PROPERTY OPTION AGREEMENT
 
THIS PROPERTY OPTION AGREEMENT is made as of the __ day of February, 2011 (the
”Effective Date”)
 
AMONG:
 
MEXIVADA MINING CORP.,
 
 
a corporation formed under the laws of British Columbia, Canada and having an
office at 1166  Alberni Street, Suite 1008, Vancouver, British Columbia, V6E
3Z3, Canada

 
(hereinafter called “Mexivada”, and together with Minera Mexivada, the
“Optionors”);
 
- and -
 
COMPANIA MINERA MEXIVADA S.A. DE C.V.,
 
 
a corporation formed under the laws of Mexico and having an office at Ramon
Corral 15, Col. Country Club, Hermosillo, Sonora, Mexico 83010

 
(hereinafter called “Minera Mexivada”, and together with Mexivada, the
“Optionors”);
 
- and -
 
CALIFORNIA GOLD CORP.,
 
 
a corporation formed under the laws of Nevada and having an office at 4515 Ocean
View Blvd., Suite 305, La Cañada, CA  91011

 
(hereinafter called “CLGL”, and together with CLGL S.A., the “Optionees”);
 
- and -
 
Gottbetter and Partners, LLP,
 
 
on behalf of a corporation to be formed under the laws of Mexico and having an
office at 4515 Ocean View Blvd., Suite 305, La Cañada, CA  91011

 
(hereinafter called “CLGL S.A.” and together with CLGL, the “Optionees);
 
(Mexivada, Minera Mexivada, CLGL and CLGL S.A. being hereinafter singularly also
referred to as a “Party” and collectively referred to as the “Parties” as the
context so requires).
 
 
 

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RECITALS
WHEREAS,

(A)           The Optionors, through Minera Mexivada, are the legal and
beneficial owners of certain mineral property concession interests which are
located in the State of Sonora, Mexico, and which are better known and described
respectively as the “La Viuda” and “La Viuda 1” properties (collectively, the
“Property”); and which mineral property interests comprising the Property are
more particularly described in Schedule “A” which is attached hereto and which
forms a material part hereof;

(B)           Mexivada and CLGL entered into a binding offer letter agreement
dated October 5, 2010, as amended November 21, 2010 (the “Letter Agreement”),
pursuant to which Mexivada and CLGL therein agreed to enter into a formal option
[and joint venture] agreement whereby the Optionors would grant an option to the
Optionees (the “Option”) to acquire up to an undivided Eighty percent (80%)
legal, beneficial and registerable Interest in and to the mineral property
concession interests comprising the Property; and

(C)           The Optionors and the Optionees have agreed to enter into this
agreement which formalizes and replaces, in its entirety, the Letter Agreement,
as contemplated by the terms of the Letter Agreement, and which clarifies their
respective rights, duties and obligations in connection with the Option and the
development of the mineral property concession interests comprising the Property
as a consequence thereof;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants
and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency which is hereby acknowledged, the
Parties agree as follows:

CLAUSES

1.           DEFINITIONS

1.1
Definitions.  In this Agreement:

 
“this Agreement”, “herein”, “hereby”, “hereof”, “hereunder” and similar
expressions shall mean or refer to this Property Option Agreement and any and
all agreements or instruments supplemental or ancillary hereto and the
expression “section” followed by a number means and refers to the specified
section of this Agreement.

“Affiliate” shall mean any person, partnership, joint venture, corporation or
other form of enterprise which directly or indirectly Controls, is controlled by
or is under common Control with a Party.

“Agents” shall mean servants, employees, agents, workmen and contractors.

 
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“Area of Mutual Interest” shall have the meaning given to it in Section 16.1.

“CLGL” shall mean CALIFORNIA GOLD CORP., a corporation organized under the laws
of Nevada.

“Closing” shall have the meaning set forth in Section 8.1.

“Closing Date” shall have the meaning set forth in Section 8.1.

“CLGL S.A.” shall mean CLGL’s wholly owned Mexican subsidiary, a corporation to
be organized under the laws of Mexico.

“Control” shall mean possession, directly or indirectly, of the power to direct
or cause direction of management and policies through ownership of voting
securities, contract, voting trust or otherwise.

“Effective Date” shall mean February __, 2011.

“Encumbrances” shall mean any and all mortgages, pledges, security interests,
liens, charges, encumbrances, contractual obligations and claims of others,
recorded and unrecorded, registered and unregistered.

“Environmental Laws” means any and all federal, provincial, and local laws,
statutes, regulations, ordinances, bylaws, orders, permits, licences and
approvals currently in effect or subsequently enacted that regulate or provide
liabilities or obligations in relation to mining, mine development and mineral
exploration or the existence, use, production, manufacture, processing,
distribution, transport, handling, storage, removal, treatment, disposal,
emission, discharge, migration, seepage, leakage, spillage or release of
Hazardous Substances or the construction, alteration, use or operation,
demolition or decommissioning of any facilities or other real or personal
property in relation to the foregoing or otherwise in relation to the protection
and preservation of the life, health or safety of persons, or to the protection
and preservation of the environment, including but not limited to, air, soil,
surface water, ground water, wildlife or personal or real property.

“Environmental Liability” shall mean any and all liabilities under any Laws,
Environmental Laws or pursuant to any court order or judgment in respect of any
prior, ongoing or future use of the Property, including without limitation, all
liabilities, if any, in respect of the proper abandonment and reclamation of the
Property and/or the Lots and related facilities, if any, and surrounding areas
of any nature, all in accordance with applicable environmental regulations or
requirements.

“Escrow Agent” shall have the meaning set forth in section 6.1.

 
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“Escrowed Documents” shall have the meaning set forth in section 6.1.

“Expenditures” shall mean all direct or indirect costs and expenses (including,
among others, travel, legal and accounting)  incurred by or on behalf of the
Optionees in respect of prospecting, exploring and developing the Property,
pursuant to Section 4.2(c) hereof, incurred before or after the Effective Date,
including, but not limited to, any and all costs, fees and expenses that may be
paid to obtain a NI 43-101 compliant technical report, feasibility, engineering
or other studies or reports on or with respect to the Property, and assessments
relating to the concessions. The certificate of the Chief Financial Officer or
other financial or operational officer of CLGL, together with a statement of the
Expenditures in reasonable detail shall be prima facie evidence of such
Expenditures.

“Exploration Program” shall have the meaning given to it in Section 9.1.

“Hazardous Substance” means any substance or material that is or becomes
prohibited, controlled or regulated by any federal, provincial, municipal, local
or other level of government and any government agency, body, corporation,
organization, department, official or authority responsible for administering or
enforcing any law and includes any toxic substance, waste and dangerous goods.

“Interest" means an undivided beneficial interest in and to the Property.

“Issuances” shall have the meaning set forth in Section 4.2(b).

 “Laws” means collectively, all federal, state, provincial, territorial,
municipal or local statutes, regulations and by-laws, whether Canadian, U.S.,
Mexican or otherwise, applicable to the Parties or the Property, or to any
activities thereon, including without limitation, all orders, notices, rules,
decrees, decisions, codes, guidelines, policies, directions, permits, approvals,
licenses and similar authorizations issued, rendered or imposed by any level of
government including any ministry, department or administrative or regulatory
agency or authority.

