EXPLORATION AGREEMENT AND OPTION

THIS EXPLORATION AGREEMENT AND OPTION (“Agreement”) is dated and effective this
9th day of July, 2015 (“Effective Date”) by and between LKA GOLD INCORPORATED, a
Delaware corporation (“LKA”) and KINROSS GOLD U.S.A, INC., a Nevada corporation
(“Kinross”).

RECITALS

A.           LKA owns those patented mining claims described in Part 1 of
Exhibit A hereto, which are situated in Hinsdale County, Colorado (“Patented
Claims”).  LKA also owns those unpatented mining claims described in Part 2 of
Exhibit A hereto, which are situated in Hinsdale County, Colorado (“Unpatented
Claims”). The Patented Claims and Unpatented Claims are collectively referred to
herein as the “Property.”

B.           LKA is currently conducting mineral exploration, development and
mining activities on a portion of the Property described in Exhibit B hereto
(“Carve-Out Area”).  The portion of the Property that is not included within the
Carve-Out Area is referred to herein as the “Exploration Property.”

C.           LKA and Kinross desire to provide for the exploration, development
and mining of minerals on and in the Property pursuant to the terms of this
Agreement.

THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, LKA and Kinross agree as follows:

TERMS OF AGREEMENT

1.           Grant.

(a)           LKA grants to Kinross, for so long as this Agreement is in effect,
the exclusive right to prospect and explore for Minerals on and in the
Exploration Property and to use, occupy, excavate and disturb so much of the
surface and subsurface of the Exploration Property as is reasonably necessary
and convenient in exploring and prospecting for Minerals, subject to the terms
of this Agreement.  For purposes of this Agreement, “Minerals” shall mean any
and all metals, minerals, ores and mineral rights of whatever kind and nature
that are included in the Property.

(b)           Without limiting the scope of the grant under Section 1(a), LKA
grants to Kinross the exclusive right: (i) to prospect and explore for Minerals
by any method now known or hereafter discovered, and the right to use any water
rights appurtenant to the Property for such purposes; (ii) to erect, construct,
maintain, and operate, on and in the Exploration Property, buildings,
structures, facilities, roads, machinery, and equipment, and to use, occupy,
excavate, and disturb so much of the Exploration Property as Kinross may
reasonably determine to be useful, desirable, or convenient, (iii) to stockpile,
deposit or store on the Exploration Property any waste, water or other materials
related to Mineral prospecting or exploration, and (iv) to use and improve all
roads, access routes and access rights running with LKA’s rights or title in the
Property.
 
 
 
- 1 -

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

 
(c)           LKA further grants to Kinross the nonexclusive right to access
across and through the Carve-Out Area for purposes of prospecting and exploring
for Minerals, including, but not limited to, drilling through the Carve-Out Area
to reach targets within the Exploration Property.  Kinross shall have the right
to use the surface and subsurface of the Carve-Out Area and any shafts, roads,
access routes, openings, and underground workings sunk or made on or within the
Carve-Out Area for the prospecting and exploration of any Minerals. If Kinross
encounters or identifies any Minerals within the Carve-Out Area not previously
encountered and identified by LKA and confirmed through exploratory mining or
drilling as a result of its prospecting or exploration activities, Kinross shall
have the exclusive right to further explore and define those Minerals, and to
include those Minerals in any mineral resource determination pursuant to Section
6(a) below, and LKA shall have no rights to explore for, develop or mine any
Minerals that were encountered or identified by Kinross. LKA reserves the right
to conduct mineral exploration, development and mining activities within the
Carve-Out Area, in accordance with this Section and the other terms of this
Agreement.

(d)           LKA and Kinross recognize that allowing Kinross to drill and
conduct other exploration activities from within existing mine workings in the
Carve-Out Area will be beneficial to both parties and may promote the
identification of Mineral resources on or within the Property. LKA and Kinross
shall coordinate the planning and conduct of their respective activities within
the Carve-Out Area so as to minimize any interference with each other’s
activities. If there is a conflict between Kinross’s and LKA’s use of the
Carve-Out Area, Kinross shall undertake reasonable alternative measures to
accommodate LKA’s uses.

(e)           LKA may access across the Exploration Property to the extent such
access is reasonably necessary to support LKA’s mineral exploration, development
and mining activities in the Carve-Out area.  LKA shall provide Kinross advance
notice of any proposed uses within the Exploration Property, and LKA shall
undertake reasonable alternative measures to accommodate Kinross’s uses of the
Exploration Property.

2.           Term.  Unless earlier terminated pursuant to the provisions of this
Agreement, the term of this Agreement shall be for five (5) years from the
Effective Date hereof, unless Kinross provides a Resource Notice within such
five year period pursuant to Section 6(a) below, in which case this Agreement
shall continue in effect until (i) a final Venture Agreement is executed by the
parties pursuant to Section 6(d), in the event LKA exercises the Venture Option,
or (ii) completion of the Closing pursuant to Section 6(f) below.

 
- 2 -

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

 
3.           Conduct of Operations.

(a)           All activities carried out by or on behalf of Kinross under this
Agreement shall materially conform to all applicable Laws.  Kinross will apply
for any government permits required to conduct Kinross’s operations and will
post any bonds or other financial assurances required by Laws.  LKA will
cooperate with Kinross’s efforts to obtain any required permits or other
government approvals. For purposes of this Agreement, the term “Laws” shall mean
applicable common law and any statute, ordinance, code or other law, rule,
regulation, order, requirement, or procedure enacted, adopted, promulgated,
applied, or followed by any federal, state or local governmental authority with
jurisdiction over the Property or activities conducted on the Property.

(b)           In conducting any activities within the Carve-Out Area in areas or
mine workings that are being operated by LKA, Kinross shall comply with LKA’s
reasonable safety rules and worker safety training procedures.  LKA makes no
representation or warranty with respect to the suitability of any existing
workings for Kinross’ use or the safety or security of any such workings and
such workings are made available for Kinross’ use on an “AS IS/WHERE IS”
basis.  Before using any existing mine workings in the Carve-Out Area, Kinross
shall inspect such workings and undertake such activities as Kinross deems
necessary to make such workings safe and secure for its use.  Kinross will be
solely responsible for the safety of its employees, contractors, subcontractors,
guests or invitees within such workings and shall indemnify, defend, release and
hold harmless LKA with respect to any claim made by Kinross or any of its
employees, contractors, subcontractors, guests or invitees as a result of any
damage to property or injury to Kinross’ employees, contractors, subcontractors,
guests or invitees, except to the extent that such claim, injury or damage is a
result of the willful misconduct or gross negligence of LKA or its employees,
contractors or subcontractors.

