ex10-1.htm


    Exhibit
10.1

    PROPERTY
OPTION AGREEMENT

    


    


    THIS
AGREEMENT made as of October 27, 2009.

     

    BETWEEN:

     

    WILPENA
RESOURCES LTD. PTY.

     

    (hereafter
referred to as "Wilpena
Resources")

     

    AND:

     

    AYERS
EXPLORATION INC.

     

    (hereafter
referred to as "Ayers
Exploration")

     

    WHEREAS:

     

    A.
Wilpena Resources owns a 100% Interest (defined below) in certain mining
properties known as the Wilpena Property (the "Property") located in the
State of Queensland, Australia as more particularly described in Schedule "A"
hereto;

     

    B.
Wilpena Resources has agreed to grant to Ayers Exploration the exclusive right
and option to acquire all of Wilpena Resources's Interest in and to the Property
on the terms and conditions hereinafter set forth.

     

    C. Ayers
Exploration will have the exclusive option to acquire, subject to the
reservation of a royalty by Wilpena Resources and the covenant by Ayers
Exploration to pay a production bonus, all of Wilpena Resources's Interest in
the Property on the terms and conditions hereinafter set forth.

     

    NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
and agreements herein contained the parties hereto mutually agree as
follows:

     

    
      	
               
      

            	
               

            	
              1.
      DEFINITIONS

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              For
      the purposes of this Agreement:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              "Affiliate" means a
      corporation which is (i) a subsidiary of a party hereto, (ii) a subsidiary
      of a corporation of which a party hereto is a subsidiary or (iii)
      controlled by the same corporation or person as a party hereto (where
      "controlled" means that more than 50% of the votes that may be cast to
      elect directors of the corporation are held, other than by way of security
      only, by or for the benefit of that corporation or person, and the votes
      attached to those securities are sufficient, if exercised, to elect a
      majority of the directors of the
corporation);

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "Business Day" means, for
      any obligation to be performed in Canada, any day (other than a Saturday
      or Sunday) on which banks in Sydney,
Australia;

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              "Commencement of Commercial
      Production" means

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              if
      a Mill is located on the Property, the last day of a period of 40
      consecutive days in which, for not less than 30 days, such concentrator
      processed ore from the Property at 70% of its nameplate concentrating
      capacity,

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              if
      no Mill is located on the Property, the first day on which direct shipping
      ore has been shipped from the Property for the purpose of earning
      revenues, or

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              if
      the commencement of commercial production or the completion date of the
      mine, as described in any project financing arrangements, is fulfilled
      under such project financing arrangements before the dates described in
      (i) and (ii) above, the day on which such fulfillment
    occurs,

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              but
      no period of time during which ore or concentrate is shipped from the
      Property for testing purposes, shall be taken into account in determining
      the date of Commencement of Commercial
  Production;

            


    

     

    
      	
               
      

            	
               

            	
              "Effective Date" means
      October 27, 2009;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "Expenditures" means all
      items of outlay and expense whatsoever, direct or indirect, with respect
      to Mining Operations, recorded by Ayers Exploration in accordance with
      this Agreement, and includes, without duplication, Ayers Exploration's
      Fee. Without limiting generality, the following categories of Expenditures
      shall have the following meanings:

            


    

    
      	
               
      

            	
               

            


    

    
      
      

    

    
      	
               
      

            	
               

            	
              "Construction
      Expenditures" means those Expenditures recorded after a production
      decision and before the completion date of the
  mine;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "Exploration
      Expenditures" means those Expenditures recorded during the
      exploration period prior to a decision having been made to put the
      Property into production by building a mine;
and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "Operating Expenditures"
      means those Expenditures recorded after the completion date of the
      mine;

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              "Interest" means the
      undivided beneficial interest of Wilpena Resources in the Property, which
      beneficial interest is subject to the charges contemplated in Section
      6.2(d);

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "Mill" means any crusher,
      concentrator and other processing facilities to be constructed on or in
      proximity to the Property and used for the processing of production from
      the Property, whether or not in conjunction with or after production from
      any other mineral property;

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              "Mining Operations" means
      every kind of work done by Ayers Exploration on or in respect of the
      Property including, without limiting generality, investigating,
      prospecting, exploring, developing, property maintenance, preparing
      reports, estimates and studies, designing, equipping, improving,
      surveying, construction and mining, milling, concentrating,
      rehabilitation, reclamation, and environmental
  protection;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "NSR Royalty" means the
      royalty to be paid by Ayers Exploration to Wilpena Resources in accordance
      with the terms of this Agreement; 

            


    

     

    
      	
               
      

            	
               

            	
              "Option" means the sole
      and exclusive right and option granted by Wilpena Resources to Ayers
      Exploration to acquire, subject to Wilpena Resources's NSR Royalty which
      is hereby reserved, an undivided 100% right, title and Interest in and to
      the Property pursuant to this
Agreement;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              "Shares" means the voting
      common shares in the capital of Ayers Exploration as presently
      constituted; and

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              2. OPTION
      GRANT

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Wilpena Resources hereby gives and grants to Ayers Exploration the Option
      in accordance with the terms of this
Agreement.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              2.  In
      order for Ayers Exploration to acquire, subject to Wilpena Resources's NSR
      Royalty, an undivided 100% Interest in the Property, it
    must:

            


    

    
      	
               
      

            	
               

            


    

    
      
      

    

    
      	
               
      

            	
               

            	
              a.
      within 30 days of the Effective Date issue to Wilpena Resources 45,000
      Shares ; and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      incur the Expenditures (or make cash payments to Wilpena Resources for any
      shortfall), in the following amounts and on or before the following
      dates:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              i.
      US$25,000 on or before April 27, 2010;
and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              ii.
      An additional US$50,000 on or  before October 27,
      2010.

