Filed by Automated Filing Services Inc. (604) 609-0244 - Miranda U.S.A., Inc. - Red Hill Mining Lease





 MINING LEASE 

 THIS MINING LEASE (“Agreement”) is hereby made
  and entered into as of the 27th day of May, 2004 (the "Effective
  Date") by and between: NEVADA NORTH RESOURCES (U.S.A.), INC., hereinafter called
  "Lessor", and MIRANDA U.S.A., INC., a Wyoming corporation hereinafter called
  "Lessee or Miranda". THIS MINING LEASE (“Agreement”) supercedes
  the previous Agreement which encompassed four properties (Red Hill, CONO, BPV
  and Coal Canyon) and provides separate leases for each of the four properties
  under the mutual promises and covenants set below. 

 WITNESSETH: 

                In
  consideration of the mutual promises and covenants set forth herein, Ten Dollars
  ($10.00) in hand paid and other good and valuable consideration, the receipt
  and sufficiency of which are hereby acknowledged, Lessee and Lessor (sometimes
  referred to hereinafter as a "Party" or collectively as the "Parties") agree
  as follows: 

 I. GRANT OF LEASE

               1.1Grant
  of Lease. 

               (a)Lessor
  hereby grants and conveys unto Lessee, its successors and assigns, subject to
  Section 5.1, below, an exclusive lease unto the Property on the terms and conditions
  set forth in this Agreement. As used in this Agreement, the term "Property"
  means Lessor's entire interest in the Red Hill property described in Exhibit
  A, attached hereto and made a part hereof, together with all minerals, mineral
  substances, mineral rights, water rights and all surface, access, and other
  rights associated with or appurtenant to such Property. 

                1.2
  Term. The initial term of this Agreement shall be twenty (20)
  years from the Effective Date, unless sooner terminated according to the provisions
  of this Agreement. This Agreement shall remain in effect after the initial term
  for so long as mining, processing, construction of mine facilities, development
  of ore reserves or exploration activities ("Mining Related Activities") continue
  on the Property or other adjacent or contiguous properties owned or controlled
  by Lessee within each anniversary of this Agreement. It shall not be required
  that Mining Related Activities be continuous in order for this Agreement to
  be extended beyond the initial term hereof. 

                (a)
  Minimum term. Miranda commits to a two (2) year option on the property made
  up of the initial payment and the first year anniversary payments. 

                1.3
  Grant of Rights. During the term of this Agreement,
  Lessor grants to Lessee the following exclusive rights: 

                (a)
  the right of entry; 





                (b)
  by whatever method is now known or subsequently developed, to survey, explore,
  prospect, sample, drill, develop, mine (including without limitation by surface,
  open pit, underground, solution or any other method whatsoever), cross-mine,
  stockpile, remove, transport, leach, concentrate, mill, smelt, beneficiate,
  process, treat, ship, market and sell all minerals, whether extracted or removed
  from the Property or other properties; 

                (c)
  to construct, use, maintain, repair, replace and relocate buildings, roads,
  pipelines, ore bins, shafts, declines, inclines, tunnels, drifts, adits, open
  pits, openings, haulage ways, mine workings, leach pads, mineral treatment facilities,
  tailings ponds, waste dumps, ore stockpiles, reservoirs, power and communication
  lines and any other structures, facilities or improvements of any kind or description
  whatsoever; 

                (d)
  to use the Property for the storage or permanent disposal of minerals, overburden,
  waste, tailings, water or other by-products of materials produced from the Property
  or from other properties; 

                (e)
  to use all easements, rights-of-way and means of access for ingress and egress
  to, from, across and through the Property; 

                (f)
  to take, develop, or use water, whether surface, underground, or artesian, by
  any lawful taking or development, without restriction as to the place or places
  of Lessee's use of the waters, except that such use may not interfere with Lessor's
  domestic or agricultural use of water to which Lessor has a right of use; 

                (g)
  to extract, process, test, remove and dispose of any minerals and mineral substances
  for testing purposes (including, without limitation, for bulk samples) without
  payment of any Production Royalty or other additional consideration whatsoever
  to Lessor, provided that Lessee shall pay Production Royalty on any such minerals
  removed from the Property for testing purposes for which it receives actual
  sales revenues; 

                (h)
  to use the Property for all of the purposes stated in this Section 1.3 in connection
  with or in furtherance of Lessee's activities on other properties; and 

                (i)
  to exercise all other rights that are incidental to or customarily associated
  with any or all of the rights granted expressly or implicitly to Lessee in this
  Agreement. 

 II. PAYMENTS TO LESSOR 

                2.1
  Advance Minimum Royalties. Advance royalties as used
  herein means the amount required to be paid by Lessee to Lessor, as set forth
  below, to provide for a specific minimum payment in such periods. During the
  term of this Agreement, Lessee shall pay to Lessor advance minimum royalties
  ("Advance Royalties") as follows: 

	 	 Upon exercise of this Lease: (already paid) 
    	 $6,250  







 

	 	 On or before the first  	 
	 	 anniversary of the Effective Date  	 $12,500 
	 	  	 
	 	 On or before the second  	 
	 	 anniversary of the Effective Date  	 $12,500 
	 	  	 
	 	 On or before the third  	 
	 	 anniversary of the Effective Date  	 $20,000 
	 	  	 
	 	 On or before the fourth  	 
	 	 anniversary of the Effective Date  	 $20,000 
	 	  	 
	 	 On or before the fifth  	 
	 	 anniversary of the Effective Date  	 $25,000 
	 	  	 
	 	 On or before the sixth  	 
	 	 anniversary of the Effective Date  	 $30,000 
	 	  	 
	 	 On or before the seventh  	 
	 	 anniversary of the Effective Date  	 $40,000 
	 	  	 
	 	 On or before the eighth  	 
	 	 anniversary of the Effective Date  	 $40,000 
	 	  	 
	 	 On or before the ninth  	 
	 	 anniversary of the Effective Date  	 $50,000 
	 	  	 
	 	 On or before the tenth  	 
	 	 anniversary of the Effective Date  	 $50,000 
	 	  	 
	 	 On or before each subsequent  	 
	 	 anniversary of the Effective Date  	 $60,000* 


 * Beginning on the eleventh anniversary of the Agreement,
  the Advance Royalty of $60,000 shall be adjusted for inflation increases
  according to the United States Department of Labor Consumer Price Index. The
  beginning index shall be the index published for April 2015. However, in no
  case will the Advance Royalty drop below the Advance Royalty base amount of
  $60,000. 

 Subject to Section 2.2(a), Advance Royalties shall be paid
  on or before the date due. Lessee shall not be responsible or liable for Advance
  Royalties that become due subsequent to termination or expiration of this Agreement.
  Advance Royalties paid hereunder shall be credited against and fully recoupable
  from any and all Production Royalty that may accrue under Section 2.2, regardless
  of whether such Production Royalty accrues or is made in the same or any subsequent
  year to the year of payment of 









the Advance Royalties. 