(c)           Kinross shall conduct all activities on the Property in a good and
workman-like manner in accordance with generally accepted mineral exploration
practices.

(d)           Kinross shall provide to LKA a copy of any governmental permit
application relating to activities conducted by Kinross on the Property prior to
submission to the applicable governmental entity, and LKA shall have ten (10)
days to provide comments to Kinross, which comments, if any, Kinross will
consider prior to submitting the application to the agency.  Kinross shall
provide LKA copies of any other formal written correspondence or notices sent to
or received from any governmental agency having jurisdiction over the Property
that relates to Kinross’s activities on the Property.

(e)           All activities carried out by or on behalf of LKA on or within the
Carve-Out Area or Exploration Property shall materially conform to all
applicable Laws.  LKA will apply for any government permits required to conduct
LKA’s operations and will post any bonds or other financial assurances required
by Laws.  LKA shall provide to Kinross a copy of any governmental permit
application relating to activities conducted by LKA on the Property prior to
submission to the applicable governmental entity, and Kinross shall have ten
(10) days to provide comments to LKA, which comments, if any, LKA will consider
prior to submitting the application to the agency.  LKA shall provide Kinross
copies of any other formal written correspondence or notices sent to or received
from any governmental agency having jurisdiction over the Property that relates
to LKA’s activities on the Property. LKA shall conduct all activities on the
Property in a good and workman-like manner in accordance with generally accepted
mineral exploration, development and mining practices.

 
- 3 -

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

 
(f)           No implied covenants or conditions whatsoever shall be read into
this Agreement relating to the prospecting or exploration of the Exploration
Property and Area of Interest (defined below) or any other operations of Kinross
hereunder, including but not limited to the time therefor or measure of
diligence thereof.  Any operations conducted by Kinross upon or relating to the
Property or Area of Interest shall be conducted at such time and in such manner
as Kinross, in its sole discretion deems advisable, subject only to the express
provisions of this Agreement.

(g)           If Kinross desires to use any of LKA’s buildings or equipment in
conducting its operations, Kinross and LKA shall first enter an agreement for
such use which will provide for maintenance of such buildings or equipment and
reasonable compensation to LKA.

4.           Representations and Warranties.

(a)           LKA represents and warrants that: (1) subject to the rights of the
United States in the Unpatented Claims, LKA owns the entire right, title, and
interest in and to the Property; (2) to the best of LKA’s knowledge, the
Unpatented Claims were properly located and have been maintained in good
standing in accordance with applicable federal, state and local laws; (3) except
for the Existing Royalty (defined below) and the Existing Liens defined in
Section 4(b) below, the Property is not subject to any agreements, liens,
encumbrances, royalties, overriding royalties, net profit interests, payments on
or out of production, or any other burden or restriction; (4) there have been no
orders, judgments, claims, suits, actions, or proceedings (including government
investigations) pending or effective or, to the knowledge of LKA, threatened
relating to the Property or any conditions or activities thereon, and LKA has no
knowledge of any reasonable grounds therefore; (5) all permits, licenses,
permissions and other authorizations relating to the Property and LKA’s
activities on the Property, which are required under applicable Law, have been
obtained and LKA is in material compliance with all such terms and conditions;
and (6) to LKA’s knowledge there has been no unpermitted disposal, release or
discharge of hazardous substances, pollutants or hazardous wastes on or from the
Property.  For purposes of this Agreement, “Existing Royalty” means the six
percent (6.0%) net smelter return royalty payable pursuant to that Settlement
Agreement and Release between LKA and Au Mining, Inc., dated August 24, 2007 and
that Royalty Agreement dated August 24, 2007 executed by LKA (attached as
Exhibit E to the Settlement Agreement and Release (collectively “Settlement
Agreement”).  As set forth in the Settlement Agreement, the Existing Royalty has
a cap of $12,647,505.00.  LKA represents and warrants that, as of the Effective
Date of this Agreement, it has paid $275,690.96 in royalties pursuant to the
Settlement Agreement, and has otherwise complied with the terms of the
Settlement Agreement.  To LKA’s knowledge, all requirements of the Settlement
Agreement that have become or are due have been satisfied.

 
- 4 -

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

 
(b)           For purposes of this Agreement, the “Existing Liens” are: (i) that
lien placed on the Golden Wonder Patented Claim, dated March 13, 2015, by Hansen
Drilling of Phillipsburg Montana in the amount of $22,538.10, which is recorded
in the records of Hinsdale County, Colorado at Document No. 101279; and (ii)
past due real property taxes on the Patented Claims for 2013 and 2014 totaling
$10,458.60.  LKA shall pay all past due property taxes on the Patented Claims
within thirty (30) days following the Effective Date of this Agreement.

(c)           Each party represents and warrants to the other party that it is
in good standing under the laws of the jurisdiction in which it is incorporated,
and that it has all the requisite power, right and authority to enter into this
Agreement, to perform its present and future obligations under this Agreement,
and to commit to this Agreement.  The execution and delivery of this Agreement,
and the consummation of the obligations, indemnities and payments provided
herein have been duly and validly authorized by all necessary corporate or
company action on the part of each party, and will not result in a default or
violation of any other agreement or commitment by that party.

(d)           For purposes of this Agreement, the terms “disposal,” “release,”
“discharge,” “hazardous substances,” “pollutants,” and “hazardous wastes” shall
have the definitions assigned thereto by the Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976 and the Federal Water Pollution Control Act of 1972, as
presently amended.

