Document:

ARTICLES OF MERGER
                                       OF
                             WINCHESTER MINING CORP.
                            (A DELAWARE CORPORATION)
                                       AND
                             HI-PLAINS ENERGY CORP.
                             (A WYOMING CORPORATION)

     The  Undersigned,  being,  and the President of  Winchester  Mining Corp. a
Delaware corporation, hereby certify as follows:

1.   A merger has been approved by the boards of directors of Winchester  Mining
     Corp.,  a  Delaware   corporation   (the  parent)  and  its,  wholly  owned
     subsidiary,  Hi-Plains Energy Corp., a Wyoming  corporation,  by resolution
     dated May 13, 2000.

2.   Winchester  Mining Corp.  is the Parent and  Hi-Plains  Energy Corp. is the
     wholly owned subsidiary.

3.   No vote of Shareholders is necessary because 100% of the outstanding shares
     of Hi-Plains Energy Corp.  consisting of 780,000 common shares are owned by
     Winchester Mining Corp. and

     a) The  corporation,  Winchester  Mining Corp. is the sole survivor and the
name of the  corporation  will be changed to PNW Capital  Corp. by Amendments to
the Articles of Incorporation.

     b)  The  Articles  of  Incorporation  will  not  differ  from  Articles  of
Incorporation prior to merger, except as to a name change

     c) Each  shareholder  of the  corporation  whose  shares  were  outstanding
immediately before the effective date of the merger will hold the same number of
shares,  with  identical  designations,  preferences,  limitations  and relative
rights immediately after the effective date of the merger.

     d) The voting power of the number of shares  outstanding  immediately after
the merger will not be changed from that  existing  prior to the merger since no
shares are being issued as a result of the merger.

     e) The number of participating  shares  outstanding  immediately  after the
merger is the same as immediately  before the merger and there will be no change
in shares.

     f) The Board of  Directors  of each  corporation  has adopted a  resolution
approving the Plan of Merger, which is attached hereto as Exhibit A.

4.   The merger shall be effective on May 13, 2000 or as soon  thereafter as the
     Articles of Merger are filed with the Secretary of State of Delaware.

Winchester Mining Corp.                     Hi-Plains Energy Corp.

By: /s/Wayne Miller                     By: /s/M.A. Littman
_____________________                   ________________________
President                               M.A. Littman as Attorney-in Fact
                                         for Z.S. Merritt, President

<PAGE>

                  * * * * * * * * * * * * * * * * * * * * * * *

State of Vancouver, B.C.             )
                                     ) ss.
County of ______________________     )

         On this 15th day of May, 2000, before me, a Notary Public,  personally
appeared Wayne Miller as President of Winchester  Mining Corp.,  and executed on
this date the  foregoing  instrument  for the  purposes  therein  contained,  by
signing on behalf of the above named corporations as a duly authorized officer.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

         My Commission Expires:

                                             /s/
                                            ------------------------------
                                            Notary Public

                                            Residing at: ____________________

State of Colorado                    )
                                     ) ss.
County of Jefferson                  )

         On this 15th day of May, 2000, before me, a Notary Public,  personally
appeared  M.A.  Littman as  Attorney-in-Fact  for Z.S.  Merritt as  President of
Hi-Plains  Energy Corp.  and executed on this date the foregoing  instrument for
the  purposes  therein  contained,  by  signing  on behalf  of the  above  named
corporations as a duly authorized officer.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

         My Commission Expires:

                                             /s/Jodie L. Ball
                                            ------------------------------
                                            Notary Public

                                            Residing at: Jefferson County, COEXHIBIT A

                                 PLAN OF MERGER

         THIS PLAN OF MERGER (this "Plan of Merger"),  dated as of May 12, 2000,
is among PNW Capital,  Inc., a Delaware  corporation  ("Parent"),  and Hi-Plains
Energy Corp., a Wyoming corporation (the "Company")  (collectively  "Constituent
Corporations").

          WHEREAS, Parent owns 100% of the shares of the Company and the parties
thereto have agreed to the merger of the Company with and into Parent; and

          WHEREAS,   Parent,  as  the  sole  shareholder  of  Company  and,  the
respective  Boards of Directors of Parent and the  Company,)  have each approved
the merger of the Company into Parent in  accordance  with the Delaware  General
Law and

         WHEREAS,  this Plan of Merger  shall be filed with  Articles  of Merger
with the Secretaries of State of Delaware and Wyoming in order to consummate the
merger of the Company with and into Parent; and

          WHEREAS,  Parent and the Company  have agreed to execute and file this
Plan of Merger as provided under the Delaware Law and the Wyoming Statutes.

          NOW,  THEREFORE,  in  consideration  of the  premises  and the  mutual
covenants herein contained, Parent and the Company hereby agree as follows:

         1. THE MERGER.  At the Effective  Time, in accordance with this Plan of
Merger,  and Delaware Law and the Wyoming Statutes,  the Company shall be merged
(such merger being herein referred to as the "Merger") with and into the Parent,
the separate  existence of the Company shall cease, and Parent shall continue as
the surviving  corporation.  Parent hereinafter  sometimes is referred to as the
"Surviving Corporation."

