<PAGE>   1

                                                                   EXHIBIT 10.13



                        MINERAL PROPERTY OPTION AGREEMENT



THIS MINERAL PROPERTY OPTION AGREEMENT is made and dated for reference effective
 (the "Effective Date") as of the day of July, 1998.



BETWEEN:


         AZCO MINING INC., and on behalf of nominee or assignee, a corporation
         registered in British Columbia and having its main business office at
         Suite 1250 - 999 West Hastings Street, Vancouver, B.C. V6C 2W2

         ("AZCO")

                                                               OF THE FIRST PART

AND:

         MINERA CORTEZ RESOURCES LTD., AND ON BEHALF OF ITS MEXICAN SUBSIDIARY,
         incorporated under the laws of British Columbia and having its address
         for notice hereunder at 5640 Marine Drive, West Vancouver, B.C., V7W
         2R6

         ("CORTEZ")

                                                              OF THE SECOND PART


         (AZCO and CORTEZ being hereinafter singularly also referred to as a
         "Party" and collectively referred to as the "Parties" as the context so
         requires.)


WHEREAS:


A.         CORTEZ, through its Mexican subsidiary, is the owner of property (the
"Property") called the La Adelita property in the State of Sonora, Mexico and
currently optioned by CORTEZ, which Property is described in Schedule "A"
attached hereto; and


B.         CORTEZ has agreed to provide AZCO with the herein option to earn
interests in the Property in accordance with this Agreement;



NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
promises, covenants, conditions, representations and warranties herein
contained, THE PARTIES HERETO AGREE AS FOLLOWS:


<PAGE>   2

                                      -2-



                                    ARTICLE 1

                         DEFINITIONS AND INTERPRETATION


1.1        DEFINITIONS. For the purposes of this Agreement, except as otherwise
           expressly provided or unless the context otherwise requires, the
           following words and phrases shall have the following meanings:


           (a)        "Agreement" means this Agreement as entered into between
                      AZCO and CORTEZ together with any Schedules attached
                      hereto, as amended from time to time;


           (b)        "arbitration" means arbitration under the laws of the
                      Province of British Columbia;


           (c)        "CORTEZ Interest" means that Property interest set forth
                      in section 2.2(a);


           (d)        "Environmental Hazard" means any and all naturally
                      occurring or man-made toxic materials, substances,
                      pollutants, contaminants or wastes;


           (e)        "Expenditures" or "Expenditure" means all cash, expenses,
                      obligations and liabilities, other than for personal
                      injury or property damage, of whatever kind or nature
                      spent or incurred directly or indirectly, including a ten
                      (10%) administrative allowance, in connection with
                      Property maintenance, mobilization and accommodation,
                      consulting and services, acquisition or rental of goods
                      and facilities, exploration and all matters pertaining
                      thereto, development and all matters pertaining thereto,
                      or equipping of the Property or any portion thereof for
                      Commercial Production including, without limiting the
                      generality of the foregoing, monies expended in
                      constructing, leasing or acquiring all facilities,
                      buildings, machinery and equipment in connection with
                      Mining Work, in paying any taxes, fees, charges, payments
                      or rentals (including payments in lieu of assessment work)
                      or otherwise to keep the Property or any portion thereof
                      in good standing (including any payment to or in respect
                      of acquiring any agreement or confirmation from any holder
                      of surface rights respecting the Property or any portion
                      thereof), in carrying out any survey of the Property or
                      any portion thereof, in doing geophysical, geochemical and
                      geological surveys, in drilling, assaying, metallurgical
                      testing, bulk sampling and pilot plan operations, in
                      paying the fees, wages, salaries, traveling expenses,
                      fringe benefits (whether or not required by law) of all
                      persons engaged in work with respect to and for the
                      benefit of the Property or any portion thereof, in paying
                      for the food, lodging and other reasonable needs of such
                      persons, in preparing any reports and in supervising and
                      managing any work done with respect to and for the benefit
                      of the Property or any portion thereof or in any other
                      respects necessary for the due carrying out of Exploration
                      and Development or Mining Work;


           (f)        "Exploration and Development" means, inter alia, all
                      direct and indirect preparation, analysis, sampling,
                      drilling, administration and filing work and Expenditures
                      conducted and incurred by AZCO or CORTEZ on the Property,
                      at their instruction, or on their behalf, or by assignment
                      to another party, for the purpose of determining the
                      existence of Product on the Property and the economic
                      viability of extracting the same;


           (g)        "Mining Work" means every kind of work done on or in
                      respect of the Property or the Products therefrom by or
                      under the direction of or on behalf of or for the benefit
                      of a


<PAGE>   3
                                      -3-


                      Party and, without limiting the generality of the
                      foregoing, includes assessment work, geophysical,
                      geochemical and geological surveying, studies and mapping,
                      investigating, drilling, designing, examining, equipping,
                      improving, surveying, shaft sinking, raising, crosscutting
                      and drifting, digging, trucking, sampling, working and
                      procuring minerals, mineral products, ores, metals and
                      concentrates, surveying, reporting and all other work
                      usually considered to be prospecting, exploration,
                      development and mining work;


           (h)        "Management Committee" means the management committee
                      established pursuant to Article 12;


           (i)        "Operator" means AZCO or such other party as determined by
                      Article 9;


           (j)        "Option" means the Option hereunder granted to AZCO to
                      earn, directly or indirectly, up to 70% of CORTEZ's
                      Interest in and to the Property;


           (k)        "Party (party)" or "Parties (parties)" means AZCO and/or
                      CORTEZ and their respective successors and permitted
                      assigns as the context so requires;


           (l)        "Product" means all ores, gravel, sand, metals and
                      minerals including, without limitation, gold, silver,
                      copper, and any other mineral product, mined or extracted
                      from the Property or any portion thereof and any
                      concentrates produced therefrom;


           (m)        "Property" means the La Adelita property situate in the
                      State of Sonora, Mexico, and described in Schedule "A"
                      hereto; and


1.2        U.S. CURRENCY. In this Agreement, all dollar amounts are expressed in
           lawful currency of the United States, unless specifically provided to
           the contrary.



