Document:

Exhibit 10.4

NORD PACIFIC LIMITED

AND

PGM VENTURES CORPORATION

__________________________________

DEED OF CROSS CHARGE

__________________________________

 

THIS DEED is made the 31st day
of December 2002

BETWEEN:

NORD PACIFIC LIMITED of 2727 San Pedro NE,
Suite 116, Albuquerque, New Mexico, 87110 ("Nord")

AND

PGM VENTURES CORPORATION of Suite 1003, 60
Yonge Street, Toronto, Ontario M5E 1H5 ("PGM").

RECITALS:

A.          
Nord, Nord Australex Nominees (PNG) Limited, Simberi Gold Company
Limited and PGM have entered into a joint venture agreement dated November 29,
2002 (the "Joint Venture Agreement").  Under the Joint Venture Agreement, cash
calls may be issued initially to PGM and thereafter to each of Nord and PGM in
proportion to their Participating Interests in the Joint Ventures (as hereafter
defined).

B.          
The parties enter into this Deed pursuant to the terms of the Joint
Venture Agreement in order to secure the payment of contributions required or
cash calls issued to each of Nord and PGM under the Joint Venture Documents.

Part 1

Definitions and Interpretation

Definitions

1.1        
In this Deed, unless the contrary intention appears:

"Business Day" means every day which is not a Saturday,
Sunday or a day on which the banks in the Province of Ontario are closed for
business.

"Charge" means, in relation to each Chargor, the
fixed and floating charge created by that Chargor under this Deed; "fixed
Charge" means the Charge to the extent that it is fixed and "floating Charge"
means the Charge to the extent that it is floating.

"Charged Property" means, the Exploration Charged
Property or the Mining Charged Property as applicable and Charged Properties
means both the Exploration Charged Property and the Mining Charged Property.

"Chargee" means, in relation to each Chargor, the
other party to this Deed.

"Chargor" means individually each of Nord and PGM.

 

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"Collateral Security" means any present or future
agreement, document or other instrument which is expressed to be supplemental
or collateral to this Deed or an implementation of this Deed or entered into by
way of further assurance in respect of this Deed.

"Default" means, in relation to each Chargor, any
of the events specified in Part 7 of this Deed.

"Encumbrance" includes any mortgage, pledge,
charge, lien, assignment, hypothecation, security interest, title, retention,
preferential right or trust arrangement and any other security agreement or
arrangement of any kind given or created, in each case, by way of security, and
the expressions "encumber" and "encumbrancer" shall be construed accordingly.

"Exploration Charged Property" means, in relation
to each Chargor, the Chargor's present and future right, title and interest in
and to the following property and where the context so admits, includes any
part thereof:

(a)         
its Participating Interest in the Exploration Joint Venture;

(b)        
all of the Chargor's right, title and interest in the Exploration Joint
Venture Property;

(c)         
the Chargor's share of Product produced from the Exploration Area and
proceeds arising from sale thereof.

"Joint Ventures" means the Mining Joint Venture
and the Exploration Joint Venture.

"Joint Venture Agreement" means the Simberi Mining
and Tabar Exploration Joint Venture Agreement dated 29 November 2002 between
Nord, Nord Australex Nominees (PNG) Limited, Simberi Gold Company Limited and PGM.

"Joint Venture Documents" means the Joint Venture
Agreement and any joint venture agreement replacing the Joint Venture Agreement
and all documentation entered into pursuant to any such joint venture
agreement.

"Mining Charged Property" means in relation to
each Chargor, the Chargor's present and future right, title and interest in and
to the following property and, where the context so admits, includes any part
thereof: 

(a)         
its Participating Interest in the Mining Joint Venture;

(b)        
all of the Chargor's right, title and interest in the Mining Joint
Venture Property;

(c)         
the Chargor's share of Product produced from the Mining Area and
proceeds arising from sale thereof.

 

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"Monies Hereby Secured"
means, in relation to each Chargor:

(a)         
the Principal Monies;

(b)         
all monies now or hereafter to become due and payable by the Chargor to
the Chargee pursuant to this Deed, any Collateral Security or the Joint Venture
Documents;

(c)          
all payments made by or on behalf of the Chargee pursuant to this Deed
or any receiver or receiver and manager appointed pursuant to this Deed and all
costs, charges and expenses (including costs as between solicitor and own
client) incurred by or on account of the Chargee or any such receiver or
receiver and manager in the exercise or execution or attempted exercise or
execution of all or any of the powers, authorities and discretions conferred
under, pursuant to or exercisable by virtue of this Deed,

and, where the context so admits, includes any part
thereof.

"this Deed" means this Deed as it may from time to
time be amended, varied, supplemented or assigned, and includes any deed of
variation hereof.

"Participating Interest" means, in relation to
each Chargor, all of the contractual rights of the Chargor in respect of the
Project under the Joint Venture Documents.

"Principal Monies" means, in relation to each
Chargor, all cash calls and interest thereon that may at any time and in any
manner become payable by the Chargor pursuant to the Joint Venture Documents
including but not limited to cash calls issued to the Chargor pursuant to Part
17 of the Joint Venture Agreement.

"Project Charge" means any charge that is given by
the Chargor and the Chargee collectively to secure a Project Loan.

All other capitalized terms utilized herewith without
definitions shall have the meanings specified therefor in the Joint Venture
Agreement.

General Interpretation

1.2        
In this Deed, unless the context otherwise requires:

(1)         
part, clause and paragraph headings and underlinings or both shall not
affect the construction of this Deed, and references to parts, clauses,
paragraphs and Schedules are to be construed as references to the same in this
Deed;

(2)         
a reference to an Act of a Parliament shall include any regulations,
rules, by-laws and orders made under that Act, and a reference to an Act of a
Parliament shall include any amendment, re enactment, variation or extension
thereof or statutory provision substituted therefor;

 

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(3)         
references to any agreement, document or instrument shall be deemed to
include references to the agreement, document or instrument as amended, varied,
supplemented or replaced from time to time;

(4)         
words and expressions importing the singular number shall include the
plural number and vice versa, words and expressions importing natural persons
shall include any company, corporation or other body corporate, partnership,
joint venture, association, trust, unincorporated association or any
government, government authority, agency or instrumentality of whatsoever
nature or kind and howsoever named or called and vice versa; and

(5)         
where under or pursuant to this Deed or anything done hereunder the day
on or by which any act, matter or thing is required to be done is a day other
than a Business Day, that act, matter or thing shall be done on or by the
immediately preceding Business Day.

