Filed by Automated Filing Services Inc. (604) 609-0244 - North American General Resources Corporation - Exhibit 10.1






  July 5, 2002 

 

 

 

 WOOL BAY PROPERTY OPTION AGREEMENT 

  


BETWEEN


  

4763 NWT LTD. 

  


AND


  

NORTH AMERICAN GENERAL RESOURCES CORPORATION  

  

 

 








 TABLE OF CONTENTS

	1	DEFINITIONS	2
	 	 	 
	2	OPTION	3
	 	 	 
	3	TITLE	4
	 	 	 
	4	GROSS OVERRIDING ROYALTY	5
	 	 	 
	5	EARN-IN OBLIGATIONS	5
	 	 	 
	6	ACCELERATION, FORCE MAJEURE	5
	 	 	 
	7	PERFORMANCE OF WORK	6
	 	 	 
	8	VESTING OF INTEREST	7
	 	 	 
	9	TERMINATION	7
	 	 	 
	10	RESTRICTION ON ASSIGNMENT	8
	 	 	 
	11	NOTICES	8
	 	 	 
	12	REPRESENTATIONS AND WARRANTIES	9
	 	 	 
	13	CONFIDENTIALITY	11
	 	 	 
	14	MISCELLANEOUS	12
	 	 
	SCHEDULE A        PROPERTY	 
	 	 
	SCHEDULE B        GROSS
      OVERRIDING ROYALTY	 
	 	 
	SCHEDULE C       
      JOINT VENTURE AGREEMENT	 


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  WOOL BAY PROPERTY OPTION AGREEMENT 

 

  THIS AGREEMENT is made the 5th day of July, 2002. 


BETWEEN:



  
    
      
         4763 NWT LTD., a company incorporated
          under the laws of the Northwest Territories 

         (hereinafter called the “Optionor”) 

      

    

  



 AND: 





        NORTH AMERICAN GENERAL RESOURCES CORP., a Company
          incorporated under the laws of British Columbia 

      

    

  




  
    
      
 (hereinafter called “NAGR”) 

      

    

  



 THIS AGREEMENT WITNESSES that in consideration of the sum
  of $10 now paid by NAGR to the Optionor (the receipt and sufficiency
  of which is hereby acknowledged) and the covenants and agreements hereinafter
  set forth, the parties hereto agree as follows: 


  1.        DEFINITIONS 

  1.1      “Affiliate” means a corporation
    which directly or indirectly controls, or is controlled by or is under common
    control with, a party. The term “control” as used herein means the
    rights to the exercise of, directly or indirectly, more than 50% of the voting
    rights attributable to the shares of the controlled company. 

   1.2      “Expenditures”
    means without duplication all direct and indirect expenses of or incidental
    to Operations after April 10, 2002 together with any and all costs, fees and
    expenses which may be paid to obtain feasibility, engineering or other studies
    or reports on or with respect to the Property or any part of it. For greater
    certainty, the costs, fees and expenses of recording work for assessment credit
    under applicable legislation are included in Expenditures. There shall be
    added to and included in “Expenditures” reasonable charges by NAGR
    for services provided in connection with Operations by geologists or others
    in the employment of NAGR and reasonable charges for machinery, tools,
    equipment and camp facilities owned by NAGR and used or employed in
    Operations. There shall be added to and included in “Expenditures”
    a charge for NAGR’s
  
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  administrative expenses equal to 10% of all direct and indirect expenses
    and charges.

  1.3       “Force Majeure”
    means any cause beyond NAGR’s reasonable control, including law
    or regulation, action or inaction of civil or military authority, interference
    by Natives, Native rights groups, environmentalists or other activists, inability
    to obtain any licence, permit or other authorization that may be required,
    unusually severe weather, fire, explosion, flood, insurrection, riot, labour
    dispute, inability after diligent effort to obtain workmen or material, delay
    in transportation and acts of God, but not including lack of funds. 

   1.4       “GOR” or Gross
    Overriding Royalty” means the royalty in favour of the Optionor described
    in Section 4.1, in the form attached hereto as Schedule B. 

   1.5       “Operations”
    includes any and every kind of work which NAGR in its sole discretion
    elects to do or to have done on or in respect of the Property or the products
    derived therefrom and all expenditures in respect of or incidental to such
    work. 

   1.6       “Property”
    means the mining claims described in Schedule A to this Agreement, and all
    rights, licences and permits incidental or ancillary thereto and any substitutions
    or replacements therefor including any mining leases that may replace such
    mining claims, all of which are located in Mackenzie District, Nunavut, Canada.
  

