EXHIBIT 4.11  








PROPERTY ACQUISITION
AGREEMENT 



made among 



TECK COMINCO AMERICAN
INCORPORATED 



and 



WHITE KNIGHT RESOURCES
LTD. 



and 



WHITE KNIGHT GOLD
(U.S.) INC. 



in respect of 



the Celt Property,
Nevada 











Effective as of
December 1, 2004 





























PROPERTY ACQUISITION
AGREEMENT 



This Property Acquisition Agreement
(hereafter “Agreement”) is entered into and effective this 1st day of
December 2004 by and between Teck Cominco American Incorporated, a Washington corporation,
(hereafter “TCAI”) of 15918 East Euclid Avenue, Spokane, Washington 99216-1815,
White Knight Resources Ltd., a British Columbia corporation, of 922 — 510 Hastings
St. W., Vancouver B.C. Canada V6B 1L8, and White Knight Gold (U.S.) Inc., a Delaware
corporation of Suite 140, 121 Woodland Ave., Reno, Nevada, USA 89523 (hereafter
collectively referred to as “WKR”). 



RECITALS 



WHEREAS: 



     (A)       
          WKR is engaged in the acquisition and exploration of mineral properties in the
          State of Nevada; and 



     (B)       
          WKR and TCAI entered into a Financing and Acquisition Agreement with respect to
          the Fye Canyon Property dated October 20, 2004 (the “Financing
          Agreement”); and 



     (C)       
          Under the Financing Agreement WKR provided TCAI the right to enter into an
          option agreement to earn a direct ownership interest in the Celt property
          located in Nevada; and 



     (D)       
          WKR is agreeable to providing to TCAI certain rights to earn a direct ownership
          interest in the Celt property located in Nevada as provided for in this
          Agreement; and 



     (E)       
          TCAI is desirous of exercising its rights to the Celt property under the
          Financing Agreement and securing rights to earn a direct ownership interest in
          the Celt property located in Eureka County in the State of Nevada, USA and more
          particularly described in Schedule “A1” (the “Celt
          Property”), all as provided for in this Agreement; and 



     (F)       
          Upon and subject to the terms and conditions herein WKR has agreed to grant TCAI
          an option to earn an initial 51% interest in the Celt Property; and 



     (G)       
          Upon TCAI exercising the option with respect to the Celt Property a joint
          venture shall be formed amongst TCAI and WKR; and 



     (H)       
          WKR has agreed to grant TCAI an additional option to increase its interest in
          the Celt Property after the earlier of $8 million in expenditures by the joint
          venture or the delivery of a preliminary feasibility study by the joint venture. 



NOW THEREFORE, in
consideration of the premises and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows: 



	1.  	   	Option  






	1.1  	  	Subject
as hereinafter provided, WKR hereby grants TCAI an option (the “Option”)
to earn an initial 51% undivided right, title and interest in and to the Celt Property.  






	1.2  	  	As
consideration  for the granting of the Option,  TCAI shall make the following  optional
cash payments,  for an aggregate of          $750,000, to White Knight Gold (U.S.) Inc.
as follows: 





















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	  	(a) 	  	on
the first anniversary of this Agreement, $50,000;  






	  	(b) 	  	on
or before December 31, 2006, an additional $100,000;  






	  	(c) 	  	on
or before December 31, 2007, an additional $250,000; and  






	  	(d) 	  	on
or before December 31, 2008, an additional $350,000.  






	1.3  	  	TCAI
may exercise the Option by incurring the following expenditures (the “Expenditures”) on
the Celt Property:  






	  	(a)  	  	on
or before December 31, 2005, TCAI shall incur a minimum of $500,000 in
                    Expenditures (note that, subject only to §22.1, this first
amount is a                     guaranteed Expenditure under this Agreement and the
balance of the Expenditures                     are optional);  






	  	(b)  	  	on
or before December 31, 2006, TCAI shall incur a minimum of $1,250,000 in
                    Expenditures in the aggregate;  






	  	(c)  	  	on
or before December 31, 2007, TCAI shall incur a minimum of $2,500,000 in
                    Expenditures in the aggregate; and  






	  	(d)  	  	on
or before December 31, 2008, TCAI shall incur a minimum of $4,000,000 in
                    Expenditures in the aggregate.  






	  	
The
amounts required to be spent within the periods referred to in §1.3(a) to
§1.3(d) hereof are cumulative, aggregate amounts and accordingly, all Expenditures
incurred in a particular period, including any excess in the amount of Expenditures
required to be incurred to maintain the Option to the end of such period, shall be carried
over and included in the aggregate amount of Expenditures for the subsequent period. 






	1.4 	  	
If TCAI terminates the Option prior to December 31, 2005 then any shortfall between the
actual Expenditures incurred and the guaranteed Expenditure requirement of $500,000
contemplated in §1.3(a) shall be due and owing in cash within 30 days of the date of
such termination. If that shortfall is not paid by that date it shall accrue interest from
the original date due at a rate of prime, for the period of calculation, as quoted by the
Bank of America, as being charged by it on United States Dollar demand loans to its most
creditworthy domestic commercial customers (the “Prime Rate”) plus 2%,
calculated monthly, until paid. 






	1.5 	  	
Upon TCAI making the cash payments under §1.2 and expending an aggregate of
$4,000,000 in Expenditures under §1.3, TCAI shall forthwith provide WKR written
notice of such Expenditures (the “Earn-in Notice”), which shall include a
statement in reasonable detail evidencing such Expenditures and a technical report on the
results obtained from such Expenditures. 






	2.  	   	Deficiencies
in Expenditures  






	2.1 	  	
If TCAI has not incurred the requisite Expenditures under §1.3 to maintain the Option
in good standing, TCAI may pay to WKR, within 30 days following the Expenditure due date,
the amount of the deficiency and the amount of such deficiency shall thereupon be deemed
to have been Expenditures incurred by TCAI. 

























3 







	3.  	   	Expenditures
Defined  






	3.1  	  	“Expenditures” include:  






	  	(a)  	  	all
costs, expenses, charges and outlays, direct and indirect, funded or
                    incurred by or on behalf of TCAI on or in respect of the Celt
Property from the                     date hereof until the formation of the JV, and
thereafter during the term of the                     JV by the Operator, including,
without limiting generality, all costs, including                     but not limited to,
costs for prospecting, claim staking, tenure obligations,                     taxes,
mapping, surveying, permitting, geochemical surveys, geophysical surveys,
                    sampling, assaying, trenching, drilling, geochemical analyses, road
building,                     drill site preparation, drafting, report writing,
consultants, all costs related                     to the preparation of a Feasibility
Study and production program, all costs                     spent or incurred directly or
indirectly in connection with a production program                     in order to equip
the Celt Property or a part thereof for commercial production,                     all
costs, incurred or chargeable, directly or indirectly, by the Operator in
                    connection with operating the Celt Property as a mine and all other
project                     expenditures; and  






	  	(b)  	  	a
fee for administrative services and head office services overhead provided by
                    or on behalf of TCAI during the term of the Option and thereafter by
the                     Operator and not recovered directly in §3.1(a) above, which
charge shall be                     as follows:  






	  	  	(i)  	  	10%
of costs incurred prior to a production decision; and  






	  	  	(ii)  	  	3%
of mine construction costs; and  






	  	  	(iii)  	  	2%
of mine operating costs.  






	  	
The
charges set out in §3.1(b) are intended as a reimbursement of the direct costs for
the time incurred by TCAI’s or the Operator’s, as the case may be, head office
management and support functions in respect of work carried out on or in respect of the
Celt Property. It is intended that TCAI or the Operator, as the case may be, shall not
profit nor suffer loss by virtue of providing the services. This charge shall not be
subject to audit but may be reviewed, in good faith, by the parties from time to time, at
the election of either party. 






	4.  	   	Holding
of the Celt Property  






	4.1 	  	
Initially WKR shall hold title to the Celt Property in trust for the parties. TCAI may
register this Agreement against title to the Celt Property. TCAI may request that WKR and,
if so requested, WKR shall promptly execute and deliver to TCAI a transfer of the portions
of the Celt Property held by WKR in recordable form. TCAI shall then hold such portions of
the Celt Property in trust for the parties as their interests may appear as provided for
herein. On the formation of any JV under §8, the Operator shall then hold such
portions of the Celt Property in trust for the parties as their interests may appear as
provided for herein. 






	5.  	   	TCAI’s
Obligations During the Currency of the Option  






	5.1 	  	
During the currency of the Option TCAI and its employees, agents and contractors shall
have the right and option, as between TCAI and WKR, to: 






	  	(a) 	  	enter
upon the Celt Property;  























4 








	  	(b)  	  	have
exclusive and quiet possession thereof;  






	  	(c)  	  	do
such prospecting, exploration, development or other mining work thereon and
                    thereunder as TCAI in its sole discretion may consider advisable and
including,                     without limitations, the removal of ores, minerals and
metals from the Celt                     Property but only for the purpose of testing;
and  






	  	(d)  	  	bring
upon and erect upon the Celt Property such facilities and workings
                    (whether fixed or moveable) as TCAI may consider advisable.  






	5.2 	  	
During the currency of the Option TCAI shall, prior to January 31st of each
year beginning in 2006, deliver to WKR a statement showing in reasonable detail the
Expenditures incurred by TCAI during the period, under §1.3, last expired and the
aggregate Expenditures incurred to the end of such period. WKR shall have 45 days from the
time of receipt of such statement to question the accuracy thereof in writing, failing
which such statement shall be deemed to be correct and unimpeachable thereafter. If WKR
questions any statement delivered pursuant to §5.2, WKR shall have 3 months from the
time of delivery of any statement to request that TCAI’s independent external
auditors review the accounts and provide their audit opinion as to the correctness of the
statement, and: 






	  	(a)  	  	the
audit opinion shall be final and determinative of the amount of Expenditures
                    incurred for the audited period; provided that, if such audit opinion
discloses                     a deficiency in the amount of Expenditures required to be
incurred to maintain                     its Option in good standing, TCAI may pay to WKR
the amount of such deficiency                     within 15 days following receipt of
notice of such audited results, whereupon                     such amount shall be deemed
to have been Expenditures incurred during the                     audited period; and  






	  	(b)  	  	the
costs of the audit opinion shall be borne by WKR if TCAI’s statement
                    understated Expenditures or if it overstated Expenditures by not more
than 3%                     and shall be borne by TCAI if such statement overstated
Expenditures by greater                     than 3%.  






	5.3  	  	During
the currency of the Option TCAI shall: 






	  	(a)  	  	keep
the Celt Property free and clear of all liens, charges and encumbrances
                    arising from its operations hereunder (except liens for taxes not yet
due, other                     inchoate liens and liens contested in good faith by TCAI)
and shall proceed with                     all diligence to contest and discharge any
such lien that is filed and shall                     keep the Celt Property in good
standing by the doing and filing of all necessary                     work and by the
doing of all other acts and things and making all other payments
                    (said payments being considered Expenditures), which may be necessary
in that                     regard, in connection with the above and while WKR holds
title to the Celt                     Property WKR shall provide timely support to TCAI
in the processing of filings                     and payments on the Celt Property;  






	  	(b)  	  	permit
WKR, or its representatives duly authorized by it in writing, at their
                    own risk and expense, access to the Celt Property at all reasonable
times and                     access to all factual records in the possession of TCAI,
its servants and agents                     in connection with work done on or with
respect to the Celt Property;  






	  	(c)  	  	furnish
WKR with annual reports by January 31st of each year during
                    the conduct of the work carried out by TCAI on or with respect to the
Celt                     Property and results obtained, together with regular progress
updates, during                     periods of active work, on the status of  






















5 








	  	
exploration,
 and immediately or as soon as practicable  furnish WKR with any results obtained
                  which reasonably may be considered to be material to WKR for the
purpose of its meeting  applicable public disclosure                   requirements; 






	  	(d)  	  	conduct
all work on or with respect to the Celt Property in a manner consistent
                    with good exploration, engineering and mining practices and in
compliance with                     all applicable laws, rules, orders and regulations,
and indemnify and save WKR                     harmless from any and all claims, suits or
actions made or brought against it as                     a result of work done by or on
behalf of TCAI on or with respect to the Celt                     Property;  






	  	(e)  	  	provide
insurance in accordance with TCAI’s ongoing business practices.
                    Such insurance shall include, but shall not be limited to,
comprehensive general                     liability, with coverage of at least $5 million
and automobile liability                     insurance, having a limit of not less than
$2 million inclusive for any one                     occurrence, and insuring against
claims for bodily injury, including death, and                     for property damage
arising out of the use of TCAI ‘s owned, leased and                     non-owned
vehicles for the performance of any activities under this Agreement.
                    TCAI shall pay the full deductible amounts if there is a claim
against any                     policy of insurance to be provided by TCAI under §5.3(e)
of this Agreement;  






	  	(f)  	  	be
responsible for providing health, accident, and employment insurance and
                    worker’s compensation coverage for its personnel; and  






	  	(g)  	  	indemnify
and save harmless WKR and its respective directors, officers,
                    employees and agents from and against any liability whatsoever for
any loss                     (other than loss of profits), damage, claim, demand, lien,
action or suit,                     charge or expense, including legal fees, on account
of injury to or the death of                     any person, damage to or loss of any
property, or infringement or interference                     of patent, any of which
arises directly or indirectly from TCAI’s                     negligence or willful
misconduct in relation to or connection with any work done                     by or for
TCAI on or in respect of the Celt Property save and except that TCAI
                    shall not be liable for special or consequential damages, or indirect
damages or                     for acts or omissions of WKR. Any other liabilities will
be shared by the                     parties in proportion to their interest in the Celt
Property.  






