Filed by Automated Filing Services Inc. (604) 609-0244 - Exhibit 10.3







EXHIBIT 10.3 



LetterAgreement


 PMI VENTURES LTD.

  Suite 1760 – 750 West Pender Street

  Vancouver, B.C. V6C 2T8

  Tel: (604)681-8069 Fax: (604)681-0269  


November 22, 2002


 BETWEEN:

	 	Goknet Mining Company Limited, of 1 Switchback
        Lane, P.O. Box MS62, Mile Seven, Achimota, Accra, Ghana 

       (“Goknet”) 




OF THE FIRST PART 

 AND:

	 	PMI Ventures Ltd., of 3492 Marine Drive, Surrey, British
        Columbia V4A 1G2 

       (“PMI”) 




OF THE SECOND PART 

      This letter agreement outlines
  the basic terms by which Goknet and PMI will enter into an option and joint
  venture agreement to further develop Goknet’s Ashanti II Project (the “Project”)
  located in Ghana, West Africa. The Project and project area are as further described
  in the appended “Technical Evaluation Report on the Asankrangwa Gold Belt
  of Ghana, West Africa” prepared by E.D. Black Consulting for Goknet and
  dated 28 October 2002. PMI shall at its sole cost complete whatever due diligence
  it deems necessary to confirm that Goknet’s various legal titles and agreements
  are substantially as represented by B.A. Yoyowah & Co. in his due diligence
  report dated 15 October 2002 (the “Due Diligence Report”), such confirmation
  to be completed by the close of business on December 21, 2002 (the “Due
  Diligence Period”). The effective date of this letter agreement will be
  the date on which PMI receives TSX Venture Exchange acceptance to the terms
  of this letter agreement and pays to Goknet the sum of CAD$90,000 (the “Effective
  Date”), which date shall not be later than December 28, 2002. The parties
  agree that immediately following the Effective Date, they will each negotiate
  in good faith to expeditiously settle and enter into a definitive agreement
  (the “Agreement”) to supercede and replace this letter agreement and
  that will encompass the terms, conditions and intent herein.

	1.1	Goknet hereby represents and warrants to PMI that: 







 

	 	(a)	it is a corporation duly incorporated
        and organized and validly existing under the laws of its incorporating
        jurisdiction and has full corporate power, authority and capacity to enter
        into this letter agreement and to carry out its obligations under this
        letter agreement;

	 	 	 
	 	(b)	it has been duly authorized to enter
        into, and to carry out its obligations under this agreement and no obligation
        of it in this Agreement conflicts with or will result in the breach of
        any term in its articles or by-laws or any other agreement or binding
        commitment;

	 	 	 
	 	(c)	it has duly executed and delivered this agreement, which
      binds it in accordance with its terms;
	 	 	 
	 	(d)	the Due Diligence report by B.A. Yoyowah
        & Co., dated 15 October 2002, and which gives an opinion on the legal
        status of the major agreements and Licenses which currently comprise the
        Project, has been provided to PMI and that Goknet has no information that
        in any substantive way detracts from the stated facts of this report.

	 	 	 
	 	(e)	it has the exclusive right to earn a
        100% interest in the Project, subject to the Underlying Agreements, and
        dependent on the success of further negotiations with other License holders
        and the success of the further applications and Governmental approvals
        required, as currently envisaged by the Project;

	 	 	 
	 	(f)	it is not aware of any default in any
        of the Underlying Agreements, and each of them may be assigned to PMI
        pursuant to the respective terms of the Underlying Agreements and Licenses
        and all payments and expenditures required to be made under the Underlying
        Agreements are current and the Underlying Agreements are to the best of
        our knowledge in full force and effect.

	 	 	 
	1.2 	PMI hereby represents and warrants to Goknet
      that:
	 	 	 
	 	(a)	it is a corporation duly incorporated
        and organized and validly existing under the laws of its incorporating
        jurisdiction and it has full corporate power, authority and capacity to
        enter into this letter agreement and to carry out its obligations under
        this letter agreement;

	 	 	 
	 	(b)	it has been duly authorized to enter
        into, and to carry out its obligations under, this letter agreement and
        no obligation of it in this Agreement conflicts with or will result in
        the breach of any term in its articles or by-laws or any other agreement
        or binding commitment;

	 	 	 
	 	(c)	it will use its best efforts to complete
        its due diligence as soon as possible and to raise the necessary funding
        to permit it to exercise the Option described herein; and

	 	 	 
	 	(d)	it has duly executed and delivered this letter agreement,
      which binds it in accordance with its terms.
	 	 	 
	1.3 	Each party’s representations
        and warranties set out above will be relied on by the other party in entering
        into this letter agreement and shall survive the execution and delivery
        of









 

	 	this letter agreement. Each
        party shall indemnify and hold harmless to the other party for any loss,
        cost, expense, claim or damage, including legal fees and disbursements,
        suffered or incurred by the other party at any time as a result of any
        material misrepresentation or material breach of warranty arising under
        this letter agreement.

