After Recording, Return To: Crown Mines, L.L.C. P. O. Box 743547 Dallas, Texas  75374-3547   WATER RIGHTS LEASE AND WATER PIPELINE EASEMENT AGREEMENT  This Water Right Lease and Water Pipeline Easement Agreement (Agreement) is entered into between CROWN MINES, L.L.C., a Texas limited liability company, with an address of P. O. Box 743547, Dallas, Texas  75374-3547 (Crown Mines), and DEER TRAIL MINING COMPANY,

L.L.C.

, a Nevada limited liability company, with an address of 8880 Rio San Diego Drive, 8th Floor, San Diego, California 92108 (DTMC) this 30th day of July, 2007 (Effective Date).  Crown Mines and DTMC may be referred to herein individually as a Party and collectively as the Parties.  RECITALS  A. Crown Mines has been the owner of Water Right No. 63-37, being more particularly described as having a maximum flow of 0.25 cubic feet per second and a maximum annual diversion of 180.995 acre feet of water from Three Mile Spring for year-round mining purposes at the Deer Trail Mine and Mill Site situated in Piute County, State of Utah (the Spring Right). B. Water from the Spring Right is conveyed via a pipeline approximately 7,510 feet long located on an associated right-of-way extending from Three Mile Spring to the Deer Trail Mine and Mill Site (Three Mile Spring Pipeline). C. Concurrently with the Effective Date, Crown Mines has conveyed a fifty percent portion of the Spring Right to DTMC, said portion being more particularly described as having a maximum flow of 0.125 cubic feet per second and a maximum annual diversion of 90.5 acre feet of water from Three Mile Spring for year-round mining purposes. D. Concurrently with the Effective Date, Crown Mines has retained a fifty percent portion of the Spring Right, said portion being more particularly described as having a maximum flow of 0.125 cubic feet per second and a maximum annual diversion of 90.5 acre feet of water from Three Mile Spring for year-round mining purposes (the Retained Right). E. Crown Mines also owns a contractual right to use water diverted under Water Right No. 63-3043 as evidenced and described in the Agreement between Cottonwood Irrigation Company and Deer Trail Development Corporation, dated July 28, 1977 (the Contractual Right), a copy of which is attached to this Agreement as Exhibit A. F. Concurrently with the Effective Date, crown Mines has assigned a fifty percent portion of its Contractual Right to DTMC.  1    G. Concurrently with the Effective Date, Crown Mines has retained a fifty percent portion of the Contractual Right (the Retained Contractual Right).  The Retained Right and the Retained Contractual Right are referred to collective herein as the Water Rights. H. Concurrently with the Effective Date, Crown Mines conveyed to DTMC certain patented and unpatented mining claims and mill sites and dumps situated in Piute County, State of Utah, described in the attached Exhibit B (the Claims). I. DTMC desires to use the Water Rights

and Three Mile Spring Pipeline

in its operation of the Claims through a lease of the Water Rights

 and Three Mile Spring Pipeline

 from Crown Mines. J. Crown Mines desires to acquire a perpetual non-exclusive Pipeline Easement over and across the Claims for construction of a future pipeline for the transportation of water.  AGREEMENT  NOW, THEREFORE, in consideration of their mutual covenants and promises described herein, including, but not limited to, the perpetual non-exclusive Pipeline Easement described herein, the Parties agree as follows:  1. Recordation of Agreement.  This Agreement may be recorded by a Party with any governmental agency, including in the offices of the County Recorder of Piute County, Utah, and Sevier County, Utah. 2. Lease of Water Right

 and Pipeline

..  Crown Mines hereby leases the Water Rights

and the use of the Three Mile Spring Pipeline

to DTMC for purposes consistent with

the

 approved uses

 of the Water Rights

 (the Lease). 3. Term.  The term of the Lease is five (5) years from the Effective Date, unless earlier terminated or extended as provided herein. 4. Extension of Lease.  DTMC may provide written notice to Crown Mines of its desire to extend the term of the Lease for successive periods of up to five (5) years each.  DTMC shall provide notice to Crown Mines of its desire to extend the term of the Lease at least 6 months prior to the end of the term or any extension thereof.  Crown Mines shall extend the term of the Lease as requested by DTMC, provided that: (i) Crown Mines