                2.2
  Production Royalty.

	 	 (a)      	 Percentage and Calculation. Subject
        to applicable credits and adjustments, Lessee, in accordance with its
        usual practice, shall pay to Lessor a production royalty (the "Production
        Royalty") equal to the applicable percentage of Net Value as defined,
        calculated and paid as set forth in Exhibit B, attached hereto and by
        this reference made a part hereof. Said percentages shall be as follows:
      





	 Gold Price	Royalty Percentage 
	 $275 or less per ounce  	 2.5% 
	 $275.01 to $ 375 per ounce	 3.0% 
	 $375.01 to $ 475 per ounce	 4.0% 
	 $475.01 or greater 	 5.0% 




	 	 (b)      	 Option to Reduce Production Royalty. At
        any time during the term of this Lease and as to all Production Royalty
        payments not yet paid, Lessee shall have the right to reduce the Production
        Royalty by purchasing a portion of the Lessor’s Production Royalty
        such that the Lessor retains a minimum 2% Production Royalty. The purchase
        price of the Production Royalty shall be $1,000,000 US for each 1%
        Production Royalty, $500,000 for each .5% Production Royalty, and
        $250,000 for each .25% Production Royalty. Such a Production Royalty
        buy down may take place all at one time or piecemeal. 

	 
	 	 	 The right to purchase the said Production Royalty
        interest shall be exercised by Lessee providing the Lessor with notice
        of the purchase accompanied by payment in full for the amount of the Production
        Royalty interest being purchased for each project on which Lessee is purchasing
        the Production Royalty. 

	 
	 	 	 If only a portion of the Production Royalty is purchased,
        then in the event of changes in the gold price the Lessor shall retain
        the remaining unpurchased Production Royalty percentage points on the
        sliding scale Production Royalty, as outlined in Section 2.2 (a) herein.
      

	 
	 	 (c)      	 U.S. Government Tax or Royalty. If
        the United States mining laws are hereafter amended or a new federal law
        is enacted requiring the payment of a royalty, a percentage of gross or
        net profits, a severance tax or any other form of compensation to the
        United States based upon the production of minerals 








 

	 	 	 from the Property or any portion thereof (a "U.S.
        Government Tax or Royalty”), then the purchase price of the Production
        Royalty shall be half of the purchase price described above in this Section
        2.2 (b). For clarity, the purchase price of the Production Royalty would
        then be $500,000 US for each 1% Production Royalty, $250,000 for
        each .5% Production Royalty, and $125,000 for each .25% Production
        Royalty. Furthermore, Lessor’s Production Royalty shall not be reduced
        under this provision below two percent (2.0%). If only a portion of the
        Production Royalty is purchased, then in the event of changes in the gold
        price the Lessor shall retain the remaining unpurchased Production Royalty
        percentage points on the sliding scale Production Royalty, as outlined
        in Section 2.2 (a) herein. 

	 
	 	 	 This Section on US Government Tax on Royalties is
        not intended to be triggered by a general increase in personal or corporate
        income taxes. 

	 
	 	 (d)      	 Disputes. Lessor shall be deemed to
        have waived any right it may have had to dispute any payment of Production
        Royalty unless Lessor notifies Lessee in writing of such dispute within
        six (6) months after the date of Lessee's payment, providing reasonable
        detail as to the nature of the dispute. 



 III. OPERATIONS

                3.1
  No Implied Covenants. Lessee does not make, and the
  Advance Royalties and other obligations of Lessee under this Agreement exclude
  and negate, any express or implied covenant or duty of Lessee to conduct any
  activity upon or for the benefit of the Property, including without limitation
  any activities related to the exploration, development or mining of the Property.
  Whether or not any such exploration, development, mining or other activities
  shall at any time (including, without limitation, during the primary term or
  any extended term of this Agreement) be conducted and the location, manner,
  method, extent, rate and timing of such activities (if any) shall be determined
  within the sole and absolute discretion of Lessee. 

                3.2
  Compliance with Law: Reclamation. In connection with its
  activities upon the Property, Lessee shall endeavor in good faith to comply
  with applicable provisions of Federal, State and local laws and regulations.
  Upon expiration or termination of this Agreement, Lessee shall reclaim all portions
  of the Property disturbed by its operations (i.e., to the extent and only to
  the extent of Lessee's disturbance) in accordance with all applicable governmental
  laws, regulations and orders. Lessee shall have the right, without payment of
  any additional consideration to Lessor, to enter upon the Property subsequent
  to termination of this Agreement for purposes of performing such reclamation
  work. 

                3.3
  Permits and Approvals. Lessor understands that Lessee may
  make efforts to obtain permits, licenses, rights, approvals or authorizations
  from governmental or private persons or entities in connection with the exercise
  by Lessee of its rights under this Agreement. Upon request by Lessee, Lessor
  shall assist and cooperate fully with Lessee 








 in any such endeavor, including, without limitation, the execution
  of pertinent documents and the making of verbal endorsements for Lessee's related
  activities. 

                3.4
  Liens. Lessee shall keep the title to the Property free
  and clear of all mechanic's and supplier's liens resulting from its operations
  under this Agreement. Lessee may refuse, however, to pay any claims asserted
  against it which Lessee disputes in good faith. Lessee may contest any suit
  commenced to enforce such a claim, but under no circumstances shall Lessee allow
  the Property or any portion thereof to be sold as a result of foreclosure of
  such a lien. 

                3.5
  Indemnity. Each Party covenants and agrees to indemnify
  the other from and against any and all liability, claims, damages (including
  attorneys' fees) and causes of action for injury to or death of persons, and
  damage to or loss or destruction of property and environmental liabilities resulting
  from the indemnifying Party' s use or occupancy of the Property or its operations
  hereunder. 

                3.6
  Commingling. Lessee shall have the right to commingle minerals
  produced from the Property ("Subject Ore") with minerals produced from other
  tracts ("Other Ore") for any purposes whatsoever, including, without limitation,
  processing or conversion to another product. In the event that Lessee commingles
  Subject Ore with Other Ore pursuant to this Section 3.6, Lessee shall perform
  sufficient sampling, weighing and assaying, in accordance with standards and
  practices generally accepted or employed within the industry, to determine the
  grades and quantities of minerals removed and sold from the Property. Without
  limiting the foregoing, in the event that Lessee commingles Subject Ore with
  Other Ore then, for purposes of determining Production Royalty payable to Lessor,
  the percentages of valuable minerals ultimately recovered from the commingled
  ore (i.e., from the commingled Subject Ore and Other Ore as a whole) shall conclusively
  be deemed applicable to the Subject Ore included therein. Lessor has the right,
  at its own expense, to take independent samples of commingled ores, upon reasonable
  advance notice to Lessee and in a manner that will not interrupt Lessee's operations.


                3.7
  Taxes, Cooperation and Maintenance Payments.

                (a)
  Taxes. Lessor shall promptly pay when due all ad valorem and real
  property taxes and assessments levied upon, assessed against or relating to
  the Property, provided, however, that Lessee shall reimburse Lessor for any
  increases in or advance payments of such real property taxes or assessments
  that are attributable to any enhancement in the value of the Property resulting
  from Lessee's activities under this Agreement, including, without limitation,
  deferred agricultural property taxes. Each of Lessee and Lessor shall be responsible
  for all taxes and assessments levied or assessed upon or against their respective
  personal property located on or about the Property. Each of Lessee and Lessor
  shall be responsible for payment of income taxes on their own respective incomes.
  If Lessor fails to timely pay such taxes, Lessee shall have the right, but not
  the duty, to pay such taxes on Lessor's behalf and deduct such amounts from
  any amounts due Lessor hereunder. 





                (b)
  Cooperation. Lessor shall promptly furnish to Lessee all
  bills, demands, notices, assessments or statements received by Lessor which
  relate to any tax, assessment or fee for which Lessee is responsible, in whole
  or in part, pursuant to this Section 3.7. Each Party shall provide the other
  Party with copies of all checks and other documentation evidencing the timely
  payment of all taxes, assessments and fees for which it is responsible pursuant
  to Section 3.7A. 