          2.  EFFECT OF THE  MERGER.  When the  Merger  has been  effected,  the
Surviving  Corporation  shall change its name to "PNW  Capital,  Inc.";  and the
Surviving  Corporation  shall  thereupon and thereafter  possess all the rights,
privileges,  powers and  franchises of a public as well as of a private  nature,
and be subject to all the  restrictions,  disabilities and duties of each of the
Corporations;   and  all  and  singular,  the  rights,  privileges,  powers  and
franchises  of each of the  Constituent  Corporations  and all  property,  real,
personal and mixed,  and all debts due to either of the Corporations on whatever
account,  as well for  stock  subscriptions  as all  other  things  in action or
belonging  to  each  of such  corporations  shall  be  vested  in the  Surviving
Corporation;  and all property, rights,  privileges,  powers and franchises, and
all and every other interest shall be thereafter as effectually  the property of
the Surviving Corporation as they were of the Constituent Corporations,  and the
title to any real estate vested by deed or otherwise, in any of such Constituent
Corporations,  shall  not  revert  or be in any way  impaired  by  reason of the
Merger;  but all rights of  creditors  and all liens upon any property of any of
said  Constituent  Corporations  shall be preserved  unimpaired,  and all debts,
liabilities  and  duties  of  the  respective  Constituent   Corporations  shall
thenceforth attach to the Surviving Corporation,  and may be enforced against it
to the same extent as if said debts, liabilities and duties had been incurred or
contracted by it.

<PAGE>

         3. CONSUMMATION OF THE MERGER. The parties hereto will cause the Merger
to be  consummated by filing with the Secretary of State of Delaware and Wyoming
an articles  of merger and this Plan of Merger in such form as required  by, and
executed in accordance with, the relevant provisions of the Delaware Law and the
Wyoming  Statutes  (the time of such filing being the  "Effective  Time" and the
date of such filing being the "Effective Date").

          4. ARTICLES OF INCORPORATION: BYLAWS: DIRECTORS AND OFFICERS. The
Articles  of  Incorporation  and bylaws of the  Surviving  Corporation  shall be
identical  with the  Articles  of  Incorporation  and bylaws of the Parent as in
effect  immediately  prior to the  Effective  Time until  thereafter  amended as
provided therein and under Delaware Statues.

          5. CONVERSION OF SECURITIES.  At the Effective Time, by virtue of the
Merger and without  any action on the part of Parent,  the Company or the holder
of any of the shares (the "Shares") of common stock, (the "Common Stock") of the
Company:

          (a)  Each  Share  issued  and  outstanding  immediately  prior  to the
Effective  Time shall  remain as issued and  outstanding  common stock of parent
without change.

          (b) Each Share  which is held in the  treasury of the Company or which
is owned by any direct or indirect  subsidiary  of the Company shall be canceled
and retired, and no payment shall be made with respect thereto.

          (c) Each  outstanding  or authorized  subscription,  option,  warrant,
call, right (including any preemptive right),  commitment, or other agreement of
any character  whatsoever which obligates or may obligate the Parent to issue or
sell any additional  shares of its capital stock or any  securities  convertible
into or evidencing the right to subscribe for any shares of its capital stock or
securities  convertible  into or  exchangeable  for such shares,  if any,  shall
remain unchanged.

          (d) Each  share of Common  Stock of  Company  issued  and  outstanding
immediately  prior to the Effective Time shall be retired into treasury,  of the
Surviving Corporation.

          (e)     No  Fractional  Shares  and no  certificates  or scrip
representing  such  fractional  Merger Shares, shall be issued.

<PAGE>
         6. TAKING OF NECESSARY ACTION:  FURTHER ACTION. Each of Parent, and the
Company  shall use all  reasonable  efforts  to take all such  actions as may be
necessary or  appropriate  in order to effectuate  the Merger under the Delaware
Law,  the Wyoming  Statutes or federal law as promptly as  possible.  If, at any
time after the Effective  Time,  any further action is necessary or desirable to
carry out the purposes of the Agreement  and to vest the  Surviving  Corporation
with  full  right,  title  and  possession  to  all  assets,  property,  rights,
privileges, powers and franchises of either of the Constituent Corporations, the
officers and directors of the Surviving  Corporation are fully authorized in the
name of their  corporation or otherwise to take, and shall take, all such lawful
and necessary action.

IN WITNESS WHEREOF,  Parent,  and the Company have caused this Plan of Merger to
be executed as of the date first above written.

                            WINCHESTER MINING CORP.
                            (A Delaware corporation)

                            By:/s/Wayne Miller
                              _______________________________
                                    President

                            HI-PLAINS ENERGY CORP.
                            (A Wyoming corporation)

                            By:/s/M.A. Littman
                              __________________________
                            M.A. Littman as Attorney-in-Fact for Z.S. Merritt,
                            President of Hi-Plains Energy Corp.

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