Filed by Automated Filing Services Inc. (604) 609-0244 - Merritt Ventures Corp. - Exhibit 10.1





 OPTION AGREEMENT


THIS AGREEMENT made as of the 5th day of May, 2004.

	 	 	 
	 BETWEEN:  	 	 
	  	  	 INTERNATIONAL ARIMEX RESOURCES INC.,
      a British  
	  	  	 Columbia company, with an office located
      at Suite 706, 595  
	  	  	 Hornby Street, Vancouver, BC, Canada V6C
      1A4  
	  	  	 (the "Optionor")  
	  	  	 OF THE FIRST PART  
	 AND:  	  	  
	  	  	 MERRITT VENTURES CORP., a Nevada
      corporation, with an  
	  	  	 office at Suite 201, 810 Peace Portal Drive,
      Blaine, WA 98230  
	  	  	 (the "Optionee")  
	  	  	 OF THE SECOND PART  




WHEREAS:
 A.            The
  Optionor is the owner of certain mineral claims located in the Omenica Mining
  Division of British Columbia; 

 B.            The
  Optionor has agreed to grant an exclusive option to the Optionee to acquire
  an interest in and to the Property, subject to the Royalty, on the terms and
  conditions hereinafter set forth; 

 NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
  of the sum of $1.00 now paid by the Optionee to the Optionor (the receipt of
  which is hereby acknowledged), the parties agree as follows: 

 DEFINITIONS 

 1.            For
  the purposes of this Agreement the following words and phrases shall have the
  following meanings, namely: 

	 	 (a)      	 "Commencement of Commercial Production" means:
      

	 	 	 	 
	  	 	 (i)     
      
	 if a mill is located on the Property, the
        last day of a period of 40 consecutive days in which, for not less than
        30 days, the mill processed ore from the Property at 60% of its rated
        concentrating capacity; or 








 

	 	   	 (ii)      	 if a mill is not located on the Property, the last day of a
      period of 30 consecutive days during which ore has been shipped from the
      Property on a reasonably regular basis for the purpose of earning revenues,
    




	 	 	but any period of time during which ore or concentrate is shipped
      from the Property for testing purposes or during which milling operations
      are undertaken as initial tune-up, shall not be taken into account in determining
      the date of Commencement of Commercial Production; 
	 	 	 
	 	 (b)      	 "Exploration Expenditures" means the sum of all costs of acquisition
      and maintenance of the Property, all expenditures on the exploration and
      development of the Property, and all other costs and expenses of whatsoever
      kind or nature, including those of a capital nature, incurred or chargeable
      by the Optionee with respect to the exploration of the Property; 
	 	 	 
	 	 (c)      	 "Option" means the option to acquire up to a 75% undivided
      interest in and to the Property as provided in this Agreement; 
	 	 	 
	 	 (d)      	 "Option Period" means the period from the date of this Agreement
      to and including the date of exercise or termination of the Option; 
	 	 	 
	 	 (e)      	 "Property" means the mineral claims described in Schedule "A"
      hereto including any replacement or successor claims, and all mining leases
      and other mining interests derived from any such claims. Any reference herein
      to any mineral claim comprising the Property includes any mineral leases
      or other interests into which such mineral claim may have been converted;
    
	 	 	 
	   	 (f)      	 "Property Rights" means all licenses, permits, easements, rights-of-way,
      certificates and other approvals obtained by either of the parties either
      before or after the date of this Agreement and necessary for the exploration
      of the Property; 
	 	 	 
	 	 (g)      	 "Regulatory Approval" means approval on behalf of the Optionor
      by the TSX Venture Exchange or written confirmation by independent legal
      counsel for the Optionor that no such approval is required. 
	 	 	 
	 	 (h)      	 "Royalty" means the royalty described in paragraph 10. 


 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONOR

	2. 	(a) 	The Optionor represents and warrants to
      and covenants with the Optionee that:
	 	 	 	 
	 	 	 (i)      	 it is legally entitled to hold the Property and the Property
      Rights and will remain so entitled until the interest of the Optionor in
      the Property which is subject to the Option has been duly transferred to
      the Optionee as contemplated hereby; 
	 	 	 	 
	 	 	 (ii)      	 it is, and at the time of each transfer to the Optionee of
      an interest in the mineral claims comprising the Property pursuant to the
      exercise of the Option it will be, the recorded holder and beneficial owner
      of all of the mineral claims comprising the Property free and clear of all
      liens, charges and claims of others, except as noted on Schedule "A", and
      no taxes or rentals are or will be due in respect of any of the mineral
      claims; 








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	 	 	 (iii)      	 the mineral claims comprising the Property have been duly and
      validly located and recorded pursuant to the laws of the jurisdiction in
      which the Property is situate and, except as specified in Schedule "A" and
      accepted by the Optionee, are in good standing with respect to all filings,
      fees, taxes, assessments, work commitments or other conditions on the date
      hereof and until the dates set opposite the respective names thereof in
      Schedule "A"; 
	 	 	 	 
	 	 	 (iv)      	 there are not any adverse claims or challenges against or to
      the ownership of or title to any of the mineral claims comprising the Property,
      nor to the knowledge of the Optionor is there any basis therefor, and there
      are no outstanding agreements or options to acquire or purchase the Property
      or any portion thereof, and no person other than John Robert Dahrouge and
      Lenyoran Enterprises Ltd., has any royalty or other interest whatsoever
      in production from any of the mineral claims comprising the Property; 
	 	 	 	 
	 	 	 (v)      	 it has been duly incorporated, amalgamated or continued and
      validly exists as a corporation in good standing under the laws of its jurisdiction
      of incorporation, amalgamation or continuation; 
	 	 	 	 
	 	 	 (vi)      	 it has duly obtained all corporate authorizations for the execution
      of this Agreement and for the performance of this Agreement by it, and the
      consummation of the transactions herein contemplated will not conflict with
      or result in any breach of any covenants or agreements contained in, or
      constitute a default under, or result in the creation of any encumbrance
      under the provisions of the Articles or the constating documents of the
      Optionor or any shareholders' or directors' resolution, indenture, agreement
      or other instrument whatsoever to which the Optionor is a party or by which
      it is bound or to which it or the Property may be subject; 
	 	 	 	 
	 	 	(vii) 	the Property is not the whole or substantially the whole of the undertaking
      of the Optionor; and  
	 	 	 	 
	 	 	(viii) 	no proceedings are pending for, and the Optionor is unaware of any basis
      for the institution of any proceedings leading to, the dissolution or winding
      up of the Optionor or the placing of the Optionor in bankruptcy or subject
      to any other laws governing the affairs of insolvent corporations. 
    
	 	 	 	 
	 	(b)  	Therepresentations and warranties contained in this section
      are provided for the exclusive benefit of the Optionee, and a breach of
      any one or more thereof may be waived by the Optionee in whole or in part
      at any time without prejudice to its rights in respect of any other breach
      of the same or any other representation or warranty, and the representations
      and warranties contained in this section shall survive the execution of
      this Agreement and of any transfers, assignments, deeds or further documents
      respecting the Property. 







4

 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONEE

	3. 	(a)	The Optionee represents and warrants to
      and covenants with the Optionor that:
	 	 	 	 
	 	 	 (i)      	 it has been duly incorporated, amalgamated or continued and
      validly exists as a corporation in good standing under the laws of its jurisdiction
      of incorporation, amalgamation or continuation; 
	 	 	 	 
	 	 	 (ii)      	 it is lawfully authorized to hold mineral claims and real property
      under the laws of the jurisdiction in which the Property is situate; 
	 	 	 	 
	 	 	 (iii)      	 it has duly obtained all corporate authorizations for the execution
      of this Agreement and for the performance of this Agreement by it, and the
      consummation of the transactions herein contemplated will not conflict with
      or result in any breach of any covenants or agreements contained in, or
      constitute a default under, or result in the creation of any encumbrance
      under the provisions of the Articles or the constating documents of the
      Optionee or any shareholders' or directors' resolution, indenture, agreement
      or other instrument whatsoever to which the Optionee is a party or by which
      it is bound or to which it or the Property may be subject; 
	 	 	 	 
	 	 	 (iv)      	 no proceedings are pending for, and the Optionee is unaware
      of any basis for the institution of any proceedings leading to, the dissolution
      or winding up of the Optionee or the placing of the Optionee in bankruptcy
      or subject to any other laws governing the affairs of insolvent corporations;
    
	 	 	 	 
	 	(b)   	The representations and warranties contained in this section
      are provided for the exclusive benefit of the Optionor and a breach of any
      one or more thereof may be waived by the Optionor in whole or in part at
      any time without prejudice to its rights in respect of any other breach
      of the same or any other representation or warranty, and the representations
      and warranties contained in this section shall survive the execution hereof.
    







5 

GRANT AND EXERCISE OF OPTION

	 4.      	(a) 	 The Optionor hereby grants to the Optionee the sole and exclusive
      right and option to acquire up to a 75% undivided interest in and to the
      Property free and clear of all charges, encumbrances and claims, except
      for the Royalty. 




	 	 (b)      	 The Option shall be exercised by the Optionee incurring Exploration
      Expenditures of $325,000 US on the Property as follows: 
	 	 	 	 
	 	 	 (A)      	 $225,000 US on or before December 31, 2004 to earn a 60% undivided
      interest; and 
	 	 	 	 
	 	 	 (B)      	 a further $100,000 US on or before December 31, 2005 to earn
      an additional 15% interest. 
	 	 	 	 
	 	 	 In the event that the Optionee spends, in any of the above
      periods, less than the specified sum, it may pay to the Optionor the difference
      between the amount it actually spent and the specified sum before the expiry
      of that period in full satisfaction of the Exploration Expenditures to be
      incurred. In the event that the Optionee spends, in any period, more than
      the specified sum, the excess shall be carried forward and applied to the
      Exploration Expenditures to be incurred in succeeding periods or to the
      Optionee's costs under the joint venture agreement to be entered into upon
      the exercise of the Option. 
	 	 	 	 
	 	 (c)      	 In order to maintain the Option the Optionee must pay to the
      Optionor $5,000 US on Regulatory Approval and provide to the Optionor evidence
      that it has completed financing of at least $250,000 US by June 30, 2004.
    
	 	 	 	 
	 	 (d)      	 If and when the Option has been exercised in full, or the Optionee
      has exercised the first part of the option to earn a 60% interest and the
      second part of the option has terminated, the Optionor and the Optionee
      shall enter into a joint venture agreement in the form attached hereto as
      Schedule "B". 



TRANSFER OF PROPERTY 

 5.            The Optionor
  shall, forthwith after the exercise of any part of the Option by the Optionee,
  deliver to the Optionee duly executed transfers of the appropriate interest
  in the Property which shall have been acquired by the Optionee. 


RIGHT OF ENTRY 

 6.            Throughout
  the Option Period the directors and officers of the Optionee and its servants,
  agents and independent contractors, shall have the sole and exclusive right
  in respect of the Property to: 

	 	(a) 	enter thereon; 








6

	 	 (b)      	 have exclusive and quiet possession thereof; 
	 	 	 
	 	 (c)      	 do such prospecting, exploration, development and other mining
      work thereon and thereunder as the Optionee in its sole discretion may determine
      advisable; 
	 	 	 
	 	 (d)      	 bring upon and erect upon the Property such buildings, plant,
      machinery and equipment as the Optionee may deem advisable; and 
	 	 	 
	 	 (e)      	 remove therefrom and dispose of reasonable quantities of ores,
      minerals and metals for the purposes of obtaining assays or making other
      tests. 



OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD

	 7.      	 During the Option Period the Optionee shall: 
	 	 	 
	 	 (a)      	 maintain in good standing those mineral claims comprising the
      Property by the doing and filing of assessment work or the making of payments
      in lieu thereof, by the payment of taxes and rentals, and the performance
      of all other actions which may be necessary in that regard and in order
      to keep such mineral claims free and clear of all liens and other charges
      arising from the Optionee's activities thereon except those at the time
      contested in good faith by the Optionee; 
	 	 	 
	 	 (b)      	 record all exploration work carried out on the Property by
      the Optionee as assessment work; 
	 	 	 
	 	 (c)      	 permit the directors, officers, employees and designated consultants
      of the Optionor, at their own risk and expense, access to the Property at
      all reasonable times, and the Optionor agrees to indemnify the Optionee
      against and to save it harmless from all costs, claims, liabilities and
      expenses that the Optionee may incur or suffer as a result of any injury
      (including injury causing death) to any director, officer, employee or designated
      consultant of the Optionor while on the Property; 
	 	 	 
	 	 (d)      	 do all work on the Property in a good and workmanlike fashion
      and in accordance with all applicable laws, regulations, orders and ordinances
      of any governmental authority; 
	 	 	 
	 	 (e)      	 indemnify and save the Optionor harmless in respect of any
      and all costs, claims, liabilities and expenses arising out of the Optionee's
      activities on the Property, but the Optionee shall incur no obligation hereunder
      in respect of claims arising or damages suffered after termination of the
      Option if upon termination of the Option any workings on or improvements
      to the Property made by the Optionee are left in a safe condition; 
	 	 	 
	 	 (f)      	 permit the Optionor, at its own expense, reasonable access
      to the results of the work done on the Property during the last completed
      calendar year; 
	 	 	 
	 	 (g)      	 deliver to the Optionor, forthwith upon receipt thereof, copies
      of all reports, maps, assay results and other technical data compiled by
      or prepared at the direction of the Optionee with respect to the Property.
    








