Document:

Exhibit 10.6

                                  MINING LEASE
                                       AND
                          OPTION TO PURCHASE AGREEMENT

         THIS MINING LEASE AND OPTION TO PURCHASE AGREEMENT
("Agreement") effective as of January 15, 1998 ("Effective Date"), is by and
between Mark Milner, Daniel Milner, and Stephen R. Crossland ("Owners"), as
lessors and optionors, and GOLDEN PHOENIX MINERALS, INC.. ("GPM"). a Minnesota
corporation authorized to transact business in the State of California, as
lessee and optionee, with an office at 3595 Airway Drive Suite 405, Reno, Nevada
89511.

                                    RECITALS:

         WHEREAS, Owners represent that they own certain real property interests
 situated in Modoc County, State of California, which real property interests
 are more particularly described in Exhibit "A" attached hereto and made a part
 hereof ("Property"); and,

         WHEREAS, the Owners and GPM desire to enter into a Mining Lease And
Option To Purchase Agreement whereby the Owners grant to GPM the exclusive right
to explore, and develop and mine, if warranted, the Property, and further
granting GPM an exclusive and irrevocable option to purchase all of the Owners'
right, title and interest in and to the Property, upon the terms and conditions
and for the consideration set forth herein.

         NOW THEREFORE, in consideration of the various payments, covenants and
agreements contained herein, the sufficiency of which the Owners acknowledge,
the Owners and GPM agree as follows:

                                   AGREEMENT:

1.       Grant of Lease

         Owners lease, let and demise to GPM the Property and all fixtures and
improvements thereon.

2.       Grant of Rights.

         The Owners grant to GPM the following exclusive rights on and with
respect to the Property:

         (a)      To enter the Property to survey, explore, prospect, drill,
                  develop, mine and cross-mine (in any manner whether by
                  surface, open-pit, underground, solution or other mining
                  methods), stockpile, remove, leach, concentrate,

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                  mill, smelt, beneficiate, process, ship, and market, without
                  limitation, all ores, metals, tailings and concentrates, and
                  mineral products ("Minerals") in, on and under the Property,
                  employing currently recognized or subsequently developed
                  technology and any exploration methods that GPM may deem
                  necessary, convenient or desirable to conduct its operations
                  on the Property;

         (b)      To construct, use. maintain, repair, replace, and relocate
                  buildings, ore bins, shafts, declines, inclines, tunnels,
                  drifts, open pits, reservoirs, tailing ponds, waste dumps, or
                  stock piles, roads, pipelines, power and communication lines,
                  and any other structures and facilities;

         (c)      To use the Property for the storage or permanent disposal of
                  Minerals, water. waste, tailings, or other materials produced
                  from the Property or other real property owned or controlled
                  by GPM ("Other Properties");

         (d)      To use all easements, means of access, and rights-of-way for
                  ingress and egress to and from the Property;

         (e)      To drill for, appropriate, develop, use, consume, drain, and
                  dispose of all water on or appurtenant to the Property;

         (f)      To commingle Minerals from the Property with Minerals from
                  Other Properties in accordance with the procedures set forth
                  in Section 3 of Exhibit "B."

         (g)      To use the Property for all of the purposes stated in this
                  Section 2 in conjunction with GPM's activities on Other
                  Properties; and

         (h)      To exercise all other Agreement and Property rights and
                  privileges which are necessary, convenient or incidental, for
                  GPM. to effectuate the purposes of this Agreement.

3. Term; No Implied Covenants; Operations Generally.

3.1 Unless sooner terminated as herein provided, this Agreement shall commence
on the Effective Date and continue for six (6) years therefrom ("Primary Term"),
and so long thereafter as any development, mining or processing operations or
any right set forth in Section 2 is being conducted or exercised on the Property
or in conjunction with Other Properties on a continuous basis ("Extended Term").
Development, mining and processing operations shall be deemed continuous so long
as such operations do not cease for a period of more than one hundred eighty
(180) consecutive days, excluding, however, periods of force majeure and
unsatisfactory markets as provided herein. In the event GPM is unable to obtain
a satisfactory market for any Minerals discovered or produced on the Property,
and as a result. GPM delays commencement of development, mining or processing
operations on the Property beyond the end of the Primary Term, this lease
Agreement shall not expire

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or terminate as a result of such period of lack of satisfactory markets but may
be extended by GPM's continuing payment of minimum advance royalty payments
pursuant to Section 4.1. GPM shall use diligence in searching for a satisfactory
market for the Minerals during such lack of satisfactory market periods, and
when a satisfactory market becomes available, GPM shall have a reasonable time
thereafter within which to begin or resume development, mining or processing
operations. During the term, GPM's right to cease production shall be governed
by Section 4.2.

3.2 In lieu of any obligation on the part of GPM, express or implied, to explore
the Property or to perform any other work or activities thereon, GPM agrees to
make the minimum advance royalty payments set forth in Section 4.1.

3.3 All decisions pertaining to operations on the Property and the diligence
with which such operations shall be conducted shall be made in the sole
discretion of GPM. GPM's operations on the Property and its operations on Other
Properties may be conducted on the Property as a single operation, as if all
such properties constituted a single tract.

4. Minimum Advance Royalty Payments

4.1 GPM shall pay Owners the minimum advance royalty payments ("Minimum Advance
Royalty Payments") as follows:

             Due Date(s)                           Payable Amounts
             -----------                           ---------------
         Upon execution of Agreement                   $5,000.00
         January 15, 1998                              $10,000.00
         January 15, 1999                              $15,000.00
         January 15, 2000                              $20,000.00
         January 15, 2001                              $25,000.00
         January 15, 2002                              $25,000.00

All Minimum Advance Royalty Payments paid to Owners shall be credited against
any net returns royalty that accrue pursuant to Section 5. In the event no
Minerals are produced from the Property, owners shall have no obligation to
refund the Minimum Advance Royalty Payments. GPM shall have the right to prepay
any Minimum Advance Royalty Payments. GPM shall pay the Minimum Advance Royalty
Payments directly to Owners.

4.2 If at any time during the Extended Term, GPM desires to shut down or cease
production for any reason, it shall have the right to do so without terminating
this Agreement by continuing to make the Minimum Advance Royalty Payments in
accordance with Section 4.1 as long as the suspension continues. The Extended
Term of this Agreement shall remain in effect provided Minimum Advance Royalty
Payments are made.

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5.       Net Returns Production Royalty

GPM shall pay Owners a net returns production royalty of two and a half percent
(2 1/2%) of the net returns for Minerals mined from the Property ("Net Returns
Royalty"). The Net Returns Royalty is defined in Exhibit "B" attached hereto and
made a part hereof. No production royalty shall be paid on any minerals removed
for the purposes of determining the amenability to beneficiation or mining,
including bulk sampling, unless such sampling involves removal of one thousand
(1,000) or more tons of material.

6.       Grant of Option to Purchase; Exercise; Purchase Price; Obligations
         Terminated; Property Removal

6.1 In consideration of the payment of the initial Five Thousand Dollars
(S5.000.00). the receipt and sufficiency of which the Owners hereby acknowledge,
the Owners hereby grant to GPM the exclusive and irrevocable right and option to
purchase ("Option to Purchase") all their right, title and interest in and to
the Property, all minerals and mineral deposits, ores, concentrates, metals,
materials, tailings, dumps and mine wastes, in. on and under the Property, and
mining rights appertaining thereto, all surface and water rights, and all
compensable improvements thereon. "Compensable Improvements" means all
buildings, structures, fences, fixtures and other improvements affixed to the
Property by the Owners or any predecessor owner(s).

6.2 GPM may exercise its Option to Purchase at anytime during the Primary Term
or Extended Term by giving at least thirty (30) days' advance written notice to
the Owners of its intent to exercise at a specific date, time and place
("Closing"), and by delivering to the escrow agent, defined in Section 7. the
purchase price set forth in section 6.3.

6.3 The total purchase price ("Purchase Price") for the Property, Minerals and
all Compensable Improvements thereon shall be Five Hundred Thousand Dollars
($500,000.00). The Minimum Advance Royalty Payments and any Net Returns Royalty
Payments made to the owners shall be credited against Purchase Price.

6.4 Except for the reservation by the Owners of the Net Returns Royalty and the
obligation of GPM to pay the same, if GPM purchases the Property, all rights,
duties, obligations and reservations set forth in this Agreement, including the
payment of Minimum Advance Royalty Payments, shall terminate as of the date
Owners' warranty deed, as defined in section 7.3, is delivered to GPM.

6.5 All of the Owner's personal property must be removed from the Property prior
to the expiration of ninety (90) days after closing. Any personal property not
timely removed shall be deemed to have been conveyed and transferred to GPM and
shall become the property of GPM without additional compensation due the Owners.

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7.       Escrow Agent; Method of Payment; Warranty Deed; Quitclaim Deed and
         Release

7.1 Pursuant to the terms of the escrow instructions ("Escrow Instructions") set
forth in Exhibit "C," attached hereto and made a part hereof, (Name of
firm/company) shall serve as escrow agent ("Escrow Agent") for purposes of the
Option to Purchase granted pursuant to Section 6.1.

7.2 Escrow Agent shall receive and distribute Purchase Price payments or tenders
to be made to the Owners. The Minimum Advance Royalty Payments and Net Returns
Royalty payments shall be paid directly to the Owners by GPM. All payments or
tenders made to the Owners may be made by cash, check or draft, mailed or
delivered to the address specified in Exhibit "C," on or before the appropriate
due date.

7.3 Concurrently, with the execution of this Agreement, the Owners (i) shall
execute, acknowledge and deposit with the Escrow Agent a warranty deed
("Warranty Deed"), in the form set forth in Exhibit "D," attached hereto and
made a part hereof, conveying to GPM all of the Owners' right, title and
interest in and to the Property, the Minerals and Compensable Improvements
except for the two percent (2%) Net Returns Production Royalty reserved to
Owners; (ii) if necessary to complete GPM's purchase of the Property, or if
requested by GPM, Owners shall execute, acknowledge and deliver to the Escrow
Agent a bill of sale in proper form for any personal property on the Property
which shall be conveyed and transferred to GPM; and (iii) GPM shall execute,
acknowledge and deposit with the Escrow Agent a quitclaim deed and release
("Quitclaim Deed and Release") in the form set forth in Exhibit "E," attached
hereto and made a part hereof, quit claiming and releasing to the Owners all of
GPM's interest in the Property and the Agreement. The aforementioned documents
will be held and delivered by the Escrow Agent pursuant to the terms of the
Escrow Instructions.

8.       Representations, Warranties and Covenants; Title

8.1 The Owners represent, warrant and covenant to GPM. and its successors and
assigns, that:

         (a)      The Owners are the sole legal and equitable owners of the
                  Property (subject to paramount title in the United States for
                  am unpatented "Mining Claims" compromising the Property).

         (b)      Any Mining Claims comprising part or all of the Property were
                  properly located in accordance with Federal and State law on
                  land which was then available for mineral location and all
                  such Mining Claims have been properly maintained in accordance
                  with the Federal Land Policy and Management Act of 1976 and
                  all other applicable federal, state, regional and county laws
                  and regulations.

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         (c)      The Property is free and clear of all leases, liens,
                  encumbrances and outstanding adverse claims and interests,
                  except taxes not yet payable.

         (d)      The execution and delivery of this Agreement and the
                  performance of this Agreement by the Owners will not result in
                  any breach or constitute a default (or an event which, with
                  notice or lapse of time, or both, would become a default)
                  under, or give to others any rights of termination, amendment,
                  acceleration, cancellation, or consent, or result in the
                  creation of a lien or encumbrance on the Property, pursuant to
                  any instrument or obligation to which the Owners are a party
                  or by which they are bound.

         (e)      The Owners shall not create, permit or suffer any lien or
                  encumbrance, reservation, restriction or easement on the
                  Property, which is not subordinated to GPM's rights hereunder,
                  and GPM may, in its sole discretion, discharge any claims or
                  demand and thereby be subrogated to all rights of the holder
                  thereof, and may recover any amounts so paid from any amount
                  otherwise due to the Owners under Agreement.

