<PAGE>
                                                                    EXHIBIT 4.20

                        ENVIRONMENTAL INDEMNITY AGREEMENT
                                 (JOHNSON CAMP)

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (the "AGREEMENT") is made by NORD
RESOURCES CORPORATION, a Delaware corporation and successor by merger to NORD
COPPER CORPORATION whose address is P.O. Box 384, Dragoon, AZ 85609 ("NORD") in
favor of AURAMET TRADING, LLC, a Delaware limited liability company (the
"LENDER").

     WHEREAS, Lender has made a loan in the principal amount of $2,850,000 (as
amended, supplemented, refinanced, renewed, refunded or otherwise modified from
time to time, the "Loan") to Nord represented by that certain secured promissory
note, dated as of even date herewith (as amended, supplemented or otherwise
modified from time to time, the "NOTE"), pursuant to which Nord has agreed,
among other things, to make the full and punctual payment and performance when
due of the obligations and liabilities of Nord, whether direct or indirect,
absolute or contingent, due or to become due, or existing now or prior to the
date hereof or hereafter incurred, which may arise under, out of, or in
connection the Note and any other agreements relating to the Loan (together with
any and all other obligations arising under the Loan, the "OBLIGATIONS");

     WHEREAS, contemporaneously herewith and as required by the Note, and the
other transaction documents executed by the parties in connection with the Note
(collectively with the Note, the "LOAN DOCUMENTS"), Nord is delivering to Lender
a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
(collectively, the "DEED OF TRUST"), for the purpose of, among other things,
securing the Obligations by and through the grant to Lender of a lien against
certain premises located in Cochise County, Arizona, commonly known as the
Johnson Camp Mine, and which are more particularly described on Exhibit "A"
attached hereto (the "JOHNSON CAMP MINE"); and

     WHEREAS, the Loan Documents require Nord indemnify Lender as set forth
herein.

     NOW, THEREFORE, FOR AND IN CONSIDERATION of valuable consideration, the
receipt and sufficiency of which are acknowledged, and further in consideration
of the mutual covenants and conditions contained in this Agreement, Nord hereby
certifies, represents, and warrants to Lender, and agrees as follows:

1. As used herein, the following terms shall have the meanings specified below:

     The term "ENVIRONMENTAL LAWS" shall mean any federal, state or local law,
whether by common law, statute, ordinance, or regulation, pertaining to health,
industrial hygiene, or environmental conditions, including without limitation,
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
42 U.S.C. Sections 9601, et seq. ("CERCLA"); the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq. ("RCRA"); the Toxic
Substances Control Act of 1976, 15 U.S.C.

<PAGE>

$62501, et seq. ("TSCA"); the Superfund Amendments and Reauthorization Act of
1986, Title III, 42 U.S.C. Sections 11001, et seq. ("SARA"); the Clean Air Act,
42 U.S.C. Sections 7401, et seq.; the Federal Water Pollution Control Act, 33
U.S.C. Sections 1251, et seq.; the Safe Drinking Water Act, 42 U.S.C. Sections
300f, et seq.; the Solid Waste Disposal Act, 42 U.S.C. Sections 3251, et seq.;
the Arizona Environmental Quality Act, Ariz. Rev. Stat. Ann. 49-101, et seq.;
and any other federal, state or local law, common law, statute, ordinance, or
regulation now in effect or hereinafter enacted which pertains to health,
industrial hygiene, or the regulation or protection of the environment.

     The term "HAZARDOUS SUBSTANCE" shall include:

     (a) Those substances included within the definitions of "hazardous
materials," "toxic substances," or "solid waste" in CERCLA, RCRA, TSCA, SARA,
and the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et
seq., and in the regulations promulgated pursuant thereto;

     (b) Those substances defined as "hazardous substances" in A.R.S. 49-201 and
in rules adopted or guidelines promulgated pursuant thereto;

     (c) Those substances listed in the United States Department of
Transportation Table (49 C.F.R. 172.1010 and amendments thereto) or by the
Environmental Protection Agency as hazardous substances (40 C.F.R. Part 302 and
amendments thereto); and

     (d) All other substances, materials and wastes that are, or that become,
regulated under, or that are classified as hazardous or toxic under any
Environmental Law.

     The term "RELEASE" shall mean any releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing, or dumping.

2. Nord shall neither use, generate, manufacture, produce, store, or Release,
on, under or about the Johnson Camp Mine, or transfer to or from the Johnson
Camp Mine, any Hazardous Substance nor permit any third party to do so, except
in substantial compliance with all applicable Environmental Laws. Nord shall not
permit any environmental liens to be placed on any portion of the Johnson Camp
Mine.

3. Nord shall give prompt written notice to Lender at the address set forth in
the Note of:

     (a) Any proceeding, including lawsuit, investigation or settlement by or
with any federal, state or local governmental authority (including, without
limitation, the Arizona Department of Health Services, Arizona Department of
Environmental Quality or the U.S. Environmental Protection Agency) with respect
to the presence of any Hazardous Substance on the Johnson Camp Mine or the
migration thereof from or to any other property adjacent to, or in the vicinity
of, the Johnson Camp Mine;


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<PAGE>

     (b) Nord's discovery of a violation of Environmental Laws that Nord is
legally required to report to any federal, state or local governmental authority
or the discovery of a Release of a Hazardous Substance in sufficient quantities
to be reportable under CERCLA or the Arizona Environmental Quality Act to any
federal, state or local governmental authority.