Successors and Assigns

1.3        
In this Deed, references to the Chargor and the Chargee, shall be deemed
to be references to or include, as appropriate, their respective Related
Corporations, successors, transferees and assigns as applicable.  Any
assignment of a party's rights, obligations and interest under this Deed shall
be permitted only by the written consent of the other party hereto, except that
PGM may assign it's rights, obligations and interest hereunder to a Related
Corporation without consent provided the assignee shall consent to be bound by
the terms of this Deed and the Joint Venture Agreement.

Writing

1.4        
A reference in this Deed to any matter or thing having to be done in
writing shall be satisfied if it is transmitted by telex, telegram, facsimile
machine or electronic mail in accordance with the notice provisions contained
in the Joint Venture Agreement.

Accounting Principles

1.5        
In this Deed unless the context otherwise requires:

(a)         
all computations and determinations as to financial matters, and all
financial statements to be delivered under this Deed, shall be made or prepared
in accordance with generally accepted Canadian accounting practices and
principles for the time being consistently applied; and

(b)        
all accounting terms used in this Deed shall have the meanings
respectively ascribed to those terms by those practices and principles for the
time being.

 

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Part 2

Payment of Monies Hereby Secured

2.1        
The Chargor shall duly and punctually pay the Principal Monies in the
amounts and otherwise in the manner required under the Joint Venture Agreement.

2.2        
The Chargor shall duly and punctually pay all of the other Monies Hereby
Secured in the amounts and otherwise in the manner required under this Deed. 
Except where otherwise provided in this Deed, such other Monies Hereby Secured
shall be payable on demand by the Chargee in accordance with the Joint Venture
Agreement, provided that demand shall not be made by the Chargor until such
Monies Hereby Secured become payable under this Deed.

Part 3

Fixed and Floating Charge

3.1        
The Chargor hereby charges the Exploration Charged Property in favour of
the Chargee with:

(a)          
the due and punctual payment and repayment of the Monies Hereby Secured
in respect of the Exploration Joint Venture; and

(b)         
the due and punctual observance and performance of each and all of the
covenants, agreements, obligations and liabilities of the Chargor arising under
or from or in connection with this Deed or the Joint Venture Documents in
respect of the Exploration Joint Venture.

3.2        
The Chargor hereby charges the Mining Charged Property in favour of the
Chargee with:

(c)           the due and punctual payment and repayment of
the Monies Hereby Secured in respect of the Mining Joint Venture; and

(d)          the due and punctual observance and performance
of each and all of the covenants, agreements, obligations and liabilities of
the Chargor arising under or from or in connection with this Deed or the Joint
Venture Documents in respect of the Mining Joint Venture.

3.3        
The Charge shall operate as a first fixed charge over that part of the
Exploration Charged Property which comprises the present or future right, title
and interest of the Chargor in, to, under or derived from:

(a)         
its Participating Interest in the Exploration Joint Venture;

 

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(b)        
the Joint Venture Assets, to the extent that the Exploration Joint
Venture Property comprise:

(i)    any freehold lands, leasehold lands, mining leases, prospecting
licences, exploration licences and other mining tenements;

(ii)   any other leases and licences;

(iii)  any fixtures;

(iv)  any plant, machinery and equipment;

(v)   any licences, permits and approvals;

(vi)  the benefit of any contracts and arrangements; and

(vii) 
goodwill, and all patents, patent applications, trade marks, trade
names, registered designs and copyrights, and all licences and ancillary and
connected rights relating to intangible property,

and shall operate as a first floating charge over
all of the remainder of the Exploration Charged Property.

3.4        
The Charge shall operate as a first fixed charge over that part of the
Mining Charged Property which comprises the present or future right, title and
interest of the Chargor in, to, under or derived from:

(a)      its Participating Interest in the Mining Joint
Venture;

(b)     the Joint Venture Assets, to the extent that the
Mining Joint Venture Property comprise:

(i)    any freehold lands, leasehold lands, mining leases, prospecting
licences, exploration licences and other mining tenements;

(ii)   any other leases and licences;

(iii)  any fixtures;

(iv)  any plant, machinery and equipment;

(v)   any licences, permits and approvals;

(vi)  the benefit of any contracts and arrangements; and

(vii) 
goodwill, and all patents, patent applications, trade marks, trade
names, registered designs and copyrights, and all licences and ancillary and
connected rights relating to intangible property,

 

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                and shall operate as a first floating charge over
all of the remainder of the Mining Charged Property.

3.5        
Upon the Charge becoming enforceable, that part of the Charge as is then
floating in nature shall immediately become fixed as regards all of the Charged
Property.  Upon any other Encumbrance over property the subject of the floating
Charge becoming enforceable, the floating Charge shall immediately become a
fixed Charge over that property.

3.6        
Where the Charge becomes fixed over property over which it was
previously floating, the Chargee may by notice in writing to the Chargor,
release the property from the fixed Charge.  When any property is released from
the fixed Charge under this clause, that property will again be subject to the
floating Charge.

3.7        
As regards any property the subject of the floating Charge, until such
time as the Charge becomes fixed over that property, the Chargor shall be free
to deal with that property in the ordinary course of business.  Upon the Charge
becoming fixed over that property in accordance with the provisions of this
Deed, the Chargor shall not deal with that property in any manner, except as
otherwise permitted in writing by the Chargee.

Part 4

Prohibition on Further Encumbrances

4.1        
Except for the Project Charge and the Cross Charges contemplated herein,
the Chargor shall not create or suffer to exist any Encumbrances, royalties,
overriding royalties or production payments or any other interest of any nature
having the same or similar effect and the foregoing over all or any of the
Charged Properties which comprises the present or future right, title and
interest of the Chargor in, to, under or derived from the property referred to
in clause 3.3(a) and (b) or clause 3.4(a) and (b) without prior written consent
of the Chargee.

Part 5

Undertakings of Chargor

5.1        
The Chargor shall duly and punctually observe, perform and fulfill each
and all of its covenants, agreements, obligations and liabilities arising under
or from or in connection with the Joint Venture Documents and this Deed.