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              3.
      Ayers Exploration must have fulfilled all of the conditions in Section 2.2
      and have exercised the Option by October 1, 2008, after which date the
      Option will expire.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              4.
      Provided Ayers Exploration has complied with Section 2.2 hereof, the
      Option will have been exercised without any further action on the part of
      Ayers Exploration and Ayers Exploration shall have acquired, subject to
      Wilpena Resources's NSR Royalty, Wilpena Resources's Interest in the
      Property, and Wilpena Resources will promptly execute and deliver all such
      documents and to do all such things as may be required to transfer its
      Interest in the Property to Ayers Exploration or its designated nominee.
      Ayers Exploration consents to Wilpena Resources registering the NSR
      Royalty against title to the Property in the Mining Registry of Queensland
      upon such transfer.

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              For
      the purposes of Sections 2.2(a), and
3.1:

            


    

     

    
      
      

    

    
      	
               
      

            	
               

            	
              a.
      Wilpena Resources must give notice to Ayers Exploration of its election,
      where applicable, to take payment in cash or in Shares, as the case may
      be, and, if applicable, the name of the nominee in which the Shares should
      be registered, on or before the fifth Business Day after the date on which
      the payment required under such paragraph becomes due, and if Wilpena
      Resources does not give Ayers Exploration such notice within such time
      period then Wilpena Resources will have been deemed to have elected to
      receive the payment in cash;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      the value of each Share (if any) to be issued shall be equal to the
      weighted average trading price of the Shares on the Over-the Counter
      Bulletin Board ( the "OTCBB")or the
      Australian Stock Exchange  (the "ASX"), as the case may
      be, for the five trading days prior to the date on which the payment
      required under such paragraph becomes due, such weighted average trading
      price to be determined by dividing the aggregate number of Shares traded
      on the OTCBB or the ASX, as the case may be, for the five days prior to
      the date on which the determination is being made by the aggregate value
      of Shares traded on the ASX or the OTCBB during such five day
      period;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              c.
      Ayers Exploration shall issue certificates representing the Shares (if
      any) as soon as practicable after receiving notice from Wilpena Resources
      of its election to receive Shares, and in any event within five Business
      Days of receipt of such election.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              Notwithstanding
      anything to the contrary in this Agreement, the obligations described in
      Sections 2.2(a) and 3.1 shall remain obligations of Ayers Exploration
      throughout the term of this
Agreement.

            


    

     

    
      	
               
      

            	
               

            	
              3.
      ADDITIONAL PAYMENT

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      In addition to the payment obligations described in Article 2 above that
      Ayers Exploration must make in order to exercise the Option, on the six
      month anniversary of the Commencement of Commercial Production on the
      Property, Ayers Exploration will be obligated to pay to Wilpena Resources
      US$20,000 in cash or in Shares, at the election of Wilpena Resources in
      its sole discretion.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              4.
      TECHNICAL COMMITTEE

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Wilpena Resources and Ayers Exploration shall form a technical committee
      with respect to the Property, such technical committee to consist of one
      member from Ayers Exploration and one member from Wilpena
      Resources.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              2.
      The technical committee shall meet at least once per year, with the first
      meeting of the technical committee to be held no later than April 27,
      2009. At each meeting of the technical committee, Ayers Exploration will
      provide to Wilpena Resources evidence of and the results from the
      Expenditures made by Ayers Exploration as of the date of the
      Meeting.

            


    

    
      
      

    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              5.
      NET SMELTER ROYALTY

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Upon the Commencement of Commercial Production on the Property, Ayers
      Exploration will be obligated to pay to Wilpena Resources the NSR Royalty
      in accordance with Schedule "B"
hereto.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              6.
      REPRESENTATIONS AND WARRANTIES

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Each of Wilpena Resources and Ayers Exploration hereby represent and
      warrant to the other that as at the date
hereof:

            


    

    
      	
               
      

            	
               

            


    

    
      
      

    

    
      	
               
      

            	
               

            	
              a.
      it has full power, capacity and authority to carry on its business and to
      enter into and perform its obligations under this Agreement and any
      agreement or instrument referred to or contemplated by this Agreement and
      this Agreement is legally binding upon it and is enforceable in accordance
      with its terms;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      neither the execution and delivery of this Agreement nor any of the
      agreements referred to herein or contemplated hereby, nor the consummation
      of the transactions hereby contemplated conflict with, result in the
      breach of or accelerate the performance required by, any agreement to
      which it is a party; and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              c.
      the execution and delivery of this Agreement has been duly authorized by
      all necessary corporate action on its part and will not violate or result
      in the breach of the laws of any jurisdiction applicable or pertaining
      thereto or of its constating
documents.

