ex10_1.htm


    PROPERTY
OPTION AGREEMENT

     

    BETWEEN

     

    BARRY
J. PRICE

     

    AND

     

    IRC
EXPLORATION LTD.


     

    THE
OMINECA QUEEN

    MINERAL
PROPERTY

    


    PROVINCE
OF BRITISH COLUMBIA

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE OF
CONTENTS


    


    
      
        
          	DEFINITIONS 
      	
                  3

                
	REPRESENTATIONS AND
      WARRANTIES OF PRICE	
                  5

                
	
                  REPRESENTATIONS
      AND WARRANTIES OF IRC

                	
                  6

                
	
                  GRANT
      AND EXERCISE OF OPTION

                	
                  6

                
	
                  RIGHT
      OF ENTRY

                	
                  8

                
	
                  OBLIGATIONS
      OF PRICE DURING PROPERTY OPTION PERIOD

                	
                  8

                
	
                  TERMINATION
      OF PROPERTY ACQUISITION

                	
                  8

                
	
                  TRANSFERS

                	
                  8
      

                
	
                  FORCE
      MAJEURE

                	
                  9

                
	
                  CONFIDENTIAL
      INFORMATION

                	
                  10

                
	
                  ARBITRATION

                	
                  10

                
	
                  DEFAULT
      AND TERMINATION

                	
                  11

                
	
                  NOTICES

                	
                  11

                
	
                  GENERAL

                	
                  11

                
	 	 
	
                  SCHEDULE
      "A"

                	 
	
                  DESCRIPTION
      OF PROPERTY RIGHTS AND PROPERTY

                	 
	 	 
	SCHEDULE
      "B"	 
	
                  JOINT
      VENTURE AGREEMENT

                	 


        

      

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    OPTION
AGREEMENT

     

    THIS AGREEMENT made effective
as of the 11th day of August, 2008.

     

    BETWEEN:

    BARRY J. PRICE an individual
having a residence at 820 East 14th Street,
North Vancouver, B.C., Canada;

     

    (hereafter
"Price")

     

    -
and-

     

    IRC EXPLORATION LTD., a body
corporate, incorporated under the laws of Alberta and having offices located at
530-1015 4th Street
S.W., Calgary, Alberta, Canada;

     

    (hereafter
"IRC")

     

    WHEREAS:

     

    A.           Price
is the holder of or is entitled to become the holder of all Property Rights
related to the Property;
and

     

    B.           Price
has agreed to grant an Option to lRC to acquire an interest in and to the
Property Rights and the
Property, on the tem1S and conditions hereinafter set forth;

     

    NOW THEREFORE THIS AGREEMENT
WITNESSETH that in consideration of the sum  of $1.00 now paid
by IRC to Price (the receipt of which is hereby acknowledged), the parties agree
as follows:

     

    DEFINITIONS

     

    1.1    For
the purposes of this Agreement the following words and phrases shall have the
following meanings,
namely:

     

    a)  "Agreement"
means this agreement and any amendments thereto from time to time;

     

    b)  "Commencement
Date" means the date of this Agreement;

     

    
      	
              c)  

            	
              "Completion
      Date" means the date on which IRC fulfills all of its obligations with
      respect to proper exercise of the Option as contemplated in Article 4
      hereof;

            


    

     

    
      	
              d)  

            	
              "Exploration
      Expenditures" means the sum of (i) all costs of acquisition and
      maintenance of the Property, all exploration and development expenditures
      and all other costs and expenses of whatsoever kind or nature including
      those of a capital nature, incurred or chargeable by IRC with respect to
      the exploration and development of the Property and the placing of the
      Property into Commercial
Production.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              e)  

            	
              "Feasibility
      Report" means a detailed written report of the results of a comprehensive
      study on the economic feasibility of placing the Property or a portion
      thereof into Commercial Production and shall include a reasonable
      assessment of the mineral ore reserves and their amenability to
      metallurgical treatment, a description of the work, equipment and supplies
      required to bring the Property or a portion thereof into Commercial
      Production and the estimated cost thereof, a description of the mining
      methods to be employed and a financial appraisal of the proposed
      operations supported by an explanation of the data used
      therein;

            


    

     

    
      	
              f)  

            	
              “Price”
      means Barry J. Price

            


    

    


    
      	
              g)  

            	
               "IRC"
      means IRC Exploration Ltd.;

            


    

     

    
      	
              h)  

            	
              "Joint
      Venture Agreement" means the agreement substantially in the fonn as
      attached hereto as Schedule "B";

            


    

     

    
      	
              i)  

            	
              "Mine"
      means the workings established and assets acquired, including, without
      limiting the generality of the foregoing, development headings, plant and
      concentrator installations, infrastructure, housing, airport and other
      facilities in order to bring the Property into Commercial
      Production;

            


    

     

    
      	
              a.  

            	
              "Mineral
      Products" means the end products derived from operating the Property as a
      Mine;

            


    

     

    
      	
              b.  

            	
              "Mining
      Operations" means every kind of work
done:

            


    

     

    
      	
              c.  

            	
              on
      or in respect of the Property in accordance with a Feasibility Report;
      or

            


    

     

    
      	
              d.  

            	
              if
      not provided for in a Feasibility Report, unilaterally and in good faith
      to maintain the Property in good standing, to prevent waste, or to
      otherwise discharge any obligation which is imposed upon it pursuant to
      this Agreement;

            


    

     

    including,
without limiting the generality of the foregoing, investigating, prospecting,
exploring, developing, property maintenance, preparing reports, estimates and
studies, designing, equipping, improving, surveying, construction and mining,
milling, concentrating, rehabilitation, reclamation, and environmental
protection;

     

    
      	
              j)  

            	
              "Option"
      means the irrevocable option for IRC to earn in and acquire a net
      undivided interest in and to the Property as provided in this
      Agreement;

            


    

     

    
      	
              k)  

            	
              "Option
      Period" means the period commencing on the Commencement Date to and
      including July 31, 2012;

            


    

     

    
      	
              1)  

            	
              "Property"
      means the exploration properties and lands located m the Province of
      British Columbia all as more particularly described in Schedule "A"
      hereto;

            


    

     

    
      	
              m)  

            	
              "Property
      Rights" means all applications for pern1its for general reconnaissance,
      permit for general reconnaissance, interim approvals, applications for
      contracts of work, contracts of work, licenses, pern1its, easements,
      rights-of-way, certificates and other approvals obtained by either of the
      parties either before or after the date of this Agreement and necessary
      for the exploration and development of the Property, or for the purpose of
      placing the Property into production or continuing production
      therefrom.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    REPRESENTATIONS
AND WARRANTIES OF PRICE

     

    2.1           Price
hereby acknowledges and confirms that it holds the Property Rights related to an
undivided one
hundred (100%) percent interest in the Property as at the date
hereof.

     

    2.2           Price
represents and warrants to IRC that:

     

    
      	
              a)  

            	
              Price
      is lawfully authorized to hold his interest in the Property and will
      remain so entitled until 85% of the interests of Price in the Property
      have been duly transferred to IRC as contemplated by the terms
      hereof;

            


    

     

    
      	
              b)  

            	
              Price
      is an individual, has attained the age of majority and is legally
      competent to execute this agreement and to take all actions required
      pursuant thereto and that upon the execution and delivery, this agreement,
      will constitute a legal, valid and binding contract of Price enforceable
      against Price in accordance with its
terms;

            


    

     

    
      	
              c)  

            	
              as
      at the date hereof and at the time of transfer to IRC of an interest in
      the mineral claims and/or exploration licenses comprising the Property
      Price is and will be the beneficial owner of its interest in the Property
      free and clear of all liens, charges, claims, royalties or net profit
      interests of whatsoever nature, and no taxes or rentals will be due in
      respect of any thereof;

            


    

     

    
      	
              d)  

            	
              Price
      has the right and capacity to deal with the Property and the right to
      enter into this Agreement and to dispose of his right, title and interest
      in the Property as herein
contemplated;

            


    

     

    
      	
              e)  

            	
              there
      is no adverse claim or challenge against or to Price's interest in the
      Property, nor to the knowledge of Price is there any basis therefor, and
      there are no outstanding agreements or options to acquire or purchase such
      interest in the Property or any portion thereof other than this
      Agreement;

            


    

     

    
      	
              f)  

            	
              no
      person has any royalty, net profit interests or other interest whatsoever
      in the Property;

            


    

     

    
      	
              g)  

            	
              Price
      is duly authorized to execute this Agreement and for the performance of
      this Agreement by him, and the consummation of the transactions herein
      contemplated will not conflict with or result in any breach of any
      covenants or agreements contained in, or constitute a default under, or
      result in the creation of any encumbrance under the provisions of its
      articles or constating docill11ents or any indenture, agreement or other
      instrument whatsoever to which Price is a party or by which he is bound or
      to which he or the Property may be
subject;

            


    

     

    
      	
              h)  

            	
              no
      proceedings are pending for, and it is unaware of any basis for the
      institution of any proceedings leading to, the placing of Price in
      bankruptcy or subject to any other laws governing the affairs of and
      insolvent person;

            


    

     

    
      	
              i)  

            	
              there
      are no claims, proceedings, actions or lawsuits in existence and to the
      best of Price's information and belief none are contemplated or threatened
      against or with respect to the right, title, estate and interest of Price
      in the Property;

            


    

     

    
      	
              j)  

            	
              to
      the best of his information and belief, all laws, regulations and orders
      of all governmental agencies having jurisdiction over the Property have
      been complied with by Price;

            


    

     

    
      	
              k)  

            	
              to
      the best of his information and belief Price is in good standing under all
      agreements and instruments affecting the Property to which he is a party
      or is bound.

            


    

     

    2.3 The
representations and warranties contained in this section are provided for the
exclusive benefit of IRC, and a breach of anyone or more thereof may be waived
by IRC in whole or in part at any time without prejudice to its rights in
respect of any other breach of the same or any other representation or warranty,
and the representations and warranties contained in this section shall survive
the execution hereof.

     

    2.4 The
representations and warranties contained in this section shall be deemed to
apply to all assignments, transfers, conveyances or other documents transferring
to IRC the interest to be acquired hereunder and there shall not be any merger
of any covenant, representation or warranty in such

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    assignments,
transfers, conveyance or documents, any rule or law, in equity or statute to the
contrary notwithstanding.

     

    REPRESENTATIONS
AND WARRANTIES OF IRC

     

    3.1 IRC
represents and warrants to Price that:

     

    
      	
              a)  

            	
              it
      has been duly incorporated and validly exists as a corporation in good
      standing under the laws of its jurisdiction of
    incorporation;

            


    

     

    
      	
              b)  

            	
              it
      is or will be prior to acquiring any undivided interest in the Property
      hereunder, lawfully authorized to hold mineral claims and real property
      under the laws of the jurisdiction in which the Property is
      situate;

            


    

     

    
      	
              c)  

            	
              it
      has duly obtained all corporate authorizations for the execution of this
      Agreement and for the performance of this Agreement by it, and the
      consummation of the transaction herein contemplated by it will not
      conflict with or result in any breach of any covenants or agreements
      contained in, or constitute a default under, or result in the creation of
      any encumbrance under the provisions of the articles or the constating
      documents of it or any shareholders' or directors' resolution, indenture,
      agreement or other instrument whatsoever to which it is a party or by
      which they are bound or to which it or the Property may be subject;
      and,

            


    

     

    
      	
              d)  

            	
              no
      proceedings are pending for, and it is unaware of any basis for the
      institution of any proceedings leading to, the dissolution or winding up
      of IRC or the placing of IRC in bankruptcy or subject to any other laws
      governing the affairs of insolvent
corporations.

            


    

     

    3.2 The
representations and warranties contained in this section are provided for the
exclusive benefit of Price and a breach of anyone or more thereof may be waived
by Price in whole or in part at any time without prejudice to its rights in
respect of any other breach of the same or any other representation or warranty,
and the representations and warranties contained in this section shall survive
the execution hereof.

     

    3.3 The
representations and warranties contained in this section shall be deemed to
apply to all assignments, transfers, conveyances or other documents transferring
to Price the interest to be acquired hereunder and there shall not be any merger
of any covenant, representation or warranty in such assignments, transfers,
conveyance or documents, any rule or law, in equity or statute to the contrary
notwithstanding.

     

    GRANT
AND EXERCISE OF OPTION

     

    4.1 Price
hereby irrevocably grants to IRC the sole and exclusive right and Option to
acquire up to and including a eighthly five percent (85%) right, title, estate
and interest of Price's one hundred (100%) percent net undivided interest) in
and to the Property Rights and Property, free and clear of all charges,
encumbrances, claims, royalties and net profit interests of whatsoever
nature.

     

    4.2 If at
any time after the date hereof Price determines in its sole discretion to
commission a Feasibility Report recommending the Construction of a Mine, Price
shall give written notice thereof to IRC

     

    4.3 The
Option may be exercised at any time (subject to the terms as stated herein) by
IRC:

     

    
      	
              a)  

            	
              paying
      Price two thousand dollars ($2,000) upon the execution of this
      agreement

            


    

     

    
      	
              b)  

            	
              paying
      Price two thousand dollars ($2,000) on or before July 31,
    2009

            


    

     

    
      	
              c)  

            	
              paying
      Price fifty thousand dollars ($50,000) on or before July 31,
      2010,

            


    

     

    
      	
              d)  

            	
              incurring
      Exploration Expenditures on the Property as
  follows:

            


    

     

    
      	
               
      

            	
              (i) aggregate Exploration
      Expenditures of not less than fifteen thousand dollars ($15,000) on or
      before July 31, 2009;

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (ii)

            	
              aggregate
      Exploration Expenditures (including Exploration Expenditures as described
      in paragraph 4.3( d)(i) above) of not less thirty one thousand dollars
      ($31,000) on or before July
31,2010;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              aggregate
      Exploration Expenditures (including Exploration Expenditures as
      contemplated in paragraph 4.3( d)(i) and (ii) above) of not less than two
      hundred forty one thousand dollars ($241,000) on or before July 31, 20 11,
      and;

            


    

     

    4.4 Prior
to the exercise of the Option as herein provided, Price is hereby appointed as
operator of the Property and shall carry out exploration and development
programs on the Property on the following terms:

     

        a)
Price shall have the same powers, duties and obligations in carrying out such
programs asset out in Article 7 of the Joint Venture Agreement attached hereto
as Schedule "B", excepting Section 7.5 and 7.6 thereof;

     

    b) For
income tax purposes, all Exploration Expenditures incurred by Price pursuant to
such programs shall be incurred for the benefit of IRC; and

     

    c) Until
such time as the Option is exercised in accordance with the terms hereof, IRC
shall have no interest of whatsoever nature in the Property Rights or the
Property.

