Document:

<PAGE>

                                                                    EXHIBIT 10.6

        EXPLORATION LICENSE, MINERAL PURCHASE OPTION AND LEASE AGREEMENT

        THIS EXPLORATION LICENSE, MINERAL PURCHASE OPTION AND LEASE AGREEMENT is
made this 7th day of October, 1999 by and between William W. Lewis Equity Trust
and David W. Lewis ("Owners"); and Delta International Mining and Exploration,
Inc. ("Delta").

        A. Owners own and possesses Township 16 North, Range 24 East Section 19:
NE1/4; NE1/4SW1/4; NW1/4SE1/4; containing 240 acres situated in Petroleum
County, Montana. All ores, minerals, mineral rights, and the right to explore
for, mine, remove the same and so much of the water rights as will be required
or with the right to drill a water well, with ingress and egress over adjoining
lands now owned by Owners shall be referred to collectively as "Mineral
Property" and the remainder of the surface, water rights and improvements,
easements, licenses, rights-of-way and other interests appurtenant thereto,
shall be referred to collectively as the "Surface".

        B. The parties now wish to enter into an agreement giving Delta an
exclusive license to explore the Mineral Property and the exclusive option to
purchase the Mineral Property.

        THEREFORE, the parties have agreed as follows.

                                   SECTION ONE
                               Exploration License

        1.1 Grant of Exploration License. Owners hereby grant to Delta the
exclusive right and option to enter upon and explore the Mineral Property. The
Exploration License shall have a term of three (3) years commencing on execution
of this agreement by both parties (the "Effective Date"). During the term of the
license, Delta shall have the right to undertake geological, geophysical, and
geochemical examinations of the Mineral Property; to sample the Mineral Property
by means of pits, trenches, and drilling by any means; and to take bulk samples
from the Mineral Property for the purpose of conducting mineralogical tests,
etc. However, Delta shall not commence mining activities on the Mineral Property
unless it exercises its option to purchase set forth in Section 2 below.

        1.2 Payments For Exploration License. In consideration of this License,
Delta shall pay Owners the sum of Three Thousand Dollars ($3,000.00) upon
execution of this agreement.

        1.3 Delivery of Data. Following execution of this Agreement, Owners
shall allow Delta to review and copy (at Delta's cost) all data and reports, if
any, in the possession of Owners.

        1.4 Termination of Exploration License. This exploration license shall
terminate three (3) years from the Effective date, unless extended by mutual
agreement of the parties. Delta shall have the right to terminate the License at
any time and shall, upon delivery of a termination notice to Owners, be relieved
of all further obligations after termination date.

        1.5 Work Commitment. The payment set forth in Section 1.2 above shall be
in lieu of any work commitment on the Mineral Property, and Delta shall have no
obligation, express or implied, to explore, develop, or mine the Mineral
Property.

<PAGE>

        1.6 Environmental Liabilities. Owners shall remain solely liable and
responsible for all environmental conditions and reclamation responsibilities
which arose prior to the execution of this Agreement. Delta shall have
responsibility for all environmental conditions and reclamation responsibilities
arising from Delta's activities on the Surface after execution of this
Agreement.

                                   SECTION TWO
                                 Option to Lease

        2.1 Grant of option. In consideration of the payment made in Section
1.2, Owner hereby grants to Delta the exclusive right and option to Purchase
Owners' ownership interest, in and to all mineral interests, as defined in "A"
above, and Lease so much of the Surface as needed and/or required for the sum of
One Hundred Fifty Thousand Dollars ($150,000.00) The option shall have a term of
five (5) years unless sooner terminated or canceled as hereinafter provided, and
the Surface Lease shall run for 5 years or so long after the end of such term as
there is production from the Mineral Property. The Lease shall commence on the
date Delta gives Owners' notice of execution of Option to Purchase and makes a
payment of Five Thousand Dollars ($5,000.00). In order to maintain the option in
effect, Delta shall make the following annual option payments to owners:

<TABLE>
<CAPTION>
        Anniversary of Option Date                   Option Payment
        -----------------------------------------------------------
<S>                                                  <C>
                       1                             $   10,000.00