	5.4  	  	Prior
to the Participation Date TCAI may recommend the abandonment of up to 20% of the initial
lands comprising the Celt Property in a given year. If WKR, within 30 days of receiving a
notice of abandonment, notifies TCAI that they wish to acquire the claims in question,
then TCAI shall cause a transfer of the claims to be abandoned to WKR, with at least 90
days good standing from the date of TCAI’s notice recommending the abandonment, as
soon as practicable thereafter and such claims shall cease to form part of the Celt
Property or be subject to this Agreement.  






	6.  	   	TCAI’s
Obligations on Termination  






	6.1  	  	TCAI
may terminate the Option at any time prior to the delivery of the Earn-in Notice by
giving notice in writing to that effect to WKR. Subject to §2.1, the Option shall
also terminate if TCAI fails to make the requisite cash payments under, and before the
dates set forth in, §1.2 or fails to make the requisite Expenditures under, and
before the dates set forth in §1.3. On termination, the Option shall be of no
further force or effect and TCAI shall have no interest in the Celt Property. However on
termination of the Option TCAI shall:  






	  	(a)  	  	leave
the Celt Property in good standing with respect to the filing of
                    assessment work for a period of 90 days from the date of termination,
free and                     clear of all liens, charges and  





















6 







	  	
encumbrances
arising from operations hereunder (except for taxes not yet due, other inchoate liens and
liens contested in good faith by TCAI during the period of such contest, such liens to be
removed by TCAI if such contest is unsuccessful) and in good standing with respect to all
applicable environmental, safety and other statutory rules, regulations and orders
arising from or applicable to work done on the Celt Property by TCAI;  






	  	(b)  	  	if
the Agreement is terminated after June 1st in any given year TCAI
                    shall be responsible for making payment with respect to the BLM and
county                     holding costs for the Property that are due in such calendar
year;  






	  	(c)  	  	upon
a written request made by WKR within 60 days of termination of the Option,
                    remove from the Celt Property, within 180 days of said request, such
equipment,                     facilities and workings (whether fixed or moveable)
brought on to, or erected on                     the Celt Property by TCAI, or arising
from work done on the Celt Property by                     TCAI; and  






	  	(d)  	  	deliver
to WKR, within 60 days of a written request made by WKR, a comprehensive
                    report on all work carried out by TCAI on the Celt Property (limited
to factual                     matters only), together with all drill cores, assay
samples, copies of all maps,                     drill logs, assay results and other
factual technical data compiled by TCAI with                     respect to the Celt
Property which were not previously delivered to WKR; and  






	  	(e)  	  	if
TCAI holds title to the Celt Property, promptly execute and deliver to WKR a
                    transfer of the Celt Property in recordable form.  






	7. 	  	Interest
to be Earned by TCAI 






	7.1 	  	
Upon TCAI exercising the Option, by making the cash payments referred to in §1.2
within the time referred to therein, incurring the Expenditures referred to in §1.3
within the time referred to therein or paying any deficiencies as provided for in
§2.1, and delivering to WKR the Earn-in Notice under §1.5, (the
“Participation Date”) TCAI shall have earned a 51% undivided right, title
and interest in and to the Celt Property and WKR shall retain a 49% interest in the Celt
Property and the parties shall form a joint venture under §8. 






	8.  	   	Formation,
Funding and Dilution of the JV  






	8.1 	  	
On the Participation Date, a joint venture (“JV”) shall be formed between
TCAI and WKR with the JV interests being 51% TCAI – 49% WKR and the JV shall be
governed by the terms outlined under §8 through §13. 






	8.2 	  	
On the Participation Date each parties initial deemed Expenditure for the purposes of the
JV shall be based on their pro rata share of total Expenditures (“TE”),
where the pro rata share of TE shall be $4,000,000 in the case of TCAI and the pro rata
share of TE shall be $3,840,000 for WKR. Subsequent to the Participation Date, the
respective interests of the parties shall be determined from time to time as being equal
to the product obtained by: 






	  	(a)  	  	multiplying
100% by;  






	  	(b)  	  	the
respective parties initial deemed Expenditures on the Participation Date
                    plus the amount of the respective parties’ contributions to
Expenditures                     subsequent to the Participation Date;  






















7 








	  	(c)  	  	divided
by the TE plus the amount of all contributions to Expenditures made
                    subsequent to the Participation Date by all parties.  






	8.3 	  	
From formation of the JV each party shall be liable for its pro rata share of costs in
accordance with its interest in the JV. 






	8.4 	  	
If a party elects not to contribute its pro rata share of Expenditures of a work program
or Feasibility Study (and the other party contributes to the shortfall thereby created),
the interests of the parties shall be adjusted according to §8.2 so that each party
holds an interest proportionate to its deemed and actual contributions. If any party
dilutes its interest to less than 10% in the JV, its interest shall then be converted to a
2% net smelter returns royalty (the “NSR”), as further defined in
Schedule “B”. However, if any program is completed with less than 80% of
the budgeted Expenditures having been incurred, the non-contributing party may contribute,
within 30 days, its proportionate share of the actual Expenditures incurred and thereby
maintain its interest. 






	8.5 	  	
A party shall be entitled to surrender its interest to the other party on notice to it. A
surrender of interest shall not release a party from liabilities accrued prior to the
effective surrender date. Should the other party not consent to receive the interest
offered for surrender under this §8.5 then the JV shall be terminated and the assets
shall be liquidated or sold and the assets or proceeds from the sale thereof distributed
to the parties, net of liabilities hereunder or related thereto, in accordance with their
interests in the JV. Each party shall be responsible for its share of all costs and
expenses related to such termination and liquidation. 






	8.6 	  	
Upon payment for Expenditures incurred by the Operator under the JV a party contributing
to those Expenditures shall be entitled to all tax benefits with respect thereto. 






	9.  	   	Management
Committee, Operator and Programs Under the JV  






	9.1 	  	
Upon the formation of a JV, a management committee (the “Management
Committee”) shall be formed to manage all exploration, development and operating
programs on the Celt Property. The Management Committee shall be comprised of two
representatives from each party having an interest in the Celt Property. Each party’s
representatives shall have a collective vote equal to the interest held by the party they
represent and the Operator shall have the deciding vote in the case of a tie. 






	9.2 	  	
Except as otherwise specifically provided for herein to the contrary, TCAI shall be the
initial operator (the “Operator”) of all programs on the Celt Property,
and shall remain as Operator so long as TCAI holds at least a 51% interest in the JV. If
TCAI holds less than a 51% interest in the JV WKR shall be entitled to elect to become
Operator. 






	9.3 	  	
Prior to a production decision the Operator shall propose draft work programs, by February
28th of each year, for Management Committee approval and carry out approved
programs. Any Feasibility Study or Preliminary Feasibility Study shall be prepared under a
separate program and budget. 






	9.4 	  	
Each party may, within 30 days of Management Committee approval, elect to contribute its
proportionate share of the Expenditures required to conduct each program. If a party (for
the purposes hereof a “Non-Contributor”) elects or is deemed to have
elected not to contribute its cost share of a program, each other party (for the purposes
hereof a “Contributor”) that has elected to contribute its cost share of
the program may give notice in writing to the Operator and 




















8 







	  	
the
Non-Contributor stating that it will contribute, in addition to its own cost share, the
cost share of the Non-Contributor.  






	9.5 	  	
Except as provided for in §9.7, the Operator will not proceed with any program which
is not fully subscribed. If the parties fully subscribe to a program, the Operator will
proceed with such program. 






	9.6 	  	
The Operator may invoice for exploration Expenditures incurred or to cash call reasonably
in advance of requirements. If a party has approved a program and does not pay the amount
invoiced for said program within 30 days, the Operator may demand payment. If payment is
not made within 30 days of demand, and subject to §9.7, the other party may elect to
either: 






	  	(a)  	  	advance
all of the unpaid cost share of the defaulting party. If the other party
                    advances such unpaid share, then they or it will be entitled to
recover the                     amount so paid, together with interest thereon from the
date so paid at a per                     annum rate equal to Prime Rate plus 4%. The
party making the advance shall have                     a lien against the defaulting
party’s interest, which it may enforce by                     selling the defaulting
party’s interest; or  






	  	(b)  	  	pay
the amount of the defaulted payment and the defaulting party shall be deemed
                    to have incurred dilution at a rate equal to twice the standard
dilution rate,                     their interest shall be adjusted and the deemed total
Expenditures of each party                     shall be adjusted to reflect the interest
held; provided that if a party’s                     interest is reduced to less
than 10% it shall be deemed to have assigned and                     conveyed its
interest to the other party and be entitled to a 2% NSR.  






	9.7 	  	
If in any year there is no approved program and circumstances are such that the Operator
must incur costs in order to maintain tenure to the Celt Property, to satisfy contractual
obligations or obligations imposed by law or to prevent waste or protect life and
property, the Operator shall be entitled to propose a program (the “mandatory
program”) of Expenditures to maintain tenure to the Celt Property, to satisfy
contractual obligations that have been entered into as the result of a previously approved
program and to satisfy obligations imposed by law or to prevent waste or protect life and
property. The mandatory program shall be deemed to be approved and each of the parties
shall be obligated to contribute its proportionate share of Expenditures. If payment is
not made within 30 days of written demand, the other party may elect to advance the amount
of the defaulted payment and the defaulting party shall be deemed to have forfeited its
rights to participate in future programs and its interest shall then be converted to a 2%
NSR. If a written demand is made as aforesaid, it shall contain a reminder to the party
upon which demand is being made that its interests under this Agreement will be converted
to a NSR interest if payment of its proportionate share is not made as demanded. 






	9.8 	  	
If the Management Committee elects to abandon any claim comprising the Celt Property and
one party (the “Contesting Party”) has voted against such abandonment,
then each party shall be notified of such abandonment at least 60 days prior to the
anniversary of the recording date for the claim to be abandoned. If the Contesting Party,
within 30 days of receiving a notice of abandonment, notifies the Management Committee
that the Contesting Party wishes to acquire the abandoned claim, then the parties shall
cause a transfer of the claim to be abandoned to the Contesting Party as soon as
practicable thereafter without any payment to the other parties, however the Contesting
Party shall be responsible for the costs of the transfer. 





















9 








	10.  	   	Additional
TCAI Option  






	10.1  	  	Upon
the earlier of the JV completing: 






	  	(a) 	  	$8.0
million in Expenditures from the formation of the JV; or  






	  	(b) 	  	a
Preliminary Feasibility Study on the Celt Property,  






	  	
the
Operator shall forthwith provide the parties written notice (the “Additional
Rights Notice”) which shall include a copy of the Expenditures incurred to date
and, if applicable, a copy of the Preliminary Feasibility Study. 






	  	
“Preliminary
Feasibility Study” means a comprehensive study, prepared in good faith, of the
viability of exploiting a mineral deposit on the Celt Property that has advanced to a
stage where the mining method, in the case of underground mining, or the pit
configuration, in the case of an open pit, has been established, and includes an effective
method of mineral processing and a financial analysis based on reasonable assumptions of
technical, engineering, operating, economic factors and the evaluation of other relevant
factors which are sufficient for a Qualified Person, as defined in §11.2, acting
reasonably, to determine that all or part of the mineral resource may be classified as a
mineral reserve. 






	10.2 	  	
TCAI will have a one-time option to elect to earn an additional 9% interest in the JV and
Celt Property (“Additional Interest”) by sole funding and completing a
Feasibility Study within 4 years of the Additional Rights Notice (the “Additional
Earn-in Right”).  






	10.3 	  	
TCAI may elect to invoke the Additional Earn-in Right with respect to the Celt Property by
delivering written notice to WKR, at any time up to 60 days after the delivery by the
Operator of the Additional Rights Notice. If TCAI fails to deliver such notice within such
applicable 60 day period the Additional Earn-in Right shall terminate. 