                (c)
  Maintenance Payments. Lessee shall pay those federal claim maintenance
  fees due on the Property by September 1, 2004 and any associated county recordation
  fees. For each year this Agreement remains in effect past June 1 of the then
  current year, Lessee shall timely and properly pay federal maintenance fees
  and county recordation fees pertaining to the Property leased hereunder to Lessee.


 IV. TITLE

                4.1
  Provision of Information. Upon request by Lessee, Lessor
  shall furnish to Lessee copies of all information in its possession or under
  its control relating to title to or description of the Property, including without
  limitation copies of all abstracts, certificates of title, title insurance policies,
  commitments for title insurance, title reports, memorandum or opinions of counsel,
  prior deeds, contracts, maps, surveys and documents filed with any local, state
  or federal governmental agency. Lessee shall promptly reimburse Lessor for the
  costs of such copies. Upon execution of this Agreement, Lessor shall provide
  to Lessee any and all information in its possession or under its control regarding
  any existing or past industrial, milling, manufacturing, waste storage, exploration,
  development, mining, processing or beneficiating use of the Property. Pursuant
  to this Section 4.1, Lessor shall only be obligated to provide to Lessee information
  that is in its possession or under its control and Lessor shall not be obligated
  to obtain or provide any other information or documents. 

                4.2
  Representations. Lessor represents to Lessee that to
  the best of Lessor's knowledge and belief, as of the Effective Date and as of
  the date of execution of this Agreement that: 

                (a)
  Subject to the paramount title of the United States, Lessor is the sole legal
  and equitable owner of a one hundred percent (100%) undivided ownership interest
  in those unpatented lode mining claims described as Property herein, without
  limitation or restriction whatsoever; 

                (b)
  The Property is free and clear of all leases, liens, encumbrances, adverse claims,
  burdens on production and royalty interests; 

                (c)
  Any and all taxes and assessments that have been levied or assessed against
  or upon the Property that are due and owing have been paid; 





                (d)
  Lessor (and the individual who is executing this Agreement on Lessor’s
  behalf) has the full right, power and authority to execute and enter into this
  Agreement and such execution and performance shall not violate any contract
  or other obligation of Lessor; 

                (e)
  Lessee shall have the quiet and peaceful possession and enjoyment of the Property,
  and, upon request by Lessee, Lessor shall defend title to the Property, and
  Lessee's quiet and peaceful possession and enjoyment thereof against any and
  all persons or entities who may claim any right, title or interest in or to
  the Property or any portion thereof; 

                (f)
  There is and has been no violation of any applicable federal, state or local
  law or regulation, including, without limitation, those concerning zoning, land
  use or environmental protection, with respect to the Property or activities
  relating thereto; 

                (g)
  No actions, claims or proceedings have been brought, asserted or threatened
  concerning the ownership or right to possession of the Property or any portion
  thereof or otherwise concerning the Property or activities relating thereto;
  and 

                (h)
  All unpatented mining claims included in the Property have been properly staked
  according to industry standards and maintained and are validly existing in accordance
  with applicable law. 

                4.3
  Indemnity. In the event that any of Lessor's representations
  set forth in Section 4.2 is less than represented, Lessor shall indemnify and
  hold Lessee harmless from and against any and all damage, liability, obligation,
  claim, demand, judgment, action, cost, loss and expense, including, without
  limitation, reasonable attorneys' fees arising directly or indirectly as a result
  of said misrepresentation. 

                4.4
  Title Curative Measures.

                               A.
  Title Defects. If title to any part of the Property
  is defective or less than as represented in Section 4.2, Lessee shall have the
  right, but not the obligation, to undertake to cure any such defects or to defend
  or to initiate litigation to perfect, defend or cure title to the Property,
  but only after Lessor has been offered the opportunity to take any necessary
  curative measures. 

                               B.
  Crediting of Costs. Lessee shall have the right to credit
  against any and all payments to Lessor under this Agreement ("Payments"), including
  without limitation Advance Royalties, Production Royalty and all costs and expenses
  incurred by Lessee at Lessor's request in connection with any action to cure,
  defend or perfect title pursuant to Section 4.4. A. Such costs and expenses
  may include, without limitation, those relating to title research, court costs,
  surveying and attorneys' fees. 

                               C.
  Redemption. Lessee, at its option, shall have the right
  to pay off, discharge or redeem, in whole or in part, any or all mortgages,
  liens, encumbrances or unpaid taxes on, against or affecting the Property. If
  Lessee pays any such mortgage, lien, encumbrance or unpaid taxes created or
  caused by Lessor, Lessee shall be subrogated to the rights of the 








 holder thereof and shall have the right to retain and repay
  itself from any or all Payments to Lessor hereunder. 

                               D.
  Liability. Lessee at any time may withdraw from or discontinue
  any action or activity undertaken or initiated by it to cure, defend or perfect
  title to the Property pursuant to Section 4.4. A. Lessee shall not be liable
  to Lessor in any way if Lessee is unsuccessful in, withdraws from or discontinues
  any such action or activity. 

                4.5
  Additional and After-Acquired Title. If Lessor now owns
  or subsequently acquires any further right, title or interest in or to the Property,
  Lessor shall promptly provide Lessee with written notice thereof and such right,
  title and interest shall, without payment of additional consideration, be part
  of the Property subject to all of the terms and conditions of this Agreement.


                4.6
  Lesser Title. If Lessor owns less than the entire and undivided
  estate in those lands described as the Property (including, without limitation,
  the minerals therein, thereon and thereunder), as warranted in Section 4.2(a),
  then Lessee shall have the right to reduce all Payments to Lessor, so that such
  Payments are made to Lessor only in the proportion that Lessor's actual interests
  bears to the entire undivided interest. Lessee shall be entitled to offset all
  overpayments or monies erroneously paid to Lessor against any and all subsequent
  Payments to Lessor. 

                4.7
  Third Party Claims. In the event that any person or entity
  (other than Lessor) makes a bona fide claim or asserts or appears to hold any
  right, title or interest whatsoever in or to the Property (including, without
  limitation, the minerals therein, thereon or thereunder) production therefrom
  or this Agreement, then the following shall apply: 

                               (i)
  Lessee may deposit in a special escrow account any Payments otherwise due Lessor;


                               (ii)
  the sum deposited shall remain in the special escrow account until the claim
  or controversy is resolved or until there has been a final determination by
  a court or administrative body of competent jurisdiction and all appeals have
  been exhausted or periods for appeal have expired; and 

                               (iii)
  Lessee shall have the right to deduct from any Payments to Lessor any amounts
  that Lessee is required to pay to such third parties or that Lessee reasonably
  elects to pay to such third parties in satisfaction of their claims. 

 V. LESSOR’S USE, INSPECTIONS, RECORDS AND
  CONFIDENTIALITY





                5.1
  Lessor’s Use and Inspections.

                (a)
  During the term of this Agreement Lessor shall have the right of
  entry and use of the Property for purposes that do not interfere with the current
  and anticipated activities of Lessee. Lessor acknowledges and agrees that Lessee’s
  use of the Property shall prevail in the event of any conflict between the use
  or proposed use of the Property by Lessee and Lessor. Lessor agrees to assume
  all liability for, and to indemnify, protect and hold harmless Lessee from and
  against any and all damage, loss, liability, obligation, claim, demand, cost
  or expense (including attorneys' fees) which it incurs or to which it becomes
  subject as a result of or arising out of any such entry use or the presence
  or actions of Lessor (or its agents or invitees) upon the Property, including,
  without limitation, those relating to death, personal injury or property damage.