                       2                             $   15,000.00

                       3                             $   25,000.00

                       4                             $   35,000.00

                       5                             $   60,000.00
</TABLE>

        2.2 Exercise of Option. Delta shall elect (a) to terminate this
Agreement and relinquish the Mineral Property and Surface to Owners in
accordance with Section 6.1 below, or (b) to exercise its option and purchase
the Mineral Property for the price set forth in Section 2.1 and Lease so much of
the Surface as is needed and/or required. During the term of the 5 year Option,
if Delta elects to purchase the Mineral Property, the parties shall open an
escrow account and proceed to complete the sales transaction within sixty (60)
days following Delta's election. Owners shall deposit a Warranty Deed into the
escrow account conveying the Mineral Property to Delta, and Delta shall deposit
the purchase price in to escrow. Upon deposit of both the deed and purchase
payment, the deed shall be released and recorded, and the initial payment shall
be delivered to owners. Delta shall bear all of the costs of escrow.

        The parties acknowledge that Delta shall have the right to terminate the
option at any time in accordance with Section 6 below.

                                       -2-

<PAGE>

                                  SECTION THREE
                              Conduct of Operations

        3.1 Right to Explore. Following the execution of this Agreement, Delta
shall have the right to make geological investigations and surveys, to drill on
the Surface by any means, and to have all the rights and privileges incident to
Owner's ownership of the Mineral Property. However, Delta shall not commence
development or mining operations on the Mineral Property unless it has executed
the option to purchase the Mineral Property in accordance with Section 2 above.

        3.2 Conduct of Work. Delta shall perform its activities on the Mineral
Property in accordance with good mining practices, shall comply with the
applicable laws and regulations relating to the performance of exploration
operations on the Mineral Property, and shall comply with the applicable
worker's compensation laws of the State of Montana.

        3.3 Liability. During the term of the Agreement, Delta shall indemnify
and hold Owner harmless from any claims, demands, liabilities or liens arising
out of Delta's activities on the Mineral Property.

        3.4 Liens. Delta shall keep the Mineral Property free and clear from any
and all mechanics' or laborers' liens arising from labor performed on or
material furnished to the Mineral Property at Delta's request.

        3.5 Installation of Equipment. Delta may install, maintain, replace, and
remove during the term of this Agreement any and all machinery, equipment,
tools, and facilities which it may desire to use in connection with its
exploration activities on the Mineral Property. Upon termination of this
Agreement for any reason, Delta shall have a period of ninety (90) days
following such termination during which it may remove all or part of the above
items at its sole cost and expense. Any equipment remaining on the Mineral
Property after ninety (90) days shall become property of Owners.

        3.6 Acquisition of Permits. Delta shall acquire all federal, state and
county permits required for its operations. In the event that Delta is required
to post a reclamation bond, the bond will revert to Delta upon satisfactory
completion of the reclamation program.

                                  SECTION FOUR
                               Inspection by Owner

        During the term of this Agreement, Owner, or their authorized agents or
representatives, shall be permitted to enter upon the Mineral Property for the
purpose of inspection. Owners shall enter upon the Mineral Property at their own
risk and so not to hinder unreasonably the operations of Delta. Owners shall
indemnify and hold Delta harmless from any damage, claim, or demand by reason of
injury to Owners or their agents or representatives on the Mineral Property or
the approaches thereto.

                                       -3-

<PAGE>

                                  SECTION FIVE
                                      Taxes

        Delta shall pay all taxes levied or assessed upon any improvements
placed on the Mineral Property by Delta. Upon termination of this Agreement for
any reason, taxes shall be paid by Delta for the remaining portion of the
calender year. However, Owner shall not be liable for taxes on any tools,
equipment, machinery, facilities, or improvements placed upon the Surface unless
Delta fails to remove them within the time provided by this Agreement.

                                   SECTION SIX
                             Termination and Default

        6.1 Termination. Delta shall have the right to terminate this Agreement
at its sole discretion at any time upon written notice to Owners. Upon
termination, Owners shall retain all payments previously made as liquidated
damages and this Agreement shall cease and terminate. Delta will also deliver a
Quitclaim Deed to Owners.