5.           Area of Interest.  For purposes of this Agreement, the Area of
Interest is defined as all lands and minerals within the area defined in Exhibit
C hereto.  If LKA acquires any additional interest in the Property or Area of
Interest while this Agreement is in effect, including any production royalty
interest, LKA shall promptly deliver to Kinross written notice of such
acquisition and such acquired interests shall be, at Kinross’s election, to be
exercised, if at all, within 60 days after delivery of a notice of acquisition
by LKA, included within the Property that is subject to this Agreement, at no
cost to Kinross.  If Kinross elects to include such acquired interests within
the Property, LKA and Kinross shall promptly prepare and execute an amendment to
this Agreement documenting such inclusion.  If Kinross fails to elect to have
the acquired interests included in the Property, the interest acquired by LKA
shall not be further subject to this Agreement.

6.           Venture Option.

(a)           If, during the term of this Agreement, Kinross identifies one or
more “mineral resources” (as defined in the Canadian Securities Administration,
National Instrument 43-101, Standards of Disclosure for Mineral Projects, as
amended) on or within the Property or Area of Interest containing a collective
total of fifty thousand (50,000) or more ounces of gold, Kinross may provide LKA
with written notice thereof (“Resource Notice”).  Such Resource Notice shall
include: (i) a copy of all factual data in Kinross’ possession relating to the
Property and Area of Interest that Kinross has not previously provided to LKA,
and (ii) a detailed summary of all Exploration Expenditures (defined below)
incurred by Kinross on or for the benefit of the Property or Area of
Interest.  LKA shall thereafter have a one-time option (“Venture Option”) to
enter into a joint venture (“Venture”) covering the Property and Area of
Interest, including the Carve-Out Area (“Venture Property”).

 
- 5 -

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

 
(b)           For purposes of this Agreement, “Exploration Expenditures” shall
mean all expenses incurred by Kinross following the Effective Date of this
Agreement in ascertaining the existence, location, quantity, quality or
commercial value of deposits of Minerals on or within the Venture Property,
including reclamation of such activities (“Exploration Work”), described below:

(i)           Actual field salaries and wages (or the allocable portion
thereof), including benefit costs and payroll taxes, of employees or contractors
of Kinross actually performing Exploration Work;

(ii)           Costs and expenses for the use of machinery, facilities,
equipment and supplies required for Exploration Work;

(iii)           Travel expenses and transportation of employees and contractors,
materials, equipment and supplies reasonably necessary for the conduct of
Exploration Work;

(iv)           All payments to contractors for Exploration Work;

(v)           Costs of assays, or other costs incurred to determine the quality
and quantity of minerals on or within the Venture Property;

(vi)           Costs incurred to obtain permits, rights of way and other similar
rights as may be incurred in connection with Exploration Work, including any
environmental studies;

(vii)           Costs and expenses of performing feasibility or other studies to
evaluate the economic feasibility of mining on the Venture Property;

(viii)           All taxes levied against the Property and paid by Kinross and
the cost of any reclamation bonds required to be posted for reclamation of
disturbance associated with Exploration Work;

(ix)           All land holding costs or fees and other necessary expenditures
made to preserve in good standing the status and title of the Venture Property;
 
 
- 6 -

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

 
(x)           All land and mineral acquisition costs for any interests acquired
by Kinross within the Venture Property; and

(xi)           Any payments made by Kinross to acquire all or any portion of the
Existing Royalty pursuant to Section 9 below.

(c)           LKA shall exercise the Venture Option, if at all, by delivering
and paying to Kinross within ninety (90) days of Kinross’s delivery of a
Resource Notice: (i) a written notice of its election to participate in the
Venture, and (ii) a cash payment, by check or wire transfer, in an amount equal
to forty and one-quarter percent (40.25%) of all Exploration Expenditures
incurred by Kinross. The amount of this payment shall be reduced by the sum of
(i) one million eight hundred thousand dollars ($1,800,000.00), plus (ii) an
amount equal to sixty-five percent (65%) of one hundred fifteen percent (115%)
of any cash that LKA paid following the Effective Date of this Agreement to
acquire any real property interests within the Area of Interest that Kinross
elected to have included in the Property pursuant to Section 5 above, and which
will be contributed by LKA to the Venture.  If LKA disputes either the estimate
of mineral resources or, subject to the time limits set forth in Section 8(c)
below, the amount of Exploration Expenditures set forth in the Resource Notice,
LKA may within thirty (30) days following delivery of the Resource Notice
deliver to Kinross a Dispute Notice in accordance with Section 17(c) below, in
which case the  remaining time period for electing whether to participate in the
Venture shall be tolled until final resolution of the dispute in accordance with
Section 17(c).

(d)           If LKA elects to exercise the Venture Option, Kinross and LKA
shall, within one hundred twenty (120) days following Kinross’s delivery of its
Resource Notice, negotiate in good faith and enter into a joint venture
agreement (“Venture Agreement”), covering the Venture Property, which will
generally follow the form of Rocky Mountain Mineral Law Foundation, Form 5
(1984), and will include the following terms:

(i)           LKA shall contribute to the Venture all of its right, title and
interest in the Venture Property and all improvements, buildings, mine workings
structures, facilities and equipment situated on or within the Venture Property,
including all of its rights in any permits relating to the exploration,
development or mining of Minerals on or within the Venture Property free and
clear of all liens or encumbrances arising by or through LKA.  Kinross shall
contribute to the Venture all of its right, title and interest in the Venture
Property, including all of its rights in any permits relating to the
exploration, development or mining of Minerals on or within the Venture
Property.

(ii)            The initial participating interest of Kinross shall be
sixty-five percent (65.0%) and the initial participating interest of LKA shall
be thirty-five percent (35.0%).  The initial contributions of the parties will
be valued at sixty-five percent (65.0%) and thirty-five percent (35.0%),
respectively, of the sum of Exploration Expenditures, plus one million eight
hundred thousand dollars ($1,800,000.00), plus any cash that LKA paid following
the Effective Date of this Agreement to acquire any real property interests
within the Area of Interest that Kinross elected to have included in the
Property pursuant to Section 5 above.