                (b)
  Subject to compliance with applicable federal, state and local health and
  safety laws and regulations, and requirements of Lessee's health and safety
  program, Lessor shall have the right, upon not less than forty-eight (48) hours
  prior written notice to Lessee, at a mutually convenient time and during normal
  business hours, and at the sole risk of Lessor, to inspect the facilities, operations
  and mine workings of Lessee upon the Property. Lessee shall have the right to
  accompany Lessor upon any such inspection. Lessor agrees to assume all liability
  for, and to indemnify, protect and hold harmless Lessee from and against any
  and all damage, loss, liability, obligation, claim, demand, cost or expense
  (including attorneys' fees) which it incurs or to which it becomes subject as
  a result of or arising out of any such inspection or the presence or actions
  of Lessor (or its agents or invitees) upon the Property, including, without
  limitation, those relating to death, personal injury or property damage. 

                5.2
  Books and Records. Lessee shall keep accurate records
  of all minerals extracted and sold from the Property by Lessee, and of all calculations
  relative to Production Royalty payments hereunder for not less than two (2)
  calendar years. Such records may be inspected by Lessor or duly authorized representatives
  of Lessor once each calendar year at a mutually convenient time, during normal
  business hours, upon providing to Lessee not less than five (5) days prior written
  notice. Under no circumstances shall Lessee be obligated to provide access to
  Lessor to any confidential, interpretive or proprietary data, information or
  techniques. The indemnification and hold harmless provisions set forth in the
  last sentence of each of Section 5.1 and Section 5.4 shall also apply to any
  and all inspections of records pursuant to this Section 5.2. 

                5.3
  Confidentiality. Lessor agrees that, during the term
  of this Agreement, Lessor shall treat all information related to or acquired
  under this Agreement, including, without limitation, any interpretive, proprietary
  or financial information, as confidential and shall not give, disclose or make
  available any such information to any third party or to the public without the
  prior written consent of Lessee, except if such disclosure is required by law
  or legal process, in which case Lessor shall make its best efforts to notify
  Lessee so that it may pursue a protective order. Lessor shall not make, disclose
  or issue any press 








 release, statement or other disclosure, of any type whatsoever,
  pertaining to the Property, this Agreement or Lessee's operations hereunder,
  without the express prior written consent of Lessee as to both the form and
  content thereof, such consent not to be unreasonably withheld. 

                5.4
  Provision of Information. No later than thirty (30)
  days after termination, expiration or surrender of this Agreement, Lessee shall
  provide to Lessor copies of all information and data in its possession or under
  its control generated by and pertaining directly to Lessee's operations upon
  the Property pursuant to this Agreement, provided however, that Lessee shall
  be under no obligation whatsoever to provide Lessor with any proprietary, interpretive
  or financial information whatsoever. Lessee makes no representations or warranties
  whatsoever as to the truth, accuracy or completeness of any information that
  may be provided to Lessor pursuant to this Agreement, provided such information
  is given in good faith. Lessor shall rely upon such information at its sole
  risk and shall indemnify, protect and hold harmless Lessee from and against
  any and all damage, loss, liability, obligation, claim, demand, cost or expense
  (including attorneys' fees) which it incurs or to which it becomes subject as
  a result of or arising out of any reliance upon such information by Lessor or
  by any person or entity obtaining such information directly or indirectly by
  or through Lessor. 

 VI. TERMINATION 

                6.1
  By Lessor. At the election of Lessor, the failure of Lessee
  to perform any material obligation according to the terms or provisions of this
  Agreement, which substantially affect the rights of the Lessor under this Agreement,
  shall constitute an event of default. Upon an event of default, Lessor shall
  give to Lessee written notice of default, specifying in reasonable detail the
  particular default or defaults relied on by Lessor. Lessee shall have thirty
  (30) days after receipt of Lessor's notice in which to contest, cure, or commence
  to cure (and diligently thereafter proceed to cure) the alleged default or defaults.
  If Lessee contests that default occurred, it shall so advise Lessor in writing
  within thirty (30) days after receipt of Lessor's notice. If, within fifteen
  (15) days after Lessor's receipt of Lessee's notice the Parties have not resolved
  the dispute by mutual agreement, the issue of default may be submitted to a
  court of competent jurisdiction, and Lessee shall not be deemed to be in default
  until the matter shall have been determined finally by the court and all appeals
  have been waived or exhausted and all periods for appeal have expired. If the
  judicial process results in a final finding of default, Lessee shall have thirty
  (30) days thereafter in which to cure or commence to cure (and diligently thereafter
  proceed to cure) the default. Upon Lessee's failure to cure or commence to cure
  the default within the time periods allowed above, Lessor may declare, by written
  notice to Lessee, a termination of this Agreement. Lessor's sole remedy shall
  be the recovery of actual compensatory damages, including attorney’s fees.


                6.2
  By Lessee.  Lessee shall have the right, at any time and from
  time to time, to surrender and terminate this Agreement by providing to Lessor
  written notice of such surrender. The termination shall take effect upon the
  date notice is given. Upon such termination, Lessee's right, title, interest
  and obligations with respect to the Property shall 








 terminate, except as provided in this Agreement to the contrary.
  All Payments which have accrued as of the date of termination shall be payable
  to Lessor by Lessee. Partial termination of select claims is not allowed without
  Lessors written consent. 

                6.3
  Removal of Property. Lessee shall have the right, but not
  the obligation, for a period of one (1) year after expiration, surrender, or
  termination of this Agreement, to enter upon and remove from the Property any
  or all machinery, equipment, fixtures, buildings, improvements, concentrates,
  ore, tailings, residue and personal property of every kind and description erected
  or placed upon or extracted from the Property by Lessee. Any such property not
  removed by Lessee from the Property within the period allowed for removal shall
  become the exclusive property of Lessor and Lessee shall have no further right,
  title, obligation, or interest therein. 

 VII. FORCE MAJEURE

                 7.1
  Force Majeure. The time for the exercise of rights
  or the performance of obligations hereunder, including, without limitation,
  the removal of property pursuant to Section 6.3, and the term of the Lease included
  herein, shall be extended for a period equal to the period or periods of Force
  Majeure. Lessee shall use reasonable diligence to remove Force Majeure. The
  term "Force Majeure" refers to any cause of any kind or nature whatsoever beyond
  Lessee's reasonable control that prevents, inhibits or delays Lessee's performance
  hereunder, including without limitation the following: 

 (a) law, ordinance, governmental regulations, restraint or
  court orders; 

 (b) action or inaction of civil or military authorities; 

 (c) inability to obtain or delay in obtaining any license,
  permit or other authorization that may be necessary to any of Lessee's activities
  hereunder; 

 (d) unusually severe weather; 

 (e) mining casualty, unavoidable mill shutdown, damage to
  or destruction of mine, plant or facility; 

 (f) fire, explosion, flood, storm or other acts of God; 

 (g) insurrection, war, riot, labor disputes; 

 (h) inability after diligent effort to obtain workers, fuel
  or materials; or 

 (i) delay in transportation. 

 VIII. ASSIGNMENT





                8.1
  Assignment. Upon providing written notice to the other
  Party in accordance with Section 9.2, either Party may assign its respective
  rights and obligations under this Agreement. No such assignment shall in any
  way enlarge or diminish the rights or obligations of Lessee or Lessor hereunder
  and the assigning Party shall remain liable for performance of this Agreement
  in the event that the assignee defaults in its performance hereunder following
  a written demand and reasonable time to cure such default. A fully-executed
  Memorandum of Assignment in recordable form shall be provided to the non-assigning
  Party by the assigning Party. 

