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Exhibit 10.8
 
 
Index No. 952
GIA

Option to Purchase Contract for Mining Property
 
from
 
Minera Farellón Limitada
 
to
 
Minera Polymet Limitada

 
In Vallenar, República de Chile on October 10th, 2008, appearing before me,
Ricardo Olivares Pizarro, Lawyer, Notary Public and Official Registrar of
Commerce and Mines, with an office at 960 calle Prat, local 14, is Kevin Robert
Mitchell, Canadian, married, separate asset marriage, miner, foreigner identity
card no.14 498 917-1, representing both Minera Farellón Limitada, a Chilean
mining company, Rol Único Tributario no.76 814 170-3, both located at 3260
Baldomero Lilio, Villa El Manantial, Comuna de Vallenar, hereinafter also
“Minera Farellón” and Minera Polymet Limitada, a Chilean mining company, Rol
Único Tributario no. 76 975 260-9, also located at 3260 Baldomero Lilio, Villa
El Manantial, comuna de Vallenar, hereinafter also “Minera Polymet”.  The
appearing parties are of legal age and have verified their identities with the
aforementioned identity cards and declare that:  By virtue of the present
document, they have come to enter into the following option to purchase contract
for mining properties, in conformity with that which is stipulated in article
169 and any other applicable articles of the Mining Code.

Article I: Identification of Properties:  The company “Minera Farellón Limitada”
is the sole and exclusive owner of the following gold, copper and silver
producing mining properties located in Sierra La Colorada, Comuna de Vallenar,
Provincia de Huasco, Tercera Región de Atacama:  1)“Che Uno uno – ocho” (Che Uno
1-8), Rol Nacional no. 033012279-K whose measure has been registered on page 77,
no.42 of the 1993 Registro de Propiedad de Minas(Mining Property Register) of
the Conservador de Minas (Mining Registrar) of Vallenar.  They cover a total
area of 32 hectares, 4 hectares corresponding to each one of them.  2)“Che Dos
uno al diez” (Che Dos 1-10), Rol Nacional no. 0330122803, whose measure has been
registered on the back of page 181, no.43 of the 1993 Registro de Propiedad de
Minas (Mining Property Register) of the Conservador de Minas ( Mining Registrar)
of Vallenar.  They cover an area of 44 hectares, 4 properties of which each
consist of 5 hectares and 6 of which each consist of 4 hectares.  The mining
properties identified above will be designated, hereinafter and altogether, as
“Mining Properties”.  Minera Farellón acquired the Mining Properties via
contract of sale from Jaime Antonio Caballero Castillo, according to public
document of sale of mining properties dated June 25, 2008, granted by the Notary
Public of Vallenar, Ricardo Olivares Pizarro.
 
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Article II: 1. Option Offer:  By the present act, Minera Farellón, by way of its
representative Kevin Mitchell, gives to Minera Polymet the offer to purchase and
offers irrevocably to sell, cede and transfer to Minera Polymet the Mining
Properties identified in Article I of this document. 2. Price of the Offered
Contract of Sale: The price of the contract of sale is the amount of $20,000 US
to be paid in conformity with that which is denoted in Article VII that
follows.  The Mining Properties and the minerals contained in them will be sold
and transferred with all of their uses, rights, customs and obligations, free
from any lien, prohibition, condition subsequent, pending restriction or
litigation, contracts of sale of minerals in situ, rents, as well as any other
type of personal or actual encumbrance that may constitute  an impediment that
may affect their free use, possession and disposal, and free from all
overlapping and with their mining patents fully paid.  The seller or offering
party is responsible for the clearance in conformity with the law.  3. Option
Term:  The term for the option, within which Minera Polymet will be able to
freely accept or reject the offer of sale of the Mining Properties, expires on
April 10, 2009.  4.Option Price:  The price of the option is the sum in national
currency pesos equivalent to $444US, that will be paid within the period denoted
in article V of this document.

Article III:  Kevin Robert Mitchell, representing Minera Polymet Limitada,
accepts, under the terms of article 169 and other applicable articles of the
Mining Code, the stipulations of this contract whereby its second article grants
to Minera Polymet the power to accept or reject the offer made by Minera
Farellón.  Therefore, Minera Polymet will be able to decide to accept the
contract of sale for the Mining Properties at any time, from the date of this
document and until the expiration of the term indicated in number 3 of article
II of this document, under the terms indicated in this contract.

