EXHIBIT 10.48
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                                 EXPLORATION AGREEMENT AND OPTION TO LEASE

                                             Table of Contents


1.       Description of Property/Grant of Exploration Rights................  1
         ---------------------------------------------------

2.       Term..............................................................  1
         ----

3.       Consideration.....................................................  1
         -------------

4.       Conduct of Operations.............................................  2
         ---------------------

5.       Notice............................................................  2
         ------

6.       Termination.......................................................  3
         -----------

7.       Insurance.........................................................  3
         ---------

8.       Indemnity.........................................................  3
         ---------

9.       Compliance With Laws..............................................  3
         --------------------

10.      Option to Lease...................................................  4
         ---------------

11.      Removal of Property...............................................  4
         -------------------

12.      Information.......................................................  4
         -----------

13.      Default and Termination...........................................  5
         -----------------------

         13.1     Default..................................................  5
                  -------

                  13.1.1   Breach of Covenants.............................  5
                           -------------------
                  13.1.2   Assignments.....................................  5
                           -----------
                  13.1.3   Bankruptcy......................................  5
                           ----------
                  13.1.4   Receivership....................................  6
                           ------------
                  13.1.5   Attachment......................................  6
                           ----------

         13.2     Remedies.................................................  6
                  --------

14.      Inurement.........................................................  6
         ---------

15.      Force Majeure.....................................................  6
         -------------

16.      Title.............................................................  7
         -----

17.      Counterparts......................................................  7
         ------------

18.      Complete Agreement.................................................  7
         ------------------

19.      Recordation........................................................  8
         -----------


<PAGE>
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE


         This   Agreement   is  made  and   effective  as  of  the  ___  day  of
_______________,  19__,  by and between  CHARLES  JACKSON,  MARIE  UNRUH,  JAMES
HOPKINS,  SR., TRACY HOPKINS, RICK JACKSON, MARA JACKSON, PAUL JACKSON and JARED
JACKSON  (hereinafter  referred to as "LICENSOR") and DESERT  MINERALS,  INC., a
Delaware corporation, (hereinafter referred to as "LICENSEE"), agree as follows:

20. Description of Property/Grant of Exploration Rights.
         LICENSOR is the owner of all or part of the  unpatented  placer  mining
claims described in EXHIBIT "A" attached hereto. LICENSOR grants to LICENSEE the
exclusive  right to explore  LICENSOR's  ownership  interest in the property set
forth in EXHIBIT  "A"  (LICENSOR's  interest is  hereinafter  referred to as the
"PREMISES").
         21.      Term.
         The term of this Agreement shall be five (5) years,  unless  terminated
earlier or extended.  LICENSEE shall have the right to extend for two additional
five (5) year terms upon the payment of Five Hundred Dollars  ($500.00) for each
such extension.
         22.      Consideration.
         In consideration  for the granting of the exploration  rights set forth
herein,  LICENSEE agrees to pay to LICENSOR each year in which this Agreement is
in effect on or before the  anniversary  date,  the sum of Five Hundred  Dollars
($500.00).  Upon execution of this Agreement,  LICENSEE shall pay the sum of One
Thousand Dollars ($1,000.00) which shall be full consideration for the

                                              Page 1 of 8

<PAGE>
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



first and second year's  payments.  LICENSORS  authorize Rick Jackson to receive
such payments for them, for their benefit, as follows:
                  Rick Jackson
                  P.O. Box 874
                  Jacksonville, OR 97530

         23.      Conduct of Operations.
         During the term of this  Agreement,  LICENSEE shall have possession of,
and free and  unrestricted  access to, the  PREMISES and shall have the right to
explore,  investigate,  measure, sample (including bulk sample),  examine, test,
work, use, manage,  control and develop the PREMISES.  LICENSOR shall receive an
accounting  and  production  royalty,  pursuant to the terms of the Mining Lease
attached hereto as EXHIBIT "B", for all ores, minerals and concentrates  removed
and  sold  from the  PREMISES.  LICENSEE  may  trench  or drill  any part of the
PREMISES,  may rehabilitate existing mine workings,  construct new workings, and
may erect,  construct,  use, and maintain on the PREMISES  such roads,  building
structures,  equipment  and  machinery  as in its  sole  discretion  it may deem
necessary to its operations.
         24.      Notice.
         Any notices  required or  permitted to be given to LICENSOR or LICENSEE
hereunder  shall be given in the manner  provided  herein and be  considered  as
delivered  and received when the same are delivered in person or received by the
addressee following deposit in the United States mail by registered mail, return
receipt  requested,  with postage prepaid.  All notices given hereunder shall be
addressed  to the persons  and  addresses  given below or such other  persons or
addresses  as the parties  may  designate  from time to time.  Any change in the
names and/or addresses of the persons

                                              Page 2 of 8

<PAGE>



DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



listed below shall be  effective  thirty (30) days from the giving of the notice
to the other party as provided herein.
LICENSEE:                  Desert Minerals, Inc.
                           c/o LS Capital Corporation
                           15915 Katy Freeway, Suite 250
                           Houston, TX 77094
LICENSOR:                  Rick Jackson
--------
                           P.O. Box 874
                           Jacksonville, OR 97530