 
- 7 -

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

 
(iii)           Kinross shall have the right to be the manager of the Venture so
long as it maintains a Fifty Percent (50%) or greater participating interest in
the Venture.  The manager of the Venture shall earn a management fee from the
Venture of (i) seven percent (7%) of the Venture exploration expenditures during
exploration (except for invoices exceeding $50,000.00, in which case the fee
would be five percent (5%) for the amount over $50,000.00), and (ii) five
percent (5%) of Venture development expenses during development (except for
invoices exceeding $50,000.00, in which case the fee would be three percent (3%)
for the amount over $50,000.00).  Upon commencement of production, the
management fee will be adjusted to reflect the manager’s actual costs, so that
the manager makes neither a profit nor loss from being manager.  The manager
shall be required to conduct all Venture operations in a good, workmanlike and
efficient manner, in accordance with sound mining and other applicable industry
standards and practices.

(iv)           A management committee shall be formed, consisting of up to two
representatives from each Venture participant.  The management committee members
shall have voting rights in proportion to the participants’ respective
participating interests.  The manager shall present work programs and budgets to
the management committee for approval.  Management committee decisions shall be
made by a majority vote, provided that: (i) in the event of a tie vote, the
manager shall have the deciding vote; and (ii) any decision to dispose of all or
substantially all of the Venture Property or to amend an approved program and
budget to increase the expenditures during that budget period by more than
fifteen percent (15%) shall require a vote of the participants holding at least
seventy percent (70%) of the participating interests in the Venture.

(v)           If either participant elects not to contribute its proportionate
share to an approved program and budget, such participants’ participating
interest shall be subject to straight-line dilution.  If either participant
elects to contribute to an approved program and budget, but fails to make such
contribution, the amount of dilution shall be twice the amount that would have
occurred if the defaulting participant initially elected not to contribute.  In
the event that either participant’s participating interest is diluted to below
ten percent (10.0%), it shall relinquish its participating interest to the other
participant, in return for a royalty agreement in the form of Exhibit D hereto
conveying to the diluting participant a two and one-half percent (2.5%) net
profits interest on all Minerals thereafter produced and removed from
the  Property.  The royalty agreement shall further provide that following full
satisfaction or termination of the Existing Royalty, the royalty payable to the
diluting participant with respect to the Property shall convert to a one and
one-half percent (1.5%) net smelter return royalty as further set forth in
Exhibit D.  As to any portion of the Venture Property not burdened by the
Existing Royalty or any third party royalty, the royalty payable to the diluting
participant shall be a one and one-half percent (1.5%) net smelter return
royalty as further set forth in Exhibit D, and as to any portion of the Venture
Property not burdened by the Existing Royalty but burdened by a third party
royalty, the royalty payable to the diluting participant shall be a one percent
(1.0%) net smelter return royalty as further set forth in Exhibit D.

 
- 8 -

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

 
(e)           At such time as the parties enter into the Venture Agreement and
title to the Property is transferred to the manager, this Agreement shall
terminate.

(f)           If LKA does not timely exercise the Venture Option following
delivery of a Resource Notice by delivering to Kinross the notice and payments
provided in Section 6(c) above, LKA and Kinross shall hold a closing (“Closing”)
within one hundred twenty (120) days following Kinross’ delivery of the Resource
Notice.  At such Closing: (i) LKA shall deliver to Kinross a fully executed and
authorized Special Warranty Deed conveying to Kinross, free and clear of all
liens or encumbrances arising by or through LKA, all of LKA’s right, title and
interest in the Property, (ii) LKA shall assign to Kinross, subject to any
government approvals, any existing permits or authorizations governing
exploration , development or mining activities within the Carve-Out Area that
Kinross elects to have transferred; and  (iii) Kinross shall deliver to LKA a
royalty agreement in the form of Exhibit D hereto conveying to LKA a two and
one-half percent (2.5%) net profits interest on all Minerals thereafter produced
and removed from the  Property.  The royalty agreement shall further provide
that, following full satisfaction or termination of the Existing Royalty, the
royalty payable to LKA with respect to the  Property shall convert to a one and
one-half percent (1.5%) net smelter return royalty as further set forth in
Exhibit D.  As to any portion of the Venture Property not burdened by the
Existing Royalty or any third party royalty, the royalty payable to LKA shall be
a one and one-half percent (1.5%) net smelter return royalty as further set
forth in Exhibit D, and as to any portion of the Venture Property not burdened
by the Existing Royalty but burdened by a third party royalty, the royalty
payable to LKA shall be a one percent (1.0%) net smelter return royalty as
further set forth in Exhibit D.     Following any such Closing, this Agreement
shall terminate and LKA shall promptly deliver possession of the Property to
Kinross.

(g)           Kinross shall cooperate with LKA’s efforts to secure financing for
LKA’s share of Venture expenditures by providing informational and technical
support.  Kinross shall have no obligation to provide any financial assurances
or guarantees.

(h)           LKA will have the right to continue mineral exploration,
development and mining within the Carve-Out Area at its sole cost and for its
sole benefit in accordance with the terms of this Agreement through ninety (90)
days following Kinross’s delivery of a Resource Notice.  LKA shall be solely
responsible for complying with any permits and applicable Laws related to such
mining activities.  Following the expiration of that ninety-day period, LKA
shall, in coordination with Kinross, cease all exploration, development and
mining activities, and place all operations and workings in a care and
maintenance status in accordance with applicable Laws, until finalization of the
Venture Agreement, or completion of the Closing, as applicable.  Following
execution of a Venture Agreement, any operations and workings within the
Carve-Out Area shall be managed by and on behalf of the Venture for the benefit
of the Venture participants.

 
- 9 -

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

 
7.           Property Maintenance.

(a)           Except as provided in Section 7(b) below, LKA shall take such
actions as are necessary to maintain the Property in good standing, including,
but not limited to, payment of property taxes and satisfying royalty
payments.  Upon making any such payment or required filing, LKA shall promptly
deliver to Kinross a copy of the documents that were filed, and written evidence
of any payment that was made.  LKA shall satisfy all requirements to maintain
the Property in good standing as required  by this Section 7(a), and deliver to
Kinross written documentation of such satisfaction at least 45 days prior to the
legal deadline for satisfying such requirement.  If Kinross has not received
such documentation by such time, Kinross may, but has no obligation to, satisfy
such requirement(s), and LKA shall promptly reimburse Kinross for the amount of
any payment made by Kinross, and any related costs, plus fifteen percent (15%)
of the amount of those payments and costs.  