7 

OPERATOR

 8.            The Optionor
  shall act as Operator of the Property during the Option Period and shall be
  entitled to charge an operators fee of 10% of the Exploration Expenditures incurred
  payable out of the Exploration Expenditures to be incurred by the Optionee.


 TERMINATION OF OPTION BY OPTIONEE

	9.	 (a)      	 The Option shall terminate: 
	 	 	 	 
	 	 	 (i)      	 upon the Optionee failing to incur or make any expenditure
      which must be incurred or made in exercise of the Option; or 
	 	 	 	 
	 	 	 (ii)      	 at any other time, by the Optionee giving notice of such termination
      to the Optionor. 
	 	 	 	 
	 	 (b)      	 If the Option is terminated the Optionee shall: 
	 	 	 	 
	 	 	 (i)      	 leave in good standing for a period of at least 12 months from
      the termination of the Option Period those mineral claims comprising the
      Property; 
	 	 	 	 
	 	 	 (ii)      	 deliver or make available at no cost to the Optionor within
      90 days of such termination, all drill core, copies of all reports, maps,
      assay results and other relevant technical data compiled by, prepared at
      the direction of, or in the possession of the Optionee with respect to the
      Property and not theretofore furnished to the Optionor. 
	 	 	 	 
	 	 (c)      	 Notwithstanding the termination of the Option, the Optionee
      shall have the right, within a period of 180 days following the end of the
      Option Period, to remove from the Property all buildings, plant, equipment,
      machinery, tools, appliances and supplies which have been brought upon the
      Property by or on behalf of the Optionee, and any such property not removed
      within such 180 day period shall thereafter become the property of the Optionor.
    



ROYALTY

 10.           The interests
  of the parties in the property shall be subject to the Royalty of 3% of net
  smelter returns in favour or John Robert Dahrouge and Lenyoran Enterprises Ltd.
  as set out in the agreement between the Optionor and those parties dated September
  19, 2002. 





 8 

 TRANSFERS 

	11.	(a) 	The Optionee may at any time either during the Option Period
      or thereafter, sell, transfer or otherwise dispose of all or any portion
      of its interest in and to the Property and this Agreement provided that
      any purchaser, grantee or transferee of any such interest shall have first
      delivered to the Optionor its agreement relating to this Agreement and to
      the Property, containing: 




	 	 	 (i)      	 a covenant to perform all the obligations of the Optionee to
      be performed under this Agreement in respect of the interest to be acquired
      by it from the Optionee to the same extent as if this Agreement had been
      originally executed by such purchaser, grantee or transferee; and 
	 	 	 	 
	 	 	 (ii)      	 a provision subjecting any further sale, transfer or other
      disposition of such interest in the Property and this Agreement or any portion
      thereof to the restrictions contained in this paragraph (a). 
	 	 	 	 
	 	 (b)      	 No assignment by the Optionee of any interest less than its
      entire interest in this Agreement and in the Property shall, as between
      the Optionee and the Optionor, discharge it from any of its obligations
      hereunder, but upon the transfer by the Optionee of the entire interest
      at the time held by it in this Agreement, whether to one or more transferees
      and whether in one or in a number of successive transfers, the Optionee
      shall be deemed to be discharged from all obligations hereunder save and
      except for the fulfillment of contractual commitments accrued due prior
      to the date on which the Optionee shall have no further interest in this
      Agreement. 
	 	 	 	 
	 	 (c)      	 If the Optionor should receive a bona fide offer from an
      independent third party (the "Proposed Purchaser") dealing at arm's length
      with the Optionor to purchase all or a part of its interest in the Property,
      which offer the Optionor desires to accept, or if the Optionor intends to
      sell all or a part of its interest in the Property: 
	 	 	 	 
	 	 	 (i)      	 The Optionor shall first offer (the "Offer") such interest
      in writing to the Optionee upon terms no less favourable than those offered
      by the Proposed Purchaser or intended to be offered by the Optionor, as
      the case may be. 
	 	 	 	 
	 	 	 (ii)      	 The Offer shall specify the price, terms and conditions of
      such sale, the name of the Proposed Purchaser and shall, in the case of
      an intended offer by the Optionor, disclose the person or persons to whom
      the Optionor intends to offer its interest and, if the offer received by
      the Optionor from the Proposed Purchaser provides for any consideration
      payable to the Optionor otherwise than in cash, the Offer shall include
      the Optionor's good faith estimate of the cash equivalent of the non-cash
      consideration. 
	 	 	 	 
	 	 	 (iii)      	 If within a period of 60 days of the receipt of the Offer the
      Optionee notifies the Optionor in writing that it will accept the Offer,
      the Optionor 








 9

	 	 	 	shall be bound to sell such interest to the Optionee on the
      terms and conditions of the Offer. If the Offer so accepted by the Optionee
      contains the Optionor's good faith estimate of the cash equivalent of the
      non cash consideration as aforesaid, and if the Optionee disagrees with
      the Optionor's best estimate, the Optionee shall so notify the Optionor
      at the time of acceptance and the Optionee shall, in such notice, specify
      what it considers, in good faith, the fair cash equivalent to be and the
      resulting total purchase price. If the Optionee so notifies the Optionor,
      the acceptance by the Optionee shall be effective and binding upon the Optionor
      and the Optionee, and the cash equivalent of any such non-cash consideration
      shall be determined by binding arbitration and shall be payable by the Optionee,
      subject to prepayment as hereinafter provided, within 60 days following
      its determination by arbitration. The Optionee shall in such case pay to
      the Optionor, against receipt of an absolute transfer of clear and unencumbered
      title to the interest of the Optionor being sold, the total purchase price
      which is specified in its notice to the Optionor and such amount shall be
      credited to the amount determined following arbitration of the cash equivalent
      of any non-cash consideration. 
	 	 	 	 
	 	 	 (iv)      	 If the Optionee fails to notify the Optionor before the expiration
      of the time limited therefor that it will purchase the interest offered,
      the Optionor may sell and transfer such interest to the Proposed Purchaser
      at the price and on the terms and conditions specified in the Offer for
      a period of 60 days, but the terms of this paragraph shall again apply to
      such interest if the sale to the Proposed Purchaser is not completed within
      such 60 days. 
	 	 	 	 
	 	    	 (v)      	 Any sale hereunder shall be conditional upon the Proposed Purchaser
      delivering a written undertaking to the Optionee, in form and substance
      satisfactory to its counsel, to be bound by the terms and conditions of
      this Agreement. 



SURRENDER OF PROPERTY INTERESTS PRIOR TO TERMINATION OF AGREEMENT

 12.           The Optionee
  may at any time during the Option Period elect to abandon any one or more of
  the mineral claims comprised in the Property by giving notice to the Optionor
  of such intention. Any claims so abandoned shall be in good standing under the
  laws of the jurisdiction in which they are situate for at least 12 months from
  the date of abandonment. Upon any such abandonment, the mineral claims so abandoned
  shall for all purposes of this Agreement cease to form part of the Property
  and, if title to such claims has been transferred to the Optionee the Optionee
  shall retransfer such title to the Optionor at the Optionee's expense. 


FORCE MAJEURE

	 13.      	(a)	 If the Optionee is at any time either during the Option Period
      or thereafter prevented or delayed in complying with any provisions of this
      Agreement by reason of strikes, lock-outs, labour shortages, power shortages,
      fuel shortages, fires, wars, acts of God, governmental regulations restricting
      normal operations, 








 10

	 	 	shipping delays or any other reason or reasons, other than lack
      of funds, beyond the control of the Optionee, the time limited for the performance
      by the Optionee of its obligations hereunder shall be extended by a period
      of time equal in length to the period of each such prevention or delay,
      but nothing herein shall discharge the Optionee from its obligations hereunder
      to maintain the Property in good standing;
	 	 	 
	 	 (b)      	 The Optionee shall give prompt notice to the Optionor of each
      event of force majeure and upon cessation of such event shall furnish to
      the Optionor with notice to that effect together with particulars of the
      number of days by which the obligations of the Optionee hereunder have been
      extended by virtue of such event of force majeure and all preceding events
      of force majeure. 
	 	 	 
	 	 (c)      	 After the Commencement of Commercial Production, the Optionee
      shall work, mine and operate the Property during such time or times as the
      Optionee in its sole judgment considers such operations to be profitable.
      The Optionee may suspend or curtail operations, both before and after Commencement
      of Commercial Production, during periods when the products derived from
      the Property cannot be profitably sold at prevailing prices or if an unreasonable
      inventory thereof, in the Optionee's sole judgment, has accumulated or would
      otherwise accumulate. 



CONFIDENTIAL INFORMATION

 14.           No information
  furnished by the Optionee to the Optionor hereunder in respect of the activities
  carried out on the Property by the Optionee, or related to the sale of minerals,
  ore, bullion or other product derived from the Property, shall be published
  or disclosed by the Optionor without the prior written consent of the Optionee,
  but such consent in respect of the reporting of factual data shall not be unreasonably
  withheld, and shall not be withheld in respect of information required to be
  publicly disclosed pursuant to applicable securities or corporation laws, regulations
  or policies. 


ARBITRATION

	 15.      	(a) 	 All questions or matters in dispute under this Agreement shall
      be submitted to arbitration pursuant to the terms hereof. 
	 	 	 


	 	 (b)      	 It shall be a condition precedent to the right of any party
      to submit any matter to arbitration pursuant to the provisions hereof, that
      any party intending to refer any matter to arbitration shall have given
      not less than 10 days' prior notice of its intention to do so to the other
      party, together with particulars of the matter in dispute. On the expiration
      of such 10 days, the party who gave such notice may proceed to refer the
      dispute to arbitration as provided in paragraph (c). 
	 	 	 
	 	 (c)      	 The party desiring arbitration shall appoint one arbitrator,
      and shall notify the other party of such appointment, and the other party
      shall, within 15 days after receiving such notice, either consent to the
      appointment of such arbitrator which shall then carry out the arbitration
      or appoint an arbitrator, and the two arbitrators so named, before proceeding
      to act, shall, within 30 days of the appointment of 








11

	 	the last appointed arbitrator, unanimously agree on the appointment
      of a third arbitrator to act with them and be chairman of the arbitration
      herein provided for. If the other party shall fail to appoint an arbitrator
      within 15 days after receiving notice of the appointment of the first arbitrator,
      the first arbitrator shall be the only arbitrator. If the two arbitrators
      appointed by the parties shall be unable to agree on the appointment of
      the chairman, the chairman shall be appointed under the provisions of the
      Commercial Arbitration Act of British Columbia. Except as specifically
      otherwise provided in this section, the arbitration herein provided for
      shall be conducted in accordance with such Act. The chairman, or in the
      case where only one arbitrator is appointed, the single arbitrator, shall
      fix a time and place in Vancouver, British Columbia, for the purpose of
      hearing the evidence and representations of the parties, and he shall preside
      over the arbitration and determine all questions of procedure not provided
      for under such Act or this section. After hearing any evidence and representations
      that the parties may submit, the single arbitrator, or the arbitrators,
      as the case may be, shall make an award and reduce the same to writing,
      and deliver one copy thereof to each of the parties. The expense of the
      arbitration shall be paid as specified in the award. 
	 	 
	 (d)      	 The parties agree that the award of a majority of the arbitrators,
      or in the case of a single arbitrator, of such arbitrator, shall be final
      and binding upon each of them. 
	 	 



DEFAULT

 16.           If at any
  time during the Option Period the Optionee is in default of any provision in
  this Agreement (other than the provisions of subparagraph 4(b) for which no
  notice of default need be given), the Optionor may terminate this Agreement,
  but only if: 

	 	 (a)      	 it shall have first given to the Optionee a notice of default
      containing particulars of the obligation which the Optionee has not performed,
      or the warranty breached; and 
	 	 	 
	 	 (b)      	 the Optionee has not, within 45 days following delivery of
      such notice of default, cured such default or commenced proceedings to cure
      such default by appropriate payment or performance, the Optionee hereby
      agreeing that should it so commence to cure any default it will prosecute
      the same to completion without undue delay. 


                  Should
  the Optionee fail to comply with the provision of subparagraph (b), the Optionor
  may thereafter terminate this Agreement by giving notice thereof to the Optionee.



TERMINATION OF MINING OPERATIONS

 17.           The Optionee
  may permanently discontinue mining operations on the Property at any time after
  the Commencement of Commercial Production when in its opinion no further mining
  operations can be economically carried out thereon. At such time, the Optionee
  shall dispose of all mining plant and equipment used on the Property, effect
  all reclamation work as required by law,





12


and otherwise dispose of the Property as it thinks fit.  Any purchaser of the Property after termination of mining operations on the Property shall take the Property free and clear of all claims by the Optionor. The accounts of the Optionee relating
to its mining operations on the Property shall be audited by the auditors of the Optionee as soon as practicable after the sale or disposition of all mining plant, equipment and the Property, and completion of reclamation. Final settlement of any
Royalty payable shall be effected without delay after receipt of the final audited statements. After receipt of such final audited statements and payment of Royalty, if any, this Agreement and the mutual obligations of the Optionee and the Optionor
hereunder shall terminate. 


RULE AGAINST PERPETUITIES 

 18.           If any right,
  power or interest held by or to be acquired by any party in the Property under
  this Agreement would violate the rule against perpetuities, then such right,
  power or interest shall terminate after the death of the last survivor of all
  the lineal descendants of Her Majesty, Queen Elizabeth II of England, living
  on the date of the execution of this Agreement. 


