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SETTLEMENT AGREEMENT

THIS AGREEMENT is made effective October 18, 2006.

AMONG:

NORD RESOURCES CORPORATION, a Delaware corporation, with an office at 1 West
Wetmore Road, Suite 203, Tucson, Arizona, 85705

(“Nord”)

AND:

TMD ACQUISITION CORPORATION, a Tennessee corporation, with an address c/o 668 N.
Coast Hwy, #171 Laguna Beach, CA 92561

(“TMD Acquisition”)

WHEREAS:

A.

In May 2004, Nord commenced pursuing an opportunity (the “Opportunity”) to
acquire assets comprising ASARCO Inc.’s (“ASARCO”) Tennessee Mines Division zinc
business (the “Zinc Assets”);

    B.

As a result of Nord’s development efforts, ASARCO subsequently selected Nord as
the primary candidate with whom ASARCO would negotiate the sale and purchase of
the Zinc Assets, and presented Nord with a draft Asset Purchase Agreement in
respect of the Zinc Assets;

    C.

In October, 2004, Nord entered into a secured bridge loan agreement with
Regiment Capital III, L.P. (“Regiment Capital”), the terms of which prevented
Nord from making an investment in, or undertaking any business with respect to,
the Zinc Assets without the prior written consent of Regiment Capital. Regiment
Capital informed Nord that it would not consent to the direct acquisition of the
Zinc Assets by Nord;

    D.

Pursuant to an Agreement of Assignment and Assumption dated October 14, 2004,
Ronald Hirsch (“Hirsch”) and Stephen Seymour (“Seymour”) agreed to assist Nord
in preserving the Opportunity and, in conjunction therewith Hirsch and Seymour
entered into an Agreement of Option and Right of First Refusal dated October 14,
2004 with Nord;

    E.

Hirsch and Seymour subsequently assigned their interest and right to acquire the
zinc business to TMD Acquisition, a corporation formed by Hirsch and Seymour to
facilitate an asset purchase agreement dated March 21, 2005 (the “Acquisition
Agreement”) with ASARCO;

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F.

On August 2, 2005, ASARCO purported to terminate the Acquisition Agreement and
subsequently filed for relief under Chapter 11 of the United States Bankruptcy
Code;

    G.

TMD Acquisition has disputed ASARCO’s position that the Acquisition Agreement
has been terminated, but was advised in May 2006 that the Zinc Assets have been
sold at auction;

    H.

Nord believes that the Zinc Assets were a property of potential merit, and is
desirous of preserving Nord’s right of action (the “ASARCO Claim”) against
ASARCO and ASARCO’s trustee in bankruptcy;

    I.

As there are no longer any restrictions imposed by Nord’s current lender in
respect of the Zinc Assets, Nord and TMD Acquisition have agreed that Nord will
take an assignment of the Acquisition Agreement, will reimburse certain of the
expenses incurred by TMD Acquisition and will assume certain accounts payable
owing by TMD Acquisition in the preservation of the Opportunity; and

    J.

In order to assist TMD Acquisition in the payment of its legal costs to preserve
the Opportunity, Nord lent the aggregate sum of $50,000 to TMD Acquisition.

THIS AGREEMENT WITNESSES that in consideration of the premises and of the sum of
$10 and other good and valuable consideration now paid by each of the parties to
the others (the receipt and sufficiency of which are hereby acknowledged by the
parties), the parties covenant and agree that;

Zinc Assets

1. TMD Acquisition will, pursuant to an Assignment and Assumption Agreement
substantially in the form attached hereto as Schedule A, assign to Nord, an
affiliate (as defined under the Acquisition Agreement) of TMD Acquisition, all
of its right, title and interest under the Acquisition Agreement.

2. Nord will reimburse TMD Acquisition for certain expenses (the “TMD Expenses”)
in the aggregate amount of $365,000 (as set out in Section 3) and hereby
absolutely and unconditionally assumes and accepts responsibility for the
payment of certain of TMD Acquisition’s accounts payable in the aggregate amount
of $101,442 (more particularly described in Schedule B), all of which Nord
acknowledges have been properly incurred by TMD Acquisition to preserve the
Opportunity for Nord.

3.