     (c) All claims made or threatened by any third party against Nord or the
Johnson Camp Mine relating to any loss or injury resulting from any Hazardous
Substance; and

     (d) Nord's discovery of any occurrence or condition on any property
adjoining or in the vicinity of the Johnson Camp Mine that could cause the
Johnson Camp Mine or any part thereof to be subject to any restrictions on its
ownership, occupancy, transferability or use under any Environmental Laws.

4. Nord shall conduct and complete all investigations, studies, sampling,
testing and all remedial, removal, and other actions necessary to clean up and
remove all Hazardous Substances in, from or affecting the Johnson Camp Mine;

     (a) In compliance with all applicable Environmental Laws;

     (b) In accordance with the orders and directives of all governmental
authorities.

5. If Lender shall ever have good reason to believe that there are Hazardous
Substances (other than those disclosed in writing to Lender) affecting any of
the Johnson Camp Mine, Lender (by their respective officers, employees, and
agents) at any time and from time to time may contract for the services of
persons (the "SITE REVIEWERS") to perform environmental site assessments ("SITE
ASSESSMENTS") on the Johnson Camp Mine for the purpose of determining whether
there exists on the Johnson Camp Mine any environmental condition that could
result in any liability, cost, or expense to the owner, occupier, or operator of
such Johnson Camp Mine arising under any Environmental Laws. The Site
Assessments may be performed at any time or times, upon reasonable notice, and
under reasonable conditions established by Nord that do not impede the
performance of the Site Assessments and do not unreasonably interfere with any
of Nord's activities or operations at the Johnson Camp Mine. The Site Reviewers
are hereby authorized to enter upon the Johnson Camp Mine for such purposes. The
Site Reviewers are further authorized to perform both above and below the ground
testing for environmental damage or the presence of Hazardous Substances on the
Johnson Camp Mine and such other tests on the Johnson Camp Mine as may be
necessary to conduct the Site Assessments in the reasonable opinion of the Site
Reviewers. Nord will supply to the Site Reviewers such historical and
operational information regarding the Johnson Camp Mine as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments and will make
available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. On request, Lender shall make the results of such
Site Assessments fully available to Nord, which (prior to an Event of Default


                                        3

<PAGE>

under the Loan Documents) may, at their election, participate under reasonable
procedures in the direction of such Site Assessments and the description of
tasks of the Site Reviewers. The cost of performing such Site Assessments shall
be paid by Lender. Lender agrees to keep all data and information pertaining to
the Site Assessments, and the Site Assessments themselves, confidential, and not
to disclose any such data or information to any third party (other than the
consultants preparing the Site Assessments; unless such disclosure is required
by applicable law or court order).

6. Lender shall have the right, but not the obligation, without in any way
limiting Lender's other rights and remedies under the Loan Documents, to enter
onto the Johnson Camp Mine or to take such other actions as it deems reasonably
necessary or advisable in good faith, to clean up, remove, resolve, or minimize
the impact of, or otherwise deal with, any Hazardous Substances on or affecting
the Johnson Camp Mine following receipt of any notice from any person or entity
asserting the existence of any Hazardous Substances pertaining to the Johnson
Camp Mine or any part thereof that, if true could result in an order, notice,
suit, imposition of a lien on the Johnson Camp Mine, or other action and/or
that, in Lender's reasonable and good faith opinion, could jeopardize Lender's
security under the Loan Documents. All reasonable costs and expenses paid or
incurred by Lender in the exercise of any such rights shall be paid by Nord, and
all such reasonable costs and expenses paid or incurred by Lender shall be
secured by the Loan Documents and shall be payable by Nord upon demand. All such
actions taken by Lender pursuant to this Paragraph 7 shall be in a manner so as
not to unreasonably interfere with any of Nord's activities or operations at the
Johnson Camp Mine, and shall be taken in accordance with Nord's reasonable
safety rules and regulations and any such rules and regulations imposed by any
governmental agency.

7. Lender shall have the right at any time to appear in and to participate in,
as a party if it so elects, and be represented by counsel of its own choice in,
any action or proceeding initiated in connection with any Environmental Law that
affects the Johnson Camp Mine.

8. Nord shall indemnify and hold harmless Lender, any successor to Lender, any
purchaser of the Johnson Camp Mine upon foreclosure of Lender's interest in the
Johnson Camp Mine, and all directors, officers, employees and agents of all of
the foregoing, from and against all claims, costs, expenses, actions, suits,
proceedings, losses, damages and liabilities of any kind whatsoever, including
but not limited to attorneys' fees and expenses, directly or indirectly arising
out of or attributable to (i) the use, generation, manufacture, production,
storage, Release, threatened Release, or presence of a Hazardous Substance on,
under or about the Johnson Camp Mine occurring from and after the closing of the
sale of the Johnson Camp Mine to Nord and not substantially arising out of or
substantially related to any material action or omission to act by Lender; (ii)
any violation or claim of violation of any Environmental Law with respect to the
Johnson Camp Mine, and not substantially arising out of or substantially related
to any material action or omission to act by Lender; or (iii) any material
breach of any of the warranties, representations and covenants contained herein.
Lender shall give written notice to Nord promptly of any claim, suit, action,
the commencement of any proceeding


                                        4

<PAGE>

or demand of which Lender has received written notice from a third party and as
to which Lender believes it may be entitled to indemnification hereunder.

9. This Agreement shall be binding upon Nord and its successors and assigns and
shall inure to the benefit of Lender, their respective successors and assigns.
The indemnity contained herein shall continue in full force and effect and shall
survive the payment and performance of the Note, the release of any lien or
encumbrance securing the Note, any foreclosure (or action in lieu of
foreclosure) of any lien or encumbrance securing the Note, the exercise by
Lender of any other remedy under any documents securing the Note, and any suit,
proceeding or judgment against Nord by Lender hereon.