         (f)      There is no environmental or other condition on the Property
                  which is. or may become, a violation of any applicable
                  federal, state, county or municipal law, regulation or
                  ordinance relating to zoning, land use, environmental
                  protection, or otherwise with respect to the Property or any
                  activities relating thereto, and the Owners have not received
                  any notice of any investigation of any such condition or
                  violation.

         (g)      GPM shall have the quiet and peaceful possession and enjoyment
                  of the Property and the Owners will do everything lawfully
                  within their power to defend title to the Property and GPM's
                  quiet and peaceful possession thereof against all persons or
                  entities who may claim any interest in the Property or
                  Minerals, or proceeds therefrom.

         (h)      Promptly following execution of this Agreement, and at any
                  time during the Term hereof, the Owners shall make available
                  to GPM copies of all technical, title, and recording
                  information and data relating to the Property in the
                  possession of the Owners.

GPM may investigate and in the Owners' name take any action GPM deems necessary
to remedy any defects in the title to the Property including but not limited to,
the right, at GPM's sole discretion, to relocate, amend, or abandon the location
of any one or more of the Mining Claims whenever GPM deems such relocation,
amendment, or abandonment desirable to perfect any of the Mining Claims, to
avoid or create overlaps, or to include ground within the boundaries of any
individual mining claim found not to be included because of improper location
procedures, or to obtain mill sites. Any such relocations, amendments, or
abandonments made by GPM shall be done as agent for Owners.

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Owners shall deliver to GPM a full and irrevocable power of attorney authorizing
GPM to apply for a United States mineral patent for any or all of the Mining
claims and agree not to object to or adverse such application. If GPM takes any
such action or applies for a patent to any or all of the Mining Claims,
application may be made in Owners' names and Owners shall, at the request of
GPM, execute any and all documents in connection with the patent application.
GPM shall pay all costs of such application.

If any of the above action is unsuccessfully taken by GPM or any patent
application is rejected in whole or in part, GPM shall not be liable to Owners
for any loss whatsoever provided GPM has proceeded in good faith. If patent to
the Property or any of the Mining Claims is issued in Owners' names and if GPM
has acquired the Property or Mining Claims, Owners shall promptly transfer the
patented Property or Mining Claims to GPM.

The Owners agree to cooperate with GPM in investigating and remedying any title
defects. GPM shall have the right to offset and credit against any amounts due.
or which become payable to the Owners hereunder, all costs incurred by and
payments made by GPM to remedy such defects.

Neither GPM's approval of title nor its omission to examine title shall
constitute a release or waiver of Owners' warranties, representations or
covenants and all the terms, conditions and covenants, expressed or implied
herein, shall continue in full force and effect.

9.       Conduct of Operations; Indemnification; Insurance; Data

9.1 GPM shall conduct its operations on the Property according to the following
standards, methods and requirements and shall pay damages as follows:

         (a)      All work performed by GPM on the Property pursuant to this
                  Agreement shall be done in a good and miner-like manner and in
                  compliance with all federal, state, county and municipal laws,
                  regulations and ordinances governing such operations. GPM
                  shall reclaim the Property in accordance with and to the
                  extent required by relevant applicable law, regulation or
                  ordinance when any condition requiring reclamation is a direct
                  result of GPM's operations on the Property.

         (b)      GPM shall avoid conducting drilling and trenching activities
                  within one hundred fifty (150) feet of a dwelling house or
                  outbuildings, if any. now located on the Property. Completed
                  drill holes shall be plugged pursuant to federal, state,
                  county and municipal laws and regulations unless transferred
                  to the Owners pursuant to Paragraph 9.1 (j).

         (c)      Ingress and egress routes, drill pads, and trench sites
                  constructed by GPM shall be reclaimed to approximate the
                  conditions and contours existing prior to the commencement of
                  GPM's operations on the Property. All areas of

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                  surface disturbance shall be reseeded, if necessary, after the
                  completion of activities.

         (d)      GPM may use existing roads on the Property and may construct
                  additional roads on the Property. GPM shall maintain and shall
                  repair all damage caused by GPM's activities to existing and
                  new roads.

         (e)      GPM shall avoid undue degradation of trees and vegetation when
                  conducting its exploration activities on the Property. Where
                  practicable, trees that impede passage over the Property shall
                  be pruned rather than cut and removed.

         (f)      GPM, its employees, agents, or contractors shall not hunt or
                  fish on the Property, nor shall they carry onto the Property
                  any firearms.

         (g)      GPM shall not use water from the Owners' well, tanks or
                  surface reservoirs without first obtaining the consent of the
                  Owners; however, GPM may drill its own water wells.

         (h)      GPM may. in its sole discretion, and to the extent that it may
                  legally do so, offer to transfer to the Owners any drill hole
                  on the Property, in which water is discovered, on an "as is"
                  basis for the purpose of converting the drill hole to a water
                  well. Prior to abandoning or plugging a drill hole, GPM shall
                  give the Owners written notice, delivered at least ten (10)
                  days prior to its intended action. Within seventy-two (72)
                  hours of the receipt of GPM's notice, the Owners shall give
                  written notice to GPM accepting the transfer of such drill
                  hole, and all responsibility therefore, including, but not
                  limited to, any and all reclamation and environmental
                  responsibilities. GPM shall then transfer the drill hole to
                  the Owners. The Owners shall be responsible for all permits,
                  materials and costs required to convert such drill hole to a
                  water well. The Owners shall indemnify, defend and hold GPM
                  harmless from any and all claims, liability, loss and
                  expenses, including attorneys' fees, demands or causes of
                  action made against GPM and relating to such drill hole after
                  its transfer to the Owners.

         (i)      GPM shall remove all garbage, litter and other waste produced
                  by its operations from the Property on a regular basis.

         (j)      GPM shall not create or suffer any liens or encumbrances on
                  the Property that may arise out of work conducted by or on its
                  behalf pursuant to this Agreement, except for those it
                  contests in good faith or for which it posts a statutory bond.
                  However, nothing herein shall prevent GPM from mortgaging or
                  granting a security interest in or otherwise encumbering its
                  leasehold rights to or its Option to Purchase the Property for
                  any purpose whatsoever, including the obtaining of financing
                  for exploration,

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                  development, construction or mining operations on the
                  Property. The Owners hereby consent to any such encumbrance.

         (k)      GPM shall indemnify and hold the Owners harmless from and
                  against any liability arising from personal injury, death or
                  property damage caused solely by GPM's activities on the
                  Property during the Term of this Agreement. Nothing herein
                  shall relieve the Owners from and against any liability for
                  their own negligence or for the negligence of persons or
                  entities acting as agents or as guests of the Owners. This
                  indemnification shall survive the termination of this
                  Agreement for as long as GPM is performing reclamation work
                  upon the Property or is in possession of its personal property
                  and improvements remaining on the Property.

         (1)      During the Term, GPM agrees to comply with all applicable
                  federal and state laws and regulations regarding insurance for
                  persons working in or on the Property and under the direct
                  supervision of GPM. GPM will carry liability insurance with
                  respect to its operations in reasonable amounts with reputable
                  insurance companies licensed to do business in the state.

         (m)      GPM shall be responsible for the payment of federal
                  maintenance rental payments, performance and filing of
                  assessment work (if such should ever be reinstated), and
                  payment of the necessary fees and recordation of the required
                  documents (such as, the annual notice of intention to hold)
                  with the appropriate federal or county offices for all
                  unpatented Mining Claims in Exhibit "A" or located under
                  Section 8 of this Agreement for each year that this Agreement
                  is in effect. If GPM shall keep this Agreement in effect
                  beyond June 1 of any year, it shall immediately pay and
                  perform all BLM rental payments, work obligations and
                  recordation requirements with the federal government.

         (n)      GPM shall provide to the Owners annually, within thirty (30)
                  days after each anniversary of the Effective Date, a brief
                  summary report, including copies of all relevant
                  non-interpretative data of work performed on the Property
                  during the preceding year. GPM does and shall not make any
                  representations or warranties as to the accuracy, reliability
                  or completeness of such data or information so provided.

10.      Lesser Interest; After Acquired Rights; Third-Party Claims

10.1 Without impairment of the representations, warranties and covenants
contained in this Agreement, if the Owners own less than the entire and
undivided interest in the Property, then the Minimum Advance Royalty Payments,
Net Returns Royalty payments. Purchase Price and the reserved Net Returns
Royalty provided herein shall be paid to and reserved by the Owners only in the
proportion that the Owners' actual interest bears to the entire ownership
interest of the Property. GPM shall be entitled to recover excess monies

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previously paid to the Owners or to offset, such excess monies paid, against any
future monies due or which become payable thereafter to the Owners.

10.2 The Owners agree that any additional interest in the Property acquired by
GPM during the Term of this Agreement shall be owned solely by GPM and the
Owners shall have no right or interest in such acquired interest.

10.3 If during the Term of this Agreement, the Owners acquire any additional
right or interest in the Property, then (i) the Owners shall promptly notify GPM
of such acquisition; (ii) such right or interest shall automatically become part
of the Property for all purposes of this Agreement; and (iii) the Owners shall
sign, acknowledge and deliver to GPM an amendment to the Agreement and the
Warranty Deed so as to include such right or interest.

10.4 If GPM is advised by an attorney that a third party may have a claim of
ownership in the Property, any of the Mining Claims, or Minerals or the proceeds
therefrom, GPM may deposit in a special escrow account any payments otherwise
due and give written notice of such a deposit to Owners. The sums deposited
shall remain in the special escrow account until the claim, or controversy is
resolved or until there has been a final determination of the claim or
controversy by a court or administrative body of competent jurisdiction and any
appeal therefrom, or the period in which to appeal has expired.

11.      Assignment

The rights of the Owners and GPM hereunder may not be assigned in whole or in
part without the prior written consent of the other party, which consent shall
not be unreasonably withheld. However, GPM may freely assign its right hereunder
to an affiliate, subsidiary or partner. An assignment of this Agreement by GPM.
in whole or in part, shall relieve and discharge GPM from any obligations
hereunder as to the interest assigned. No change in or division of ownership or
of any interest under this Agreement shall bind GPM for any purpose until
forty-five (45) days after such person or entity acquiring such rights has
furnished GPM with written notice and a copy of the instrument (or a certified
copy thereof if requested by GPM) evidencing the change in or division of
ownership. The assignee shall enter into a written assumption, satisfactory to
GPM. of all the assignor's obligations hereunder. No assignment by the Owners or
GPM shall have the effect of increasing the duties of the non-assigning party or
enlarging the rights of the assignee.

12.      Default

Failure by GPM to perform or comply with any terms, provisions or conditions,
express or implied, hereunder shall not cause a forfeiture or termination of
this Agreement, including the Option to Purchase, nor be grounds for a reversion
of the estate or rights granted hereunder nor for cancellation of this
Agreement. If GPM defaults in the performance of its duties hereunder, the
Owners shall give GPM written notice specifying the default. GPM shall commence
curing the default within forty-five (45) days after receiving such notice and
thereafter diligently prosecute such action to completion. Any default by GPM
consisting

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of only the failure to make payments required hereunder may be cured within ten
(10) business days after GPM receives notice of such default from the Owners. In
the event GPM fails to timely cure a default, this Agreement shall remain in
force and the Owners' sole remedy shall be compensatory damages.

If the Owners and GPM agree in writing or a court of competent jurisdiction
determines there has been a default under this agreement, and within (10) days
from the date of the agreement or determination, GPM pays the Owners the monies
due them. GPM shall be excused from any obligation to pay damages and this
Agreement shall remain in full force and effect.

13.      Termination

13.1 GPM may terminate its rights under this Agreement, as to all or any part of
the Property, at any time by delivering to the Owners, ten (10) days prior to
the termination, written notice of GPM's intent to terminate as of a specified
date. As of the specified date, all rights of GPM as to all or any part of the
Property, subject to the termination, shall terminate.