“Letter Agreement” shall mean that certain binding offer letter agreement
between CLGL and Mexivada dated October 5, 2010, as amended November 21, 2010.

“Losses” shall mean actual losses, liabilities, damages, injuries, costs or
expenses.

“Lots” shall mean the surface properties were the Property is located.

“MEXIVADA MINING CORP.” shall mean a corporation incorporated under the laws of
British Columbia.

 
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“MINERA MEXIVADA” shall mean COMPANIA MINERA MEXIVADA, S.A. DE c.v., a company
incorporated under the laws of Mexico and a wholly owned subsidiary of Mexivada.

“Operator” shall have the meaning set forth in Section 9.1.

“Option” shall mean the exclusive right herein granted by the Optionors to the
Optionees to permit the Optionees to acquire up to an eighty percent (80%)
undivided interest in and to the Property.

“Optionees” shall mean CLGL and CLGL S.A.

“Optionees’ Closing Certificate” shall have the meaning given to in Section
7.2(c).

“Optionors” shall mean Mexivada and Minera Mexivada.

“Optionors’ Closing Certificate” shall have the meaning given to it in Section
7.1 (d).

“Option Period” shall mean the period during which the Option is in full force
and effect as provided in section 4.1.

“Parties” shall mean collectively, MEXIVADA, MINERA MEXIVADA, CLGL and CLGL S.A.

“Party” shall mean either MEXIVADA, MINERA MEXIVADA, CLGL or CLGL S.A.

“Payments” shall have the meaning set forth in Section 4.2(a).

“Person” shall mean any individual, partnership, company, corporation,
unincorporated association, person, government or governmental agency, authority
or entity howsoever designated or constituted.

“Property” shall mean the mineral concessions described in Schedule “A” (the
“Property”) as they may be augmented pursuant to Section 16.1 (such augmenting
claims or interests being referred to herein as the “Additional Property” and
included as part of the Property), and all mining leases and other mining
interests derived from any such claims, and a reference herein to a mineral
claim comprised in the Property includes any mineral leases or other interests
into which such mineral claim may have been converted and Property includes all
Property Rights.

“Property Rights” shall mean all licenses, permits, easements, rights-of-way,
surface or water rights and other rights, approvals obtained by any of the
parties either before or after the date of this Agreement and necessary or
desirable for the development of the Property, or for the purpose of placing the
Property into production or continuing production.

 
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"Proportionate Share" means that share which is equal to a Party's percentage
Interest.

“RPM” means the Mexican Public Mining Registry (Registro Público Minero).

“Shares” shall mean the fully paid and non-assessable shares of restricted
common stock, par value $0.001 per share, of CLGL which are issuable by CLGL to
Mexivada under this Agreement, pursuant to exemptions from registration and
prospectus requirements contained in the United States Securities Act of 1933
and the rules and regulations promulgated thereunder, which Shares shall contain
such restrictive legends regarding applicable hold periods as required by such
securities laws.

“Steering Committee” shall have the meaning given to it in Section 9.2.

“Surface Rights Agreement” shall have the meaning given to it in Section 7.3.

“Termination Notice” shall have the meaning set forth in section 10.2.

“Transfer” when used as a verb, shall mean to sell, grant, assign, encumber,
pledge or otherwise commit or dispose of, directly or indirectly, including
through mergers, consolidations or asset purchases.  When used as noun,
“Transfer” shall mean a sale, grant, assignment, pledge or disposal or the
commitment to do any of the foregoing, directly or indirectly, including through
mergers, consolidations or asset purchases.

“Trust Deeds” shall have the meaning set forth in section 6.1.

2. 
SCHEDULES, GENDER AND DOLLARS

2.1         Schedules.  The following are the exhibits attached to and
incorporated in this Agreement by reference and deemed to be a part hereof:

Schedule “A” – Concessions Comprising the Property; and
Schedule “B” – the Letter Agreement, as amended.

2.2         Gender and Extended Meanings.  In this Agreement all words and
personal pronouns relating thereto shall be read and construed as the number and
gender of the party or parties referred to in each case require and the verb
shall be construed as agreeing with the required word and pronoun.  In this
Agreement words importing the singular number include the plural and vice versa.

2.3         Currency.  Unless otherwise expressly stated, all dollar amounts,
“$” or “USD$” referred to in this Agreement are in United States of America
dollars.

 
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2.4           Business Days.  All references in this Agreement to business days
are to days excluding Saturdays, Sundays and banking holidays in the United
States of America.

2.5           Period of Time.  When calculating the period of time within which
or following which any act is to be done or step is to be taken pursuant to this
Agreement, the date which is the reference date in calculating such period shall
be excluded.  If the last day of such period is a non-business day, the period
in question shall end on the next business day.

2.6           Section Headings.  The section and other headings contained in
this Agreement or in the Exhibit are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

3.             REPRESENTATIONS AND WARRANTIES

3.1           Representation and Warranties of the Optionors.  The Optionors
hereby jointly and severally represent and warrant as follows and acknowledge
that the Optionees are relying on such representations and warranties in
entering into this Agreement and acknowledges and agrees that such
representations and warranties shall be true and correct as of the Effective
Date with the same force and effect as if made on and as of such date:

 
(a)
Corporate Approvals.  Each of the Optionors has duly obtained all corporate and
all regulatory authorizations for the execution, delivery and performance of
this Agreement and such execution, delivery and performance of this Agreement by
each of the Optionors and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any covenants or
agreements contained in or constitute a default under or result in the creation
of any Encumbrance under the provisions of the Optionors’ corporate documents or
any shareholders’ or directors’ resolution or any indenture, agreement or other
instrument whatsoever to which either of the Optionors is a party or by which
either of the Optionors is bound and does not contravene any applicable Laws.

 
(b)
No Acts of Bankruptcy.  Each of the Optionors has not committed an act of
bankruptcy, is not insolvent, has not proposed a compromising arrangement to its
creditors generally, has not had any petition for a receiving order in
bankruptcy filed against it, has not made a voluntary assignment in bankruptcy,
has not taken any proceedings with respect to a compromise or arrangement, has
not taken any proceeding to have itself declared bankrupt or wound-up, has not
taken any proceeding to have a receiver appointed for any part of its assets,
has not had any encumbrancer take possession of any of its property and has not
had any execution or distress become enforceable or become levied upon any of
its property.

 
 
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(c)
Brokerage or Finder's Fee.  There is no Person acting or purporting to act at
the Optionors’ request who is entitled to any brokerage or finder's fee in
connection with the transactions contemplated herein.

 
(d)
Interest.  The Optionors are the beneficial owner of a 100% undivided interest
in the Property, free and clear of any and all Encumbrances.  Each of the
Optionors has the full power to hold its Interest in the Property and hold
recorded or registered title to the Property and no person has any proprietary
or other possessory interest in the Property.  Neither of the Optionors has
received any notice of the existence of any condemnation, expropriation or
similar proceeding respecting the Property.

 
(e)
Property in Good Standing. The mining concessions forming part of the Property
are in good standing and no event, condition or occurrence exists that, after
notice or lapse of time or both, would constitute a default under such mining
concessions and all required assessment work, reports, fees, duties and payments
have been filed or made and are current. There are no pending or unpaid dues,
fees, duties or charges of any kind relating to the Property.

