EXHIBIT
4.6

     

    DEED OF TRUST TO PUBLIC
TRUSTEE,

    MORTGAGE, SECURITY
AGREEMENT,

    ASSIGNMENT OF PRODUCTION AND
PROCEEDS,

    FINANCING STATEMENT AND
FIXTURE FILING

    


    FROM

    


    HUNTER
BATES MINING CORPORATION, AS DEBTOR

    


    TO

     

    THE
PUBLIC TRUSTEE OF GILPIN COUNTY, COLORADO, AS TRUSTEE

     

    AND TO
AND FOR THE BENEFIT OF

     

    CABO
DRILLING (AMERICA), INC., AS SECURED PARTY

     

    Dated as
of April 27, 2009

     

      
        

      

    

     

    THIS
INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.

     

    EXHIBIT A
CONTAINS A LEGAL DESCRIPTION OF THE REAL ESTATE CONCERNED.  DEBTOR HAS
AN INTEREST OF RECORD IN THE REAL ESTATE.  SOME OF THE PERSONAL
PROPERTY CONSTITUTING A PORTION OF THE COLLATERAL IS OR IS TO BECOME FIXTURES
RELATED TO THE REAL ESTATE.

     

    THIS
INSTRUMENT COVERS FIXTURES, AS-EXTRACTED COLLATERAL AND MINERALS OR THE LIKE OR
OTHER SUBSTANCES OF VALUE WHICH MAY BE EXTRACTED FROM THE EARTH AND THE ACCOUNTS
RELATING THERETO, INCLUDING ACCOUNTS RESULTING FROM THE SALE THEREOF AT THE
MINEHEAD THEREOF.  THIS INSTRUMENT IS TO BE FILED FOR RECORD AS A
FINANCING STATEMENT, AMONG OTHER PLACES, IN THE REAL ESTATE
RECORDS.

     

    THIS
INSTRUMENT IS TO BE RECORDED IN THE REAL ESTATE RECORDS OF THE COUNTY RECORDER
IN EACH COUNTY WHERE THE REAL ESTATE IS LOCATED.

     

    A POWER
OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT.  A POWER OF SALE MAY
ALLOW SECURED PARTY OR THE TRUSTEE TO TAKE THE COLLATERAL AND SELL IT WITHOUT
GOING TO COURT IN A FORECLOSURE ACTION.

     

    THIS
INSTRUMENT WAS PREPARED BY

    AND WHEN
RECORDED AND/OR FILED

    RETURN
TO:

     

    Lee D.
Vogel, Esq.

    Holme
Roberts & Owen LLP

    90 S.
Cascade Ave., Suite 1300

    Colorado
Springs, CO 80903


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    DEED OF TRUST TO PUBLIC TRUSTEE,

     

    MORTGAGE, SECURITY AGREEMENT,

     

    ASSIGNMENT OF PRODUCTION AND
PROCEEDS,

     

    FINANCING STATEMENT

     

    AND FIXTURE FILING

     

    This Deed
of Trust to Public Trustee, Mortgage, Security Agreement, Assignment of
Production and Proceeds, Financing Statement and Fixture Filing (this “Instrument”), dated
as of April 27, 2009, is from Hunter Bates Mining Corporation, a Minnesota
corporation (Organizational I.D. No. 2820102-2) (“Debtor”), with a
principal office address of 900 IDS Center, 80 South 8th Street, Minneapolis,
MN  55402-8773, to the Public Trustee of Gilpin County, Colorado
(“Trustee”),
and to and for the benefit of Cabo Drilling (America), Inc., a Washington
corporation, as beneficiary (“Secured Party”), with
an address of 3rd Floor, 120 Lonsdale Avenue, North Vancouver, BC  V7M
2E8, Canada.

     

    DEFINITIONS

     

    Capitalized
terms used but not defined herein have the meanings provided in the Debenture
(as defined below).  In this Instrument, the following terms shall
have the following meanings:

     

    “Approvals” means each
and every approval, authorization, license, permit, consent, variance, land use
entitlement, franchise, agreement, performance of surety bond, filing or
registration by or with any governmental authority or other person necessary for
any stage (or all stages) of developing, operating, maintaining and closing a
mine on all or any part of the Lands (or any other lands any production from
which, or profits or proceeds from such production, is attributed to any
interest in the Lands), including construction of a mine and related
improvements and all other activities described above in clauses (a) through
(i) of the
definition of “Mine
Property”.

     

    “Environmental Laws”
shall mean all laws, ordinances, rules and regulations of the United States or
any other political subdivision, agency, or instrumentality exercising
jurisdiction over Debtor or the Collateral, which laws, ordinances, rules and
regulations are applicable to Debtor or the Collateral, governing, regulating or
otherwise pertaining to health, industrial hygiene or the environment, or
regulating, relating to or imposing liability (including strict liability) or
standards of conduct concerning any Hazardous Materials, as are now or at any
time hereafter in effect and as amended from time to time.

     

    “Hazardous Materials”
shall mean any hazardous waste, hazardous substance, pollutant, contaminant,
toxic substance, oil, hazardous material or chemical, or other substance
regulated by any Environmental Law.

     

    “Lands” means the
lands that are described in Exhibit A hereto, the
leasehold estates that are described in Exhibit A hereto, and
all now-existing or hereafter-arising leasehold, overriding royalty, royalty,
net profits or other interests in real property of the Debtor, together with all
appurtenant rights accruing to the owner thereof, including extralateral rights,
surface use rights and water rights relating to the lands and leasehold estates
identified on Exhibit
A hereto.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Leases” means all
surface and mineral leases, subleases, assignments, options, licenses,
concessions, occupancy agreements, profits-à-prendre, work agreements, joint
venture agreements, partnerships (including mining partnerships), exploration
agreements, operating agreements, surface use agreements and surface use and
damage agreements, subsidence agreements, easements, licenses, net profits
agreements, royalty agreements, nominee agreements, options and all other
conveyances, transfers, agreements or arrangements (whether mineral or
otherwise, whether previously or hereafter made, and whether existing now or
hereafter) relating to all or any part of the Lands or any other lands any
production from which, or profits or proceeds from such production, is
attributed to any interest in Lands, together with all rentals, royalties and
other rights of Debtor thereunder.

     

    “Mine Property” means
all tangible property (whether now or hereafter existing or acquired, and
whether real, personal or mixed) owned by Debtor and located or found now or
hereafter on, in, or under all or any part of the Lands (or any other lands any
production from which, or profits or proceeds from such production, is
attributed to any interest in the Lands) that now or hereafter is (together with
all substitutions and replacements for, and all accessions, additions and
attachments to any thereof) used or useful in connection with mining gold or
Other Minerals (which as used herein shall include ores, compounds and
concentrates bearing the same) or in connection with any related activities,
including:

     

    (a)           exploration
for and evaluation of deposits of gold or Other Minerals,

     

    (b)           the
development, operation, shutdown and closure (temporary and permanent) of a mine
(whether an underground or a surface mine),

     

    (c)           handling,
processing, refining and beneficiation of gold or Other Minerals, including
crushing, screening, non-screen classifying, grinding, flotation, washing,
gravity separation, magnetic separation, chemical leaching, thickening,
filtration, drying, sintering, palletizing, briquetting, calcining,
crystallization, sorting, sizing, roasting, ion exchange, solvent extraction,
electrostatic separation, electrorefining, electrowinning and
smelting,

     

    (d)           storage
of gold or Other Minerals,

     

    (e)           transportation
of gold or Other Minerals by any means, including haulage within a mine and from
a mine to a mill or to any other handling, processing, beneficiation, storage or
marketing location, haulage between any of the foregoing locations, haulage of
mine waste (including waste rock and overburden) and tailings, slag and other
wastes resulting from handling, processing, and beneficiation and loading in
connection with any haulage,

     

    (f)          
 marketing, and readying for market, gold or Other Minerals,

     

    (g)      
    disposal (temporary and permanent) of mine waste
(including waste rock and overburden) and tailings, slag and other wastes from
handling, processing and beneficiation,

     

    (h)           monitoring,
maintaining, restoring and improving environmental quality, including
elimination, treatment and mitigation of air and water pollution,
and

     

    (i)          
 reclamation of lands and other natural resources affected by any of the
foregoing activities.

     

    Without
restricting the foregoing, “Mine Property” shall
include the following property (together with all substitutions and replacements
for, and all accessions, additions and attachments to any thereof) now or
hereafter used or useful in connection with mining gold or Other Minerals or in
connection with related activities:


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (i)       
    generally — buildings; structures; improvements;
furnishings; fixtures; equipment; apparatus; facilities; machinery; tools;
vehicles; goods; supplies and inventory; and

     

    (ii)           specifically  —
headframes; mine offices; maintenance and equipment repair shops; carpentry;
tool and electrical shops; parts and supplies warehouses; change houses;
laboratory and assay facilities; ore bins; air compressors; electrical
generators and buildings for same; dynamos; staff, workers’ and families’ living
and eating facilities; ventilation shafts and ducts; fans; refrigeration units;
underground workings (including injection wells and recovery wells; adits;
shafts; tunnels; crosscuts; laterals; drifts; raises; winzes; stopes; and other
openings to ore); pump rooms; underground hoist rooms; level stations;
underground equipment and machinery storage and repair areas; escape shafts; ore
storage areas; storehouses; hoist houses; drums; controls; and motors; wire rope
for hoists; ore skips and man cars; timber; roof supports; track (including
branch; cut-off, spur; industrial; switch; connecting; storage; yard; terminal
and other railroad tracks); roads and haulage ways; conveyor belts; electrical
wire; apparatus; and controls (including transformers and switch boxes); pipe;
water and fuel supply tanks, pumps and pipelines; rolling stock; including
locomotives and cars; mine vehicles; drills and related equipment; explosives
and explosives storage facilities; continuous miner machines; mucking equipment;
loaders and loading equipment; tipples; dewatering facilities; including pumps;
sewage facilities; waste water treatment and disposal facilities; water
treatment plants (including, without limitation, the water treatment plant
adjacent to the Mine headframe); wells for the extraction or injection of water,
or for the monitoring of water quality or supply; ditches; water drainage
courses; dams; and silt ponds; telephones and other communications equipment;
pipelines (including slurry and pneumatic pipelines); tractors; scrapers; power
shovels; backhoes; bucket-wheel excavators; draglines; dredges; haulage and
water and maintenance trucks; inclined skips; graders; electrical power lines;
ships; barges; port facilities; loading docks; tramways and aerial trams;
aircraft; airstrips; recreation facilities; company townsite and buildings; mill
or processing plants; sluices; wells; augers; overburden; waste rock or spoil;
and other mine wastes; load-haul-dump vehicles; conveyors (including screw and
bucket conveyors); crushers (including jaw crushers; gyratory crushers; wire
crushers; impact crushers; roil crushers; hammer mills; shredders and roller
mills); screens (including grizzlies); grinding mills (including ball mills; rod
mills; autogenous mills and semi-autogenous mills); flotation circuits
(including flotation cells; collection troughs and launders and flumes); washers
(including hydrocyclones); gravity separation devices (including jigs; sluices;
shaking tables; cones; spirals; vanners and heavy liquids); magnets; leaching
circuits; thickening tanks; filters (including drum; disk; belt; and plate
filters); driers; kilns; smelting furnaces (including reverberatory furnaces and
flash smelters); converters; slag; tailings and tailings ponds.

     

    “Mine-Related Agreements and
Plans” means all existing and future contracts, agreements, plans,
specifications, technical reports, surveys, designs, drawings and other matters
executed by Debtor and (or prepared by) any contractor, architect, engineer,
surveyor or other consultant, in each case in connection with the design,
construction or operation of the Mine Property, including all contracts and
agreements executed by Debtor and any landscape architect, civil engineer,
electrical engineer, soils engineer, mining engineer or mechanical engineer,
together with all plans and specifications prepared by any design architect for
the construction and improvements comprising Mine Property.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Mines” shall mean the
mine commonly referred to as the Bates Hunter Mine, located in Gilpin County,
Colorado, and any and all other mines now or hereafter located in, on or under
the Lands and the assets related thereto.

     

    “Other Minerals” means
all minerals other than gold, whether or not similar to gold or found or
produced in association with gold, including silver, coal, all existing and
future ores, minerals, mineral elements and compounds, veins, lodes and mineral
deposits, whether solid, liquid or gaseous, whether organic or inorganic,
metallic or nonmetallic, hydrocarbonaceous or non-hydrocarbonaceous, including
rock, gravel, sand, methane, water, and geothermal steam, geothermal heat and
geothermal resources, found or located on the Lands.

     

    “Permitted Liens”
means:

     

    (i)       
    Liens for taxes, assessments or governmental charges not
then due and delinquent or in respect of which the Debtor has furnished such
security as the Secured Party may require and which are being contested in good
faith by appropriate proceedings promptly initiated and diligently
conducted;

     

    (ii)           Liens
in the nature of zoning restrictions, easements and rights and restrictions of
record on the use of real property, which do not materially interfere with the
conduct of the business of the Debtor and do not materially affect the value of
the property subject to such Liens;

     

    (iii)          undetermined
or inchoate Liens, including unregistered construction Liens, incidental to
current operations of the Debtor which have not at such time been filed pursuant
to laws against the Debtor and which relate to obligations neither due nor
delinquent;

     

    (iv)          Liens
in the form of security given to a public utility or any Governmental Authority
in connection with the operations of the Debtor in the ordinary course of its
business; and

     

    (v)           matters
of record as of the date hereof, itemized on Exhibit C, save and
except for the Subordinated Liens.

     

    “Rights of Way” means
(including any of the following that are described in Exhibit A hereto) all
now or hereafter existing or acquired easements, servitudes, permits, licenses,
tenements, hereditaments, rights of way, privileges, liberties, appendages,
appurtenances and similar rights appertaining or appurtenant to or beneficially
used or useful in connection with the Lands and/or the Mine Property, including
and together with all estates, claims, demand rights, title and interests in and
to any street, road, highway or alley, vacated or otherwise, adjoining or
beneficially used or useful in connection with the Lands and/or the Mine
Property.

     

    “Subordinated Liens”
means the Liens listed in Exhibit B
hereto.

     

    “Water Rights” means
all now or hereafter existing or acquired water and water rights, reservoirs and
reservoir rights, ditches and ditch rights, wells and well rights, whether
evidenced or initiated by permit, decree, well registration, appropriation not
decreed, shares of stock or other interests in mutual ditch or reservoir
companies or carrier ditch or reservoir companies or otherwise, appertaining or
appurtenant to or beneficially used or useful in connection with the Lands
and/or the Mines, together with all pumps, well casings, wellheads, electrical
installations, pumphouses, meters, monitoring wells and systems, parshall flumes
or other measuring devices, pipes, pipelines and other structures or personal
property which are or may be used to produce, regulate, measure, distribute,
store or use water from the said water and water rights, reservoirs and
reservoir rights, ditches and ditch rights, wells and well
rights.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    COLLATERAL

     

    All of
Debtor’s right, title and interest in and to all the hereinafter described
properties, rights and interests, whether now owned or hereafter acquired, and
whether now or hereafter existing or created, is herein collectively called the
“Collateral”:

     

    (a)           the
Lands and the Rights of Way,

     

    (b)           the
gold and Other Minerals that originated from the Lands which are (i) on, in, or
under, extending from or into, (ii) produced or to be produced from, (iii)
stored, handled, processed, refined or beneficiated or to be stored, handled,
processed, refined or beneficiated on, or (iv) transported or marketed or to be
transported or marketed on or from, in each case, all or any part of the Lands
or any other lands any production from which (or profits or proceeds from such
production) is attributed to any interest in the Lands,

     

    (c)           without
duplication of any other provision of this granting clause all of Debtor’s now
or hereafter arising accounts, as-extracted collateral, chattel paper,
commercial tort claims, deposit accounts, documents, general intangibles, goods
(including all its consumer goods, equipment, farm products, fixtures and
inventory), instruments, investment property, letter-of-credit rights,
securities and supporting obligations (as such terms are defined in the
applicable Uniform Commercial Code), but only if, and only to the extent, any
such above-listed properties, rights or interests relate to, or arise out of,
Collateral that is described elsewhere other than in this subsection
(c),

     

    (d)           the
Leases,

     

    (e)           the
Mines and the Mine Property,

     

    (f)   
        the Approvals,

     

    (g)           the
Mine-Related Agreements and Plans,

     

    (h)           the
Water Rights,

     

    (i)       
    all awards, payments or judgments, including interest
thereon, and the right to receive the same, as a result of the exercise or
threatened exercise of any right of eminent domain, other injury to, taking up,
or decrease in the value of all or any portion of the Lands, the Mine Property,
the Water Rights or any other property described herein,

     

    (j)      
     all other property or rights of any kind or
character related to the Lands, the Mine Property, the Water Rights or other
property described herein, and

     

    (k)           all
proceeds (as such term is defined in the applicable Uniform Commercial Code) and
products of the foregoing,


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    together
with, to the extent Debtor may lawfully grant a security interest therein, any
and all corrections or amendments to, or renewals, extensions or ratifications
of, or replacements or substitutions for, any of the same, or any instrument
relating thereto, and all contracts, title instruments, title opinions, land
status reports, title abstracts, title insurance commitments or policies, title
materials and information, files, records, writings, data bases, information,
systems, maps, plats, surveys, geological and geophysical (including electrical,
electromagnetic, gravity and seismic), geochemical, and radiometric data and
information, drilling data, test data, mineral -samples (including drill cores),
mineral assay reports, interpretative and analytical reports of any kind or
nature (including reserve or deposit studies or evaluations), mine feasibility
reports, technical reports (including, without limitation, that certain
“Technical Report on the Bates Hunter Project”, dated July 15, 2008, by Orem
Inc.), mine development studies and plans, information concerning exploration
and development of deposits of gold and Other Minerals (including information
concerning mine operation, shutdown and closure and concerning reclamation of
lands and other resources affected by mining), environmental data and related
information and reports and studies, computer hardware and software and all
documentation therefor or relating thereto (including all licenses relating to
or covering such computer hardware, software and/or documentation), trade
secrets, business names and the goodwill of the business relating thereto,
unpatented inventions, patent applications and patents, lease records (including
rental and royalty payment records), payment of rental or maintenance fees, and
filings and recordings made with governmental authorities, the Approvals and
records and information concerning compliance therewith, mine development
programs and budgets, financial statements and audits, reclamation plans and
related data and reports, hedging agreements, interest rate protection
agreement, commodity hedging agreement or any other agreement evidencing a swap
or other derivative transaction, insurance policies, commingling agreements,
information and data and reports regarding the products and proceeds of mine
operations (including quantities produced, proceeds from sale or other
disposition, and disbursement of proceeds to persons entitled to a share
thereof), information and data and reports regarding all aspects of the Mine
Property (including transportation and marketing of mine products), development
rights, air rights, parcel maps, extralateral rights, condemnation awards,
franchises, easements, servitudes, permits, licenses, tenements, hereditaments,
appurtenances, rents, royalties, overriding royalties, revenues, avails, income,
security deposits, reclamation bonds, bonuses, accounts, returns, issues,
profits, advantages, claims against third parties, products, proceeds and all
other benefits, whether now or hereafter existing or arising, used or useful in
connection with, covering, relating to, or arising from or in connection with,
any of the aforesaid in this granting clause referenced, and all other things of
value and incident thereto which Debtor might at any time have or be entitled to
(including any and all liens, lien rights and security interests, and all
properties, rights and interests, whether now or hereafter existing or arising,
that Debtor uses or installs for use in connection with mining gold or Other
Minerals from all or any part of the Lands or any other lands any production
from which, or the profits or proceeds from such production, is attributed to
any interest in the Lands, or in connection with any related activities);
together with all strips and gores belonging, adjacent or pertaining to the
Lands; and any after-acquired title, additions to any of the foregoing,
including those which may be subjected to the lien and security interest of this
Instrument by means of supplements hereto, all the aforesaid properties, rights
and interests, together with any after-acquired title, additions and accretions
to any of the foregoing.

     

    GRANTING
CLAUSES

     

    In
consideration of ten dollars and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Debtor, and the
matters hereinafter set forth, Debtor hereby:


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    A.           Real
Property.  Grants, bargains, sells, mortgages, assigns,
transfers and conveys to Trustee, with POWER OF SALE, for the benefit of Secured
Party, that part of the Collateral that is real property (including any fixtures
that are real property under applicable state law), subject to the assignment of
severed and extracted gold and Other Minerals and the proceeds thereof made
under paragraph C below; TO HAVE AND TO HOLD all of the Collateral that is real
property (including any fixtures that are real property under applicable state
law), together with all of the rights, privileges, benefits, hereditaments and
appurtenances in any way belonging, incidental or pertaining thereto, to Trustee
and its successors and assigns, forever, IN TRUST, NEVERTHELESS, for the
security and benefit of Secured Party and its successors and assigns, subject to
all of the terms, conditions, covenants, agreements and trusts herein set
forth;

     

    B.      
     Personal
Property.  Grants to Secured Party a security interest in that
part of the Collateral that is personal property (including any fixtures that
are personal property under applicable state law); and

     

    C.      
     Assignment of
Production.  Collaterally assigns to Secured Party all of the
severed and extracted ore, gold and Other Minerals produced from or allocated or
attributed to any of the Collateral or any other interest of Debtor (whether now
owned or hereafter acquired by operation of law or otherwise) in, to and under
or that covers, affects or otherwise relates to the Land or to any of the
estates, property rights or other interests described or referred to above,
together with all of the proceeds thereof.

