Lincoln
        Hill LLC 

      Members’
        Agreement

      


      This
        Lincoln Hill LLC Members’ Agreement (the “Agreement”) is made between Western
        Goldfields, Inc., an Idaho corporation (“WGI”), and Coolcharm Gold Mining
        Company Ltd., a company registered in England and Wales (“Coolcharm”).


      


      Recitals

      


      A. WGI
        owns
        or controls certain properties in Pershing County, Nevada, which properties
        are
        described in Exhibit A.

      


      B. Coolcharm
        wishes to participate with WGI in the exploration, evaluation and, if justified,
        the development and mining of precious metal products within the
        Properties.

      


      C. WGI
        and
        Coolcharm are parties to the Letter Agreement dated April 8, 2004 (the “Letter
        Agreement”) which the parties agree will be superseded by this
        Agreement.

      


      D. WGI
        and
        Coolcharm wish to form and operate a limited liability company (the “Company”)
        under Chapter 86 of the Nevada Revised Statutes (the “Act”) to own the
        Properties and conduct the operations contemplated by Recital B. The name
        of the
        limited liability company shall be Lincoln Hill LLC and its affairs shall
        be
        governed by that certain Operating Agreement of Lincoln Hill LLC, dated
        effective the date of this Agreement (the “LLC Agreement”).

      


      Now
        therefore, in consideration of their mutual promises, WGI and Coolcharm agree
        as
        follows:

      


      1.  Definitions
        and Cross-References.

      


      1.1  Definitions.
        The
        terms
        defined in this Agreement shall have the defined meanings wherever used in
        this
        Agreement. Capitalized terms used but not defined in this Agreement shall
        have
        the meanings given them in the LLC Agreement.

      


      1.2  Cross
        References.
        References to exhibits are to Exhibits of the LLC Agreement. References to
        “Sections” and “Subsections” refer to Sections and Subsections of this Agreement
        unless indicated otherwise. References to “Paragraphs” and “Subparagraphs” refer
        to paragraphs and subparagraphs of the Exhibits.

      


      2.  Payments.

      


      2.1  Cash
        Payments. On
        the
        dates described below, Coolcharm shall pay to WGI the sums described
        below:

       

       

      
        
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                  Date

                	 	
                  Amount

                	 
	
                  On
                    the parties’ execution of the Letter of Intent 

                	 	 	 
	
                  Agreement
                    (Paid 9-1-2004)

                	 	
                  $

                	
                  50,000.00

                	 
	
                  June
                    1, 2005

                	 	
                  $

                	
                  25,000.00

                	 
	
                  September
                    1, 2005

                	 	
                  $

                	
                  50,000.00

                	 
	
                  April
                    1, 2006

                	 	
                  $

                	
                  100,000.00

                	 


        



      The
        foregoing payments are not contributions of capital and shall not be credited
        to
        Coolcharm’s Initial Contribution obligations.

      


      2.2  Share
        Payments. On
        the
        dates described below, Coolcharm shall cause the issuance or delivery to
        WGI of
        the shares of Coolcharm, as follows:

       

      
        
          	
                  Date

                	 	
                  Shares 

                	 
	
                  On
                    the parties’ execution of this Agreement

                	 	
                  600,000

                	 


        

The
        foregoing payments are not contributions of capital and shall not be credited
        to
        Coolcharm’s Initial Contribution obligations.

      


      The
        shares shall be subject to the requirements of all applicable Canadian, United
        States, provincial and state laws and regulations and the rules of each exchange
        or trading association on which the shares are listed for trading or are
        traded.
        Owner acknowledges that the shares have not been registered under any Canadian,
        United States, provincial or state securities laws, and that the shares may
        not
        be offered or sold unless subsequently registered under all applicable Canadian,
        United States, provincial and state securities laws or unless exemptions
        from
        registration requirements are available for the transaction, as established
        to
        the satisfaction of Coolcharm by opinion of counsel or otherwise. If the
        designations and rights relative to the shares or the share structure of
        Coolcharm are changed or modified by an amalgamation, conversion, exchange,
        merger, share dividend, reverse dividend or any other means, the number of
        shares which Coolcharm is obligated to issue in accordance with this Section
        shall be adjusted accordingly. 

      


      3.  Contributions
        by Members. 

      


      3.1  Contributions
        by WGI.
        WGI
        shall contribute to the Company WGI’s right, title and interest in and to the
        leasehold interests, mining claims and other property interests which constitute
        the Lincoln Hill gold property situated in the Rochester Mining District,
        Pershing County, Nevada, more particularly described in Exhibit A, and the
        right
        to copy and use all Member Information concerning the Property which WGI
        presently possesses.

      
         

        
          
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      3.2  Contributions
        by Coolcharm.
        Coolcharm shall have the right to earn and acquire an undivided sixty percent
        (60%) ownership interest in the Company on the terms and conditions prescribed
        in this Agreement and the Operating Agreement. In order to earn its ownership
        interest in the Company, in addition to performance of its obligations described
        in Sections 2.1 and 2.2, on or before July 1, 2010, Coolcharm shall: (a)
        fund
        the Company’s completion of a bankable Feasibility Study on the Property which
        supports the development of a mine which has proven reserves equal to or
        greater
        than one hundred fifty thousand (150,000) troy ounces of gold; or (b) incur
        and
        pay expenditures for the Exploration and Development of the Property as a
        mine
        in the cumulative amount of Four Million Dollars ($4,000,000.00) and, if
        a
        bankable Feasibility Study is not completed on or before July 1, 2010, pay
        for
        additional Qualifying Expenses on or before the times and in the amounts
        described in this Section. Coolcharm’s Qualifying Expenses obligation to and
        including July 1, 2010, shall be paid on or before the times and in the amounts
        described as follows:

       

      
        
          	
                  Date

                	 	
                  Amount

                	 	
                  Cumulative

                  Amount

                	 
	
                  July
                    1, 2005-2006

                	 	
                  $

                	
                  500,000

                	 	
                  $

                	
                  500,000

                	 
	
                  July
                    1, 2006-2007

                	 	
                  $

                	
                  500,000

                	 	
                  $

                	
                  1,000,000

                	 
	
                  July
                    l, 2007-2008

                	 	
                  $

                	
                  1,000,000

                	 	
                  $

                	
                  2,000,000

                	 
	
                  July
                    1, 2008-2009

                	 	
                  $

                	
                  1,000,000

                	 	
                  $

                	
                  3,000,000

                	 
	
                  July
                    1, 2009-2010

                	 	
                  $

                	
                  1,000,000

                	 	
                  $

                	
                  4,000,000

                	 


        

      

       

      If
        a
        bankable Feasibility Study for the Property is not completed on or before
        July
        1, 2010, in order to earn its ownership interest, Coolcharm must pay for
        additional Qualifying Expenses at the times and in the amounts described
        below:


       

      

        
          	
                  Date

                	 	
                  Amount
                    

                	 
	
                  July
                    1, 2010-2011

                	 	
                  $

                	
                  1,000,000

                	 
	
                  July
                    1, 2011-2012

                	 	
                  $

                	
                  1,000,000

                	 
	
                  July
                    1, 2012-2013

                	 	
                  $

                	
                  1,000,000

                	 


        

      

      


      Provided
        that Coolcharm has performed its obligations under Sections 2.1. and 2.2,
        on the
        earlier of completion of a bankable Feasibility Study or Coolcharm’s payment of
        the additional Qualifying Expenses described above in the amount of Three
        Million Dollars ($3,000,000.00), Coolcharm shall be deemed to have completed
        its
        Initial Contribution obligations and its sixty percent (60%) interest in
        the
        Company shall be vested.

      


      All
        Qualifying Expenses incurred and paid by Coolcharm in excess of the minimum
        amounts for any period described above, whether before or after July 1, 2010,
        shall be carried forward by Coolcharm and shall apply as a credit toward
        Coolcharm’s Qualifying Expenses obligation for any subsequent
        period.

      


      Coolcharm
        shall provide WGI with a written statement of Qualifying Expenses, certified
        as
        being complete and accurate by Coolcharm, within sixty (60) days after the
        end
        of each period, and shall make available for WGI’s inspection during normal
        business hours backup invoices, statements and the like verifying the Qualifying
        Expenses. In connection with any such review, Coolcharm may satisfy any
        Qualifying Expense obligation by payment to WGI of any agreed-upon
        deficiency.

      


      
        
           

          
            
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          If
            Coolcharm fails or elects not to perform the Qualifying Expense requirement
            during any period, and if such failure is not excused by force majeure,
            then, in
            order to keep this Agreement in full force and effect, within thirty
            (30) days
            after the end of the period, Coolcharm may elect to make a payment to
            WGI which
            shall equal one-half of the difference between the required Qualified
            Expenses
            for the period and the amount actually incurred by Coolcharm during the
            period,
            provided, however, that on or before July 1, 2010, or July 1, 2013, as
            applicable to the initial Qualifying Expenses and the additional Qualifying
            Expenses, Coolcharm shall incur and pay for Qualifying Expenses in an
            amount
            equal to the one-half of the difference of the Qualifying Expenses for
            which
            Coolcharm does not pay WGI. Any such payment shall satisfy the Qualifying
            Expense obligation for the period for which the payment relates. For
            purposes of
            determining whether Coolcharm has earned the sixty percent (60%) ownership
            interest in the Company, Coolcharm shall be deemed to have paid Qualifying
            Expenses in an amount equal to the actual Qualifying Expenses paid by
            it plus
            any cash payments paid by Coolcharm directly to WGI pursuant to this
            Section.


        

      

      


      Until
        Coolcharm has completed its Initial Contribution obligation and its ownership
        interest is vested, as a condition to the vestment of Coolcharm’s ownership
        interest in the Company, and in addition to its payment of all Qualifying
        Expenses, Coolcharm shall timely make all payments required under any underlying
        agreement described in Exhibit A, timely pay all Federal annual mining claim
        maintenance fees required to maintain the unpatented mining claims which
        comprise the Property and timely perform any and all other financial or work
        commitment obligations required to maintain any underlying agreement or the
        Property. Such payments made or expenses incurred by Coolcharm for the foregoing
        shall not be considered Qualifying Expenses, notwithstanding the terms of
        Exhibit B which otherwise characterize such Qualifying Expenses as expenses
        chargeable to the Company’s Business Account. Coolcharm shall also timely file
        and record all affidavits of annual assessment work, notices of intent to
        hold
        and other instruments necessary to maintain the Property in accordance with
        all
        applicable laws and regulations and the terms of any underlying agreement.
        Coolcharm shall perform such obligations not less than thirty (30) days before
        the applicable contractual or legal deadline for performance of such obligations
        and within fifteen (15) days following Coolcharm’s performance of such
        obligations, Coolcharm shall deliver proof of performance to WGI. If Coolcharm
        terminates this Agreement less than sixty (60) days before the deadline for
        payment of any fees or the filing or recording of any instruments or performance
        of any other obligation under applicable laws and regulations or any underlying
        agreement, Coolcharm shall be obligated to perform such obligations which
        arise
        before the termination date notwithstanding its delivery of notice of
        termination of this Agreement.