(b)           Kinross shall pay all federal maintenance fees for the Unpatented
Claims and satisfy any federal and state filing requirements for maintaining the
Unpatented Claims in good standing.  Upon making any such payment or filing,
Kinross shall promptly deliver to LKA a copy of the documents that were filed,
and written evidence of any payment that was made.  Kinross shall satisfy the
requirements of this Section 7(b), and deliver to LKA written documentation of
such satisfaction, at least 45 days prior to the legal deadline for satisfying
such requirement.  If LKA has not received such documentation by such time, LKA
may, but has no obligation to, satisfy such requirement(s), and Kinross shall
promptly reimburse LKA for the amount of any payment made by LKA, and any
related costs, plus fifteen percent (15%) of the amount of those payments and
costs.  

(c)           If Kinross determines that any of the Unpatented Claims should be
amended or relocated, Kinross may take such curative action, provided that
Kinross shall provide prior notice to LKA and any such amendment or relocation
shall be made in the name of LKA.  LKA shall cooperate in making any filings
necessary to achieve any such amendment or relocation.

8.           Reporting Meetings and Audit.

(a)           On or before February 28 of each calendar year, Kinross shall
deliver to LKA an annual report that: (i) summarizes Kinross's operations on the
Property and Area of Interest during the prior calendar year, (ii) includes a
copy of all factual geologic data developed from activities conducted on the
Property and Area of Interest by or on behalf of Kinross that was not previously
provided to LKA, (iii) includes a summary of all Exploration Expenditures
completed during the prior calendar year, and (iv) summarizes projected
activities to be conducted by or on behalf of Kinross on the Property and Area
of Interest during the present calendar year.  For purposes of this paragraph
and paragraph 8(b) below, "factual geologic data" includes any drilling logs,
assay data and seismic data generated from prospecting or exploration activities
on the Property.  Neither Kinross nor LKA has any obligation under this
Agreement, including Section 10 below, to provide the other party with any
interpretation of such data.  Neither party makes any representation or warranty
as to the accuracy or completeness of any data or geologic information provided
pursuant to this Agreement and neither party shall have any liability for any
damages relating to any inaccuracies or incompleteness of such data or
information.

 
- 10 -

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

 
(b)           On or before February 28 of each calendar year, LKA shall deliver
to Kinross an annual report that: (i) summarizes LKA’s operations on the
Property and Area of Interest during the prior calendar year, (ii) includes a
copy of all factual geologic data developed from activities conducted on the
Property and Area of Interest by or on behalf of LKA that was not previously
provided to Kinross, and (iii) summarizes projected activities to be conducted
by or on behalf of LKA on the Property and Area of Interest during the present
calendar year.

(c)           At least once during each calendar quarter, Kinross
representatives shall meet with LKA representatives, by telephone or in
person.  During these quarterly meetings or calls, each party shall provide the
other with an update of the activities they have conducted and intend to conduct
on the Property and Area of Interest, and shall use good faith efforts to
coordinate their respective activities to avoid conflicts with the other’s
activities in accordance with Section 1 above.

(d)            LKA shall have the right to audit the books and records
pertaining to the Exploration Expenditures reported in an annual report required
under Section 8(a) above for a period of twelve (12) months following the
delivery of that report to LKA.  The reported Exploration Expenditures shall be
deemed conclusively correct and not subject to any future dispute, unless LKA
objects to them in writing within that twelve (12) month period and provides a
detailed basis for its objection.

9.           Acquisition of Existing Royalty.  LKA agrees to pursue negotiations
with the current owners of the Existing Royalty in good faith on an agreement to
purchase all or a portion of the Existing Royalty interests.  Kinross agrees to
coordinate with LKA in developing mutually acceptable agreement terms, which
would provide that Kinross would fund any agreed upon purchase payments that
would be made during the term of this Agreement.  Upon acquisition, the Existing
Royalty would be terminated.

10.           Inspections.  LKA shall be entitled to enter the Property for
purposes of inspecting any of Kinross’s operations, facilities or structures at
reasonable times, upon reasonable advance notice, provided that LKA shall so
enter at its own risk and shall indemnify and hold Kinross and its Affiliates
harmless against and from any and all loss, cost, damage, liability and expense
(including but not limited to reasonable attorneys' fees and costs) by reason of
injury to LKA or its agents or representatives, or damage to or destruction of
any property of LKA or its agents or representatives while on the Property, or
in such workings, facilities and structures, except to the extent that such
injury, damage, or destruction is a result of the willful misconduct or gross
negligence of Kinross.  LKA shall comply with all rules and polices established
by Kinross for the protection of worker and public health and safety.  LKA shall
have the right during regular business hours to review and copy all of Kinross’s
non-privileged files and documents relating to activities on the Property,
including, but not limited to, all invoices and other documentation of
Expenditures.

 
- 11 -

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

 
11.           Indemnities.
 
 
(a)           In addition to Kinross’ obligations under Section 3(b), Kinross
shall indemnify, defend, release and hold harmless LKA and its successors, along
with their respective officers, shareholders, directors, employees and agents
from any and all claims, losses, damages, demands, and liabilities whatsoever
arising from or in connection with Kinross’s breach of its representations or
warranties or other terms of this Agreement or in connection with its operations
or activities on the Property during the term of this Agreement, except as
provided in Section 10 above or to the extent caused by the negligence or
misconduct of LKA, its employees, agents, contractors or subcontractors.

(b)           In addition to LKA’s obligations under Section 10, LKA shall
indemnify, defend, release and hold harmless Kinross, its affiliates and
subsidiaries and its successors, along with their respective officers,
shareholders directors, employees and agents, from and against any and all
claims, losses, damages, demands, and liabilities whatsoever arising from or in
connection with LKA’s breach of its representations or warranties or other terms
of this Agreement or in connection with its operations or activities on the
Property whether occurring before or after the Effective Date of this Agreement,
except to the extent caused by the negligence or misconduct of Kinross, its
employees, agents, contractors or subcontractors.   The condition of the
underground workings or any claims, losses, damages, demands, and liabilities
arising out of Kinross’ use of such workings shall not be subject to the
provisions of this Section 11(b), except as provided in Section 3(b) above.