5.2        
The Chargor shall promptly notify the Chargee of any event which
constitutes a Default under this Deed or which would, with lapse of time, would
constitute a Default.

 

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5.3        
The Chargor shall not deal with that part of the Charged Properties as
is subject to a fixed Charge in any manner, except in accordance with the Joint
Venture Documents or as otherwise permitted in writing by the Chargee.

5.4        
If the Chargor fails to comply with any of its covenants or obligations
under this Deed or the Joint Venture Documents and fails to remedy such
non-compliance within 30 days after written notice from the Chargee requiring
the same to be remedied, the Chargee may do all things as the Chargee considers
necessary to remedy such non-compliance on behalf of the Chargor.  All costs,
expenses and liabilities incurred by the Chargee in exercise of its rights
under this clause shall be payable by the Chargor on demand and shall form part
of the Monies Hereby Secured.

Part 6

Warranties by Chargor

6.1        
The Chargor represents and warrants to the Chargee as follows:

(a)          
the Chargor is validly existing and has the corporate power to enter
into and perform its obligations under this Deed and has taken all necessary
action to authorize the execution, delivery and performance of this Deed in
accordance with its terms;

(b)         
this Deed constitutes and shall for the duration of the Charge continue
to constitute a legal, valid and binding obligation of the Chargor fully
enforceable in accordance with its terms;

(c)          
the Charged Properties are free from all Encumbrances except as
otherwise disclosed in the Agreement.

Part 7

Events of Default

7.1        
A Default shall occur if, for whatever reason, and whether or not within
the control of the Chargor, any of the following events or circumstances
occurs, subject to occurrence of force majeure as provided in Part 32 of the
Joint Venture Agreement:

(a)          
the Chargor fails to pay when due and payable any of the Monies Hereby
Secured in accordance with the terms of the Joint Venture Agreement;

(b)         
any resolution is passed for the winding up, dissolution or termination
of existence of the Chargor, or a petition is presented to wind up the Chargor,
except in the course of a scheme of reconstruction or amalgamation previously
approved in writing by the Chargee, and such petition is not removed within 60
days;

 

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(c)          
an application is made for a moratorium or an arrangement with creditors
of the Chargor or any similar proceeding or arrangement occurs by which all or
any part of the assets of the Chargor are submitted to the control of its
creditors, or the Chargor makes any assignment for the benefit of its creditors
generally or any class of its creditors, or the Chargor enters into any
arrangement or compromise with its creditors generally or any class of its
creditors;

(d)         
without the prior written consent of the Chargee, there is appointed a
liquidator, provisional liquidator, trustee, administrator, receiver, receiver
and manager or similar officer of the Chargor, or a receiver or receiver and
manager of all or any part of the Chargor's interest in the Joint Venture
Assets or any other substantial or material assets of the Chargor, or an
Encumbrancer takes possession of all or any of the Chargor's interest in the
Joint Venture Assets or any other substantial or material assets of the
Chargor; or

(e)          
any action is commenced by any government authority, its agents or its
representatives with a view to cancelling the registration of the Chargor.

Part 8

Powers and Rights on Charge becoming Enforceable

8.1         
If a Default occurs, then the Chargee may do all or any of the
following:

(a)          
the Chargee may declare the Principal Monies immediately due and
payable, whereupon the Principal Monies shall become immediately due and
payable;

(b)         
the Chargee may declare that the Charge has become enforceable,
whereupon the Charge shall become enforceable;

(c)          
the Chargee may take any action or proceeding necessary or desirable to
exercise or enforce any right conferred by the Charge.

8.2        
The provisions of this Part shall apply:

(a)         
without prejudice to any other rights enjoyed by the Chargee;

(b)         
notwithstanding any previous waiver of or delay in the exercise of any
rights hereunder;

(c)         
without the necessity for any demand or notice to the Chargor or any
other person; and

 

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(d)         
notwithstanding that the Chargee shall or may have exercised partially
or entirely the power of sale herein contained or implied.

8.3        
The powers and remedies conferred on a Chargee by any statute or
ordinance, the general law or otherwise shall be in augmentation of the powers
hereby expressly conferred and may be exercised by the Chargee and any receiver
appointed hereunder immediately upon or at any time after the Charge becomes
enforceable.

Part 9

Appointment of Receiver

9.1        
At any time after the Charge becomes enforceable and from time to time
thereafter and whether or not the Chargee has entered into possession of the
Charged Property:

(a)          
the Chargee may appoint in writing any person or persons jointly and
each of them severally to be a receiver or receiver and manager ("receiver") of
the Charged Property or any part thereof;

(b)         
the Chargee may remove any receiver;

(c)          
in case of the removal, retirement or death of any receiver, the Chargee
may appoint another in his place;

(d)         
the Chargee may appoint in writing any person to be an additional
receiver of the Charged Property or any part thereof.

9.2        
The Chargee may at any time:

(a)          
withdraw any receiver appointed by it; or

(b)          
if a receiver has gone into possession of the Charged Property or any
part or parts thereof of, direct the receiver to give up possession of the
Charged Property or any part or parts thereof.

Part 10

Powers of Receiver

10.1     
The receiver from time to time appointed by the Chargee shall, without
any consent on the part of the Chargor and without being responsible to the
Chargor for any loss have full power:

 

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(a)          
to take possession of, demand, collect and get in the Charged Property
and for that purpose to take proceedings in the name of the Chargor or
otherwise;

(b)         
to exercise all or any of the rights, powers, authorities and remedies
conferred on the Chargor by any Charge or other security or under any contract,
agreement or otherwise and, without prejudice thereto, to conform to the
directions of the Chargee given from time to time in relation thereto;

(c)          
to exercise any and all of the Chargor's powers, rights, privileges and
remedies in relation to the Charged Property, and to make and effect all
repairs and maintenance and to raise money on the Charged Property with or
without security and if secured with such priority and upon such conditions as
the receiver with the prior written consent of the Chargee thinks fit, and
generally to do all other acts and things which the Chargor might do in the
ordinary conduct of its business or for the protection or improvement of the
Charged Property or for obtaining income or returns therefrom;

(d)         
to lease or license in the name of the Chargor or otherwise the Charged
Property for any period, at such rent or licence fee and upon such terms and
conditions as the receiver considers expedient;

