Filed by Automated Filing Services Inc. (604) 609-0244 - Sterling Group Ventures, Inc. - Exhibit 10.1





 Exhibit 10.1 

 CONTRACT ON A SINO-FOREIGN EQUITY JOINT VENTURE 

 SICHUAN JIHAI LITHIUM LTD. 


THIS CONTRACT IS ENTERED INTO 


BETWEEN 


  
    
      
         Micro Express Ltd.

          A corporate entity incorporated and validly existing under the laws
          of the British Virgin Islands, holding a business license with a registration
          number 124770 

         (Hereinafter referred to as “Micro”) 

         Address: Suite 900-789 West Pender Street, Vancouver, 

          British Columbia, Canada V6C 1H2 

          Telephone: 1-604-893-8891 

          Facsimile: 1-604-408-8515 

          Legal representative: Raoul Tsakok

          Nationality: Canadian 

      

    

  




AND 


  
    
      
         Sichuan Province Mining Ltd. 

          A corporate entity incorporated and validly existing under the laws
          of the People’s Republic of China (“China”),
          holding a business license with a registration number 5100001814790
        

         (Hereinafter referred to as “SPM”) 

         Address: 11th Floor, Dikuang Building, Section 1, 25 

          Renmin Road North, Chengdu, Sichuan Province, China 

          610081 

          Telephone: 86-28-8322-9993

          Facsimile: 86-28-8322-8887

          Legal representative: Yunxin Liu

          Nationality: Chinese 

         (Each of SPM and Micro a "Party" and collectively the "Parties")
        

      

    

  










WHEREAS: 

	 A.      	 Micro is in the business of natural resource development.
        Micro is wholly owned by Micro Express Holdings Inc., which is in turn
        wholly owned by Sterling Group Ventures, Inc., a Nevada USA company with
        its common shares traded on NASD OTC Bulletin Board. 

	 
	 B.      	 SPM is a Chinese company specializing in mineral
        development. SPM has a valid mining permit on the Jiajika lithium mineral
        deposit (the “Mining Permit”) issued by Sichuan Bureau
        of Land and Resources. The No. of Mining Permit is 5100000410234, a copy
        of which is attached hereto as Schedule I. 

	 
	 C.      	 Micro and SPM have agreed to establish a Chinese-foreign
        equity joint venture company (the “Company”) in Sichuan
        for the development of Jiajika spodumene resources in Kangding District,
        Sichuan Province, China (the “Business”). The detailed
        development plan and process of the Business are described in a Joint
        Venture Feasibility Study for Jiajika Lithium Deposit (the “Feasibility
        Study Report”), a copy of which is attached hereto as Schedule
        II. 



 Now therefore, the Parties have agreed to enter into this
  Contract on the terms and conditions contained hereunder: 

 Article 1

  Establishment of the Company 

 1.1 Formation. In accordance with the Law of China
  on Chinese-foreign Equity Joint Ventures (the “Joint Venture Law”),
  its Implementing Regulations and other relevant laws, regulations and provisions
  applicable hereto, the Parties agree to form and incorporate a limited liability
  company in Kangding District, Sichuan Province, China on terms and conditions
  contained herein.

 1.2 Name of the Company. The English name of the Company
  shall be: Sichuan 

 Jihai Lithium Ltd., and the Chinese name of the Company shall
  be:  四川省集海锂业有限公司.

 1.3 Legal Address. The legal address of the Company
  shall be .

 1.4 Fiscal Year. The fiscal year of the Company shall
  be from January 1 to December 31 (the “Fiscal Year”). 

 1.5 Articles of Association. The Parties agree to complete
  the Articles of Association of the Company based on the provisions contained
  herein. 

 1.6 Limited Liability. The Company shall be a limited
  liability company with a separate legal personality, for the purposes of the
  laws and regulations of China. The liabilities of the Company shall be limited
  to its total assets. The liabilities of each Party 








 shall be limited to its respective contribution to the registered
  capital of the Company only.

 1.7 Profit Distribution. The profits generated by the
  Company shall be distributed in accordance with the Interest of each Party as
  defined in section 3.3 hereunder. 

 Article 2

  Purpose and Business Scope 

 2.1 Purpose and Business Scope. The Company shall develop
  lithium and other mineral deposits, extract and process commercially valuable
  mineral products therefrom, in Sichuan, China, using internationally advanced
  technologies. 

 2.2 Principal Business and products. The principal
  business of the Company shall be the extraction, processing, manufacturing,
  marketing and sales of commercially valuable mineral products including spodumene,
  tantalum, niobium, and beryllium concentrate, and such other related products.

 2.3 Production Scale. The Company shall develop a production
  facility, which, when fully completed, shall have an annual production capacity
  of Nine Hundred Thousand (900,000) tons (the “Project”).
  The Project will be developed in two stages. In stage I of the Project the facility
  will be developed initially to be able process Two Hundred Forty Thousand (240,000)
  tons of spodumene rock per annum. Stage I shall commence on or before May 24,
  2005 (“Initiation Date”). Within 3 months after major engineering
  of stage I starts, the Company shall start preparation work for Stage II. Stage
  II shall starts after Stage I has finished. Stage I and II shall be fully completed
  within twenty eight months after the Initiation Date. If for any reason, the
  business license is not issued to the Company on or before the Initiation Date,
  then the Parties shall still conduct such necessary work and file such documents
  so that Stage I shall commence for all practical purposes and shall be deemed
  initiated.