10. If any material warranty, representation or statement contained herein shall
be or shall prove to have been false when made or if Nord shall fail or neglect
to perform or observe any of the terms, provisions or covenants contained
herein, the same shall constitute an Event of Default under the Note and under
all documents and instruments executed and delivered in connection therewith
that shall entitle Lender to pursue any and all remedies provided for such
default.

11. Any notice required or permitted in connection herewith shall be given in
the manner provided in the Note or other documents executed and delivered in
connection with the Note.

12. Nord acknowledges that Lender has and will rely upon the representations,
warranties and agreements herein set forth in closing and funding (or modifying
as the case may be) the Note and that the execution and delivery of this
Agreement is an essential condition but for which Lender would not have agreed
to loan Nord the funds as set forth in the Note.

13. Nord waives any right or claim of right to cause a marshaling of the assets
of Nord or to cause Lender to proceed against any of the security for the Note
before proceeding under this Agreement against Nord; Nord agrees that any
payments required to be made hereunder shall become due on demand; Nord
expressly waives and relinquishes all rights and remedies accorded by applicable
law to Nord or guarantors (including, without limitation, A.R.S. Sections
12-1641, et seq., and 44-142, and Rule 17f of the Arizona Revised Statutes Rules
of Civil Procedure), except any rights of subrogation that Nord may have,
provided that the indemnity provided for hereunder shall neither be contingent
upon the existence of any such rights of subrogation nor subject to any claims
or defenses whatsoever that may be asserted in connection with the enforcement
or attempted enforcement of such subrogation rights, including, without
limitation, any claim that such subrogation rights were abrogated by any acts or
omissions of Lender.

14. This Agreement shall be governed by and construed according to the laws of
the State of Arizona, without giving effect to conflict of laws principles.


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<PAGE>

     IN WITNESS WHEREOF, Nord has executed this Agreement on October 17th, 2005.

                                        NORD RESOURCES CORPORATION, a
                                        Delaware corporation and successor by
                                        merger to NORD COPPER CORPORATION


                                        By: /s/ Erland A. Anderson
                                            ------------------------------------
                                        Name: Erland A. Anderson
                                        Title: President

STATE OF ARIZONA   )
                   ) ss.
County of Pima     )

The foregoing instrument was acknowledged before me this day of October 17th,
2005 by Erland A. Anderson, the President of NORD RESOURCES CORPORATION, a
Delaware corporation and the successor by merger to NORD COPPER CORPORATION, on
behalf of the corporation.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                        /s/ Madelyn L. Swingle
                                        ----------------------------------------
                                        Notary Public

My commission expires:
6-14-09


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<PAGE>

                                   EXHIBIT "A"

The following property located in Cochise County, Arizona, together with all
extralateral rights, water rights, and appurtenances, and all fixtures,
stockpiles, leach heaps, dumps, and tailings situated thereon:

                         Part 1 - Patented Mining Claims

PARCEL 1

     Arizona, Blue Grass, Puzzle, Enough, and Canton patented lode mining
claims, Mineral Survey No. 4340, embracing a portion of Section 23, Township 15
South, Range 22 East, G&SRB&M, in the Cochise Mining District, Cochise County,
Arizona, U.S. Patent No. 1143496, recorded in the records of Cochise County at
Docket 100, Page 283,

     EXCEPT all that portion of the ground within the boundaries of Ross, Dewey,
and True Blue, Mineral Survey No. 1717, and North Star, Mineral Survey No. 3242;
and further except all veins, lodes, and ledges, throughout their entire depth,
the tops or apexes of which lie inside the said excluded ground,

     containing 66.721 acres, more or less.

PARCEL 2

     Afterthought, Burro, Burro No. 3, Coronado, Coronado No. 2, and Mason No. 1
patented lode mining claims, Mineral Survey No. 4571, embracing portions of
Sections 25, 26, and 35, Township 15 South, Range 22 East, G&SRB&M, in the
Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 02-63-0060,
recorded in the records of Cochise County at Docket 315, Page 561,

     EXCEPT all that portion of the ground within the boundaries of Republic,
Mineral Survey No. 324; Golden Shield, Mineral Survey No. 325; Chicora, Mineral
Survey No. 326; Southern, Mineral Survey No. 327; Mayflower, Mineral Survey No.
2764; Calumet, Mineral Survey No. 4197; Tenderfoot, Mineral Survey No. 4314; and
Section 36, Township 15 South, Range 22 East; and further except all veins,
lodes, and ledges, throughout their entire depth, the tops or apexes of which
lie inside the said excluded ground,

     containing 89.005 acres, more or less.

PARCEL 3

     St. George patented lode mining claim, Mineral Survey No. 1966, embracing a
portion of Section 36, Township 15 South, Range 22 East, G&SRB&M, in the Cochise
Mining District, Cochise County, Arizona, U.S. Patent No. 42949, recorded in the
records of Cochise County at Book 20, Deeds of Mines, Page 312,

     containing 17.732 acres, more or less.


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PARCEL 4

     Mayflower (aka May Flower) patented lode mining claim, Mineral Survey No.
2764, embracing portions of Sections 25 and 26, Township 15 South, Range 22
East, G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S.
Patent No: 298716, recorded in the records of Cochise County at Docket 12, Page
581,

     containing 19.414 acres, more or less.

