| Re:  | ÁGUA BRANCA GOLD PROJECT |
|-----------|-------------------------------|

|   | 1) | Pay to Talon, upon agreement’s signing, an amount of US$ 120,000. |
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|   | 2) | Brazauro will be commited to spend in exploration at Água Branca, a minimum of US$ 500,000 including at least 2,000 metres of core drilling, in the first year and, if Brazauro wishes to extend the option to the second year, to spend a minimum of additional US$ 500,000 during the second year. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3) | To maintain the option in good standing, Brazauro will pay to Talon US$ 130,000 on or before December 31, 2010.  If Brazauro abandons the option and returns the Property to Talon before this date and the minimum budget of the first year has not been expended, Brazauro is obligated to pay the US$ 130,000. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4) | To complete the exercise of the option, Brazauro will pay to Talon, two (2) years after the agreement’s signing, an amount of US$ 1,870,000. |
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|   | 5) | The definitive agreement will provide that Brazauro will pay to Talon a NSR royalty of 2%, with Brazauro being able to buyout the NSR royalty for a payment of US$ 2 million. |
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|   | 6) | During the term of the option, Brazauro will also: |
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|   | a. | Assume the payments due under the underlying agreement with the original owner of the mineral rights; |
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|   | b. | Assume the payment of any taxes due to the DNPM; |
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|   | c. | Assume the costs of the rental of the office/house in Água Branca village; |
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|   | d. | Assume the rental of the use of the land at Camãro Hill; |
|--------|----|---------------------------------------------------------------|

|   | e. | Conduct its operations in a good and miner-like manner; |
|--------|----|---------------------------------------------------------|

|   | f. | Indemnify Talon for any liability arising from Brazauro’s operations on the Property. |
|--------|----|---------------------------------------------------------------------------------------------|

|  / Signature / |   |
|---------------------|--------|

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