(c)           The indemnities set forth in Section 3(b), this Section and
Section 10 shall survive the expiration or termination of this Agreement.

12.           Liens.

(a)           Kinross shall keep the Property free of all liens for labor or
materials furnished to it in its operations hereunder, except for any such liens
not yet due; provided that Kinross may refuse to pay any claims asserted against
it or the Property that Kinross disputes in good faith.  Kinross, however, shall
defend and hold LKA harmless against any such disputed claims, and shall comply
with any final court orders with respect to such disputed claims.  Kinross may,
but shall have no obligation to, contest the validity of any lien on the
Property at its expense, and LKA shall cooperate in such contest, including but
not limited to allowing such contest to be taken and prosecuted in LKA’s
name.  Any such lien shall not be deemed a default unless finally adjudicated to
be valid and not discharged by Kinross.

 
- 12 -

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

 
(b)           Subject to Kinross’s obligations under Section 12(a), LKA shall
not cause or allow any liens, encumbrances, or adverse claims to accrue against
the Property, except for any such liens not yet due; provided that LKA may
refuse to pay any claims asserted against it or the Property that LKA disputes
in good faith.

13.           Insurance.

(a)           Kinross and LKA shall each carry at all times during the term of
this Agreement, with insurance companies authorized to do business in the State
of Colorado and having a BEST rating of B+ or better, the following minimum
insurance coverages:

(i)           Workers compensation insurance as required by law;

(ii)           Employer’s liability insurance with minimum limits of one million
dollars ($1,000,000) for all personal injuries or death resulting from any
accident or occupational disease;

(iii)           Commercial General Liability and/or Umbrella Liability insurance
with a limits of not less than four million dollars ($4,000,000) each occurrence
covering bodily injury to or death of persons and/or loss of or damage to
property; and

(iv)           Automobile liability insurance, covering all owned, non-owned and
hired vehicles in the amount of not less than one million dollars ($1,000,000)
per each occurrence.

(b)           Policies obtained by each party pursuant to this Section shall not
be subject to cancellation or material change, except on 30 days advance written
notice to the other party.

(c)           Each party shall name the other party as an additional insured on
the commercial general liability policies that they obtain pursuant to this
Section.

(d)           Kinross and LKA shall require any contractor doing work on the
Property on their respective behalf to have the same type of insurance coverage
required by this Section.

(e)            Within ten (10) business days following the Effective Date of
this Agreement, each party shall provide the other party certificates of
insurance for each above-required insurance policy that contain the following:

(i)           a statement that the other party is named as an additional insured
on the commercial general liability policy;

 
- 13 -

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

 
(ii)           a statement that the insurance provider has waived subrogation
rights with respect to the other party; and

(iii)           a statement that the policy will not be materially changed or
cancelled with at least thirty (30) days prior Notice to the other party.

Upon request of the other party, each party shall promptly provide to the
requesting party copies of the insurance policies that are required by this
Section.

14.           Termination.

(a)           Kinross may terminate this Agreement at any time upon providing
LKA written notice thereof.  Upon termination of this Agreement by Kinross,
except as otherwise provided in this Agreement, all liabilities and obligations
of Kinross to LKA, with respect to the Property, not then due or accrued, shall
cease and terminate.  LKA shall have the right, within ten (10) days following
delivery of a termination notice to deliver written notice to Kinross of its
election to acquire all or any part of Kinross's interest, if any, in any lands
or minerals within the Area of Interest.  Within sixty (60) days following
timely receipt of such election notice, Kinross shall, to the extent allowable,
transfer to LKA by quitclaim deed or assignment any interest it holds in the
Area of Interest, subject to its rights under Section 14(c) below.
 
 
(b)             If Kinross defaults in any of its material obligations
hereunder, LKA may give Kinross written notice thereof and specify the default
or defaults relied on.  If Kinross has not begun to cure such default within a
reasonable time after receipt of such notice (which shall not, in any case, be
less than thirty (30) days), LKA may terminate this Agreement by written notice
to Kinross; provided, however, that if Kinross disputes that any default has
occurred, the matter shall be determined pursuant to Section 17(k) below, and if
Kinross is found to be in default hereunder, Kinross shall have a reasonable
time (which in any case shall not be less than sixty (60) days from receipt by
Kinross of the final decision adverse to Kinross) to cure such default, and if
so cured, LKA shall have no right to terminate this Agreement by reason of such
default.

(c)           Upon any termination of this Agreement prior to Kinross’s delivery
of a Resource Notice, Kinross shall within 60 days after the effective date of
termination: (i) surrender the Property to LKA free and clear of any
encumbrances created by or under Kinross, if requested by LKA as provided in
Section 14(a), transfer to LKA by quitclaim deed or assignment any interest in
lands or minerals it holds within the Area of Interest, and deliver to LKA a
written instrument or instruments, in a form appropriate for recording and
acceptable to LKA, further evidencing termination of this Agreement; and (ii)
deliver to LKA copies of all factual data obtained by Kinross in conducting
activities or operations on the Property and the Area of Interest, not already
provided to LKA.  Upon any termination of this Agreement prior to Kinross’s
delivery of a Resource Notice, Kinross shall promptly reclaim all disturbance
caused by its activities on the Property and the Area of Interest (to the extent
being transferred) in accordance with applicable statutory and regulatory
requirements, unless LKA agrees in writing to assume such reclamation
obligations and relieve Kinross of the performance thereof.  Following
termination of this Agreement, Kinross shall have the continued right of ingress
to and egress from the Property and the Area of Interest and the right to
complete such reclamation and restoration of the Property and the Area of
Interest and to make such inspections as may be required by the terms by law,
for so long as is reasonably necessary to complete all such reclamation,
restoration, and inspections.

