Exhibit 10.4

GUARANTY AGREEMENT
 
THIS GUARANTY (the “Guaranty”), made as of this 10th day of April, 2007 by the
undersigned for the benefit of China Gold, LLC, a Kansas limited liability
company (herein, with its participants, successors and assigns, called
“Purchaser”).
 
For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and to induce Purchaser to extend financial accommodations
to Wits Basin Precious Minerals Inc., a Minnesota corporation and parent
corporation of the undersigned (herein called “Issuer”) pursuant to those
certain Convertible Secured Promissory Notes of Issuer in favor of Purchaser, in
an aggregate amount of up to $25,000,000 (the “Notes”), issued pursuant to that
certain Convertible Notes Purchase Agreement dated of even date herewith between
Issuer and Purchaser (the “Purchase Agreement”), the undersigned hereby
guarantees and agrees as follows:
 
The undersigned hereby absolutely and unconditionally guarantees to Purchaser
the due and punctual payment of principal, interest and liabilities when due
under the Notes (and all renewals, extensions, modifications and rearrangements
thereof) (the “Indebtedness”), whenever the Indebtedness becomes due, (whether
at a stated maturity or earlier by reason of acceleration or otherwise), and the
undersigned represents, warrants and agrees that:
 
1.  No act or thing need occur to establish the liability of the undersigned
hereunder, and no act or thing, except full payment and discharge and completion
of all Indebtedness, shall in any way exonerate the undersigned or modify,
reduce, limit or release the liability of the undersigned hereunder. This is an
absolute, unconditional and continuing guaranty of payment and fulfillment of
the Indebtedness and shall continue to be in force and be binding upon the
undersigned until all Indebtedness is paid in full and otherwise completed. Any
adjudication of bankruptcy or death or disability or incapacity of the
undersigned shall not revoke this guaranty, except upon actual receipt of
written notice thereof by Purchaser and then only prospectively, as to future
transactions, as herein set forth.
 
2.  If the undersigned shall be or become insolvent or shall initiate or have
initiated against the undersigned any act, process or proceeding under the
United States Bankruptcy Code or any other bankruptcy, insolvency or
reorganization law or otherwise for the modification or adjustment of the rights
of creditors, then the undersigned will forthwith pay to Purchaser, the full
amount of all Indebtedness then outstanding, whether or not any Indebtedness is
then due and payable.
 
3.  Until all of the Indebtedness and the obligations of the undersigned
hereunder have been paid in full and otherwise completed, the undersigned shall
not have and waives any right or subrogation to any of the rights of Purchaser
against Issuer, any other guarantor, maker or endorser, and waives its rights to
any reimbursement, contribution, recourse and indemnity therefrom; waives any
right to enforce any remedy which Purchaser now has or may hereafter have
against Issuer, and any other guarantor, maker or endorser; and waives any
benefit of, and any other right to participate in, any collateral security for
the Indebtedness or any guaranty of the Indebtedness now or hereafter held by
Purchaser.
 
4.  If any payment received and applied by Purchaser to Indebtedness is
thereafter set aside, recovered or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
Issuer or such other person), the Indebtedness to which such payment was applied
shall, for the purposes of this Guaranty, be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such Indebtedness as fully as if such application had not been
made.
 