      


      Subject
        to Coolcharm’s right to pay WGI for Qualifying Expenses in lieu of performance
        of its Initial Contribution obligations, if Coolcharm fails to timely make
        a
        payment under this Section, Coolcharm shall be deemed to have elected to
        terminate this Agreement.

       

      
        
          
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        3.3  Certain
          Obligations of
          Coolcharm During Period of Its Initial Contributions.

         

        a. During
          the period when the Company conducts Operations pursuant to Section 3.1(c)
          of
          the LLC Agreement, Coolcharm shall provide for accrual of reasonably anticipated
          Environmental Compliance expenses, which shall constitute Qualifying Expenses,
          and upon completion of its Initial Contribution, Coolcharm shall transfer
          any
          accrued but unexpended amounts to the Environmental Compliance Fund established
          under Paragraph 2.14 of Exhibit B.

        


        b. If
          Coolcharm resigns pursuant to Subsection 3.2.1 of the LLC Agreement, Coolcharm
          shall indemnify WGI for any costs or losses related to contractual obligations
          of the Company to third parties for Operations existing at the time of
          such
          resignation. In addition, Coolcharm shall indemnify WGI for Coolcharm’s share of
          liabilities to third parties (regardless of whether such liabilities accrue
          before or after such resignation), including Environmental Liabilities,
          Continuing Obligations and Environmental Compliance, arising before Coolcharm’s
          resignation from Operations conducted by Coolcharm, which responsibility
          shall
          be based on Coolcharm’s initial Ownership Interest.

        


        c. If
          Coolcharm resigns pursuant to Subsection 3.2.2 of the LLC Agreement, Coolcharm
          shall be obligated to fund Operations up to the amount of Coolcharm’s agreed
          contribution to the then currently adopted Program and Budget. In addition,
          Coolcharm shall indemnify WGI for Coolcharm’s share of liabilities to third
          parties (regardless of whether such liabilities accrue before or after
          such
          resignation), including Environmental Liabilities, Continuing Obligations
          and
          Environmental Compliance, arising from Operations conducted by Coolcharm
          after
          the Effective Date and before its resignation. 

        


        3.4  Additional
          Contributions.
          At such
          time as Coolcharm has contributed the full amount of its Initial Contribution
          and performed all of the conditions precedent to the vesting of its ownership
          in
          the Company, Coolcharm’s obligation to fund all of the Company’s Operations in
          accordance with Section 3.2 shall terminate, and thereafter the Members,
          subject
          to any elections permitted under the LLC Agreement, shall be obligated
          to
          contribute funds to the Company to fund adopted Programs and Budgets in
          proportion to their respective Ownership Interests.

        


        3.5  Emergency
          or Unexpected Expenditures.
          In case
          of emergency, the Manager may take any reasonable action it deems necessary
          to
          protect life or property, to protect the Assets or to comply with Laws.
          The
          Manager may make reasonable expenditures on behalf of the Members for unexpected
          events that are beyond its reasonable control and that do not result from
          a
          breach by it of its standard of care. The Manager shall promptly notify
          the
          Members of the emergency or unexpected expenditure, and the Manager shall
          be
          reimbursed for all resulting costs by the Members in proportion to their
          respective Ownership Interests.

        


        
          
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        4.  Representations
          and Warranties; Title to Assets; Indemnities.

        


        4.1  Representations
          and Warranties of the Members.
          As of
          the Effective Date, each Member warrants and represents to the other
          that:

        


        a. It
          is a corporation duly organized and
          in good standing in its state of incorporation and is qualified to do business
          and is in good standing in those states where necessary in order to carry
          out
          the purposes of this Agreement;

        


        b. It
          has
          the capacity to enter into and perform this Agreement and all transactions
          contemplated in this Agreement and that all corporate, board of directors,
          shareholder, surface and mineral rights owner, lessor, lessee and other
          actions
          and consents required to authorize it to enter into and perform this Agreement
          have been properly taken;

         

        c. It
          will
          not breach any other agreement or arrangement by entering into or performing
          this Agreement;

        


        d. It
          is not
          subject to any governmental order, judgment, decree, debarment, sanction
          or Laws
          that would preclude the permitting or implementation of Operations under
          this
          Agreement; and

        


        e. This
          Agreement has been duly executed and delivered by it and is valid and binding
          upon it in accordance with its terms.

        


        4.2  Representations
          and Warranties of WGI.
          As of
          the Effective Date, WGI makes the following representations and warranties
          to
          Coolcharm:

        


        a. With
          respect to those Properties WGI owns in fee simple, if any, WGI is in exclusive
          possession of and owns such Properties free and clear of all Encumbrances
          or
          defects in title except those specifically identified in Exhibit A.

        


        b. With
          respect to those Properties in which WGI holds an interest under leases
          or other
          contracts: (i) WGI is in exclusive possession of such Properties; (ii)
          WGI has
          not received any notice of default of any of the terms or provisions of
          such
          leases or other contracts; (iii) WGI has the authority under such leases
          or
          other contracts to perform fully its obligations under this Agreement;
          (iv) to
          WGI’s knowledge, such leases and other contracts are valid and are in good
          standing; (v) WGI has no knowledge of any act or omission or any condition
          on
          the Properties which could be considered or construed as a default under
          any
          such lease or other contract; and (vi) to WGI’s knowledge, such Properties are
          free and clear of all Encumbrances or defects in title except for those
          specifically identified in Exhibit A.

