Exhibit 10.b

                     LEADVILLE MINING & MILLING CORPORATION

                           76 Beaver Street, Suite 500

                            New York, New York 10005

                                  March 6, 2001

International Northair Mines Ltd.
625 Howe Street, Suite 860
Vancouver, British Columbia  V6C 2T6

Attention:        Mr. Frederic G. Hewett, President

Dear Sirs:

     Pursuant to the ongoing  discussions we have had, this letter is to confirm
the terms and  conditions  under which  Leadville  Mining & Milling  Corporation
and/or  a   wholly-owned   Mexican   subsidiary   of   Leadville   (collectively
"Leadville"),  and  International  Northair  Mines Ltd.  and Grupo  Northair  de
Mexico,  S.A.  de C.V.,  a wholly  owned  Mexican  subsidiary  of  International
Northair  Mines  Ltd.  (collectively  "Northair"),  have  agreed  to enter  into
arrangements regarding the Lobos and Los Lobitos concessions (the "Concessions")
in the municipality of Culiacan, in the state of Sinaloa,  Mexico (together with
any  and  all  ancillary  rights  thereto  herein  referred  to  as  the  "Lobos
Properties" or the "Lobos Project"), as set forth below.

<TABLE>
<CAPTION>
        Concession                Concessionaire              Expediente            Titulo             Hectares
        ----------                --------------              ----------            ------             --------
        <S>                       <C>                           <C>                  <C>                   <C>
        Los Lobos                 Grupo Northair                95/1.1/11418          212328                2857
        Los Lobitos               Enrique Coronel                95/1.1/8967          203468                 143
</TABLE>
         Shown and attached as Schedule A.

     The parties  agree that this letter is  intended to and does  constitute  a
binding agreement, notwithstanding any past, present or future assurances to the
contrary and until the parties  execute a formal option  agreement  (the "Option
Agreement")  the  obligations  of the  parties  shall be governed by this letter
agreement.

     Northair  hereby  grants  to  Leadville  the  exclusive  right  to  earn an
undivided  51%  interest in  Northair's  interest in the Lobos  Project upon the
terms and conditions set forth below. All dollar amounts set forth herein are in
United States dollars.

A.   GENERAL POINTS

     1.   Leadville  has  the  right  to  earn  an  undivided  51%  interest  in
          Northair's  interest in the Lobos  Project and any  interests  in real
          property within the  surrounding  Area of Interest as defined below in
          Sec.  A(2),  and the  parties  will have a joint  venture  arrangement
          effective upon Leadville's earning that 51% interest.

<PAGE>

     2.   The Area of Interest is defined as all lands within five kilometers of
          the perimeter of the Los Lobos  Concession.  Leadville will assume all
          costs for any  potential  land  acquisitions  agreed to by both of the
          parties  during the earn-in  period (as defined below) that are within
          the  Area of  Interest,  all of  which  will  form  part of the  Lobos
          Project.

     3.   Upon the execution of this letter agreement,  Northair will provide or
          make  available  to  Leadville  for  review  and  copying  all  title,
          environmental, metallurgical, engineering, geological, geochemical and
          other documentation relating to the Lobos Project. Leadville will have
          a 30 day period (the "Due Diligence Period") following signing of this
          letter to complete a due diligence review of (a) title to, (b) surface
          ownership or other surface rights pertaining to, and (c) environmental
          conditions at, or affecting the Lobos Project,  and Northair agrees to
          fully  cooperate  with  Leadville in  facilitating  such  reviews.  If
          Leadville is not satisfied with the results of its due  diligence,  it
          may  notify  Northair  that it does not  desire to  proceed  with this
          agreement,  in which case this letter  agreement  will  terminate  and
          Leadville  will have no further  obligations  hereunder.  The  parties
          agree that this letter  agreement  and its contents are intended to be
          confidential  and are not to be  disclosed  to or  discussed  with any
          third  party,  except  to  legal  counsel  and  consultants  assisting
          Leadville in its  evaluation  of or the conduct of  activities  on the
          Concessions,  or to the extent  disclosure is required by law or stock
          exchange rule (provided that either party,  after  providing the other
          with notice and a reasonable  opportunity  to comment on the language,
          may  issue a press  release  announcing  the  signing  of this  letter
          agreement).

     4.   Leadville will provide Northair with appropriate corporate information
          during the Due  Diligence  Period to ensure to  Northair's  reasonable
          satisfaction   that  Leadville  has  the  financial   capabilities  to
          undertake its obligations hereunder. If it is not reasonably satisfied
          that  Leadville  has the  financial  capabilities  to  undertake  such
          obligations,  Northair may notify Leadville in writing that it desires
          to terminate  this letter  agreement (in which case the  provisions of
          Sections  B.1 and B.2 will  apply and  Leadville  will have no further
          obligations under this agreement),  so long as such notice is received
          by Leadville on or prior to the last day of the Due Diligence Period.

