Document:

<PAGE>
                                                                               1

       THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
       TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "****" AND HAS
       BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION."

                                                                    EXHIBIT 4.23

                         PINE VALLEY MINING CORPORATION

                                   BCOL-C-0219

THIS CONFIDENTIAL TRANSPORTATION AGREEMENT ("Contract") is made as of the 8th
day of June, 2004 and is

BETWEEN:

                    BC RAIL PARTNERSHIP, a partnership having no general
                    partner, comprised of BC Rail Ltd., BCR Properties Ltd., and
                    British Columbia Railway Company pursuant to a partnership
                    agreement dated December 5, 1997

                    ("BCOL")

AND:

                    FALLS MOUNTAIN COAL INC.

                    ("Customer")

WHEREAS, the Customer, a wholly-owned subsidiary of Pine Valley Mining
Corporation, requires freight service from and to its Willow Creek Coal Mine
located at Falls, British Columbia (herein called the "Mine" or "Origin").

WHEREAS, BCOL wishes to provide freight service for the Customer.

NOW THEREFORE, the Customer and BCOL (the "Parties" and each a "Party") agree as
follows:

1.       EFFECTIVE DATE AND TERM

         Notwithstanding its actual execution date, this Contract shall take
         effect upon the first to occur of the 2004 start of production at the
         Mine and the 1st day of July 2004, and shall remain in effect until the
         30th day of June 2009 ("Contract Period").

2.       TRANSPORTATION SERVICE AND CHARGES

A.       This Contract specifies the terms and conditions applicable to the
         transportation by BCOL of products specified in Schedule 1 to this
         Contract (the "Commodity") from the Origin to each destination
         described in Schedule 1 to this Contract.

B.       The Customer represents to BCOL that it controls the transportation of
         the Commodity covered by this Contract and it agrees to ship the
         Commodity in accordance with the terms and conditions set forth herein.

<PAGE>

                                                                               2

3.       CUSTOMER TO ADVISE

         The Customer shall advise BCOL of the contract number when cars are
         released pursuant to this Contract or cause the shipper to advise BCOL
         of the contract number. The bill of lading and any other written
         documentation issued by the Customer in connection with the shipment of
         the Commodity under this Contract shall include the following statement
         - "Subject to BCOL Confidential Transportation Contract No.
         BCOL-C-0219"

4.       INCORPORATION BY REFERENCE

         This Contract incorporates by reference all tariffs, rules and
         regulations of BCOL that are applicable to the transportation of the
         Commodity by BCOL including, without limitation BCOL Tariff 750, except
         to the extent that such tariffs, rules and regulations are in conflict
         with this Contract. In the event of any conflict, the terms and
         conditions of the Contract shall govern.

5.       LIABILITY AND CLAIMS

         The liability of BCOL and any other railway used by BCOL as
         contemplated herein for any alleged loss, damage or delay to the
         Commodity shall be limited to that stated on the Bill of Lading or
         Bills of Lading respecting the shipment of the Commodity.

6.       CONFIDENTIALITY

         This Contract is confidential and shall not be disclosed to any third
         party except and to the extent as may be required by law, regulatory
         authority, or as consented to by BCOL. BCOL acknowledges that the
         Customer's parent corporation, Pine Valley Mining Corporation, is
         subject to certain disclosure obligations imposed by the policies of
         the TSX Venture Exchange and securities laws applicable to public
         companies in Canada and the United States, and agrees that,
         notwithstanding the provisions of this Contract, the Customer will not
         be in violation of this Contract as a result of any disclosure made by
         the Customer or Pine Valley Mining Corporation which, in the reasonable
         opinion of the Customer, is required to comply with such disclosure
         obligations.

7.       RESTRICTIONS

         Except as may be otherwise specifically provided for in Schedule 1 to
         this Contract, this Contract does not include any transit, diversion or
         reconsignment privileges and may not be used in combination with any
         transportation of the Commodity from any origin or destination other
         than as specified in Schedule 1.

8.       FORCE MAJEURE

A.       The Parties and any railway identified in Schedule 1 to this Contract
         shall not be liable for any failure to perform under this Contract
         while such performance is prevented or delayed by any cause or
         condition of Force Majeure, which is not within the control of the
         Party affected. The term "Force Majeure" shall include, but shall not
         be limited to, acts of God, act of public enemy, war, insurrection,
         authority of law, fire or explosion, lock-out, strike or other labour
         dispute, refusal of third party railway to accept interchange,
         derailment, damage to tracks, or any other causes not within the
         control of the Party affected.

B.       The Party affected by Force Majeure shall give to the other Party
         notice of:

         (i)   the Force Majeure, including a reasonable description and
               expected duration of the same, to the other Party within three
               (3) days, excluding weekends and holidays, following the
               occurrence of the Force Majeure condition;

         (ii)  any change in the expected duration of the Force Majeure
               condition, promptly following such a change coming to the
               attention of the affected Party; and

         (iii) the end of the Force Majeure condition within three (3) days,
               excluding weekends and holidays, following the end of the Force
               Majeure condition.

<PAGE>

                                                                               3

C.       Force Majeure shall not extend the Contract Period. Force Majeure may
         have the effect of reducing the commitments of the Parties to the
         extent specifically provided in this Contract.

9.       NOTICE

A.       Except as otherwise provided herein, notices shall be in writing and
         shall be delivered to the Party entitled to receive the same by
         personal delivery, or by registered or certified mail. Notices may be
         also communicated by any electronic means which can produce a written
         copy provided that acknowledgement of receipt of the electronic
         communication notice is obtained.

B.       Any notice given under this Contract shall be effective as of the date
         of delivery in the case of personal delivery, date of receipt in the
         case of notices sent by registered or certified mail, and as of the
         date of electronic transmission, in the case of notices given by
         electronic communication where receipt of the communication has been
         acknowledged.