        


        c. WGI
          has
          delivered to or made available for inspection by Coolcharm all Existing
          Data in
          its possession or control, and true and correct copies of all leases or
          other
          contracts relating to the Properties.

        
          


          
            
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        d. With
          respect to unpatented mining claims and millsites located by WGI that are
          included within the Properties, except as provided in Paragraph 1.1 of
          Exhibit A
          and subject to the paramount title of the United States: (i) the unpatented
          mining claims were properly laid out and monumented; (ii) all required
          location
          and validation work was properly performed; (iii) location notices and
          certificates were properly recorded and filed with appropriate governmental
          agencies; (iv) all assessment work required to hold the unpatented mining
          claims
          has been performed and all Governmental Fees have been paid in accordance
          with
          applicable laws and regulations through the assessment year ending September
          1,
          2004; (v) all affidavits of assessment work, evidence of payment of Governmental
          Fees, and other filings required to maintain the claims in good standing
          have
          been properly and timely recorded or filed with appropriate governmental
          agencies; (vi) the claims are free and clear of Encumbrances or defects
          in
          title; and (vii) WGI has no knowledge of conflicting mining claims. Nothing
          in
          this Subsection, however, shall be deemed to be a representation or a warranty
          that any of the unpatented mining claims contains a valuable mineral
          deposit.

        


        e. With
          respect to unpatented mining claims and millsites not located by WGI but
          which
          are included within the Properties, except as provided in Paragraph 1.1
          of
          Exhibit A and subject to the paramount title of the United States: (i)
          all
          assessment work required to hold the unpatented mining claims has been
          performed
          and all Governmental Fees have been paid in accordance with applicable
          laws and
          regulations and the terms of any underlying agreement in order to maintain
          those
          claims through the assessment year ending September 1, 2004; (ii) all affidavits
          of assessment work, evidence of payment of Governmental Fees, and other
          filings
          required to maintain the claims in good standing have been properly and
          timely
          recorded or filed with appropriate governmental agencies; (iii) the claims
          are
          free and clear of Encumbrances or defects in title; and (iv) WGI has no
          knowledge of conflicting mining claims. Nothing in this Subsection, however,
          shall be deemed to be a representation or a warranty that any of the unpatented
          mining claims contains a valuable discovery of minerals.

        


        f. With
          respect to the Properties, to WGI’s knowledge, there are no pending or
          threatened actions, suits, claims or proceedings, and there have been no
          previous transactions affecting its interests in the Properties which have
          not
          been for fair consideration.

        


        g. Except
          as
          to matters otherwise disclosed in writing to Coolcharm before the Effective
          Date,

        


        (i) to
          WGI’s
          knowledge, formed without inquiry, the conditions existing on or with respect
          to
          the Properties and its ownership and operation of the Properties are not
          in
          violation of any Laws (including without limitation any Environmental Laws)
          nor
          causing or permitting any damage (including Environmental Damage, as defined
          below) or impairment to the health, safety, or enjoyment of any person
          at or on
          the Properties or in the general vicinity of the Properties;

        
          
            


            
              
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            (ii) to
              WGI’s
              knowledge, formed without inquiry, there have been no past violations
              by it or
              by any of its predecessors in title of any Environmental Laws or other
              Laws
              affecting or pertaining to the Properties, nor any past creation of
              damage or
              threatened damage to the air, soil, surface waters, groundwater, flora,
              fauna,
              or other natural resources on, about or in the general vicinity of
              the
              Properties (“Environmental Damage”); and

          

        

        


        (iii) WGI
          has
          not received inquiry from or notice of a pending investigation from any
          governmental agency or of any administrative or judicial proceeding concerning
          the violation of any Laws.

        


        The
          representations and warranties stated above shall survive the execution
          and
          delivery of any documents of Transfer provided under this Agreement. For
          a
          representation or warranty made to a Member’s “knowledge,” the term “knowledge”
          shall mean actual knowledge on the part of the officers, employees, and
          agents
          of the representing Member or of facts that would reasonably lead to the
          indicated conclusions.

        


        4.3  Disclosures.
          Each of
          the Members represents and warrants that it is unaware of any material
          facts or
          circumstances that have not been disclosed in this Agreement or in the
          LLC
          Agreement from being materially misleading. WGI has disclosed to Coolcharm
          all
          information it believes to be relevant concerning the Assets and has provided
          to
          or made available for inspection by Coolcharm all such information, but
          does not
          make any representation or warranty, express or implied, as to the accuracy
          or
          completeness of the information or as to the boundaries or value of the
          Assets.
          Each Member represents to the other that in negotiating and entering into
          this
          Agreement and the LLC Agreement it has relied solely on its own appraisals
          and
          estimates as to the value of the Assets and upon its own geologic and
          engineering interpretations related thereto.

        


        5.  Loss
          of Title.
          Any
          failure or loss of title to the Assets, and all costs of defending title,
          shall
          be charged to the Business Account, except that in the event of costs or
          losses
          arising from or resulting from any breach of the representations and warranties
          of WGI or Coolcharm as to title, the breaching Member shall indemnify the
          non-breaching Member for such costs and losses.

