PROPERTY
      OPTION AGREEMENT

    


    THIS
      AGREEMENT is dated March 5,2001

     

    BETWEEN:

     

    STEPHEN
      KOCSIS, P. Geo., of
      

    301
      - 776
      Vaughan Street Quesnel, 

    B.
      C. V2J
      2T5

     

    (hereinafter
      called "Kocsis")

    


    AND:

    


    MOSQUITO
      CONSOLIDATED GOLD MINES LTD., ,
      a
      company incorporated under the laws of the Province of British Columbia and
      having its head office at Suite 301, 455 Granville Street, Vancouver, B. C.
      V 6C
      1 T 1

    


    (hereinafter
      called the "Mosquito")

    


    AND:

    


    GOLDEN
      CARIBOO RESOURCES LTD., a
      company
      incorporated under the laws of the Province of British Columbia and having
      its
      head office at Suite 305, 455 Granville Street, Vancouver, B.C. V6C 1
      T1

    


    (hereinafter
      called the "Golden Cariboo")

    


    WHEREAS:

    


    A.
      Kocsis
      is the registered owner of a 100% right, title and interest in the Dufferin,
      Antler, Nugget Mtn, Heron, Grouse and Eagle Claims mineral claims, located
      in
      the Cariboo Mining Division of British Columbia and are more particularly
      described in Schedule "A" attached to this Agreement (the "Property"). The
      claims represent a total of 117 mineral titles of which the Heron, Dufferin,
      Grouse and Antler 1 claims represent a 20 unit, 4-post claims;

    


    B.
      Mosquito has claimed an interest in the Property and is in a dispute with Kocsis
      with respect to the rightful ownership of the Property and has agreed with
      Kocsis to terminate the dispute by being compensated by Golden Cariboo for
      the
      purchase of 50% of the Property as ifit were also one of the vendors of the
      Property and Kocsis has agreed with Mosquito that it shall be compensated by
      Golden Cariboo as to 50% of the purchase price of the Property;

    


    C.
      Kocsis
      and Mosquito hereby grant to Golden Cariboo the sole and exclusive right to
      earn
      a 100% right, title and interest in' and to the Property, subject to a 2% Net
      Smelter Return Royalty
      payable to Kocsis and Mosquito;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    D.
      Kocsis
      and Mosquito are at arm's length to Golden Cariboo;

    


    E.
      Golden
      Cariboo is listed on the Canadian Venture Exchange ("CDNX"); and

    


    F. Mosquito
      is listed on the CDNX.

    


    NOW
      THEREFORE in consideration of the premises and the mutual covenants, agreements,
      representations and warranties herein contained, the parties hereto agree as
      follows:

    


    1.
      DEFINITIONS

    


    1.1
      In
      this Agreement:

    


    (a)
      "Agreement" means this Agreement, as the same may be amended, supplemented
      or modified from time to time;

    


    (b)
      "Approval Date" is the date on which this Agreement has been accepted for
:filing
      with the CDNX;

    


    (
      c) "Net
      Smelter Return Royalty" means payment of a royalty of net smelter returns
      as described in Schedule B attached to this Agreement.

    


    (d)
      "Option") means the option to acquire 100% of the Property as provided for
      in
this
      Agreement;

    


    (e) "Property"
      shall mean and include:

    


    
      	
            	(i)	
              the
                mineral properties located in the Province of British Columbia, known
                as
                the Dufferin, Antler, Nugget Mtn, Heron, Grouse and Eagle Claims,
                which
                claim is more particularly described in Schedule "A" attached hereto;
                and

            


    

    


    
      	
            	(ii)	
              all
                rights and appurtenances pertaining to the mineral claims, leases,
                ,
                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 development of the Property,
                or for the purpose of placing the Property into production or continuing
                production therefrom.