   1.7       “$” means Canadian
    dollars. 

   1.8       Attached to and forming
    part of this Agreement are the following Schedules: 

   Schedule A -           Property
    

    Schedule B -           Gross
    Overriding Royalty

    Schedule C -           Joint
    Venture Agreement 

   2.         OPTION
  

   2.1      The Optionor hereby grants
    to NAGR the sole and exclusive right and option (the “Option”)
    exercisable in the manner described in Section 8, to acquire a 70% undivided
    interest in the Property, free and clear of all liens, charges, encumbrances,
    security interests and adverse claims except for the GOR, and any Aboriginal
    rights or interests, all of which shall be borne by the Optionor and NAGR
    in proportion to their respective Participating Interests from time to time
    under the Joint Venture Agreement. 

   2.2      The Optionor hereby grants
    to NAGR, its servants, agents and independent contractors, the sole
    and exclusive right and option to: 

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  2.2.1       enter upon and have
    immediate possession of the Property; 

   2.2.2       carry out Operations
    on the Property as NAGR may in its sole discretion determine; 

   2.2.3      bring and install on the
    Property and remove from time to time such buildings, plant, machinery, equipment,
    tools, appliances and supplies as NAGR may deem necessary; and 

   2.2.4      remove from the Property
    reasonable quantities of rocks, ores, minerals and metals and to transport
    the same for the purpose of sampling, testing and assaying. 

   2.2.5       NAGR will be
    the exclusive operator of the Property as provided in this Agreement; and




  
2.3       Any diamonds and samples from the Property
      may be used by NAGR for exploration, development and valuation purposes.
      If NAGR does not exercise the Option, any diamonds taken from samples
      from the Property that have not been destroyed by processing or testing
      will be returned to the Optionor. 

  

   3.         TITLE
  

   3.1       The Optionor shall hold
    the Property in trust for the parties in accordance with their respective
    interests therein and subject to the terms of this Agreement. 

   3.2       If the Optionor’s
    title to the Property is now or at any time hereafter deficient, defective
    or encumbered in any way other than as provided by Section 2.1 then, without
    limiting NAGR’s rights and remedies provided hereunder or by law,
    such deficiency, defect or encumbrance may be remedied or removed by NAGR
    in which event the cost and related expenses thereof may at NAGR’s
    option be deducted from any amounts or payments which may be or become due
    or payable to the Optionor hereunder or may be credited against the Expenditures
    contemplated by Section 5.1. 

   3.3       NAGR may at any
    time and from time to time during the currency of the Option abandon, surrender,
    allow to lapse, reduce the area of or otherwise deal with any part or parts
    of the Property as it may determine, provided that NAGR shall give
    to the Optionor not less than 90 days’ notice of its intention to do
    so and shall ensure that the mining claims then comprised in the Property
    shall be in good standing for 180 days at a minimum, commencing at the expiry
    of the 90 day notice period. If requested by the Optionor by notice to NAGR
    within that period of time, NAGR shall deliver forthwith to the Optionor duly
    executed transfers of the part or parts of the Property so intended to be
    dealt with. Any part or parts of the Property so dealt with shall cease to
    be included in the Property and shall cease to be subject to this Agreement
    for all purposes. 


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3.4       NAGR shall:


  3.4.1       record for assessment
    credit under the Canada Mining Regulations sufficient work to maintain the
    Property in good standing until at least 180 days subsequent to notice of
    termination of the Option as provided in Section 9 of this Agreement; and
  

   3.4.2       subject to section
    3.3 keep the Property free of all liens and encumbrances arising out of Operations
    on the Property.


 4.         GROSS OVERRIDING ROYALTY


  4.1       In addition to the consideration
    provided in Section 5.1, the Optionor reserves for itself and shall be entitled
    to receive a gross overriding royalty equal to 2.5% of all products mined
    and removed from the Property, to be calculated and paid in accordance with
    Schedule B to this Agreement. At the discretion of NAGR, it may buy down 1%
    of the Gross Overriding Royalty for $2.5 million, leaving a 1.5% Gross Overriding
    Royalty to the Optionor.



 5.         EARN-IN OBLIGATIONS


  5.1      NWT, in consideration
    of the sum of $10, the receipt and sufficiency of which is hereby acknowledged,
    hereby grants to the Optionors the exclusive right and option (the Option")
    to acquire a 70% undivided interest in and to the Property in consideration
    of: 

   5.2       In order to exercise
    the Option as to an undivided 70% interest in consideration of exploration
    and mining rights to the Property NAGR must:
  

 5.2.1      pay the sum of $5000.00 to the
      Optionor on or before July 5, 2002; 

  

  


 5.2.2       incur, as operator,
    Expenditures on the Property totalling $4000.00 per year for four years after
    the date of this Agreement; and 

   5.2.3      issue to the Optionor 20,000
    common shares of NAGR on signing of this Agreement; all such shares
    to be subject to such restrictions as to their transferability by the Optionor
    as may be applicable.