Nord will reimburse the TMD Expenses, upon the earlier of

      (a)

December 22, 2006, and

      (b)

the closing date of

     

(i) a registered equity offering and/or a debt project financing (collectively
or separately, a “Funding”) in which Nord raises not less than the aggregate
amount of $25,000,000, or

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  (ii)

a significant corporate transaction (a “Significant Transaction”) in which

          (A)

any person, together with all affiliates and associates of such person, becomes
the beneficial owner, directly or indirectly, of securities of Nord representing
51% or more of the common shares Nord, or

          (B)

there is a sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of Nord or of assets of Nord valued at
$12,000,000 or greater,

provided that:

(c) if the maturity date of Nord’s $4,900,000 loan facility with Nedbank Limited
(“Nedbank”) is extended, Nord and TMD Acquisition agree to negotiate an
extension to Section 3(a) above in good faith; and

(d) if prior to the reimbursement in full by Nord of the TMD Expenses, Nord
receives any cash payment in full or partial settlement of the ASARCO Claim,
Nord will, within five business days following receipt, remit such portion of
the cash payment to TMD Acquisition as will be required to fully pay the
outstanding balance of the TMD Expenses. For greater certainty, this paragraph
3(d) will apply to successive payments received by Nord in respect of the ASARCO
Claim until the TMD Expenses have been reimbursed in full.

4. TMD Acquisition acknowledges that the aggregate amount of $50,000 lent by
Nord (evidenced by demand promissory notes dated February 27, 2006 and May 8,
2006, respectively, each in the principal amount of $25,000) is currently
outstanding and is payable to Nord on demand. Nord and TMD Acquisition agree
that the sum of $50,000 will be set-off against the expenses to be reimbursed to
TMD Acquisition pursuant to Section 2 above.

Notice

5. Any notice, waiver or other document (each a “Notice”) required or permitted
to be given pursuant to this Agreement will be deemed to be well and
sufficiently given if in writing and delivered by hand or transmitted by
facsimile as follows:

  (a) if to Nord, at:           1 West Wetmore Road, Suite 203     Tucson,
Arizona, 85705     Fax: (520) 292-0268     Attn: John Perry         (b) if to
TMD Acquisition, at:         668 N. Coast Hwy. #171     Laguna Beach, CA 92561

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Fax: (949) 715-6746
Attention: Ronald Hirsch

or at such other address or facsimile number as the party to whom the Notice is
to be given shall have last notified the party giving the same in the manner
provided in this paragraph. A Notice given or sent as aforesaid will be deemed
conclusively to have been effectively given and received on the day it is hand
delivered or transmitted by facsimile if it is delivered or transmitted before
4:00 p.m. on a day that is not a Saturday, Sunday or statutory holiday in the
State of Arizona (a “Business Day”) or on the next day that is a Business Day in
any other case.

Governing Law

6. This Agreement will be exclusively governed by, and interpreted and construed
in accordance with, the laws prevailing in the State of Arizona. The parties
irrevocably and unconditionally attorn to the exclusive jurisdiction of the
courts of the State of Arizona and all courts having appellate jurisdiction
thereover.

Further Assurances

7. Each party will execute and deliver such further agreements and other
documents and do such further acts and things as another party reasonably
requests to evidence, carry out or give full force and effect to the intent of
this Agreement.

Time of the Essence

8. Time is of the essence in the performance of each obligation under this
Agreement.

Severability

9. If any provision of this Agreement is at any time unenforceable or invalid
for any reason, it will be severable from the remainder of this Agreement and,
in its application at that time, this Agreement will be construed as though such
provision was not contained herein and the remainder will continue in full force
and effect and be construed as if this Agreement had been executed without the
invalid or unenforceable provision.

Amendments

10. This Agreement may not be amended except in writing signed by all parties.

Assignment

11. This Agreement and the individual rights and obligations hereunder may not
be transferred or assigned in whole or in part by any party without the consent
of the other party, which consent will not be unreasonably withheld or delayed,
and any purported transfer or assignment without such consent will be null and
void.

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Enurement

12. This Agreement and the provisions hereof will enure to the benefit of and be
binding upon the parties and their respective successors and permitted assigns.

Entire Agreement

13. This Agreement constitutes the entire agreement between the parties, and
supersedes every previous agreement, communication, expectation, negotiation,
representation or understanding, whether oral or written, express or implied,
statutory or otherwise between the parties, with respect to the subject matter
of this Agreement. Nothing in this Section 13 will limit or restrict the
effectiveness and validity of any document with respect to the subject matter of
this Agreement that is executed and delivered contemporaneously with or pursuant
to this Agreement.

Counterparts

14. This Agreement may be executed in any number of counterparts, in original
form or by facsimile, each of which will together, for all purposes, constitute
one and the same instrument, binding on the parties, and each of which will
together be deemed to be an original, notwithstanding that each party is not a
signatory to the same counterpart.

IN WITNESS WHEREOF this Agreement has been executed by the parties effective as
of the day and year first above written.