            


    

    


    
      (f)
        "Regulatory
        Authorities" means those governmental and regulatory agencies which
        have jurisdiction over the Golden Cariboo and Mosquito including the
Canadian
        Venture Exchange (CDNX)
        and
        the
        British Columbia Securities Commission (the "Commission");

    

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.
      GRANT OF OPTION

    


    2.1. Kocsis
      and Mosquito grant to Golden Cariboo the sole, exclusive and irrevocable
right
      and
      option (the "Option") to acquire an undivided 100% right, title and interest
      in
      and to the Property, subject to the Net Smelter Return Royalty, for and in
      consideration of the obligations set out in Paragraph 3 below.

    


    3.
      TERMS OF OPTION

    


    3.1
      In
      order to acquire the 100% right, title and interest in and to the Property,
      Golden Cariboo agrees to allot and issue a total of 400,000 of its common shares
      and to pay option payments totalling $25,000 to Kocsis and Mosquito, in
      accordance with the following schedule:

    


    (a)
      allot
      and issue 100,000 of its common shares to Kocsis on receipt of CDNX acceptance
      of this option agreement;

     

    (b)
      allot
      and issue 100,000 of its common shares to Mosquito on receipt of CDNX
acceptance
      of this option agreement;

     

    (c)
      pay
      $7,500 to Kocsis on receipt ofCDNX acceptance of this option agreement; (d)
      pay
      $5,000 to Mosquito on receipt ofCDNX acceptance of this option agreement; (e)
      allot and issue a further 100,000 common shares to Kocsis by March 30,2002,
      following
      receipt of CDNX acceptance to the issuance of these further shares;

     

    (f)
      allot
      and issue a further 100,000 common shares to Mosquito by March 30, 2002
following
      receipt of CDNX acceptance to the issuance of these further shares; (g) pay
      a
      further $5,000 to Mosquito on or before June 30, 2001; and (h) pay a further
      $7,500 to Kocsis on or before June 30,2001

    


    3.2
      At
      such time that the Property is brought into commercial production, Golden
      Cariboo

    agrees
      to
      pay to Kocsis and Mosquito (1 % to Kocsis and 1 % to Mosquito), a Net Smelter
      Return Royalty equal to 2% of the Net Smelter Returns received from the property
      in accordance with Schedule B to this Agreement;

    


    3.3
      Golden Cariboo may purchase from Kocsis and Mosquito and Kocsis and Mosquito
      shall sell to the Golden Cariboo, the 2% Net Smelter Return Royalty for a cash
      payment of $2,000,000 ($1,000,000 to Kocsis and $1,000,000 to Mosquito) at
      such
      time as the purchaser may, by notice in writing to Kocsis and Mosquito advising
      of its intention to purchase the Net Smelter Return Royalty.

    


    4.
      EXERCISE OF OPTION

    


    4.1
      When
      Golden Cariboo has issued the 400,000 shares and made all cash payments
required
      under Paragraph 3 above, it shall have
      exercised
      this Option and will have acquired an undivided
      100% right title and interest in the Property, subject to the 2% Net Smelter
      Return Royalty described in Schedule B to this Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    5.
      RIGHT
      OF ENTRY

    


    5.1
      During the term of the Option, Golden Cariboo and its employees, agents and
      any
      person duly authorized by Golden Cariboo shall have the sole and exclusive
      right
      to:

    


    (a)
      enter
      in, under and upon the Property;

     

    (b)
      have
      exclusive and quiet possession thereof;

     

    (c)
      do
      such prospecting, exploration, development and other mining work thereon and
      thereunder as Golden Cariboo in its sole discretion may consider
      advisable;

     

    (d)
      bring
      upon and erect upon the Property, such mining facilities as Golden Cariboo
      may
      consider advisable; and

     

    (e)
      remove from the property and sell or otherwise dispose of mineral products
      derived
      therefrom.

