Document:

SEVEN PERCENT (7%) CONVERTIBLE NOTE
                               DATED March 8, 2000

THIS Note (this "Note") is one of the duly authorized issue of convertible Notes
of North Lily Mining Company, (the "Company") its successors and or its assigns.
This Note is offered, issued and sold pursuant to and in accordance with the
rules applying to "piggyback registration" promulgated under the Securities Act
of 1933, as amended, and the Securities Act of 1934, with the understanding that
the Company is now completing the neccessary audit and filings required to
update its SEC filings as a fully reporting issuer and to file an SB-2
registration statement including the shares hereunder and those issuable
pursuant to the attached Stock Warrant Agreement; such filings to be completed
by the Company as soon as feasible within 120 days from its acquisition of or
merger with Loan Mining. Com, Inc..

     For value received, the Company promises to pay to ______________their
successors and or assigns, or the permitted registered Holder hereof (the
"Holder"), the principal sum of US $ __________ (______thousand) (the "Initial
Principal Amount") or such lesser principal amount following the conversion or
conversions of this Note in accordance with paragraph 4 (the "Outstanding
Principal Amount") on October 31, 2000 (the "Maturity Date"), and to pay
interest of the outstanding principal amount from time to time, semiannually in
arrears on the first business day of June (the "Interest Payment Date"), at the
rate of seven percent 7% per annum occurring from the date of issuance.

     Accrual of interest shall commence on the first day to occur after the date
hereof until repayment in full of the principal sum has been made or duly
provided for. Accrued and unpaid interest shall bear interest at the same rate
until paid. The interest so payable will be paid in shares ("Interest Shares")
of the Company's common stock, ("Common Stock") at the then applicable
conversion price (computed as described in paragraph 4 below) on the interest
payment dates to the Holder on the interest payment date. The principal of this
Note is payable in such coin or currency of the United States as at the time of
payment is legal tender for payment of public and private debts, at the address
last appearing on the Note register of the Company as designated in writing by
the Holder from time to time.

     The Company will pay the principal of this Note on the due date, free of
any withholding or deduction of any kind (subject to the provision of paragraph
2 below), to the Holder as of the due date and addressed to the Holder at the
address appearing on the Note register.

     The following of such check and/or interest shares shall constitute a
payment of principal and interest hereunder and shall satisfy and discharge the
liability for principal and interest on this Note to the extent of the sum
represented by such check and/or interest shares.

     This Note is subject to the following additional provisions:

1.   These Notes are originally issuable in amount of not less that
     US$_____________.

2.   All payments on account of the principal of this Note and all other amounts
     payable under this Note (whether made by the Company or any other person)
     to or for the account of the Holder hereunder shall be made free and clear
     of and without reduction by reason of any present and future income, stamp,
     registration and other taxes, levies, duties, cost, and charges whatsoever
     imposed, assessed, levied or collected by the United States or any
     political subdivision or taxing authority thereof or therein, together with
     interest thereon and penalties charges being herein collectively called "US
     Taxes").

3.   If at any time there occurs a transaction in which in excess of 50% of the
     Company's voting power is transferred (excluding any public or private
     offering of Company equity securities) on any consolidation or merger of
     the Company into any other or other entity or person (whether of not the
     Company is the surviving corporation), or any other corporate
     reorganization or transaction or series of related transactions, the Holder
     of this Note then outstanding may participate in any such transaction as a
     class with common stock Holder on the same basis as if this Note had been
     converted one day prior to the effective date of such transaction;
     provided, however, that at the option of the Holder of this Note, such
     Holder may treat the effective date of any transaction that occurs prior to
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     June 1, 2000, as a redemption date and shall be entitled to have the
     Company redeem this Note at a price equal to 100% of the outstanding
     principal amount of this Note. The Holder shall be entitled to make such
     election at any time up to ten (10) day prior to the effective date of the
     transaction. The Company shall not affect any stock split, subdivision or
     combination with an effective date within three (3) trading days preceding
     the effective date of a merger or consolidation. Notwithstanding the above
     Holder, shall not redeem this Note upon the Company acquiring the assets of
     or merging or reorganizing with LoanMining.com,Inc..

