Exhibit 10.13
                                                                  EXECUTION COPY





                                ROYALTY AGREEMENT
                                -----------------
                               (Mesquite Mine NSR)

     THIS ROYALTY AGREEMENT (this "Agreement") is dated November 7, 2003 (the
                                   ---------
"Effective Date")
 --------------

BETWEEN:

WESTERN MESQUITE MINES, INC.
----------------------------
a corporation incorporated under the laws of Nevada
7000 Independence Parkway, Suite 160 #135
Plano, Texas 75025 USA
Facsimile: 972-208-2155
Phone: 972-208-0696

("Grantor")
  -------

and

HOSPAH COAL COMPANY
-------------------
a corporation incorporated under the laws of Delaware
1700 Lincoln Street
Denver, Colorado 80203
Facsimile: 303-837-5851
Phone:  303-837-5863

("Hospah")
  ------

                                    RECITALS
                                    --------

     Pursuant to the terms and conditions of that certain Asset Purchase
Agreement dated November 7, 2003 (the "Purchase Agreement") among Grantor,
                                       ------------------
Western Goldfields, Inc., Hospah and Hospah's affiliate Newmont USA Limited dba
Newmont Mining Corporation ("Newmont") with respect to those certain properties
                             -------
more particularly described in attached Schedule "A" (the "Property"): (1)
                                                           --------
Newmont and Hospah have conveyed to Grantor all of their rights, titles,
interests and obligations in and to the Property; and (2) Grantor has agreed to
grant


<PAGE>
                                                                   Exhibit 10.13
                                                                  EXECUTION COPY

to Hospah a Net Smelter Returns Royalty with respect to the Property.  In
addition, Hospah is entitled to receive from Operator a "Net Operating Cash Flow
                                                         -----------------------
Royalty" with respect to the leach facilities on the Property pursuant to a
-------
separate "Net Operating Cash Flow Royalty Agreement" dated as of the date of
          -----------------------------------------
this Agreement.

                                   AGREEMENTS
                                   ----------

     In  consideration  of  Ten  Dollars (US $10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties  hereby  agree  as  follows.

     1.     Royalty
            -------

          1.1     Grantor shall pay to Hospah a perpetual production royalty in
the amount of the applicable percentage Net Smelter Returns (as hereinafter
described) as determined in accordance with the following schedule from the sale
or other disposition of all Minerals produced from the Property, determined in
accordance with the provisions of this Agreement (the "Royalty"), excluding,
                                                       -------
however, "Existing Ore" on the "Leach Facility," as those terms are defined in
          ------------          --------------
the Net Operating Cash Flow Royalty Agreement.  For purposes of this Agreement,
the term "Minerals" shall mean any and all metals, minerals and mineral rights
          --------
of whatever kind and nature in, under or upon the surface or subsurface of the
Property (including, without limitation metals, precious metals, base metals,
industrial minerals, gems, diamonds, commercially valuable rock, aggregate,
clays and diatomaceous earth, hydrocarbons, and oil and gas, and other minerals
which are mined, excavated, extracted or otherwise recovered). The Royalty shall
apply to 100% of the Property.

     -------------------------------------------------------------------
                 Property                 Percentage Net Smelter Returns
                 --------                 ------------------------------

     -----------------------------------  ------------------------------
     Wade/Kelly Claims and McCrae/Hoover  One-half of One percent (0.5%)
     Patents,
     as described on Schedule A

     -----------------------------------  ------------------------------
     Glamis & Associates Claims,          One percent (1.0%)
     as described on Schedule A

     -----------------------------------  ------------------------------
     Hospah Non-Royalty Burdened Claims,  Two Percent (2.0%)
     as described on Schedule A
     -------------------------------------------------------------------

          1.2     For Precious Metals.  "Net Smelter Returns", in the case of
                  -------------------    -------------------
gold, silver, and platinum group metals ("Precious Metals"), shall be determined
                                          ---------------
by multiplying (a) the gross number of troy ounces of Precious Metals recovered
from production from the Property during the preceding calendar month ("Monthly
                                                                        -------
Production") delivered to the smelter, refiner, processor, purchaser or other
----------
recipient of such production (collectively, "Payor"), by (b) for gold, the
                                             -----
average of the London Bullion Market, Afternoon Fix, spot prices reported for
the preceding calendar month (the "Applicable Spot Price"), and for all other
                                   ---------------------
Precious Metals, the average of