        6.2 Default. If Delta fails to perform its obligations under this
Agreement and in particular fails to make any payment due to Owners hereunder,
Owners may declare Delta in default by giving Delta written notice of default
which specifies the obligation(s) which Delta has failed to perform. If Delta
fails to remedy or satisfactorily respond to a notice of default within sixty
(60) days, Owners may terminate this Agreement and Delta shall peaceably
surrender possession of the Mineral Property to Owners. Notice of termination
shall be in writing and served in accordance with this Agreement.

        6.3 Obligations Following Termination. In the event of voluntary or
involuntary termination, Delta shall surrender possession of the Mineral
Property to the Owners and shall have no further liability or obligation under
this Agreement except for its obligation (1) to pay its apportioned share of
taxes, as provided for in Section Five, (2) to pay the cost of removal of all
equipment, (3) to fulfill its reclamation responsibility, and (4) to satisfy any
accrued obligations or liabilities, and (5) to satisfy any other obligation
imposed by this agreement or by law.

               F.      Upon termination of this Agreement, except termination
                       upon Delta's exercise of the Option, Delta will provide a
                       copy of all drilling logs, assays, maps and other factual
                       data which Delta has prepared in connection with its
                       exploration and development of the Mineral Property under
                       this Agreement.

                                  SECTION SEVEN
                              Notices and Payments

        7.1 Notices. All notices to Delta or Owners shall be in writing and
shall be sent certified or registered mail, return receipt requested, to the
addresses below. Notice of any change in address shall be given in the same
manner.

                                       -4-

<PAGE>

        TO Owners:       William & David Lewis
                       --------------------------------
                         100 Fountain Terrace Dr.
                       --------------------------------
                         Lewiston, MT 59457
                       --------------------------------

        TO Delta:      Peter C. Ellsworth, Director
                       Delta International Mining and Exploration, Inc.
                       P.O. Box 7495
                       Missoula, MT 59807

        7.2 Payments. All payments shall be in U.S. currency payable to Owners
at the address above.

                                  SECTION EIGHT
                                   Assignment

        Delta may assign this Agreement at any time, in whole or in part, upon
the prior notification to Owners. Owners, prior to conveying their interest
under this Agreement to any other party, shall first offer Delta a 60-day
opportunity to acquire Owners' interests on the same terms and conditions
offered by a third party

                                  SECTION NINE
                                Warranty of Title

        9.1 Warranty. Owner warrants and represents that they are the owners of
the Mineral Property and Surface as described; that Owners have created no Liens
or encumbrances affecting the Mineral Property; and that Owners have and will
continue to have the right to commit the Mineral Property and Surface to this
Agreement.

        9.2 Examination of Title Documents. Promptly after execution of the
Option to Purchase section of this Agreement, Owners shall deliver to Delta
available copies of all documents bearing upon Owners' title, interest, and
ownership in the Mineral Property. Delta may then undertake such further
investigation of the title and status as Delta shall deem necessary. If that
investigation should reveal defects in the title, Delta agrees to proceed
forthwith to cure the title defects to their own satisfaction.

        9.3 Additional Interest. If Owners acquire an interest in the mineral
estate, which is greater than the estate therein at the signing of this
Agreement, Delta shall proportionately increase the terms of this agreement,
upon receipt of documents officially indicating such increase in ownership of
the mineral estate, including but not limited to, any and all mineral royalties.

                                   SECTION TEN
                            Miscellaneous Provisions

        10.1 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective heirs, executors,
administrators, successors, and assigns.

                                       -5-

<PAGE>

        10.2 Applicable Law. The terms and provisions of this Agreement shall be
interpreted in accordance with the laws of the State of Montana.

        10.3 Entire Agreement. This Agreement terminates and replaces all prior
agreements, either written, oral or implied, between the parties hereto, and
constitutes the entire agreement between the parties.

        10.4 Recording Memorandum of Agreement. The parties hereto agree to
execute a Memorandum of this Agreement (short form) for the purpose of recording
same in the records of Petroleum County, Montana so as to give public notice,
pursuant to the laws of the State of Montana, of the existence of this
Agreement.