13.2 Upon termination of this Agreement, GPM shall not be required to make any
further payments or perform any further obligations hereunder except as follows:
(i) to perform reclamation work required as a direct result of GPM's operations
on the Property, as required by applicable law and this Agreement; (ii) to
deliver to the Owners, within forty-five (45) days after termination, one set of
copies of all available non-interpretative data, which GPM has developed during
its operations on the Property and which data has not been previously furnished
to the Owners, provided that GPM shall not be responsible for the accuracy,
reliability or completeness of such data: and (iii) to permit the Owners, at
their expense, to take possession of any available core, cutting, and other
samples derived from the Property, provided that GPM shall in no event be liable
to the Owners for any prior loss or damage to such core, cuttings and other
samples.

13.3 If GPM's notice of termination provides that the Agreement is being
terminated as to only part of the Property, the Agreement shall remain in force
as to the remaining lands comprising the Property and all other obligations of
GPM, including the Purchase Price to be paid pursuant to the Option to Purchase
in Section 6. shall be proportionately reduced.

14.      Removal of Property

For six (6) months after the termination of this Agreement, GPM shall have the
right to remove from the Property all improvements and personal property placed
on the Property by GPM. All such improvements or personal property not removed
from the Property within the six (6) month time period shall become the personal
property of the Owners. GPM shall have the right, at its expense, to keep one or
more watchmen on the Property during the six-month period.

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15.      Taxes

15.1 The Owners and GPM shall pay their proportionate share of all taxes or
assessments (whether based on ownership, mining, production, processing,
severance of minerals or net proceeds from the extraction of minerals) on their
respective interests in the Property or assessed against their respective
personal property on or about the Property. The Owners shall be responsible for
all federal and state income taxes resulting from any payments made by GPM to
them. Prior to any purchase of the Property by GPM pursuant to Section 6, the
Owners shall pay, when due, their proportionate share of all taxes and
assessments against the Property and all taxes resulting from the Owners' use
thereof. GPM may, in its sole discretion, pay and discharge any taxes levied or
assessed upon the Property which are past due and owed by the Owners; GPM shall
be subrogated to the holder of the rights thereof. GPM may reimburse itself for
such expenditures from any monies thereafter payable to the Owners.

15.2 GPM shall pay when due, or reimburse the Owners for all taxes or
assessments that are levied upon the Property as a result of GPM's operations or
improvements upon the Property while this Agreement is in effect and for so long
thereafter as GPM's operations continue on or its improvements or personal
property remain upon the Property.

16.      Force Majeure

GPM shall not be deemed in default of this Agreement during any period when it
is hindered, prevented or delayed from complying therewith in whole or in part
by, including but not limited to: acts of God; acts of the public enemy; labor
disturbances; civil disorders; war; unavoidable accidents; unusually severe
weather; unforeseen geological conditions; inability to obtain any necessary
permits, bonds or operating approvals whether by action or inaction of
governmental authorities; inability to obtain competent workmen, fuel, water,
equipment or transportation; litigation; rules or regulations imposed by any
federal, state, or other governmental agency under asserted authority;
environmental restrictions or conditions; or any other cause reasonably beyond
the control of GPM, other than financial or economic delays, each of which is
called a "Force Majeure." The term of this Agreement shall be extended by the
period of any Force Majeure. GPM shall not be required to compensate the Owners
for any loss occasioned by a Force Majeure. GPM shall promptly notify the Owners
of any suspension caused by a Force Majeure and it shall use reasonable
diligence to remedy or eliminate the cause of such suspension. However, GPM
shall not be required to remedy the effects of any Force Majeure by settlement
of any labor difficulty contrary to its wishes or contest the validity of any
law, regulation or any action or inaction by a civil or military authority. The
handling of those controversies shall be entirely within GPM's discretion.

17.      Rights Not To Be Suspended

Disputes or differences between GPM and the Owners shall not interrupt
performance of this Agreement. In the event of any dispute or difference, GPM
may continue operations in the

                                       12
<PAGE>

same manner as prior to the dispute until the matters have finally been
determined between GPM and the Owners by judicial determination, if necessary.

18.      Confidentiality

18.1 During the Term of this Agreement, the Owners shall not disclose to any
third party any information furnished to them by GPM, or obtained through any
other source whatever, concerning GPM's operations on the Property without the
prior written consent of GPM.

18.2 Owners shall not use GPM's name, or its subsidiaries', affiliates' or
partners' names in any public statement or press release and shall not make any
press release, public statements or public announcements of any sort concerning
this Agreement or the operations and activities of GPM with respect thereto,
except with the prior consent of GPM or as required by law or by a stock
exchange.

19.      Notice

Any notice or other communication ("Notice") required or desired to be given
under this Agreement shall be in writing and shall become effective when
personally served upon the party to be given such Notice: when posted by
certified or registered mail, return receipt requested; or when delivered by
telex, telegraph, telecopier or other wire service.

         The addresses for such Notices shall be:

The Owners:       Mark Milner. Daniel Milner & Stephen Crossland
                  in care of Stephen Crossland
                  Johnson. Gaukroger & Crossland. P.S.
                  104 Cottage Avenue P.O. Box 566
                  Cashmere, WA 98815-0566
                  Telephone: (509) 782-4418
                  Telecopier (509) 782-4298

Golden Phoenix:   Golden Phoenix Minerals, Inc.
                  3595 Airway Drive Suite 405
                  Reno, Nevada 89511
                  Attention: Michael R. Fitzsimonds, President
                  Telephone: (702) 853-4919
                  Telecopier: (702) 853-5010

                                       13
<PAGE>

Escrow Agent:     Flowers Escrow
                  100 S Terminal Way #104
                  P.O. Box 12520
                  Reno, NV 89510-2520
                  Attention:
                  Telephone: (702) 786-3090
                  Telecopier (702) 786-0562

20.      Binding Effect

All covenants, conditions and terms of this Agreement shall be of benefit to and
run with the Property and shall bind and inure to the benefit of the parties
hereto, their respective heirs, representatives, assigns and successors in
interest.

21.      Memorandum

GPM and the Owners shall sign and acknowledge a memorandum of this Agreement
suitable for recording to give notice hereof to third parties. GPM shall record
the memorandum at its expense. This Agreement shall not be recorded.

22.      Headings

The section headings herein have been inserted for convenience of reference only
and shall not modify or restrict any of the terms or provisions hereof. Unless
otherwise expressly provided, or unless the context shall otherwise require,
words importing the singular shall include the plural and words importing the
masculine gender shall include the feminine gender, and vice versa.

23.      Entire Agreement; Waiver and Modification; Counterparts

23.1 This Agreement and the exhibits attached hereto set forth the entire
agreement between the parties hereto with respect to the subject matter hereof.
This Agreement supersedes all prior written and oral negotiations, discussions,
agreements and understandings related to such subject matter.

23.2 Any waiver or modification of the covenants, conditions, warranties,
representations or obligations contained herein or amendment of this Agreement
must be in writing, dated subsequent to the Effective Date, and signed by each
of the parties hereto.

23.3 This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which shall constitute the same
Agreement.

                                       14
<PAGE>

24.      Governing Law; Severability; Perpetuities; Attorneys' Fees; Currency

24.1 This Agreement is to be governed by and construed under the laws of the
State of California, without reference to its conflicts of laws, and each of the
parties hereto irrevocably attorns to the jurisdiction of the courts of
California for adjudication of rights, obligations and interests arising
pursuant to this Agreement.

24.2 Any provision of this Agreement prohibited by the laws of the United States
or the States of California or Nevada shall be ineffective to the extent of such
prohibition without invalidating the remaining provisions of this Agreement.

24.3 Any right or option to acquire any interest in real property (and any other
right held subject to the Rule Against Perpetuities) under the Agreement must be
exercised, if at all, so as to vest such interest within twenty-one (21) years
after the Effective Date.

24.4 In the event of any suit between the parties hereto, the prevailing party
shall be entitled to recover reasonable attorneys' fees incurred in connection
with that suit.

24.5 All references to monetary amounts contained in this Agreement are
references to the currency of the United States of America

25.      Further Assurances

The Owners and GPM hereby covenant to do and perform all acts and provide all
documents which are necessary to give full effect to the provisions of this
Agreement.

THE OWNERS AND GPM, INTENDING TO BE LEGALLY BOUND, have executed this Agreement
effective the date and year first above written.

The Owners:

/s/ Stephen R. Crossland
-----------------------------
Stephen R. Crossland

###-##-####
------------------------
Tax ID Number

/s/ Mark Milner                                    /s/ Daniel  Milner
-----------------------------                      -----------------------------
Mark Milner                                        Daniel  Milner

###-##-####                                        ###-##-####
-----------------------------                      -----------------------------
Tax ID Number                                      Tax ID Number

                                       15
<PAGE>

GOLDEN PHOENIX MINERALS, INC.

By: /s/ Michael Fitsimonds
Name: Michael Fitsimonds
Title: President

STATE OF WASHINGTON                        )
                                           )SS.
COUNTY OF_______________________________   )

         On this day personally appeared before me Mark Milner to me known to be
the individual described in and who executed the within and foregoing
instrument, and acknowledges that he signed the same as his free and voluntary
act and deed, for the uses and purposes therein mentioned. Given under my hand
and official seal this ____ day of _____________________, 1998.

                                                ________________________________
                                                Notary Public
My commission expires:

____________________________

STATE OF WASHINGTON                        )
                                           )SS.
COUNTY OF_______________________________   )

         On this day personally appeared before me Daniel Milner to me known to
be the individual described in and who executed the within and foregoing
instrument, and acknowledges that he signed the same as his free and voluntary
act and deed, for the uses and purposes therein mentioned. Given under my hand
and official seal this ___ day of _________________, 1998.

                                                ________________________________
                                                Notary Public
My commission expires:

____________________________

                                       16
<PAGE>

STATE OF WASHINGTON                        )
                                           )SS.
COUNTY OF_______________________________   )

         On this day personally appeared before me Stephen R. Crossland to me
known to be the individual described in and who executed the within and
foregoing instrument, and acknowledges that he signed the same as his free and
voluntary act and deed, for the uses and purposes therein mentioned. Given under
my hand and official seal this ___ day of _________________, 1998.

                                                ________________________________
                                                Notary Public
My commission expires:

____________________________

STATE OF NEVADA                            )
                                           )SS.
COUNTY OF WASHOE                           )

         On this 15th day of January, 1998. before me, personally appeared
Michael R. Fitzsimonds, to me known to be the President of Golden Phoenix
Minerals, Inc., a Minnesota corporation, that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and
upon oath stated that he was authorized to execute said instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.