     Notwithstanding the transfer of 50% of the Company's voting power, the
     Company shall have the unequivocal right to redeem this Note at any time
     prior to the maturity date at a price equal to 100% of the outstanding
     principal amount of this Note, provided that the Company shall give to the
     Holder five (5) days written notice of its intention to do so and the
     Holder has not faxed a notice of conversion with respect to the Note (or
     portion thereof) sought to be redeemed. Upon notice of its right and
     intention to redeem the Note, by the Holder shall have two business days to
     convert the Note, otherwise the Company shall immediately transfer the full
     redemption price to the Holder.

4.   The Holder of this Note is entitled, at its option, at any time after the
     issuance of this Note, to convert all or any lesser portion of the initial
     principal amount into common stock at a conversion price (the "Conversion
     Price") of twenty cents ($0.20). In the event of any stock split, dividend,
     combination or similar event occurring after a conversion date and prior to
     the issuance of the respective stock certificates, the conversion price
     will be subject to appropriate adjustment. Conversion of this Note into
     common stock shall be effectuated by surrendering the Note to be converted
     to the Company, with the form of conversion notice attached to the Note as
     Exhibit A, executed by the Holder of the Note evidencing such Holder's
     intention to convert the Note. Interest accrued or accruing from the date
     if issuance to the conversion date (but not previously paid in cash or
     interest shares) on the amounts so converted shall be paid in interest
     shares, calculated at the same conversion price (as determined above) as
     would apply on the conversion date for the principal amount being converted
     but using the discount percentage applicable as of such date and shall
     constitute payment in full of any such interest on the same terms as would
     otherwise apply to the conversion of the principal amount thereof.

     No fractional shares or scrip representing fractions of shares of common
     stock will be issued on conversion, but the number of shares of common
     stock issuable shall be rounded to the nearest whole share. The date on
     which a notice of conversion is given shall be deemed to be the date on
     which the Holder notifies the Company of its intention to so convert by
     delivery, by facsimile transmission or otherwise, of a copy of the notice
     of conversion. Notice of conversion may be given by facsimile to the
     Company at 303-293-2235. This Note, together with original executed copy of
     the notice of conversion, shall be delivered to the Company within three
     (3) business days following the date on which notice of conversion is given
     as described above. At the maturity date, any unconverted principal amount
     and accrued interest thereon shall at the maturity date be paid, at the
     option of the Company, in either (a) cash (b) common stock valued at a
     price equal to the conversion price determined as if the Note was converted
     in accordance with its terms into common stock on the maturity date.

     Upon the surrender of this Note, accompanied by a notice of conversion in
     the form attached hereto as Exhibit A, properly completed and duly executed
     by the Holder, the Company shall issue and, within ten (10) business days
     after actual delivery to the Company of this note with the notice of
     conversion (the "deadline"), deliver to or upon the order of the Holder (1)
     on or more certificates (the "certificates"), representing that number of
     shares of common stock into which the portion of the Note converted is
     convertible, as shall be determined in accordance herewith ( which shares
     shall be free trading upon the effectiveness of the Company's SB-2
     registration statement referred above, subject to the Holder not
     constituting an affiliate or other such restricted party), and (2) this
     Note with appropriate notation by an authorized officer of the Company to
     account for the remaining balance of principal amount hereof following
     conversion, if any. Without in any way limiting the Holder's right to
     pursue other remedies, including actual damages and/or equitable relief,
     the parties agree that if delivery of the certificates (without restrictive
     legend of any kind or stop transfer order affecting the common stock
     represented by the certificates except as provided) issuable upon

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     conversion of this note is more than five (5) days after the deadline, the
     Company shall pay to the Holder $100.00 per each $50,000.00 in principal
     amount per day in cash, for the first day beyond the deadline and $100.00
     per each day thereafter that the Company fails to deliver the certificates.
     Such cash amount shall be paid to the Holder upon Holder's written demand
     therefore.

     The number of shares of common stock to be issued upon each conversion of
     this Note shall be determined by dividing that portion of the principal
     amount of the Note to be converted at such time, plus the dollar amount of
     all interest that has accrued on that portion of the Note then being
     converted but which has not previously been paid, by the $0.20 conversion
     price in effect on the date the notice of conversion is delivered via
     facsimile to the Company by the Holder. The number of interest shares shall
     be determined utilizing the following equation: [(the principal amount of
     the Note to be converted, multiplied by a fraction (A) the numerator of
     which is the number of days elapsed since the date of issuance of this Note
     and (b) the denominator of is 365) multiplied by (7%), the resulting number
     shall be divided by the conversion price then in effect to determine the
     number of interest shares.