 
(f)
Lots. Concession Holder has not entered into any arrangements with the surface
owners where the Property is located, other than the Surface Rights Agreement to
be in place prior to Closing. To the best of Optionors’ knowledge, there are no
current, pending or future issues with the surface owners where the Property is
located that would limit or endanger the access, works and investments relating
to the Property to be carried out by the Optionees.

 
(g)
Abutting Concessions.  The Optionors do not own any right, title or interest in
or to any mining concessions abutting the Property.

 
(h)
Property Staked. Each mining concession forming part of the Property has been
duly and properly staked, tagged, located and issued in accordance with all
applicable laws and regulations in Mexico, and recorded in the RPM, and is in
good standing.

 
(i)
Taxes, Charges and Assessments.  All taxes and charges with respect to the
Property have been paid in full as of the date hereof.  All requisite minimum
assessment work has been performed and reported on the Property pursuant to the
provisions of the applicable Laws in Mexico. No Person other than the Optionors
has any proprietary or possessory interest in the Property.  No Person is
entitled to any royalty or other payment in the nature of rent or royalty on any
minerals, metals or concentrates or any other such products removed or produced
from the Property.  The Optionors have not entered into and are not aware of any
other agreements in respect of the Property.

 
 
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(j)
Adverse Claims.  To the best of the knowledge of the Optionors, there are no
existing, pending or threatened adverse claims or challenges against or to the
ownership of, possession, operation, control, management or title to the
Property, or, to the best of Optionors’ knowledge, the Lots or substances
thereon or therefrom nor, to the best knowledge of the Optionors, is there any
basis therefore.

 
(k)
Compliance with Laws.  To the best of the knowledge of the Optionors, the
Optionors have materially complied with all Laws, including, but not limited to
all Environmental Laws in Mexico, with respect to the Property and the Optionors
have not received notice of any breach, violation or default with respect to the
Property.  Conditions on and relating to the Property are materially compliant
with all applicable Laws in Mexico.

 
(l)
Litigation. There is no legal, administrative, arbitration or other proceeding,
claim or action of any nature or investigation pending or, to the knowledge of
the Optionors, threatened against or involving the Property, Lots or which
questions or challenges the validity of this Agreement, or any action taken or
to be taken by the Optionors pursuant to this Agreement or any other agreement
or instrument to be executed and delivered by the Optionors in connection with
the transactions contemplated hereby and the Optionors do not know or have any
reason to know of any valid basis for any such legal, administrative,
arbitration or other proceeding, claim, action of any nature or
investigation.  Neither of the Optionors is subject to any judgment, order or
decree entered in any lawsuit or proceeding which has had or may be expected to
have an adverse effect on the Property.

 
(m)
All Material Information. Mexivada has made available to CLGL all material
information in its possession or control relating to the Property and throughout
the Option Period, shall continue to make available to the Optionees all
information in its possession or control relating to the Property.

 
(n)
Due Incorporation. Each of the Optionors is a corporation duly incorporated
under the laws of the jurisdiction of its incorporation and each is duly
organized and validly subsisting under such laws and is duly licensed and
qualified as necessary to carry on its business as currently conducted or as
proposed to be conducted.

 
(o)
Corporate Power.  Each of the Optionors has full power and authority to carry on
its business and to enter into this Agreement and any agreement or instrument
referred to or contemplated by this Agreement and to carry out and perform all
of its obligations and duties hereunder.

 
(p)
Due Execution and Delivery.  This Agreement has been duly executed and delivered
by each of the Optionors and is valid, binding and enforceable against it in
accordance with its terms.

 
 
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(q)
Hazardous Substances. No Hazardous Substance has been placed, held, located,
used or disposed of, on, under or at the Property by either of the Optionors,
their Affiliates, or their Agents that would have a materially adverse effect on
the Property.  No claim has ever been asserted and there are no present
circumstances which could reasonably form the basis for the assertion of any
claim against the either of the Optionors for material Losses of any kind as a
direct or indirect result of the presence on or under or the escape, seepage,
leakage, spillage, discharge, emission or release from the Property of any
Hazardous Substance.

 
(r)
Other Information.  Neither of the Optionors has any information or knowledge of
any facts pertaining to the Property or substances thereon, including, but not
limited to, Hazardous Substances, or therefrom not disclosed in writing to the
Parties, which if known to the Parties might reasonably be expected to deter any
of the Parties from completing the transactions contemplated hereby.

 
(s)
Environmental.  There are no outstanding work orders or actions required or
reasonably anticipated to be required to be taken in respect of the
rehabilitation or restoration of the Property or relating to environmental
matters in respect of the Property or any operations thereon. Neither of the
Optionors has received any order or direction, or notice of an order or
direction, from any government authorities that would constitute an
Environmental Liability in respect of the Property or the Lots.

 
(t)
Previous Exploration Work. To the best of the knowledge of the Optionors all
previous exploration on the Property has been carried out in accordance with
applicable Laws, including, but not limited to the Environmental Laws, and sound
mining, environmental and business practice.  Neither of the Optionors has
received notice of any breach, violation or default with respect to the
Property.  The prospecting work, processes, undertakings and other operations
carried on or conducted by or on behalf of the Optionors in respect of the
Property have been carried on or conducted in a sound and workmanlike manner and
in compliance with sound geological and geophysical exploration and mining,
engineering and metallurgical practices.

3.2           Representations and Warranties of the Optionees.  The Optionees
hereby jointly and severally each represent and warrant to the Optionors as
follows and acknowledge that the Optionors are relying on such representations
and warranties in entering into this Agreement and acknowledge and agree that
such representations and warranties shall be true and correct as of the
Effective Date with the same force and effect as if made on and as of such date:

 
(a)
Due Incorporation.  Is a company duly incorporated under the laws of the
jurisdiction of its incorporation and it is duly organized and validly
subsisting under such laws and is duly licensed and qualified as necessary to
carry on its business as currently conducted or as proposed to be conducted.

 
 
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(b)
Corporate Power.  Has full power and authority to carry on its business and to
enter into this Agreement and any agreement or instrument referred to or
contemplated by this Agreement and to carry out and perform all of its
obligations and duties hereunder, including without limitation, with respect to
CLGL - the issuance of the Shares.

 
(c)
Corporate Approvals.  Has duly obtained all corporate authorizations for the
execution, delivery and performance of this Agreement and such execution,
delivery and performance and the consummation of the transactions herein
contemplated, including without limitation, with respect to CLGL - the issuance
of the Shares, will not conflict with or result in a breach of any covenants or
agreements contained in or constitute a default under or result in the creation
of any Encumbrance under the provisions of its constating documents or any
shareholders’ or directors’ resolution or any indenture, agreement or other
instrument whatsoever to which it is a party or by which it is bound and does
not contravene any applicable Laws.

 
(d)
Due Execution and Delivery.  This Agreement has been duly executed and delivered
by it and is valid, binding and enforceable against it in accordance with its
terms.