                                                   /s/ DARCI DAWN BERTRAM
                                                   __________________________
                                                   Notary Public

My commission expires:

        7/29/00

                                          DARCI DAWN BERTRAM
                                          Notary Public - State of Nevada
                                          Appointment Recorded in Washoe County
                                          No. 96-3591 -2-EXPIRES JULY 29, 20OO

                                       17
<PAGE>

                                   EXHIBIT "A"
                                       TO
         MINING LEASE AND OPTION TO PURCHASE AGREEMENT DATED JANUARY 15,
                                      1998
                                    BETWEEN
              MARK MILNER, DANIEL MILNER and STEPHEN R. CROSSLAND
                                   ("OWNERS")
                    AND GOLDEN PHOENIX MINERALS, INC ("GPM")

                                    Property

         Under the terms of the above-referenced Agreement, Owners have leased
to GPM and have granted GPM the exclusive option to purchase certain unpatented
mining claims referred to as the Property and situated in the County of Modoc,
State of California, and more particularly described as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
           CLAIM                        SEC/TWP/RGE             LOCATION         MODOC COUNTY RECORDING            CAMC NO.
           NAME                                                                          BOOK/PAGE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                     <C>                       <C>                        <C>
 CIRRUS #1                               12/47N/15E             11/28/1982                295/777                    120351
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #2                               12/47N/15E             11/28/1982                295/776                    120352
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #3                               12/47N/15E             11/28/1982                295/775                    120353
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #4                               12/47N/15E             11/28/1982                295/774                    120354
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #5                               12/47N/15E             11/28/1982                295/773                    120355
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #6                               12/47N/15E             11/28/1982                295/772                    120356
------------------------------------------------------------------------------------------------------------------------------------
 STONE                                  7,12/47N/15E            11/28/1982                295/778                    120357
------------------------------------------------------------------------------------------------------------------------------------
 KLONDIKE FRACTION                       12/47N/15E             11/28/1982                295/779                    120358
------------------------------------------------------------------------------------------------------------------------------------
 RUBY TOO FRACTION                       12/47N/15E             11/28/1982                295/780                    120359
------------------------------------------------------------------------------------------------------------------------------------
 RUBY FRACTION                           12/47N/15E             11/28/1982                295/781                    120360
------------------------------------------------------------------------------------------------------------------------------------

Initialed for Identification: /s/ MRF
                                     "A-1"
</TABLE>
<PAGE>

                                   EXHIBIT "B"
                                       TO
           MINING LEASE AND OPTION TO PURCHASE AGREEMENT DATED JANUARY 15,1998
                                     BETWEEN
        MARK MILNER, DANIEL MILNER and STEPHEN R. CROSSLAND
                                   ("OWNERS")
                    AND GOLDEN PHOENIX MINERALS, INC ("GPM")

                         NET RETURNS PRODUCTION ROYALTY

1.       Reserved Net Returns Production Royalty

         Owners have reserved, and GPM and the Owners agree that, a net returns
production royalty (hereinafter called "Net Returns Royalty") shall be
calculated and payable on a calendar quarter basis by GPM to the Owners at a
rate equal to two percent (2%) of the "Net Returns" (defined herein) of all
minerals, ores, concentrates, metals, and other materials produced from the
Property ("Minerals") during "Commercial Production" (defined herein) from the
Property.

         (A) Commercial Production. The term "Commercial Production" shall be
defined as the mining, extraction, processing, and recovery for sale of Minerals
from the Property. Commercial Production shall not include the taking of
Minerals from the Property for the purpose of determining the amenability to
benefaction processes or mining thereof, including bulk sampling. Only the sale
proceeds, if any, of such sampling in excess of one thousand (1,000) tons shall
become subject to the Net Returns Royalty.

         (B) Net Returns. The term "Net Returns" shall mean the total "Gross
Sale Proceeds" or "Deemed Gross Sale Proceeds" (both defined herein) less
deductions for the following total actual costs paid by, charged to or otherwise
incurred by GPM within that calendar quarter which are attributable to the
handling, treatment and sale of individual Minerals within that calendar
quarter:

         (1)      All smelting, refining, treatment, assaying, sampling,
                  umpiring, selling and other costs, charges and penalties
                  charged by any refinery, smelter or other purchaser of
                  Minerals;

         (2)      All taxes paid on production of Minerals, except income taxes,
                  including but not limited to production, severance, sales and
                  privilege taxes, and all local, state and federal royalties
                  that are based upon the production of Minerals;

                                     "B-1"
<PAGE>

         (3)      All costs of loading, securing, transporting and insuring
                  Minerals from the Property to the refinery, smelter or
                  purchaser;

         (4)      All costs or charges of any nature for or in connection with
                  insurance, storage, or representation' at a smelter or
                  refinery for ores and Minerals; and,

         (5)      All actual sales and brokerage costs on ores and minerals.

         (C) Gross Sale Proceeds or Deemed Gross Sale Proceeds. "Gross Sale
Proceeds" or "Deemed Gross Sale Proceeds" from sales or deemed sales of Minerals
shall mean and be determined as follows:

         Gold. Silver, Platinum and Palladium.

         The Gross Sale Proceeds for gold, silver, platinum and palladium shall
be deemed gross proceeds from deemed sales of such Minerals, and sales of such
Minerals shall be deemed to have occurred, without regard to when or to whom
they actually are made, upon the earliest of the following:

         (1)      When such Minerals (other than refined bullion, dore, or
                  concentrates) are shipped by GPM from the Property to an
                  independent refinery, smelter or other unaffiliated
                  third-party purchaser; or,

         (2)      With respect to refined bullion produced by GPM, the day the
                  final, refined bullion was produced; or,

         (3)      With respect to dore produced by GPM, three (3) business days
                  after the dore was produced; or,

         (4)      With respect to other concentrates produced by GPM, thirty
                  (30) days after those concentrates have been produced.

         The total Deemed Gross Proceeds of all such sales occurring within a
single calendar quarter shall be determined by multiplying the total number of
troy ounces of the particular Minerals deemed sold within that calendar quarter
by the following:

         (1)      For gold, platinum or palladium, the arithmetic mean of the
                  daily London Bullion Market afternoon fixing for the calendar
                  quarter per ounce of the respective Minerals; and

         (2)      For silver, the arithmetic mean of the weekly Handy & Harman
                  base price per troy ounce as quoted in Metals Week for the two
                  weeks which conclude within that calendar quarter, but in the
                  event Metals

                                     "B-2"
<PAGE>

                  Week is not published or if for any other reason such
                  quotation is not available, the arithmetic mean of the daily
                  handy & Harman base price quote as published in the Wall
                  Street Journal for the calendar quarter will be utilized.

         Other Products

         The Gross Sale Proceeds for all Minerals other than gold, silver,
platinum or palladium shall be the actual proceeds of sale to an independent
refinery, smelter or other unaffiliated third-party purchaser of such minerals
during a calendar quarter.

         In the event such Minerals other than gold, silver, platinum or
palladium are actually and finally disposed of by GPM by means other than sale,
Net Returns shall be determined as follows: using assays or other accurate
analyses regularly taken for ores and concentrates, the recoverable marketable
content of the ores and concentrates produced from the Property shall be
determined in accordance with commonly accepted industry standards; the mineral
content then shall be multiplied by the closing price for each respective
marketable mineral on the day of disposition of the subject ores and
concentrates quoted on the New York Commodity Exchange ("COMEX"); the product
thereof shall be the value of the subject Minerals disposed of other than by
sale; and Net Returns shall be determined upon the value of the Minerals less
applicable charges, royalties, taxes, costs, and penalties which GPM actually
incurs with respect to the disposition of the subject ores and minerals.

2.       Grantor Owned Facilities

         In the event smelting or refining are carried out in facilities owned
or controlled, in whole or in part, by GPM, then charges, costs and penalties
for such operations shall mean the amount GPM would have incurred if such
operations were carried out at facilities not owned or controlled by GPM then
offering comparable services for comparable product on prevailing terms, but in
no event greater than actual costs incurred.

3.       Stockpiling and Commingling

         GPM may stockpile and commingle Minerals with ores, concentrates or
other products not mined from the Property. GPM shall, prior to such stockpiling
or commingling, measure, weigh and analyze samples of such commingled materials
in accordance with sound mining and metallurgical practices, and GPM shall keep
accurate records as a basis for computing any Net Returns Royalty payments. In
determining which commingled materials are sold from a commingled stockpile, a
first-in, first-out system shall be used.

4.       Tailings and Waste

         All tailings or waste material shall be the property of GPM and GPM
shall have no obligation to process or extract substances therefrom. If GPM
elects to extract Minerals of value therefrom and utilizes or sells the same,
the Owners shall be paid a Net Returns

                                     "B-3"
<PAGE>

Royalty thereon in the amount and manner provided herein. If GPM commingles the
tailings or waste material produced from the Property with tailings and waste
material not produced from the Property, GPM shall record the tonnage amount and
source of such tailings and waste material prior to commingling and a Net
Returns Royalty, if any, shall be paid based upon a pro rata portion of the
average production as determined as a percentage of the volume of the tailings
or waste material stored. The records of GPM shall be deemed conclusive as to
the tailings or waste material attributable to each source.

5.       Trading Activities

         GPM shall have the right to sell or refrain from selling Minerals
produced from the Property in any manner it may elect. GPM shall have the right
to engage in forward sales, future trading or commodity options trading, and
other price hedging, price protection, gold and silver loans, financing and
speculative arrangements which may involve the possible delivery of Minerals
produced from the Property but do not result in the actual sale and delivery of
Minerals produced from the Property ("Trading Activities"). The Owners
acknowledge that the proceeds of Trading Activities shall not be considered part
of or included in the amounts paid to GPM for Minerals sold for purposes of
determining Net Returns. The Owners shall not be entitled to participate in the
proceeds or be obligated to share in any losses generated by any Trading
Activities.

6.       Bulk Sampling

         GPM shall have the right to take samples of minerals and material from
any portion of the surface and subsurface of the Property for the purpose of
determining the amenability to beneficiation processes and mining thereof,
including bulk sampling. Only the sale proceeds, if any, of such sampling in
excess of one thousand (1,000) tons shall become subject to the Net Returns
Royalty.

7.       Payments and Records Inspection

         All Net Returns Royalty payments due the Owners shall be made by cash,
check, or draft, mailed or delivered on or before the twenty-fifth (25th) day of
the month following the calendar quarter in which payment or the equivalent
accounting amount is received by GPM from the sale or deemed sale of Minerals.
All Net Returns Royalty payments shall be accompanied by a statement showing the
basis upon which the payment was computed. For six (6) months subsequent to any
such payments, the Owners, or their representatives appointed in writing, upon
reasonable notice to GPM and during normal business hours, shall have the right
to inspect GPM's record regarding the computation of the Net Returns Royalty.

                                     "B-4"
<PAGE>

8.       Termination of Net Returns Royalty

         In the event GPM purchases the Property, the Net Returns Royalty, and
all right of Owners, and duties and obligations of GPM to Owners pertaining to
thereto, shall terminate upon the date of delivery of the Warranty Deed set
forth in Exhibit "D" by Owners to GPM.

Initialed for Identification: /s/ MNF

                                     "B-5"
<PAGE>

                                   EXHIBIT "C"
                                       TO
                  MINING LEASE AND OPTION TO PURCHASE AGREEMENT
                              DATED JANUARY 15,1998
                                     BETWEEN
              MARK MILNER, DANIEL MILNER and STEPHEN R. CROSSLAND
                                       AND
                          GOLDEN PHOENIX MINERALS, INC

                               ESCROW INSTRUCTIONS

To:      Flowers Escrow
         1005 Terminal Way, #104
         Post Office Box 12520
         Reno, NV 89510-2520

The Undersigned, being Golden Phoenix Minerals, Inc. ("GPM"), and Mark Milner,
Daniel Milner and Stephen R. Crossland ("Owners"), hereby deliver to you (also
called "Escrow Agent") the instruments described below, to be held and disposed
of by Escrow Agent in accordance with the following instructions and upon the
following terms and conditions to which the undersigned agree.

1.       Instruments Deposited or Required

1.1 The following instruments ("Instruments") are herewith delivered to the
Escrow Agent by GPM and the Owners:

         (a)      A copy of the fully executed Mining Lease and Option to
                  Purchase Agreement ("Agreement"), dated effective January 15,
                  1998, between Mark Milner, Daniel Milner and Stephen R.
                  Crossland, as lessors and optionors, and Golden Phoenix
                  Minerals, Inc., as lessee and optionee. The subject of the
                  Agreement is certain real property, comprised of unpatented
                  mining claims, situated in Modoc County, CA ("Property") and
                  more fully described in Exhibit "A" to the Agreement. Pursuant
                  to the terms of the Agreement, the Owners granted GPM an
                  option to purchase ("Option to Purchase") the Property.

         (b)      The original of the fully executed and acknowledged Warranty
                  Deed, dated effective January _________, 1998, by which the
                  Owners, as grantors, have conveyed the Property to GPM, as
                  grantee.