 Article 3

  Total Investment and Registered Capital

 3.1 Total Investment. The total amount of investment
  of the Company shall be Ninety-six Million Eight Hundred Eight-five Thousand
  Yuan (RMB ¥96,885,000).

 3.2 Registered Capital. The registered capital of the
  Company shall be Fifty-six Million Yuan (RMB ¥56,000,000).

 3.3 Interest of the Parties. The Parties agree that
  their respective Interest in the registered capital of the Company shall
  be as follows: 








 3.3.1 Micro’s Interest shall be Seventy Five Percent
  75%, with its contribution to the registered capital of the Company being foreign
  exchange equivalent of Forty-two Million Yuan (RMB ¥42,000,000).

 3.3.2 SPM’s Interest shall be Twenty Five Percent (25%),
  with its contribution to the registered capital of the Company being Fourteen
  Million Yuan (RMB ¥14,000,000). SPM’s contribution shall be in the
  form of all prior work done, all technical data and information in relation
  to the Business, and all existing permits, licenses and approvals (together
  the “SPM Contribution”). For greater clarity, it is agreed
  that the total deemed value of SPM Contribution is Twenty One Million Yuan (RMB
  ¥21,000,000).

 3.4 Construction Capital Requirement. Additional construction
  funds required for the operation of the Business over the registered capital
  shall be financed by Micro as debt of the Company..

 3.5 Contribution of Capital. The Parties agree to contribute
  to the registered capital of the Company in the following manner: 

 3.5.1 . On April 15th 2005, Micro shall contribute
  5 million Yuan. By the end of July 2005, Micro shall contribute another 10 million
  Yuan. After Stage I construction finishes, Micro shall contribute another 7
  million Yuan to pay SPM’s over contribution – 7 million Yuan according
  to section 3.3.2. The balance 20 million Yuan shall be contributed within two
  years from the date of the issuance of the business license to the Company into
  the Company’s account. Micro shall ensure that the Company shall have
  sufficient funds in place for the operation of the Business and the Company
  including Stage I and Stage II. Micro’s contribution may include all expenses
  it has incurred for the purpose of this Contract and for the incorporation of
  the Company, including any funds advanced or expended for the purposes specified
  in section 2.3 hereunder. The early contributions of Micro shall be determined
  by the independent appraisal report recognized by both parties. Before the Company
  has its account after obtaining business license, Micro shall put its contributions
  into an account monitored by both parties. 

 SPM shall transfer the mining permit to the Company after
  the business license of the Company is issued and within three months. Due to
  delay of approval authorities, the transferring time can be extended. SPM shall
  guarantee the resources requirements for the operation with capacity of 900,000
  tons per year. 

 3.5.2 SPM recognizes the importance of expeditious transfer
  of the Mining Permit to the Company for the commencement of Stage I of the Project
  and will take such steps necessary to cause the early transfer of the Mining
  Permit immediately after the business license is issued to the Company.

 3.5.3 The date for contribution to the registered capital
  by the Parties may be reasonably extended should there be any delay in the approval
  process or any occurrence of event beyond the control of the Parties, subject
  to necessary approval by the Ministry of Commerce. 








 3.5.4 For greater clarity, it is understood that, for the
  transfer and acquisition of the Mining Permit, SPM is obligated to pay Thirteen
  Million Nine Hundred Eighty Thousand Yuan (RMB ¥13,980,000) (the “Permit
  Transfer Payment”) to Sichuan Bureau of Land and Resources (“SBLR”)
  on or before September 28, 2006 (the “Date of Full Payment”),
  under an agreement between SPM and SBLR dated March 29, 2004 and RMB4,190,000
  of the Permit Transfer Payment has already been paid by SPM to SBLR. It is expressly
  agreed that full payment of the Permit Transfer Payment is the sole obligation
  of SPM. If, for any reason, SPM is unable or unwilling to pay the balance of
  Permit Transfer Payment or any portion thereof, then SPM shall deliver a written
  notice to Micro no less than six months before the Full Payment Date, and upon
  receipt of the notice Micro may elect to make such payment (the “Optional
  Payment”) and the Optional Payment shall be credited as Micro’s
  additional contribution to the registered capital of the Company, and the amount
  equal to the Optional Payment shall be deducted from SPM’s contribution
  to the registered capital of the Company. The Parties’ Interest in the
  Company shall then be adjusted pursuant to the formula set forth in section
  4.5.1 below, to reflect the changes in their respective contribution to the
  registered capital of the Company, and the Parties shall cause such adjustment
  in Interest to be properly filed and registered.

 3.6 Use of Funds. The Parties agree that all investment
  and contribution made under this Contract shall be directed solely to the development
  of the Business of the Company. 