     5.   The  "earn-in  period"  for  Leadville  will  commence  at the date of
          signing this letter  agreement and will continue until all obligations
          in Sections B and C have been met (the  "Earn-In  Period").  Following
          completion  of the  earn-in  obligations  as set out in Sec.  B and C,
          Leadville will have earned an undivided 51% of Northair's  interest in
          the Lobos  Project.  Leadville  will solely fund all  expenses for the
          project during the Earn-In Period and, in order to retain its interest
          in this letter agreement,  will perform "Exploration,  Development and
          Related  Work"  which   includes  all  operations  and  activities  of
          Leadville  on or  relating  to the  Lobos  Property  for  purposes  of
          determining  ore  reserves  and  mineralization,  and for  purposes of
          development of ores,  minerals and mineral substances and

                                      -2-
<PAGE>

          materials of any kind and character whatsoever  ("Valuable  Minerals")
          from the Lobos Property including,  without  limitation,  the right to
          enter upon the Lobos  Property for purposes of  surveying,  exploring,
          testing, sampling, trenching, bulk sampling,  prospecting and drilling
          for Valuable  Minerals,  and to construct  and use  buildings,  roads,
          power and  communication  lines,  and to use so much of the surface of
          the Lobos Property in such manner as Leadville deems necessary for the
          enjoyment of any rights and privileges granted to Leadville  hereunder
          or  otherwise   necessary  to  effect  the  purposes  of  this  letter
          agreement.  All costs or fees, expenses,  liabilities and charges paid
          or incurred by Leadville which are related to Exploration, Development
          and  Related  Work  conducted  during the  earn-in  period,  including
          without  limitation  those costs or fees,  expenses,  liabilities  and
          charges   described  on  Appendix  I  hereto  are  herein  defined  as
          "Exploration  and  Development  Expenditures."  If Leadville  does not
          fulfill  all of  the  obligations  required  for it to  earn  its  51%
          interest  by  June  30,  2004,  this  agreement  will  terminate,  and
          Leadville  will have no further  obligations  to  Northair  other than
          obligations accrued to the date of termination.

     6.   Northair  grants to Leadville  the  exclusive  right to enter upon the
          Lobos Property during the Earn-In Period for the purpose of conducting
          Exploration, Development and Related Work.

     7.   During the Earn-In  Period,  a  technical  committee  (the  "Technical
          Committee"),  with two members each from Northair and Leadville,  will
          be designated to advise on exploration. The parties hereby agree to an
          exploration  program for the first and second  phases of activities as
          set forth on Schedule C attached hereto,  although Leadville will have
          no  obligation  to fund or conduct  any such  activities,  except on a
          cumulative  basis  as  required  under  Section  C.3 to  earn  its 51%
          interest.  The Technical  Committee  will be free to advise  Leadville
          during the earn-in period,  but Leadville will have final authority to
          carry  out  such  exploration  activities  as it  desires  in its sole
          discretion.  Certain of the exploration activities will be carried out
          by Northair on behalf of Leadville, as discussed in Section A.8 below.

     8.   During  Leadville's first phase of exploration  ("Phase One"), and the
          second phase of exploration ("Phase Two"), if carried out (see Section
          B), Jim Robinson (an employee of Northair)  will direct and manage all
          exploration  activities  contemplated  under  Schedule  C,  subject to
          modification as set forth in Section A.7 above.  Field assistance will
          be provided by Jim Robinson,  a Mexican  geologist  based in Culiacan,
          and local  laborers  as needed  (all of whom other  than Jim  Robinson
          shall be hired as an  independent  contractor or consultant and not as
          employees of either  Northair or  Leadville).  Leadville  reserves the
          right to direct  expenditures,  and make changes in the nature,  scope
          and timing (Phase Two only) of the exploration programs for Phases One
          and Two.  During Phases One and Two, Jim Robinson  shall not be deemed
          an employee of Leadville in any manner  whatsoever  and Northair shall
          remain  responsible  for all fringe  benefits,

                                      -3-
<PAGE>

          employment and payroll taxes,  worker's  compensation  insurance,  and
          other employment-related benefits and obligations.

     9.   Northair   will  incur   expenditures   related  to  the   conduct  of
          Exploration,  Development  and Related Work during  Phases One and Two
          only with the written  approval  of  Leadville.  Northair  will make a
          written  request for such  approval at least 10 days prior to the date
          it plans to incur such expenditures. Northair will charge Leadville an
          administration  and management fee of 10% of all costs associated with
          the Lobos Project and incurred by Northair with Leadville's  approval,
          with the exclusion of underlying  option  payments and Jim  Robinson's
          salary.  No charge will be made for any head office overhead  expenses
          unless they are directly related to the Lobos Project.  Both companies
          are  expected  to  maintain  standard  accounting  procedures  for the
          project. Each company has the right to review expenses incurred by the
          other  company  upon a 30 day  notice.  To the  extent  such  approved
          expenditures  are  incurred  by  Northair  during  Phases One and Two,
          unless their  propriety is being  contested  by  Leadville,  Leadville
          shall reimburse  Northair for such expenditures not later than 30 days
          after its receipt of an invoice for the same.

     10.  Leadville  has  the  right  to  request  continued  use of  Northair's
          personnel  (including  Jim Robinson)  and  logistical  support  (which
          Northair will provide if possible)  for any or all future  exploration
          programs following completion of Phases 1 & 2.

     11.  Northair will be responsible  for insuring that the Concessions are in
          good legal  standing at the time of executing  this letter;  including
          payment  of  taxes,  filing  work  commitments,  and  registering  the
          underlying  option agreement with appropriate  governmental  agencies.
          Northair  represents and warrants the matters outlined in Appendix II.
          All such  representations and warranties shall remain true and correct
          throughout the Earn-In Period.

     12.  Leadville  represents and warrants to Northair the matters outlined in
          Appendix III. All such  representations  and  warranties  shall remain
          true and correct throughout the Earn-In Period.

     13.  During the earn-in period Northair will be responsible for keeping the
          Concessions in good legal standing, including payment of holding costs
          and registering proofs of labor (Comprobacion de Trabajos).  Leadville
          will  prepay  Northair  upon 30 days prior  written  request for those
          holding costs and any related  filing fees (provided that Northair may
          not request prepayment for such costs and fees more than 45 days prior
          to their due date).  Northair  will  prepare  all  filings and related
          paperwork  and provide  copies of the same to Leadville as early as is
          practicable  prior to the date such payments are due, and will provide
          proof  that  all  payments   required  to  be  made  to  maintain  the
          Concessions  in good  standing  have been made not later  than 10 days
          prior to the date such payments are due.