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              2.
      Wilpena Resources hereby represents and warrants to Ayers Exploration that
      as at the date hereof:

            


    

    
      	
               
      

            	
               

            


    

    
      
      

    

    
      	
               
      

            	
               

            	
              a.
      it holds a   100% Interest in the Property, which is
      registered in the name of its principal and is in good
      standing;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      Wilpena Resources has the exclusive right to enter into this Agreement and
      all necessary authority to dispose of an interest in and to the Property in accordance
      with the terms of this Agreement;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              c.
      The Property is comprised
      of the mining concessions which are properly and accurately
      described in Schedule "A" hereto;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              d.
      to the best of its knowledge, no person, firm or corporation has any
      proprietary or possessory interest in the Property or any right capable of
      becoming an interest in the Property and, no person is entitled to any
      royalty or other payment in the nature of rent or royalty on any minerals,
      ores, metals or concentrates or any other such products removed from the
      Property;

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              e.
      there are no actual, pending or threatened actions, suits, claims or
      proceedings regarding the Property or any basis therefor of which it is
      aware;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              f.
      there are no liens, charges or encumbrances (recorded or unrecorded), and
      Wilpena Resources has not been served with any notice and is not aware of
      any defects or objections, materially affecting Wilpena Resources's rights
      in respect of the Property;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              g.
      to Wilpena Resources's knowledge, conditions on and relating to the Property and operations
      conducted thereon are in compliance with all applicable laws, regulations
      or orders including, without limitation, laws relating to environmental
      matters, waste disposal and storage and
  reclamation;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              h.
      Wilpena Resources has not been served with any outstanding orders or
      directions relating to environmental matters requiring any work, repairs,
      construction or capital expenditures with respect to the Property and the conduct
      of the operations related thereto;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              i.
      Wilpena Resources has not received notice of any act or omission of any
      party which could result by notice or lapse of time in the breach,
      termination, abandonment, forfeiture, relinquishment or other premature
      termination of the Property;
      and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              j.
      any consents or approvals required by Wilpena Resources with respect to
      the grant of the Option hereunder
      will be obtained prior to such
grant.

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              3.
      The representations and warranties hereinbefore set out are conditions on
      which the parties have relied in entering into this Agreement and shall
      survive the acquisition of any interest in the Property by Ayers
      Exploration, for a period of two years with respect to the representations
      and warranties in Sections 6.2(e) to (j) and indefinitely with respect to
      the representations and warranties in Sections. to (c) and 6.2(a) to
      (d), and each of the parties will indemnify and save the other harmless
      from all loss, damage, costs, actions and suits arising out of or in
      connection with any breach of any representation, warranty, covenant,
      agreement or condition made by them and contained in this
      Agreement.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              7.
      COVENANTS

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      During the term of the Option and before Wilpena Resources's Interest in
      the Property has been transferred by Wilpena Resources to Ayers
      Exploration or its designated nominee pursuant to Section 2.4, Wilpena
      Resources hereby covenants and agrees with Ayers Exploration
      to:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              a.
      not do or permit or suffer to be done any act or thing which would or
      might in any way adversely affect the rights of Ayers Exploration
      hereunder and, without limitation, will not transfer, convey, assign,
      mortgage or grant an option in respect of or grant a right to purchase or
      in any manner transfer or alienate any or all of the title to or its
      Interest in the Property, except as
      expressly provided under this
Agreement;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      make available to Ayers Exploration and its representatives all records
      and files in its possession relating to the Property and permit
      Ayers Exploration and its representatives at their own expense to take
      abstracts therefrom and make copies
thereof;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              c.
      promptly provide Ayers Exploration with any and all notices and
      correspondence received by Wilpena Resources from government agencies in
      respect of the Property;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              d.
      do all things necessary to maintain its Interest in the Property;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              e.
      immediately notify Ayers Exploration of any claims, actions, demands or
      similar acts of a civil, labour or juridical nature, filed against it
      respecting the Property; and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              f.
      obtain the written consent of Ayers Exploration prior to entering into any
      lease of the surface of the Property as to the terms
      of such proposed lease.

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              2.
      During the term of the Option and before Wilpena Resources's Interest in
      the Property has been transferred by Wilpena Resources to Ayers
      Exploration or its designated nominee pursuant to Section 2.4, Ayers
      Exploration hereby covenants and agrees with Wilpena Resources
      to:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              a.
      perform its obligations and conduct all operations in a workmanlike and
      commercially reasonable manner, in accordance with sound mining,
      engineering and processing methods and
  practices;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      provide automobile liability insurance, having a limit consistent with
      local practices as agreeable between the parties, and insuring against
      claims for bodily injury, including death, and for property damage arising
      out of the use of owned, leased and non-owned vehicles for the performance
      of any activities under this
Agreement;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              c.
      provide health, accident, and unemployment insurance and worker's
      compensation coverage for itself and its employees, agents and contractors
      hired to perform the services in connection with the
    Property;

