<PAGE>



                                                                    EXHIBIT 10.3


        EXPLORATION LICENSE, MINERAL PURCHASE OPTION AND LEASE AGREEMENT

        THIS EXPLORATION LICENSE, MINERAL PURCHASE OPTION AND LEASE AGREEMENT is
made this 7th day of December, 1999 by and between A. Russell Gjerde and Betty
Ann Gjerde, h/w, Joint Tenants ("Owners"); and Britt Minerals, Inc. ("Britt").

        A. Owners own and possesses Mineral Property as shown on Exhibit "A"
heretofore attached and a part of this Agreement in Fergus County, Montana. All
ores, minerals, mineral rights, and the right to explore for, mine, remove the
same and so much of the water as will be required or with the right to drill a
water well, with ingress and egress over adjoining lands now owned by Owners
shall be referred to collectively as "Mineral Property", except oil and gas, and
the remainder of the surface, water rights and improvements, easements,
licenses, rights-of-way and other interests appurtenant thereto, shall be
referred to collectively as the "Surface".

        B. The parties now wish to enter into an agreement giving Britt an
exclusive license to explore the Mineral Property and the exclusive option to
purchase the Mineral Property on the terms and conditions set forth below.

        THEREFORE, the parties have agreed as follows.

                                   SECTION ONE
                               Exploration License

        1.1 Grant of Exploration License. Owners hereby grant to Britt the
exclusive right and option to enter upon and explore the Mineral Property. The
Exploration License shall have a term of Five (5) years commencing on execution
of this agreement by both parties (the "Effective Date"). During the term of the
license, Britt shall have the right to undertake geological, geophysical, and
geochemical examinations of the Mineral Property; to sample the Mineral Property
by means of pits, trenches, and drilling by any means; and to take mini-bulk
samples (not to exceed 1 ton total) from the Mineral Property for the purpose of
conducting mineralogical tests, etc. However, Britt shall not commence mining
activities on the Mineral Property unless it exercises its option to purchase
set forth in Section 2 below.

        1.2 Payments For Exploration License. In consideration of this License,
Britt shall pay Owners the sum of Three Thousand Dollars ($3,000.00) upon
execution of this agreement with annual payments of Three Thousand Dollars
($3,000.00) on or before the anniversary date shown above for the duration of
the Exploration License.

        1.3 Delivery of Data. Following execution of this Agreement, Owners
shall allow Britt to review and copy (at Britt's cost) all data and reports, if
any, in the possession of Owners.

        1.4 Termination of Exploration License. This exploration license shall
terminate Five (5) years from the Effective date, unless extended by mutual
agreement of the parties. Britt shall have the right to terminate the License at
any time and shall, upon delivery of a termination notice to Owners, be relieved
of all further obligations after termination date.



<PAGE>



        1.5 Work Commitment. The payment set forth in Section 1.2 above shall be
in lieu of any work commitment on the Mineral Property, and Britt shall have no
obligation, express or implied, to explore, develop, or mine the Mineral
Property.

        1.6 Environmental Liabilities. Owners shall remain solely liable and
responsible for all environmental conditions and reclamation responsibilities
which arose prior to the execution of this Agreement. Britt shall have
responsibility for all environmental conditions and reclamation responsibilities
arising from Britt's activities on the Surface after execution of this
Agreement.

                                   SECTION TWO
                                 Option to Lease

        2.1 Grant of Option. In consideration of the payment made in Section
1.2, Owners hereby grant to Britt the exclusive right and option to Purchase
Owners' ownership interest, in and to all mineral interests, as defined in "A"
above, and Lease so much of the Surface as needed and/or required for the sum of
Five Hundred Dollars ($500.00) per acre to be paid according to the schedule set
forth below. The option shall have a term of five (5) years unless sooner
terminated or canceled as hereinafter provided, and the Surface Lease shall run
for five (5) years or so long after the end of such term as there is production
from the Mineral Property. The Lease shall commence on the date Britt gives
Owners' notice of execution of Option to Purchase and makes a payment of Twenty
Five Dollars ($25.00) per acre. In order to maintain the option in effect, Britt
shall make the following annual option payments to Owners:

<TABLE>
<CAPTION>
        Anniversary of Option Date                    Option Payment
        -------------------------------------------------------------
<S>                                                   <C>
                       1                              $37.50 per acre