                                        2
<PAGE>
the New York Commodities Exchange final spot prices reported for the preceding
calendar month for the particular Mineral for which the price is being
determined, and subtracting from the product of Subsections 1.2(a) and 1.2(b)
only the following if actually incurred: (i) charges imposed by the Payor for
refining bullion from dore or concentrates of Precious Metals ("Beneficiated
                                                                ------------
Precious Metals") produced by Grantor's final mill or other final processing
---------------
plant; however, charges imposed by the Payor for smelting or refining of raw or
crushed ore containing Precious Metals or other preliminarily processed Precious
Metals shall not be subtracted in determining Net Smelter Returns; (ii) penalty
substance, assaying, and sampling charges imposed by the Payor for refining
Beneficiated Precious Metals contained in such production; and (iii) charges and
costs, if any, for transportation and insurance of Beneficiated Precious Metals
from Grantor's final mill or other final processing plant to places where such
Beneficiated Precious Metals are smelted, refined and/or sold or otherwise
disposed of.

          1.3     In the event the refining of bullion from the Beneficiated
Precious Metals contained in such production is carried out in custom toll
facilities owned or controlled, in whole or in part, by Grantor, which
facilities were not constructed solely for the purpose of refining Beneficiated
Precious Metals or Other Minerals from the Property, then charges, costs and
penalties for such refining shall mean the amount Grantor would have incurred if
such refining were carried out at facilities not owned or controlled by Grantor
then offering comparable services for comparable products on prevailing terms,
but in no event greater than actual costs incurred by Grantor with respect to
such refining.  In the event Grantor receives insurance proceeds for loss of
production of Precious Metals, Grantor shall pay to Hospah the Royalty
percentage of any such insurance proceeds which are received by Grantor for such
loss of production.

          1.4     For Other Minerals.  "Net Smelter Returns", in the case of all
                  ------------------    -------------------
Minerals other than Precious Metals and the beneficiated products thereof
("Other Minerals"), shall be determined by multiplying (a) the gross amount of
  --------------
the particular Other Mineral contained in the Monthly Production delivered to
the Payor during the preceding calendar month by (b) the average of the New York
Commodities Exchange final daily spot prices reported for the preceding calendar
month of the appropriate Other Mineral, and subtracting from the product of
Subsections 1.4(a) and 1.4(b) only the following if actually incurred: (i)
charges imposed by the Payor for smelting, refining or processing Other Minerals
contained in such production, but excluding any and all charges and costs
related to Grantor's mills or other processing plants constructed for the
purpose of milling or processing Other Minerals, in whole or in part; (ii)
penalty substance, assaying, and sampling charges imposed by the Payor for
smelting, refining, or processing Other Minerals contained in such production,
but excluding any and all charges and costs of or related to Grantor's mills or
other processing plants constructed for the purpose of milling or processing
Other Minerals, in whole or in part; and (iii) charges and costs, if any, for
transportation and insurance of Other Minerals and the beneficiated products
thereof from Grantor's final mill or other final processing plant to places
where such Other Minerals are smelted, refined and/or sold or otherwise disposed
of. If for any reason the New York Commodities Exchange does not report spot
pricing for a particular Other Mineral, then the Parties shall mutually agree
upon an appropriate pricing entity or mechanism that accurately reflects the
market value of any such Other Mineral.


                                        3
<PAGE>
          1.5     In the event smelting, refining, or processing of Other
Minerals are carried out in custom toll facilities owned or controlled, in whole
or in part, by Grantor, which facilities were not constructed solely for the
purpose of milling or processing Other Minerals from the Property, then charges,
costs and penalties for such smelting, refining or processing shall mean the
amount Grantor would have incurred if such smelting, refining or processing were
carried out at facilities not owned or controlled by Grantor then offering
comparable services for comparable products on prevailing terms, but in no event
greater than actual costs incurred by Grantor with respect to such smelting and
refining. In the event Grantor receives insurance proceeds for loss of
production of Other Minerals, Grantor shall pay to Hospah the Royalty percentage
of any such insurance proceeds which are received by Grantor for such loss of
production.

