Exhibit 10.8


                              *Independent Thinking


September 9, 2004

Bay Resources Ltd.
Suite 1801
1 Yonge Street
Toronto, Ontario
M5E 1W7

Attention:        Mr. Joseph I. Gutnick, President

Dear Sir or Madam:

Re:               Bay Resources Ltd. (the "Company")
                  Engagement Letter - Sponsorship

We understand that Bay Resources Ltd. ("the Company") will be undertaking a TSX
Venture Exchange Listing Application (the "Transaction") and wishes Canaccord
Capital Corporation ("Canaccord") to act as the Company's sponsor pursuant to
the sponsorship policies of the TSX Venture Exchange (the "Exchange"). Canaccord
hereby agrees to act as the Company's sponsor subject to completing our due
diligence and on the terms and conditions set forth below.

The following terms represent the basis under which Canaccord and the Company
have agreed to proceed with the Sponsorship and they will be superseded and
replaced by a more formal sponsorship agreement in our standard form (the
"Formal Agreement"):

1.       In order for Canaccord and Canaccord's legal counsel to commence their
         due diligence, the Company agrees to provide to Canaccord the following
         documents (the "Documents") forthwith:

          (a)  all  available   audited,   unaudited  and  pro-forma   financial
               statements of the Company;

          (b)  all  available  technical  reports  (draft or  otherwise),  title
               reports,   valuations,   patents,   trademarks   and   copyrights
               respecting the operations and assets of the Company;

          (c)  a current copy of the  Company's  business  plan,  together  with
               financial  projections and details of all underlying  assumptions
               made by management;

          (d)  a copy of the  draft  information  circular  or other  disclosure
               document appropriate to the Transaction;

          (e)  copies of all material contract; and

          (f)  personal  information  forms  (in  Form 2A of the  Exchange)  and
               resumes for each of the  directors,  officers and insiders of the
               Company.

<PAGE>

     Canaccord may request further documents from the Company apart from those
     noted above. The Company represents, warrants and covenants that the
     Documents provided to Canaccord or its counsel and any other written or
     oral representations made by the Company to Canaccord or its counsel are
     accurate and complete and fairly represent the business of the Company.
     Where there is any material change to any information provided to Canaccord
     by the Company, the Company agrees to immediately advise Canaccord and its
     counsel of the change.

2.   Canaccord shall conduct such other investigations as it deems appropriate.
     This may involve Canaccord engaging independent consultants to assess the
     Company, at the Company's expense. The Company acknowledges that Canaccord
     is entitled to decide at any time during its investigations not to act as
     sponsor or to terminate its sponsorship. If Canaccord is prepared to act as
     sponsor, it shall notify the Exchange of that fact and in doing so shall
     prepare and deliver a sponsorship report (the "Sponsorship Report") in
     accordance with the rules and policies of the Exchange.

3.   In order to prepare the Sponsorship Report and fulfill its sponsorship
     duties as required by the rules and policies of the Exchange, Canaccord
     will undertake:

     (a)  a review of the  experience  and expertise of the  Company's  board of
          directors and management;

     (b)  a review of the business of the Company;

     (c)  a review of the Company's  compliance with all applicable  regulations
          whether securities related or industry related;

     (d)  site visits as Canaccord considers is required; and

     (e)  a  review  of  such  other  documentation  and  matters  as  Canaccord
          considers is required.

4.   The Company agrees to advise Canaccord promptly of any material event or
     material change in business, affairs, condition (financial or otherwise) or
     prospects of the Company that occur during the term of Canaccord's
     engagement hereunder.

5.   The Company agrees to pay Canaccord a sponsorship fee of $ 50,000 plus GST;
     50% of which will be non-refundable and paid upon execution of this
     agreement and the balance to be paid upon Canaccord delivering the
     preliminary Sponsorship Report to the Exchange. In the event the Company
     terminates this agreement prior to entering into the Formal Agreement, the
     Company agrees to pay all reasonable costs and expenses as outlined in "6"
     below.