         25.      Termination.
         Upon  termination  or surrender  under the terms of this  License,  all
rights of LICENSEE  under this  Agreement,  except as provided in Paragraph 11.,
shall  terminate and all payments  heretofore made under this Agreement shall be
retained by LICENSOR as full compensation,  as rental, for the use and occupancy
of said PREMISES and as consideration for which this Agreement is given.
         26.      Insurance.
         LICENSEE shall, at its sole expense,  cause to be issued and maintained
during  the  term  of  this  Agreement,  or  any  extension  thereof,  workmen's
compensation  insurance coverage in accordance with the provisions of California
law.
         27.      Indemnity.
         LICENSEE  shall protect and  indemnify and hold LICENSOR  harmless from
and against any and all claims, actions or causes of action, including,  without
limitation,  employees of LICENSEE,  contractors and employees of contractors of
LICENSEE, for injury to or death of persons or damage to property arising out of
or in connection with LICENSEE's exploration activities.

                                              Page 3 of 8

<PAGE>
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



         28.      Compliance With Laws.
         LICENSEE shall conduct all  exploration  activities in full  compliance
with the  applicable  laws and  regulations  of the State of California  and the
United States of America  including,  but not limited to, the  provisions of the
Federal Land Management and Policy Act of 1976 and the  regulations  promulgated
pursuant thereto.
         29.      Option to Lease.
         During the term of this Agreement,  or during the term of any extension
hereof,  LICENSEE may  exercise an option to lease the PREMISES  pursuant to the
terms and conditions  set forth in the Mining Lease  attached  hereto as EXHIBIT
"B" and made a part  hereof as though set forth in its  entirety.  The option to
lease shall be deemed  exercised when LICENSOR has received a certified check in
the amount of Five Thousand Dollars ($5,000.00), together with two (2) copies of
EXHIBIT "B" that have been  executed by LICENSEE.  LICENSOR  shall sign one copy
and return it  promptly  to  LICENSEE.  If  LICENSOR is the owner at the date of
exercise of this option of less than one hundred  percent (100%) of the title to
the PREMISES,  LICENSOR  shall receive an amount equal to LICENSOR's  percentage
ownership  multiplied  by Five  Thousand  Dollars  ($5,000.00)  pursuant to this
paragraph.
         30.      Removal of Property.
         LICENSEE  shall have,  and it is hereby given and granted,  ninety (90)
days  after  a  valid  forfeiture,  surrender,  or  other  termination  of  this
Agreement,  to remove  from the  PREMISES  all  machinery,  equipment,  personal
property and improvements erected or placed in or upon the said property by

                                              Page 4 of 8

<PAGE>
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



it. If not so removed by LICENSEE within said ninety (90) day period,  titles to
unremoved property will then vest in LICENSOR.
         31.      Information.
                  31.1 If the Option to Lease  contained  in Paragraph 10 is not
exercised and this  Agreement is  terminated,  LICENSOR may,  within ninety (90)
days,  request,  and if requested,  LICENSEE shall supply LICENSOR copies of all
Information as defined below.  As used in this  Agreement,  "Information"  shall
mean all geological, geophysical and geochemical data, maps and reports, whether
acquired,  generated or compiled by or for LICENSEE.  LICENSEE warrants that all
information  supplied to LICENSOR  pursuant to the terms of this provision shall
be true and accurate copies of the Information  acquired,  generated or compiled
by or for LICENSEE;  provided,  however, that LICENSEE does not warrant that the
data contained  therein is an accurate  interpretation  of the geology described
therein.
                  31.2  Any and  all  data,  information,  reports  and  samples
provided  by LICENSEE to  LICENSOR  under the terms of this  Agreement  shall be
treated and held  confidential for the term of this Agreement,  and for the term
of the Mining  Lease  attached as EXHIBIT "B", if LICENSEE  should  exercise its
Option to Lease.
         32.      Default and Termination.
                  32.1     Default.
                  The occurrence of any of the following events shall constitute
an event of default on the part of LICENSEE:
                           32.1.1      Breach of Covenants.

                                              Page 5 of 8

<PAGE>
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



Failure (i) to perform any of LICENSEE's covenants hereunder, including, but not
limited to the failure to make a payment under  Paragraph 3 herein,  and (ii) to
remedy  such  failure  within  ninety  (90) days  after  written  demand is made
therefor. 32.1.2 Assignments. The making of a general assignment by LICENSEE for
the benefit of creditors. 32.1.3 Bankruptcy. The filing of any form of voluntary
petition in bankruptcy by LICENSEE,  or the filing of an involuntary petition by
LICENSEE's  creditors,  if such petition  remains  undischarged  for a period of
thirty (30) days.  32.1.4  Receivership.  The  appointment of a receiver to take
possession of substantially  all of LICENSEE's assets or of the interest held by
LICENSEE under this Agreement,  if such receivership  remains  undissolved for a
period of thirty (30) days. 32.1.5 Attachment.  The attachment or other judicial
seizure of substantially  all of LICENSEE's assets or of the interest held under
this  Agreement,  if such  attachment or other  seizure  remains un dismissed or
undischarged  for a period of  thirty  (30) days  after the levy  thereof.  32.2
Remedies.  In the event of the  occurrence of any event of default  mentioned in
Paragraph  13.1  hereof,  LICENSOR  shall  have the  right,  so long as  default
continues,  to immediately  terminate this Agreement by giving LICENSEE  written
notice of such termination.
                                              Page 6 of 8