 
(e)
No Acts of Bankruptcy.  It has not committed an act of bankruptcy, is not
insolvent, has not proposed a compromising arrangement to its creditors
generally, has not had any petition for a receiving order in bankruptcy filed
against it, has not made a voluntary assignment in bankruptcy, has not taken any
proceedings with respect to a compromise or arrangement, has not taken any
proceeding to have itself declared bankrupt or wound-up, has not taken any
proceeding to have a receiver appointed for any part of its assets, has not had
any encumbrancer take possession of any of its property and has not had any
execution or distress become enforceable or become levied upon any of its
property.

 
(f)
Brokerage or Finder's Fee.  There is no Person acting or purporting to act at
its request who is entitled to any brokerage or finder's fee in connection with
the transactions contemplated herein.

 
(g)
Litigation.  There is no legal, administrative or other proceeding, claim or
action of any nature or investigation pending or, to the knowledge of the
Optionees, threatened against or involving them or which questions or challenges
the validity of this Agreement, or any action taken or to be taken by it
pursuant to this Agreement or any other agreement or instrument to be executed
and delivered by it in connection with the transactions contemplated hereby and
it does not know or have any reason to know of any valid basis for any such
legal, administrative, arbitration or other proceeding, claim, action of any
nature or investigation.

 
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3.4
Representations and Warranties as Conditions.  Each Party:

 
(a)
Condition.  Acknowledges and agrees that the contra Parties are entering into
this Agreement relying upon the representations and warranties made by it herein
and the correctness of each such representation and warranty is a condition upon
which such other Parties are relying upon entering into this Agreement, each of
which conditions may be waived in whole or in part solely by such other Parties
in writing and all such representations and warranties shall survive the
execution, delivery and termination of this Agreement and the completion of the
transactions contemplated hereby notwithstanding any independent investigations
any Party may make.

 
(b)
Indemnification.  Agrees to indemnify and hold harmless the contra Parties from
all Losses actually incurred by such other Parties in connection with a breach
of any representation or warranty made by it and contained herein, provided that
such representations and warranties shall only have a survival period that
terminates two years following: (i) the exercise of the Option in full; or (ii)
the termination of the Option.

4. 
GRANT OF OPTION; OPTION PAYMENTS AND OBLIGATIONS.

4.1         Grant of Option and Acquisition of the Property Interest.  Subject
to the terms of this Agreement and for the consideration set out in Section 4.2
below, the Optionors hereby agree to sell, transfer and assign to the Optionees
eighty percent (80%) of the Optionors’ right, title and interest in and to the
Property, such 80% Interest to be free and clear of all Encumbrances arising
from or through the Optionors, and subject to the laws applicable to the
Property.  The option shall commence on the Effective Date and shall terminate
on the fifth anniversary of the Closing Date or such earlier date as the
Optionees may have complied with Section 5.1 and exercised the Option in full
(the “Option Period”).

4.2         Consideration.  The consideration for the exercise of the Option to
acquire this 80% Interest shall be as follows:
                   

 
(a) 
CLGL shall make cash payments (the “Payments”) to Mexivada as follows:

 
 
(i)
$30,000 upon the Closing;

 
(ii)
$40,000 on the 1st anniversary of the Closing;

 
(iii)
$50,000 on the 2nd anniversary of the Closing;

 
(iv)
$70,000 on the 3rd anniversary of the Closing; and

 
(v)
$100,000 on the 4th anniversary of the Closing.

                            
 
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(b)
CLGL shall issue (the “Issuances”) 1,650,000 shares of its restricted common
stock, par value $0.001 per share (the “Shares”), to Mexivada, as follows:

 
 
(i)
250,000 Shares upon the Closing;

 
(ii)
250,000 Shares on the 1st anniversary of the Closing;

 
(iii)
300,000 Shares on the 2nd anniversary of the Closing;

 
(iv)
350,000 Shares on the 3rd anniversary of the Closing; and

 
(v)
500,000 Shares on the 4th anniversary of the Closing.

 

 
(c) 
CLGL shall incur $3,000,000 in Expenditures on the Property as follows:

                            
 
(i)
$750,000 during the 1st 12 month period following the Closing;

 
(ii)
$750,000 during the 2nd 12 month period following the Closing;

 
(iii)
$750,000 during the 3rd 12 month period following the Closing; and

 
(iv)
$750,000 during the 4th 12 month period following the Closing.

 
Mexivada acknowledges and agrees that the Shares will be issued in accordance
with all applicable securities laws and will be subject to hold periods and
restrictions on resale in accordance with applicable securities laws and it is
Mexivada's responsibility to determine what those hold periods and restrictions
are before selling or otherwise transferring any Shares.

4.3           Acknowledgement of Initial Payment. Mexivada acknowledges that,
prior to December 31, 2010, it received from CLGL a deposit payment of $20,000
($15,000 of which is refundable if this Agreement is terminated prior to
Closing), which sum shall be applied towards the $30,000 cash payment due to
Mexivada upon Closing as referenced in item 4.2(a)(i) above.  For the sake of
clarity, CLGL shall be required to pay Mexivada only $10,000 in cash at Closing.

4.4           Expedited Payments.  CLGL may make the Payments and the Issuances
to Mexivada and the Expenditures on the Property on an accelerated basis in
advance of the due dates set forth in section 4.2.  Any such accelerated
Payments, issuances and Expenditures that are greater than the minimum required
by section 4.2, shall be credited toward future payments and issuances as
applicable.

5.             EXERCISE OF OPTION; VESTING OF INTEREST

5.1           Option Exercise.  Upon completing the Payments, Expenditures and
Issuances as set out above, including those items set out in paragraphs 4.2
(a)(i) and 4.2(b)(i) due at Closing, the Optionees shall have duly exercised the
Option in full and shall have earned an 80% undivided, irrevocable Interest in
the Optionors’ Property, free and clear of any and all Encumbrances, and the
Optionees shall be immediately vested in and shall be deemed to legally and
beneficially own such 80% Interest in the Property, in those percentages and
upon those conditions set forth below:
                            
 
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(a)
A 20% undivided, irrevocable Interest in the Property upon completion of the
items set out in paragraphs 4.2(a)(ii), 4.2(b)(ii) and 4.2(c)(i);

 
 
(b)
An additional 20% undivided, irrevocable Interest in the Property upon
completion of the items set out in paragraphs 4.2(a)(iii), 4.2(b)(iii) and
4.2(c)(ii);

 
 
(c)
An additional 20% undivided, irrevocable Interest in the Property upon
completion of the items set out in paragraphs 4.2(a)(iv), 4.2(b)(iv) and
4.2(c)(iii); and

 
 
(d)
an additional 20% undivided, irrevocable Interest in the Property upon
completion of the items set out in paragraphs 4.2(a)(v), 4.2(b)(v) and
4.2(c)(iv).

 
Each 20% Interest may vest early if the Optionees complete the required
respective Payments, Issuances and Expenditures prior to the due dates set forth
in Section 4.2 above.