                                      -4-
<PAGE>

     14.  Leadville  will agree to register an official  Spanish  translation of
          the Option Agreement with the appropriate governmental agencies within
          a reasonable time period after the execution of the Option  Agreement.
          Once the Option  Agreement has been  registered  in Mexico,  Leadville
          will be responsible for payment of any IVA taxes to the "Hacienda" and
          attributable to payments made by Leadville under the Option Agreement.
          Northair  and the owner of the Los  Lobitos  concession  will  provide
          Leadville  with  "Facturas"  that  satisfy  all  the  requirements  of
          applicable Mexican tax laws,  indicating receipt of all cash payments,
          and also indicating the amounts of "IVA" paid.

     15.  To the extent that Northair  carries out work for Leadville during the
          Earn-In  Period,  Northair will supply  Leadville  summary reports and
          related  maps  of  all  work  completed  under  the  direction  of Jim
          Robinson.  If Leadville performs  exploration  programs  independently
          following  completion  of  Phases 1 & 2,  Leadville  agrees  to supply
          Northair  with  short  bi-monthly  reports   summarizing   exploration
          activities and results.  Formal annual summary and accounting  reports
          will be  delivered  to  Northair  for  each  calendar  year,  prior to
          February 15 of the following year.

     16.  Either company,  regardless of who is managing  exploration  programs,
          will be  granted  full  field  access  to the Lobos  Property  at that
          party's  sole risk and  expense,  shall  have the  right,  exercisable
          during  regular  business  hours,  at a mutually  convenient  time, in
          compliance with the other party's safety rules and regulations, and in
          a reasonable  manner so as not to interfere with on-going  operations,
          to go upon the Lobos  Property for the purpose of confirming  that the
          other  party  managing  the  exploration  program  is  conducting  its
          operations in the manner required by this letter agreement. Each party
          shall  indemnify  and hold the  other  harmless  from all  claims  for
          damages  arising out of any death,  personal  injury or Lobos Property
          damage  sustained by the  inspecting  party,  its agents or employees,
          while in or upon the Lobos  Property,  whether  or not the  inspecting
          party,  its  agents or  employees  are in or upon the  Lobos  Property
          pursuant to this Section A.16, unless such death,  injury or damage is
          due to the other party's gross  negligence or willful  misconduct.  If
          requested  by either  party,  the  inspecting  party,  its  agents and
          employees  will confirm in writing their waiver of claims  against the
          other party.

     17.  Following  completion of commitments outlined in Sec. B, Leadville may
          terminate  this  letter  agreement  at any  time  subject  to a 45 day
          written  advance notice to Northair.  All original files and maps will
          be delivered to Northair within 60 days following formal  termination.
          Any data in digital format will also be delivered as such.

     18.  Both  companies  have the right to sell or transfer all or any part of
          their  interest in this  agreement  and the Lobos Project to any third
          party,  upon the prior  written  consent of the other party (not to be
          unreasonably  withheld),  so long as the

                                      -5-
<PAGE>


          transferee agrees to be bound by the terms of this agreement.  No such
          consent will be necessary  for an assignment by Leadville to a Mexican
          subsidiary,  wholly-owned by Leadville and another subsidiary company.
          If either Leadville or Northair chooses to transfer all or any part of
          their  interest  in this  Agreement  and the Lobos  Project to a third
          party,  they will allow the other  company  (Leadville  or Northair) a
          preemptive  right to acquire that  interest  (subject to details as to
          notices and time frames as agreed to in the Option Agreement).

     19.  Each party agrees to keep  confidential  and not disclose to any third
          party  or the  public  any of the  "Program  Results"  or any  data or
          information derived from the Program Results except

          (a)  to the extent required by

                (i) law or regulation;

               (ii) any rule, policy,  guideline or instrument of any securities
                    commission or stock exchange binding on a party; or

              (iii) the   order  of  a  court  or   regulatory   agency   having
                    jurisdiction;

          (b)  where the other party has given its prior consent,  which consent
               shall not unreasonably be withheld.

          Neither  party will be allowed to disclose  any  Program  Results in a
          news  release or other  public  statement  unless that party has first
          afforded the other party  reasonable  opportunity of not less than one
          business  day to  review  and  comment  on  the  proposed  release  or
          statement.

     20.  All Exploration and Development  Expenditures will apply to activities
          carried  out on or related to any lands  acquired  within the "Area of
          Interest" defined in Schedule A.

     21.  Leadville,  if  it so  desires,  will  be  allowed  100%  of  the  tax
          deductions  for  exploration  expenses  while it is expending  100% of
          exploration dollars under this letter agreement, and the parties agree
          in the Option  Agreement to make such  reasonable  adjustments  to the
          structure of their  relationship  as are necessary to accomplish  that
          purpose. Leadville shall be entitled to control all U.S. tax elections
          pertaining to activities carried out under this letter agreement.

     22.  Each of the parties  agrees to  indemnify  the other for all  damages,
          costs,  fees  and  expenses  (including  reasonable  attorneys'  fees)
          incurred  by the other  party and  arising  out of or  related  to any
          breach by the  indemnifying  party of  representations,  warranties or
          covenants contained in this letter agreement.