     

    ARTICLE
I

    


    Secured
Obligations

     

    Section
1.1            
Obligations
Secured.  This Instrument is executed, acknowledged and
delivered by Debtor to secure and enforce the following indebtedness,
liabilities and obligations (the “Secured
Obligations”):

     

    A.           Convertible
Debenture.  All indebtedness (including but not limited to the
Principal, Interest, Expenses and Extension Fee) evidenced by that certain
Convertible Debenture, of even date herewith, in the principal amount of U.S.
$511,589.59 made by Wits Basin Precious Minerals Inc., a Minnesota corporation
(“Borrower”),
and payable to the order of Secured Party, and any renewals, extensions or
restatements thereof, modifications, changes, amendments or supplements thereto
and substitutions therefor (the “Debenture”), as well
as all indebtedness payable by Debtor as a result of Debtor’s obligations in the
Debenture to guaranty the Borrower’s obligations under the
Debenture;

     

    B.     
      This
Instrument.  All indebtedness payable by Debtor pursuant to the
provisions of and evidenced by this Instrument, including, without limitation,
any amounts advanced to protect the liens and security interests herein granted
and all reasonable attorneys fees, court costs, and expenses of whatever kind or
character now existing or hereafter created or arising, incident thereto or to
the collection of the indebtedness, liabilities and obligations hereby secured
and enforcement of the liens and security interests herein granted and
created;

     

    C.     
      Other
Obligations.  All other indebtedness payable by Debtor to
Secured Party of whatever kind or character now existing or hereafter created or
arising, whether fixed, absolute or contingent, direct or indirect, primary or
secondary, joint, several or joint and several, due or to become due, and
however evidenced whether by note, open account, overdraft, endorsement,
security agreement, guarantee or otherwise, it being contemplated that Debtor
may hereafter become indebted to Secured Party in such further sum or sums;
and


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    D.      
     Renewals, Extensions and
Amendments.  All indebtedness evidenced by all renewals,
extensions and restatements of, modifications, changes, amendments and
supplements to and substitutions for, all or any part of the
foregoing.

     

    ARTICLE
II

    


    Warranties, Representations,
Covenants

    and
Indemnities

     

    Section
2.1          Representations and Warranties.  Debtor
warrants and represents as follows:

     

    A.            Power and
Authority.  Debtor has the power and authority to grant,
bargain, sell, mortgage, assign, transfer and convey the Collateral as provided
herein.

     

    B.             Title.  Exhibit A attached
hereto correctly describes, as of the date hereof, all of the land, mineral
estates, surface estates and real property leasehold estates (including, without
limitation, easements and rights of way) in which Debtor owns an interest and
all Water Rights owned by Debtor.  Subject to Permitted Liens and
Subordinated Liens, Debtor is the lawful owner of and has good and marketable
title to the Collateral free and clear of all Liens.  Debtor warrants
and will forever defend the title to the Collateral against the claims of all
persons claiming or to claim the same or any part thereof.   To
the best of the Debtor’s knowledge, each Lease is a valid and subsisting Lease
and is in full force and effect.  Each Lease or a certified copy or
memorandum thereof has been recorded in the real property records of the county
or counties in which the Lands covered thereby are located, and has been
delivered to Secured Party.  Each Lease (a) either is within its
primary term, or the primary term thereof has been extended by production of
gold or Other Minerals from the Lands covered thereby or otherwise by its terms;
(b) is prior to any deed of trust, mortgage or other lien or encumbrance upon
the fee interest in such Lands; and (c) is assignable without the prior written
consent of the lessor or any other third party.

     

    C.             Approvals.  To
the best of Debtor’s knowledge, without inquiry, other than recording or filing
of this Instrument, financing statements and similar instruments in favor of
Secured Party, Debtor is not required to submit any notice, report or other
filing with any governmental authority, person or entity in connection with
Debtor’s execution, delivery or performance of this Instrument, and no consent,
approval or authorization of any governmental authority, person or entity is
required to be obtained by Debtor in connection with Debtor’s execution,
delivery and performance of this Instrument or the consummation of the
transactions contemplated hereby.  To the best of the Debtor’s
knowledge, Debtor is duly qualified to own, hold and operate leases, easements,
rights-of-way, mineral agreements and other agreements covering, affecting or
otherwise relating to state lands.

     

    D.             Security
Interest.  Except for Permitted Liens, Trustee and Secured
Party, as the case may be, will obtain, as security for the Secured Obligations
a legally valid and binding first perfected lien on, and security interest in,
the Collateral.

     

    E.           Structure.  Debtor’s
name, identity, corporate structure, state of incorporation and organizational
identification number are correctly reflected in the preamble to this
Instrument.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section
2.2             Covenants.  Debtor
covenants and agrees as follows:

     

    A.           Secured
Obligations.  Debtor shall pay when due and perform the Secured
Obligations in accordance with the terms thereof and hereof.

     

    B.    
       Recording and
Filing.  Debtor shall sign all documents reasonably requested
by Secured Party to assist Secured Party to create, perfect, maintain and
preserve the priority of the liens and security interests intended to be created
hereby as a first lien on real property and fixtures and a first priority
security interest in personal property and fixtures.

     

    C.   
        Modifications and
Dispositions.  Without the prior written consent of Secured
Party, except in the ordinary course of business Debtor shall not
(1) amend, modify or otherwise revise any lease, license or other agreement
described in Exhibit
A; (2) release, surrender, abandon or forfeit the Collateral or any
part thereof; (3) sell, convey, assign, lease, sublease, alienate, mortgage
or grant security interests in or otherwise dispose of or encumber the
Collateral or any part thereof, except to the extent explicitly permitted by the
Debenture and except sales of severed gold and Other Minerals in the ordinary
course of Debtor’s business and for fair consideration, and except for the liens
and security interests created by this Instrument and liens for taxes,
assessments and governmental charges not delinquent; or (4) consent to,
permit or authorize any such act by another party with respect to the Land, the
Collateral or any part thereof.

     

    D.           Defense of
Title.  If the title or interest of Debtor, Trustee or Secured
Party to the Collateral or any part thereof, or the lien or encumbrance created
by this Instrument, or the rights or powers of Secured Party or Trustee
hereunder, shall be attacked, either directly or indirectly, or if any legal
proceedings are commenced against Debtor or the Collateral, Debtor shall
promptly give written notice thereof to Secured Party and at Debtor’s own
expense shall take all reasonable steps diligently to defend against any such
attack or proceedings, employing attorneys reasonably acceptable to Secured
Party.

     

    E.    
       Environmental
Matters.  Debtor shall comply with all Environmental Laws and
shall maintain and obtain all permits, licenses and approvals required under
Environmental Laws.  Debtor shall not cause or permit the Collateral
or Debtor to be in violation of, or do anything or permit anything to be done
that will subject the Collateral, Debtor or Secured Party to any additional
remedial obligations under any applicable Environmental Laws, assuming
disclosure to the applicable governmental authorities of all relevant facts,
conditions and circumstances, if any, pertaining to the Collateral or
otherwise.  Debtor shall promptly notify Secured Party in writing of
any material existing, pending or threatened investigation or inquiry by any
governmental authority in connection with any applicable Environmental
Laws.

     

    F.   
        Further
Assurances.  Debtor shall execute, acknowledge and deliver, or
cause to be executed, acknowledged or delivered, to Secured Party such other and
further instruments and do such other acts as in the reasonable opinion of
Secured Party may be necessary or desirable to effect the intent of this
Instrument, promptly upon request of Secured Party and at Debtor’s
expense.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section
2.3             Costs, Expenses and
Indemnities.  Debtor agrees to pay and indemnify Secured Party
and Trustee as follows:

     

    A.           Costs and
Expenses.  Debtor shall indemnify Secured Party and Trustee
from and reimburse and pay Secured Party for all fees, costs and expenses
(including without limitation, attorneys’ fees, court costs and legal expenses
and consultant’s and expert’s fees and expenses), incurred or expended by
Secured Party or Trustee in connection with (1) the breach by Debtor of any
representation or warranty contained in this Instrument, the Debenture or any
other documents and instruments evidencing, securing or otherwise relating to
the Secured Obligations, (2) the failure by Debtor to perform any
agreement, covenant, condition, indemnity or obligation contained in this
Instrument, the Debenture or any other documents and instruments evidencing,
securing or otherwise relating to the Secured Obligations, (3) Secured
Party’s or Trustee’s exercise of any of its rights and remedies under this
Instrument, the Debenture and the other documents and instruments evidencing,
securing or otherwise relating to the Secured Obligations, or (4) the
protection of the Collateral and the liens thereon and security interests
therein.  All such fees, costs and expenses shall be a demand
obligation owing by Debtor to Secured Party.  The liabilities of
Debtor as set forth in this Section 2.3(A)
shall survive the termination of this Instrument.

     

    B.           Indemnity.  Debtor
shall indemnify and hold harmless Secured Party and persons or entities owned or
controlled by or affiliated with Secured Party and their respective directors,
officers, shareholders, partners, employees, consultants and agents (herein
individually, an “Indemnified Party,”
and collectively, “Indemnified Parties”)
from and against, and reimburse and pay Indemnified Parties with respect to, any
and all direct claims, demands, liabilities, losses, damages (including without
limitation, actual, consequential, exemplary and punitive damages), causes of
action, judgments, penalties, fees, costs and expenses (including without
limitation, attorneys’ fees, court costs and legal expenses and consultant’s and
expert’s fees and expenses), of any and every kind or character, known or
unknown, fixed or contingent, that may be imposed upon, asserted against or
incurred or paid by or on behalf of any Indemnified Party on account of, in
connection with, or arising out of (1) any bodily injury or death or
property damage occurring in or upon or in the vicinity of the Collateral
through any cause whatsoever, (2) any act performed or omitted to be
performed hereunder or the breach of or failure to perform any warranty,
representation, indemnity, covenant, agreement or condition contained in this
Instrument, the Debenture or any other document or instrument evidencing,
securing or otherwise relating to the Secured Obligations, (3) any
transaction, act, omission, event or circumstance arising out of or in any way
connected with the Collateral or with this Instrument, the Debenture or any
other document or instrument evidencing, securing or otherwise relating to the
Secured Obligations, or (4) the violation of or failure to comply with any
statute, law, rule, regulation or order, including without limitation,
Environmental Laws and statutes, laws, rules, regulations and orders relating to
Hazardous Materials; provided however, that such
indemnities shall not apply to any Indemnified Party to the extent the subject
of the indemnification is caused by or arises out of the gross negligence or
willful misconduct of such Indemnified Party (as determined by a court of
competent jurisdiction).  The foregoing indemnities shall not survive
in the event that the Lender takes ownership of the Collateral, provided that
the forgoing indemnities will survive the release, foreclosure or other
termination of this Instrument in all other circumstances.  The
rights, powers and remedies herein conferred are cumulative, and not exclusive,
of any and all other rights, powers and remedies existing at law or in equity
(including without limitation, rights, powers and remedies under Environmental
Laws).

     

    Section
2.4             Performance by Secured
Party.  Debtor agrees that, if Debtor fails to perform any act
which Debtor is required to perform hereunder, Secured Party and Trustee may,
but shall not be obligated to, perform or cause to be performed such act, and
any expense so incurred by Secured Party or by Trustee in connection therewith
shall be a demand obligation owing by Debtor to Secured Party, and Secured Party
shall be subrogated to all of the rights of the party receiving such
payment.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    ARTICLE
III

    


    Collection of Proceeds of
Production

     

    Section
3.1            Assignment of
Proceeds.  Pursuant to paragraph C of the granting clause
of this Instrument, Secured Party is absolutely assigned and entitled to receive
all of the severed and extracted ore, gold and Other Minerals produced from or
allocated or attributed to all of the Collateral, together with all of the
proceeds thereof and payments in lieu thereof.  Debtor acknowledges
and agrees that said assignment is intended to be an absolute and unconditional
assignment and not merely a pledge of or creation of a security interest in said
gold and Other Minerals and proceeds or an assignment as additional
security.  Debtor shall execute, acknowledge and deliver or cause to
be executed, acknowledged and delivered, transfer orders or letters-in-lieu
thereof directing all purchasers of ore, gold and Other Minerals to make
payments directly to Secured Party.  All parties producing,
purchasing, receiving or having in their possession any such ore, gold and Other
Minerals or proceeds are hereby authorized and directed by Debtor to treat and
regard Secured Party as the party entitled in Debtor’s place and stead to
receive such ore, gold and Other Minerals and proceeds; and said parties shall
be fully protected in so treating and regarding Secured Party and shall be under
no obligation to see to the application by Secured Party of any such proceeds
received by it.  Notwithstanding the foregoing or any provision
contained in this Deed of Trust, Secured Party agrees that, until and unless an
Event of Default occurs hereunder, Secured Party shall exercise no rights to
possession of any of the Collateral and shall permit Debtor to receive such ore,
gold and Other Minerals or proceeds until such time as Secured Party shall have
made written demand therefore following an Event of Default.  Such
election by Secured Party shall not in any way waive the right of Secured Party
to demand and receive such ore, gold and Other Minerals and proceeds thereafter
allocated or attributed to the Collateral and shall not in any way diminish the
absolute and unconditional right of Secured Party to receive all of such ore,
gold and Other Minerals and proceeds and cash proceeds not theretofore expended
or distributed by Debtor.  Following an Event of Default, any such
ore, gold and Other Minerals or proceeds received by Debtor shall, when
received, constitute trust funds in Debtor’s hands and shall be held by Debtor
for the benefit of Secured Party.  Debtor hereby agrees that upon the
first to occur of either (A) written demand of Secured Party, or
(B) the occurrence of any event which constitutes an Event of Default (as
hereinafter defined) or which upon the giving (or receiving) of notice or lapse
of time, or both, would constitute such an Event of Default, all cash, proceeds,
instruments and other property, of whatever kind or character, received by
Debtor on account of the Collateral, whether received by Debtor in the exercise
of its collection rights hereunder or otherwise, shall, in accordance with
instructions then given by Secured Party, be remitted to Secured Party or
deposited to an account designated by Secured Party, in the form received
(properly assigned or endorsed to the order of Secured Party or for collection
and in accordance with Secured Party’s instructions) not later than the first
banking business day following the day of receipt, to be applied as provided in
Section 3.2
hereof and, until so applied, may be held by Secured Party in a separate account
on which Debtor may not draw.  Debtor agrees not to commingle any such
property, following the receipt of any such demand from Secured Party or the
occurrence of an Event of Default, with any of its other funds or property and
agrees to hold the same upon an express trust for Secured Party until remitted
to Secured Party.

     

    Section
3.2             Application of
Proceeds.  Secured Party shall apply all of the proceeds
received pursuant to Section 3.1
hereof in satisfaction of the Secured Obligations as provided below, unless
otherwise agreed to by Secured Party and Debtor.  All such proceeds
received and to be applied by Secured Party up to the close of business on the
last day of each calendar month shall be applied by Secured Party on or before
the fifth business day of the next succeeding calendar month as follows (with
any balance remaining after such application to be paid to
Debtor):


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    A.           First,
to the payment to Secured Party and Trustee of all outstanding or unreimbursed
fees, costs and expenses incurred by Secured Party or Trustee pursuant hereto,
and any part of the Secured Obligations not evidenced by written instrument,
including without limitation, all charges and penalties, including interest
thereon, due Secured Party;

     

    B.     
      Second, to the payment or prepayment of all
interest accrued on the Secured Obligations; and

     

    C.     
      Third, to the payment or prepayment of the
principal of the Secured Obligations in any order the Secured Party may elect
from time to time;

     

    Section
3.3             Inclusion in
Sale.  Upon any sale of any of the Collateral pursuant to Article V hereof
and expiration of any mandatory redemption periods, the ore, gold and Other
Minerals thereafter produced from or attributed to the part of the Collateral so
sold, and the proceeds thereof, shall be included in such sale and shall pass to
the purchaser free and clear of the provisions of this Article III.

     

    Section
3.4             No Liability in Secured
Party.  Except for negligent acts or willful misconduct,
Secured Party is hereby absolved from all liability for failure to enforce
collection of any such proceeds and from all other responsibility in connection
therewith, except the responsibility to account to Debtor for proceeds actually
received.

     

    Section
3.5             Rights of Secured
Party.  Subject to the terms and conditions contained herein,
Secured Party shall have the immediate and continuing right to demand, collect,
receive and receipt for all production, proceeds and payments assigned
hereunder.  In addition, Debtor agrees that, upon the request of
Secured Party and following an Event of Default, it will promptly execute and
deliver to Secured Party such transfer orders, payment orders, division orders
and other instruments as Secured Party may deem necessary, convenient or
appropriate in connection with the payment and delivery directly to Secured
Party of all proceeds, production, and payments assigned
hereunder.  Debtor hereby authorizes and directs that, upon the
request of Secured Party and following an Event of Default, all purchasers,
transporters and other parties now or hereafter purchasing mineral production
produced from or allocated or attributed to the Collateral or any other interest
of Debtor (whether now owned or hereafter acquired by operation of law or
otherwise), in, to or relating to the Land or to any of the estates, property,
rights or other interests included in the Collateral, or any part thereof, or
now or hereafter having in their possession or control any production from or
allocated to the Collateral or any other interest of Debtor (whether now owned
or hereafter acquired by operation of law or otherwise), in, to or relating to
the Land or to any of the estates, property, rights or other interests included
in the Collateral, or any part thereof, or now or hereafter otherwise owing
monies to Debtor under contracts and agreements herein assigned, shall, until
Secured Party directs otherwise, pay and deliver such proceeds, production or
amounts directly to Secured Party at Secured Party’s address set forth in the
introduction to this Instrument, or in such other manner as Secured Party may
direct such parties in writing, and this authorization shall continue until the
assignment of production and proceeds contained herein is released and
reassigned.  No payor making payments to Secured Party at its request
under the assignment of production and proceeds contained herein shall have any
responsibility to see to the application of any of such funds, and any party
paying or delivering proceeds, production or amounts to Secured Party under such
assignments shall be released thereby from any and all liability to Debtor to
the full extent and amount of all payments, production or proceeds so
delivered.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section
3.6             Change of
Purchaser.  Should any purchaser taking the production from the
Collateral or any other interest of Debtor (whether now owned or hereafter
acquired by operation of law or otherwise), in, to or relating to the Land or to
any of the estates, property, rights or other interests included in the
Collateral, or any part thereof, fail to make any payment promptly to Secured
Party, in accordance with the assignment of production and proceeds herein made,
then Secured Party, to the fullest extent permissible under applicable law,
shall have the right to demand a change of purchaser and to designate another
purchaser of the ore, gold and Other Minerals included in the Collateral,
without any liability on the part of Secured Party in making such selection; and
failure of Debtor to consent to and promptly effect such change of purchaser
shall constitute an Event of Default under Article V
below.

     

    Section
3.7             No Delegation or
Assumption.  Nothing in this Instrument shall be deemed or
construed to create a delegation to or assumption by Secured Party, of the
duties and obligations of Debtor under any agreement or contract relating to the
Collateral or any portion thereof, and all of the parties to any such contract
shall continue to look to Debtor for performance of all covenants and other
obligations and the satisfaction of all representations, warranties, covenants,
indemnities and other agreements of Debtor thereunder, notwithstanding the
assignment of production and proceeds contained herein or the exercise by
Secured Party, prior to foreclosure, of any of its rights hereunder or under
applicable law.

     

    Section
3.8             Cumulative.  The
assignment of production and proceeds contained herein shall not be construed to
limit in any way the other rights and remedies of Secured Party hereunder,
including without limitation, its right to accelerate the indebtedness evidenced
by the Secured Obligations upon an Event of Default and the other rights and
remedies herein conferred, conferred in the other documents and instruments
evidencing, securing or relating to the Secured Obligations, or conferred by
operation of law.  Monies received under the assignment of production
and proceeds contained herein shall not be deemed to have been applied in
payment of the Secured Obligations unless and until such monies actually are
applied thereto by Secured Party.

     

    ARTICLE
IV

    


    Termination and
Release

     

    Section
4.1             Release Upon
Termination.  If all of the Secured Obligations shall be paid
in full and otherwise satisfied pursuant to the terms and conditions of this
Instrument and the other documents and instruments evidencing, securing or
relating to the Secured Obligations, and if Debtor shall have well and truly
performed all of the covenants and agreements herein contained, then all of the
Collateral shall revert to Debtor, the liens and security interests created by
this Instrument shall terminate and Secured Party shall, promptly after the
request of Debtor, execute, acknowledge and deliver to Debtor a request to the
Trustee to release this Instrument, and Secured Party shall execute such other
instruments as may be necessary to evidence the termination of the liens and
security interests created by this Instrument.

