Purchase Agreement


    


     

    


     

    THIS
      PURCHASE AGREEMENT BETWEEN:

     

    


    SUSTUT
      EXPLORATION INC.

    #220
      -
      1420 - 5th Avenue

    Seattle,
      Washington

    98101

    Attention:
      Terry Hughes

     

    


     

    and

     

    


     

    RICHARD
      SIMPSON

    1201
      -
      1188 Quebec Street

    Vancouver,
      BC

    V6A
      4B3

    


     

    RE:
      SALE AND ACQUISITION OF MINERAL CLAIMS, 

     

    NORTH-CENTRAL
      BRITISH COLUMBIA, CANADA

     

    The
      following terms and conditions are applicable for the sale of one mineral claim
      160 km northeast of Smithers, British Columbia, Canada by Richard Simpson
      (herein after referred to as “RS”) to Sustut Exploration Inc. (herein after
      referred to as “SEI”). Both RS and SEI agree to the following: 

     

    
      	
              a)

            	
              RS
                will transfer title to the mineral claim listed in Exhibit “A” and
                outlined in Exhibit “B” to SEI within 30 days of this agreement. This
                claim will be a contiguous hard rock mineral claim totaling 445.70
                hectares. 

            


    

     

    
      	
              b)

            	
              RS
                will provide to SEI within 30 days of this agreement a geological
                report
                summarizing the mineral claims, particulars of recent sampling and
                geological investigation, copies of all records, a budget for further
                work
                and recommendations, and all other information and material relevant
                to a
                geological report requisite for filing with the regulatory
                bodies.

            


    

     

     

    
      
         

      

      
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              c)

            	
              RS
                will ensure that the claims shall be maintained in good standing
                for up to
                24 months from the date of claim recording and can provide geological
                consulting services for the claims.

            


    

     

    
      
        	
                d)

              	
                
                  RS
                    shall sell 100% (one hundred percent) interest in the claims
                    to SEI
                    subject to a 21⁄2% Net Smelter Royalty (NSR) a total of $25,000.00. 11⁄2% of
                    the NSR can be acquired for $1.0 million within 12 months from
                    commencement of commercial production. Advance royalties of $20,000
                    shall
                    be paid annually commencing January 17,
                    2010.

                

              


      

       

      
        
          
            	
                    e)

                  	
                    
                      If
                        SEI fails to make the advance royalty payments on the 5 year
                        anniversary
                        of the claims, as described in (d) above, then SEI agrees
                        to transfer
                        ownership of the subject mining claims to RS within no less
                        than a 10 day
                        period.

                    

                  


          

           

        

      

    

    SEI
      shall:

     

    
      	
              i)

            	
              Pay
                $55,000 to RS on or before May 15, 2006 and a further $20,000 on
                or before
                May 15, 2008.

            


    

     

    
      	
              ii)

            	
              Provide
                the name and number of an individual or corporate Free Miner Certificate
                to transfer the claims into.

            


    

     

    By
      signature witnessed below, the undersigned hereby acknowledge that they have
      read and understood and agree to the aforementioned terms.

     

    Dated
      at
      Vancouver, British Columbia, Canada this 5th
      day of
      May, 2006.

     

     

    _______________________________      _____________________________

    Terry
      Hughes, Sustut Exploration Inc.        Richard
      Simpson

    


    Witness        
Witness

    


    _____________________________   _____________________________

    


    _____________________________   _____________________________

    Print
      name        Print
      Name

     

    
 

    
      
         

      

      
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    Footnotes
      to Agreement

     

    
      	
              1)

            	
              All
                dollar figures are denoted in the currency of the United States of
                America.

            


    

    


    
      	
              2)

            	
              The
                total to be paid by SEI to RS or third parties for the claims is
                $70,000
                inclusive of assessment.

            


    

    


    
      	
              3)

            	
              To
                maintain claims in British Columbia annual assessment work is required
                of
                $0.40 per hectare in year 1-3 per claim, followed by $0.80 per hectare
                thereafter. There is a filing fee of $10 per $100 expended per claim.
                

            


    

     

    
      
        	
                4)

              	
                Attached
                  are definitions of NSR.