	10.4 	  	
After electing to invoke the Additional Earn-in Right TCAI shall commence a Feasibility
Study and incur a minimum of $500,000 in Expenditures per calendar year until the
completion of such Feasibility Study or earlier termination of the Additional Earn-in
Right under §10.5. If TCAI fails to meet the minimum annual expenditure requirement
then WKR may by providing Notice to TCAI, revoke the Additional Earn-in Right, in which
case, TCAI shall: 






	  	(a)  	  	have
no further obligation to sole fund Expenditures to earn the Additional
                    Interest;  






	  	(b)  	  	pay
WKR any shortfall between the actual Expenditures incurred and the
                    requirement of $500,000 per calendar year contemplated above, which
shall be due                     and owing in cash within 30 days of the date of
termination of the Additional                     Earn-in Right; and  






	  	(c)  	  	retain
the interest it held prior to invoking the Additional Earn-in Right and
                    the provisions of the JV shall apply to further funding.  






	  	
However,
if TCAI has been diligent in carrying out the Feasibility Study but has been prevented or
delayed from being able to expend funds effectively or efficiently to meet the minimum
annual expenditure requirement by events of force majeure or by technical, engineering,
permitting, local or social issues, or country/global financing issues that are outside
the control of TCAI, acting reasonably, then WKR may not revoke the Additional Interest
Earn-in Right. 






















10 








	10.5 	  	
After electing to invoke the Additional Earn-in Right TCAI may at any time notify WKR that
TCAI does not wish to earn the Additional Interest, in which case, TCAI shall have no
further obligation to sole fund Expenditures to earn the Additional Interest, TCAI shall
retain the interest it held prior to invoking the Additional Earn-in Right and the
provisions of the JV shall apply to further funding. 






	10.6 	  	
If TCAI invokes the Additional Earn-in Right and completes a Feasibility Study within the
time referred to in §10.2, subject to any extensions under §10.8, TCAI shall
have earned the Additional Interest. 






	10.7 	  	
If TCAI earns the Additional Interest, if a positive production decision is made and if
requested by WKR under §12.1, TCAI shall arrange project financing on behalf of WKR
as provided for in §12.1. 






	10.8 	  	
If TCAI has initiated but not completed a Feasibility Study within 4 years of the
Additional Rights Notice (subject to force majeure and permitting issues) it may elect to
extend the time limit to complete Feasibility Study (so long as it is in good faith
diligently working to complete such feasibility study) for additional annual periods of 12
months by making cash payments to WKR of one million dollars ($1,000,000) for each 12
month extension. 






	10.9 	  	
If TCAI invokes the Additional Earn-in Right and does not complete a Feasibility Study
within the time referred to in §10.2, subject to any extensions under §10.8, it
shall lose the right to earn the Additional Interest, it shall retain the interest it held
prior to invoking the Additional Earn-in Right and the provisions of the JV shall apply to
further funding. 






	11.  	   	Feasibility
Study Defined  






	11.1 	  	
“Feasibility Study” means a comprehensive report, prepared in good faith
and signed by a Qualified Person, that shows the feasibility of placing the Celt Property
or part thereof into commercial production. The Feasibility Study shall contain all
geological, engineering, operating, economic and other relevant factors which are to be
considered in sufficient detail that, in the opinion of a Qualified Person, the
Feasibility Study could reasonably serve as the basis for a decision by an independent
commercial financial institution to finance the development of the Celt Property for
commercial production. The Feasibility Study shall examine the following matters: ore
reserves; mining methods; metallurgy and processing (including metal recovery);
environment, tailings and waste disposal; capital and operating cost estimates; manpower,
social and community affairs; transportation methods and costs; marketing; project
financing alternatives; a sensitivity analysis; such other matters as are appropriate. The
Feasibility Study shall include at least the following information: 






	  	(a) 	  	a
description of that part of the Celt Property to be covered by the proposed
          mine;  






	  	(b) 	  	the
estimated recoverable reserves of minerals and the estimated composition and
          content thereof;  






	  	(c) 	  	the
proposed procedure for development, mining and production;  






	  	(d) 	  	results
of ore amenability tests;  





















11 







	  	(e)  	  	the
nature and extent of the facilities proposed to be acquired which may
                    include mill facilities, if the size, extent and location of the ore
body makes                     such mill facilities feasible, in which event the study
shall also include a                     preliminary design for such mill;  






	  	(f)  	  	the
total costs, including capital budget, which are reasonably required to
                    purchase, construct and install all structures, machinery and
equipment required                     for the proposed mine, including a schedule of
timing of such requirements;  






	  	(g)  	  	all
environmental impact studies prepared to date and the anticipated future
                    costs of reclamation;  






	  	(h)  	  	the
period in which it is proposed the Celt Property shall be brought to
                    commercial production;  






	  	(i)  	  	such
other data and information as are reasonably necessary to substantiate the
                    existence of an ore deposit of sufficient size and grade to justify
development                     of a mine, taking into account all relevant business, tax
and other economic                     considerations; and  






	  	(j)  	  	working
capital requirements for the initial four months of operation of the
                    Property as a mine or such longer period as may be reasonably
justified in the                     circumstances.  






	11.2  	  	“Qualified
Person” means an individual who:  






	  	(a)  	  	is
an engineer or geoscientist with at least five years relevant experience and
                    expertise in mineral exploration, mine development or operation or
mineral                     project assessment, or any combination of these;  






	  	(b)  	  	has
experience relevant to the subject matter of the mineral project and the
                    technical report; and  






	  	(c)  	  	is
a member in good standing of a professional association.  






	12. 	  	Project
Financing 






	12.1 	  	
If TCAI has earned the Additional Interest, upon the Management Committee approving a
production plan under §13.2, WKR will have the option to request that TCAI arrange
financing for WKR’s share of the capital costs required to develop the Celt Property.
WKR may exercise this option by providing notice to TCAI within 45 days of the Management
Committee approving a production plan under §13.2. TCAI shall then commit to either: 






	  	(a)  	  	use
its best efforts to arrange or provide project debt financing for not less
                    than 60% of the projected capital costs on a limited recourse basis
after                     technical completion (the “Debt Financing”),
and in connection                     therewith TCAI shall be entitled to arrange such
Debt Financing on such terms as                     it deems fit and may commit, on
behalf of WKR, the whole of the Celt Property as                     security for such
financing. For greater clarity TCAI shall not be obliged to                     agree to
project loan rates higher than those that would be payable if TCAI
                    remained liable in respect of such financing after technical
completion and, if                     Debt Financing is provided by a third party, the
terms of any financing arranged                     for WKR shall be on terms no less
favorable than those arranged for TCAI; and  




















12 









	  	  	(i)  	  	if
TCAI elects to arrange the Debt Financing, and if project costs exceed the
amount available for Debt Financing and the parties elect nonetheless to put
the Celt Property into commercial production, then at WKR’s election, TCAI
shall also arrange or provide WKR’s portion of equity financing on a
subordinate loan basis at LIBOR (“LIBOR” means the average London
Inter Bank Offered Rate, for three-month US dollar borrowings, posted by the
British Bankers Association, currently at their website www.bba.org.uk but at
such other locations as they may post if this website changes, two business
days prior to the commencement of the calendar quarter.) plus 4% per annum,
calculated monthly.  







	  	
or






	  	  	(ii)  	  	even
if third party project debt financing is available at acceptable rates,           TCAI
may nevertheless, itself, elect to use its best efforts to arrange or           provide
project financing for 100% of the projected capital costs, through other           means,
and shall provide such financing to WKR on a subordinate loan basis at           Prime
Rate plus 2% per annum, calculated monthly and in connection therewith           TCAI
shall be entitled to arrange such financing on such terms as it deems fit           and
may commit, on behalf of WKR, the whole of the Celt Property as security for
          such financing;  






	12.2 	  	
For greater clarity if TCAI is able to raise financing on commercially reasonable terms
and does not arrange the financing, then the Additional Interest earned shall be returned
to WKR. 






	12.3 	  	
TCAI’s obligation to arrange or provide project financing on WKR’s behalf, is
non-assignable by WKR and WKR’s option to elect to have TCAI provide such project
financing shall terminate if: 






	  	(a)  	  	White
Knight Resources Ltd. is controlled by a third party (defined as a party
                    holding a right to at least 30% of the voting shares of White Knight
Resources                     Ltd.); or  






	  	(b)  	  	White
Knight Gold (U.S.) Inc. ceases to be 100% owned by White Knight Resources
                    Ltd.  






	  	
For
clarity in such a case TCAI shall have no obligation to return any of the Additional
Interest earned.  






	12.4 	  	
If TCAI provides financing for WKR under §12.1, the available free cash flows from
the project, after deduction of operating costs, shall be used, firstly, to retire Debt
Financing (including principal, interest and a charge (to cover TCAI’s direct costs)
attributable to any guarantees provided by TCAI (the “Project Debt”)) and
the balance shall be divided and paid as follows: 






	  	  	(i)  	  	100%
of the free cash flow attributable to TCAI’s interest shall be paid to
          TCAI; and  






	  	  	(ii)  	  	until
any subordinated loan provided under under 12.1(a)(i) or 12.1(a)(ii) has           been
repaid, 85% of the free cash flow attributable to WKR’s interest shall           be
paid to TCAI, to recover the principal and interest of such subordinated           loan,
and 15% shall be paid to WKR, and  






	  	  	(iii)  	  	after
any subordinated loan provided under 12.1(a)(i) or 12.1(a)(ii) has been           repaid,
100% of the free cash flow attributable to WKR’s interest shall be           paid to
WKR,  





















13 








	12.5 	  	
In connection with and as security for the financing, WKR shall also provide TCAI with the
right (but not the obligation) to market WKR’s share of production until the payback
of the initial development cost (the Project Debt and the subordinated loan). TCAI may
have the right to charge a competitive marketing fee. 






	13.  	   	Developing
and Operating the Celt Property as a Mine  






	13.1 	  	
Any decision to place the Celt Property into production is to be based on a production
plan approved by the Management Committee and based on an approved Feasibility Study with
such modifications, if any, as the Management Committee considers necessary or desirable
and which do not have a material negative impact upon either party. 






	13.2 	  	
Upon delivery of a production plan on the Celt Property the Management Committee may
approve a production plan (including a cost estimate, with reasonable allowance for
contingencies, which the Management Committee considers necessary to implement the
production plan, together with a schedule of advances which the parties shall be required
to make in respect of Expenditures required to construct and to operate the mine) and the
giving of a notice to each of the parties that a decision has been made to construct a
mine on the Celt Property. 






	13.3 	  	
Each party may, by notice within 60 days of receipt of an approved production plan, elect
to participate in placing the Celt Property into production by committing to contribute
its proportionate share of the capital Expenditures required to construct and to operate
the mine in proportion to its interest, or some lesser share but at least 10%. If a party
so elects to contribute, it shall be deemed to hold an interest equivalent to that
percentage it elected to contribute. If either TCAI or WKR elects not to contribute, it
shall be deemed to have assigned its interest to the other party, in consideration for a
2% NSR, if that other party elects to increase its contribution thereby. If a party elects
to fund some lesser share than its entire interest percentage, but at least 10%, the
interest that was forgone in the election shall be deemed to have been assigned to the
other party, for no consideration, if that other party elects to increase its contribution
thereby. No party shall be required to provide any completion guarantees, unless
completion guarantees are required by lenders providing project financing, in which case
each party shall provide guarantees acceptable to those lenders. No party may mortgage its
interest in the Celt Property except to a lender that provides project financing and which
agrees that upon any realization of its security it shall observe all of the terms of the
JV and Agreement including right of first offer provisions in the Agreement to the same
extent as if its borrower proposed to sell its interest in the Celt Property. If elections
have not been made to fully fund the capital Expenditures then the production plan shall
be deemed withdrawn. 






	13.4 	  	
A mine shall be constructed substantially in conformity with the production plan approved
under §13.2, but subject to the right of the Management Committee to approve such
reasonable variations in construction as it may deem advisable. 






	13.5 	  	
A mine shall be operated on the basis of annual operating plans approved by the Management
Committee; provided that the Management Committee may temporarily suspend or permanently
terminate operations pursuant to a suspension or closure plan approved by it. 