PARCEL 5

     Acorn, A-Number One, A-Number Two, Chicago, Cochise, Copper Thread,
Johnson, Little Johnnie, Rough Rider, Tenderfoot, and United Fraction patented
lode mining claims, Mineral Survey No. 4314, embracing portions of Sections 23,
25, and 26, Township 15 South, Range 22 East, G&SRB&M, in the Cochise Mining
District, Cochise County, Arizona, U.S. Patent No. 1141449, recorded in the
records of Cochise County at Docket 93, Page 620,

     EXCEPT all that portion of the ground within the boundaries of Blue Lead
Extension, Dwarf, Esmeralda, and Copper Chief, Mineral Survey No. 3242; Copper
Bell, Mineral Survey 1717; Highland Mary, Mineral Survey No. 284; Copper King,
Mineral Survey No. 285; Republic, Mineral Survey No. 324; Golden Shield, Mineral
Survey No. 325; Mayflower, Mineral Survey No. 2764; Tycoon, Mineral Survey No.
329; and Gingham No. 3, unsurveyed; and further except all veins, lodes, and
ledges, throughout their entire depth, the tops or apexes of which lie inside
the said excluded ground,

     FURTHER EXCEPT those portions of Cochise and United Fraction, containing
0.026 and 0.387 acres, more or less, respectively, being those portions lying in
the Southeast Quarter of the Northwest Quarter (SE1/4NW1/4) and the Northeast
Quarter of the Southwest Quarter (NE1/4SW1/4) of Section 25, Township 15 South,
Range 22 East, G&SRB&M, conveyed by Special Warranty Deed dated January 26, 1987
from Cyprus Mines Corporation, Grantor, to David Rae, Grantee, recorded in the
Cochise County records as document No. 870102364,

     containing 106.572 acres, more or less.

PARCEL 6

     Blue Lead, North Star, Little Bush, Copper Chief, Southern Cross, Blue Lead
Extension, Dwarf, and Esmeralda patented lode mining claims, Mineral Survey No.
3242, embracing portions of Sections 23 and 26, Township 15 South, Range 22
East, G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S.
Patent No. 610053, recorded in the records of Cochise County at Book 29, Deeds
of Mines, Page 92,

     containing 92.563 acres, more or less.


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<PAGE>

PARCEL 7

     Anaconda, Last Chance, Delta, and Sara patented lode mining claims, Mineral
Survey No. 1525, embracing portions of Sections 23 and 24, Township 15 South,
Range 22 East, G&SRB&M, in the Cochise Mining District, Cochise County, Arizona,
U.S. Patent No. 036147, recorded in the records of Cochise County at Book 15,
Deeds of Mines, Page 236,

     containing 54.14 acres, more or less.

PARCEL 8

     Southern patented lode mining claim, Lot 45, Mineral Survey No. 327,
embracing portions of Sections 25, 26, and 36, Township 15 South, Range 22 East,
G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S. Patent
No. 9043 (or 9143), recorded in the records of Cochise County at Book 31, Deeds
of Mines, Page 459,

     containing 18.79 acres, more or less.

PARCEL 9

     Mi-an-te-no-mah patented lode mining claim, Lot 48, Mineral Survey No. 330,
embracing a portion of Section 23, Township 15 South, Range 22 East, G&SRB&M, in
the Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 10723,
recorded in the records of Cochise County at Book 31, Deeds of Mines, Page 455,

     containing 19.28 acres, more or less.

PARCEL 10

     Peabody patented lode mining claim, Lot 39, Mineral Survey No. 286,
embracing portions of Sections 23 and 24, Township 15 South, Range 22 East,
G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S. Patent
No. 6424, recorded in the records of Cochise County at Book 12, Deeds of Mines,
Page 433,

     containing 17.36 acres, more or less.

PARCEL 11

     Donna Anna patented lode mining claim, Lot 40, Mineral Survey No. 287,
embracing a portion of Section 26, Township 15 South, Range 22 East, G&SRB&M, in
the Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 6423,
recorded in the records of Cochise County. at Book 31, Deeds of Mines, Page 427,

     containing 20.66 acres, more or less.


                                        9

<PAGE>

PARCEL 12

     Highland Mary patented lode mining claim, Lot 37, Mineral Survey No. 284,
embracing portions of Sections 25 and 26, Township 15 South, Range 22 East,
G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S. Patent
No. 6474, recorded in the records of Cochise County at Book 31, Deeds of Mines,
Page 431,

     EXCEPT all that portion of Highland Mary containing 0.064 acres, more or
less, being that portion lying in the Southeast Quarter of the Northwest Quarter
(SE1/4NW1/4) of Section 25, Township 15 South, Range 22 East, G&SRB&M, conveyed
by Special Warranty Deed dated January 26, 1987 from Cyprus Mines Corporation,
Grantor, to David A. Rae, Grantee, recorded in the Cochise County records as
Document No. 870102364,

     containing 20.596 acres, more or less.

PARCEL 13

     Copper King patented lode mining claim Lot 38, Mineral Survey No. 285,
embracing a portion of Section 26, Township 15 South, Range 22 East, G&SRB&M, in
the Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 6475,
recorded in the records of Cochise County at Book 31, Deeds of Mines, Page 435,

     containing 20.11 acres, more or less.

PARCEL 14

     Golden Shield patented lode mining claim, Lot 43, Mineral Survey No. 325,
embracing a portion of Section 26, Township 15 South, Range 22 East, G&SRB&M, in
the Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 8891,
recorded in the records of Cochise County at Book 31, Deeds of Mines, Page 439,

     containing 19.51 acres, more or less.