C.       Notices shall be communicated to the Parties as follows:

                  If to BCOL:

                  BC Rail Ltd.
                  221 West Esplanade
                  North Vancouver, British Columbia
                  Canada
                  V7M 3J1
                  Attention:  Vice President, Marketing and Sales
                  Fax No.:    604-984-5367

                  If to the Customer:

                  Pine Valley Mining Corporation
                  Suite 501 - 535 Thurlow St.
                  Vancouver, B.C.
                  Canada
                  V6E 3L2
                  Attention: President
                  Fax No:    604-682-4698

         Or to such other person or address as either Party may designate by
         notice given in accordance with this Contract.

         Any communication relating to Force Majeure, or any matter of an
         emergency or operating nature, may be given be any reasonable means. If
         given verbally or by telephone, such communication shall, as soon as is
         reasonable in the circumstances, be confirmed in writing or if given by
         electronic communication, the Party receiving the electronic
         communication must specify if written confirmation is required.

10.      PLANT RATIONALIZATION

         If BCOL or any other railway specified in Schedule 1 to this Contract,
         pursuant to lawful authority, embargoes, abandons, sells or otherwise
         disposes of a line of railway or facility on which service is provided
         pursuant to this Contract, such embargo, abandonment, sale or other
         disposal shall not be deemed a breach of this Contract and the
         provisions of this Contract shall be inapplicable with respect to such
         line or facility on or after the date such line or facility is
         embargoed, abandoned, disposed of or sold.

<PAGE>

                                                                               4

11.      PAYMENT OF ACCOUNT

A.       Without in any way limiting any other provision of this Contract, BCOL
         will invoice the Customer weekly and the Customer will pay each invoice
         within seven (7) business days from receipt of that invoice, except to
         the extent such invoice is in good faith contested by the Customer. An
         interest rate equal to the prime lending rate of the Royal Bank of
         Canada for Canadian dollar commercial demand loans, as published from
         time to time, plus 2% per annum shall apply to all overdue amounts, and
         unpaid contested amounts which are subsequently determined to be
         correct.

B.       In the event, at anytime, the amount owing to BCOL hereunder shall
         exceed the credit limit established by BCOL and communicated to the
         Customer from time to time in total or the Customer shall become
         insolvent, then (1) BCOL may, at its election and without terminating
         this Contract, and without limiting any other right, remedy or claim it
         may have under this Contract or at law or in equity, suspend the
         provision of services under this Contract until full payment of the
         outstanding amount is received and seize any Commodity of the
         Customer's and hold or sell same in satisfaction of any amount
         outstanding to BCOL. If BCOL suspends services under this provision,
         then BCOL shall give three (3) days advance written notice to the
         Customer and, upon receipt of all payment as aforesaid, BCOL shall
         recommence service as quickly as reasonably possible unless BCOL has
         proceeded under Section 12 hereof; or (2) all amounts to BCOL
         outstanding, in the sole discretion of BCOL, shall become due on demand
         and BCOL may declare this Contract in default by the Customer.

12.      DEFAULT AND TERMINATION

A.       In the event of a material breach of this Contract by either Party or,
         without limiting the rights of BCOL set out in Section 11 hereof, upon
         any failure by the Customer to pay any amount when due hereunder, and
         after the Party suffering such breach gives the defaulting Party ten
         (10) calendar days' notice within which to remedy the breach, the Party
         suffering such breach may, without prejudice to any other rights or
         remedies that that Party may have, terminate this Contract, unless the
         defaulting Party has remedied the breach within the ten (10) day notice
         period to the reasonable satisfaction of the Party suffering the
         breach, or (excluding the payment of monies) such longer period as may
         be reasonable in the circumstances.

B.       If either Party commits an act of bankruptcy or has a receiver or
         liquidator appointed for its assets, then the other Party may, without
         prejudice to any other rights or remedies that that Party may have,
         terminate this Contract, by written notice of not less than thirty (30)
         days' given to the other Party.

13.      SCHEDULES

A.       In the event that any schedule hereto is inconsistent with the terms
         and conditions of the Contract, the schedule shall prevail.

B.       This Contract includes and incorporates the following schedules:

         Schedule 1 - Commodity and Transportation Particulars

         Schedule 2 - Ancillary Charges

<PAGE>

                                                                               5

14.      MISCELLANEOUS PROVISIONS

A.       Entirety: This Contract constitutes the entire agreement and merges and
         supersedes all prior understandings and representations between BCOL
         and the Customer concerning the subject matter hereof, including
         without limitation the Freight Transportation Agreement made as of
         February 14, 1996 between BC Rail Ltd., Pine Valley Coal Ltd., the
         Customer (Falls Mountain Coal Inc.), Mitsui Matsushima Canada Ltd., and
         BCR Ventures Inc. For greater certainty, the Parties acknowledge and
         agree that, prior to the making of this Contract, the Customer had
         assumed the rights and obligations of Mitsui Matsushima Canada Ltd. and
         BCR Ventures Inc. under that Freight Transportation Agreement.

B.       Assignment: This Contract may be assigned by BCOL, but shall not be
         assigned by the Customer hereto without the consent of BCOL, which
         consent shall not be withheld unreasonably. BCOL hereby consents to the
         assignment of this Contract to Mitsui Matsushima Canada Ltd. and
         Marubeni Corporation pursuant to security agreements entered into
         between such corporations and the Customer to secure financing provided
         to the Customer and its affiliates in connection with the acquisition
         and development of the Mine.

C.       Non-Waiver: The failure of a Party to enforce any provisions of this
         Contract shall not be considered as a waiver of that provision and
         shall not prevent termination of this Contract due to default.