      

	 	 
	2.	Goknet hereby grants to
        PMI the sole and exclusive right and option to become the owner of up
        to an 85% undivided interest in the Project (the “Option”),
        subject to TSX Venture Exchange acceptance, by:

	 	 	 
	 	(a)
 	paying to Goknet US$100,000
        on the first anniversary of the Effective Date and an additional US$100,000
        on the second anniversary of the Effective Date; and

	 	 	 
	 	(b)	issuing and delivering to Goknet:
	 	 	 
	 	(i)	500,000 shares in the capital stock of PMI within two business
      days of the Effective Date; and
	 	 	 
	 	(ii)	an additional 500,000 shares in the capital stock of PMI
      on the first anniversary of the Effective Date; and
	 	 	 
	 	(iii)	an additional 750,000 shares in the capital stock of PMI
      on the second anniversary of the Effective Date; and
	 	 	 
	 	(iv)	an additional 1,250,000 shares in the capital stock of PMI
      on the third anniversary of the Effective Date; and
	 	 	 
	 	(c)	incurring:
	 	 	 
	 	(g)	US$500,000 in direct expenditures on
        the Project on or before the first anniversary of the Effective Date;
        and

	 	 	 
	 	(ii)	a cumulative total of US$1,500,000 in
        direct expenditures on the Project on or before the second anniversary
        of the Effective Date; and

	 	 	 
	 	(iii)	a cumulative total of US$3,000,000 in
        direct expenditures on the Project on or before the third anniversary
        of the Effective Date.

	 	 
	3.	Goknet hereby acknowledges
        and agrees that the Option is an option only and nothing in this letter
        agreement shall be construed as obligating PMI to make any payments, incur
        any expenditures, do any acts or issue any shares, and any payments made,
        expenditures incurred, acts done or shares issued by PMI hereunder shall
        not be construed as obligating PMI to make any further payments, incur
        any further expenditures, do any further acts or issue any further shares.

	 	 
	4.	At any time after executing
        this letter agreement PMI may terminate the Option by giving notice in
        writing to that effect to Goknet and, in the event of such termination,
        PMI will have no further obligations hereunder except as set out in section
        5. If PMI fails to make the cash payments, and incur the expenditures
        or issue the shares in the amounts and by the dates set out in section
        2, Goknet may give notice in writing to PMI requesting that it remedy
        such failure and if within 30 days of receipt of such notice PMI has not
        remedied the default then, provided PMI has on that date incurred at least
        US$1,500,000 in direct expenditures on the Project, paid US$200,000 and
        issued and delivered at least 1,500,000 shares in its capital stock to
        Goknet (the









 

	 	“Minimum Contribution”), PMI will
        be deemed to have acquired as of that date an undivided interest in the
        Project which is equivalent to:

       PMI Direct expenditures in US$ + # of shares then
        Issued to Goknet * US$1 per share x 85% 

        US$6 million

       commencing with a 42.5% undivided interest for the Minimum
        Contribution and to a maximum of an undivided 85% interest in the Project.
        However, if on that date PMI has not incurred the Minimum Contribution,
        the Agreement and the Option will terminate and PMI will have no further
        interest in the Project, the Option, or the Agreement, and no further
        obligations to Goknet except as set out in section 5. In addition to the
        foregoing, PMI must give Goknet at least 14 days notice of PMI’s
        intent to not make any required option or other payment pursuant to any
        Underlying Agreement or on any license comprising the Project and if Goknet
        elects by notice in writing to PMI to make any such payment, PMI agrees
        to forthwith transfer its entire interest therein to Goknet and such portion
        of the Project will no longer form a part of the Agreement.

	
	 	 
	5.	In the event of termination of the Option for
      any reason other than through the exercise thereof, PMI will:
	 	 	 
	 	(a)	leave the Project in good standing,
        free and clear of all liens, charges and encumbrances arising from its
        operations hereunder, in as safe and orderly condition as it was in on
        commencement of its activities, and in a condition which is in compliance
        with all rules and orders of governmental authorities with respect to
        reclamation and rehabilitation of all disturbances resulting from PMI’s
        use and occupancy of the Project;

	 	 	 
	 	(b)	deliver to Goknet within 90 days of
        a written request therefore, a report on all work carried out by PMI on
        the Project (limited to factual matters only) together with copies of
        all sample location maps, drillhole assay logs, assay results and other
        technical data compiled by PMI with respect to the Licences; and

	 	 	 
	 	(c)
	have the right (and, if requested by
        Goknet within 30 days of the effective date of termination, the obligation)
        to remove from the Project with 12 months of the effective date of termination,
        all facilities erected, installed or bought upon the Project by or at
        the instance of PMI, failing which such facilities will then become the
        property of Goknet.