 IX. PAYMENTS AND NOTICES

                9.1
  Payments. All payments provided for in this Agreement
  may be made by mailing or delivering company checks of the Lessee to Lessor
  at the address set forth in Section 9.2. Notwithstanding any provision of this
  Agreement to the contrary or any assignment pursuant to Section 8.1, under no
  circumstances shall Lessee be required to make any payment hereunder, except
  by mailing or delivering one check to a single address. Upon making such payment,
  Lessee shall be relieved of any and all responsibility for the division or distribution
  of the amount paid. Payments shall be deemed made upon delivery (in cases of
  personal delivery of checks) or upon mailing (in cases of mailing of checks
  by U.S. mail). 

                9.2
  Notices. Any notice or other instrument required or
  desired to be given under this Agreement shall be effective only if in writing
  and served personally or by certified or registered mail (postage prepaid, return
  receipt requested) on the Parties at the following addresses: 

	 Lessor:  	 Nevada North Resources (U.S.A.) Inc.  
	  	 501 South 1ST Avenue  
	  	 Suite N  
	  	 Arcadia, California 91006-3888  
	  	 Attn: Larie Richardson  
	  	 Telephone: 626-821-9630  
	  	 Facsimile: 626-821-9635  
	  	 
	  	 
	 Lessee:  	 Miranda U.S.A., Inc.  
	  	 1140 Homer Street  
	  	 Suite 306  
	  	 Vancouver, BC V6B 2X6  
	  	 Attn: Dennis Higgs  
	  	 Telephone: 604-689-1659  
	  	 Facsimile: 604-689-1722  
	  	 
	 With copy to:  	 Miranda U.S.A., Inc.  
	  	 5900 Philoree Lane  
	  	 Reno, Nevada 89511  







 

	 	Attn: Ken Cunningham 

      Telephone: 775-849-2347 

      Facsimile: 775-849-2336 


               Notices
  shall be deemed given upon delivery (in cases of personal service) or mailing
  (in cases of notice by U.S. mail) as provided in the preceding sentence. Upon
  giving notice to Lessor at the address shown above, Lessee shall be deemed to
  have given notice to all of the individuals and/or entities comprising Lessor,
  and Lessee shall be relieved of any and all responsibility for further distribution
  of the notice. Either Party may change its address by giving written notice
  of the change to the other Party in accordance with the provisions of this Section
  9.2. Any notice from Lessor hereunder shall be effective only if executed by
  each of the individuals and/or entities comprising Lessor. 

 X. MISCELLANEOUS

                10.1
  Severability. Whenever possible, each provision of
  this Agreement shall be interpreted in such a manner as to be effective and
  valid under applicable law, and if any provision of this Agreement shall be
  or becomes prohibited or invalid in whole or in part for any reason whatsoever,
  that provision shall be ineffective only to the extent of such prohibition or
  invalidity without invalidating the remaining portion of that provision or the
  remaining provisions of this Agreement. 

                10.2
  Binding Effect. Construction and Enforcement. Subject
  to the provisions of Section 8.1, all covenants, conditions and terms of this
  Agreement shall be deemed to run with the land and shall be binding upon and
  inure to the benefit of the Parties and their respective heirs, successors,
  personal representatives and assigns. The headings in this Agreement are for
  convenience only; they form no part of this Agreement and shall not affect its
  interpretation. 

                10.3
  Sole Agreement. This Agreement sets forth the complete,
  entire and final agreement between the Parties with respect to the subject matter
  hereof and supersedes all previous agreements or understandings, whether written
  or otherwise. No modification or alteration of this Agreement shall be effective
  unless in writing and executed by the Parties. No waiver of any right hereunder
  shall be effective unless in writing and executed by the Party to be bound thereby.


                10.4
  Legal Advice. Lessor expressly acknowledges that it has
  sought (or has had the opportunity to seek) the advise of Lessor's own legal
  counsel to assist Lessor in negotiating and reviewing this Agreement. Lessor
  expressly acknowledges that Lessor is not relying on any oral or written statement
  (not expressly set forth in this Agreement) made by Lessee, its employees or
  agents regarding any matters pertaining to this Agreement. 

                10.5
  Further Assurances. Upon request by Lessee, and without
  cost to Lessee, Lessor agrees to execute and/or furnish Lessee with such additional
  formal assurances or 








 other written documents, in proper and recordable form, as
  may be reasonably necessary to carry out the intent, purposes and terms of this
  Agreement. 

                10.6
  Counterparts. This Agreement may be executed in counterparts,
  all of which taken together shall constitute a single and complete contract.


                10.7
  Rights Not Suspended. No dispute between the Parties shall
  result in a suspension of this Agreement or the rights of the Parties hereunder.


                10.8
  Governing Law. This Agreement and any disputes arising
  hereunder shall be governed by and construed in accordance with the laws of
  the State of Nevada. 

                10.9
  Joint and Several Liability. In the event that either Party
  is now or in the future comprised of more than one person or entity, then all
  the liabilities, obligations, duties, covenants, representations and warranties
  of such Party shall be the joint and several undertakings of each of such persons
  and entities. 

                10.10
  Set Off. Lessee shall have the right to set off and deduct
  from any or all Payments to Lessor hereunder, any and all amounts owed to Lessee
  by Lessor.



	 NEVADA NORTH RESOURCES (U.S.A.), INC.  

      
 By:  ________________________________________________ 
 

      Title:  _______________________________________________ 
 
 Tax
      ID No.  ___________________________________________ 
 
 	 MIRANDA U.S.A., Inc.  
 
 By:  ________________________________________________
      
 
 Title:  _______________________________________________ 

    







 

	 STATE OF  	 )  	  
	  	 )  	 §  
	 COUNTY OF  	 )  	  




              This
  instrument was acknowledged before me on the ____________ day of ____________
  , 2004, by ________________as ____________________of Nevada North Resources
  (U.S.A.), Inc. 

  

___________________________________________ 

  Notary Public 

 (Seal) 



	 STATE OF  	 )  	  
	  	 )  	 §  
	 COUNTY OF  	 )  	  






              This
  instrument was acknowledged before me on the ____________ day of ____________
  , 2004, by ________________as ____________________of Miranda U.S.A., Inc.

  

___________________________________________ 

  Notary Public 


(Seal) 





      EXHIBIT A 

  TO THAT MINING LEASE 

  BY AND BETWEEN 

  NEVADA NORTH RESOURCES (U.S.A.), INC. 

  AND 

  MIRANDA U.S.A. Inc. 


THE PROPERTY 

              The
  following unpatented lode mining claims. 