D.       Other Destinations: The Customer may desire to transport the Commodity
         to other destinations than the Destination (Neptune Bulk Terminals,
         North Vancouver) during the term of this Contract. The Customer and
         BCOL will negotiate in good faith to achieve mutually satisfactory
         terms in the event of this occurring and the volume transported to such
         other destinations shall be included in the Volume Commitment described
         in Section 15

15.      VOLUME COMMITMENT

                        CONFIDENTIAL TREATMENT REQUESTED

A.       Volume Commitment: The Customer shall ship with BCOL during each
         12-month period of the Contract Period, not less than ********* tonnes
         of the Commodity between the Origin and Destination specified in
         Schedule 1.

B.       Default of Volume Commitment: In the event that the Customer fails to
         ship in accordance with the Volume Commitment (as described in 15A
         above), BCOL may invoice the Customer for liquidated damages amounting
         to ***** per tonne times the total shortfall (i.e. the Volume
         Commitment less all tonnes actually shipped during the applicable
         12-month period.)

C.       Effect of Force Majeure on Volume Commitment: In the event of Force
         Majeure which affects either the Customer or BCOL and which prevents or
         delays the Customer from shipping the Commodity for a period in excess
         of seven (7) consecutive calendar days or an aggregate of 14 calendar
         days in any 12-month period, then the Volume Commitment shall be
         reduced by 1/365 for each day that the Customer is unable to ship the
         Commodity as a result of the Force Majeure.

16.      VOLUME FORECAST

A.       The Customer shall, before the end of each quarter of each calendar
         year, provide BCOL with a written forecast of the Commodity production
         at the Origin and shipment via BCOL during the next quarter and each of
         the following four quarters.

B.       Subject to the specific provisions of this Contract, BCOL shall supply
         to the Customer the rail equipment and infrastructure, including
         rolling stock, all maintained to a prudent and sound standard, and
         render shipping services to ship the Commodity, all in accordance with
         the Customer's forecasts. The Customer shall make shipments of the
         Commodity and BCOL shall accept such shipments in approximately equal
         monthly quantities and fairly evenly distributed throughout each twelve
         month period.

<PAGE>

                                                                               6

17.      MINE INFRASTRUCTURE

         The Customer's loading facility, weighing system and track
         infrastructure at the Mine shall be constructed and maintained by the
         Customer, at its sole expense, including replacement of materials from
         time to time as may be necessary, in a manner which (i) meets the
         reasonable specifications of BCOL; (ii) meets any applicable government
         regulations; and (iii) preserves such infrastructure in condition
         reasonably suited to the loading and handling the Customer's traffic.
         The siding track at the Mine will be designed and constructed to load
         unit trains of 104 cars.

18.      FURTHER ASSURANCES

         The Parties will from time to time promptly execute and deliver all
         further documents and take all further action necessary or appropriate
         to give effect to the provisions and intent of this Contract and to
         carry out the transactions contemplated hereby.

19.      MODIFICATION

         Neither this Contract nor any provision hereof will be modified,
         changed, discharged or terminated except by an instrument in writing
         signed by the Party against whom any waiver, change, discharge or
         termination is sought.

20.      TIME OF THE ESSENCE

         Time will be of the essence of each provision of this Contract.

21.      ENUREMENT

         This Contract enures to the benefit of and binds the Parties and their
         respective successors and permitted assigns.

22.      CURRENCY

         Except as otherwise specifically provided, all references in this
         Contract to amounts of money are expressed in Canadian dollars.

23.      SEVERABILITY

         Each provision of this Contract is several. If any provision of this
         Contract is or becomes illegal, invalid or unenforceable in any
         jurisdiction, the illegality, invalidity or unenforceability of that
         provision will not affect: (i) the legality, validity or enforceability
         of the remaining provisions of this Contract, or (ii) the legality,
         validity or enforceability of that provision in any other jurisdiction,
         except that if: (iii) on the reasonable construction of this Contract
         as a whole, the applicability of the other provision presumes the
         validity and enforceability of the particular provision, the other
         provision will be deemed also to be invalid or unenforceable, and (iv)
         as a result of the determination by a court of competent jurisdiction
         that any part of this Contract is unenforceable or invalid and, as a
         result of this Section, the basic intentions of the parties in this
         Contract are entirely frustrated, the Customer and BCOL will use all
         reasonable efforts to amend, supplement or otherwise vary this Contract
         to confirm their mutual intention in entering into this Contract.

24.      GOVERNING LAW AND VENUE

         This Contract, any amendment, addendum or supplement hereto, and all
         other documents relating hereto will be governed by and construed in
         accordance with the laws of the Province of British Columbia, and the
         federal laws of Canada applicable therein, governing contracts made and
         to be performed wholly therein, and without reference to its principles
         governing the choice or conflict of laws. The parties hereto
         irrevocably attorn and submit to the exclusive jurisdiction of the
         courts of the Province of British Columbia, sitting in the City of
         Vancouver, with respect to any dispute related to or arising from this
         Contract.

<PAGE>

                                                                               7

IN WITNESS WHEREOF, this Contract has been executed by the Parties as of the day
and year first above written.

PINE VALLEY MINING CORPORATION

By:

Title:

                        ________________________________
                              Authorized Signatory

BC RAIL PARTNERSHIP

By:

Title:

                        ________________________________
                              Authorized Signatory

<PAGE>

                                   SCHEDULE 1

                                   BCOL-C-0219

                    COMMODITY AND TRANSPORTATION PARTICULARS

COMMODITY:               COAL, THERMAL AND SEMI-HARD COKING IN BULK FOR EXPORT

TERM:                    THE FIRST TO OCCUR OF THE 2004 START OF PRODUCTION AT
                         THE MINE AND THE 1ST DAY OF JULY 2004, TO AND INCLUDING
                         JUNE 30, 2009.