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              d.
      keep the Property free and clear from any liens or encumbrances relating
      to its work on the Property;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              e.
      provide Wilpena Resources with regular progress reports during periods of
      active exploration and with an annual summary of the work performed and
      the results obtained. The annual summary shall include copies of any drill
      records, assays, maps, plans and all other relevant factual information
      and materials not previously
delivered;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              f.
      do and file such assessment work or other reports required to maintain
      tenure to the Property in good
standing;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              g.
      maintain accounts of its Expenditures on the Property in accordance with
      international accounting standards generally accepted in the mining
      industry;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              h.
      indemnify Wilpena Resources for any claims arising against Wilpena
      Resources, its Affiliates and the directors, officers, employees and
      agents thereof which may arise as a result of Ayers Exploration's work and
      Expenditures on the Property, such indemnification to expire two years
      from the date of the transfer of Wilpena Resources's Interest to Ayers
      Exploration or its designated
nominee;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              i.
      use its commercial best efforts to incorporate the Subsidiary, and
      immediately upon the incorporation of the Subsidiary provide notice to
      Wilpena Resources of such incorporation, at which time all references
      herein to "Ayers Exploration" will be deemed to be references to the
      Subsidiary, with the exception of the requirements to issue shares of
      Ayers Exploration, which shall continue to be the responsibility of Ayers
      Exploration. In addition, the requirement to make the payment contemplated
      by Section 3.1 shall be a joint liability of both Ayers Exploration and
      the Subsidiary.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              8.
      RIGHTS AND DUTIES DURING OPTION
PERIOD

            


    

    
      	
               

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      During the term of this Agreement, Ayers Exploration or its designated
      nominee pursuant to Section 2.4:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              a.
      Ayers Exploration and its employees, agents and independent contractors
      shall have the right to enter upon the Property and to do such
      prospecting, exploration, development or other mining work thereon and
      thereunder as is permitted by this agreement, including the removal of
      mineral samples for the purpose of, and in the amounts appropriate for,
      testing such mineral samples, and Ayers Exploration shall have the right
      to bring upon and erect upon the Property such buildings, plant machinery
      and equipment as Ayers Exploration may deem necessary or desirable to
      carry out such activities;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      Ayers Exploration in its sole discretion will make any decision concerning
      the Expenditures; and

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              c.
      Ayers Exploration shall have exclusive and quiet possession of the
      Property.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              9. TERMINATION OR FORFEITURE OF
      OPTION

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Ayers Exploration shall at any time have the right to elect by notice in
      writing to Wilpena Resources not to make the payments provided for under
      Section 2.2, thereby forfeiting its Option to acquire the
      Interest.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              2.
      If Ayers Exploration fails to make a payment on or before the dates
      specified in Section 2.2 and the default continues for 14 days after
      receipt by Ayers Exploration of notice from Wilpena Resources of the
      default, the Option to acquire the Interest will terminate on the 30th day
      after receipt of such notice by Ayers Exploration. If Ayers Exploration
      cures any default in respect of a payment in accordance with this section,
      Ayers Exploration will be deemed to have duly made the payment in respect
      of such default.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              3.
      If either party terminates this Agreement in accordance with this Article
      9, Ayers Exploration will:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              a.
      leave the Property free and clear of all liens, charges and encumbrances
      arising from its operations hereunder and in a safe and orderly condition
      and in good standing;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      deliver to Wilpena Resources within 60 days of its written request, all
      drill cores, assay samples, pulps, rejects and copies of all maps, drill
      logs, assay results and other factual technical data compiled by Ayers
      Exploration with respect to the
Property;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              c.
      have the right and, if so requested by Wilpena Resources, the obligation,
      to remove from the Property within six months of the effective date of
      termination all facilities erected, installed or brought upon the Property
      by or at the instance of Ayers
Exploration;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              d.
      comply with all laws, rules, orders and regulations in effect on the date
      of termination with respect to reclamation and environmental
      rehabilitation in relation to the work performed on the Property by Ayers
      Exploration under this Agreement;
and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              e.
      leave the property in good standing with respect to any annual minimum
      assessment work required and payment of any applicable taxes then due on
      the Property,

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              whereupon
      this Agreement will terminate and be of no further force or
      effect.

            


    

     

    
      	
               
      

            	
               

            	
              10. SHARING OF AND CONFIDENTIAL
      NATURE OF INFORMATION

            


    

    
      	
               

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Each party agrees that all information obtained hereunder shall be the
      exclusive property of the parties and not publicly disclosed or used other
      than for the activities contemplated hereunder except as required by law
      or by the rules and regulations of any regulatory authority or stock
      exchange having jurisdiction, or with the written consent of the other
      party, such consent not to be unreasonably withheld. Where a party
      releases information based on a requirement at law or under the rules and
      regulations of any regulatory authority or stock exchange having
      jurisdiction it will deliver a copy concurrently to the other
      party.