                                    ARTICLE 2

              REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITY


2.1        PARTIES' REPRESENTATIONS AND WARRANTIES. Each Party represents and
           warrants and covenants to the other Party hereto that:


           (a)        it is a company duly incorporated, validly subsisting and
                      in good standing under the laws of the jurisdiction of its
                      incorporation and is or shall be, or its nominee or
                      affiliate or assignee shall be, qualified at the relevant
                      time to do business and to hold an interest in the
                      Property in the jurisdiction in which the Property is
                      located;

           (b)        it has full power and authority to carry on its business
                      and to enter into this Agreement and any agreement or
                      instrument referred to or contemplated by this Agreement
                      and to carry out and perform all of its obligations and
                      duties hereunder;

           (c)        it has duly obtained all authorizations for the execution,
                      delivery and performance of this Agreement, and such
                      execution, delivery and performance and the


<PAGE>   4
                                      -4-


                      consummation of the transactions herein contemplated shall
                      not conflict with, or accelerate the performance required
                      by or result in any breach of any covenants or agreements,
                      or result in the creation of any encumbrance, lien or
                      charge in respect to the Property, or violate the
                      provisions of its constating documents or any indenture,
                      agreement or other instrument whatsoever to which it is a
                      party or by which it is bound or to which it may be
                      subject and shall not contravene any applicable laws; and

           (d)        it shall diligently and in good faith perform its
                      respective duties and obligations of this Agreement and in
                      the event of a Party conducting or supervising Exploration
                      and Development and Mining Work then it shall conduct or
                      supervise the same in a careful, diligent, efficient and
                      professional manner, file all eligible expenditures for
                      required assessment work with the appropriate authorities
                      and keep the Property in good standing.


2.2        CORTEZ'S REPRESENTATIONS AND WARRANTIES. CORTEZ represents and
           warrants to AZCO that:


           (a)        through its Mexican subsidiary, it is the sole and
                      exclusive 100% owner (the "CORTEZ Interest") of an option
                      (the "Option Agreement"), which is attached as Schedule
                      "B" hereto, to acquire a 100% legal and beneficial
                      interest in and to the Property (subject only to the
                      reservations, conditions, and terms of the Option
                      Agreement set forth in Schedule "B"), the Property and the
                      CORTEZ Interest are in good standing under the laws of
                      Mexico and the relevant regulations and the Option
                      Agreement, there are no liens, encumbrances, royalties or
                      other impositions on the Property except as disclosed
                      herein, there are no other parties or party having any
                      claim thereto whatsoever (neither contingent or
                      un-contingent), and there are no claims, debts,
                      encumbrances, or any other liabilities of any nature which
                      will or may create an imposition on the Property, with the
                      sole exception of the Option Agreement and governmental
                      requirements pursuant to generally prevailing mining laws;

           (b)        the only obligation to the grantors of the Option
                      Agreement to earn the CORTEZ Interest (and upon earning of
                      the CORTEZ Interest no further obligations shall be
                      required except for governmental obligations of a general
                      nature) is the payment to the grantors of $10,000 on July
                      31, 1998 and cash payments each year thereafter for a
                      further four years increasing by $10,000 per year (i.e. -
                      $20,000 in 1999, $30,000 in 2000, $40,000 in 2001, and a
                      final $50,000 in 2002) (collectively the "Option
                      Payments") and the only other obligation thereto is a
                      finder's fee ("Finder's Fee") to Minera Cascabel S.A. de
                      C.V. in the amount of equal to ten (10%) percent of the
                      Option Payments and payable at the time of the Option
                      Payments;

           (c)        to the best of its knowledge and belief, all laws in
                      effect in Mexico with respect to the Property and the
                      Option Agreement have been complied with and such Property
                      has been duly and properly acquired and recorded in
                      accordance with such laws;

           (d)        to the best of its information and belief, after due
                      inquiry, there are no man-made mining or exploration
                      workings or excavations or any naturally occurring
                      conditions on the Property that are presently or in the
                      future shall or may become Environmental Hazards causing
                      CORTEZ or AZCO to become liable for the cost


<PAGE>   5
                                      -5-



                      of restoration or reclamation work as set out under
                      existing legislation applicable in Mexico or as may be
                      ordered by any competent regulatory body or governmental
                      agency within Mexico;

           (e)        no proceedings are pending for, and CORTEZ is unaware of
                      any basis for the institution of any proceedings leading
                      to the dissolution or winding up of CORTEZ or the placing
                      of CORTEZ in bankruptcy or causing it to be subject to any
                      other laws governing the affairs of insolvent persons;

           (f)        it shall employ due diligence, best efforts, and good
                      faith in its performance of this Agreement;

           (g)        it shall provide to AZCO, in as expeditious a manner as
                      possible, all information which it has in its possession,
                      from time to time, or which comes into its possession
                      directly or indirectly related to the Option Agreement and
                      the Property and any of the activities of the Parties
                      thereto; and

           (h)        it shall remain sole owner of the CORTEZ Interest during
                      the course of this Agreement, except as otherwise
                      permitted by this Agreement and, while owner, it shall
                      take all necessary action during the life of this
                      Agreement to ensure that the CORTEZ interest and the
                      Property are maintained in good standing and it shall
                      advise AZCO immediately if at any time the CORTEZ Interest
                      or the Property, or any part, is in jeopardy and, further,
                      it shall grant to AZCO all such authorities as may be
                      necessary or advisable to perform all of its activities
                      contemplated by this Agreement or which it may require to
                      safe-guard the CORTEZ Interest and the Property.