5.   No provision of this Note shall alter or impair the obligation of the
     Company, which is absolute and unconditional, to the payment of the
     principal of this Note at the time, place and rate, and in the coin or
     currency herein prescribed. This Note and all other Notes now or hereafter
     issued on similar terms are direct obligations of the Company. This Note
     ranks equally with or superior to all other Notes now or hereafter issued
     under the terms set forth herein. In the event of any liquidation,
     reorganization, winding up or dissolution, repayment of this Note shall not
     be subordinate in any respect to any other indebtedness of the Company
     outstanding as of the date of this Note or hereafter incurred by the
     Company.

     Such non-subordination shall extend without limiting the generality of the
     foregoing, to all indebtedness of the Company to banks, financial
     institutions, and other secured lenders, equipment lessors and equipment
     finance companies, but shall exclude trade debts; and any warrants, options
     or other securities convertible into stock of the Company shall rank pari
     passu with the Notes in all respects, so long as issued prior to the date
     hereof.

6.   The Company hereby expressly waives demand and presentment for payment,
     notice of nonpayment, protest, notice of dishonor, notice of acceleration
     or intent to accelerate, bringing of suit and diligence in taking any
     action to collect amounts called for hereunder and shall be directly and
     primarily liable for the payment of all sums owing and to be owing hereon,
     regardless of and without notice, diligence, act or omission as or with
     respect to the collection of any amount called for hereunder.

7.   If the Company at any time or from time to time after the date of this Note
     makes a dividend or other distribution to Holders of common stock payable
     in securities of the Company other than the interest shares, then in each
     such event provision shall be made so that the Holder shall receive upon
     conversion of this Note pursuant to paragraph 4 hereof, in addition to the
     numbers of interest shares receivable thereupon, the amount of such other
     securities of the Company to which the Holder on the relevant record of
     payment date, as applicable, of the number of interest shares so receivable
     upon conversion would have been entitled, plus any dividends or other
     distributions would have been received with respect to such securities had
     the Holder thereafter, during the period from the date of such event to and
     including the conversion date retained such securities, subject to all
     other adjustments called for during such period under this Note with
     respect to the rights of the Holder.

8.   If at any time or from time to time after the date of this Note, the common
     stock issuable upon the conversion of the Note is changed into the same or
     different numbers of shares of any class or classes of stock; whether by
     recapitalization or otherwise (other than subdivision or combination of
     shares of common stock or stock dividend or reorganization provided for
     elsewhere in this Note or a merger or consolidation, provided for in
     paragraph 3), then in each such event the Holder shall have the right
     thereafter to convert the Note into the kind of security receivable in such
     recapitalization, reclassification or other change by Holders of common

<PAGE>

     stock, all subject to further adjustment as provided herein. In such event,
     the formula set forth herein for conversion and redemption shall be
     equitably adjusted to reflect such change in number of shares or, if shares
     of a new class of stock are issued; to reflect the market price of the
     class of the classes of stock issued in connection with the above described
     transaction.

9.   If at any time or from time to time after the date of this Note there is a
     capital reorganization of the common stock (other than a recapitalization,
     subdivision, combination, reclassification, or exchange of shares provided
     for elsewhere in this Note) then, as a part of such reorganization,
     provision shall be made so that the Holder shall thereafter to be entitled
     to receive upon conversion of this Note the number of shares of stock or
     other securities or property to which a Holder of the number of shares
     deliverable upon conversion would have been entitled on such capital
     reorganization. In any such case, appropriate adjustment shall be made in
     the application of the provisions of this Note with respect to the rights
     of the Holder after the reorganization to the end that the provisions of
     this Note shall be applicable after that event and be as nearly equivalent
     as may be practicable, including, by way of illustration and not
     limitation, by equitably adjusting the formulae set forth herein for
     conversion and redemption to reflect the market price of the securities or
     property issued in connection with the above described transaction.

10.  If one or more of the "events of default" as described in paragraph 11
     shall occur, the Company agrees to pay all costs and expenses, including
     reasonable attorney's fees, which may be incurred by the Holder in
     collecting any amount due under, or enforcing any terms of, this Note.