NOTICES

 19.           Each notice,
  demand or other communication required or permitted to be given under this Agreement
  shall be in writing and shall be delivered, telegraphed or telecopied to such
  party at the address for such party specified above. The date of receipt of
  such notice, demand or other communication shall be the date of delivery thereof
  if delivered or telegraphed or, if given by telecopier, shall be deemed conclusively
  to be the next business day. Either party may at any time and from time to time
  notify the other party in writing of a change of address and the new address
  to which notice shall be given to it thereafter until further change. 

GENERAL 

	20.	(a) 	This Agreement shall supersede and replace any other agreement
      or arrangement, whether oral or written, heretofore existing between
      the parties in respect of the subject matter of this Agreement.  
	 	 	 
	 	 (b)      	 No consent or waiver expressed or implied by either party in
      respect of any breach or default by the other in the performance by such
      other of its obligations hereunder shall be deemed or construed to be a
      consent to or a waiver of any other breach or default. 
	 	 	 
	 	 (c)      	 The parties shall promptly execute or cause to be executed
      all documents, deeds, conveyances and other instruments of further assurance
      and do such further and other acts which may be reasonably necessary or
      advisable to carry out fully the intent of this Agreement or to record wherever
      appropriate the respective interest from time to time of the parties in
      the Property. 
	 	 	 
	 	 (d)      	 This Agreement shall enure to the benefit of and be binding
      upon the parties and their respective successors and permitted assigns.
    







 

	 	 (e)      	 This Agreement shall be governed by and construed in accordance
      with the laws of British Columbia and shall be subject to the approval of
      all securities regulatory authorities having jurisdiction. 
	 	 	 
	 	 (f)      	 Time shall be of the essence in this Agreement. 
	 	 	 
	 	 (g)      	 Wherever the neuter and singular is used in this Agreement
      it shall be deemed to include the plural, masculine and feminine, as the
      case may be. 



INDEPENDENT LEGAL ADVICE

 21.           The parties
  have equally participated in the drafting of the within Agreement, each having
  had the opportunity to be independently represented by counsel. The Optionor
  acknowledges that O'Neill Law Corporation has acted solely for the Optionee
  in connection with the preparation, negotiation and execution of this Agreement
  and the Optionor has been advised to obtain the advice of independent legal
  counsel in entering into this Agreement. 


COUNTERPART EXECUTION 

 22.           This agreement
  may be executed in one or more counter-parts, each of which so executed shall
  constitute an original and all of which together shall constitute one and the
  same agreement 


IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. 

	 	 	 
	 INTERNATIONAL ARIMEX RESOURCES 
    	  	 MERRITT VENTURES CORP  
	 INC.  	  	 by its authorized signatory:  
	 by its authorized signatories:  	  	  
	  	 	 
	  	 	 
	
      /s/Anthony Garson  	  	
      /s/Lorrie Archibald  
	 Anthony Garson  	  	 Lorrie Archibald  
	 	 	 
	 	 	 
	 	 	 
	/s/J. Kenney Berscht	 	 
	J. Kenney Berscht	 	 







 SCHEDULE "A" 


A. 	Located Mineral Claims 

	 	 	 	 	 
	  	 	Tenure 	 	 
	 Claim Name  	  	 Number  	  	 Expiry Date  
	  	 	 	 	 
	 Claw 1  	  	 394095  	  	 2005/06/07  
	 Claw 2  	  	 394096  	  	 2005/06/08  
	 Claw 3  	  	 394097  	  	 2005/06/07  
	 Claw 4  	  	 394098  	  	 2005/06/08  




 all located in the Omineca Mining Division, British Columbia






SCHEDULE "B"

 JOINT VENTURE AGREEMENT






  JOINT VENTURE AGREEMENT 

 THIS AGREEMENT made as of the * day of *, 200* 

 BETWEEN: 

	 	*, of * Street, *, * 
	 	 	 	 
	 	 	(hereinafter called "ABC") 
	 	 	 	 
	 	 	 	OF THE FIRST PART 
	 	 	 	 
	AND: 	 	 	 
	 	 
	 	*, of * Street, *, * 
	 	 	 	 
	 	 	(hereinafter called "XYZ") 
	 	 	 	 
	 	 	 	OF THE SECOND PART 


WHEREAS: 

 A.             ABC
  owns an undivided *% interest and XYZ owns an undivided *% interest in and to
  the Property; and 

 B.             The
  parties have agreed to create a joint venture to carry out the continued exploration
  and development of the Property on the terms and conditions hereinafter set
  forth. 

 NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
  of the premises and of the mutual covenants and agreements herein contained
  the parties hereto have agreed and do hereby agree as follows: 

	1.             INTERPRETATION

       1.1           In
        this Agreement the following words, phrases and expressions shall have
        the following meanings:

      

	 	 
	(a)	"Accounting Procedure" means the procedure
        attached to this Agreement as Appendix I by which the Joint Operation
        shall be accounted for.

	 	 
	(b)	"Affiliate" shall have the meaning attributed
        to it in the Company Act (British Columbia).

	 	 
	(c)	"Agreement" means this Joint Venture
        Agreement, as amended from time to time.









 2 

	(d)	"Assets" means all tangible
        and intangible goods, chattels, improvements or other items including,
        without limiting the generality of the foregoing, land, buildings, and
        equipment, excluding the Property, acquired for or made to the Property
        under this Agreement or the cost of which is included in Prior Exploration
        Costs.

	 	 	 
	(e)	"Commercial Production"
        means the operation of the Property as a producing mine and the production
        of mineral products therefrom (excluding bulk sampling, pilot plant or
        test operations).

	 	 	 
	(f)	"Completion Date" means
        the date on which it is demonstrated to the satisfaction of the Management
        Committee that the preparing and equipping of the Mine for Commercial
        Production is complete.

	 	 	 
	(g)	"Construction" means every
        kind of work carried out during the Construction Period by the Operator
        in accordance with the Feasibility Report approved by the Management Committee.

	 	 	 
	(h)
 	"Construction Period" means,
        unless the Production Notice is subsequently withdrawn, the period beginning
        on the date a Production Notice is given and ending on the Completion
        Date.

	 	 	 
	(i)	"Costs" means all items
        of outlay and expense whatsoever, direct or indirect, with respect to
        Mining Operations in accordance with this Agreement. Without limiting
        the generality of the foregoing, the following categories of Costs shall
        have the following meanings:

	 	 	 
	(i)	 	 "Construction Costs" means those Costs
        incurred by the Participants during the Construction Period including,
        without limiting the generality of the foregoing, the Operator's fee;

	 	 	 
	(ii) 	 	"Exploration Costs" means those Costs
        incurred by the Participants during the Exploration Period including,
        without limiting the generality of the foregoing, the Operator's fee;

	 	 	 
	(iii)	 	 "Mine Costs" means Construction Costs
        and Operating Costs;

	 	 	 
	(iv) 	 	"Operating Costs" means those Costs
        incurred by the Participants subsequent to the Completion Date including,
        without limiting the generality of the foregoing, the Operator's fee;
        and

	 	 	 
	(v)	 	 "Prior Exploration Costs" means the
        expenditures and deemed expenditures of the parties as determined in accordance
        with Appendix III.

	 	 	 
	(j)	"Exploration Period" means
        the period beginning on the date of this Agreement and ending on the date
        an effective Production Notice is given.

	 	 	 
	 	 








 3

	(k)	"Feasibility Report" means a detailed
        report demonstrating the feasibility of placing any part of the Property
        into Commercial Production at an acceptable rate of return on capital
        in such form and detail as is customarily required by institutional lenders
        of major financing for mining projects and shall include a reasonably
        assessment of the mineable ore reserves and their amenability to metallurgical
        treatment, a complete description of the work, equipment and supplies
        required to bring such part of the Property into Commercial Production
        and the estimated cost thereof, a description of the mining methods to
        be employed and a financial appraisal of the proposed operations supported
        by explanations of the following information:

	 	 
	 	 -a description of that part of the Property
        to be covered by the proposed mine;

       -the estimated recoverable reserves of minerals and
        the estimated composition and content thereof;

       -the proposed procedure for development, mining and
        production;

       -results of ore amenability tests;

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

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

       -all environmental impact studies and costs;

       -the period in which it is proposed the Property be
        put into Commercial Production;

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

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

	 	 
	(l)	"Interest" means the undivided beneficial
        percentage interest in the Property, the Assets and any Mine which is
        subject to adjustment during the Exploration Period according to Article
        8, and subsequent to the Exploration Period according to Article 11.

	 	 
	(m)	"Joint Operation" means the joint venture
        formed pursuant to Article 2 for the purpose of exploring and developing
        the Property and operating it as a Mine.

	 	 
	(n)	"Management Committee" means the committee
        established pursuant to Article 4.









 4 

	(o)	"Mine" means the workings
        established and Assets acquired including, without limiting the generality
        of the foregoing, development headings, plant and concentrator installations,
        infrastructure, housing, roads, airport and other facilities in order
        to bring the Property into Commercial Production.

	 	 	 
	(p)	"Minerals" means all ores,
        and concentrates derived therefrom, and all minerals, precious and base,
        metallic and non-metallic, in, on or under the Property which may lawfully
        be explored for, mined and sold.

	 	 	 
	(q)	"Mining Operations" means
        every kind of work done by or on behalf of the Operator:

	 	 	 
	(i) 	 	on or in respect of the Property in
        accordance with a Program or Production Notice; or

	 	 	 
	(ii)	 	 if not provided for in a Program or
        Production Notice, unilaterally and in good faith to maintain the Property
        in good standing, to prevent waste or to otherwise discharge any obligation
        which is imposed upon it pursuant to this Agreement and in respect of
        which the Management Committee has not given it directions;

	 	 	 
	 	including, without limiting
        the generality of the foregoing, investigating, prospecting, exploring,
        developing, property maintenance, preparing reports, estimates and studies,
        designing, equipping, improving, surveying, Construction and mining, milling
        concentrating, rehabilitation, reclamation, and environmental protection.

	 	 	 
	(r)	"Operating Plan" shall mean
        a plan prepared in accordance with Article 14 for the operation of the
        Mine.

	 	 	 
	(s)	"Operating Year" shall mean
        a 12 month period, the first Operating Year to commence on the day after
        the Completion Date and each succeeding Operating Year commencing immediately
        after the expiration of the preceding Operating Year.

	 	 	 
	(t)	"Operator" means the party
        or other person appointed as the Operator in accordance with Article 5.

	 	 	 
	(u)	"Participant" means a party
        that has elected to contribute to Exploration Costs or Mine Costs, as
        the case may be.

	 	 	 
	(v)	"Party" or "Parties" means
        the parties to this Agreement and their respective successors and permitted
        assigns which become parties pursuant to this Agreement.

	 	 	 
	(w)	"Prime Rate" means the rate
        of interest from time to time stated by the Royal Bank of Canada at its
        main branch in Vancouver, British Columbia, as being its prime rate on
        Canadian dollar demand loans.

	 	 	 
	(x)	"Production Notice" means
        a notice which is given to each of the Parties pursuant to Article 10
        respecting the establishment of a Mine on and Commercial Production from
        the Property.









 5 

	(y)	"Program" means the work plan and budget
        of Mining Operations conducted during the Exploration Period and adopted
        pursuant to Article 8.

	 	 
	(z)	"Property" means the mineral properties
        described in Appendix IV and any additional mineral properties that become
        part of the Property pursuant to this Agreement, the Minerals therein,
        all information obtained from Mining Operations and those rights and benefits
        appurtenant to the Property that are acquired for the purpose of conducting
        Mining Operations. A reference to Property shall include a reference to
        any portion thereof.

	 	 
	(aa)	"Proportionate Share" means the share
        which is equal to a Party's Interest.

	 	 
	(bb)	"Simple Majority" means a decision made
        by the Management Committee by greater than 50% of the votes entitled
        to be cast.

	 	 
	(cc)	"$" means Canadian dollars.



 1.2           The
  words "Article", "Section", "Subsection", "Paragraph", "Subparagraph", "Clause",
  "herein" and "hereunder" refer to this Agreement. The words "this Agreement"
  include every Schedule or Appendix attached hereto. 

 1.3           The
  captions and the emphases of the defined terms have been inserted for convenience
  and do not define the scope of any provision. 

 2.              FORMATION
  OF THE JOINT VENTURE 

 2.1           The
  Parties hereby agree, subject to Article 23, to associate and participate in
  a joint venture for the sole purpose of exploring the Property and, if deemed
  warranted, bringing the Property or a portion thereof into Commercial Production
  by establishing and operating a Mine. 

 2.2           Except
  as expressly provided in this Agreement each party shall have the right independently
  to engage in and receive full benefits from business activities whether or not
  competitive with the Joint Operation without consulting any other party. The
  doctrines of "corporate opportunity" or "business opportunity" shall not be
  applied to any other activity, venture or operation of any party with respect
  to any opportunity to acquire any assets outside of the Property at any time,
  or within the Property after the termination of this Agreement. Unless otherwise
  agreed in writing no Party shall have any obligation to mill, beneficiate or
  otherwise treat any Minerals or any other Party's share of Minerals in any facility
  owned or controlled by such Party. 

 3.            
  INTERESTS 

 3.1           Except
  as otherwise provided herein the parties shall bear all Costs and all liabilities
  arising under this Agreement and shall own the Property, the Assets and any
  Mine all in proportion to their respective Interests. 