         (c)      The original of the fully executed and acknowledged Quitclaim
                  Deed and Release, dated effective January_________, 1998,
                  whereby GPM, as grantor, quit

                                     "C-1"
<PAGE>

                  claims all its interest in the Property to the Owners, as
                  grantees, and releases its interest in the Agreement.

1.2 If needed, or if requested by GPM, to complete the purchase of the Property
or to satisfy Section 7.3 of the Agreement pertaining to personal property to be
transferred by Owners to GPM, Owners shall execute, acknowledge and deliver to
Escrow Agent a bill of sale ("Bill of Sale") in which they sell, convey and
transfer to GPM any personal property which becomes part of the Option to
Purchase transaction or is required to be transferred to GPM.

1.3 Ten (10) days prior to closing, Owners, at their expense, shall furnish to
GPM a current commitment for an owner's title insurance policy in an amount
equal to the Purchase Price (unless the Property is unpatented mining claims).

2.       Instructions

2.1 You are authorized by the Owners to receive and give receipts for all
purchase price payments made by GPM pursuant to the Option to Purchase and to
distribute such payments to the Owners.

2.2 GPM shall pay your escrow fees. GPM shall pay the fee for recording the
Warranty Deed. The Owners shall pay the fee for recording the Quitclaim Deed and
Release.

2.3 You are instructed to hold the aforementioned documents in escrow and
deliver them in accordance with the following instructions:

         (a)      If GPM exercises the Option to Purchase the Property and pays
                  the purchase price required by the Agreement, you shall have
                  the Warranty Deed recorded and shall deliver the recorded
                  Warranty Deed and all remaining documents (i.e., the Quitclaim
                  Deed and Release and the Bill of Sale, if any) to GPM, or its
                  order; or,

         (b)      If the Agreement is terminated without the exercise of the
                  Option to Purchase by GPM, you shall record the Quitclaim Deed
                  and Release and shall deliver the recorded document and all
                  remaining documents (i.e., Warranty Deed and the Bill of Sale,
                  if any) to the Owners, or their order.

2.4 You are not a party to, nor are you bound by any agreement other than these
Escrow Instructions.

2.5 You are to act herewith as a depositor only and are not responsible or
liable, in any manner whatsoever, for the sufficiency, correctness, genuineness,
or validity of any instrument, or with respect to the form or execution of the
same, or for the identity or authority or rights of any person executing or
depositing it.

                                     "C-2"
<PAGE>

Golden Phoenix Minerals, Inc.:

Golden Phoenix Minerals, Inc.:

___________________________________
Michael R. Fitzsimonds
President
Date: _______________, 1998

         Escrow Agent hereby acknowledges receipt of these Escrow Instructions
and of the Instruments deposited herewith and agrees to hold and dispose of the
same in accordance with the Instructions herein:

Flowers Escrow:

/s/
Its: President
Dated: Jan 1, 1998

Initialed for Identification:/s/ MNF

                                     "C-5"
<PAGE>

                                   EXHIBIT "D"
                                       TO
                  MINING LEASE AND OPTION TO PURCHASE AGREEMENT
                               DATED JANUARY, 1998
                                     BETWEEN
              MARK MILNER, DANIEL MILNER and STEPHEN R. CROSSLAND
                                       AND
                          GOLDEN PHOENIX MINERALS, INC

                                  WARRANTY DEED

         THIS WARRANTY DEED ("Deed") is made effective as of January 15, 1998 by
and between Mark Milner, Daniel Milner and Stephen R. Crossland ("Grantors"),
whose address is Johnson, Gaukroger & Crossland, P.S., 104 Cottage Avenue, Post
Office Box 566, Cashmere, WA 98815-0566, and GOLDEN PHOENIX MINERALS, INC., a
Minnesota corporation, duly authorized to transact business in the State of
California, with offices at 3595 Airway Drive Suite, 405 Reno, NV 89511
("Grantee"). Grantors or Grantees may individually or collectively be referred
to herein as a "Party" or the "Parties."

                                   WITNESSETH:

         Grantors, for and in consideration of the sum of Ten Dollars ($10.00),
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by Grantors, have granted, bargained, sold and conveyed,
and by these presents do grant, bargain, sell, convey, confirm and warrant
against the lawful claims of all persons whomsoever to Grantee, its successors
and assigns, that certain real property consisting of unpatented mining claims
situated in Modoc County, California ("Property"), which Property (includes, but
is not limited to, any water and extra lateral mining rights thereto) is more
particularly described in Exhibit "A" attached hereto and made a part hereof,
and all of Grantor's right, title and interest in and to that reserved net
returns production royalty for all minerals produced from the Property ("Net
Returns Royalty"), which Net Returns Royalty is more particularly described in
Section 2 below.

         TOGETHER with all and singular the hereditaments and appurtenances
thereto belonging, or in anywise appertaining, and the reversion and reversion,
remainder and remainders, rents, issues and profits thereof, and all the estate,
right, title, interest, claim and demand whatsoever of the Grantors, either in
law or in equity, of, in and to the bargained Property, with hereditaments and
appurtenances.

         TO HAVE AND TO HOLD the Property and title hereby conveyed to Grantee,
its successors and assigns, forever.

                                     "D-1"
<PAGE>

1.       Representations and Warranties

         The Grantors represent, warrant and covenant to Grantee, and its
successors and assigns, that:

         The Grantors are the sole legal and equitable owners of the Property.

         (a)      The Property is free and clear of all leases, liens,
                  encumbrances and outstanding adverse claims, demands and
                  interests.

         (b)      The execution and delivery of this Deed and the performance of
                  this Deed by the Grantors will not result in any breach or
                  constitute a default (or an event which, with notice or lapse
                  of time, or both, would become a default) under, or give to
                  others any rights of termination, amendment, acceleration,
                  cancellation, or consent, or result in the creation of a lien
                  or encumbrance on the Property, pursuant to any instrument or
                  obligation to which the Grantors are a party or by which they
                  are bound.

         (c)      There is no environmental or other condition on the Property
                  which is, or may become, a violation of any applicable
                  federal, state, county or municipal law, regulation or
                  ordinance relating to zoning, land use, environmental
                  protection, or otherwise with respect to the Property or any
                  activities of the Grantors or their predecessors in interest
                  relating thereto, and the Grantors have not received any
                  notice of any investigation of any such condition or
                  violation.

         (d)      The Grantors are lawfully seized of the Property and have good
                  right and lawful authority to convey the Property.

         (e)      Grantee shall have the quiet and peaceful possession and
                  enjoyment of the Property and the Grantors will do everything
                  lawfully within their power to defend title to the Property
                  and Grantee's quiet and peaceful possession thereof against
                  all persons or entities who may claim any interest in the
                  Property or the minerals therein, or proceeds therefrom.

2.       Net Returns Royalty; Termination of Mining Lease

         Pursuant to a certain Mining Lease and Purchase Option Agreement, dated
effective January 15, 1998, between Mark Milner, Daniel Milner and Stephen R.
Crossland and Golden Phoenix Minerals, Inc. ("Agreement"), which Agreement
pertained to the Property, the Grantors reserved a two percent (2%) Net Returns
Royalty for all minerals produced from the Property. Grantors hereby convey,
assign and transfer to Grantee all of their right title and interest in and to
the Net Returns Royalty and to the Agreement and acknowledge that the Agreement
is hereby terminated and of no further force or effect.

                                     "D-2"
<PAGE>

3.       After Acquired Title

         This Deed, without payment of any additional consideration, shall
operate to convey and transfer automatically to Grantee, its successors and
assigns, any and all right, title and interest in the Property acquired by
Grantors after the effective date of this Deed.

4.       Binding Effect

         All covenants, conditions and terms of this Deed shall bind and inure
to the benefit of the parties hereto, their respective heirs, representatives,
assigns and successors.

5.       Further Assurances

         Grantors and Grantee agree to execute or furnish the other with such
additional formal assurances or other documents, in proper and recordable form,
as may be reasonably necessary to carry out the intent, purpose and terms of
this Deed.

6.       Governing Law; Severability; Perpetuities; Attorneys' Fees

6.1 This Deed is to be governed by and construed under the laws of the State of
California, without reference to its conflicts of laws, and each of the parties
hereto irrevocably attorns to the jurisdiction of the courts of California for
adjudication of rights, obligations and interests arising pursuant to this
Agreement.

6.2 Any provision of this Agreement prohibited by the laws of the United States
or the State of California shall be ineffective to the extent of such
prohibition without invalidating the remaining provisions of this Agreement.

6.3. Any right or option to acquire any interest in real property (and any other
right held subject to the Rule Against Perpetuities) under the Agreement must be
exercised, if at all, so as to vest such interest within twenty-one (21) years
after the Effective Date.

6.4 In the event of any suit between the parties hereto, the prevailing party
shall be entitled to recover reasonable attorneys' fees incurred in connection
with that suit.

7.       Sole Agreement Modification

         This Deed and the attached Exhibit set forth the entire agreement
between the Grantors and Grantee with respect to the subject matter hereof. No
modification or alteration of this Deed and the Exhibit hereto shall be
effective unless reduced to writing and signed by both Grantors and Grantee.

         IN WITNESS WHEREOF, Grantors have executed this Deed effective the day
and year first above written.

                                     "D-3"
<PAGE>

Grantors:

/s/ Mark Milner
----------------------------------
MARK MILNER

STATE OF  Washington    )
                        )ss.
COUNTY OF Okanogan      )

         This Warranty Deed was acknowledged before me on this 24 day of
December, 1998, by Mark Milner.

/s/
-----------------------------
NOTARY PUBLIC

/s/ Daniel Milner
----------------------------
DANIEL MILNER

STATE OF Washington   )
                      )ss,
COUNTY OF Snohomish   )

         This Warranty Deed was acknowledged before me on this 19th day of
December, 1998, by Daniel Milner.

/s/ Cynthia L. Brown
--------------------------------
 NOTARY PUBLIC

/s/ Stephen R. Crossland
------------------------------
STEPHEN R. CROSSLAND

STATE OF WASHINGTON    )
                       )ss.
COUNTY OF Chelan       )

         This Warranty Deed was acknowledged before me on this 29 day of
December, 1998, by Stephen R. Crossland.

Pamela J. Wolford
--------------------------------
NOTARY PUBLIC

                                     "D-4"
<PAGE>

                                   EXHIBIT "A"
                                       TO
                                  WARRANTY DEED
                                 ("DEED") DATED
                                 JANUARY 15,1998
                                     BETWEEN
               MARK MILNER, DANIEL MILNER and STEPHEN R. CROSSLAND
                                  ("GRANTORS")
                  AND GOLDEN PHOENIX MINERALS, INC ("GRANTEE")

                                    Property

         Under the terms of the above-referenced Agreement, Owners have leased
to GPM and have granted GPM the exclusive option to purchase certain unpatented
mining claims referred to as the Property and situated in the County of Modoc,
State of California, and more particularly described as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
           CLAIM                        SEC/TWP/RGE                LOCATION       MODOC COUNTY RECORDING            CAMC NO.
           NAME                                                                          BOOK/PAGE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                      <C>                      <C>                       <C>
 CIRRUS #1                               12/47N/15E             11/28/1982                295/777                    120351
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #2                               12/47N/15E             11/28/1982                295/776                    120352
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #3                               12/47N/15E             11/28/1982                295/775                    120353
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #4                               12/47N/15E             11/28/1982                295/774                    120354
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #5                               12/47N/15E             11/28/1982                295/773                    120355
------------------------------------------------------------------------------------------------------------------------------------
 CIRRUS #6                               12/47N/15E             11/28/1982                295/772                    120356
------------------------------------------------------------------------------------------------------------------------------------
 STONE                                  7,12/47N/15E            11/28/1982                295/778                    120357
------------------------------------------------------------------------------------------------------------------------------------
 KLONDIKE FRACTION                       12/47N/15E             11/28/1982                295/779                    120358
------------------------------------------------------------------------------------------------------------------------------------
 RUBY TOO FRACTION                       12/47N/15E             11/28/1982                295/780                    120359
------------------------------------------------------------------------------------------------------------------------------------
 RUBY FRACTION                           12/47N/15E             11/28/1982                295/781                    120360
------------------------------------------------------------------------------------------------------------------------------------

Initialed for Identification: /s/ MRF

                                     "D-5"
</TABLE>
<PAGE>

                                   EXHIBIT "E"
                                       TO
                  MINING LEASE AND OPTION TO PURCHASE AGREEMENT
                              DATED JANUARY 15,1998
                                     BETWEEN
              MARK MILNER, DANIEL MILNER and STEPHEN R. CROSSLAND
                                       AND
                          GOLDEN PHOENIX MINERALS, INC

                           QUITCLAIM DEED AND RELEASE

         For valuable consideration received, GOLDEN PHOENIX MINERALS, INC.. a
Minnesota corporation authorized to transact business in the State of
California, whose address is 3595 Airway Drive, Suite 405, Reno, Nevada 89511
("Grantor") hereby conveys and quit claims to Mark Milner, Daniel Milner and
Stephen R. Crossland, whose address is Johnson, Gaukroger & Crossland, P.S., 104
Cottage Avenue, Post Office Box 566, Cashmere, WA 98815-0566("Grantee"), all of
Grantor's interest, now held or hereafter acquired, in and to that certain real
property situated in Modoc County, California, which real property is more
particularly described in Exhibit "A" attached hereto and made a part hereof
(hereinafter called the "Property").