        10.5 Void or Invalid Provisions. If any term, provision, covenant or
condition of this agreement, or any application thereof, should be held by a
court of competent jurisdiction to be invalid, void or unenforceable, all
provisions, covenants and conditions of this Agreement, and all applications
there of not held invalid, void or unenforceable, shall continue in full force
and effect and shall in no way be affected, impaired, or invalidated thereby.

        10.6 Time of the Essence. Time is of the essence of this Agreement and
each and every part thereof.

        10.7 Confidentiality. All reports and data provided by Delta to Owners
shall be held in strictest confidence, and Owners shall not disclose such
information without Delta's prior written consent.

                                 SECTION ELEVEN
                                  Surface Owner

        11.1 Surface Owner. The Surface Owner now wishes to enter into this
agreement giving Delta the exclusive right to Lease so much of the surface as is
needed and/or required to explore for, mine, produce and remove the Mineral
Property, as defined above in A. In consideration for the right to use so much
of the surface as is needed and/or required, Delta will pay Surface Owners
$20.00 per acre per year for grazing land and $50.00 per acre per year for crop
land taken out of production until the time Delta reclaims the land to its
original productivity. Delta also agrees to pay Surface Owners $1,000.00 per
acre for crop land and $500.00 per acre for grazing land as compensation for any
land taken out of permanent grazing or farming production.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.

Owners:

  /s/  William W. Lewis                                /s/ David W. Lewis
-----------------------------                         --------------------------
William W. Lewis                                      David W. Lewis

                                Delta International Mining and Exploration, Inc.

                                By:    /s/ Peter Ellsworth
                                     -------------------------------------------
                                       Peter C.  Ellsworth, Director

                                       -6-

<PAGE>

STATE OF MONTANA        )
                        )ss:
COUNTY OF FERGUS        )

        On this 7 day of October, in the year 1999, before me, a Notary Public
in and for said state, personally appeared Peter C. Ellsworth, who is Director
of Delta International Mining and Exploration, Inc., personally known (or
proved) to me to be the person who executed the above instrument, and
acknowledged to me that he executed the same for purposes stated therein.

                                        /s/  Cindie L. Fitch
                                      -----------------------------------------
                                      Notary Public
                                      My Commission Expires    Nov. 15, 2002
                                                             ------------------

STATE OF MONTANA        )
                        )ss:
COUNTY OF FERGUS        )

        On this 7 day of October, in the year 1999, before me, a Notary Public
in and for said state, personally appeared William W. Lewis, who is the Trustee
of the William W. Lewis Equity Trust, personally known (or proved) to me to be
the person who executed the above instrument, and acknowledged to me that he
executed the same for purposes stated therein.

                                        /s/  Cindie L. Fitch
                                      -----------------------------------------
                                      Notary Public
                                      My Commission Expires    Nov. 15, 2002
                                                             ------------------

STATE OF MONTANA       )
                       )ss:
COUNTY OF FERGUS       )

        On this 7 day of October, in the year 1999, before me, a Notary Public
in and for the county of Fergus, State of Montana, duly commissioned and sworn,
personally appeared David W. Lewis, who acknowledged to me that he executed the
above Mining Exploration and Option Agreement.

                                        /s/  Cindie L. Fitch
                                      -----------------------------------------
                                      Notary Public
                                      My Commission Expires    Nov. 15, 2002
                                                             ------------------

                                       -7-<PAGE>

                                                                    EXHIBIT 10.7

                                                                          DS-470
                                                                    Revised 1/99

                                STATE OF MONTANA

                    METALLIFEROUS MINERAL OR GEM MINING LEASE

                                  NO. M-1947-99

        This indenture of lease made and entered into by and between the State
of Montana, acting through its State Board of Land Commissioners, hereinafter
referred to as lessor, and the person, persons, company or corporation herein
named and hereinafter referred to as lessee, under and pursuant to the terms and
provisions of Part 1, Chapter 3, Title 77, MCA, as amended and rules adopted
pursuant thereto,

        The lessor, in consideration of the annual rentals provided for herein,
the royalties to be paid, and the covenants to be kept and performed by the
lessee, leases to the lessee for the purpose of mining metalliferous minerals
and or gems as described below, all the lands described as follows:

Date this lease takes effect:  JUNE 21, 1999

Name of Lessee:  PETER C. ELLSWORTH                   Address: 265 BENTON AVENUE
                                                             MISSOULA, MT  59801

