or which is contiguous to such
claims which are otherwise within this area of mutual interest, shall at the
option of the other party form a part of the Property.  Any party shall, upon
acquisition of any such additional claims or interests, forthwith give notice to
the other party of same and thereafter the other party shall have thirty days
from the date on which the Option is fully exercised within which to give notice
of its desire to have such additional claims or interests form part of the
Property and to pay to the other party their proportionate share of acquisition
costs.  The other party shall be responsible to pay its proportionate share of
costs of acquiring the additional claims or interests in accordance with its
interest in the Property.  All title to such additional claims or interests
shall be held subject to the terms of this Agreement.

 
 
(b)
Paragraph (a) shall cease to operate if and when the Optionee loses its right to
exercise the Option in full.

 
 

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- 21 -
 
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.

SIGNED AND DELIVERED BY
Gold Canyon Partners, LLP
   
Per:
   
ss: “Ben Collins”
 
Authorized Signatory
   
SIGNED AND DELIVERED BY
Kingsmere Mining Ltd.
   
Per:
   
ss: “Cam Watt”
 
Authorized Signatory

 
 

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- 22 -
 
 SCHEDULE "B"
 
Definition of Net Smelter Returns
 
1.           For the purposes of this Agreement, the term "Net Smelter Returns"
shall mean the net proceeds actually paid to the Optionee from the sale by the
Optionee of minerals mined and removed from the Property, after deduction of the
following:
 
 
(a)
smelting costs, treatment charges and penalties including, but not being limited
to, metal losses, penalties for impurities and charges for refining, selling and
handling by the smelter, refinery or other purchaser; provided, however, in the
case of leaching operations or other solution mining or beneficiation
techniques, where the metal being treated is precipitated or otherwise directly
derived from such leach solution, all processing and recovery costs incurred by
the Optionee, beyond the point at which the metal being treated is in solution,
shall be considered as treatment charges;

 
 
(b)
costs of handling, transporting and insuring ores, minerals and other materials
or concentrates from the Property or from a concentrator, whether situated on or
off the Property, to a smelter, refinery or other place of treatment; and

 
(c)           ad valorem taxes and taxes based upon production, but not income
taxes.
 
2.           In the event the Optionee commingles minerals from the Property
with minerals from other properties, the Optionee shall establish procedures, in
accordance with sound mining and metallurgical techniques, for determining the
proportional amount of the total recoverable metal content in the commingled
minerals attributable to the input from each of the properties by calculating
the same on a metallurgical basis, in accordance with sampling schedules and
mining efficiency experience, so that production royalties applicable to
minerals produced from the Property may reasonably be determined.

 
 

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