has

 determined, in its sole and absolute discretion but exercising reasonable commercial judgment, that the Water Rights are not required for operation and development of any of its mining claims or for other uses which may by law be permitted during the period of extension requested by DTMC; and (ii) the Parties have negotiated additional terms, including a price for the lease of the Water Rights, as Crown Mines may have determined to be appropriate, in its sole and absolute discretion but exercising reasonable commercial judgment, for the period of extension requested by DTMC.  In the event that Crown Mines determines that the Water Rights are necessary for operation and development of its mining claims or for other uses which may by law be permitted, Crown Mines shall so  2    notify DTMC in writing no later than 4 months prior to the end of the term or any extension thereof. 5. Rent.  The Water Rights shall be leased to DTMC at no cost during the initial term of the Lease.  The Parties shall negotiate in good faith the rental for the Water Rights for each period during which the Lease is proposed to be extended. 6. Duty to Use Water.  DTMC shall divert and fully use the water available under the Water Rights consistent with their approved uses.  Within 120 days of the Effective Date, DTMC shall submit a water use plan to Crown Mines, including, but not limited to, a description of the diversion and conveyance facilities, the amount of water that it reasonably expects to use, the timing of the proposed use, and a description of the operations that will use the water in its mining and development of the Claims. 7. Diversion and Use Records.  DTMC shall measure its water diversions and keep records of all water diverted, used, and returned under the Water Rights.  The water diversion and use records maintained by DTMC shall be considered confidential and shall not be disclosed to anyone but Crown Mines without Crown Mines express written permission.  On each anniversary of the Effective Date, DTMC shall provide a report of its diversion and use of water under the Water Rights to Crown Mines. 8. Filing of Change Applications Restricted.  DTMC shall not file any permanent or temporary change applications on the Water Rights without the express prior written permission of Crown Mines. 9. Termination of Lease.  Crown Mines may terminate the Lease upon 12 months written notice to DTMC if Crown Mines determines, in its sole and absolute discretion but exercising reasonable commercial judgment, that the use of the Water Rights are necessary for the mining and development of its claims or for other uses which may by law be permitted.  Termination of the Lease shall have no effect on the perpetual pipeline easement granted by DTMC to Crown Mines herein, which is expressly intended to survive termination of the Lease. 10. Pipeline Easement.  DTMC hereby grants to Crown Mines a perpetual, non-exclusive easement (Pipeline Easement) over and across the Claims at any reasonable point to locate, survey a route, construct, entrench, maintain, protect, inspect and operate a surface or an underground pipeline for the transportation of water, together with necessary valves and other appurtenances.  The easement hereby granted is a burden on the Claims for the benefit of Crown Mines, which burden shall run with the Claims and shall be binding upon successor owners of the Claims or any portion thereof and constitute an easement in grossin favor of Crown Mines and its successors and assigns.  The PipelineEasement shall be 20 feet in width being 10 feet on each side of the centerline of thepipeline.  The use of the Pipeline Easement shall not unreasonably interfere with DTMCs mining activities on the Claims, and the Pipeline Easement is in addition to and not in derogation of any other rights of access available to Crown Mines by law. 11. Notices.  All notices, payments and other required communications (Notices) to the Parties shall be in writing, and shall be addressed as follows:  3    If to Crown Mines: Crown Mines, L.L.C. P. O. Box 743547 Dallas, Texas  75374-3547  With a Copy to: Michael R. Haggerty Jackson Walker L.L.P. 901 Main Street, Suite 6000 Dallas, Texas  75202  If to DTMC: Deer Trail Mining Company,