     

    Section
4.2             Partial
Release.  No partial release from the liens and security
interests created by this Instrument of any part of the Collateral by Trustee or
Secured Party shall in any way alter, vary or diminish the force or effect of
this Instrument or impair, release or subordinate the liens and security
interests created by this Instrument on the remainder of the
Collateral.

     

    ARTICLE
V

    


    Default

     

    Section
5.1             Events of
Default.  The occurrence of any of the following events which
continues five (5) Banking Days after written notice thereof by the Debtor shall
constitute an event of default (“Event of Default”)
and upon the occurrence thereof the liens and security interests created hereby
shall be subject to foreclosure in any manner provided for herein or provided
for by applicable law:


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    A.           Failure
of Debtor to pay as and when provided herein any fee or other amount due Secured
Party or Trustee under this Instrument when due;

     

    B.    
       Failure of Debtor to perform or
observe any covenant, agreement, indemnity, condition or provision in this
Instrument;

     

    C.    
       Any of Debtor’s representations or
warranties made in this Instrument or any statement or certificate at any time
given in writing pursuant hereto or in connection herewith shall be false or
misleading in any material respect as of the date made or deemed made;
or

     

    D.           An
“Event of Default” as defined in the Debenture shall occur.

     

    Section
5.2             Treatment of
Fixtures.  Upon the occurrence of any Event of Default, or at
any time thereafter, if deemed appropriate by Secured Party or if required by
applicable law, Secured Party may elect to treat the fixtures included in the
Collateral either as real property or as personal property, or both, and proceed
to exercise such rights as apply to the type of property selected.

     

    Section
5.3             Foreclosure.  Upon
the occurrence of any Event of Default, or at any time thereafter, in addition
to any other rights, powers and remedies herein conferred or conferred by
operation of law, Secured Party and Trustee shall have all of the rights, powers
and remedies of a secured party, a mortgagee, a beneficiary under a deed of
trust, and a public trustee under a deed of trust granted under applicable
law.  Secured Party may, with notice, proceed by one or more actions
in equity or at law for the seizure and sale of the Collateral or any portion
thereof, for the foreclosure or sale of the Collateral or any portion thereof by
judicial foreclosure by appropriate proceedings in any court of competent
jurisdiction, by a public trustee’s sale, or in any other manner then permitted
by law, for the specific performance of any covenant or agreement of Debtor
herein contained or in aid of the execution of any right, power or remedy herein
granted, or for the enforcement of any other appropriate equitable or legal
remedy and to recover judgment against Debtor.  In furtherance, and
not in limitation, thereof:

     

    A.           Deed of
Trust.  This Instrument shall constitute a trust deed under
Articles 37, 38 and 39 of Title 38 of the Colorado Revised Statutes,
as amended and as may be amended from time to time, or any future law containing
provisions under which the sale of property securing debts is authorized or
permitted; and upon an Event of Default, or any time thereafter, Trustee shall,
whenever requested by Secured Party, cause the Collateral to be sold in
accordance with the provisions thereof and hereof.

     

    B.           Mortgage.  This
Instrument shall also constitute a mortgage, and upon the occurrence of an Event
of Default and during the continuance thereof may be foreclosed as to any of the
Collateral by judicial action or in any manner then permitted by applicable law;
and to the extent, if any, required to cause this Instrument to be so effective
as a mortgage as well as a deed of trust, Debtor hereby mortgages the Collateral
to Secured Party.

     

    C.           Election.  Secured
Party may elect to treat this Instrument, from time to time and at any time,
either as a deed of trust to the public trustee or as a mortgage.  In
the event a public trustee’s sale of the Collateral shall be commenced by
Trustee, Secured Party may at any time before the sale of the Collateral, elect
to abandon the public trustee’s sale, and Secured Party may then institute a
suit for the collection of the Secured Obligations and for the foreclosure of
this Instrument by judicial action.  It is agreed that if Secured
Party should institute a suit for the foreclosure of this Instrument by judicial
action, Secured Party may at any time before the entry of a final judgment,
dismiss such suit, and then direct Trustee to cause the Collateral to be sold
pursuant to a public trustee’s sale in accordance with the provisions of this
Instrument.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    D.           Additional
Actions.  This Instrument shall also constitute and may be
enforced from time to time as an assignment, chattel mortgage, contract, deed of
trust, mortgage, financing statement and security agreement, and from time to
time as any one or more thereof as appropriate under applicable
law.  Secured Party shall be entitled to all of the rights, remedies
and benefits of a secured party, mortgagee and a beneficiary granted under
applicable law; and, to the fullest extent of such law, shall be entitled to
enforce such rights, remedies and benefits.  Debtor intends and hereby
grants to Secured Party all rights, powers and remedies accorded a secured
party, mortgagee and a beneficiary under applicable law whether or not such
rights, powers and remedies are expressly granted or reserved
herein.

     

    E.     
      Notice, Place and Manner of
Sale.  Any sale of the Collateral under this Article V shall
take place at such place or places and otherwise in such manner and upon such
notice as may be required by law; or, in the absence of any such requirement, as
Secured Party may deem appropriate.  Debtor expressly agrees that
Secured Party or Trustee may offer the Collateral as a whole or in such parcels
or lots as Secured Party or Trustee elects, regardless of the manner in which
the Collateral may be described.

     

    F.     
      Postponement of
Sale.  Any sale of the Collateral conducted under this Article V may be
postponed from time to time as provided by applicable law; or, in the absence of
any such provisions, Secured Party may postpone the sale of the Collateral or
any part thereof by public announcement at the time and place of such sale, and
from time to time thereafter may further postpone such sale by public
announcement made at the time of sale fixed by the preceding
postponement.  Sale of a part of the Collateral will not exhaust the
power of sale, and sales may be made from time to time until all Collateral is
sold or the Secured Obligations are paid in full.

     

    G. 
          Secured Party’s Right to
Purchase.  Secured Party shall have the right to bid or to
become the purchaser at any sale made pursuant to the provisions of this Article V, and
shall have the right to credit upon the amount of the bid made therefor the
amount payable to it out of the net proceeds of such sale.

     

    H.           Conveyance to
Purchaser.  Any lawful sale of the Collateral or any portion
thereof pursuant to the provisions of this Article V will
operate to divest all right, title, interest, claim and demand of Debtor in and
to the property sold and will be a perpetual bar against Debtor and shall,
subject to applicable law, vest title in the purchaser free and clear of all
liens, security interests and encumbrances, including without limitation, liens,
security interests and encumbrances junior or subordinate to the liens, security
interests and encumbrances created by this Instrument.  Upon any
lawful sale of the Collateral or any portion thereof pursuant to the provisions
of this Article V, the
receipt by Secured Party, Trustee, the sheriff or other official or party
responsible for conducting the sale, shall be sufficient discharge to the
purchaser or purchasers at any sale for the purchase money, and such purchaser
or purchasers and the heirs, devisees, personal representatives, successors and
assigns thereof shall not, after paying such purchase money and receiving such
receipt of Secured Party, Trustee, the sheriff or such other official or party,
be obliged to see to the application thereof or be in anywise answerable for any
loss, misapplication or nonapplication thereof.  Any purchaser at a
sale will, subject to mandatory redemption periods, if any, receive immediate
possession of the Collateral purchased, and Debtor agrees that if Debtor retains
possession of the Collateral or any part thereof subsequent to such sale, Debtor
will be considered a tenant at sufferance of the purchaser, and will, if Debtor
remains in possession after demand to remove, be guilty of forcible detainer,
and will be subject to eviction and removal, forcible or otherwise, with or
without process of law and all damages to Debtor by reason thereof are hereby
expressly waived by Debtor.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section
5.4             Personal
Property.  Upon the occurrence of any Event of Default, or at
any time thereafter, in addition to all other rights, powers and remedies herein
conferred or conferred by operation of law, Secured Party shall have all of the
rights and remedies of an assignee and secured party granted by applicable law,
including without limitation, the applicable Uniform Commercial Code as then in
effect, and shall, to the extent permitted by applicable law, have the right and
power, but not the obligation, to take possession of the personal property
included in the Collateral and any proceeds thereof wherever located, and for
that purpose Secured Party may enter upon any premises on which any or all of
such personal property is located and take possession of and operate such
personal property or remove the same therefrom.  Secured Party may
require Debtor to assemble such personal property and make it available to
Secured Party at a place to be designated by Secured Party that is reasonably
convenient to both parties.  The following presumptions shall exist
and shall be deemed conclusive with regard to the exercise by Secured Party of
any of its remedies with respect to personal property:

     

    A.           If
notice is required by applicable law, Debtor agrees that ten days’ prior written
notice of the time and place of any public sale or of the time after which any
private sale or any other intended disposition thereof is to be made shall be
deemed reasonable notice to Debtor.  No such notice is necessary if
such property is perishable, threatens to decline speedily in value or is of a
type customarily sold on a recognized market.

     

    B.           If
Secured Party in good faith believes that the Securities Act of 1933 or any
other state or federal law prohibits or restricts the customary manner of sale
or distribution of any of such property, Secured Party may sell such property
privately or in any other manner deemed advisable by Secured Party at such price
or prices as Secured Party determines in its sole discretion.  Debtor
recognizes that such prohibition or restriction may cause such property to have
less value than it otherwise would have and that, consequently, such sale or
disposition by Secured Party may result in a lower sales price than if the sale
were otherwise held.

     

    Section
5.5             Possession.  Upon
the occurrence of any Event of Default, or at any time thereafter, in addition
to all other rights, powers and remedies herein conferred or conferred by
operation of law, Secured Party shall, to the extent not prohibited by
applicable law, have the right and power, but not the obligation, to enter upon
and take immediate possession of the Collateral or any portion thereof, to
exclude Debtor therefrom, to hold, use, operate, manage, enjoy and control such
Collateral, to make all such repairs, replacements, alterations, additions and
improvements to the same as Secured Party may deem proper or expedient, to sell
all of the severed and extracted ore, gold and Other Minerals included in the
same subject to the provisions of Article III
hereof, to demand, collect and retain all other earnings, rents, issues,
profits, proceeds and other sums due or to become due with respect to such
Collateral accounting for and applying to the payment of the Secured Obligations
only the net earnings arising therefrom after charging against the receipts
therefrom all fees, costs, expenses, charges, damages and losses incurred by
reason thereof plus interest thereon without any liability to Debtor in
connection therewith.  Such possession shall at once be delivered to
Secured Party upon request, and on refusal or failure to so deliver possession,
the delivery of such possession may be enforced by Secured Party by any
appropriate civil suit or proceeding.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section
5.6             Appointment of
Receiver.  Upon the occurrence of any Event of Default, or at
any time thereafter, in addition to all other rights, powers and remedies herein
conferred or conferred by operation of law, Secured Party shall be entitled to
the appointment of a receiver of the Collateral without the necessity of the
posting of a bond or notice; and shall, to the extent not prohibited by
applicable law, be entitled to such receiver as a matter of right, without
regard to the solvency or insolvency of Debtor, the value or adequacy of the
Collateral or the Collateral being in danger of being materially injured or
reduced in value as security by removal, destruction, deterioration,
accumulation of prior liens or otherwise; and such receiver may be appointed by
any court of competent jurisdiction upon ex parte application,
and without notice, notice being expressly waived.  Debtor does hereby
consent to the appointment of such receiver or receivers, waive any and all
defenses to such appointment, and agree not to oppose any application therefor
by Secured Party, and agree that such appointment shall in no manner impair,
prejudice or otherwise affect the rights of Secured Party under this Article V.  Nothing
herein is to be construed to deprive Secured Party of any other right, remedy or
privilege it may now or hereafter have under law to have a receiver
appointed.  Any money advanced by Secured Party in connection with any
such receivership shall be a demand obligation owing by Debtor to Secured
Party.  Any such receiver shall have all powers conferred by the court
appointing such receiver, which powers shall, to the extent not prohibited by
applicable law include, without limitation, the right to enter upon and take
immediate possession of the Collateral or any part thereof, to exclude Debtor
therefrom, to hold, use, operate, manage and control such Collateral, to make
all such repairs, replacements, alterations, additions and improvements to the
same as such receiver or Secured Party may deem proper or expedient, to lease,
sell or otherwise transfer the Collateral or any portion thereof as such
receiver or Secured Party may deem proper or expedient, to lease, sell or
otherwise transfer the Collateral or any portion thereof as such receiver or
Secured Party may deem proper or expedient, to sell all of the severed and
extracted ore, gold and Other Minerals included in the same subject to the
provisions of Article III
hereof, to demand and collect all of the other earnings, rents, issues, profits,
proceeds and other sums due or to become due with respect to such Collateral,
accounting for only the net earnings arising therefrom after charging against
the receipts therefrom all fees, costs, expenses, charges, damages and losses
incurred by reason thereof plus interest thereon without any liability to Debtor
in connection therewith which net earnings shall be turned over by such receiver
to Secured Party to be applied by Secured Party to the payment of the Secured
Obligations in the order set forth in Section 5.10.

     

    Section
5.7             Waiver by
Debtor.  To the extent not prohibited by applicable law, Debtor
agrees that Debtor shall not at any time have, invoke, utilize or assert any
right under any laws pertaining to the marshaling of assets or liens, the sale
of property in the inverse order of alienation, the exemption of homesteads, the
administration of estates of decedents, appraisement, moratorium, valuation,
stay, extension or redemption now or hereafter in force, and Debtor hereby
waives the benefit of all such laws to the fullest extent not prohibited by
applicable law.

     

    Section
5.8             Remedies
Cumulative.  All rights, powers and remedies herein conferred
are cumulative, and not exclusive, of (A) any and all other rights and
remedies herein conferred, (B) any and all rights, powers and remedies
existing at law or in equity, and (C) any and all other rights, powers and
remedies provided for in any other documents or instruments evidencing, securing
or relating to the Secured Obligations, and Secured Party shall, in addition to
the rights, powers and remedies herein conferred, be entitled to avail itself of
all such other rights, powers and remedies as may now or hereafter exist at law
or in equity for the collection of and enforcement of the Secured Obligations
and the enforcement of the warranties, representations, covenants, indemnities
and other agreements contained in this Instrument and the other documents and
instruments evidencing, securing or relating to the Secured Obligations and the
foreclosure of the liens and security interests created by this
Instrument.  Each and every such right, power and remedy may be
exercised from time to time and as often and in such order as may be deemed
expedient by Secured Party and the exercise of any such right, power or remedy
shall not be deemed a waiver of the right to exercise, at the same time or
thereafter, any other right, power or remedy.  No delay or omission by
Secured Party or by Trustee, the sheriff or other official or person in the
exercise of any right, power or remedy will impair any such right, power or
remedy or operate as a waiver thereof or of any other right, power or remedy
then or thereafter existing.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section
5.9             Costs and
Expenses.  All fees, costs and expenses (including without
limitation, attorneys’ fees and legal expenses), incurred by or on behalf of
Secured Party or Trustee in protecting and enforcing their rights hereunder or
incident to the enforcement of this Instrument and the liens and security
interests created hereby, shall be a demand obligation owing by Debtor to
Secured Party.

     

    Section
5.10           Application of
Proceeds.  The proceeds of any sale of the Collateral or any
part thereof made pursuant to this Article V shall
be applied as may be required by applicable law, or in the absence of any such
requirements, as follows:

     

    A.           First,
to the payment of all fees, costs, expenses and penalties incident to the
enforcement of this Instrument and the liens and security interests created
hereby, including without limitation, the fees, costs and expenses described in
Section 5.9
hereof;

     

    B.           Second,
to the payment of all fees, costs, expenses and penalties remaining unpaid under
the Debenture;

     

    C.           Third,
to the payment or prepayment of accrued interest remaining unpaid on the
Debenture;

     

    D.           Fourth,
to the payment or prepayment of principal remaining unpaid on the Debenture in
such order as Secured Party may elect;

     

    E.           Fifth,
to the payment or prepayment of the Secured Obligations other than the Secured
Obligations evidenced by the Debenture in such order as Secured Party may elect;
and

     

    F.           Sixth,
the remainder, if any, shall be paid to Debtor or such other person or persons
as may be legally entitled thereto.

     

    Section
5.11           Limitation on Rights and
Waivers.  All rights, powers and remedies herein conferred
shall be exercisable by Trustee and Secured Party only to the extent not
prohibited by applicable law; and all waivers and relinquishments of rights and
similar matters shall only be effective to the extent such waivers or
relinquishments are not prohibited by applicable law.

     

    ARTICLE
VI

    


    Miscellaneous
Provisions

     

    Section
6.1             Waiver.  Any
and all covenants of Debtor in this Instrument may from time to time, be waived
by Secured Party by an instrument in writing signed by Secured Party to such
extent and in such manner as Secured Party may desire, but no such waiver will
ever affect or impair Secured Party’s rights hereunder, except to the extent
specifically stated in such written instrument.  All changes to,
amendments and modifications of this Instrument must be in writing and signed by
Secured Party.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section
6.2             Severability.  If
any provision of this Instrument or of any of the instruments and documents
evidencing, securing or relating to the Secured Obligations is invalid or
unenforceable in any jurisdiction, such provision shall be fully severable from
this Instrument and the other provisions hereof and of said instruments and
documents shall remain in full force and effect in such jurisdiction and the
remaining provisions hereof shall be liberally construed in favor of Secured
Party and Trustee in order to carry out the provisions and intent
hereof.  The invalidity of any provision of this Instrument in any
jurisdiction shall not affect the validity or enforceability of any such
provision in any other jurisdiction.

     

    Section
6.3             Subrogation.  This
Instrument is made with full substitution and subrogation of Secured Party and
Trustee in and to all covenants and warranties by others heretofore given or
made with respect to the Collateral or any part thereof.

     

    Section
6.4             Financing
Statement.  This Instrument shall be deemed to be and may be
enforced from time to time as an assignment, contract, deed of trust, mortgage,
financing statement, real estate mortgage or security agreement, and from time
to time as any one or more thereof is appropriate under applicable state
law.  Debtor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Debtor at any time after the
execution of this Instrument, and hereby ratifies any thereof filed prior to the
execution of this Instrument.

     

    Section
6.5             Rate of
Interest.  Notwithstanding anything to the contrary contained
herein, no rate of interest required hereunder or under the Secured Obligations
shall exceed the maximum legal rate under applicable law, and, in the event any
such rate is found to exceed such maximum legal rate, Debtor shall be required
to pay only such maximum legal rate.

     

    Section
6.6             Governing
Law.  Insofar as permitted by otherwise applicable law, this
Instrument shall be construed under and governed by the laws of the state of
Colorado without giving effect to the conflicts of laws principles
thereof.

     

    Section
6.7             Recording.  All
recording references in the Exhibits hereto are to the official real property
records of the county in which the affected Land is located and in which records
such documents are or in the past have been customarily recorded, whether deed
records, oil and gas records, oil and gas lease records or other
records.  The references in this Instrument and in the Exhibits hereto
to liens, encumbrances and other burdens are for the purposes of defining the
nature and extent of Debtor’s warranties and shall not be deemed to ratify,
recognize or create any rights in third parties.

     

    Section
6.8             Execution in
Counterparts.  This Instrument may be executed in one or more
original counterparts.  To facilitate filing and recording, there may
be omitted from any counterpart the parts of Exhibit A containing
specific descriptions of the Collateral that relate to land located in counties
other than the county in which the particular counterpart is to be filed or
recorded.  Each counterpart shall be deemed to be an original for all
purposes, and all counterparts shall together constitute but one and the same
instrument.

     

    Section
6.9             Notices.  All
notices given hereunder shall be in writing, shall be given by certified mail,
return receipt requested, overnight courier service, telecopy, facsimile or copy
delivered by hand, and, (A) if mailed, shall be deemed received three
business days after having been deposited in a receptacle for United States
mail, postage prepaid, (B) if delivered by overnight air courier service,
shall be deemed received one business day after having been deposited with such
overnight air courier service, postage prepaid, and (C) if delivered by
telex, telecopy or hand delivery, shall be deemed received on the day the notice
is sent if the sender thereof exercises reasonable efforts to confirm receipt
thereof, in each case addressed as follows:


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    If to
Debtor:

     

    Hunter
Bates Mining Corporation

    900 IDS
Center

    80 South
8th Street

    Minneapolis,
MN  55402-8773

    Attention:
Mark D. Dacko

    Fax.
No.:  (612) 395-5276

     

    If to Secured
Party:

     

    Cabo
Drilling (America), Inc.

    3rd
Floor, 120 Lonsdale Avenue,

    North
Vancouver, BC  V7M 2E8, Canada

    Attention:
President

    Fax.
No.:  (604) 983-8056

     

    Any party
may, by written notice so delivered to the others, change the address or
facsimile number to which delivery shall thereafter be made.