 6 

	3.2           The
      respective initial Interests shall be as follows:
	 	 	 
	 	(a)	ABC - *%
	 	 	 
	 	(b)	XYZ - *%


 4.             
  MANAGEMENT COMMITTEE 

 4.1           
  A Management Committee shall be established on or forthwith after the date of
  this Agreement. Except as herein otherwise provided the Management Committee
  shall make all decisions in respect of Mining Operations. 

 4.2           Each
  Party, and the Operator if not a party, shall forthwith appoint one representative
  and one alternate representative to the Management Committee. The alternate
  representative may act for a party's representative in his absence. 

 4.3           The
  Operator shall call a Management Committee meeting at least once every 12 months
  and, in any event, within 14 days of being requested to do so by any representative.


 4.4           The
  Operator shall give notice specifying the time, place of and the agenda for
  the meeting to all representatives at least seven days before the time appointed
  for the meeting. 

 4.5           Notice
  of a meeting shall not be required if all representatives are present and unanimously
  agree upon the agenda. 

 4.6           A
  quorum for any Management Committee meeting shall be present if the representatives
  of Parties holding Interests totalling over 75% are present. If a quorum is
  present at the meeting the Management Committee shall be competent to exercise
  all of the authority, power and discretion herein bestowed upon it. The Management
  Committee shall not transact any business at a meeting unless a quorum is present
  at the commencement of the meeting but the quorum need not be present throughout
  the meeting. A meeting at which a quorum is not present shall be adjourned to
  the same time and place one week later at which adjourned meeting a quorum shall
  be one representative of a Party. 

 4.7           The
  Management Committee shall decide every question submitted to it by a vote with
  each Party's representative being entitled to cast that number of votes which
  is equal to its Party's Interest. Unless otherwise specifically required the
  Management Committee shall make decisions by Simple Majority. In the event of
  a deadlock the Operator's representative or the representative of a party who
  is Operator shall have a second or casting vote *OPTION* [shall
  not have a second or casting vote and the matter shall be submitted to arbitration
  pursuant to Article 27]. 

 4.8           The
  representative of the Operator shall be the chairman of Management Committee
  meetings. 





 7 

 4.9           The
  secretary of the Management Committee shall be appointed by the chairman and
  shall take minutes of that meeting and circulate copies thereof to each representative.


 4.10         The Management
  Committee may make decisions by obtaining the consent in writing of the representatives
  of all Parties which consent may be in one or more counterparts which together
  shall be deemed to constitute one consent. Any decision so made shall be as
  valid as a decision made at a duly called and held meeting of the Management
  Committee. 

 4.11          Management
  Committee decisions made in accordance with this Agreement shall be binding
  upon all of the parties. 

 4.12          Each
  party shall bear the expenses incurred by its representatives and alternate
  representatives in attending meetings of the Management Committee. 

 4.13          The
  Management Committee may establish such other rules of procedure, not inconsistent
  with this Agreement, as the Management Committee deems fit. 

 5.             
  OPERATOR 

 5.1            XYZ
  shall be the Operator until it resigns or is removed by the Management Committee.


 5.2           
  The Operator may resign as Operator by giving notice to all the parties at least
  90 days before its resignation. The Management Committee shall thereupon select
  another Operator not later than the 90th day after receipt of the previous Operator's
  notice of resignation. 

 5.3           The
  Management Committee may remove an Operator by six months notice in writing
  and shall appoint a new Operator. If the Operator has failed to perform in a
  manner that is consistent with good mineral exploration and development practice
  or is in default of its duties and responsibilities under this Agreement, and
  the Management Committee or another Party has given to the Operator written
  notice setting forth particulars of the Operator's default and the Operator
  has not within 30 days of such notice commenced to remedy the default and thereafter
  to proceed continuously and diligently to complete all required remedial action
  the other Party, and if there is more than one, the one with the greatest Interest,
  shall become the Operator. 

 5.4           Upon
  the Operator making a voluntary or involuntary assignment into bankruptcy or
  taking advantage of any legislation for the winding-up or liquidation of the
  affairs of insolvent or bankrupt companies the Operator shall automatically
  cease to be the Operator and the other Party or, if there is more than one,
  the one with the greatest Interest, shall be appointed as Operator. 

 5.5           The
  new Operator shall assume all of the rights, duties, liabilities and status
  of Operator as provided in this Agreement. The new Operator shall have no obligation
  to hire any employees of the former Operator. 

 5.6           Upon
  ceasing to be Operator the former Operator shall forthwith deliver to the 





 8 

person nominated for that purpose by the Management Committee,
  the custody of all Assets, Property, books, records, and other property both
  real and personal relating to this Agreement.

 5.7           If
  the Operator resigns or is removed and no other person consents to act as Operator
  the Joint Operation shall terminate and the provisions of Article 18 shall apply
  mutatis mutandis.

 6.            OPERATOR'S
  FEE

 6.1           The
  Operator may charge the following sums in satisfaction of its general overhead
  costs which are not charged directly as provided in the Accounting Procedure:

	(a)	with respect to Programs:

	 	 	 
	(i)	 	 2% for each individual contract which
        includes an overhead charge by the person contracted;

	 	 	 
	(ii) 	 	5% for each individual contract which
        exceeds $100,000 and does not include an overhead charge by the person
        contracted;

	 	 	 
	(iii)	 	 10% of all other Exploration Costs;

	 	 	 
	(b)	with respect to Construction,
        1% of all Construction Costs;

	 	 	 
	(c)	subsequent to the Completion
        Date, 5% of all Operating Costs.



7.              RIGHTS,
  DUTIES AND STATUS OF OPERATOR

 7.1           The
  Operator in its operations hereunder shall be deemed to be an independent contractor
  and shall be entitled to charge for its services hereunder in accordance with
  the provisions of this Agreement and the Accounting Procedure relative thereto.
  The Operator shall not act or hold itself out as agent for any of the Parties
  nor make any commitments on their individual behalf unless specifically permitted
  by this Agreement or directed in writing by such Party.

 7.2           Subject
  to any specific provision of this Agreement and subject to it having the right
  to reject any direction on reasonable grounds by virtue of its status as an
  independent contractor, the Operator shall perform its duties hereunder in accordance
  with the directions of the Management Committee and in accordance with this
  Agreement.

 7.3          
  The Operator shall manage and carry out such Mining Operations as the Management
  Committee may direct and in connection therewith shall, in advance if reasonably
  possible, notify the Management Committee of any change in Mining Operations
  which the Operator considers material and, if it is not reasonably possible,
  the Operator shall notify the Management Committee so soon thereafter as is
  reasonably possible.





 9 

 7.4           
  The Operator shall have the sole and exclusive right and authority to manage
  and carry out all Mining Operations and to enter into contracts and sub-contracts
  on behalf of the Joint Operation with third parties in respect thereof and incur
  the Costs required for that purpose. In so doing the Operator shall, unless
  it obtains the approval of the Management Committee: 

	(a)	comply with the provisions of all agreements
        or instruments of title under which the Property or Assets are held;

	 	 
	(b)	pay all Costs properly incurred promptly
        as and when due;

	 	 
	(c)	keep the Property and Assets free of
        all liens and encumbrances other than those, if any, in effect on the
        date of this Agreement, those the creation of which is permitted pursuant
        to this Agreement, or builder's or mechanic's liens arising out of the
        Mining Operations and, in the event of any lien being filed as aforesaid,
        proceed with diligence to contest or discharge the same;

	 	 
	(d)	prosecute claims or, where a defence
        is available, defend litigation arising out of the Mining Operations provided
        that any Participant may join in the prosecution or defence at its own
        expense;

	 	 
	(e)	subject to section 19.2, perform such
        assessment work or make payments in lieu thereof and pay such rentals,
        taxes or other payments and do all such other things as may be necessary
        to maintain the Property in good standing including, without limiting
        the generality of the foregoing, staking and restaking mining claims,
        and applying for licenses, leases, grants, concessions, permits, patents
        and other rights to and interests in the Minerals;

	 	 
	(f)	maintain accounts in accordance with
        the Accounting Procedure provided that the judgement of the Operator as
        to matters related to the accounting for which provision is not made in
        the Accounting Procedure shall govern if the Operator's accounting practices
        are in accordance with accounting principles generally accepted in the
        mining industry in Canada;

	 	 
	(g)	perform its duties and obligations hereunder
        in a sound and workmanlike manner in accordance with sound mining and
        engineering practices and in substantial compliance with all applicable
        federal, state, provincial, territorial and municipal laws, by-laws, ordinances,
        rules and regulations and this Agreement; and

	 	 
	(h)	prepare and submit draft Programs for
        each calendar year for consideration by the Management Committee by the
        November 30th preceding such calendar year.



 8.            
  EXPLORATION PROGRAMS 

 8.1           Draft
  Programs submitted by the Operator to the Management Committee shall contain
  a statement in reasonable detail of the proposed Program and estimates of all
  Exploration Costs to be incurred. 





 10 

 8.2           
  The Management Committee shall review the draft Program prepared and, if it
  deems fit, adopt the same with such modifications, if any, as the Management
  Committee deems necessary. The Operator shall be entitled to an allowance for
  a Cost overrun of 10% of a Program budget and any Costs so incurred shall be
  deemed to be included in the Program. 

 8.3           
  The Operator shall forthwith submit the approved Program to the Parties. Each
  Party may, within 30 days of receipt of the Program, give notice to the Operator
  committing to contribute its Proportionate Share of the Exploration Costs on
  that Program. A Party which fails to give notice within the 30 day period shall
  be deemed to have elected not to contribute. 

 8.4           
  If any party elects or is deemed to have elected not to contribute to an approved
  Program the amounts to be contributed by the Participants who elected to contribute
  to that Program shall be increased pro rata, subject to the right
  of any of them to elect not to contribute more than the amount initially committed
  by them. If a Participant elects not to contribute more than the amount initially
  committed the Operator may elect not to proceed with the approved Program or
  may prepare an amended Program and the provisions of this Article shall apply
  to such amended Program. 

 8.5           
  The Operator shall be entitled to invoice each Participant: 

	(a)	no more frequently than monthly for
        its Proportionate Share of Exploration Costs incurred and paid by the
        Operator; or

	 	 
	(b)	in advance of requirements but not more
        than 30 days for an advance of that Participant's Proportionate Share
        of Exploration Costs.



 Each invoice shall be signed by some responsible official
  of the Operator. Each Participant shall pay to the Operator the amount invoiced
  within 30 days of receipt of the invoice. If a Participant protests the correctness
  of an invoice it shall nevertheless be required to make the payment subject
  to later adjustment if such protest is sustained. 

 8.6           
  If after electing to participate any Participant (the "Defaulting Party") fails
  to pay its Proportionate Share within the 30 day period referred to in Paragraph
  8.5 the Operator may by notice demand payment. If no payment is made within
  the period of 30 days next succeeding the receipt of the demand notice the Interest
  of the Defaulting Party shall be deemed to be less than 10% and that interest
  will be converted to a 5% Net Profits Royalty to be calculated and paid in accordance
  with Appendix II hereto, and that Party shall have no further Interest. The
  Interests of the other Parties shall be increased pro rata. 

 8.7           The
  Operator shall expend all monies advanced by a Participant ratably with the
  advances of the other Participants. If the Operator suspends or prematurely
  terminates a Program any funds advanced by a Participant in excess of that Participant's
  Proportionate Share of Exploration Costs incurred prior to the suspension or
  premature termination shall be refunded forthwith. 

 8.8           
  If any Program is altered, suspended or terminated prematurely so that the 





 11 

 Exploration Costs incurred on that Program as altered, suspended
  or terminated are less than 80% of the Exploration Costs originally proposed,
  any Party which elected or which is deemed to have elected not to contribute
  its Proportionate Share of the Exploration Costs incurred on that Program shall
  be given notice of the alteration, suspension or termination by the Operator
  and shall be entitled to contribute its Proportionate Share of the Exploration
  Costs incurred on that Program by payment thereof to the Operator within 30
  days after receipt of the notice. If payment is not made by that Party within
  the 30 days aforesaid it shall, without a demand for payment being required
  to be made thereafter by the Management Committee, forfeit its right to contribute
  to that Program. 

 8.9           
  If a Party elects or is deemed to have elected not to contribute to the Exploration
  Costs of any Program the Interest of that Party shall be decreased and the Interest
  of each Participant contributing in excess of its Proportionate Share of the
  Exploration Costs shall be increased so that at all times during the Exploration
  Period the Interest of each Party will be equal to its Exploration Costs and
  Prior Exploration Costs expressed as a percentage of the Exploration Costs and
  Prior Exploration Costs of all Parties. The party whose Interest has been reduced
  shall be entitled to receive details of and to contribute to future Programs
  to the extent of its then Interest. 

 8.10          
  If a Party's Interest is reduced to 10% or less, that Interest will be converted
  to a 5% Net Profits Royalty to be calculated and paid in accordance with Appendix
  II hereto, and that Party shall have no further Interest. The Interests of the
  other Parties shall be increased pro rata. 