    


    6.
      REPRESENTATIONS AND WARRANTIES OF THE KOCSIS AND MOS UITO

    


    6.1
      In
      order to induce the Purchaser to enter into and to complete the transactions
      contemplated by this Agreement, Kocsis and Mosquito jointly represent and
      warrant to the Purchaser that:

    


    
      	
            	(a)	
              Kocsis
                is the recorded and beneficial owner of 100% of the Property described
                in
                Schedule A to this Agreement, has the sole right to enter into this
                Agreement and to sell and assign the Property free and clear of any
                liens
                or encumbrances;

            


    

    


    
      	
            	(b)	
              Mosquito
                has the right to enter into this Agreement and the entering into
                this
                Agreement by Mosquito has received all necessary approvals of the
                board of
                directors of Mosquito, a copy of which will be made available to
                Golden
                Cariboo on execution of this
                Agreement;

            


    

    


    
      	
            	(c)	
              to
                the best of their knowledge, the mineral claims comprising the Property
                have been properly staked and recorded in compliance with all laws
                and
                regulations of the Province of British Columbia and there are no
                disputes
                over the title, the staking or recording of the mineral prospects
                on the
                property, or outstanding agreements or options to acquire or purchase
                the
                Property or any portion thereof save and except as disclosed to the
                Purchaser, and no person has any royalty or other interest whatsoever
                in
                production ITom any of the mineral claims which comprise the
                Property;

            


    

    


    
      	
            	(d)	
              Kocsis
                covenants and agrees to file all necessary documentation with the
                appropriate mining recorders office to extend the present expiry
                dates of
                the Property, such filings to be discussed and agreed to by Golden
                Cariboo
                Resources Ltd.;

            


    

    


    
      	
            	(e)	
              to
                the best of their knowledge, the Property is in good standing, and
                all
                necessary filings,
                permits and other necessary documentation has been made or received
                ITom
                all regulatory authorities, and the property is ITee and clear of
                any
                liens, charges or encumbrances or claims by any other party of any
                nature
                or kind whatsoever;

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    


    
      	
            	(f)	
              Mosquito
                has been duly incorporated under the Company
                Act (British
                Columbia) and is
                in good standing under the laws of British Columbia;
                and

            


    

    


    
      	
            	(g)	
              neither
                Kocsis nor Mosquito, nor any predecessor in interest or title has
                done
                anything whereby
                the Property may become encumbered.

            


    

    


    6.2
      Kocsis and Mosquito shall indemnifY and save the Purchaser harmless ITom all
      loss, damage, costs, actions, and suits arising out of or in connection with
      any
      breach of any representation, warranty, covenant, agreement or condition made
      by
      it and contained in this Agreement.

    


    6.3
      The
      representations and warranties contained in this paragraph are provided for
      the
      exclusive benefit of the Golden Cariboo, and a breach of anyone or more thereof
      may be waived by the Golden Cariboo
      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.

    


    6.4
      The
      representations and warranties contained in this Paragraph shall survive the
      execution hereof

    


    6.5
      On
      execution of this Agreement, Kocsis and Mosquito shall deliver duly executed
      transfer forms to the Golden Cariboo to evidence the transfer of the Property
      as
      contemplated herein and Golden Cariboo shall be entitled to record the transfer
      to effect the legal transfer of the Property to the Golden
      Cariboo provided that Golden Cariboo has acquired the 100% right, title and
      interest of Kocsis and Mosquito in the Property prusuant to the requirements
      of
      Paragraph 3 hereof

    


    6.6
      Kocsis and Mosquito covenant that all relevant particulars with respect to
      the
      staking of the Properties are disclosed in Schedule "A" and that they are
      unaware of any encumbrances on the Properties.