          1.6     Payments of Royalty In Cash or In Kind.  Royalty payments
                  --------------------------------------
shall be made to Hospah as follows:

               (a)     Royalty In Kind.  Hospah may elect to receive its Royalty
                       ---------------
on Precious Metals from the Property "in cash" or "in kind" as refined bullion.
The elections may be exercised once per year on a calendar year basis during the
life of production from the Property.  Notice of election to receive the
following year's Royalty for Precious Metals "in cash" or "in kind" shall be
made in writing by Hospah and delivered to Grantor on or before November 1 of
each year.  In the event no written election is made, the Royalty for Precious
Metals will continue to be paid to Hospah as it is then being paid.  As of the
Effective Date of this Agreement, Hospah elects to receive its Royalty on
Precious Metals "in kind."  Royalties on Other Minerals shall not be payable "in
kind."  If Hospah elects to receive its Royalty for Precious Metals in "in
kind," Hospah shall open a bullion storage account at each refinery or mint
designated by Grantor as a possible recipient of refined bullion in which Hospah
owns an interest.  Hospah shall be solely responsible for all costs and
liabilities associated with maintenance of such account or accounts, and Grantor
shall not be required to bear any additional expense with respect to such
"in-kind" payments. Royalty will be paid by the deposit of refined bullion into
Hospah's account.  On or before the 25th day of each calendar month following a
calendar month during which production and sale or other disposition occurred,
Grantor shall deliver written instructions to the mint or refinery, with a copy
to Hospah directing the mint or refinery to deliver refined bullion due to
Hospah in respect of the Royalty, by crediting to Hospah's account the number of
ounces of refined bullion for which Royalty is due; provided, however, that the
words "other disposition" as used in this Agreement shall not include
processing, milling, beneficiation or refining losses of Precious Metals.  The
number of ounces of refined bullion to be credited will be based upon Hospah's
share of the previous month's production and sale or other disposition as
calculated pursuant to the commingling provisions of Section 1.9.  Royalty
payable "in kind" on silver or platinum group metals shall be converted to the
gold equivalent of such silver or platinum group metals by using the average
monthly spot prices for Precious Metals described in Section 1.2.  Title to
refined bullion delivered to Hospah under this Agreement shall pass to Hospah at
the time such bullion is credited to Hospah at the mint or refinery.  Hospah
agrees to hold harmless Grantor from any liability imposed as a result of the
election of Hospah to receive Royalty "in kind" and from any losses incurred as
a result of Hospah's trading and hedging activities.  Hospah assumes all
responsibility for any shortages which occur as a result of Hospah's
anticipation of credits to its account in advance of an actual deposit


                                        4
<PAGE>
or credit to its account by a refiner or mint. When royalties are paid in "in
kind," they will not reflect the costs deductible in calculating Net Smelter
Returns under this Agreement. Within thirty (30) days of the receipt of a
statement showing charges incurred by Grantor for transportation, smelting or
other deductible costs, Hospah shall remit to Grantor full payment for such
charges. If Hospah does not pay such charges when due, Grantor shall have the
right, at its election, provided Hospah does not dispute such charges, to deduct
the gold equivalent of such charges from the ounces of gold bullion to be
credited to Hospah in the following month.

               (b)     In Cash.  If Hospah elects to receive its Royalty for
                       -------
Precious Metals in cash, and as to Royalty payable on Other Minerals, payments
shall be payable on or before the later of ten (10) days after Grantor receives
payment from the Payor or the twenty-fifth (25th) day of the month following the
calendar month in which the minerals subject to the Royalty were shipped to the
Payor by Grantor, but in any event Hospah shall be paid no less frequently than
when Grantor is paid.  For purposes of calculating the cash amount due to
Hospah, Precious Metals and Other Minerals will be deemed to have been sold or
otherwise disposed of at the time refined production from the Property is
delivered, made available, or credited to Grantor by a mint or refiner.  The
price used for calculating the cash amount due for Royalty on Precious Metals or
Other Minerals shall be determined in accordance with Section 1.2 and Section
1.4 as applicable.  Grantor shall make each Royalty payment to be paid in cash
by delivery of a check payable to Hospah and delivering such check to Hospah at
the address listed in this Agreement, or to such other address as Hospah may
direct or by direct bank deposit to Hospah's account as Hospah shall designate.
Should default be made in any cash payment when due for Royalty and such default
still exists ten (10) days following notice of non-payment, then all unpaid
amounts then due shall bear interest at the rate of fifteen percent (15%) per
annum commencing from and after such payment due date until paid.

               (c)      Detailed Statement.  All Royalty payments or credits
                        ------------------
shall be accompanied by a detailed statement explaining the calculation thereof
together with any available settlement sheets from the Payor.