                       2                              $62.50 per acre

                       3                              $100.00 per acre

                       4                              $125.00 per acre

                       5                              $150.00 per acre
</TABLE>

        2.2 Exercise of Option. Britt shall elect (a) to terminate this
Agreement and relinquish the Mineral Property and Surface to Owners in
accordance with Section 6.1 below, or (b) to exercise its option and purchase
the Mineral Property for the price set forth in Section 2.1 and Lease so much of
the Surface as is needed and/or required. During the term of the 5 year Option,
if Britt elects to purchase the Mineral Property, the parties shall open an
escrow account and proceed to complete the sales transaction within sixty (60)
days following Britt's election. Owners shall deposit a Warranty Deed into the
escrow account conveying the Mineral Property to Britt, and Britt shall deposit
the purchase price in to escrow. Upon deposit of both the deed and purchase
payment, the deed shall be released and recorded, and the initial payment shall
be delivered to owners. Britt shall bear all of the costs of escrow, and
recording.

                                       -2-


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        The parties acknowledge that Britt shall have the right to terminate the
option at any time in accordance with Section 6 below.

        2.3 Production Royalty. If the Premises are placed into commercial
production, Britt agrees to pay to Owners a production royalty of two percent
(2%) of the Net Returns, as defined herein, from the proceeds received from
commercial production from the Mineral Property, where Owners hold 100% of all
minerals and there is no outstanding royalty. Britt agrees to pay the Owners a
royalty reduced proportionately to the Owners actual Mineral Property ownership
percentage. In the case that the said Mineral Property contains outstanding
royalties, Britt agrees to pay Owners two percent (2%) royalty minus the
outstanding royalty amount, and no royalty will be paid to Owners if the
outstanding royalty on Mineral Property equals or exceeds two percent (2%).
Payments of such production royalty from the proceeds received from commercial
production shall be determined at the end of each calendar quarter after the
effective date. Payments of the production royalty shall be made within thirty
(30) days after the end of each calendar quarter.

               2.3.1   "Net Returns" shall mean for any period the amount of
                       earned revenues actually paid to and received by Britt by
                       any refinery or other purchaser of metals, ores, minerals
                       or mineral substances, or concentrates produced therefrom
                       for products mined from the Property, less all of the
                       following:

               2.3.2   Treatment charges and penalties, including, but without
                       being limited to, penalties for impurities and charges
                       for refining, selling, and transportation to refinery and
                       from refinery to market;

               2.3.3   Production taxes, net proceeds of mine taxes, severance
                       taxes and sales, privileges and other taxes levied on
                       product or on the production thereof.

                       Net Returns for product treated at a refinery owned,
               operated or controlled by Britt, shall be computed in the above
               manner, with deductions for all charges and items of cost
               equivalent to the deductions described above.

        2.4 Quitclaim of Mineral Rights. Upon completion of mining operations,
the Mineral Property ownership will be quit claimed to Owner, at the sole
discretion of Britt.

                                  SECTION THREE
                              Conduct of Operations

        3.1 Right to Explore. Following the execution of this Agreement, Britt
shall have the right to make geological investigations and surveys, to drill on
the Surface by any means, and to have all the rights and privileges incident to
Owner's ownership of the Mineral Property. However, Britt shall not commence
development or mining operations on the Mineral Property unless it has executed
the option to purchase the Mineral Property in accordance with Section 2 above.

        3.2 Conduct of Work. Britt shall perform its activities on the Mineral
Property in accordance with good mining practices, shall comply with the
applicable laws and regulations



                                       -3-


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relating to the performance of exploration operations on the Mineral Property,
and shall comply with the applicable worker's compensation laws of the State of
Montana.

        3.3 Liability. During the term of the Agreement, Britt shall indemnify
and hold Owners harmless from any claims, demands, liabilities or liens arising
out of Britt's activities on the Mineral Property.

        3.4 Liens. Britt shall keep the Mineral Property free and clear from any
and all mechanics' or laborers' liens arising from labor performed on or
material furnished to the Mineral Property at Britt's request.

        3.5 Installation of Equipment. Britt may install, maintain, replace, and
remove during the term of this Agreement any and all machinery, equipment,
tools, and facilities which it may desire to use in connection with its
exploration activities on the Mineral Property. Upon termination of this
Agreement for any reason, Britt shall have a period of ninety (90) days
following such termination during which it may remove all or part of the above
items at its sole cost and expense. Any equipment remaining on the Mineral
Property after ninety (90) days shall become property of Owners.

        3.6 Acquisition of Permits. Britt shall acquire all federal, state and
county permits required for its operations. In the event that Britt is required
to post a reclamation bond, the bond will revert to Britt upon satisfactory
completion of the reclamation program.