         Grantor shall no longer be obligated or liable for any payments or
other obligations resulting from or arising out of that certain Mining Lease and
Option to Purchase Agreement ("Agreement"), dated effective January 15, 1998,
between Grantee, as lessor and optionor, and Grantor, as lessee and optionee,
which Agreement has heretofore been terminated, and Grantor does hereby release,
relinquish and surrender all of its right, title and interest in and to the
Agreement and the Property which is subject thereto.

         Date effective January 15, 1998.

                                               Grantor:
                                               Golden Phoenix Minerals, Inc

                                               By:______________________________
                                               Name: ___________________________
                                               Title:___________________________

                                     "E-1"
<PAGE>

STATE OF NEVADA                            )
                                           )SS.
COUNTY OF WASHOE                           )

         On this_____________day of_______________, 1998, before me, personally
appeared Michael R. Fitzsimonds, to me known to be the President of Golden
Phoenix Minerals, Inc., a Minnesota corporation, that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and upon oath stated that he was authorized to execute said
instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.

                                                 _______________________________
                                                 Notary Public

My commission expires:

_________________________________

                                     "E-2"
<PAGE>

After Recording Return To:

Golden Phoenix Minerals, Inc.
3595 Airway Drive, #405
Reno, NV 89511

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

                                  WARRANTY DEED

         THIS WARRANTY DEED ("Deed") is made effective as of January 15, 1998 by
and between Mark Milner, Daniel Milner and Stephen R. Crossland ("Grantors"),
whose address is Johnson, Gaukroger & Crossland, P.S., 104 Cottage Avenue, Post
Office Box 566, Cashmere, WA 98815-0566, and GOLDEN PHOENIX MINERALS, INC., a
Minnesota corporation, duly authorized to transact business in the State of
California, with offices at 3595 Airway Drive Suite, 405 Reno, NV 89511
("Grantee"). Grantors or Grantees may individually or collectively be referred
to herein as a "Party" or the "Parties."

                                   WITNESSETH:

         Grantors, for and in consideration of the sum of Ten Dollars ($10.00),
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by Grantors, have granted, bargained, sold and conveyed,
and by these presents do grant, bargain, sell, convey, confirm and warrant
against the lawful claims of all persons whomsoever to Grantee, its successors
and assigns, that certain real property consisting of unpatented mining claims
situated in Modoc County, California ("Property"), which Property (includes, but
is not limited to, any water and extra lateral mining rights thereto) is more
particularly described in Exhibit "A" attached hereto and made a part hereof,
and all of Grantor's right, title and interest in and to that reserved net
returns production royalty for all minerals produced from the Property ("Net
Returns Royalty"), which Net Returns Royalty is more particularly described in
Section 2 below.

         TOGETHER with all and singular the hereditaments and appurtenances
thereto belonging, or in anywise appertaining, and the reversion and reversion,
remainder and remainders, rents, issues and profits thereof, and all the estate,
right, title, interest, claim and demand whatsoever of the Grantors, either in
law or in equity, of, in and to the bargained Property, with hereditaments and
appurtenances.

         TO HAVE AND TO HOLD the Property and title hereby conveyed to Grantee,
its successors and assigns, forever.

<PAGE>

1.       Representations and Warranties

         The Grantors represent, warrant and covenant to Grantee, and its
successors and assigns, that:

         The Grantors are the sole legal and equitable owners of the Property.

         (a)      The Property is free and clear of all leases, liens,
                  encumbrances and outstanding adverse claims, demands and
                  interests.

         (b)      The execution and delivery of this Deed and the performance of
                  this Deed by the Grantors will not result in any breach or
                  constitute a default (or an event which, with notice or lapse
                  of time, or both, would become a default) under, or give to
                  others any rights of termination, amendment, acceleration,
                  cancellation, or consent, or result in the creation of a lien
                  or encumbrance on the Property, pursuant to any instrument or
                  obligation to which the Grantors are a party or by which they
                  are bound.

         (c)      There is no environmental or other condition on the Property
                  which is, or may become, a violation of any applicable
                  federal, state, county or municipal law, regulation or
                  ordinance relating to zoning, land use, environmental
                  protection, or otherwise with respect to the Property or any
                  activities of the Grantors or their predecessors in interest
                  relating thereto, and the Grantors have not received any
                  notice of any investigation of any such condition or
                  violation.

         (d)      The Grantors are lawfully seized of the Property and have good
                  right and lawful authority to convey the Property.

         (e)      Grantee shall have the quiet and peaceful possession and
                  enjoyment of the Property and the Grantors will do everything
                  lawfully within their power to defend title to the Property
                  and Grantee's quiet and peaceful possession thereof against
                  all persons or entities who may claim any interest in the
                  Property or the minerals therein, or proceeds therefrom.

2.       Net Returns Royalty; Termination of Mining Lease

         Pursuant to a certain Mining Lease and Purchase Option Agreement, dated
effective January 15, 1998, between Mark Milner, Daniel Milner and Stephen R.
Crossland and Golden Phoenix Minerals, Inc. ("Agreement"), which Agreement
pertained to the Property, the Grantors reserved a two percent (2%) Net Returns
Royalty for all minerals produced from the Property. Grantors hereby convey,
assign and transfer to Grantee all of their right title and interest in and to
the Net Returns Royalty and to the Agreement and acknowledge that the Agreement
is hereby terminated and of no further force or effect.

<PAGE>

3.       After Acquired Title

         This Deed, without payment of any additional consideration, shall
operate to convey and transfer automatically to Grantee, its successors and
assigns, any and all right, title and interest in the Property acquired by
Grantors after the effective date of this Deed.

4.       Binding Effect

         All covenants, conditions and terms of this Deed shall bind and inure
to the benefit of the parties hereto, their respective heirs, representatives,
assigns and successors.

5.       Further Assurances

         Grantors and Grantee agree to execute or furnish the other with such
additional formal assurances or other documents, in proper and recordable form,
as may be reasonably necessary to carry out the intent, purpose and terms of
this Deed.

6.       Governing Law; Severability; Perpetuities; Attorneys' Fees

6.1 This Deed is to be governed by and construed under the laws of the State of
California, without reference to its conflicts of laws, and each of the parties
hereto irrevocably attorns to the jurisdiction of the courts of California for
adjudication of rights, obligations and interests arising pursuant to this
Agreement.

6.2 Any provision of this Agreement prohibited by the laws of the United States
or the State of California shall be ineffective to the extent of such
prohibition without invalidating the remaining provisions of this Agreement.

6.3. Any right or option to acquire any interest in real property (and any other
right held subject to the Rule Against Perpetuities) under the Agreement must be
exercised, if at all, so as to vest such interest within twenty-one (21) years
after the Effective Date.

6.4 In the event of any suit between the parties hereto, the prevailing party
shall be entitled to recover reasonable attorneys' fees incurred in connection
with that suit.

7.       Sole Agreement Modification

         This Deed and the attached Exhibit set forth the entire agreement
between the Grantors and Grantee with respect to the subject matter hereof. No
modification or alteration of this Deed and the Exhibit hereto shall be
effective unless reduced to writing and signed by both Grantors and Grantee.

         IN WITNESS WHEREOF, Grantors have executed this Deed effective the day
and year first above written.

<PAGE>

Grantors:

----------------------------------
MARK MILNER

STATE OF ______________ )
                        )ss.
COUNTY OF _____________ )

         This Warranty Deed was acknowledged before me on this __ day of
________, 1998, by Mark Milner.

-----------------------------
NOTARY PUBLIC

----------------------------
DANIEL MILNER

STATE OF ____________ )
                      )ss,
COUNTY OF ___________ )

         This Warranty Deed was acknowledged before me on this __ day of
________, 1998, by Daniel Milner.

--------------------------------
 NOTARY PUBLIC

------------------------------
STEPHEN R. CROSSLAND

STATE OF _____________ )
                       )ss.
COUNTY OF ____________ )

         This Warranty Deed was acknowledged before me on this __ day of
________, 1998, by Stephen R. Crossland.

--------------------------------
NOTARY PUBLIC

<PAGE>

Recording requested by and return to:
Donald James McDowell
9051 South, 1075 West, Suite B-301
West Jordan, Utah 84088

                                   ASSIGNMENT

         Newmont North America Exploration Limited, a Delaware corporation,
("Assignor"), for consideration paid, assigns to Donald James McDowell, a single
man, whose address is 9051 South 1075 West, Suite B-301, West Jordan, Utah 84088
("Assignee"), all right, title and interest of Assignor in and to that certain
Mining Lease and Option to Purchase Agreement with an effective date of January
15, 1998 wherein Mark Milner, Daniel Milner and Steven R. Crossland are "Owners"
and Golden Phoenix Minerals, Inc., is Lessee / Optionee, the subject of which is
certain unpatented mining claims located in Modoc County, California, more
particularly described in Schedule 1 attached hereto (the "Property").

         Assignor, for itself and its successors, represents and covenants to
Assignee, his heirs, successors and assigns, that the Property and the leasehold
interest herein assigned are free from all encumbrances made by or through
Assignor, and that Assignor will, and its successors shall, warrant and defend
the same as to Assignee, his heirs, successor and assigns, forever against the
lawful claims and demands of all persons claiming by, through, or under
Assignor, but against none other.

         Other than the foregoing representations and covenants, Assignor has no
further obligation to Assignee, his heirs, successors and assigns, arising from
the said Lease Agreement.

         IN WITNESS WHEREOF, Assignor has executed this Assignment effective as
of July 13, 2001.

         ASSIGNOR:

         Newmont North America Exploration Limited

         By: /s/ Britt D. Banks
         Name: Britt D. Banks
         Title: Vice President & Secretary

                                       1
<PAGE>

STATE OF COLORADO            )
                             ) SS.
CITY & COUNTY OF DENVER      )

         On this 21st day of August 2001, personally appeared before me, a
Notary Public, Britt Banks, a duly qualified and acting officer of NEWMONT NORTH
AMERICA EXPLORATION LIMITED, personally known or proved to me to be the person
whose name is subscribed to the above instrument who acknowledged to me that he
executed the above instrument.