        


        6.  Limitation
          of Liability.
          The
          Members shall not be required to make any contribution to the capital of
          the
          Company except as otherwise provided in this Agreement, nor shall the Members
          in
          their capacity as Members or Manager be bound by, or liable for, any debt,
          liability or obligation of the Company whether arising in contract, tort,
          or
          otherwise. The foregoing shall not limit any obligation of a Member to
          indemnify
          the other Member as expressly provided by this Agreement. The Members shall
          be
          under no obligation to restore a deficit Capital Account upon the dissolution
          of
          the Company or the liquidation of any of their Ownership Interests. Any
          obligation in this Agreement to contribute capital to the Company may be
          compromised by the Members, including by payments by an obligated Member
          directly to the other Member.

        


        
          
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        7.  Indemnification.

        


        7.1  Each
          Member shall indemnify the other Member, its directors, officers, employees,
          agents and attorneys, and Affiliates (collectively “Indemnified Party”) from and
          against the entire amount of any Material Loss. A “Material Loss” shall mean all
          direct and indirect costs, expenses, damages or liabilities, including
          attorneys’ fees and other costs of litigation (either threatened or pending)
          arising from or based on a breach by a Member (“Indemnifying Party”) of any
          representation, warranty or covenant contained in this Agreement or the
          LLC
          Agreement, including without limitation:

        


        a. any
          action taken for or obligation or responsibility assumed on behalf of the
          Company or another Member by a Member or any of its directors, officers,
          employees, agents and attorneys, or Affiliates, in violation of Section
          5.1 of
          the LLC Agreement;

         

        b. failure
          of a Member or its Affiliates to comply with the non-compete or Area of
          Interest
          provisions of Section 10;

        


        c. any
          Transfer that causes termination of the tax partnership established under
          the
          LLC Agreement, against which the transferring Member shall indemnify the
          non-transferring Member as provided in Subsection 7.2.5 of the LLC Agreement
          and
          Section 5 of Exhibit C; and

        


        d. failure
          of a Member or its Affiliates to comply with the preemptive right under
          the LLC
          Agreement and Exhibit H.

        


        A
          Material Loss shall not be deemed to have occurred until an Indemnified
          Party
          incurs losses, costs, damages or liabilities in excess of One Hundred Dollars
          ($100,000) relating to breaches of warranties, representations and covenants
          contained in this Agreement and the LLC Agreement, in the aggregate. WGI’s
          aggregate liability to all Indemnified Parties under this Section for breaches
          of the representations in Subsection 4.2(g) shall not, however, exceed
          Fifty
          Thousand Dollars ($50,000).

        


        7.2  If
          any
          claim or demand is asserted against an Indemnified Party in respect of
          which
          such Indemnified Party may be entitled to indemnification under this Agreement,
          written notice of such claim or demand shall promptly be given to the
          Indemnifying Party. The Indemnifying Party shall have the right, but not
          the
          obligation, by notifying the Indemnified Party within thirty (30) days
          after its
          receipt of the notice of the claim or demand, to assume the entire control
          of
          (subject to the right of the Indemnified Party to participate, at the
          Indemnified Party’s expense and with counsel of the Indemnified Party’s choice),
          the defense, compromise, or settlement of the matter, including, at the
          Indemnifying Party’s expense, employment of counsel of the Indemnifying Party’s
          choice. Any damages to the assets or business of the Indemnified Party
          caused by
          a failure by the Indemnifying Party to defend, compromise, or settle a
          claim or
          demand in a reasonable and expeditious manner requested by the Indemnified
          Party, after the Indemnifying Party has given notice that it will assume
          control
          of the defense, compromise, or settlement of the matter, shall be included
          in
          the damages for which the Indemnifying Party shall be obligated to indemnify
          the
          Indemnified Party. Any settlement or compromise of a matter by the Indemnifying
          Party shall include a full release of claims against the Indemnified Party
          which
          have arisen from the indemnified claim or demand.

        


        
          
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        8.  Interests
          of Members. 

        


        8.1  Continuing
          Liabilities Upon Adjustments of Ownership Interests.
          Any
          reduction or elimination of either Member’s Ownership Interest under Section 4.2
          of the LLC Agreement shall not relieve such Member of its share of any
          liability, including, without limitation, Continuing Obligations, Environmental
          Liabilities and Environmental Compliance, whether arising, before or after
          such
          reduction or elimination, from acts or omissions occurring or conditions
          existing before the Effective Date, or from Operations conducted during
          the term
          of this Agreement but before such reduction or elimination, regardless
          of when
          any funds may be expended to satisfy such liability. For purposes of this
          Section, such Member’s share of such liability shall be equal to its Ownership
          Interest at the time the act or omission giving rise to the liability occurred,
          after first taking into account any prior reduction, readjustment and
          restoration of Ownership Interests under Sections 4.4, 10.5, 10.6 and 11.5
          of
          the LLC Agreement (or, as to such liability arising from acts or omissions
          occurring or conditions existing before the Effective Date, equal to such
          Member’s initial Ownership Interest). Should the cumulative cost of satisfying
          Continuing Obligations be in excess of cumulative amounts accrued or otherwise
          charged to the Environmental Compliance Fund as described in Paragraph
          2.14 of
          Exhibit B, each of the Members shall be liable for its proportionate share
          (i.e.,
          Ownership Interest at the time of the act or omission giving rise to such
          liability occurred), after first taking into account any reduction, readjustment
          and restoration of Ownership Interests under Sections 4.4, 10.5, 10.6 and
          11.5
          of the LLC Agreement, of the cost of satisfying such Continuing Obligations,
          notwithstanding that either Member has previously resigned from the Company
          or
          that its Ownership Interest has been reduced or converted to an interest
          in Net
          Proceeds pursuant to Subsection 4.4.1 of the LLC Agreement.