 8.11          
  If the Operator fails to submit a draft Program for an Operating Year by November
  30 of the year preceding such Operating Year: 

	(a)	the Operator shall not be entitled to
        submit a draft Program for the Operating Year;

	 	 
	(b)	the other Party, and if there is more
        than one, the Party with the greatest Interest, may submit a draft Program
        (the "Non-Operator's Program") for the Operating Year for consideration
        by the Management Committee;

	 	 
	(c)	the Management Committee shall review
        the Non-Operator's draft Program and, if it deems fit (the Operator not
        being entitled to vote with respect thereto), adopt the Program with such
        modifications, if any, as the Management Committee deems necessary and
        the adopted Program shall then be submitted to the parties according to
        this Article;

	 	 
	(d)	if the Operator is a Party and elects
        not to contribute to the Program it shall cease to be the Operator and
        the Management Committee shall appoint a new Operator (the former Operator
        not being entitled to vote with respect thereto).



 8.12          If
  the Management Committee for any reason fails to adopt a Program for an Operating
  Year by December 31 of the preceding year, the Operator shall, subject to direction
  to the contrary by the Management Committee and the receipt of the necessary
  funds, carry out such work and make such disbursements as to meet the minimum
  requirements to maintain the Property in good standing. 





 12

 9.            
  FEASIBILITY REPORT 

 9.1           
  A Feasibility Report shall only be prepared with the approval of the Management
  Committee. The Operator shall provide copies of the completed Feasibility Report
  to each of the Parties forthwith upon receipt. 

 9.2           
  The Management Committee shall meet at reasonable intervals and times to review
  the Feasibility Report and discuss whether the establishing of a Mine and bringing
  the Property into Commercial Production in accordance with the Feasibility Report
  is feasible or desirable. 

 9.3           
  If the Operator has not provided copies of a completed Feasibility Report to
  each of the Parties with an Interest by the fifth anniversary of this Agreement,
  any Party whose Interest is not less than 20% and if there is more than one,
  the Party with the greatest Interest, may prepare a Feasibility Report at its
  own expense (the "Non-Operator's Feasibility Report") and submit it to the Management
  Committee. 

 10.          
  PRODUCTION NOTICE 

 10.1         The Operator
  shall call a meeting of the Management Committee to consider the Feasibility
  Report for a date no sooner than six months after the Feasibility Report was
  provided to each of the Parties. 

 10.2         The Management
  Committee shall consider each Feasibility Report prepared and may approve any
  Feasibility Report with such modifications, if any, as it considers necessary
  or desirable. Such approval by the Management Committee must be given by Participants
  holding aggregate Interests of not less than 75%. If the Feasibility Report
  is a Non-Operator's Feasibility Report the Operator is not entitled to vote
  with respect to the approval thereof. If a Feasibility Report is approved as
  aforesaid the Management Committee shall forthwith cause a Production Notice
  to be given to each of the Parties with an Interest by the Operator stating
  that the Management Committee intends to establish and bring a Mine into production
  pursuant to the Feasibility Report as so approved. 

 11.          
  ELECTION TO CONTRIBUTE 

 11.1         Each Party
  with an Interest may, within 120 days of receipt of the Production Notice, give
  the Operator notice committing to contribute its Proportionate Share of the
  Mine Costs. A Party which fails to give notice within the 120 day period shall
  be deemed to have elected not to contribute. 

 11.2         If any such
  Party fails to give such notice, that Party (a "non-Participant") shall forfeit
  the right to contribute to Mine Costs and shall suffer dilution and conversion
  of its Interest as provided in this paragraph. Those Parties which elected to
  contribute as aforesaid may thereupon elect to increase their contribution to
  the Mine Costs, if more than one Party then in 





 13 

 proportion to their respective Interests, by the amount which
  any Party has declined to contribute. If elections are made so that Mine Costs
  are fully committed the Interest of each Participant shall be increased and
  that of each non-Participant shall be decreased so that the Interest of each
  Party at all times is equal to: 

	(a)	the sum of its Exploration Costs, its Prior Exploration Costs
      and its contribution to Mine Costs;
	 	 
	 	                     divided
      by
	 	 
	(b)	the sum of the total Exploration Costs, total Prior Exploration
      Costs and the total Mine Costs of all the Parties;
	 	 
	 	                     multiplied
      by
	 	 
	(c)	100.


 If any Party's Interest is thereby less than 20% it shall
  forfeit its Interest to the Participants, if more than one then in proportion
  to their respective Interests, and that Party shall be entitled to receive as
  its sole remuneration and benefit in consideration of that assignment and conveyance,
  a 5% Net Profits Royalty calculated in accordance with Appendix II. Each Participant
  shall severally cause to be paid to each non-Participant any Net Profits Royalty
  derived from the Property in the manner provided in Appendix II. 

 11.3         If Mine Costs
  are not fully committed the Production Notice shall be deemed to be withdrawn.


 11.4         If Mine Costs
  are fully committed, the Operator shall diligently proceed to implement the
  Feasibility Report in accordance with normal standards in the mining industry.
  If the Operator fails to so implement the Feasibility Report within 12 months
  of the issuance of the Production Notice for reasons other than general economic
  conditions in the mining industry, any Party which forfeited the right to contribute
  to Mine Costs pursuant to section 11.2 shall have the right, exercisable during
  the 30 days following the expiration of such 12 month period, to reacquire from
  the Participants all of its Interest as last held, by paying its Proportionate
  Share of Mine Costs together with interest at the Prime Rate plus 2% to the
  Participants in proportion to their Interests. 

 11.5         During the
  12 month period referred to in section 11.4 the Participants shall not be obligated
  to provide any non-Participant with the results of any work carried out on the
  Property, the Participants' sole obligation during such period being to provide
  any non-Participant, on the written request of such non-Participant, but only
  once during the said 12 months, with a summary of the nature of the work carried
  out and the total Costs thereof. 

 12.           
  MINE FINANCING 

 12.1         The contributions
  of the Participants toward the Mine Costs shall be individually and separately
  provided by them. 





 14 

12.2         Any Party may
  pledge, mortgage, charge or otherwise encumber its Interest in order to secure
  monies borrowed and used by that Party for the sole purpose of enabling it to
  finance its participation under this Agreement or in order to secure by way
  of a general security interest as a part of the general corporate assets of
  that Party monies borrowed for its general corporate purposes, provided that
  the pledgee, mortgagee, holder of the charge or encumbrance (in this section
  called the "Chargee") shall hold such interest subject to the provisions of
  this Agreement and that if the Chargee realizes upon any of its security it
  will comply with this Agreement. The agreement between the Party, as borrower,
  and the Chargee shall contain specific provisions to the same effect as the
  provisions of this section. 

 13.         CONSTRUCTION


 13.1         Subject to
  Article 11, the Management Committee shall cause the Operator to, and the Operator
  shall, proceed with Construction with all reasonable dispatch after a Production
  Notice has been given. Construction shall be substantially in accordance with
  the Feasibility Report subject to any variations proposed in the Production
  Notice, and subject also to the right of the Management Committee to cause such
  other reasonable variations in Construction to be made as the Management Committee
  deems advisable. 

 14.          
  OPERATION OF THE MINE 

 14.1         Commencing
  with the Completion Date all Mining Operations shall be planned and conducted
  and all estimates, reports and statements shall be prepared and made on the
  basis of an Operating Year. 

 14.2         With the exception
  of the first Operating Year an operating plan for each Operating Year shall
  be submitted by the Operator to the Participants not later than the end of the
  third quarter in the year immediately preceding the Operating Year to which
  the Operating Plan relates. Each Operating Plan shall contain the following:


	(a)	a plan for the proposed Mining Operation;

	 	 
	(b)	a detailed estimate of all Mine Costs
        plus a reasonable allowance for contingencies;

	 	 
	(c)	an estimate of the quantity and quality
        of the ore to be mined and the concentrates or metals to be produced;
        and

	 	 
	(d)	such other facts as may be necessary
        to reasonably illustrate the results intended to be achieved by the Operating
        Plan,



 and upon request of any Participant the Operator shall meet
  with that Participant to discuss the Operating Plan and shall provide such additional
  or supplemental information as that Participant may reasonably require with
  respect thereto. 





 15 

 14.3         The Management
  Committee shall adopt each Operating Plan, with such changes as it deems necessary,
  at least three months before the commencement of the Operating Year to which
  the Operating Plan relates but the Management Committee may from time to time
  during the Operating Year amend any Operating Plan as required. 

 14.4         The Operator
  shall be entitled to include in the estimate of Mine Costs referred to in paragraph
  14.2(b) the reasonably estimated costs of satisfying continuing obligations
  that may remain after this Agreement terminates in excess of amounts actually
  expended. Such continuing obligations are or will be incurred as a result of
  the Joint Operation and shall include such things as monitoring, stabilization,
  reclamation or restoration obligations, severance and other employee benefit
  costs and all other obligations incurred or imposed as a result of the Joint
  Operation which continue or arise after termination of this Agreement and settlement
  of all accounts. The amount accrued from time to time for the satisfaction of
  such continuing obligations shall be classified as Costs hereunder but shall
  be segregated into a separate account. 

 15.           PAYMENT
  OF MINE COSTS 

 15.1         The Operator
  may invoice each Participant, from time to time, for that Participant's Proportionate
  Share of Mine Costs incurred to the date of the invoice, or at the beginning
  of each month for an advance equal to that Participant's Proportionate Share
  of the estimated cash disbursements to be made during the month. Each Participant
  shall pay its Proportionate Share of the Mine Costs or the estimated cash disbursements
  aforesaid to the Operator within 30 days after receipt of the invoice. If the
  payment or advance requested is not so made the amount of the payment or advance
  shall bear interest calculated monthly not in advance from the 30th day after
  the date of receipt of the invoice thereof by that Participant at a rate equivalent
  to the weighted average Prime Rate for the month plus 2% per annum until paid.
  The Operator shall have a lien on each Participant's Interest in order to secure
  that payment or advance together with interest which has accrued thereon. 

 15.2         If any Participant
  (in this section 15.2 called a "Defaulting Participant") fails to pay an invoice
  within the 30 day period as aforesaid, the Operator may, by notice, demand payment.
  If no payment is made within 30 days of the Operator's demand notice the Operator
  may, without limiting its other rights at law, enforce the lien created by section
  15.1 by taking possession of all or any part of the Defaulting Participant's
  Interest. The Operator may sell and dispose of the Interest which it has so
  taken into its possession by: 

	(a)	first offering that Interest to the
        non-Defaulting Participants, and if there is more than one then in proportion
        to the respective Interests of the Participants who wish to accept that
        offer, for that price which is the fair market value stated in the lower
        of two appraisals obtained by the Operator from independent, well recognized
        appraisers competent in the appraisal of mining properties; and

	 	 
	(b)	if the non-Defaulting Participants have
        not purchased all or part of that Interest as aforesaid, then by selling
        the balance, if any, either in whole or in part or in separate parcels
        at public auction or by private tender (neither the Participants nor the
        Defaulting Participant being entitled to bid) at a time and on whatever
        terms the Operator shall arrange, having first given notice to the Defaulting
        Participant of the time and place of the sale. 









 16 

As a condition of the sale as contemplated in subsection 15.2(b)
  the purchaser shall agree to be bound by this Agreement and, prior to acquiring
  the Interest, shall deliver notice to that effect to the parties in form acceptable
  to the Operator. The proceeds of the sale shall be applied by the Operator in
  payment of the amount due from the Defaulting Participant and interest as aforesaid,
  and the balance remaining, if any, shall be paid to the Defaulting Participant
  after deducting reasonable costs of the sale. Any sale or disposal made as aforesaid
  shall be a perpetual bar both at law and in equity by the Defaulting Participant
  and its successors and assigns against all other Participants and the Operator.


 16.           DISTRIBUTION
  IN KIND 

 16.1         It is expressly
  intended that, upon implementation of any Production Notice hereunder, the association
  of the parties shall be limited to the efficient production of Minerals from
  the Property and that each of the parties shall be entitled to use, dispose
  of or otherwise deal with its Proportionate Share of Minerals as it sees fit.
  Each Participant shall take in kind, f.o.b. truck or railcar on the Property
  and separately dispose of its Proportionate Share of the Minerals produced from
  the Mine. Extra costs and expenses incurred by reason of the Participants taking
  in kind and making separate dispositions shall be paid by each Participant directly
  and not through the Operator or Management Committee. 

 16.2         Each Participant
  shall construct, operate and maintain, all at its own cost and expense, any
  and all facilities which may be necessary to receive and store and dispose of
  its Proportionate Share of the Minerals at the rate they are produced. 

 16.3         If a Participant
  has not made the necessary arrangements to take in kind and store its share
  of production as aforesaid the Operator shall, at the sole cost and risk of
  that Participant store, in any location where it will not interfere with Mining
  Operations, the production owned by that Participant. The Operator and the other
  parties shall be under no responsibility with respect thereto. All of the Costs
  involved in arranging and providing storage shall be billed directly to, and
  be the sole responsibility of, the Participant whose share of production is
  so stored. The Operator's charges for such assistance and any other related
  matters shall be billed directly to an be the sole responsibility of the Participant.
  All such billings shall be subject mutatis mutandis to the provisions
  of sections 15.1 and 15.2 thereof. 

 17.          
  SURRENDER OF INTEREST 

 17.1         Any Party
  may at any time upon notice, surrender its entire Interest to the other Parties
  by giving those Parties notice of surrender. 