 3.7 Verification Report. An investment verification
  report shall be obtained from a registered accountant licensed in China, based
  on which the Company shall issue the investment certificates to the Parties.


 Article 4

  Alteration of Capital and Transfer of Interest 

 4.1 Transfer Permitted. The Parties agree, subject
  only to such restrictions as may be imposed by Chinese law from time to time
  and the terms and conditions hereunder, that either Party may transfer any or
  all of its Interest to the other Party or to a third party. Before finishing
  contributing registered capital, any party shall not transfer its Interest to
  the other Party. 

 4.2 Transfer to Either Party. Either Party may transfer
  to the other Party any or all of its Interest, provided that such transfer is
  effected in a written transfer agreement between the Parties, to be effective
  upon approval by the approval authorities.

 4.3 Transfer to a Third Party. Where either Party (the
  “Transferring Party”) intends to transfer part or all its
  Interest to a third party, the other Party shall have a right of first refusal
  to acquire the Interest or any part thereof on terms and conditions identical
  to that offered by the Transferring Party to the third party, provided that
  such right of first refusal shall be exercised within 45 days of the date of
  a detailed written offer (the “Offer”) from the Transferring
  Party. 








 4.4 Deemed Consent. If the right of first refusal is
  not exercised within 45 days as provided for in section 4.3 above, the transfer
  to a third party under section 4.3 above shall be deemed to be accepted by the
  Parties and the terms of such transfer shall be as contained in the Offer. Such
  third party, or the Transferring Party acting for such third party, shall have
  the right to apply for approval by the approval authorities in relation to the
  transfer. Once approval is granted by the approval authorities, the transfer
  shall be effective and the transfer shall be considered to be in conformity
  with the provisions of this Contract and the laws and regulations applicable
  thereto.

 4.5 Interest Adjustment. A Party’s Interest in
  the Company may be adjusted if its contribution to the registered capital of
  the Company is changed pursuant to the terms hereunder.

 4.5.1 The Parties may decide at any time during the term,
  to increase the registered capital of the Company, and if so decided and approved
  by the approval authority, each Party shall contribute its share of the increased
  registered capital of the Company pro rata to its Interest in accordance with
  such payment schedule as the Parties may agree. If either Party (the “Non-Participating
  Party”) is unwilling or unable to make any or all of its contribution
  of the increased registered capital pursuant to the schedule agreed, the Non-Participating
  Party’s Interest may be adjusted downward pursuant to the following formula:


 Cumulative contributions in the registered capital by the
  Non-Participating Party 

  -------------------------------------------------------------------------------------------
  X 100% 

  Cumulative contributions in the registered capital by both Parties 

       The Participating Party’s
  Interest shall therefore be: 100% – Non-Participating Party’s Interest.


       The adjusted Interest shall
  be accepted by the Parties and filed and registered with the approval authorities.


 Article 5

  Profits and Losses 

 5.1 Profits Distribution. The Board shall in its discretion
  and in the best interest of the Company decide on the distribution of profits
  of the Company. For greater clarity, “profits” shall mean the net
  profits generated from the operations of the Company after deduction of all
  applicable funds, taxes and levies, and all such costs and expenses as may be
  deductible under the laws and accounting practice of China, as may be applicable
  to the Company. 

 5.2 Percentage. Profits from the operations of the
  Company shall be distributed to the Parties pro rata to their respective Interest.
  Profits to be distributed to Micro shall be 








 converted to US dollars or such other convertible currency
  for remittance to Micro, subject to applicable Chinese foreign exchange regulations.

 Article 6

  Board of Directors 

 6.1 Highest Authority. The Board of Directors (the
  “Board”) shall be the highest authority of the Company. It
  shall have the power to make decisions on all major operational and administration
  matters of the Company, in compliance with the relevant laws and regulations
  of China, and subject to this Contract and the Articles of Association of the
  Company. 

 6.2 Composition of Board. The Board of the Company
  shall be composed of seven (7) directors, with five (5) directors to be nominated
  by Micro and two (2) directors to be nominated by SPM. The Chairman of the Board
  shall be nominated by Micro, and the Vice Chairman shall be nominated by SPM.


 6.3 Term of Office. The term of office of a director
  shall generally be three (3) years and directors may be re-elected if so nominated
  by the respective Parties.

 6.4 Removal of Director. Any director may be removed
  by the Party that has nominated such director, or jointly by the Parties at
  any time during the term of this Contract. 

 6.5 Disqualification. No person who is a minor, has
  been convicted of any fraud or an offence under the criminal code of the jurisdiction
  of either Party, or is bankrupt shall qualify as a director of the Company.

 6.6 Resignation. A resignation by a director appointed
  shall be effective one it is submitted to the Board and the Party by which the
  director is appointed. 

 6.7 Vacancy. A vacancy created by the removal, disqualification,
  resignation or death of a director may be filled only by nominee of the Party
  by which the director was appointed. The Party appointing a new director to
  fill the vacancy shall notify in writing the other Party and all directors of
  the Board. The appointment shall become effective upon delivery of such notice.