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5.  The liability of the undersigned shall not be affected or impaired by any of
the following acts or things (which Purchaser is expressly authorized to do,
omit or suffer from time to time, both before and after revocation of this
Guaranty, without consent or approval by or notice to the undersigned): (i) any
acceptance of collateral security, guarantors, accommodation parties or sureties
for any or all Indebtedness; (ii) one or more extensions or renewals of
Indebtedness (whether or not for longer than the original period) or any
modification of the interest rates, maturities or other contractual terms
applicable to any Indebtedness; (iii) any waiver or indulgence granted to
Issuer, any delay or lack of diligence in the enforcement of Indebtedness, or
any failure to institute proceedings, file a claim, give any required notices or
otherwise protect any Indebtedness; (iv) any full or partial release of,
compromise or settlement with, or agreement not to sue Issuer or any other
guarantor or other person liable in respect of any Indebtedness; (v) any
release, surrender, cancellation or other discharge of any evidence of
Indebtedness or the acceptance of any instrument in renewal or substitution
therefor; (vi) any failure to obtain collateral security (including rights of
setoff) for Indebtedness, or to see to the proper or sufficient creation and
perfection thereof, or to establish the priority thereof, or to preserve,
protect, insure, care for, exercise or enforce any collateral security; or any
modification, alteration, substitution, exchange, surrender, cancellation,
termination, release or other change, impairment, limitation, loss or discharge
of any collateral security; (vii) any collection, sale, lease or other
disposition of, or any other foreclosure or enforcement of or realization on,
any collateral security; (viii) any assignment, pledge or other transfer of any
Indebtedness or any evidence thereof; (ix) any manner, order or method of
application of any payments or credits upon Indebtedness. The undersigned waives
any and all defenses and discharges available to a surety, guarantor, or
accommodation co-obligor, dependent on its character as such.
 
6.  The undersigned waives any and all defenses, claims, setoffs, and discharges
of Issuer, or any other obligor, pertaining to Indebtedness, except the defense
of discharge by payment in full and complete fulfillment of all obligations.
Without limiting the generality of the foregoing, the undersigned will not
assert against Purchaser any defense of waiver, release, discharge in
bankruptcy, statute of limitations, res judicata, statute of frauds,
anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Issuer or any other person liable in
respect of any Indebtedness, or any setoff available against Purchaser to Issuer
or any such other person, whether or not on account of a related transaction,
and the undersigned expressly agrees that the undersigned shall be and remain
liable for any deficiency remaining after foreclosure of any mortgage or
security interest securing Indebtedness, whether or not the liability of Issuer
or any other obligor for such deficiency is discharged pursuant to statute or
judicial decision. The undersigned will not assert against Purchaser any claim,
defense or setoff available to the undersigned against Issuer.
 
7.  The undersigned waives presentment, demand for payment, notice of dishonor
or nonpayment, and protest of any instrument evidencing Indebtedness. Purchaser
shall not be required first to resort for payment or fulfillment of the
Indebtedness to Issuer or other persons, or their properties, or first to
enforce, realize upon or exhaust any collateral security for Indebtedness,
before enforcing this Guaranty.
 
8.  The undersigned will pay or reimburse Purchaser for all costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred by Purchaser
in connection with the collection of any Indebtedness or the enforcement of this
Guaranty.
 
9.  This Guaranty shall be binding upon the undersigned, and the heirs,
successors and assigns of the undersigned and shall inure to the benefit of
Purchaser and its respective participants, successors and assigns. Except to the
extent otherwise required by law, this Guaranty and the transaction evidenced
hereby shall be governed by the substantive laws of the State of Kansas. If any
provision or application of this Guaranty is held unlawful or unenforceable in
any respect, such illegality or unenforceability shall not affect other
provisions or applications which can be given effect, and this Guaranty shall be
construed as if the unlawful or unenforceable provision or application had never
been contained herein or prescribed hereby. All representations and warranties
contained in this Guaranty or in any other agreement between the undersigned and
Purchaser shall survive the execution, delivery and performance of this Guaranty
and the creation and payment of the Indebtedness. This Guaranty may not be
waived, modified, invalidated, terminated or released or otherwise changed
except by a writing signed by Purchaser. The Guaranty shall be effective whether
or not accepted in writing by Purchaser and the undersigned waives notice of the
acceptance of this Guaranty by Purchaser.
 
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IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the
undersigned on the day and year first above written.
 

       
WITS - CHINA ACQUISITION CORP
 
   
   
  By:   /s/ Mark D. Dacko  

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Its: Treasurer
       
Address: 
 80 South Eighth Street, Suite 900
 Minneapolis, MN 55402

 
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