          1.7     Monthly Reconciliation. (a) On or before the later of ten (10)
                  ----------------------
days after Grantor receives payment from the Payor or the twenty-fifth (25th)
day of the month, Grantor shall make an interim settlement based on the
information then available of such Royalty then due, either "in cash" or "in
kind," whichever is applicable, by paying (i) not less than one hundred percent
(100%) of the anticipated final settlement of Precious Metals "in kind" Royalty
payments and (ii) not less than ninety-five percent (95%) of the anticipated
final settlement of cash Royalty payments. (b) The Parties recognize that a
period of time exists between the production of ore, the production of dor  or
concentrates from ore, the production of refined or finished product from dor
or concentrates, and the receipt of Payor's statements for refined or finished
product.  As a result, the payment of Royalty will not coincide exactly with the
actual amount of refined or finished product produced from the Property for the
previous month.  Grantor will provide final reconciliation promptly after
settlement is reached with the Payor for all lots sold or subject to other
disposition in any particular month. (c) In the event that Hospah has been
underpaid for any provisional payment (whether "in cash" or "in kind"), Grantor
shall pay the difference "in cash" by check and not "in kind" with such payment
being made at the time of the final reconciliation.  If Hospah has been overpaid
in the previous calendar month,


                                        5
<PAGE>
Hospah shall make a payment to Grantor of the difference by check (cheque).
Reconciliation payments shall be made on the same basis as used for the payment
in cash pursuant to Subsection 1.6(b) hereof.

          1.8     Hedging Transactions.  All profits and losses resulting from
                  --------------------
Grantor's sales of Precious Metals or Other Minerals, or Grantor's engaging in
any commodity futures trading, option trading, or metals trading, or any
combination thereof, and any other hedging transactions including trading
transactions designed to avoid losses and obtain possible gains due to metal
price fluctuations (collectively, "Hedging Transactions") are specifically
                                   --------------------
excluded from Royalty calculations pursuant to this Agreement.  All Hedging
Transactions by Grantor and all profits or losses associated therewith, if any,
shall be solely for Grantor's account.  The Royalty payable on Precious Metals
or Other Minerals subject to Hedging Transactions shall be determined as
follows:

               (a)     Affecting Precious Metals.  The amount of Royalty to be
                       -------------------------
paid on all Precious Metals subject to Hedging Transactions by Grantor shall be
determined in the same manner as provided in Subsection 1.2, with the
understanding and agreement that the average monthly spot price shall be for the
calendar month preceding the calendar month during which Precious Metals subject
to Hedging Transactions are shipped by Grantor to the Payor.

               (b)     Affecting Other Minerals.  The amount of Royalty to be
                       ------------------------
paid on all Other Minerals subject to Hedging Transactions by Grantor shall be
determined in the same manner as provided in Subsection 1.4, with the
understanding and agreement that the average monthly spot price shall be for the
calendar month preceding the calendar month during which Other Minerals subject
to Hedging Transactions are shipped by Grantor to the Payor.

          1.9     Commingling.  Grantor shall have the right to commingle
                  -----------
Precious Metals and Other Minerals from the Property with minerals from other
properties, provided the Parties shall have first agreed as to the procedures to
be utilized for any commingling.  Before any Precious Metals or Other Minerals
produced from the Property are commingled with minerals from other properties,
the Precious Metals or Other Minerals produced from the Property shall be
measured and sampled in accordance with sound mining and metallurgical practices
for moisture, metal, commercial minerals and other appropriate content, applied
on a consistent basis.  Representative samples of the Precious Metals or Other
Minerals shall be retained by Grantor and assays (including moisture and penalty
substances) and other appropriate analyses of these samples shall be made before
commingling to determine gross metal content of Precious Metals or gross metal
or mineral content of Other Minerals.  Grantor shall retain such analyses for a
reasonable amount of time, but not less than twenty four (24) months, after
receipt by Hospah of the Royalty paid with respect to such commingled Minerals
from the Property, and shall retain such samples taken from the Property for not
less than thirty (30) days after collection.