 6.         ACCELERATION, FORCE MAJEURE

  
    
      6.1       NAGR may accelerate any or
        all of the activities, Expenditures or share issuances contemplated by
        Sections 5.2. NAGR may at any time from time to time pay to the
        Optionor money in lieu of conducting activities, issuing shares or

      -5- 

    

  

  

  
  
incurring Expenditures under Section 5.2 in which
    event NAGR shall be deemed to have incurred additional Expenditures
    in the same amount as the amount of any such activity or payment and in satisfaction
    of such of the provisions of Section 5.2 as indicated by NAGR at the
    time of the making of such payment. Any excess payments or Expenditures made
    or incurred in any period will be carried forward and applied as a credit
    against the payment or Expenditures, as the case may be, to be made in the
    next succeeding period or periods.

 6.2      If from time to time NAGR is
      prevented by Force Majeure from conducting activities or incurring Expenditures
      in the amounts and times provided in Section 5.1 then NAGR shall
      have such additional time as is reasonable in the circumstances to conduct
      activities, issue shares or incur Expenditures in such amounts and times,
      the amount of such additional time not to exceed the duration of the Force
      Majeure. 

   7.        PERFORMANCE OF WORK

  7.1      In exercising its
    rights under Section 2.2 NAGR shall comply with all applicable laws,
    rules and regulations and shall carry out Operations in a good and workmanlike
    manner in accordance with generally accepted mining practice.
     7.2      NAGR shall indemnify and
      save harmless the Optionor and its officers, directors, employees, agents
      and representatives from and against any and all claims, debts, demands,
      suits, actions and causes of action whatsoever which may be brought or made
      against the Optionor and its officers, directors, employees, agents and
      representatives by any person, firm or corporation and all loss, cost, damages,
      expenses and liabilities which may be suffered or incurred by the Optionor
      and its officers, directors, employees, agents and representatives arising
      out of or in connection with or in any way referable to, whether directly
      or indirectly, the entry on, presence on, or activities on the Property
      or the approaches thereto by NAGR or its servants or agents including
      without limitation bodily injuries or death at any time resulting therefrom
      or damage to property, unless and to the extent due to the acts or omissions
      of the Optionor or its servants, agents or representatives. 

     7.3      The Optionor shall at all reasonable
      times have access to the Property on reasonable notice to NAGR, provided
      that the Optionor shall not interfere with NAGR’s operations
      hereunder and that NAGR shall be under no liability to the Optionor
      for any personal injuries including death or for any damage to the property
      of the Optionor unless such injury or damage is due to the gross negligence
      or wilful default of NAGR, its servants, agents or representatives.
      The Optionor shall have access to all technical data pertaining to the property.
    

     7.4      NAGR will provide to the Optionor
      quarterly reports showing in reasonable detail the work performed in connection
      with the Property, the results obtained and the Expenditures incurred. NAGR
      will provide a summary report of all such
    
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activities annually within 60 days of the conclusion
    of each program of work. NAGR will not be required to disclose or report
    information or data that pertains to mining claims that do not form part of
    the Property. 

   8.        VESTING OF INTEREST

8.1      Upon NAGR
    satisfying the conditions in Section 5.2 and giving notice to the Optionor,
    NAGR shall without any further payment or action be deemed to have
    exercised the Option and it will thereupon acquire and be deemed to have acquired
    and be vested with a 70% undivided right, title and interest in the Property
    free and clear of all liens, charges, encumbrances, security interests and
    adverse claims, except as provided in Section 2.1.
 8.2      Upon receipt of notice from NAGR stating
      that NAGR has incurred Exploration Expenditures required per section 5.2.2
      of this agreement and delivering the shares to NWT as required by article
      5.2.3 their future relationship shall be governed by a Joint Venture Agreement
      among the parties, as attached hereto as Schedule “C”, which shall
      come into effect without it having been executed by any party. The joint
      venture shall be determined mutually by both parties at a future date. A
      principal element of the Joint Venture Agreement will be that once the Joint
      Venture is achieved then the parties will participate in future expenditures
      on the property proportional to each party’s interest. 