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              2.
      Consent to disclosure of information pursuant to Section 10.1 shall not be
      unreasonably withheld where a party wishes to disclose any such
      information to a third party for the purpose of arranging financing for
      its contributions hereunder or for the purpose of selling its Interest,
      provided that such third party gives its undertaking to the parties that
      any such information not theretofore publicly disclosed shall be kept
      confidential and not disclosed to
others.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              3.
      Except as provided for in Section 10.1, neither party will issue any press
      release concerning the Property or this Agreement without first delivering
      a copy of the proposed release to the other for comment and if such
      comment is not forthcoming within two business days of such delivery, such
      press release may be issued without the comment or consent of the other
      but a copy will be delivered to such other party concurrently with its
      release by such party.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              4.
      No party shall be liable to any other for the fraudulent or negligent
      disclosure of information by any of its employees, servants or agents,
      provided that such party has taken reasonable steps to ensure the
      preservation of the confidential nature of such
    information.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              11.
      RESTRICTIONS ON
      TRANSFER

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      The restrictions on transfer described in Sections 11.2 to 11.4
      shall apply during the term of the Option only, and, subject to
      Section 11.6,
      subsequent to the term of the Option either party may sell, transfer,
      assign or otherwise dispose of its right, title and interest in and to
      this Agreement and any of its rights hereunder in its sole
      discretion.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              2.
      Subject to Section 11.4, any party may sell, transfer, assign or otherwise
      dispose of ("Assign", or an "Assignment") all or any
      portion of its right, title and interest in and to this agreement to a
      third party ("New
      Party") only with
      the consent of the other parties hereto, which consent may be withheld for
      any reason.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              3.
      Notwithstanding the foregoing, either party may, without the consent of
      the other, Assign any or all of its Interest or its rights under this
      Agreement to an Affiliate, provided that such Affiliate first complies
      with the provisions of Section 11.4 and
      agrees with the other parties in writing to re-transfer such Interest to
      the originally assigning party before ceasing to be an Affiliate of such
      party.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              4.
      Before the completion of any Assignment by a party of its Interest or
      rights under this Agreement, to an Affiliate or otherwise, the New Party
      shall, at the election of the parties not selling, enter into an agreement
      with the party not selling on the same terms and conditions as set out in
      this Agreement.

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              5.
      Each party agrees that its failure to comply with the restrictions set out
      in this Article would constitute an injury and damage to the other party
      impossible to measure monetarily and, in the event of any such failure the
      other party shall, in addition and without prejudice to any other rights
      and remedies at law or in equity, be entitled to injunctive relief
      restraining or enjoining any sale of any Interest or assignment of any
      rights under this Agreement save in accordance with the provisions of this
      section, and any party intending to make a sale or making a sale contrary
      to the provisions of this section hereby waives any defence it might have
      in law to such injunctive relief.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              6.
      Subsequent to the term of the Option and upon exercise of the Option by
      Ayers Exploration and the transfer by Wilpena Resources of its Interest to
      Ayers Exploration, Ayers Exploration shall not transfer, assign or
      otherwise dispose of all or any portion of its right, title and interest
      in and to this Agreement, its rights hereunder or the Property to any
      third party without first causing the assignee to deliver to Wilpena
      Resources an agreement between the assignee and Wilpena Resources, in a
      form satisfactory to Wilpena Resources, acting reasonably, under which
      such assignee acknowledges the NSR Royalty and covenants to pay the NSR
      Royalty to Wilpena Resources on the same terms and conditions as under
      this Agreement.

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              12. AMALGAMATION OR
      REORGANIZATION

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      The provisions of Article 11 shall not prevent a party from entering into
      an amalgamation or corporate reorganization which will have the effect in
      law of the amalgamated or surviving company possessing substantially all
      the property, rights and interests and being subject to all the debts,
      liabilities and obligations of each amalgamating or predecessor
      company.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              13.
    NOTICE

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Any notice, direction or other instrument required or permitted to be
      given under this Agreement shall be in writing and may be given by the
      delivery of the same or by sending the same by telecommunication,
      facsimile or other similar form of communication, in each case addressed
      as follows:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              if
      to Wilpena Resources at:

            


    

    
      	
               
      

            	
               

            	
              Wilpena
      Resources Building 6, Garden City Office Park, 2404 Logan Rd, Eight Mile
      Plains QLD. 4113 Attention:
President

            


    

     

    
      	
               
      

            	
               

            	
              if
      to Ayers Exploration at:

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              Ayers
      Exploration Inc.. #6 Harston Avenue, Mosman, Sydney Australia
      2088 Attention: Greg Curson

            


    

     

    
      	
               
      

            	
               

            	
              2.
      Any notice, direction or other instrument will, if delivered, be deemed to
      have been given and received on the day after it was delivered, and if
      sent by telecommunication, facsimile or other similar form of
      communication, be deemed to have been given or received on the day it was
      so sent, if sent during the normal business hours of the recipient and
      otherwise on the first business day following the day it was so
      sent.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              3.
      Any party may at any time give to the others notice in writing of any
      change of address of the party giving such notice and from and after the
      giving of such notice the address or addresses therein specified will be
      deemed to be the address of such party for the purposes of giving notice
      hereunder.