                                      -6-
<PAGE>

B.   COMMITMENTS

     Exploration  Phase  One  is  defined  as the  first  phase  of  exploration
following signing of this letter  agreement.  Phase One will begin during March,
2001 and end during June, 2001. No interpretive results, assays or other results
of the program will be made  available  by Northair to  Leadville  until the Due
Diligence Period has expired.  Additional  office time will be required for data
compilation,  reports,  maps  and  accounting.  Upon  execution  of this  letter
agreement,  unless  Leadville  notifies  Northair of its intent to withdraw from
this  agreement  on or  prior  to the  last  day of the  Due  Diligence  Period,
Leadville  agrees,  without the option of withdrawal from this letter agreement,
to complete the following items:

     1.   Payment to  Northair  of $20,000  (payable  upon  signing  this letter
          agreement) of which $15,000 will be refunded to Leadville if Leadville
          elects not to proceed with this agreement on or prior to the expiry of
          the Due Diligence Period.

     2.   Reimbursement  of a  concession  holding  payment  of  $8,250  made by
          Northair  on  February  26,  2001  to the  underlying  property  owner
          (payable upon signing this letter agreement).

     3.   Reimbursement  of option payment of $23,000 due on May 26, 2001 to the
          underlying property owner.

     4.   Completion  of Phase One, a minimum of 1000 meters of RVC  drilling on
          the Lobos Property and associated  Exploration and Development Work to
          be completed by June 15, 2001, unless impeded or stopped by unforeseen
          problems, including "acts of God".

     5.   Leadville agrees to demonstrate that sufficient funding is in place to
          fund all points in Phase One, by placing funds, on a monthly basis, in
          an amount estimated to cover the next month's expenses, in advance, in
          an account  earmarked for funds to be spent on the Lobos  Project,  or
          other means  sufficient to demonstrate  its financial  capabilities to
          complete the Exploration and Development Work contemplated under Phase
          One.

C.   TERMS FOR LEADVILLE TO EARN 51%

     1.   Cash Payments to Northair

          (a)  The  payments  referred  to in Sections  B.1 and B.2  ($20,000 at
               signing  this  letter  agreement,  as  well as  reimbursement  of
               February 26, 2001 option payment  totaling $8,250 on execution of
               this letter agreement).

          (b)  $30,000 on January 1, 2002 or any earlier date.

          (c)  $50,000 + IVA on January 1, 2003 or any earlier date.

          (d)  $60,000 + IVA on January 1, 2004 or any earlier date.

                                      -7-
<PAGE>

     2.   Share Issuances to Northair

          (a)  30,000 unregistered,  legended and restricted shares of Leadville
               on July 1, 2001 or any earlier date.

          (b)  40,000 unregistered,  legended and restricted shares of Leadville
               on July 1, 2002 or any earlier date.

          (c)  50,000 unregistered,  legended and restricted shares of Leadville
               on July 1, 2003 or any earlier date.

     3. Work Expenditures by Leadville. $1,500,000 in cumulative Exploration and
Development  Expenditures on or before June 30, 2004 provided that to the extent
that  Leadville  has  not  incurred  the  required  amount  of  Exploration  and
Development  Expenditures,  Leadville  may elect to make a payment  to  Northair
which shall equal the sum of $1,500,000  less the  Exploration  and  Development
Expenditures actually incurred by Leadville during that period.

     Leadville will provide Northair with a written statement of Exploration and
Development Expenditures, certified as being complete and accurate by Leadville,
within 60 days  after  June 30,  2004,  and will make  available  for  review by
Northair during normal business  hours,  for a period of six months  thereafter,
backup invoices,  statements and the like verifying such  expenditures  promptly
upon  Northair's  written  request.  Leadville may satisfy any work  requirement
deficiency by the payment to Northair of any  agreed-upon  deficiency  within 30
days  after  any  reported  expenditure  has been  determined  not to be a valid
Exploration  and  Development   Expenditure,   or  if  the  amount  of  required
Exploration  and  Development  Expenditures  has  later  been  determined  to be
deficient.

     4. Underlying Agreement.  Upon completion of Phase One, Leadville agrees to
assume the payment options under the underlying option agreement,  including the
buy-out on May 26,  2004 which  amount will be  included  in the  $1,500,000  in
cumulative  Exploration and Development  Expenditures.  Leadville agrees that it
will be obligated to make any payment due under the underlying option agreement,
or tax  payment  required  to hold  either  Concession,  if it gives  notice  of
termination  to  Northair  less than 45 days  prior to any due date.  A separate
schedule of payments for the underlying option agreement is appended as Schedule
B.

     Upon  completion of the earn-in  requirements  set out in Sec. C, Leadville
shall be deemed to be  irrevocably  and  immediately  vested in an undivided 51%
interest  in  the  Lobos  Property  and,  Leadville  shall  have  the  right  to
immediately  acquire and receive from  Northair an undivided 51% interest in and
to the Lobos Property,  and not later than five days after  receiving  notice of
the same,  Northair  shall  deliver  to  Leadville  recordable  and  registrable
conveyances in a form reasonably  acceptable to Leadville  (considering that the
objective  would be the  recordation of the  conveyances  with the Public Mining
Registry) and in substance  consistent  with the title  representations  made by
Northair and reasonably  acceptable to  Leadville's  counsel,  such  conveyances
covering  both the Lobos  Concession  and  Northair's  interest  in the  Lobitos
Concession.

                                      -8-
<PAGE>

D.   DEFAULT

     Any failure to complete the above terms in Sections B and C  constitutes  a
default by Leadville  subject to receipt of a notice of default and a reasonable
opportunity  (not to exceed 30 days) to cure or diligently  commence to cure the
same and subject to  Leadville's  right to dispute the  existence of an event of
default,  resulting in automatic  termination  of this  agreement and no further
obligations owed by Leadville to Northair except obligations accrued to the date
of termination.