(e)          
to settle, arrange, compromise or submit to arbitration any accounts,
claims, questions or disputes whatsoever which may arise with third parties in
connection with the Charged Property, and to execute releases or other
discharges in relation thereto;

(f)           
at any time and from time to time after this Charge becomes enforceable,
to sell or concur in selling, exchange or otherwise dispose of absolutely or
conditionally the Charged Property or any part or parts thereof either by
public auction or private treaty or by tender for cash or on credit and either
in one lot or in lots and either with or without special conditions or
stipulations as to title or time or mode of payment of purchase money or
otherwise, and with power to allow the whole or any part of the purchase money
to remain on mortgage over the property sold or over any other security or to
remain owing without any security and upon such other terms and conditions as
the receiver considers expedient, and with full power to buy in or sell and to
compel specific performance of any contract by suit in equity or otherwise, and
to execute assurances of the Charged Property or any part or parts thereof in
the name and on behalf of the Chargor or otherwise, and to do all other acts
and things for completing any such sale which the receiver deems necessary;

(g)          
to insure such part of the Charged Property as is of an insurable nature
against loss or damage by fire or other risks in such sums as the receiver
thinks fit, and to effect such other insurances relating to the business of the
Chargor as the receiver thinks fit;

 

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(h)          
to sever fixtures belonging to the Chargor and sell them apart from any
other part of the Charged Property;

(i)           
to employ or engage managers, solicitors, professional consultants,
agents, auctioneers, Officers, clerks, workmen, servants and others for all or
any of the purposes aforesaid at such salaries or remuneration as the receiver
shall think appropriate;

(j)           
to give effectual receipts for all monies and other assets which may
come to the hands of the receiver in exercise of any power hereby conferred;

(k)         
to carry out and enforce specific performance or otherwise obtain the
benefit of, exercise or perform all or any of the Chargor's rights and
obligations under all contracts the subject of the Charged Property or entered
into in exercise of the powers or authorities hereby conferred;

(l)           
to take such action as the receiver considers appropriate against
debtors or third parties for the recovery or protection of the Charged Property
or for the security of the Chargee;

(m)         
to take proceedings at lay or otherwise in the name of the Chargor or
otherwise for all or any of the purposes aforesaid;

(n)          
to do all things necessary to perform or observe any of the covenants,
agreements, undertakings or obligations on the part of the Chargor contained in
this Deed or the Joint Venture Documents;

(o)         
to do or cause to be done all such other acts and things without
limitation as the receiver considers expedient for the protection or
enforcement of this Deed or the recovery of the Monies Hereby Secured and, for
those purposes, to exercise all powers conferred on receivers by the
Corporations Law; and

(p)         
with the prior written consent of the Chargee, to delegate to any person
for such time or times as the Chargee shall approve any of the powers
hereinbefore conferred upon the receiver.

10.2     
The receiver shall have such further powers and discretions as the
Chargee may by notice in writing to the receiver confer upon him.

Part 11

General Provisions in Relation to Receiver

11.1     
The Chargee may from time to time fix the remuneration of any receiver
appointed by the Chargee.

 

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11.2     
Every receiver shall be the agent of the Chargor (unless and until the
Chargee shall by notice in writing to the Chargor and to such receiver require
that such, receiver shall act as the agent of the Chargee).

11.3     
The Chargor shall be responsible for the receiver's remuneration.

Part 12

Chargee May Exercise Receiver's Powers

12.1     
At any time after the Charge becomes enforceable and from time to time
thereafter and notwithstanding that a receiver may or may not have been
appointed as aforesaid, all or any of the Chargee and its officers, agents or
representatives without giving any notice, shall have and shall be entitled to
exercise the same powers, authorities and discretions as a receiver would have
had and been entitled to exercise if a receiver had been appointed under this
Deed.  A reference in this Deed to a receiver includes a reference to the
Chargee exercising the powers authorities and discretions of a receiver.

Part 13

Costs.  Expenses and Liabilities Incurred in exercise of Charm's Powers

13.1     
All payments made by or on behalf of the Chargee, any receiver or any of
them and all costs, charges, expenses and liabilities (including costs as
between solicitor and own client) incurred by or on account of the Chargee, any
receiver or any of them in the exercise or execution or attempted exercise or
execution of all or any of the powers, authorities and discretions conferred
under, pursuant to or exercisable by virtue of this Deed shall be payable by
the Chargor on demand by the Chargee and shall be deemed to form part of the
Monies Hereby Secured.

Part 14

Application of Monies

14.1     
All monies received by or on behalf of any receiver or the Chargee under
or by virtue of the Charge shall be applied in the order and manner following,
namely:

(a)          
firstly, in payment of all costs, charges and expenses incurred in or
incidental to the exercise or performance or attempted exercise or performance
of any of the powers or authorities hereby conferred in relation to this Deed;

(b)         
secondly, in payment of such other outgoings as are incurred in the
exercise of the Chargee's powers under this Deed;

 

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(c)         
thirdly, in payment to the receiver of any remuneration whether by way
of commission or otherwise; and

(d)         
fourthly, into the applicable Joint Venture Account as defined in the
Joint Venture Agreement, or otherwise to the party entitled to receive the same
in accordance with the Joint Venture Documents;

               and the surplus (if any) shall belong, and be paid
promptly, to the Chargor.

Part 15

Qualification In Chargee's Power

15.1     
The Chargee agrees that it shall, in relation to any particular Default,
promptly cease to exercise its rights and powers under this Deed if the Default
is remedied in full and all costs, expenses and liabilities incurred by the
Chargee in the exercise or attempted exercise of its rights and powers under
this Deed with respect to the Default have been paid in full.

15.2     
In respect of a Default arising from the failure by the Chargor to pay
any part of the Monies Hereby Secured, the Chargee agrees that the Chargee will
exercise its powers under this Deed only to the extent that the Chargee in good
faith considers to be reasonably necessary or appropriate to remedy the
Default.