	13.6 	  	
The Operator may invoice for mine capital Expenditures or operating Expenditures incurred
or to cash call reasonably in advance of requirements. If a party does not pay the amount
invoiced within 30 days, the Operator may demand payment. If payment is not made within 30
days of demand the other party may elect to pay all or a portion of the unpaid cost share
of the defaulting 



















14 








	  	
participant. If
the other party advances such unpaid share, then they or it shall be entitled
               to recover the amount so paid, together with interest thereon from the
date so                paid at a per annum rate equal to Prime Rate plus 4%. The party
making the                advance shall have a lien against the defaulting participants
interest and shall                have:  






	  	(a)  	  	the
right to take possession of all or a portion of the defaulting
                    participant’s interest in the Celt Property and to sell, or
purchase, such                     interest to recover the amount of such default;
provided that  






	  	(b)  	  	if
the Celt Property is in production the party making the advance may, in the
                    interim of proceeding under §13.6(a) above, have a prior and a
first right,                     after retirement of project debt, to receive the share
of mineral products of                     the defaulting party until such party has
received mineral products in kind of a                     value equal to (after the
costs of sale and costs of enforcement of the lien)                     the amount
advanced, together with interest thereon at the rate specified.  






	13.7 	  	
The definitive option joint venture agreement contemplated under §25.3 shall provide
for suspension of operations during sustained periods of negative operating cash flow and
for resumption of suspended operations. 






	13.8 	  	
Subject to §12.5, a party contributing to mine costs shall take, in kind, its
proportionate share of any minerals produced and to separately dispose of the same. 






	14.  	   	Restrictions
On Alienation and Right of First Offer  






	14.1 	  	
Except in accordance with this Agreement no party shall transfer, sell, dispose or
encumber its interest in the Celt Property. Subject to §14.4, this Agreement may not
be assigned by either party without the written consent of the other party, and any
attempt to assign this Agreement or delegate performance hereunder without such consent
shall be void. 






	14.2  	  	No
party shall institute any proceedings to partition the Celt Property. 






	14.3 	  	
A party (including a party with respect to its NSR) wishing to dispose of any interest or
rights under this Agreement shall, by notice, first offer to sell it to the other party
for a price (payable in work commitments and/or cash and/or marketable securities or a
combination of the three) and on terms which the disposing party establishes. If TCAI
and/or WKR as the case may be does not accept the offer within 30 days the disposing party
shall then have 180 days, from the earlier of notice of rejection of the offer or the end
of the 30 day period, to dispose of its interest to a third party for the same or greater
price and on the same terms or terms no more favourable to the third party, provided that
the incoming party delivers, in a form acceptable to the other parties, a document whereby
it agrees to be bound by, and comply with, the terms of this Agreement. For the purposes
of this §14.3 marketable securities means common stock of a company with a market
capitalization of at least $50,000,000.00 and at least 10 million common shares issued and
outstanding that is traded on a recognized stock exchange. The per share value of the
marketable security used in any transaction hereunder for purposes of determining the
price and market capitalization of the issuer shall be the average of the closing price
for such security on its principal stock exchange for the 60 trading days that end 10 days
before the closing of the transaction. In determining the price of a transaction
hereunder, work commitments shall be valued at the amount required to be expended to meet
the work commitment without discounting or other adjustments. 





















15 








	14.4 	  	
The right of first offer shall not apply to transfers to affiliated corporations provided
that the incoming party delivers, in a form acceptable to the other parties, a document
whereby it agrees to be bound by, and comply with, the terms of this Agreement. However if
the transferee ceases to be an affiliate within 2 years of the transfer it shall offer the
interest to the remaining party at fair market value under §14.3. 






	15.  	   	Area
of Interest and Use of Data  






	15.1 	  	
Both during the term of the Option and subsequently, there shall be an area of interest
which shall be comprised of those lands included within the outer boundaries of the Celt
Property, Schedule A1 (the “Area of Interest”). If either party stakes or
acquires any surface or water rights or mineral property within the Area of Interest, it
shall offer to have those rights or property included in this Agreement. The other party
shall have 30 days to elect whether to accept that offer and, where appropriate, pay its
share of the costs of acquisition (for clarity if acquired during the term of the Option
costs shall be to TCAI’s account and be considered Expenditures and if acquired
during the JV each party shall be responsible for their cost share of such Expenditures);
failing which election and payment, the acquiring party may retain the rights or property
so acquired free of the terms of this Agreement. 






	15.2 	  	
Neither party will have any obligation to the other with respect to the acquisition of
properties or interests in minerals, surface or water rights, whether directly or
indirectly, which are outside the Area of Interest. 






	16.  	   	Representations
and Warranties  






	16.1  	  	White
Knight Resources Ltd. and White Knight Gold (U.S.) Inc. each represent and warrant to
TCAI that: 






	  	(a)  	  	White
Knight Gold (U.S.) Inc. owns or has the right to earn a 100% interest in
                    the Celt Property, as set out on Schedule “A1";  






	  	(b)  	  	the
Celt Property is recorded in the name of White Knight Gold (U.S.) Inc.;  






	  	(c)  	  	White
Knight Gold (U.S.) Inc. has the exclusive right and necessary lawful
                    authority to explore for minerals on the Celt Property and that
evidence of such                     right is or shall be recorded against title to the
Celt Property;  






	  	(d)  	  	White
Knight Gold (U.S.) Inc. has the right to enter into this Agreement, to
                    assign all or a portion of the interest in the Celt Property free of
any consent                     or preferential purchase right held by other parties, and
to dispose of the Celt                     Property in accordance with the terms of this
Agreement;  






	  	(e)  	  	there
are no adverse claims or challenges against or to the ownership of or
                    title to any of the mineral claims and other interests comprising the
Celt                     Property, nor to its knowledge is there any basis therefor, and
there are no                     outstanding agreements or options to acquire or purchase
the Celt Property or                     any portion thereof or any production therefrom
granted by it and no person has                     any royalty or other interest
whatsoever in the Celt Property or in production                     therefrom except as
herein defined;  






	  	(f)  	  	WKR’s
transfer of the Celt Property to TCAI will be free of all liens,
                    mortgages, pledges, encumbrances and charges of every kind and
nature;  





















16 








	  	(g)  	  	WKR
has not committed and will not commit any act or acts which would reasonably
                    be expected to encumber or cause any lien to be placed against the
Celt                     Property, including without limitation, by reason of any
Environmental Law;  






	  	(h)  	  	all
required permits, authorizations, approvals and consents to the transfer and
                    conveyance of the Celt Property will be obtained by WKR;  






	  	(i)  	  	the
mineral claims and other rights (land, water etc.) that comprise the Celt
                    Property are presently in good standing and are free and clear of all
liens,                     charges and encumbrances and subject to the provisions of this
Agreement it                     shall maintain them in that condition so long as TCAI
has any right to earn an                     interest therein hereunder;  






	  	(j)  	  	the
Celt Property and its existing and prior uses by WKR comply and have, to its
                    knowledge, at all times complied with, and WKR is not in violation
of, and have                     not violated, in connection with the ownership, use,
maintenance or operation of                     the Celt Property, any applicable federal
or local laws, regulations, rules,                     orders or approvals relating to
its operations on the Celt Property;  






	  	(k)  	  	without
limiting the generality of §16.1(j), WKR has operated the Celt
                    Property and has at all times received, handled, used, stored,
treated, shipped                     and disposed of all Hazardous Materials or Hazardous
Substances in strict                     compliance with all Environmental Laws and
applicable health or safety laws,                     regulations, orders or approvals;  






	  	(l)  	  	no
Hazardous Materials or Hazardous Substances have been released into the
                    environment, or deposited, discharged, placed or disposed of at, on
or near the                     Celt Property as a result of its operations carried out
on the Celt Property,                     nor, to the best of its knowledge, have any of
the above occurred nor has the                     Celt Property been used at any time by
any person as a landfill or waste                     disposal site;  






	  	(m)  	  	no
notices of any violation or apparent violation of any of the matters referred
                    to in §16.1(j) through §16.1(l) relating to the Celt
Property or its                     use have been received by WKR;  






	  	(n)  	  	to
the best of its knowledge, there are no writs, injunctions, orders or
                    judgments outstanding, no lawsuits, claims, proceedings or
investigations                     pending or threatened, relating to the use,
maintenance or operation of the Celt                     Property, whether related to
environmental, archaeological or similar matters,                     or otherwise, nor,
to the knowledge of WKR, is there any basis for such                     lawsuits,
claims, proceedings or investigations being instituted or filed;  






	  	(o)  	  	to
the best of its knowledge, there are no active treaty negotiations in respect
                    of native land claims affecting the Celt Property, nor is WKR aware
of pending                     native land claims that may affect the Celt Property; and  






	  	(p)  	  	the
Celt Property does not comprise all or substantially all of the assets of
                    White Knight Resources Ltd or White Knight Gold (U.S.) Inc.  






	16.2  	  	Each
party represents and warrants to the other party that: 




















17 







	  	(a)  	  	it
is a corporation, duly incorporated, organized, validly existing, and in good
                    standing under the laws of its incorporating jurisdiction and has the
full                     corporate power and authority to carry on its business and to
enter this                     Agreement and any agreement or instrument referred to or
contemplated by this                     Agreement;  






	  	(b)  	  	the
execution, delivery and performance of this Agreement and the other
                    instruments to be executed and delivered by it have been authorized
by all                     necessary corporate action of it, including approval by its
board of directors                     and shareholders if required, and do not and will
not: (a) contravene it’s                     charter or bylaws or other constating
documents; (b) violate any material                     provision of law, rule,
regulation, order, writ, judgment, injunction, decree,                     determination
or award presently in effect having applicability to it; or (c)
                    result in a material breach of or constitute a material default under
any                     agreement to which it is a party which would have a material
adverse effect upon                     the right, power and authority of it to perform
its obligations hereunder;  






	  	(c)  	  	no
civil or criminal actions, proceedings or investigations exist or have been
                    or are threatened by or before any court, governmental agency,
regulatory                     authority, or arbitrator with respect to or affecting it
which would restrain or                     prohibit the execution, delivery or
performance of this Agreement;  






	  	(d)  	  	no
agent, broker, investment banker, person or firm acting on behalf or under
                    the authority of it is or will be entitled to any broker’s or
finder’s                     fee or any other similar commission or fee in
connection with the execution,                     delivery, or performance of this
Agreement; and  






	  	(e)  	  	neither
the execution and delivery of this Agreement nor any of the agreements
                    referred to herein or contemplated hereby, nor the consummation of
the                     transactions hereby contemplated conflict with, result in the
breach of or                     accelerate the performance required by any agreement to
which it is a party.  






	16.3 	  	
The warranties herein shall survive the execution of this Agreement and shall be
unaffected by any examinations undertaken by TCAI or its counsel. 






	17.  	   	Covenants  






	17.1  	  	Until
the expiry of the Option, WKR covenants, subject toss.5.3(a): 






	  	(a)  	  	to
pay any costs incurred in defending its existing title to the Celt Property;
                    and  






	  	(b)  	  	not
to dispose of any part or portion of the Celt Property except in accord with
                    the terms of this Agreement or enter into any agreement or do
anything that                     would create a lien or encumbrance on the Celt Property
except as permitted                     herein; not to enter into any contract or
agreement with respect to the Celt                     Property which would in any away
negatively impact TCAI’s rights to                     exercise its Option as
provided for herein; and that it will comply with all                     governmental
requirements and laws respecting WKR’s use and operation of                     the
Celt Property, including the Environmental Laws.  






	17.2  	  	TCAI
shall perform its work on the Celt Property in conformity with all environmental and
other applicable requirements.  



















18 









	18.  	   	Indemnification  






	18.1 	  	
White Knight Resources Ltd and White Knight Gold (U.S.) Inc. agree to jointly and
severally indemnify, hold harmless and release TCAI and its officers, directors,
employees, shareholders, authorized agents, representatives, parent and affiliated
companies from and against any and all claims, causes of action, liabilities, obligations,
losses, damages, penalties, fines, settlements, costs or expenses of any nature
whatsoever, including without limitation reasonable attorneys’ fees and disbursements
arising from: 






	  	(a)  	  	Any
of the WKR’s representations or warranties set forth in §16 of
                    this Agreement being incorrect or untrue or any state of facts
contrary to any                     such representation or warranty; and  






	  	(b)  	  	Any
of WKR’s covenants, duties, obligations or agreements contained in this
                    Agreement being breached.  






	18.2 	  	
TCAI agrees to indemnify and hold harmless and release WKR and its officers, directors,
employees, shareholders, authorized agents and representatives from and against any and
all claims, causes of action, liabilities, obligations, losses, damages, penalties, fines,
settlements, costs or expenses of any nature whatsoever, including without limitation
reasonable attorneys’ fees and disbursements, arising from: 






	  	(a)  	  	Any
of TCAI’s representations or warranties set forth in §16 of this
                    Agreement being incorrect or untrue or any state of facts contrary to
any such                     representation or warranty;  






	  	(b)  	  	Any
of TCAI’s covenants, duties, obligations or agreements contained in
                    this Agreement being breached.  