11.  If more than one of the following described "events of default" shall
     occur:

     a.   The Company shall default in the timely payment of principal or
          interest; or

     b.   Any of the representations or warranties made by the Company herein or
          in the Note purchase agreement between the Company and Holder with
          respect to this Note, or in any certificate or financial or other
          document heretofore or hereafter furnished by or on behalf of the
          Company in connection with the execution and delivery of this Note,
          shall be false or misleading any material respect at the time made; or

     c.   The Company shall fail to perform or observe any other covenant,
          provision, condition, agreement or obligation of the Company under
          this Note and such failure shall continue uncured for a period of
          thirty (30) days after notice from the Holder of such failure (except
          that no cure period other than that described in paragraph 4 above
          shall be had for any violation or breach of paragraph 4 by the
          Company); or

     d.   The Company shall (1) become insolvent; (2) admit in writing its
          inability to pay its debts as they mature; (3) make an assignment for
          the benefit of creditors or commence proceedings for its dissolution;
          or (4) apply for or consent to the appointment of a trustee,
          liquidator or receiver for it or for a substantial part of its
          property or business; or

     e.   A trustee, liquidator or receiver shall be appointed for the Company
          or for a substantial part of its property or business without its
          consent and shall not be discharged within thirty (30) days after such
          appointment; or

     f.   Any governmental agency or any court of competent jurisdiction at the
          instance of any governmental agency shall assume custody or control of
          the whole or any substantial portion of the properties or assets of
          the Company and shall not be dismissed within thirty (30) days
          thereafter; or

<PAGE>

     g.   Any money judgment, writ or warrant of attachment, lien or similar
          process in excess of fifty thousand ($50,000) dollars in the aggregate
          shall be entered or filed against the Company or any of its properties
          or other assets and shall remain unsatisfied, unvacated, unbounded or
          unstayed for a period of sixty (60) days (unless such order provided
          for delayed payment) or in any event later than five (5) days prior to
          the date of any proposed sale thereunder; or

     h.   Bankruptcy, reorganization, insolvency or liquidation proceedings or
          other proceedings for relief under any bankruptcy law or any law for
          the relief of debtors shall be instituted by or against the Company
          and if instituted against the Company, shall not be dismissed, stayed
          or bonded within sixty (60) days after such institution or the Company
          shall by any action or answer approve of, consent to, or acquiesce in
          any such proceedings or admit the material allegations of, or default
          in answering a petition filed in any such proceeding; or

     i.   The Company shall have its common stock de-listed from a securities
          market.

          Then, or at any time thereafter, and in each and in every such case,
          unless such event of default shall have been waived in writing by the
          Holder (which waiver shall not be deemed to be a waiver of any
          subsequent default), the Holder may consider this not immediately due
          or payable, without presentment, demand, protest or notice of any
          kind, all of which are expressly waived, anything herein or in any
          Note or other instruments contained to the contrary notwithstanding,
          and the Holder may immediately demand without expiration of any period
          of grace, enforce any and all of the Holder's rights and remedies
          provided herein or any other rights or remedies afforded by law. In
          such event, this Note shall be redeemed by the Company at a redemption
          price per Note equal to 100% of the outstanding principal amount due
          hereunder. Notwithstanding the above, Holder understands that the
          Company is scheduled to be moved to the Pink Sheets from the OTC BB
          effective February 25, 2000, and Holder agrees that it shall not be an
          event of default hereunder provided that the Company regains its OTC
          BB listing status by June 1, 2000.

12.  Subject to the last sentence in the preceeding paragraph, if at any time on
     or after the date hereof and prior to conversion of all of this Note into
     common stock, and the common stock of the Company has been listed on a
     United States securities market, as described in paragraph 4 above, trading
     of the common stock is suspended and actually ceases trading on the
     principal market or exchange for such shares for a period of thirty (30)
     consecutive trading days, other than as a result of the suspension or
     trading of securities in general, or if the common stock at any time
     becomes ineligible for trading, then, at the Holder's option, the Company
     shall redeem the Note at a redemption date designated by the Holder, and
     for the redemption price provided in paragraph 11.

13.  Notwithstanding anything to the contrary contained herein, each notice of
     conversion shall contain representations to the effect that the Holder is
     an "accredited investor" as such term is defined in rule 501(a) of
     regulation D promulgated by the SEC under the 1933 Act, and (II) the
     conversion shares are being acquired for the Holder's own account and not
     as a nominee for any other party, and other normal provisions reasonably
     requested by Company's securities consel for such purpose.