	 RED HILL PROPERTY CLAIM LIST 
    
	 Claim Name  	 BLM-NMC  	 Loc. Date  	 County  	 Book  	 Page  
	 RH # 17	 831379  	 19-Jun-02  	 Eureka  	 350  	 1  
	RH # 18	 831380  	 19-Jun-02  	 Eureka  	 350  	 2  
	RH # 19	 831381  	 19-Jun-02  	 Eureka  	 350  	 3  
	RH # 20	 831382  	 19-Jun-02  	 Eureka  	 350  	 4  
	RH # 21	 831383  	 19-Jun-02  	 Eureka  	 350  	 5  
	RH # 22	 831384  	 19-Jun-02  	 Eureka  	 350  	 6  
	RH # 23	 831385  	 19-Jun-02  	 Eureka  	 350  	 7  
	RH # 24	 831386  	 19-Jun-02  	 Eureka  	 350  	 8  
	RH # 25	 831387  	 19-Jun-02  	 Eureka  	 350  	 9  
	RH # 26	 831388  	 19-Jun-02  	 Eureka  	 350  	 10  
	RH # 27	 831389  	 19-Jun-02  	 Eureka  	 350  	 11  
	RH # 28	 831390  	 19-Jun-02  	 Eureka  	 350  	 12  
	RH # 29	 831391  	 19-Jun-02  	 Eureka  	 350  	 13  
	RH # 30	 831392  	 19-Jun-02  	 Eureka  	 350  	 14  
	RH # 31	 831393  	 19-Jun-02  	 Eureka  	 350  	 15  
	RH # 32	 831394  	 19-Jun-02  	 Eureka  	 350  	 16  
	RH # 33	 831395  	 19-Jun-02  	 Eureka  	 350  	 17  
	RH # 34	 831396  	 19-Jun-02  	 Eureka  	 350  	 18  
	RH # 35	 831397  	 19-Jun-02  	 Eureka  	 350  	 19  
	RH # 36	 831398  	 19-Jun-02  	 Eureka  	 350  	 20  
	RH # 37	 831399  	 19-Jun-02  	 Eureka  	 350  	 21  
	RH # 38	 831400  	 19-Jun-02  	 Eureka  	 350  	 22  
	RH # 39	 831401  	 19-Jun-02  	 Eureka  	 350  	 23  
	RH # 40	 831402  	 19-Jun-02  	 Eureka  	 350  	 25  
	RH # 41	 831403  	 19-Jun-02  	 Eureka  	 350  	 26  
	RH # 42	 831404  	 19-Jun-02  	 Eureka  	 350  	 27  
	RH # 43	 831405  	 19-Jun-02  	 Eureka  	 350  	 28  











	Claim Name  	 BLM-NMC  	 Loc. Date  	 County  	 Book  	 Page  
	 RH # 44 	 831406  	 19-Jun-02  	 Eureka  	  350  	  29  
	 RH # 45 	 831407  	 19-Jun-02  	 Eureka  	  350  	  30  
	 RH # 46 	 831408  	 19-Jun-02  	 Eureka  	  350  	  31  
	 RH # 71	 831409  	 19-Jun-02  	 Eureka  	  350  	  32  
	 RH # 72 	 831410  	 19-Jun-02  	 Eureka  	  350  	  33  
	 RH # 73 	 831411  	 19-Jun-02  	 Eureka  	  350  	  34  
	 RH # 74 	 831412  	 19-Jun-02  	 Eureka  	  350  	  35  
	 RH # 75 	 831413  	 19-Jun-02  	 Eureka  	  350  	  36  
	 RH # 76 	 831414  	 19-Jun-02  	 Eureka  	  350  	  37  
	 RH # 77 	 831415  	 19-Jun-02  	 Eureka  	  350  	  38  
	 RH # 78 	 831416  	 19-Jun-02  	 Eureka  	  350  	  39  
	 RH # 79 	 831417  	 19-Jun-02  	 Eureka  	  350  	  40  
	 RH # 80 	 831418  	 19-Jun-02  	 Eureka  	  350  	  41  
	 RH # 102 	 831419  	 19-Jun-02  	 Eureka  	  350  	  42  
	 RH # 104 	 831420  	 19-Jun-02  	 Eureka  	  350  	  43  
	 RH # 106	 831421  	 19-Jun-02  	 Eureka  	  350  	  44  
	 RH # 108 	 831422  	 19-Jun-02  	 Eureka  	  350  	  45  
	 RH # 110 	 831423  	 19-Jun-02  	 Eureka  	  350  	  46  
	 RH # 112 	 831424  	 19-Jun-02  	 Eureka  	  350  	  47  
	 RH # 114 	 831425  	 19-Jun-02  	 Eureka  	  350  	  48  
	 RH # 116 	 831426  	 19-Jun-02  	 Eureka  	  350  	  49  
	 RH # 118 	 831427  	 19-Jun-02  	 Eureka  	  350  	  50  
	 RH # 120 	 831428  	 19-Jun-02  	 Eureka  	  350  	  51  
	 RH # 122 	 831429  	 19-Jun-02  	 Eureka  	  350  	  52  
	 RH # 124 	 831430  	 19-Jun-02  	 Eureka  	  350  	  53  
	  	 	 	 	 	 
	RP # 27	 831504  	 19-Jun-02  	 Eureka  	  350  	  54  
	RP # 36	 831505  	 19-Jun-02  	 Eureka  	  350  	  55  
	RP # 37	 831506  	 19-Jun-02  	 Eureka  	  350  	  56  
	RP # 38	 831507  	 19-Jun-02  	 Eureka  	  350  	  57  
	RP # 39	 831508  	 19-Jun-02  	 Eureka  	  350  	  58  
	RP # 40	 831509  	 19-Jun-02  	 Eureka  	  350  	  59  
	RP # 41	 831510  	 19-Jun-02  	 Eureka  	  350  	  60  
	RP # 42	 831511  	 19-Jun-02  	 Eureka  	  350  	  61  
	RP # 51	 831512  	 19-Jun-02  	 Eureka  	  350  	  62  
	RP # 52	 831513  	 19-Jun-02  	 Eureka  	  350  	  63  
	RP # 53	 831514  	 19-Jun-02  	 Eureka  	  350  	  64  
	RP # 54	 831515  	 19-Jun-02  	 Eureka  	  350  	  65  
	RP # 69	 831516  	 19-Jun-02  	 Eureka  	  350  	  66  
	RP # 70	 831517  	 19-Jun-02  	 Eureka  	  350  	  67  
	RP # 71	 831518  	 19-Jun-02  	 Eureka  	  350  	  68  







 

	 Claim Name  	 BLM-NMC  	 Loc. Date  	 County  	 Book  	 Page  
	 RP # 86  	 831519  	 19-Jun-02  	 Eureka  	  350  	 69  
	 RP # 87  	 831520  	 19-Jun-02  	 Eureka  	  350  	 70  
	 RP # 88  	 831521  	 19-Jun-02  	 Eureka  	  350  	 71  
	 RP # 216	 831522  	 20-Jun-02  	 Eureka  	 350  	 72  
	RP # 224	 831523  	 20-Jun-02  	 Eureka  	 350  	 73  
	RP # 226	 831524  	 20-Jun-02  	 Eureka  	 350  	 74  
	RP # 240	 831525  	 20-Jun-02  	 Eureka  	 350  	 75  
	RP # 242	 831526  	 20-Jun-02  	 Eureka  	 350  	 76  
	RP # 244	 831527  	 20-Jun-02  	 Eureka  	 350  	 77  
	RP # 248	 831528  	 20-Jun-02  	 Eureka  	 350  	 78  
	RP # 250	 831529  	 20-Jun-02  	 Eureka  	 350  	 79  
	 RP # 43  	 847956  	 12-Mar-03  	 Eureka  	 361  	 276  








      EXHIBIT B TO

  THAT MINING LEASE 

  BY AND BETWEEN 

  NEVADA NORTH RESOURCES (U.S.A.), INC. 

  AND 

  MIRANDA U.S.A., Inc. 


PRODUCTION ROYALTY 

                1.               
  Production Royalty

                                  The
  Production Royalty provided for in Section 2.2 of the Agreement and payable
  to Lessor shall be based upon: (a) the value of doré produced from ores
  and minerals mined from the Property, determined at the Property or at such
  other facility producing such doré, sold or deemed sold, determined by
  reference to published prices for refined gold and silver and other Precious
  Metals (as hereinafter defined), and (b) the value of all other Products produced
  from ores and minerals mined from the Property, determined at the Property or
  at such other facility producing such Product, sold or deemed sold, determined
  by reference to published prices for such “Other Products,” all
  as hereinafter provided. It is acknowledged that it will be necessary to process,
  treat or upgrade Precious Metals or Other Products at a location or locations
  not on the Property before they are sold or deemed to be sold; and that to determine
  the value of such Precious Metals or Other Products of the Property or other
  facility producing doré or Other Products, all costs incurred or deemed
  to be incurred by Miranda in paying the Production Royalty with respect to the
  transporting, processing, treatment or upgrading of the Precious Metals or Other
  Products after they have been processed shall be deducted from the proceeds
  received or deemed to be received by Miranda as hereinafter set forth. 