Land Located in  PETROLEUM                            County:

Description of Land:     TOWNSHIP 15 NORTH, RANGE 25 EAST
                         --------------------------------
                         SECTION 30: SE1/4

<TABLE>
<S>                                                                                   <C>
Total number of acres    160.00     , more or less, belonging to     UNIVERSITY       Grant.
</TABLE>

Minerals authorized to be mined:    SAPPHIRES, DIAMONDS, AND ASSOCIATED GOLD

Royalty:      5% PLUS AN ANNUAL ADVANCE ROYALTY OF $250.00

Bond:         $1,000.00

        To have and to hold these premises unto said lessee and successors,
legal representatives or assigns, for the primary term of' ten (10) years, and
as long thereafter as the minerals hereinabove designated are being produced in
paying quantities from said premises, the royalties and rents provided for
herein are being paid, and all other obligations are fully kept and performed.

        It is mutually understood, agreed and covenanted by and between the
parties to this lease as follows:

        1. The lessor expressly reserves the right to lease, sell, or otherwise
dispose of the surface of the lands hereby leased, under existing law or laws
hereafter enacted, insofar as the surface is not necessary for the use of the
lessee in connection with operations under this lease; and lessee agrees to
comply with all statutory requirements, rules, and regulations thereunder made
by the lessor if the lands embraced hereby have been or shall hereafter be sold,
leased, or disposed of.

        2. The lessee shall pay to the lessor an annual money rental in the
amount of $ 1.00 per acre for the first three year period, $2.50 per acre for
the next two years, and thereafter annually $3.00 per acre. This is in addition
to any bonus which may be required as a condition of obtaining the lease.

        3. Lessee shall prospect and explore with minimum disturbance to the
surface of the land which is required to adequately explore the property. All
mining operations shall be conducted in such a manner as to protect property and
resources from disturbance which is not reasonably necessary in order to
efficiently and economically remove the mineral deposit.

<PAGE>

        4. The lessee shall obtain the consent of the Department of Natural
Resources and Conservation before cutting any timber upon this land for use in
their operations; and shall pay the lessor the customary charges made by the
lessor for timber thereafter cut.

        5. The lessee shall not assign this lease without the consent of the
lessor.

        6. The lessee shall cover or enclose all shafts, mines or openings of
any kind in such manner as to remove danger to human beings or livestock.

        7. The lessee shall fully comply with all applicable state and federal
laws, rules and regulations, including but not limited to those concerning
safety, environmental protection and reclamation. The lessee shall conduct and
reclaim the operation in accordance with the performance and reclamation
standards of applicable mine reclamation laws. The exemption of lessee's
operations from applicable reclamation laws does not relieve the lessee from the
obligation to conduct and reclaim the operations in accordance with the
performance and reclamation standards of those laws. All disturbances must be
reclaimed prior to release of any bond.

        8. If the surface of the land has been sold or leased prior to issuance
of this lease. the mineral lessee shall be responsible for damages to the
surface, the leasehold interest and any improvements.

        9. The lessee shall furnish to the Department of Natural Resources and
Conservation, upon request, but not more than once each calendar year an
exploration and development report. The report shall include a description of
any work completed to date, a plat showing the location of any work and shall
include a complete geologic log and electric log (if done) of any test holes.

        10. The lessee shall have the right at the termination of any rental
year, by giving at least thirty (30) days previous notice in writing to the
Director of Natural Resources and Conservation, to surrender and relinquish this
lease and thereupon be discharged from any obligation not theretofore accrued.

        11. At the termination of this lease, for any cause, the lessee shall
immediately surrender the premises and shall, within sixty (60) days, remove
machinery, tools or equipment that the lessee may have placed thereon.

        12. The lessee shall pay a royalty in cash unless the lessor requests
that it be delivered in kind. The royalty rate as specified above shall be based
upon the applicable percentage of returns from the metalliferous minerals or
gems being mined but in no case shall be less than 5 percent of the fair market
value of the metalliferous minerals or gems recovered. The returns are defined
as the net amount received by the shipper after deducting reasonable
transportation costs to the closest feasible point of sale, smelting charges and
deductions and other treatment costs, not including as a deduction any cost of
producing or treating at the mine. The fair market value is the value of the
minerals or gems in raw crude form as recovered at the mine site.