14.  The Holder may, subject to compliance with any Note purchase agreement
     pursuant to which this Note was purchased, and the provisions under the
     Securities Act of 1933, as amended (the 1933) act), without notice,
     transfer, assign, mortgage or encumber this Note, any interest herein or
     any part hereof in integral multiples of $10,000 or the entire outstanding
     balance to an "accredited investor" as defined in the 1933 Act that will be
     acquiring the Note or interest herein for its account for the purpose of
     investment and not with a view to or for sale in connection with any
     distribution hereof and, each assignee, transferee and mortgagee shall have
     all of the rights of the Holder under this Note. The Company may condition
     registrations of transfers on the receipt of a certificate from the

<PAGE>

     assignee, transferee of mortgagee in a form acceptable to the Company that
     contains representations and warranties similar to those of the Holder
     contained in section 2 of said note purchase agreement, and IRS forms W-9
     or an equivalent certification under penalty of perjury in compliance with
     the Internal Revenue Code of 1986, as amended from time to time, and other
     nornal provisions reasonably requested by the Company's securities consel
     for such purpose.

15.  The Company covenants that until all amounts due under this Note have been
     paid in full, by conversion or otherwise, unless the Holder or subsequent
     Holder waives compliance in writing, the Company shall:

     a.   Give prompt written notice to the Holder of any event of default or of
          any other matter which has resulted in, or could reasonably be
          expected to result in a materially adverse change in its financial
          condition or operations;

     b.   Give prompt notice to the Holder of any claim, action or proceeding
          which, in the event of any unfavorable out come, would or could
          reasonably be expected to have a material adverse effect (as defined
          in the Note purchase agreement) on the financial condition of the
          Company;

     c.   At all times reserve and keep available out of its authorized but
          un-issued common stock, for the purpose of effecting the conversion of
          this Note into common stock, such number of its duly authorized shares
          of common stock as shall from time to time be sufficient to effect the
          conversion of the outstanding principal balance of this Note into
          common stock. If the Company does not have a sufficient number of
          shares of common stock available to satisfy the Company's obligations
          to the Holder upon receipt of a notice of conversion or is otherwise
          unable to issue such shares in accordance with the terms of this Note
          (a "conversion default"), from and after the tenth day following a
          conversion default (which for all purposes shall be deemed to have
          occurred upon the Company's facsimile receipt of the applicable
          conversion notice), the Holder shall have the right to demand from the
          Company the immediate redemption of this Note in cash at a redemption
          price equal to 125% of the then outstanding principal amount;
          provided, however, that no redemption notice may be delivered by the
          Holder subsequent to the Holder's receipt of notice from the Company
          (sent by overnight or 2-day courier with a copy sent by facsimile) of
          availability of sufficient shares to permit conversion (a
          "post-default conversion") of the Note; provided further that such
          right shall be reinstated if the Company shall thereafter fail to
          perfect such post-default conversion by delivery of common stock in
          accordance with applicable provision of paragraph 4 hereof with
          respect thereto within five (5) business days of delivery of the
          notice of post-default conversion. In additions to the foregoing, upon
          the conversion default, the rate of interest on the Note shall to the
          maximum extent permitted by law be increased by two percent (2%)
          commencing on the first day of the thirty (30) day period (or part
          thereof) following a conversion default; an additional two percent
          (2%) commencing on the first day of each second such thirty (30) day
          periods (or part thereof); and additional one percent (1%) on the
          first day of each consecutive thirty (30) day period (or part
          thereof); thereafter until such securities have been duly converted or
          redeemed as herein provided. Any such interest which is not paid when
          due shall, to the maximum extent permitted by law, accrue interest
          until paid at the rate from time to time applicable to interest on the
          Note as to which the conversion default has occurred.

     d.   Upon receipt by the Company of evidence from the Holder reasonably
          satisfactory to the Company of the loss, theft, destruction or
          mutilation of this Note,

          I.   In the case of loss, theft or destruction, upon provision of
               indemnity reasonably satisfactory to it and/or its transfer
               agent, or

          II.  In the case of mutilation, upon surrender and cancellation of
               this Note, then Company at its expense will execute and deliver
               to the Holder a New Note, dated the date of the lost, stolen,
               destroyed or mutilated Note, and evidencing the outstanding and
               unpaid principal amount of the lost, stolen, destroyed or
               mutilated Note.