<PAGE>
DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



         33.      Inurement.
         All covenants, conditions,  limitations and provisions herein contained
apply  and are  binding  upon the  parties  hereto  and their  heirs,  devisees,
successors and assigns.
         34.      Force Majeure.
         If,  because of force  majeure,  LICENSEE is unable to carry out any of
its  obligations  under this  Agreement,  the  obligation  of LICENSEE  shall be
excused to the extent made  necessary by such force  majeure and this  Agreement
shall be  extended  by a length of time equal to its  continuance  not to exceed
maximum term  permitted  by law.  The term "force  majeure" as used herein shall
include,  but not be  limited  to,  acts  of God,  acts  of  civil  or  military
authority, acts of war or the public enemy,  legislation,  acts or orders of any
court, acts or failure to act of regulatory  agencies or  administrative  bodies
having   jurisdiction  with  respect  to  the  performance  of  this  Agreement,
insurrections,  riots,  strikes,  boycotts  or other labor  disturbances,  fire,
flood,  windstorm,  explosion and other causes not within the reasonable control
of the parties  directly  affected and  claiming  suspension  of its  obligation
whether  or not  like or  similar  to the  causes  or  occurrences  specifically
enumerated above.
         35.      Title.
         Each  LICENSOR  covenants  that said LICENSOR now owns and is in actual
possession  of an undivided  one-eighth  interest in the PREMISES free and clear
from all former grants,  sales,  liens,  or  encumbrances  of any kind, and that
there are no delinquent  taxes; and agrees to furnish LICENSEE upon request such
abstracts,  deeds, or other evidence of title as may be in LICENSOR's possession
and control. LICENSEE may elect to correct any defects it determines

                                              Page 7 of 8

<PAGE>



DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



exist  in title to the  PREMISES,  including,  but not  limited  to,  amendment,
relinquishment,  relocation of existing claims and location of additional claims
over fractions within the PREMISES.
         36.      Counterparts.
         This  Agreement  may be  signed  in  counterparts  and  shall be deemed
effective  when all parties have  executed  this  Agreement  or any  counterpart
thereof.
         37.      Complete Agreement.
         This  Agreement  and all the terms and covenants  contained  herein are
deemed to be the complete and unequivocal  written  agreement of the parties and
no other  agreements,  either written or oral, are contemplated  with respect to
said PREMISES.
         38.      Recordation.
         This  Agreement  shall not be  recorded,  however,  the  Memorandum  of
Exploration  Agreement with Option to Lease attached hereto as EXHIBIT "C" shall
be executed and recorded promptly following the execution of this Agreement.
LICENSOR:
-----------------------------------
CHARLES JACKSON

-----------------------------------
MARIE UNRUH

-----------------------------------
JAMES HOPKINS, SR.

-----------------------------------
TRACY HOPKINS


                                              Page 8 of 8

<PAGE>



DESERT MINERALS, INC./CHARLES JACKSON, et al.

                    EXPLORATION AGREEMENT AND OPTION TO LEASE



-----------------------------------
RICK JACKSON

-----------------------------------
MARA JACKSON

-----------------------------------
PAUL JACKSON

-----------------------------------
JARED JACKSON



LICENSEE:

DESERT MINERALS, INC.

By ____________________________________
Paul J. Montle
Its Vice-President

Page 9 of 8

<PAGE>

                                   EXHIBIT "A"

                         UNPATENTED PLACER MINING CLAIMS

                       Located in Inyo County, California



<TABLE>
<CAPTION>
                                                                                        Inyo County
                                            Township/Range             Date of            Document
Claim Name             Section                   SBB&M                Location             Number               CAMC
<S>                      <C>                      <C>                    <C>                <C>

OBOE #66                 10                   21 N./7 E.               4-30-95             95-1475             265730
      Amended                                                                              97-1702

OBOE #67                 10                   21 N./7 E.               4-30-95             95-1476             265731
      Amended                                                                              97-1703

OBOE #68                 10                   21 N./7 E.               4-30-95             95-1477             265732
      Amended                                                                              97-1704

OBOE #69                 10                   21 N./7 E.               4-30-95             95-1478             265733
      Amended                                                                              97-1705

OBOE #70                 15                   21 N./7 E.               4-30-95             95-1479             265734
      Amended                                                                              97-1706

OBOE #71                 15                   21 N./7 E.               4-30-95             95-1480             265735
      Amended                                                                              97-1707

OBOE #72                 15                   21 N./7 E.               4-30-95             95-1481             265736
      Amended                                                                              97-1708

OBOE #73                 15                   21 N./7 E.               4-30-95             95-1482             265737
      Amended                                                                              97-1709

OBOE #74                 22                   21 N./7 E.               4-30-95             95-1483             265738
      Amended                                                                              97-1710

OBOE #75                 22                   21 N./7 E.               4-30-95             95-1484             265739
      Amended                                                                              97-1711

OBOE #76                 22                   21 N./7 E.               4-30-95             95-1485             265740
      Amended                                                                              97-1712

OBOE #77                 22                   21 N./7 E.               4-30-95             95-1486             265741
      Amended                                                                              97-1713

                                              Page 10 of 8

                                                             10

<PAGE>

OBOE #82                 16                   21 N./7 E.               2-26-96             96-0978             268344
      Amended                                                                              96-3080