     8.3      Once the Joint Venture is in effect,
      if 4763 NWT Ltd chooses not to participate in proposed programs under
      the Joint Venture Agreement, they will dilute and once diluted to 10% or
      less they will revert to a 2.5% G.O.R. 

     8.4      The dilution formula in the Joint Venture
      Agreement, to be detailed in Schedule “C”, will be based on the
      expenditure of approximately $16,000.00. 


   9.       TERMINATION

  9.1      The parties acknowledge
    and agree that NAGR has the right and option but not the obligation
    to conduct the activity and incur the Expenditures referred to in Section
    5.2 and neither anything which NAGR might do nor any payment which
    it makes or Expenditure which it incurs will obligate it to do anything more
    or to incur any further Expenditures.
     9.2      Subject to Section 9.1, NAGR
      may at any time let the Option lapse by notice to the Optionor or by not
      satisfying any of the conditions referred to in Section 5.1 whereupon this
      Agreement except Sections 3.3 and 9.3 shall terminate. 

     9.3      If this Agreement is terminated pursuant
      to Section 9.2 before NAGR has exercised the Option as described
      in Section 5.2, NAGR shall:
    
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9.3.1      within 180
    days remove from the Property any machinery, buildings, structures, facilities,
    equipment and all other property of every nature and description erected,
    placed or situated thereon by NAGR; any property not so removed at
    the end of the 180 day period shall at the option of the Optionor become the
    property of the Optionor; and 

     9.3.2      within the said 180 days leave the
      working and camp site in a clean and environmentally acceptable condition.


  
9.4      If NAGR is prevented from or delayed
      in performing its obligations in Subsections 9.3.1or 9.3.2 by Force Majeure,
      the relevant period of 180 days referred to therein shall be extended by
      the period of Force Majeure. 

  

   10.      RESTRICTION ON ASSIGNMENT

  10.1     Neither party
    shall sell, assign, transfer, convey or otherwise dispose of or deal with
    or agree to sell, assign, transfer, convey or otherwise dispose of or deal
    with its rights and interests in or with respect to the Property or under
    or by virtue of this Agreement in whole or in part without the prior written
    consent of the other party, not to be unreasonably withheld.
 10.2     A party shall have the right without
      restriction under Section 10.1 to assign, transfer, convey or otherwise
      dispose of all its rights and interests to an Affiliate of such party. 

     10.3     In the event of an assignment, conveyance,
      transfer or other disposition as contemplated in Section 10.2, the party
      making the same shall not be relieved or discharged of any of its obligations
      or liabilities hereunder, and the other party may continue to look to it
      for the performance thereof. 

     10.4     A party transferring its rights and
      interests as permitted hereby shall require any transferee to execute a
      counterpart of this Agreement and thereby to agree to be bound by the terms
      hereof in the same manner and to the same extent as though a party hereto
      in the first instance, all without in any way derogating from the provisions
      of Section 10.3. 


   11.       NOTICES

  
    11.1     All notices, payments and other required communications
      (“Notices”) to one of NAGR or the Optionor by the other
      shall be in writing and shall be addressed respectively as follows:

    If to NAGR: 

  

  
     P. O. Box 11604
    
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#620 – 650 West Georgia Street

    Vancouver, B. C. V6B 4N9

 If to the Optionor: 

     3502 Raccine Road

      Yellowknife, NWT X1A 3J2
    
All Notices shall be given (1) by personal delivery to the addressee, or
      (2) by electronic communication, with a confirmation sent by registered
      or certified mail return receipt requested, or (3) by registered or certified
      mail or commercial carrier return receipt requested. All Notices shall be
      effective and shall be deemed delivered (1) if by personal delivery on the
      date of delivery if delivered during normal business hours and, if not delivered
      during normal business hours, on the next business day following delivery,
      (2) if by electronic communication on the next business day following receipt
      of the electronic communication, and (3) if solely by mail or commercial
      carrier on the next business day after actual receipt. A party may change
      its address by Notice to the other party. 

   12.      REPRESENTATIONS AND WARRANTIES

  12.1     The Optionor represents
    and warrants to NAGR that:

  
    12.1.1     4763 NWT Ltd. owns and possesses
      and has good and marketable title to the Property free and clear of all
      mortgages, liens, charges, pledges, security interests, encumbrances or
      other claims whatsoever except for the GOR. Without limiting the generality
      of the foregoing, the Optionor has not entered into and there are not any
      agreements or options to grant or convey any interest in the Property or
      to pay any royalties with respect to the Property except as provided in
      Section 2.3; 