6. 
TITLE TO PROPERTY

6.1          Title to Property.  During the Option Period, recorded title to the
Property shall remain in the name of the Optionors. Notwithstanding the
foregoing, contemporaneous with the execution and delivery of this Agreement,
the Optionors shall deliver to Gottbetter & Partners, LLP, 488 Madison Avenue,
12th Floor, New York, New York 10022, Attention: Adam S. Gottbetter, Esq. (the
“Escrow Agent”) to hold in trust pending exercise or other termination of the
Option four (4) duly executed and notarized copies of transfer agreements of
mining concessions in respect of the Property in registrable or recordable form
(the “Trust Deeds”) and in content sufficient pursuant to the Laws of Mexico
each to transfer a twenty percent (20%) undivided Interest, and in the
aggregate, an eighty percent (80%) undivided Interest, in the Property to the
Optionees, in the name of CLGL S.A., free and clear of any and all Encumbrances.
The Parties shall also deliver to the Escrow Agent an indemnification agreement
(together with the Trust Deeds, the “Escrowed Documents”), as required by the
Escrow Agent, on terms and conditions satisfactory to the Escrow Agent.  The
Escrowed Documents shall be held by the Escrow Agent pending termination of the
Option in accordance with sections 10.1 or 10.2, in which case the Trust Deeds
shall be released to the Optionors and destroyed (and the Escrow Agent shall
confirm such destruction) or upon exercise of the Option in accordance with
section 5.1, the Trust Deeds shall be released to the Optionees.

The Optionees shall be entitled to record such transfers at their own cost with
the appropriate government office to effect legal transfer of such Interest in
the Property into the name of CLGL S.A., provided that the Optionees shall hold
such Interest in the Property subject to the terms of this Agreement, it being
understood that the transfer of such legal title to the Optionees prior to the
exercise of the Option is for administrative convenience only.

 
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7. 
CONDITIONS TO CLOSING

 
7.1         Optionees’ Conditions to Closing.  The Optionees’ obligation to
consummate the transactions provided for herein is subject to the satisfaction
or waiver on or before the Closing Date of the following conditions:
 
 
(a)
Representations and Warranties. The representations and warranties of Optionors
contained in Section 3.1 shall be true and correct in all material respects on
the Closing Date as though made on and as of that date.

 
 
(b)
Required Authorizations.  The Optionors shall have obtained, at their expense,
all waivers, permits, consents, approvals or other authorizations from
governmental entities, and effect all registrations, filings and notices with or
to governmental entities, as may be required for the Optionors to consummate the
transactions contemplated by this Agreement and to otherwise comply with all
applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement.

 
 
(c)
Private Placement.  Prior to the Closing, CLGL shall have completed a financing
in which it has raised a minimum of one million US dollars (US $1,000,000), an
amount sufficient to meet its payment obligations under Section 4.2(a)(i) and
its first year’s investment obligation under Section 4.2(c)(i) of this
Agreement.

 
 
(d)
Performance. The Optionors shall have performed in all material respects the
obligations, covenants and agreements required hereunder to be performed by them
at or prior to the Closing.

 
 
(e)
Officer’s Certificate. The Optionors shall have delivered to the Optionees a
certificate of a corporate officer, dated as of the Closing Date, certifying on
behalf of the Optionors that the conditions set forth in Sections 7.1, above,
have been fulfilled (the “Optionors’ Closing Certificate”).

 
7.2         Optionors’ Conditions to Closing.  The Optionors’ obligation to
consummate the transactions provided for herein is subject to the satisfaction
or waiver on or before the Closing Date of the following conditions:
 
 
(a)
Representations and Warranties. The representations and warranties of Optionees
contained in Section 3.2 shall be true and correct in all material respects on
the Closing Date as though made on and as of that date.

 
 
(b)
Required Authorizations.  The Optionees shall have obtained, at their expense,
all waivers, permits, consents, approvals or other authorizations from
governmental entities, and effect all registrations, filings and notices with or
to governmental entities, as may be required for the Optionees, including for
CLGL S.A., to consummate the transactions contemplated by this Agreement and to
otherwise comply with all applicable laws and regulations in connection with the
consummation of the transactions contemplated by this Agreement.

 
 
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(c)
Performance. The Optionees shall have performed in all material respects the
obligations, covenants and agreements required hereunder to be performed by them
at or prior to the Closing.

 
 
(d)
Officer’s Certificate. The Optionees shall have delivered to the Optionors a
certificate of a corporate officer, dated as of the Closing Date, certifying on
behalf of the Optionees that the conditions set forth in Sections 7.2, above,
have been fulfilled (the “Optionees’ Closing Certificate”).

 
7.3         Additional Conditions to Closing.
 
 
(a)
Surface Rights Agreement. Prior to Closing, the Optionees shall have pursued and
obtained a surface rights agreement on terms acceptable to them and at their
cost (the “Surface Rights Agreement”) with the land owner(s) owning the land
over the Property.  The Surface Rights Agreement shall be sufficiently long term
and broad in its scope to enable the Optionees to complete their exploration
program on the Property.  The Optionors shall use their best efforts to assist
the Optionees in obtaining the Surface Rights Agreement.  If the Surface Rights
Agreement is not obtained by the end of the sixty (60) day period following the
execution of this Agreement, the Parties may agree to proceed to Closing and
hold in escrow the Payment to be made and Shares to be issued to Mexivada at
Closing until such time as the Surface Rights Agreement is obtained or the
Parties determine that it can not be obtained within a reasonable period of time
or on reasonable terms. Failure of the Optionees to obtain a satisfactory
Surface Rights Agreement, for whatever reason, will release the Optionees from
their obligations under this Agreement and terminate the Agreement.

 
 
(b)
Re-Execution Undertaking.  The Parties agree that, prior to Closing and promptly
following completion of the incorporation in Mexico of CLGL’s wholly owned
Mexican subsidiary, CLGL S.A., the Optionors and the Optionees, including CLGL
S.A., will re-execute this Agreement making CLGL S.A. a full party to the
Agreement for all purposes.  The Parties acknowledge that, in addition to
signing this Agreement on behalf of CLGL, Gottbetter & Partners, LLP is signing
this Agreement on behalf of CLGL S.A.  The Parties understand and agree that,
upon re-execution of this Agreement as contemplated in the previous sentence,
Gottbetter & partners, LLP shall be released by CLGL S.A. from any and all
personal liability with respect to CLGL S.A.

 
8.
  CLOSING

 
8.1        Closing Date. The closing of the Transactions contemplated by this
Agreement (the “Closing”) shall take place at Gottbetter & Partners, LLP. 488
Madison Avenue, 12th Floor, New York, New York 10022, at the time and on the
date specified by the Parties, which date shall be no later than sixty (60) days
following the execution by the Parties of this Agreement.  Closing is subject to
satisfaction of all conditions set forth in Section 7 of this Agreement.  The
date on which the Closing occurs is referred to in this Agreement as the
“Closing Date.”
 
 
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8.2         Deliveries by the Optionors at the Closing. At the Closing, the
Seller shall deliver to Buyer the following:
 
 
(a)
such good and sufficient executed notarized instruments of transfer (Trust
Deeds) as the Optionees reasonably deem necessary and appropriate to vest in the
Optionees all right, title and interest in, to eighty percent (80%) of the
Property;

 

 
(b) 
all necessary third party consents; and

 

 
(c) 
the Seller’s Closing Certificate.

 
8.3         Deliveries by the Optionees at the Closing.  At the Closing,
Optionees shall deliver to the Optionors the following:
 

 
(a) 
all necessary third party consents, including the Surface Rights Agreement;

 

 
(b) 
the Buyer’s Closing Certificate; and

 
 
(c)
those Payments and Issuances set out in paragraphs 4.2(a)(i) and 4.2(b)(i)
above, respectively.