                                  SECTION FOUR
                               Inspection by Owner

        During the term of this Agreement, Owners, or their authorized agents or
representatives, shall be permitted to enter upon the Mineral Property for the
purpose of inspection. Owners shall enter upon the Mineral Property at their own
risk and so not to hinder unreasonably the operations of Britt. Owners shall
indemnify and hold Britt harmless from any damage, claim, or demand by reason of
injury to Owners or their agents or representatives on the Mineral Property or
the approaches thereto.

                                  SECTION FIVE
                                      Taxes

        Britt shall pay all taxes levied or assessed upon any improvements
placed on the Mineral Property by Britt. Upon termination of this Agreement for
any reason, taxes shall be paid by Britt for the remaining portion of the
calender year. However, Owners shall not be liable for taxes on any tools,
equipment, machinery, facilities, or improvements placed upon the Surface unless
Britt fails to remove them within the time provided by this Agreement.



                                       -4-


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                                   SECTION SIX
                             Termination and Default

        6.1 Termination. Britt shall have the right to terminate this Agreement
at its sole discretion at any time upon written notice to Owners. Upon
termination, Owners shall retain all payments previously made as liquidated
damages and this Agreement shall cease and terminate. Britt will also deliver a
Quitclaim Deed to Owners.

        6.2 Default. If Britt fails to perform its obligations under this
Agreement and in particular fails to make any payment due to Owners hereunder,
Owners may declare Britt in default by giving Britt written notice of default
which specifies the obligation(s) which Britt has failed to perform. If Britt
fails to remedy or satisfactorily respond to a notice of default within thirty
(30) days, Owners may terminate this Agreement and Britt shall peaceably
surrender possession of the Mineral Property to Owners. Notice of termination
shall be in writing and served in accordance with this Agreement.

        6.3 Obligations Following Termination. In the event of voluntary or
involuntary termination, Britt shall surrender possession of the Mineral
Property to the Owners and shall have no further liability or obligation under
this Agreement except for its obligation (1) to pay its apportioned share of
taxes, as provided for in Section Five, (2) to pay the cost of removal of all
equipment, (3) to fulfill its reclamation responsibility, and (4) to satisfy any
accrued obligations or liabilities, and (5) to satisfy any other obligation
imposed by this agreement or by law. Upon termination of this Agreement, except
termination upon Britt's exercise of the Option, Britt will provide a copy of
all drilling logs, assays, maps and other factual data which Britt has prepared
in connection with its exploration and development of the Mineral Property under
this Agreement.

                                  SECTION SEVEN
                              Notices and Payments

        7.1 Notices. All notices to Britt or Owners shall be in writing and
shall be sent certified or registered mail, return receipt requested, to the
addresses below. Notice of any change in address shall be given in the same
manner.

        TO Owners:     A. Russell Gjerde or Betty Ann Gjerde
                       P.O. Box 57
                       Grassrange, MT 59032

        TO Britt:      Peter C. Ellsworth, President
                       Britt Minerals, Inc.
                       P.O. Box 7495
                       Missoula, MT 59807

        7.2 Payments. All payments shall be in U.S. currency payable to Owners
at the address above.


                                       -5-


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                                  SECTION EIGHT
                                   Assignment

        Britt may assign this Agreement at any time, in whole or in part, upon
the prior notification to Owners. Owners, prior to conveying their royalty
interest under this Agreement to any other party, shall first offer Britt a
60-day opportunity to acquire Owners' interests on the same terms and conditions
offered by a third party.

                                  SECTION NINE
                                Warranty of Title

        9.1 Warranty. Owners represent that they are the owners of the Mineral
Property and Surface as described; that Owners have created no Liens or
encumbrances affecting the Mineral Property, and that Owners have and will
continue to have the right to commit the Mineral Property and Surface to this
Agreement.

        9.2 Examination of Title Documents. Promptly after execution of the
Option to Purchase section of this Agreement, Owners shall deliver to Britt
available copies of all documents bearing upon Owners' title, interest, and
ownership in the Mineral Property. Britt may then undertake such further
investigation of the title and status as Britt shall deem necessary. If that
investigation should reveal defects in the title, Britt agrees to proceed
forthwith to cure the title defects to their own satisfaction.

                                   SECTION TEN
                            Miscellaneous Provisions

        10. 1 Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, their respective heirs, executors,
administrators, successors, and assigns.

        10.2 Applicable Law. The terms and provisions of this Agreement shall be
interpreted in accordance with the laws of the State of Montana.