 6.8 Unanimous Approval. Unanimous consent of all the
  directors shall be required for the following matters: 

	 	 (a)      	 amendment of this Contract; 
	 
	 	 (b)      	 increase or decrease of registered capital of the Company; 
	 
	 	 (c)      	 termination of this Contract, and dissolution and liquidation of the
      Company prior to the expiry of the term of the Contract (except dissolution
      pursuant to section 12.3(c) and (d) hereunder); 
	 
	 	 (d)      	 merger with or acquisition by other economic entity or entities; and
    
	 





 

	 	 (e)      	 any mortgage or pledge of assets of the Company. 
	 
	 	 (f)      	 approval of the business plan for xin Project 


 6.9 Other Decisions. Decisions involving all other
  matters than those listed in section 6.8 shall be adopted at any Board meeting
  by a simple majority of votes of those directors present, in person or by proxy,
  and eligible to vote at that meeting. If voting on a matter is tied, the Chairman
  shall have the deciding vote. 

 6.10 Chairman of the Board. The Chairman of the Board
  shall be the legal representative of the Company. Whenever the Chairman’s
  position is vacated by the retirement, removal, resignation or death of the
  Chairman, the Party which has appointed the Chairman shall name a new appointee
  to assume the position of Chairman for the remainder of the term. Whenever the
  Chairman is temporarily unable to perform his responsibilities due to illness
  or disability, the Vice-Chairman shall temporarily assume his responsibilities,
  until such time as a new Chairman is appointed or the Chairman is again able
  to resume his duties. 

 6.11 Meetings of the Board. The Board shall convene
  at least one (1) meeting every year. The meeting may be held via telephone or
  by electronic means. The meetings shall be called and presided over by the Chairman
  of the Board. If the Chairman is unable to attend, he shall authorize the Vice-Chairman
  or a director to chair the Board meeting. Upon a request from three or more
  directors, specifying the matters to be discussed, the Chairman shall call an
  extraordinary meeting of the Board by giving notice to all directors pursuant
  to section 6.12. A quorum for the holding of any Board meeting shall be five
  (5) directors then in office including at least one from SPM, except that if
  the meeting is properly called and SPM chooses to abstain or not attend, then
  the quorum of five directors will still stand minus the requirement for 1 director
  from SPM. Should any director be unable to attend a meeting of the Board, he
  may authorize another director or any other person to act as his representative,
  by written proxy, to attend and form part of the quorum, and vote on his behalf.


 6.12 Notice of Meeting. Directors shall be given a
  minimum of 21 days notice of a Board meeting unless such notice is waived by
  all directors.

 6.13 Meeting Venue. The venue for meetings of the Board
  will normally be the legal address of the Company. The Board however may decide
  to hold meetings at any other venue. 

 6.14 Meeting Expenses. Reasonable travel and accommodation
  expenses of the directors to attend a Board meeting shall be reimbursed by the
  Company. 

 6.15 Resolution in Lieu of Meeting. In lieu of a meeting
  of the Board, a written resolution may be adopted by the Board, if such resolution
  is sent to all directors, in both English and Chinese languages, and affirmatively
  signed by all of the directors of the Company. 








 6.16 Language of Meeting. Board meetings shall be conducted
  in Chinese and English, where necessary with an interpreter present to carry
  out interpretation. Minutes of all meetings of the Board and resolutions adopted
  in lieu of a meeting, in both Chinese and English shall be kept in the minute
  book of the Company at the Company’s legal address. 

 6.17 Preparation group 

 During construction period of the project, both parties shall
  form a preparation group. Each party has two members. The group has one director
  and vice director. If Micro’ s registered contribution is less than SPM’s
  registered contribution, then SPM appoints director. When Micro’s registered
  contribution is more than SPM’s registered contribution, then Micro appoints
  director. 

 Article 7

  Operation and Management 

 7.1 Selection and Appointment of General Manager and Deputy
  General Manager. The Company shall set up a management team to be responsible
  for the daily management of the operation of the Company. The management team
  shall have one General Manager and two or three Deputy General Managers. The
  General Manager shall be nominated by Micro and one Deputy of General Manager
  shall be nominated by SPM, to be approved by the Board. The performance of the
  General Manager and Deputy General Managers nominated by the Parties shall be
  subject to the review by the Board of Directors and their re-appointment shall
  be subject to unanimous approval of all the directors. 

 7.2 Duties of General Manager and Deputy General Managers.
  The duty of the General Manager shall be to carry out the resolutions approved
  in the meeting of the Board, and to be responsible for the daily business management
  of the Company. TheGeneral Manager shall report and be accountable to the Board.
  The Deputy General Managers shall assist the General Manager in the discharge
  of his/her duties and be responsible to the General Manager. The General Manager
  shall have the right to make decisions on all important matters in the daily
  operations of the Company. When the General Manager is not able to perform his
  duties for any reason, the General Manager may authorise a Deputy General Manager
  to act on behalf of the General Manager. Directors may be appointed as General
  Manager or other senior executives upon approval by the Board. The General Manager
  may award or discipline any senior executives upon the approval of the Board.