EFFECTIVE DATE:          UPON THE COMMENCEMENT OF THE TERM AS DESCRIBED ABOVE.

EQUIPMENT:               UNIT TRAINS OF RAILWAY SUPPLIED ROTARY DUMP GONDOLA
                         CARS

ORIGIN(s):               FALLS, BC

DESTINATION:             NEPTUNE BULK TERMINALS, NORTH VANCOUVER, BC

RATES:                   RATES IN CANADIAN DOLLARS PER METRIC TONNE

                                CONFIDENTIAL TREATMENT REQUESTED

                         COMMENCEMENT OF THE TERM AS DESCRIBED ABOVE TO AND
                         INCLUDING JUNE 30, 2005: $****** (BEING A RATE OF
                         $****** MINUS $***** DEVELOPMENT INCENTIVE FOR FIRST
                         YEAR)

                         JULY 1, 2005 TO JUNE 30, 2009: $*******

ROUTE:                   BCOL ( INCLUDING CN DELIVERY )

MINIMUM WEIGHT:          95 METRIC TONNES PER CAR
MAXIMUM WEIGHT:          GROSS WEIGHT ALLOWED ON RAIL LINE (CURRENTLY 268,000
POUNDS PER LOADED RAILCAR), OR THE MAXIMUM GROSS WEIGHT ALLOWED FOR THE CAR AS
STENCILED ON THE CAR, WHICHEVER IS LESS.

MINIMUM SHIPMENT OF 80 CARS PER UNIT TRAIN, WITH THE SPECIFIC NUMBER OF CARS UP
TO 104 CARS PER UNIT TRAIN BEING AT THE SOLE DISCRETION OF BCOL

OTHER CONDITIONS:

THE ABOVE DESCRIBED RATES DO NOT INCLUDE LOADING, UNLOADING AND PORT TERMINAL
CHARGES ALL OF WHICH WILL BE THE RESPONSIBILITY OF THE CUSTOMER

BCOL WILL PROVIDE POWER AND CREW TO MOVE THE UNIT TRAIN THROUGH LOADING
FACILITY, SUBJECT TO LOADING TIMES OUTLINED IN SCHEDULE 2 - "ANCILLARY CHARGES"
OF THIS CONTRACT

BCOL WILL PROVIDE ALL MAINTENANCE AND CLEARING OF THE SWITCHES FROM THE SIDING
TO THE MAIN RAIL LINE, AND INVOICE THE CUSTOMER FOR THIS WORK.

<PAGE>

                                                                               2

COAL LOADING OPERATION MUST INCLUDE THE CUSTOMER TREATING THE COAL AFTER THE CAR
IS LOADED TO PREVENT UNREASONABLE DUSTING FROM COAL WHILE ON ROUTE TO NORTH
VANCOUVER OR TO MEET ANY ACTUAL OR FUTURE ENVIRONMENT REGULATION OR REQUIREMENT.

NOTWITHSTANDING THE OTHER PROVISIONS OF THIS SCHEDULE AND THE CONTRACT, BCOL
WILL ALLOW 20 CAR BLOCKS TO BE LOADED AT THE ABOVE RATE DURING THE CONSTRUCTION
OF THE CUSTOMER'S UNIT TRAIN SIDING, BUT ONLY TO OCTOBER 31, 2004. ON THESE
SMALLER BLOCKS OF LOOSE CARS THE CUSTOMER WILL BE RESPONSIBLE TO MOVE CARS ON
THE SIDING AS REQUIRED DURING LOADING. BCOL WILL CONSOLIDATE THESE SMALL BLOCKS
INTO A MINIMUM 80 CAR UNIT TRAIN FOR DELIVERY TO NEPTUNE BULK TERMINALS.

CUSTOMER SHALL PROVIDE BCOL WITH A BILL OF LADING AND LIST OF THE RAILCARS
INCLUDING PAYLOAD WEIGHTS AND DESTINATION FOR EACH RAILCAR UPON RELEASE OF
LOADED CARS FROM THE MINE.

<PAGE>

                                   SCHEDULE 2

                                   BCOL-C-0219

                                ANCILLARY CHARGES

THE FOLLOWING APPLIES ON UNIT TRAINS OF GREATER THAN OR EQUAL TO EIGHTY (80)
RAIL CARS:

(1) Loading time of seven (7) hours will be allowed for unit trains up to eighty
eight (88) cars from the time empty train is placed until released loaded. BCOL
will place the first car of the train at origin for loading. Unit trains of
greater than eighty eight (88) cars will have the loading time allowance
increased on a prorated basis.

(2) Unloading time of eight (8) hours at Destination for all unit trains of
eighty (80) to one hundred and four (104) cars from time unit train is placed on
Destination siding. Unloading shall be deemed complete when the unit train is
empty and returned to the CN Rail ready for movement.

(3) Three hundred and forty five dollars ($345.00) detention per hour per unit
train will be assessed for the first forty eight (48) hours when, for reasons
attributable to the Customer, loading and unloading times exceed the allowances
specified in this Schedule, trains are delayed, or trains cannot be received at
origin or destination. Two hundred dollars ($200.00) detention per hour per unit
train will be assessed for each hour after the first forty eight (48) hours
when, for reasons attributable to the Customer, locomotives and railcars are
detained.

(4) Three thousand dollars ($3,000.00) will be assessed for each occurrence of
delay, attributable to the Customer, which requires an additional loading,
unloading, or road crew for a unit train.

(5) Ancillary charges may be assessed unless a Force Majeure notice has been
issued. A Force Majeure notice may be issued only if the occurrence lasts twenty
four (24) hours or more. Charges will resume immediately after the Force Majeure
condition has ceased.