 The notice of surrender shall: 





 17 

	(a)	 indicate a date for surrender
        not less than three months after the date on which the notice is given;
        and

	 	 	 
	(b)	contain an undertaking that
        the surrendering Party will:

	 	 	 
	(i) 	 	satisfy its Proportionate Share, based
        on its then Interest, of all obligations and liabilities which arose at
        any time prior to the date of surrender;

	 	 	 
	(ii) 	 	if the Operator has not included in
        Mine Costs the costs of continuing obligations as set out in section 14.4
        hereof, pay its reasonably estimated Proportionate Share, based on the
        surrendering Party's then Interest, of the Costs of rehabilitating the
        Mine site and of reclamation as at the date of surrender; and

	 	 	 
	(iii)	 	 hold in confidence, for a period of
        two years from the date of surrender, all information and data which it
        acquired pursuant to this Agreement.



 17.2         Upon the surrender
  of its entire Interest as contemplated in section 17.1 and upon delivery of
  a release in writing in form acceptable to counsel for the Operator releasing
  the other parties from all claims and demand hereunder, the surrendering party
  shall be relieved of all obligations or liabilities hereunder except for those
  which arose or accrued or were accruing due on or before the date of the surrender.


 17.3         A Party to
  whom a notice of surrender has been given may elect, by notice within 90 days
  to the Party which first gave the notice, to accept the surrender, in which
  case the provisions of this Article shall apply, or to join in the surrender.
  If all of the Parties join in the surrender the Joint Operation shall be terminated
  in accordance with Article 18. 

 18.           TERMINATION
  OR SUSPENSION OF MINING OPERATIONS 

 18.1         The Operator
  may at any time subsequent to the Completion Date, on at least 30 days notice
  to all Participants, recommend that the Management Committee approve the suspension
  of Mining Operations. The Operator's recommendation shall include a plan and
  budget (in this Article called the "Mining Maintenance Plan") in reasonable
  detail of the activities to be performed to maintain the Assets and Property
  during the period of suspension and the Costs to be incurred. The Management
  Committee may at any time subsequent to the Completion Date, cause the Operator
  to suspend Mining Operations in accordance with the Operator's recommendation
  with such changes to the Mine Maintenance Plan as the Management Committee deems
  necessary. The Participants shall be committed to contribute their Proportionate
  Share of the Costs incurred in connection with the Mine Maintenance Plan. The
  Management Committee may cause Mining Operations to be resumed at any time.


 18.2         The Operator
  may at any time following a period of at least 90 days during which Mining Operations
  have been suspended, upon at least 30 days notice to all Participants, or in
  the events described in section 18.1, recommend that the Management Committee
  approve the permanent termination of Mining Operations. The Operator's recommendation
  shall include a plan and budget (in this Article called the "Mine Closure Plan")
  in reasonable detail of the activities 





 18 

 to be performed to close the Mine and reclaim the Property.
  The Management Committee may, by unanimous approval of the representatives of
  all Participants, approve the Operator's recommendation with such changes to
  the Mine Closure Plan as the Management Committee deems necessary. 

 18.3         If the Management
  Committee approves the Operator's recommendation to permanently terminate Mining
  Operations it shall cause the Operator to: 


  	(a)
   	implement the Mine Closure Plan whereupon
          the Participants shall be committed to pay, in proportion to their respective
          Interests, such Costs as may be required to implement that Mine Closure
          Plan;

	 	 
	(b)	remove, sell and dispose of such Assets
          as may reasonably be removed and disposed of profitably and such other
          Assets as the Operator may be required to remove pursuant to applicable
          environmental and mining laws; and

	 	 
	(c)	sell, abandon or otherwise dispose
          of the Property.





 The disposal price for the Assets and the Property shall be
  the best price obtainable and the net revenues, if any, from the removal and
  sale shall be credited to the Participants in proportion to their respective
  Interests. 

 18.4         If the Management
  Committee does not approve the Operator's recommendation contemplated to permanently
  terminate Mining Operations the Operator shall maintain Mining Operations in
  accordance with the Mine Maintenance Plan. 

 19.           THE
  PROPERTY 

 19.1         Title to the
  Property shall be held in the name of the Operator in trust for the Parties
  in proportion to their respective Interests as adjusted from time to time. Each
  of the Parties shall have the right to receive from the Operator, forthwith
  upon making demand therefor, such documents as it may reasonably require to
  confirm its Interest. 

 19.2         Notwithstanding
  subsection 6.4(e), the Operator shall be entitled, at any time and from time
  to time to surrender all or any part of the Property or to permit the same to
  lapse, but only upon first either obtaining the unanimous consent of the Management
  Committee, or giving 60 days notice of its intention to do so to the other Parties
  with an Interest. In this latter event the Parties, other than the Operator,
  shall be entitled to receive from the Operator, on request prior to the date
  of the surrender or lapse, a conveyance of that portion of the Property intended
  for surrender or lapse, together with copies of any plans, assay maps, diamond
  drill records and factual engineering data in the Operator's possession and
  relevant thereto. Any part of the Property so acquired shall cease to be subject
  to this Agreement. 

 20.           
  INFORMATION AND DATA 





 19 

 20.1         At all times
  during the subsistence of this Agreement the duly authorized representatives
  of each Participant shall, at its and their sole risk and expense and at reasonable
  intervals and times, have access to the Property and to all technical records
  and other factual engineering data and information relating to the Property
  which is in the possession of the Operator. 

 20.2         During the
  Exploration Period while Programs are being carried out the Operator shall furnish
  the Participants with monthly progress reports and with a final report on conclusion
  of each Program. The final report shall show the Mining Operations performed
  and the results obtained and shall be accompanied by a statement of Costs and
  copies of pertinent plans, assay maps, diamond drill records and other factual
  engineering data. During the Construction Period and the Operating Year the
  Operator shall provide monthly progress reports to the Participants which reports
  shall include information on any changes or developments affecting the Mine
  that the Operator considers are material. 

 20.3         All information
  and data concerning or derived from the Mining Operations shall be kept confidential
  and, except to the extent required by law or by regulation or policy of any
  securities commission, stock exchange or other regulatory body, shall not be
  disclosed to any person other than an Affiliate without the prior consent of
  all the Participants, which consent shall not unreasonably be withheld. 

 20.4         The text of
  any news release or other public statements which a party desires to make with
  respect to the Property shall be made available to the other parties prior to
  publication and the other parties shall have the right to make suggestions for
  changes therein within 24 hours of delivery. 

 21.           
  LIABILITY OF THE OPERATOR 

 21.1         Each party
  shall indemnify and save the Operator harmless from and against any loss, liability,
  claim, demand, damage, expense, injury or death, including, without limiting
  the generality of the foregoing, legal fees, resulting from any acts or omissions
  of the Operator or its officers, employees or agents. 

 21.2         Notwithstanding
  the foregoing, the Operator shall not be indemnified or held harmless by any
  of the Parties for any loss, liability, claim, damage, expense, injury or death,
  including, without limiting the generality of the foregoing, legal fees, resulting
  from the negligence or wilful misconduct of the Operator or its officers, employees
  or agents. 

 21.3         An act or
  omission of the Operator or its officers, employees or agents done or omitted
  to be done: 

	(a)	at the direction or within the scope
        of the direction of the Management Committee;

	 	 
	(b)	with the concurrence of the Management
        Committee; or

	 	 
	(c)	unilaterally and in good faith by the
        Operator to protect life or property,









 20 

 shall be deemed not to be negligence or wilful misconduct.


 21.4         The obligation
  of the other parties to indemnify and save the Operator harmless shall be in
  proportion to their Interests as at the date that the loss, liability, claim,
  demand, damage, expense, injury or death occurred or arose. 

 21.5         The Operator
  shall not be liable to any other party nor shall any party be liable to the
  Operator in contract, tort or otherwise for special or consequential damages,
  including, without limiting the generality of the foregoing, loss of profits
  or revenues. 

 22.           INSURANCE


 22.1         The Management
  Committee shall cause the Operator to place and maintain with a reputable insurer
  or insurers such insurance, if any, as the Management Committee in its discretion
  deems advisable in order to protect the parties together with such other insurance
  as any Participant may by notice reasonably request. The Operator shall, upon
  the written request of any Participant, provide it with evidence of that insurance.


 22.2         A party may
  place, for its own account, insurance for greater or other coverage than that
  placed by the Operator. 

 23.           RELATIONSHIP
  OF PARTIES 

 23.1         The rights,
  duties, obligations and liabilities of the Parties shall be several and not
  joint nor joint and several, it being the express purpose and intention of the
  Parties that their respective Interests shall be held as tenants in common.


 23.2          Nothing
  herein contained shall be construed as creating a partnership of any kind or
  as imposing upon any Party any partnership duty, obligation or liability to
  any other Party. 

 23.3         No Party shall,
  except when required by this Agreement or by any law, by-law, ordinance, rule,
  order or regulation, use, suffer or permit to be used, directly or indirectly,
  the name of any other Party for any purpose related to the Property. 

 24.           
  PARTITION 

 24.1         Each of the
  Parties waives, during the term of this Agreement, any right to partition of
  the Property or the Assets or any part thereof and no Party shall seek to be
  entitled to partition of the Property or the Assets whether by way of physical
  partition, judicial sale or otherwise during the term of this Agreement. 

 25.           TAXATION






 21 

 25.1         All Costs
  incurred hereunder shall be for the account of the Party or Parties making or
  incurring the same, if more than one then in proportion to their respective
  Interests, and each Party on whose behalf any Costs have been incurred shall
  be entitled to claim all tax benefits, write-offs, and deductions with respect
  thereto. 

 26.           FORCE
  MAJEURE 

 26.1         Notwithstanding
  anything herein contained to the contrary, if any Party is prevented from or
  delayed in performing any obligation under this Agreement, and such failure
  is occasioned by any cause beyond its reasonable control, excluding only lack
  of finances, then the time for the observance of the condition of performance
  of the obligation in question shall be extended for a period equivalent to the
  total period the cause of the prevention or delay persists or remains in effect
  regardless of the length of such total period. 

 26.2         Any Party
  claiming suspension of its obligations as aforesaid shall promptly notify the
  other Parties to that effect and shall take all reasonable steps to remove or
  remedy the cause and effect of the force majeure described in the said notice
  insofar as it is reasonably able so to do and as soon as possible but the terms
  of settlement of any labour disturbance or dispute, strike or lockout shall
  be wholly in the discretion of the Party claiming suspension of its obligations
  by reason thereof, and that Party shall not be required to accede to the demands
  of its opponents in any such labour disturbance or dispute, strike, or lockout
  solely to remedy or remove the force majeure thereby constituted. 

 26.3         The extension
  of time for the observance of conditions or performance of obligations as a
  result of force majeure shall not relieve the Operator from its obligations
  to keep the Property in good standing. 

 *OPTION* 

 27.           
  ARBITRATION 

 27.1         If any question,
  difference or dispute shall arise between the Parties or any of them in respect
  of any matter arising under this Agreement or in relation to the construction
  hereof the same shall be determined by the award of three arbitrators to be
  named as follows: 

	(a)	the Party or Parties sharing one side
        of this dispute shall name an arbitrator and give notice thereof to the
        Party or Parties sharing the other side of the dispute;

	 	 
	(b)	the Party or Parties sharing the other
        side of the dispute shall, within 14 days of receipt of the notice, name
        an arbitrator; and

	 	 
	(c)	the two arbitrators so named shall,
        within 15 days of the naming of the latter of them, select a third arbitrator.



 The decision of the majority of these arbitrators shall be
  made within 30 days after the selection of the latter of them. The expense of
  the arbitration shall be borne by the Parties to 





 22 

 the dispute as determined by the arbitrators. If the Parties
  on either side of the dispute fail to name their arbitrator within the time
  limited or proceed with the arbitration, the arbitrator named may decide the
  question. The arbitration shall be conducted in accordance with the provisions
  of the Commercial Arbitration Act (British Columbia) and the decision
  of the arbitrator or a majority of the arbitrators, as the case may be, shall
  be conclusive and binding upon all the parties. 

 28.           
  RIGHT OF FIRST REFUSAL 

 28.1         Except as
  a result of the reduction of its Interest, a Party shall not transfer, convey,
  assign, mortgage or grant an option in respect of or grant a right to purchase
  or in any manner transfer or alienate all or any portion of its Interest or
  rights under this Agreement otherwise than in accordance with this Article.


 28.2         Nothing in
  this Article shall prevent: 

	(a)	a sale by a Party of all of its Interest
        or an assignment of all its rights under this Agreement to an Affiliate
        provided that such Affiliate first complies with the provisions of section
        28.11 and agrees with the other Parties in writing to retransfer such
        Interest to the originally assigning Party before ceasing to be an Affiliate
        of such Party;

	 	 
	(b)	a variation in a Party's Interest pursuant
        to Articles 8 or 11; or

	 	 
	(c)	a disposition pursuant to an amalgamation
        or corporate reorganization which will have the effect in law of the amalgamated
        or surviving company possessing all the property, rights and interests
        and being subject to all the debts, liabilities and obligations of each
        amalgamating or predecessor company.



 28.3         Should a Party
  (the "Transferring Party") intend to dispose of all or any portion of its Interest
  or rights under this Agreement it shall first give notice in writing to the
  other parties (the "Other Parties") of such intention together with the terms
  and conditions on which the Transferring Party intends to dispose of its Interest
  or a portion thereof or rights under this Agreement. 

 28.4         If a Party
  (the "Transferring Party") receives any offer to dispose of all or any portion
  of its Interest or rights under this Agreement which it intends to accept, the
  Transferring Party shall not accept the same unless and until it has first offered
  to sell such Interest or rights to the other Parties (the "Other Parties") on
  the same terms and conditions as in the offer received and the same has not
  been accepted by the Other Parties in accordance with this Article. 