    


    7.
      REPRESENTATIONS AND WARRANTIES OF GOLDEN CARIBOO

    


    7.1
      In
      order to induce the Kocsis and Mosquito to enter into and to complete the
      transactions contemplated by this Agreement, the Golden Cariboo represents
      and
      warrants to them that:

    


    
      	
            	(a)	
              it
                has been duly incorporated and validly exists as a corporation in
                good
                standing under the law of the Province of British Columbia and has
                full
                capacity to enter into this Agreement and carry out the transactions
                contemplated hereby;

            


    

    


    
      	
            	(b)	
              it
                is in good standing with respect to all filings required to be made
                with
                the British Columbia
                Securities Commission;

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    


    
      	
            	(c)	
              Golden
                Cariboo has full corporate power and authority to enter into this
                Agreement and
                the entering into of this Agreement does not conflict with any applicable
                laws or with the charter documents of Golden Cariboo any contract
                or other
                commitment to which Golden Cariboo is a
                party;

            


    

    


    
      	
            	(d)	
              Golden
                Cariboo covenants and agrees to maintain the Property in good
                standing;

            


    

    


    
      	
            	(e)	
              Should
                Golden Cariboo elect to abandon its interest in the Property, either
                in
                whole or in part, it shall transfer to Kocsis and to Mosquito a 50%
                interest in the Property to each party, and file a minimum of one
                (1)
                year's assessment work on the Property beyond the date of such Notice
                of
                abandonment; and

            


    

    


    
      	
            	(f)	
              Should
                Golden Cariboo elect to sell its interest in the Property, it shall
                grant
                Mosquito a
                right of first refusal on this
                sale.

            


    

    


    7.2
      The
      execution of this Agreement and the performance of its terms have been duly
      authorizedby all necessary corporate actions including resolutions of the board
      of directors;

    


    7.3
      Golden Cariboo shall indemnify and save Kocsis and Mosquito harmless from all
      loss, damage, costs, actions, and suits arising out of or in connection with
      any
      breach of any representation, warranty, covenant, agreement or condition made
      by
      it and contained in this Agreement.

    


    7.4
      The
      representations and warranties contained in this paragraph are provided for
      the
      exclusive benefit of Kocsis and Mosquito, and a breach of anyone or more thereof
      may be waived by the Kocsis and Mosquito 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.

    


    7.5
      The
      representations and warranties contained in this paragraph shall survive the
      execution hereof

    


    7.6
      Golden Cariboo covenants that it will continue to comply with the requirements
      of applicable securities laws and the Regulatory Authorities in relation to
      the
      issue and trading of its securities and in all matters relating to the
      transactions contemplated by this Agreement, including the filing of a renewal
      Annual
      Information Form, prior to the issuance of the shares contemplated herein;
      .

    


    8.
      TRANSFER OF TITLE

    


    8.1
      Upon
      completion of the last payment and delivery of all shares required to be made
      by
      Golden Cariboo to Kocsis and Mosquito in accordance with Paragraph 3, Golden
      Cariboo shall be entitled to record all transfers contemplated hereby at its
      own
      cost with the appropriate government office to effect the transfer of its 100%
      interest in the Property, free and clear of any liens,
      charges or encumbrances whatsoever, except the Net Smelter Return
      Royalty.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    


    9.
      TERMINATION

    


    9.1
      If
      the Option is terminated otherwise than upon the exercise thereof Golden Cariboo
      will leave the claims in good standing for a period of at least one year from
      the termination of the option period and deliver to Kocsis and Mosquito, the
      documentation being held by Golden Cariboo to transfer the claims into its
      name
      on completion of the option payments and share deliveries described
      above.

    


    9.2
      This
      Agreement and Option shall terminate:

    


    (a)
      at
      the option of Kocsis and Mosquito if, after giving 30 days written notice to
      Golden Cariboo of default of any of the payments described in paragraph 3 and
      Golden Cariboo has not within those 30 days made the outstanding payments to
      Kocsis and Mosquito, unless the time for making such payments has been extended,
      in writing, by Kocsis and Mosquito;

    


    (b)
      at
      the option of Golden Cariboo by giving thirty (30) days written notice to Kocsis
      and Mosquito; and

    


    (c)
      at
      the option of Kocsis and Mosquito, by giving thirty (30) days written notice
      to
      Golden Cariboo, if any of the warranties and representations of Golden Cariboo
      set out herein are untrue in any material respect.