     

    Section
6.10           Binding
Effect.  This Instrument shall bind and inure to the benefit of
the respective permitted successors and assigns of Debtor, Secured Party and
Trustee.

     

    Section
6.11           Filing.  Some
of the above described goods are or are to become fixtures on the Land described
in Exhibit
A.  This Instrument is to be filed for record in, among other
places, the real estate records of each county identified in Exhibit
A.  This instrument covers fixtures, as-extracted collateral
and minerals or the like or other substances of value which may be extracted
from the earth and the accounts relating thereto, including accounts resulting
from the sale thereof at the minehead thereof.  Debtor is the owner of
an interest of record in the real estate concerned.

     

    Executed
as of the date first above written.

     

    
      
        
          	
                  DEBTOR:

                	 
      
	 
      	 
      
	
                  HUNTER
      BATES MINING CORPORATION

                	 
      
	
                  a Minnesota
      corporation

                	 
      
	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Mark D. Dacko

                	 
      


        

      

    

    


    
      
        	
                Printed Name:

              	
                Mark D. Dacko

              	 
      


      

    

    
      
        	
                Title:

              	
                CFO

              	 
      


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

     

    Attached
to and made a part of that certain

    Deed of
Trust to Public Trustee,

    Mortgage,
Security Agreement, Assignment,

    Financing
Statement and Fixture Filing,

    dated as
of April 27, 2009,

    from
Hunter Bates Mining Corporation, as Debtor,

    to the
Public Trustee of Gilpin County, Colorado, as Trustee,

    and to
and for the benefit of Cabo Drilling (America), Inc., as Secured
Party

    


    1.           Fee Simple as to the following
parcels:

    


    Parcel
A-1:

    


    The BATES
LODE Mining Claim, U. S. Survey No. 224, as described in the United States
Patent recorded on November 21, 1876, in Book 62 at Page 287, EXCEPTING AND
EXCLUDING all town property rights upon the surface and all houses, buildings,
structures, lots, blocks, streets, alleys and other municipal improvements on
the surface, and all rights necessary or proper to the occupation, possession or
enjoyment of the same, as excepted and excluded in the said United States
Patent, County of Gilpin, State of Colorado.

    


    Parcel
A-2:

    


    The CARR
LODE Mining Claim, U. S. Survey No. 442, as described in the United States
Patent

    recorded
on August 7, 1879, in Book 68 at Page 349, EXCEPTING AND EXCLUDING therefrom any
portion thereof embraced by Survey No. 173, as excepted and excluded in the said
United States Patent, County of Gilpin, State of Colorado.

    


    Parcel
A-3:

    


    Mineral
rights only in and to the ELLIETH LODE Mining Claim, U. S. Survey No. 37, as
described in the United States Patent recorded on June 20, 1872, in Book 53 at
Page 277,

    County of
Gilpin, State of Colorado.

    


    Parcel
A-4:

    


    An
undivided 2/3 interest in and to the East 185 feet, being the discovery claim,
and 85 feet of the West end of Claim No. 1 East of the discovery claim of the
GERMAN LODE Mining Claim, U. S. Survey No. 204, the said GERMAN LODE Mining
Claim being described in the United States Patent recorded on August 24, 1874,
in Book 58 at Page 74, County of Gilpin, State of Colorado.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Parcel
A-5:

    


    The East
715 feet of the West 1,100 feet Claim of the GERMAN LODE Mining Claim, U. Survey
No. 204, the said GERMAN LODE Mining Claim being described in the United States
Patent recorded on August 24, 1874, in Book 58 at Page 74, County of Gilpin,
State of Colorado.

    


    Parcel
A-6:

    


    Surface
rights only in and to that portion of the HOPE NO. 2 LODE Mining Claim, U. S.
Survey No. 252, as described in the United States Patent recorded on September
16, 1970, in Book 268 at Page 311, that lies Southwest of Block 47, in the City
of Central, EXCEPTING AND EXCLUDING therefrom all town property rights upon the
surface, and excepting and excluding from the same all houses, buildings,
structures, lots, blocks, streets, alleys or other municipal improvements, as
excepted and excluded in the said United States Patent, County of Gilpin, State
of Colorado.

    


    Parcel
A-7:

    


    The
HUNTER LODE Mining Claim, U. S. Survey No. 266, as described in the United
States Patent recorded on June 22, 1883, in Book 93 at Page 137, EXCEPTING AND
EXCLUDING therefrom all town property rights upon the surface and all houses,
buildings, structures, lots, blocks, streets, alleys and other municipal
improvements on the surface, and all rights necessary or proper to the
occupation, possession or enjoyment of the same, as excepted and

    excluded
in the said United States Patent, County of Gilpin, State of
Colorado.

    


    Parcel
A-8:

    


    Mineral
rights in and to the KITTY LODE Mining Claim, U. S. Survey No. 734, a described
in the United States Patent recorded in Book 246 at Page 437, together with that
portion of the surface of the said KITTY LODE Mining Claim lying East of the
railroad right of way,

    EXCEPTING
AND EXCLUDING therefrom any portion thereof embraced by Lots Nos. 72, 204, 252,
267, 730, and all town property rights upon the surface and all houses,
buildings, structures, lots, blocks, streets, alleys and other municipal
improvements on the surface, and all rights necessary or proper to the
occupation, possession or enjoyment of the same, as excepted and excluded in the
said United States Patent, County of Gilpin, State of Colorado.

    


    Parcel
A-9:

    


    Mineral
rights only in and to the LEAVITT LODE Mining Claim, U. S. Survey No. 76, as
described in the United States Patent recorded on November 6, 1871, in Book 53
at Page 83,

    EXCEPTING
AND EXCLUDING any portion thereof embraced by Survey No. 37, as excepted and
excluded in the said United States Patent, County of Gilpin, State of
Colorado.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Parcel
A-10:

    


    Surface
rights only in and to that portion of the MOSELL LODE Mining Claim, U. S. Survey
No. 675, lying Northeast of the railroad right of way crossing the said MOSELL
LODE Mining Claim, as the said MOSELL LODE Mining Claim is described in the
United States Patent recorded on September 12, 1988, in Book 296 at Page 419,
EXCEPTING AND EXCLUDING therefrom any portion thereof embraced by Mining Claims
or Surveys Nos. 311, 500 and 609, as excepted and excluded in the said United
States Patent, County of Gilpin, State of Colorado.

    


    Parcel
A-11

    


    The SAXON
LODE Mining Claim, U. S. Survey No. 730, as described in the United States
Patent recorded in Book 296 at Page 426, EXCEPT that portion of the surface of
the said SAXON LODE Mining Claim which lies between the Gregory Street and
Lawrence Street rights of way, EXCEPTING AND EXCLUDING therefrom any portion
thereof embraced by Mining Claims or Surveys Nos. 37, 73, 76, 204, 224, 235,
266, 276, 372 506, 590, 607 and 675 and all town property rights upon the
surface and all houses, buildings, structures, lots, blocks, streets, alleys and
other municipal improvements on the surface, and all rights necessary or proper
to the occupation, possession or enjoyment of the same, as excepted and excluded
in the said United States Patent, EXCEPT surface rights in and to that portion
of the said SAXON LODE Mining Claim that is Southwest of the railroad right of
way, AND EXCEPT the railroad right of way which crosses the said SAXON LODE
Mining Claim, County of Gilpin, State of Colorado.

    


    Parcel
A-12:

    


    Lots 3, 4
and 5,

    Block
47,

    City of
Central,

    County of
Gilpin,

    State of
Colorado.

    


    Parcel
A-13:

    Lots
1-11,

    Block
48,

    City of
Central,

    County of
Gilpin,

    State of
Colorado.

    


    Parcel
A-14:

    Mineral
rights only in and to Lot 1,

    Block
49,

    City of
Central,

    County of
Gilpin,

    State of
Colorado.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Parcel
A-15:

    


    Conrad
Lot, City of Central, described in deed recorded in Book 150 at Page 332,
to-wit: Beginning at a point on Line 5-6 of Survey No. 73, Kip Lode, whence
Corner No. 5 of Survey No. 73 bears N 68 30’ E, 6.24 feet and Station No. 2
Leavitt Street bears N 5 56’ W, 297.3 feet; thence S 68 30’ W, 45.76 feet;
thence S 27 W, 76 feet; thence N 86 15’ E, 82.5 feet; thence N 3 45’ W, 79.53
feet to Place of Beginning, County of Gilpin, State of Colorado.

    


    PARCEL GROUP
B:

    


    Parcel
B-1:

    


    Mineral
rights only in and to the ELLIOTT LODE Mining Claim, U. S. Survey No. 77, as
described in the United States Patent recorded on November 6, 1871, in Book 53
at Page 80,

    EXCEPTING
AND EXCLUDING therefrom any portion thereof embraced by Survey No. 76,
as

    excepted
and excluded in the said United States Patent, County of Gilpin, State of
Colorado.

    


    Parcel
B-2:

    


    Mineral
rights only in and to the HARTFORD LODE Mining Claim, U. S. Survey No. 742, as
described in the United States Patent recorded on September 12, 1988, in Book
393 at Page 333,

    EXCEPTING
AND EXCLUDING therefrom any portion thereof embraced by Mining Claims or Surveys
Nos. 56, 64, 73, 204, 235, 506, 675, 730, 734, 739, 753, and Bledsoe and Simmons
Lodes, as excepted and excluded in the said United States Patent, County of
Gilpin, State of Colorado.

    


    Parcel
B-3:

    


    Mineral
rights only in and to the HUNTER LODE Mining Claim, U. S. Survey No. 507, as
described in the United States Patent recorded on December 16, 1881, in Book 82
at Page 12,

    County of
Gilpin, State of Colorado.

    


    Parcel
B-4:

    


    Mineral
rights only in and to the East 450 feet of the KIP LODE Mining Claim, U. S.
Survey No. 73, and surface rights only in and to that portion of the said KIP
LODE Mining Claim, U. S. Survey No. 73, that is East of the East side-line of
the Ontonagon Lode Mining Claim, U. S. Survey No. 506, as the said KIP LODE
Mining Claim, U. S. Survey No. 73, is described in the United States Patent
recorded on November 6, 1871, in Book 53 at Page 77, EXCLUSIVE OF “ground
previously conveyed, the portions of all other claims previously surveyed
and

    patented
by the United States and falling within the boundary lines hereinbefore
described,” as provided in the said United States Patent, County of Gilpin,
State of Colorado.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Parcel
B-5:

    


    Mineral
rights only in and to the McCALLISTER LODE Mining Claim, U. S. Survey No. 235,
as described in the United States Patent recorded on December 17, 1975, in Book
296 at Page 413, EXCEPTING AND EXCLUDING therefrom any portion thereof embraced
by Mining Claims or Surveys Nos. 53 and 62, as excepted and excluded in the said
United States Patent, County of Gilpin, State of Colorado.

    


    Parcel
B-6:

    


    Mineral
rights only in and to the ONTONAGON LODE Mining Claim, U. S. Survey No. 506, as
described
in the United States Patent recorded on February 28, 1892, in Book 82 at Page
40, EXCEPTING
AND EXCLUDING therefrom any portion thereof embraced by Mining Claims or Surveys
Nos. 37, 62, 73, 76, 204 and 235, as excepted and excluded in the said United
States Patent, County of Gilpin, State of Colorado.

    


    2.           Easement as to Parcel B-7:

    


    A
permanent easement to the German Mine site, located on the German Mining Claim,
Survey #204, form Packard Street in the City of Central. This easement grants
regular vehicle and truck traffic related to the German Mine site, located on
the German Mining Claim Survey # 204;

    


    And

    


    A
permanent easement to the German Mine site, located on the German Mining Claim,
Survey #204, form the nearest developed street in the Mammoth Hill Planned Unit
Development;

    


    And

    


    A surface
area of 100 foot radius from the center of the German Mine Shaft, located on the
German Mining Claim Survey #204, as designated for the purpose of erecting a
headframe, locating a hoisthouse hoist, and usual mining equipment and to
maintain an escapeway while mining the German Mining Claim is being actively
pursued, County of Gilpin, State of Colorado.

    


    3.           Lease and Option to Purchase Mammoth
Property

     

    The
entire leasehold estate of Hunter Bates Mining Corporation (as a
successor-in-interest of Wits Basin Precious Minerals Inc.) created by that
certain Mining Lease and Option to Purchase Agreement, dated effective September
20, 2007, by and between Mammoth Hill LLC and Wits Basin Precious Minerals Inc.
(the “Lease Agreement”)
and as assigned to Hunter Bates Mining Corporation pursuant to that certain
Assignment and Assumption of Lease and Option Agreement dated March 31, 2009 by
and between Wits Basin Precious Minerals Inc., as assignor, and Hunter Bates
Mining Corporation, as assignee), which Lease Agreement and exhibits thereto are
attached as Schedule 1 to Exhibit A and covers the lands described
therein.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
1 TO EXHIBIT A

    


    MINING LEASE AND OPTION TO
PURCHASE AGREEMENT

    


    THIS
MINING LEASE AND OPTION TO PURCHASE AGREEMENT  (the “Agreement”) is
dated effective the 20th day of September, 2007 (the “Effective Date”), by and
between Mammoth Hill LLC (“Owner”); and Wits Basin Precious Minerals, Inc., a
Minnesota corporation duly qualified to transact business in the State of
Colorado (“Wits”).

    


    RECITALS:

    Owner is
the  owner of those certain patented mining claims and other
properties located in Gilpin County, Colorado more specifically described on
Exhibit “A,” attached hereto and incorporated herein  by this
reference (the “Property”); and

    


    The
parties desire to enter into an agreement whereby Wits has the exclusive right
to enter on, explore for,  and, after exercise of the option herein
granted, to develop, mine, remove and sell any and all ores, Minerals (as
defined below) and materials located in, under or upon the Property, together
with the exclusive and irrevocable right to purchase the Property, all on the
terms and conditions set forth herein.

    


    NOW, THEREFORE, in
consideration of the mutual covenants and conditions set forth below, the
parties hereto agree as follows:

    


    1.           OWNER'S
REPRESENTATIONS AND WARRANTIES.

    Owner
represents and warrants to Wits as follows:  that Owner is the sole
owner of  and has the exclusive possession of the Property free and
clear of all claims, liens, encumbrances, royalties, options, agreements or
rights of third-parties whatsoever, except as specifically set forth in Exhibit
B attached hereto and incorporated herein by this reference; that all necessary
taxes and assessments have been timely made in accordance with all applicable
local, state and federal laws; that Owner is in actual possession of the
Property and knows of no claim to or possession of the Property adverse to
Owner; and that Owner has the full right, power and capacity to enter into this
Agreement on the terms and conditions herein contained.  Owner
covenants that the status of the Property, as represented above, shall not be
affected adversely because of any act or omission on the part of Owner during
the term of this Agreement.  Owner and Wits hereby expressly agree and
acknowledge that any title defects or breach or failure of the representations
and warranties set forth above are subject to the conditions and limitations set
forth in Section 7 hereof.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    2.           GRANT.

    Owner
hereby grants to Wits the exclusive possession of and right to enter upon the
Property to explore for, and after exercise of the option herein granted, to
develop, mine, remove, process and sell any and all ores, Minerals or materials
in, under or upon the Property.  Owner makes no warranty of title with
regard to any dumps or tailings that may lie in whole or part upon the
Property.  Wits shall have the right to conduct such operations,
including, but not limited to,  geological, geophysical, geochemical
and metallurgical work; surveying; excavating; sampling; assaying; testing;
drilling; conducting feasibility studies; developing, constructing and
maintaining roads, plants and sites and conducting pilot mining and processing
operations, including processing by heap leach methods and including mining by
open pit, strip, underground, solution mining or by any other method hereafter
developed, as Wits, in its sole discretion, deems advisable for such testing and
feasibility purposes; provided, however, that Wits shall not conduct commercial
mining or processing operations on the Property until it has purchased the
Property. Subject to Wits’ compliance with any applicable local, state and
federal laws, rules and regulations, Wits shall have the right to use such
resources of the Property, including, but not limited, to timber and water, as
Wits in its sole discretion deems advisable for such purposes.

    


    In
addition to the foregoing, Owner hereby grants to Wits the exclusive and
irrevocable option to purchase the Property and all of Owner's right, title and
interest in and to the Property at any time during the term of this Agreement,
in accordance with the terms of Section 5 hereof. The option to purchase shall
terminate upon termination or expiration of this Agreement, unless Wits has
previously exercised the option granted it herein.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    The word
“Minerals” as used in this Agreement shall include all minerals subject to the
patent or patents by which the Property was transferred from the Federal
Government to private ownership, any minerals which may have been transferred by
virtue of city or town site titles  and all other minerals or
substances of any nature whatsoever found in natural deposits, whether similar
or dissimilar in character to the foregoing minerals, lying in, under or upon
the Property that are vested, owned, or claimed by Owner. “Minerals” shall also
include any dumps or tailings upon the property.

     

    3.  TERM OF
AGREEMENT.

    Unless
sooner terminated as hereinafter provided, the term of this Agreement shall be
for a period of six (6) years from the Effective Date.

    


    4.    ANNUAL LEASE
PAYMENTS.

    Wits
shall pay to Owner an initial lease payment in the amount of Twenty Thousand
Dollars ($20,000.00) upon the execution of this Agreement. Unless this Agreement is
sooner terminated, commencing on the first anniversary of the Effective Date of
this Agreement, and continuing on each subsequent anniversary of the Effective
Date of this Agreement so long as this Agreement remains in effect, Wits shall
pay to Owner an annual lease payment in the amount of Twenty Thousand Dollars
($20,000.00).  All payments to Owner pursuant to this Section 4 shall
be a credit against and a deduction from the Purchase Price in the event Wits
exercises its option to purchase the Property.

    


    5.  OPTION TO
PURCHASE.

    A.  Purchase
Price.  The purchase
price of the Property is Eight Hundred Thousand Dollars
($800,000.00).   All lease payments made by Wits to Owner
pursuant to Section 4 and, to the extent set forth in Section 7, all costs and
expense incurred by Wits relating to curative title matters, shall be credited
against and a deduction from the purchase price.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    B.  Exercise
of Option; Closing.  Wits may exercise
the option to purchase granted herein at any time during the term of this
Agreement by
delivering written notice to Owner of its election to purchase. Promptly
following receipt of the notice of the exercise of the option to purchase, Owner
shall provide to Wits a preliminary title report or commitment of title
insurance covering the property.  Unless extended pursuant to Section
7 hereof, closing shall take place within ninety (90) days from the date of the
delivery of the preliminary title report or commitment of title insurance at a
title company or escrow agent located in Denver, Colorado jointly selected by
the parties. If the parties cannot agree on such selection, Wits shall select
the title company or escrow agent.   At the closing, Owner shall
deliver to Wits a fully executed and acknowledged Warranty Deed, in the form
attached hereto as Exhibit C, conveying to Wits the Property and all of Owner’s
right, title and interest in and to the Property, but reserving the Net Smelter
Returns Royalty set forth therein, together with an owner's standard form policy
of title insurance in the amount of the purchase price, and Wits shall pay to
Owner the unpaid amount of the Purchase Price, calculated in accordance with
this Section 5 and Section 7 hereof.   Owner shall execute such
other documents and perform such other acts as Wits may reasonably require to
effect  the transfer of the Property to Wits.  All recording
fees shall be paid by Wits, and Owner shall bear the cost of any transfer taxes
assessed on the conveyance. Owner shall pay the cost of the policy of title
insurance.  The parties shall each pay one-half of any other costs of
closing.

    


    6.           OBLIGATIONS OF
WITS.

    A.  Manner of
Work.  Wits agrees to
perform all work on the Property in a good workmanlike and minerlike
manner.  Wits will comply with all applicable laws, rules and
regulations of any governmental agency, whether local, state or federal;
provided, however, that Wits shall have the right at all times to contest in
good faith any such laws, rules or regulations.  Wits is specifically
obligated to comply with all laws, rules and regulations relating to the
maintenance and reclamation of the Property to the extent that such is required
for activities conducted by Wits during the term hereof. Wits shall obtain all
necessary permits for its operations on the Property.  Wits shall be
solely responsible for the performance of any reclamation work required on the
Property as a direct result of  its operations, and is granted a
limited right of entry for a period of  eighteen (18) months after
termination of this Agreement for this sole purpose. Any bond posted with the
State of Colorado or other agency shall be the sole responsibility of Wits. Any
reclamation obligation imposed  by any permit issued to Wits shall
survive termination of this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    B.           Protection
from Liens.  If  Owner
shall prepare and provide to Wits a notice, prepared in accordance with Colorado
law, establishing that Owner is not responsible  for any liens for
work, labor or materials caused to be done on the property or brought to the
property by a lessee, its contractors or its sub-contractors, Wits shall
prominently post such notice on the Property and shall keep the same posted
throughout the term of this Agreement.  Wits shall allow no liens to
remain on the Property on account of any debt for materials or services
furnished to Wits for the benefit of the Property; provided, however, that Wits
shall not be required to remove any such liens so long as Wits is contesting in
good faith the validity or the amount thereof. If any lien, purported lien, or
notice of lien is filed or attempted to be filed on the Property, Wits shall
immediately: notify Owner of such filing or attempted filing; notify Owner of
the basis therefore; and describe the action being taken by Wits to remove,
defeat or to avoid such lien or purported lien.