     

    4.5 If and when the Option has been
exercised in accordance with Section 4.3 and commencing on the Completion
Date:

     

    a) The
undivided right, title and interest of the parties in the Property shall be as
follows:

    
    

     

    
      	
              Before Completion Date
      (net)

            	
              After Completion Date
      (net)

            
	
              Price
      100% 

            	
              Price
      15%

            
	
              IRC 0%

            	
              IRC
    85%

            
	
              Total
      100% 

            	
              Total
      100%

            


    

     

    b) the
undivided right, title and interest in and to the Property Rights and the
Property acquired by IRC upon the Completion Date shall vest in IRC free and
clear of all charges, encumbrances, claims, royalties or net profit interests of
whatsoever nature other than as set forth and described in the Joint Venture
Agreement substantially in the form attached hereto as Schedule
"B";

     

    c) for
the purposes of the Joint Venture Agreement:

     

    i) Price
will be deemed to have contributed forty two thousand six hundred dollars
($42,600)and IRC will be deemed to have contributed two hundred and forty one
thousand dollars ($241,000) of Costs to the Joint Venture for purposes
thereof;

     

    ii) Price
will be the initial operator of the Joint Venture and will have the option to
remain as operator of the Joint Venture for so long as Price holds a
participating interest of fifteen (15%) percent or greater in the Joint
Venture;

     

    4.6
Within 30 days after the Completion Date, Price shall deliver to IRC such number
of duly executed transfers which in the aggregate convey Price's interest to be
acquired hereunder in the Property in favour of IRC. In the event that Price
shall deliver notice to IRC that it has exercised the Option pursuant to the
terms hereof, IRC shall be entitled to receive and to record such of the
transfers contemplated hereby at its own cost with the appropriate governmental
office to effect legal transfer of such interest in the Property into the name
of IRC.

     

    4.7 If,
during the Option Period, Price:

    a) makes
a voluntary or involuntary assignment into bankruptcy or takes advantage of any
legislation for the winding-up or liquidation of the affairs of insolvent or
bankrupt persons or has a bankruptcy petition filed against it; or

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    b) fails
to perform in a manner that is consistent with good mining practice or fails to
perform in a manner consistent with its duties and responsibilities under this
Agreement and does not remedy such default within 45 days of receipt of notice
from IRC specifying such default;

     

    IRC shall
have the right to terminate Price as the Operator of the Property.

     

    RIGHT
OF ENTRY

     

    5.1
During the term of this Agreement, the directors and officers of IRC and its
servants, agents and independent contractors, shall have the sole and exclusive
right in respect of the Property to:

     

    
      	
              a)  

            	
              enter
      thereon at their sole risk and
expense;

            


    

               


               
b) do such
prospecting, exploration, development and other mining work thereon and
thereunder as Price, as operator, in its sole discretion may determine
advisable;

     

    c) bring
upon and erect upon the Property such buildings, plant, machinery and equipment
as Price and IRC may deem advisable and for a period of six months following the
termination of this Agreement, to remove such buildings, plant, machinery and
equipment; and

     

    d) remove
therefrom and dispose of reasonable quantities of ores, minerals and metals for
the purposes of obtaining assays or making other tests.

     

    OBLIGATIONS
OF PRICE DURING OPTION PERIOD

     

    6.1
During the term of this Agreement, Price shall:

     

    a)
maintain in good standing those mineral claims and/or exploration licenses
comprised in the Property by the doing and filing of assessment work or the
making of payments in lieu thereof, and the performance of all other actions
which may be necessary in that regard and in order to keep such mineral claims
free and clear of all liens and other charges arising from Price's activities
thereon except those at the time contested in good faith by IRC;

     

    b) permit
the directors, officers, employees and designated consultants of IRC, at their
own risk and expense, access to the Property at all reasonable times, and IRC
agrees to indemnify Price against and to save it ha11111ess from all costs,
claims, liabilities and expenses that IRC may incur or suffer as a result of any
injury (including injury causing death) to any director, officer, employee or
designated consultant of IRC while on the Property;

     

    c) permit
IRC, at its own expense, reasonable access to the results of the work done on
the Property during the last completed calendar year;

     

    d) do all
work on the Property in a good and workmanlike fashion and in accordance with
all applicable laws, regulations, orders and ordinances of any governmental
authority;

     

    e)
indemnify and save IRC harmless in respect of any and all costs, claims,
liabilities and expenses arising out of Price's activities on the
Property;

     

    TERMINATION
OF OPTION

     

    7.1
Provided that IRC is not in default pursuant to the provisions hereof, IRC shall
have the right at any time during the term of this Agreement to terminate the
Option by providing not less than forty five (45) days written notice to
Price.

     

    7.2
Notwithstanding the termination of the Option, IRC shall have the right, within
a period of one hundred and eighty (180) days following the end of the Option
Period, to remove from the Property all buildings, plant, equipment, machinery,
tools, appliances and supplies which have been brought upon the Property by or
on behalf of IRC, and any such property not removed within such 180 day period
shall thereafter become the property of Price.

     

    TRANSFERS

     

       
8.1 If Price (the "Proposed Seller") should receive a bona fide offer from an
independent third party (the "Proposed Purchaser") dealing at arm's length with
the Proposed Seller to purchase all or a part of its

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

                  interest
in the Property, which offer the Proposed Seller desires to accept, or if the
Proposed Seller intends to sell all or a P3lt of its interest in the
Property:

    

     

    a) The
Proposed Seller shall first offer (the "Offer") such interest in writing to IRC
upon terms no less favourable than those offered by the Proposed Purchaser or
intended to be offered by the Proposed Seller, as the case may be;

     

    b) The
Offer shall specify the price, terms and conditions of such sale, the name of
the Proposed Purchaser and shall, in the case of an intended offer by the
Proposed Seller, disclose the person or persons to whom Price intends to offer
its interest and, if the offer received by the Proposed Seller from the Proposed
Purchaser provides for any consideration payable to the Proposed Seller
otherwise than in cash, the Offer shall include the Proposed Seller's good faith
estimate of the cash equivalent of the non-cash consideration;

     

    c) If
within a period of sixty (60) days of the receipt of the Offer and IRC notifies
the Proposed Seller in writing that it will accept the Offer, the Proposed
Seller shall be bound to sell such interest to IRC on the terms and conditions
of the Offer. If the Offer so accepted by IRC contains the Proposed Seller's
good faith estimate of the cash equivalent of the non-cash consideration as
aforesaid, and if IRC disagrees with the Proposed Seller's best estimate, IRC
shall so notify Price at the time of acceptance and IRC shall, in such notice,
specify what it considers, in good faith, the fair cash equivalent to be and the
resulting total purchase price. If IRC so notifies the Proposed Seller, the
acceptance by IRC shall be effective and binding upon IRC, and the cash
equivalent of any such non-cash consideration shall be determined by binding
arbitration and shall be payable by IRC, subject to prepayment as hereinafter
provided, within 60 days following its determination by arbitration. IRC shall
in such case pay to the Proposed Seller, against receipt of an absolute transfer
of clear and unencumbered title to the interest of the Proposed Seller being
sold, the total purchase price which is specified in its notice to the Proposed
Seller and such amount shall be credited to the amount determined following
arbitration of the cash equivalent of any non-cash consideration;

     

    d) If IRC
fails to notify the Proposed Seller before the expiration of the time limited
therefor that it will purchase the interest offered, the Proposed Seller may
sell and transfer such interest to the Proposed Purchaser at the price and on
the terms and conditions specified in the Offer for a period of sixty (60) days,
but the terms of this paragraph shall again apply to such interest if the sale
to the Proposed Purchaser is not completed within such sixty (60)
days;

     

       
e) Any sale hereunder shall be conditional upon the Proposed Purchaser
delivering to the nonselling party, its agreement related to this Agreement and
to the Property, containing:

     

    i) a
covenant by the Proposed Purchaser to perform all the obligations of the
Proposed Seller to be performed under this Agreement in respect of the interest
to be acquired by it from the Proposed Seller to the same extent as if this
Agreement had been originally executed by the Proposed Purchaser;
and

     

       ii)
a provision subjecting any further sale, transfer or other disposition of such
interest in the
Property and this Agreement or any portion thereof to the restrictions contained
in this paragraph (e).

     

    8.2 The
provision of Section 8.1 shall apply to a proposed sale by IRC of its interest
in the Property mutatis mutandis
such that Price shall have a right of first refusal to acquire such
interest in proportion to the then current interest.

     

    8.3 No
assignment by a party of any interest less than its entire interest in this
Agreement and in the Property shall discharge it from any of its obligations
hereunder, but upon the transfer by a party of the entire interest at the time
held by it in this Agreement, whether to one or more transferees and whether in
one or in a number of successive transfers, the party shall be deemed to be
discharged from all obligations hereunder save and except for fulfillment of
contractual commitments accrued due prior to the date on which the party shall
have no further interest in this Agreement.

     

          
FORCE MAJEURE

     

    9.1 If
Price is at any time either during the term of this Agreement or thereafter
prevented or delayed in complying with any provisions of this Agreement by
reason of strikes, lock-outs, labour shortages, power shortages, fuel shortages,
fires, wars, acts of God, governmental regulations restricting normal
operations,

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    shipping
delays or any other reason or reasons, other than lack of funds, beyond the
control of Price, the time limits for the performance by IRC of its obligations
hereunder shall be extended by a period of time equal in length to the period of
each such prevention or delay, but nothing herein shall discharge Price from its
obligations hereunder to maintain the Property in good standing.

    9.2 Price
shall give prompt notice to IRC of each event of force majeure under Section 9.1
and upon cessation of such event shall furnish to IRC with notice to that effect
together with particulars of the number of days by which the obligations of IRC
hereunder have been extended by virtue of such event of force majeure and all
preceding events of force majeure.

     

    CONFIDENTIAL
INFORMATION

     

    10.1 The
parties to this Agreement shall keep confidential all books, records, files and
other information supplied by any party to one of the other parties or to their
employees, agents or representative in connection with this Agreement or in
respect of the activities carried out on the Property by a party, or related to
the sale of minerals, or other products derived from the Property, including all
analyses, reports, studies or other documents prepared by a party or its
employees, agents or representatives, which contain information from, or
otherwise reflects such books, records, files or other information. The parties
shall not and shall ensure that their employees, agents or representatives do
not disclose, divulge, publish, transcribe, or transfer such information, all or
in part, without the prior written consent of the other parties, which may not
be arbitrarily withheld and which shall not apply to such information or any
part thereof to the extent that:

     

    a) prior
to its receipt by a party such information was already in the possession of such
party or its employees, agents or representatives; or

     

    b) in
respect of such information required to be publicly disclosed pursuant to
applicable securities or corporate laws.

     

    ARBITRATION

     

    11.1 The
parties agree that all questions or matters in dispute with respect to any
dispute shall be settled by arbitration and shall be submitted to arbitration
pursuant to the terms hereof

     

    11.2
It shall be a condition
precedent to the right of any parties, to submit any matter to arbitration
pursuant to the provisions hereof, that any party intending to refer any matter
to arbitration shall have given not less than ten (10) days' prior notice of its
intention to do so to the other party, together with particulars of the matter
in dispute. On the expiration of such ten (10) days, the party who gave such
notice may proceed to refer the dispute to arbitration as provided in
11.3.

     

    11.3 The
party desiring arbitration shall appoint one arbitrator, and shall notify the
other party of such appointment, and such other party shall, within fifteen (15)
days after receiving such notice, either consent to the appointment of such
arbitrator which shall then carry out the arbitration or appoint an arbitrator,
and the two arbitrators so named, before proceeding to act, shall, within thirty
(30) days of the appointment of the last appointed arbitrator, unanimously agree
on the appointment of a third arbitrator to act with them and be chairman of the
arbitration herein provided for. If the
other parties shall fail to appoint an arbitrator within fifteen (15) days after
receiving notice of the appointment of the first arbitrator, the first
arbitrator shall be the only arbitrator, and if the two arbitrators appointed by
the party shall be unable to agree on the appointment of the chairman, the
chairman shall be appointed under the provisions of the Arbitration Act of Alberta.
Except as specifically otherwise provided in this section, the arbitration
herein provided for shall be conducted in accordance with such Act. The
chairman, or in the case where only one arbitrator is appointed, the single
arbitrator, shall fix a time and place in Calgary, Alberta, for the purpose of
hearing the evidence and representations of the parties, and he shall preside
over the arbitration and determine all questions of procedure not provided for
under such Act or this section. After hearing any evidence and representations
that the parties may submit, the single arbitrator, or the arbitrators, as the
case may be, shall make an award and reduce the same to writing, and deliver one
copy thereof to each of the parties. The expense of the arbitration shall be
paid as specified in the award

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    11.4 The
parties agree that the award of a majority of the arbitrators, or in the case of
a single arbitrator, of such arbitrator, shall be final and binding upon each of
them.

     

    DEFAULT
AND TERMINATION

     

    12.1 If
at any time during the term of this Agreement Price fails to perform any
obligation required to be performed by it hereunder or is in breach of a
warranty given by it hereunder, which failure or breach materially interferes
with the implementation of this Agreement, IRC may terminate this Agreement but
only if:

     

    a) it
shall have first given to the defaulting Price a notice of default containing
particulars of the obligation which the defaulting Price has not performed, or
the warranty breached; and

     

    b) the
defaulting Price has not, within forty-five (45) days following delivery of such
notice of default, cured such default or commenced proceedings to cure such
default by appropriate payment or performance, the defaulting Price hereby
agreeing that should it so commence to cure any default it will prosecute the
same to completion without undue delay, provided however, that this paragraph
shall not be extended to a default by Price to exercise an Option pursuant to
Article 4 thereof.

     

    12.2
Notwithstanding Section 12.1 hereof, if at any time Price fails to perform a
condition precedent to the exercise of the Option, IRC shall be entitled to
forthwith terminate this Agreement.