PARCEL 15

     Republic patented lode mining claim, Lot 42, Mineral Survey No. 324,
embracing a portion of Section 26, Township 15 South, Range 22 East, G&SRB&M, in
the Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 9045,
recorded in the records of Cochise County at Book 31, Deeds of Mines, Page 471,

     containing 20.66 acres, more or less.

PARCEL 16


                                       10

<PAGE>

     Chicora patented lode mining claim, Lot 44, Mineral Survey No. 326
embracing a portion of Sections 25 and 26, Township 15 South, Range 22.East,
G&SRB&M, in the Cochise Mining District Cochise County, Arizona, U.S. Patent No.
9044, recorded in the records of Cochise County at Book 31, Deeds of Mines, Page
443,

     containing 15.60 acres, more or less.

PARCEL 17

     Tycoon patented lode mining claim, Lot 47, Mineral Survey No. 329,
embracing portions of Sections 25 and 26, Township 15 South, Range 22 East,
G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S. Patent
No. 8888, recorded in the records of Cochise County at Book 31, Deeds of Mines,
Page 467,

     containing 16.88 acres, more or less.

PARCEL 18

     Mammoth patented lode mining claim, Lot 49, Mineral Survey No. 331,
embracing portions of Sections 23 and 26, Township 15 South, Range 22 East,
G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U. S. Patent
No. 8889, recorded in the records of Cochise County at Book 31, Deeds of Mines,
Page 463,

     containing 19.28 acres, more or less.

PARCEL 19

     Clondike, Blue Jacket, Keystone, Blue Bell, Copper Bell, Dewey, True Blue,
and Ross patented lode mining claims, Mineral Survey No. 1717, embracing a
portion of Section 23, Township 15 South, Range 22 East, G&SRB&M, in the Cochise
Mining District, Cochise County, Arizona, U.S. Patent No. 42087, recorded in the
records of Cochise County at Book 20, Deeds of Mines, Page 542,

     containing 147.266 acres, more or less.

PARCEL 20

     Hillside, Pittsburg, and Teaser patented lode mining claims, Mineral Survey
No. 3306, embracing a portion of Sections 23 and 24, Township 15 South, Range 22
East, G&SRB&M, in the Cochise Mining District, Cochise County, Arizona, U.S.
Patent No. 648851, recorded in the records of Cochise County at Docket 634, Page
478,

     EXCEPT all that portion of Hillside and Pittsburg containing 1.235 and
0.381 acres, more or less, respectively, being that portion lying in the South
Half of the Southeast Quarter of the Northwest Quarter (SE1/4NW1/4) and the East
Half of the Southwest Quarter (E1/2SW1/4) of Section 24, Township 15 South,
Range 22 East,


                                       11

<PAGE>

G&SRB&M, conveyed by Special Warranty Deed dated January 26, 1987 from Cyprus
Mines Corporation, Grantor, to David A. Rae, Grantee, recorded in the Cochise
County records as Document No. 870102364,

     containing 49.852 acres, more or less.

PARCEL 21

     San Jacinto patented lode mining claim, Lot 46, Mineral Survey No. 328,
embracing a portion of Section 27, Township 15 South, Range 22 East, G&SRB&M, in
the Cochise Mining District, Cochise County, Arizona, U.S. Patent No. 8890,
recorded in the records of Cochise County at Book 31, Deeds of Mines, Page 475,

     containing 19.15 acres, more or less


                                       12

<PAGE>

                               PART 2 - FEE LANDS

PARCEL 1

TOWNSHIP 15 SOUTH, RANGE 22 EAST, G&SRB&M
COCHISE COUNTY, ARIZONA

     Section 26: Lots 8, 9, 10, and 11

     EXCEPT all coal and other minerals as reserved in the patent from the
United States of America,

     containing 139.00 acres, more or less.

PARCEL 2

TOWNSHIP 15 SOUTH, RANGE 22 EAST, G&SRB&M
COCHISE COUNTY ARIZONA

     Section 26: Those portions of the King and Wolfrime Queen patented lode
          mining claims lying within the Southeast Quarter (SE1/4) as shown on
          Mineral Survey No. 1800, U.S. Patent No. 40087, recorded in the
          records of Cochise County at Book 26, Deeds of Mines, Page 251,

     containing 1.00 acres, more or less.

PARCEL 3

TOWNSHIP 15 SOUTH, RANGE 22 EAST, G&SRB&M
COCHISE COUNTY, ARIZONA

     Section 24: Lot 16

     Section 25: Lots 11, 13, 14, 16, 17, 18, 20, and 21

               EXCEPT any portion of Section 25 lying in the Southeast Quarter
               of the Northwest Quarter and the Northeast Quarter of the
               Southwest Quarter of Section 25, Township 15 South, Range 22
               East, G&SRB&M conveyed by Special Warranty Deed dated January 26,
               1987 from Cyprus Mines Corporation, Grantor, to David A. Rae,
               Grantee, recorded in the Cochise County records as Document No.
               870102364.

     EXCEPT a right-of-way for ditches and canals constructed by the authority
of the United States as reserved in the patent from the United States of
America.


                                       13

<PAGE>

     containing 53.444 acres, more or less.

PARCEL 4

TOWNSHIP 15 SOUTH, RANGE 22 EAST, G&SRB&M
COCHISE COUNTY, ARIZONA

     Section 23: Lots 11, 12, 13, 15, and 16

     Section 24: Lots 11, 12, and 13

               EXCEPT any portion lying within the South Half of the Southeast
               Quarter of the Northwest Quarter (S1/2SE1/4NW1/4) and the East
               Half of the Southwest Quarter (E1/2SW1/4) of Section 24, Township
               15 South, Range 22 East, G&SRB&M conveyed by Special Warranty
               Deed dated January 26, 1987 from Cyprus Mines Corporation,
               Grantor, to David A. Rae, Grantee, recorded in the Cochise County
               records as Document No. 870102364.