    C.  Liability;
Insurance.  Wits shall hold
Owner harmless and shall indemnify Owner against any claims, losses, and damages
arising out its operations on the Property and for any acts of negligence on the
part of Wits in the exercise of any of its rights pursuant to this Agreement,
provided that Owner or any person or instrumentality acting on Owner's behalf
shall not have been a contributing cause to the event giving rise to such claim,
loss or damage.  Wits shall have no responsibility or liability for
any claims or liabilities of any type whatsoever, including, but not limited to,
any such claims or liabilities arising from or relating
to  environmental or reclamation matters resulting from conditions
existing on the Property prior to the Effective Date unless directly caused by
Wits' operations or activities on the Property and Owner shall be solely
responsible for all such matters; provided, however,  that Owner and
Wits shall be proportionally responsible for any such claims or liabilities if
the operations of Wits on the Property caused such claims or
liabilities.  Wits shall at all times during the term hereof maintain
at its sole expense liability insurance in the amount of not less than One
Million Dollars ($1,000,000.00) covering its activities on the
Property.  Owner shall be a named as an additional insured on such
policy, and Wits shall provide Owner a certificate of  insurance
evidencing the same.

    D.  Taxes and
Assessments.  Wits shall pay
all taxes, assessments and other governmental charges imposed upon the Property
during the term of this Agreement other than income tax or taxes, assessments or
charges levied against Owner's personal property or income of Owner derived
through this Agreement.  Owner shall transmit promptly to Wits any
notice pertaining to such taxes, assessments and other charges which Owner may
receive.  Upon termination of this Agreement, applicable taxes shall
be prorated between Owner and Wits.  Wits shall be responsible for
taxes assessed on any of its fixtures, improvements or personal property brought
onto the Property by Wits during the term of this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    7.  TITLE
DEFECTS; DEFENSE AND PROTECTION.

    A.           Title
Documents; Data.   Promptly following execution of this
Agreement, Owner shall deliver to Wits all existing policies of title insurance,
preliminary title reports and abstracts of title to the Property and copies of
any existing plats or field notes of surveys thereon which Owner may have in its
possession.

    B.  Limitation
on Title Actions by Wits.  Prior to
the exercise of the option to purchase granted it herein, Wits shall not assert
any claim or commence any action against Owner pertaining to the status of title
to the Property or any warranties or representation made in Section 1
hereof.

    C.           Title
Defects, Defense and Protection.  (i) If at any time during the
term of this Agreement title to the Property is contested or questioned by any
person, entity or governmental agency; or (ii) if, following the exercise by
Wits of the option to purchase granted it herein, in the opinion of counsel for
Wits, Owner’s title to the Property or any part thereof is defective or less
than as represented in Section 1; Wits shall provide notice thereof to Owner and
if Owner is unable or unwilling to promptly commence action reasonably designed
to correct the defects or alleged defects in title and to thereafter diligently
pursue such action to completion, Wits may, but shall not be obligated to,
attempt to perfect, defend or initiate litigation to protect Owner’s
title.  In that event, Owner shall execute all documents and shall
take such other actions as are reasonably necessary to assist Wits in its
efforts to perfect, defend or protect Owner’s title.  The costs and
expenses of perfecting, defending or correcting title, including, but without
being limited to, the cost of attorney’s fees, costs of litigation, costs of
settlement of litigation, and costs of releasing or satisfying any mortgages,
liens or encumbrances, shall be paid as follows (a) With regard to the costs of
defense of third party claims  incurred by Owner prior to the exercise
of the Option, such costs will be borne by Owner (b) With regard to costs
elected to be incurred by Wits either in the defense of pre-exercise third party
claims, or in the defense or perfection of title defects after the exercise of
the Option,  the first One Hundred Thousand Dollars ($100,000.00)
shall be paid by Owner as a deduction from the purchase price; and
(b)  amounts in excess of One Hundred Thousand Dollars ($100,000.00)
shall be paid by Wits.  If title is less than as represented in
Section 1, then the amounts paid by Wits shall be a credit against and deduction
from the purchase price of the Property.  In the event Wits exercises
the option to purchase and subsequently the provisions of subsection (ii) above
are invoked, the time for closing the purchase of the Property shall be extended
until such matters are resolved to the reasonable satisfaction of Wits, and
appropriate adjustment made to the purchase price at closing in the manner
provided above.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    D.           General.
– Nothing herein contained and no notice or action which may be taken under this
Section shall limit or detract from the right of Wits to terminate this
Agreement at any time.

    


    8.  LESSER
INTEREST PROVISIONS.

     If
Owner's title to the Property (or any portion thereof) is less than the entire
interest or is subject to a superior adverse interest other than the paramount
title of the United States, Wits shall have the right to elect to accept such
title as Owner has by giving notice of such election to Owner.  Since
the payments and the purchase price payable to Owner pursuant to this Agreement
are predicated upon Owner owning the entire interest in the Property free and
clear of any superior adverse interests, if Owner owns less than the entire
interest, or such interest is subject to a superior adverse interest, then all
such payments shall be reduced proportionately.   Properties
represented as being fractional interests in Exhibit A hereto shall not be
deemed or regarded as insufficient by virtue of being fractional or partial
interests, unless the actual interest owned is less than the fractional interest
represented in Exhibit A.

    


    9.  ENVIRONMENTAL
CONDITIONS.

    A.  Representations
and Warranties of Owner.  Owner hereby represents and warrants
to Wits as follows: that Owner has disclosed to Wits in Exhibit D, attached
hereto and incorporated herein by this reference, any environmental problems or
conditions which Owner has knowledge of  that exist on the Property
which disclosure shall include the Phase 1 environmental report prepared at the
time of the original purchase by Owner in the 1990’s; that Owner has received no
notification from any local, state or federal governmental agency or body that
any environmental problem or condition may exist upon the Property; and that
Owner has disclosed to Wits all past environmental problems or conditions
associated with the Property known to Owner, including, but not limited to, the
release of any and all hazardous substances upon or within the Property, whether
or not any such problem or condition may have been remedied as of the Effective
Date.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    B.  Representations
and Warranties of Wits.  Wits hereby represents and warrants to
Owner as follows: that Wits has disclosed to Owner in Exhibit E, attached hereto
and incorporated herein by this reference, any environmental problems or
conditions which Wits has knowledge of that exist on the Property; that Wits has
received no notification from any local, state or federal governmental agency or
body that any environmental problem or condition may exist upon the Property;
and that Wits has disclosed to Owner all past environmental problems or
conditions associated with the Property known to Wits, including, but not
limited to, the release of any and all hazardous substances upon or within the
Property, whether or not any such problem or condition may have been remedied as
of the Effective Date. Wits disclosure hereunder shall include any Phase 1 or
expanded environmental report prepared as to the Property, or as to properties
owned, controlled, leased or optioned by Wits within 2500 feet of the exterior
boundaries of the Property.

    


    C.  Environmental
Assessment. Absent actions or claims against Wits by third parties
related to the actions of Owner or the condition of the Property on the date of
this Agreement, Wits shall make no environmental claims against Owner during the
option period .  If this Agreement is in effect on the date two (2)
years from the Effective Date, Wits, at its cost, shall conduct or shall cause a
qualified engineering or environmental firm to conduct an environmental survey
or assessment of the Property designed to identify all conditions then existing
on the Property which might then or in the future give rise to any environmental
claim or liability or to any obligation to undertake corrective or remedial
action or present or future reclamation obligations.  Such report
shall contain, at a minimum:  a detailed description of each such
condition: the likely activity or cause of such condition;  an
estimate of the time of occurrence of such activities or conditions, including
specifically whether it existed prior to the Effective Date; and a description
of the remedial or corrective action likely to be required and an estimate of
its cost.  Such report shall be used solely as a basis for determining
the respective responsibilities of the parties with respect to reclamation and
environmental matters pursuant to this Agreement.   With regard
to any pre-existing adverse environmental conditions on the
property  pre-dating the Option, such conditions shall be presumed to
be the responsibility of Owner, unless any costs of required remediation,
reclamation or response are agreed to be borne by Wits, in which case they shall
be a deduction from the purchase price. With regard to any exacerbation of
pre-existing environmental conditions which may be caused by the operations or
activities of Wits, the report shall allocate responsibility for any required
remediation, reclamation or response between Owner and Wits, in which case
Owner’s share shall be a deduction from the purchase price  with the
costs of required remediation, reclamation or response to be borne initially by
Wits. With regard to any required remediation, response or reclamation which is
required solely as a response to the activities or operations of Wits, the
report shall allocate such responsibility to Wits.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    The initial Phase 1 report on the
property identified the presence of some mine dumps on the Property which
pre-dated the acquisition by Owner. It is the intent of the parties that removal
or remediation of the mine dumps shall not be a required response pursuant to
the terms of this contract unless such removal or remediation is required as a
response to, or, by virtue of third party demand or action. enforceable against
either or both of Owner or Wits.

    


    10.  TERMINATION; REMOVAL OF
PROPERTY.

    A.  Termination
by Owner.  In the event
Owner considers that Wits has not complied with any of its obligations
hereunder, either express or implied  (other than the failure to make
the annual payments provided for in Section 4),  Owner shall give
notice to Wits setting forth specifically in what respect it is claimed that
Wits has breached this Agreement.  The giving of such notice by Owner
and the lapse of thirty (30) days after its effective date without Wits’
commencing action reasonably designed to cure the alleged breaches, and without
Wits thereafter diligently completing such cure, shall be a condition precedent
to any action by Owner for any cause hereunder.  Neither the service
of said notice nor the doing of any acts by Wits aimed to meet all or any of the
alleged breaches shall be deemed an admission or presumption that Wits has
failed to perform all of its obligations hereunder.  This Agreement
shall not be terminated or cancelled in whole or in part for failure of Wits to
perform any express or implied obligation, other than the failure to make a
payment pursuant to Section 4, until it shall have been finally judicially
determined that such failure exists.  Any decree of termination shall
be in the alternative, providing for termination unless Wits complies with the
obligations breached within a reasonable time to be determined by the
court.

    B.  Failure
to Make Payments.  If Wits fails to
timely make a payment pursuant to Section 4, Owner shall give notice to Wits of
such failure to pay and if  Wits does not make such payment within
fifteen (15) days of the effective date of such notice, Owner may terminate this
Agreement by delivering to Wits written notice of such
termination.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    C.           Termination
by Wits.  Wits shall have
the right to terminate this Agreement upon thirty (30) days prior notice to
Owner.  Upon termination, all right, title and interest of Wits under
this Agreement shall terminate and Wits shall not be required to make any
further payment, the due date of which would occur on any date following the
effective date of such notice of termination.  Upon termination, Wits
shall be relieved of any and all further obligations set out in this Agreement
except those obligations, if any, which accrue prior to such termination,
specifically including, but not limited to, reclamation
obligations.  Any taxes, assessments or governmental charges shall be
prorated as of the termination date, and paid by Wits within thirty (30) days
after written request from Owner.

    D.           Removal
of Property.  Upon any
termination or expiration of this Agreement, Wits shall have a period of one
hundred eighty (180) days from and after the effective date of termination in
which to remove from the Property all of its machinery, buildings, structures,
facilities, equipment and other property of every nature and description
erected, placed or situated thereon by Wits, except mine timber,
foundations,  supports, track and pipe placed in shafts, drifts or
openings on the Property.  Any property of Wits not removed at the end
of said one hundred eighty (180) day period shall become the property of
Owner.  Wits shall have the right to keep a non-resident watchman on
the Property during said one hundred eighty (180) day period.

    E.  Delivery
of Data.  Upon termination
or expiration of this Agreement, Wits shall deliver to Owner all
non-interpretative factual data produced as a result of Wits' operations on the
Property, including, but not limited to, assays, core assay data, drill logs,
assay maps, geophysical and geochemical data and any related maps, and
production records.  If requested by Owner, any surviving drill core
or core splits  in the original collection boxes with any labels or
footage markers intact shall either be left on the Property if stored thereon or
shall be made available for pick up by Owner, at Owner's cost,  for a
period of one hundred eighty (180) days after termination, after which Wits may
destroy or otherwise dispose of the same.  Wits makes absolutely no
warranty with respect to, and shall in no manner be responsible for, the
accuracy or completeness of any such data.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    11.  FORCE
MAJEURE.

    The
obligations of either  party hereunder (except for the obligation to
make annual payments) shall be suspended to the extent and for the period that
performance is prevented by any cause, whether foreseeable or unforeseeable,
beyond its reasonable control, including, without limitation: labor
disputes  (however arising and whether or not employee demands are
reasonable or within the power of the party to grant); acts of God; laws,
regulations, orders, proclamation, instructions or requests of any government or
governmental entity; judgments or orders of any court; inability to obtain on
reasonably acceptable terms and within such reasonable periods of time as are
customary in the jurisdiction, any public or private license, permit or other
authorization; curtailment or suspension of activities to remedy or avoid an
actual or alleged, present or prospective violation of federal, state or local
environmental standards; acts of war or conditions arising out of or
attributable to war, whether declared or undeclared; terrorism, riot, civil
strife, insurrection or rebellion; fire, explosion, earthquake, storm, flood,
sink holes, drought or other adverse weather condition; delay or failure by
suppliers or transporters of materials, parts, supplies, services or equipment
or by contractors' or subcontractors' shortage of, or inability to obtain,
labor, transportation, materials, machinery, equipment, supplies, utilities or
services; accidents; breakdown of equipment, machinery or facilities; or any
other cause whether similar or dissimilar to the foregoing.  The
affected party shall promptly give notice to the other party of the suspension
of performance, stating therein the nature of the suspension, the reasons
therefor, the measures, if any, being taken to alleviate the suspension, and the
expected duration thereof.  The affected party shall resume
performance as soon as reasonably possible.

    


    12.         NOTICE.

    Any
notices or communications required or permitted hereunder shall be in writing
and shall be effective when personally delivered to or when
addressed:

    


    
      
        
          	
                  If
      to Owner:

                	
                  Mammoth
      Hill LLC.

                	
                  Copy
      to:

                	
                  John
      R. Henderson

                
	 
      	
                  Attn:
      Bill Ogg

                	 
      	
                  Law
      Offices of John R. Henderson

                
	 
      	
                  35
      Wedge Way

                	 
      	
                  2960
      Diagonal Hwy.-Suite 207

                
	 
      	
                  Littleton,
      CO 80123

                	 
      	
                  Boulder,
      CO 80301

                


        

      

    

    


    
      
        	
                If
      to Wits:

              	
                Wits
      Basin Precious Minerals, Inc.

              
	 
      	
                Attn:
      Stephen King, President

              
	 
      	
                IDS
      Center, Suite 900

              
	 
      	
                80
      South 8th
      Street

              
	 
      	
                Minneapolis,
      MN 55402

              


      

    

    


    and
deposited, postage prepaid, and registered or certified, return receipt
requested, in the United States Mail.  Either Owner or Wits may, by
notice to the other given as set forth herein, change its mailing address for
purposes of future notices.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    13.         TRANSFER OF
INTEREST.

    Any
assignment of interest under this Agreement shall be made expressly subject to
this Agreement and shall require the assignee to assume and agree in writing to
perform all of the obligations of the assignor under this Agreement as relate to
the interest assigned.  No transfer shall be effective as between the
Parties until the first day of the month following the delivery to the
non-transferring Party of satisfactory evidence of such transfer.

    


    14.  ACCESS;
CONFIDENTIALITY.

    Owner, at
its sole risk and expense, shall have access  to the Property to
inspect the same upon reasonable notice to Wits and in a manner which shall not
interfere with the operations of Wits.  All information provided to
Owner or obtained by Owner pertaining to the activities and operations of Wits,
including the terms and conditions of this Agreement, shall be maintained
confidential by Owner, Owner’s attorneys and accountants and any professional
advisors employed by Owner who have executed a confidentiality
agreement.

    


    15.         MEMORANDUM.

    Upon the
request of Wits, Owner shall execute for recording a Memorandum of this
Agreement in a form sufficient under the laws of the State of Colorado to give
notice to third parties of the rights granted hereunder.  This
Agreement shall not be recorded.

    


    16.  MISCELLANEOUS.

    The title
headings in this Agreement are inserted for convenience only and shall not be
deemed to be a part of this Agreement.  This Agreement shall inure to
the benefit of, and be  binding upon, the heirs, assigns, transferees,
personal representatives and successors in interest of the parties
hereto.  This Agreement constitutes the sole understanding of the
parties with respect to the subject matter hereof and no  modification
or alteration of the terms hereof shall be binding unless such modification or
alteration shall be in writing, executed subsequent to the date hereof by all
parties hereto.  This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same
agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    IN WITNESS WHEREOF, Owner and
Wits have executed this Agreement as of the Effective Date.

    
      
        	
                "WITS"

              	 
      	
                "OWNER"

              
	
                WITS
      BASIN PRECIOUS MINERALS, INC.

              	 
      	
                Mammoth
      Hill LLC

              
	 
      	 
      	 
      	 
      	 
      	 
      
	
                 By

              	
                /s/ Stephen D. King

              	 
      	
                By

              	
                /s/ William W. Ogg

              
	
                Title

              	
                CEO

              	 
      	 
      	
                Title

              	
                Manager/Member

              


      

    

    


    ACKNOWLEDGMENT

    


    
      
        
          	
                  STATE
      OF Georgia

                	
                  )

                
	 
      	
                  )
      ss.

                
	
                  COUNTY
      OF Dekalb

                	
                  )

                


        

      

    

    


    The
foregoing instrument was acknowledged before me this 2nd day of
October, 2007 by Stephen D. King the CEO of Wits Basin Precious Metals, Inc., on
behalf of the corporation.

    


    WITNESS
my hand and official seal.

    


    
      
        	
                /s/ Amy D. Williams

              
	
                Notary
      Public

              


      

    

     

    My
Commission Expires:  Aug. 17, 2009


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ACKNOWLEDGMENT

    


    
      
        
          	
                  STATE
      OF Colorado

                	
                  )

                
	 
      	
                  )
      ss.

                
	
                  COUNTY
      OF Boulder

                	
                  )

                


        

      

    

    


    The
foregoing instrument was acknowledged before me this 20th day of
September, 2007 by Willianm W. Ogg the Manager Member of Mammoth Hill LLC, on
behalf of the corporation.

    


    WITNESS
my hand and official seal.

    


    
      
        	
                /s/ Sara E. Morison

              
	
                Notary
      Public

              


      

    

     

    My
Commission Expire April 2, 2011


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    EXHIBIT
A TO MINING LEASE AND OPTION

    TO
PURCHASE AGREEMENT

    


    NEXT
PRESIDENT LODE MINING CLAIM, SURVEY NO. 739

    AS
DESCRIBED IN U.S. PATENT RECORDED NOVEMBER 21, 1883 IN BOOK 93 AT PAGE
467,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 204, 608, 675, AND
730, AS SET FORTH IN SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HEREBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    PECK AND
THOMAS LODE MINING CLAIM, SURVEY NO. 38 (DATE OF ENTRY: OCTOBER 27, 1868), AS
DESCRIBED IN UNITED STATES PATENT RECORDED NOVEMBER 11, 1902, IN BOOK 103 AT
PAGE 429, COUNTY OF GILPIN, STATE OF COLORADO.

    


    SIMMONS
LODE MINING CLAIM, SURVEY NO. 754

    AS
DESCRIBED IN U.S. PATENT RECORDED SEPTEMBER 13, 1988 IN BOOK 393 AT PAGE
316,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NO. 739, AS SET FORTH IN
SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HERBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    WHITESIDE
LODE MINING CLAIM, SURVEY NO. 954 (DATE OF ENTRY: JULY 26, 1886), AS DESCRIBED
IN U.S. PATENT RECORDED JANUARY 23, 1974 IN BOOK 286 AT PAGE 115,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 76, 424, 777, AND
879, AS SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF
COLORADO.