        10.3 Entire Agreement. This Agreement terminates and replaces all prior
agreements, either written, oral or implied, between the parties hereto, and
constitutes the entire agreement between the parties.

        10.4 Recording Memorandum of Agreement. The parties hereto agree to
execute a Memorandum of this Agreement (short form) for the purpose of recording
same in the records of Fergus County, Montana so as to give public notice,
pursuant to the laws of the State of Montana, of the existence of this
Agreement.

        10.5 Void or Invalid Provisions. If any term, provision, covenant or
condition of this agreement, or any application thereof, should be held by a
court of competent jurisdiction to be invalid, void or unenforceable, all
provisions, covenants and conditions of this Agreement, and all applications
there of not held invalid, void or unenforceable, shall continue in full force
and effect and shall in no way be affected, impaired, or invalidated thereby.



                                       -6-


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        10.6 Time of the Essence. Time is of the essence of this Agreement and
each and every part thereof.

        10.7 Confidentiality. All reports and data provided by Britt to Owners
shall be held in strictest confidence, and Owners shall not disclose such
information without Britt's prior written consent.

        10.8 Water Well Development. In the event that Britt should encounter
productive groundwater during the course of the exploration drilling, the Owners
will be notified and Britt agrees to install, to the best of their ability,
water well casing to be provided by Owners, into exploration drillhole, upon the
request of the Owners. Water well casing will be installed using drill rig
before removing from drill site.

        10.9 Preservation of Rattlesnake Butte. Britt recognizes the importance
of preserving Rattlesnake Butte (also known as Elk Creek Butte) as a local
landmark, located in the SE1/4 Sec. 13, T14N, R24E, Fergus County, Montana.
Britt agrees to restrict open pit mining of the Rattlesnake Butte landmark.
Underground mining techniques beneath the surface of Rattlesnake Butte will be
deemed acceptable, so long as the natural character of the Butte is not
disturbed.

                                 SECTION ELEVEN
                                  Surface Owner

        The Surface Owner now wishes to enter into this agreement giving Britt
the exclusive right to Lease so much of the surface as is needed and/or required
to explore for, mine, produce and remove the Mineral Property, as defined above
in "A" and referenced to Exhibit "A". In consideration for the right to use so
much of the surface as is needed and/or required, Britt will pay Surface Owners
$150.00 per acre per year for grazing land and $240.00 per acre per year for
crop land taken out of production until the time Britt reclaims the land to its
original productivity. Britt also agrees to pay Surface Owners $1,000.00 per
acre for crop land and $500.00 per acre for grazing land as compensation for any
land taken out of permanent grazing or farming production.

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

Owners:

  /s/ A.  Russell Gjerde                            /s/ Betty Ann Gjerde
------------------------------                    ------------------------------
A. Russell Gjerde                                 Betty Ann Gjerde

                                             Britt Minerals, Inc.

                                             By: /s/ Peter Ellsworth
                                                 -------------------------------
                                                 Peter C.  Ellsworth, President




                                       -7-


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STATE OF MONTANA              )
                              )ss:
COUNTY OF FERGUS              )

        On this 7th day of December, in the year 1999, before me, a Notary
Public in and for said state, personally appeared Peter C. Ellsworth, who is
Director of Britt Minerals, Inc., personally known (or proved) to me to be the
person who executed the above instrument, and acknowledged to me that he
executed the same for purposes stated therein.

                                               /s/ Sheryl M. Cramer
                                             -----------------------------------
                                             Notary Public
                                             My Commission Expires   6/5/2002
                                                                   -------------

STATE OF MONTANA              )
                              )ss:
COUNTY OF FERGUS              )

        On this 7th day of December, in the year 1999, before me, a Notary
Public in and for said state, personally appeared A. Russell Gjerde and Betty
Ann Gjerde, personally known (or proved) to me to be the person who executed the
above instrument, and acknowledged to me that he executed the same for purposes
stated therein.

                                               /s/ Sheryl M. Cramer
                                             -----------------------------------
                                             Notary Public
                                             My Commission Expires   6/5/2002
                                                                   -------------




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<PAGE>



                                   EXHIBIT "A"

Made a part of and attached to that certain EXPLORATION LICENSE, MINERAL
PURCHASE OPTION AND LEASE AGREEMENT, dated 7th day of December, 1999 by and
between A. Russell Gjerde and Betty Ann Gjerde, h/w, Joint Tenants and Britt
Minerals, Inc.