Part 16

General Provisions in relation to Chargee's Powers

Persons not bound to inquire

16.1     
Upon the exercise of any power or authority herein contained or implied,
no person dealing with the Chargee or any receiver appointed as aforesaid or
any attorney appointed hereunder shall be bound to inquire whether any default
as aforesaid has been made or as to the due appointment of any receiver or
attorney or otherwise as to the propriety or regularity of the exercise of such
power or authority, and shall not be affected by notice, express or otherwise,
that any such exercise is unnecessary or improper and, notwithstanding any
irregularity or impropriety therein, such exercise shall, as regards the
protection of such person, be deemed authorised by the aforesaid powers and
authorities and shall be valid and effectual accordingly.

Liability limited to actual receipts

16.2     
Except In the case of negligence or wilful act or neglect, the Chargee
and any receiver shall not be answerable or accountable for any losses of any
kind whatsoever which may happen in or about the exercise or attempted exercise
of any of the powers or authorities herein contained and shall not, by reason
of the Chargee and such receiver entering into and taking possession of the
Charged Property or any part or parts thereof, be liable to account as Chargee
in possession or for anything except actual receipts or be liable for any loss
on realisation or for any default or omission for which a Chargee in possession
might be liable.  The Chargee shall not by virtue of the appointment of any
receiver be responsible for the acts or defaults of the receiver.

 

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Chargee and receiver not obligated to the Chargor to
perform agreements

16.3     
Nothing contained in this Charge shall, as between the Chargor on the
one hand and the Chargee or any receiver on the other hand, impose on the
Chargee or the receiver any personal obligation to perform or observe any
agreement, covenant, condition or obligation on the part of the Chargor to be
performed or observed under any contract or agreement forming part of the
Charged Property.

Part 17

Further Assurance

Assurances on realisation

17.1     
At any time after the Charge hereby created becomes enforceable in
accordance with this Deed, the Chargor shall from time to time and at all times
(at the cost and expense of the Chargor) execute, make and do all such
assurances and things as the Chargee requires for more perfectly assuring or
facilitating the realisation of the Charged Property and for exercising all the
powers, authorities and discretions hereby conferred on the Chargee and, in
particular, the Chargor:

(a)          
shall execute all transfers, conveyances, assignments and assurances of
the Charged Property or any part thereof to all or any of the Chargee and its
respective nominees;

(b)         
shall perform or cause to be performed all acts and things requisite or
desirable according to the law in force in any place where any part of the
Charged Property is situate for the purpose of giving effect to the exercise of
any of the said powers, authorities and discretions; and

(c)         
shall give all notices, orders and directions which the Chargee thinks
expedient.

Power of Attorney

17.2     
 

(a)         
Subject to paragraph (b) and in consideration, amongst other things, of
the Chargee entering into this Charge at the Chargor's request, the Chargor
hereby (irrevocably and for so long as any Monies Hereby Secured remain owing
or unpaid or the Charge hereby created remains undischarged) appoints the
Chargee and also any Officer of the Chargee, and every receiver for the time
being jointly and each of them severally its attorneys and attorney in its name
and on its behalf or otherwise to execute, sign, seal, deliver, register, stamp
and do all such deeds, instruments, documents, acts and things whatsoever which
the Chargee thinks fit for the purpose of carrying out any agreement,
covenantor obligation imposed upon the Chargor by this Charge or any power
conferred upon the Charge by this Charge including, without limitation:

 

Page 16 of 21

(i)    executing, signing, sealing, delivering, registering and stamping any
instrument of further assurance or for giving to the Chargee the full benefit
of any of the provisions of this Charge;

(ii)    acceptance of service of any writ, summons or other legal process and
appearance and representation of the Chargor in any court in connection with
the proceedings in any way relating to the, the Charged Property;

(iii)   selling, transferring and disposing of all or any part of the Charged
Property including the Chargor's interests in or rights in respect of any such
property;

(iv)   leasing or letting all or any part of the Charged Property and
surrendering or obtaining or accepting the surrender of any such leases;

(v)    releasing, discharging or redeeming whether wholly or partially all or
any Encumbrances to which the Chargor may be entitled from time to time and, in
connection therewith, executing all such instruments in the name and on behalf
of the Chargor as may be required to effect any such release, discharge or
redemption and, where applicable, in such registrable form as may be required
or desirable for the time being; and

(vi)   to do all such acts, matters and things and sign and execute all such
deeds, agreements, documents, papers and instruments as may be necessary in
order to exercise the powers hereby conferred as fully and effectually to all
intents and purposes as the Chargor could do on its own account, and generally
to use the Chargor's name in the exercise of all or any of the powers,
authorities and discretions hereby conferred on the Chargee and any Officer of
the Chargee and any receiver for the time being appointed hereunder.  The
Chargor ratifies and confirms and agrees to ratify and confirm all acts,
matters and things done in exercise of the powers conferred by this clause to
preserve the rights of the Chargee.

(b)        
The Chargee shall not exercise the powers conferred by paragraph (a)
unless a Default has occurred.

 

Page 17 of 21

Further assurances

17.3     
From time to time and at all times hereafter upon the request of the
Chargee and at the cost of the Chargor, the Chargor shall do and execute or
cause to be done and executed all such acts, deeds and assurances whatsoever to
perfect, preserve or protect the rights of the Chargee under this Deed as the
Chargee may direct.

Part 18

Chargor's Obligations Unconditional And Not Otherwise Affected

Chargor's liability not affected

18.1     
This Deed and the duties, obligations and liabilities of the Chargor
hereunder shall not be abrogated, prejudiced, affected or discharged:

(a)         
by the granting to the Chargor, or any other person of any time, credit,
forebearance, concession or other indulgence or consideration; or

(b)         
by the Chargee failing or neglecting to recover the Monies Hereby
Secured by the realisation of any collateral or other security or otherwise; or

(c)         
by any other laches, acquiescence, delay, acts, omissions or mistakes on
the part of the Chargee or any other person; or

(d)         
by the release, waiver, amendment, variation, supplement, compounding, compromise,
discharge, abandonment or transfer (whether wholly or partially and with or
without consideration) of any agreement, deed, right, power, remedy, mortgage,
charge, guarantee, indemnity, security, judgment or negotiable instrument now
or hereafter held or recovered by the Chargee from or against the Chargor, or
any other person; or

(e)         
by reason of any agreement, deed, mortgage, charge, guarantee, indemnity
or security held or taken at any time by the Chargee or by reason of the same
being void, voidable or unenforceable or by reason of any other dealing, matter
or thing which, but for this provision, could or might operate to abrogate,
prejudice, affect or discharge the liability of the Chargor hereunder; or

(f)          
by any moratorium or other period staying or suspending by statute or
the order of any court or other authority all or any of the Chargee's rights,
remedies or recourse against the Chargor, or any other person; or

(g)         
by any person or company now or hereafter becoming a guarantor;

(h)         
by any alteration or addition to any Collateral Security with or without
the concurrence of the Chargor;

 

Page 18 of 21

(i)          
by any insolvency, bankruptcy, reorganisation or cessation of existence
of any entity or person;

(j)          
by any failure to obtain any consents, approvals and authorities
necessary or appropriate in connection with this Deed; or

(k)        
by any other matter whatsoever.