E.   JOINT VENTURE

     Upon Leadville  having completed all items in Sections B and C it will have
earned an undivided 51% interest in the Lobos Project,  and the  relationship of
Northair and Leadville in proceeding with  development of the Lobos Project will
be governed in  accordance  with the terms of an agreement  (the "Joint  Venture
Agreement") to be negotiated,  prepared and finalized between the parties acting
diligently and in good faith forthwith after the earning of the interest,  using
the Rocky  Mountain  Mineral  Law  Foundation  Forms 5 and 5A as  models,  which
agreement  will contain the  following  minimum  terms  together with such other
terms and  conditions as the  respective  counsel for Northair and Leadville may
reasonably request,  and modified as necessary to comply with applicable Mexican
law, in order that the affairs of Northair and Leadville in respect of the Lobos
Project may be reasonably  carried out as a joint venture  operation (the "Joint
Venture").

     1.   the  objectives  of the Joint  Venture  will be to  acquire,  explore,
          develop and if feasible, to place the Concessions or some part thereof
          into commercial production;

     2.   the  affairs  of the Joint  Venture  will be under the  direction  and
          control  of  a  management  committee  (the  "Management   Committee")
          comprised  of two (2)  representatives  of the  Leadville  and two (2)
          representatives of Northair;

     3.   voting in the  Management  Committee  will be decided by majority vote
          and will be on the basis of one (1) vote for each percentage  point of
          undivided  beneficial  interest of a party in the Joint Venture and in
          the  Lobos   Project  and  other  assets  of  the  Joint   Venture  (a
          "Participating Interest"), provided that in the case of a deadlock the
          Operator will have a further deciding vote;

     4.   Leadville  will  initially be the  operator of the Joint  Venture (the
          "Operator").  The Operator will have the  responsibility  to carry out
          the directions of the Management  Committee and have such other powers
          and duties as are  required to carry out that  function.  The Operator
          will establish and maintain full,  complete and separate financial and
          other  records  for the Joint  Venture  which  will be  available  for
          inspection by Northair,  and will provide  detailed  expenditures  and
          progress reports to Northair on a timely basis. Information related to
          press releases will be mutually and reasonably agreed upon.  Leadville
          will provide

                                       -9-
<PAGE>

          access to ongoing information including copies of records and reports,
          as  required.  The  Operator  will  have the right to charge a fee for
          overhead,  management  and  other  unallocable  costs  equal to 10% of
          expenditures  up  to  commencement  of  a  production   program.   The
          Management   Committee   will   determine  the  Operator  fees  during
          production  and may  adjust  such  fees from time to time on the basis
          that the Operator should neither gain nor lose  financially for acting
          in such capacity. If the interest of Leadville is diluted to less than
          50%, Northair will become the Operator;

     5.   all Joint Venture  activities  will be performed  pursuant to programs
          and budgets approved in advance by the Management Committee ("Approved
          Programs and Budgets").  The Operator will prepare and submit proposed
          programs and budgets to the Management  Committee on or before 60 days
          after  completion of the last program,  on or before  November 15th in
          each year if no program and budget has been  approved or  completed in
          that year.  The  Management  Committee will meet and approve a program
          and  budget  for the next year by  December  15th of the prior year if
          there was no program in such prior  year,  or within 30 days after the
          proposed  program was  submitted,  if there was a program in the prior
          year;

     6.   each  party  will pay that cost  share of each  Approved  Program  and
          Budget in which it elects to participate  that is  proportional to its
          Participating  Interest  and  shall  have a period of 60 days from the
          date of  approval  of a budget in which to pay its share.  A party may
          decline to participate in an Approved Program and Budget in which case
          its Interest will be reduced as provided in Section E.7 below;

     7.   if a party declined to  participate in a proposed  program and budget,
          it will be diluted as per Section F;

     8.   each party has a preemptive right to acquire the interest of the other
          party if that  party  wishes to  dispose  of all or a  portion  of its
          Participating Interest in the Joint Venture;

     9.   each party  will have the right to take its share of mineral  products
          of the Joint  Venture in kind upon  reasonable  advance  notice to the
          Operator and so long as such election does not interfere with existing
          contractual relationships;

     10.  if a party defaults in paying its share of Joint Venture  expenditures
          related  to an  Approved  Program  and  Budget in which it  elected to
          participate,  it  will  be  precluded  from  participating  in  future
          Approved  Programs and Budgets and its Interest will be reduced in the
          manner set forth in the Rocky Mountain Mineral Law Foundation Form 5A;
          and

     11.  if the Management  Committee elects to bring in a major mining company
          at arm's  length to each party to develop  the  Mineral  Claims to the
          point at which a production decision can be made, each of Northair and
          Leadville  will  negotiate in

                                      -10-
<PAGE>

          good  faith  with the  major  mining  company  to  reach an  agreement
          consistent with the Canadian mining industry  standards for properties
          equivalent  in size and stage of  development  to the Lobos Project to
          enable the major mining company to acquire up to a 60% interest in the
          Lobos  Project.  Each of Northair and Leadville  will  proportionately
          reduce  its  respective  interest  in the Lobos  Project to enable the
          major mining company to earn an interest.

F.   DILUTION

     If a party  elects  not to  participate  fully in a  proposed  program  and
budget,  then that  party's  interest  will be  reduced in  accordance  with the
formula set forth in the Rocky Mountain  Mineral Law Foundation  Form 5A. Once a
parties'  interest has been diluted to 10%,  it's interest will be determined as
follows:

     Leadville will have no interest  (provided that if such dilution  occurs as
part of a joint  venture  arrangement  of the kind set  forth in  Section  E.11,
Leadville will be diluted to a 1% NSR interest).