     Section 25: Lot 12

               EXCEPT any portion lying within the Southeast: Quarter of the
               Northwest Quarter (SE1/4NW1/4) and the Northeast Quarter of the
               Southwest Quarter (NE1/4SW1/4) of Section 25, Township 15 South,
               Range 22 East, G&SRB&M, conveyed by Special Warranty Deed dated
               January 26, 1987 from Cyprus Mines Corporation, Grantor, to David
               A. Rae, Grantee, recorded in the Cochise County records as
               Document No. 870102364.

     Section 26: Lots 4, 14, 15, 16, 17, 18, and 19; Southwest Quarter of the
          Northwest Quarter (SW1/4NW1/4)

               EXCEPT a right-of-way for ditches and canals constructed by the
               authority of the United States as reserved in the patent from the
               United States of America.

               containing 307.47 acres, more or less.

TOWNSHIP 15 SOUTH, RANGE 22 EAST, G&SRB&M (SURFACE AND MINERAL)
COCHISE COUNTY, ARIZONA

     Section 25: Lot 15 consisting of 37.53 acres, more or less; and

               Lot 16 consisting of 38.26 acres, more or less; and


                                       14

<PAGE>

               Lot 19 consisting of 40 acres, more or less, subject to ownership
               of those portions of unpatented claims Gladys R and Erika that
               lie North of the Southern boundary of Lot 19; and

               Those portions of Lots 20 and 21 that lie East of the survey line
               dated April 23, 1989 completed by H.W. Smith, Registered Land
               Surveyor; and

               Those portions of the Cochise Lode Claim and the United Fraction
               Lode

               Claim that lie East of the survey line dated April 23, 1989
               completed by

               H.W. Smith, Registered Land Surveyor; and

               That portion of the Highland Mary Lode Claim lying East of the
               survey line dated April 23, 1989 completed by H.W. Smith,
               Registered Land Surveyor.

               All described lands, in sum, containing 116.267 acres, more or
               less.


                                       15

<PAGE>

                        PART 3 - UNPATENTED MINING CLAIMS

The following unpatented lode mining claims located in Sections 22, 23, 24, 25,
26, 27, 35, and 36, Township 15 South, Range 22 East, G&SRB&M, Cochise Mining
District, Cochise County, Arizona:

<TABLE>
<CAPTION>
                Original Recordation   Amended Recordation   BLM Serial
                --------------------   -------------------       No.
Name of Claim        Book   Page           Book   Page          A MC
-------------        ----   ----           ----   ----       ----------
<S>             <C>         <C>        <C>        <C>        <C>
Alamosa                38     38            369    145          43520
Bee R1                 65    247           1504    298          43521
Bee No. R2           1128    723           1504    300          43522
Bee R3                 65    249           1504    302          43523
Bee R4                 65    250           1504    304          43524
Bee R5                 65    251           1504    306          43525
Bee R11                65    256           1504    308          43531
Bee R12                65    257           1504    310          43532
Bumble Bee             75     24            383    207          43542
Burro - 4             278    485                                43543
Burro -5              278    486                                43544
Burro -6              278    487                                43545
Burro -R7            1010    363                                43546
Burro -8-             278    489                                43547
Burro -9              278    490                                43548
Burro -11             278    492                                43550
Burro -12             278    493                                43551
Burro -13             278    494                                43552
Burro -14             278    495                                43553
Burro -R15           1010    364                                43554
Burro -16             278    497                                43555
Burro -A              821    104                                43560
Burro -B              821    106                                43561
Burro -C              821    107                                43562
Burro -D              821    108                                43563
Burro -E              821    109                                43564
Burro -G              821    111                                43566
Burro -H              821    112                                43567
Burro - I             821    113                                43568
Burro R L            1010    361                                43571
Calumet                17    310             37    446          43573
Charles                17    530             37    445          43574
Coronado R-1         1013    447                                43576
Dora                   39    262                                43578
Echo I                395    301                                43579
Echo R2              1128    457           1504    312          43580
</TABLE>


                                       16

<PAGE>

<TABLE>
<S>             <C>         <C>        <C>        <C>        <C>
Echo R3               395    303           1504    314          43581
</TABLE>

<TABLE>
<CAPTION>
                Original Recordation   Amended Recordation   BLM Serial
                --------------------   -------------------       No.
Name of Claim        Book   Page           Book   Page          A MC
-------------        ----   ----           ----   ----       ----------
<S>             <C>         <C>        <C>        <C>        <C>
Elephant               38     36            369    142          43586
Ella                   39    264                                43587
Erika                  24    424             37    435          43588
Ernest                 36    380             37    439          43589
Gladys R               49    102           1504    316          43593
Gustave                39    263                                43594
Hagerman               16     19             37    438          43595
Ina                    39    261                                43597
Laura J               362    507                                43602
Louie                  17    581             37    440          43603
Mary                   24    423             37    436          43605
Millinton              38     39            369    144          43622
Portland               38     37            369    143          43635
Prim Rose              41    331            369    141          43636
Primrose-Bee           73    428            369    147          43637
Ultimo                 36    381             37    437          43645
Wolfrime               17    259             37    442          43675
Rosie R              1592    459                               172613
Addie R                16     98                                43519
Bonanza                17     41                                43539
Branda Kaye          1620    440                               187203
Burro -17             278    513                                43556
Burro - 18            278    498                                43557
Burro - 19            278    499                                43558
Burro - 20            278    500                                43559
Charlene             1620    434                               187204
Colorado               39     41                                43575
Defender               41    328                                43577
Ellenor              1620    432                               187205
Eula Belle           1620    430                               187206
Francine             1620    436                               187207
Imogene              1620    426                               187208
Indicator              41    329                                43598
Jane Rae             1620    438                               187209
Katie                  36    204                                43599
Kentucky               41    330                                43600
Last Chance            36    151                                43601
Lime No. 1           1620    448                               187214
Lime No. 2           1620    446                               187215
Lime No. 3           1620    444                               187216
</TABLE>