        


        8.2  Continuing
          Obligations and Environmental Liabilities.
          On
          dissolution of the Company under Section 14.1 of the LLC Agreement, each
          Member
          shall remain liable for its respective share of liabilities to third parties
          (whether such arises before or after such dissolution), including Environmental
          Liabilities and Continuing Obligations. In the event of the resignation
          of a
          Member pursuant to Section 14.2 of the LLC Agreement, the resigning Member’s
          share of such liabilities shall be equal to its Ownership Interest at the
          time
          such liability was incurred, after first taking into account any reduction,
          readjustment, and restoration of Ownership Interests under Sections 4.4,
          10.5,
          10.6 and 11.5 of the LLC Agreement (or, as to liabilities arising before
          the
          Effective Date, its initial Ownership Interest).

        


        8.3  Grant
          of Lien and Security Interest.

        


        a. Subject
          to the terms of this Agreement, each Member grants to the other Member
          a lien
          upon and a security interest in its Ownership Interest, including all of
          its
          right, title and interest in the Assets, whenever acquired or arising,
          and the
          proceeds from and accessions to the foregoing.

        


        
          
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        b. The
          liens
          and security interests granted under this Agreement shall secure every
          obligation or liability of the Member granting such lien or security interest
          to
          the other Member created under this Agreement or the LLC Agreement, including
          the obligation to repay a Cover Payment in accordance with Section 11.4
          of the
          LLC Agreement. Each Member hereby agrees to take all action necessary to
          perfect
          such lien and security interest and hereby appoints the other Member its
          attorney-in-fact to execute, file and record all financing statements and
          other
          documents necessary to perfect or maintain such lien and security
          interest.

        


        8.4  Subordination
          of Interests.
          Each
          Member shall, from time to time, take all necessary actions, including
          execution
          of appropriate agreements, to pledge and subordinate its Ownership Interest,
          any
          liens it may hold which are created under this Agreement other than those
          created subject to the terms of this Agreement, and any other right or
          interest
          it holds with respect to the Company and the Assets (other than any statutory
          lien of the Manager) to any secured borrowings for Operations approved
          by the
          Management Committee, including any secured borrowings relating to Project
          Financing, and any modifications or renewals thereof.

        


        9.  Relationship
          of The Members.

        


        9.1  Transfer
          or Termination of Rights.
          Neither
          Member shall Transfer all or any part of its rights or obligations under
          this
          Agreement, except in conjunction with a transfer or termination of the
          Member’s
          Ownership Interest permitted by the LLC Agreement. Any such permitted assignment
          shall be subject to the consent requirements of Section 7.2 of the LLC
          Agreement. Nothing in this Section requires that a Member’s rights and
          obligations under this Agreement be assigned in connection with the transfer
          of
          its Ownership Interest.

        


        9.2  Abandonment
          and Surrender of Properties.
          The
          Member that desires to abandon or surrender all or part of the Properties
          pursuant to Section 12.2 of the LLC Agreement shall remain liable to the
          other
          Member for its share (determined by its Ownership Interest as of the date
          of
          such abandonment, after first taking into account any reduction, readjustment,
          and restoration of Ownership Interests under Sections 4.4, 10.5, 10.6 and
          11.5
          of the LLC Agreement) of any liability with respect to such Properties,
          including, without limitation, Continuing Obligations, Environmental Liabilities
          and Environmental Compliance, whether accruing before or after such abandonment,
          arising from activities before the Effective Date and from Operations conducted
          before the date of such abandonment, regardless of when any funds may be
          expended to satisfy such liability.

        


        9.3  Supplemental
          Business Arrangement.
          The
          Members hereby agree that in the event of a Supplemental Business Arrangement
          pursuant to Section 10.13 of the LLC Agreement, this Agreement shall apply
          mutatis
          mutandis
          to such
          business in the same manner as to the LLC Agreement.

         

        
          
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        9.4  Implied
          Covenants.
          There
          are no implied covenants contained in this Agreement other than those of
          good
          faith and fair dealing.

        


        9.5  No
          Third Party Beneficiary Rights.
          This
          Agreement shall be construed to benefit the Members and their respective
          successors and assigns only, and shall not be construed to create third
          party
          beneficiary rights in any other party, expressly including the Company,
          or in
          any governmental organization or agency, except to the extent required
          to permit
          indemnification of a non-Member’s Indemnified Party.

        


        10.  Acquisitions
          Within Area of Interest.

        


        10.1  General.
          Any
          interest or right to acquire any interest in real property or water rights
          related thereto within the Area of Interest either acquired or proposed
          to be
          acquired during the term of this Agreement by or on behalf of either Member
          (“Acquiring Member”) or any Affiliate of such Member shall be subject to the
          terms and provisions of this Agreement and the LLC Agreement. WGI and Coolcharm
          and their respective Affiliates for their separate account shall be free
          to
          acquire lands and interests in lands outside the Area of Interest and to
          locate
          mining claims outside the Area of Interest. Failure of any Affiliate of
          either
          Member to comply with this Article shall be a breach by such Member of
          this
          Agreement.