     12.1.2     the mining claims comprised in the
      Property have been duly and validly staked, located and recorded pursuant
      to all applicable laws and regulations in the Northwest Territories and
      are in good standing and the information in Schedule A is accurate; and
      no person has protested and there is no basis for protesting the recording
      of any such claims pursuant to section 28 of the Canada Mining Regulations;
    

     12.1.3     to the best of the Optionor’s knowledge
      after due inquiry all activities on or in relation to the Property up to
      the date hereof have been in compliance with all applicable laws, regulations
      and permits including those for the protection of the environment and no
      conditions exist which could give rise to the making of a remediation order
      or similar order in respect of the Property or which could subject NAGR
      to liability;
    
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12.1.4     the Optionor has
    full power and authority to grant to NAGR the rights provided
    in this Agreement;

 12.1.5     the execution and delivery of this Agreement
      and the exercise by NAGR of the rights granted to it under
      this Agreement will not conflict with or be in contravention of any law,
      regulation or order of any government, government department or other competent
      authority including Ministerial orders and Orders-in-Council or conflict
      with rights of third parties or result in a breach of or default under any
      agreement or other instrument of obligation to which the Optionor is a party
      or by which the Optionor or the Property may be bound; 

     12.1.6     this Agreement constitutes a legal, valid
      and binding obligation of the Optionor; 

     12.1.7     to the best of the Optionor’s knowledge
      after due inquiry, there are not any material suits, actions, prosecutions,
      investigations or proceedings, actual, pending or threatened, against or
      affecting the Optionor or that relates to or has a material adverse effect
      on the Property; 

     12.1.8     to the best of the Optionor’s knowledge
      after due inquiry, all taxes, rates or other levies of every nature and
      kind heretofore levied against the Property have been fully paid and satisfied;
    

     12.1.9     neither the granting of the Option nor
      the exercise of it constitutes a disposition by the Optionor of all or substantially
      all of its property or undertaking; and 

     12.1.10    the Optionor is unaware of any material facts
      or circumstances which have not been disclosed in this Agreement, which
      should be disclosed to NAGR in order to prevent the representations
      in this Section 12.1 from being materially misleading.


  
    12.2     NAGR represents and warrants
      to the Optionor that:

  

  12.2.1     NAGR
    has full power and authority to enter into this Agreement and the execution
    and delivery of this Agreement and the exercise by the Optionor of the rights
    granted to it under this Agreement will not conflict with or result in a breach
    of or default under any agreement or other instrument of obligation to which
    NAGR is a party or by which it may be bound; and
 12.2.2     this Agreement constitutes a legal, valid
      and binding obligation of NAGR.


  
    12.3     The representations and warranties contained
      in Section 12.1 are provided for the exclusive benefit of NAGR
      and a breach of any one or more of

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them may be waived by NAGR in writing
    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.

 12.4     The representations and warranties contained
      in Section 12.2 are provided for the exclusive benefit of the Optionor and
      a breach of any one or more of them may be waived by the Optionor 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. 

     12.5     It is agreed between the parties that any
      technical, economic or geological information of any nature, including without
      limitation any studies, reports, mining models, assays, drill hole data,
      geochemical reports, recovery reports and other information concerning the
      Property and the existence, location, quantity, quality or value of any
      minerals thereon or therein, provided to, or made available by one party
      to the other under this Agreement or prior to the effective date hereof,
      is provided without representation or warranty and is at the sole risk of
      the party receiving the same. Such information is provided “AS IS,
      WHERE IS” and EACH PARTY EXPRESSLY DISCLAIMS ALL EXPRESS OR IMPLIED
      WARRANTIES CONCERNING THE SAME, AND EXPRESSLY EXCLUDING ANY WARRANTIES OF
      MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. 


   13.     CONFIDENTIALITY

13.1     Subject to Section
    13.2 all information received or obtained by NAGR or the Optionor
    hereunder or pursuant hereto shall be kept confidential by it and no part
    thereof may be disclosed or published without the prior written consent of
    the other except such information as may be required to be disclosed or published
    by regulatory bodies having jurisdiction; provided that a party may disclose
    in confidence information to any person or persons with whom it proposes to
    contract pursuant to Section 10.1.
     13.2     Confidential information shall not include
      the following:


  
    13.2.1     information that, at the time of disclosure,
      is in the public domain; 

     13.2.2     information that, after disclosure, is
      published or otherwise becomes part of the public domain through no fault
      of the recipient; 

     13.2.3     information that the recipient can show
      already was in the possession of the recipient at the time of disclosure;
    

     13.2.4     information that the recipient can show
      was received by it after the time of disclosure, from a third party who
      was under no
    
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 obligation of confidence to the disclosing party
    at the time of disclosure.

