EXHIBIT 4.6

                      COMMERCE GROUP CORP.
                     A Wisconsin Corporation

                Two-Year Stock Option to Purchase
              70,000 Shares of Commerce Group Corp.
           Common Stock at a Price of $0.25 Per Share

     For value and consideration received on this 2nd day of
July, 2001, Commerce Group Corp. (Commerce), a Wisconsin
Corporation, whose business address is 6001 North 91st Street,
Milwaukee, Wisconsin 53225, grants a stock option (stock option
agreement) to Lawrence E. Kau (Option Holder), whose address is
N2316 Mehring Road, Jefferson, Wisconsin  53549, under the
following terms and conditions:

     1.   Issue.  Option Holder will have the right to purchase
up to seventy thousand (70,000) Commerce common shares, ten
cents ($0.10) par value, hereinafter referred to as "option
shares," at a price (option price) of twenty-five cents ($0.25)
per share, payable in cash.

     Upon tender of the sum of U.S. seventeen thousand five
hundred dollars ($17,500.00), Commerce agrees to issue to
Option Holder, a total of seventy thousand (70,000) Commerce
validly issued nonassessable and fully paid common shares, ten
cents ($0.10) par value.

     2.   Exercise Date.  Option Holder will have the right to
purchase the common shares at any time during a two (2) year
period of time, commencing from the date of this agreement and
expiring on July 2, 2003.

     3.   Tender.  At any time the Option Holder of this stock
option agreement, pursuant to the foregoing terms and
conditions, shall exercise the right to purchase these option
shares, the Option Holder of said stock option agreement shall
surrender this stock option agreement for said shares of option
shares, accompanied by proper instruments of surrender, to
Commerce, at its principal office, accompanied by a written
notice to the effect that the Option Holder elects to exercise
its stock option agreement, and stating the name or names in
which the certificate or certificates for shares of option
shares shall be issued.  As promptly as practicable, after the
receipt of such notice and the surrender of this stock option
agreement, Commerce shall issue and deliver to Option Holder or
such other holder of the stock option agreement, or to the
written order of such holder, a new certificate or certificates
for the number of shares of option shares issuable upon
surrendering of this s tock option agreement.  Such issuance of
option shares shall be deemed to have been effected on the date
on which such notice shall have been received by Commerce and
such stock option agreement shall have been surrendered as
hereinabove provided.  All shares of option shares which may be
issued upon exercise of the stock option agreement, shall, upon
issuance, be validly issued, fully paid, and nonassessable by
Commerce.

     4.   Partial Purchases.  Option Holder will not have the
right to purchase the option shares in blocks of not less than
the total amount of option shares provided under the stock
option agreement.

     5.   Notice of Change of Rights.  Commerce agrees to
notify Option Holder as follows:

          a.   When Commerce shall declare a dividend (or make
     any other distribution) on its option shares, payable
     otherwise than in cash out of the consolidated earnings
     surplus of Commerce, its subsidiaries, and the
     Commerce/Sanseb Joint Venture (Joint Venture); or

          b.   When Commerce shall authorize the granting to
     the holders of its common shares of rights to subscribe
     for or purchase any shares of capital stock of any class
     or any other rights; or

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          c.   Of any reclassification of the common shares of
     Commerce other than a subdivision or a combination of its
     outstanding shares of such stock, of any consolidation or
     merger to which Commerce is a party and for which approval
     of any stockholders of Commerce is required or of the sale
     or transfer of all or substantially all the assets of
     Commerce, its subsidiaries, and the Joint Venture; or

          d.   Of the voluntary or involuntary dissolution,
     liquidation or winding up of Commerce; then Commerce shall
     cause to be filed at the office of Commerce, and shall
     cause to be mailed to the option holders of this stock
     option agreement, at their addresses as they shall then
     appear on the records of Commerce, at least ten days prior
     to the record date specified below, a notice stating:

               (1)  the record date for such dividend,
          distribution or rights or, if a record is not to be
          taken, the date as of which the holders of the option
          shares of record to be entitled to such dividend,
          distribution or rights are to be determined; or

               (2)  the date on which such reclassification,
          consolidation, merger, sale, transfer, dissolution,
          liquidation or winding up is expected to become
          effective, and the date as of which it is expected
          that holders of the option shares of record shall be
          entitled to exchange their option shares for
          securities or other property deliverable upon such
          reclassification, consolidation, merger, sale,
          transfer, dissolution, liquidation or winding up.