	 	 	 
	6.
   	

      During the Option period, PMI, its employees, agents
        and independent contractors, will, subject to the terms of the Underlying
        Agreements and Licenses, have the right to enter upon the land which comprises
        the Project, have exclusive and quiet possession thereof for large scale
        mining purposes, do such prospecting, exploration or other mining work
        thereon and thereunder as PMI in its sole discretion may consider advisable,
        bring and erect upon the Project such facilities as PMI may consider advisable
        and remove from the Project and sell or otherwise dispose of mineral products,
        but only for the purpose of testing.

	 	 	 
	7.
   	During the Due Diligence
        Period and after the Effective Date during the Option period, Goknet will
        not purposely do any act or thing which would adversely affect the rights
        of PMI hereunder, will make available to PMI and its representatives all
        records and files in its possession relating to the Project, the Licences
        and the Underlying Agreements and permit PMI and its representatives at
        their own expense to take abstracts therefrom and make copies thereof
        and promptly provide PMI with any and all notices and correspondence from
        government agencies in respect of the Project and the Licences or from
        the parties to the Underlying Agreements.









 

	8.	 During the Option, PMI will:
	 	 	 
	 	(a)	keep the Project free of all liens,
        charges and encumbrances arising from its operations (except liens for
        taxes not yet due, other inchoate liens or liens contested in good faith
        by PMI) and proceed with all diligence to contest or discharge any lien
        that is filed;

	 	 	 
	 	(b)	subject to section 4, maintain the Underlying
        Agreements in good standing in accordance with their terms and their respective
        Licenses;

	 	 	 
	 	(c)	permit Goknet, or its representatives
        duly authorized by it in writing, at their own risk and expense, access
        to the Project at all reasonable times and to all records and reports,
        if any, prepared by PMI in connection with the work done on or with respect
        to the Project, and furnish Goknet with copies of any Monthly, Quarterly
        or Terminal reports when and as filed with the Minerals Commission with
        respect to the work carried out by PMI on or with respect to the Project
        and to include all material results obtained; and

	 	 	 
	 	(d)	conduct all work on or with respect
        to the Project in a careful and minerlike manner and in compliance with
        all applicable laws, rules, orders and regulations.





	9. 	The parties hereto agree to execute such additional
        documents as may be reasonably requested by PMI to ensure that notice
        of those rights granted to PMI herein are properly registered with such
        Ghanaian or other local authorities as may be appropriate. Alternatively,
        or in addition to the registration cited above, the parties will use their
        collective best efforts in requesting that the Minerals Commission of
        Ghana assign the respective license or licenses which comprise the Project,
        to PMI, Goknet, and the respective underlying vendor if any, as tenants
        in common, or in such other form of title as PMI may further agree in
        writing. In either case, any registration of the Agreement, or the assignment
        of the license or licenses in the manner described herein (whichever applies),
        shall be subject to the terms of the Agreement and those conditions pursuant
        to which PMI may earn its interest herein; it being further agreed that
        PMI shall have the right to suspend and defer paying those amounts in
        section 2(a) and 2(b)(ii) to (iv) hereof until either of the foregoing
        objectives are satisfied and PMI deems itself reasonably secure as to
        its rights and title to the Project area. Within 30 days of the date PMI
        fully completes the exercise of the Option in accordance with section
        2, Goknet will elect by notice in writing to PMI whether it wishes to
        retain an undivided 15% interest in the Project or to convert such interest
        to a 4% net smelter returns royalty interest (“NSR”) and in
        that case Goknet will be responsible to pay any non-governmental NSR royalties
        pursuant to the Underlying Agreements. PMI will pay to Goknet advance
        NSR payments of US$100,000 per year commencing on the date the election
        to convert to an NSR interest is made, deductible against future NSR payments.
      

	 	 
	10. 	Notwithstanding section 9, PMI will be under no obligation
        to place the Project into commercial production and if the Project is
        placed into commercial production, PMI, as long as it is the Operator,
        will have the right at any time to curtail, suspend or terminate such
        commercial production. 

	 	 
	11. 	PMI may at any time elect by notice in writing delivered
        to Goknet to purchase 50% of Goknet’s 4% NSR interest by paying to
        Goknet according to the following schedule: 

                First 1%
                  US$1,000,000
        

                  First 2%          
        US$2,000,000 










	12. 	If Goknet elects to retain an undivided 15% interest
        in the Project pursuant to section 9 or PMI acquires less than an undivided
        85% interest in the Project under section 4, the parties hereby agree
        to form a joint venture (the “Joint Venture”) for the exploration
        of the Project and each party shall have the right to participate in the
        Joint Venture according to such party’s undivided interest and corresponding
        obligation to fund the further exploration of the Project (the “Participating
        Interest”). 