<PAGE>

16.  The Holder, by acceptance hereof, acknowledges he is an accredited, fully
     informed, sophisticated investor, and that this Note is being acquired for
     investment and that the Holder will not offer, sell or otherwise dispose of
     this Note or the common stock issuable upon conversion hereof except under
     circumstances which will not result in a violation of the 1933 act or any
     applicable state securities laws.

17.  In the case any provision of this Note is held by a court of competent
     jurisdiction to be excessive in scope or otherwise invalid or
     unenforceable, such provision shall be adjusted rather than voided, if
     possible, so that its enforceable to the maximum extent possible, and the
     validity and enforceability of the remaining provisions of this Note will
     not in any way be affected impaired thereby.

18.  The Note between the Company and the Holder (including all exhibits
     thereto) constitute the full and entire understanding and agreement between
     the Company and the Holder with respect to the subject hereof. Neither this
     Note nor any term hereof may be amended, waived, discharged or terminated
     other than by a written instrument signed by the Company and the Holder.

In witness whereof, the Company has caused this instrument to be duly executed
by an officer thereunto duly authorized.

BY:____________________________              BY:___________________________
North Lily Mining Company.                   Holder

<PAGE>

                                    EXHIBIT A

REDEMPTION NOTICE

Date: _________________

Amount of Redemption: $___________________

Price of Redemption: $________________

Type of Redemption: Cash __________or Shares __________

If shares please specify amount of shares: __________________

________________________________
HolderTHE SECURITIES IN THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED ( THE "ACT" "), AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED
IN OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE
ACT.

                            NORTH LILY MINING COMPANY

     THIS STOCK WARRANT AGREEMENT (the "Agreement") is made and entered into,
effective as of 8 March 2000 by and between North Lily Mining Company, a Utah
corporation (the Company), and ____________________ ("Holder").

                                   WITNESSETH:

     WHEREAS, the Board Of Directors of the Company agree to Issue to the Holder
a warrant to purchase shares of the common stock of the Company, said warrant to
be for the number of shares, at the price per share and on the terms set forth
in this Agreement; and

     WHEREAS, Holder desires to receive a warrant on the terms and conditions
set forth in this Agreement.

NOW, THEREFORE, The parties agree as follows:

     1. Grant of Warrant. The Company hereby grants to the Holder, the warrant,
right and option (the "Warrant") to purchase all or any part of shares of the
authorized and unissued $.10 par value common stock of the Company (the "Warrant
Shares") pursuant to the terms and conditions set forth in this Agreement.
Notwithstanding anything to the contrary herein and in the attached Agreement to
Exercise, it is understood that the Company is now completing the necessary and
filings required to update its SEC filings as a full reporting issuer and to
file an SB-2 registration statement including the Warrant Shares hereunder, such
that they will be free trading, subject to the Holder not constituting an
affiliate or other restricted party.

     2. Exercise Price. On or before 8 March 2001 (one year from the date
hereof), the purchase (the "Exercise Price") for each Warrant Share shall be
$5.00. Subsequent to 9 March 2001 and prior to 8 March 2002, the Exercise Price
for each Warrant Share shall be $7.50.

     3. Exercise Period. The Warrant exercise period shall terminate on 8 March
2002 (two years from the date hereof) at 5:00 p.m., local time of the address
for delivery of notices to the Company specified in Paragraph 11, unless
terminated earlier as provided in Paragraph 8 of this Agreement.

     4. Exercise Warrant.

          (a) The Warrant may be exercised by delivering to the Treasuer of the
Company (i) an Irrevocable Notice And Agreement Of Exercise Of Warrant, in the
form attached hereto as Exhibit A, specifying the number of Warrant Shares with
respect to which Warrant is exercised, and (ii) full payment of the Exercised
Price for such shares.

          (b) Promptly upon receipt of the Notice Of Agreement And Exercise and
the full payment of the Exercise Price, the Company shall deliver to the Holder
a properly executed certificate or certificates representing the Warrant Shares
being Purchased.

<PAGE>

     5. Securities Laws Requirements. No Warrant Shares shall be issued unless
and until, in the opinion of the Company, any applicable registration
requirements of the Securities Act of 1933, as amended ( the "Act" ), any
applicable listing requirements of any securities exchange on which the stock of
the same class has been listed, and any other requirements of law or any
regulatory bodies having jurisdiction over such issuance and delivery have been
fully complied with or exemptions therefrom have been fully complied with.
Pursuant to the following:

          (a) All Warrant Shares shall be acquired solely for the account of the
Holder for investment purposes only and with no view to their resale or other
distribution of any kind; and

          (b) No Warrant Shares shall be sold or otherwise distributed in
violation of the Act or any other applicable federal or state securities laws.