6.   In addition to the Sponsorship Fee, the Company agrees to reimburse all
     reasonable costs and expenses of Canaccord, whether or not the Transaction
     contemplated herein is completed and whether or not the Formal Agreement is
     entered into. Without limiting the generality of the foregoing, reasonable
     expenses include the costs of any consultant's report, the fees and
     disbursements of Canaccord's counsel, the costs of any searches into the
     background of directors and officers, and Canaccord's expenses related to
     informational meetings and travel, if any. Any other unusual expenses will
     normally be reviewed with the Company prior to being incurred. A $10,000
     retainer will be payable in this regard upon signing of this engagement
     letter.

<PAGE>

7.   Fiscal advisory services provided by Canaccord Capital will be included in
     the fees described in item 5. Canaccord Capital's fiscal advisory services
     shall include:

     *    Assistance in identifying  and evaluating the strategic  direction and
          business plan of the Company;

     *    Assistance in developing the Company's capital markets strategy;

     *    Assistance in developing a capitalization plan for the Company;

8.   Subject to market conditions, Canaccord may offer to act as Agent on a
     commercially reasonable basis to raise Bay Resources up to $3,000,000 in
     Flow-Through financing. A separate engagement will outline more definitive
     terms and will be subject to successful listing on the TSX-V and a mutually
     agreeable valuation.

9.   The Company covenants and agrees to indemnify Canaccord as provided for in
     Schedule A attached hereto. The provisions of the indemnity as provided for
     in Schedule A shall survive the termination of this Agreement.

10.  The Company agrees that Canaccord shall have the right of first refusal for
     all future financings of the Company (the "Right of First Refusal") for a
     period of 12 months from the date of acceptance of the Transaction by the
     Exchange. The Right of First Refusal must be exercised by Canaccord within
     10 business days of Canaccord receiving notice in writing from the Company
     that the Company intends to proceed with a financing. Such notice must
     contain the specific terms and conditions of such financing evidenced by a
     bona fide third party offer.

11.  This Agreement shall terminate on the earlier of: (i) the date upon which
     either party gives written notice of the other party of termination of this
     Agreement, or (ii) the entering into of the Formal Agreement.
     Notwithstanding the termination of this Agreement, the Company will
     promptly pay all expenses and fees provided for in this Agreement. In
     addition, the Right of First Refusal will continue in full force upon
     termination of this Agreement.

12.  Time is of the essence of this Agreement.

13.  This Agreement constitutes the entire agreement between the parties with
     respect to its subject matter, and supercedes any prior agreements with
     respect to that subject matter between the Company and Canaccord.

14.  This Agreement and its application and interpretation will be governed
     exclusively by the laws prevailing in British Columbia. The parties to this
     Agreement consent to the jurisdiction of the courts of British Columbia,
     which courts shall have exclusive jurisdiction over any dispute of any kind
     arising out of or in connection with this Agreement.

<PAGE>

15.  This Agreement may be executed in as many counterparts as may be necessary
     and by facsimile, each of such counterparts so executed will be deemed to
     be an original, and such counterparts together will constitute one and the
     same instrument.

If this letter accurately reflects your understanding of the terms of our
agreement and you agree to be legally bound thereby, please execute this letter
agreement, in duplicate, where indicated below and return a signed copy thereof
(by facsimile and by courier) to Canaccord Capital Corporation (attention: Frank
G. Sullivan). Should you have any questions or comments on the above, please
contact Frank G. Sullivan at (604) 643-7648 or direct fax (604) 643-7040.



Yours truly,

CANACCORD CAPITAL CORPORATION



/s/ DAVID J. HORTON
------------------------------------
David J. Horton
Senior Vice President and Director


The foregoing accurately reflects the terms of the transaction which we hereby
agree to enter into and the undersigned agrees to be legally bound hereby.




<PAGE>



Agreed and accepted this 22nd day of September, 2004.

BAY RESOURCES LTD.