L.L.C. 8880 Rio San Diego Drive, 8th Floor San Diego, California  92108  With a Copy to: Robert N. Wilkinson, Esq. 60 East South Temple, Suite 1200 Salt Lake City, Utah  84111  All

Notices

 shall be given by personal delivery, by electronic communication or facsimile, with a confirmation sent by registered or certified mail return receipt requested, or by commercial courier service.  All Notices shall be effective and shall be deemed delivered on the date of delivery if delivered during normal business hours, and if not, delivered during normal business hours, on the next business day following delivery.  A Party may change its address by Notice to the other Party. 12. Authority.  Each of Crown Mines and DTMC represents and warrants to the other that its undersigned officer has been duly authorized, and has the power and authority, to execute this Agreement on its behalf. 13. Successors and Assigns.  This Agreement and the covenants contained herein shall be binding upon and inure to the benefit of the Parties, their successors and assigns. IN WITNESS WHEREOF, the parties have caused this Agreement to be properly executed by persons thereunto duly authorized for the purposes therein stated. EXECUTED as of the date first above written. DEER TRAIL MINING COMPANY,

L.L.C.

, CROWN MINES, L.L.C., a Nevada limited liability company a Texas limited liability company  By:  _/s/ Mark A. Lopez___________ By:  _/s/ I.N. Fehr______________ Its:  _Manager___________________ Its:  _Manager_________________   4    STATE OF CALIFORNIA ) : ss. COUNTY OF SAN DIEGO )  The foregoing instrument was acknowledged before me this 31 day of July, 2007, by Mark A. Lopez, Manager of DEER TRAIL MINING COMPANY,

L.L.C.

, a Nevada limited liability company. [NOTARY SEAL] _/s/ Vivian T. Harris____________ Notary Public   STATE OF TEXAS ) : ss. COUNTY OF DALLAS )  The foregoing instrument was acknowledged before me this 30th day of July, 2007, by I.N. Fehr, the President of CROWN MINES, L.L.C., a Texas limited liability company. [NOTARY SEAL] _/s/ Lorlee C. Bartos____________ Notary Public    5    EXHIBIT A To Water Rights Lease and Water Pipeline Easement Agreement Agreement between Cottonwood Irrigation Company and Deer Trail Development Corporation, dated July 28, 1977   6    [f1550001.jpg]  7    [f1550002.jpg]  8    [f1550003.jpg]  9    [f1550004.jpg]  10    [f1550005.jpg]   11


EXHIBIT B To Water Rights Lease and Water Pipeline Easement Agreement PART 1 Crown Mines L.L.C. Claims Purchased by Deer Trail Mining Company, L.L.C. Patented Claims Located in Piute County, Utah  CLAIM NAMEMINERAL SURVEY NUMBERCLIFFMS 41DEER TRAILMS 42 ADEER TRAIL#01MS 6365 ADEER TRAIL#01 MILLSITEMS 6385 BDEER TRAIL#02MS 6365 ADEER TRAIL#02 MILLSITEMS 6365 BDEER TRAIL#03MS 6365 ADEER TRAIL#03 MILLSITEMS 6365 BDEER TRAIL#04MS 6396DEER TRAIL#05MS 6403 ADEER TRAIL#05 MILLSITEMS 6403 BDEER TRAIL#07MS 6403 ADEER TRAIL#08MS 6736DEER TRAIL#09MS 6736DEER TRAIL#10MS 6736DEER TRAIL#20MS 6736DEER TRAIL#30MS 6717DEER TRAIL#33MS 6717DEER TRAIL#34MS 6717DEER TRAIL#35MS 6717DEER TRAIL#36MS 6717DEER TRAIL#37MS 6717DEER TRAIL#38MS 6736DEER TRAIL FRAC.MS 6717DEER TRAIL MILLSITEMS 42 BDEWITT & FERGUSONMS 52 A*DEWITT & FERSUSON MILLSITEMS 52 BGREEN EYED MONSTERMS 43 AMONSTER APEXMS 5972MONSTER APEX #2MS 5972PLUTOMS 46SPHINXMS 6397 TOTAL CLAIMS     32 *DEWITT & FERGUSON MILLSITE MINERAL RIGHTS ONLY