    


    10
      TRANSFER OF INTEREST

    


    10.1
      During the term of this Agreement neither party to this Agreement may transfer
      or assign any interest it holds in the Property to any other party, without
      the
      express written consent of of the other party, such consent not to be
      unreasonably withheld.

    


    11.
      FURTHER ASSURANCES

    


    11.1
      The
      parties shall execute and deliver such further and other documents and do such
      further and other things as may be necessary to carry out and give effect to
      the
      intent of this Agreement.

    


    12.
      FORCE
      MAJEURE

    


    12.1
      If
      Golden Cariboo is at any time during the Option Period prevented or delayed
      in
      complying with any provisions of this Agreement by reason of strikes, walk-outs,
      labour shortages, power shortages, fuel shortages, fires, wars, acts of God,
      governmental regulations restricting
      normal operations, shipping delays or any other reason or reasons beyond the
      control of Golden Cariboo, the time limited for the performance of Golden
      Cariboo of its obligations hereunder will be extended by a period of time equal
      in length to the period of each such prevention or delay, provided however
      that
      nothing herein will discharge Golden Cariboo of its obligations set out
      herein.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    


    12.2
      Golden Cariboo will within seven days give notice to Kocsis and Mosquito of
      each
      event of force majeure under this paragraph and upon cessation of such event
      will furnish Kocsis and Mosquito with notice to that effect together with
      particulars of the number of days by which the obligations of Golden Cariboo
      have been extended by virtue of such event of force majeure and all preceding
      events of force majeure.

    


    13
      NOTICE

    


    13.
      1 All
      notices required or permitted to be given hereunder shall be in writing and
      personally delivered to the address of the intended recipient set forth on
      the
      first page hereof or at such other address as may from time to time be notified
      by any of the parties hereto in the manner herein provided.

    


    14.
      ENTIRE AGREEMENT

    


    14.1
      This
      Agreement constitutes the entire Agreement between the parties, and there are
      no
      representations or warranties, express or implied, statutory or otherwise and
      no
      agreements collateral hereto other than as expressly set forth or referred
      to
      herein.

    


    15.
      TIME
      OF THE ESSENCE

    


    15.
      1
      Time shall be the essence of this Agreement.

    


    16.
      APPLICABLE LAW

    


    16.1
      This
      Agreement is subject to regulatory approval and shall be governed by and
      interpreted in accordance with the laws of this Province of British
      Columbia.

    


    17.
      REGULATORY APPROVAL

    


    17.1
      This
      Agreement is subject to regulatory approval and Golden Cariboo agrees to obtain
      such regulatory approval as may be required within 90 days of execution of
      this
      Agreement. If such approval is not obtained within such period, Golden Cariboo
      may request a further 30 days within which to obtain such approval failing
      which
      approval this option shall terminate unless extended by mututal agreement of
      the
      parties. All parties agree to take such steps to cooperate fully with each
      other
      as may be reasonable and necessary to obtain such approvals and it is further
      agreed that if the consideration set out in Paragraph 3 is not acceptable,
      then
      Kocsis and' Mosquito agree to modify such consideration as may be necessary
      and
      in their opinion commercially
      reasonable to obtain regulatory approval. Until the Approval Date. Golden
      Cariboo may
      have
      access to the Property but only for the purposes of examination and verification
      of eh.-1sting
      data and for the purpOS6 of pr~paring a technical report on the Property should
      one be required
      to obtain Regulatory Approval of this Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    


    18.
      ARBITRATION

    