     

    NOTICES

     

    13.1 Each
notice, demand or other communication required or permitted to be given under
this Agreement shall be in writing and shall be sent by prepaid registered mail
deposited in a Post Office in Canada addressed to the party entitled to receive
the same, or delivered, telexed, telegraphed or telecopied to such party at the
address for such party specified on the face page hereof. The date of receipt of
such notice, demand or other communication shall be the date of delivery thereof
if delivered, telexed, telegraphed or telecopied, or, if given by registered
mail as aforesaid, shall be deemed conclusively to be the third business day
after the same shall have been so mailed except in the case of interruption of
postal services for any reason whatever, in which case the date of receipt shall
be the date on which the notice, demand or other communication is actually
received by the addressee.

     

    13.2
Either party may at any time and from time to time notify the other party in
writing of a change or address and the new address to which notice shall be
given to it thereafter until further change.

     

    GENERAL

     

    14.1 This
Agreement shall supersede and replace any other agreement or arrangement,
whether oral or written, heretofore existing between the parties in respect of
the subject matter of this Agreement.

     

    14.2 No
consent or waiver expressed or implied by any party in respect of any breach or
default by any other party in the performance by such other of its obligations
hereunder shall be deemed or construed to be a consent to or a waiver of any
other breach of default.

     

    14.3 The
parties shall promptly execute or cause to be executed all documents, deeds,
conveyances and other instruments of further assurance and do such further and
other acts which may be reasonably necessary or advisable to carry out fully and
effectively the intent and purpose of this Agreement or to record wherever
appropriate the respective interest from time to time of the parties in the
Property.

     

    14.4 This
Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns.

     

    14.5 This
Agreement shall, (i) be governed by and construed in accordance with the laws of
Alberta and the parties hereby irrevocably attorn to the jurisdiction of the
said province and (ii) be subject to the approval of all securities regulatory
authorities having jurisdiction, such approvals to be sought in a timely and
diligent manner.

     

    14.6 Time
shall be of the essence in this Agreement.

     

    14.7
Wherever the neuter and singular is used in this Agreement it shall be deemed to
include the plural, masculine and feminine, as the case may be.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    14.8 The
rights and obligations of each party shall be in every case several and not
joint or joint and several.

    


    IN WITNESS WHEREOF the parties
hereto have executed this Agreement as of the day and year first above
written.

    


    
      	
              BARRY
      J. PRICE

            	
              /s/Marvin A.
    Mitchell

            
	/s/Barry J. Price	
              witness

            
	 	 
	 	Marvin
      A. Mitchell 
	 
      	
              name
      of witness

            
	 	 
	 	 
	
              IRC
      EXPLORATION LTD.

            	 
      
	 	 
	/s/Harry
    Bydgnes 	 
	
              Harry
      Bydgnes, Pres. & CFO

            	 


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    SCHEDULE "A"

     

    THE
OPTION AGREEMENT

     

    DESCRIPTION
OF PROPERTY RIGHTS AND PROPERTY 

       

      The
Omineca Queen mineral claim is located within the Omineca Mining Division of
British Columbia 

        Latitude:
55 deg 31 '28"N 

          Longitude:
124 deg 06'36"W

        

      

    

    


    
    

    
    

    
      	
            	
               

            	
            	
            	
               

            	
               

            	
            	
            	
            
	
              
                Tenure

                Number

              

            	
              
                Tenure
Type

            	
              
                Claim
Name

            	 
      

              Owner

            	
              
                Map
Number

            	 
      

              Expiry

            	 
      

              Status

            	
              
                Number
of
      Cells

            	
              
                Area

                (Hectares)

              

            
	
              574763

            	
              Mineral

            	
              QUEEN

            	
              121855

              (100%)

            	
              093N

            	
              January
      

                27,2009

              

            	
              Good

            	
              23

            	
              457.726

            


    

     

    Owner
121855 is Barry J. Price

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
"B" TO

    THE
PROPERTY OPTION AGREEMENT D

    ated
August 11,2008

     

     

    JOINT
VENTURE AGREEMENT

     

    between

     

    PRICECO
(a company to be formed)

     

    and

     

    IRC
EXPLORATION LTD.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE OF
CONTENTS

     

    
      
        	
                DEFINITIONS

              	
                4

              
	
                REPRESENTATIONS
      AND WARRANTIES

              	
                6

              
	
                PURPOSE
      AND CREATION OF THE JOINT VENTURE

              	
                6

              
	
                DILUTION

              	
                8

              
	
                MANAGEMENT
      COMMITTEE

              	
                8

              
	
                OPERATOR

              	
                10

              
	
                POWER,
      DUTIES AND OBLIGATIONS OF OPERATOR

              	
                11

              
	
                PROGRAMS

              	
                13

              
	
                MINE
      FINANCING

              	
                14

              
	
                CONSTRUCTION
      OF MINE

              	
                14

              
	
                OPERATION
      OF MINE

              	
                14

              
	
                PAYMENT
      OF CONSTRUCTION AND OPERATING COSTS

              	
                15

              
	
                DISTRIBUTION
      IN KIND

              	
                15

              
	
                SURRENDER
      OF INTEREST

              	
                16

              
	
                TERMINA
      TION OR SUSPENSION OF MINING OPERATIONS

              	
                16

              
	
                INFORMATION
      AND DATA

              	
                17

              
	
                PARTITION

              	
                17

              
	
                TAXATION

              	
                18

              
	
                RIGHT
      OF FIRST REFUSAL

              	
                18

              
	
                FORCE
      MAJEURE

              	
                19

              
	
                NOTICE

              	
                19

              
	
                WAIVER

              	
                20

              
	
                FURTHER
      ASSURANCES

              	
                20

              
	
                USE
      OF NAME

              	
                20

              
	
                ENTIRE
      AGREEMENT

              	
                20

              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	
                AMENDMENT

              	
                20

              
	
                ARBITRATION

              	
                20

              
	
                RIGHT
      TO AUDIT

              	
                20

              
	
                TIME

              	
                21

              
	
                RULE
      AGAINST PERPETUITIES

              	
                21

              
	
                DOCUMENT
      RETENTION ON TERMINATION

              	
                21

              
	
                ENUREMENT

              	
                21

              
	
                GOVERNING
      LAW

              	
                21

              
	
                NUMBER
      AND GENDER

              	
                21

              
	
                HEADINGS

              	
                21

              
	
                TIME
      OF TI-IE ESSENCE

              	
                21

              
	 	 
	
                SCHEDULE
    "A"

              	 
	
                DESCRIPTION
      OF PROPERTY RIGHTS AND PROPERTY

              	 
	 	 
	SCHEDULE"B"	 
	
                DEFINITION
      OF NET PROFITS

              	 
	 	 
	
                SCHEDULE
      "CO"

              	 
	
                ACCOUNTING
      PROCEDURES

              	 


      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    JOINT
VENTURE AGREEMENT

    


    


    THIS AGREEMENT made as of the
____________day of ______________, 20______.

    


    


    BETWEEN:

    


     

    PRICECO, a corporation to be
formed having offices at 820 East 14th Street,
North Vancouver, in the Province of British Columbia, (hereafter referred to as
"Priceco");

     

    OF THE
FIRST PART

     

    AND:

     

    IRC
EXPLORATION LTD." a body corporate, incorporated under the laws of Alberta and
having offices located at 530 - 1015 4th Street
S.W., Calgary, Alberta" Canada;

     

    (hereafter
"IRC")

     

    OF THE
SECOND PART

     

    WHEREAS:

    
      	
              A.  

            	
              Priceco
      owns a 15 % and IRC owns a 85% undivided right, title and interest in and
      to the Property;

            


    

     

     
B.  The
parties wish to create a joint venture to carry out the continued operation of
the Property on the terms and subject to the conditions hereinafter set
forth.

     

    NOW THEREFORE THIS AGREEMENT
WITNESSETH that in consideration of the premises, and of the mutual
covenants and agreements herein contained, the parties hereto have agreed and do
hereby agree as follows:

     

    DEFINITIONS

     

    1.1 In
this Agreement, including the Recitals and Schedules hereto the following words
and expressions shall have the following meanings:

     

    
    

     

    
      	
              a)

            	"Accounting
      Procedure" means the accounting procedure attached to this Agreement as
      Schedule "C";
	 	 
	
              b)

            	
              "Affiliate"
      shall have the same meaning as under the Business Corporations Act
      (Alberta) as at the date hereof;

            
	 	 
	
              c)

            	
              "Agreement"
      means this Joint Venture Agreement as amended from time to
      time;

            
	 	 
	
              d)

            	
              "Commercial
      Production" means the operation of the Property as a producing mine and
      the production of Mineral Products therefrom (excluding bulk sampling,
      pilot plant or test

            
	 	 
	
              e)

            	
              operations);

            
	 	 
	
              f)

            	
              "Completion
      Date" means the date on which it is demonstrated to the satisfaction of
      the Management Committee that the preparing and equipping of a Mine for
      Commercial Production is complete;

            
	 	 
	
              g)

            	
              "Construction"
      means every kind of work carried out during the Construction Period by the
      Operator in accordance with a Feasibility Report approved by the
      Management Committee;

            
	 	 
	
              h)

            	
              "Construction
      Period" means the period beginning on the date of a Feasibility Report and
      ending on the Completion Date;

            
	 	 
	
              i)

            	
              "Costs"
      means all items of outlay and expense whatsoever, direct or indirect, with
      respect to Mining Operations in accordance with this Agreement, without
      limiting the generality of the foregoing, the following categories of
      Costs shall have the following meanings

            
	 	 
	 	
              i)
      "Mine Construction Costs" means those Costs incurred during the
      Construction Period;

            


    

    
    

    
    

    
    

    
    

    
    

    
    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

                                      

      
        
          	 	
                  ii)"Mine
      Costs" means Mine Construction Costs and Operating Costs;
    and

                
	 	 
	
                	
                  iii) "Operating
      Costs" means those Costs incurred subsequent to the Completion
      Date;

                
	 	 
	
                  j)

                	
                  "Feasibility
      Report" means a detailed written report of the results of a comprehensive
      study on the economic feasibility of placing the Property or a portion
      thereof into Commercial Production and shall include a reasonable
      assessment of the mineral ore reserves and their amenability to
      metallurgical treatment, a description of the work, equipment and supplies
      required to bring the Property or a portion thereof into Commercial
      Production and the estimated cost thereof, a description of the mining
      methods to be employed and a financial appraisal of the proposed
      operations supported by an explanation of the data used
      therein;

                
	 	 
	
                  k)

                	
                  "Interest"
      means the undivided beneficial percentage interest from time to time of a
      party in the Joint Venture
      and the Property, and Mineral Products, as set out
      hereunder;

                
	 	 
	
                  1)

                	
                  "IRC"
      means IRC Exploration Ltd.

                
	 	 
	
                  m)

                	"Joint Venture"
      means the joint venture created pursuant to this Agreement;
	 	 
	
                  n)

                	
                  "Management
      Committee" means the management committee constituted in accordance with
      the provisions of Article 5 hereof to manage or supervise the management
      of the business and affairs of the Joint Venture;

                
	
                   

                	 
	
                  o)

                	
                  "Mine"
      means the workings established and assets acquired, including, without
      limiting the generality of the foregoing, development headings, plant and
      concentrator installations, infrastructure, housing, airport and other
      facilities in order to bring the Property into Commercial
      Production;

                
	 	 
	
                  p)

                	
                  "Mine
      Construction Costs" means those Costs incurred during the Construction
      Period;

                
	 	 
	
                  q)

                	
                  "Mine
      Costs" means Mine Construction Costs and Operating Costs;
    and

                
	 	 
	
                  r)

                	
                  "Mineral
      Products" means the end products derived from operating the Property as a
      Mine;

                
	 	 
	
                  s)

                	
                  "Mining
      Operations" means every kind of work done by the
  Operator:

                
	 	 
	 	i)  on or in
      respect of the Property in accordance with a Feasibility Report;
    or
	 	 
	 	
                  ii) 
      if
      not provided for in a Feasibility Report, unilaterally and in good faith
      to maintain the Property in good standing, to prevent waste or to
      otherwise discharge any obligation which is imposed upon it pursuant to
      this Agreement and in respect of which the Management Committee has not
      given it directions; including, without limiting the generality of the
      foregoing, investigating, prospecting, exploring, developing, property
      maintenance, preparing reports, estimates and studies, designing,
      equipping, improving, surveying, Construction and mining, milling,
      concentrating, rehabilitation, reclamation, and environmental
      protection.

                
	 	 
	
                  t)

                	
                  "Net
      Profits" shall mean net profits calculated in accordance with Schedule "B"
      hereto

                
	 	 
	
                  u)

                	
                  "Operating
      Costs" means those Costs incurred subsequent to the Completion
      Date;

                
	 	 
	
                  v)

                	
                  "Operating
      Year" shall mean a twelve-month period, the first Operating Year to
      commence on the Completion Date and each succeeding Operating Year
      commencing at the expiration of the preceding Operating
    Year.

                
	 	 
	
                  w)

                	
                  "Operating
      Plan" shall mean a plan in accordance with Section
11.2.

                
	 	 
	
                  x)

                	
                  "Operator"
      means the operator appointed pursuant to Article 6;

                
	 	 
	
                  y)

                	
                  "Option Agreement"
      means the option agreement, made as of the 11th day
      of April between Barry J. Price
      and IRC;

                
	 	 
	
                  z)

                	
                  "Other
      Tenements" means

                
	 	 
	 	
                  i)  all
      surface rights of and to any lands within or outside the Property
      including surface held in fee or under lease, license, easement, right of
      way or other rights of any kind (and all renewals, extensions and
      amendments thereof or substitutions therefore) acquired by or on behalf of
      the parties with respect to the Property,

                
	 	 
	 	
                  ii)  all
      information obtained from Mining Operations, and

                
	 	 
	 	
                  iii)
      those rights and benefits appurtenant to the Property that are acquired
      for the purpose of conducting Mining Operations;

                
	 	 
	
                  aa)

                	"Party" or "Parties"
      means the parties to this Agreement and their respective successors and
      permitted assigns which become parties to this Agreement;
	 	 
	
                  bb)

                	"Priceco" means a
      corporation to be formed pursuant to the instructions of Barry J.
      Price


        

      

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              cc)

            	"Program" means a
      plan, including budgets, for the Project or any part thereof as approved
      by the Management Committee pursuant to this Agreement;
	 	 
	
              dd)

            	"Project" means the
      exploration and development of the Property, preparation and delivery of a
      Feasibility Report and the Construction and operation of facilities to put
      the Property into Commercial Production;
	 	 
	
              ee)

            	"Property" means
      those certain mining claims and related rights and interests set out and
      more particularly described in Schedule "A" hereto and Other Tenements and
      shall include any renewal thereof and any form of substitute or successor
      title thereto;
	 	 
	
              ff) 

            	
              "Royalty"
      means a royalty on the Net Profits calculated in accordance with Schedule
      "B" hereto;

            
	 	 
	
              gg)

            	"Simple Majority"
      means a decision made by the parties hereof or the Management Committee by
      greater than 50% of the votes entitled to be
cast.