OBOE #83                 21                   21 N./7 E.               2-26-96             96-0979             268345
      Amended                                                                              96-3081

OBOE #84                 24                   21 N./6 E.               2-26-96             96-0980             268346
      Amended                                                                              96-3082
      Amended                                                                              97-1714

OBOE #85                 24                   21 N./6 E.               2-26-96             96-0981             268347
      Amended                                                                              96-3083
      Amended                                                                              97-1715
</TABLE>
<PAGE>
                                   EXHIBIT "B"

                                  MINING LEASE

      This Agreement is made and effective as of the ___ day of _______________,
19__, by and between CHARLES  JACKSON,  MARIE UNRUH,  JAMES HOPKINS,  SR., TRACY
HOPKINS,  RICK JACKSON,  MARA JACKSON, PAUL JACKSON and JARED JACKSON (hereafter
referred to as "LESSOR"),  and DESERT  MINERALS,  INC., a Delaware  corporation,
(hereafter "LESSEE").
      1.      DESCRIPTION OF PROPERTY.
      LESSOR is the owner of all or part of the unpatented  placer mining claims
described on EXHIBIT "A" attached hereto.
      2.           GRANT OF LEASE.
                          2.1  LESSOR  hereby  leases   exclusively  to  LESSEE,
subject to the terms and conditions hereinafter expressed,
LESSOR's  interest  in the  property  set forth in EXHIBIT "A"  attached  hereto
(LESSOR's interest is hereafter referred to as "LEASED PROPERTY").
                        2.2  This  lease  is  granted  for  the  purpose  of the
exploration, development, and mining of the LEASED PROPERTY
for minerals as may be found therein (hereinafter referred to as the "Leased 
Minerals"). LESSEE is hereby

                                              Page 11 of 8

                                                             11

<PAGE>

granted the exclusive right to enter into possession of the LEASED PROPERTY, and
during the term of this lease, to remain in possession thereof,  and to develop,
mine,  operate  and use the  property  and any  surface or  underground  rights,
including  but not limited to access,  and water or water  rights,  and to mine,
extract and remove from the LEASED  PROPERTY  the Leased  Minerals and to treat,
mill, ship, sell or otherwise  dispose of the same and receive the full proceeds
thereof (subject to the obligation of royalty payment as specified  below);  and
to  construct,  use and operate  thereon and  therein  structures,  excavations,
roads,  equipment and other im provements or facilities  which LESSEE shall deem
reasonably required for, or in connection with, the full enjoyment of the rights
and interests granted to LESSEE by this lease.
      3.           TERM OF LEASE.
      The term of this  Mining  Lease  shall be for  twenty  (20) years from and
after  the  date  of this  lease  and for so long  thereafter  as  LESSEE  is in
production  on properties  located  within a five (5) mile radius of the nearest
LEASED PROPERTY. For purposes of this paragraph,  production shall be defined as
the  processing of ore.  LESSEE may terminate this lease at any time by delivery
to LESSOR of a quitclaim  deed to the LEASED  PROPERTY,  provided that LESSEE is
not then in default under the terms of this lease.
      4.    ROYALTIES AND CONSIDERATION.
                        4.1            Advance Minimum Royalty.
      LESSEE shall pay to LESSOR advance minimum royalties as follows:
           a)       Upon execution of this agreement                  $1,000.00
           b)       On or before the anniversary date
                             and each anniversary date thereafter     $1,000.00
                        4.2              Production Royalties.

                                              Page 12 of 8

                                                             12

<PAGE>

4.2.1A  production  royalty for all minerals mined,  removed,  and sold from the
property  set forth in EXHIBIT  "A" equal to 2.5  percent  (2.5%) of the Smelter
Returns shall be calculated. LESSOR, as defined in this Agreement, shall receive
a percentage  of the  production  royalty  calculated  equal to LESSOR's  actual
ownership  interest of the  property  described in EXHIBIT  "A".  4.2.2The  term
"Smelter Returns" shall be defined to be the gross amount received from the sale
of valuable minerals after recovery of all exploration, development, and capital
costs and less all taxes levied,  incurred or imposed on the sale,  severance or
production  of such  minerals  and less costs of  extraction,  mining,  milling,
treating,  transportation to the smelter and/or refinery,  smelting and refining
charges  and costs of sale.  4.3 Manner of  Payment.  4.3.1All  minerals  mined,
removed and extracted  from the LEASED  PROPERTY shall be sold under the name of
LESSEE and a royalty  settlement sheet accounting for such transactions shall be
furnished  to  LESSOR  on or  before  the  twenty-fifth  (25th)  day of the next
succeeding  calendar month for all sales made and received  during the preceding
calendar quarter.  All production royalty payments,  accompanied by a settlement
sheet  required by this lease,  shall be made to LESSOR at the address set forth
in  Paragraph  12.1  below,  or such other  person or  address  as LESSOR  shall
designate by written notice pursuant to the provisions of Paragraph 8 by mail or
personal  delivery.  LESSEE shall receive a cumulative credit against production
royalties  for all  minimum  royalties  paid  pursuant  to this lease  agreement
regardless of the year in which said minimum  royalties are paid and  production
royalties  shall  not be  payable  until  the  production  royalty  set forth in
Paragraph 4.2 exceeds the cumulative  sums paid by LESSEE  pursuant to Paragraph
4.1. If the Leased  Minerals are sold to, or processed by, a smelter or refinery
owned, operated,  affiliated with or controlled by LESSEE, in no event shall the
royalties  computed  herein be less than  would  have been paid had the ore been
sold to or  processed  by a major  smelter  or  refinery  not  owned,  operated,
affiliated with, or controlled by LESSEE. Page 13 of 8