    18.1
      All
      matters and differences between the parties hereto in relation to this Agreement
      and the option
      granted herein will be referred to the arbitration of a single arbitrator,
      if
      the parties agree to one
      arbitrator, otherwise two arbitrators will be appointed by each party and a
      third will be chosen by the two already appointed arbitrators before they enter
      into the business of arbitration. The aware and determination arbitrator or
      arbitrators will be binding upon the parties hereto and their respective
      heirs, executors, administrators and assigns. In the event that any party fails
      to appoint an
      arbitrator, the matter of difference will be settled under the terms of the
      Commercial Arbitration Act of British Columbia, as amended,

     

    19
      _
      CAPTIONS

    


    19,
      1 The
      captions appearing in this Agreement are inserted for convenience or reference
      only and shall not affect the interpretation of this Agreement.

    


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

     

    

     

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
      A

    


    Mineral
      Property Option Agreement between Stephen Kocsis, Mosquito 
Consolidated Gold
      Mines Ltd. and Golden Cariboo Resources Ltd.

     

    
      
        	
                 Name
                  of Claims

              	 	
                Tenure
                  #

              	 	
                Expirv

              	 	
                No.
                  of Units

              	 
	
                 Dufferin

              	 	
                382423

              	 	
                2001/11/09

              	 	
                20

              	 
	
                 Dufferin
                  1

              	 	
                375107

              	 	
                2001/03/25

              	 	
                1

              	 
	
                 Dufferin
                  21

              	 	
                377806

              	 	
                2001/06/1
                  0

              	 	
                1

              	 
	
                 Antler
                  1

              	 	
                382424

              	 	
                2001/11/01

              	 	
                20

              	 
	
                 Antler
                  9

              	 	
                375230

              	 	
                2001/04/07

              	 	
                1

              	 
	
                 Antler
                  11-12

              	 	
                375232
                  & 33

              	 	
                2001/04/07

              	 	
                2

              	 
	
                 Antler
                  13-18

              	 	
                375719-24

              	 	
                2001/04/07

              	 	
                6

              	 
	
                 Antler
                  19 & 20

              	 	
                375764
                  & 65

              	 	
                2001/04/20

              	 	
                2

              	 
	
                 Antler
                  22

              	 	
                375235

              	 	
                2001/04/07

              	 	
                1

              	 
	
                 Antler
                  29-38

              	 	
                375725-34

              	 	
                2001/04/08

              	 	
                10

              	 
	
                 Antler
                  43-56

              	 	
                375770-83

              	 	
                2001/04/14

              	 	
                13

              	 
	
                 Antler
                  57

              	 	
                375784

              	 	
                2001/04/20

              	 	
                1

              	 
	
                 Antler
                  59 & 60

              	 	
                275786
                  & 87

              	 	
                2001/04/20

              	 	
                2

              	 
	
                 Antler
                  61-66

              	 	
                375892-97

              	 	
                2001/04/21

              	 	
                6

              	 
	
                 Antler
                  67-80

              	 	
                375898-911

              	 	
                2001/04/23

              	 	
                14

              	 
	
                 Nugget
                  Mntn 19-28

              	 	
                375801-10

              	 	
                2001/04/01

              	 	
                10

              	 
	
                 Nugget
                  Mntn 29-42

              	 	
                375811-824

              	 	
                2001/04/12

              	 	
                14

              	 
	
                 Nugget
                  Mntn 43-52

              	 	
                375914-23

              	 	
                2001/04/16

              	 	
                10

              	 
	
                 Nugget
                  Mntn 53-62

              	 	
                375924-33

              	 	
                2001/04/18

              	 	
                9

              	 
	
                 Heron

              	 	
                382422

              	 	
                2001/11/09

              	 	
                20

              	 
	
                 Heron
                  32-36

              	 	
                376130-34

              	 	
                2001/04/24

              	 	
                5

              	 
	
                 Grouse

              	 	
                382421

              	 	
                2001/11/09

              	 	
                20

              	 
	
                 Eagle
                  1

              	 	
                382433

              	 	
                2001/11/03

              	 	
                1

              	 
	
                 Eagle
                  2 & 3

              	 	
                382434
                  & 35

              	 	
                2001/11/07

              	 	
                2

              	 
	
                 Eagle
                  4

              	 	
                382436

              	 	
                2001/11/09

              	 	
                1

              	 


      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      SCHEDULE
        B

       

    

    Mineral
      Property Option Agreement between Stephen Kocsis, Mosquito

    Consolidated
      Gold Mines Ltd. and Golden Cariboo Resources Ltd.