              


      

      

 

    

     


    
      
         

      

      
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    Advance
      Royalty Payments
      means
      from time to time payments to the Optionor by the Optionee before Commencement
      of Commercial Production of Minerals.

     

    Commencement
      of Commercial Production,
      with
      respect to Minerals or Rock, as the case may be, means:

     

    	(a)  	
            if
              a mill is located on the subject property, the last day of a period
              of
              forty (40) consecutive days in which, for not less than thirty (30)
              days,
              the mill processed Mineral or Rock from the Property at 60% of its
              rated
              capacity; or

          


     

    	(b)  	
            if
              no Mill is located on the Property, the last day of the first period
              of
              thirty (30) consecutive days during which Mineral or Rock has been
              shipped
              from the Property on a reasonably regular basis for the purpose of
              earning
              revenues; or

          


     

    	(c)  	
            with
              respect to Rock, following the 30th day of extraction for commercial
              use.

          


     

    No
      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
      will be taken into account in determining the date of Commencement of Commercial
      Production.

     

    Gross
      Rock Revenue
      means,
      for any period, the gross proceeds received by the Optionee in that period
      from
      the sale of Rock produced from the Property less any treatment, beneficiation
      or
      other changes or penalties deducted by the purchase to whom such Rock is
      shipped, less:

     

    	(a)  	
            all
              costs of the Optionee associated with such sales involving handling,
              weighing, sampling, determination of water content, insuring, packaging
              and transporting Rock;

          


     

    	(b)  	
            the
              costs of marketing, including rebates or allowances made or given;
              and

          


     

    	(c)  	
            any
              sales, severance, gross production, privilege or similar taxes (other
              than
              income taxes or mining taxes based on
              income).

          


     

    Minerals
      means
      the
      ores or concentrates of minerals, as that term is defined in the Mineral Tenure
      Act (British Columbia), and the rock that is part of such ores and concentrates
      sold by the Optionee.

     

     

    
      
         

      

      
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    Net
      Smelter Return means,
      for any period the difference between:

     

    (a) the
      sum
      of:

     

    	(i)  	
            the
              gross proceeds received by the Optionee in that period from the sale
              of
              Minerals produced from the property to a party that is arm’s length to the
              Optionee, or that would have been received by the Optionee if the purchase
              of the Minerals were at arm’s length to the Optionee;
              and

          


     

    	(ii)  	
            in
              the case of the sale of Minerals that are ores that have not been
              processed in a Mill, the estimated cost that would have been incurred
              in
              crushing and beneficiating such Minerals in a Mill as agreed by the
              parties or otherwise determined by a competent mining or metallurgical
              engineer;

          


     

    and

     

    (b) the
      sum
      of:

     

    	(i)  	
            all
              amounts paid on account of Advance Royalty
              Payments;

          


     

    	(ii)  	
            any
              insurance costs in connection with shipping such
              Minerals;

          


     

    	(iii)  	
            any
              costs of transport;

          


     

    	(iv)  	
            all
              costs of the Optionee associated with such sales involving handling,
              weighing, sampling, determination of water content, insuring and
              packaging;

          


     

    	(v)  	
            the
              costs of marketing, adjusted for rebates or allowance made or
              given;

          


     

    	(vi)  	
            any
              sales, severance, gross production, privilege or similar taxes (other
              than
              income taxes or mining taxes based on income) assessed on or in connection
              with the Minerals or the value thereof;
              and

          


     

    	(vii)  	
            any
              treatment, beneficiation or other charges or penalties deducted by
              any
              smelter or refinery to which such Minerals are shipped that have not
              been
              previously deducted in the computation of gross
              proceeds.

          


     

     

    
      
         

      

      
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    Net
      Smelter Royalty means
      the
      percentage of Net Smelter Return from time to time payable to the Optionor
      after
      Commencement of Commercial Production from the sale of Minerals.

     

    Rock
      means
      all substances that are mined from the Property and sold by the Optionee that
      are not Minerals.

     

    Rock
      Royalty
      means
      the amount of royalty from time to time payable to the Optionor after
      Commencement of Commercial Production from the sale of Rock pursuant to Section
      11.06.

     


    
      
         

      

      
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    EXHIBIT
      A:

     

    


     

    Mineral
      Claims

     

    


     

    


     

    EXHIBIT
      B:

     

    


     

    Claim
      Map