                                                             13

<PAGE>

      5.    CONDUCT OF MINING OPERATIONS.
                        5.1                    General.
                          LESSEE shall conduct, and cause all mining activities
to be conducted in a prudent,
workmanlike, miner-like manner in accordance with established mining practices.
                        5.2               Commingling of Ore.
LESSEE may commingle ore from the LEASED PROPERTY with ore from other
properties, either before or after concentration or beneficiation, provided that
the method and procedures  LESSEE uses to commingle the ore and to determine the
weight and grade of the ore removed from the LEASED PROPERTY and of the ore with
which it is commingled  shall be a method  recognized by the mining industry and
conducted in accordance with generally accepted  accounting  principles.  LESSEE
shall use that method to determine  weight and grade and to allocate net returns
from the  commingled  ore between the LEASED  PROPERTY and the other  properties
from which the other  commingled ore was removed and to assure that the share of
production  received by LESSOR is  representative  of the ore that was  produced
from the LEASED PROPERTY. All such weight, grade and allocation  calculations by
LESSEE shall be done in accordance with generally accepted accounting principles
and in a manner recognized by the mining industry as practical and sufficient at
that time. If it is impractical to determine  which portions of any of the costs
and expenses described in Paragraph 4.2.2 above are directly attributable to ore
removed from the LEASED PROPERTY,  such costs and expenses shall be allocated on
a straight-line,  per-ton basis among all ores that give rise to those expenses,
in accordance with acceptable accounting standards.
                        5.3              Cross-Mining Rights.
      LESSEE is hereby  granted the right,  if it so desires,  to mine or remove
from the LEASED PROPERTY any ores,  waste,  water and other  materials  existing
therein or thereon or in any part thereof, through or by means of shafts,

                                              Page 14 of 8

                                                             14

<PAGE>

openings  or  pits  which  may be  sunk  or  made  upon  other  property  owned,
controlled, or operated by or for LESSEE (hereinafter "Other Property").  LESSEE
also may stockpile  any ores,  waste,  or other  materials  and/or  concentrated
products  of  ores  or  materials  (collectively  "Products")  from  the  LEASED
PROPERTY,  or any part thereof,  upon stockpile grounds situated upon such Other
Property.  In the event LESSEE  stockpiles  Products from the LEASED PROPERTY on
Other Properties,  LESSEE shall execute or cause to be executed such instruments
as LESSOR  may  reasonably  request  in writing  to  evidence  LESSOR's  royalty
interest in the Products so stockpiled.  Any such instrument executed by LESSEE,
however,  expressly  shall  acknowledge  LESSEE's  right to sell the  stockpiled
Products.  LESSEE also,  if it so desires,  may use the LEASED  PROPERTY and any
shafts,  openings,  pits and  stockpile  grounds  sunk or made  for the  mining,
removal and/or  stockpiling of any Products from the LEASED PROPERTY and/or from
the  Other  Property,  or for  any  purpose  or  purposes  connected  therewith,
provided,  however,  that such use of the LEASED  PROPERTY  does not  prevent or
interfere with the mining or removal of ore from the LEASED PROPERTY.
      6.    RECORDS AND BOOKS OF ACCOUNT.
                        6.1                Books of Account.
      LESSEE shall keep  complete,  true and proper books and records of account
showing all minerals  mined and removed from the LEASED  PROPERTY and  recording
all sales,  transfers,  conveyances or other  dispositions of ores,  minerals or
other  materials  taken from the LEASED  PROPERTY in accordance  with  generally
accepted  accounting  principles.  Said  books  and  records  shall  be  open to
examination  by  LESSOR or its duly  authorized  representative  during  regular
business hours and shall include any and all documents  necessary to establish a
gross  selling  price of the ores,  minerals or other  materials  taken from the
Leased  Premises.  LESSOR is hereby  granted  the right at  LESSOR's  expense to
examine  and make a copy or  copies  of said  books or  records  or any  portion
thereof.

                                              Page 15 of 8

                                                             15

<PAGE>

                        6.2                   Inspection.
LESSOR or its duly authorized agents shall have,  following advanced notice, the
right at  reasonable  times  under  reasonable  circumstances  to enter upon the
LEASED  PROPERTY  for the  purpose  of  inspecting  operations  and  work  being
performed by LESSEE pursuant to this lease. Such entry shall be at LESSOR's risk
and LESSEE shall not be liable for injury to LESSOR unless such injury is caused
by the willful or grossly  negligent conduct of LESSEE. 7. PROTECTING FROM LIENS
AND TAXES.  7.1 LESSEE  shall keep the subject  premises  and every part thereof
free and clear of any and all liens and encumbrances for work performed upon the
subject premises,  or for materials furnished to it while this agreement remains
in force and  effect.  7.2 LESSEE  shall pay not later than ten (10) days before
due, one hundred percent (100%) of all taxes and assessments  that may be levied
or assessed  against  the  premises,  including  all taxes that may be levied or
assessed  as a direct or  indirect  result of LESSEE's  mining  activities,  and
including,  but not  limited  to,  taxes on the mineral  estate,  real  property
improvements and personal property and possessory  interest taxes.  LESSOR shall
forward to LESSEE,  upon  receipt,  all  notices of taxes and  assessments  due.
LESSOR shall be  responsible  for payment of all taxes or  assessments  due as a
result of its  activities.  8. NOTICE.  Any notices  required or permitted to be
given to  LESSOR or LESSEE  hereunder  shall be  considered  as  delivered  when
received by the parties to whom they shall be directed. Notice shall be given by
personal  delivery or by registered  mail,  postage  prepaid and return  receipt
requested,  addressed to the persons and addresses  given below or to such other
person or address as the parties may  designate  by written  notice from time to
time.
                                              Page 16 of 8