Part 19

Interest on the Monies Herebv Secured

19.1     
If the Chargor fails to pay any amount payable by it hereunder on the
due date for payment, the Chargor shall on demand by the Chargee from time to
time pay interest on such overdue amount from and including the due date up to
and including the date of actual payment (after as well as before judgment) at
a rate of interest equal to the rate at which interest accrues on the Principal
Monies under the Joint Venture Documents.

19.2     
Such interest shall accrue from day to day and be computed on the basis
of a 365 day year and for the actual number of days elapsed.

Part 20

General

Stamp and other fees and duties

20.1     
All stamp duty, tax, registration fees and other similar duties or taxes
legally imposed by any authority on this Charge or any of the Monies Hereby
Secured shall be paid by the Exploration Joint Venture or the Mining Joint
Venture as applicable.

Exercise of rights; non-waiver; cumulative remedies

20.2     
No failure to exercise and no delay in exercising, on the part of the
Chargee any right, power or remedy under this Charge shall operate as a waiver
of that right, power or remedy, nor shall any single or partial exercise of any
right, power or remedy preclude any other or further exercise of that or any
other right, power or remedy.  The rights, powers and remedies provided in this
Charge are cumulative and not exclusive of any rights or remedies provided at
law or in equity.

Successors and assigns and survival

20.3     
This Charge shall be binding upon and inure to the benefit of the
Chargor, the Chargee and their respective successors, transferees and assigns. 
The provisions of this Charge shall survive for so long as may be necessary or
desirable to give full effect thereto.

 

Page 19 of 21

Registration of this Charge

20.4     
The Chargor shall forthwith at the cost and expense of the Chargor duly
register, record or file this Charge or a copy thereof at each place where it
is necessary so to do in order either to perfect or preserve the priority of
this Charge or to prevent this Charge being rendered partially or wholly
invalid or of limited effect or enforceability.

20.5     
Nothing herein or in any further or other assurance or Collateral
Security taken by the Chargee shall extinguish, merge, postpone, lessen or
otherwise prejudice the Charge hereby created.

Governing law and iurisdiction

20.6  

(a)         
This Charge shall be governed by and construed in accordance with the
laws of the Province of Ontario in force from time to time.

(b)         
The Chargor acknowledges and agrees that jurisdiction under this Charge
shall be vested in the National Court in the Province of Ontario (and all
Courts competent to hear appeals therefrom), and the Chargor hereby irrevocably
submits and agrees to submit to the non-exclusive jurisdiction of any and all
such courts to any suit, action or proceeding arising out of or relating to
this Charge or the transactions contemplated hereby and the Chargor hereby
irrevocably agrees that all claims in respect of such suit, action or
proceedings may be heard and determined in any such court.

Amendments

20.7     
The provisions of this Charge may only be amended, varied, supplemented
or waived by an instrument or instruments in writing signed by the Chargor and
the Chargee.  No amendment, variation, supplement or waiver shall be valid or
enforceable unless it is contained in a document executed by both parties.

Entire agreement

20.8     
This Charge shall take effect according to its tenor notwithstanding any
other prior agreement in conflict or variation with it or any correspondence or
documents which may have passed between the parties or may have been executed
by all or any of them prior to the execution of this Charge.

 

Page 20 of 21

EXECUTED by the
Parties as a Deed

NORD PACIFIC LIMITED

                                                                                                                            

Director                                                                       Director

                                                                                                                            

Name (please print)                                                       Name
(please print)

PGM VENTURES
CORPORATION

                                                                                                                            

Secretary/Director                                                         Director

                                                                                                                            

Name (please print)                                                       Name
(please print)

 

 

Page 21 of 21Exhibit 10.9

SETTLEMENT
AGREEMENT

Between and Among:

NORD
RESOURCES CORPORATION, a body corporate, with offices in Dragoon, Arizona ("NRC");

NORD
PACIFIC LIMITED, a body corporate of the Province of New Brunswick, Canada,
with offices in Albuquerque, New Mexico ("Nord Pacific");

MARK
R. WELCH, and individual residing in Albuquerque, New Mexico ("Welch");

SHARON
S. WELCH, an individual residing in Albuquerque, New Mexico;

JOHN
ROBERTS, an individual residing in St. Georges, South Australia ("Roberts");

LUCILLE
LANSING, an individual residing in Albuquerque, New Mexico ("Lansing");

ALEX
CHISHOLM, as trustee for the Retirement Trust of Mark R. Welch and Sharon
S. Welch; 

RONALD
A. HIRSCH  an individual residing in Laguna Beach, California ("Hirsch");

ERLAND ANDERSON an
individual residing in Oro Valley, Arizona ("Anderson"); 

CLIVE
BAILEY an individual residing in Dragoon, Arizona ("Bailey"); and

MATTHEW WILLIAMS an
individual residing in Benson, Arizona ("Williams");

RECITALS:

            WHEREAS:

  	A.	

Nord Resources Corporation commenced an action in the
Court of Queen's Bench of the Province of New Brunswick, Canada, Trial Division
Judicial District of Saint John, Court File No:  S/M/25/03 (the "NB
Action") against Nord Pacific Limited, Mark R. Welch, Sharon S. Welch,
John Roberts, Lucile Lansing and Alex Chisholm as trustee for the Retirement
Trust of Mark R. Welch and Sharon Welch (collectively, including Nord Pacific,
the "NB Defendants").

      

 

  	B.	