    

     

    REPRESENTATIONS
AND WARRANTIES

     

    2.1 Each
of the parties represents each to the other that:

     

    a) it is
the legal and beneficial owner of the Interest as set forth and described in the
recitals hereto free and clear of all liens, charges and encumbrances except as
set forth in Schedule "A" attached hereto and the Option Agreement;
and

     

    b) save
and except as set out herein, there is no adverse claim or challenge against or
to the ownership of or title to its Interest or any portion thereof, nor is
there any basis therefor, and there are no outstanding agreements or options to
acquire or purchase its Interest or any portion thereof.

     

    2.2 Each
of the parties represents each to the other that:

     

    a) it is
a company duly incorporated, organized and validly subsisting under the laws of
its incorporating jurisdiction;

     

    b) it has
full power and authority to carry on its business and enter into this Agreement
and any agreement or instrument referred to or contemplated by this Agreement
and to carry out and perform all of its obligations hereunder; and

     

    c) it has
duly obtained all corporate authorizations for the execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in any breach of any covenants or
agreements contained in, or constitute a default under, or result in the
creation of any encumbrance, lien or charge under the provisions of its con
stating documents or any indenture, agreement or other instrument whatsoever to
which it is a party or by which it is bound or to which it may be subject and
will not contravene any applicable laws.

     

    2.3 The
representations and warranties hereinbefore set out are conditions on which the
parties have relied in entering into this Agreement, are to be construed as both
conditions and warranties and shall, regardless of any investigation which may
have been made by or on behalf of any party as to the accuracy of such
representations and warranties, survive the closing of the transactions
contemplated hereby and each of the parties will indemnity and save the other
harmless from all loss, damage, costs, actions and suits arising out of or in
connection with any breach of any representation or warranty contained in this
Agreement and each party shall be entitled, in addition to any other remedy to
which it may be
entitled, to set off any such loss, damage or costs suffered by it as a result
of any such breach against any payment required to be made by it to the other
party hereunder.

     

    PURPOSE
AND CREATION OF THE JOINT VENTURE

     

    3.1 The
parties agree each with the other to use their best efforts to develop and
operate the Property with the goal of eventually putting the Property into
Commercial Production should a Feasibility Report recommending Commercial
Production be obtained and a decision to commence Commercial Production be made,
and for this purpose the parties hereby agree to associate and participate in a
single purpose joint venture to carry out all such acts which are necessary or
appropriate, directly or indirectly, to carry out the Project.

     

    3.2 The
parties have not created a partnership and nothing contained in this Agreement
shall in any manner whatsoever constitute a party the partner, agent or legal
representative of any other party or create any fiduciary relationship between
them for any purpose whatsoever. No party shall have any authority
to

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    act for
or to assume any obligations or responsibility on behalf of any other party
except as may be, from time to time, agreed upon in writing between the parties
or as otherwise expressly provided.

     

    3.3 The
rights and obligations of each party shall be in every case several and not
joint or joint and several.

     

    3.4
Beneficial ownership of the Property shall remain in each party in proportion to
its respective Interest and any legal title to the Property held by any party
shall be subject to this Agreement. All property held, acquired or contributed
by or on behalf of the parties under or pursuant to this Agreement shall be
beneficially owned by the parties as tenants in common in proportion to their
respective Interests.

     

    3.5 Each
party shall make available its Interest for the purposes of the Project and, in
particular, each party agrees to grant a mortgage, charge, lien, encumbrance on,
or a security Interest in, its Interest to and in favour of any lender or party
hereto to facilitate financing of the Project or any portion
thereof.

     

    3.6 The
rights and obligations of the parties created under this Agreement shall be
strictly limited to the Property and shall not be extended by implication or
otherwise, except with the unanimous written consent of the
parties.

     

    3.7
Except as may be otherwise expressly provided in this Agreement, nothing herein
shall restrict in any way the freedom of any party, except with respect to its
Interest, to conduct as it sees fit any business or activity whatsoever,
including the development or application of any process, and the exploration
for, development, mining, extraction, production, handling, processing or any
treatment, transportation or marketing of any ore, mineral or other product for
any other purpose, without any accountability to any other party.

     

    3.8 Each
party shall do all things and execute all documents necessary in order to
maintain the Property and the Property Rights in good standing.

     

    3.9
Except as may be otherwise expressly specified in this Agreement, each party, in
proportion to its Interest, shall indemnify and hold harmless each other party
and each director, officer, employee, agent and representative of each other
party, from and against any claim of or liability to any third person asserted
on the ground that action taken under this Agreement has resulted in or will
result in any loss or damage to such third person to the extent, but only to the
extent that such claim or liability is paid by such other party in the amount in
excess of that amount payable by reason of such other party's Interest, but the
foregoing shall not prejudice any claim of any party against the
Operator.

     

    3.10 Each
party covenants and agrees with the others:

     

    
      	
               
      

            	
              (a)
      to perform or cause to be performed its obligations and commitments under
      this Agreement and, without limiting the generality of the foregoing, to
      pay Costs in proportion to its Interest except as may be otherwise
      provided in Article 4 and Article 9 hereof;
and

            


    

     

    
      	
               
      

            	
              (b)
      not to engage either alone or in association with others in any activity
      in respect of the Property or the Project except as provided or authorized
      by this Agreement.

            


    

     

    3.11 For
administrative convenience, and without, altering or affecting the rights,
titles and interests created hereby, the parties agree that the Operator may
hold the Property, in trust, for the use and benefit of the parties in
accordance with the terms and provisions of this Agreement and in proportion to
their respective Interests as adjusted from time to time, until such times as
the Management Committee shall determine that it is appropriate or advisable for
the Property to be held or registered in the name of the parties, another
trustee or nominee which the Management Committee may select. Such holding of
the Property in trust shall not prevent the vesting of the legal and beneficial
title hereto in the parties in the manner and at the times as otherwise herein
provided.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    DILUTION

     

    4.1 Upon
formation of the Joint Venture, Priceco will be deemed to have contributed forty
two thousand six hundred dollars ($42,600)and IRC will be deemed to have
contributed two hundred forty one thousand dollars ($241 ,000)of Costs to the
Joint Venture for purposes thereof

     

    4.2 The
respective Interests of the parties shall be subject to variation from time to
time in the event: (a) of failure by a party to pay its proportionate share of
Costs;

     

         
(b) subject to Section 4.5 and Section 8.7 hereof, of the election by a party
not to participate in a Program, or;

     

    
      	
               
      

            	
              (c)
      subject to Section 4.5 and Section 8.7 hereof, of the election by a party
      to pay less than its proportionate share of Costs in respect of a Program
      adopted by the Management
Committee.

            


    

     

    4.3 Upon the happening of any of the
events set forth in subsection 4.2(a)-(b), inclusive hereof, each party's
Interest shall be varied to equal the product obtained by multiplying 100% by a
fraction of which the numerator shall be the amount of Costs paid by such party
and of which and the denominator shall be the total amount of Costs paid by all
parties. For the purposes of this section, the amount of Costs paid by a party
shall include the amount of Costs deemed to have been paid by that party as set
forth in Section 4.1.

     

    4.4 In
the event that a party's Interest is reduced to five (5%) percent or less by the
operation of Section 4.3 hereof, such party shall forthwith relinquish its
Interest and shall transfer such Interest to the other parties hereto in
proportionate shares and shall receive as consideration therefor a Royalty equal
to two and one-half (2.5%) percent of Net Profits. In the event of such
relinquishment, such party shall have no further right to participate in any
Programs and shall have no further Interest in the Property, except the
Royalty.

     

    4.5 A
party which forfeits or reduces its Interest in the Property pursuant to Section
4.2 shall have the rights to redeem its position if the actual Costs expended is
less costly by at least 25% than the budget as set out in the Program to which
the party had not agreed, otherwise the forfeiture is final. The Operator shall
not later than thirty (30) days after completion of a Program, provide a
complete statement of expenditures incurred to date and an estimate of
expenditures to be incurred to completion of the Operating Year (such
expenditures to be verified by audit within six (6) months if the forfeiting
party request and agrees to pay for same) to all parties including the
forfeiting party. Within twenty (20) days of receipt of the foregoing statement,
the forfeiting party shall inform the Operator of its wish to redeem its
Interest or to require an audit. A party redeeming its Interest shall pay the
Costs it would have paid had it participated in the Program, plus interest
thereon at a rate per annum of prime plus one percent thereon from the date of
the Operator's invoices to the date of payment to the Operator. Payment shall be
made by the redeeming party to the Operator within thirty (30) days of providing
notice of such redemption. The Operator shall pay the proceeds to the other
parties in proportion to the manner in which their Interests related to the
participation in the subject Program.

     

    MANAGEMENT
COMMITTEE

    5.1 A
Management Committee, consisting of one representative of each party, and one or
more alternate representatives, shall be constituted and appointed within
fourteen (14) days after the formation of the Joint Venture. The Management
Committee shall manage, or supervise the management of, the business and affairs
of the Joint Venture and shall exercise all such powers and do all such acts as
the Joint Venture may exercise and do. The Management Committee shall meet
within fifteen (15) days of its constitution (at which time a chairman shall be
elected from among their number) and may otherwise meet at such places as it
thinks fit for the dispatch of business, adjourn and otherwise regulate its
meetings and proceedings as the members thereof deem fit. Unless otherwise
provided herein, questions arising at any meeting of the Management Committee
shall be decided by a Simple Majority of votes with each party's representatives
being entitled to cast that number of votes which is equal to that party's
Interest. Unless agreed to in writing by the parties hereto, all meetings of the
Management Committee

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    shall be
held in Calgary, Alberta or such other place as the parties may agree. Any
meetings may, if the parties so consent, be held by conference
telephone.

     

    5.2
Management Committee Quorum:

     

    
      	
              a)  

            	
              A
      quorum for any meeting of the Management Committee shall consist of a
      representative or representatives of a party or parties whose Interests
      aggregate one hundred (l00%) percent. No business other than the election
      of a chairman, if any, and the adjournment or termination of the meeting
      shall be dealt with if a quorum is not present at the commencement of the
      meeting but the quorum need not be present throughout the
      meeting;

            


    

    
      	
              b)  

            	
              If
      a quorum is not present at the opening of a meeting, the parties present
      or represented shall adjourn the meeting for a period of seven (7) days
      from the date of the adjourned meeting, but shall not transact any other
      business. A quorum for any such adjourned meeting shall consist of a
      representative or representatives of a party or parties who attend such
      reconvened meeting.

            


    

     

    5.3 A
meeting of the Management Committee at which a quorum is present shall be
competent to exercise all or any of the authorities, powers and discretion
bestowed upon the Management Committee in this Agreement.

     

    5.4 No
questions submitted to the Management Committee need be seconded and the
chairman, if any, of the meeting shall be entitled to submit the questions to a
vote during the meeting.

     

    5.5 The
decision on any question by consent in writing of the representatives of all
parties shall be as valid as if it had been decided at a duly called and held
meeting of the Management Committee. Each decision may be in counterparts each
consented to in writing by one or more representatives which together shall be
deemed to constitute one decision.

     

    5.6 At
the time of any decision by the Management Committee to adopt a Program, the
parties shall pay, su~iect to the provisions of Article 8 hereof, their
proportionate share of the estimated Costs of such Program by depositing the
same into the interest bearing bank account opened and maintained pursuant to
Section 5.7 hereof.

     

    5.7 The
Management Committee shall open and maintain an interest bearing bank account
with a Canadian Chartered bank in the name of the Joint Venture and shall use
the funds on deposit therein for the purposes of the Joint Venture. The
Management Committee shall appoint signing officers on the said account as shall
be required and shall advise the parties of the particulars of the said
account.

     

    5.8 Each
of the parties hereby agrees that:

    
      	
              a)  

            	
              any
      interest earned on any sums deposited in the bank account opened and
      maintained pursuant to Section 5.7 hereof shall be shared in proportion to
      their respective Interests; and

            


    

    
      	
              b)  

            	
              each
      shall, following formation of the Joint Venture, deposit in such account
      in proportion to their Interests any of the actual Costs in excess of the
      estimated Costs when requested to do so by the Management
      Committee.

            


    

     

    5.9 Any
party (the "Paying Party") may pay any reasonable Costs due to maintain the
Property or the Project in good standing and the other parties shall, in
proportion to their Interest and within fifteen (15) days of being given notice
of such payment, reimburse the Paying Party for such payment, failing such
reimbursement the parties not paying shall, for purposes of Section 4.2 hereof,
be deemed to have elected not to participate in a Program in accordance with
Section 8.3 hereof, and the provisions of Article 4 hereof shall
apply.

     

    5.10 In
the event that the Operator or the consultant appointed pursuant to Section 7.4
recommends that further work be conducted on the Property, then the Management
Committee shall prepare or cause to be prepared a Program.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    5.11 At
any time during the currency of this Agreement the Management Committee may
cause a Feasibility Report to be prepared by a substantial and well recognized
engineering firm in such form as the Management Committee may require. The
Management Committee shall, forthwith upon receipt of a Feasibility Report,
provide each of the parties with a copy thereof. Upon request of any party and
at reasonable intervals and times the parties shall meet in order to discuss
such a report.

     

    OPERATOR

     

    6.1 The
initial Operator shall be Priceco. An Operator shall continue as Operator until
changed pursuant to the terms hereof or by a decision of the Management
Committee with parties representing a Simple Majority voting in favour if the
Operator has failed to perform in a manner that is consistent with good mining
practice or has failed to perform in a manner consistent with its duties and
responsibilities under this Agreement, and the Management Committee has given to
the Operator written notice setting forth particulars ofthe Operator's default
and the Operator has not within 30 days of receipt of such notice commenced to
remedy the default and thereafter to proceed continuously and diligently to
complete all required remedial action.