    


    AN
UNDIVIDED 1⁄2 INTEREST IN AND TO FOOT AND SIMMONS LODE MINING CLAIM, SURVEY NO.
676 (DATE OF ENTRY: AUGUST 24, 1881), AS DESCRIBED IN U.S. PATENT RECORDED
JANUARY 24, 1883 IN BOOK 93 AT PAGE 105,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    FOOT AND
SIMMONS LODE MINING CLAIM, SURVEY NO. 258 (DATE OF ENTRY: MARCH 17, 1875), AS
DESCRIBED IN U.S. PATENT RECORDED JANUARY 21, 1883 IN BOOK 93 AT PAGE
101,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    AN
UNDIVIDED 7/12 INTEREST IN AND TO BRACH LODE MINING CLAIM, SURVEY NO. 753 (DATE
OF ENTRY: MAY 25, 1883), AS DESCRIBED IN U.S. PATENT RECORDED FEBRUARY 21, 1879
IN BOOK 93 AT PAGE 573,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 38, 178, 255, 258,
609, 612, 676, 739, 754, AND 773, AS SET FORTH IN SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HEREBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    DUMP LODE
MINING CLAIM, SURVEY NO. 6875 (DATE OF ENTRY: FEBRUARY 20, 1894), AS DESCRIBED
IN U.S. PATENT RECORDED AUGUST 30, 1923 IN BOOK 187 AT PAGE 189,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 38, 212, 237A, 265,
609, 612, 753, AND 564, SAID SURVEY NO. 288 DESIGNATED AS TRACT E AND DESCRIBED
AS FOLLOWS: BEGINNING AT CORNER NO. 1 OF SAID SURVEY NO. 288 SOUTH 36°53’ WEST
336.4 FEET FROM CORNER NO. 1 OF SAID LOT 6875; THENCE NORTH 40°18’ WEST 50 FEET
TO CORNER NO. 2 OF SAID SURVEY NO. 288; THENCE NORTH 44°45’ EAST 99 FEET TO
CORNER NO. 3 OF SAID SURVEY NO. 288; THENCE SOUTH 45°15’ EAST 50 FEET TO CORNER
NO. 4 OF SAID SURVEY NO. 288; THENCE SOUTH 44°45’ WEST 101 FEET TO CORNER NO. 1
THE PLACE OF BEGINNING, AND SAID SURVEY NO. 297 DESIGNATED AS TRACT F DESCRIBED
AS FOLLOWS:  BEGINNING AT CORNER NO. 1 OF SAID SURVEY NO. 297; THENCE
NORTH 45°15’ WEST 50 FEET TO CORNER NO. 2 OF SAID SURVEY NO. 297; THENCE NORTH
44°45’ EAST 100 FEET TO CORNER NO. 3 OF SAID SURVEY NO. 297; THENCE SOUTH 45°15’
EAST 15 FEET TO CORNER NO. 4 OF SAID SURVEY NO. 297, AT SOUTH 25°15’ WEST 139.66
FEET FROM CORNER NO. 1 OF SAID LOT NO. 6875; THENCE SOUTH 44°45’ WEST 100 FEET
TO CORNER NO. 1, THE PLACE OF BEGINNING, AS SET FORTH IN SAID U.S.
PATENT,

    ALSO
EXCEPTING THEREFROM ALL THAT PORTION OF GROUND INCLUDED IN THE DUMP LODE SURVEY
NO. 6875 WHICH LIES WITHIN THE BOUNDARIES OF THE CITY OF BLACK HAWK, AS
DESCRIBED IN DEED RECORDED IN BOOK 135 AT PAGE 447, COUNTY OF GILPIN, STATE OF
COLORADO.

    


    THE EAST
904 FEET OF MOSELL LODE MINING CLAIM, SURVEY NO. 675


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    AS
DESCRIBED IN U.S. PATENT RECORDED SEPTEMBER 12, 1988 IN BOOK 296 AT PAGE
419,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 311, 500, AND 609, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    HOPE NO.
2 LODE MINING CLAIM, SURVEY NO. 252, AS DESCRIBED IN U.S. PATENT RECORDED IN
BOOK 268 AT PAGE 311,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT,

    ALSO
EXCEPTING THEREFROM THE SURFACE OF ANY PORTION LYING NORTHEASTERLY OF BLOCK 47
IN THE CITY OF CENTRAL, COUNTY OF GILPIN, STATE OF COLORADO.

    


    NEW LODE,
CITY TITLE, CITY OF CENTRAL, DESCRIBED IN DEED RECORDED FEBRUARY 12, 1894 IN
BOOK 122 AT PAGE 12, TO-WIT:  BEGINNING AT THE NORTHEASTERLY CORNER
BACK OF CLAIM, WHENCE CORNER NO. 4 SURVEY NO. 754 SIMMONS LODE BEING A GRANITE
STONE 36X9X3 INCHES IN SIZE SET IN THE GROUND WITH A MOUND OF STONES MARKED
“4-754” BEARS S. 68°E. 100 FEET, MARYLAND MOUNTAIN BEARS N.9°30’W.; THENCE
S.49°45’W. 1500 FEET; THENCE S.40°15’E. 150 FEET; THENCE N.49°45’E. 1500 FEET;
THENCE N.40°15’W. 150 FEET TO THE PLACE OF BEGINNING,

    EXCLUSIVE
OF MINERAL SURVEYS AND ALL MUNICIPAL IMPROVEMENTS AS FOLLOWS,
TO-WIT:  SURVEY NOS. 609 BRIGHTON, 612 WATERBURY, 739 NEXT PRESIDENT,
754 SIMMONS, 742 HARTFORD, 753 BRANCH, 758 BROOKLYN EAGLE, AND 6875 DUMP LODE
MINING CLAIMS, LOTS 13, 14, AND 15, IN BLOCK 46, SNELL AND GLASSON LOTS, COUNTY
OF GILPIN, STATE OF COLORADO.

    


    LA VIDA
MINING COMPANY TRACT, AS DESCRIBED IN DEED RECORDED MAY 2, 1934 IN BOOK 61 AT
PAGE 443, TO-WIT: “THAT UNPLATTED PORTION OF CITY GROUND LYING BETWEEN LINES
2-3-4 OF THE CORA H. LODE MINING CLAIM SURVEY 668, AND LINE 1-4 OF THE MINNESOTA
LODE MINING CLAIM SURVEY 729 AND THE EAST LINE OF LOTS 13 TO 18 INCLUSIVE IN
BLOCK 18 AND LOTS 1 AND 2 INCLUSIVE IN BLOCK 19,

    EXCLUDING
THAT PORTION OF LAND COVERED BY COLORADO STREET IN ADDITION THE UNPLATTED LOTS
FRONTING ON COLORADO STREET BETWEEN LINES 1-4 OF THE MINNESOTA LODE MINING CLAIM
SURVEY 729 AND THE SOUTH EAST SIDE LINE OF THE OURAY LODE MINING CLAIM SURVEY
726,” CITY OF CENTRAL COUNTY OF GILPIN, STATE OF COLORADO.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    PORTION
OF SURFACE ON JEAN LODE MINING CLAIM, AS DESCRIBED IN DEED TO CLARENCE K.
COLVIN, RECORDED NOVEMBER 11, 1899 IN BOOK 122 AT PAGE 80,
TO-WIT:  “SURFACE GROUND ON THE JEAN LODE MINING
CLAIM.  BEGINNING AT THE NORTHEASTERLY CORNER OF THE SAID CLAIM WHENCE
CORNER NO. 4 SURVEY NO. 640 FREEDOM LODE BEING A GRANITE STONE SET IN THE GROUND
AND MARKED “4/640” BEARS S.35°27’W. 290.4 FEET; THENCE S.37°30’ WEST. 1500 FEET;
THENCE N. 37°30’E. 1500 FEET; THENCE S.53°E. 150 FEET TO THE PLACE OF
BEGINNING.  THIS DEED IS MEANT TO CONVEY ALL THAT PORTION OF THE SAID
JEAN LODE WITHIN THE CITY OF CENTRAL, EXCLUSIVE OF ITS CONFLICT WITH SURVEY NOS.
640 FREEDOM, 441 RIALTO, 481 CLIPPER LODES ALSO CHESTER AND MAMIE LODES AND ALL
CITY LOTS,” CITY OF CENTRAL

    COUNTY OF
GILPIN, STATE OF COLORADO.

    


    LOTS 14
AND 15,

    BLOCK
46,

    CITY OF
CENTRAL,

    COUNTY OF
GILPIN,

    STATE OF
COLORADO

    


    AKA
GLASSON TRACT

    commencing
at a point one hundred ninety feet (190’) south of the s.w. corner of the east
abutment of the railroad bridge across PACKARD GULCH AND RUNNING THENCE
SOUTHERLY ALONG THE EAST LINE OF PACKARD STREET EIGHTY (80’) THENCE EASTERLY ONE
HUNDRED FEET (100’), THENCE NORTHERLY EIGHTY FEET (80’) THENCE WESTERLY ONE
HUNDRED FEET (100’) TO PLACE OF BEGINNING,

    COUNTY OF
GILPIN,

    STATE OF
COLORADO.

    


    Any and
all interest of Owner in and to the right-of-way and bed for the old Colrado
& Southern railroad as conveyed by deed recorded at Book 589, pages 417-420
as may lie within the boundaries of the claims, lots and parcels heretofore
described in this Exhibit A to Mining lease and Option to Purchase
Agreement.

    


    Subject
to easements and rights of way of record or revealed on surface
inspection.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
B TO MINING LEASE AND OPTION TO PURCHASE AGREEMENT

     

    1.           Taxes
for the current year, including all taxes now or heretofore assessed, due or
payable. A) The subject property may be located in a special taxing district; B)
A certificate of Taxes due listing each taxing jurisdiction may be obtained from
the County Treasurer or the County Treasurer’s authorized agent; C) Information
regarding special districts and the boundaries of such district may be obtained
from the Board of County Commissioners, the County Clerk and Recorder, or the
County Assessor.

    


    2.           All
reservations or exceptions contained in U.S. Mineral Patents as recorded,
including, but not limited to the following:

    


    Reservations
as contained in United States Patent for the FOOT & SIMMONS Lode, Survey No.
258, recorded in Book 93 at Page 101 providing as follows:

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the FOOT & SIMMONS Lode, Survey No.
676, recorded in Book 93 at Page 105 providing as follows:

    That the
Mineral Survey Lot No. 258 is excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the NEXT PRESIDENT Lode, recorded in
Book 93 at Page 467, providing as follows:

    That the
Mineral Survey Lot(s) No. 204, 608, 675 and 730 are excluded
therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the BRANCH Lode, recorded in Book 93 at
Page 573 providing as follows:

    That the
Mineral Survey Lot(s) No. 38, 255, 258, 609, 612, 676, 728, 739, 742 and 754 are
excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the PECK AND THOMAS Lode, recorded in
Book 103 at Page 429 providing as follows:

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the DUMP Lode, recorded in Book 187 at
Page 189 providing as follows:

    That the
Mineral Survey Lot(s) No. 38, 212, 237A, 265, 288, 564, 609, 612 and 763 are
excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    


    Reservations
as contained in United States Patent for the WHITESIDE Lode, recorded in Book
286 at Page 115 providing as follows:

    That the
Mineral Survey Lot(s) No. 76, 424, 777 and 879 are excluded
therefrom.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the MOSELL Lode, recorded in Book 296
at Page 419 and in Book 393 at Page 309 providing as follows:

    That the
Mineral Survey Lot(s) No. 311, 500 and 609 are excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the SIMMONS Lode, recorded in Book 393
at Page 316 providing as follows:

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    


    Reservations
and exceptions contained in Deed for the NEW Lode from the City of Central
recorded in Book 122 at Page 12, providing that Surveys No. 609, 612, 739, 742,
753, 758 and 6875 and Lots 13, 14, and 15 in Block 46, and the Snell and Glasson
lots are excluded thereform.

    


    Reservations
as contained in United States Patent for the HOPE NO. 2 Lode, recorded in Book
393 at Page 302 providing as follows:

    That the
surface thereof is excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    


    3.           Reservations
and exceptions contained in United States Patent recorded July 21, 1876 in Book
62 at Page 193, providing substantially as follows:  “That no title
shall be hereby acquired to any mine of gold, silver, cinnabar or copper or to
any valid mining claim or possession held under existing laws.”


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    4.           Subject
to an easement and right of way for the Colorado and Southern Railroad as
depicted on maps on file at Gilpin County, other than for any portion
re-conveyed to Grantor herein by that certain deed recorded in Book 589 at Page
417, Recorded of Gilpin County, Colorado, which re-conveyed segments lying
within the named properties herein conveyed are intended to pass to Grantee
herein.

    


    5.           Subject
to those rights of way for roads and roadways as depicted on the Map of the City
of Central on file at Gilpin County.

    


    6.           Any
lien or right of way by reason of inclusion of the subject property within the
Black Hawk-Central City Water and Sanitation District.

    


    7.           All
reservations and exceptions contained in the patents for lots of Blocks or
Tracts within the City of Central, County of Gilpin, State of
Colorado.

    


    8.           Any
exceptions or reservations contained in the Central City Townsite patents for
Lots 14 and 15, Block 46, City of Central.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit C to Mining Lease
and Option to Purchase Agreement

    MINING
DEED

    


    THIS MINING DEED, dated effective the
20th
day of September, 2007, is by and between Mammoth Hill LLC (herein “Grantor”);
and Wits Basin Precious Minerals, Inc., a Minnesota corporation authorized to
transact business in Colorado (herein “Wits”).

     

    Grantor, for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,  hereby
grants, bargains, sells and conveys unto Wits, its successors and assigns all
the right, title and interest  in and to the patented mining claims
and other properties situated in Gilpin County, Colorado more particularly
described in Exhibit A, attached hereto and incorporated herein by this
reference (herein the "Property"), TOGETHER WITH  all mines, minerals,
mineral substances, metals, ores, ore bearing and other mineral materials and
all water and water rights (if any) on, under, appurtenant to or in any way
pertaining to the Property.  To have and to hold the Property granted
and conveyed unto Wits, its successors and assigns, subject only to the
reservation to Grantor of the "Net Smelter Returns" royalty set forth
below.

     

    Grantor hereby warrants and covenants
to Wits that the Property is free and clear of all liens, claims, encumbrances
and burdens of any type whatsoever and Grantor warrants the title against all
persons whomsoever., subject only to the matters set forth in Exhibit B,
attached hereto and incorporated herein by this reference.

     

    There is expressly reserved unto
Grantor, its successor and assigns a two percent (2.0%) "Net Smelter Returns"
royalty, the amount of which and the computation and determination of which are
all as more particularly set forth in Exhibit C, attached hereto and
incorporated herein by this reference.

     

     IN WITNESS WHEREOF, Grantor has
executed this MINING DEED effective as of the day and year set forth
above.

    


    
      
        	 
      	
                GRANTOR:

              
	 
      	
                Mammoth
      Hill LLC

              
	 
      	 
      
	 
      	
                By

              	
                /s/ William W. Ogg

              
	 
      	
                Its

              	
                Manager/Member

              


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    ACKNOWLEDGMENT

    


    
      
        
          	
                  STATE
      OF Colorado

                	
                  )

                
	 
      	
                  )
      ss

                
	
                  COUNTY
      OF Boulder

                	
                  )

                


        

      

    

     

    The
foregoing instrument was acknowledged before me this 20th day of September, 2007
by William W. Ogg, the Manager Member of Mammoth Hill LLC, who acknowledged that
the above instrument was executed on behalf of the LLC.

    


    
      
        	 
      	
                /s/ Sara E. Morison

              
	 
      	
                Notary
      Public

              


      

    

     

    My
Commission Expires: April 21, 2011


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

    TO

    MINING
DEED

    


    NEXT
PRESIDENT LODE MINING CLAIM, SURVEY NO. 739

    AS
DESCRIBED IN U.S. PATENT RECORDED NOVEMBER 21, 1883 IN BOOK 93 AT PAGE
467,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 204, 608, 675, AND
730, AS SET FORTH IN SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HEREBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    PECK AND
THOMAS LODE MINING CLAIM, SURVEY NO. 38 (DATE OF ENTRY: OCTOBER 27, 1868), AS
DESCRIBED IN UNITED STATES PATENT RECORDED NOVEMBER 11, 1902, IN BOOK 103 AT
PAGE 429, COUNTY OF GILPIN, STATE OF COLORADO.

    


    SIMMONS
LODE MINING CLAIM, SURVEY NO. 754

    AS
DESCRIBED IN U.S. PATENT RECORDED SEPTEMBER 13, 1988 IN BOOK 393 AT PAGE
316,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NO. 739, AS SET FORTH IN
SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HERBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    WHITESIDE
LODE MINING CLAIM, SURVEY NO. 954 (DATE OF ENTRY: JULY 26, 1886), AS DESCRIBED
IN U.S. PATENT RECORDED JANUARY 23, 1974 IN BOOK 286 AT PAGE 115,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 76, 424, 777, AND
879, AS SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF
COLORADO.

    


    AN
UNDIVIDED 1⁄2 INTEREST IN AND TO FOOT AND SIMMONS LODE MINING CLAIM, SURVEY NO.
676 (DATE OF ENTRY: AUGUST 24, 1881), AS DESCRIBED IN U.S. PATENT RECORDED
JANUARY 24, 1883 IN BOOK 93 AT PAGE 105,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    FOOT AND
SIMMONS LODE MINING CLAIM, SURVEY NO. 258 (DATE OF ENTRY: MARCH 17, 1875), AS
DESCRIBED IN U.S. PATENT RECORDED JANUARY 21, 1883 IN BOOK 93 AT PAGE
101,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    AN
UNDIVIDED 7/12 INTEREST IN AND TO BRACH LODE MINING CLAIM, SURVEY NO. 753 (DATE
OF ENTRY: MAY 25, 1883), AS DESCRIBED IN U.S. PATENT RECORDED FEBRUARY 21, 1879
IN BOOK 93 AT PAGE 573,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 38, 178, 255, 258,
609, 612, 676, 739, 754, AND 773, AS SET FORTH IN SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HEREBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    DUMP LODE
MINING CLAIM, SURVEY NO. 6875 (DATE OF ENTRY: FEBRUARY 20, 1894), AS DESCRIBED
IN U.S. PATENT RECORDED AUGUST 30, 1923 IN BOOK 187 AT PAGE 189,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 38, 212, 237A, 265,
609, 612, 753, AND 564, SAID SURVEY NO. 288 DESIGNATED AS TRACT E AND DESCRIBED
AS FOLLOWS: BEGINNING AT CORNER NO. 1 OF SAID SURVEY NO. 288 SOUTH 36°53’ WEST
336.4 FEET FROM CORNER NO. 1 OF SAID LOT 6875; THENCE NORTH 40°18’ WEST 50 FEET
TO CORNER NO. 2 OF SAID SURVEY NO. 288; THENCE NORTH 44°45’ EAST 99 FEET TO
CORNER NO. 3 OF SAID SURVEY NO. 288; THENCE SOUTH 45°15’ EAST 50 FEET TO CORNER
NO. 4 OF SAID SURVEY NO. 288; THENCE SOUTH 44°45’ WEST 101 FEET TO CORNER NO. 1
THE PLACE OF BEGINNING, AND SAID SURVEY NO. 297 DESIGNATED AS TRACT F DESCRIBED
AS FOLLOWS:  BEGINNING AT CORNER NO. 1 OF SAID SURVEY NO. 297; THENCE
NORTH 45°15’ WEST 50 FEET TO CORNER NO. 2 OF SAID SURVEY NO. 297; THENCE NORTH
44°45’ EAST 100 FEET TO CORNER NO. 3 OF SAID SURVEY NO. 297; THENCE SOUTH 45°15’
EAST 15 FEET TO CORNER NO. 4 OF SAID SURVEY NO. 297, AT SOUTH 25°15’ WEST 139.66
FEET FROM CORNER NO. 1 OF SAID LOT NO. 6875; THENCE SOUTH 44°45’ WEST 100 FEET
TO CORNER NO. 1, THE PLACE OF BEGINNING, AS SET FORTH IN SAID U.S.
PATENT,

    ALSO
EXCEPTING THEREFROM ALL THAT PORTION OF GROUND INCLUDED IN THE DUMP LODE SURVEY
NO. 6875 WHICH LIES WITHIN THE BOUNDARIES OF THE CITY OF BLACK HAWK, AS
DESCRIBED IN DEED RECORDED IN BOOK 135 AT PAGE 447, COUNTY OF GILPIN, STATE OF
COLORADO.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    THE EAST
904 FEET OF MOSELL LODE MINING CLAIM, SURVEY NO. 675

    AS
DESCRIBED IN U.S. PATENT RECORDED SEPTEMBER 12, 1988 IN BOOK 296 AT PAGE
419,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 311, 500, AND 609, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    HOPE NO.
2 LODE MINING CLAIM, SURVEY NO. 252, AS DESCRIBED IN U.S. PATENT RECORDED IN
BOOK 268 AT PAGE 311,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT,

    ALSO
EXCEPTING THEREFROM THE SURFACE OF ANY PORTION LYING NORTHEASTERLY OF BLOCK 47
IN THE CITY OF CENTRAL, COUNTY OF GILPIN, STATE OF COLORADO.