     2.     Stockpilings and Tailings.  All tailings, residues, waste rock,
            -------------------------
spoiled leach materials, and other materials (collectively "Materials")
                                                            ---------
resulting from Grantor's operations and activities on the Property shall be the
sole property of Grantor, but shall remain subject to the Royalty should the
Materials be processed or reprocessed, as the case may be, in the future and


                                        6
<PAGE>
result in the production and sale or other disposition of Precious Metals or
Other Minerals.  Notwithstanding the foregoing, Grantor shall have the right to
dispose of Materials from the Property on or off of the Property and to
commingle the same (as provided herein) with materials from other properties.
In the event Materials from the Property are processed or reprocessed, as the
case may be, and regardless of where such processing or reprocessing occurs, the
Royalty payable thereon shall be determined on a pro rata basis as determined by
using the best engineering and technical practices then available.

     3.     Term. The Royalty created hereby shall be perpetual, it being the
            ----
intent of the Parties hereto that, to the extent allowed by law, the Royalty
shall constitute a vested interest in and a covenant running with the land
affecting the Property and all successions thereof whether created privately or
through governmental action and shall inure to the benefit of and be binding
upon the Parties and their respective legal representatives, successors and
assigns so long as Grantor or any successor or assign of Grantor holds any
rights or interests in the Property. The Parties do not intend that there be any
violation of the rule of perpetuities. If, however, such violation should
inadvertently occur, the Participants hereby agree that a court shall reform
that provision in such a way as to approximate most closely the intent of the
Participants within the limits permissible under such rules.

     4.     Real Property Interest and Relinquishment of Property. If at any
            -----------------------------------------------------
time after the Effective Date Grantor or any Affiliate or successor or assignee
of Grantor stakes, applies for, and obtains or otherwise acquires, directly or
indirectly, any right to or interest in any mining claim, license, lease, grant,
concession, permit, patent, or other tenure or mineral property or other rights
or interests located wholly or partly within the boundaries of the Property,
such rights or interests shall thereafter become part of the Property. The
Royalty shall attach to any amendments, relocations or conversions of any mining
claim, license, lease, concession, permit or other tenure comprising the
Property, or to any renewals or extensions thereof. The Royalty shall be a real
property interest that runs with the Property and shall be applicable to Grantor
and its successors and assigns of the Property. If Grantor or any Affiliate or
successor or assign of Grantor surrenders, allows to lapse or otherwise
relinquishes or terminates its interest in any portion or all of the Property
and within a period of five (5) years after the effective date of relinquishment
or abandonment reacquires a direct or indirect interest in the land covered by
the former Property, then from and after the date of such reacquisition such
reacquired properties shall be included in the Property and the Royalty shall
apply to such interest so acquired. Grantor shall give written notice to Hospah
within ten (10) days of any acquisition or reacquisition of the Property.

     5.     Standard of Operations.  Grantor shall comply with all applicable
            ----------------------
laws, statutes, rules, regulations, permits, ordinances, certificates, licenses
and other regulatory requirements relating to operations on the Property,
provided, however, Grantor shall have the right to, in good faith, contest any
such requirements if such contest does not jeopardize Hospah's rights hereunder.
Grantor shall use reasonable diligence in exploring for, and developing Minerals
on the Property.

     6.     Registration on Title. The Parties agree that following the
            ---------------------
Effective Date Grantor shall immediately undertake all acts required to register
title to the Property in Grantor's name by


                                        7
<PAGE>
filing an appropriate statutory form of transfer document(s) executed by Hospah.
The Parties hereby consent to such registering or recording and agree to
co-operate with such Party to accomplish the same. Hospah may register or record
against title to the Property this Agreement to secure payment from time to time
and protect Hospah's right to receive the Royalty.

     7.     Reporting, Records and Audits, Inspections, New Resources or
            ------------------------------------------------------------
            Reserves, Confidentiality and Press Releases.
            --------------------------------------------

          7.1     Reporting. No later than March 1 of each year, Grantor shall
                  ---------
provide to Hospah with an annual report of activities and operations conducted
with respect to the Property during the preceding calendar year, and from time
to time shall provide such additional information as Hospah may reasonably
request.  Such annual report shall include details of:  (a) the preceding year's
activities with respect to the Property; (b) ore reserve data for the calendar
year just ended; and (c) estimates of anticipated production and estimated
remaining ore reserves with respect to proposed activities for the Property for
the current calendar year.