            


    

    
      
      

    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              14.
      FURTHER ASSURANCES

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      The parties will execute such further and other documents and do such
      further and other things as may be necessary or convenient to carry out
      and give effect to the intent of this
Agreement.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              15.
      MANNER OF PAYMENT

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      All references to monies hereunder shall be in lawful currency of the
      United States of America. All payments to be made to any party hereunder
      may be made by cheque or draft mailed or delivered to such party at its
      address for notice purposes as provided herein, or deposited for the
      account of such party at such bank or banks as such party may designate
      from time to time by written notice. Said bank or banks shall be deemed
      the agent of the designating party for the purpose of receiving,
      collecting and receipting such
payment.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              16.
      TIME OF ESSENCE

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Time shall be of the essence in the performance of this
      Agreement.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              17.
      HEADINGS

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      The headings of the sections of this Agreement are for convenience only
      and do not form a part of this Agreement nor are they intended to affect
      the construction or meaning of anything herein contained or govern the
      rights and liabilities of the
parties.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              18.
      ENUREMENT

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      This Agreement shall enure to the benefit of and be binding upon the
      parties hereto and their respective successors and permitted
      assigns.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              19. FORCE
      MAJEURE

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Neither party will be liable for its failure to perform any of its
      obligations under this Agreement due to a cause beyond its control
      including, but not limited to adverse weather conditions, environmental
      protests or blockages, acts of God, fire, flood, explosion, strikes,
      lockouts or other industrial disturbances, laws, rules and regulations or
      orders of any duly constituted governmental authority or non-availability
      of materials or transportation (each an "Intervening
    Event").

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              2.
      A party relying on the provisions of Section 19.1 will promptly give
      written notice to the other of the particulars of the Intervening Event
      and all time limits imposed by this Agreement will be extended from the
      date of delivery of such notice by a period equivalent to the period of
      delay resulting from an Intervening Event described in Section 20.1. If an
      Intervening Event continues for a period of more than one year,
      the parties hereto will enter into negotiations to amend or terminate this
      Agreement, as appropriate.

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              3.
      A party relying on the provisions of Section 19.1 will take all reasonable
      steps to eliminate any Intervening Event and, if possible, will perform
      its obligations under this Agreement as far as practical, but nothing
      herein will require such party to settle or adjust any labour dispute or
      to question or to test the validity of any law, rule, regulation or order
      of any duly constituted governmental authority or to complete its
      obligations under this Agreement if an Intervening Event renders
      completion impossible. A party relying on the provisions of Section 19.1
      will give written notice to the other as soon as such Intervening Event
      ceases to exist.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              4.
      During an Intervening Event Wilpena Resources will use its commercially
      reasonable efforts to maintain its Interest in the Property, and Ayers
      Exploration shall provide to Wilpena Resources any funds required to make
      any payments to any governmental agencies or bodies with respect to the
      Property necessary in order for Wilpena Resources to maintain its
      Interest.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              20.
    DEFAULT

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      Notwithstanding anything in this Agreement to the contrary, if any party
      (a "Defaulting Party") is in default of any requirement herein set forth
      the party affected by such default shall give written notice to the
      Defaulting Party specifying the default and the Defaulting party shall not
      lose any rights under this Agreement, unless within 30 days after the
      giving of notice of default by the affected party the Defaulting party has
      failed to take reasonable steps to cure the default by the appropriate
      performance and if the Defaulting Party fails within such period to take
      reasonable steps to cure any such default, the affected party shall be
      entitled to seek any remedy it may have on account of such
      default.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              21.
      ENTIRE AGREEMENT

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      This Agreement constitutes the entire agreement between the parties and,
      except as hereafter set out, replaces and supersedes all prior agreements,
      memoranda, correspondence, communications, negotiations and
      representations, whether oral or written, express or implied, statutory or
      otherwise between the parties with respect to the subject matter
      herein.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              22.
      GOVERNING LAW AND ARBITRATION

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      This Agreement shall be governed by and construed according to the laws of
      the State of Nevada.

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              2.
      Any dispute arising under this Agreement will be determined by a panel of
      three arbitrators, one of which will be appointed by Ayers Exploration,
      one of which will be appointed by Wilpena Resources and one of which will
      be appointed by Ayers Exploration and Wilpena Resources jointly, as
      follows:

            


    

    
      
      

    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              a.
      either party may refer any such matter to arbitration by written notice to
      the other and, within ten Business Days after receipt of such notice, the
      parties will agree on the appointment of an
  arbitrator;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              b.
      no person will be appointed as an arbitrator hereunder unless such person
      agrees in writing to act;

            


    

    
      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
               

            	
              c.
      upon appointment in accordance with section (a), the arbitrator will
      immediately proceed to hear and determine the matter in question and
      unless otherwise agreed, such hearing shall take place in Vancouver,
      British Columbia;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              d.
      the determination by the arbitrator will be made within 45 days after his
      appointment subject to any reasonable delay due to unforeseen
      circumstances and the decision of the arbitrator will be in writing and
      signed by the arbitrator and will be final and binding upon the parties
      who will abide by such decision;

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              e.
      if the parties cannot agree on a single arbitrator as provided in section
      (b), or if the person appointed is unwilling or unable to act, either
      party will have the right to request the Court to mediate in the
      appointment of a mutually acceptable arbitrator;
  and

            


    

    
      
      

    

     

    
      	
               
      

            	
               

            	
              f.
      the arbitrators' fees shall be paid by both parties in equal parts during
      the course of the arbitration, but upon final decision of the dispute, the
      panel of arbitrators shall determine the responsibility for the payment of
      all arbitration costs, and if the arbitrators do not make such a
      determination then the unsuccessful party shall pay all arbitration costs,
      including the amounts paid by the prevailing
  party.