     

    6.2 The
Operator may at any time on sixty (60) days notice to the Management Committee
resign as Operator, in which event the Management Committee shall select another
party or person to be Operator (hereinafter called the "new Operator") upon the
thirtieth (30th) day after receipt of the Operator's notice of resignation or
such sooner date as the Management Committee may establish and give notice of to
the resigning Operator. The resigning Operator shall thereupon be released and
discharged from all its duties and obligations as Operator upon the appointment
of the new Operator except those duties and obligations that it theretofore
should have performed.

     

    6.3 Upon
the Operator making a voluntary or involuntary assignment into bankruptcy or
taking advantage of any legislation for the winding-up or liquidation of the
affairs of insolvent or bankrupt companies the Operator shall automatically be
terminated as operator and the other party or its nominee appointed as
Operator.

     

    6.4 The
new Operator shall assume all of the rights, duties, obligations and status of
the Operator as provided in this Agreement, other than the previous Operator's
Interest, if any, without obligation to retain or hire any of the employees of
the former Operator or to indemnify the former Operator for any costs or
expenses which the previous Operator will incur as a result of the termination
of employment of any of its employees resulting from this change of Operator,
and shall continue to act as Operator until its replacement or
resignation.

     

    6.5 Upon
the effective time of a resignation, removal or cessation, the departing
Operator shall within sixty (60) days of such resignation, removal or cessation,
turn over to its successor, or if no successor has been designated, to the
Management Committee, control and possession of the Property together with (i)
all documents, books, records and accounts (or copies thereof) pertaining to the
performance of its functions as Operator and (ii) all monies held by it in its
capacity as the Operator. Upon transfer and delivery thereof, the departing
Operator shall be released and discharged from, and the successor Operator shall
assume, all duties and obligations of Operator except the unsatisfied duties and
obligations of the departing Operator accrued prior to the effective date of the
change of Operator and for which the departing Operator shall, notwithstanding
its release or discharge, continue to remain liable, it being understood and
agreed that the departing and successor Operators respectively shall co-operate
in finalizing all outstanding matters and completing the transition. If the
title to any real or personal property included in the Property is held in the
name of the departing Operator, it shall transfer such property to the successor
Operator in trust for the parties hereto unless otherwise directed by the
Management Committee.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    6.6
Within sixty (60) days of the effective time of an Operator's resignation,
removal or cessation as Operator, the Management Committee may cause an audit to
be made of the records maintained by the departing Operator and the cost of such
audit shall be for the joint account of the parties hereto. 6.7 Except as
authorized by the Management Committee or as otherwise herein provided, the
Operator shall not assign its operating rights or obligations under this
Agreement.

     

    POWER,
DUTIES AND OBLIGATIONS OF OPERATOR

     

    7.1
Subject to the control and direction of the Management Committee, the Operator
shall have full right, power and authority to do everything necessary or
desirable to carry out a Program and the Project and to determine the manner of
exploration and development of the Property and, without limiting the generality
of the foregoing, the right, power and authority to:

     

    
      	
              a)  

            	
              regulate
      access to the Property subject only to the right of representatives of the
      parties to have access to the Property at all reasonable times for the
      purpose of inspecting work being done thereon but at their own risk and
      expense;

            


    

    
      	
              b)  

            	
              employ
      and engage such employees, agents and independent contractors as it may
      consider necessary or advisable to carry out its duties and obligations
      hereunder and in this connection to delegate any of its powers and rights
      to perform its duties and obligations hereunder, but the Operator shall
      not enter into contractual relationships with another person except on
      terms which are commercially
competitive;

            


    

    
      	
              c)  

            	
              execute
      all documents, deeds and instruments, do or cause to be done all such acts
      and

            


    

    
      	
              d)  

            	
              things
      and give all such assurances as may be necessary to maintain good and
      valid title to the Property. Each party hereby irrevocably constitutes the
      Operator its true and lawful attorney to give effect to the foregoing and
      hereby agrees to indemnify and save the Operator harmless from any and all
      costs, loss or damage sustained or incurred without gross negligence or
      bad faith by the Operator directly or indirectly as a result of its
      exercise of its powers pursuant to this subsection;
  and

            


    

    
      	
              e)  

            	
              conduct
      such title examination and cure such title defects as may be advisable in
      the reasonable judgment of the
Operator.

            


    

     

    7.2 The
Operator shall have the following duties and obligations during the term
hereof:

     

    
      	
              a)  

            	
              to
      diligently manage, direct and control all exploration, development and
      producing operations in and under the Property in a prudent and
      workmanlike manner and in compliance with all applicable laws, rules,
      orders and regulations;

            


    

    
      	
              b)  

            	
              to
      prepare and deliver to each of the parties during the periods of active
      field work, monthly progress and expense reports of the work in progress,
      on or before the day which is forty-five (45) days following each calendar
      month with respect to work done in such month and on or before the first
      day of every calendar year, comprehensive annual reports covering the
      activities and expenses hereunder and such report shall include the
      results obtained during the twelve (12) month period ending on !
      immediately preceding;

            


    

    
      	
              c)  

            	
              to
      provide and deliver to each of the parties, together with the reports
      referred to in subparagraph (b), copies of all assays, maps and drill
      logs;

            


    

    
      	
              d)  

            	
              subject
      to the terms and conditions of this Agreement, to keep the Property in
      good standing, free and clear of all liens, charges and encumbrances of
      every character arising from operations (except for those which are in
      effect on the date of this Agreement or are created pursuant to this
      Agreement, liens for taxes not yet due, other inchoate liens and liens
      contested in good faith by the Operator) and to proceed with all diligence
      to contest or discharge any lien that is filed by reason of the Operator's
      failure to perform its obligations
hereunder;

            


    

    
      	
              e)  

            	
              to
      maintain true and correct books, accounts and records of operations
      hereunder in accordance with the Accounting Procedure, separate and apart
      from any other books, accounts and records maintained by the Operator,
      provided that the judgment of the Operator as to matters related to
      accounting, for which provision is not made in the Accounting Procedure
      shall govern if the Operator's accounting practices are in accordance with
      accounting principles generally accepted in the mining industry in
      Canada;

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    
      	
              f)  

            	
              to
      permit one representative of the parties appointed in writing at all
      reasonable times and at their expense to inspect, audit and copy the
      Operator's accounts and records relating to the accounting for production
      or to the determination of the proceeds from the sale thereof for any
      fiscal year of the Operator within 9 months following the end of such
      fiscal year. The Operator shall maintain its accounts and records for a
      period of at least two (2) years or such longer period as required by the
      laws of Canada or its Provinces. The parties shall be entitled to inspect,
      audit and copy the accounts and records upon giving the Operator ten (10)
      days notice of their intention to do
so;

            


    

    
      	
              g)  

            	
              to
      obtain and maintain or cause any contractor engaged hereunder to obtain
      and maintain during any period in which active work is carried out
      hereunder such insurance coverage as the Management Committee deems
      advisable;

            


    

    
      	
              h)  

            	
              to
      permit the parties or their representatives appointed in writing, at all
      reasonable times, at their own expense and risk, reasonable access to the
      Property and all data derived from carrying out work
    thereon;

            


    

     

    
      	
              i)  

            	
              to
      open and maintain on behalf of the Joint Venture such bank account or bank
      accounts as the Management Committee may direct with a Canadian chartered
      bank;

            


    

     

    
      	
              j)  

            	
              to
      prosecute and defend, but not to initiate without the consent of the
      Management Committee, all litigation or administrative proceedings arising
      out of the Property, or Project;

            


    

    
      	
              k)  

            	
              to
      transact, undertake and perform all transactions, contracts, employments,
      purchases, operations, negotiations with third parties and any other
      matter or thing undertaken by or on behalf of the Joint Venture hereunder
      in the Operator's name and to pay all expenditures incurred in connection
      therewith promptly when due;

            


    

     

    
      	
              1)  

            	
              to
      transact, undertake and perform all transactions, contracts, employments,
      purchases, operations, negotiations with third parties and any other
      matter or thing undertaken on behalf of the parties in the Operators name;
      m) to maintain in good standing those mineral claims comprised in the
      Property by the doing and filing of all assessment work or the making of
      payments in lieu thereof and by the payment of all taxes and other like
      charges;

            


    

    
      	
              m)  

            	
              to
      take all proper and reasonable steps for the protection of rights of
      surface owners against damage occasioned by operations to be conducted
      hereunder and pay such damages as may lawfully be determined as resulting
      from such operations.

            


    

     

    7.3
Subject to any specific provisions of this Agreement, the Operator, in carrying
out its duties and obligations hereunder, shall at all times be subject to the
direction and control of the Management Committee and shall perform its duties
hereunder in accordance with the instructions and directions as from time to
time communicated to it by the Management Committee and shall make all reports
to the Management Committee except where otherwise specifically provided
herein.

     

    7.4 The
Operator shall commence and diligently complete the Project and without limiting
the generality of the foregoing, may retain an independent consulting geologist
acceptable to the Management Committee to prepare a report in respect of the
Project, the results thereof, the conclusions derived therefrom and the
recommendation as to whether or not further work should be conducted on the
Property.

     

    7.5
Subject to Section 7.3, the Operator may charge the following sums in return for
its head office overhead functions which are not charged directly as provided in
the Accounting Procedure: a) with respect to Mine Construction, an amount equal
to 5.0% of all Construction Costs; and b) subsequent to the Completion Date, an
amount equal to 2.5% of all Operating Costs.

     

    7.6
Notwithstanding Section 7.5, if a party gives notice in writing to the
Management Committee that the party holds a bona fide belief that the sums
charged under Section 7.5 are either excessive or insufficient then the
Management Committee shall call a meeting to be held within ninety (90) days of
receipt of such notice for the purpose of amending or ratifying the amounts
charged under Section 7.5 hereof.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    PROGRAMS

     

    8.1
Expenditures shall only be incurred under and pursuant to Programs prepared by
the Operator and approved by the Management Committee. Any Feasibility Report
shall be prepared pursuant to a separate Program.

     

    8.2 The
Operator shall prepare and submit to the Management Committee a Program within
90 days of the completion of the previous Program. If the Operator does not prepare
a Program within the time limited, then the other parties shall have the right
to prepare a Program for submission to the Management Committee at which time
the party submitting the Program shall become the Operator.

     

    8.3
Within sixty (60) days of the approval by the Management Committee of a Program,
each party shall give written notice to the Operator stating whether or not it
elects to contribute its respective Costs of such Program or requesting the
Operator to revise this Program provided that each party may only make such
requests once in respect of each Program. Subject to Section 8.7, failure by any
of the parties to give notice pursuant to this subsection within such sixty (60)
day period shall be deemed an election by that party not to contribute to such
Program.

     

    8.4 If
the party elects or is deemed to have elected not to contribute its Costs of a
Program, the other parties may give notice in writing to the Operator stating
that it or they will contribute all expenditures under or pursuant to such
Program and the Operator will proceed with such Program and thereafter the
interests of the parties shall be adjusted in accordance with Article 4. The
Operator will not proceed with any Program which is not fully
subscribed.

     

    8.5 If the parties elect or
contribute their respective Costs of a Program, the Operator will proceed with
the Program.

     

    8.6 If any
party requests the Operator to revise a Program in accordance with Section 8.3,
the Operator will revise such Program at once and resubmit the revised Program
to the parties on the same terms and conditions as any other Program, except
that the parties shall not have the right to request any further
revisions.

     

    8.7 If any
party elects or is deemed to have elected not to contribute to a Program its
Interest will not be subject to adjustment if, within sixty (60) days of such
election or deemed election it elects to pay to the contributing party or
parties one hundred and fifty (150%) percent of what would otherwise have been
its contribution to such Program, but any amount so paid in excess of what would
otherwise have been its contribution to such Program shall be deemed not to be a
contribution to Costs by the party making it.

     

    8.8 An
election by a party to contribute to a Program shall make that party liable to
pay its proportionate share of Costs actually incurred under or pursuant to the
Program including Program Overruns, as herein after defined, of up to but not
exceeding ten (10%) percent.

     

    8.9 After
having elected to contribute to a Program which is proceeded with, a party
shall, within 30 days after being invoiced therefor by the Operator, pay such
portion of its share of Costs as the Operator may require but the Operator shall
not require payment of any funds more than one month in advance.

     

    8.10
If it
appears that Costs will exceed by greater than ten (10%) percent those estimated
under a program the Operator shall immediately give written notice to the party
or parties contributing to that program outlining the nature and extent of the
additional costs and expenses (hereinafter called "Program overruns"). If Program Overruns are approved
by the party or parties contributing to that Program, then within thirty (30)
days after the receipt of a written request from the Operator, the party or
parties contributing to that Program shall provide the Operator with their
respective shares of such Program overruns. If Program Overruns are not approved
by the party or parties contributing to that Program, the Operator shall have a
right to curtail or abandon such Program. Any costs incurred by the Operator due
to

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    a
curtailment or abandonment of the Program shall be paid by the parties pursuant
to their respective Interests in the Program.

     

    8.11
If any party at any time
fails to pay its share of Costs in accordance with Sections 8.9 or 8.10, the
Operator may give written notice to that party demanding payment, and if the
party has not paid such amount within fifteen (15) days of the receipt of such
notice, that party shall be deemed to:

    (a) be in
default under Section 8.9 or 8.10 as applicable; and

    
      	
               
      

            	
              (b)
      have elected not to contribute to that Program for the purpose of Article
      4 and the Interest of the parties shall be adjusted in accordance with
      Article 4 and the Operator shall have the right to curtail or abandon the
      Program and that party shall not be entitled to contribute to any
      subsequent Programs.

            


    

     

    MINE
FINANCING

     

    9.1 The
parties hereto shall be responsible for providing or arranging the financing of
a Mine. In providing or arranging the financing for a Mine, the Property and
Mine may be pledged, hypothecated, mortgaged, charged, or otherwise encumbered
in order to secure monies borrowed and used for the sole purpose of enabling the
Mine to be financed. Subject to this Article any party may pledge, mortgage,
hypothecate, charge or otherwise encumber its interest in order to secure by way
of floating charge as a part of the general corporate assets of that party's
money borrowed for its general corporate purposes, provided that the pledgee,
mortgagee, holder of the charge or encumbrance (in this paragraph referred to as
a "Chargee") shall hold the same subject to the provisions of this Agreement and
that if the Chargee realizes upon any of its security it will comply with this
Agreement. The agreement between the party, as borrower, and the Chargee shall
contain specific provisions to the same effect as the provisions of this
Article.