                                            /s/ Vicki Engeman Kelley
                                           -------------------------------------
                                           Notary Public

My Commission expires:
   July 16, 2005

                                       2
<PAGE>

                                   SCHEDULE 1
                       to Assignment - Newmont to McDowell

                                 The "Property"

Those certain unpatented mining claims in Township 47 North, Range 15 East, MDM,
Modoc County, California, more particularly described as:

                                        Modoc Co.
        Claim Name                      Book/Page           BLM Serial Number
        ----------                      ---------           -----------------
        Klondike Fraction               445/168             CAMC - 274724
        Stone                           445/170             CAMC - 274725
        Ruby Fraction                   445/172             CAMC - 274726
        Ruby Too Fraction               445/174             CAMC - 274727
        Cirrus #1                       445/176             CAMC - 274728
        Cirrus #2                       445/178             CAMC - 274729
        Cirrus #3                       445/180             CAMC - 274730
        Cirrus #4                       445/182             CAMC - 274731
        Cirrus #5                       445/184             CAMC - 274732
        Cirrus #6                       445/186             CAMC - 274733

                                       3
<PAGE>

Recording requested by and return to:
Donald James McDowell
Great American Minerals. Inc
9051 South 1075 West, Suite B-301
West Jordan, Utah 84088

                                   Assignment

         Donald James McDowell, a single man ("Assignor"), for consideration
paid, assigns to Great American Minerals, Inc., a Nevada Corporation
("Assignee"), all right, title and interest of Assignor in and to that certain
Mining Lease and Option to Purchase Agreement with an effective date of January
15, 1998 wherein Mark Milner, Daniel Milner and Stephen R Crossland are "Owners"
and Golden Phoenix Minerals, Inc is the original Lessee / Optionee, the subject
of which is certain unpatented mining claims located in Modoc County,
California, more particularly described in Schedule 1 attached hereto (The
"Property")

         Assignor, for itself and its successors, represents and covenants to
Assignee, its heirs, successors and assigns, that the property and leasehold
interest herein assigned and free from all encumbrances made by or through
Assignor, and that Assignor will, and its successors shall, warrant and defend
the same as to the Assignee, his heirs, successor and assigns, forever against
the lawful claims and demands of all persons claiming by, through, or under
Assignor, but against non other

         Other than the foregoing representations and covenants, Assignor has no
further obligation to Assignee, his heirs, successors and assigns, arising from
the said lease

         IN WITNESS THEREOF, Assignor has executed this assignment effective as
of May 15, 2003

         ASSIGNOR

         /s/ Donald James McDowell
         -------------------------------
         Donald James McDowell

STATE OF UTAH             )
                          ) ss
COUNTY OF Salt Lake       )

         On this 16 day of May 2003, personally appeared before me, a Notary
Public Donald James McDowell personally known or proved to me to be the person
whose name is subscribed to the above instrument who acknowledged to me that he
executed the above instrument

                                                     /s/ Tammy L. Fontana
                                                     ---------------------------
                                                     Notary Public

My Commission expires: 7-21-04

<PAGE>

                                   SCHEDULE 1
            To Assignment - McDowell to Great American Minerals, Inc.

                                 The "Property"

Those certain unpatented mining claims in Township 47 North, Range 15 East,
MDB&M, Modoc County, California, more particularly described as:

                                      Modoc County
         Claim Name                   Book/Page             BLM Serial Number
         ----------                   ---------             -----------------
         Klondike Fraction            445/168               CAMC - 274724
         Stone                        445/170               CAMC - 274725
         Ruby Fraction                445/172               CAMC - 274726
         Ruby Too Fraction            445/174               CAMC - 274727
         Cirrus #1                    445/376               CAMC - 274728
         Cirrus #2                    445/178               CAMC - 274729
         Cirrus #3                    445/180               CAMC - 274730
         Cirrus #4                    445/182               CAMC - 274731
         Cirrus #5                    445/184               CAMC - 274732
         Cirrus #6                    445/186               CAMC - 274733Exhibit 10.7

                           Suite 2000, Guinness Tower, 1055 West Hastings Street
MADISON                                          Vancouver, B.C., Canada V6E 2E9
--------------------------------------------------------------------------------
ENTERPRISES CORP.       Tel(604) 331-8772 o Fax (604) 331-8773 or (604) 668-0063

May 23, 2002

Great American Minerals Exploration, LLC
9051 South 1075 West, Suite B-301
West Jordan, Utah U.S.A. 84088

Attention: D J. McDowell

Dear Don:

Re:      Lewis Property, Lander County, Nevada

Further to our letter agreement dated May 1, 2002, our subsequent negotiations
with F.W. Lewis, Inc. ("Lewis") and our subsequent telephone conversations, this
letter agreement confirms the agreement of Madison Enterprises Corp. ("Madison")
and Great American Minerals Exploration, LLC ("GAME") respecting the Lewis
Property:

1.       Madison and GAME will continue work together to negotiate and settle
         the terms of the underlying agreement (the "Lewis Agreement") between
         Lewis, Madison and GAME and to ensure that its terms are acceptable to
         both parties. In particular, the parties will attempt to modify the
         initial payment provisions so that the initial payment will be due on
         Madison's receipt of regulatory approval of the agreement. If the Lewis
         Agreement, in a form acceptable to both Madison and GAME, is not in
         place by June 15, 2002, this letter agreement, other than the
         provisions of paragraph 12 below, will terminate and be of no further
         force and effect. The agreement of Madison and GAME set forth in this
         letter agreement is predicated on the Lewis Agreement (as presently
         proposed) providing that Madison and GAME can jointly acquire a 100%
         interest in the Lewis Property free and clear of all encumbrances other
         than a 5% gross royalty on gold and a 4% net smelter returns royalty
         (collectively the "Royalty") on all other metals in favour of Lewis by:

         (a)      paying Lewis

                  (i)      US$25,000 on execution of the Lewis Agreement;

                  (ii)     US$2,000 per month from June 1, 2002 to December 1,
                           2002; and

                  (iii)    US$3,000 per month thereafter until the purchase
                           option in the Lewis Agreement is terminated or
                           exercised; and

                  (iv)     US$2,000,000 by December 31, 2007; and

<PAGE>

                                       -2-

         (b)      incurring exploration expenditures of US$250,000 by December
                  31, 2002, exploration expenditures of US$150,000 by December
                  31, 2003, and at least US$250,000 every year thereafter until
                  the purchase option in the Lewis Agreement is terminated or
                  exercised, provided that GAME and Madison will be allowed to
                  credit excess expenditures in prior periods to subsequent
                  periods.

         The Lewis Agreement as presently proposed requires an advance minimum
         royalty of US$60,000 per year commencing on purchase of the Lewis
         Property. The Lewis Agreement (as presently proposed) provides that the
         Royalty can be purchased for US$4,000,000 for a period of one year
         following the exercise of the purchase option. The Lewis Agreement (as
         presently proposed) provides that the purchase price for the Royalty
         increases by US$500,000 per annum on each anniversary of the date of
         exercise of the purchase option.

2.       Madison has an option to acquire a 51% interest in the Lewis Agreement
         by paving GAME US$25,000 on CDNX approval, paying the property payments
         anticipated to be due pursuant to the Lewis Agreement before December
         31, 2004 as described in paragraph l(a) above (which total US$111,000)
         and spending US$650,000 on exploration by December 31, 2004, in
         accordance with the terms of the Lewis Agreement. In the event that
         Madison fails to make the payments and incur the expenditures as set
         out in this paragraph or otherwise terminates this letter agreement
         prior to the exercise of this option, the option will terminate and
         Madison shall have no interest whatsoever in the Lewis Agreement or the
         Lewis Property, provided, however, that GAME shall indemnify and hold
         Madison harmless from any claims, demands or liabilities arising from
         the Lewis Agreement after termination of this letter agreement in the
         event that GAME does not also terminate the Lewis Agreement.

3.       Madison has an option to acquire a further 9% interest (60% in the
         aggregate) by paying the property payments due pursuant to the Lewis
         Agreement from January 1, 2005 to December 31, 2006 (which total
         US$72,000) and spending a further US$500,000 on exploration by December
         1,2006, with US$250,000 to be spent in each year. In the event that
         Madison fails to make the payments and incur the expenditures as set
         out in this paragraph, the option will terminate and Madison shall not
         have acquired the additional 9% interest in the Lewis Agreement and its
         interest will remain at 51%, subject to the provisions hereof
         concerning dilution in the event that either party fails to contribute
         its proportionate share of costs.

4.       Madison must elect at 51% whether to acquire the further interests or
         enter into a joint venture with GAME for future exploration and
         development of the Lewis Property. If Madison elects to enter into a
         joint venture, the joint venture agreement shall contain terms which
         are standard in the mineral exploration business, including the
         requirement that all costs be borne by the parties on a pro rata basis,
         failing which the interest of the party not contributing will be
         subject to dilution on a straight-line basis. If the interest

<PAGE>

                                       -3-

         of either party is diluted to 25% or less, its interest will convert to
         a 25% net profits interest.

5.       If Madison elects to acquire the additional 9% interest (60% in the
         aggregate), GAME will have 120 days after Madison acquires the
         additional interest to elect whether to participate on a 60/40 joint
         venture basis (on the terms set out above) or to allow Madison to
         acquire a further 15% interest (75% in the aggregate) by completing an
         industry standard bankable feasibility study and arranging on behalf of
         GAME non-recourse project financing for GAME'S remaining 25% interest.
         If GAME elects to permit Madison to acquire an additional interest,
         Madison will then have 120 days to elect whether to participate on a
         60/40 joint venture basis or to acquire the further 15% interest on the
         terms set out above.

6.       Madison will be entitled to accelerate exploration expenditures at any
         time. If it does so and completes the expenditure requirement for the
         earn-in stage at which it has elected to move to a joint venture, GAME
         will be required to be begin contributing to all costs except the
         property payments due pursuant to the Lewis Agreement and referred to
         above which shall be solely Madison's responsibility.

7.       Madison will provide GAME with copies of all data and analyses
         respecting the Lewis Property and will consult with GAME on all
         exploration programs during the currency of the agreement and all
         exploration decisions will be made by a technical committee comprised
         of one representative of Madison and one representative of GAME, with
         Madison's representative having the deciding vote in the case of a
         deadlock.

8.       During periods of active exploration, Madison agrees to engage Don
         McDowell as a exploration consultant to assist with exploration at
         daily rate of US$300, plus all reasonable expenses which have received
         advance approval. Madison agrees to engage Don McDowell for a minimum
         of ten days in each of the six months following CDNX approval of the
         agreement.

9.       Madison and GAME shall use their best efforts to expeditiously and in
         good faith settle the terms of and execute a joint venture agreement to
         take effect upon Madison exercising its option and acquiring a 51%
         interest or a 60% interest, as the case may be, in the Lewis Property.
         The joint venture agreement will contain terms which are generally
         standard in the North American mining industry in addition to the
         specific terms outlined herein.

10.      The Lewis Agreement provides that the obligation to incur exploration
         costs for a calendar year is incurred unless the Lewis Agreement is
         terminated prior to the beginning of such calendar year. Madison may
         not terminate this letter agreement as to the payments and exploration
         work required under the Lewis Agreement during the calendar year ending
         December 31, 2002. Madison may terminate this letter agreement and
         thereby not be required to make the payments and exploration work
         required under the Lewis Agreement during and after calendar year 2003
         by giving GAME notice of termination no later than November 30, 2002.
         Such termination will be effective on the

<PAGE>

                                       -4-

         earlier of Madison's completion of all 2002 obligations under the Lewis
         Agreement or December 31, 2002. For subsequent years, Madison may
         similarly terminate this letter agreement by giving GAME notice of
         termination no later than November 15 of the calendar year, such
         termination to be effective on the earlier of completion of all
         obligations under the Lewis Agreement for the calendar year in which
         notice was given or December 31 of the calendar year in which notice
         was given.

11.      If the parties are required to indemnify Lewis pursuant to Section
         4.4(E) of the Lewis Agreement solely as a result of the use of the
         Lewis Information by only one of the parties, the party whose use of
         the information resulted in the indemnification obligation shall
         indemnify and hold harmless the other party from and against all
         resulting claims, liabilities and damages.

12.      If the Lewis Agreement, in a form acceptable to both Madison and GAME,
         is not in place by June 15, 2002, or if Madison does not obtain or
         waive CDNX approval, Madison agrees that it shall not, without the
         written consent of GAME, acquire any interest in the Lewis Property for
         a period of two years following the date of this letter agreement.