           The foregoing representations and warranties are for the benefit of
           AZCO, are conditions on which AZCO has relied in entering into this
           Agreement, are to be construed as both conditions and warranties and
           shall, regardless of any investigation which may have been made by or
           on behalf of AZCO as to the accuracy of such representations and
           warranties, remain true, correct, and complete at all times for the
           entire duration of this Agreement.


2.3        AZCO'S REPRESENTATIONS AND WARRANTIES. AZCO represents and warrants
           to CORTEZ that:


           (a)        to the best of its knowledge, there are no actions, suits
                      or proceedings pending or threatened against or adversely
                      affecting, or which could adversely affect AZCO before or
                      by any federal, provincial, municipal or other government
                      court, department, commission, board, bureau or agency or
                      instrumentality, domestic or foreign, whether or not
                      insured, which would reasonably involve the possibility of
                      any judgment or liability against AZCO which would prevent
                      it from carrying out its obligations under this Agreement;

           (b)        no proceedings are pending for and AZCO is unaware of any
                      basis for the institution of any proceedings leading to
                      the dissolution or winding up of AZCO or the placing of
                      AZCO in bankruptcy or subject to any other laws governing
                      the affairs of insolvent persons;

           (c)        it shall employ due diligence, best efforts, and good
                      faith in its performance of this Agreement;



<PAGE>   6
                                      -6-


           (d)        it shall provide to CORTEZ, in as expeditious a manner as
                      possible, all information which it has in its possession,
                      from time to time, or which comes into its possession
                      directly or indirectly related to the Property and any of
                      the activities of the Parties thereto;

           (e)        while operator it shall take all necessary action during
                      the life of this Agreement to ensure that the Property is
                      maintained in good standing;

           (f)        it shall save CORTEZ harmless in respect of all claims,
                      liabilities and expenses arising out of AZCO's activities
                      on the Property; and

           (g)        it shall do all work on the Property in good and
                      miner-like fashion and in accordance with all applicable
                      laws, regulations, orders and ordinances of any
                      governmental authority.


           The foregoing representations and warranties are for the benefit of
           CORTEZ, are conditions on which CORTEZ has relied in entering into
           this Agreement, are to be construed as both conditions and warranties
           and shall, regardless of any investigation which may have been made
           by or on behalf of CORTEZ as to the accuracy of such representations
           and warranties, remain true, correct, and complete at all times for
           the entire duration of this Agreement.


2.4        INDEMNITY. The Parties hereto agree that any defaulting Party shall
           be liable and shall indemnify and save harmless the non-defaulting
           Party from any and all loss, costs, damages, actions and suits
           arising out of or in connection with any breach of any
           representation, warranty, covenant, agreement or condition made by it
           and contained in this Agreement or ancillary thereto.



                                    ARTICLE 3

                         GRANT AND MAINTENANCE OF OPTION


3.1        GRANT OF OPTION. CORTEZ hereby grants to AZCO the sole and exclusive
           right and option (the "Option") to earn up to seventy (70%) percent
           of the CORTEZ's Interest in and to the Property (and thereby a
           seventy (70%) interest in the Property) in accordance with the terms
           of this Agreement and subject to the Expenditures on the Property
           referred to below.


3.2        EARNING OF INTEREST. AZCO may earn its interest (the "AZCO Interest")
           in the Property by effecting the following:

           (a)        Payments during the Option as follows:

                      (i) immediately after execution hereof AZCO will subscribe
                      to $25,000 CDN of CORTEZ common stock at $0.25 CDN per
                      common share for a total of 100,000 CORTEZ common shares;





<PAGE>   7
                                      -7-


                      (ii) AZCO will assume payment responsibility during the
                      Option for the Option Payments and Finder's Fee; and

           (b)        incurring, or arranging for the incurring of, Expenditures
                      during the Option in respect to the Property as follows:

                      (i) during the first year following the Effective Date of
                      this Agreement the sum of $75,000 (which shall include a
                      2500 foot drill program);

                      (ii) during the second year the sum of $150,000 (which
                      shall include a 5000 foot drilling program); and

                      (iii) during the third year the sum of $275,000;

                      whereupon, upon effecting such foregoing Expenditures and
                      making such foregoing payments of (a)(i) and (b) above and
                      by assuming the obligations of (a)(ii), AZCO shall
                      automatically be vested in a seventy (70%) percent
                      undivided interest in the CORTEZ Interest, unless within
                      60 days of the third anniversary of this Agreement AZCO
                      gives notice that it revokes the option to receive such
                      interest. AZCO may elect at any time to accelerate its
                      earning of the AZCO Interest by advancing Expenditures on
                      an accelerated basis.


                                    ARTICLE 4

                              TERMINATION OF OPTION


4.1        TERMINATION OF OPTION. The Option shall, at the election of the party
not in default and subject to the provisions of Article 11, terminate upon the
following events:


           (a)        if AZCO fails to incur the required payments or
                      Expenditures in accordance with Article 3 above or
                      otherwise fails to remedy a material bona fide default; or

           (b)        if CORTEZ has failed to remedy a material bona fide
                      default.