	19. 	  	Environmental
Law(s) Defined 






	19.1 	  	
“Environmental Law(s)” means any federal, state, or municipal law, code,
ordinance, rule, regulation, policy, guidelines, permit, consent, approval, license,
judgment, order, writ, decree, injunction or other authorization, relating to: 






	  	(a)  	  	emissions,
discharges, releases or threatened releases of Hazardous Materials or
                    Hazardous Substances into the natural or human environment,
including, without                     limitation, air, soil, sediments, land surface or
subsurface, surface water,                     ground water, buildings or facilities,
treatment works, drainage systems or                     septic systems; or  






	  	(b)  	  	the
generation, treatment, storage, disposal, recycling, use, handling,
                    manufacturing, processing, reprocessing, transportation or shipment
or                     arrangement for transportation or shipment of any Hazardous
Materials or                     Hazardous Substances; or  






	  	(c)  	  	otherwise
concerning pollution or protection of the environment, public health
                    and safety or exposure to Hazardous Materials, Hazardous Substances
or other                     hazardous or toxic substances alleged to be harmful
including without                     limitation, the laws described in the definition of
“Hazardous                     Materials” below, the Clean Water Act, and all
amendments to the foregoing                     and all state and local variations of the
same.  






	19.2 	  	“Hazardous
Materials” and “Hazardous Substances” means:  




















19 







	  	(a)  	  	any
and all contaminants, pollutants, constituents, wastes and substances that
                    are listed or defined as hazardous in the following statutes and
their                     implementing federal and state regulations:  






	  	  	(i)  	  	the
Hazardous Materials Transportation Act, 49 U.S.C. §1801 et seq.;  






	  	  	(ii)  	  	the
Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq.                     (“RCRA”);  






	  	  	(iii)  	  	the
Comprehensive Environmental Response, Compensation and Liability Act, as
                    amended by the Superfund Amendments and Reauthorization Act, 42
U.S.C.                     §9601 et seq. (“CERCLA”);  






	  	  	(iv)  	  	the
Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq.;  






	  	  	(v)  	  	the
Clean Air Act, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C.
                    §7401 et seq.;  






	  	  	(vi)  	  	the
Emergency Planning and Community Right-to-Know Act of 1986, as amended, 42
                    U.S.C. §11001 et seq.; and  






	  	  	(vii)  	  	any
amendments to any of the foregoing and any state or local variation thereto.  






	  	(b)  	  	petroleum,
including crude oil and any fractions thereof;  






	  	(c)  	  	natural
gas, synthetic gas and any mixtures thereof;  






	  	(d)  	  	asbestos
and/or asbestos-containing materials  






	  	(e)  	  	PCBs
or PCB-containing materials or fluids;  






	  	(f)  	  	any
other substance with respect to which any federal, state or local agency or
                    other governmental authority may require either an environmental
investigation                     or environmental remediation; and  






	  	(g)  	  	any
other hazardous or noxious material, contaminant, pollutant, constituent,
                    substance, or solid or liquid waste that is or may be regulated by,
or forms a                     basis of liability under, any Environmental Laws.  






	20. 	  	Confidentiality
and Press Releases 






	20.1 	  	
Each party agrees that until the termination of this Agreement all information obtained
hereunder shall be the exclusive property of the parties and shall not be publicly
disclosed or used other than for the activities contemplated hereunder, except as required
by law or by the rules and regulations of any regulatory authority or stock exchange
having jurisdiction or in connection with the filing of an annual information form,
prospectus or similar document, or with the written consent of the other parties, such
consent not to be unreasonably withheld, provided that the provisions of this section do
not apply to information which is or becomes part of the public domain other than through
a breach of the terms hereof or which would not otherwise be considered as material to the
parties, acting reasonably. 




















20 







	20.2 	  	
Consent to disclosure of information hereunder shall not be unreasonably withheld where a
party wishes to disclose any such information to a third party for the purpose of
arranging financing for its contributions hereunder or, where permitted by this Agreement,
for the purpose of selling its interest in the Celt Property or its interest in this
Agreement, provided that such third party gives its undertaking to the parties that any
such information not theretofore publicly disclosed shall be kept confidential and not
disclosed to others for a period agreed upon by the parties, which shall not be less than
one year in duration. 






	20.3 	  	
A party proposing a press release relating to the Celt Property, or the terms of this
Agreement, work thereon or the activities of the parties or their affiliates with respect
thereto, shall provide a copy to the other party for its information and comments using
its best efforts, in light of its timely disclosure obligations under applicable law, to
ensure it is provided at least 2 business days prior to release. Any comments that the
receiving party may make shall not be considered certification by the other party of the
accuracy of the information in such press release, or a confirmation by it that the
content of such press release complies with the disclosure standards of the applicable
regulatory authorities. If the receiving party fails to provide comments within said time
period the providing party may, subject to §20.4 make the proposed press release. 






	20.4 	  	
Each party shall obtain prior approval of the other party before issuing any press
release or public statement using the other party’s name, the name of any of the
officers, directors or employees of the other party, or the name of any of its
subsidiaries. The foregoing prohibition shall not apply if disclosure of the other
party’s name is required, in the written opinion of counsel to a party, by applicable
public disclosure requirements however in such a case the party wishing to make the
disclosure must provide a copy to the other party for its information and comments using
its best efforts to ensure it is provided at least 2 Business Days prior to release.
However, such approval shall not be considered certification by the other party of the
accuracy of the information in such press release, or a confirmation by it that the
content of such press release complies with the rules, policies, by-laws and disclosure
standards of the applicable regulatory authorities or stock exchanges. 






	21.  	   	Notice  






	21.1 	  	
Any notices, requests, demands or other communication required or permitted to be given
under this Agreement shall be in writing and shall be given in the manner provided below
addressed as follows: 






	  	(a) 	  	If
to TCAI at:  






	  	
Teck Cominco American Incorporated

Post Office Box 3087

Spokane, Washington 99220

Attention:  Legal Department

Fax: 509-459-4400 






	  	
with
a copy to  






	  	
Teck Cominco American Incorporated

c/o Teck Cominco Limited

500 - 200 Burrard St.

Vancouver, British Columbia, Canada  V6C 3L7

Attention:  Corporate Secretary 




















21 








	  	
Fax:
 604-687-6100 







	  	(b)  	  	If
to WKR at: 






	  	
White Knight Resources Ltd.

922 - 510 Hastings St. W.,

Vancouver B.C. Canada V6B 1L8

Attention: President

Fax: 604-681-0180 








	  	
All
notices shall be given (i) by personal delivery, (ii) by commercial courier, (iii) by
certified mail, return receipt requested, or (iv) by sending it by facsimile or other
similar form of telecommunication. All notices shall be effective and shall be deemed
delivered on the date of delivery if delivered during normal business hours. If not
delivered during normal business hours, delivery shall be deemed effective on the next
business day following delivery. A party may change its address by notice to the other
parties. 






	22.  	   	Exchange
Approval  






	22.1 	  	
This Agreement is subject to the acceptance of the Financing Agreement by the TSX Venture
Exchange. If such acceptance is not obtained within 30 days of the date hereof, this
Agreement, at TCAI’s sole discretion, shall terminate and have no force or effect. 






	23.  	   	Termination  






	23.1  	  	This
Agreement shall terminate upon the occurrence of the following: 






	  	(a) 	  	a
termination of the Option or subsequent JV formed with respect to the Celt
          Property.  






	23.2  	  	The
JV with respect to the Celt Property shall terminate upon the occurrence of the earliest
of: 






	  	(a)  	  	sale
or other disposition of the Celt Property following the written agreement
                    by the parties to terminate the JV;  






	  	(b)  	  	a
termination pursuant to §8.5 or §13.6(a);  






	  	(c)  	  	except
with respect to its NSR, the conversion of a party’s entire interest
                    to a NSR pursuant to §8.4, §9.6(b), §9.7 or §13.3;
or  






	  	(d)  	  	abandonment
of the entire Celt Property under §9.8.  






	24. 	  	Force
Majeure 






	24.1 	  	
A party may claim force majeure if such party is prevented from or delayed in
performing any obligation under this Agreement by any cause beyond its reasonable control,
whether foreseeable or unforeseeable, excluding only lack of finances, but including,
without limitation, acts of God, strikes, lockouts, or other industrial disputes, laws,
rules and regulations or orders of any duly constituted court or governmental authority,
acts of terrorism, acts of the public enemy, war, insurrection, riots, fire, storm, flood,
unusually harsh weather causing delay, explosion, government restriction, failure to
obtain any approvals required from regulatory authorities or unavailability of equipment,
materials or transportation (provided the approvals were properly 




















22 








	  	
applied
 for and  pursued  in good  faith and on a timely  basis or the  equipment, materials or
transportation were sought in a timely way), interference by third party interests groups
(including environmental lobbyists and First Nations or indigenous peoples’groups)
or other causes whether of the kind enumerated above or otherwise, then the time for the
performance of that obligation shall be extended for a period equivalent to the total
period the cause of the prevention or delay persists regardless of the length of such
total period. A party may also claim force majeure, if such party, acting
reasonably, believes that social or political unrest in the region of the Celt Property
or the threat of that unrest will endanger the safety of its employees or the employees
of its contractors if the party were to continue with the work program unless such social
or political unrest is caused by action or inaction by that party. The party that claims
force majeure shall promptly notify the other party and shall take all reasonable
steps to remove or remedy the cause of the prevention or delay insofar as it is
reasonably able to do so and as soon as possible. The party claiming force majeure will
provide the other party with a regular a written report summarizing events that have
occurred and prospects for resolution.  






	25.  	   	Miscellaneous
Provisions  






	25.1  	  	The
obligations of TCAI under this Agreement will be subject to the satisfaction of the
following conditions: 






	  	(a)  	  	White
Knight Resources Ltd. will have received, within 30 days of execution or
                    this Agreement, all required approvals from the TSX Venture Exchange
for White                     Knight Resources Ltd. entering into the Financing Agreement
and completing the                     transactions contemplated thereby.  






	25.2 	  	
This Agreement shall be a binding agreement between the parties, until such time, if any,
as a definitive agreement contemplated under §25.3 is executed, that shall govern
joint operations on the Celt Property. 






	25.3 	  	
After the execution of this Agreement, and prior to TCAI exercising the Option,
TCAI’s solicitors shall prepare, and the parties shall endeavor to settle, a
definitive joint venture agreement, which incorporates the terms of this Agreement and
which contains such other provisions for the joint operation of the Celt Property as the
parties may otherwise agree. 






	25.4 	  	
This Agreement, and the Schedules and instruments to be delivered in connection herewith,
contains the entire understanding of the parties and supersedes all prior agreements and
understandings between the parties relating to the subject matter hereof. In the event of
any conflict between this Agreement and any Schedule attached hereto, the terms of this
Agreement shall be controlling. No modification of this Agreement shall be valid unless
made in writing and duly executed by the parties. 






	25.5 	  	
The rights and obligations of the parties shall be several, the parties shall hold their
interests as tenants in common, and nothing contained in the Agreement shall be construed
as creating a partnership or in imposing any fiduciary duty on any party. 






	25.6 	  	
Nothing expressed or implied in this Agreement is intended by the parties or shall be
construed to confer upon or to give to any person or entity other than the parties to this
Agreement or their successors or assigns any rights or remedies under or by reason of this
Agreement. 




















23 








	25.7 	  	
Each of the parties agrees that it shall take such actions and execute such additional
instruments as counsel to any party deems reasonably necessary or convenient to implement
and carry out the intent and purpose of this Agreement. 






	25.8 	  	
Each of the parties shall have the right from time to time to register or record notice of
this Agreement against title to the Celt Property, and the other parties shall co-operate
with all such registrations and recordings and provide its written consent or signature to
any documents and do such other things from time to time as are necessary or desirable to
effect all such registrations or recordings or otherwise to protect the interests of the
parties hereunder. 






	25.9  	  	Each
party shall have all remedies provided at law or in equity with respect to the
obligations hereunder. 






	25.10 	  	
Except as otherwise specifically provided in this Agreement, all fees, costs and expenses
incurred by WKR or TCAI in negotiating this Agreement or in consummating this transaction
shall be paid by the party incurring the same, including without limitation, legal,
brokerage and accounting fees, costs and expenses. 






	25.11 	  	
If any legal action or any arbitration or other proceeding is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default or misrepresentation
in connection with any of the provisions, representations or warranties in this Agreement,
the successful or prevailing party shall be entitled to recover reasonable attorney’s
fees and other costs incurred in that action or proceeding, in addition to any other
relief to which it may be entitled. 