          7.2     Records and Audits. Hospah shall have the right, upon
                  ------------------
reasonable notice to Grantor, to inspect and copy all books, records, technical
data, information and materials (the "Data") pertaining to Grantor's activities
                                      ----
with respect to the Property; provided that such inspections shall not
unreasonably interfere with Grantor's activities with respect to the Property.
Grantor makes no representations or warranties to Hospah concerning any of the
Data or any information contained in the annual reports, and Hospah agrees that
if it elects to rely on any such Data or information, it does so at its sole
risk. If any such audit or inspection reveals that Royalty payments for any
calendar year are underpaid by more than three percent (3%), Grantor shall
reimburse Hospah for its reasonable costs incurred in such audit or inspection.
Hospah shall be entitled to enter the mine workings and structures on the
Property at reasonable times upon reasonable advance notice for inspection
thereof, but Hospah shall so enter at its own risk and shall indemnify and hold
Grantor and its Affiliates harmless against and from any and all loss, costs,
damage, liability and expense (including but not limited to reasonable
attorneys' fees and costs) by reason of injury to Hospah or its agents or
representatives or damage to or destruction of any property of Hospah or its
agents or representatives while on the Property on or in such mine workings and
structures, unless such injury, damage, or destruction is a result, in whole or
in part, of the negligence of Grantor.

          7.3     New Resources or Reserves. If Grantor establishes a mineral
                  -------------------------
resource or mineral reserve on any of the Property, Grantor shall provide to
Hospah the amount of such resource or reserve as soon as practicable after
Grantor makes a public declaration with respect to the establishment thereof.

          7.4     Confidentiality. Except for recording this Agreement, Hospah
                  ---------------
shall not, without the prior written consent of Grantor, which shall not be
unreasonably delayed or withheld, knowingly disclose to any third party data or
information obtained pursuant to this Agreement which is not generally available
to the public; provided, however, Hospah may disclose data or information so
obtained without the consent of Grantor:  (a) if required for compliance with
laws, rules, regulations or orders of a governmental agency or stock exchange;
(b) to any of Hospah's consultants or advisors; (c) to any third party to whom
Hospah, in good


                                        8
<PAGE>
faith, anticipates selling or assigning Hospah's interest in the Property; and
(d) to a prospective lender, provided that such consultants, third parties or
lenders first sign a confidentiality agreement with Hospah; or (e) to a third
party to which a Party or its parent Hospah contemplates a transfer to, or a
merger, amalgamation or other corporate reorganization with, provided however,
that any such third party to whom disclosure is made has a legitimate business
need to know the disclosed information, and shall first agree in writing to
protect the confidential nature of such information to the same extent Hospah is
obligated under this section.

          7.5     Press Releases. Subject to its rights and obligations
                  --------------
regarding confidentiality under Section 7.4, Hospah shall not issue any press
release relating to the Property or this Agreement except upon giving Grantor
two (2) days advance written notice of the contents thereof, and Hospah shall
make any reasonable changes to such proposed press release as such changes may
be timely requested by Grantor, provided, however, Hospah may include in any
press release without notice any information previously reported by Grantor.  A
Party shall not, without the consent of the other Party, issue any press release
that implies or infers that the non-issuing Party endorses or joins the issuing
Party in statements or representations contained in any press release.

     8.     General Provisions.
            ------------------

          8.1     Amendment. This Agreement may be amended, modified or
                  ---------
supplemented only by a written agreement signed by each Party.

          8.2     Waiver of Rights. Any waiver of, or consent to depart from,
                  ----------------
the requirements of any provision of this Agreement shall be effective only if
it is in writing and signed by the Party giving it, and only in the specific
instance and for the specific purpose for which it has been given.  No failure
on the part of any Party to exercise, and no delay in exercising, any right
under this Agreement shall operate as a waiver of such right.  No single or
partial exercise of any such right shall preclude any other or further exercise
of such right or the exercise of any other right.

          8.3     Applicable Law. This Agreement shall be governed by and
                  --------------
interpreted and enforced in accordance with the laws of the State of Colorado,
USA.

          8.4     Dispute Resolution. Disputes resulting from, arising out of,
                  ------------------
or in connection with this Agreement or the construction or enforcement thereof
may be resolved by a court of competent jurisdiction.  In any litigation between
the Parties or any person claiming under them, resulting from, arising out of,
or in connection with this Agreement or the construction or enforcement thereof,
the substantially prevailing party shall be entitled to recover all reasonable
costs, expenses, legal and expert witness fees and other costs of suit incurred
by it in connection with such litigation, including such costs, expenses and
fees incurred prior to the commencement of the litigation, in connection with
any appeals, and in collecting or otherwise enforcing any final judgment entered
therein.  If a party substantially prevails on some aspects of such action, but
not on others, the court may apportion any award of costs and legal fees in such
manner as it deems equitable.