4.2        OPTION ONLY. It is hereby agreed and acknowledged that this Agreement
           is an option only and that during the term of the Option AZCO may
           determine to cease and to withdraw from this Agreement upon thirty
           (30) days' notice in writing to CORTEZ and upon termination of such
           thirty (30) day notice period the Option shall be terminated and AZCO
           shall have no further obligation to or in respect to CORTEZ, the
           Option Agreement, or the Property. In the event AZCO shall have
           earned the AZCO Interest and it determines to abandon its interest
           and not enter into a joint venture (or other structure herein
           contemplated) it shall quit-claim all interest to CORTEZ and it shall
           leave the Property in good standing for a period of not less than
           thirty (30) days, which shall also pertain where AZCO ceases this
           Option without having earned an interest. AZCO shall also deliver to
           CORTEZ all pertinent data, samples, cores, reports, and other matters
           relating to its activities in respect to the Property. AZCO shall be
           responsible for all remediation and reclamation work required in
           respect to its activities on the Property to the effective date of
           its withdrawal.




<PAGE>   8
                                      -8-


                                    ARTICLE 5

           ACQUISITION UPON EXERCISE OF OPTION AND VESTING OF INTEREST


5.1        ACQUISITION OF INTEREST. At each such time as AZCO has incurred the
           required Expenditures on the Property and made the required payments
           in accordance with article 3 above, it shall be deemed to have
           exercised its option with respect to acquiring the AZCO Interest
           (unless revoked in the time set forth in section 3.2) and AZCO shall
           have thereby, without any further act, acquired such interest, and
           shall be therein vested, and CORTEZ shall transfer such interest on
           the relevant public title records and with the relevant agencies or
           the grantors of the Option Agreement upon AZCO's request.


5.2        JOINT VENTURE. Upon the acquisition by AZCO of the AZCO Interest, the
           proportionate interests of CORTEZ and AZCO shall be governed by a
           joint venture agreement or common joint venture company, whichever
           counsel advises is most appropriate under Mexican law and practice
           (both corporate and tax) and whose interests shall be proportionately
           reflected in the agreement or entity. The parties shall form such
           agreement or entity in accordance with British Columbia practice and
           law, as necessarily modified for Mexican law, and such shall be
           negotiated in good faith and, further, shall be negotiated at the
           requirement of either party. If a joint venture agreement is
           recommended by counsel, the basic form employed shall be that of the
           Rocky Mountain Mineral Law Foundation Joint Venture Form 5. If a
           joint venture company is recommended then the shareholder agreement
           shall be that basic form commonly referenced in material of the CLE
           of the law society of British Columbia. Whether corporate entity or
           joint venture agreement, the following shall be encompassed in the
           shareholder or joint venture agreement:


           (a)        required representation of each party (except where
                      diluted to a royalty interest only) on the board and
                      management committee with votes proportional to interest
                      ownership;


           (b)        all assets of and interests in the Property and activities
                      therein to be held by the entity, if possible, otherwise
                      by a mutually controlled entity or trust;


           (c)        financing obligations proportional to each parties
                      interest;


           (d)        dilution in the event of non-participation based upon a
                      deemed valuation of $100,000 per 1% interest, and a Party
                      converting to a 2% net smelter return interest if reduced
                      to an interest less than 10%;

           (e)        provisions for notice of, remedy for, and consequences of
                      failure to perform party obligations;


           (f)        a right of first refusal on any intended dispositions;


           (g)        standard terms and definitions shall be carried over from
                      this Agreement where the Parties cannot otherwise agree;
                      and


           (h)        unless otherwise agreed, the party with the largest
                      interest being operator but in the event of an equality
                      the operator shall be AZCO.



<PAGE>   9
                                      -9-


                                    ARTICLE 6

               RIGHT OF FIRST REFUSAL, ASSIGNMENT, AND ABANDONMENT


6.1        PARTIES' RIGHT OF FIRST REFUSAL. Each party hereby grants unto the
           other a right of first refusal to acquire the other's interest, or a
           portion thereof, in the Property (direct or indirect) in the event of
           any intended disposition of any interest from the date of execution
           of this Agreement. In the event a party chooses to assign or
           otherwise dispose of its interest, or a portion thereof, it shall
           forthwith notify the other, in writing, of the terms and conditions
           under which it is willing to sell its interest, which terms and
           conditions shall be the same terms and conditions as those contained
           in the intended offer to the third party. The receiving party shall
           be entitled to elect, by written notice to the other within 60 days
           from the date of receipt of the Notice, to acquire the interest on
           the terms and conditions provided for in the notice. If the receiving
           party does not exercise its right to acquire the offered interest,
           the disposing party may, for a period of 120 days following the last
           date upon which the other party could have made election, dispose of
           its interest, but only on the same terms and conditions as set forth
           in the notice. No disposition shall be effective until the transferee
           has executed the prevailing agreements to which the Property is
           subject, including this Agreement and any subsequent joint venture or
           shareholder's agreement. Notwithstanding the forgoing, AZCO may
           assign to a nominee or affiliate, without triggering a right of first
           refusal, its rights herein or in the AZCO Interest for the purpose of
           finance, for its organizational purposes, or for purpose of
           compliance with Mexican law to hold a Property interest or for the
           purpose of effecting a public floatation of its interests herein,
           subject to AZCO maintaining a controlling interest (at least
           initially for a going public process).