12


EXHIBIT B  To Water Rights Lease and Water Pipeline Easement Agreement PART II Crown Mines L.L.C. Claims Purchased by Deer Trail Mining Company, L.L.C. Unpatented Claims Located in Piute County, Utah  CLAIM NAMERECORDED BOOKRECORDED PAGEAMENDED BOOK PAGEBLM SERIAL NUMBERAPEX LODED45295579ATHENIAD42395580BUSTERG45995585BUSTER NO.1G46095586BUSTER NO.2G46195587BUSTER NO.3G46195588BUSTER NO.4M12995589BUSTER NO.5M13095590BUSTER NO.6M13195591BUSTER NO.7M13195592BUSTER NO.8M13295593BUSTER NO.9M13395594CALEDONIA LODED58895596CINNABAR LODED58495599CLIFF NO. 1D37195600CLIFF NO. 2D37295601CLIFF NO. 3D37295602CLIFF NO. 4D37395603CLIFF NO. 5D37395604CLIFF NO. 6D37395605CLIFF NO. 7D37495606CLIFF NO. 8D37495607COLUMBINE LODED58695608CREST LODED45295610DEER TRAIL EXT.C25095666DEER TRAIL EXT. NO. 01C25095667DEER TRAIL EXT. NO. 02C25095668DEER TRAIL EXT. NO. 03C25195669DEER TRAIL EXT. NO. 04C25195670DEER TRAIL EXT. NO. 05C25295671DEER TRAIL EXT. NO. 06C25295672DEER TRAIL EXT. NO. 07C25395673DEER TRAIL EXT. NO. 08C25395674


13


DEER TRAIL EXT. NO. 09C25395675DEER TRAIL EXT. NO. 10C25495676DEER TRAIL EXT. NO. 11C25495677DEER TRAIL EXT. NO. 12ll710JJ               65353982DEER TRAIL EXT. NO. 13ll711353983DEER TRAIL EXT. NO. 14ll772353984DEER TRAIL EXT. NO. 15ll713353985DEER TRAIL EXT. NO. 24ll722353994DEER TRAIL EXT. NO. 25ll723353995DEER TRAIL EXT. NO. 26ll724353996DEER TRAIL EXT. NO. 27ll725353997DEER TRAIL EXT. NO. 28ll726353998DEER TRAIL EXT. NO. 29ll727353999DEER TRAIL EXT. NO. 30ll728354000DEER TRAIL EXT. NO. 31ll729354001DEER TRAIL EXT. NO. 32ll730354002DEER TRAIL EXT. NO. 33ll731354003DEER TRAIL EXT. NO. 34ll732354004DEER TRAIL EXT. NO. 35ll733354005DEER TRAIL EXT. NO. 36ll734354006DEER TRAIL EXT. NO. 37ll735354007DEER TRAIL EXT. NO. 38ll736354008DEER TRAIL EXT. NO. 39ll737354009DEER TRAIL EXT. NO. 40ll738354010DEER TRAIL EXT. NO. 41ll739354011DEER TRAIL EXT. NO. 42ll740354012DEER TRAIL EXT. NO. 43ll741354013DEER TRAIL EXT. NO. 44ll742354014DEER TRAIL EXT. NO. 45ll743354015DEER TRAIL EXT. NO. 46ll744354016DEER TRAIL EXT. NO. 47ll745354017DEER TRAIL EXT. NO. 48ll746354018DEER TRAIL EXT. NO. 49ll747354019DEER TRAIL EXT. NO. 50ll748354020DEER TRAIL EXT. NO. 51ll749354021DEER TRAIL EXT. NO. 52ll750354022DEER TRAIL NO. 11A13595612DEER TRAIL NO. 12A14295613DEER TRAIL NO. 13A14295614DEER TRAIL NO. 14A14395615DEER TRAIL NO. 15A14395616DEER TRAIL NO. 16A14495617