                                                             16

<PAGE>

LICENSEE:                                Desert Minerals, Inc.
                                      c/o LS Capital Corporation
                                     15915 Katy Freeway, Suite 250
                                           Houston, TX 77094


LICENSOR:                                    Rick Jackson
                                             P.O. Box 874
                                        Jacksonville, OR 97530


      Changes in the above  names and  addresses  shall be  effected  by sending
notice as set forth herein and said change shall be effective  fifteen (15) days
from receipt thereof.
      9.          WASTE AND REFUSE.
      LESSEE  agrees to dispose of refuse from all mining  activities  conducted
pursuant to this lease in accordance with good mining practice and in accordance
with the provisions of applicable ordinances, laws and regulations.
      10.            INSURANCE.
      LESSEE  shall,  at its sole  cost and  expense,  cause  to be  issued  and
maintained  during  the term of this  lease or any  extension  thereof  workers'
compensation  insurance coverage in accordance with the provisions of California
law.
      11.       COMPLIANCE WITH LAWS.
      LESSEE shall  conduct and cause to be conducted  all mining  activities in
full  compliance  with the  applicable  laws of the State of California  and the
United States of America.
      12.              TITLE.
                        12.1Each  LESSOR  warrants that said LESSOR is the owner
of an undivided 1/8th interest in the LEASED
PROPERTY  and that there are no defects in LESSOR's  title  which  would  affect
LESSEE's right to possession and use pursuant to the terms of this lease.
      LESSORS authorize Rick Jackson to receive all payments for them, for their
benefit, as follows:

                                              Page 17 of 8

                                                             17

<PAGE>
                                             Rick Jackson
                                             P.O. Box 874
                                        Jacksonville, OR 97530

                        12.2 In the event that any defect in  LESSOR's  title is
determined to exist, LESSOR shall, at its sole cost and expense,
take  such  steps  as may be  required,  including,  but  not  limited  to,  the
commencement of litigation,  the location of additional claims,  relinquishment,
amendment or relocation of existing  claims held by LESSOR.  In the event LESSOR
fails or refuses to take or complete  appropriate steps to correct any defect in
LESSOR's  title,  LESSEE may elect to correct such defect and deduct the cost of
such  correction,   including  attorneys  fees,  from  the  payment  obligations
contained  in this  lease.  LESSEE  also may make such  deductions  for costs or
corrections to title to the LEASED PROPERTY incurred by LESSEE prior to the date
of this Lease.
                        12.3In the event it is determined  that LESSOR owns less
than one hundred percent (100%) of the LEASED
PROPERTY,  then LESSOR's  rights under this Agreement shall be adjusted so as to
reflect the actual  interest  owned. It is the intention of the parties that the
full ownership of LESSOR be included in this Mining Lease.
      13.     DEFAULT AND TERMINATION.
                        13.1                   Default.
The occurrence of any of the following events shall constitute an event of 
default on the part of LESSEE:
13.1.Breach  of  Covenants.  Failure (i) to perform  any of  LESSEE's  covenants
hereunder, and (ii) to remedy such failure within ninety (90) days after written
demand is made therefore. 13.1.2 Assignments. The making of a general assignment
by LESSEE for the benefit of creditors. 13.1.3 Bankruptcy.
                                              Page 18 of 8

                                                             18

<PAGE>

The filing of any form of voluntary  petition in  bankruptcy  by LESSEE,  or the
filing of an  involuntary  petition  by  LESSEE's  creditors,  if such  petition
remains undischarged for a period of thirty (30) days. 13.1.4 Receivership.  The
appointment of a receiver to take  possession of  substantially  all of LESSEE's
assets or of the interest held by LESSEE under this lease, if such  receivership
remains  undissolved for a period of thirty (30) days.  13.1.5  Attachment.  The
attachment or other judicial seizure of substantially  all of LESSEE's assets or
of the  interest  held under this lease,  if such  attachment  or other  seizure
remains  undismissed or undischarged  for a period of thirty (30) days after the
levy thereof. 13.2 Remedies. 13.2.1 Termination.  In the event of the occurrence
of any event of default mentioned in Paragraph 13.1 hereof,  LESSOR,  shall have
the right, so long as default continues,  to immediately terminate this lease by
giving LESSEE written notice of such termination.  13.2.2 Eviction. In the event
of any  such  termination  of  this  lease,  LESSOR  may  then  or at  any  time
thereafter,  re-enter the LEASED  PROPERTY,  or any part  thereof,  and expel or
remove  therefrom  LESSEE and any other person  occupying  the same,  using such
force as may be  necessary  so to do, and again  repossess  and enjoy the LEASED
PROPERTY,  without  prejudice to any other  remedies  that LESSOR may have under
this  lease,  or at law or  equity,  by reason of  LESSEE's  default  or of such
termination.
                                              Page 19 of 8