6.2        ABANDONMENT. In the event that any party hereto shall voluntarily
           elect to abandon any part or all of the Property (this shall not
           apply to abandonment required by law), or its interest therein, or
           its interest in this Agreement, then it shall give not less than
           thirty (30) days notice to the other party of such intent and of the
           nature and encumbrances and obligations of such interest and, upon
           the other party's election to receive such interest conveyed within
           such period, shall assign and quit-claim such interest to such other
           party for consideration of one ($1.00) dollar and the assumption of
           all disclosed liabilities and obligations thereof. A party's rights
           and obligations shall be calculated and accrued to the day the
           abandonment becomes effective in accordance with the notice issued in
           accordance with this clause.


6.3        PARTICIPATION OF MAJOR. Notwithstanding section 6.1 hereof, AZCO may
           assign any portion of its interest to a major mining company at any
           time.



<PAGE>   10
                                      -10-


                                    ARTICLE 7

                 REGISTRATION AND TRANSFER OF PROPERTY INTERESTS


7.1        REGISTRATION OF PROPERTY INTERESTS. The parties shall execute and
           deliver such additional documentation as legal counsel for the
           parties determines is necessary in order to duly register and record
           in the appropriate registration and recording offices notice that
           CORTEZ's Interest is subject to and bound by the terms of this
           Agreement.


7.2        TRANSFER OF PROPERTY INTERESTS. Upon earning of the AZCO Interest
           CORTEZ shall execute and deliver to AZCO such additional
           documentation as legal counsel for AZCO determines is necessary in
           order to duly register and record in the appropriate registration and
           recording offices a transfer of title in and to the Property. AZCO
           may, at its election and at any time, require that CORTEZ deposit in
           escrow the appropriate title transfer documents as AZCO's counsel may
           suggest.



                                    ARTICLE 8

                                 RIGHT OF ENTRY


8.1        RIGHT OF ENTRY. While this Option is in effect and when any part of
           the Option is exercised or until the Option is terminated in
           accordance with the terms of this Agreement without AZCO earning an
           interest, AZCO, its servants and agents shall have the right to:


           (a)        enter in, under or upon the Property and conduct
                      Exploration and Development and Mining Work;

           (b)        exclusive and quiet possession of the Property;

           (c)        bring upon the Property and to erect thereon such
                      facilities as it may consider advisable; and

           (d)        remove from the Property ore or Product for the purpose of
                      bulk sampling, pilot plant or test operations.



                                    ARTICLE 9

                                    OPERATOR


9.1        OPERATOR. AZCO, or its duly authorized nominee, assignee, or
           contractor, will act as the Operator of the Property, under the
           authority of the Management Committee, during the currency of this
           Agreement.




<PAGE>   11
                                      -11-


9.2        POWER AND AUTHORITY. After execution of this Agreement the Operator
           shall have full right, power and authority to do everything necessary
           or desirable in connection with the Exploration and Development of
           the Property and, without limiting the generality of the foregoing,
           the right, power and authority to:


           (a)        regulate access to the Property subject only to the right
                      of the Parties to have access to the Property at all
                      reasonable times for the purpose of inspecting work being
                      done thereon but at their own risk and expense;

           (b)        employ and engage such employees, agents and independent
                      contractors as it may consider necessary or advisable to
                      carry out its duties and obligations hereunder and in this
                      connection to delegate any of its powers and rights to
                      perform its duties and obligations hereunder; and

           (c)        to engage Expenditures as the Operator may determine in
                      its sole discretion to conduct, provided it shall act
                      under the supervision and guidance of the Management
                      Committee, in accordance with development programs
                      approved from time-to-time, and in accordance with the
                      provisions of Clause 9.3 hereof.


9.3        DUTIES AND OBLIGATIONS. After execution of this Agreement, the
           Operator shall have such duties and obligations as it may from time
           to time determine, including, without limiting the generality of the
           foregoing, the following duties and obligations:

           (a)        to manage, direct and control all exploration, development
                      and mining operations in and under the Property, in a
                      prudent and workmanlike manner, and in compliance with all
                      applicable laws, rules, orders and regulations;

           (b)        to prepare and deliver to the Parties annual work plans
                      and budgets and during periods of active field work to
                      provide monthly and quarterly progress reports of the work
                      in progress within 14 days of the end of the relevant
                      period;

           (c)        subject to the terms and conditions of this Agreement, to
                      keep the Property in good standing free of liens, charges
                      and encumbrances of every character arising from
                      operations, (except liens for taxes not yet due, other
                      inchoate liens and liens contested in good faith by the
                      Operator), and to proceed with all diligence to pay or
                      contest or discharge any lien that is filed;

           (d)        to maintain true and correct books, accounts and records
                      of operations;

           (e)        to permit the Parties, at their own expense, to inspect,
                      take abstracts from or audit any or all of the records and
                      accounts during normal business hours;

           (f)        to obtain and maintain, or cause any contractor engaged
                      hereunder to obtain and maintain, during any period in
                      which active work is carried out hereunder adequate
                      insurance;

           (g)        to regulate access to the Property, subject only to the
                      right of CORTEZ and its representatives to have access to
                      the Property, at all reasonable times for the purpose of
                      inspecting work being done thereon and to permit CORTEZ to
                      conduct such independent audits of the work as it may
                      reasonably require, at its own cost;



<PAGE>   12
                                      -12-


           (h)        to arrange for and maintain worker's compensation or
                      equivalent coverage for all eligible employees engaged by
                      the Operator in accordance with local statutory
                      requirements;

           (i)        to perform its duties and obligations in a manner
                      consistent with good exploration and mining practices;

           (j)        to transact, undertake and perform all transactions,
                      contracts, employments, purchases, operations,
                      negotiations with third parties and any other matter or
                      thing undertaken by the Operator; and

           (k)        to diligently advise the parties of any material change in
                      the status or exploration results of the Property, to take
                      all necessary acts in respect to such changes, and to
                      assist the parties to produce timely coordinated public
                      announcements.