    


    NEW LODE,
CITY TITLE, CITY OF CENTRAL, DESCRIBED IN DEED RECORDED FEBRUARY 12, 1894 IN
BOOK 122 AT PAGE 12, TO-WIT:  BEGINNING AT THE NORTHEASTERLY CORNER
BACK OF CLAIM, WHENCE CORNER NO. 4 SURVEY NO. 754 SIMMONS LODE BEING A GRANITE
STONE 36X9X3 INCHES IN SIZE SET IN THE GROUND WITH A MOUND OF STONES MARKED
“4-754” BEARS S. 68°E. 100 FEET, MARYLAND MOUNTAIN BEARS N.9°30’W.; THENCE
S.49°45’W. 1500 FEET; THENCE S.40°15’E. 150 FEET; THENCE N.49°45’E. 1500 FEET;
THENCE N.40°15’W. 150 FEET TO THE PLACE OF BEGINNING,

    EXCLUSIVE
OF MINERAL SURVEYS AND ALL MUNICIPAL IMPROVEMENTS AS FOLLOWS,
TO-WIT:  SURVEY NOS. 609 BRIGHTON, 612 WATERBURY, 739 NEXT PRESIDENT,
754 SIMMONS, 742 HARTFORD, 753 BRANCH, 758 BROOKLYN EAGLE, AND 6875 DUMP LODE
MINING CLAIMS, LOTS 13, 14, AND 15, IN BLOCK 46, SNELL AND GLASSON LOTS, COUNTY
OF GILPIN, STATE OF COLORADO.

    


    LA VIDA
MINING COMPANY TRACT, AS DESCRIBED IN DEED RECORDED MAY 2, 1934 IN BOOK 61 AT
PAGE 443, TO-WIT: “THAT UNPLATTED PORTION OF CITY GROUND LYING BETWEEN LINES
2-3-4 OF THE CORA H. LODE MINING CLAIM SURVEY 668, AND LINE 1-4 OF THE MINNESOTA
LODE MINING CLAIM SURVEY 729 AND THE EAST LINE OF LOTS 13 TO 18 INCLUSIVE IN
BLOCK 18 AND LOTS 1 AND 2 INCLUSIVE IN BLOCK 19,

    EXCLUDING
THAT PORTION OF LAND COVERED BY COLORADO STREET IN ADDITION THE UNPLATTED LOTS
FRONTING ON COLORADO STREET BETWEEN LINES 1-4 OF THE MINNESOTA LODE MINING CLAIM
SURVEY 729 AND THE SOUTH EAST SIDE LINE OF THE OURAY LODE MINING CLAIM SURVEY
726,” CITY OF CENTRAL COUNTY OF GILPIN, STATE OF COLORADO.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    PORTION
OF SURFACE ON JEAN LODE MINING CLAIM, AS DESCRIBED IN DEED TO CLARENCE K.
COLVIN, RECORDED NOVEMBER 11, 1899 IN BOOK 122 AT PAGE 80,
TO-WIT:  “SURFACE GROUND ON THE JEAN LODE MINING
CLAIM.  BEGINNING AT THE NORTHEASTERLY CORNER OF THE SAID CLAIM WHENCE
CORNER NO. 4 SURVEY NO. 640 FREEDOM LODE BEING A GRANITE STONE SET IN THE GROUND
AND MARKED “4/640” BEARS S.35°27’W. 290.4 FEET; THENCE S.37°30’ WEST. 1500 FEET;
THENCE N. 37°30’E. 1500 FEET; THENCE S.53°E. 150 FEET TO THE PLACE OF
BEGINNING.  THIS DEED IS MEANT TO CONVEY ALL THAT PORTION OF THE SAID
JEAN LODE WITHIN THE CITY OF CENTRAL, EXCLUSIVE OF ITS CONFLICT WITH SURVEY NOS.
640 FREEDOM, 441 RIALTO, 481 CLIPPER LODES ALSO CHESTER AND MAMIE LODES AND ALL
CITY LOTS,” CITY OF CENTRAL

    COUNTY OF
GILPIN, STATE OF COLORADO.

    


    LOTS 14
AND 15,

    BLOCK
46,

    CITY OF
CENTRAL,

    COUNTY OF
GILPIN,

    STATE OF
COLORADO

    


    AKA
GLASSON TRACT

    commencing
at a point one hundred ninety feet (190’) south of the s.w. corner of the east
abutment of the railroad bridge across PACKARD GULCH AND RUNNING THENCE
SOUTHERLY ALONG THE EAST LINE OF PACKARD STREET EIGHTY (80’) THENCE EASTERLY ONE
HUNDRED FEET (100’), THENCE NORTHERLY EIGHTY FEET (80’) THENCE WESTERLY ONE
HUNDRED FEET (100’) TO PLACE OF BEGINNING,

    COUNTY OF
GILPIN,

    STATE OF
COLORADO.

    


    Any and
all interest of Owner in and to the right-of-way and bed for the old Colrado
& Southern railroad as conveyed by deed recorded at Book 589, pages 417-420
as may lie within the boundaries of the claims, lots and parcels heretofore
described in this Exhibit A to Mining lease and Option to Purchase
Agreement.

    


    Subject
to easements and rights of way of record or revealed on surface
inspection.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    EXHIBIT
B

    TO

    MINING
DEED

    


    1.           Taxes
for the current year, including all taxes now or heretofore assessed, due or
payable. A) The subject property may be located in a special taxing district; B)
A certificate of Taxes due listing each taxing jurisdiction may be obtained from
the County Treasurer or the County Treasurer’s authorized agent; C) Information
regarding special districts and the boundaries of such district may be obtained
from the Board of County Commissioners, the County Clerk and Recorder, or the
County Assessor.

    


    2.           All
reservations or exceptions contained in U.S. Mineral Patents as recorded,
including, but not limited to the following:

    


    Reservations
as contained in United States Patent for the FOOT & SIMMONS Lode, Survey No.
258, recorded in Book 93 at Page 101 providing as follows:

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the FOOT & SIMMONS Lode, Survey No.
676, recorded in Book 93 at Page 105 providing as follows:

    That the
Mineral Survey Lot No. 258 is excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the NEXT PRESIDENT Lode, recorded in
Book 93 at Page 467, providing as follows:

    That the
Mineral Survey Lot(s) No. 204, 608, 675 and 730 are excluded
therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the BRANCH Lode, recorded in Book 93 at
Page 573 providing as follows:

    That the
Mineral Survey Lot(s) No. 38, 255, 258, 609, 612, 676, 728, 739, 742 and 754 are
excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the PECK AND THOMAS Lode, recorded in
Book 103 at Page 429 providing as follows:

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the DUMP Lode, recorded in Book 187 at
Page 189 providing as follows:

    That the
Mineral Survey Lot(s) No. 38, 212, 237A, 265, 288, 564, 609, 612 and 763 are
excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    


    Reservations
as contained in United States Patent for the WHITESIDE Lode, recorded in Book
286 at Page 115 providing as follows:

    That the
Mineral Survey Lot(s) No. 76, 424, 777 and 879 are excluded
therefrom.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the MOSELL Lode, recorded in Book 296
at Page 419 and in Book 393 at Page 309 providing as follows:

    That the
Mineral Survey Lot(s) No. 311, 500 and 609 are excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    


    Reservations
as contained in United States Patent for the SIMMONS Lode, recorded in Book 393
at Page 316 providing as follows:

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.

    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    


    Reservations
and exceptions contained in Deed for the NEW Lode from the City of Central
recorded in Book 122 at Page 12, providing that Surveys No. 609, 612, 739, 742,
753, 758 and 6875 and Lots 13, 14, and 15 in Block 46, and the Snell and Glasson
lots are excluded thereform.

    


    Reservations
as contained in United States Patent for the HOPE NO. 2 Lode, recorded in Book
393 at Page 302 providing as follows:

    That the
surface thereof is excluded therefrom.

    That the
grant is restricted to one vein or lode with the surface ground as described
therein and that any other vein or lode, should such exist, shall be excepted
and excluded.

    Subject
to the right of an adjoining proprietor of a vein or lode to extract and remove
his ore therefrom, should the same be found to penetrate or intersect the
premises.

    Subject
to the laws of the State of Colorado for working the mine, involving easements,
drainage and other necessary means to complete development.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Subject
to vested and accrued water rights for mining, agriculture, manufacturing or
other purposes and rights to ditches and reservoirs used in connection with such
water rights.

    


    3.           Reservations
and exceptions contained in United States Patent recorded July 21, 1876 in Book
62 at Page 193, providing substantially as follows:  “That no title
shall be hereby acquired to any mine of gold, silver, cinnabar or copper or to
any valid mining claim or possession held under existing laws.”

    


    4.           Subject
to an easement and right of way for the Colorado and Southern Railroad as
depicted on maps on file at Gilpin County, other than for any portion
re-conveyed to Grantor herein by that certain deed recorded in Book 589 at Page
417, Recorded of Gilpin County, Colorado, which re-conveyed segments lying
within the named properties herein conveyed are intended to pass to Grantee
herein.

    


    5.           Subject
to those rights of way for roads and roadways as depicted on the Map of the City
of Central on file at Gilpin County.

    


    6.           Any
lien or right of way by reason of inclusion of the subject property within the
Black Hawk-Central City Water and Sanitation District.

    


    7.           All
reservations and exceptions contained in the patents for lots of Blocks or
Tracts within the City of Central, County of Gilpin, State of
Colorado.

    


    8.           Any
exceptions or reservations contained in the Central City Townsite patents for
Lots 14 and 15, Block 46, City of Central.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT C TO MINING
DEED

    


    The “Net
Smelter Returns” royalty reserved to Grantor in the Mining Deed to which this
Exhibit is attached shall mean the production royalty reserved to Grantor, the
amount of which, the method and manner of computation of which and the
obligations of Wits concerning which are as follows:

    


    A.  ROYALTY
PAYMENTS

    1.  Production
Royalty.  Wits shall pay to GRANTOR a production royalty in the
amount of two percent (2%) of the Net Smelter Returns derived by Wits from the
sale of ores, minerals, concentrates, specimens  and other mineral
materials mined and marketed by Wits from the Property.

     

    2.  Definitions.

    (a)  The
term "Property" shall mean the patented mining claims and other properties
situated in Gilpin County, Colorado more particularly described in Exhibit A to
the Mining Deed to which this Exhibit C is attached.

    (b)  The
term “Net Smelter Returns” shall mean the total dollar value of returns received
by Wits from the smelter, refinery or other purchaser from the sale of ores,
minerals, concentrates, specimens and other mineral materials mined and marketed
by Wits from the Property after deductions for all of the
following:

     

    
      	
               
      

            	
              i.

            	
              Smelting,
      refining, roasting, custom milling or other processing costs (but not
      milling performed by Wits or its affiliates), treatment charges and
      penalties including, but without being limited to, metal losses, penalties
      for impurities and charges for refining, roasting, custom milling or other
      processing (but not milling performed by Wits or its affiliates), selling,
      handling, transporting and insuring ores, minerals or other mineral
      product from smelter, refinery or other processing facility to a purchaser
      or further processor; provided, however, that in the case of leaching
      operations or other solution mining techniques where the metal being
      treated is precipitated or otherwise directly derived from such leach or
      solution, all processing and recovery costs incurred by Wits beyond the
      point at which the metal being treated is in solution shall be considered
      as treatment charges, and therefore deductible, to the point of producing
      dore or other marketable product;

            


    

    
      	
            	
              ii.

            	
              Cost
      of handling, transporting and insuring ores, minerals and mineral products
      other than concentrates from the Property to the point of delivery to a
      purchaser or to a refinery, smelter, custom mill, roaster, concentrator or
      other place of treatment situated off the
  Property;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
            	
              iii.

            	
              Cost
      of handling, transporting and insuring concentrates from a concentrator or
      mill, whether such concentrator or mill is situated on or off the
      Property, to a purchaser or to a refinery, smelter, custom mill, roaster
      or other place of treatment; and

            


    

    
      	
            	
              iv.

            	
              Production
      taxes, severance taxes and sales, privilege and other taxes (other than
      income taxes measured by production or value of
    production).

            


    

    


    In the
event smelting, refining, or processing of ores, minerals or materials from the
Property is carried out in custom toll facilities owned or controlled, in whole
or in part, by Wits, then charges, costs and penalties for such smelting,
refining or processing shall mean the amount Wits would have incurred if such
smelting, refining or processing were carried out at facilities not owned or
controlled by Wits then offering comparable services for comparable products on
prevailing terms.

    


    B.  GENERAL
PROVISIONS

    1.  Computation and Payment of
Royalty.  For the purposes of computing the Net Smelter Returns
royalty, Wits shall, in accordance with sound mining and metallurgical
practices, sample, weight and measure by volumetric survey, truck factors or
other suitable methods all ores, minerals or mineral materials mined and removed
from the Property.  In order to do so, Wits shall develop an assay and
sampling plan designed to systematically sample ores or other mineral materials
mined from the Property.  Sampling of ores from the Property shall
take place prior to the mixing of ores from the Property with any other ores,
waste or mineral material. The assay and sampling plan shall be designed to
sample ores at a time, place and in a manner to indicate within a reasonable
range of  probability, the metal content of the ores mined from the
Property.  The sampling plan shall be periodically evaluated using
sound mining and metallurgical practices to insure that it is yielding results
which are representative, and fair to both parties.  Following such
sampling, Wits may mix such ores, minerals and mineral materials with ores,
minerals and mineral materials from lands other than the
Property.  Payment to Grantor shall be made within thirty (30) days
after the end of the calendar quarter during which Wits actually received Net
Smelter Returns.  Such payments shall be accompanied by a statement
showing in reasonable detail the derivation and computation of such payments.
Wits’ computation of production royalty payments, as reflected in the statements
furnished to Grantor, shall be deemed correct and binding on Grantor unless
Grantor shall dispute the correctness thereof in writing within one (1) year
after receipt by Grantor of such statement.  Wits shall permit Grantor
to inspect, during such one (1) year period, at Grantor’s expense, the books and
records of Wits which are pertinent to the determination of the production
royalty payable herein at any reasonable time during normal business hours,
provided such inspection is conducted by Grantor or by an accounting firm of
recognized standing, at least one of whose members is a member of the American
Institute of Certified Public Accountants, and provided such inspection does not
unreasonably interfere with the operations or procedures of
Wits.  Such records shall include the haulage records by weight and
date, and the results of the systematic sampling program for each lot of ore
where such ore was later mixed with  ores, waste or mineral materials
from lands other than the Property.    Wits shall be held to
a standard of good faith and fair dealing in the calculation and payment of the
royalty hereunder.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    2.  Confidentiality.  Grantor
shall not, without the prior written consent of Wits, which shall not be
unreasonably withheld, knowingly disclose to any third party any data or
information obtained hereunder which is not generally available to the public;
provided, however, Grantor may disclose data or information so obtained if
required for compliance with laws, rules, regulations or orders of a
governmental agency or stock exchange, or in the preparation of any necessary
tax statements to state, local or Federal governments, and then only to the
extent of the information that must be disclosed by law or
regulation.

     

    3.  Hedging
Transactions.  All profits and losses resulting from Wits
engaging in any commodity futures trading, option trading, or metals trading, or
any combination thereof, or any other hedging transactions designed to avoid
possible losses or obtain possible gains due to metal price fluctuations, and
all profits or losses associated therewith, shall be solely for the account of
Wits. In like manner, all ores, concentrates, specimens and other mineral
products shall be deemed sold at prevailing market prices for such materials and
commodities, and any contract, option or hedge requiring the delivery of such
mineral products at less than prevailing prices shall not result in the payment
of a lesser royalty to Grantor.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    4.  No Implied
Covenant.  Wits shall have no obligations with respect to the
royalty reserved to Grantor other than to make the payments specifically set
forth in Section B hereof if, as and when the same become due and payable and
the reservation by Grantor of the Net Smelter Returns royalty shall impose no
obligations upon Wits, express or implied, to conduct any exploration,
development or mining operations upon the Property, it being the intent of the
Grantor in reserving the Net Smelter Returns royalty that Wits shall have the
sole discretion to determine the time, method, manner and rate of conducting any
operations on the Property.  If Wits commences to mine and sell
minerals, ores or materials from the Property it may at any time and from time
to time cease its operations on the Property.  The terms and
conditions hereof shall not be construed to create, expressly or by implication,
a joint venture, mining partnership, commercial partnership, or other
partnership relationship between Grantor and Wits.

     

    5.  Payment; Notice to
Grantor.   Grantor shall provide Wits written notice
designating the name and address of a single bank or other similar institutional
depository to which all payments, notices or communications required or
permitted to be made by Wits shall be made and the party so designated by
Grantor shall be deemed to be the agent of Grantor for the purposes of
receiving, disbursing and distributing all such notices, communications or
payments.  Any payment, notice or communication to Grantor shall be
effective when personally delivered to or when deposited in the United States
mail, postage prepaid, certified or registered, and properly addressed to the
party so designated.  Any payment required to be made by Wits may be
made in currency or by draft or by check, at the option of Wits, and upon the
making of such payment to the party designated by Grantor, Wits shall be
relieved of any responsibility for the distribution of such payment to Grantor,
its successors and assigns.  Grantor may, upon 30-days written notice
to Wits, designate a successor bank or institutional
depository.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit D to Mining Lease
and Option to Purchase Agreement

    


    MAMMOTH
HILL ENVIRONMENTAL DISCLOSURES

    


    Mammoth
Hill, LLC has made the following environmental disclosures:

    


    1.
Mammoth Hill, LLC has provided Wits with a copy of an environmental Phase I
Report dated March 1994, which report was prepared at the time of Mammoth Hill,
LLC’s original purchase of properties including the Property the subject of this
Agreement.

    


    2.
Mammoth Hill, LLC and its principals have no knowledge of environmental
conditions on the property other than as disclosed in the Phase I Report
provided, have received no notification from any local, state or federal
governmental agency about any environmental condition or problem on the
Property, and have disclosed in the form of the Phase I Report all known
environmental conditions or problems associated with the Property, including,
but not limited to, the release of any and all hazardous substances upon or
within the Property, known to Mammoth Hill, LLC or its
principals.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit E to Mining Lease
and Option to Purchase Agreement

     

    Environmental Disclosure of
Wits

     

    The
Mammoth Hill claims lie in the Central City/Clear Creek Superfund site, which
encompasses the approximately 400-square-mile watershed of Clear Creek.
Superfund is a program of the U.S. Environmental Protection Agency that cleans
up abandoned hazardous waste sites. The Central City/Clear Creek Superfund
site’s EPA Comprehensive Environmental Response, Compensation, and Liability
Information System (CERCLIS) Site ID number is COD980717557. It was first listed
in 1983. Within this Superfund site, Operable Unit 4 has been designated as the
North Fork of Clear Creek and its tributaries, an area which includes the
Mammoth Hill claims. A Record of Decision for cleanup of OU4 was signed in
September, 2004, and remediation work continues at present.

     

    The water
quality of Clear Creek has been affected by historic mining activities:
according to the EPA, “abandoned mines produce acidic metal-rich water that
drains into the river. Piles of mine tailings located along or near the river’s
bank erode or leach metals into the water.” This is a concern because Clear
Creek serves as a drinking water source for communities downstream. The primary
contaminants of concern are arsenic and lead. EPA and the Colorado Department of
Public Health and Environment have instituted a number of remediation
activities, including controlling contamination from surface sediment and
treating contaminated water. This work has included capping old shafts and
adits. Wits Basin is aware of some Superfund remediation work done on the
Mammoth Hill claims, including capped shafts at the Next President, Dump, and
Foot & Simmons mines.

     

    Wits
Basin has not been notified of any specific environmental contamination on or
from the Mammoth Hill claims. However, the company is aware that historic mine
workings and mining waste piles exist on the properties and that these may
contribute acidic metal-rich water to the North Fork of Clear Creek. Wits Basin
is not aware of any other environmental issues on the Mammoth Hill
claims.

     

    More
detailed information on the Clear Creek/Central City Superfund site can be found
on web sites of the EPA (http://www.epa.gov/region08/superfund/co/ccclearcreek/)
and the Colorado Department of Public Health and Environment
(http://www.cdphe.state.co.us/HM/ClearCreek/index.htm).


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    MEMORANDUM
OF

    


    MINING LEASE AND OPTION TO
PURCHASE AGREEMENT

    


    Notice is
hereby given that pursuant to that certain Mining Lease and Option to Purchase
Agreement (therein and herein referred to as the “Agreement”), dated effective
September 20th, 2007,
Mammoth Hill LLC (therein and herein referred to as “Owner”) has granted and
hereby grants unto Wits Basin Precious Minerals Inc., a Minnesota corporation
qualified to do business in Colorado (therein and herein referred to as “Wits”)
the exclusive possession of and right to enter upon to explore and develop the
real property situated in Gilpin County, Colorado more particularly described in
Exhibit A, attached hereto and incorporated herein by this reference, TOGETHER
WITH the exclusive right and option to purchase the real property described in
said Exhibit A, all as more fully set forth in the Agreement.