 7.3 Senior Executives. The Board alone shall have the
  right to hire and dismiss any senior executives. Senior executives shall report
  to the Board and be accountable to the Board. Senior executives of the Company
  (including the General Manager and the Deputy General Managers) shall not engage
  in any employment or other business activities of other economic organizations
  or business enterprises in China unless written 








 approval is given by the Board, and shall not compete directly
  or indirectly with the Business of the Company.

 7.4 Removal of Senior Executives. The Board may by
  resolutions at any time dismiss, remove, discipline or replace the General Manager,
  the Deputy General Managers or other senior executives. The Company shall sign
  an employment contract with each senior executive in accordance with the Labour
  Law of the People’s Republic of China.

 7.5 Operational Departments. The Company shall set
  up production department, sales department, testing unit, and other departments,
  units, divisions, and offices as may be required by operation of the Company.
  The Company may appoint such number of division managers to be responsible for
  each division of the Company, and report to the General Manager.

 Article 8

  Purchase of Equipment and Sale of Products 

 8.1 Purchase. The raw material, supplies, equipment,
  components, office supplies and vehicles may be purchased by the Company in
  China or abroad based on such consideration as price, quality and availability.

 8.2 Sale of Products. The Company shall sell its products
  at prevailing market prices and with competitive terms first to such affiliates
  or subsidiaries of the Company or the Parties, and then to users in China or
  abroad for best returns. 

 Article 9

  Labour Management and Trade Union 

 9.1 Labour Relations. Any decision on the recruitment,
  employment, dismissal, resignation, wages, insurance, welfare, rewards, penalties
  and other matters concerning the personnel of the Company shall be made in accordance
  with the Labour Law of China, Labour Management Regulations of China on Enterprises
  with Foreign Investment Enterprises, Labour Management Regulations of China
  on Chinese-foreign Joint Venture Enterprises and other labour and social security
  laws and regulations. The Company shall enter into an employment contract with
  the employees once the Company hires them.

 9.2 Trade Union. Workers and staff members of the Company
  may establish a trade union and participate in the activities of the trade union
  in accordance with the Labour Law and Trade Union Law of China. 





 Article 10 

  Taxes, Finance and Audit 

 10.1 Preferential Treatment. The Parties hereto agree
  that each of them shall use its best efforts to secure or cause the Company
  to obtain and become eligible for all preferential tax and other treatment permissible
  under the laws, regulations and discretionary power of relevant China central
  and local authorities. The Parties shall act in good faith and cooperate with
  each other in maximizing the tax and other preferential treatment and minimizing
  the costs and expenses of the Company. 

 10.2 Payment of Taxes. The Company shall be responsible
  for and pay all applicable taxes in accordance with Chinese laws and regulations.
  Workers and staff members of the Company shall pay individual income tax according
  to the tax laws of China. Each Party agrees to use its best efforts and to cooperate
  with the other Party to ensure that the business and affairs of the Company
  are conducted in the most cost efficient manner.

 10.3 Reserves. The Company shall deduct from its profits
  such amounts as required by Chinese law for the purpose of reserve fund, employee
  bonus and welfare fund and expansion fund. The Board of the Company shall ensure
  that the deduction, application and percentage thereof shall be established
  in accordance with the appropriate provisions of the law and regulations of
  China.

 10.4 Books and Records. The Company shall maintain
  and keep at its legal address all books and records required by this Contract
  and the laws of China. Upon reasonable notice, each Party shall have the right
  to inspect the books and records of the Company.

 10.5 Financial Supervision. Micro shall have the right
  to nominate a chief finance officer to oversee the financial matters of the
  Company so long as it holds the majority interest in the Company. SPM shall
  have the right to nominate an accounting officer to oversee the administration
  of bookkeeping and accounting matters of the Company. 

 10.6 Language of Books. All accounting records, vouchers,
  account books shall be written in Chinese. All financial statements and reports
  of the Company shall be made and kept in Chinese and English. 

 10.7 Accounting. The Company shall, according to the
  requirements for foreign investment enterprises in China, retain accountants
  registered in China to conduct auditing and report to the board and the General
  Manager.

 10.8 Foreign Exchange. The Parties agree that all matters
  relating to foreign exchanges of the Company shall be handled in compliance
  with China’s foreign exchange regulations. The Company shall open its
  foreign exchange accounts with a bank or financial institution licensed or permitted
  by the relevant authorities. 

 10.9 Audit. The Company may retain at its cost such
  external auditors as the Board may approve from time to time to audit the financial
  statements, books, and records of 








 the Company. If Micro requests any auditing by auditors it
  retains, then it may do so at its own cost and SPM shall agree to such auditing.

 10.10 Audit Requested by a Party. The Parties agree
  that where audit is necessary for a Party to comply with its reporting or disclosure
  obligations as required by any regulatory authorities, the Company and the other
  Party shall act expeditiously to facilitate such audit.