THE FOLLOWING APPLIES TO LOADING SMALLER BLOCKS OF LOOSE CARS, AND NOT UNIT
TRAINS:

(1) Loading time of twenty four (24) hours free time will be allowed for smaller
blocks of cars from the time cars are placed empty until they are released
loaded. After the twenty four (24) hours free time railway demurrage terms and
charges, as found in BCOL Tariff BCOL 1100, or its future replacement, will
apply. BCOL will supply loose cars up to October 31, 2004.

(2) Unloading time will be the same as for unit trains as these blocks of loose
cars will be consolidated to meet the eighty (80) car minimum requirement for
unloading at Destination.<PAGE>

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "****" AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION."

                                                                    EXHIBIT 4.24

                     WILLOW CREEK MARKETING AGENCY AGREEMENT

Made on                                           2004

--------------------------------------------------------------------------------

BETWEEN     FALLS MOUNTAIN COAL INC. of Suite 501-535 Thurlow St Vancouver, B.C.
            Canada
                                                                         ('FMC')

AND
            PINE VALLEY MINING CORPORATION of Suite 501-535 Thurlow St
            Vancouver, B.C. Canada
                                                                 ('PINE VALLEY')

AND
            MARUBENI CORPORATION of 4-2, Ohtemachi 1-Chome, Chiyoda-Ku, Tokyo,
            Japan
                                                                          ('MC')

BACKGROUND

A.    Pursuant to rights it holds under coal licenses and leases issued pursuant
      to the Coal Act (British Columbia) and a permit issued pursuant to the
      Mines Act (British Columbia), FMC has the right to mine Coal (as defined
      below) in a mine located near Chetwynd, B.C. Canada ('WILLOW CREEK MINE'),
      and intends to commence commercial production at the Willow Creek Mine in
      June 2004.

B.    FMC has agreed to appoint MC as its exclusive agent for sales of Coal in
      Japan, Korea and Taiwan on the terms and conditions contained in this
      Agreement.

C.    FMC is a wholly-owned subsidiary of Pine Valley.

<PAGE>

OPERATIVE PROVISIONS

1.    DEFINITIONS

      In this Agreement, except to the extent the context otherwise requires:

      'AGREEMENT' means this Willow Creek Marketing Agency Agreement;

      'BUSINESS DAY' means a day other than a Saturday, Sunday or a public
      holiday on which banks are open for business in B.C., Canada and Japan;

      'COAL' means Willow Creek PCI and Coking coal produced from the Willow
      Creek Mine;

      'CONTRACT OF SALE' means a contract for sale of Coal to end-users;

      'PARTY' means a party to this Agreement and 'PARTIES' has a corresponding
      meaning;

      'RELATED CORPORATION' means an affiliated body corporate as defined in the
      Canada Business Corporations Act;

      'TERM' means the term of this Agreement, which will start on the date of
      this Agreement and end on the date specified in section 2.3, unless
      otherwise agreed in writing by the Parties; and

      'YEAR' means a period of 12 consecutive months starting from 1 April.

2.    APPOINTMENT OF MC AS AGENT FOR FMC

2.1   Subject to section 2.3, FMC appoints MC as its exclusive agent to be
      responsible for the promotion, marketing and sale from time to time of
      Coal during the Term to the end-users in Japan, Korea and Taiwan. All
      actions to be taken by MC on account of FMC pursuant to this Agreement
      will be taken and, will be disclosed by MC to FMC as agent for FMC. It is
      both Parties' intention that FMC will not directly communicate with the
      end-users without the attendance of MC, but if such communications occur
      ,regardless of the intention of FMC, then FMC will disclose the content of
      such communications to MC. If end-users in the Japan, Korea or Taiwan
      request that FMC participate in direct communications concerning the sale
      of Coal without the participation of MC, then FMC will inform such
      end-users of the existence of the agency relationship arising under this
      Agreement and will direct the end-user to an authorized representative of
      MC. MC will have the right to appoint sub-agents to assist in the
      performance of its obligations under this Agreement, provided that:

      (a)   prior to their appointment, any and all such sub-agents must be
            accepted as sub-agents by FMC, such acceptance not to be
            unreasonably withheld;

      (b)   MC will be fully responsible for and liable to FMC for the conduct
            of such sub-agents; and

      (c)   MC will be liable for any and all compensation and reimbursement of
            expenses payable to such sub-agents, and FMC will not be liable for
            any such obligations to the sub-agents.

<PAGE>

2.2   MC may introduce the Coal to potential end-users from countries outside of
      Japan, Korea or Taiwan and FMC will consider granting agency rights to MC
      in connection with sales of Coal to those end-users on case by case basis
      at FMC's sole discretion.

2.3   The appointment of MC as FMC's agent will terminate upon the first to
      occur of:

      (a)   the aggregate production of export saleable Coal reaching to
            15,000,000 tonnes;

      (b)   the voluntary resignation of MC as FMC's agent, which resignation
            will be effected by MC giving FMC not less than 30 days' prior
            written notice of MC's intent to resign; and

      (c)   MC becoming insolvent or making a general assignment for the benefit
            of its creditors, or an order being made or effective resolutions
            being passed for the winding-up of MC or MC being declared bankrupt
            or a custodian or receiver being appointed for MC under any
            bankruptcy legislation, or a compromise or arrangement being
            proposed by MC to its creditors or any class of its creditors, or a
            receiver or other officer with like powers being appointed for MC.

2.4   Notwithstanding section 2.3 hereof, if, in FMC's opinion, MC's performance
      under this Agreement has been satisfactory, then FMC will consider
      extending the term of MC's agency.

2.5   MC acknowledges and agrees that FMC has entered or may enter into
      marketing agency and coal sales agreements with other companies for the
      sale of Coal to customers other than end-users in Japan, Korea and Taiwan.