     Northair will be diluted to a 1% NSR interest.

     Until the Joint Venture  Agreement is executed and delivered  under Mexican
laws,  the Joint  Venture  will be  governed  by the  provisions  of this letter
agreement or the Option  Agreement.  This letter  agreement  will be governed by
Colorado law, without regard to its rules as to conflicts of law.

     The  execution of this letter  shall  constitute  the binding  agreement of
Northair to refrain from entering into  discussions,  negotiations or agreements
with any third  party  regarding  the  conveyance  of any  interest in the Lobos
Project, the sale of Grupo Northair de Mexico, or any joint venture, farm-out or
other arrangement  affecting  activities at the Lobos Project. In addition,  the
parties agree to work  diligently  and in good faith towards the  negotiation of
the terms and  conditions  of the  Option  Agreement  during  the Due  Diligence
Period.  If the  foregoing  is  acceptable  to  Northair,  please so indicate by
executing  duplicate  originals  of this letter of intent in the space  provided
below, and returning one  fully-executed  original to me. The parties agree that
faxed and/or  counterpart copies of this letter agreement may serve as originals
for all intents and purposes.

                                  Yours very truly,

                                  s/ Jack V. Everett

                                  Jack V. Everett, Vice President and Director,
                                  Leadville Mining & Milling Corporation


Accepted and agreed to this 6th day of March, 2001.

                                      -11-
<PAGE>

s/Fred Hewett
--------------------------------------------

Fred Hewett
President, International Northair Mines Ltd.


                                      -12-
<PAGE>


                                   APPENDIX I

"Exploration  and  Development  Expenditures"  include  the  following  (whether
incurred  directly by Leadville or its consultants or reimbursed by Leadville to
Northair):

(a)  All costs and expenses  incurred in conducting  exploration and prospecting
     activities on or in connection with the Lobos Property,  including, without
     limitation,  the preparation of feasibility  studies, the active pursuit of
     required  federal,  state  or  local  authorizations  or  permits  and  the
     performance   of   required   environmental   protection   or   reclamation
     obligations,  the  building,  maintenance  and repair of roads,  drill site
     preparation,   drilling,   tracking,  digging  test  pits,  shaft  sinking,
     acquiring,  diverting and/or  transporting water necessary for exploration,
     logging  of drill  holes and  drill  core,  completion  and  evaluation  of
     geological,   geophysical,   geochemical  or  other  exploration  data  and
     preparation of interpretive reports, and surveying and laboratory costs and
     charges (including assays or metallurgical analyses and tests);

(b)  All  expenses  incurred  in  conducting  development  activities  on  or in
     connection with the Lobos Property, the active pursuit of required federal,
     state or local  authorization  or permits and the  performance  of required
     environmental  protection or  reclamation  obligations,  pre-stripping  and
     stripping, the construction and installation of a mill, leach pads or other
     beneficiation  facilities  for  Valuable  Minerals,  and other  activities,
     operations  or work  performed in  preparation  for the removal of Valuable
     Minerals from the Lobos Property;

(c)  All  costs of  acquiring  interests  in real  property  within  the Area of
     Interest;

(d)  All costs  incurred in performing any  reclamation or other  restoration or
     clean-up work required by any federal, state or local agency or authority;

(e)  Salaries,   wages,  expenses  and  benefits  of  Leadville's  employees  or
     consultants engaged in operations relating to the Lobos Property, including
     salaries and fringe benefits of those who are  temporarily  assigned to and
     directly employed on work relating to the Lobos Property for the periods of
     time  such  employees  are  engaged  in  such   activities  and  reasonable
     transportation  expenses for all such  employees to and from their  regular
     place of work to the Lobos Property;

(f)  All costs  incurred  in  connection  with the  preparation  of  feasibility
     studies  and  economic  and  technical  analyses  pertaining  to the  Lobos
     Property,  whether  carried  out by  Leadville  or by third  parties  under
     contract with Leadville;

(g)  Taxes and assessments,  other than income taxes, assessed or levied upon or
     against the Lobos Property or any improvements thereon situated thereon for
     which Leadville is responsible or for which Leadville reimburses Northair;


<PAGE>

(h)  Costs of material,  equipment and supplies  acquired,  leased or hired, for
     use in conducting  exploration  or development  operations  relating to the
     Lobos  Property;  provided,  however,  that equipment owned and supplied by
     Leadville  shall be chargeable at rates no greater than  comparable  market
     rental rates available in the area of the Lobos Property;

(i)  Costs and expenses of establishing and maintaining field offices, camps and
     housing facilities;

(j)  Costs  incurred by Leadville  in examining  and curing title to any part of
     the Lobos  Property  or any  interest in real  property  within the Area of
     Interest,  in  maintaining  the  Lobos  Property  or any  interest  in real
     property  within the Area of Interest  whether  through the  performance of
     labor or paying  required  holding costs,  in making  required  payments or
     performing  other  required   obligations   under  the  underlying   option
     agreement,  in satisfying  surface use or damage obligations to landowners,
     in defending title and rights to the use of the Lobos Property from actions
     by private parties or governmental  agencies, or in conducting any analyses
     of the environmental conditions at the Lobos Property; and

(k)  An  additional  5% as overhead on all costs and  expenses  described in (a)
     through (j) above (except for equipment owned and supplied by Leadville).



