Exhibit
      10.4


    GUARANTY
      AGREEMENT

     

    THIS
      GUARANTY (the “Guaranty”),
      made
      as of this 10th day of April, 2007 by the undersigned for the benefit of China
      Gold, LLC, a Kansas limited liability company (herein, with its participants,
      successors and assigns, called “Purchaser”).

     

    For
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and to induce Purchaser to extend financial accommodations to
      Wits
      Basin Precious Minerals Inc., a Minnesota corporation and parent corporation
      of
      the undersigned (herein called “Issuer”)
      pursuant to those certain Convertible Secured Promissory Notes of Issuer in
      favor of Purchaser, in an aggregate amount of up to $25,000,000 (the
“Notes”),
      issued pursuant to that certain Convertible Notes Purchase Agreement dated
      of
      even date herewith between Issuer and Purchaser (the “Purchase
      Agreement”),
      the
      undersigned hereby guarantees and agrees as follows:

     

    The
      undersigned hereby absolutely and unconditionally guarantees to Purchaser the
      due and punctual payment of principal, interest and liabilities when due under
      the Notes (and all renewals, extensions, modifications and rearrangements
      thereof) (the “Indebtedness”),
      whenever the Indebtedness becomes due, (whether at a stated maturity or earlier
      by reason of acceleration or otherwise), and the undersigned represents,
      warrants and agrees that:

     

    1.  No
      act or
      thing need occur to establish the liability of the undersigned hereunder, and
      no
      act or thing, except full payment and discharge and completion of all
      Indebtedness, shall in any way exonerate the undersigned or modify, reduce,
      limit or release the liability of the undersigned hereunder. This is an
      absolute, unconditional and continuing guaranty of payment and fulfillment
      of
      the Indebtedness and shall continue to be in force and be binding upon the
      undersigned until all Indebtedness is paid in full and otherwise completed.
      Any
      adjudication of bankruptcy or death or disability or incapacity of the
      undersigned shall not revoke this guaranty, except upon actual receipt of
      written notice thereof by Purchaser and then only prospectively, as to future
      transactions, as herein set forth.

     

    2.  If
      the
      undersigned shall be or become insolvent or shall initiate or have initiated
      against the undersigned any act, process or proceeding under the United States
      Bankruptcy Code or any other bankruptcy, insolvency or reorganization law or
      otherwise for the modification or adjustment of the rights of creditors, then
      the undersigned will forthwith pay to Purchaser, the full amount of all
      Indebtedness then outstanding, whether or not any Indebtedness is then due
      and
      payable.

     

    3.  Until
      all
      of the Indebtedness and the obligations of the undersigned hereunder have been
      paid in full and otherwise completed, the undersigned shall not have and waives
      any right or subrogation to any of the rights of Purchaser against Issuer,
      any
      other guarantor, maker or endorser, and waives its rights to any reimbursement,
      contribution, recourse and indemnity therefrom; waives any right to enforce
      any
      remedy which Purchaser now has or may hereafter have against Issuer, and any
      other guarantor, maker or endorser; and waives any benefit of, and any other
      right to participate in, any collateral security for the Indebtedness or any
      guaranty of the Indebtedness now or hereafter held by Purchaser.

     

    4.  If
      any
      payment received and applied by Purchaser to Indebtedness is thereafter set
      aside, recovered or required to be returned for any reason (including, without
      limitation, the bankruptcy, insolvency or reorganization of Issuer or such
      other
      person), the Indebtedness to which such payment was applied shall, for the
      purposes of this Guaranty, be deemed to have continued in existence,
      notwithstanding such application, and this Guaranty shall be enforceable as
      to
      such Indebtedness as fully as if such application had not been
      made.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.  The
      liability of the undersigned shall not be affected or impaired by any of the
      following acts or things (which Purchaser is expressly authorized to do, omit
      or
      suffer from time to time, both before and after revocation of this Guaranty,
      without consent or approval by or notice to the undersigned): (i) any acceptance
      of collateral security, guarantors, accommodation parties or sureties for any
      or
      all Indebtedness; (ii) one or more extensions or renewals of Indebtedness
      (whether or not for longer than the original period) or any modification of
      the
      interest rates, maturities or other contractual terms applicable to any
      Indebtedness; (iii) any waiver or indulgence granted to Issuer, any delay or
      lack of diligence in the enforcement of Indebtedness, or any failure to
      institute proceedings, file a claim, give any required notices or otherwise
      protect any Indebtedness; (iv) any full or partial release of, compromise or
      settlement with, or agreement not to sue Issuer or any other guarantor or other
      person liable in respect of any Indebtedness; (v) any release, surrender,
      cancellation or other discharge of any evidence of Indebtedness or the
      acceptance of any instrument in renewal or substitution therefor; (vi) any
      failure to obtain collateral security (including rights of setoff) for
      Indebtedness, or to see to the proper or sufficient creation and perfection
      thereof, or to establish the priority thereof, or to preserve, protect, insure,
      care for, exercise or enforce any collateral security; or any modification,
      alteration, substitution, exchange, surrender, cancellation, termination,
      release or other change, impairment, limitation, loss or discharge of any
      collateral security; (vii) any collection, sale, lease or other disposition
      of,
      or any other foreclosure or enforcement of or realization on, any collateral
      security; (viii) any assignment, pledge or other transfer of any Indebtedness
      or
      any evidence thereof; (ix) any manner, order or method of application of any
      payments or credits upon Indebtedness. The undersigned waives any and all
      defenses and discharges available to a surety, guarantor, or accommodation
      co-obligor, dependent on its character as such.