                                       17

<PAGE>

<TABLE>
<S>             <C>         <C>        <C>        <C>        <C>
Lime No. 4           1620    442                               187217
Linda Sue            1620    422                               187210
</TABLE>

<TABLE>
<CAPTION>
                Original Recordation   Amended Recordation   BLM Serial
                --------------------   -------------------       No.
Name of Claim        Book   Page           Book   Page          A MC
-------------        ----   ----           ----   ----       ----------
<S>             <C>         <C>        <C>        <C>        <C>
Mary Eilene          1620    428                               187211
Mescal No. 5           67     51                                43621
Moore #1              132     73                                43623
Moore #2              132     72                                43624
Moore #3              132     71                                43625
Nelda Lane           1620    424                               187212
Puzzle no. 2           17    529                                43638
Sharie Lynn          1620    418                               187218
Shirley Louise       1620    420                               187213
</TABLE>


                                       18

<PAGE>

                             PART 4 - RIGHTS OF WAY

BLM RIGHT OF WAY NO. A-22976

     A 50 foot wide right--of-way, designated as BLM Right-of-way Number
A-22976, for a road crossing the Ella, Dora, Wolfrime, Mary, Charles, Hagerman,
and Erika unpatented lode mining claims, BLM Serial Numbers A MC 43587, 43578,
43675, 43605, 43574, 43595, and 043588, respectively, the same being located in
the Southeast Quarter of the Southwest Quarter (SE1/4SW1/4) of Section 25 and
the East Half of the Northwest Quarter (E1/2NW1/4) of Section 36, Township 15
South, Range 22 East, G&SRB&M, Cochise County, Arizona, and containing 3.4980
acres more or less, which is more fully described as follows:

          Beginning at adot stationing 895 + 99.3, Thence North 27 degrees 25'
          15" West 306.32 feet to a curve with an arc of 34 degrees 15' 52", a
          radius of 300', a tangent of 92.48' and a length of 179.41';

          Thence North 61 degrees 41' 07" West 701.98 feet to a curve with an
          arc of 58 degrees 34' 32", a radius of 400', a tangent of 224.36' and
          a length of 408.93';

          Thence North 3 degrees 06' 35" West 251.47 feet to the southern
          boundary line of the Ella lode claim, the true point of beginning;

          Thence from the true point of beginning, 1,972.03 feet to a curve with
          an arc of 13 degrees 08' 56", a radius of 400', a tangent of 46.10
          feet, and a length of 91.80';

          Thence North 2 degrees 02' 21" East 233.66 feet to a curve with an arc
          of 10 degrees, a radius of 400', a tangent of 35.23' and a length of
          70.29';

          Thence North 0 degrees 08' 13" East 679.68' to the point where the
          centerline of the road intersects the northern boundary of the Erika
          unpatented lode mining claim, BLM Serial Number A MC 43588.

BLM RIGHT-OF-WAY NO. A-9621

Right-of-way for a pipeline, powerline, and access road over and across Lot 4 of
Section 24, Township 15 South, Range 22 East, G&SRB&M, which right-of-way
crosses a portion of the Bee R12 and the Echo R3 unpatented lode mining claims,
BLM Serial Numbers A MC 43532 and 43581, respectively.


                                       19

<PAGE>

STATE OF ARIZONA RIGHT-OF-WAY NO. 18-95162

A 50-foot wide right-of-way for a road crossing State of Arizona surface lying
directly south of and abutting the Ella unpatented lode mining claim, BLM Serial
Number A MC 43587, and more particularly described as follows:

          Beginning at adot stationing 895 + 99.3, Thence North 27 degrees 25'
          15" West 306.32 feet to a curve with an arc of 34 degrees 15' 52", a
          radius of 300 feet, a tangent of 92.48 feet and a length of 179.41
          feet;

          Thence North 61 degrees 41' 07" West 701.98 feet to a curve with an
          arc of 58 degrees 34' 32", a radius of 400 feet, a tangent of 224.36
          feet and a length of 408.93 feet to the true point of beginning.

          Thence from the true point, of beginning North 3 degrees 06' 35" West
          251.47 feet to the southern boundary line of the Ella unpatented lode
          mining claim, which point lies South 69 degrees 17' 35" East 167.92
          feet from the southwest corner of the Ella unpatented lode mining
          claim.