 
9.          OPERATOR OF THE PROPERTY; EXPLORATION PROGRAM

9.1        Appointment of Operator.  CLGL and/or its Affiliates shall act as
operator of the Property (the “Operator”) during the Option Period and
thereafter.  The Operator shall be exclusively responsible, in consultation with
Mexivada, for carrying out and administering exploration, development and mining
work on the Property (the “Exploration Program”).  As Operator and subject to
the Surface Rights Agreement, CLGL and/or its Affiliates shall have the
exclusive right to enter upon, explore, develop and mine the Property, to permit
any other Agents as it may in its sole discretion decide, to enter on or conduct
operations on the Property and to have possession of the Property with the power
and authority to sample, extract, diamond drill, prospect, explore, develop and
mine the Property in such manner as CLGL and/or its Affiliates may determine, in
consultation with Mexivada, including without limitation, the right to erect,
bring and install thereon all buildings, machinery, equipment and supplies as
CLGL and/or its Affiliates shall deem necessary and proper and to remove
therefrom quantities of ores, minerals or metals for assay and testing purposes
and, at the time production begins, for production and sale.

9.2        Steering Committee.  Promptly following the Closing, the Parties
shall establish a committee to counsel and advise the Operator with respect to
the management of the Exploration Program (the “Steering Committee”).  The
Steering Committee shall be comprised of three (3) members, one (1) of whom
shall be appointed by the Optionors and two (2) of whom shall be appointed by
the Optionees.The Steering Committee shall meet at least quarterly to review the
Operator’s implementation of the Exploration Program, review and approve interim
work programs and budgets, report to the Parties on the progress of the
Exploration Program and provide to the Parties an accounting of expenditures.

 
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9.3         Exploration Program.

 
(a)
Exploration Program.  The Optionees agree under the terms of this Agreement to
fund a $3,000,000 Exploration Program upon the Property within the first
forty-eight (48) month period following the Closing, in accordance with the time
line set out in Section 4.2(c) above, through a prepared mining exploration and
development work program.  The Operator shall carry out the Exploration Program
in respect of the Property during the forty-eight (48) month period following
the Closing, and shall submit to Mexivada a draft of an initial phase of the
Exploration Program for review within thirty (30) days of the Closing.

 
(b)
Expenditures; Payments.  During the Option Period, the Optionees shall be
responsible for the payment of invoices submitted by sub-contractors for
exploration work carried out on the Property by such sub-contractors under the
Exploration Program, provided that during each 12 month period specified in
section 4.2(c), the Optionees shall only be required to pay in respect of
Expenditures for the Property the amount specified in section 4.2(c) for each
such 12 month period and the Optionees shall not be liable or otherwise required
to pay any amounts in excess of the amounts specified in section
4.2(c).  Notwithstanding the foregoing, the Optionees may accelerate funding
their commitment to the Exploration Program and the payment of open invoices to
the extent the Operator deems it beneficial.

 
(c)
Additional Exploration Costs.  To the extent that costs of the Exploration
Program exceed the $3,000,000 Optionees’ funding obligation, a revised and
updated Exploration Program and budget reflecting the additional cost
requirements shall be prepared by the Operator and submitted to the Steering
Committee for review and approval, and the Optionees and the Optionors shall be
responsible for their pro rata, Proportionate Share of all additional costs
under any such revised Exploration Program.

 
The Operator shall submit to the Parties a copy of any revised budget indicating
the Parties’ Proportionate Share of additional expenditures approved by the
Steering Committee.  Each of the Parties shall then have thirty (30) days to
notify the Operator of its intent to comply with the additional cost
commitments.  The Operator shall be entitled to invoice the Parties for their
Proportionate Share of additional costs sixty (60) days prior to the required
funding date and such invoiced amounts shall be paid within thirty days of
receipt of an invoice.

 
 
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(d)
Dilution.  Failure of a Party to notify the Operator of its intent to contribute
its Proportionate Share of additional exploration costs or failure of a Party to
pay an invoice within the required period will result in that Party’s Interest
being decreased pursuant to the following formula: (a) the amount of such
Party’s invoiced exploration costs, divided by (b) the amount of all exploration
costs by all Parties (provided, however, that no Party’s Interest shall be
reduced below a five percent (5%) net project interest)

 
(e)
Assessments.  During the Option Period, the Optionees shall be responsible to
pay and record all taxes, assessments and other charges lawfully levied or
assessed against the Property as may be required to keep the Property in good
standing, which expenditures, on the part of the Optionees, shall be covered in
their Expenditures under the Exploration Program.  Once the Optionees have
earned their full eighty percent (80%) interest, the Optionees and the Optionors
shall be responsible for these assessments on a Proportionate Share basis.  The
Optionors shall transmit promptly to the Operator any notices pertaining to the
taxes, assessments and other charges.

 
(f)
Exploration Program Updates.  The Operator shall deliver progress and program
update reports to Mexivada as results and events dictate, but at least
semi-annually, by July 15th and January 15th of each year.

 
(g)
Joint Venture.  Following the date on which the Optionees shall have earned
their full eighty percent (80%) interest in the Property, the Optionors and the
Optionees shall negotiate a joint venture agreement and/or other relevant
agreement(s) applicable to the further development and commercialization of the
Property, on terms and conditions mutually agreeable to the parties and
incorporating the principles set forth above.

9.4         No Further Obligations.  Nothing herein contained nor any act done
nor payment made hereunder shall obligate the Optionees to do any further or
other act or acts or to make any payment or payments over and above those
contemplated in the Exploration Program as it may be revised pursuant to Section
9.3(c) above, and in no event shall this Agreement or any act done or payment
made be construed as an obligation of the Optionees to do or perform anything on
or with respect to the Property over and above what is contemplated in such
Exploration Program.

9.5         Standard of Care. The prospecting work, processes, undertaking and
other operations carried on or conducted by or on behalf of CLGL and/or its
Affiliates, as Operator, in respect of the Property shall be carried on or
conducted in a sound and workmanlike manner and in compliance with sound
geological and geophysical exploration and mining engineering and metallurgical
practices. All such work, processes, undertaking and other operations shall be
in compliance with all federal and state Laws.

 
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9.6           Access.  The Optionees shall provide the Optionors with access to
all records, data and information relating to the Property which is in the
possession of the Optionees.  The Optionors, at their own risk and expense and
at reasonable times agreed to by the Operator, may enter on the Property and
examine the mining operations being conducted there; provided, that the
Optionors will not, in the opinion of the Operator, interfere with the
Operator’s Exploration Program

9.7           Indemnification. The Optionees hereby covenant and agree to
indemnify and hold harmless the Optionors from and against any and all Losses
actually incurred by the Optionees in connection with any breach of Laws,
accidents, labour law violations or any other claims or actions arising out of
the prospecting work, processes, undertaking and other operations carried on or
conducted by or on behalf of the Optionees in respect of the Property during the
Option Period. This indemnity shall survive the termination of this Agreement.

10. 
  TERMINATION OF AGREEMENT

10.1         Termination by the Optionees.  The Optionees shall have the right
to terminate this Agreement at any time after the Effective Date, and after such
termination, the Optionees shall have no further or other rights or obligations
under this Agreement, other than payment of the stipulated Mexican government
concession fees for the year in which the Agreement is terminated if the
Optionees terminate this Agreement within sixty (60) days of the due date of
such fees.
 