14


DEER TRAIL NO. 17A14495618DEER TRAIL NO. 18A14595619DEER TRAIL NO. 19A14595620DEER TRAIL NO. 212411495621DEER TRAIL NO. 222411495622DEER TRAIL NO. 232411595623DEER TRAIL NO. 242411695624DEER TRAIL NO. 252411795625DEER TRAIL NO. 262411795626DEER TRAIL NO. 272411895627DEER TRAIL NO. 282411995628DEER TRAIL NO. 292412095629DEER TRAIL NO. 31159995630DEER TRAIL NO. 322412295631DEER TRAIL NO. 39B9995632DEER TRAIL NO. 40B10095633DEER TRAIL NO. 41B10095634DEER TRAIL NO. 42B10195635DEER TRAIL NO. 43B24595636DEER TRAIL NO. 44B24695637DEER TRAIL NO. 45B24795638DEER TRAIL NO. 46B24595639DEER TRAIL NO. 47B24695640DEER TRAIL NO. 48B27095641DEER TRAIL NO. 49B32295642DEER TRAIL NO. 50B32295643DEER TRAIL NO. 51B32395644DEER TRAIL NO. 52B32395645DEER TRAIL NO. 53B32495646DEER TRAIL NO. 54B32495647DEER TRAIL NO. 55G22795648DEER TRAIL NO. 56G22795649DEER TRAIL NO. 57G22895650DEER TRAIL NO. 58G22995651DEER TRAIL NO. 59G22995652DEER TRAIL NO. 60G23095653DEER TRAIL NO. 61G23195654DEER TRAIL NO. 62G23195655DEER TRAIL NO. 63G23295656DEER TRAIL NO. 64G23395657DEER TRAIL NO. 65G23395658DEER TRAIL NO. 66G23495659


15


DEER TRAIL NO. 67G23495660DEER TRAIL NO. 68G23595661DEER TRAIL NO. 69G23595662DEER TRAIL NO. 70G23695663DEER TRAIL NO. 71G23795664DEER TRAIL NO. 72G44795665FALCON LODED58495681FIRE FLY LODED58495682GOLDEN EAGLE LODED58395693GORGE LODED45395697GRAND VIEW LODED42395698HIDDEN TREASURE AMENDEDD58995701JONQUIL LODED58795705KIESTERD58695706LA CIGALED58795707LINDA PLACERN12595709LOWER CONTACTD45095714MONSTER #3B12395719MONSTER #4B12395720MONSTER #5B12495721MONSTER #6B12495722MONSTER #7B12595723MONSTER #8B12595724MONSTER #9B12695725MOUNTAIN CHIEF AMENDEDD58995726MOUNTAIN CHIEF NO. 1M12895727MOUNTAIN CHIEF NO. 2M12995728OLD CHANNEL LODED46495747OLD CHANNEL LODE NO. 1M8195748PORCUPINE LODED58895742PORTAL LODED45395749PORTAL NO. 1M8295750PORTAL NO. 2M8395751PYRITE LODED58595729RED KNOLL LODED45395731SANTA MARIAD46495735SILVER WEDGED42295737SLOPE NO. 1D45095752SLOPE NO. 2D45195753SLOPE NO. 3D45195754


16


SLOPE NO. 4M8395755SLOPE NO. 5M12795756SLOPE NO. 6M12795757SNOW SHOE LODED58395760SYLVIA PLACERN12695763TAMARAC LODED58595764THE REEF LODED58895732TOMAHAWK LODED58395767TOPAZ LODED58795768VICTORY LODED58695771WHITE FLINT LODED42395776WILD CAT LODED58595758WOODLAND LODED45195759TOTAL CLAIMS170


17