                                                             19

<PAGE>

13.2.3 Damages. In the event of any such termination of this lease, LESSOR shall
have all of the rights and remedies of a landlord  provided by Section 1951.2 of
the Civil Code of the State of  California.  13.2.4  Remedies of LESSOR.  In the
event LESSEE breaches this lease and abandons the LEASED PROPERTY,  LESSOR shall
have all of the  remedies of a landlord  provided by the Civil Code of the State
of California.  13.2.5  Default by Landlord.  In the event of default by LESSOR,
LESSEE  shall have all of the  remedies of a tenant  provided by the laws of the
State  of  California.  13.3  Termination  by  LESSEE.  This  agreement  may  be
terminated  by LESSEE at any time by the  giving  of three  (3)  months  written
notice. 13.4 Information.
                  Upon  termination  of this  Agreement  LESSEE  shall (upon the
request of LESSOR made within 60 days of termination) provide LESSOR with copies
of all Information as defined below.  As used in this  Agreement,  "Information"
shall mean all  geological,  geophysical  and  geochemical  data, all laboratory
testing results, maps and reports, whether acquired, generated or compiled by or
for LESSEE.  LESSEE warrants that all Information supplied to LESSOR pursuant to
the terms of this provision shall be true and accurate copies of the Information
acquired, generated or compiled by or for LESSEE; provided, however, that LESSEE
does not warrant that the data contained  therein is an accurate  interpretation
of the geology described therein.

                                              Page 20 of 8

                                                             20

<PAGE>

13.4.1 Upon execution of this  Agreement,  LESSOR shall provide LESSEE access to
all geologic,  geophysical and  geochemical  data concerning the LEASED PROPERTY
which has been acquired,  generated,  or compiled by LESSOR.  13.4.2 Any and all
data,  information,  reports and samples  provided by LESSEE to LESSOR under the
terms of this Agreement shall be treated and held  confidential  for the term of
this Agreement.
         14.      FORCE MAJEURE.
         The failure to perform or comply with any of the covenants or 
conditions hereof on the part of LESSEE
(including, but not limited to, production requirements set forth in Paragraph 3
above) will not be grounds for cancellation,  penalty, termination or forfeiture
hereof,  during  such time as  failure to  perform  is caused or  compliance  is
prevented by severe weather, explosion, unusual mining casualty, mill shutdowns,
damage to or destruction of mill or mill plant facility,  fire, flood,  civil or
military  authority,  insurrection,  strikes,  riots,  inability  after diligent
effort to obtain  competent  workmen or  material  or  necessary  permits,  fuel
shortages,  inadequate or shortages of transportation  facilities not due to the
negligence  or lack of  diligence  by LESSEE,  governmental  actions or policies
which  substantially  restrict the legality or  profitability  of extracting and
selling any of the valuable  minerals  produced under the Mining Lease,  acts of
God, or any  circumstances  or conditions  beyond the control of LESSEE,  and in
such an event,  LESSEE  shall be excused  from,  and not held liable  for,  such
failure to perform or comply.
         15.      INUREMENT.
         This lease  shall  inure to the  benefit  of and be binding  upon their
respective heirs, trustees, conservators, successors and assigns of the parties.
         16.      RECORDATION.

                                              Page 21 of 8

                                                             21

<PAGE>

         This agreement is not to be recorded.  LESSEE may, however, prepare and
submit to LESSOR for signature, a memorandum of this agreement for recordation.
         17.      ASSIGNMENT.
                  17.1     Assignment by LESSOR.
                  LESSOR  agrees  that it shall  give  notice  to  LESSEE of its
intention to sell or otherwise assign the Lease or LEASED PROPERTY. Upon receipt
of a bona fide offer to purchase the Lease or LEASED PROPERTY,  the LESSOR shall
forthwith  give  notice,  to be  accompanied  by a true  copy of such  offer  to
purchase attached thereto,  to LESSEE, and LESSEE shall have ninety (90) days in
which to present to LESSOR a written counter offer, such counter offer to be for
greater   consideration  than  the  offer,   expressed  in  cash  or  marketable
securities.  Upon  receipt of such counter  offer,  LESSOR will have thirty (30)
days to sell to LESSEE or to give  notice  to  LESSEE  of  receipt  of a further
counter offer for greater  consideration  than LESSEE's  counter  offer.  In the
event of a further counter offer being presented,  LESSEE will have fifteen (15)
days from  receipt  of notice to raise its offer,  and the  offers  and  counter
offers shall  thereafter be limited to a response time of fifteen (15) days from
receipt of notice.
                  17.2     Assignment by LESSEE.
                  LESSEE may assign this Lease without the prior written consent
of LESSOR provided LESSEE guarantees the obligations of the assignee; otherwise,
this Lease shall not be assigned by LESSEE without the prior written  consent of
LESSOR which consent shall not be unreasonably withheld.
         18.      REMOVAL OF EQUIPMENT.
         At the  termination  of  this  lease,  LESSEE  may  remove  any and all
equipment  it placed  on the  property  during  the term of this  lease,  or any
extension thereof, provided said removal is completed within one (1) year of the
termination date.