RIGHT-OF-WAY AS RESERVED FROM DAVID RAE

A right-of-way across an existing roadway in the East Half of the West Half
(E1/2W1/2) of Section 25, Township 15 South, Range 22 East, G&SRB&M as reserved
in Special Warranty Deed dated January 26, 1987 from Cyprus Mines Corporation,
Grantor, to David A. Rae, Grantee, recorded in the Cochise County records as
Document No. 8701-02364, as further described below:

          BEGINNING at a point on the centerline of the road at its intersection
          with the section line of Sections 25 and 36, Township 15 South, Range
          22 East, G&SRB&M, Cochise County, Arizona, which point is South 89
          degrees 50' 33" West, 414.85 feet from the quarter section corner of
          Sections 25 and 36:

          Thence North 00 degrees 30' 06" West, 678.30 feet;

          Thence North 10 degrees 27' 11" West, 981.02 feet;

          Thence North 14 degrees 40' 20" West, 171.79 feet;

          Thence North 29 degrees 16' 00" West, 128.66 feet;

          Thence North 34 degrees 47' 37" West, 638.55 feet;

          Thence North 37 degrees 21' 57" West, 109.64 feet;

          Thence North 45 degrees 39' 35" West, 126.85 feet;

          Thence North 49 degrees 59' 15" West, 127.59 feet to the intersection
          of the road with the west sixteenth section line of Section 25, which
          point is North 00 degrees 00' 40" East, 66.19 feet from the west
          center sixteenth section corner of Section 25.


                                       20

<PAGE>

ACCESS ROAD RIGHT OF WAY

A right-of-way for ingress and egress over and across an existing roadway
extending from the West Half (W1/2) of Lot 20 in Section 25, and running thence
through portions of the Northeast Quarter (NE1/4) of Section 25, the Southeast
Quarter (SE1/4) of Section 23 and the Southwest Quarter (SW1/4) of Section 23,
all in Township 15 South, Range 22 East, G&SRB&M, as further described below:

          BEGINNING at a point lying North 49 degrees 59' 15" West.127.59 feet
          to the intersection of the road with the west sixteenth section line
          of Section 25, which point is North 00 degrees 00' 40" East, 66.19
          feet from the west center sixteenth section corner of Section 25;

          Thence North 49 degrees 59' 15" West, 798.44 feet;

          Thence North 53 degrees 14' 47" West, 221.39 feet;

          Thence North 60 degrees 43' 02" West, 194.54 feet;

          Thence North 64 degrees 21' 44" West, 145.27 feet;

          Thence North 65 degrees 49' 06" West, 257.90 feet to the intersection
          of the road with the section line between Sections 25 and 26, which
          point is south 00 degrees 00' 43" West, 1660.30 feet from the section
          corner of Sections 23, 24, 25, and 26;

          Thence North 65 degrees 49' 06" West, 89.93 feet;

          Thence North 61 degrees 10' 22" West, 232.91 feet;

          Thence North 72 degrees 14' 31" West, 609.33 feet;

          Thence North 59 degrees 29' 13" West, 409.07 feet;

          Thence North 53 degrees 11' 26" West, 669.07 feet;

          Thence North 48 degrees 10' 06" West, 176.99 feet;

          Thence North 41 degrees 05' 19" West, 562.84 feet;

          Thence North 48 degrees 15' 42" West, 246.72 feet;

          Thence North 50 degrees 38' 20" West, 25.91 feet to the intersection
          of the road with the line between Sections 23 and 26, which point is
          South 89 degrees 54' 08" East, 194.54 feet from the quarter section
          corner of Sections 23 and 26;

          Thence North 50 degrees 38' 20" West, 312.68 feet;

          Thence North 27 degrees 54' 00" West, 152.67 feet;

          Thence North 27 degrees 57' 35" West, 177.57 feet;

          Thence North 27 degrees 47' 54" West, 155.73 feet;

          Thence North 20 degrees 07' 26" West, 194.99 feet;

          Thence North 48 degrees 22' 21" West, 158.51 feet;


                                       21

<PAGE>

          Thence North 56 degrees 34' .27" West, 143.29 feet;

          Thence North 56 degrees 39' 39" West, 296.31 feet;

          Thence North 64 degrees 44' 49" West, 276.84 feet;

          Thence South 89 degrees 42' 38" West, 184.52 feet;

          Thence North 64 degrees 28' 24" West, 339.24 feet to a point on the
          East end line (line 2-3) of the Enough lode, common with line 2-3 of
          the Arizona lode, both of Mineral Survey No. 4340, which point is
          South 32 degrees 27' West, 266.03 feet from Corner No. 2 of the Enough
          lode, identical with Corner No. 3 of the Arizona lode.


                                       22

<PAGE>

                  PART 5 - WATER RIGHTS, WELLS, AND AGREEMENTS

STATE OF ARIZONA WELL REGISTRATIONS

     State of Arizona, Department of Water Resources, Water Well Registrations
and associated water wells located in portions of Sections 23 and 25, Township
15 South, Range 22 East, G&SRB&M, Cochise County, Arizona, as further described
below:

<TABLE>
<CAPTION>
Well Registration No.                      Location of Well
---------------------                      ----------------
<S>                     <C>
       36-66376         Township 15 South, Range 22 East, G&SRB&M Section 23:
                        SE1/4SW1/4

       36-66377         Township 15 South, Range 22 East, G&SRB&M Section 25:
                        SW1/4NW1/4

       36-66378         Township 15 South, Range 22 East, G&SRB&M Section 23:
                        NW1/4SE1/4
</TABLE>

ACCESS AND WATER USE AGREEMENT

Access and Water Use Agreement dated the 26th day of January, 1987 between David
A. Rae and Cyprus Mines Corporation, the same being recorded as Document No.
870102368, Cochise County, Arizona, which agreement covers the unrestricted use
by Cyprus of that certain water well, State of Arizona Department of Water
Resources Well Registration No. 36-66379, located in Northwest Quarter of the
Northwest Quarter (NW1/4NW1/4) of Section 19, Township 15 South, Range 23 East,
G&SRB&M.


                                       23