                                   ARTICLE 10

                              MANAGEMENT COMMITTEE


10.1       THE MANAGEMENT COMMITTEE. The Management Committee shall consist of
           four individuals, two each of whom shall be designated by each of
           AZCO and CORTEZ. Either party may appoint new representatives at any
           time and representatives may delegate proxies and alternates at any
           time. The Management Committee shall be responsible for approving
           plans and budgets for Exploration and Development and Mining Work and
           Expenditures and for determining the general policies and direction
           to be used in the conduct of operations hereunder. The Management
           Committee shall meet at least once annually and otherwise on thirty
           (30) days' notice given by a Party. All notices of Management
           Committee meetings must specify, or include an agenda which
           specifies, the matters to be discussed at such meetings. A Party's
           representatives may in any manner and at any time waive a notice of a
           meeting of the Management Committee and attendance of a Party's
           representative at a meeting of the Management Committee is a waiver
           of notice of the meeting, except where a Party's representative
           attends a meeting for the express purpose of objecting to the
           transaction of any business on the grounds that the meeting is not
           properly called. Decisions of the Management Committee shall be made
           by majority vote at a duly called and constituted meeting of the
           Management Committee. Each Party shall be entitled to two votes on
           the committee during the Option period. In the event of any
           deadlocked vote at a meeting of the Management Committee, AZCO,
           during the Option (as the provider of finance) and otherwise while
           Operator, shall have the casting vote. It is the intention of the
           Parties that decisions of the Management Committee shall be made in
           accordance with sound business and commercial judgment.


10.2       QUORUM. A quorum for a Management Committee meeting shall be present
           and such meeting shall be duly constituted when proper notice has
           been given or waived and 51% of the available votes are represented
           and a voting representative of each Party is present in person or by
           proxy at such meeting. In the event a quorum is not present at such
           meeting, the Operator may immediately give notice of a second meeting
           to be held within 10 days thereafter, at which meeting a quorum shall
           be deemed to be present and such meeting shall be duly constituted if
           50% of the available votes are represented regardless of whether
           voting representatives of each Party are present. All decisions taken
           by the Management Committee shall be binding upon the Parties (except
           for matters requiring


<PAGE>   13
                                      -13-



           unanimity) and any decision which may be made at a meeting of the
           Management Committee may also be made by an agreement or resolution
           in writing signed by all of the Parties' representatives who would be
           entitled to vote on that decision at a meeting of the Management
           Committee. The Operator shall keep minutes of the Management
           Committee meetings which, when delivered to the representatives of
           all Parties, shall constitute evidence of proceedings taken and
           decisions made at such meeting. All meetings of the Management
           Committee, unless otherwise agreed to by the Parties, shall be held
           at the location selected by the Operator. If all of the
           representatives of the Parties entitled to vote at an Management
           Committee meeting consent, a meeting of the Management Committee may
           be held by means of such telephone, electronic or other
           communications facilities as permit all persons participating in the
           meeting to communicate with each other simultaneously and
           instantaneously, and a Party's representative participating in such
           meeting by such means is deemed for the purpose of this Agreement to
           be present at that meeting. Any consent by a Party's representative
           to such meetings shall be effective whether given before or after the
           meeting to which it relates and may be given with respect to all
           meetings of the Management Committee.


10.3       CONTINUANCE OF MANAGEMENT COMMITTEE AND AGREEMENT. Upon AZCO having
           earned an interest and this Agreement requiring that the successor
           agreement be engaged, this Agreement and the Management Committee and
           the Operator shall continue until replaced or continued pursuant to
           the successor structure agreement (whether joint venture or corporate
           entity). This Agreement shall continue to govern and the Management
           Committee and the Operator shall govern the Property in the same
           manner as in the preceding sections until replaced by subsequent
           agreement. If a party fails to contribute to costs during such an
           interregnum, the other party may elect to pay the cost and the
           non-paying party shall, at the election of the paying party, be
           diluted at the rate of section 5.2(d). Notwithstanding the forgoing,
           a Party may instead determine to carry another Party's costs as a
           demand loan at an interest rate of 12% per annum calculated and
           compounded monthly, not in arrears, and such Party carrying the costs
           may elect to seek recovery or to dilute at any time.



                                   ARTICLE 11

                             DEFAULT AND TERMINATION


11.1       DEFAULT. The Parties hereto agree that if a party is in default with
           respect to any of the provisions of this Agreement, the
           non-defaulting party shall give written notice to the defaulting
           party, and specifying the nature of the default, and within thirty
           (30) days (or such shorter period if required by imperatives of law)
           after its receipt of such notice, the defaulting party shall either:


           (a)        cure such default, or commence proceedings to cure such
                      default and prosecute the same to completion without undue
                      delay; or

           (b)        give the non-defaulting party notice that it denies that
                      such default has occurred and that it is submitting the
                      question to arbitration under the provisions of this
                      Agreement, whereupon a party shall not be considered in
                      default until an arbitration so rules.