     

    The term
of the Agreement is for a period of six (6) years from the effective date
thereof, unless sooner terminated pursuant to the terms thereof.

     

    The terms
and provisions of the Agreement are hereby fully incorporated into this
Memorandum by this reference and are hereby made a part hereof.

     

    Fully
executed copies of the Agreement are in the possession of Owner, whose address
is c/o Mr. Bill Ogg, 35 Wedge Way, Littleton, Colorado 80123, and Wits, whose
address is Wits Basin Precious Minerals Inc., Attn: Stephen King, IDS Center,
Suite 900, 80 South
8th
Street, Minneapolis, Minnesota 55402.

     

    IN
WITNESS WHEREOF, the parties have executed this Memorandum of Mining Lease and
Option to Purchase Agreement effective as of the date set forth
above.

     

    
      
        	
                “WITS”

              	 
      	
                “OWNER”

              
	
                WITS
      BASIN PRECIOUS MINERALS INC.

              	 
      	
                Mammoth
      Hill LLC

              
	 
      	 
      	 
      
	
                By

              	
                /s/ Stephen D. King

              	 
      	
                By

              	
                /s/ William W. Ogg

              
	
                Title

              	
                CEO

              	 
      	
                Title

              	
                Manager/Member

              


      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      
        
          	
                  STATE
      OF Georgia

                	
                  )

                
	 
      	
                  )
      ss.

                
	
                  COUNTY
      OF Dekalb

                	
                  )

                


        

      

    

    


    The
foregoing instrument was acknowledged before me this 2nd day of
October, 2007 by ____________ the ______________________ of Wits Basin Precious
Minerals Inc., on behalf of the corporation.

     

    WITNESS
my hand and official seal.

     

    
      
        	 
      	
                /s/ Amy D. Williams

              
	 
      	
                Notary
      Public

              


      

    

    


    My
Commission Expires:  Aug 17, 2009

    


    
      
        
          	
                  STATE
      OF Colorado

                	
                  )

                
	 
      	
                  )
      ss.

                
	
                  COUNTY
      OF Boulder

                	
                  )

                


        

      

    

    


    The
foregoing instrument was acknowledged before me this 20th day of
September, 2007 by William W. Ogg the Manager Member of Mammoth Hill LLC, on
behalf of the corporation.

     

    WITNESS
my hand and official seal.

     

    
      
        	 
      	
                /s/ Sara E. Morison

              
	 
      	
                Notary
      Public

              


      

    

    


    My
Commission Expires: April 2, 2011


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
A

    to

    Memorandum
of Mining Lease and Option to Purchase Agreement

    


    NEXT
PRESIDENT LODE MINING CLAIM, SURVEY NO. 739

    AS
DESCRIBED IN U.S. PATENT RECORDED NOVEMBER 21, 1883 IN BOOK 93 AT PAGE
467,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 204, 608, 675, AND
730, AS SET FORTH IN SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HEREBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    PECK AND
THOMAS LODE MINING CLAIM, SURVEY NO. 38 (DATE OF ENTRY: OCTOBER 27, 1868), AS
DESCRIBED IN UNITED STATES PATENT RECORDED NOVEMBER 11, 1902, IN BOOK 103 AT
PAGE 429, COUNTY OF GILPIN, STATE OF COLORADO.

    


    SIMMONS
LODE MINING CLAIM, SURVEY NO. 754

    AS
DESCRIBED IN U.S. PATENT RECORDED SEPTEMBER 13, 1988 IN BOOK 393 AT PAGE
316,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NO. 739, AS SET FORTH IN
SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HERBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    WHITESIDE
LODE MINING CLAIM, SURVEY NO. 954 (DATE OF ENTRY: JULY 26, 1886), AS DESCRIBED
IN U.S. PATENT RECORDED JANUARY 23, 1974 IN BOOK 286 AT PAGE 115,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 76, 424, 777, AND
879, AS SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF
COLORADO.

    


    AN
UNDIVIDED 1⁄2 INTEREST IN AND TO FOOT AND SIMMONS LODE MINING CLAIM, SURVEY NO.
676 (DATE OF ENTRY: AUGUST 24, 1881), AS DESCRIBED IN U.S. PATENT RECORDED
JANUARY 24, 1883 IN BOOK 93 AT PAGE 105,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    FOOT AND
SIMMONS LODE MINING CLAIM, SURVEY NO. 258 (DATE OF ENTRY: MARCH 17, 1875), AS
DESCRIBED IN U.S. PATENT RECORDED JANUARY 21, 1883 IN BOOK 93 AT PAGE
101,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    AN
UNDIVIDED 7/12 INTEREST IN AND TO BRACH LODE MINING CLAIM, SURVEY NO. 753 (DATE
OF ENTRY: MAY 25, 1883), AS DESCRIBED IN U.S. PATENT RECORDED FEBRUARY 21, 1879
IN BOOK 93 AT PAGE 573,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 38, 178, 255, 258,
609, 612, 676, 739, 754, AND 773, AS SET FORTH IN SAID U.S. PATENT,

    ALSO
EXCEPTING AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE
HEREBY EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS,
STRUCTURES, LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    DUMP LODE
MINING CLAIM, SURVEY NO. 6875 (DATE OF ENTRY: FEBRUARY 20, 1894), AS DESCRIBED
IN U.S. PATENT RECORDED AUGUST 30, 1923 IN BOOK 187 AT PAGE 189,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 38, 212, 237A, 265,
609, 612, 753, AND 564, SAID SURVEY NO. 288 DESIGNATED AS TRACT E AND DESCRIBED
AS FOLLOWS: BEGINNING AT CORNER NO. 1 OF SAID SURVEY NO. 288 SOUTH 36°53’ WEST
336.4 FEET FROM CORNER NO. 1 OF SAID LOT 6875; THENCE NORTH 40°18’ WEST 50 FEET
TO CORNER NO. 2 OF SAID SURVEY NO. 288; THENCE NORTH 44°45’ EAST 99 FEET TO
CORNER NO. 3 OF SAID SURVEY NO. 288; THENCE SOUTH 45°15’ EAST 50 FEET TO CORNER
NO. 4 OF SAID SURVEY NO. 288; THENCE SOUTH 44°45’ WEST 101 FEET TO CORNER NO. 1
THE PLACE OF BEGINNING, AND SAID SURVEY NO. 297 DESIGNATED AS TRACT F DESCRIBED
AS FOLLOWS:  BEGINNING AT CORNER NO. 1 OF SAID SURVEY NO. 297; THENCE
NORTH 45°15’ WEST 50 FEET TO CORNER NO. 2 OF SAID SURVEY NO. 297; THENCE NORTH
44°45’ EAST 100 FEET TO CORNER NO. 3 OF SAID SURVEY NO. 297; THENCE SOUTH 45°15’
EAST 15 FEET TO CORNER NO. 4 OF SAID SURVEY NO. 297, AT SOUTH 25°15’ WEST 139.66
FEET FROM CORNER NO. 1 OF SAID LOT NO. 6875; THENCE SOUTH 44°45’ WEST 100 FEET
TO CORNER NO. 1, THE PLACE OF BEGINNING, AS SET FORTH IN SAID U.S.
PATENT,

    ALSO
EXCEPTING THEREFROM ALL THAT PORTION OF GROUND INCLUDED IN THE DUMP LODE SURVEY
NO. 6875 WHICH LIES WITHIN THE BOUNDARIES OF THE CITY OF BLACK HAWK, AS
DESCRIBED IN DEED RECORDED IN BOOK 135 AT PAGE 447, COUNTY OF GILPIN, STATE OF
COLORADO.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    THE EAST
904 FEET OF MOSELL LODE MINING CLAIM, SURVEY NO. 675

    AS
DESCRIBED IN U.S. PATENT RECORDED SEPTEMBER 12, 1988 IN BOOK 296 AT PAGE
419,

    EXCEPTING
THEREFROM ANY PORTION THEREOF IN CONFLICT WITH SURVEY NOS. 311, 500, AND 609, AS
SET FORTH IN SAID U.S. PATENT, COUNTY OF GILPIN, STATE OF COLORADO.

    


    HOPE NO.
2 LODE MINING CLAIM, SURVEY NO. 252, AS DESCRIBED IN U.S. PATENT RECORDED IN
BOOK 268 AT PAGE 311,

    EXCEPTING
AND EXCLUDING ALL TOWN PROPERTY RIGHTS UPON THE SURFACE, AND THERE ARE HEREBY
EXPRESSLY EXCEPTED AND EXCLUDED FROM THE SAME ALL HOUSES, BUILDINGS, STRUCTURES,
LOTS, BLOCKS, STREETS, ALLEYS, OR OTHER MUNICIPAL IMPROVEMENTS, AS SET FORTH IN
SAID U.S. PATENT,

    ALSO
EXCEPTING THEREFROM THE SURFACE OF ANY PORTION LYING NORTHEASTERLY OF BLOCK 47
IN THE CITY OF CENTRAL, COUNTY OF GILPIN, STATE OF COLORADO.

    


    NEW LODE,
CITY TITLE, CITY OF CENTRAL, DESCRIBED IN DEED RECORDED FEBRUARY 12, 1894 IN
BOOK 122 AT PAGE 12, TO-WIT:  BEGINNING AT THE NORTHEASTERLY CORNER
BACK OF CLAIM, WHENCE CORNER NO. 4 SURVEY NO. 754 SIMMONS LODE BEING A GRANITE
STONE 36X9X3 INCHES IN SIZE SET IN THE GROUND WITH A MOUND OF STONES MARKED
“4-754” BEARS S. 68°E. 100 FEET, MARYLAND MOUNTAIN BEARS N.9°30’W.; THENCE
S.49°45’W. 1500 FEET; THENCE S.40°15’E. 150 FEET; THENCE N.49°45’E. 1500 FEET;
THENCE N.40°15’W. 150 FEET TO THE PLACE OF BEGINNING,

    EXCLUSIVE
OF MINERAL SURVEYS AND ALL MUNICIPAL IMPROVEMENTS AS FOLLOWS,
TO-WIT:  SURVEY NOS. 609 BRIGHTON, 612 WATERBURY, 739 NEXT PRESIDENT,
754 SIMMONS, 742 HARTFORD, 753 BRANCH, 758 BROOKLYN EAGLE, AND 6875 DUMP LODE
MINING CLAIMS, LOTS 13, 14, AND 15, IN BLOCK 46, SNELL AND GLASSON LOTS, COUNTY
OF GILPIN, STATE OF COLORADO.

    


    LA VIDA
MINING COMPANY TRACT, AS DESCRIBED IN DEED RECORDED MAY 2, 1934 IN BOOK 61 AT
PAGE 443, TO-WIT: “THAT UNPLATTED PORTION OF CITY GROUND LYING BETWEEN LINES
2-3-4 OF THE CORA H. LODE MINING CLAIM SURVEY 668, AND LINE 1-4 OF THE MINNESOTA
LODE MINING CLAIM SURVEY 729 AND THE EAST LINE OF LOTS 13 TO 18 INCLUSIVE IN
BLOCK 18 AND LOTS 1 AND 2 INCLUSIVE IN BLOCK 19,

    EXCLUDING
THAT PORTION OF LAND COVERED BY COLORADO STREET IN ADDITION THE UNPLATTED LOTS
FRONTING ON COLORADO STREET BETWEEN LINES 1-4 OF THE MINNESOTA LODE MINING CLAIM
SURVEY 729 AND THE SOUTH EAST SIDE LINE OF THE OURAY LODE MINING CLAIM SURVEY
726,” CITY OF CENTRAL COUNTY OF GILPIN, STATE OF COLORADO.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    PORTION
OF SURFACE ON JEAN LODE MINING CLAIM, AS DESCRIBED IN DEED TO CLARENCE K.
COLVIN, RECORDED NOVEMBER 11, 1899 IN BOOK 122 AT PAGE 80,
TO-WIT:  “SURFACE GROUND ON THE JEAN LODE MINING
CLAIM.  BEGINNING AT THE NORTHEASTERLY CORNER OF THE SAID CLAIM WHENCE
CORNER NO. 4 SURVEY NO. 640 FREEDOM LODE BEING A GRANITE STONE SET IN THE GROUND
AND MARKED “4/640” BEARS S.35°27’W. 290.4 FEET; THENCE S.37°30’ WEST. 1500 FEET;
THENCE N. 37°30’E. 1500 FEET; THENCE S.53°E. 150 FEET TO THE PLACE OF
BEGINNING.  THIS DEED IS MEANT TO CONVEY ALL THAT PORTION OF THE SAID
JEAN LODE WITHIN THE CITY OF CENTRAL, EXCLUSIVE OF ITS CONFLICT WITH SURVEY NOS.
640 FREEDOM, 441 RIALTO, 481 CLIPPER LODES ALSO CHESTER AND MAMIE LODES AND ALL
CITY LOTS,” CITY OF CENTRAL

    COUNTY OF
GILPIN, STATE OF COLORADO.

    


    LOTS 14
AND 15,

    BLOCK
46,

    CITY OF
CENTRAL,

    COUNTY OF
GILPIN,

    STATE OF
COLORADO

    


    AKA
GLASSON TRACT

    commencing
at a point one hundred ninety feet (190’) south of the s.w. corner of the east
abutment of the railroad bridge across PACKARD GULCH AND RUNNING THENCE
SOUTHERLY ALONG THE EAST LINE OF PACKARD STREET EIGHTY (80’) THENCE EASTERLY ONE
HUNDRED FEET (100’), THENCE NORTHERLY EIGHTY FEET (80’) THENCE WESTERLY ONE
HUNDRED FEET (100’) TO PLACE OF BEGINNING,

    COUNTY OF
GILPIN,

    STATE OF
COLORADO.

    


    Any and
all interest of Owner in and to the right-of-way and bed for the old Colrado
& Southern railroad as conveyed by deed recorded at Book 589, pages 417-420
as may lie within the boundaries of the claims, lots and parcels heretofore
described in this Exhibit A to Mining lease and Option to Purchase
Agreement.

    


    Subject
to easements and rights of way of record or revealed on surface
inspection.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    EXHIBIT
B

     

    Attached
to and made a part of that certain

    Deed of
Trust to Public Trustee,

    Mortgage,
Security Agreement, Assignment,

    Financing
Statement and Fixture Filing,

    dated as
of April 27, 2009,

    from
Hunter Bates Mining Corporation, as Debtor,

    to the
Public Trustee of Gilpin County, Colorado, as Trustee,

    and to
and for the benefit of Cabo Drilling (America), Inc., as Secured
Party

     

    SUBORDINATED
LIENS

     

    1.           Secondary
Deed of Trust and Security Agreement from Hunter Bates Mining Corporation, a
Minnesota corporation, to the Public Trustee of Gilpin County, for the benefit
of China Gold, LLC (as assignee of Platinum Long Term Growth V, LLC) securing
(i) an original principal indebtedness of One Million Twenty Thousand Dollars
(U.S.) pursuant to a senior secured convertible note of Wits Basin Precious
Minerals Inc. dated February 11, 2008, (ii) an original principal indebtedness
of One Hundred Ten Thousand Dollars (U.S.) pursuant to a secured promissory note
dated on or about July 10, 2008 and (iii) any other amounts and/or obligations
to China Gold, LLC under such notes, recorded on September 15, 2008 at Reception
No. 137375.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
C

     

    Attached
to and made a part of that certain

    Deed of
Trust to Public Trustee,

    Mortgage,
Security Agreement, Assignment,

    Financing
Statement and Fixture Filing,

    dated as
of April 27, 2009,

    from
Hunter Bates Mining Corporation, as Debtor,

    to the
Public Trustee of Gilpin County, Colorado, as Trustee,

    and to
and for the benefit of Cabo Drilling (America), Inc., as Secured
Party

     

    PERMITTED
LIENS

     

    1.
Easements, or claims of easements, not shown by public records.

     

    2.
Discrepancies, conflicts in boundary lines, shortage in area, encroachments, and
any facts which a correct survey and inspection of the land would disclose, and
which are not shown by the public records.

     

    3. Any
water rights or claims or title to water, in, on or under the land.

     

    4. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 21, 1876, in Book 62 at Page 287;
and any and all assignments thereof or interest therein. (Affects Parcel
A-1)

     

    5. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on August 7, 1879, in Book 68 at Page 349; and
any and all assignments thereof or interest therein. (Affects Parcel
A-2)

     

    6. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on June 20, 1872, in Book 53 at Page 277; and
any and all assignments thereof or interest therein.(Affects Parcel
A-3)

     

    7. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on August 24, 1874, in Book 58 at Page 74; and
any and all assignments thereof or interest therein. (Affects Parcels A-4 and
A-5)


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    8. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on September 16, 1970, in Book 268 at Page 311;
and any and all assignments thereof or interest therein. (Affects Parcel
A-6)

     

    9. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on June 22, 1883, in Book 93 at Page 137; and
any and all assignments thereof or interest therein. (Affects Parcel
A-7)

     

    10. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded in Book 246 at Page 437; and any and all
assignments thereof or interest therein. (Affects Parcel A-8)

     

    11. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 6, 1871, in Book 53 at Page 83; and
any and all assignments thereof or interest therein. (Affects Parcel
A-9)

     

    12. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on September 12, 1988, in Book 296 at Page 419;
and any and all assignments thereof or interest therein. (Affects Parcel
A-10)

     

    13. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded in Book 296 at Page 426; and any and all
assignments thereof or interest therein. (Affects Parcel A-11)

     

    14. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 6, 1871, in Book 53 at Page 80; and
any and all assignments thereof or interest therein.  (Affects Parcel
B-1)

     

    15. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on September 12, 1988, in Book 393 at Page 333;
and any and all assignments thereof or interest therein. (Affects Parcel
B-2)

     

    16. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on December 16, 1881, in Book 82 at Page 12;
and any and all assignments thereof or interest therein. (Affects Parcel
B-3)


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    17. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 6, 1871, in Book 53 at Page 77; and
any and all assignments thereof or interest therein. (Affects Parcel
B-4)

     

    18. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on December 17, 1975, in Book 296 at Page 413;
and any and all assignments thereof or interest therein. (Affects Parcel
B-5)

     

    19. The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on February 28, 1892, in Book 82 at Page 40;
and any and all assignments thereof or interest therein. (Affects Parcel
B-6)

     

    20.
Terms, agreements, provisions, conditions and obligations as contained in the
Mammoth Hill Project, State of Colorado, Division of Minerals and Geology,
Colorado Inactive Mine Reclamation Program, Consent for Right of Entry for
Reclamation Activities recorded on February 10, 1997 in Book 615 at Page 240.
(Affects Parcels B-3 and B-5.)

     

    21.
Reservations contained in the Patent to the City of Central recorded on July 21,
1876 , in Book 62 at Page 193, as follows: “Providing that no title shall be
hereby acquired to any mine of gold, silver, cinnabar or copper or to any valid
mining claim or possession held under existing laws.”  (Affects
Parcels A-12, A-13 and A-14)

     

    22. The
effect of the inclusion of the subject property in the Black Hawk-Central City
Sanitation District, as disclosed by the instrument recorded July 26, 1968, in
Book 259 at Page 288.

     

    23. The
effect of the inclusion of portions of the subject property in the Central City
Business Improvement District, as disclosed by the instrument recorded on May
21, 2003 at Reception No. 117343.

     

    24.
Rights of co-tenants, including, but not limited to, the right of partition.
(Affects Parcel A-4).

     

    25.
Exception of rights of way, if any, for existing roads, as contained in the Deed
from the County of Gilpin to William C. Russell, Jr. recorded on January 22,
1970, in Book 26 at Page 297.  (Affects Parcel A-15).


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    26. A one
percent (1%) net smelter return royalty as granted to GSR Goldsearch Resources
(U.S.), Inc. by the deed recorded on August 15, 1996, in Book 605 at Page 410,
and any assignment thereof or interest therein. (Affects Parcels A-1, A-4, A-5,
A-6, A-7., A-8, A-10, A-11, A-12, A-13, A-14 and A-15 and Parcels B-1, B-2, B-3,
B-4 and B-5).

     

    27. Any
question as to the size or location of the easements referred to as Parcel
B-7.

     

    28. A two
percent (2%) net smelter return royalty as granted to Kenneth Swaisland by the
deed recorded on January 22, 2009, in Gilpin County, Colorado, and any
assignment thereof or interest therein.   (Affects Parcels A-1,
A-4, A-5, A-6, A-7., A-8, A-10, A-11, A-12, A-13, A-14 and A-15 and Parcels B-1,
B-2, B-3, B-4 and B-5).

     

    29. Deed
of Trust from Hunter Bates Mining Corporation, a Minnesota corporation, to the
Public Trustee of Gilpin County, for the benefit of George E. Otten, securing an
original principal indebtedness of Six Million Seven Hundred Fifty Thousand
Canadian Dollars (CND $6,750,000.00), and any other amounts and/or obligations
dated June 6, 2008, recorded on June 25, 2008 at Reception No.
136731.