 
 13.3     Except as required by law or regulatory authority,
      neither NAGR nor the Optionor shall make any public announcements
      or statements concerning this Agreement or the Property without the prior
      approval of the other, not to be unreasonably withheld. 

     13.4     The text of any public announcements or statements
      including any news release which the Optionor intends to make pursuant to
      the exception in Section 13.2 shall be made available to NAGR
      not less than 24 hours prior to publication and NAGR shall
      have the right to make suggestions for changes therein. If NAGR
      is identified in such public announcement or statement it shall not be released
      without the consent of NAGR in writing, not to be unreasonably
      withheld. 


   14.     MISCELLANEOUS

  14.1     Applicable Law.
    The terms and provisions of this Agreement shall be interpreted in accordance
    with the laws of British Columbia.
     14.2     Regulatory Approval. This Agreement
      is subject to regulatory approval. 

     14.3     Entire Agreement. This Agreement terminates
      and replaces all prior agreements, either written, oral or implied, between
      NAGR and the Optionor with respect to the Property, and constitutes
      the entire agreement between the parties with respect to the Property. 

     14.4     Void or Invalid Provision. If any
      term, provision, covenant or condition of this Agreement, or any application
      thereof, should be held by a court of competent jurisdiction to be invalid,
      void or unenforceable, all provisions, covenants and conditions of this
      Agreement, and all applications thereof not held invalid, void or unenforceable
      shall continue in full force and effect and in no way be affected, impaired
      or invalidated thereby. 

     14.5     Additional Documents. The parties
      shall do and perform all such acts and things, and execute all such deeds,
      documents and writings, and give all such assurances, as may be necessary
      to give effect to this Agreement. 

     14.6     Good Faith. All parties shall act
      in good faith to fulfil their respective duties and obligations under this
      Agreement.
    
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  14.7     Binding Effect.
    This Agreement shall enure to the benefit of and be binding upon the parties
    hereto and their respective successors and permitted assigns.
 

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


   

    NORTH AMERICAN GENERAL RESOURCES CORP. 

     

   By:   /s/ Martin Ermer

    Title: 

   By:   /s/ Teresita Ortiz

    Title: 

  

   4763 NWT LTD. 

     

   By:   /s/ Gary Vivian

    Title: VP - NWT

   By:   /s/ Louis Covello

    Title: President

  -13- 







   SCHEDULE A  


Description of Property


  	Claim Name	Tag No.	NTS
	 	 	 
	WLB1	F74601	85 J/08


   The WLB1 claim was staked March 29, 2002 and recorded April 30, 2002 under
    the terms of the Canadian Mining Regulations by the Miming Recorders Office
    in Yellowknife, NWT. The WLB1 claim consists of 206 acres and is located approximately
    24 kilometres southeast of Yellowknife, NWT. 

   

    

  -14-

  





   SCHEDULE B 

   Definition of Gross Overriding Royalty  

Base Metals 

   In respect of base metals, the phrase "Gross Overriding Royalty" means 2.5%
    of NAGR’s interest in the Base Net Smelter Returns from all ores
    mined from any of the Properties which have a base metal or combination of
    base metals as the contained element of greatest economic value and all concentrates
    and other mineral products, metals or minerals which are derived therefrom
    prior to their sale (the "Base Products"), where Base Net Smelter Returns
    equals the Base Gross Proceeds from sales of such Base Products less Base
    Allowable Deductions, where:

  (a)      "Base Gross
    Proceeds" for any Base Product means the actual proceeds received for
    the sale of such Base Product (for greater certainty, including insurance
    proceeds in respect of any loss); and
     (b)      "Base Allowable Deductions" for any
      Base Product means the following costs, charges and expenses paid, incurred,
      or deemed incurred by or on behalf of NAGR with respect to such Base
      Product:


  
    (i)      charges for treatment in the smelting, refining
      and other beneficiation process (including handling, processing, interest,
      and provisional settlement fees, weighing, sampling, assaying umpire and
      representation costs, penalties, and other processor deductions); 

     (ii)     actual costs of transportation (including
      loading, freight, insurance, security, transaction taxes, handling, port,
      demurrage, delay, and forwarding expenses incurred by reason of or in the
      course of transportation) of Base Product from the Properties to the place
      of treatment; 

     (iii)    costs or charges of any nature for or in connection
      with insurance, storage, or representation at a facility where Base Product
      is treated; and 

     (iv)     sales, use, severance, excise, net proceeds
      of mine, and ad valorem taxes and any tax on or measured by mineral production,
      insofar as such taxes are attributable to Base Product, but not including
      income taxes of NAGR;


  
    provided that when Base Product is treated, whether on or off the Properties,
      in a facility wholly or partially owned by NAGR or an affiliate of
      NAGR, Base Allowable Deductions will not include any costs that are
      in excess of those which 

    -15-

  

  

  
  
  would be incurred on an arm's length basis, or which
    would not be Base Allowable Deductions if those Base Products were treated
    by an independent third party.
 