 
- 14 -

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

 
15.           Force Majeure.  The terms of this Agreement may be extended or
this Agreement terminated in the case of an event of force majeure in accordance
with the following:

(a)           If Kinross is prevented from complying with any of its obligations
under this Agreement by a force majeure (the “Affected Obligations”), the
Affected Obligations shall be suspended and Kinross shall not be deemed in
default or liable for damages or other remedies as a result thereof for so long
as Kinross is prevented from complying with the Affected Obligations by the
force majeure.  For purposes of this Agreement, “force majeure” shall mean any
matter (whether foreseeable or unforeseeable) beyond Kinross’s reasonable
control, including but not limited to:  acts of God; unusually inclement
weather; acts of war, insurrection, riots or terrorism, strikes, lockouts or
other labor disputes; inability to obtain necessary equipment or materials, or
obtain permits, approvals or consents; damage to, destruction of, or unavoidable
shutdown of necessary facilities or equipment; and acts or failures to act on
the part of local, state, federal, or foreign governmental agencies or courts,
allegedly sovereign Native entities or organizations, or any officer or official
acting under color of governmental authority (any such agency, court, entity,
organization, officer, or official, a “Governmental Authority”); provided,
however, that (i) challenging (by protest, petition, appeal, or any other means)
or consenting to any actions or inactions of any Governmental Authority, and
(ii) settling strikes, lockouts, and other labor disputes, shall be entirely
within the discretion of Kinross; and, provided further, that Kinross shall
promptly notify LKA of the existence of an event of force majeure and shall
exercise reasonable diligence, subject to the foregoing, in an effort to remove
or overcome the cause of such inability to comply.

(b)           In entering into this Agreement, the parties assume that Kinross’s
access to the Property is and will continue to be unrestricted.  Kinross’s
reasonable belief that the actions or inactions of any Governmental Authority or
other third party might prevent or impede access to the Property, or otherwise
limit Kinross’s ability to operate thereon, shall also be considered an event of
force majeure for purposes of this Agreement, and shall be referred to as an
“access force majeure.”  If an access force majeure occurs, Kinross shall have
the right to suspend this Agreement for a period not to exceed two years,
without payment or penalty to LKA, while the access force majeure is in effect;
provided, however, that Kinross shall resume operations on the Property within a
reasonable time after access to the Property is no longer restricted.  In
determining “reasonableness” under this Section, Kinross shall be under no duty
to challenge (by protest, petition, appeal, or any other means) or to consent to
any actions or inactions of any Governmental Authority.

 
- 15 -

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

 
16.           Transfer of Interests, Right of First Refusal.

(a)           If LKA or Kinross (“Transferring Party”) receives a bona fide
offer to acquire all or any part of its interest in this Agreement or the
Property (the “Offered Property”), the Transferring Party shall promptly provide
written notice (“Offer Notice”) to the other party (“Non-Transferring
Party”).  The Offer Notice shall specifically identify the Offered Property and
the person or entity submitting the offer (“Transferee”) and shall state the
price and all other pertinent terms and conditions of the offer.  If the offer
includes provision of any non-monetary consideration by the Transferee, the
Offer Notice shall include a good faith estimate of the cash equivalent value of
such non-cash consideration.  If the Non-Transferring Party does not agree with
any such estimate, and the parties are not able to resolve the issue, the
Non-Transferring Party may seek appropriate injunctive relief from a court to
stay the transaction pending resolution of the valuation dispute as provided in
Section 17(k) below.  If the Non-Transferring Party desires to acquire the
Offered Property it will deliver notice of such election to the Transferring
Party within 30 days from the date of receipt of the Offer Notice at the same
price and on the same terms as set forth in the Offer Notice.  If the
Non-Transferring Party does elect to acquire the Offered Property, such closing
shall occur within 30 days after notice of such election is delivered to the
Transferring Party.  If the Non-Transferring Party fails to provide the
Transferring Party with notice of its election to acquire the Offered Property
within the 30-day election period, such failure shall be deemed to be an
election to not acquire the property.  If the Non-Transferring Party elects to
not acquire the Offered Property, the Transferring Party shall have 120 days
following the expiration of such 30-day period to complete the transfer of the
entire Offered Property to the Transferee at a price and on terms set forth in
its Offer Notice.  If the Transferring Party fails to complete the transfer of
the Offered Property to the Transferee within that period, the Non-Transferring
Party’s right of first refusal in the Offered Property shall be revived.  Any
subsequent proposal by the Transferring Party to transfer the Offered Property,
or any part thereof, shall be conducted in accordance with all of the procedures
set forth in this Section.  A transfer may be made under this Section only if
the Transferee first agrees in writing with the Non-Transferring Party to be
bound by the terms of this Agreement, including this Section, to the same extent
as the Transferring Party with respect to the transferred interests; provided,
however, no transfer of any interest in the Property or this Agreement shall
relieve the Transferring Party of its obligations under this Agreement, unless
the Non-Transferring Party otherwise agrees in writing, which agreement shall
not be unreasonably withheld based on the financial and technical capabilities
of the Transferee.

 
- 16 -

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

 
(b)           This Section 16 shall apply to LKA and Kinross and any successor
or transferee (including any Affiliate or successor by merger), but shall not
apply to (i) a corporate merger, consolidation or reorganization by the
Transferring Party by which the surviving entity possesses substantially all of
the stock or all of the property rights and interests, and is subject to
substantially all of the liabilities and obligations of the Transferring Party;
(ii) any equity offering made by a Transferring Party; (iii) a transfer of
direct or indirect Control of a Transferring Party to a non-Affiliate third
party (whether in a single transaction or series of related transactions), but
only if the fair market value of the Transferring Party’s interest in the
Property or this Agreement that is being transferred does not exceed twenty-five
percent (25%) of the combined market value of all of the assets of the
Transferring Party and all of its Affiliates, if any, direct or indirect Control
of which is also being transferred; or (iv) a transfer of Control of a
Transferring Party to an Affiliate, provided that in each case, the acquiring
party shall agree in writing with the other party to assume the Transferring
Party’s obligations under this Agreement or any other agreement hereunder, as to
the transferred interest.  For purposes of this Agreement, “Affiliate” means any
person or entity that Controls, is Controlled by or under common Control with
LKA or Kinross.  The term “Control” used as a verb means the ability, directly
or indirectly through one or more intermediaries, to direct or cause the
direction of the management and policies of such entity through (i) the legal or
beneficial ownership of voting securities or membership interests; (ii) the
right to appoint managers, directors or corporate management; (iii) contract;
(iv) operating agreement; or (v) voting trust.  The term “Control” used as a
noun means an interest which gives the holder the ability to exercise any of the
foregoing powers.