/s/ JOSEPH I. GUTNICK
----------------------------------------
Joseph I. Gutnick


<PAGE>

                                   SCHEDULE A

Bay Resources Ltd. (the "Indemnitor") hereby agrees to indemnify and hold
Canaccord Capital Corporation and/or any its subsidiary companies and/or
divisions (hereinafter referred to as the "Sponsor") and each and every one of
the directors, officers, employees and shareholders of the Sponsor (hereinafter
referred to as the "Personnel") harmless from and against any and all expenses,
losses, claims, actions, damages or liabilities, whether joint or several
(including the aggregate amount paid in reasonable settlement of any actions,
suits, proceedings or claims), and the reasonable fees and expenses of its
counsel that may be incurred in advising with respect to and/or defending any
claim that may be made against the Sponsor to which the Sponsor and/or its
Personnel may become subject or otherwise involved in any capacity under any
statute or common law or otherwise insofar as such expenses, losses, claims,
damages, liabilities or actions arise out of or are based directly or
indirectly, upon the performance of professional services rendered to the
Indemnitor by the Sponsor and its Personnel hereunder or otherwise in connection
with the matters referred to in the attached letter agreement, provided however,
that this indemnity shall not apply to the extent that a court of competent
jurisdiction in a final judgement that has become non-appealable shall determine
that:

i.   the Sponsor or its Personnel have been negligent or dishonest or have
     committed any fraudulent act in the course of such performance; and

ii.  the expenses, losses, claims, damages or liabilities, as to which
     indemnification is claimed, were directly caused by negligence, dishonesty
     or fraud referred to in (i).

If for any reason (other than the occurrence of any events itemized in (i) and
(ii) above, the foregoing indemnification is unavailable to the Sponsor or
insufficient to hold it harmless, then the Indemnitor shall contribute to the
amount paid or payable by the Sponsor as a result of such expense, loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnitor on the one hand and the Sponsor on
the other hand but also the relative fault of the Indemnitor and the Sponsor, as
well as any relevant equitable considerations provided that the Indemnitor shall
in any event contribute to the amount paid or payable by the Sponsor as a result
of such expense, loss, claim, damage or liability any excess of such amount over
the amount of the fees received by the Sponsor hereunder.

The Indemnitor agrees that in case any legal proceeding shall be brought against
the Indemnitor and/or the Sponsor by any governmental commission or regulatory
authority or any stock exchange or other entity having regulatory authority,
either domestic or foreign, shall investigate the Indemnitor and/or the Sponsor
and Personnel of the Sponsor shall be required to testify in connection
therewith or shall be require to respond to procedures designed to discover
information regarding, in connection with, or by reason of the performance of
professional services rendered to the Indemnitor by the Sponsor, the Sponsor
shall have the right to employ its own counsel in connection therewith, and the
reasonable costs and out-of-pocket expenses incurred by the Sponsor and its
Personnel in connection therewith shall be paid by the Indemnitor as they occur.

<PAGE>

Promptly after receipt of notice of the commencement of any legal proceeding
against the Sponsor or any of its Personnel or after receipt of notice of the
commencement of any investigation, which is based, directly or indirectly, upon
any matter in respect of which indemnification may be sought from the
Indemnitor, the Sponsor will notify the Indemnitor in writing of the
commencement thereof and, throughout the course thereof, will provide copies of
all relevant documentation to the Indemnitor, will keep the Indemnitor advised
of the progress thereof and will discuss with the Indemnitor all significant
actions proposed.

The indemnity and contribution obligations of the Indemnitor shall be in
addition to any liability which the Indemnitor may otherwise have, shall extend
upon the same terms and conditions to the Personnel of the Sponsor and shall be
binding upon and ensure to the benefit of any successors, assigns, heirs and
personal representatives of the Indemnitor, the Sponsor and any of the Personnel
of the Sponsor. The foregoing provisions shall survive the completion of
professional services rendered under the attached letter of agreement or any
terminations of the authorization given by the attached Engagement Letter.



/s/ DAVID J. HORTON
--------------------    for CANACCORD CAPITAL CORPORATION


/s/ JOSEPH I. GUTNICK
----------------------  for BAY RESOURCES LTD.