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              23.
      EXECUTION

            


    

    
      	
               
      

            	
               

            


    

    
      	
               
      

            	
               

            	
              1.
      This Agreement may be executed by each of Ayers Exploration and Wilpena
      Resources in counterparts and by facsimile, each of which when so executed
      and delivered shall be an original, but both such counterparts, whether
      executed and delivered in the original or by facsimile, shall together
      constitute one and the same
instrument.

            


    

    
      	
               
      

            	
               

            


    

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

     

    


     

    
      
        
          
            
              
                
                  
                    	
                             

                          	
                            WILPENA
      RESOURCES LTD. PTY.

                          
	
                             

                          	
                            By:

                          	
                             

                          
	
                             

                          	
                             

                          	
                            Authorized
      Signatory

                          
	
                             

                          	
                            AYERS
      EXPLORATION INC.

                          
	
                             

                          	
                            By:

                          	
                             

                          
	
                             

                          	
                             

                          	
                            Authorized
      Signatory

                          


                  

                

              

            

          

        

      

    

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      SCHEDULE
"A"  

       

      WILPENA
PROPERTY

       

      
        	
                Licence
      Area 

              	
                Tenure No.

              	
                Area

              
	
                Mt.
      Morgan

              	
                EPM
      15313

              	
                5
      acres

              


      

       

       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      SCHEDULE
"B"

       

      DEFINITION,
CALCULATION AND PAYMENT OF NSR ROYALTY

       

      The NSR
Royalty is the percentage royalty provided in the body of the Agreement to which
this Schedule "B" is attached and calculated and paid by Ayers Exploration to
Wilpena Resources in accordance with the following provisions:

       

      


      
        	
                 
      

              	
                Definitions

              


      

      


      


      
        	
                 
      

              	
                Unless
      otherwise set forth below, all capitalized terms used in this Schedule
      shall have the meaning ascribed to them in the
  Agreement.

              


      

      
        	
                 
      

              	
                "Calendar Quarter" means
      each three-month period ending March 31st, June 30th, September 30th and
      December 31st of each calendar
year. 

              


      

       

      
        	
                 
      

              	
                "Mineral Price Quotation"
      means the final sale price of gold as quoted on the London Metals
      Exchange, as published in Metals Week or a
      similar publication.

              


      

       

      
        	
                 
      

              	
                "Net Smelter Returns" or
      "NSR"
      means:

              


      

       

      


      
        	
                 
      

              	
                where
      all or a portion of the ores or concentrates derived from the Property are
      sold as ores or concentrates, the gross amount received from the purchaser
      following sale thereof after deduction (i) if applicable under the sale
      contract, of all smelter or refinery charges, penalties and other
      deductions; (ii) of all costs of transporting and insuring the ores or
      concentrates from the mine to the smelter, refinery or other place of
      final delivery; and (iii) of sales, use, severance, excise, net proceeds
      of mine, and ad valorem taxes and any tax on or measured by mineral
      production, but excluding income taxes of Ayers Exploration;
      and

              


      

      
        	
                 
      

              	
                 

              


      

       

      
        	
                 
      

              	
                where
      all or a portion of the said ores or concentrates derived from the
      Property are treated in a smelter or refinery and a portion of the metals
      recovered therefrom are delivered to, and sold by Ayers Exploration, the
      gross amount received from the purchaser following sale of the metals so
      delivered, after deduction of (i) all smelter or refinery charges,
      penalties and other deductions; (ii) all costs of transporting and
      insuring the ores or concentrates from the mine to the smelter or
      refinery; (iii) if applicable under the smelter or refining contract, all
      costs of transporting and insuring the metals from the smelter or refinery
      to the place of final delivery by the purchaser; and (iv) sales, use,
      severance, excise, net proceeds of mine, and ad valorem taxes and any tax
      on or measured by mineral production, but excluding income taxes of Ayers
      Exploration,

              


      

      


      
        	
                 
      

              	
                and
      where any ores or concentrates are sold to, or treated in, a smelter or
      refinery owned or controlled by Ayers Exploration, the pricing for that
      sale or treatment will be established by Ayers Exploration on an arm's
      length basis so as to be fairly competitive with pricing, net of
      transportation, insurance, treatment charges and other related costs, then
      available on world markets for product of like quantity and quality. Page
      .

              


      

       

      
        	
                 
      

              	
                NSR
      Royalty

              


      

      


      


      
        	
                 
      

              	
                Upon
      the Commencement of Commercial Production, each Calendar Quarter Ayers
      Exploration shall be obligated to pay and Wilpena Resources shall be
      entitled to receive the NSR Royalty as
follows:

              


      

       

      
        	
                 
      

              	
                for
      gold produced from the Property:

              


      

      
        	
                 
      

              	
                (i)
      1.5% of Net Smelter Returns if the average Mineral Price Quotation for
      gold over the Calendar Quarter for which the NSR Royalty is being paid is
      less than US$600 per ounce; or (ii) 2% of Net Smelter Returns if the
      average Mineral Price Quotation for gold over the Calendar Quarter for
      which the NSR Royalty is being paid is equal to or greater than US$600 per
      ounce; and 

              


      

       

      
        	
                 
      

              	
                for
      all other minerals produced from the Property, 1.75% of Net Smelter
      Returns.