	 	 
	13.	Forthwith after the formation of the Joint Venture
        a Management Committee, consisting of one representative of each of PMI
        and Goknet shall be established. Each of the parties shall also nominate
        an alternate representative to the Management Committee who shall represent
        it in the absence of the appointed representative. The Management Committee
        shall be responsible for approving work plans and budgets and for determining
        the general policies and direction to be adopted by the Operator in the
        conduct of the operations. Decisions of the Management Committee shall
        be by majority vote. Each party’s representative shall be entitled
        to one vote for each 1% Participating Interest held by such party. 

	 	 
	14. 	PMI shall be the initial Operator and shall have
        the right to remain Operator so long as it continues to own at least a
        50% Participating Interest. The Operator shall have exclusive charge of
        all operations and shall conduct such operations in accordance with approved
        work plans and budgets. 

	 	 
	15.	Each party must within 30 days of receipt of an approved
        work plan and budget elect whether to participate in the work plan and
        fund its required share of the expenditures. Failure to elect within the
        30 day time period shall be deemed to be an election not to participate.
        A party who elects or is deemed to have elected not to participate in
        a work plan or whose respective Participating Interest has been diluted
        pursuant to the provisions of section 16 shall be entitled to participate
        in subsequent work plans and budgets only to the extent of its Participating
        Interest at any time any subsequent work plans and budgets are approved
        by the Management Committee. 

	 	 
	16. 	If any party fails to make its required contribution
        to expenditures under an approved work plan then the party failing to
        make the contribution shall have its Participating Interest reduced by
        a straight line dilution. For the purposes of this dilution calculation
        the initial actual plus deemed expenditures of each party will be proportional
        to such party’s undivided interest at the time of formation of the
        Joint Venture x US$10,000,000. For example, if PMI’s undivided interest
        is 85% , its initial deemed plus actual expenditures will equal US$8,500,000
        and Goknet’s 15% will equal US$1,500,000. At any time a Joint Venture
        party’s Participating Interest can be calculated by dividing that
        party’s expenditures and deemed expenditures by the total expenditures
        and deemed expenditures of both parties and expressing the results as
        a percentage. Should either party’s Participating Interest be reduced
        to a percentage equal to or less than 5%, then its Participating Interest
        will be deemed to have been transferred to the other party and it will
        be entitled to receive a 4% NSR subject to a 50% buyout by the other party
        pursuant to the schedule in section 11 and the party will be responsible
        to pay any non-governmental NSR royalties pursuant to the Underlying Agreements.
      

	 	 
	17. 	The parties agree that this agreement shall be interpreted and governed
      according to the laws of the Province of British Columbia. 
	 	 
	18.	No party shall be liable to the others and no party
        hereto shall be deemed in default under this agreement for any failure
        or delay to perform any of its covenants and agreements caused or arising
        out of any act not within the control of the party, excluding lack of
        funds but including, without limitation, acts of God, strikes, lockouts,
        or other industrial disputes, acts of the public 










	 	enemy, riots, fire, storm, flood, explosion, government
        restriction, failure to obtain any approvals required from regulatory
        authorities, including environmental protection agencies, unavailability
        of equipment, interference of environmentalists or native rights pressure
        groups or other causes whether of the kind enumerated above or otherwise,
        which is not reasonably within the control of the party. No right of a
        party shall be affected for failure or delay of the party to meet any
        condition of this agreement, which failure or delay is caused by one of
        the events above referred to, and all times provided for in this agreement
        shall be extended for a period commensurate with the period of the delay,
        and so far as possible the party affected will take all reasonable steps
        to remedy the delay caused by the events above referred to provided, however,
        that nothing contained in this section shall require any party to settle
        any industrial dispute or to test the constitutionality of any law enacted
        by any government. Any party relying on the provisions of this section
        shall forthwith give notice to the other party of the commencement of
        such event and of its end. 

	 	 
	19.	This agreement shall be binding upon the parties hereto and their respective
      successors and assigns. 
	 	 
	20. 	This agreement is subject to all necessary regulatory approvals which
      the parties will diligently seek to obtain. 
	 	 
	21. 	PMI agrees to appoint D.R. MacQuarrie to its board of Directors as the
      VP of Exploration, West Africa projects on the Effective Date. 
	 	 
	22.	 PMI agrees to forthwith make an application to become
        a “qualifying issuer” as defined by Multilateral Instrument
        45-102, such status to be obtained prior to the distribution of shares
        to Goknet referred to in section 2 hereof. 



SIGNED AND ACCEPTED BY:  

	GOKNET MINING COMPANY LIMITED	PMI VENTURES LTD.
	 	 
	Per: /s/ Douglas R. MacQuarrie	Per: /s/ Arthur T. Fisher
	Douglas R. MacQuarrie, Director	Arthur T. Fisher, President