Article IV: Transfer of Royalty: By the public document of sale mentioned in the
first article of this document, Jaime Antonio Caballero Castillo and Minera
Farellón agreed to the payment of a Royalty in addition to the payment of the
price agreed to in said document.  The royalty is equal to 1% of the net or
liquid value that Minera Farellón may receive or obtain from the mineral
extracted from the properties that are the object of said contract; the royalty
that will be paid directly by Minera Farellón if the processing of the minerals
is carried out by Minera Farellón or by whomsoever acquires them from Minera
Farellón if they are sold to a third party.  According to that which was agreed
to, this Royalty will be paid until the sum, in national currency pesos,
equivalent to $100,000 US is fulfilled, taking into account the settlement of
the royalty’s value at the observed price on the date of each payment until the
cited sum is fulfilled.  By the present contract, Minera Farellón Limitada,
represented by Kevin Mitchell, promises to cede and transfer to Minera Polymet
Limitada, who promises to accept and acquire, the contractual position and all
of the rights and obligations that arise for Minera Farellón from the obligation
undertaken in article IV of the public document of contract of sale of mining
properties mentioned in the first article of this document and that relates to
the payment of a royalty under the terms previously indicated. The promise of
transfer contract must be entered into by public document together with the
acceptance of the offer made to Minera Polymet by the present act, whose
deadline to accept expires on April 10, 2009.  The price of the promise of
transfer made to Minera Polymet by the present act is the sum of 1 peso.
 
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Article V: Payment of the Price of the Option to Purchase the Mining
Properties:  The price of the option contract for the purchase of the Mining
Properties is the amount of $444 US, equivalent to 271,000 pesos, as of today,
that Minera Polymet pays in cash with this act and Minera Farellón declares
having received the payment to its complete satisfaction. 2) Transfer of the
obligation of future payments in the event of relinquishment:  If Minera Polymet
declines to accept the offer of sale, of which this document gives account,
before the expiration of the term indicated in number 3 of article II above, the
obligation of Minera Polymet to carry out payment of the offered sale price will
cease immediately.

Article VI:  Acceptance of the offer: If, within the negotiated term,  Minera
Polymet decides to accept the offer it will state such intentions with the
issuance of a public document declaring its acceptance.  With the same purpose,
Minera Polymet will submit, to the Notary that authorizes the acceptance
document, a bank cashier’s cheque made to the order of Minera Farellón or its
transferee, for the amount, in national currency pesos, equivalent to $20,000
US.  The Notary will not submit to Minera Farellón the cashier’s cheque referred
to, unless it is with the signing of a corresponding public document of
receipt.  The corresponding Conservador de Minas (Mine Registrar) will register
the Mining Properties indicated in the document of acceptance in the name of
Minera Polymet Limitada upon having seen a copy of the present document,
consisting of the submission of the aforementioned cashier’s cheque to the
authorized Notary and a copy of the acceptance document issued by Minera
Polymet. All of this is by virtue of that which is stipulated by the final
paragraph of article 169 of the Mining Code, according to which, and regarding
the rights of the purchase option contract that are specially regulated by said
Code, the sole acceptance of the irrevocable offer will suffice so that the
offered contract of sale may be concluded, with the sole requirement that both
the offer and the acceptance be registered by public document.

Article VII: Payment of the sale price: The price of the contract of sale is the
sum equivalent to $20,000 US that Minera Polymet will pay in national currency
pesos to Minera Farellón on April 10, 2009, payable when the purchase option, of
which this document gives account, is exercised.

Article VIII: Irrevocability:  This contract will have the characteristics of
the mining option to purchase of the contract denoted in article 169 of the
Mining Code and agrees with the nature of irrevocability so that Minera Farellón
will be able to neither regret nor withdraw its offer.  Consequently, the sole
acceptance at any time of the irrevocable offer on the part of Minera Polymet
Limitada, that is formulated by this act, will suffice to conclude the sale.  In
the event that the deadline of the term of the option expires and Minera Polymet
has not accepted the offer of sale of the Mining Properties to which this
document refers, it shall be understood that Minera Polymet has declined to
exercise the option granted to it in this document.  To this effect, Minera
Polymet or whoever has derived rights in this contract must issue a public
document of removal and cancellation, requiring the cancellation of the
registration of this contract in the corresponding register of the respective
Conservador de Minas (Mining Registrar).
 
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Article IX: Authorizations:  In representation of Minera Farellón, Kevin
Mitchell irrevocably authorizes Minera Polymet so that, from the date of the
signing of the present document and while the term to exercise the option
granted to it is pending, it may carry out, at its exclusive cost and risk, the
legally appropriate explorations, surveillances, prospecting and exploitations
that it desires.  Minera Polymet also being able to carry out all of its own
work and labour with the express declaration that Minera Polymet will be able to
exercise all of the active obligations that benefit said properties, leaving the
seller to request them if Minera Polymet asks upon deeming it necessary, and
will likewise be able to dispose of the minerals extracted as a result of its
labours.  Minera Polymet will be solely responsible for the mining worksites for
exploration and/or exploitation that may be made on the properties, as well as
for the effects that such worksites provide, having to give observance to all of
the applicable legal regulations in kind.  No part of that which is indicated in
the present article may be interpreted as if Minera Polymet has the obligation
to carry out determined studies or reports of whatever the nature these may be.