        13. The lessee shall, upon commencement of mining, make a report on or
before the last day of each quarter concerning the operations for the latest 3
months for which records are available but in no case more than 3 months
preceding the report. The report shall be on the form prescribed by the
department and shall provide sufficient information to determine the royalty as
well as any other pertinent information requested by the department. The royalty
for the quarter reported shall accompany the report.

        14. The lessee has filed a bond with the lessor in the penal sum as
specified above, conditioned upon compliance with all lease terms and in order
to protect the rights of any prior purchasers or surface lessees. Additional
bonds may be required at any time during the period of the lease.

        15. The lease is subject to cancellation for failure to comply with the
terms of the lease, applicable state statutes concerning metalliferous and gem
leases and rules enacted pursuant to those statutes, as amended. The lessee
shall be notified of any failure to comply and allowed a reasonable time to
comply. If the lessee fails to comply within a reasonable time, the lease shall
be canceled.

        16. All the terms and conditions hereof which are applicable to the
lessee shall likewise be applicable to the heirs, executors, administrators,
assigns, and other successors in interest of the lessee to the same extent as
though they had been specifically mentioned in connection with each of such
terms and conditions and the provisions of this lease shall be binding upon and
inure to the benefit of such heirs, executors, administrators, assigns and other
successors in interest of the lessee.

        17. Special conditions:

                               SEE ATTACHMENT 'A'

                                       -2-

<PAGE>

        IN WITNESS WHEREOF, the State of Montana and the lessee have caused this
lease to be executed in duplicate and the Director of the Department of Natural
Resources and Conservation, pursuant to the authority granted him by the State
Board of Land Commissioners of the State of Montana, has hereunto set his hand
and affixed the seal of the Board of Land Commissioners this _____ day of August
31, 1999, year of ______.

 /s/ Arthur R. Clinch
--------------------------------------
ARTHUR R. CLINCH
Director of the Department of Natural
Resources & Conservation

                                              /s/ Peter Ellsworth
                                             -----------------------------------
                                                             Lessee
                                                      PETER C. ELLSWORTH
                                             Address: 265 BENTON AVENUE
                                                     ---------------------------
                                                       MISSOULA, MT 59802

                                       -3-

<PAGE>

                                                             Lease No. M-1947-99
                                                                   -------------

                                 ATTACHMENT "A"

ANNUAL REPORT

1.      Lessee shall submit to the Department of Natural Resources and
        Conservation a verified report showing in detail what work the lessee
        has done and performed under this lease during the preceding year and
        the location and character of the same, a plat showing all development
        work and improvements on the leased lands, and shall furnish such
        additional information relating thereto as the Director shall require,
        and in case it is advisable to prospect by test holes or other testing
        methods an itemized statement of actual cost of testing, location of
        test holes and other relating information with a report as to all
        buildings, structures or other work placed in or upon leased lands,
        together with a statement as to the amount and grade of minerals and/or
        gems produced and sold and the amount received therefor by operations
        hereunder.

OPERATING PLAN

2.      If the Lessee intends to conduct mining and/or milling activities or
        exploration activities, including road building, trenching, dumping, or
        other activities which result in land disturbance on the leased
        premises, it shall submit to the Department of Natural Resources and
        Conservation, Minerals Management Bureau two copies of an Operating Plan
        or Amendment to an existing Operating Plan, describing its proposed
        activities. No activities shall occur on the tract until an Operating
        Plan or Amendments have been approved, in writing, by the Minerals
        Management Bureau. The Plan or Amendment shall include the following:

        a.      A complete description of each activity planned, locations of
                each activity, scheduled starting date, and expected duration on
                each.

        b.      Maps (1:24,000 scale or larger) showing use and/or
                reconstruction of existing access routes, the location of
                proposed new road construction, pipelines, utilities and other
                uses and improvements.

        c.      Drawings showing road construction plans, including width,
                drainage, cut/fill slopes and other details, as well as detailed
                topographic drawings showing mine and/or mill site development
                and layout, and water supply and disposal system.

        d.      Plans, to include resource protection measures for mining,
                milling, waste disposal, sanitation, wildfire prevention, soil
                erosion and air and water pollution; emergency actions covering
                mining or milling related spills; and land reclamation
                procedures.

        e.      Other information necessary for the Department to assess
                probable impacts upon surface and other resources.