<PAGE>   14
                                      -14-


11.2       FAILURE TO CURE DEFAULT. If:


           (a)        a default is not cured or the defaulting party does not
                      commence and diligently proceed to cure the default within
                      the required period; or

           (b)        arbitration is not sought; or

           (c)        the defaulting party is found in arbitration proceedings
                      to be in default, and fails to cure it or commence curing
                      it, and proceed without delay within thirty (30) days
                      after the rendering of the arbitration award,

           then the non-defaulting party may, by written notice given while the
           default continues, terminate this Agreement and seek such specific
           performance and damages as it may determine. The defaulting party
           shall comply with the provisions of section 4.2, mutatis mutandis, in
           respect to any declaration by the non-defaulting party resulting in
           withdrawal of a party from the Property.



                                   ARTICLE 12

                            POWER TO CHARGE PROPERTY


12.1       POWER TO CHARGE. Except as otherwise provided in this Agreement,
           neither Party may charge, encumber, mortgage, lien or otherwise
           burden the Property or a Party's interest in the same, during the
           currency of this Agreement, except with the consent of the Management
           Committee for Property finance purposes, which consent shall not be
           unreasonably with-held. The Management Committee may determine to
           charge or burden the Property for finance purposes and the Parties
           shall effect all such consents and documents as may be required for
           such purposes.



                                   ARTICLE 13

                              PARTITION AND TENANCY


13.1       PARTITION. No Party owning a partitionable interest in a Property,
           shall, during the term of this Agreement, exercise any right to apply
           for any partition of the Property or for sale thereof in lieu of
           partition.


13.2       TENANCY. Subject to Mexican law, any interests of AZCO and CORTEZ in
           and to the Property shall be held as tenants in common and not as
           joint tenants.




<PAGE>   15
                                      -15-


                                   ARTICLE 14

                                  FORCE MAJEURE


14.1       EVENTS. If either Party hereto is at any time during this Agreement
           prevented or delayed in complying with any provisions of this
           Agreement by reason of strikes, walk-outs, labour shortages, power
           shortages, fires, wars, acts of God, earthquakes, storms, floods,
           explosions, accidents, protests or demonstrations by environmental
           lobbyists or local rights groups, delays in transportation, breakdown
           of machinery, unusual disruptions in financial markets, inability to
           obtain necessary materials in the open market, unavailability of
           equipment, governmental regulations restricting normal operations,
           shipping delays or any other reason or reasons beyond the control of
           that Party, then the time limited for the performance by that Party
           of its respective obligations hereunder shall be extended by a period
           of time equal in length to the period of each such prevention or
           delay.


14.2       NOTICE. A Party shall within seven (7) calendar days give notice to
           the other Party of each event of force majeure hereinabove, and upon
           cessation of such event shall furnish the other Party with notice of
           that event together with particulars of the estimated number of days
           by which the obligations of that Party hereunder have been extended
           by virtue of such event of force majeure and all preceding events of
           force majeure.



                                   ARTICLE 15

                            CONFIDENTIAL INFORMATION


15.1       CONFIDENTIAL INFORMATION. The Parties shall keep all information
           regarding the Property and Mining Work confidential, except for such
           disclosure as may be required by law, securities regulatory bodies,
           or stock exchanges governing one or more of the Parties.



                                   ARTICLE 16

                                   ARBITRATION


16.1       MATTERS FOR ARBITRATION. The Parties agree that all questions or
           matters in dispute with respect to this Agreement shall be submitted
           to arbitration pursuant to the terms hereof.


16.2       NOTICE. It shall be a condition precedent to the right of any Party
           to submit any matter to arbitration pursuant to the provisions
           hereof, that any Party intending to refer any matter to arbitration
           shall have given not less than thirty (30) calendar days' prior
           written notice of its intention to do so to the other Party together
           with particulars of the matter in dispute. On the expiration of such
           thirty (30) days, the Party who gave such notice may proceed to refer
           the dispute to arbitration as provided in section 16.3 below.



<PAGE>   16
                                      -16-


16.3       APPOINTMENTS. The Party desiring arbitration shall appoint one (1)
           arbitrator, and shall notify the other Party of such appointment, and
           the other Party shall, within thirty (30) calendar days after
           receiving such notice, appoint an arbitrator, and the two arbitrators
           so named, before proceeding to act, shall, within thirty (30)
           calendar days of the appointment of the last appointed arbitrator,
           unanimously agree on the appointment of a third arbitrator, to act
           with them and be chairman of the arbitration herein provided for. If
           the other Party shall fail to appoint an arbitrator within thirty
           (30) calendar days after receiving notice of the appointment of the
           first arbitrator then the single arbitrator shall act, and if the two
           (2) arbitrators appointed by the Parties shall be unable to agree on
           the appointment of the chairman, the chairman shall be appointed
           under the provisions and Rules of the Arbitration Act of British
           Columbia. Except as specifically otherwise provided in this section,
           the arbitration herein provided for shall be conducted in accordance
           with such provisions and Rules. The arbitrators, or in the case where
           only one arbitrator is appointed, the single arbitrator, shall fix a
           time and place in accordance with the Rules, for the purpose of
           hearing the evidence and representations of the Parties, and they
           shall preside over the arbitration and determine all questions of
           procedure not provided for under such Rules or this section. After
           hearing any evidence and representations that the Parties may submit,
           the single arbitrator, or the arbitrators, as the case may be, shall
           make an award and reduce the same to writing, and deliver one copy
           thereof to each of the Parties. The expense of the arbitration shall
           be paid as specified in the award.


16.4       AWARD. The Parties agree that the award of a majority of the
           arbitrators, or in the case of a single arbitrator, of such
           arbitrator, shall be final, binding, and enforceable upon each of
           them.