Article X: Non-Repayment: If Minera Polymet declines to accept the offer of sale
of the Mining Properties, its obligation to pay the offered price of sale will
cease immediately, but Minera Farellón will not be obligated to repay any
payment already received that corresponds to the option price, those which
Minera Farellón will retain as sole and exclusive indemnity for losses of any
nature, type or amount that may have caused the act of having impeded, during
the option term, the exploration and exploitation as well as third party
negotiation for the Mining Properties or that may have caused Minera Polymet to
not accept the offer or that may stem from any other cause or reason related to
the contract that this document contains.

Article XI: Relinquishment:  At any time Minera Polymet will be able to issue a
declaration by public document, making a note in the margin of the original copy
of this document, expressing its decision to not accept the offer that was made
in this document and from the date of this marginal notation all of the
obligations contracted by virtue of this contract, of any nature or type and in
particular the obligation to carry out payment as referred to in no.2 of article
II and article VII of this document, will cease.

Article XII:  Maintenance of the properties:  Minera Farellón must take, at its
exclusive cost, all of the judicial and non-judicial steps necessary for the
current maintenance of the rights that arise from the Mining Properties
indicated in the first article of this document and to defend those rights, and
the minerals contained in the properties, from any third party claim.  Without
damage to that stipulated above, Minera Polymet Limitada will repay to Minera
Farellón all of the amounts paid out for payment of  mining patents that protect
the properties and the mining rights that are the object of this option and that
have been incurred during the option term.
 
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Article XIII:  Prohibitions and restrictions: (the original contract has this
heading as Article III.  The word “décimo” is most likely missing in the
original) 1: Minera Farellón is obligated not to sell, tax, transfer, cede,
promise sale, mortgage, offer, give option or enter into acts or contracts, of
any nature, about the mining rights originating from the Mining Properties
referred to in this document or about the minerals contained on them while the
term that Minera Polymet has to exercise the option is pending.  If, in spite of
the previous prohibitions,  any act is executed or any contract is entered into
that limits or affects or may limit or affect the landownership, possession or
property of the Mining Properties, or the minerals contained on them, that act
or contract will be terminated ipso facto once Minera Polymet accepts the
irrevocable offer made in this document, all in conformity with article 169 of
the Mining Code and without damage to the rights that arise for Minera Polymet
from this contract and the Law.  2:  The offering party, during the option term,
is obligated to maintain under strict confidentiality all of the information,
technical data that may be dealt with in the exploration, and know-how, as well
as all other information related to the work that Minera Polymet or its
contractors carry out on the Mining Properties.  This obligation of
confidentiality will remain with respect to the mining concessions that Minera
Polymet may have acquired by means of the exercising of the option to
purchase.  3:  Without damage to that which was stipulated in number 1 of this
article, Minera Farellón is, during the term of the option discussed in this
document, obligated not to present new pediments or demonstrations or establish
new exploration and/or exploitation concessions, in the area covered by the
Mining Properties identified in the first article of this document, without the
advance authorization in writing from Minera Polymet.  4:  Minera Farellón shall
not completely or partially cede or transfer the rights and authorizations deal
with in this contract.  5:  Minera Polymet, at any time following written
notification to Minera Farellón, can sell, cede, transfer or dispose of, in any
manner, all of or part of  its rights in this contract, provided that the
purchaser or transferee declares in the contract that serves as the title of
acquisition that it will exactly fulfil the same and all of the obligations that
Minera Polymet has contracted in this document under the same terms and as if
this contract had been entered into with said transferee, promising to impose
equal obligations to any future transferee.

Article XIV:  Present to this act appears Jaime Antonio Caballero Castillo,
Chilean, married, separate asset marriage, miner, national identity card no. 9
190 760-7, located at 1930 calle General Ibañez, Población General Baquedano,
comuna de Vallenar, signing party of the Contract of Sale of the Mining
Properties mentioned in Article I above, who declares: 1.- To know and accept
the promise of transfer of contractual position and of rights and obligations
with respect to the payment of a royalty that stem from the Contract of Sale of
Mining Properties already indicated in Article I above and is considered as
notified of the promise of transfer.  2.- To accept without reservation the
definitive transfer of rights and contractual position with respect to the
obligation of payment of a royalty, and as of now authorizing the entering into
of this contract, without which his future authorization or notification would
be necessary.  3.- That he has fully and satisfactorily received all of the
payments that Minera Farellón was obligated to make, up to the date of the
present document, by virtue of the Contract of Sale of the Mining Properties
indicated in Article I above.
 