    


    NET
      SMELTER ROYALTY

    


    Golden
      Cariboo Resources Ltd. is acquiring 100% of the Property subject to a 2% Net
      Smelter
      Return Royalty in favour of Kocsis as to 1 % and Mosquito as to 1 % on the
      net
      smelter
      returned derived from the production of minerals from the Property which shall
      be
      computed as follows:

     

    a.
      If
      minerals, mineral concentrates or other substances, ore-bearing materials and
      rock
      of
      every kind whether metalliferous or non-metalliferous substances are removed
      from the Property and delivered to a mill, smelter in a bona fide arm's
length
      transaction or any minerals processed at a mill located on the property, the
      net
      smelter return shall be the total, gross sale proceeds therefore which are
      received
      by or credited to the Purchaser, including any proceeds of insurance, less
      only
      (1) all actual costs incurred by the Purchaser for transportation of the
substances
      to the pointes or point of sale; and (2) all sampling, assaying, weighing,
      treatment, smelter or refining charges, or penalties which are charges, or
      penalties, which are charged by the buyer to the Purchaser, except those
deducted
      by the buyer directly from the proceeds of sale; and there shall be no
deduction
      for costs of any treatment, processing or benefication by or on behalf of
the
      Purchaser;

     

    b.
      If
      ores are removed from the Property other than a bona fide arm's length sale
      transaction, the Net Smelter Returns shall be based upon a value equivalent
      to
      Net Smelter
      Return, which shall be the gross fair market value of the ores at the
Property,
      in the form and condition in which the ores are transported from the
Property,
      without any deduction for costs of any treatment, processing or benefication;

    


    c.
      Any
      sale of by-products of operations or other materials produced from the
Property,
      such as tailings or dump wastes, sand, gravel or clays and any use of
them
      off
      the property without a sale (except solely as a waste disposal) shall be
subject
      to the Net Smelter Return Royalty;

    


    d.
      Within
      120 days after the end of each calendar year for which the Net Smelter
Returns
      are payable, the records relating to the calculation of Net Smelter Returns
      for
      such
      year shall be audited any resulting adjustments in the payment of Net
Smelter
      Returns shall be made forthwith after completion of the audit. All payment
      of Net Smelter Returns for a calendar year shall be deemed final and in
full
      satisfaction of all obligations of the Golden Cariboo in respect thereof if
      such
payments
      or the calculations thereof are not disputed by Kocsis and/or Mosquito
within
      60
      days after receipt by Kocsis and Mosquito of the audited
      statements.

     

    
      
        
        

      

      
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    e.
      Golden
      Cariboo shall maintain an accurate record ofthe results of all mining
operations
      on the Property and results of such sampling, weighing and assaying with
      respect to any ore mined and concentrate and bullion produced on the
      Property;

    


    f
      Kocsis
      and Mosquito, or their authorized agents, shall be permitted the right to
      examine, at all reasonable times, such records pertaining to the calculations
      of
      Net Smelter Returns and shall have, at their own risk, access to the
      Property.

    


    g,
      Payment of Net Smelter Return Royalties shall be made within seven (7) days
      following
      each month end, during which the Purchaser has carried out any exploration,
      development or mining operations on the Property.

     

    h,
      Kocsic
      and Mosquito have the right to register its Net Smelter Royalty in appropriate
      Land Title or Mining Recorder's Office, as the case may be.

     

    
      
        
        

      

      
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