	25.12 	  	
The failure of a party to insist on the strict performance of any provision of this
Agreement or to exercise any right, power or remedy upon a breach hereof shall not
constitute a waiver of any provision of this Agreement or limit the party’s right
thereafter to enforce any provision or exercise any right. 






	25.13 	  	
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction
shall be ineffective in such jurisdiction only to the extent of such prohibition or
unenforceability without affecting the remaining provisions of this Agreement. 






	25.14  	  	Unless
otherwise specified, all dollar amounts referred to herein shall be in the currency of
the United States of America.  






	25.15  	  	This
Agreement shall be governed by and interpreted in accordance with the laws of the State
of Nevada.  






	25.16 	  	
This Agreement may be executed in counterparts, each of which when so executed shall be
deemed an original, and such counterparts shall together constitute but one and the same
instrument. 






	25.17  	  	This
Agreement shall be read with such changes in gender or number as the context shall
require.  






	25.18 	  	
The headings to the articles, paragraphs, parts or clauses of this Agreement are inserted
for convenience only and shall not affect the construction hereof. 






	25.19  	  	The
Schedules to this Agreement are an integral part of this Agreement and are incorporated
into this Agreement.  




















24 








	25.20 	  	
Unless otherwise stated, a reference to an Article means an Article of this Agreement and
the symbol “§” followed by a number or some combination of numbers and
letters refers to the provision of this Agreement so designated and the symbol
“§" followed by a letter within a provision refers to a clause within such
provision. A reference to “this Agreement”, “hereof”,
“hereunder”, “herein” or words of similar meaning, means this
agreement including the schedules hereto, together with any amendments thereof. 






	25.21 	  	
Time is of the essence in this Agreement and the performance by the parties of their
respective duties and obligations hereunder. 






If the foregoing terms are
acceptable, please confirm your acceptance of the terms set out above by kindly executing
in the space provided below and returning it to TCAI, whereupon it shall form a binding
agreement between us in consideration for the mutual covenants herein. 





TECK COMINCO AMERICAN INCORPORATED




By:  “Fred S. Daley”             
                  

Fred S. Daley 

Its:   Vice President Exploration  




WHITE KNIGHT RESOURCES LTD.




By:   “John M. Leask”                
                  

Its:   President  






WHITE KNIGHT GOLD (U.S.) INC. 



By:   “John M. Leask”             
                         

Its:  President  

























This is SCHEDULE
“A1” to the Letter Agreement between 

TECK COMINCO AMERICAN INCORPORATED, 

WHITE KNIGHT RESOURCES LTD. and WHITE KNIGHT GOLD (U.S.) INC. 

dated for reference December 1, 2004  



     



Celt Property 



The Celt Property consists of the
following mining claims owned by White Knight Gold (US) Inc. All are located in portions
of Townships 22 and 23 North, Ranges 49 and 50 East, Mount Diablo Base and Meridian, all
in Eureka County, Nevada. 



A 100% interest in KILT 1-47, 50-64:
consisting of 62 Claims, CELT 1-70: consisting of 70 Claims, COT 001-121: consisting of
121 Claims, KEL 001-136, and 141-148: consisting of 144 Claims, AMT 1 to 69, and 76 to 77:
consisting of 71 Claims, and CSAMT 67 -78 and 87- 91: consisting of 17 Claims, all of
which are listed below. 



A 100% interest in CS AMT 1-66,
79-86, and 92-95, consisting of 78 claims, which have been legally located and will be
filed with the BLM and recorded in Eureka County within 2 weeks of the effective date of
this Agreement. 



Total of 563 claims. 


	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
	         KILT 1	 	852265	 	367	 	298	 
	         KILT 2	 	852266	 	367	 	299	 
	         KILT 3	 	852267	 	367	 	300	 
	         KILT 4	 	852268	 	367	 	301	 
	         KILT 5	 	852269	 	367	 	302	 
	         KILT 6	 	852270	 	367	 	303	 
	         KILT 7	 	852271	 	367	 	304	 
	         KILT 8	 	852272	 	367	 	305	 
	         KILT 9	 	852273	 	367	 	306	 
	        KILT 10	 	852274	 	367	 	307	 
	        KILT 11	 	852275	 	367	 	308	 
	        KILT 12	 	852276	 	367	 	309	 
	        KILT 13	 	852277	 	367	 	310	 
	        KILT 14	 	852278	 	367	 	311	 
	        KILT 15	 	852279	 	367	 	312	 
	        KILT 16	 	852280	 	367	 	313	 
	        KILT 17	 	852281	 	367	 	314	 
	        KILT 18	 	852282	 	367	 	315	 
	        KILT 19	 	852283	 	367	 	316	 
	KILT 20 Amended	 	852284	 	367	 	317	 
	        KILT 21	 	852285	 	367	 	318	 
	        KILT 22	 	852286	 	367	 	319	 
	        KILT 23	 	852287	 	367	 	320	 
	        KILT 24	 	852288	 	367	 	321	 
	        KILT 25	 	852289	 	367	 	322	 
	        KILT 26	 	852290	 	367	 	323	 
	        KILT 27	 	852291	 	367	 	324	 




















A-2 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	        KILT 28	 	852292	 	367	 	325	 
	        KILT 29	 	852293	 	367	 	326	 
	        KILT 30	 	852294	 	367	 	327	 
	        KILT 31	 	852295	 	367	 	328	 
	        KILT 32	 	852296	 	367	 	329	 
	        KILT 33	 	852297	 	367	 	330	 
	        KILT 34	 	852298	 	367	 	331	 
	        KILT 35	 	852299	 	367	 	332	 
	        KILT 36	 	852300	 	367	 	333	 
	        KILT 37	 	852301	 	367	 	334	 
	        KILT 38	 	852302	 	367	 	335	 
	        KILT 39	 	852303	 	367	 	336	 
	        KILT 40	 	852304	 	367	 	337	 
	        KILT 41	 	852305	 	367	 	338	 
	        KILT 42	 	852306	 	367	 	339	 
	        KILT 43	 	852307	 	367	 	340	 
	        KILT 44	 	852308	 	367	 	341	 
	        KILT 45	 	852309	 	367	 	342	 
	        KILT 46	 	852310	 	367	 	343	 
	        KILT 47	 	852311	 	367	 	344	 
	        KILT 50	 	852314	 	367	 	347	 
	        KILT 51	 	852315	 	367	 	348	 
	        KILT 52	 	852316	 	367	 	349	 
	        KILT 53	 	852317	 	367	 	350	 
	        KILT 54	 	852318	 	367	 	351	 
	        KILT 55	 	852319	 	367	 	352	 
	        KILT 56	 	852320	 	367	 	353	 
	        KILT 57	 	852321	 	367	 	354	 
	        KILT 58	 	852322	 	367	 	355	 
	        KILT 59	 	852323	 	367	 	356	 
	        KILT 60	 	852324	 	367	 	357	 
	        KILT 61	 	852325	 	367	 	358	 
	        KILT 62	 	852326	 	367	 	359	 
	        KILT 63	 	852327	 	367	 	360	 
	        KILT 64	 	852328	 	367	 	361	 
	         CELT 1	 	852329	 	367	 	228	 
	         CELT 2	 	852330	 	367	 	229	 
	         CELT 3	 	852331	 	367	 	230	 
	         CELT 4	 	852332	 	367	 	231	 
	         CELT 5	 	852333	 	367	 	232	 
	         CELT 6	 	852334	 	367	 	233	 
	         CELT 7	 	852335	 	367	 	234	 
	         CELT 8	 	852336	 	367	 	235	 
	         CELT 9	 	852337	 	367	 	236	 
	        CELT 10	 	852338	 	367	 	237	 
	        CELT 11	 	852339	 	367	 	238	 
	        CELT 12	 	852340	 	367	 	239	 
	        CELT 13	 	852341	 	367	 	240	 
	        CELT 14	 	852342	 	367	 	241	 

























A-3 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	        CELT 15	 	852343	 	367	 	242	 
	        CELT 16	 	852344	 	367	 	243	 
	        CELT 17	 	852345	 	367	 	244	 
	        CELT 18	 	852346	 	367	 	245	 
	        CELT 19	 	852347	 	367	 	246	 
	    CELT 20 Amended	 	852348	 	367	 	247	 
	        CELT 21	 	852349	 	367	 	248	 
	        CELT 22	 	852350	 	367	 	249	 
	        CELT 23	 	852351	 	367	 	250	 
	        CELT 24	 	852352	 	367	 	251	 
	        CELT 25	 	852353	 	367	 	252	 
	        CELT 26	 	852354	 	367	 	253	 
	        CELT 27	 	852355	 	367	 	254	 
	        CELT 28	 	852356	 	367	 	255	 
	        CELT 29	 	852357	 	367	 	256	 
	        CELT 30	 	852358	 	367	 	257	 
	        CELT 31	 	852359	 	367	 	258	 
	        CELT 32	 	852360	 	367	 	259	 
	        CELT 33	 	852361	 	367	 	260	 
	        CELT 34	 	852362	 	367	 	261	 
	        CELT 35	 	852363	 	367	 	262	 
	        CELT 36	 	852364	 	367	 	263	 
	        CELT 37	 	852365	 	367	 	264	 
	        CELT 38	 	852366	 	367	 	265	 
	        CELT 39	 	852367	 	367	 	266	 
	        CELT 40	 	852368	 	367	 	267	 
	        CELT 41	 	852369	 	367	 	268	 
	        CELT 42	 	852370	 	367	 	269	 
	        CELT 43	 	852371	 	367	 	270	 
	        CELT 44	 	852372	 	367	 	271	 
	        CELT 45	 	852373	 	367	 	272	 
	        CELT 46	 	852374	 	367	 	273	 
	        CELT 47	 	852375	 	367	 	274	 
	        CELT 48	 	852376	 	367	 	275	 
	        CELT 49	 	852377	 	367	 	276	 
	        CELT 50	 	852378	 	367	 	277	 
	        CELT 51	 	852379	 	367	 	278	 
	        CELT 52	 	852380	 	367	 	279	 
	        CELT 53	 	852381	 	367	 	280	 
	        CELT 54	 	852382	 	367	 	281	 
	        CELT 55	 	852383	 	367	 	282	 
	        CELT 56	 	852384	 	367	 	283	 
	        CELT 57	 	852385	 	367	 	284	 
	        CELT 58	 	852386	 	367	 	285	 
	        CELT 59	 	852387	 	367	 	286	 
	        CELT 60	 	852388	 	367	 	287	 
	        CELT 61	 	852389	 	367	 	288	 
	        CELT 62	 	852390	 	367	 	289	 
	        CELT 63	 	852391	 	367	 	290	 






















A-4 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	        CELT 64	 	852392	 	367	 	291	 
	        CELT 65	 	852393	 	367	 	292	 
	        CELT 66	 	852394	 	367	 	293	 
	        CELT 67	 	852395	 	367	 	294	 
	        CELT 68	 	852396	 	367	 	295	 
	        CELT 69	 	852397	 	367	 	296	 
	        CELT 70	 	852398	 	367	 	297	 
	         COT 1	 	872489	 	383	 	374	 
	         COT 2	 	872490	 	383	 	375	 
	         COT 3	 	872491	 	383	 	376	 
	         COT 4	 	872492	 	383	 	377	 
	         COT 5	 	872493	 	383	 	378	 
	         COT 6	 	872494	 	383	 	379	 
	         COT 7	 	872495	 	383	 	380	 
	         COT 8	 	872496	 	383	 	381	 
	         COT 9	 	872497	 	383	 	382	 
	         COT 10	 	872498	 	383	 	383	 
	         COT 11	 	872499	 	383	 	384	 
	         COT 12	 	872500	 	383	 	385	 
	         COT 13	 	872501	 	383	 	386	 
	         COT 14	 	872502	 	383	 	387	 
	         COT 15	 	872503	 	383	 	388	 
	         COT 16	 	872504	 	383	 	389	 
	         COT 17	 	872505	 	383	 	390	 
	         COT 18	 	872506	 	383	 	391	 
	         COT 19	 	872507	 	383	 	392	 
	         COT 20	 	872508	 	383	 	393	 
	         COT 21	 	872509	 	383	 	394	 
	         COT 22	 	872510	 	383	 	395	 
	         COT 23	 	872511	 	383	 	396	 
	         COT 24	 	872512	 	383	 	397	 
	         COT 25	 	872513	 	383	 	398	 
	         COT 26	 	872514	 	383	 	399	 
	         COT 27	 	872515	 	383	 	400	 
	         COT 28	 	872516	 	383	 	401	 
	         COT 29	 	872517	 	383	 	402	 
	         COT 30	 	872518	 	383	 	403	 
	         COT 31	 	872519	 	383	 	404	 
	         COT 32	 	872520	 	383	 	405	 
	         COT 33	 	872521	 	383	 	406	 
	         COT 34	 	872522	 	383	 	407	 
	         COT 35	 	872523	 	383	 	408	 
	         COT 36	 	872524	 	383	 	409	 
	         COT 37	 	872525	 	383	 	410	 
	         COT 38	 	872526	 	383	 	411	 
	         COT 39	 	872527	 	383	 	412	 
	         COT 40	 	872528	 	383	 	413	 
	         COT 41	 	872529	 	383	 	414	 
	         COT 42	 	872530	 	383	 	415	 
	         COT 43	 	872531	 	383	 	416	 






