 10.11 Delivery of Financial Statements. The Company
  shall deliver to the Parties within sixty (60) days after the end of each Fiscal
  Year, an annual report containing: 

	 	 (a)      	 audited financial statements as at the end of, and
        for, such Fiscal Year (prepared in accordance with GAAP as adopted and
        consistently applied in China, with comparative financial statements as
        at the end of, and for, the immediately preceding Fiscal Year) containing
        a balance sheet; a statement of profit and loss; a statement of changes
        in financial position; and a statement of change in capital; 

	 
	 	 (b)      	 a report of the Auditors on such financial statements
        stating that such financial statements have been prepared in accordance
        GAAP as adopted and consistently applied in China; 

	 
	 	 (c)      	 a profit distribution report; 

	 
	 	 (d)      	 such other information as is required to be provided
        to the Parties or, in the opinion of the chairman of the Board, is material
        to the business of the Company; 

	 
	 	 (e)      	 such financial and other information as may be reasonably
        requested by a Party for the purpose of any regulatory compliance; and
      

	 
	 	 (f)      	 information concerning creditors and charges to
        the capital and current accounts allocated to the Parties and such other
        information as may be necessary to enable a Party to file income tax returns
        with respect to such Party’s income or loss in respect of such Fiscal
        Year. 



 Article 11

  Intellectual Property 

 11.1 Ownership of Intellectual Property. Each Party
  shall continue to own exclusively all its intellectual property rights, and
  any and all renewals, extensions, and restorations thereof, now or hereafter
  in force and effect worldwide, unless it has expressly transferred, licensed
  or assigned such intellectual property rights to the other Party or to the Company.
  Any intellectual property independently developed by the Company and any intellectual
  property rights arising therefrom shall be owned by the Company. 

 11.2 Protection of Intellectual Property. Each Party
  shall act diligently to protect the intellectual property of the other Party
  and the Company, and assist each other in taking necessary steps in remedying
  any infringement of such intellectual property rights. 





 Article 12

  Term, Dissolution and Liquidation 

 12.1 Term. The term of the Company shall be thirty
  (30) years commencing from the date on which the business license of the Company
  is issued, unless terminated sooner or extended pursuant to the terms of this
  Contract.

 12.2 Extension. The term of the Company may be extended
  for such period of time as may be agreed to by the Parties. The agreement for
  the extension shall be in writing signed by all the Parties and shall be submitted
  for approval to the approval authorities no later than six (6) months prior
  to the expiry of the term as provided herein. The extension shall become effective
  upon approval by the approval authorities. 

 12.3 Dissolution. The Company shall be dissolved when:


	 	 (a)      	 the term of the Company specified herein including
        extension has expired; 

	 
	 	 (b)      	 it becomes incapable of continuing its business
        and operations due to such serious financial losses, or force majeure;
      

	 
	 	 (c)      	 a Party is in serious breach of its obligations
        under this Contract, the Articles of Association or law and such breach
        is not remedied within a reasonable period of time after notice is given,
        such that the Company is prevented from its normal operations; 

	 
	 	 (d)      	 the Company cannot achieve its business purposes
        and no reasonable prospect of improvement therefore;. 

	 
	 	 (e)      	 the Parties mutually agree to dissolve the Company.
      



      Where any of the events under
  sections 12.3 (b), (d) and (e) occurs, the Board shall pass a resolution to
  dissolve the Company and apply for approval by the approval authorities of the
  dissolution. Where section 12.3 (c) becomes applicable, the Party not in breach
  shall have the right to apply for an approval to dissolve the Company and upon
  receipt of such approval the Company shall be dissolved pursuant to the terms
  thereof and/or the terms of this Article 12. The Party in breach of this Contract
  and/or the Articles of Association shall be responsible for the resulting losses
  to the Company. 

 12.4 Approval for Dissolution. An approval by the approval
  authorities shall be condition precedent to the dissolution of the Company except
  in the case of section 12.3 (a). The Parties agree that they shall act reasonably
  and in good faith to give effect to the intent of section 12.3 hereof. 

 12.5 Liquidation. Where the Company is dissolved pursuant
  to this Contract, the Board shall establish a liquidation committee and shall
  prepare the liquidation procedures, appoint members of the liquidation committee.

 12.6 Liquidation Committee. Members of the liquidation
  committee shall in general be appointed pursuant to the terms of the approval
  of the approval authorities, or from directors and, where necessary, from such
  professional advisers or consultants as the 








 Board may decide, provided that the number of such professional
  advisers does not exceed one-third (1/3) of the number of the members on the
  liquidation committee.

 12.7 Expenses and Remuneration. The liquidation expenses
  and remuneration for members of the liquidation committee shall be paid in priority
  out of the remaining assets of the Company. Where the Company has no sufficient
  remaining assets, the Parties hereby agree to negotiate in good faith for the
  payment of the expenses and remuneration. 

 12.8 Assets Allocation. Subject to the mandatory laws
  of China on bankruptcy and insolvency and on creditors’ rights, upon dissolution
  and liquidation of the Company the remainder assets and proceeds of liquidation
  of the Company shall be allocated in the following order of priority, to: 

	 	 (a)      	 the repayment of all outstanding debts and liabilities
        of the Company; and 

	 
	 	 (b)      	 the distribution between the Parties according to
        the ratio of their respective ownership of the registered capital of the
        Company described in Section 3.3. 