                 Miranda
  shall pay to Lessor a Production Royalty as set forth in Section 2.2 of the
  Agreement as a percentage of the Net Value (as hereinafter defined) of Precious
  Metals or Other Products mined, removed and sold (or deemed sold as hereinafter
  described) from the Property. For purposes of this Agreement, the term “Precious
  Metals” shall mean gold, silver, platinum and palladium and “Other
  Products” shall mean all other metallic and non-metallic minerals of every
  kind except: (a) Precious Metals and (b) oil, gas, casinghead gas and associated
  liquid and gaseous hydrocarbon substances. The Production Royalty shall run
  with the land described as the Property. The Production Royalty shall specifically
  apply to unpatented lode mining claims that are a part of the Property and to
  any relocation or amendment thereof, to any patent issued covering such land
  and to any other right, title or interest acquired by, for, or on behalf of
  Miranda with respect to such land. The obligation to pay the Production Royalty
  shall accrue upon and not before: (a) the outturn of refined Precious Metals
  meeting the requirements of the specified published price and a credit for which
  is made to Miranda's account (or to a third-party account for the benefit of
  Miranda) or (b) the sale of unrefined metals, doré, concentrates, ores
  or Other Products, as hereinafter provided, whichever is sooner. 




                2.               
  Net Value Definition

                                  As
  used herein, “Net Value” means the Gross Value of Precious Metals
  or Other Products, less all costs, charges and expenses paid or incurred by
  Miranda after production of doré, or, in the case of Other Products,
  after production of concentrates, whether at the Property or elsewhere with
  respect to the transportation, processing, treatment or upgrading of the doré
  or concentrates such costs, charges and expenses to include, without limitation,
  the following:

                                   (a)
  charges for treatment in the smelting and refining processes (including handling,
  processing, interest and provisional settlement fees, sampling, assaying and
  representation costs, penalties and other processor deductions);

                                   (b)
  actual costs of transportation (including freight, insurance, security, transaction
  taxes, handling, port, demurrage, delay, and forwarding expenses incurred by
  reason of or in the course of such transportation) of doré or concentrates
  from the Property or other facility producing doré or concentrates to
  the place of additional treatment and to the place of sale; 

                                   (c)
  actual sales and brokerage costs of Precious Metals or Other Products for which
  the Production Royalty is based on proceeds received by the Lessee as hereinafter
  provided in Section 3(d) below, and an allowance for reasonable sales and brokerage
  costs for refined Precious Metals subject to the Production Royalty hereinafter
  provided in Sections 3(a), (b) and (c) below; 

                                   (d)
  sales, use, severance, net proceeds of mine, ad valorem taxes applicable under
  state, federal or local law and any other tax or governmental levy or fee relating
  to production of Precious Metals or Other Products from the Property or the
  value thereof (other than taxes based upon income); and 

                3.               
  Gross Value Definition

                                  “Gross
  Value” shall have the following meaning: 

                                   (a)
                 If
  Miranda causes refined gold which meets or exceeds generally accepted commercial
  standards for the sale of refined gold (it being understood that the specifications
  for refined gold published by the London Metal Exchange presently meet such
  standards) to be produced from ores and minerals mined from the Property and,
  if Section 3(d) shall not be applicable, for purposes of determining the Production
  Royalty, the refined gold shall be deemed to have been sold at the Monthly Average
  Gold Price for the month in which it was refined, and the Gross Value shall
  be determined by multiplying Gold Production during the calendar month by the
  Monthly Average Gold Price. As used in this Agreement, “Gold Production”
  means the quantity of refined gold in troy ounces outturned to Miranda’s
  pool account (or to a third-party account for the benefit of Miranda) by an
  independent third-party refinery from ores and minerals mined from the Property
  on either a provisional or final settlement basis each calendar month. As used
  herein, “Monthly Average Gold Price” means the average London Bullion
  Market Association P.M. Gold Fix for a troy ounce of refined gold of a quality
  that is equal to or less than the quality of refined gold produced from the
  ores and minerals and meeting the standards applicable to the refined gold for
  which the Gross Value is to be 




 determined hereunder, calculated by dividing the sum of all
  such prices reported for the month in question by the number of days for which
  such prices were reported. 

                 In
  the event that the London Bullion Market Association P.M. Gold Fix ceases or
  quotes prices for refined gold of a quality that is greater than the quality
  of refined gold for which the Gross Value is being determined hereunder, all
  such references shall be replaced with references to prices of gold of a comparable
  quality for immediate delivery in the most nearly comparable established market
  selected by Miranda as such prices are published in “Metals Week”
  or a similar publication. 

                                   (b)
                 If
  Miranda causes refined silver which meets or exceeds generally accepted commercial
  standards for the sale of refined silver (it being understood that the specifications
  for refined silver published by Handy & Harman presently meet such standards)
  to be produced from ores and minerals mined from the Property and, if Section
  3(d) shall not be applicable, for purposes of determining the Production Royalty,
  the refined silver shall be deemed to have been sold at the Monthly Average
  Silver Price for the month in which it was refined, and the Gross Value shall
  be determined by multiplying Silver Production during the calendar month by
  the Monthly Average Silver Price. As used herein, “Silver Production”
  means the quantity of refined silver in troy ounces outturned to Miranda’s
  pool account (or to a third-party account for the benefit of Miranda) by an
  independent third-party refinery from ores and minerals mined from the Property
  on either a provisional or final settlement basis each calendar month. As used
  herein, “Monthly Average Silver Price” means the average New York
  Silver Price as published daily by Handy & Harman for a troy ounce of refined
  silver of a quality that is equal to or less than the quality of refined silver
  produced from the ores and minerals meeting the standards applicable to the
  refined silver for which the Gross Value is to be determined hereunder, calculated
  by dividing the sum of all such prices reported for the calendar month in question
  by the number of days for which such prices were reported. 

                 In
  the event that the Handy & Harman quotation ceases or quotes prices for
  refined silver of a quality that is greater than the quality of refined silver
  for which the Gross Value is being determined hereunder, all such references
  shall be replaced with references to prices of silver of a comparable quality
  for immediate delivery in the most nearly comparable established market selected
  by Miranda as published in “Metals Week” or a similar publication.
  

                                    (c)
                 If
  Miranda causes refined or processed Precious Metals, other than refined gold
  and refined silver, which meets or exceeds commercial standards for the sale
  of such Precious Metals, or refined or processed Other Products, to be produced
  from ores and minerals mined from the Property, and if Section 3(d) shall not
  be applicable, for purposes of determining the Gross Value of such Precious
  Metals (other than refined gold and refined silver) or refined or processed
  Other Products hereunder the same shall be deemed to have been sold at the Monthly
  Average Price for the same for the month in which it was refined, and the Gross
  Value shall be determined by multiplying Production of the same during the calendar
  month by the Monthly Average Price for the same. As used herein, Production
  means the quantity of such Precious Metals (other than refined gold and refined
  silver) or refined or processed Other Products in standard commercial units
  outturned to Miranda’s pool account (or to a third-party account for the
  benefit of Miranda by an independent third-party refinery from ores and minerals
  mined from the 




 Property on either a provisional or final settlement basis
  each calendar month. As used herein, “Monthly Average Metal Price”
  means the price for each such standard commercial unit of such Precious Metals
  (other than refined gold and refined silver) or refined or processed Other Products
  for immediate delivery in an established market selected by Miranda as such
  price is published in “Metals Week” or a similar publication. 