                                              Page 22 of 8

                                                             22

<PAGE>

         19.      COUNTERPARTS.
         This  agreement  may be  signed  in  counterparts  and  shall be deemed
effective  when all parties have  executed  this  agreement  or any  counterpart
thereof.
         20.      COMPLETE AGREEMENT.
         This writing and all terms and covenants contained herein are deemed to
be the complete and unequivocal  written agreement of the parties,  and no other
agreements,  either  written  or oral,  are  contemplated  with  respect to said
property.
         21.      CALIFORNIA LAW.
         This lease shall be governed by and construed and interpreted under the
internal laws of the State of California.
         22.      SEVERABILITY.
         If any term, covenant, condition or provision of this agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable,  the
remainder  of the  provisions  hereof  shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
         23.      TITLE HEADINGS.
         The  headings  of the  respective  paragraphs  of  this  Agreement  are
inserted  for  convenience  only and  shall  not be  deemed to be a part of this
Agreement and considered in construing this Agreement.
                                     LESSEE:

                              DESERT MINERALS, INC.

                     By ____________________________________
                        Its______________________________

                     By ____________________________________
                        Its______________________________


                                              Page 23 of 8

                                                             23

<PAGE>
                                     LESSOR:

                       -----------------------------------
                                 CHARLES JACKSON

                       -----------------------------------
                                   MARIE UNRUH

                       -----------------------------------
                               JAMES HOPKINS, SR.

                       -----------------------------------
                                  TRACY HOPKINS

                       -----------------------------------
                                  RICK JACKSON



                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]
                       -----------------------------------
                                  MARA JACKSON

                       -----------------------------------
                                  PAUL JACKSON

                       -----------------------------------
                                  JARED JACKSON



                                              Page 24 of 8

                                                            24
<PAGE>

DESERT MINERALS, INC./CHARLES JACKSON, et al.

                                                        MINING LEASE

                                                      Table of Contents

1.       DESCRIPTION OF PROPERTY............................................  1
         -----------------------

2.       GRANT OF LEASE.....................................................  1
         --------------

3.       TERM OF LEASE......................................................  2
         -------------

4.       ROYALTIES AND CONSIDERATION........................................  2
         ---------------------------

         4.1      Advance Minimum Royalty...................................  2
                  -----------------------
         4.2      Production Royalties......................................  2
                  --------------------
         4.3      Manner of Payment.........................................  3
                  -----------------

5.       CONDUCT OF MINING OPERATIONS.......................................  4
         ----------------------------

         5.1      General...................................................  4
                  -------
         5.2      Commingling of Ore........................................  4
                  ------------------
         5.3      Cross-Mining Rights.......................................  5
                  -------------------

6.       RECORDS AND BOOKS OF ACCOUNT.......................................  5
         ----------------------------

         6.1      Books of Account..........................................  5
                  ----------------
         6.2      Inspection................................................  6
                  ----------

7.       PROTECTING FROM LIENS AND TAXES....................................  6
         -------------------------------

8.       NOTICE.............................................................  7
         ------

9.       WASTE AND REFUSE...................................................  7
         ----------------

10.      INSURANCE..........................................................  8
         ---------

11.      COMPLIANCE WITH LAWS.................../...........................  8
         --------------------

12.      TITLE..............................................................  8
         -----

13.      DEFAULT AND TERMINATION............................................  9
         -----------------------

         13.1     Default...................................................  9
                  -------


                                                             25

<PAGE>



DESERT MINERALS, INC./CHARLES JACKSON, et al.


                  13.1.1   Breach of Covenants.............................  9
                           -------------------
                  13.1.2   Assignments.....................................  9
                           -----------
                  13.1.3   Bankruptcy......................................  9
                           ----------
                  13.1.4   Receivership..................................... 10
                           ------------
                  13.1.5   Attachment....................................... 10
                           ----------

         13.2     Remedies.................................................. 10
                  --------

                  13.2.1   Termination...................................... 10
                           -----------
                  13.2.2   Eviction......................................... 10
                           --------
                  13.2.3   Damages.......................................... 11
                           -------
                  13.2.4   Remedies of LESSOR............................... 11
                           ------------------
                  13.2.5   Default by Landlord.............................. 11
                           -------------------

         13.3     Termination by LESSEE..................................... 11
                  ---------------------

         13.4     Information............................................... 11
                  -----------

14.      FORCE MAJEURE...................................................... 12
         -------------

15.      INUREMENT.......................................................... 13
         ---------

16.      RECORDATION........................................................ 13
         -----------

17.      ASSIGNMENT......................................................... 13
         ----------

         17.1     Assignment by LESSOR...................................... 13
                  --------------------
         17.2     Assignment by LESSEE...................................... 14
                  --------------------

18.      REMOVAL OF EQUIPMENT............................................... 14
         --------------------

19.      COUNTERPARTS....................................................... 14
         ------------

20.      COMPLETE AGREEMENT................................................. 14
         ------------------

21.      CALIFORNIA LAW..................................................... 14
         --------------

22.      SEVERABILITY....................................................... 14
         ------------

23.      TITLE HEADINGS.................................................. 15
         --------------