 12.9 Sale of Assets. The Parties hereto agree that
  SPM shall have an option to purchase all assets from the Company at the price
  determined through an appraisal as herein provided for, if the Company is dissolved
  under section 12.3 (a), which option shall be exercisable no later than ninety
  (90) days prior to the expiry of the term specified in section 12.1. The purchase
  price shall be determined through an appraisal by an independent appraisal firm
  selected jointly by the Parties, failing which each Party shall conduct its
  own appraisal by an appraisal firm it selects and the purchase price shall be
  the medium value of the two appraisals. 

 12.10 Sale to Third Party. If prior to the completion
  of asset purchase by SPM pursuant to section 12.3 above, a third party makes
  an offer to purchase all of the assets of the Company at a price higher than
  the price determined pursuant to section 12.9 hereof then the assets shall be
  sold to that third party, unless SPM shall purchase all the assets at a price
  no less than the price offered by the third party. 

 12.11 Sale Proceeds. Where all the assets of the Company
  are sold pursuant to sections 12.9 or 12.10, the proceeds of such sale shall
  be distributed to the Parties pro rata to its Interest of the Company as specified
  in section 3.3 hereof as may be adjusted from time to time. 

 12.12 Permit Transfer. If due to the reasons of SPM,
  the Mining Permit cannot be transferred to the Company, Section 12.3(c) and
  (d) hereunder shall deemed to apply, but any funds then held in the designated
  trust account shall be returned to Micro. 





 Article 13 

  Insurance 

 13.1 Insurance. The Company shall take out issuance
  against various risks with an insurance company of international reputation
  licensed to carry on business in China. The type, value and duration of the
  insurance shall be decided by the Board in accordance with generally accepted
  international standards for such coverage. The insurance premium paid by the
  Company shall be recorded as operational expenses of the Company.

 Article 14

  Representations and Warranties 

 14.1 Full Authority. The Parties represent and warrant
  to each other that the entering into of the contract and their performance of
  the terms and conditions hereof do not and will not violate the laws, regulations
  and decrees of their respective jurisdictions. All shareholder and board approvals,
  consents and permissions necessary for entering into this Contract have been
  or will be obtained by the Parties respectively.

 14.2 Ownership of Assets. SPM represents and warrants
  that it lawfully and fully owns or holds all assets that it is obligated to
  transfer to the Company as its contribution to the registered capital, including
  all SPM Contribution and all permits, licenses and approvals in relation to
  the Business, free from any claims, lien, mortgages, security, litigation, charges
  or any other encumbrance except those expressly disclosed to Micro in writing.
  Such permits, licenses or approvals can and shall be transferred to the Company
  subject only to necessary approval of the approval authorities. SPM is not aware
  of any conflicting claim to any assets or property covered by the licenses,
  permits or approvals. SPM has duly paid all fees, charges or levies in relation
  to the licenses, permits and approvals, except those expressly disclosed to
  Micro in writing. There is nothing under any Chinese laws, regulations or contract
  preventing SPM from entering into this Contract or performing any of its obligations
  or completing any of the transactions contemplated hereunder. 

 14.3 Environmental Protection. SPM represents and warrants,
  to its best knowledge and belief, and having made reasonable inquiries, that
  that there has been no material spill, discharge, leak, emission, ejection,
  escape, dumping, or any release or threatened release of any kind, of any toxic
  or hazardous, substance or waste (as defined by applicable Chinese law) from,
  on or under the mining or exploration property or into the environment, except
  releases permitted or otherwise authorized by such law; no toxic or hazardous
  substance or waste has been disposed of or is located on the property comprising
  the mining and exploration property as a result of activities of SPM or its
  predecessors in interest; and no toxic or hazardous substance or waste has been
  treated on or is now stored on the property comprising the mining and exploration
  property.





 Article 15

  Further Covenants

 15.1 Best Interests. The Parties shall at all times
  act in good faith and in the best interests of the Company.

 15.2 Both parties to Secure. The Parties shall make
  best efforts to obtain and secure all decisions, approvals, permits, rights
  and licenses as may be required by the incorporation, operations and development
  of the Company. 

 15.3 Confidentiality. The Parties, on their own behalf
  and on behalf of their respective shareholders, directors, officers, employees,
  and agents, shall keep in confidence all information acquired by them concerning
  the affairs of the other Party and the Company except disclosure to their professional
  advisors, who shall likewise agree to keep all such information in confidence,
  and disclosure as may be required by law or any regulatory authorities. 

 15.4 Adjustment. If circumstances are such that reasonable
  adjustment or change of any schedule, time frame or dates hereunder is warranted,
  then the Parties shall, after discussions in good faith, make such adjustment
  or change, to the extent permitted at law and subject to necessary regulatory
  approval. 