     

    CONSTRUCTION
OF MINE

     

    10.1 Upon
approval by the Management Committee of the Feasibility Report recommending the
Construction of a Mine, the Management Committee shall cause the Operator to,
and the Operator shall, proceed with Construction with all reasonable dispatch.
Construction shall be substantially in accordance with the Feasibility Report
subject to any variations agreed upon by the parties and subject also to the
right of the Management Committee to cause such other reasonable variations in
Construction to be made as the Management Committee deems
advisable.

     

    OPERATION
OF MINE

    11.1
Commencing with the Completion Date, all Mining Operations shall be planned and
conducted and all estimates, reports and statements shall be prepared and made
on the basis of an Operating Year.

     

    11.2 With
the exception of the first Operating Year, an Operating Plan for each Operating
Year shall be submitted by the Operator to the parties not later than ninety
(90) days prior to the end of the year immediately preceding the Operating Year
to which the Operating Plan relates. Each Operating Plan shall contain the
following:

     

    
      	
               
      a)  

            	
              a
      plan for the proposed Mining
Operations;

            


    

    
      	
               b)  

            	
              a
      detailed estimate of all Mine Costs plus a reasonable allowance for
      contingencies;

            


    

    
      	
               c)  

            	
              an
      estimate of the quantity and quality of the ore to be mined and the
      concentrates or metals to be produced; and such other facts as may be
      necessary to reasonably illustrate the results intended to be achieved by
      the Operating Plan; and upon request of any party the Operator shall meet
      with that party to discuss the Operating Plan and shall provide such
      additional or supplemental information as that party may reasonably
      require with respect thereto.

            


    

     

    11.3 The
Management Committee shall adopt each Operating Plan, with such changes as it
deems necessary, on or prior to ninety (90) days prior to the end of the year
immediately preceding the Operating Year to which the Operating Plan relates;
provided, however, that the Management Committee may from time to time and at
any time amend any Operating Plan.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    11.4 The
Operator shall be entitled to include in the estimate of Mine Costs referred to
in Section 11.2 hereof the reasonably estimated costs of satisfying continuing
obligations that may remain after this Agreement terminates, in excess of
amounts actually expended. Such continuing obligations are or will be incurred
as a result of the Joint Venture and shall include such things as monitoring,
stabilization, reclamation or restoration obligations, severance and other
employee benefit costs and all other obligations incurred or imposed as a result
of the Joint Venture which continue or arise after termination of this Agreement
and settlement of all accounts. The amount accrued from time to time for the
satisfaction of such continuing obligations shall be classified as Costs
hereunder but shall be segregated into a separate account.

     

    PAYMENT
OF CONSTRUCTION AND OPERATING COSTS

     

    12.1 The
parties hereto shall, from time to time, pay for all Mine Construction Costs
incurred to the date of invoice, or at the beginning of each month for an
advance equal to the estimated cash disbursements to be made during the month.
Each party shall pay the Mine Construction Costs or the estimated cash
disbursements within thirty (30) days after receipt of the invoice.

     

    12.2 The
Operator may invoice the parties, from time to time, for Operating Costs
incurred to the date of the invoice, or at the beginning of each month for an
advance equal to the estimated cash disbursements to be made during the month.
The parties shall pay the Operating Costs or the estimated cash disbursements
aforesaid to the Operator within thirty (30) days after receipt of the invoice.
If the payment or advance requested is not so made, the amount of the payment or
advance shall bear interest calculated monthly not in advance from the 30th day
after the date of receipt of the invoice thereof by the parties at a rate
equivalent to the weighted average prime rate for the month plus two percent
until paid. The Operator shall have a lien on a party or parties' aggregate
Interest in order to secure any payment or advance required hereunder together
with interest which has accrued thereon. 12.4 If a party or parties fail (i) to
pay an invoice contemplated in Section 9.3 within the time period herein
provided, or (ii) to pay an invoice contemplated in Section 12.3 within the
thirty (30) day period aforesaid, the Operator may, by notice, demand payment.
If no payment is made within fifteen (15) days of the Operator's demand notice,
the Operator may, without limiting its other rights at law, enforce the lien
created by Section 12.3 by taking possession of all or any part of the parties'
aggregate Interest. The Operator may sell and dispose of the Interest which it
has so taken into its possession by:

     

    
      	
              a)  

            	
              first
      offering that Interest to the other parties, if more than one then in
      proportion to the respective Interests of the parties which wish to accept
      that offer, for that price which is the fair market value stated in the
      lower of two appraisals obtained by the Operator from independent, well
      recognized appraisers competent in the appraisal of mining properties;
      and

            


    

    
      	
              b)  

            	
              if
      the parties have not purchased all or part of that Interest as aforesaid,
      then by selling the balance, if any, either in whole or in part or in
      separate parcels at public auction or by private tender (the parties being
      entitled to bid) at a time and on whatever terms the Operator shall
      arrange, having first given notice to the parties of the time and place of
      the sale. As a condition of the sale as contemplated in Article 12.4(b),
      the purchaser shall agree to be bound by this Agreement and, prior to
      acquiring the Interest, shall deliver notice to that effect to the
      parties, in form acceptable to the Operator. The proceeds of the sale
      shall be applied by the Operator in payment of the amount due from the
      parties and interest as aforesaid, and the balance remaining, if any,
      shall be paid to the parties after deducting reasonable costs of the sale.
      Any sale or disposal made as aforesaid shall be a perpetual bar both at
      law and in equity by the parties and its successors and assigns against
      all other parties and the Operator.

            


    

     

    DISTRIBUTION
IN KIND

     

    13.1
It is expressly intended
that, upon approval of a Feasibility Report recommending the Construction of a
Mine, the association of the parties shall be limited to the efficient
production of Mineral Products from the Property and that each of the parties
shall be entitled to use, dispose of or otherwise deal with its proportionate
share of Mineral Products as it sees fit. Each party shall take in kind the
Mineral Products

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    produced
from the Mine, f.o.b. truck or railcar on the Property, and separately dispose
of its proportionate share of the Mineral Product. Extra costs and expenses
incurred by reason of the parties taking in kind and making separate
dispositions shall be paid by each party directly and not through the Operator
or Management Committee.

     

    13.2 Each
party shall construct, operate and maintain, all at its own cost and expense,
any and all facilities which may be necessary to receive and store and dispose
of its proportionate share of the Mineral Product at the rate the same are
produced.

     

    13.3 If a
party has not made the necessary arrangements to take in kind and store its
share of production as aforesaid the Operator shall, at the sole cost and risk
of that party store, in any location where it will not interfere with Mining
Operations, the production owned by that party. The Operator and the other
parties shall be under no responsibility with respect thereto. All of the Costs
involved in arranging and providing storage shall be billed directly to, and be
the sole responsibility of the party whose share of production is so stored. The
Operator's charges for such assistance and any other related matters shall be
billed directly to and be the sole responsibility of the party. All such
billings shall be subject mutatis mutandis to the provisions of Paragraphs
12.3.

     

    SURRENDER
OF INTEREST

     

    14.1 Any
party may, at any time upon notice, surrender its entire Interest to the other
parties by giving those parties notice of surrender. The notice of surrender
shall:

     

    
      	
              a)  

            	
              indicate
      a date for surrender not less than three months after the date on which
      the notice is given; and

            


    

    
      	
              b)  

            	
              contain
      an undertaking that the surrendering party
will:

            


    

    
      	
              i)  

            	
              satisfy
      its proportionate share, based on its then Interest, of all obligations
      and liabilities which arose at any time prior to the date of
      surrender;

            


    

    
      	
              ii)  

            	
              if
      the Operator has not included in Mine Costs the costs of continuing
      obligations as set out in Section 11.4 hereof, pay its reasonably
      estimated prop0l1ionate share, based on the surrendering party's then
      Interest, of the Costs of rehabilitating the Mine site and of reclamation
      as at the date of surrender; and

            


    

    
      	
              iii)  

            	
              iii)
      will hold in confidence, for a period of two years from the date of
      surrender, all information and data which it acquired pursuant to this
      Agreement.

            


    

     

    14.2 Upon
the surrender of its entire Interest as contemplated herein and upon delivery of
a release in writing, in form acceptable to counsel for the Operator, releasing
the other parties from all claims and demands hereunder, the surrendering party
shall be relieved of all obligations or liabilities hereunder except for those
which arose or accrued or were accruing due on or before the date of the
surrender.

     

    14.3 A
party to whom a notice of surrender has been given as contemplated herein may
elect, by notice within ninety (90) days to the party which first gave the
notice, to accept the surrender, in which case Article 11.4 and 14.2 shall
apply, or to join in the surrender.

     

    TERMINATION
OR SUSPENSION OF MINING OPERATIONS

     

    15.1 The
Operator may, at any time subsequent to the Completion Date, on at least thirty
(30) days notice to all parties, recommend that the Management Committee approve
the suspension of Mining Operations. The Operator's recommendation shall include
a plan and budget (in this Article 15 called the "Mine Maintenance Plan") in
reasonable detail of the activities to be performed to maintain the Property
during the period of suspension and the Costs to be incurred. The Management
Committee may, at any time subsequent to the Completion Date, cause the Operator
to suspend Mining Operations in accordance with the Operator's recommendation
with such changes to the Mine Maintenance Plan as the Management Committee deems
necessary. The parties shall be committed to contribute their proportionate
share of the Costs incurred in connection with the Mine Maintenance Plan. The
Management Committee may cause Mining Operations to be resumed at any
time.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    15.2 The
Operator may, at any time following a period of at least ninety (90) days during
which Mining Operations have been suspended, upon at least thirty (30) days
notice to all parties, or in the events described herein, recommend that the
Management Committee approve the permanent termination of Mining Operations. The
Operator's recommendation shall include a plan and budget (in this Article 15
called the "Mine Closure Plan") in reasonable detail of the activities to be
performed to close the Mine and reclaim the Property. The Management Committee
may, by unanimous approval of the representatives of all parties, approve the
Operator's recommendation with such changes to the Mine Closure Plan as the
Management Committee deems necessary.

     

    15.3
If the Management
Committee approves the Operator's recommendation as aforesaid, it shall cause
the Operator to:

     

    
      	
              a)  

            	
              implement
      the Mine Closure Plan whereupon the parties shall be committed to pay, in
      proportion to their respective Interests, such Costs as may be required to
      implement that Mine Closure Plan;

            


    

    
      	
              b)  

            	
              remove,
      sell and dispose of such assets as may reasonably be removed and disposed
      of profitably and such other assets as the Operator may be required to
      remove pursuant to applicable environmental and mining laws; and sell,
      abandon or otherwise dispose of the Property. The disposal price for the
      Property shall be the best price obtainable and the net revenues, if any,
      from the removal and sale shall be credited to the parties in proportion
      to their respective Interests.

            


    

     

    15.4 If
the Management Committee does not approve the Operator's recommendation
contemplated herein, the Operator shall maintain Mining Operations in accordance
with the Mine Maintenance Plan pursuant to this Article 1

     

    INFORMATION
AND DATA

     

    16.1 At
all times during the subsistence of this Agreement the duly authorized
representatives of each party shall have access to the Property and the Project
at its and their sole risk and expense and at reasonable intervals and times,
and shall further have access at all reasonable time to all technical records
and other factual engineering data and information relating to the Property and
the Project in the possession of the Management Committee or the Operator. In
exercising the right of access to the Property or the Project the
representatives of a party shall abide by the rules and regulations laid down by
the Management Committee and by the Operator relating to matters of safety and
efficiency. If any representative of a party is not an employee, the party shall
so advise the Operator so that the Operator may require the representative,
before giving him access to the Property or the Project or to data or
information relating thereto, to sign and undertaking in favour of the Joint
Venture, in form and substance satisfactory to the Operator, to maintain
confidentiality to the same extent as each party is required to do under Section
16.2 hereof.

     

    16.2 All
records, reports, accounts and other documents referred to herein with respect
to the Property and the Project and all information and data concerning or
derived from the Property and the Project shall be kept confidential and each
party shall take or cause to be taken such reasonable precautions as may be
necessary to prevent the disclosure thereof to any person other than each party,
the Operator, an Affiliate and any financial institution or other person having
made, making or negotiating loans to one or more of the foregoing or any trustee
for any such person, or as may be required by laws, by regulation or policy of
any governmental agency, securities commission or stock exchange, or in
connection with the filing of a prospectus or statement of material facts by a
party, an Affiliate or the Operator or to a prospective assignee as permitted
hereunder, or as may be required in the performance of obligations under this
Agreement without prior consent of all parties, which consent shall not be
unreasonably withheld.

     

    PARTITION

     

    17.1 No
party shall, during the term of this Agreement, exercise any right to apply for
any partition of the Property or for sale thereof in lieu of
partition.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    TAXATION

     

    18.1 Each
party on whose behalf any Costs have been incurred shall be entitled to claim
all tax benefits, write-offs and deductions with respect thereto.

     

    RIGHT
OF FIRST REFUSAL

     

    19.1 Save
and except as provided in Section 3.5 and Article 4 hereof, the parties shall
not transfer, convey, assign, mortgage or grant an option in respect of or grant
a right to purchase or in any manner transfer or alienate all or any portion of
its Interest or rights under this Agreement otherwise in accordance with this
Article.

     

    19.2
Nothing in this Article shall prevent a sale by a party of all of its Interest
or an assignment of all its rights under this Agreement to an Affiliate provided
that such Affiliate first complies with the provisions of Section.

     

    19.10 and
agrees with the other party in writing to retransfer such interest to the
originally assigning party before ceasing to be an Affiliate of such
party;

     

    
      	
              a)  

            	
              a
      variation pursuant to Section 4.3;
or

            


    

     

    
      	
              b)  

            	
              a
      disposition pursuant to an amalgamation or corporate reorganization which
      will have the effect in law of the amalgamating or surviving company
      possessing all the property, rights and interests and being subject to all
      the debts, liabilities and obligations of each amalgamating or predecessor
      company.

            


    

     

    19.3
Should a party (the "transferring party") intend to dispose of all or any
portion of its Interest or rights under this Agreement it shall first give
notice in writing to the parties (the "other par1ies") of such intention
together with the terms and conditions on which the transferring party intends
to dispose of its Interest or a portion thereof or rights under this
Agreement.