A-5 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	         COT 44	 	872532	 	383	 	417	 
	         COT 45	 	872533	 	383	 	418	 
	         COT 46	 	872534	 	383	 	419	 
	         COT 47	 	872535	 	383	 	420	 
	         COT 48	 	872536	 	383	 	421	 
	         COT 49	 	872537	 	383	 	422	 
	         COT 50	 	872538	 	383	 	423	 
	         COT 51	 	872539	 	383	 	424	 
	         COT 52	 	872540	 	383	 	425	 
	         COT 53	 	872541	 	383	 	426	 
	         COT 54	 	872542	 	383	 	427	 
	         COT 55	 	872543	 	383	 	428	 
	         COT 56	 	872544	 	383	 	429	 
	         COT 57	 	872545	 	383	 	430	 
	         COT 58	 	872546	 	383	 	431	 
	         COT 59	 	872547	 	383	 	432	 
	         COT 60	 	872548	 	383	 	433	 
	         COT 61	 	872549	 	383	 	434	 
	         COT 62	 	872550	 	383	 	435	 
	         COT 63	 	872551	 	383	 	436	 
	         COT 64	 	872552	 	383	 	437	 
	         COT 65	 	872553	 	383	 	438	 
	         COT 66	 	872554	 	383	 	439	 
	         COT 67	 	872555	 	383	 	440	 
	         COT 68	 	872556	 	383	 	441	 
	         COT 69	 	872557	 	383	 	442	 
	         COT 70	 	872558	 	383	 	443	 
	         COT 71	 	872559	 	383	 	444	 
	         COT 72	 	872560	 	383	 	445	 
	         COT 73	 	872561	 	383	 	446	 
	         COT 74	 	872562	 	383	 	447	 
	         COT 75	 	872563	 	383	 	448	 
	         COT 76	 	872564	 	383	 	449	 
	         COT 77	 	872565	 	383	 	450	 
	         COT 78	 	872566	 	383	 	451	 
	         COT 79	 	872567	 	383	 	452	 
	         COT 80	 	872568	 	383	 	453	 
	         COT 81	 	872569	 	383	 	454	 
	         COT 82	 	872570	 	383	 	455	 
	         COT 83	 	872571	 	383	 	456	 
	         COT 84	 	872572	 	383	 	457	 
	         COT 85	 	872573	 	383	 	458	 
	         COT 86	 	872574	 	383	 	459	 
	         COT 87	 	872575	 	383	 	460	 
	         COT 88	 	872576	 	383	 	461	 
	         COT 89	 	872577	 	383	 	462	 
	         COT 90	 	872578	 	383	 	463	 
	         COT 91	 	872579	 	383	 	464	 
	         COT 92	 	872580	 	383	 	465	 
	         COT 93	 	872581	 	383	 	466	 






















A-6 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	         COT 94	 	872582	 	383	 	467	 
	         COT 95	 	872583	 	383	 	468	 
	         COT 96	 	872584	 	383	 	469	 
	         COT 97	 	872585	 	383	 	470	 
	         COT 98	 	872586	 	383	 	471	 
	         COT 99	 	872587	 	383	 	472	 
	        COT 100	 	872588	 	383	 	473	 
	        COT 101	 	872589	 	383	 	474	 
	        COT 102	 	872590	 	383	 	475	 
	        COT 103	 	872591	 	383	 	476	 
	        COT 104	 	872592	 	383	 	477	 
	        COT 105	 	872593	 	383	 	478	 
	        COT 106	 	872594	 	383	 	479	 
	        COT 107	 	872595	 	383	 	480	 
	        COT 108	 	872596	 	383	 	481	 
	        COT 109	 	872597	 	383	 	482	 
	        COT 110	 	872598	 	383	 	483	 
	        COT 111	 	872599	 	383	 	484	 
	        COT 112	 	872600	 	383	 	485	 
	        COT 113	 	872601	 	383	 	486	 
	        COT 114	 	872602	 	383	 	487	 
	        COT 115	 	872603	 	383	 	488	 
	        COT 116	 	872604	 	383	 	489	 
	        COT 117	 	872605	 	383	 	490	 
	        COT 118	 	872606	 	383	 	491	 
	        COT 119	 	872607	 	383	 	492	 
	        COT 120	 	872608	 	383	 	493	 
	        COT 121	 	872609	 	383	 	494	 
	         KEL 1	 	867814	 	381	 	211	 
	         KEL 2	 	867815	 	381	 	212	 
	         KEL 3	 	867816	 	381	 	213	 
	         KEL 4	 	867817	 	381	 	214	 
	         KEL 5	 	867818	 	381	 	215	 
	         KEL 6	 	867819	 	381	 	216	 
	         KEL 7	 	867820	 	381	 	217	 
	         KEL 8	 	867821	 	381	 	218	 
	         KEL 9	 	867822	 	381	 	219	 
	         KEL 10	 	867823	 	381	 	220	 
	         KEL 11	 	867824	 	381	 	221	 
	         KEL 12	 	867825	 	381	 	222	 
	         KEL 13	 	867826	 	381	 	223	 
	         KEL 14	 	867827	 	381	 	224	 
	         KEL 15	 	867828	 	381	 	225	 
	         KEL 16	 	867829	 	381	 	226	 
	         KEL 17	 	867830	 	381	 	227	 
	         KEL 18	 	867831	 	381	 	228	 
	         KEL 19	 	867832	 	381	 	229	 
	         KEL 20	 	867833	 	381	 	230	 
	         KEL 21	 	867834	 	381	 	231	 
	         KEL 22	 	867835	 	381	 	232	 






















A-7 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	         KEL 23	 	867836	 	381	 	233	 
	         KEL 24	 	867837	 	381	 	234	 
	         KEL 25	 	867838	 	381	 	235	 
	         KEL 26	 	867839	 	381	 	236	 
	         KEL 27	 	867840	 	381	 	237	 
	         KEL 28	 	867841	 	381	 	238	 
	         KEL 29	 	867842	 	381	 	239	 
	         KEL 30	 	867843	 	381	 	240	 
	         KEL 31	 	867844	 	381	 	241	 
	         KEL 32	 	867845	 	381	 	242	 
	         KEL 33	 	867846	 	381	 	243	 
	         KEL 34	 	867847	 	381	 	244	 
	         KEL 35	 	867848	 	381	 	245	 
	         KEL 36	 	867849	 	381	 	246	 
	         KEL 37	 	867850	 	381	 	247	 
	         KEL 38	 	867851	 	381	 	248	 
	         KEL 39	 	867852	 	381	 	249	 
	         KEL 40	 	867853	 	381	 	250	 
	         KEL 41	 	867854	 	381	 	251	 
	         KEL 42	 	867855	 	381	 	252	 
	         KEL 43	 	867856	 	381	 	253	 
	         KEL 44	 	867857	 	381	 	254	 
	         KEL 45	 	867858	 	381	 	255	 
	         KEL 46	 	867859	 	381	 	256	 
	         KEL 47	 	867860	 	381	 	257	 
	         KEL 48	 	867861	 	381	 	258	 
	         KEL 49	 	867862	 	381	 	259	 
	         KEL 50	 	867863	 	381	 	260	 
	         KEL 51	 	867864	 	381	 	261	 
	         KEL 52	 	867865	 	381	 	262	 
	         KEL 53	 	867866	 	381	 	263	 
	         KEL 54	 	867867	 	381	 	264	 
	         KEL 55	 	867868	 	381	 	265	 
	         KEL 56	 	867869	 	381	 	266	 
	         KEL 57	 	867870	 	381	 	267	 
	         KEL 58	 	867871	 	381	 	268	 
	         KEL 59	 	867872	 	381	 	269	 
	         KEL 60	 	867873	 	381	 	270	 
	         KEL 61	 	867874	 	381	 	271	 
	         KEL 62	 	867875	 	381	 	272	 
	         KEL 63	 	867876	 	381	 	273	 
	         KEL 64	 	867877	 	381	 	274	 
	         KEL 65	 	867878	 	381	 	275	 
	         KEL 66	 	867879	 	381	 	276	 
	         KEL 67	 	867880	 	381	 	277	 
	         KEL 68	 	867881	 	381	 	278	 
	         KEL 69	 	867882	 	381	 	279	 
	         KEL 70	 	867883	 	381	 	280	 
	         KEL 71	 	867884	 	381	 	281	 
	         KEL 72	 	867885	 	381	 	282	 






















A-8 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	         KEL 73	 	867886	 	381	 	283	 
	         KEL 74	 	867887	 	381	 	284	 
	         KEL 75	 	867888	 	381	 	285	 
	         KEL 76	 	867889	 	381	 	286	 
	         KEL 77	 	867890	 	381	 	287	 
	         KEL 78	 	867891	 	381	 	288	 
	         KEL 79	 	867892	 	381	 	289	 
	         KEL 80	 	867893	 	381	 	290	 
	         KEL 81	 	867894	 	381	 	291	 
	         KEL 82	 	867895	 	381	 	292	 
	         KEL 83	 	867896	 	381	 	293	 
	         KEL 84	 	867897	 	381	 	294	 
	         KEL 85	 	867898	 	381	 	295	 
	         KEL 86	 	867899	 	381	 	296	 
	         KEL 87	 	867900	 	381	 	297	 
	         KEL 88	 	867901	 	381	 	298	 
	         KEL 89	 	867902	 	381	 	299	 
	         KEL 90	 	867903	 	381	 	300	 
	         KEL 91	 	867904	 	381	 	301	 
	         KEL 92	 	867905	 	381	 	302	 
	         KEL 93	 	867906	 	381	 	303	 
	         KEL 94	 	867907	 	381	 	304	 
	         KEL 95	 	867908	 	381	 	305	 
	         KEL 96	 	867909	 	381	 	306	 
	         KEL 97	 	867910	 	381	 	307	 
	         KEL 98	 	867911	 	381	 	308	 
	         KEL 99	 	867912	 	381	 	309	 
	        KEL 100	 	867913	 	381	 	310	 
	        KEL 101	 	867914	 	381	 	311	 
	        KEL 102	 	867915	 	381	 	312	 
	        KEL 103	 	867916	 	381	 	313	 
	        KEL 104	 	867917	 	381	 	314	 
	        KEL 105	 	867918	 	381	 	315	 
	        KEL 106	 	867919	 	381	 	316	 
	        KEL 107	 	867920	 	381	 	317	 
	        KEL 108	 	867921	 	381	 	318	 
	        KEL 109	 	867922	 	381	 	319	 
	        KEL 110	 	867923	 	381	 	320	 
	        KEL 111	 	867924	 	381	 	321	 
	        KEL 112	 	867925	 	381	 	322	 
	        KEL 113	 	867926	 	381	 	323	 
	        KEL 114	 	867927	 	381	 	324	 
	        KEL 115	 	867928	 	381	 	325	 
	        KEL 116	 	867929	 	381	 	326	 
	        KEL 117	 	867930	 	381	 	327	 
	        KEL 118	 	867931	 	381	 	328	 
	        KEL 119	 	867932	 	381	 	329	 
	        KEL 120	 	867933	 	381	 	330	 
	        KEL 121	 	867934	 	381	 	331	 
	        KEL 122	 	867935	 	381	 	332	 






