                                   ARTICLE 17

                                     NOTICE


17.1       NOTICE. Each notice, demand or other communication required or
           permitted to be given under this Agreement shall be in writing and
           shall be delivered or sent by facsimile to a Party at the address for
           such Party or Parties specified above. The date of receipt of such
           notice, demand or other communication shall be the date of delivery.
           Copies of any notice to AZCO are to be delivered to Devlin Jensen,
           Barristers & Solicitors, 2550 - 555 West Hastings Street, Vancouver,
           British Columbia V6B 4N5.


17.2       CHANGE OF ADDRESS. Any Party may at any time, and from time to time,
           notify the other Party in writing of a change of address and the new
           address to which notice shall be given to it thereafter until further
           change.



<PAGE>   17
                                      -17-


                                   ARTICLE 18

                               GENERAL PROVISIONS


18.1       ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
           between the Parties hereto and supersedes every previous agreement,
           communication, expectation, negotiation, representation or
           understanding, whether oral or written, express or implied, statutory
           or otherwise, between the Parties with respect to the subject matter
           of this Agreement.


18.2       ENUREMENT. This Agreement shall enure to the benefit of and shall be
           binding upon the Parties, their respective heirs, executors,
           administrators and assigns.


18.3       SCHEDULES. The Schedules to this Agreement are hereby incorporated by
           reference into this Agreement in their entirety.


18.4       TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.


18.5       FURTHER ASSURANCES. Each of the Parties covenants and agrees, from
           time to time and at all times, to do all such further acts and
           execute and deliver all such further deeds, documents and assurances
           as may be reasonably required in order to fully perform and carry out
           the terms and intent of this Agreement.


18.6       APPLICABLE LAW. For all purposes this Agreement shall be governed
           exclusively by and construed and enforced in accordance with the laws
           prevailing in British Columbia, however, the Parties hereto expressly
           acknowledge and agree to forthwith execute any and all documentation
           which may be necessary in order to ensure the valid registration
           thereof as against the Property and its effectiveness under the laws
           prevailing in Mexico. Interpretation hereof shall be subordinate to
           Mexico mining and property law only to the extent necessary to make
           this Agreement, or the rights flowing from this Agreement,
           enforceable as against the Property. This Agreement is made and shall
           be enforced in British Columbia but the parties shall effect such
           subsidiary agreements and Mexican agreements or joint corporations as
           may be required to effect this Agreement's purposes, as may be
           recommended by Mexican counsel and as may be required for business
           and legal necessities, including registration and tax efficiencies.


18.7       MEXICAN CONTRACT AND REGISTRATION. The Parties, at the requirement of
           a Party, shall effect a contract for Mexican registration and legal
           requirements in order to register and make enforceable in Mexico the
           terms of this Agreement. The form of Agreement shall be that
           recommended by AZCO's Mexican counsel but failing agreement by the
           Parties, at AZCO's sole election, AZCO may translate and file this
           Agreement and CORTEZ shall give all assistance (including original
           signatures of such translation) or the Parties shall incorporate a
           Mexican company to hold the Option Agreement, CORTEZ shall assign the
           Option Agreement to such Mexican company, and the AZCO Option shall
           be to earn up to 70% of such Mexican company wherein this Option
           shall be treated as a shareholder's agreement to govern the relations
           and affairs of the Parties.


<PAGE>   18
                                      -18-


18.8       INVALID PROVISIONS. If any provision of this Agreement is at any time
           unenforceable or invalid for any reason it shall be severable from
           the remainder of this Agreement and, in its application at that time,
           this Agreement shall be construed as though such provision was not
           contained herein and the remainder shall continue in full force and
           effect and be construed as if this Agreement had been executed
           without the invalid or unenforceable provision.


18.9       COUNTERPARTS. This Agreement may be signed by the Parties hereto in
           as many counterparts as may be necessary, each of which so signed
           shall be deemed to be an original, and such counterparts together
           shall constitute one and the same instrument and notwithstanding the
           date of execution shall be deemed to bear the execution date as set
           forth on the front page of this Agreement.


18.10      NO PARTNERSHIP OR AGENCY. The Parties have not created a partnership
           and nothing contained in this Agreement shall in any manner
           whatsoever constitute any Party the partner, agent or legal
           representative of any other Party, nor create any fiduciary
           relationship between them for any purpose whatsoever. No Party shall
           have any authority to act for, or to assume any obligations or
           responsibility on behalf of, any other party except as may be, from
           time to time, agreed upon in writing between the Parties or as
           otherwise expressly provided.


18.11      CONSENTS AND WAIVERS. No consent or waiver expressed or implied by
           either Party in respect of any breach or default by the other in the
           performance by such other of its obligations hereunder shall:


           (a)        be valid unless it is in writing and stated to be a
                      consent or waiver pursuant to this section;

           (b)        be relied upon as a consent to or waiver of any other
                      breach or default of the same or any other obligation;

           (c)        constitute a general waiver under this Agreement; or

           (d)        eliminate or modify the need for a specific consent or
                      waiver pursuant to this section in any other or subsequent
                      instance.




<PAGE>   19
                                      -19-


IN WITNESS WHEREOF the Parties hereto have hereunto set their respective hands
and seals in the presence of their duly authorized signatories effective the
date first herein set forth.


The CORPORATE SEAL of                       )
AZCO MINING INC.                            )
was hereunto affixed in the presence of:    )
                                            )
____________________________________________)                    (C/S)
Authorized Signatory                        )


The CORPORATE SEAL of                       )
MINERA CORTEZ RESOURCES LTD.                )
was hereunto affixed in the                 )
presence of:                                )
                                            )
____________________________________________)                    (C/S)
Authorized Signatory                        )