     

    19.4 If a
party (the "transferring party") receives any offer to dispose of all or any
portion of its Interest or rights under this Agreement which it intends to
accept, the transferring party shall not accept the same unless and until it has
first offered to sell such Interest or rights to the parties (the "other
parties") on the same terms and conditions as in the offer received and the same
has not been accepted by the other parties in accordance with Section
19.6.

     

    19.5 Any
communication of an intention to sell pursuant to Section 19.3 and 19.4 (the
"Offer") for the purpose of this Article only shall be in writing delivered in
accordance with Article 21 and shall:

     

    
      	
              a)  

            	
              set
      out in reasonable detail all of the terms and conditions of any intended
      sale;

            


    

     

    
      	
              b)  

            	
              if
      it is made pursuant to Section 19.3, include a photocopy of the Offer;
      and

            


    

     

    
      	
              c)  

            	
              if
      it is made pursuant to Section 19.4, clearly identify the offering party
      and include such information as is known by the transferring party about
      such offering party; and such communication will be deemed to constitute
      an Offer by the transferring party to the other parties to sell the
      transferring party's Interest or its rights (or a portion thereof as the
      case may be) under this Agreement to the other parties on the terms and
      conditions set out in such Offer. For greater certainty it is agreed and
      understood that any Offer hereunder shall deal only with the disposition
      of the Interest or rights of the transferring party hereunder and not with
      any other interest, right or property of the transferring party and such
      disposition shall be made solely for a monetary
    consideration.

            


    

     

    19.6 Any
Offer made as contemplated in Section 19.5 shall be open for acceptance by the
other parties in accordance with their respective Interests for a period of
sixty (60) days from the date of receipt of the Offer by the transferring
party.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    19.7 If
the other parties accept the Offer within the period provided for in Section
19.6, such acceptance shal1 constitute a binding agreement of purchase and sale
between the transferring party and the other parties for the Interest or its
rights (or a portion thereof as the case may be) under this Agreement on the
terms and conditions set out in such Offer.

     

    19.8 If
the other parties do not accept the Offer within the period provided for in
Section 19.6 or do accept but fail to close the transaction contemplated thereby
within ninety (90) days following receipt of such Offer, the transferring party
may complete a sale and purchase of its Interest or a portion thereof on terms
and conditions not less favourable to the transferring party than those set out
in the Offer and, in the case of an Offer under Section 19.4, only to the party
making the original offer to the transferring party and in any event such sale
and purchase shall be completed within nine months from the expiration of the
right of the other party to accept such Offer of the transferring party must
again comply with the provisions of this Article.

     

    19.9
While any Offer is outstanding no other Offer may be made until the first
mentioned Offer is disposed of and any sale resulting therefrom completed or
abandoned in accordance with the provisions of this Article.

     

    19.10
Before the completion of any sale by the transferring party of its Interest or
rights or any portion thereof under this Agreement, the purchasing party shall
enter into an agreement with the parties agreeing not to sell except on the same
terms and conditions as set out in this Agreement.

     

    FORCE
MAJEURE

     

    20.1 No
party will be liable for its failure to perform any of its obligations under
this Agreement due to a cause beyond its reasonable control (except those caused
by its own lack of funds) including, but not limited to acts of God, fire,
flood, explosion, strikes, lockouts or other industrial disturbances, laws,
rules and regulations or orders of any duly constituted governmental authority
or non-availability of materials or transportation (each an "Intervening
Event").

     

    20.2 All
time limits imposed by this Agreement, excepting those set out in Article 15,
will be extended by a period equivalent to the period of delay resulting from an
Intervening Event. 20.3 A party relying on the provisions of Section 20.1 will
take all reasonable steps to eliminate any Intervening Event and, if possible,
will perform its obligations under this Agreement as far as practical, but
nothing herein will require such party to settle or adjust any labour dispute or
to question or to test the validity of any law, rule, regulation or order of any
duly constituted governmental authority or to complete its obligations under
this Agreement if an Intervening Event renders completion
impossible.

     

    NOTICE

     

    21.1 Any
notice, direction, cheque or other instrument required or permitted to be given
under this Agreement shall be in writing and may be given by the delivery of the
same or by mailing the same by prepaid registered or certified mail or by
sending the same by telegram, telex, telecommunication or other similar form of
communication, in each case addressed to the intended recipient at the address
of the respective party set out on the front page hereof.

     

    21.2 Any
notice, direction, cheque or other instrument aforesaid will, if delivered, be
deemed to have been given and received on the day it was delivered, and if
mailed, be deemed to have been given and received on the third business day
following the day of mailing, except in the event of disruption of the postal
service in which event notice will be deemed to be received only when actually
received and, if sent by telegram, telex, telecommunication or other similar
form of communication, be deemed to have been given or received on the day it
was so sent.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    21.3 Any
party may at any time give to the other notice in writing of any change of
address of the party giving such notice and from and after the giving of such
notice the address or addresses therein specified will be deemed to be the
address of such party for the purposes of giving notice hereunder.

     

    WAIVER

     

    22.1
If any provision of this
Agreement shall fail to be strictly enforced or any party shall consent to any
action by any other party or shall waive any provision as set out herein, such
action by such party shall not be construed as a waiver thereof other than at
the specific time that such waiver or failure to enforce takes place and shall
at no time be construed as a consent, waiver or excuse for any failure to
perform and act in accordance with this Agreement at any past or future
occasion.

     

    FURTHER
ASSURANCES

     

    23.1 Each
of the parties hereto shall form time to time and at all times do all such
further acts and execute and deliver all further deeds and documents as shall be
reasonably required in order to fully perform and carry out the terms of this
Agreement. For greater certainty, this section shall not be construed as
imposing any obligation on any party to provide guarantees.

     

    USE
OF NAME

     

    24.1 No
party shall, except when required by this Agreement or by any law, by-law,
ordinance, rule, order or regulation, use, suffer or permit to be used, directly
or indirectly, the name of any other party for any purpose related to the
Property or the Project.

     

    ENTIRE
AGREEMENT

     

    25.1 This
Agreement embodies the entire agreement and understanding among the parties
hereto and supersedes all prior agreements and undertakings, whether oral or
written, relative to the subject matter hereof.

     

    AMENDMENT

     

    26.1 This
Agreement may not be changed orally but only by an agreement in writing, by the
party or parties against which enforcement, waiver, change, modification or
discharge is sought.

     

    ARBITRATION

     

    27.1 If
any question, difference or dispute shall arise between the parties or any of
them in respect of any matter arising under this Agreement or in relation to the
construction hereof the same shall be determined by the award of three
arbitrators to be named as follows:

     

    
      	
              a)  

            	
              the
      party or parties sharing one side of this dispute shall name an arbitrator
      and give notice thereof to the party or parties sharing the other side of
      the dispute;

            


    

     

    
      	
              b)  

            	
              the
      party or parties sharing the other side of the dispute shall, within 14
      days of receipt of the notice, name an arbitrator;
  and

            


    

     

    
      	
              c)  

            	
              the
      two arbitrators so named shall, within 15 days of the naming of the latter
      of them, select a third arbitrator. The decision of the majority of these
      arbitrators shall be made within 30 days after the selection of the latter
      of them. The expense of the arbitration shall be borne equally by the
      parties to the dispute. If the
      parties on either side of the dispute fail to name their arbitrator within
      the time limited or proceed with the arbitration, the arbitrator named may
      decide the question. The arbitration shall be conducted in accordance with
      the provisions of the Arbitration Act of
      Alberta and the decision of the arbitrator or a majority of the
      arbitrators, as the case may be, shall be conclusive and binding upon all
      the parties.

            


    

     

    RIGHT
TO AUDIT

     

    28.1 Any
party acquiring a Royalty pursuant to this Agreement shall have the right to
audit at its expense the books and records in respect of such Royalty of the
Operator or the other parties, if it is not the Operator in respect of such
Royalty.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    TIME

     

    29.1
Unless earlier terminated by agreement of all parties or as a result of one
party acquiring a 100% Interest, the Joint Venture and this Agreement shall
remain in full force and effect for so long as any part of the Property or
Project is held in accordance with this Agreement. Termination of the Agreement
shall not, however, relieve any party from any obligations theretofore accrued
but unsatisfied.

     

    RULE
AGAINST PERPETUITIES

     

    30.1 If
any right, power or interest of any party in any Property under this Agreement
would violate the rule against perpetuities, then such right, power or interest
shall terminate at the expiration of 20 years after the death of the survivor of
all the lineal descendants of her Majesty, Queen Elizabeth II of the United
Kingdom, living on the date of execution of this Agreement.

     

    DOCUMENT
RETENTION ON TERMINATION

     

    31.1
Prior to the distribution of the Property or the Project or the net revenues
received on the disposal thereof on termination of this Agreement, the
Management Committee shall meet any may approve a procedure for the retention,
maintenance and disposal of documents maintained by the Management Committee
(the "Documents") and shall appoint such party as may consent thereto to ensure
that all proper steps are taken to implement and maintain that procedure. If a
quorum is not present at the meeting or if he Management Committee fails to
approve a procedure as aforesaid, the Operator, if a party, otherwise the party
holding the largest Interest as at the day immediately preceding the date the
Management Committee was called to meet, shall retain, maintain and dispose of
the Documents according to such procedure, in compliance with all applicable
laws, as it deems fit. The party entrusted with the retention, and expenses
incidental thereto and shall be entitled to receive payment of those costs and
expenses prior to any distribution being made of the Property and Project or the
net revenues received on the disposal thereof.

     

    ENUREMENT

     

    32.1 This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.

     

    GOVERNING
LAW

     

    33.1 This
Agreement shall be governed by and interpreted in accordance with the laws of
the Province of Alberta and the parties irrevocably attorn to the jurisdiction
of the said province.

     

    SEVERABILITY

     

    34.1
If anyone or more of the
provisions contained herein should be invalid, illegal or unenforceable in any
respect in any jurisdiction, the validity, legality and enforceability of such
provision shall not in any way be affected or impaired thereby in any other
jurisdiction and the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.

     

    NUMBER
AND GENDER

     

    35.1
Words used herein importing the singular number only shall include the plural,
and vice versa, and words importing the masculine gender shall include the
feminine and neuter genders, and vice versa, and words importing persons shall
include firms and corporations.

     

    HEADINGS

     

    36.1 The
division of this Agreement into articles and sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.

     

    TIME
OF THE ESSENCE

     

    37.1 Time
shall be of the essence in the performance of this Agreement.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF the parties
hereto have executed this Agreement as of the day, month and year first above
written.

    


    


    PRICECO

    


    


    per_____________________________________

       Barry
J. Price, Pres. & CEO

    


    


    IRC
EXPLORATION LTD.

    


    


    per_____________________________________

       Harry
Bydgnes, Pres & CEO

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    


    SCHEDULE
"A"

    TO

    THE JOINT
VENTURE AGREEMENT

     

    DESCRIPTION
OF PROPERTY RIGHTS AND PROPERTY

     

    DESCRIPTION
OF PROPERTY RIGHTS AND PROPERTY 

     

    The
Omineca Queen mineral claim is located within the Omineca Mining Division of
British Columbia

     

    Latitude:
55 deg 31 '28"N Longitude: 124 deg 06'36"W

     

    


    
      	
              
                Tenure

                Number

              

            	
              
                Tenure
Type

            	
              
                Claim
Name

            	 
      

              Owner

            	
              
                Map
Number

            	 
      

              Expiry

            	 
      

              Status

            	
              
                Number
of
      Cells

            	
              
                Area
(Hectares)

            
	
              574763

            	
              Mineral

            	
              QUEEN

            	
              121855
      

                (100%)

              

            	
              093N

            	
              January
      

                27,
      2009

              

            	
              Good

            	
              23

            	
              457.726

            


    

     

    Owner
121855 is Barry J. Price

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE"B"

    TO

    THE JOINT
VENTURE AGREEMENT

     

    DEFINITION
OF NET PROFITS

     

    1. "Net
Profits" means the aggregate of:

     

    
      	
               
      

            	
              (a)  all
      revenues from the sale or other disposition of ores, metals or minerals
      mined or extracted from the Property or any portion thereof and any
      concentrates produced therefrom;
and

            


    

    
      	
                

            	
              b)  
      all revenues from the operation, sale or other disposition of any
      Facilities the cost of which is included in the definition of "Operating
      Expenses", "Capital Expenses" or "Exploration Expenses", less (without
      duplication) Working Capital, Operating Expenses, Capital Expenses and
      Exploration Expenses.

            


    

     

    2.
"Working Capital" means the amount reasonably necessary to provide for the
operation of the mining operation on the Property and for the operation and
maintenance of the Facilities for a period of six months.

     

    3.
"Operating Expenses" means all costs, expenses, obligations, liabilities and
charges of whatsoever nature or kind incurred or chargeable directly or
indirectly in connection with Commercial Production from the Property and in
connection with the maintenance and operation of the Facilities, all in
accordance with generally accepted accounting principles, consistently applied,
including, without limiting the generality of the foregoing, all amounts payable
in connection with mining, handling, processing, refining, transporting and
marketing of ore, concentrates, metals, minerals and other products produced
from the Property, all amounts payable for the operation and maintenance of the
Facilities including the replacement of items which by their nature require
periodic replacement, all taxes (other than income taxes), royalties and other
imposts and all amounts payable or chargeable in respect of reasonable overhead
and administrative services.

     

    4.
"Capital Expenses" means all expenses, obligations and liabilities of whatsoever
kind (being of a capital nature in accordance with generally accepted accounting
principles) incurred or chargeable, directly or indirectly, with respect to the
development, acquisition, redevelopment, modernization and expansion of the
Property and the Facilities, including, without limiting the generality of the
foregoing, interest thereon from the time so incurred or chargeable at a rate
per annum from time to time equal to "prime rate" of the Royal Bank of Canada
plus two (2%) percent per annum, but does not include Operating Expenses nor
Exploration Expenses.

     

    5.
"Exploration Expenses" means all costs, expenses, obligations, liabilities and
charges of whatsoever nature or kind incurred or chargeable, directly or
indirectly, in connection with the exploration and development of the Property
including, without limiting the generality of the foregoing, all costs
reasonably attributable, in accordance with generally accepted accounting
principles, to the design, planning, testing, financing, administration,
marketing, engineering, legal, accounting, transportation and other incidental
functions associated with the exploration and mining operation contemplated by
this Agreement and with the Facilities, but does not include Operating Expenses
nor Capital Expenses.