                                     AppI-2

<PAGE>


                                   APPENDIX II

For Northair:

(a)  Due  Organization.  Each of the  corporations  comprising  Northair is duly
     incorporated,  validly existing and in good standing, under the laws of the
     jurisdictions in which it was formed.


(b)  Due  Authorization.  Each of the corporations  comprising  Northair has the
     full  corporate  power and  authority to enter into and perform this letter
     agreement and to  consummate  the  transactions  contemplated  hereby.  The
     execution and delivery of this letter agreement by each of the corporations
     comprising  Northair,  the  consummation of the  transactions  contemplated
     hereby, and the performance by each of the corporations comprising Northair
     of all of its  obligations  under  this  letter  agreement  have  been duly
     authorized and approved by such corporation. This letter agreement has been
     duly executed and delivered by duly authorized officers of the corporations
     comprising Northair.

(c)  Enforceability.  This letter  agreement  constitutes  the legal,  valid and
     binding  obligation  of  each  of  the  corporations   comprising  Northair
     enforceable  against  it in  accordance  with  its  terms,  except  as such
     enforceability  may  be  limited  by  applicable  bankruptcy,   insolvency,
     reorganization,  moratorium or other laws of general application  referring
     to or  affecting  the  enforcement  of  creditors'  rights,  or by  general
     equitable principles.

(d)  No Conflict. Neither the execution and delivery of this letter agreement by
     either of the  corporations  comprising  Northair,  nor the consummation by
     either  of  the  corporations   comprising  Northair  of  the  transactions
     contemplated hereby, will conflict with or result in a breach of any of the
     terms,  conditions  or  provisions of the  certificates  of  incorporation,
     articles of incorporation,  by-laws of such corporation, any law applicable
     to it or its properties or assets, or any order, writ, injunction, judgment
     or decree of any governmental authority or any arbitration award applicable
     to it or its properties or assets.

(e)  No Contract  Conflict.  Neither the  execution  and delivery of this letter
     agreement  by  either  of the  corporations  comprising  Northair,  nor the
     consummation by either such  corporation of the  transactions  contemplated
     hereby,  will  conflict  with or  result  in a breach  of or give rise to a
     default or violation on the part of such corporation  under any obligation,
     license, letter agreement, contract, plan, or other arrangement to which it
     is a party or by which it is bound.

(f)  No Litigation Conflict.  There is no action, suit or proceeding pending or,
     to the  knowledge  of  either  of  the  corporations  comprising  Northair,
     threatened  against or  affecting  either  such  corporation  or any of its
     properties  or  assets,  at law or in equity,  or before  any  governmental
     authority,  which would be reasonably  likely to interfere with its ability
     to  consummate  this  letter  agreement  or the  transactions  contemplated
     hereby.


<PAGE>

(g)  Regulatory  Approvals and Third Party  Consents.  Except for the consent of
     the Canadian Venture Exchange (which,  if it is not obtained,  will require
     the refund by Northair to Leadville of all payments made by Leadville under
     Section B), no governmental notice, filing, authorization,  approval, order
     or consent is  required  to be given,  filed or  obtained  by either of the
     corporations  comprising Northair from or to any governmental  authority or
     any third party in connection with the execution,  delivery and performance
     by it of this letter agreement or the transactions contemplated hereby.

(h)  Title to Mining  Concessions and Surface  Rights.  The entity or individual
     listed as holding title to each of the Concessions holds good title to that
     Concession free and clear of all claims,  liens,  encumbrances  and defects
     arising by,  through or under either of them,  and Northair has  sufficient
     legal and contractual rights under Mexican law, including rights to use the
     surface of the Concessions,  to allow Leadville to conduct  Exploration and
     Development Work as contemplated  under this letter agreement.  All actions
     required to be performed  and made all payments of holding  costs and taxes
     or other  assessments  necessary  to keep each of the  Concessions  in good
     standing under the Mexican Mining Law ("Ley  Minera"),  the  Regulations of
     the Mining Law  ("Reglamento  de la Ley  Minera"),  and the  administrative
     rules  derived  therefrom,  through  the date of  execution  of this letter
     agreement, have been made.

(i)  Compliance  with  Underlying  Agreement.  Northair has conducted all of its
     activities on the  Concessions  in compliance  with the  underlying  option
     agreement,  and has  timely  made all  payments  and  performed  all of its
     obligations  thereunder.  The underlying  option agreement  remains in full
     force and  effect and  Northair  has not taken or failed to take any action
     which could give rise to a default thereunder.

(j)  Environmental  Compliance.  To  the  best  of  knowledge  of  each  of  the
     corporations   comprising  Northair,  (i)  all  activities  and  operations
     undertaken at the Lobos Project have been in material  compliance  with all
     applicable  federal,  state and  local  environmental  laws and other  laws
     designed for the protection of human health and safety,  and (ii) there are
     no (A) adverse  environmental  conditions at any of the  concessions or (B)
     administrative  proceedings  for  environmental  issues  pending before any
     Mexican authorities with jurisdiction.

(k)  Compliance  with  Laws.  To the  knowledge  of  each  of  the  corporations
     comprising Northair,  all activities and operations on the Concessions have
     been performed in material  compliance with all laws, rules and regulations
     of all governmental authorities.

(l)  No  Commissions.  Neither  of  the  corporations  comprising  Northair  has
     retained any broker,  investment  banker or other person or entity entitled
     to any commission or similar  compensation  in connection  with this letter
     agreement or the transactions contemplated by this letter agreement.

(m)  Royalties.  There  are  no  advance  or  production  royalties  payable  in
     connection with the production of ores or minerals of any kind derived from
     the Lobos Property,  other than the 2% NSR due under the underlying  option
     agreement.