NRC and Hirsch commenced Action No. CV-2002 in the Second Judicial
District Court in the State of New Mexico (the "New Mexico Action")
against Nord Pacific, Welch, Lansing and Roberts (collectively the New
Mexico Defendants"),  who filed counterclaims (the "New Mexico
Counterclaims") against NRC, Hirsch and John Champagne  (collectively the "New
Mexico Counter-Defendants").

      
	 	 
	C.	

Nord Pacific commenced  Action No. CIV 03-0799 BB/ACT in the
United States District Court for the District of New Mexico (the "Federal
Action") against NRC, Hirsch, John Champagne, Anderson, Bailey and Williams
(collectively the "Federal Defendants").

      
	 	 
	D.	

NRC and the NB Defendants, as well as their
respective principals, officers, directors, subsidiaries, associates,
affiliates, agents, predecessor and successor corporations, heirs, assigns and
administrators, as the case may be ("NB Associated Parties"),
wish to finally and completely resolve any and all claims or counterclaims
(including the New Mexico Counterclaims) that were made, ought to have been
made or could have been made in the NB Action, including but not limited to any
claim for costs in the Action (the "NB Claims"), and to that
end acknowledge and agree that the Recitals herein are true and that they form
part of the terms of this Settlement Agreement.

      
	 	 
	E.	

Nord Pacific and the New Mexico Defendants and
the New Mexico Counter-Defendants other than John Champagne, as well as their
respective principals, officers, directors, subsidiaries, associates,
affiliates, agents, predecessor and, successor corporations, heirs, assigns and
administrators, as the case may be ("New Mexico Associated
Parties"), wish to finally and completely resolve any and all claims
or counterclaims that were made (including the New Mexico Counterclaims), ought
to have been made or could have been made in the New Mexico Action, including
but not limited to any claim for costs in the New Mexico Action and the New
Mexico Counterclaims (the "New Mexico Claims"), and to that
end acknowledge and agree that the Recitals herein are true and that they form
part of the terms of this Settlement Agreement.

      
	 	 
	F.	

Nord Pacific and the Federal Defendants other
than John Champagne, as well as their respective principals, officers,
directors, subsidiaries, associates, affiliates, agents, predecessor and,
successor corporations, heirs, assigns and administrators, as the case may be
("Federal Associated Parties"), wish to finally and completely
resolve any and all claims or counterclaims that were made, ought to have been
made or could have been made in the Federal Action, including but not limited
to any claim for costs in the Federal Action (the "Federal Claims"),
and to that end acknowledge and agree that the Recitals herein are true and
that they form part of the terms of this Settlement Agreement.

      
	 	 
	G.	

All the parties hereto acknowledge and agree
that there is valid consideration supporting this Settlement Agreement,
including the inducement to Allied Gold Limited ("Allied"):

      
	 	 
	 	

(a)               

      	
      to enter into an arrangement agreement (the "Arrangement
Agreement") under which Allied would exchange shares of Allied for all of
the shares of the Corporation and Nord Pacific shareholders and NRC would be
entitled to benefit therefrom as a shareholder, and 

2

  	 	(b)	

to enter into a credit facility agreement (the "Credit
Agreement") contemplating whereunder Allied would obtain notes of Nord
Pacific convertible into shares of Nord Pacific in exchange for certain
advances to be made to Nord Pacific to pay certain costs and expenses of Nord
Pacific including historic costs of Nord Pacific;

      

(collectively the
Arrangement Agreement and the Credit Agreement are hereinafter referred to as
the "Allied Agreements");

NOW THEREFORE the parties hereto agree to the following
TERMS:

  	1.	

The terms of this Settlement Agreement shall be disclosed by press
release mutually agreed by NRC and Nord Pacific and may be described in
documents required to be filed by Nord Pacific or which relate to the
Arrangement Agreement.

      
	 	 
	2.	

It is expressly acknowledged by each of the parties hereto that there is
no admission of liability on the part of the NB Defendants for any of the NB
Claims and there is no admission liability on the part of the New Mexico
Defendants for the New Mexico Claims or the Federal Defendants for the Federal
Claims and in each case such liability is denied.

      
	 	 
	3.	

All parties acknowledge that the directors of Nord Pacific are Roberts,
Welch and Lansing.

      
	 	 
	4.	

In order to allow the Board of Directors of Nord Pacific to immediately
approve and for Nord Pacific to enter into this Settlement Agreement and the
Allied Agreements, each of Hirsch, Anderson, Bailey and Williams who were
purported to be elected on June 28, 2003 agree to resign effective immediately
from any position they may have on the Board of Directors of Nord Pacific and
from any office or employment they may have in Nord Pacific and to release Nord
Pacific from any claims in respect thereof.  NRC and Hirsch shall forthwith
petition the Court of Queen's Bench of the Province of New
Brunswick, Canada, Trial Division Judicial District of Saint John, to
declare that the directors of  Nord Pacific are Roberts, Lansing and Welch and
that John Champagne is not a director thereof and Nord Pacific shall support
NRC in this regard.

      
	 	 
	5.	

NRC shall cause its counsel to take all action necessary to withdraw the
NB Action without costs.  The NB Defendants hereby authorize the solicitors for
NRC to execute on their behalf and to file all documents necessary to achieve
the same and shall consent to any order of the New Brunswick Court:  (i)
terminating the New Brunswick court's interim order; and (ii) declaring that
the existing directors of Nord Pacific are Welch, Lansing and Roberts and that
John Champagne is not a director thereof;

      
	 	 
	6.	

NRC represents and warrants that it has delivered to PGM Ventures
Corporation ("PGM") an executed copy of a release and
withdrawal of the letter of October 9, 2003 in a form which has been agreed
upon between NRC and PGM.

      
	 	 
	7.	

Upon the Board of Directors of Nord Pacific approving and ratifying this
Settlement Agreement and the entry into of the Allied Agreements:

      

3

(a)  Each of Nord Pacific and NRC shall provide to each other corporate resolutions
evidencing that this Settlement Agreement has been approved and shall
immediately use their best efforts to complete documentation of the matters set
forth herein.

(b)  Nord Pacific shall cause its counsel to promptly file with the Second
Judicial District Court in the State of New Mexico an order dismissing the New
Mexico Action and the New Mexico Counterclaims without costs and to promptly
file with the United States District Court for the District of New Mexico an
order dismissing the Federal Actions without costs.  The New Mexico Defendants
hereby authorize the solicitors for Nord Pacific to execute on their behalf and
to file all documents necessary to achieve the same.