        Submittal of plans of operation to other departments and Divisions of
        State Government including but not limited to the Environmental
        Management Bureau of the Department of

<PAGE>

        Environmental Quality does not satisfy this provision. Original copies
        of all plans, maps and amendments must be delivered by the lessee
        hereunder to the Minerals Management Bureau.

ACTIVITIES MAY BE DENIED

3.      The Department reserves the right to deny all activity that would result
        in material disturbance to the leased premises.

RECORDS

4.      Representatives of the Lessor shall at all reasonable times have the
        right to enter into and upon the premises and all of the workings and
        shafts and tunnels or buildings thereon and all parts thereof for the
        purpose of inspecting and examining the same.

        The lessee agrees to keep books of account showing the amount of
        metalliferous minerals and/or gems extracted from the leased lands; the
        amount of such minerals and/or gems produced, saved, treated, shipped or
        marketed collectively or individually; and the amount of money received
        from the sale of the minerals and/or gems or the value extracted from
        them; and from and out of the values extracted from them.

        Representatives of the Lessor shall also at all reasonable hours have
        free access to all books, accounts, records and papers of the Lessee
        insofar as they shall relate to the production of the mineral for which
        this lease is issued, or the price received therefore or any agreements
        relating thereto.

REMOVAL OF GEMS AND/OR MINERALS

5.      The lessee shall not, during the prospecting period or any continuation
        thereof, remove any metalliferous minerals and/or gems from the leased
        premises except as may be permitted by the Department. When the lessee
        has discovered metalliferous minerals and/or gems in commercial
        quantities he shall notify the Director of the Department that the
        prospecting period is terminated, and request permission to dispose of
        the metalliferous minerals and/or gems as provided in this lease.

FINANCIAL AGREEMENTS

6.      All contracts made in relation to the mineral interest granted herein,
        such as but not limited to, assignments, subleases, joint ventures,
        overriding royalties, operating agreements, project financing, back-in
        rights, or other similar agreements, whether verbal or written between
        the lessee herein and any other person or corporation must be approved
        by the Director. The Department reserves the right to deny any agreement
        that may impair the productive capability of the trust asset. It will be
        the Department's sole discretion whether the proposed agreement is
        approved. The Department may consider payment of a reasonable
        compensatory bonus as adequate mitigation for the proposed agreement.

                                       -2-

<PAGE>

DILIGENCE

7.      The lessee agrees to commence actual prospecting operations under the
        land embraced herein promptly after the execution of this lease and
        thereafter diligently prospect, develop and mine in or upon the leased
        land unless consent to suspend operations temporarily is granted by the
        Department annually.

ADVANCE ROYALTY

8.      In addition to the yearly rental, lessee shall pay an advance minimum
        royalty of $250.00 per year. This amount is payable each year on the
        anniversary date of this lease. This minimum royalty is not refundable
        in the event that actual production royalty is less than $250.00 per
        year. In the event such actual production royalty is greater, lessee is
        obligated to pay the greater amount.

RENT AND ROYALTY REVIEW

9.      The rate of the rental shall be reviewed at the end of each five (5)
        year period of the lease, and may be adjusted at such time at the
        discretion of the Department.

        The rate of royalty and any advance royalty shall be reviewed at the end
        of each five (5) year period of the lease, and may, after negotiation
        between lessor and lessee be adjusted at such time.

WATER RIGHTS

10.     Lessee may not interfere with any existing water right owned or operated
        by any person. Lessee shall hold Lessor harmless against all claims,
        including attorney fees, for damages claimed by any person asserting
        interference with a water right.

