NOTE AND TRUST DEED MODIFICATION AGREEMENT


OF AUGUST 2008








I.           BACKGROUND:  Effective August 5, 2005, the undersigned Calais Resources, Inc, a British Columbia corporation (“Calais-BC”), and Calais Resources Colorado, Inc, a Nevada corporation (“Calais-CO”) (collectively, the “Calais Companies”) executed a promissory note (the “Note”) in which Calais-BC and Calais-CO promised to pay Duane A. Duffy, Glenn E. Duffy, James Ober, and Luke Garvey (Holders herein) the sum of $807,650.11.  Concurrently, the Calais Companies and the Holders entered into a Security Agreement, pursuant to which the Calais Companies executed a deed of trust encumbering certain real property located in Boulder County, Colorado.  On or about December 15, 2005, the Calais Companies made a principal payment due under the Note in the amount of $166,000.  In March 2007, following a default by the Calais Companies on further payments, the Note was modified and extended to require monthly installment payments of $75,000.00 on the fifteenth (15th) day of each month, beginning April 15, 2007 and continuing until the entire Note balance was paid.  No monthly payments were made by the Calais Companies.  On or about March 31, 2007, the Calais Companies made a further payment of $200,000 on the amount due and payable.  In November 2007, the Calais Companies and the Holders agreed to a further modification of the Note to extend repayment terms through April 1, 2008, pending the expected resolution by the Calais Companies of certain financial issues.  Subsequent to the April Agreement on April 1, 2008 Calais made a payment of $100,000, an additional payment of $50,000 on May 1, 2008, and an additional payment of $25,000 on July 20, 2008.





In the interest of assuring full payment of all principal and interest due under the Note as modified, the Calais Companies and the Holders now agree to revise and amend the terms of the Note further, as follows:





II.           AGREEMENTS OF THE PARTIES:





A.
The balance due under the Note as of August 1, 2008 shall be $816,800.07 as set forth on attached Exhibit 1.  Commencing August  1, 2008, interest on the unpaid balance shall accrue at a rate of 15.9 percent per annum through the date on which the unpaid balance is paid in full.





B.
The Calais Companies shall make an initial payment of $12,500 on August 1, 2008, and shall thereafter pay, on or before the first day of each of the four succeeding months, commencing September 1, 2008, the sum of $12,500, for a total of $62,500.





C.
The Calais Companies shall pay the remainder due and payable under the Note, together with all interest accruing thereon to the date of such payment, on or before December 31, 2008.














D.
The Calais Companies shall pay a loan extension fee of ten percent of the balance due under the Note through the issuance to the Holders of restricted shares of Calais-BC common stock in the aggregate amount of 1,021,000 shares, valued at $0.08 per share, together with an identical number of warrants exercisable at any time within five years of the date of issuance for an exercise price of $0.12 per share.








E.
All payments to Holders by the Calais Companies, including the share and warrant issuances described in Paragraph D above, shall be delivered to each Holder directly in accordance with the following allocation:





Duane A. Duffy – 40.3746 %




Glenn E. Duffy  – 40.3746 %




James Ober       --   9.6254 %




Luke Garvey     --   9.6254 %




Cash payments shall be delivered by wiring the respective funds to each Holder in accordance with instructions to be furnished by electronic mail to David K. Young at DYoung1619@aol.com.




All modifications of the Note described herein shall also modify the terms of the deed of trust and security agreement referenced herein.. All other terms of the Note and such deed of trust and security agreement shall remain in full force and effect.





Executed on the dates shown below by:




CALAIS RESOURCES, INC.


CALAIS RESOURCES COLORADO, INC.By:  _______________________________


By: __________________________David K. Young


David K. YoungPresident and Chief Executive Officer


President and Chief Executive Officer


STATE OF COLORADO                  )


) ss.


COUNTY OF ____________         )





On this ____ day of _______________, 2008, before the undersigned officer, personally appeared David K. Young, who acknowledged himself to be the President and Chief Executive Officer of Calais Resources, Inc. and Calais Resources Colorado, Inc., and who, as such, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing on behalf of each such corporation.














IN WITNESS WHEREOF, I hereunto set my hand and official seal.





My Commission Expires:                                                                           ___________________________________


Notary Public













Duane A. Duffy








________________                                                                      ___________________________________


Date                                                                 Duane A. Duffy





STATE OF COLORADO                  )


) ss.


COUNTY OF ____________         )





The foregoing instrument was acknowledged before me on this _____ day of ________, 2008, by Duane A. Duffy.





My Commission Expires:                                                                           ___________________________________


Notary Public










Glenn E. Duffy








__________________________________


Date                                                                       Glenn E. Duffy







STATE OF FLORIDA                       )


) ss.


COUNTY OF ____________         )





The foregoing instrument was acknowledged before me on this _____ day of ________, 2008, by Glenn E. Duffy.





My Commission Expires:                                                                           ___________________________________


Notary Public



















Luke Garvey








__________________________________


Date:                                                                           Luke Garvey







STATE OF______________          )


) ss.


COUNTY OF ____________         )





The foregoing instrument was acknowledged before me on this _____ day of ________, 2008, by Luke Garvey.





My Commission Expires:                                     ___________________________________


Notary Public










James Ober








__________________________________


Date:                                                                           James Ober







STATE OF______________          )


) ss.


COUNTY OF ____________         )





The foregoing instrument was acknowledged before me on this _____ day of ________, 2008, by James Ober.





My Commission Expires:                                   ___________________________________


Notary Public













Exhibit 1










Calculation of Note Principal as of August 1, 2008














Item
Interest / Day
Days
Amount
New PrincipalPrincipal and interest due as of March 31, 2008:



$948,396.66Payment - $100,000 on April 1, 2008


$100,000.00
848,396.66Per Diem Interest Accruing since April 1, 2008 to May 1, 2008 at 15.9% APR
$369.58
30
11,087.27
$859,483.93Payment on May 1, 2008


$50,000.00
809,483.93Per Diem Interest Accruing since May 1, 2008 to June 20, 2008 at 15.9% APR
$352.62
51
$17,983.85
827,467.78Payment on June 20, 2008


$25,000.00
802,467.78Per Diem Interest Accruing since June 20, 2008 to August 1, 2008 at 15.9% APR
$349.57
41
$14,332.29
$816,800.07