     

    6.  The
      undersigned waives any and all defenses, claims, setoffs, and discharges of
      Issuer, or any other obligor, pertaining to Indebtedness, except the defense
      of
      discharge by payment in full and complete fulfillment of all obligations.
      Without limiting the generality of the foregoing, the undersigned will not
      assert against Purchaser any defense of waiver, release, discharge in
      bankruptcy, statute of limitations, res judicata, statute of frauds,
      anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
      unenforceability which may be available to Issuer or any other person liable
      in
      respect of any Indebtedness, or any setoff available against Purchaser to Issuer
      or any such other person, whether or not on account of a related transaction,
      and the undersigned expressly agrees that the undersigned shall be and remain
      liable for any deficiency remaining after foreclosure of any mortgage or
      security interest securing Indebtedness, whether or not the liability of Issuer
      or any other obligor for such deficiency is discharged pursuant to statute
      or
      judicial decision. The undersigned will not assert against Purchaser any claim,
      defense or setoff available to the undersigned against Issuer.

     

    7.  The
      undersigned waives presentment, demand for payment, notice of dishonor or
      nonpayment, and protest of any instrument evidencing Indebtedness. Purchaser
      shall not be required first to resort for payment or fulfillment of the
      Indebtedness to Issuer or other persons, or their properties, or first to
      enforce, realize upon or exhaust any collateral security for Indebtedness,
      before enforcing this Guaranty.

     

    8.  The
      undersigned will pay or reimburse Purchaser for all costs and expenses
      (including reasonable attorneys' fees and legal expenses) incurred by Purchaser
      in connection with the collection of any Indebtedness or the enforcement of
      this
      Guaranty.

     

    9.  This
      Guaranty shall be binding upon the undersigned, and the heirs, successors and
      assigns of the undersigned and shall inure to the benefit of Purchaser and
      its
      respective participants, successors and assigns. Except to the extent otherwise
      required by law, this Guaranty and the transaction evidenced hereby shall be
      governed by the substantive laws of the State of Kansas. If any provision or
      application of this Guaranty is held unlawful or unenforceable in any respect,
      such illegality or unenforceability shall not affect other provisions or
      applications which can be given effect, and this Guaranty shall be construed
      as
      if the unlawful or unenforceable provision or application had never been
      contained herein or prescribed hereby. All representations and warranties
      contained in this Guaranty or in any other agreement between the undersigned
      and
      Purchaser shall survive the execution, delivery and performance of this Guaranty
      and the creation and payment of the Indebtedness. This Guaranty may not be
      waived, modified, invalidated, terminated or released or otherwise changed
      except by a writing signed by Purchaser. The Guaranty shall be effective whether
      or not accepted in writing by Purchaser and the undersigned waives notice of
      the
      acceptance of this Guaranty by Purchaser. 

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the
      undersigned on the day and year first above written.

     

    
      	 	 	 
	 	
              WITS
                - CHINA ACQUISITION CORP

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Mark D. Dacko
	 	
              
                
Its:
                Treasurer

            
	 	 	 
	 	
              Address: 

            	
               80
                South Eighth Street, Suite 900

              
                 Minneapolis,
                  MN 55402

              

            


    

     

    
      
        
        

      

      
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