     6.   Procedures.  The Board of Directors of Commerce, or a
committee established by it, shall have the right, from time to
time, to adopt other specific rules of procedure to carry out
the full intent of this stock option agreement, and to do all
reasonable acts necessary therefore; provided that such rules
and acts shall not violate the specific terms of this stock
option agreement.

     7.   Dividends.  Until such time as the Option Holder
purchases the option shares under this stock option agreement,
the Option Holder shall not be entitled to receive such
dividends and distributions as from time to time may be
declared by the Board of Directors of Commerce.

     8.   Voting.  The Option Holders of this stock option
agreement shall have no voting rights.

     9.   Notice.  The Option Holders of the stock option
agreement shall be entitled to any notice of shareholders'
meetings.

    10.   Reservation of Common Stock.  Commerce shall at all
times reserve and keep available out of its authorized but
unissued common shares, or shall authorize from time to time,
an increase in such shares if required, of such number of its
duly authorized shares of common stock, as shall be sufficient
to effect the exercise of this stock option agreement.

    11.   Registration.  Option Holder, as owner of this stock
option agreement, by acceptance thereof, shall agree for itself
and for all subsequent owners, that before any disposition is
made of this stock option agreement or of the option shares,
Option Holder shall give written notice to Commerce describing
briefly the manner of any such proposed disposition.  No such
disposition shall be made unless and until (1) Commerce has
advised such owners that it has received an opinion from its
legal counsel satisfactory to it that no post-effective
amendment to Commerce's registration statement, if any, filed
with the Securities and Exchange Commission (Commission) under
the Securities Act of 1933 (Act) and no other registration
under said Act is required to such disposition, or (2) such
post-effective amendment or such other registration has been
filed by Commerce and made effective by the Commission,
provided, however, that Commerce shall have no obligation to so
file.

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    12.   Investment Letter Agreement.  The Option Holder
agrees at the time of exercising this option to execute an
investment letter agreement in such form as is attached to this
agreement and identified as Exhibit A.

    13.   Restriction on Certificates.  Each certificate for
the option shares to be issued hereunder, until the Option
Holder has held this stock option agreement for a period of two
years, without the intent of selling, transferring, or
disposing them, shall bear a legend reading substantially as
follows:

          "Neither this stock option agreement nor the shares
          of common stock issuable upon the exercise of the
          stock option agreement have been registered under the
          United States Securities Act of 1933; and the common
          stock to be issued under the stock option agreement
          has been acquired for investment and has not been
          registered under the Securities Act of 1933 or the
          securities law of any state.  Except upon such
          registration, such securities may not be sold,
          pledged, hypothecated or otherwise transferred unless
          the transferor delivers to Commerce Group Corp., an
          opinion of counsel satisfactory to Commerce Group
          Corp., its counsel, its transfer agent and its
          counsel that registration is not required and such
          transfer will not be in violation of the Securities
          Act of 1933 or any applicable state securities laws
          or any rule of regulation thereunder."

    14.   Entire Agreement.  This agreement is the entire,
final and complete agreement pertaining to the subject matter
hereof, and it supersedes and replaces all written and oral
agreements heretofore made or existing by and between the
parties or their representatives insofar as this subject matter
is concerned.  Neither party shall be bound by any promises,
representations or agreements except as are herein expressly
set forth.

    15.   Applicable Law.  This agreement is being delivered in
and shall be governed by and construed and enforced in
accordance with the laws of the State of Wisconsin, United
States.

    16.   Binding Effect.  This agreement shall be binding upon
and inure to the benefit of all parties and all parties and
their respective successors, heirs, assigns, and legal
representatives are subject to its terms.

    In Witness Whereof, Commerce has executed this stock option
agreement on the day and date first written above.

                      COMMERCE GROUP CORP.

                      /s/ Edward L. Machulak
                      __________________________________________
                      By:  Edward L. Machulak, President


This stock option agreement is accepted by Lawrence E. Kau on
the 2nd day of July, 2001.


/s/ Lawrence E. Kau
________________________________
Lawrence E. Kau