10.2         Termination by the Optionors.  The Optionors shall have the right
to terminate the Agreement as a result of a breach by the Optionees of section
4.2, on prior written notice to CLGL (the “Termination Notice”), if within
thirty (30) business days after receipt of the Termination Notice, the Optionees
shall fail to make any of the Payments, Issuances or Expenditures as provided in
section 4.2. In the event that the Optionees shall fail to make any Payment,
Issuance or Expenditures required to be made, or cure any default, under this
Agreement, the right of the Optionees to earn any further interest in the
Property shall terminate and the Optionees will only be entitled to the Interest
earned to that date.  Upon termination of this Agreement by the Optionors, or by
the Optionees pursuant to Section 10.1,  the Optionees shall have no further or
other rights or obligations under this Agreement in addition to those rights or
obligations that may have been earned and vested in the Optionees in accordance
with Section 5.

11. 
  ASSIGNMENT OF AGREEMENT/OPTION; ENCUMBRANCES; RIGHT OF FIRST REFUSAL

11.1         Assignment of Agreement.  Subject to Section 11.2, each Party shall
have the right to assign, convey, dispose of or otherwise Transfer all or part
of its rights and interests in this Agreement or its rights or interests in the
Property, provided that as a condition precedent to such assignment, (i) the
assignee shall execute a counterpart of this Agreement and thereby agree to be
bound by the contractual terms hereof in the same manner and to the same extent
as though a Party hereto in the first instance; (ii) the assignor shall not be
relieved or discharged of any of its obligations or liabilities hereunder and
the other parties may continue to look to it for the performance thereof, and
(iii) the assignor will subject any further assignment, conveyance, disposition
or other Transfer of its rights and interests in this Agreement to the
restrictions set out in this Section 11.1.
 
 
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11.2         Prior Consent.  If a Party wishes to assign, convey, dispose of or
otherwise Transfer all or part of its rights and interests in this Agreement or
its rights or interests in the Property pursuant to Section 11.1, it may do so
only with the consent of the contra Party, such consent not to be unreasonably
withheld.

11.3         Encumbrances.  During the life of this Agreement, the Optionors
shall not pledge, mortgage, charge, or otherwise encumber their beneficial
Interest in the Property or their rights under this Agreement.

11.4         Right of First Refusal.  The Optionors hereby grant to the
Optionees the first right of refusal to purchase or option the Optionors’
remaining twenty percent (20%) Interest in the Property on terms which shall
have been offered to any third party.  The Optionors shall provide notice to the
Optionees of their intent to sell and the Optionees shall have thirty (30) days
to meet the terms of agreement to sell.

12. 
  FORCE MAJEURE - GENERAL

12.1         Force Majeure.  Time shall be of the essence of this Agreement,
provided however that notwithstanding anything to the contrary contained herein,
if a Party should at any time or times during the currency of this Agreement be
delayed in or prevented from complying with this Agreement by reason of wars,
acts of God, strike, lockouts or other industrial disputes, inability to access
its place of business, acts of the public enemy, riots, fire, storm, flood,
explosion, government restriction, failure to obtain any approvals required from
regulatory authorities including environmental protection agencies,
unavailability of equipment or qualified personnel, delays of transportation,
breakdown of machinery, interference of persons primarily concerned about
environmental issues or native rights pressure groups or other causes whether of
the kind enumerated above or otherwise which are not reasonably within the
control of the applicable Party (excluding for greater certainty and without
limitation, unavailability of funds except to the extent caused by the causes
enumerated above), the period of all such delays resulting from such causes or
any of them, shall be excluded in computing the time within which anything
required or permitted by the applicable Party to be done, is to be done
hereunder, it being understood that the time within which anything is to be done
hereunder shall be extended by the total period of all such delays.  Nothing
contained in this section shall require the applicable Party to settle any
industrial dispute or to test the constitutionality of any enacted Law.

 
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13. 
  AREA OF MUTUAL INTEREST

 
13.1         Area of Mutual Interest Option.  The parties hereby agree that each
and every mineral claim (including internal fractions) or interest therein which
they may stake or otherwise acquire during the currency of this Agreement and
which lies in whole or in part within five (5) miles from the outside perimeter
of either of the concessions comprising the Property, or which is contiguous to
such claims which are otherwise within this area of mutual interest (the “Area
of Mutual Interest”), shall at the option of the other party form a part of the
Property. Any party shall, upon acquisition of any such additional claims or
interests, forthwith give notice to the other parties of same and thereafter the
contra parties shall have thirty days from the date of such notice within which
to give notice of its desire to have such additional claims or interests form
part of the Property and to pay to the other party their proportionate share of
acquisition costs. The other party shall be responsible to pay its proportionate
share of costs of acquiring the additional claims or interests in accordance
with its Interest in the Property. All title to such additional claims or
interests shall be held subject to the terms of this Agreement.

13.2.        Termination of Area of Mutual Interest Option Section 13.1 shall
cease to operate if and when the Optionees lose their right to exercise the
Option in full.

14.
  RELATIONSHIP AND OTHER OPPORTUNITIES - GENERAL

14.1         Relationship of Parties.  The rights, privileges, duties,
obligations and liabilities, as between the Parties, shall be separate and not
joint or collective and nothing herein contained shall be construed as creating
a partnership, an association, agency or subject as herein specifically
provided, a trust of any kind or as imposing upon either of the Parties any
partnership duty, obligation or liability.  No Party is liable for the acts,
covenants and agreements of any other Party, except as herein specifically
provided.

14.2         Other Opportunities.  Each of the Parties shall have the free and
unrestricted right independently to engage in and receive the full benefits of
any and all business endeavours of any sort whatsoever whether or not
competitive with the endeavours contemplated herein without consulting the other
Party or inviting or allowing the other Party to participate therein. No Party
shall be under any fiduciary or other duty to any other Party which shall
prevent it from engaging in or enjoying the benefits of competing endeavours
within the general scope of endeavours contemplated by this Agreement. The legal
doctrine of “corporate opportunity” sometimes applied to persons engaged in a
joint venture or having fiduciary status shall not apply in the case of a Party.

15. 
  CONFIDENTIALITY

15.1        Confidentiality. No disclosure or announcement, public or otherwise,
in respect of this Agreement or the transaction herein contained shall be made
by any Party without the prior written consent of the other Party as to timing
and content, provided that the obligations herein will not prevent either Party
from making, after consultation with the other Party, such disclosure as its
counsel may advise is required by applicable law or the rules and policies of
any securities regulatory authority or stock exchange having jurisdiction or
potential jurisdiction.

 
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15.2         News Releases.  The text of any public announcements or statements
including news releases which a party intends to make pursuant to the exception
in §15.1 shall be made available to the other party not less than twenty-four
(24) hours prior to publication and the disclosing party shall limit or amend
such disclosure as may be requested by the non-disclosing parties to the extent
such limitation or amendment does not prevent the disclosing party from meeting
its legal obligations.  No party may issue a release containing a factual error
identified by another party.