A-9 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	        KEL 123	 	867936	 	381	 	333	 
	        KEL 124	 	867937	 	381	 	334	 
	        KEL 125	 	867938	 	381	 	335	 
	        KEL 126	 	867939	 	381	 	336	 
	        KEL 127	 	867940	 	381	 	337	 
	        KEL 128	 	867941	 	381	 	338	 
	        KEL 129	 	867942	 	381	 	339	 
	        KEL 130	 	867943	 	381	 	340	 
	        KEL 131	 	867944	 	381	 	341	 
	        KEL 132	 	867945	 	381	 	342	 
	        KEL 133	 	867946	 	381	 	343	 
	        KEL 134	 	867947	 	381	 	344	 
	        KEL 135	 	867948	 	381	 	345	 
	        KEL 136	 	867949	 	381	 	346	 
	        KEL 141	 	867950	 	381	 	347	 
	        KEL 142	 	867951	 	381	 	348	 
	        KEL 143	 	867952	 	381	 	349	 
	        KEL 144	 	867953	 	381	 	350	 
	        KEL 145	 	867954	 	381	 	351	 
	        KEL 146	 	867955	 	381	 	352	 
	        KEL 147	 	867956	 	381	 	353	 
	        KEL 148	 	867957	 	381	 	354	 
	         AMT 1	 	878790	 	395	 	179	 
	         AMT 2	 	878791	 	395	 	180	 
	         AMT 3	 	878792	 	395	 	181	 
	         AMT 4	 	878793	 	395	 	182	 
	         AMT 5	 	878794	 	395	 	183	 
	         AMT 6	 	878795	 	395	 	184	 
	         AMT 7	 	878796	 	395	 	185	 
	         AMT 8	 	878797	 	395	 	186	 
	         AMT 9	 	878798	 	395	 	187	 
	         AMT 10	 	878799	 	395	 	188	 
	         AMT 11	 	878800	 	395	 	189	 
	         AMT 12	 	878801	 	395	 	190	 
	         AMT 13	 	878802	 	395	 	191	 
	         AMT 14	 	878803	 	395	 	192	 
	         AMT 15	 	878804	 	395	 	193	 
	         AMT 16	 	878805	 	395	 	194	 
	         AMT 17	 	878806	 	395	 	195	 
	         AMT 18	 	878807	 	395	 	196	 
	         AMT 19	 	878808	 	395	 	197	 
	         AMT 20	 	878809	 	395	 	198	 
	         AMT 21	 	878810	 	395	 	199	 
	         AMT 22	 	878811	 	395	 	200	 
	         AMT 23	 	878812	 	395	 	201	 
	         AMT 24	 	878813	 	395	 	202	 
	         AMT 25	 	878814	 	395	 	203	 
	         AMT 26	 	878815	 	395	 	204	 
	         AMT 27	 	878816	 	395	 	205	 
	         AMT 28	 	878817	 	395	 	206	 






















A-10 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	         AMT 29	 	878818	 	395	 	207	 
	         AMT 30	 	878819	 	395	 	208	 
	         AMT 31	 	878820	 	395	 	209	 
	         AMT 32	 	878821	 	395	 	210	 
	         AMT 33	 	878822	 	395	 	211	 
	         AMT 34	 	878823	 	395	 	212	 
	         AMT 35	 	878824	 	395	 	213	 
	         AMT 36	 	878825	 	395	 	214	 
	         AMT 37	 	878826	 	395	 	215	 
	         AMT 38	 	878827	 	395	 	216	 
	         AMT 39	 	878828	 	395	 	217	 
	         AMT 40	 	878829	 	395	 	218	 
	         AMT 41	 	878830	 	395	 	219	 
	         AMT 42	 	878831	 	395	 	220	 
	         AMT 43	 	878832	 	395	 	221	 
	         AMT 44	 	878833	 	395	 	222	 
	         AMT 45	 	878834	 	395	 	223	 
	         AMT 46	 	878835	 	395	 	224	 
	         AMT 47	 	878836	 	395	 	225	 
	         AMT 48	 	878837	 	395	 	226	 
	         AMT 49	 	878838	 	395	 	227	 
	         AMT 50	 	878839	 	395	 	228	 
	         AMT 51	 	878840	 	395	 	229	 
	         AMT 52	 	878841	 	395	 	230	 
	         AMT 53	 	878842	 	395	 	231	 
	         AMT 54	 	878843	 	395	 	232	 
	         AMT 55	 	878844	 	395	 	233	 
	         AMT 56	 	878845	 	395	 	234	 
	         AMT 57	 	878846	 	395	 	235	 
	         AMT 58	 	878847	 	395	 	236	 
	         AMT 59	 	878848	 	395	 	237	 
	         AMT 60	 	878849	 	395	 	238	 
	         AMT 61	 	878850	 	395	 	239	 
	         AMT 62	 	878851	 	395	 	240	 
	         AMT 63	 	878852	 	395	 	241	 
	         AMT 64	 	878853	 	395	 	242	 
	         AMT 65	 	878854	 	395	 	243	 
	         AMT 66	 	878855	 	395	 	244	 
	         AMT 67	 	878856	 	395	 	245	 
	         AMT 68	 	878857	 	395	 	246	 
	         AMT 69	 	878858	 	395	 	247	 
	         AMT 76	 	878859	 	395	 	248	 
	         AMT 77	 	878860	 	395	 	249	 
	        CSAMT 67	 	876631	 	393	 	149	 
	        CSAMT 68	 	876632	 	393	 	150	 
	        CSAMT 69	 	876633	 	393	 	151	 
	        CSAMT 70	 	876634	 	393	 	152	 
	        CSAMT 71	 	876635	 	393	 	153	 
	        CSAMT 72	 	876636	 	393	 	154	 
	        CSAMT 73	 	876637	 	393	 	155	 





















A-11 







	
Claim Name 	
BLM Serial No. 	
Book 	
Page 
		 		 		 		 
	CSAMT 74	 	876638	 	393	 	156	 
	CSAMT 75	 	876639	 	393	 	157	 
	CSAMT 76	 	876640	 	393	 	158	 
	CSAMT 77	 	876641	 	393	 	159	 
	CSAMT 78	 	876642	 	393	 	160	 
	CSAMT 87	 	876651	 	393	 	169	 
	CSAMT 88	 	876652	 	393	 	170	 
	CSAMT 89	 	876653	 	393	 	171	 
	CSAMT 90	 	876654	 	393	 	172	 
	CSAMT 91	 	876655	 	393	 	173	 














































This is SCHEDULE “B” to the Letter Agreement between 

TECK COMINCO AMERICAN INCORPORATED, 

WHITE KNIGHT RESOURCES LTD. and WHITE KNIGHT GOLD (U.S.) INC.

dated for reference December 1, 2004  



     



NET SMELTER RETURNS
ROYALTY 




	1  	  	DEFINITION  






1.01     “Net Smelter Returns” for
purposes of the Agreement are defined as follows:  



	  	
(a)    where all or a portion of the ores or concentrates derived from
the Property are                     sold as ores or concentrates, the Net Smelter
Returns shall be the gross amount                     received from the purchaser
following sale thereof after deduction of:  






	  	
(i)    if applicable under the sale contract, of all smelter charges,
penalties and                     other deductions;  






	  	
(ii)    all costs of transporting and insuring the ores or concentrates
from the mine to                     the smelter or other place of final delivery; and  






	  	
(iii)    sales, use, severance, excise, net proceeds of mine, and ad
valorem taxes and                     any tax on or measured by mineral production, but
excluding income taxes of the                     Royaltypayor; and  






	  	
(b)    where all or a portion of the said ores or concentrates derived
from the                     Property are treated in a smelter and a portion of the
metals recovered                     therefrom are delivered to, and sold by
Royaltypayor, the Net Smelter Returns                     shall be the gross amount
received from the purchaser following sale of the                     metals so
delivered, after deduction of:  






	  	
(i)    all smelter charges, penalties and other deductions;  






	  	
(ii)    all costs of transporting and insuring the ores or concentrates
from the mine to                     the smelter; and  






	  	
(iii)    if applicable under the smelter contract, all costs of
transporting and insuring                     the metals from the smelter to the place of
final delivery by the purchaser; and  






	  	
(iv)    sales, use, severance, excise, net proceeds of mine, and ad
valorem taxes and                     any tax on or measured by mineral production, but
excluding income taxes of the                     Royaltypayor.  






	  	
Where
any ores or concentrates are sold to, or treated in, a smelter owned or controlled by
Royaltypayor, the pricing for that sale or treatment will be established by Royaltypayor
on an arms-length basis so as to be fairly competitive with pricing, net of
transportation, insurance, treatment charges and other related costs, then available on
world markets for product of like quantity and quality. 























B-2 










	2  	  	PAYMENT
OF NET SMELTER RETURNS  






2.01     If a party becomes entitled to a
Net Smelter Returns royalty pursuant to the Agreement, the party paying the Net Smelter
Returns (the “Royaltypayor”) shall calculate the Net Smelter Returns and
the sums to be disbursed to the party receiving the Net Smelter Returns (the
“Royaltyholder”) as at the end of each calendar quarter. 



2.02     The Royalty payor shall, within
60 days of the end of each calendar quarter, as and when any Net Smelter Returns are
available for distribution: 



	  	
(a)    
          pay or cause to be paid to the Royaltyholder that percentage of the Net Smelter
          Returns to which the Royaltyholder are entitled under the Agreement less any
net           smelter returns royalty or other royalties;  






	  	
(b)    
          deliver to the Royaltyholder a statement indicating:  






	  	
(i)    
          the gross amounts received from the purchaser contemplated in §1.01of this
          Schedule “B”;  






	  	
(ii)    
          the deductions therefrom in accordance with §1.01 of this Schedule “B”;  






	  	
(iii)    
          the amount of Net Smelter Returns remaining;  






	  	
(iv)    
          the amount of any net smelter returns royalty or other royalties; and  






	  	
(v)    
          the amount of the Net Smelter Returns to which the Royaltyholder are entitled;  






	  	
supported
by such reasonable information as to the tonnage and grade of ores or concentrates
shipped as will enable the Royaltyholder to verify the gross amount payable by the
smelter or other purchaser.  






	3  	  	ADJUSTMENTS
AND VERIFICATION  






3.01     Payment of any Net Smelter
Returns by Royaltypayor shall not prejudice the right of Royaltypayor to adjust any
statement supporting the payment; provided, however, that all statements presented to the
Royaltyholder by Royaltypayor for any quarter shall conclusively be presumed to be true
and correct upon the expiration of 12 months following the end of the quarter to which the
statement relates, unless within that 12-month period Royaltypayor gives notice to the
Royaltyholder claiming an adjustment to the statement which will be reflected in
subsequent payment of Net Smelter Returns. 



3.02     Royaltypayor shall not adjust
any statement in favour of itself more than 12 months following the end of the quarter to
which the statement relates. 



3.03     The Royaltyholder shall, upon 30
days’ notice in advance to Royaltypayor, have the right to request that Royaltypayor
have its independent external auditors provide their audit certificate for the statement
or adjusted statement, as it may relate to the Agreement and the calculation of Net
Smelter Returns. 



3.04     The cost of the audit
certificate shall be solely for the Royaltyholder’ account unless the audit
certificate discloses material error in the calculation of Net Smelter Returns, in which
case Royaltypayor shall reimburse the Royaltyholder the cost of the audit certificate.
Without limiting the generality of the  























B-3 









foregoing, a discrepancy of one
percent in the calculation of Net Smelter Returns shall be deemed to be material.  



	4  	  	ROYALTYPAYOR
TO DETERMINE OPERATIONS  






4.01     The Royaltypayor will have
complete discretion concerning the nature, timing and extent of all exploration,
development, mining and other operations conducted on or for the benefit of the Property
and may suspend operations and production on the Property at any time it considers prudent
or appropriate to do so. The Royaltypayor will owe the Royaltyholder no duty to explore,
develop or mine the Property, or to do so at any rate or in any manner other than that
which the Royaltypayor may determine in its sole and unfettered discretion. The
Royaltypayor may, but will not be obligated to treat, mill, heap leach, sort, concentrate,
refine, smelt, or otherwise process, beneficiate or upgrade the ores, concentrates, and
other products at sites located on or off the Property, prior to sale, transfer, or
conveyance to a purchaser, user, or consumer. The Royaltypayor will not be liable for
mineral values lost in processing under sound practices and procedures, and no royalty
will be due on any such lost mineral values. 



	5  	  	COMMINGLING  






5.01     Ores, concentrates and
derivatives mined or retrieved from the Property may be commingled with ores, concentrates
or derivatives mined or retrieved from other properties. All determinations required for
calculation of Net Smelter Returns, including without limitation the amount of the metals
contained in or recovered from ores, solutions, concentrates or derivatives mined or
retrieved from the Property, the amount of the metals contained in or recovered from
commingled ores, solutions, concentrates or derivatives shall be made in accordance with
prudent engineering, metallurgical and cost accounting practices. 



	6  	  	TRADING
ACTIVITIES  






6.01     The Royaltypayor may, but need
not, engage in forward sales, futures trading or commodity options trading, and other
price hedging, price protection, and speculative arrangements (“Trading
Activities”) which may involve the possible delivery of base or precious metals
produced from the Property. The parties acknowledge and agree that the Royaltyholder shall
not be entitled to participate in the proceeds or be obligated to share in any losses
generated by the Trading Activities.