                                   (d)
                 In
  the event Miranda sells raw ores of Precious Metals or Other Products or concentrates
  or doré produced from such ores and minerals mined from the Property,
  then the Gross Value shall be calculated as set forth in Section 3(a), (b) and
  (c), except that Gold Production, Silver Production or other Production shall,
  in each case, be equal to the amount of gold, silver, other Precious Metals
  and Other Products contained in such raw ores, concentrates or doré sold
  in the specified month multiplied by (i) the recovery rate for such gold, silver,
  other Precious Metals and Other Products contractually determined between Miranda
  and a third party processor or (ii) if there is not a specifically contracted
  recovery rate, then by an assumed recovery rate equal to the average actual
  recovery rate experienced by Miranda from the beneficiation of such ores and
  minerals for such gold, silver, other Precious Metals and Other Products for
  the latest calendar quarter ended prior to such month. In the event that such
  ores and minerals have not been so beneficiated by Miranda during any such calendar
  quarter, the recovery rate shall be the actual recovery rate experienced by
  the purchaser of such ores and minerals determined in good faith by Miranda.
  

                                   (e)
                 Where
  outturn of Precious Metals or Other Products is made by an independent third-party
  refinery on a provisional basis, the Gross Value shall be based upon the amount
  of such provisional settlement, but shall be adjusted in subsequent statements
  to account for the amount of such Precious Metals or Other Products established
  by final settlement by such refinery. 

                4.               
  Forward Sales 

                                    Lessor
  acknowledges that Miranda shall have the right to market and sell or refrain
  from selling ores and minerals mined from the Property and Precious Metals and
  Other Products produced from ores and minerals mined from the Property in any
  manner it may elect. Accordingly, Gross Value shall be determined as provided
  in Section 3 above irrespective of any actual selling arrangements entered into
  by Miranda, specifically including, but not limited to, forward sales, futures
  trading or commodity options trading, and any other price hedging, price protection
  and speculative arrangements which may involve the possible delivery of ores
  and minerals and Precious Metals or Other Products produced from ores and minerals
  mined from the Property. 

                5.               
  Processing by Miranda

                                    Miranda
  may, but is not obligated to, beneficiate, mill, sort, concentrate, refine,
  smelt or otherwise process or upgrade the ores and minerals mined from the Property,
  Precious Metals ores and concentrates or Other Products ores and concentrates
  produced from ores and minerals mined from the Property prior to sale, transfer
  or conveyance to any purchaser, user, or consumer. Miranda shall not be liable
  for any mineral values, including, without limitation, any ores and minerals,
  Precious Metals or 




 Other Products, lost in any manner or at any time or times
  except and only to the extent any such losses resulted exclusively from the
  bad faith or gross negligence of Miranda. 

                 6.               
  Sales to Affiliated Party 

                                    Miranda
  shall be permitted to sell ores and minerals mined from the Property in the
  form of raw ore, doré, or concentrates to an Affiliate, provided that
  such sales shall be considered, solely for the purpose of computing Net Value,
  to have been sold at prices and on terms no less favorable than those which
  would be extended to a non-affiliated third party under similar circumstances.
  Nothing contained herein shall preclude or restrain Miranda in any way or at
  any time or times from selling or otherwise disposing of ores and minerals,
  Precious Metals or Other Products mined from the Property to any third party
  or any Affiliates. 

                7.               
  Measurement of Products

                                    All
  ores and minerals mined from the Property for which a Net Smelter Returns Royalty
  is payable hereunder shall be weighed or measured and sampled in accordance
  with sound mining and metallurgical practices, after which Miranda may mix or
  commingle such ores and minerals, Precious Metals or Other Products mined from
  the Property with ores or other materials from properties other than the Property.


                8.               
  Calculation of Net Value 

                                    Net
  Value shall be determined on a calendar month basis (except the first month,
  which shall be calculated based upon Gross Value and costs, charges and expenses
  incurred with respect to the month in which the Agreement date occurs, prorated
  based upon the number of days remaining in such month as of the Agreement date).
  Production Royalty shall be paid on the tenth business day following the last
  day of the calendar quarter in which the same accrued. At the time of payment
  of Production Royalty, Miranda shall deliver to Lessor a statement showing,
  in reasonable detail, the quantities and grades of the refined Precious Metals,
  doré, concentrates, Other Products or ores and minerals produced and
  sold or deemed to be sold by Miranda in the preceding quarter; the Average Monthly
  Price determined, as herein provided, for refined Precious Metals and Other
  Products on which the Production Royalty is due; costs and other deductions;
  and other pertinent information, in reasonable detail, to explain the calculation
  of Production Royalty payment with respect to each month in such quarter. Payment
  to Lessor shall be made in cash or by check, or upon 48 hours prior written
  notice from Lessor, by wire transfer to the account specified by Lessor in such
  notice. In the event a Production Royalty payment is not due for any quarter,
  Miranda shall not be required to provide Lessor with any statement hereunder.
  

                 Such
  quarterly statement shall also list the quantity and quality of any Precious
  Metals doré in inventory, if any, for more than ninety (90) days. No
  Production Royalty shall be due with respect to ores and minerals, Precious
  Metals or Other Products mined from the Property or stockpiles of the same unless
  and until the same are actually sold or deemed sold as expressly set for the
  above. 




                9.               
  Sales 

                                     All
  Production Royalty payments shall be considered final and in full satisfaction
  of all obligations of Miranda with respect thereto, unless Lessor gives Miranda
  written notice describing and setting forth a specific objection to the calculation
  thereof within ninety (90) days after receipt by Lessor of the quarterly statement
  herein provided for.

                10.              Miranda’s
  Duty to Inform 

                                      Miranda
  shall be under no obligation to provide Lessor with any ore reserve calculations
  (including, but not limited to, any information that would be required to be
  included in documents filed with the Securities and Exchange Commission or such
  other regulatory body regarding ore reserve calculations), mine plans, forecasts
  or other information relating to its operations other than as expressly set
  forth in this Agreement. 

                11.             Assignment
  of Production Royalty 

                                     Subject
  to the provisions of this Agreement Lessor may transfer, pledge, mortgage, charge
  or otherwise encumber all or any part of its right, title and interest in and
  to the Production Royalty; provided, however, that Miranda shall be under no
  obligation to make its payments hereunder to any such assignee, transferee,
  pledgee or other third party until Miranda’ s receipt of written notice
  concerning the transfer, pledge, mortgage, charge or other encumbrance and provided
  further that in no event shall Miranda be obligated to deliver payment or notices
  pursuant to this Agreement to more than one entity or location. 

                12.              No
  Duty to Mine 

                                    Miranda
  shall have the sole and exclusive right to determine the timing and the manner
  of any Mining or production from the Property and all related exploration, development
  and mining activities. Nothing in this Exhibit or the remainder of this Agreement
  shall require Miranda to explore, develop, mine or continue operations on the
  Property or to process ores and minerals from the Property. The mining of ores
  from any properties not subject to the Production Royalty to the exclusion of
  ores and minerals that are subject to the Production Royalty shall not violate
  any provision of this Exhibit or the remainder of this Agreement and there shall
  not be any express or implied covenant, duty or obligation of Miranda to undertake
  any exploration, development or mining.