          The foregoing restrictions or notice thereof shall be placed on the
certificates representing the Warrant Shares purchased pursuant to the Warrant,
and the Company may refuse to issue the certificates or to transfer the shares
on its books unless it is satisfied that no violation of such restrictions will
occur.

     6. Transferability of Warrant. This Warrant and the Warrant Shares or any
other security issued or issuable upon exercise of this Warrant may not be sold
or otherwise disposed of exempt as follows:

          (a) to a person who, in the reasonable opinion of the Company, is a
person to whom this Warrant or Warrant Shares may legally be transferred without
registration and without the delivery of a current prospectus under the Act with
respect thereto and then only against receipt of a letter from such person in
which such person represents that he is acquiring the Warrant or Warrant Shares
for his own account for investment purposes and not with the view to
distribution, and in which such person agrees to comply with the provisions of
this Section 6 with respect to any resale or other disposition of such
securities; or

          (b) to any person upon delivery of a prospectus then meeting the
requirement of the Act relating to such securities and the offering thereof for
such sale or disposition.

     7. Adjustment By Stock Split, Stock Dividend, Etc. If at any time the
Company increases or decreases the number of its outstanding shares of Common
Stock, or changes in any way the rights and privileges of such shares, by means
of the payment of a stock dividend or the making of any other distribution on
such shares payable in its Common Stock, or through a stock split or subdivision
of shares, or consolidation or combination of shares, or through
reclassification or recapitalization involving its Common Stock, the numbers,
rights and privileges of the shares of common Stock included in the Warrant
shall be increased, decreased or changed in the like manner as if such shares
had been issued and outstanding, fully paid and nonassessable at the time of
such occurrence.

     8. Merger Or Consolidation.

          (a) Effect of Transaction. Upon the occurrence of any of the following
events, if the notice required by Paragraph 8(b) has been given, the Warrant
shall automatically terminate and be of no further force or effect whatever: (i)

<PAGE>

the merger or consolidation of the Company with one or more other corporations,
regardless of which entity survives the transaction: (ii) the dissolution or
liquidation of the company; (iii) the appointment of a receiver for all, or
substantially all, of the company's reorganization under applicable statutes; or
(v) the sale, lease or exchange of all or substantially all, of the Company's
assets and business.

          (b) Notice of Such Occurrence. At lease 30 days prior written notice
of any event described in Paragraph 3(a), except the transactions described in
Subparagraphs 3(a)(iii) and (iv) as to which no notice shall be required, shall,
at the Company's option, be given by the Company to Holder. After receipt of
such notice, Holder may at any time before the occurrence of the event requiring
the giving of notice exercise the unexercised portion of the Warrant as to all
the shares covered thereby. Such notice shall be deemed to have been given when
delivered personally to Holder or pursuant to the provisions of Paragraph II of
this Agreement. If no such notice shall be given with respect to a transaction
described in Subparagraphs, 3(a)(i),(ii) or (v), the provisions of Paragraph
3(a) shall not apply and the Warrant shall not terminate upon the occurrence of
such transactions of a transaction described in subparagraph 8(a)(i),(ii) or
(v), and the Warrant shall terminate, unless previously exercised, at the close
of business 30 days after the written notice has been given.

     9. Common Stock to Be Received Upon Exercise. Holder understands the
Company is under no obligation to register the Warrant Shares under the Act, and
that in the absence of any such registration, the Warrant Shares cannot be sold
unless they are sold pursuant to an exemption from registration under the Act.
The Company is under no obligation to comply, or to assist Holder in complying,
with any exemption from such registration requirement including supplying Holder
with any information necessary to permit routine sales of the Warrant Shares
under Rule 144 of the Securities And Exchange Commission. Holder also
understands that with respect to Rule 144, routine sales of securities made in
reliance upon such Rule can be made only in limited amounts in accordance with
the terms and conditions of the Rule, and that in cases in which the Rule
inapplicable, compliance with either Regulation A or another exemption under the
Act will be required. Thus, the Warrant Shares will have to be held indefinitely
in the absence of registration under the Act or an exemption from registration.