              


      

       

      
        	
                 
      

              	
                Ayers
      Exploration shall, within 60 days of the end of each Calendar Quarter, as
      and when any Net Smelter Returns are available for
      distribution:

              


      

       

      
        	
                 
      

              	
                pay
      or cause to be paid to Wilpena Resources that percentage of the Net
      Smelter Returns to which Wilpena Resources is entitled under the
      Agreement;

              


      

      
      

       

      
        	
                 
      

              	
                deliver
      to Wilpena Resources a statement
indicating:

              


      

      


      
        	
                 
      

              	
                (i)
      the gross amounts received from the purchaser contemplated in the
      definition of "Net Smelter Returns" in subsection 1.01 of this
      Schedule "B"; (ii)
      the deductions therefrom in accordance with the definition of "Net Smelter
      Returns" in subsection 1.01 of this Schedule "B"; (iii) the amount of Net
      Smelter Returns remaining; and (iv) the amount of those Net Smelter
      Returns to which Wilpena Resources is entitled; supported by such
      reasonable information as to the tonnage and grade of ores or concentrates
      shipped as will enable Wilpena Resources to verify the gross amount
      payable by the smelter or other
purchaser. Page

              


      

       

      
        	
                 
      

              	
                Adjustments
      and Verification

              


      

      


      


      
        	
                 
      

              	
                Payment
      of any Net Smelter Returns by Ayers Exploration shall not prejudice the
      right of Ayers Exploration to adjust any statement supporting the payment;
      provided, however, that all statements presented to Wilpena Resources by
      Ayers Exploration for any quarter shall conclusively be presumed to be
      true and correct upon the expiration of 12 months following the end of the
      quarter to which the statement relates, unless within that 12-month period
      Ayers Exploration gives notice to Wilpena Resources claiming an adjustment
      to the statement which will be reflected in subsequent payment of Net
      Smelter Returns.

              


      

      
      

       

      
        	
                 
      

              	
                Ayers
      Exploration shall not adjust any statement in favour of itself more than
      12 months following the end of the quarter to which the statement
      relates.

              


      

      
      

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Wilpena
      Resources shall, upon 30 days' notice in advance to Ayers Exploration,
      have the right to request that Ayers Exploration have its independent
      external auditors provide their audit certificate for the statement or
      adjusted statement, as it may relate to the Agreement and the calculation
      of Net Smelter Returns.

              


      

      
      

       

      
        	
                 
      

              	
                The
      cost of the audit certificate shall be solely for Wilpena Resources's
      account unless the audit certificate discloses material error in the
      calculation of Net Smelter Returns, in which case Ayers Exploration shall
      reimburse Wilpena Resources the cost of the audit certificate. Without
      limiting the generality of the foregoing, a discrepancy of one percent in
      the calculation of Net Smelter Returns shall be deemed to be
      material.

              


      

      


      


      
        	
                 
      

              	
                Ayers
      Exploration to Determine Operations

              


      

      


      


      
        	
                 
      

              	
                Ayers
      Exploration will have complete discretion concerning the nature, timing
      and extent of all exploration, development mining and other operations
      conducted on or for the benefit of the Property and may suspend operations
      and production on the Property at any time it considers prudent or
      appropriate to do so. Ayers Exploration will owe Wilpena Resources no duty
      to explore, develop or mine the Property, or to do so at any rate or in
      any manner other than that which Ayers Exploration may determine in its
      sole and unfettered discretion. Ayers Exploration may, but will not be
      obligated to treat, mill, heap leach, sort, concentrate, refine, smelt or
      otherwise process, beneficiate or upgrade the ores, concentrates, and
      other products at sites located on or off the Property, prior to sale,
      transfer, or conveyance to a purchaser, user, or consumer. Ayers
      Exploration will not be liable for mineral values lost in processing under
      sound practices and procedures, and no royalty will be due on any such
      lost mineral values.

              


      

      


      


      
        	
                 
      

              	
                Commingling

              


      

      


      


      
        	
                 
      

              	
                Ores,
      concentrates and derivatives mined or retrieved from the Property may be
      commingled with ores, concentrates or derivatives mined or retrieved from
      other properties. All determinations required for calculation of Net
      Smelter Returns, including without limitation the amount of the metals
      contained in or recovered from ores, solutions, concentrates or
      derivatives mined or retrieved from the Property, the amount of the metals
      contained in or recovered from commingled ores, solutions, concentrates or
      derivatives shall be made in accordance with prudent engineering,
      metallurgical and cost accounting
practices.

              


      

      


      
      

       

      
        	
                 
      

              	
                Trading
      Activities

              


      

      


      


      
        	
                 
      

              	
                Ayers
      Exploration may, but need not, engage in forward sales, futures trading or
      commodity options trading, and other price hedging, price protection, and
      speculative arrangements ("Trading Activities")
      which may involve the possible delivery of base or precious metals
      produced from the Property. The parties acknowledge and agree that Wilpena
      Resources shall not be entitled to participate in the proceeds or be
      obligated to share in any losses generated by the Trading
      Activities.