2.6   FMC acknowledges and agrees that, subject to the limitations expressed
      below, MC may market Coal to any potential end-users, including but not
      limited to end-users in Japan Korea and Taiwan. In the case of end-users
      outside of Japan, Korea or Taiwan, MC will first provide written notice to
      FMC of the specific end-user MC would like to contact and will not
      undertake any marketing to that potential end-user until FMC, in its sole
      discretion, has granted permission for MC to initiate such marketing. In
      addition, and notwithstanding the foregoing, if FMC notifies MC that FMC
      has entered into an exclusive agency relationship with a third-party to
      represent FMC in marketing the Coal to end-users in a specific market area
      outside of Japan, Korea and Taiwan, then, except to the extent
      then-previously authorized in writing by FMC, MC will then immediately
      cease any actions in connection with marketing the Coal to any and all
      end-users in such specific market area.

3.    MARKETING ACTIVITIES

3.1   FMC will make reasonable commercial efforts to assist MC as MC may
      reasonably require in the performance of the MC's marketing activities,
      including providing MC with such information

<PAGE>

      concerning the Coal and the mining operations of FMC that MC may
      reasonably require in order for MC to effectively market the Coal in
      accordance with the terms of this Agreement.

3.2   MC will manage and conduct all marketing activities, including the
      identification of potential end-users of the Coal, the introduction of the
      Coal to end-users, the development of market intelligence, assistance on
      contractual negotiations and maintenance of contract relationships, in
      accordance with the instructions of FMC, and will keep FMC fully informed
      of all such activities.

3.3   MC's activities under this Agreement will be conducted with the skill,
      diligence and care normally exercised by qualified persons in the
      performance of comparable work in accordance with accepted industry
      standards and practices.

3.4   MC will supply to FMC at least yearly, and more frequently if requested by
      FMC, documented programs developed by MC for the marketing activities
      regarding the Coal.

3.5   MC will supply to FMC at least quarterly, and more frequently if requested
      by FMC:

      (a)   progress reports summarizing MC's marketing activities; and

      (b)   details of the marketing activities planned by MC for the next
            quarter period.

3.6   MC will keep and maintain accurate, correct and up-to-date records in a
      manner that fully and fairly explains all of its marketing activities and
      transactions carried on or effected in respect of or pursuant to this
      Agreement.

3.7   It is the intent of both MC and FMC to sell the majority of Coal into
      Japan, Korea and Taiwan, and MC will make reasonable commercial efforts to
      maximize sales of the Coal in Japan, Korea and Taiwan.

3.8   Notwithstanding the other provisions of this Agreement, FMC will retain
      absolute discretion as to whether it sells any coal into Japan, Korea and
      Taiwan and on what terms.

4.    COMMISSION ARRANGEMENTS

4.1   FMC will pay to MC the following commission based on the FOBT sales price
      per tonne (exclusive of GST) during the Term.

                        CONFIDENTIAL TREATMENT REQUESTED

      (a)   a commission of ******% will be payable in respect of any Coal sold
            to purchasers of Coal in Japan, Taiwan or Korea, and to other
            purchasers of Coal approved by FMC, and also in respect of Coal
            purchased by MC and shipped to or to the order of the purchaser up
            to an aggregate amount of ******** tonnes in each Year;

<PAGE>

      (b)   a commission of ***** % will be payable in respect of any Coal sold
            to purchasers of Coal in Japan, Taiwan or Korea, and to other
            purchasers of Coal approved by FMC, and also in respect of Coal
            purchased by MC and shipped to or to the order of the purchaser from
            ******* tonnes up to an aggregate of ******* tonnes in each Year;
            and,

      (c)   a commission of *****% will be payable in respect of any Coal sold
            to purchasers of Coal in Japan, Taiwan or Korea, and to other
            purchasers of Coal approved by FMC, and also in respect of Coal
            purchased by MC and shipped to or to the order of the purchaser in
            excess of ******** tonnes in each Year.

4.2   MC will invoice FMC for the commissions described in Section 4.1 within 7
      Business Days of the shipping documents being released and the commission
      will be payable within 14 Business Days following receipt of such an
      invoice.

4.3   MC will also be reimbursed from time to time for certain reasonable
      out-of-pocket costs incurred by MC in connection with negotiating,
      visiting and coordinating activities, including entertainment, with
      respect to the marketing of the Coal to end-users, provided that, in each
      case, the nature and amount of such costs have been approved in advance
      and in writing by FMC. Except as otherwise provided for in this section,
      MC will bear all of its costs arising in connection with its activities in
      connection with or pursuant to this Agreement. For greater certainty and
      without limiting the foregoing, the Parties acknowledge that MC will be
      generally responsible for those of its out-of-pocket costs that are of the
      kind customarily associated with the marketing activities required to
      fulfil its duties under this Agreement, including routine travel,
      accommodation, meal and entertainment expenses.