   Precious Metals 

   In respect of precious metals, the phrase "Gross Overriding Royalty" means
    2.5% of NAGR’s interest in the Precious Net Smelter Returns from
    all ores mined from the Properties and having a precious metal or combination
    of precious metals as the contained element of greatest economic value, and
    all doré, concentrates and other mineral products, metals or minerals
    which are derived therefrom prior to their sale (the "Precious Products"),
    where Precious Net Smelter Returns equals the Precious Gross Proceeds from
    sales of such Precious Products less Precious Allowable Deductions, where:

  
    (a)      "Precious Gross Proceeds" for
      any Precious Product means the proceeds received or deemed to have been
      received for the sale of such Precious Product, determined as follows:

  

  (i)      if there is a
    sale of Precious Product in the form of refined gold, then such gold will
    be deemed to have been sold at the average London Bullion Market Association
    of P.M. Gold Fix, calculated by dividing the sum of all such prices reported
    for the month in which it was produced by the number of days in that month
    for which such prices were reported;
     (ii)     if there is a sale of Precious Product
      in the form of refined silver, then such silver will be deemed to have been
      sold at the average New York Silver Price as published daily by Handy &
      Harman (or, should that publication cease, another similar publication acceptable
      4763 NWT Ltd. and NAGR, acting reasonably), calculated by
      dividing the sum of all such prices reported for the calendar month in which
      it was produced by the number of days in that month for which such prices
      were reported; and 

     (iii)    if there is any other sale of Precious Product
      including, without limitation, a sale in the form of raw ore, doré,
      concentrates, refined metals other than gold or silver, and any loss of
      Precious Product in any form, then the Precious Gross Proceeds will be equal
      to the amount of the proceeds actually received from the sale (for greater
      certainty , including insurance proceeds in respect of any loss).


  
    (b)      "Precious Allowable Deductions"
      for any Precious Product means the following costs, charges and expenses
      paid, incurred, or deemed incurred by or on behalf of NAGR with respect
      to such Precious Product: 

    -16-

  

  

  
  
  (i)      charges for treatment
    in the smelting, refining and other beneficiation process (including handling,
    processing, interest, and provisional settlement fees, weighing, sampling,
    assaying umpire and representation costs, penalties, and other processor deductions); 

    (ii)      actual costs of transportation (including
      loading, freight, insurance, security, transaction taxes, handling, port,
      demurrage, delay, and forwarding expenses incurred by reason of or in the
      course of transportation) of Precious Product from the Properties to the
      place of treatment and then to the place of sale;

    (iii)     costs or charges of any nature for or in
      connection with insurance, storage, or representation at a facility where
      Precious Product is treated;

    (iv)     actual sales and brokerage costs; and

    (v)      sales, use, severance, excise, net proceeds
      of mine, and ad valorem taxes and any tax on or measured by mineral production,
      insofar as such taxes are attributable to Precious Product, but not including
      income taxes of NAGR or 4763 NWT Ltd.;


  
provided that when Precious Product is treated, whether on or off the Properties,
      in a facility wholly or partially owned by NAGR or an affiliate of
      NAGR, Precious Allowable Deductions will not include any costs that
      are in excess of those which would be incurred on an arm's length basis,
      or which would not be Precious Allowable Deductions if those Precious Products
      were treated by an independent third party. 

  

   Diamonds 

   In respect of diamonds, the phrase "Gross Overriding Royalty" means 2.5 %
    of NAGR’s interest in the Diamond Net Sales Returns from all diamonds
    mined from any of the Properties ("Diamonds"), where Diamond Net Sales Returns
    equals the Diamond Gross Proceeds less Diamond Allowable Deductions, where:

  (a)      "Diamond Gross
    Proceeds" for any Diamond Product means the actual proceeds received for
    the sale of such Diamonds (for greater certainty, including insurance proceeds
    in respect of lost or damaged Diamonds); and
     (b)      "Diamond Allowable Deductions"
      means the following costs, charges and expenses paid, incurred, or deemed
      incurred by NAGR:


  
    (i)      cost and expenses for preparing rough
      Diamonds for sale including, without limitation, for sorting, weighing,
      grading, valuing, pricing, parceling (any or all of the foregoing, "sorting")
      and cleaning; 