                                    AppII-2

<PAGE>


(n)  Investment  Intent.  Northair is acquiring  the shares of Leadville  common
     stock solely for its own account with the present intention of holding that
     stock for  investment  purposes  only and it has no  present  intention  of
     distributing  that  stock  in  violation  of  applicable  securities  laws.
     Northair  acknowledges  that  the  Leadville  common  stock  has  not  been
     registered  under the U.S.  Securities Act of 1933 or any state  securities
     law,  and is being sold in reliance on  exemptions  from such  registration
     requirements  that are available  only if those shares of Leadville  common
     stock are not being  offered  to the  public  and are  being  acquired  for
     investment and not with a present view to their distribution or sale.

(o)  Acknowledgement  of  Restrictions.  Northair  recognizes that the Leadville
     common  stock  is  subject  to  certain   restrictions  on  transfer  under
     applicable   securities   laws;  and  that  a  legend   identifying   those
     restrictions  will be placed on the certificates  representing  that stock.
     Northair agrees that it will in no circumstances attempt to sell or dispose
     of any portion of the  Leadville  common  stock except in  accordance  with
     applicable securities laws.

(p)  Private Placement Representations.

     (i)  Northair can bear the economic risk of losing its entire investment in
          the Leadville common stock and can afford to hold the Leadville common
          stock for an indefinite period of time.

     (ii) Northair has reviewed  Leadville's most recent financial statement and
          other  Leadville  financial  information,  and  Leadville  annual  and
          quarterly reports on forms 10-Q and 10-K or otherwise for the previous
          three years  (collectively,  the "Reports") and is otherwise  familiar
          with Leadville's financial condition,  and confirms that all requested
          documents, records and books pertaining to its investment in Leadville
          have been made available or delivered to it.

     (iii)Northair  has had the  opportunity  to ask  questions  of, and receive
          answers from,  representatives of Leadville  concerning its investment
          in the Leadville  common stock,  and has otherwise  received  whatever
          additional  information it deemed  necessary to verify the accuracy of
          the information contained in the Reports.

(q)  Investigations.  Northair is  familiar  with the mining  industry,  current
     conditions  pertaining to mineral commodity prices, the properties owned or
     controlled by Leadville,  and has  undertaken or caused to be undertaken on
     its behalf, such  investigations as it deems necessary,  reasonably prudent
     and  desirable  to  satisfy  itself  as to the  value  and  quality  of the
     Leadville  common  stock to be  acquired  from  Leadville  pursuant to this
     letter agreement.

                                    AppII-3

<PAGE>

                                  APPENDIX III

For Leadville:

(a)  Due Organization.  Leadville is duly incorporated,  validly existing and in
     good standing, under the laws of the jurisdiction in which it was formed.

(b)  Due Authorization.  Leadville has the full corporate power and authority to
     enter  into  and  perform  this  letter  agreement  and to  consummate  the
     transactions contemplated hereby. The execution and delivery of this letter
     agreement by Leadville,  the consummation of the transactions  contemplated
     hereby,  and the performance by Leadville of all of its  obligations  under
     this  letter  agreement  have been duly  authorized  and  approved  by such
     corporation.  This letter agreement has been duly executed and delivered by
     duly authorized officers of Leadville.

(c)  Enforceability.  This letter  agreement  constitutes  the legal,  valid and
     binding obligation of Leadville  enforceable  against it in accordance with
     its terms,  except as such  enforceability  may be  limited  by  applicable
     bankruptcy, insolvency, reorganization, moratorium or other laws of general
     application referring to or affecting the enforcement of creditors' rights,
     or by general equitable principles.

(d)  No Conflict. Neither the execution and delivery of this letter agreement by
     Leadville,   nor  the  consummation  by  either  such  corporation  of  the
     transactions  contemplated hereby, will conflict with or result in a breach
     of any of the  terms,  conditions  or  provisions  of the  certificates  of
     incorporation,  articles of incorporation,  by-laws or other organizational
     instruments of Leadville, any law applicable to it or any of its properties
     or  assets,  or any  order,  writ,  injunction,  judgment  or decree of any
     governmental  authority or any  arbitration  award  applicable to it or its
     properties or assets.

(e)  No Contract  Conflict.  Neither the  execution  and delivery of this letter
     agreement by  Leadville,  nor the  consummation  by it of the  transactions
     contemplated  hereby,  will  conflict with or result in a breach of or give
     rise to a default or  violation on the part of such  corporation  under any
     obligation, lease, license, agreement, contract, plan, or other arrangement
     to which it is a party or by which it is bound.

(f)  No Litigation Conflict.  There is no action, suit or proceeding pending or,
     to the knowledge of Leadville, threatened against or affecting it or any of
     its properties or assets,  at law or in equity,  or before any governmental
     authority,  which would be reasonably  likely to interfere with its ability
     to  consummate  this  letter  agreement  or the  transactions  contemplated
     hereby.

(g)  Regulatory Approvals and Third Party Consents. Except for the establishment
     of a Mexican subsidiary,  no governmental  notice,  filing,  authorization,
     approval,  order or consent is required  to be given,  filed or obtained by
     Leadville  from or to any  governmental  authority  or any  third  party in
     connection with the execution, delivery and


<PAGE>

     performance  by  such   corporation   of  this  letter   agreement  or  the
     transactions contemplated hereby.

(h)  No Commissions. Leadville has not retained any broker, investment banker or
     other person or entity  entitled to any commission or similar  compensation
     in connection with this letter agreement or the  transactions  contemplated
     by this letter agreement.


                                    AppIII-2