5.    CONFIDENTIALITY

5.1   Each Party will use reasonable commercial efforts to preserve and protect
      any confidential information concerning the business or affairs of the
      other party (the "Disclosing Party") which may be disclosed to the
      receiving party (the "Receiving Party") by the directors, officers,
      employees, agents or other representatives of the Disclosing Party either
      prior to or during the term of this Agreement ("Confidential
      Information"). Without restricting the generality of the foregoing, the
      Receiving Party will not:

      (a)   disclose any Confidential Information to third parties without prior
            written consent of the Disclosing Party, except that such consent
            will not be required where the information is disclosed:

            (i)   to the employees, officers, accountants, legal advisers,
                  Related Corporations, or agents of the Receiving Party or such
                  other persons as the directors of the

<PAGE>

                  Receiving Party may designate provided that, the Disclosing
                  Party first takes reasonable steps to ensure that, in the case
                  of disclosure to employees, officers, Related Corporations, or
                  agents of the Receiving Party, the Receiving Party first
                  ensures that such persons are made subject to binding
                  confidentiality agreements requiring them to comply with the
                  restrictions in this Agreement concerning the use and
                  disclosure of Confidential Information; or

            (ii)  pursuant to any law, statute, regulation, ordinance or
                  administrative, regulatory, judicial order, or stock exchange
                  policy, provided that, prior to such disclosure the Receiving
                  Party gives notice of the proposed disclosure, the entity to
                  which the information will be disclosed, and the circumstances
                  relating to the same to the Disclosing Party; or

      (b)   use any Confidential Information for its own purpose or benefit or
            to the detriment or intended or probable detriment of the Disclosing
            Party.

The foregoing covenants will not apply to any information which:

      (c)   through no act or omission of the Receiving Party is or becomes
            generally known or part of the public domain; or

      (d)   is lawfully furnished to the Receiving Party by a third party
            without breach of any existing or future restriction on disclosure
            owed to the Disclosing Party.

5.2   The Parties acknowledge that, without prejudice to any and all rights of
      either Party, an injunction may be the only effective remedy to protect a
      breach of the provisions of section 5.1 above.

5.3   The Parties will make reasonable commercial efforts to limit the amount of
      Confidential Information that is disclosed to other persons under section
      5.1(a) to the extent reasonably required to accomplish the desired
      purpose.

5.4   The Parties will make reasonable commercial efforts to agree on the
      wording of all public announcements and statements including statements to
      their shareholders, whether contained in an annual report or made at a
      general meeting or otherwise, relative to the subject matter of this
      Agreement including details of Coal sales agreements.

6.    ASSIGNMENT

6.1   Except in the case of an assignment to a Related Corporation of MC, MC
      will not assign or transfer all or any of its rights or obligations under
      this Agreement without the prior written approval of FMC, which consent
      will not be unreasonably withheld.

<PAGE>

6.2   FMC will not assign or transfer all or any of its rights or obligations
      under this Agreement without the prior written approval of MC, which
      consent will not be unreasonably withheld.. If FMC sells over 50% of its
      right, title and interest to the Willow Creek Mine, or if a third party
      purchases all outstanding shares of FMC, then FMC will ensure that it is a
      condition of such sale that this Agreement will remain good standing and
      in full force with respect to sales of the Coal, regardless of the
      then-current legal and beneficial owners of the Willow Creek Mine.

7.    COSTS OF AGREEMENT

      The Parties will each bear their own legal costs in relation to the
      negotiation, preparation, execution and completion of this Agreement, but
      any and all stamp duty assessed by and payable to Canadian tax authorities
      in relation to this Agreement will be paid by FMC.

8.    NO WAIVER

8.1   The failure of a Party at any time to require full or partial performance
      of any provision of this Agreement does not affect in any way the full
      right of that Party to require that performance subsequently.

8.2   The waiver by any Party of a breach of a provision of this Agreement is
      not deemed a waiver of all or part of that provision or of any other
      provision or of the right of that Party to avail itself of its rights
      subsequently.

8.3   Any waiver of a breach of this Agreement will be in writing signed by the
      Party granting the waiver, and is effective only to the extent
      specifically set out in that waiver.

8.4   All remedies afforded to the parties under this Agreement are cumulative.

9.    ENTIRE AGREEMENT

9.1   This Agreement constitutes the entire agreement of the parties as to its
      subject matter and supersedes and cancels all prior arrangements,
      understandings and negotiations in connection with the same.

10.   FURTHER ASSURANCES

      Each Party will do all things and execute all further documents necessary
      to give full effect to this Agreement and refrain from doing anything that
      might hinder the performance of this Agreement.

<PAGE>

11.   NOTICE

      A notice required or authorized to be given or served upon a Party
      pursuant to this Agreement will be in writing in the English language and
      may be given or served by facsimile, prepaid post or hand to that Party at
      its address or facsimile number appearing in Schedule 1 or such other
      address or facsimile number as the Party may have notified in writing to
      the other Party or Parties, from time to time.

11.1  In the absence of proof to the contrary a notice will be deemed to have
      been given or served on the Party to whom it was sent:

      (a)   in the case of hand delivery, upon delivery during Business Hours of
            the recipient;

      (b)   in the case of pre-paid post, 2 Business Days after the date of
            dispatch; and

      (c)   in the case of facsimile transmission:

            (i)   at the time of dispatch if that dispatch is during Business
                  Hours; or

            (ii)  at 9.00 a.m. at the location of intended recipient on the next
                  Business Day following the day of dispatch, if the dispatch is
                  outside Business Hours.

11.2  A notice given or served under this Agreement is sufficient if:

      (a)   in the case of a corporation, it is signed by a director or
            secretary of that corporation; and

      (b)   in the case of an individual, it is signed by that individual.

11.3  The provisions of this section are in addition to any other mode of
      service permitted by law.

11.4  In this section 'NOTICE' includes a demand, request, consent, approval,
      offer and any other instrument or communication made, required or
      authorized to be given under or pursuant to a provision of this Agreement.

11.5  In this section 'BUSINESS HOURS' means from 9.00 a.m. to 5.00 p.m. on a
      Business Day in the geographic location of the intended recipient.