NORD RESOURCES CORPORATION TMD ACQUISITION CORPORATION                 Per: /s/
John T. Perry Per: /s/ Stephen D. Seymour   John Perry, Senior Vice President  
Stephen Seymour, Director

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SCHEDULE A
ASSIGNMENT AGREEMENT

THIS AGREEMENT is made effective October 18, 2006

BETWEEN:

NORD RESOURCES CORPORATION, a Delaware corporation, with an office at 1 West
Wetmore Road, Suite 203, Tucson, Arizona, 85705

(“Nord”)

AND:

TMD ACQUISITION CORPORATION, a Tennessee corporation, with an address c/o 668 N.
Coast Hwy, #171 Laguna Beach, CA 92561

(“TMD Acquisition”)

WHEREAS:

A.

In May 2004, Nord commenced pursuing an opportunity (the “Opportunity”) to
acquire assets comprising ASARCO Inc.’s (“ASARCO”) Tennessee Mines Division zinc
business (the “Zinc Assets”);

    B.

As a result of Nord’s development efforts, ASARCO subsequently selected Nord as
the primary candidate with whom ASARCO would negotiate the sale and purchase of
the Zinc Assets, and presented Nord with a draft Asset Purchase Agreement in
respect of the Zinc Assets;

    C.

In October, 2004, Nord entered into a secured bridge loan agreement with
Regiment Capital III, L.P. (“Regiment Capital”), the terms of which prevented
Nord from making an investment in, or undertaking any business with respect to,
the Zinc Assets without the prior written consent of Regiment Capital. Regiment
Capital informed Nord that it would not consent to the direct acquisition of the
Zinc Assets by Nord;

    D.

Pursuant to an Agreement of Assignment and Assumption dated October 14, 2004,
Hirsch and Seymour agreed to assist Nord in preserving the Opportunity and, in
conjunction therewith Hirsch and Seymour entered into an Agreement of Option and
Right of First Refusal dated October 14, 2004 with Nord;

    E.

Hirsch and Seymour subsequently assigned their interest and right to acquire the
zinc business to TMD Acquisition, a corporation formed by Hirsch and Seymour to
facilitate an asset purchase agreement dated March 21, 2005 (the “Acquisition
Agreement”) with ASARCO;

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F.

On August 2, 2005, ASARCO purported to terminate the Acquisition Agreement and
subsequently filed for relief under Chapter 11 of the United States Bankruptcy
Code;

    G.

TMD Acquisition has disputed ASARCO’s position that the Acquisition Agreement
has been terminated, but was advised in May 2006 that the Zinc Assets have been
sold at auction;

    H.

Nord believes that the Zinc Assets were a property of potential merit, and is
desirous of preserving Nord’s right of action against ASARCO and ASARCO’s
trustee in bankruptcy;

    I.

As there are no longer any restrictions imposed by Nord’s current lender in
respect of the Zinc Assets, Nord and TMD Acquisition have agreed that Nord will
take an assignment of the Acquisition Agreement and all other agreements, rights
and obligations related thereto (the “TMD Agreement”); and

    J.

TMD Acquisition wishes to assign all of its rights and obligations under the TMD
Agreement to Nord and Nord wishes to assume all of TMD Acquisition’s rights and
obligations under the TMD Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and
of the mutual covenants and agreements hereinafter contained, the parties hereto
agree as follows:

1. Effective October 18, 2006 (the “Effective Date”) all of TMD Acquisition’s
rights and obligations under the TMD Agreement including without limitation, any
and all claims and causes of action which TMD has or may have against ASARCO,
ASARCO’s bankruptcy estate, ASARCO’s parents, subsidiaries or affiliates and
ASARCO’s directors and officers.

2. Nord covenants and agrees that from and after the Effective Date it will
perform all of the duties and obligations on the part of TMD Acquisition to be
performed under the TMD Agreement.

3. This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successor and assigns.

4. The parties will execute all such further and other documents or assurances
as may be required in order to carry out the terms of this Agreement.

5. This Agreement shall be governed by and in accordance with the laws of the
State of Arizona.

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6. This Agreement may be executed in counterparts, which together shall
constitute one instrument. Delivery of an executed copy of this Agreement by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Agreement as of its effective date.

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

NORD RESOURCES CORPORATION TMD ACQUISITION CORPORATION     Per:
______________________________________________________________ Per:
______________________________________________________________            
 Authorized Signatory            Authorized Signatory

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SCHEDULE B
ACCOUNTS PAYABLE

August Law Group $  15,979               Erland Anderson $  1,302              
Lang Michener LLP $  2,374               Roscoe Postle $  78,727              
Visani Law $  3,060               Total Accounts Payable              to be
Assumed $ 101,442    

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