 28.5         Any communication
  of an intention to sell pursuant to sections 28.3 and 28.4 (the "Offer") shall
  be in writing and shall: 

	(a)	set out in reasonable detail all of
        the terms and conditions of any intended sale;

	 	 
	(b)	if it is made pursuant to section 28.3,
        include a photocopy of the Offer; and

	 	 
	(c)	if it is made pursuant to section 28.4,
        clearly identify the offering party and include such information as is
        known by the Transferring Party about such offering party; 









 23

 and such communication will be deemed to constitute an Offer
  by the Transferring Party to the Other Parties to sell the Transferring Party's
  Interest or its rights (or a portion thereof as the case may be) under this
  Agreement to the Other Parties on the terms and conditions set out in such Offer.
  For greater certainty it is agreed and understood that any Offer hereunder shall
  deal only with the disposition of the Interest or rights of the Transferring
  Party hereunder and not with any other interest, right or property of the Transferring
  Party and such disposition shall, if for consideration, in whole or in part,
  other than for money, be converted to a monetary consideration. 

 28.6         Any Offer
  made as contemplated in section 28.5 shall be open for acceptance by the Other
  Parties for a period of 60 days from the date of receipt of the Offer by the
  Other Parties. 

 28.7         If the Other
  Parties accept the Offer within the period provided for in section 28.6, such
  acceptance shall constitute a binding agreement of purchase and sale between
  the Transferring Party and the Other Parties, in proportion to their Interests,
  for the Interest or its rights (or a portion thereof as the case may be) under
  this Agreement on the terms and conditions set out in such Offer. 

 28.8         If the Other
  Parties do not accept the Offer within the period provided for in section 28.6,
  the Transferring Party may complete a sale and purchase of its Interest or a
  portion thereof on terms and conditions no less favorable to the Transferring
  Party than those set out in the Offer and, in the case of an Offer under section
  28.4, only to the party making the original offer to the Transferring Party
  and in any event such sale and purchase shall be completed within nine months
  from the expiration of the right of the Other Parties to accept such Offer or
  the Transferring Party must again comply with the provisions of this Article.


 28.9         If the Other
  Parties do accept the Offer within the period provided for in section 28.6 but
  fail to close the transaction contemplated thereby within 90 days following
  receipt of such Offer, the Transferring Party may complete a sale and purchase
  of its Interest or a portion thereof on any terms and conditions but in any
  event such sale and purchase shall be completed within nine months from the
  expiration of the right of the Other Parties to accept such Offer or the Transferring
  Party must again comply with the provisions of this article. 

 28.10       While any Offer is outstanding
  no other Offer may be made until the first mentioned Offer is disposed of and
  any sale resulting therefrom completed or abandoned in accordance with the provisions
  of this Article. 

 28.11        Before the completion
  of any sale by the Transferring Party of its Interest or rights or any portion
  thereof under this Agreement, the purchasing party shall enter into an agreement
  with the parties agreeing not to sell except on the same terms and conditions
  as set out in this Agreement. 

 *OPTION* - Delete if no Area of Mutual Interest


 29.           AREA
  OF MUTUAL INTEREST 

 29.1         If, during
  the term of this Agreement, any Party stakes or acquires any mineral 





 24 

 claims located wholly or partly within an area * *OPTION*
  [*] miles from the outermost boundary of the Property as of the date of this
  Agreement, the acquiring Party shall forthwith give notice to the other Parties
  of such staking or acquisition, the cost thereof and all details in the possession
  of that Party with respect to the nature of the claims and the known mineralization.


 29.2         The other
  Parties may, within 30 days of receipt of the acquiring Party's notice, elect,
  by notice to the acquiring Party, to require that such claims be included in
  and thereafter form part of the Property for all purposes of this Agreement.


 29.3         If the other
  Parties makes such election, such claims shall be included in and thereafter
  form part of the Property and the other Parties shall reimburse the acquiring
  Party for its proportionate share of the staking or acquisition costs. 

 29.4         If the other
  Parties do not make such election, such claims acquired or staked shall not
  form part of the Property and the acquiring Party shall be solely entitled thereto.


 30.          
  NOTICE 

 30.1         Any notice,
  direction or other instrument required or permitted to be given under this Agreement
  shall be in writing and shall be given by the delivery of same or by sending
  it by telecopier or other similar form of communication, in each case addressed
  to the intended recipient at the address of the respective Party set out on
  the first page hereof. 

 30.2         Any notice,
  direction or other instrument aforesaid will, if delivered, be deemed to have
  been given and received on the day it was delivered, and, if sent by telecopier
  or other similar form of communication, on the day it was actually received.


 30.3         Any Party
  may, at any time, give notice in writing to the others of any change of address,
  and from and after the giving of such notice, the address therein specified
  will be deemed to be the address of such party for the purposes of giving notice
  hereunder. 

 31.           WAIVER


 31.1         No waiver
  of any breach of this Agreement shall be binding unless evidenced in writing
  executed by the party against whom waiver is claimed. Any waiver shall extend
  only to the particular breach so waived and shall not limit any rights with
  respect to any future breach. 

 32.           AMENDMENTS


 32.1         This Agreement
  constitutes the entire agreement between the parties with respect to the subject
  matter hereof. An amendment or variation of this Agreement shall only be binding
  upon a Party if evidenced in writing executed by that Party. 





 25

 33.           
  TERM 

 33.1         Unless earlier
  terminated by agreement of all Parties having an Interest or as a result of
  one Party acquiring a 100% Interest and a 100% interest in any Net Profits Royalty
  provided for herein, the Joint Operation and this Agreement shall remain in
  full force and effect for so long as any Party has any right, title or interest
  in the Property. Termination of this Agreement shall not, however, relieve any
  Party from any obligations theretofore accrued but unsatisfied nor from its
  obligations with respect to rehabilitation of the Mine site and reclamation.


 34.           
  TIME OF ESSENCE 

 34.1         Time is of
  the essence of this Agreement. 

 35.           SUCCESSORS
  AND ASSIGNS 

 35.1         This Agreement
  shall enure to the benefit of and be binding upon the parties and their respective
  successors and permitted assigns. 

 36.           GOVERNING
  LAW AND ATTORNMENT 

 36.1         This Agreement
  shall be governed by and interpreted in accordance with the laws of the Province
  of British Columbia and the parties hereto irrevocably attorn to the jurisdiction
  of the said Province. 

 IN WITNESS WHEREOF the parties have executed this Agreement
  as of the day and year first above written. 

	THE COMMON SEAL OF	 )	 
	*	)	 
	was hereunto affixed in the	)	 
	presence of:	)	 
	 	)	 
	 	)	 
	 	)	 
	Authorized Signatory	)	 
	 	)	 
	 	)	 
	Authorized Signatory	)	  c/s










	THE COMMON SEAL OF	 )	 
	*	)	 
	was hereunto affixed in the	)	 
	presence of:	)	 
	 	)	 
	 	)	 
	 	)	 
	Authorized Signatory	)	 
	 	)	 
	 	)	 
	Authorized Signatory	)	  c/s








 APPENDIX I  

 to that certain Joint Venture Agreement between * and * made
  as of the * day of *, 19*. 

  ACCOUNTING PROCEDURE 

	1.        
            INTERPRETATION

       1.1          
        In this Appendix the following words, phrases and expressions shall have
        the following meanings:

      

	 	 
	(a)
	"Agreement" means the Agreement to which
        this Accounting Procedure is attached as Appendix I.

	 	 
	(b)
	"Count" means a physical inventory count.

	 	 
	(c)
	"Employee" means those employees of
        the Operator who are assigned to and directly engaged in the conduct of
        Mining Operations, whether on a full-time or part-time basis.

	 	 
	(d)
	"Employee Benefits" means the Operator's
        cost of holiday, vacation, sickness, disability benefits, field bonuses,
        paid to and the Operator's cost of established plans for employees' group
        life insurance, hospitalization, pension, retirement and other customary
        plans maintained for the benefit of Employees and Personnel, as the case
        may be, which costs may be charged as a percentage assessment on the salaries
        and wages of Employees or Personnel, as the case may be, on a basis consistent
        with the Operator's cost experience.

	 	 
	(e)
	"Field Offices" means the necessary
        sub-office or sub-offices in each place where a Program or Construction
        is being conducted or a Mine is being operated.

	 	 
	(f)
	"Government Contributions" means the
        cost or contributions made by the Operator pursuant to assessments imposed
        by governmental authority which are applicable to the salaries or wages
        of Employees or Personnel, as the case may be.

	 	 
	(g)
	"Joint Account" means the books of account
        maintained by the Operator to record all costs, expenses, credits and
        other transactions arising out of or in connection with the Mining Operations.

	 	 
	(h)
	"Material" means the personal property,
        equipment and supplies acquired or held, at the direction or with the
        approval of the Management Committee, for use in the Mining Operations
        and, without limiting the generality of the foregoing, more particularly
        "Controllable Material" means such Material which is ordinarily classified
        as Controllable Material, as that classification is determined or approved
        by the Management Committee, and controlled in mining operations 









 2

	(i)	"Personnel" means those management,
        supervisory, administrative, clerical or other personnel of the Operator
        normally associated with the Supervision Offices whose salaries and wages
        are charged directly to the Supervision Offices in question.

	 	 
	(j)	"Reasonable Expenses" means the reasonable
        expenses of Employee or Personnel, as the case may be, for which those
        Employees or Personnel may be reimbursed under the Operator's usual expense
        account practice, including, without limiting the generality of the foregoing,
        any relocation expenses necessarily incurred in order to properly staff
        the Mining Operations if the relocation is approved by the Management
        Committee.

	 	 
	(k)	"Supervision Offices" means the Operator's
        offices or department within the Operator's offices from which the Mining
        Operations are generally supervised.



 1.2           Other
  capitalized words, phrases and expressions in this Appendix shall have the same
  meaning as in the Agreement. 

 2.             STATEMENTS
  AND BILLINGS 

 2.1           The
  Operator shall, by invoice, charge each Participant with its Proportionate Share
  of Explorations Costs and Mine Costs in the manner provided in the Agreement.


 2.2          The Operator
  shall deliver, with each invoice rendered for Costs incurred, a statement indicating:


	(a)	all charges or credits to the Joint
        Account relating to Controllable Material in detail; and

	 	 
	(b)	all other charges and credits to the
        Joint Account summarized by appropriate classification indicative of the
        nature of the charges and credits.



 2.3           The
  Operator shall delivery with each invoice for an advance of Costs a statement
  indicating: 

	(a)	the estimated Exploration Costs or,
        in the case of Mine Costs, the estimated cash disbursements to be made
        during the next succeeding month;

	 	 
	(b)	the addition thereto or subtraction
        therefrom, as the case may be, made in respect of Exploration Costs or
        Mine Costs actually having been incurred in an amount greater or lesser
        that the advance which was made by each Participant for the penultimate
        month preceding the month of the invoice; and

	 	 
	(c)	the advances made by each Participant
        to date and the Exploration Costs or Mine Costs incurred to the end of
        the penultimate month preceding the month of the invoice.









 3 

 3.             DIRECT
  CHARGES 

 3.1           The Operator shall charge
  the Joint Account with the following items: 

	(a)	Contractor's Charges: 


All proper costs relative to the Mining Operations incurred under contracts
  entered into by the Operator with third parties. 

	(b)	Labour Charges: 




	 	(i)	 The salaries and wages
        of Employees in an amount calculated by taking the full salary or wage
        of each Employee multiplied by that fraction which has as its numerator
        the total time for the month that the Employees were directly engaged
        in the conduct of Mining Operations and as its denominator the total normal
        working time for the month of the Employee. 

	 	 	 	 	 
	 	(ii) 	The Reasonable Expenses
        of the Employees. 

	 	 	 	 	 
	 	(iii) 	Employee Benefits and Government
        Contributions in respect of the Employees in an amount proportionate to
        the charge made to the Joint Account in respect of their salaries and
        wages. 

	 	 	 	 	 
	(c)	Office Maintenance:
      

	 	 	 	 	 
	 	(i) 	The cost or a pro rata portion
        of the costs, as the case may be, of maintaining and operating the Offices.
        The basis for charging the Joint Account for Office maintenance costs
        shall be as follows: 

	 	 	 	 	 
	 	 	(A) 	the expense of maintaining
        and operating Field Offices, less any revenue therefrom; and 

	 	 	 	 	 
	 	 	(B)	that portion of maintaining
        and operating the Supervision Offices which is equal to 

	 	 	 	 	 
	 	 	 	(1)	the anticipated total operating expenses of the Supervision Offices
	 	 	 	 	 
	 	 	 	 	divided by 

	 	 	 	 	 
	 	 	 	(2) 	the anticipated total staff man-days for the Employees whether in connection
      with the Mining Operations or not
	 	 	 	 	 
	 	 	 	 	multiplied by 

	 	 	 	 	 
	 	 	 	(3) 	the actual total time spent on the Mining Operations by the Employee expressed
      in man-days. 








 4 

	 	(ii) 	 Without limiting the generality
        of the foregoing, the anticipated total operating expenses of the Supervision
        Offices shall include: 

	 	 	 	 
	 	 	(A)	the salaries and wages of the Operator's Personnel
        which have been directly charged to those offices; 

	 	 	 	 
	 	 	(B) 	the Reasonable Expenses of the Personnel; and 

	 	 	 	 
	 	 	(C)	Employee Benefits. 