12.   GOVERNING LAW AND JURISDICTION

12.1  This Agreement is governed by the laws of British Columbia, Canada.

12.2  Each party irrevocably submits to the non-exclusive jurisdiction of the
      courts of British Columbia, Canada.

12.3  All disputes between the parties arising out of this Agreement which
      cannot be settled by them will be referred to a single arbitrator under
      the Commercial Arbitration Act then in effect in British Columbia whose
      decision thereon will be final, binding and conclusive. All arbitration
      proceedings

<PAGE>

      will be conducted, unless the Parties otherwise agree, in Vancouver,
      British Columbia. Any matter, issue or dispute referred to arbitration
      will be dealt with on an expeditious basis with the parties using all
      commercially reasonable efforts to obtain and implement a timely decision
      of the arbitrator.

13.   AMENDMENTS IN WRITING

      No amendment to this Agreement has any force unless it is in writing and
      signed by the all of the Parties to this Agreement.

14.   GUARANTEE AND INDEMNITY OF PINE VALLEY

14.1  MC is willing to proceed with this Agreement and the transactions
      contemplated hereby only with the participation of Pine Valley as set
      forth in this Section 14. In consideration of the payment of $20 and other
      good and valuable consideration paid and given by MC to Pine Valley (the
      receipt and sufficiency of which are hereby acknowledged), Pine Valley
      hereby guarantees the performance by FMC of the respective covenants,
      agreements and obligations of FMC under this Agreement and guarantees
      payment by FMC to MC of any and all loss, damage, expense, liability,
      claim or demand suffered or incurred by MC arising out of any breach of
      any covenant, agreement, representation or warranty of this Agreement by
      FMC or any misrepresentation on the part of FMC.

14.2  Pine Valley acknowledges and agrees that none of the following will
      release Pine Valley of any of its obligations under this Section 14:

      (a)   any modification, amendment or change to the rights or obligations
            of FMC under this Agreement in any manner whatsoever, regardless of
            the magnitude or materiality of such change and regardless of
            whether Pine Valley has consented to or approved such change;

      (b)   the granting of any time, renewals, extensions, or indulgences to
            FMC with respect to its obligations under this Agreement;

      (c)   the taking of any securities (which word as herein used includes
            other guarantees) for the performance by FMC of its obligations
            under this Agreement; abstaining from taking or perfecting such
            securities; accepting compositions from, exchanging, enforcing,
            waiving or releasing any such securities; or otherwise dealing with
            such securities as MC may see fit, and, MC may apply all monies at
            any time received from such securities or FMC or others to such part
            of the liabilities of FMC as MC deems best and change such
            application in whole or in part from time to time as MC sees fit;

<PAGE>

            and Pine Valley further waives presentment, demand, protest and all
            notices and any right to require MC to proceed against FMC or to
            proceed against or exhaust any security or pursue any other remedy
            available to MC as a condition to enforcement of Pine Valley's
            obligations under this Agreement.

14.3  Pine Valley will indemnify and save harmless MC from and against all
      suits, claims, demands, liabilities, losses and expenses which MC may
      suffer, incur or sustain resulting or arising from any non-fulfilment of
      any covenant or agreement or any breach of or incorrectness in any
      representation or warranty by or of Pine Valley or FMC contained in this
      Agreement.

15.   INTERPRETATION

      In this Agreement, except to the extent the context otherwise requires:

      (a)   the singular includes the plural and vice versa and a gender
            includes other genders;

      (b)   a reference to a party to this Agreement or any other document or
            Agreement includes its successors and permitted assigns;

      (c)   a reference to an item in a recital, section, schedule, annexure or
            appendix is a reference to a recital , section of or schedule,
            annexure or appendix to this Agreement and references to this
            Agreement include its schedules and any annexures;

      (d)   where a word or phrase is given a particular meaning, other parts of
            speech or grammatical forms of that word or phrase have
            corresponding meanings;

      (e)   a reference to a document or Agreement including this Agreement
            includes a reference to that document or Agreement as amended,
            novated, supplemented, varied or replaced from time to time;

      (f)   in the interpretation of this Agreement, headings are to be
            disregarded;

      (g)   where a party comprises 2 or more persons, an Agreement or
            obligation to be performed or observed by that party binds those
            persons jointly and severally and a reference to that party includes
            a reference to any one or more of those persons; and

      (h)   references to '$C', 'dollar', '$' and to any amount not otherwise
            designated is to be construed as a reference to Canadian currency.

<PAGE>

                                   SCHEDULE 1
                               Notice Particulars

================================================================================

Pine Valley Mining Corporation               Marubeni Corporation
Suite 501-535 Thurlow St,                    4-2, Ohtemachi 1-Chome
Vancouver, B.C.                              Chiyoda-Ku
Canada V6E 3L2                               Tokyo Japan
Fax: 1-604-682-4698                          Fax: 81-3-3282-9539
Attention: Graham Mackenzie                  Attention: Hisao Azuma

                                             Marubeni Canada Ltd. Calgary Office
                                             Suite 3060, Bow Valley Square 2
                                             205-5th Avenue, South West
                                             Calgary, Alberta
                                             Canada T2P 2V7
                                             Fax: 1-403-263-8100
                                             Attention: Junji Morinaga

--------------------------------------------------------------------------------

<PAGE>

EXECUTED as an Agreement in British Columbia, Canada

SIGNED for and on behalf of
FALLS MOUNTAIN COAL INC.
in the presence of:

---------------------------                         ----------------------------
Signature of witness                                Authorized Signing Officer

---------------------------                         ----------------------------
Full name of witness                                Full name of Signing Officer

SIGNED for and on behalf of
PINE VALLEY MINING CORPORATION
in the presence of:

---------------------------                         ----------------------------
Signature of witness                                Authorized Signing Officer

---------------------------                         ----------------------------
Full name of witness                                Full name of Signing Officer

SIGNED for and on behalf of
MARUBENI CORPORATION
in the presence of:

---------------------------                         ----------------------------
Signature of witness                                Authorized Signing Officer

---------------------------                         ----------------------------
Full name of witness                                Full name of Signing Officer

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