         

        10.2  Notices
          to Non-Acquiring Member.
          Within
          sixty (60) days after the acquisition or proposed acquisition, as the case
          may
          be, of any interest or the right to acquire any interest in real property
          or
          water rights wholly or partially within the Area of Interest (except real
          property acquired by the Manager pursuant to a Program), the Acquiring
          Member
          shall notify the other Member of such acquisition by it or its Affiliate;
          provided that if the acquisition of any interest or right to acquire any
          interest pertains to real property or water rights partially within the
          Area of
          Interest, then all such real property (i.e.,
          the
          part within the Area of Interest and the part outside the Area of Interest)
          shall be subject to this Article. The Acquiring Member’s notice shall describe
          in detail the acquisition, the acquiring party if that party is an Affiliate,
          the lands and covered minerals, any related water rights, the cost and
          the
          reasons why the Acquiring Member believes that the acquisition (or proposed
          acquisition) of the interest is in the best interests of the Members under
          this
          Agreement. In addition to such notice, the Acquiring Member shall make
          any and
          all information concerning the relevant interest available for inspection
          by the
          other Member.

        


        10.3  Option
          Exercised.
          Within
          sixty (60) days after receiving the Acquiring Member’s notice, the other Member
          may notify the Acquiring Member of its election to accept a proportionate
          interest in the acquired interest equal to its Ownership Interest. Promptly
          upon
          such notice, the Acquiring Member shall convey or cause its Affiliate to
          convey
          to the Members in proportion to their respective Ownership Interests or
          to the
          Company (as agreed by the Members), by special warranty deed all of the
          Acquiring Member’s (or its Affiliate’s) interest in such acquired interest, free
          and clear of all Encumbrances arising by, through or under the Acquiring
          Member
          (or its Affiliate) other than those to which both Members have agreed.
          Immediately upon such notice, the acquired interest either shall be subject
          to a
          Supplemental Business Arrangement, or if conveyed to the Company, shall
          become a
          part of the Properties for all purposes of this Agreement and the LLC Agreement.
          The other Member shall promptly pay to the Acquiring Member its proportionate
          share of the latter’s actual out-of-pocket acquisition costs.

         

        
          
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        10.4  Option
          Not Exercised.
          If the
          other Member does not give such notice within the sixty (60) day period
          described in the foregoing subsection, shall have no interest in the acquired
          interests, and the acquired interests shall not be a part of the Assets
          or
          continue to be subject to this Agreement or the LLC Agreement.

        


        10.5  Non-Compete
          Covenants.
          Neither
          a Member that resigns pursuant to Section 14.2 of the LLC Agreement, or
          is
          deemed to have resigned pursuant to Sections 3.2, 4.4 or 11.5 of the LLC
          Agreement, nor any Affiliate of such a Member, shall directly or indirectly
          acquire any interest or right to explore or mine, or both, on any property
          any
          part of which is within the Area of Interest for twenty-four (24) months
          after
          the effective date of resignation. If a resigning Member, or the Affiliate
          of a
          resigning Member, breaches this Section, such Member shall be obligated
          to offer
          to convey to the non-resigning Member, without cost, any such property
          or
          interest so acquired (or ensure its Affiliate offers to convey the property
          or
          interest to the non-resigning Member, if the acquiring party is the resigning
          Member’s Affiliate). Such offer shall be made in writing and can be accepted by
          the non-resigning Member at any time within ten (10) days after the offer
          is
          received by such non-resigning Member. Failure of a Member’s Affiliate to comply
          with this Section shall be a breach by such Member of this
          Agreement.

        


        11.  Disputes.
          

        


        11.1  Governing
          Law.
          This
          Agreement shall be governed by and interpreted in accordance with the laws
          of
          the State of Nevada, without regard for any conflict of laws or choice
          of laws
          principles that would permit or require the application of the laws of
          any other
          jurisdiction. The parties agree that jurisdiction of and venue in the Second
          Judicial District Court, Washoe County, Nevada, is proper for any action
          or
          legal proceeding relating to this Agreement.

        


        11.2  Dispute
          Resolution. All
          disputes arising under or in connection with this Agreement which cannot
          be
          resolved by agreement between the Members shall be resolved in accordance
          with
          applicable Law. If any legal action or other proceeding is brought for
          the
          enforcement of this Agreement, or because of an alleged dispute, breach,
          default, or misrepresentation in connection with any of the provisions
          of this
          Agreement, the successful or substantially prevailing Member shall be entitled
          to recover reasonable attorneys’ fees and other costs incurred in that action or
          proceeding, in addition to any other relief to which it or they may be
          entitled.

        


        
          
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        12.  General
          Provisions.

        


        12.1  Notices.
          All
          notices, payments and other required or permitted communications (“Notices”) to
          either Member shall be in writing, and shall be addressed respectively
          as
          follows:

        


        


        
          	 	 If to WGI: 	 Western Goldfields, Inc.
	 	 	 961 Matley Lane, No. 120
	 	 	 Reno, Nevada 89502
	 	 	 tmancuso@westerngoldfields.com
	 	 	 Fax: 775-337-9441
	 	 	 
	 	 If to Coolcharm: 	 Coolcharm Gold Mining Company
                  Ltd.
	 	 	 133 Ebury St.
	 	 	 London SW 1W9QU
	 	 	 United Kingdom
	 	 	 gerard.thompson@ftnetwork.com
	 	 	 Fax:
                  011-44-20-7881-0707
	 	 	 


        

                                                              

        All
          Notices shall be given (a) by personal delivery to the Member; (b) by electronic
          communication, capable of producing a printed transmission, (c) by registered
          or
          certified mail return receipt requested; or (d) by overnight or other express
          courier service. All Notices shall be effective and shall be deemed given
          on the
          date of receipt at the principal address if received during normal business
          hours, and, if not received during normal business hours, on the next business
          day following receipt, or if by electronic communication, on the date of
          such
          communication. Either Member may change its address by Notice to the other
          Member.