 Article 16 

  Liabilities for Default 

 16.1 If Micro does not contribute according to section 3.5.1:
  on April 15, 2005, Micro does not contribute 5 million Yuan, SPM has right to
  terminate the contract from the 7th day of delay date; If Micro does
  not contribute 10 million Yuan before the end of July 2005, SPM has right to
  terminate the contract from the 30th day of the delay date. SPM has
  right to take action for any loss. If Micro breaches section 3.4 and 3.5.1,
  and section 2.3 cannot be finished and production design capacity cannot be
  reached due to this reason, Micro shall compensate any loss due to this reason.
  If SPM does not transfer the Mining Permit into the Company according to section
  3.5.1 in time, SPM shall compensate Micro for double of all loss arising as
  a result of such default. 

 Article 17 

  Applicable Law 

 17.1 Applicable Law. This Contract and its interpretations
  shall be governed by the published laws of China known to the public. 





 Article 18 

  Dispute Resolution 

 18.1 Consultation and Arbitration. In the event a dispute
  arises in connection with the interpretation or implementation of this Contract
  or any terms therein, the Parties shall attempt in the first instance to resolve
  such dispute through friendly consultations. If the dispute is not resolved
  in this manner within thirty (30) days after the commencement of consultations,
  then either Party may submit the dispute for arbitration to China International
  Economic Trades Arbitration Committee pursuant to its rules. The languages used
  in the arbitration shall be Chinese and English. All the materials, affidavits,
  statement of claim, statement of defense, arbitration award and supporting reasons
  shall be in both Chinese and English. There shall be three (3) arbitrators.
  The award shall be final, and binding on the Parties.

 18.2 Continuing Performance. Where disputes are dealt
  with pursuant to section 19.1, the Parties shall continue to be bound by this
  Contract and to perform their respective duties and obligations under the provisions
  of this Contract not in dispute. 

 Article 19 

  Force Majeure 

 19.1 Force Majeure. Where the occurrence of any earthquake,
  typhoon, flood, fire, war, terrorist attack, epidemic outbreak, change of law,
  or other events of force majeure which can not be foreseen, prevented and avoided,
  directly affects the performance of this Contract or any terms herein, a Party
  encountering such force majeure shall immediately notify the other Party by
  fax or e-mail and shall within fifteen (15) days provide details of such force
  majeure and valid documents stating the reasons why the Contract cannot be performed,
  or cannot be fully performed or the performance has been delayed. The documentary
  proof shall be issued by competent authorities where the force majeure event
  has occurred. The Parties may decide whether to rescind the Contract, to perform
  the Contract in part or delay the performance in light of the extent to which
  such force majeure event affects the performance. 

 Article 20 Supplementary Provisions 

 20.1 Currency. Unless otherwise specified in this Contract,
  all unit of currency in this Contract shall be Renminbi (RMB¥). 

 20.2 Further Actions. The Parties shall execute, file
  and submit all documents and instruments necessary to comply with the requirements
  of laws, decrees, rules and regulations of China and shall execute, file, consent
  to and submit all documents and instruments necessary for the establishment
  and maintenance of the Company. The Parties further agree that each of them
  shall, upon reasonable request of the other, do or cause to be done all further
  acts and agree to execute or cause to be executed all further documents and
  instruments as may be required to give effect to the intent and purpose of 








 this Contract. It is the express understanding of the Parties
  that the provisions contained in this section shall apply to the matters provided
  for in section 4.1 of this Contract. 

 20.3 Language. This Contract shall be written in both
  Chinese and English languages with both versions having the same legal force
  and effect. In the event of any discrepancy in the interpretation of this Contract
  or any term herein, Chinese version prevails. 

 20.4 Approvals. The contents of this Contract shall
  be subject to the approval of the approval authorities and shall become effective
  upon such approval. The contents and agreements that do not need approval by
  the approval authorities shall become effective upon signed by both parties.


 20.5 Notices. Parties may communicate through fax or
  email. If the correspondences are related to the rights and obligations of the
  Parties, the correspondences shall be sent through registered courier or mail.
  The legal addresses of the Parties listed in the Contract are the addresses
  of the Parties 

 20.6 Waivers. No express or implied waiver by either
  Party of any provision of this Contract or of any breach or default of the other
  shall be a continuing waiver or be effective unless in writing. 

 20.7 Copies. This Contract is executed in eight (8)
  copies in each of the Chinese and English versions. 

 20.8 Signature. This Contract is signed by the legal
  representatives of the Parties on April 5, 2005. If the agreements signed before
  by both parties have any discrepancy with this Contract, this Contract prevails.


	 Micro Express Ltd.  	 	 Sichuan Province Mining Ltd. 
      
	 By its authorized signatory:  	 	 By its authorized signatory:  
	  	 	 
	 /s/ Richard Shao” 
    	 	 /s/ Yunxin Liu” 
    
	 Signature  	 	 Signature  
	 Richard Shao  	 	 Yunxin Liu  
	 	 	 
	  	 	 
	 Printed Name  	 	 Printed Name  
	 President  	 	 President  
	 	 	 
	  	 	 
	 Title  	 	 Title  
	 April 5, 2005  	 	 April 5, 2005  
	 	 	 
	  	 	 
	 Date  	 	 Date  












Schedule I 

      List of Mining Permits 

The No. of Mining Permit is 5100000410234 


Schedule II 


Feasibility Study Report