     Furthermore, Holder fully understands that the Warrant Shares have not been
registered under the Act and that they will be issued in reliance upon an
exemption which is available only if Holder acquires such shares for investment
and not with a view to distribution. Holder is familiar with the phrase
"acquired for investment and not with a view to distribution" as it relates to
the Act and the special meaning given to such term in various releases of the
Securities And Exchange Commission.

     10. Privilege of Ownership. Holder shall not have any of the rights of a
stockholder with respect to the shares covered by the Warrant except to the
extent that one or more certificates for such shares shall be delivered to him
upon exercise of the Warrant.

     11. Notices. All notices, request, demands, directions and other
communications ("Notices") provided for in this Agreement shall be in writing
and shall be mailed or delivered personally or sent by telecopier or facsimile
to the applicable party at the address of such party set forth below in this
Section II. When mailed, each such Notice shall be sent by first class,
certified mail, return receipt requested, enclosed in a postage prepaid wrapper,
and shall be effective on the third business day after it has been deposited in
the mail. When delivered personally, each such Notice shall be effective when
delivered to the address for the respective party set forth in this Section 11.
When sent by telecopier or facsimile, each such Notice shall be effective on the
first business day on which or after which it is sent.

<PAGE>

         Company:   North Lily Mining Company
                    1800 Glenarm Place, Suite 210
                    Denver, Colorado 80202
                    Attention:  President
                    Facsimile No. (303) 293-2235

         Holder:

     Either party may change his or its respective address for purposes of this
section 11 by giving the other party Notice of the new address in the manner set
forth above.

     12. General Provisions. This instrument (a) contains the entire agreement
between the Parties, (b) may not be amended nor may any rights hereunder be
waived except by an instrument in writing signed by the party sought to be
charged with such amendment or waiver (c) shall be construed in accordance with,
and governed by, the laws of Colorado, and (d) shall be binding upon and shall
inure to the benefit of the parties and their respective personal
representatives and assigns, except as above set forth. All pronouns contained
herein and any variations thereof shall be deemed to refer to the masculine,
feminine or neutral, singular or plural as the identity of the parties hereto
may require.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below.

                                                  NORTH LILY MINING COMPANY

Date:  ____________________                       By: _______________________

                                                  HOLDER

Date:  _____________________                      ___________________________
                                                  Signature

                                                  ___________________________
                                                  Printed Name

                                                  ___________________________
                                                  Address

                                                  Facsimile No. _____________

<PAGE>

                                    EXHIBIT A
                                    ---------
             (To North Lily Mining Company Stock Warrant Agreement)

                            NORTH LILY MINING COMPANY

             IRREVOCABLE NOTICE AND AGREEMENT OF EXERCISE OF WARRANT

     I hereby exercise my North Lily Mining Company Stock Warrant dated
effective as of 8, March, 2000 as to 550,000 (five hundred fifty thousand)
shares of the $0.10 par value Common Stock (the "Warrant Shares") of North Lily
Mining Company (the "Company").

     I understand that this Irrevocable Notice And Agreement Of Exercise Of
Warrant is irrevocable and agree to pay to the Company the full amount of the
Exercise Price for the Warrant Shares purchased within three days after the
receipt from the Company of notice of the amount of the Exercise Price
determined in accordance with Section 2 of the Warrant Agreement.

     I understand that no Warrant Shares will be issued unless and until, in the
opinion of the Company, any applicable registration requirements of the
Securities Act of 1933, as amended, any applicable listing requirements of any
securities exchange on which stock of the same class is then listed, and any
other requirements of law or any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with or exemptions
therefrom have been fully complied with. I hereby acknowledge, represent,
warrant and agree, to and with the Company as follows;

     a.   The Warrant Shares I am purchasing are being acquired for my own
          account for investment purposes only and with no view to their
          distribution of any kind, and no other person (except, if I am
          married, my spouse) will own any interest therein.

     b.   I will not sell or dispose of my Warrant Shares in violation of the
          Securities Act Of 1933, as amended, or any other applicable federal or
          state securities laws.

     c.   I agree that the Company may, without liability for its good faith
          actions, place legend restrictions upon my Warrant Shares and issue
          "stop transfer" instructions requiring compliance with applicable
          securities laws and the terms of my Warrant.

     The number of Warrant Shares specified above are to be issued in the name
or names set forth below in the left-hand column.

-----------------------                              ---------------------------
(Print Your Name)                                    Signature

-----------------------                              ---------------------------
(Print Name of Spouse if you                         Address
wish joint registration)

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