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  (ii)     actual costs of shipping
    and transporting (including packaging, insurance, security , transaction taxes,
    handling, port, demurrage, delay, and forwarding expenses incurred by reason
    of or in the course of transportation) Diamonds from the Properties to the
    place of sale; 

     (iii)    costs and expenses for or in connection with
      insurance, security, packing, storage or representation at a facility where
      the sorting or cleaning of Diamonds takes place;


  
    provided that when there is sorting or cleaning of Diamonds, whether on or
      off the Properties, in a facility wholly or partially owned by NAGR
      or an Affiliate of NAGR, Diamond Allowable Deductions will not include
      any costs that are in excess of those which would be incurred on an arm's
      length basis, or which would not be Diamond Allowable Deductions if the
      sorting or cleaning of the Diamonds was being done by an independent third
      party. 

    -18-


  





   SCHEDULE C  

    

  JOINT VENTURE AGREEMENT  


Between



4763 NWT LTD. (“OPTIONOR”), a company incorporated under the laws of the Northwest Territories



and



NORTH AMERICAN GENERAL RESOURCES CORP. (“OPTIONEE”), a company duly incorporated under the laws of British Columbia.


   Dated this 5th day of July, 2002. 


Upon the exercise of the option, North American General Resources Corp. (NAGR) and 4763 NWT LTD. (4763) will be deemed to have formed a joint venture with respect to further exploration, development and, if warranted, commercial production of the
Property, with the following initial interests:


   NAGR (70%) and 4763 (30%)  


Once the Joint Venture is in effect the following terms will apply:


  	1	 a)	Relationship of the Parties.
	 	 	 


  	 	i.	The relationship of the participants will be
        as tenants-in-common in their respective participating interests. The
        liabilities of each of them and their responsibilities for costs in relation
        to the Property will be several and not joint nor joint and several and
        will be borne severally in proportion to their respective participating
        interests. Each participant will be entitled to its share of mineral production
        from the Property.


  -19- 



  
   

  	1	b)	Manager and Operator.
	 	 	 


  	 	i.	A management committee will be constituted with responsibility
        for overseeing joint venture operations. Each of the participants will
        be entitled to appoint two representatives to the management committee,
        with each representative being entitled to vote in proportion to the participating
        interest of the participant that appointed him. A representative of the
        party who is the operator of the joint venture will be the chairman of
        the management committee.
	 	 	 
	 	ii.	The participant with the largest participating interest
        will be the operator.
	 	 	 
	 	iii.	The operator will have the right to cash call in advance
        to cover anticipated approved program expenditures, including a reasonable
        amount of working capital.
	 	 	 
	 	iv.	The operator will report to the management committee periodically
        as to the progress of work upon and the development of the Property.
	 	 	 
	 	v.	The operator will have a lien on the participants’
        interests to secure cost shares of committed expenditures, and the right
        to advance the cost of the share of a participant in default.
	 	 	 
	 	vi.	The operator will market all diamonds produced from the
        Property on behalf of the Joint Venture.
	 	 	 
	1	c)	Initiation and Approval of Programmes.
	 	 	 
	 	i.	The operator will propose and carry out programs as approved
        by the management committee.
	 	 	 
	 	ii.	Each of the participants may elect to participate in any
        such program and if it does so will be obliged to contribute to the costs
        and expenses of the program according to its respective participating
        interest.
	 	 	 
	 	iii.	If a participant elects not to participate in an approved
        program, its interest will be diluted so as to be proportionate to the
        amount it has contributed as compared with the aggregate amounts contributed
        by all participants. If it elects to contribute and fails to do so, then
        its participating interest will be diluted doubly.
	 	 	 
	 	iv.	If a participating interest of a participant has been diluted
        to 10% or less, then the participating interest will be automatically
        converted to a royalty of 2.5% of the Net Smelter Returns on base and/or
        precious metals and 2.5% Gross Over-riding Royalty on diamonds. The NSR
        and GOR are explained within the Option Agreement.


  -20- 



  
   

  	1	d)	Transfer Restrictions.
	 	 	 


  	 	i.	No participant will be entitled to dispose of its participating
        interest (other than to affiliate) without first offering it to the other
        participant.
	 	 	 
	 	ii.	No encumbrance of any participating interest will be permitted
        except for financing of development of the Property and then only subject
        to the joint venture agreement and the operator’s lien.
	 	 	 


  	1	e)	 The Joint Venture Agreement will be subject to laws of British Columbia.


  -21-