WASTE PROHIBITED

11.     All mining operations shall be done in good and workmanlike manner in
        accordance with approved methods and practices using such methods to
        insure the extraction of the greatest amount of mineral, having due
        regard for the prevention of waste of the minerals developed on the
        land, the protection of the environment and all natural resources, the
        preservation and conservation of the property for future uses, and for
        the health and safety of workmen and employees. If the Lessor has
        reasonable belief that the operations are not so being conducted, he
        shall so notify the lessee in writing, and if compliance is not promptly
        obtained and the delinquency fully satisfied, the Lessor may at its
        option, after thirty (30) days notice by registered mail to the Lessee,
        cancel the lease.

                                       -3-

<PAGE>

SURRENDER OF DATA

12.     All geological data, including reports, maps, logs and other pertinent
        data regarding Trust resources shall be given to the Department upon
        surrender or expiration of the lease. Bond will not be released until
        surrender of such data to the Department. All drill core and/or splits
        of drill cuttings shall be saved. Upon surrender or expiration of the
        lease lessee will contact the Department for instructions on the
        required disposition of drill core and/or cuttings.

STREAMBED PRESERVATION

13.     Prior to the commencement of any activities within the ordinary high
        water mark of perennial streams on the leased premises, the lessee shall
        obtain a 310 Permit, if required, from the appropriate Conservation
        District. A copy of such permit shall be submitted to the Department.

FIELD NOTIFICATION

14.     The Department of Natural Resources and Conservation Unit Manager (or
        his representative) who may be contacted regarding matters pertaining to
        the leased premises is:

        Unit Manager, Lewistown Unit Office, DNRC, Suite E, 613 NE Main Street,
        Lewistown, MT 59457-1020 Phone (406) 538-7789

        The lessee shall also contact the surface lessee, Teigen Land &
        Livestock Co., Box 1 Hwy 200, Teigen, MT 59084, prior to entry onto any
        portion of the leased area. Any problems or questions regarding access
        to the described property must be addressed prior to entry upon the
        property, except that reasonable access for the purpose herein described
        may not be withheld pending resolution.

WEED CONTROL

15.     Lessee shall be responsible for controlling any noxious weeds introduced
        by Lessee's activity on State-owned land and shall prevent or eradicate
        the spread of noxious weeds onto land adjoining the leased premises. The
        Lessee's methods of control must be reviewed by the Department's Area
        Field Office that has jurisdiction for that locale.

CONFIDENTIALITY WAIVED

16.     The Lessee is required to contact the Department of Environmental
        Quality regarding requirements of the Hard Rock Act prior to the
        commencement of any activities on the leased premises. In order to
        provide the Department of Natural Resources and Conservation with
        information regarding exploration activities important to Trust
        resources and to protect the confidentiality of the Lessee's exploration
        activities, the Lessee hereby agrees that the Trust Lands Management
        Division staff are hereby authorized to review any records pertaining to
        Small Miners Exclusion Statement and/or Exploration License obtained by
        the Department of Environmental Quality.

                                       -4-

<PAGE>

SPECIAL CONDITIONS

17.     DNRC-Trust Land Management Division (TLMD) will complete an initial
        review for cultural resources and, where applicable, paleontological
        resources of the area intended for disturbance and may require a
        resources inventory. Based on the results of the inventory, the TLMD may
        restrict surface activity for the purpose of protecting significant
        resources- located on the lease premises.

        Vehicular traffic is restricted to existing roads and to periods when
        the soil moisture is low enough (generally below 20 percent) to prevent
        rutting unless otherwise authorized by TLMD.

        All vehicles and equipment must be washed, particularly the underside,
        prior to entry onto the property to minimize the spread of noxious
        weeds.

        Material disturbed in emplacing exploration sampling holes will be
        replaced in the holes immediately on completion of sampling.

        Soil disturbance within 100 feet of springs, wetlands, and/or the
        ordinary high water mark of streams is not permitted without prior
        approval by the Department of Natural Resources and Conservation, Trust
        Land Management Division.

        Shrub or brush removal is not permitted without prior approval by the
        Department of Natural Resources and Conservation, Trust Land Management
        Division.

NON-WARRANTY OF TITLE

18.     Regardless of any of the above provisions of the said lease, actual or
        implied, the State of Montana does not warrant title to its lands.

                                                     /s/  Peter Ellsworth
                                                    ----------------------------
                                                    PETER C. ELLSWORTH

                                       -5-

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