	 	 	 	 
	 	(iii) 	The Operator shall make
        an adjustment in respect of the Office Maintenance cost forthwith after
        the end of each Operating Year upon having determined the actual operating
        expenses and actual total staff man-days referred to in clause 3.1(c)(i)(B)
        of this Appendix I. 

	 	 	 	 
	(d) 	Material: 

	 	 	 	 
	 	The cost of Material purchased or furnished by
      the Operator. 
	 	 	 	 
	(e) 	Transportation Charges:
      

	 	 	 	 
	 	The cost of transporting Employees and Material
      necessary for the Mining Operations. 
	 	 	 	 
	(f) 	Service Charges:
      

	 	 	 	 
	 	(i) 	The cost of services and
        utilities procured from outside sources other than services covered by
        paragraph 3.1(h). Subject to section 5.1 of the Agreement, the cost of
        consultant services shall not be charged to the Joint Account unless the
        retaining of the consultant is approved in advance by the Management Committee
        but if not so charged the cost of such services shall be included as Costs
        of the Participant retaining such consultant. 

	 	 	 	 
	 	(ii) 	Use and service of equipment
        and facilities furnished by the Operator as provided in section 4.5 of
        this Appendix I. 

	 	 	 	 
	(g)	Damages and Losses to Joint
        Property: 

       All costs necessary for the repair or replacement of
        Assets made necessary because of damages or losses by fire, flood, storms,
        theft, accident or other cause. The Operator shall furnish each Participant
        in writing with particulars of the damages or losses incurred as soon
        as practicable after the damage or loss has been discovered. The proceeds,
        if any, received on claims against any policies of insurance in respect
        of those damages or losses shall be credited to the Joint Account. 

	 	 	 
	(h)	Legal Expense: 

       All costs of handling, investigating and settling litigation
        or recovering the Assets including, 









 5 

	 	without limiting the generality
        of the foregoing, lawyer's fees, court costs, costs of investigation or
        procuring evidence and amounts paid in settlement or satisfaction of any
        litigation or claims but unless otherwise approved in advance by the Management
        Committee, no charge shall be made for the services of the Operator's
        legal staff or the fees and expenses of outside solicitors.

	 	 
	(i)	Taxes:

       All taxes, duties or assessments of every kind and nature,
        except income taxes, assessed or levied upon or in connection with a Property,
        the Mining Operations thereon, or the production therefrom, which have
        been paid by the Operator for the benefit of the parties.

	 	 	 
	(j)	 Insurance:

       Net premiums paid for:

	 	 	 
	 	(i) 	such policies of insurance on or in
        Operations as may be required to be carried by law;

	 	 	 
	 	(ii)	 such other policies of insurance as
        the Operator may carry in accordance with the Agreement; and

	 	 	 
	 	(iii)	the applicable deductibles in event
        of an insured loss.

	 	 	 
	(k)	Rentals:

       Fees, rentals and other similar charges required to
        be paid for acquiring, recording and maintaining permits, mineral claims
        and mining leases and rentals and of the Mining Operations.

	 	 
	(l)
	Permits: 

      Permit costs, fees and other similar charges which are
        assessed by various governmental agencies.

	 	 
	(m)
   	Other Expenditures:

       Such other costs and expenses which are not covered
        or dealt with in the foregoing provisions as are incurred with the approval
        of the Management Committee for Mining Operations or as may be contemplated
        in the Agreement.



4.              PURCHASE
  OF MATERIAL

 4.1           The Operator shall purchase
  all Materials for Mining Operations.





 6 

 4.2          Materials
  purchased and services procured by the Operator directly for the Mining Operations
  shall be charged to the Joint Account at the price paid by the Operator less
  all discounts actually received. 

 4.3          So far
  as it is reasonably practical and consistent with efficient and economical operations
  the Operator shall purchase, furnish or otherwise acquire only such Material
  and the Operator shall attempt to minimize the accumulation of surplus stocks
  of Material. 

 4.4          Any Participant
  may sell Material or services required in the Mining Operations to the Operator
  for such price and upon such terms and conditions as the Management Committee
  may approve. 

 4.5          Notwithstanding
  the foregoing provisions, the Operator shall be entitled to supply for use in
  connection with the Mining Operations equipment and facilities which are owned
  by the Operator and to charge the Joint Account with such reasonable costs as
  are commensurate with the ownership and use thereof. 

 5.            
  DISPOSAL OF MATERIAL 

 5.1           The
  Operator, with the approval of the Management Committee, may, from time to time,
  sell any Material which has become surplus to the foreseeable needs of the Mining
  Operations for such price and upon such terms and conditions as are available.


 5.2          Any Participant
  may purchase from the Operator any Material which may from time to time become
  surplus to the foreseeable need of the Mining Operations for such price and
  upon such terms and conditions as the Management Committee may approve. 

 5.3           Upon
  termination of the Agreement the Management Committee may approve the division
  of any Material held by the Operator at that date which may be taken by the
  Participants in kind or be taken by a Participant in lieu of a portion of its
  Proportionate Share of the net revenues received from the disposal of the Assets
  and Property. If such a division to a Participant be in lieu of a portion of
  its Proportionate Share it shall be for such price and on such terms and conditions
  as the Management Committee may approve. 

 5.4          The net
  revenues received from the sale of any Material to third parties or to a Participant
  shall be credited to the Joint Account. 

 6.            
  INVENTORIES 

 6.1          The Operator
  shall maintain records of Material in reasonable detail and records of Controllable
  Material in detail. 

 6.2           The
  Operator shall perform Counts from time to time at reasonable intervals and
  in connection therewith shall give notice of its intention to perform a Count
  to each Participant at least 30 days in advance of the date set for performing
  of the Count. Each Participant shall be 





 7 

 entitled to be represented at the performing of a Count upon
  giving notice thereof to the Operator within 20 days of the Operator's notice.
  A Participant who is not represented at the performing of the Count shall be
  deemed to have approved the Count as taken. 

 6.3           Forthwith
  after performing a Count the Operator shall reconcile the inventory with the
  Joint Account and provide each Participant with a statement listing the overages
  and shortages of inventory except such shortages as may have arisen due to a
  lack of diligence on the part of the Operator. 

 7.           
  ADJUSTMENTS 

 7.1           Payment
  of any invoice by a Participant shall not prejudice the right of that Participant
  to protest the correctness of the statement supporting the payment but all invoices
  and statements presented to each Participant by the Operator during any Operating
  Year shall conclusively be presumed to be true and correct upon the expiration
  of 12 months following the end of the Operating Year to which the invoice or
  statement relates, unless within that 12 month period that Participant gives
  notice to the Operator making claim on the Operator for an adjustment to the
  invoice or statement. 

 7.2          The Operator
  shall not adjust any invoice or statement in favour of itself after the expiration
  of 12 months following the end of the Operating Year to which the invoice or
  statement relates. 

 7.3           Notwithstanding
  the foregoing, the Operator may make adjustments to an invoice or statement
  which arise out of a Count. 

 7.4          A Participant
  shall be entitled upon notice to the Operator to request that the independent
  external auditor of the Operator provide that Participant with its opinion that
  any invoice or statement delivered pursuant to the Agreement in respect of the
  period has been prepared in accordance with the Agreement. 

 7.5          The time
  for giving the audit opinion shall not extend the time for the taking of exception
  to any statement or invoice and making claims on the Operator for adjustment
  thereto. 

 7.6          The cost
  of the auditor's opinion shall be solely for the account of the Participant
  requesting the auditor's opinion, unless the audit disclosed a material error
  adverse to that Participant, in which case the cost shall be solely for the
  account of the Operator. 





 APPENDIX II  

 to that certain Joint Venture Agreement between * and * made
  as of the * day of *, 19* 

  NET PROFITS ROYALTY 

 Pursuant to the attached Agreement, a party (the "Royalty
  Holder") may be entitled to a royalty equal to a percentage of Net Profits (the
  "Net Profits Royalty"). The Party or Parties who are not a Royalty Holder (the
  "Owner") shall be entitled to a 100% beneficial interest in the Property subject
  to the Net Profits Royalty. The Net Profits Royalty shall be calculated as follows:


 1.          When a
  Participant is first entitled to receive a Net Profits Royalty, the Operator
  shall establish a Royalty Account to which it shall debit: 

	(a)	Pre-production Expenditures;

	 	 
	(b)	Working Capital;

	 	 
	(c)	Operating Losses;

	 	 
	(d)	Post-production Capital Expenditures;

	 	 
	(e)	Interest Charges; and

	 	 
	(f)	Reserve Charges.



 2.           
  The Operator shall apply Net Profits first to reduce the amounts debited to
  the Royalty Account. While there is any debit balance in the Royalty Account,
  the Owner shall retain all Product or Net Profits (in proportion to their Interests
  if more than one Owner). Whenever the Royalty Account shows no debits, Net Profits
  in an amount equal to the credit balance in the Royalty Account shall be distributed
  to the Royalty Holder in an amount equal to the applicable Net Profits Royalty,
  and the balance to the Owner. 

 3.          The Operator
  shall debit or credit amounts to the Royalty Account, whichever is applicable,
  on a monthly basis and distribution of Net Profits shall be made on an interim
  basis within 20 days of the end of each month. A final settlement of the distribution
  of Net Profits shall be made within 90 days of the end of each calendar year.
  The Owner shall be entitled to deduct any overpayment of Net Profits as revealed
  in the annual calculation for purposes of the final settlement from future payments
  due to the Royalty Holder. Any underpayment shall be paid by the Owner to the
  Royalty Holder forthwith. 

 4.          The Owner
  shall at all times maintain adequate records which shall be made available to
  the Royalty Holder in order that the Royalty Holder may verify the correctness
  of any entries in the Royalty Account or in the determination of Net Profits.
  The Owner shall utilize methods of weighing and sampling ore which are generally
  accepted within the industry. 

 5.          The terms
  which are defined in the Agreement shall have the same defined meanings in this
  Appendix, the provisions of this Appendix are subject to the provisions of the
  Agreement and the following words, phrases and expressions shall have the following
  meanings: 





 2

	(a)	Interest Charges means
        an amount obtained by applying the Prime Rate at the time the calculation
        is made plus 1% to the month end debit balance in the Royalty Account.
        The amount so obtained shall be debited to the Royalty Account at the
        time of calculation.

	 	 
	(b)	Net Profits means, in
        any month after the Completion Date, the amount by which Revenue exceeds
        Operating Costs.

	 	 
	(c)	Operating Costs means
        all costs of Commercial Production categorized as "operating" costs by
        generally accepted accounting practice including all taxes, royalties
        and other levies except for federal and provincial corporate income taxes
        but not including any charges for depreciation, depletion or amortization.
        Operating Costs shall also include a reasonable charge for administration
        and management not to exceed 10% of all other Operating Costs.

	 	 
	(d)	Operating Losses means
        the amount by which Operating Costs exceed Revenue in any month after
        the commencement of Commercial Production.

	 	 
	(e)	Post-production Capital Expenditures
        means all expenditures made by the Owner after the Completion Date
        to acquire or construct assets having a useful life of more than one year
        or on development or expansion of a mine or other production facilities
        the cost of which would be charged on a unit of production basis in accordance
        with generally accepted accounting principles.

	 	 
	(f)	Pre-production Expenditures
        means all money provided and spent by the Owner on the Property prior
        to the commencement of Commercial Production including, without limiting
        the generality of the foregoing, all money provided and spent by the Owner
        exploring, developing and equipping the Property for production, completing
        Feasibility Reports, maintaining the Property in good standing, constructing
        all facilities necessary to commence Commercial Production on the Property,
        constructing or acquiring infrastructure or facilities off of the Property
        but required for Commercial Production, and on making any other expenditures
        related to the achievement of Commercial Production.

	 	 
	(g)	Reserve Charges means
        an amount to be established by estimating the cost of rehabilitation which
        will have to be spent after Commercial Production has terminated and a
        portion of that cost will be charged monthly to the Royalty Account over
        a reasonable period of time commencing no sooner than five years prior
        to the termination of Commercial Production.

	 	 
	(h)	Revenue means all money
        received by the Owner for the sale of Minerals or any Assets the cost
        of which has been previously charged to the Royalty Account.

	 	 
	(i)	Royalty Account means
        the account to be established by the Operator for purposes of calculating
        the amount of the Royalty Holder's royalty.









 3 

	(j)	Working Capital means all monies spent
        by the Owner for working capital prior to the date when Commercial Production
        on the Property generates sufficient revenue to satisfy working capital
        requirements.











 APPENDIX III  

 to that certain Joint Venture Agreement between * and * made
  as of the * day of *, 19* 

  CALCULATION OF PRIOR EXPLORATION COSTS


	ABC: 	$* 
	 	 
	XYZ:	$* 


 





  APPENDIX IV 

 to that certain Joint Venture Agreement between * and * made
  as of the * day of *, 19* 

  THE PROPERTY 

 A. Located Mineral Claims 

	 	 	Record	 	 
	 	Claim Name	Number	Anniversary Date	Year of Expiry
	 	 	 	 	 
	 	*	*	*	*


 all located in the * Mining Division, British Columbia 

 B. Crown Granted Mineral Claims 

	Name	Lot Number
	 	 
	*	*


 all located in the * Land Title District, British Columbia 

 *OPTION* Ontario & Quebec version 

	Claim Number	Year of Expiry