     

    6.
"Facilities" means all plant, equipment, structures, roads, rail lines, storage
and transport facilities, housing and service structures, real property or
interest therein, whether on the Property or not, acquired or constructed
exclusively for the mining operation on the Property contemplated by this
Agreement (all commonly referred to as "infrastructure").

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
"C" TO

    THE JOINT
VENTURE AGREEMENT

     

     

    ACCOUNTING
PROCEDURES

     

    TABLE OF CONTENTS

     

    
    

     

    
      
        	1.
      Interpretation 	
                1

              
	
                2. Statements
      and Billings

              	
                2

              
	3. Direct
      Charges	
                2

              
	4. Purchase of
      Material 	
                3

              
	5. Disposal
      of Material 	
                4

              
	6.
      Inventories 	
                4

              
	7.
      Adjustments 	
                4

              


      

    

                                                                                                           

                                                                                                                

    1.
INTERPRETATION

     

    In this
Schedule the following words, phrases and expressions shall have the following
meanings:

     

    
      	
              a)  

            	
              "Agreement" means the Agreement
      to which this Accounting Procedure is attached as Schedule "C"

            


    

    
      	
              b)  

            	
              "Count"
      means a physical inventory count.

            


    

    
      	
              c)  

            	
              "Employee"
      means those employees of the Operator who are assigned to and directly
      engaged in the conduct of Mining Operations, whether on a full-time or
      part-time basis.

            


    

    
      	
              d)  

            	
              "Employee
      Benefits" means the Operator's cost of holiday, vacation, sickness,
      disability benefits, field bonuses, paid to Employees and the Operator's
      costs of established plans for employee's group life insurance,
      hospitalization, pension, retirement and other customary plans maintained
      for the benefit of Employees and Personnel, as the case may be, which
      costs may be charged as a percentage assessment on the salaries and wages
      of Employees or Personnel, as the case may be, on a basis consistent with
      the Operator's cost experience.

            


    

    
      	
              e)  

            	
              "Field
      Offices" means the necessary sub-office or suboffices in each place where
      a Program or Construction is being conducted or a Mine is being
      operated.

            


    

    
      	
              f)  

            	
              "Government
      Contributions" means the cost or contributions made by the Operator
      pursuant to assessments imposed by governmental authority which are
      applicable to the salaries or wages of Employees or Personnel, as the case
      may be.

            


    

    
      	
              g)  

            	
              "Joint
      Account" means the books of account maintained by the Operator to record
      all costs, expenses, credits and other transactions arising out of or in
      connection with the Mining
Operations.

            


    

    
      	
              h)  

            	
              "Material"
      means the personal property, equipment and supplies acquired or held, at
      the direction or with the approval of the Management Committee, for use in
      the Mining Operations and, without limiting the generality, more
      particularly "Controllable Material" means such Material which is
      ordinarily classified as Controllable Material, as that classification is
      determined or approved by the Management Committee, and controlled in
      mining operations.

            


    

    
      	
              i)  

            	
              "Personnel"
      means those management, supervisory, administrative, clerical or other
      personnel of the Operator normally associated with the Supervision Offices
      whose salaries and wages are charged directly to the Supervision Office in
      question.

            


    

    
      	
              j)  

            	
              "Reasonable
      Expenses" means the reasonable expenses of Employee or Personnel, as the
      case may be, for which those Employees or Personnel may be reimbursed
      under the Operator's usual expense account practice; including without
      limiting the generality of the foregoing, any relocation expenses
      necessarily incurred in order to properly staff the Mining Operations if
      the relocation is approved by the Management Committee
  ..

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              k)  

            	
              "Supervision
      Office" means the Operator's offices or department within the Operator's
      offices from which the Mining Operations are generally
      supervised.

            


    

     

    2.
STATEMENTS AND BILLINGS

     

    2.1 The
Operator shall, by invoice, charge each party with its proportionate share of
Exploration Costs and Mine Costs in the manner provided in the
Agreement.

     

    2.2 The
Operator shall deliver, with each invoice rendered for Costs incurred a
statement indicating:

     

    
      	
              a)  

            	
              all
      charges or credits to the Joint Account relating to Controllable Material
      in detail; and

            


    

             


             
b)  all
other charges and credits to the Joint Account summarized by appropriate
classification indicative of the nature of the charges and credits.

     

    2.3 The
Operator shal1 deliver with each invoice for an advance of Costs a statement
indicating:

     

    
      	
              a)  

            	
              the
      estimated Exploration Costs or, in the case of Mine Costs, the estimated
      cash disbursements, to be made during the next succeeding
      month;

            


    

    
      	
              b)  

            	
              the
      addition thereto or subtraction therefrom, as the case may be, made in
      respect of Exploration Costs or Mine Costs actual1y having been incurred
      in an amount greater or lesser than the advance which was made by each
      party for the penultimate month preceding the month of the invoice;
      and

            


    

    
      	
              c)  

            	
              the
      advances made by each party to date and are Exploration Costs or Mine
      Costs incurred to the end of the penultimate month preceding the month of
      the invoice.

            


    

     

    3.
DIRECT CHARGES

     

    3.1 The
Operator shall charge the Joint Account with the following items: a) Contractor's
Charges:

     

    All
proper costs relative to the Mining Operations incurred under contracts entered
into by the Operator with third parties.

     

    
      	
              b)  

            	
              Labour
      Charges:

            


    

    
      	
              c)  

            	
              The
      salaries and wages of Employees in an amount calculated by taking the full
      salary or wage of each Employee multiplied by that fraction which has as
      its numerator the total time for the month that the Employees were
      directly engaged in the conduct of Mining Operations and as its
      denominator the total normal working time for the month of the
      Employee;

            


    

    ii) The
Reasonable Expenses of the Employees; and

    
      	
               
      

            	
              iii)
      Employee Benefits and Government Contributions in respect of the Employees
      in an amount proportionate to the charge made to the Joint Account in
      respect to their salaries and
wages.

            


    

    
      	
              c)  

            	
              Office
      Maintenance:

            


    

    
      	
               
      

            	
              i)  The
      cost or a pro rata portion of the costs, as the case may be, of
      maintaining and operating the Offices. The basis for charging the Joint
      Account for Office maintenance costs shall be as follows: the expense of
      maintaining and operating Field Offices, less any revenue therefrom; and
      that portion of maintaining and operating the Supervision Offices which is
      equal to the anticipated total operating expenses of the Supervision
      Offices divided by the anticipated total staff man days for the Employees
      whether in connection with the Mining Operations or not; multiplied by the
      actual total time spent on the Mining Operations by the Employee expressed
      in man days.

            


    

    
      	
               
      

            	
              ii)  Without
      limiting generality of the foregoing, the anticipated total operating
      expenses of the Supervision Offices shall
  include:

            


    

    A. the
salaries and wages of the Operator's Personnel which have been directly charged
to those Offices;

    B. the
Reasonable Expenses of the Personnel; and

    C.
Employee Benefits

    
      	
               
      

            	
              iii)
      The Operator shall make an adjustment in respect of the Office Maintenance
      cost forthwith after the end of each Operating Year upon having determined
      the actual operating expenses and actual total staff man days referred to
      in Clause 3.1 (c )(2)(b) of this Schedule
"C".

            


    

     

    d) Material:

    Material
purchased or furnished by the Operator for use on the Property as provided under
Section 4 of this Schedule "C".

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    e)
Transportation Charges:

     

    The cost
of transporting Employees and Material necessary for the Mining
Operations"

    f) Service
Charges:

     

    
      	
              i)  

            	
              The
      cost of services and utilities procured from outside sources other than
      services covered by Paragraph 3.1 h).. The cost of consultant services
      shall not be charged to the Joint Account unless the retaining of the
      consultant is approved in advance by the Management Committee but if not
      so charged the cost of such services shall be included as Costs of the
      party retaining such consultant;
and

            


    

              
ii)  Use and service of equipment and facilities furnished by the
Operator as provided in Subsection 4.5 of
this Schedule "C".

     

    g)
Damages and Losses to Joint Property:

     

    All costs
necessary for the repair or replacement of Assets made necessary because of
damages or losses by fire, flood, storms, theft, accident or other cause. The
Operator shall furnish each party with written particulars of the damages or
losses incurred as soon as practicable after the damage or loss has been
discovered. The proceeds, if any, received on claims against any policies of
insurance in respect of those damages or losses shall be credited to the Joint
Account.

     

    h)
Legal Expense:

     

    All costs
of handling, investigating and settling litigation or recovering the assets,
including, without limiting generality, attorney's fees, court costs, costs of
investigation or procuring evidence and amounts paid in settlement or
satisfaction of any litigation or claims; provided, however, that, unless
otherwise approved in advance by the Management Committee, no charge shall be
made for the services of the Operator's legal staff or the fees and expenses of
outside solicitors.

     

    i)
Taxes:

     

    All
taxes, duties or assessments of every kind and nature (except income taxes)
assessed or levied upon or in connection with a Property, the Mining Operations
thereon, or the production therefrom, which have been paid by the Operator for
the benefit of the parties.

     

    j)
Insurance:

     

    Net
premiums paid for

    i) such
policies of insurance on or in Operations as may be required to be carried by
law; and

    ii) such
other policies of insurance as the Operator may carry in accordance with the
Agreement; and

    iii) the
applicable deductibles in event of an insured loss.

     

    k)
Rentals:

     

    Fees,
rentals and other similar charges required to be paid for acquiring, recording
and maintaining permits, mineral claims and mining leases and rentals and of the
Mining Operations.

     

    l)
Permits:

     

    Permit
costs, fees and other similar charges which are assessed by various governmental
agencies.

     

    m)
Other Expenditures:

     

    Such
other costs and expenses which are not covered or dealt with in the foregoing
provisions of this Subsection 3.1 of this Schedule "C" as are incurred with the
approval of the Management Committee for Mining Operations or as may be
contemplated in the Agreement.

     

    4.
PURCHASE OF MATERIAL

     

    4.1
Subject to Subsection 4.4 of this Schedule "C" the Operator shall purchase
all Materials for Mining Operations.

     

    4.2
Materials purchased and services procured by the Operator directly for the
Mining Operations shall be charged to the Joint Account at the price paid by the
Operator less all discounts actually received.

     

    4.3 So
far as it is reasonably practical and consistent with efficient and economical
operations, the Operator shall purchase, furnish or otherwise acquire only such
Material and the Operator shall attempt to minimize the accumulation of surplus
stocks of Material.

     

    4.4 Any
party may sell Material or services required in the Mining Operations to the
Operator for such price and upon such terms and conditions as the Management
Committee may approve.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4.5
Notwithstanding the foregoing provisions of this Section 4, the Operator shall
be entitled to supply for use in connection with the Mining Operations equipment
and facilities which are owned by the Operator and to charge the Joint Account
with such reasonable costs as are commensurate with the ownership and use
thereof

     

    5. DISPOSAL OF
MATERIAL

     

    5.1 The
Operator, with the approval of the Management Committee may, from time to time,
sell any Material which has become surplus to the reasonably foreseeable needs
of the Mining Operations for such price and upon such terms and conditions as
are available.

     

    5.2 Any
party may purchase from the Operator any Material which may from time to time
become surplus to the reasonably foreseeable need of the Mining Operations for
such price and upon such terms and conditions as the Management Committee may
approve.

     

    5.3 Upon
termination of the Agreement, the Management Committee may approve the division
of any Material held by the Operator at that date may be taken by the parties in
kind or be taken by a party in lieu of a portion of its Proportionate Share of
the net revenues received from the disposal of the Property. If such a division
to a party be in lieu of a portion of its proportionate share, it shall be for
such price and on such terms and conditions as the Management Committee may
approve.

     

    5.4 The
net revenues received from the sale of any Material to third parties or to a
party shall be credited to the Joint Account.

     

    6. INVENTORIES

     

    6.1 The
Operator shall maintain records of Material in reasonable detail and records of
Controllable Material in detail.

     

    6.2 The
Operator shall perform Counts from time to time at reasonable intervals and in
connection therewith shall give notice of its intention to perform a Count to
each party at least 30 days in advance of the date set for performing of the
Count. Each party shall be entitled to be represented at the performing of a
Count upon giving notice thereof to the Operator within 20 days of the
Operator's notice. A party who is not represented at the performing of the Count
shall be deemed to have approved the Count as taken.

     

    6.3
Forthwith after performing a Count, the Operator shall reconcile the inventory
with the Joint Account and provide each party with a statement listing the
overages and shortages of inventory except such shortages as may have arisen due
to a lack of diligence on the part of the Operator.

     

    7. ADJUSTMENTS

     

    7.1
Payment of any invoice by a party shall not prejudice the right of that party to
protest the correctness of the statement supporting the payment; provided,
however, that all invoices and statements presented to each party by the
Operator during any Operating Year shall conclusively be presumed to be true and
correct upon the expiration of 12 months following the end of the Operating Year
to which the invoice or statement relates, unless within that 12 month period
that party gives notice to the Operator making claim on the Operator for an
adjustment to the invoice or statement.

     

    7.2 The
Operator shall not adjust any invoice or statement in favour of itself after the
expiration of 12 months following the end of the Operating Year to which the
invoice or statement relates.

     

    7.3
Notwithstanding Subsections 7.1 and 7.2 of this Schedule "C", the Operator may make
adjustments to an invoice or statement which arise out of a physical inventory
of Material or Assets.

     

    7.4 A
party shall be entitled upon notice to the Operator to request that the
independent external auditor of the Operator provide that party with its opinion
that any invoice or statement delivered pursuant to the

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Agreement
in respect of the period referred to in Subsection 7.1 of this Schedule "C" has
been prepared in accordance with this Agreement.

     

    7.5 The
time for giving the audit opinion contemplated in Subsection 7.4 of this
Schedule "C" shall not extend the time for the taking of exception to and making
claims on the Operator for adjustment as provided in Subsection 7.1 of this
Schedule "C".

     

    7.6 The
cost of the auditor's opinion referred to in Subsection 7.4 of this Schedule "C"
shall be solely for the account of the party requesting the auditor's opinion,
unless the audit disclosed a material error adverse to that party, in which case
the cost shall be solely for the account of the
Operator.