                                        9
<PAGE>
          8.5     Grantor to Bear Solely All Costs and Obligations. Commencing
                  ------------------------------------------------
from and after the Effective Date, for purposes of calculating the Royalty,
Grantor has agreed to be solely responsible for its own account all costs and
obligations pertaining to or associated with the Property.

          8.6     Currency. Unless specified otherwise, all statements of or
                  --------
references to dollar amounts in this Agreement are to lawful money of the United
                                                                      ----------
States of America.
------------------

          8.7     No  Joint Venture, Mining Partnership, Commercial Partnership.
                  -------------------------------------------------------------
This  Agreement shall not be construed to create, expressly or by implication, a
joint  venture, mining partnership, commercial partnership, or other partnership
relationship  between  or  among  Grantor  and  Hospah.

          8.8     Time. Time is of the essence of each provision of this
                  ----
Agreement.

          8.9     Definitions. In this Agreement and the Schedule(s) attached to
                  -----------
this Agreement the following terms shall have the following meanings:

     "Affiliate" of a Party means an entity or person that Controls, is
      ---------
Controlled by, or is under common Control with the Party through direct or
indirect ownership of greater than fifty percent (50%) of equity or voting
interest.

     "Agreement" (or "Royalty Agreement") means this Royalty Agreement and all
      ---------       -----------------
amendments, modifications and supplements thereto.

     "Applicable Spot Price" means as described in Section 1.2.
      ---------------------

     "Beneficiated Precious Metals" means as described in Section 1.2.
      ----------------------------

     "Business Day" means any calendar day other than a Saturday or Sunday or
      ------------
any statutory holiday or civic holiday in the State of Colorado or USA.

     "Control" used as a verb means, when used with respect to an entity, the
      -------
ability, directly or indirectly through one or more intermediaries, to direct or
cause the direction of the management and policies of such entity through (i)
the legal or beneficial ownership of voting securities or membership interests;
(ii) the right to appoint managers, directors or corporate management; (iii)
contract; (iv) operating agreement; (v) voting trust; or otherwise; and, when
used with respect to a person, means the actual or legal ability to control the
actions of another, through family relationship, agency, contract or otherwise;
and "Control" used as a noun means an interest which gives the holder the
ability to exercise any of the foregoing powers.

     "Data" means as described in Section 7.2.
      ----

     "Effective Date" means the date specified on the top of page one of this
      --------------
Agreement.


                                       10
<PAGE>
     "Grantor" shall include, to the extent applicable in the circumstances, all
      -------
of Grantor's successors-in-interest, including without limitation assignees,
partners, joint venture partners, lessees, and when applicable mortgagees and
Affiliates having or claiming an interest in the Property.

     "Hospah" shall include, to the extent applicable in the circumstances, all
      ------
of Hospah's successors-in-interest, including without limitation assignees,
partners, joint venture partners, lessees, and when applicable mortgagees and
Affiliates having or claiming an interest in the Property.

     "Hedging Transactions" means as described in Section 1.8.
      --------------------

     "Materials" means as described in Article 2.
      ---------

     "Minerals" means as described in Section 1.1.
      --------

     "Monthly Production" means as described in Section 1.2.
      ------------------

     "Net Smelter Returns" means as described in Section 1.2 and Section 1.4, as
      -------------------
applicable.

     "Notice" means as described in Section 8.10.
      ------

     "Other Mineral(s)" means as described in Section 1.4.
      ---------------

     "Parties" means Hospah and Grantor collectively.
      -------

     "Party" means either of the Parties individually.
      -----

     "Payor" means as described in Section 1.2.
      -----

     "Precious Metals" means as described in Section 1.2.
      ---------------

     "Property" means the property described in attached Schedule "A" including
      --------
without limitation any amendments, supplements, renewals and replacements
thereof.

     "Purchase Price" means the consideration referenced in the Recital(s) and
      --------------
stipulated in the Venture Agreement.