16. 
  NOTICES AND PAYMENTS

16.1         Notices.  All notices, requests, demands or other communications
which by the terms hereof are permitted to be given by a Party to the other
Parties shall be given in writing by personal delivery or fax, addressed to such
other Parties or delivered to such other Parties as follows:

 
(i)           to the Optionees at:

CALIFORNIA GOLD CORP.
4515 Ocean View Blvd., Suite 305
La Cañada, CA  91011
Attention: James D. Davidson, CEO
Telephone No.: 818-542-6891
Telefax No: 818-249-7024

with a copy to:

Gottbetter & Partners, LLP
488 Madison Avenue, 12th Floor
New York, New York 10022
Attention: Adam S. Gottbetter
Telephone No.: (212) 400-6900
Telefax No: (212) 400-6901

and

Martinez Carrera & Hernandez
Prolongacion Paseo de la Reforma 115-PH
Col. Paseo de las Lomas, 01330, Mexico DF
Attention: Abdón H. Hernández
Telephone No.: +(52.55) 5004.0420
Telefax No.: +(52.55) 5004.0420

 
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(ii)          to the Optionors at:

MEXIVADA MINING CORP.
1982 Ruby View Drive
Elko, Nevada 89801
Attention: Richard R. Redfern
Telephone No.: (775) 738-6701
Telefax No: (775) 738-6705
mexivada@frontiernet.net

with a copy to:

Mexivada Mining Corp.
c/o DuMoulin Black LLP
10th Floor, 595 Howe Street
Vancouver, British Columbia V6C 2T5
Direct:   (604) 602-6809
Telephone No.:  (604) 687-1224
Telefax No.:  (604) 687-8772
Attention: Kenneth Embree
kembree@dumoulinblack.com

and

Heiras y Asociados, S.C.
Ave. Ocampo 3806
Col. Bellavista
Chihuahua, Chih., C.P. 31050 Mexico
Attention:  Mauricio Heiras G.
Telephone No.: +52 (614) 410 6517
Telefax No.: +52 (614) 415 1381
heirasmauricio@prodigy.net.mx
 
or at such other addresses and to such other Person that may be given by any of
them to the others in writing from time to time on ten days' prior written
notice and such notices, requests, demands or other communications shall be
deemed to have been received when delivered.

16.2         Payments and Issuances.  Payments and Issuances hereunder shall be
made addressed to the recipient at the address of the recipient provided for in
Section 16.1 or to such other address or wire destination (with respect to
Payments) as may be designated by notice by the recipient party in accordance
with Section 16.1.

17. 
  ARBITRATION

17.1         Matters for Arbitration.  In the event of any dispute between the
Optionors and the Optionees with respect to this Agreement or any matter
governed by this Agreement which the Optionors and the Optionees are unable to
resolve, the matter shall be settled by arbitration as follows:
 
 
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17.2         Notices and Appointments.  The Party desiring arbitration shall
nominate one arbitrator and shall notify the other Party of such nomination and
the other Party shall within 30 days after receiving such notice nominate one
arbitrator and the two arbitrators shall select a third arbitrator to act
jointly with them.  If the said arbitrators are unable to agree upon the
selection of such third arbitrator, the third arbitrator shall be designated by
a Justice of the Supreme Court of the State of Nevada.  If the Party receiving
the notice of nomination of an arbitrator, does not nominate an arbitrator
within 30 days of receiving such notice, then the arbitrator nominated by the
Party desiring arbitration may proceed alone to determine the dispute.  Any
decision reached pursuant to this section 17 shall be final and binding upon the
Parties.  Insofar as they do not conflict with the provisions hereof, the
provisions of the Nevada statutes, rules and regulations as amended from time to
time shall be applicable.

18. 
  MISCELLANEOUS - GENERAL

18.1         Acts in Good Faith.  Each Party shall at all times during the term
of this Agreement and after the termination of the Option, act in good faith
with respect to every other Party and shall do or cause to be done all things
within their respective powers which may be necessary or desirable to give full
effect to the provisions hereof.

18.2         Severability.  Any provision of this Agreement which is invalid or
unenforceable shall not effect any other provision and shall be deemed to be
severable herefrom.

18.3         Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of Nevada.

18.4         Further Assurances.  The Parties shall sign such further and other
documents and do such further acts or things as may be necessary or desirable in
order to give full force and effect to this Agreement and every part hereof,
including for greater certainty and without limitation, any and all powers of
attorney and documents as counsel for the Optionees shall deem necessary to deal
with ongoing title and operational matters with respect to the Property during
the Option Period and any and all public deeds and documents as counsel for the
Optionees shall deem necessary to effect a registration of a short form of this
Agreement against the Property, on terms and conditions satisfactory to the
Parties.

18.5         Amendment.  This Agreement may not be amended or modified in any
respect except by written instrument signed by the Parties.

18.6         Entire Agreement.  This Agreement constitutes the entire agreement
among the Parties with respect to the subject matter hereof and supersedes the
Letter Agreement executed by the Parties on October 5, 2010 and amended on
November 21, 2010 and such Letter Agreement shall be of no force or effect upon
the execution of this Agreement by the Parties.  The execution of this Agreement
has not been induced by nor do the Parties rely upon or regard as material, any
covenants, representations or warranties whatsoever not incorporated herein and
made a part hereof.

 
25

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18.7         Enurement.  This Agreement shall enure to the benefit of and be
binding upon the Parties and each of their respective heirs, executors,
administrators, legal representatives, successors and permitted assigns, but no
other Person.

18.8         Counterparts.  This Agreement may be executed in several
counterparts by original, email or telefacsimile signature, each of which so
executed shall be deemed to be an original and such counterparts together shall
constitute one and the same document.

18.9         Courts. In the event of any dispute between the Parties with
respect to this Agreement or any matter governed by this Agreement, the Parties
hereto expressly submit themselves to courts with jurisdiction over the matter
located in Nevada, expressly waiving any jurisdiction which they may have a
right to because of their present or future domiciles, or because of any other
cause.

[SIGNATURE PAGE FOLLOWS]
 
 
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IN WITNESS WHEREOF the Parties have executed this Agreement as of the Effective
Date.

 

 
MEXIVADA MINING CORP.
     
By:
  
 
Name:
 
Title:
     
COMPANIA MINERA MEXIVADA S.A. DE
C.V.
     
By:
  
 
Name:
 
Title:
     
CALIFORNIA GOLD CORP.
     
By:
  
 
Name:
 
Title:
     
GOTTBETTER & PARTNERS, LLP
     
By:
  
 
Name: Adam S. Gottbetter
 
Title: Managing Partner
 
On behalf of California Gold Corp.’s Mexican
wholly owned subsidiary, to be formed

 
 

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SCHEDULE “A”

CONCESSIONS COMPRISING THE PROPERTY

Mexican Mineral Concessions
 
in Name of Compania Minera Mexivada, S.A. de C.V.
 
Concession
 
Status
 
File No.
 
Legal
Title #
 
Title Grant
Date
 
Title Expiry
Date
 
Surface
Area (Ha.)
La Viuda
 
Granted
 
082/323550
 
232498
 
August 18, 2008
 
August 18, 2058
 
44
La Viuda 1
 
Granted
 
082/32407
 
232859
 
October 29, 2008
 
October 29, 2058
 
7,579,794

 
 

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