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Article XV: Exchange rate:  The amounts of money expressed in this document in
US dollars will be paid in national currency pesos at the exchange rate
designated “dólar observado”(observed dollar) published by the Banco Central de
Chile in the Diario Oficial (Official Gazette) on the day on which the payment
must be made, in agreement with no.6 of the First Chapter of the Compendio de
Normas de Cambios Internacionales (Compendium of International Foreign Exchange
Regulations).

Article XVI: Residence: For all legal purposes, the parties establish their
residence in the city and comuna of Vallenar.

Article XVII: Expenses: The notary expenses, of the Registrar and others, and
the taxes that originate from the granting of this option contract, and of the
documents that must be issued on the occasion of or as a result of the
completion of the obligations derived from this same option contract, shall be
the responsibility of Minera Polymet.

Article XVIII: Arbitration:  Any difficulties that are caused between the
parties relating to the interpretation, application, fulfilment, validity, term,
termination, resolution, attainment, efficiency or clearing of the present
option contract and of the proposed sale, shall be resolved by a joint
arbitrator that the contracting parties declare to know and accept, conforming
to the regulations of the Reglamento Centro de Arbitrajes (Regulating Centre of
Arbitration) of the Cámara de Comercio (Chamber of Commerce) of Santiago
A.G..  The parties grant irrevocable mandate to the Chamber of Commerce of
Santiago A.G. so that, at written request from either party, it may appoint an
arbitrator  from within the body of arbitrating members of the Arbitration
Centre of that Chamber.  There will be no recourse against the resolutions of
the arbitrator, so the parties shall expressly defer to the arbitrator, only
excepting the recourse of complaint.   The arbitrator will be especially
empowered to resolve all matters related to his/her ability and/or jurisdiction
.

Article XIX: Power:  The holder of an authorized copy of the present document is
empowered to request the registrations, subregistrations and annotations that
may be pertinent from the respective Registrar.

Article XX: Special Power:  The selling and purchasing parties give special
power to the lawyers Enrique Benítez Urrutia and Gonzalo Nieto Valdés, both
located at 3250 Avenida Isidora Goyenechea, piso 9, Las Condes, Santiago, so
that either one of them may grant all of the complementary documents that may be
necessary to rectify any error or omission existing in the clauses related to
the correct identification of the mining properties that are the object of the
present contract, as well as any registration of ownership, method of
acquisition, etc., for the sole purpose that the Conservadores de Bienes Raíces
(Registrars of Real Estate) may perform the proper registrations and
annotations.  The attorney is expressly empowered to sign all manner of request,
declaration, lawyer’s bill and public or private document necessary for the
fulfilment of their duty.  The legal capacity of Kevin Robert Mitchell to
represent Minera Farellón Limitada, consists of public document of constitution
of said company dated February 22, 2007, granted before this same Notary.  The
legal capacity of Kevin Robert Mitchell to represent Minera Polymet Limitada
consists of public document of constitution of said company dated July 16, 2007
granted before this same Notary.  The legal capacity documents previously cited
are not inserted here because they are know by both parties and the authorizing
Notary.  Conforming to the bill drawn up by the lawyer Enrique Benítez.  After
having read and understood the appearing parties sign.  Copies are
given.  Annotated in the index under No.952.  -I swear.
 
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/s/Kevin Robert Mitchell
Kevin Robert Mitchell
C.I.E. 14 498 917-1
p.p. Minera Farellón Limitada
p.p. Minera Polymet Limitada

Stamp

/s/ Ricardo Olivares Pizarro
Ricardo Olivares Pizarro
Notary

Stamp
 
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Amendment No. 1

To

Option to Purchase Contract for Mining Property
From Minera Farellón Limitada
To Minera Polymet Limitada
Dated October 10, 2008
Signed in Vallenar on October 10, 2008

As of October 10, 2008, for valuable consideration, the parties agreed to amend
Article V: Payment of the Price of the Option to Purchase the Mining Properties
to delete the words “The price of the option contract for the purchase of the
Mining Properties is the amount of $444 US, equivalent to 271,000 pesos, as of
today, that Minera Polymet pays in cash with this act and Minera Farellón
declares having received the payment to its complete satisfaction” and to insert
the words “The price of the option contract for the purchase of the Mining
Properties is the amount of $444 US, equivalent to 271,000 pesos, as of today,
that Minera Polymet must pay in cash by December 2, 2008”.  All other terms and
conditions of the option to purchase are unchanged except as they must be
changed to accommodate these changes.

 
/s/ Kevin Robert Mitchell
Kevin Robert Mitchell
CIE 14 498 917-1
Representing Minera Farellón Limitada
RUT 76 814 170-3

/s/ Kevin Robert Mitchell
Kevin Robert Mitchell
CIE 14 498 917-1
Representing Minera Polymet Limitada
RUT 76 975 260-9
 
 
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