     "Royalty" means the Net Smelter Returns royalty stipulated in Section 1.1.
      -------

     "Transmission" means as described in Section 8.10.
      ------------

     "Purchase Agreement" means that certain agreement described in Recital A.
      ------------------

          8.10     Notices. (a) Any notice, demand or other communication (in
                   -------
this section, a "Notice") required or permitted to be given or made hereunder
                 ------
shall be in writing and shall be


                                       11
<PAGE>
sufficiently given or made if: (i) delivered in person during normal business
hours of the recipient on a Business Day and left with a receptionist or other
responsible employee of the recipient at the applicable address first set forth
in this Agreement; or (ii) sent by facsimile transmission (a "Transmission")
                                                              ------------
during normal business hours on a Business Day charges prepaid and confirmed by
regular mail at the address first set forth in this Agreement; and (b) each
notice sent in accordance with this section shall be deemed to have been
received: (i) on the day it was delivered; or on the same day that it was sent
by fax transmission; or (ii) on the first Business Day thereafter if the day on
which it was sent by fax transmission was not a Business Day. The notice
addresses for the Parties are set out on page one of this Agreement. A Party may
change its address for notice by giving notice to the other Party in accordance
with this section. Notice to Hospah shall additionally be sent to Hospah Coal
Company, 1700 Lincoln Street, Denver, Colorado 80203 U.S.A., Attention: Land
Dept., Facsimile: 303.837.5851, Phone: 303-837.5863.

          8.11     Assignment. Except as otherwise provided in this Agreement,
                   ----------
Grantor may assign, transfer, convey or otherwise dispose of its rights,
interests and obligations under this Agreement; provided, however, any option,
joint-venture, assignment, transfer, conveyance or other disposition by Grantor
of its rights and interests in or with respect to the Property or this Agreement
shall be void unless the proposed assignee has first agreed in writing with
Hospah to observe and be bound by all of the provisions of this Agreement with
respect to the rights, interests and obligations being assigned to or assumed by
the assignee in the place and stead of Grantor and only subsequent to the
signing of such written agreement shall Grantor be relieved or discharged from
this Agreement in respect thereof. Grantor shall not be relieved or discharged
from this Agreement in respect of any rights, interests or obligations of
Grantor in or with respect to this Agreement which are not assigned or assumed
in accordance with the foregoing and Hospah may continue to look to Grantor for
performance with respect thereto. Hospah shall have the unrestricted right, in
its sole and absolute discretion, to assign, transfer, convey, or relinquish any
of its rights or interests with respect to the Royalty at any time. Any such
assignment shall be effective upon written notice thereof to the other party.

          8.12     Maintenance of the Property. At any time and from time to
                   ---------------------------
time, Grantor may elect to abandon any part or parts of the Property that it no
longer desires to maintain.

          8.13     Further Assurances. The Parties promptly shall execute all
                   ------------------
such further instruments and documents and do all such further actions as may be
necessary to effectuate the purposes of this Agreement.

          8.14     Entire Agreement. This Agreement constitutes the entire
                   ----------------
agreement between the Parties with respect to the subject matter hereof.

          8.15     Rule Against Perpetuities. The Parties do not intend that
                   -------------------------
there be any violation of the rule of perpetuities, the rule against
unreasonable restraints or the alienation of property, or any similar rule.
Accordingly, if any right or option to acquire any interest in the Property, in
a Participating Interest, in the Assets, or in any real property under this
Agreement, such right or option must be exercised, if at all, so as to vest such
interest within time periods permitted by applicable rules. If, however, such
violation should inadvertently occur, the


                                       12
<PAGE>
Participants hereby agree that a court shall reform that provision in such a way
as to approximate most closely the intent of the Participants within the limits
permissible under such rules.

          8.16     Counterparts. This Agreement may be executed in any number of
                   ------------
counterparts, and it shall not be necessary that the signatures of the Parties
be contained on any counterpart.  Each counterpart shall be deemed an original,
but all counterparts together shall constitute one and the same instrument.





                            [SIGNATURE PAGE FOLLOWS.]



                                       13
<PAGE>
                                                                   Exhibit 10.13
                                                                  EXECUTION COPY


     IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement
effective as of the date first written above.


GRANTOR                               HOSPAH

WESTERN MESQUITE MINES, INC.          HOSPAH COAL COMPANY


By:   /s/John P. Ryan                 By:   /s/ Britt D. Banks
      -------------------------             ------------------------------
Name:  John P. Ryan                   Name:  Britt D. Banks
Title: Chief Financial Officer        Title: Vice President and Secretary


Its Authorized Representative         Its Authorized Representative





                                      A-14
<PAGE>