        


        12.2  Gender.
          The
          singular shall include the plural, and the plural the singular wherever
          the
          context so requires, and the masculine, the feminine, and the neuter genders
          shall be mutually inclusive.

        


        12.3  Currency.
          All
          references to “dollars” or “$” in this Agreement shall mean lawful currency of
          the United States of America.

        


        12.4  Headings.
          The
          subject headings of the Sections and Subsections of this Agreement and
          the
          Paragraphs and Subparagraphs of the Exhibits to this Agreement are included
          for
          purposes of convenience only, and shall not affect the construction or
          interpretation of any of its provisions.

        


        12.5  Waiver.
          The
          failure of either Member to insist on the strict performance of any provision
          of
          this Agreement or to exercise any right, power or remedy upon a breach
          hereof
          shall not constitute a waiver of any provision of this Agreement or limit
          such
          Member’s right thereafter to enforce any provision or exercise any
          right.

        


        12.6  Modification.
          No
          modification of this Agreement shall be valid unless made in writing and
          duly
          executed by both Members.

         

        
          
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        12.7  Force
          Majeure.
          Except
          for the obligation to make payments when due, the obligations of a Member
          shall
          be suspended to the extent and for the period that performance is prevented
          by
          any cause, whether foreseeable or unforeseeable, beyond its reasonable
          control,
          including, without limitation, labor disputes (however arising and whether
          or
          not employee demands are reasonable or within the power of the Member to
          grant);
          acts of God; Laws, instructions or requests of any government or governmental
          entity; judgments or orders of any court; inability to obtain on reasonably
          acceptable terms any public or private license, permit or other authorization;
          curtailment or suspension of activities to remedy or avoid an actual or
          alleged,
          present or prospective violation of Environmental Laws; action or inaction
          by
          any federal, state or local agency that delays or prevents the issuance
          or
          granting of any approval or authorization required to conduct Operations,
          except
          if not diligently applied for and prosecuted, beyond the reasonable expectations
          of the Member seeking the approval or authorization (including, without
          limitation, a failure to complete any review and analysis required by the
          National Environmental Policy Act or any similar state law within twenty-four
          (24) months of initiation of that process); acts of war or conditions arising
          from or attributable to war, whether declared or undeclared; riot, civil
          strife,
          insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink
          holes, drought or other adverse weather condition; delay or failure by
          suppliers
          or transporters of materials, parts, supplies, services or equipment or
          by
          contractors’ or subcontractors’ shortage of, or inability to obtain, labor,
          transportation, materials, machinery, equipment, supplies, utilities or
          services; accidents; breakdown of equipment, machinery or facilities; actions
          by
          native rights groups, environmental groups, or other similar special interest
          groups; or any other cause whether similar or dissimilar to the foregoing.
          The
          affected Member shall promptly give notice to the other Member of the suspension
          of performance, stating the nature of, reasons for and expected duration
          of the
          suspension. The affected Member shall resume performance as soon as reasonably
          possible. During the period of suspension the obligations of both Members
          to
          advance funds pursuant to Section 2 shall be reduced to levels consistent
          with
          then current Operations.

        


        12.8  Rule
          Against Perpetuities.
          The
          Members do not intend that there shall be any violation of the Rule Against
          Perpetuities, the Rule Against Unreasonable Restraints on the Alienation
          of
          Property, or any similar rule. Accordingly, if any right or option to acquire
          any interest in the Properties, in an Ownership Interest, in the Assets,
          or in
          any real property exists under this Agreement, such right or option must
          be
          exercised, if at all, so as to vest such interest within time periods permitted
          by applicable rules. If, however, any such violation should inadvertently
          occur,
          the Members hereby agree that a court shall reform that provision in such
          a way
          as to approximate most closely the intent of the Members within the limits
          permissible under such rules.

        


        12.9 Further
          Assurances.
          Each of
          the Members shall take, from time to time and without additional consideration,
          such further actions and execute such additional instruments as may be
          reasonably necessary or convenient to implement and carry out the intent
          and
          purpose of this Agreement or as may be reasonably required by lenders in
          connection with Project Financing.

         

        
          
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        12.10  Entire
          Agreement; Successors and Assigns.
          This
          Agreement contains the entire understanding of the Members and supersedes
          all
          prior agreements and understandings between the Members relating to the
          subject
          matter of this Agreement; provided that nothing in this Section modifies
          or
          affects the LLC Agreement and the Members’ obligations. This Agreement shall be
          binding upon and inure to the benefit of the respective successors and
          permitted
          assigns of the Members.

        


        12.11  Counterparts.
          This
          Agreement may be executed in any number of counterparts, and it shall not
          be
          necessary that the signatures of both Members be contained on any counterpart.
          Each counterpart shall be deemed an original, but all counterparts together
          shall constitute one and the same instrument.

        


        12.12  Memorandum
          of Agreement.
          Upon
          execution of this Agreement, the parties shall execute and deliver a short
          form
          of this Agreement which may be recorded in the office of the recorder of
          each
          county in which all or part of the Properties is located. The execution
          and
          recording of the short form of this Agreement shall not limit, increase
          or in
          any manner affect any of the terms of this Agreement, or any rights, interests
          or obligations of the parties.

         

        Dated
          effective April 8, 2004 (the “Effective Date”).

         

        
          	Western Goldfields, Inc.	 	 	Coolcharm Gold Mining Company
                  Ltd.
	 	 	 	 
	 	 	 	 
	By	 	 	By
	
                  

                	 	 	
                  

                
	Title	 	 	Title
	
                  

                	 	 	
                  

                


        

        
        

         

         

        
          
            
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