17.           General Provisions.

(a)           Notice.  All notices or other communications to either party shall
be in writing and shall be sufficiently given if (i) delivered in person, (ii)
sent by registered or certified mail, return receipt requested, or (iii) sent by
overnight mail by a courier that maintains a delivery tracking system.  Subject
to the following sentence, all notices shall be effective and shall be deemed
delivered (i) if by personal delivery, on the date of delivery, (ii) if by mail,
on the date of delivery as shown on the actual receipt, and (iii) if by
overnight courier, as documented by the courier’s tracking system.  If the date
of such delivery or receipt is not a business day, the notice or other
communication delivered or received shall be effective on the next business day
(“business day” means a day, other than a Saturday, Sunday or statutory holiday
observed by banks in the jurisdiction in which the intended recipient of a
notice or other communication is situated.)  A party may change its address from
time to time by notice to the other party as indicated above.

All notices to LKA shall be addressed to:

LKA Gold Incorporated
3724 47th St Ct NW
Gig Harbor, WA 98335

 
- 17 -

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

 
All notices to Kinross shall be addressed to:

Kinross Gold U.S.A., Inc.
Attn: Land Department
5075 South Syracuse Street, Suite 800
Denver, CO  80237

(b)           Inurement.  All covenants, conditions, indemnities, limitations
and provisions contained in this Agreement apply to, and are binding upon, the
parties to this Agreement, their heirs, representatives, successors and assigns.

(c)           Implied Covenants.  The only implied covenants in this Agreement
are those of good faith and fair dealing.

(d)           Waiver.  No waiver of any provision of this Agreement, or waiver
of any breach of this Agreement, shall be effective unless the waiver is in
writing and is signed by the party against whom the waiver is claimed.  No
waiver of any breach shall be deemed to be a waiver of any other subsequent
breach.

(e)           Modification.  No modification, variation or amendment of this
Agreement shall be effective unless it is in writing and signed by all parties
to this Agreement.

(f)           Entire Agreement.  This Agreement sets forth the entire agreement
of the parties with respect to the transactions contemplated herein and
supersede any other agreement, representation, warranty or undertaking, written
or oral.

(g)           Memorandum.  A short form of this Agreement in the form attached
as Exhibit E shall be recorded in the records of Hinsdale County, Colorado
promptly after execution of this Agreement.  This Agreement shall not be
recorded.

(h)           Confidentiality of Information; Press Releases.  Except for
recording the Memorandum pursuant to Section 17(g) above, and as otherwise
provided in this Section 17(h), the terms and conditions of this Agreement, and
all data, reports, records and other information developed or acquired by any
party in connection with this Agreement, shall be treated by the parties as
confidential, and no party shall reveal or otherwise disclose such information
to third parties without the prior written consent of the other party.  This
restriction shall not apply to disclosures to any Affiliate, to any public or
private financing agency or institution, to any securities regulatory authority,
to any contractors or subcontractors the parties may engage and to employees or
consultants of the parties, or to any third party to which a party contemplates
the transfer, sale, assignment, encumbrance or other disposition of their
interest in the Property, or with which a party or its Affiliate contemplates a
merger, amalgamation or other corporate reorganization; provided, however, that
any such third party to whom disclosure is made has a legitimate business need
to know the disclosed information, and shall first agree in writing to protect
the confidential nature of such information at least to the same extent as the
parties are obligated under this Section.  In the event a party is required to
disclose the terms of this Agreement to any federal, state or local government,
any court, agency or department thereof, or any stock exchange or securities
regulatory authority, the party so required shall immediately notify the other
party of such requirement and the proposed form and content of the
disclosure.  To the extent legally permissible, such notice shall be delivered
at least two business days prior to the date of the disclosure.  The
non-disclosing party shall have the right to review and comment upon the form
and content of the disclosure and to object to such disclosure to the entity
seeking the information, and to seek confidential treatment of that information
by the receiving entity.  Before issuing any press release relating to this
Agreement or the Property, the releasing party shall provide the other party
three business days advance written notice, with a copy of the proposed
release.  The releasing party shall make any reasonable changes to the proposed
release requested by the other party.  The confidentiality obligations under
this Section shall survive for two (2) years following termination of this
Agreement.

 
- 18 -

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

 
(i)           Amendment.  This Agreement may not be amended or modified except
by an instrument in writing, signed by both parties hereto.

(j)           Further Assurances.  Each of the parties agrees that it shall take
from time to time such actions and execute such additional instruments as may be
reasonably necessary or convenient to implement and carry out the intent and
purpose of this Agreement.

(k)           Dispute Resolution.  Disputes arising under or in connection with
this Agreement, or the construction or enforcement thereof shall be resolved in
accordance with this Section.  In the event of any such dispute, a party may
provide a notice to the other party summarizing the grounds for the dispute
(“Dispute Notice”). The parties shall endeavor to resolve any dispute amicably
by negotiation between a member of each party having a title of Vice President
or above who has authority to settle the dispute, each of whom is at a higher
level of management than the persons with direct responsibility for
administration or performance of this Agreement. Any dispute that is not
resolved by such negotiation shall be finally resolved by a federal or state
court in the State of Colorado having jurisdiction over the disputed
matter.  The parties agree that the exclusive venue for any such litigation
shall be in Denver, Colorado.  The parties agree to waive any right to trial by
jury in any such litigation.

(l)           Construction.  The section and paragraph headings contained in
this Agreement are for convenience only, and shall not be used in the
construction of this Agreement.  The invalidity of any provision of this
Agreement shall not affect the enforceability of any other provision of this
Agreement.

(m)           Currency.  All references to dollars herein shall mean United
States dollars.

(n)           Governing Law.  This Agreement shall be governed by, interpreted
and enforced in accordance with the laws of the State of Colorado, without
regard to its conflicts of laws provisions.

 
- 19 -

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

 
(o)           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.

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

LKA GOLD INCORPORATED

By:  /s/ Kye Abraham
Name:  Kye Abraham
Title:  President

KINROSS GOLD U.S.A., INC.

By:  /s/ Lauren Roberts
Name:  Lauren Roberts
Title:  President

 
 
- 20 -

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