(c)  The parties hereby agree: 

(i)        The 4,000,000 shares in Nord Pacific Limited  issued to Alex Chisholm in
trust for Mark R. Welch ("Welch") and Sharon S. Welch in satisfaction of
the debt of an amount U.S.$517,311.40 by resolution of the Board of Directors
of Nord Pacific dated March 31, 2003 are accepted as having been validly
issued;

(ii)        The 400,000 shares issued to Welch by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December 16, 2002 are
accepted as having been validly issued;

(iii)       The 400,000 shares issued to Lansing by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December 16, 2002 are
accepted as having been validly issued; 

(iv)      The 400,000 shares issued to Roberts by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December 16, 2002 are
accepted as having been validly issued; 

(v)        Nord Pacific shall acknowledge its indebtedness to Nord Resources
Corporation , which indebtedness shall be subordinated to all other creditors
pursuant to a Subordination Agreement (in substantially the form of Subordination
Agreement set forth as a Schedule to the Credit Facility Agreement), in an
amount of Australian $280,000 upon the NB Action being withdrawn or dismissed
without costs and the interim order of the court therein dated June 26, 2003
being terminated, and the Board of Nord Pacific thereby warrants that it has
passed a resolution to authorize such indebtedness and the Arrangement
Agreement shall contemplate that the arrangement thereunder shall convert such
indebtedness at a rate of Australian $0.20 per share into 1,400,000 shares of
Allied;

(vi)       NRC and its NB Associated Parties, on the one hand, and the NB
Defendants and their NB Associated Parties, on the other hand, hereby release
and forever discharge each other from any and all actions, causes of action,
claims and demands for damages, loss or injury, howsoever arising and in any
way relating to the NB Action, including the NB Claims;

4

(vii)      Nord Pacific and its New Mexico Associated Parties, on the one hand, and
the New Mexico Defendants, other than John Champagne, and their New Mexico
Associated Parties, on the other hand, hereby release and forever discharge
each other from any and all actions, causes of action, claims and demands for
damages, loss or injury, howsoever arising and in any way relating to the New Mexico
Action or the New Mexico Counterclaims, including the New Mexico Claims;

(viii)    
Nord Pacific and its Federal Associated Parties, on the one hand, and
the Federal Defendants, other than John Champagne, and their Federal Associated
Parties, on the other hand, hereby release and forever discharge each other
from any and all actions, causes of action, claims and demands for damages,
loss or injury, howsoever arising and in any way relating to the Federal
Action, including the Federal Claims;

(ix)       All agree not to make any claim or take any proceedings against any
other person, corporation or entity who might claim contribution or indemnity
under the provisions of any legislation, regulations or under law from any
party to this Settlement Agreement;

(x)        Nord Pacific will re-convey to NRC the 20% carried interest held by Nord
Pacific in NRC's Johnson Camp copper property located near Dragoon, Arizona and
NRC shall assume any and all obligations with respect to such property, past,
present or future and shall indemnify and save harmless Nord Pacific and its
subsidiaries, directors, officers and shareholders, past, present or future in
respect to any claims, obligations or liabilities in respect of such property;

(xi)       NRC and Nord Pacific release each other from any financial obligations
associated with the joint office cost sharing agreement for the Albuquerque
office at 201 Third Street N.W. Albuquerque, New Mexico;

(xii)      NRC thereby agrees to accept that the balance of the shares issued by
resolutions of the Board of Directors of Nord Pacific dated February 25, 2002
and December 16, 2002 being the 1.1 million Nord Pacific shares to certain Nord
Pacific employees and consultants (other than Welch, Lansing and Roberts), the
issuance of 150,000 Nord Pacific shares to Warrama Consulting Pty. Ltd. and
Herbert Levine and the future issuance of an additional 1,431,482 Nord Pacific
shares to Pierce Carson and that NRC releases the recipients of such shares and
the NB Defendants from any claim in respect thereof.

(xiii)     NRC will release all business records belonging to Nord Pacific in its
posession including those which are being held at Johnson Camp.

5

(xiv)     NRC will remove all information pertaining to Nord Pacific from its
website and shall not reintroduce such information in the future.

8.        It is further agreed that each of NRC and Nord Pacific will fully
disclose to each other all communications between themselves and Allied
relating to the Arrangement Agreement.

9.        This Agreement may be executed by facsimile in counterparts each of
which when executed and delivered shall together constitute one and the same
instrument.

10.      This Agreement is governed by the law of the Province of New Brunswick,
Canada.

IN WITNESS WHEREOF we have
hereunto set our hands this      th day of December, 2003.

	
  Nord Resources Corporation

  	
   

  	
  Nord Pacific Limited

  
	
   	
   	
   
	
  Per:

  	

  	

  	
  Per: 
  

  	

  
	

  	
  Name:

  Title:

 

  	

  	

  	
  Name:

  Title:

  
	

  Per:

  	

  	

  	

  Per:

  	

  
	

  	
  Name:

  Title:

 

  	

  	

  	
  Name:

  Title:

  

	

  	

  	

  	

  
	
  Mark R. Welch

  	

  	

  	
  Witness

  
	
   	

   	

   	
   

	

   	

  	

  	

  
	
  Sharon S. Welch

  	

  	

  	
  Witness

  
	
   	

   	

   	
   

	

   	

  	

  	

  
	
  John Roberts

  	

  	

  	
  Witness

  
	
   	

   	

   	
   

	

   	

  	

  	

  
	
  Lucile Lansing

  	

  	

  	
  Witness

  
	
   	

   	

   	
   

 

6

 

	

  	

  	

  	

  
	
  Alex Chisholm,

  as trustee for the
  Retirement Trust of Mark R. Welch and Sharon S. Welch

  

 

  	

  	

  	
  Witness

  
	
  Ronald A. Hirsch

  

 

  	

  	

  	
  Witness

  
	
  Erland Anderson

  

 

  	

  	

  	
  Witness

  
	
  Clive Bailey

  

 

  	

  	

  	
  Witness

  
	
  Matthew Williams

  	

  	

  	
  Witness

  

 

 

 

 

 

 

7

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