Township 13 North, Range 24 East

Section 2:     Lots 3(39.71 ac), 4(39.77 ac); SW1/4NW1/4;
Section 3:     Lots 2(40.03 ac), 3(40.17 ac); 4(40.33 ac); S1/2NE1/4; SW1/4NW;
               SW1/4; W1/2SE1/4; SE1/4SE1/4;

Section 4:     Lots 1(40.42 ac), 2(40.46 ac); 3(40.50 ac), 4(40.54 ac);
               S1/2N1/2; S1/2S1/2;
Section 5:     Lot 1(40.57 ac);  SE1/4NE1/4;  NE1/4SE1/4;



Township 14 North, Range 24 East

Section 13:    S1/2;
Section 14:    S1/2S1/2; NW1/4SW1/4; NE1/4SE1/4;
Section 15:    SE1/4NE1/4; E1/2SE1/4;
Section 22:    E1/2;
Section 23:    All;
Section 24:    All;
Section 25:    All;
Section 26:    All;
Section 27:    NE1/4; S1/2NW1/4; S1/2;
Section 28:    S1/2NE1/4; SE1/4SW1/4; SE1/4;
Section 32:    SE1/4SE1/4;
Section 33:    E1/2; E1/2NW1/4; S1/2SW1/4;
Section 34:    All;
Section 35:    W1/2SE1/4; SW1/4NE1/4; W1/2.





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A.  Russell Gjerde & Betty Ann Gjerde, h/w, JT


Township 14 North, Range 24 East
--------------------------------

Section 13:    S1/2;
               100% of all minerals with a 6-1/4% Royalty to Fergus County

Section 22:    NE1/4; E1/2SE1/4
               100% of all minerals

Section 22:    W1/2SE1/4;
               97.5% of the minerals (somewhere in past 2.5% outstanding)

Section 23:    W1/2NE1/4;
               50% of the minerals - Noel M. Newberg - 50% of the minerals

Section 23:    E1/2NE1/4; SE1/4NW1/4; W1/2NW1/4; SW1/4; N1/2SE1/4;
               100% of all minerals with a 6-1/4 % Royalty to Fergus County

Section 23:    NE1/4NW1/4;
               BLM minerals

Section 23:    S1/2SE1/4;
               100% of all minerals

Section 24:    All;
               100% of all minerals with a 6-1/4% Royalty to Fergus County

Section 25:    SW1/4NW1/4; SW1/4SW1/4;
               100% of all minerals

Section 25:    N1/2NW1/4; SE1/4NW1/4; E1/2; N1/2SW1/4; SE1/4SW1/4;
               100% of all minerals with a 6-1/4% Royalty to Fergus County

Section 26:    S1/2; NE1/4; S1/2NW1/4;
               100% of all minerals

Section 26:    N1/2NW1/4;
               100% of all minerals with a 6-1/4% Royalty to Fergus County

Section 27:    NE1/4; N1/2SE1/4;
               97.5% of the minerals (somewhere in past 2.5% outstanding)

Section 27:    S1/2NW1/4; SW1/4; S1/2SE1/4;
               100% of all minerals



                                      -10-


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Section 28:    S1/2NE1/4; N1/2SE1/4; SW1/4SE1/4
               100% of all minerals

Section 28:    SE1/4SW1/4; SE1/4SE1/4;
               50% of the minerals (somewhere in past 50% outstanding)

Section 33:    E1/2NW1/4; E1/2; S1/2SW1/4;
               100% of all minerals

Section 33:    NE1/4SW1/4;
               BLM minerals

Section 34:    All;
               100% of all minerals

Section 35:    W1/2NW1/4; SE1/4NW1/4; SW1/4NE1/4; SW1/4; SW1/4SE1/4;
               100% of all minerals


Township 13 North, Range 24 East
--------------------------------

Section 2:     Lots 3(39.71 ac), 4(39.77 ac); SW1/4NW1/4;
               100% of all minerals

Section 3:     Lots 2(40.03 ac), 3(40.17 ac), 4(40.33 ac); S1/2NE1/4;
               SW1/4NW1/4; SW1/4; W1/2SE1/4; SE1/4SE1/4;
               100% of all minerals

Section 4:     Lots 1(40.42 ac), 2(40.46 ac), 3(4.50 ac), 4(40.54 ac);
               S1/2NE1/4; S1/2NW1/4; S1/2S1/2;
               100% of all minerals

Section 5:     Lot 1(40.57 ac); SE1/4NE1/4; NE1/4SE1/4;
               100% of all minerals



                                      -11-