13.      Our agreement is subject to CDNX approval on the part of Madison, which
         Madison must obtain by June 30, 2002.

If the foregoing accords with your understanding of our agreement, please
acknowledge your acceptance of, and agreement to be bound by, the terms and
conditions of this letter agreement by signing the enclosed copy hereof in the
space provided and returning same to us. We confirm that this letter agreement
may be executed in two counterparts each of which will be deemed to be an
original and both of which will be deemed to constitute one agreement.

Yours Truly,

MADISON ENTERPRISES CORP.

/s/ J.G. Stewart
                                        Agreed to and accepted this 23rd day
per: J.G. Stewart,                      of May, 2002.
     Secretary

JGS:ea                                  /s/ Donald James McDowell, Manager
                                        ---------------------------------------
                                        Great American Minerals
                                        Exploration, LLC
                                        Per: Don McDowell

<PAGE>

                    FIRST AMENDMENT TO EXPLORATION AGREEMENT
                            WITH OPTION TO PURCHASE

         THIS FIRST AMENDMENT TO EXPLORATION AGREEMENT WITH OPTION TO PURCHASE
(the "First Amendment") is made effective this 7th day of January 2003 (the
"Effective Date") by and between F. W. LEWIS, INC., a Nevada corporation
("Lewis"); MADISON ENTERPRISES CORP., a British Columbia corporation ("MNP");
and GREAT AMERICAN MINERALS EXPLORATION (NEVADA), LLC, a Nevada limited
liability company ("GAME").

                                    RECITALS

         A. Effective June 1 , 2002 Lewis, Madison, and GAME entered into an
"Explo ration Agreement with Option to Purchase" (the "Agreement") affecting
various real property interests in Lander County, Nevada.

         B. The parties wish to amend Section 1.11 of the Agreement relating to
assignment of the Agreement.

         THEREFORE, the parties have agreed as follows:

         1 . Amendments to Section 1.11. The parties hereby agree that Section
1.11 of the Agreement shall be amended as follows:

                  a. Section 1.1 l(a) shall henceforth read as follows:

         a. Payment to Lewis often percent (10%) of any fees, payments, or other
consideration with a cash value (including stock) received by MNP or GAME, as
the case may be, for the Transfer, except in the case of transfer to a
wholly-owned subsidiary or affiliate of MNP or GAME, as the case may be.
However, the payment often percent shall not apply to any work obligation prom-

                                       -1-
<PAGE>

ised by an assignee to MNP or GAME, as the case may be, provided that such work
is actually performed on the Property.

         b. The following new paragraph shall be inserted after Section 1.11
(c):

         The foregoing requirements shall not apply to any Transfer by MNP or
         GAME or both, as the case may be, to any wholly-owned subsidiary
         corporation or limited liability company. In the case of an assignment
         by MNP or GAME or both to a wholly-owned subsidiary, assigning party
         shall give written notice to Lewis and any other non-assigning party of
         the assignment, together with the name, address, and state of
         incorporation/organization of the assignee, and the names and addresses
         of all officers and directors of the subsidiary corporation or LLC.

         2. Continuing Effect. All other provisions of the Agreement shall
consider in full force and effect, except as modified by this First Amendment.

         3. Counterparts and Facsimile Signatures. This First Amendment may be
executed in counterparts, and signature pages transmitted by facsimile shall be
treated as original and binding signatures, provided, however, that a
fully-executed original First Amendment shall be delivered to Lewis within
fourteen (14) days of the Effective Date.

         IN WITNESS WHEREOF, the parties have executed this First Amendment to
Exploration Agreement with Option to Purchase on the day and year first above
written.

                                            F. W. LEWIS, INC.

                                            By: /s/ Frank W. Lewis
                                               -------------------------
                                               FRANK W. LEWIS, President

                                       -2-
<PAGE>

                                            GREAT AMERICAN MINERALS
                                            EXPLORATION (NEVADA), LLC, a
                                            Nevada limited liability company

                                            By: /s/ Donald McDowell
                                            Name: Donald McDowell
                                            Title: Manager

                                            MADISON ENTERPRISES CORP., a British
                                             Columbia corporation

                                            By: /s/ Chet Idziszek
                                            Name: Chet Idziszek
                                            Title: President

STATE OF NEVADA         )
                        ) ss.
COUNTY OF WASHOE        )

         On this 18th day of February, 2003 personally appeared before me, a
Notary Public, Frank W. Lewis, a duly qualified and acting officer of F. W.
LEWIS, INC., personally known or proved to me to be the person whose name is
subscribed to the above instrument who acknowledged to me that he executed the
above instrument on behalf of said corporation.

                                                /s/ Hillary H. Reister
                                                --------------------------------
                                                   Notary Public

                                       -3-
<PAGE>

STATE OF UTAH           )
                        ) ss.
COUNTY OF SALT LAKE     )

         On this 25 day of February, 2003 personally appeared before me, a
Notary Public, Donald McDowell, a duly qualified and acting officer of GREAT
AMERICAN MINERALS EXPLORATION (NEVADA), LLC. a Nevada limited liability company,
personally known or proved to me to be the person whose name is subscribed to
the above instrument who acknowledged to me that he executed the above
instrument on behalf of said corporation.

                                                /s/ Tammy L. Fontana
                                                --------------------------------
                                                   Notary Public

PROVINCE OF BRITISH COLUMBIA    )
                                ) ss.
CITY OF VANCOUVER               )

         On this 24th day of February, 2003 personally appeared before me, a
Notary Public, Chet Idziszek, a duly qualified and acting officer of MADISON
ENTERPRISES CORP., a British Columbia corporation, personally known or proved to
me to be the person whose name is subscribed to the above instrument who
acknowledged to me that he executed the above instrument on behalf of said
corporation.

                                                /s/ James G. Stewart
                                                --------------------------------
                                                   Notary Public

                                       -4-
<PAGE>

                  EXPLORATION AGREEMENT WITH OPTION TO PURCHASE

                                     between

                           F. W. LEWIS, INC., a Nevada
                                   corporation

                                       and

                  MADISON ENTERPRISES CORP., a British Columbia
                                   corporation

                                       and

               GREAT AMERICAN MINERALS EXPLORATION (NEVADA), LLC,
                              a Nevada corporation

<PAGE>

                                TABLE OF CONTENTS

RECITALS....................................................................  1
SECTION ONE - Exploration Agreement.........................................  2
1.1 - Term..................................................................  2
1.2 - Minimum Royalty.......................................................  2
1.3 - Work Commitment.......................................................  3
1.4 - Environmental Evaluation .............................................  7
1.5 - Right to Explore Only.................................................  7
1.6 - Data..................................................................  8
1.7 - Area of Interest......................................................  8
1.8 - Conduct of Work.......................................................  8
1.9 - Liability and Insurance ..............................................  9
1.10 - Liens................................................................  9
1.11 - Assignment........................................................... 10
1.12 - Installation of Equipment............................................ 11
1.13 - Acquisition of Permits............................................... 11
1.14 - Inspection of Property............................................... 12
1.15 - Taxes ............................................................... 12
1.16 - Maintenance of Claims ............................................... 13
1.17 - Relocation, Amendment and Patent .................................... 14
1.18 - Mining Law Revision.................................................. 14
1.19 - Termination ......................................................... 14
1.20 - Default ............................................................. 15
1.21 - Obligations Following Termination ................................... 16

SECTION TWO - Option to Purchase the Property............................... 16

2.1 - Grant of Option to Purchase Property.................................. 16
2.2 - Purchase Price........................................................ 17
2.3 - Right to Develop and Mine ............................................ 17
2.4 - Advance Minimum Royalty .............................................. 18
2.5 - Production Royalty.................................................... 20
2.6 - Commingling .......................................................... 21

                                       -i-
<PAGE>

                                TABLE OF CONTENTS

2.7 - Accounting...........................................................  21
2.8 - Late Payments........................................................  22
2.9 - Reclamation..........................................................  23

SECTION THREE - Option to Purchase the Royalty.............................  23

3.1 - Grant of Option to Purchase Royalty .................................  23
3.2 - Royalty Purchase Price...............................................  24
3.3 - Effect of Exercising Royalty Purchase Option.........................  24
3.4 - Right of Lewis to Sell Royalty.......................................  24

SECTION FOUR - Miscellaneous Provisions....................................  24

4.1 -  Notices.............................................................  25
4.2 -  Payments in U. S. Currency   .......................................  26
4.3 -  Title   ............................................................  26
4.4 -  No Warranties or Representations as to Value........................  27
4.5 -  Bankruptcy of Madison...............................................  28
4.6 -  Abandonment   ......................................................  28
4.7 -  Binding Effect......................................................  29
4.8 -  Applicable Law......................................................  29
4.9 -  Attorney Fees and Costs   ..........................................  30
4.10 - Entire Agreement....................................................  30
4.11 - Memorandum of Agreement.............................................  30
4.12 - Void or Invalid Provisions..........................................  30
4.13 - Waiver..............................................................  31
4.14 - Amendment...........................................................  31
4.15 - Tune of Essence.....................................................  31
4.16 - No Partnership or Implied Covenants.................................  31
4.17 - Force Majeure.......................................................  31
4.18 - Confidentiality.....................................................  32
4.19 - Counterparts and Facsimile Signatures   ............................  34

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS

Exhibit A - Property Description

Exhibit B - Quitclaim Deed with Reserved Royalty

Exhibit C - Quitclaim Deed Relinquishing Royalty Interests

                                     -iii-

<PAGE>

            EXPLORATION AGREEMENT WITH OPTION TO PURCHASE

         THIS EXPLORATION AGREEMENT WITH OPTION TO PURCHASE (the "Agreement") is
entered into effective this 1st day of June, 2002 (the "Effective Date") by and
between F. W. LEWIS, INC., a Nevada corporation, located at 120 Greenridge
Drive, Reno, Nevada 89509 ("Lewis"); and MADISON ENTERPRISES CORP., a British
Columbia corporation ("MNP"), whose address is Suite 2000, Guinness Tower, 1055
W. Hastings Street, Vancouver, British Columbia, Canada V6C 2E9, and GREAT
AMERICAN MINERALS EXPLORATION (NEVADA), LLC, a Nevada limited liability company
("GAME"), located at 9051 South 1075 West, Suite B 301, West Jordan, Utah 84088
(referred to collectively as "Madison").

                                    RECITALS

         A. Lewis owns the property more particularly described in Exhibit A
attached hereto and incorporated herein, which property, together with all ores,
minerals and materials thereon and thereunder, and all right, title and interest
of Lewis in and to the surface of said property, and all water rights on the
property, improvements, easements, licenses, rights-of-way and other interests
appurtenant thereto, shall hereinafter be collectively referred to as the
"Property".

         B. Madison wishes to obtain a right to explore the Property and an
option to purchase the Property (the "Purchase Option" as defined in Section 2.
1), subject to an overriding royalty interest (the "Royalty" as defined in
Section 2.5) with the further option to purchase the Royalty (the "Royalty
Purchase Option" as defined in Section 3.1), and

                                       -1-
<PAGE>

Lewis wishes to grant such a right, Purchase Option and Royalty Purchase Option,
all on the terms and conditions hereinafter set forth.

         C. The rights of MNP and GAME between themselves regarding the interest
in the Property which may be acquired hereunder from Lewis are governed by that
certain letter agreement dated May 23, 2002 (the "Madison Joint Venture
Agreement") between MNP and GAME, as the same may be amended from time to time.

         NOW THEREFORE, the parties agree as follows:

                                   SECTION ONE
                              Exploration Agreement

         1.1 Term. Lewis hereby grants to Madison the exclusive right to explore
the Property, together with the exclusive option to purchase the Property, for
an initial period from the Effective Date, June 1, 2002, through December 31,
2007; and with a continuing option to purchase the Royalty for a term of thirty
five (35) years after exercise of the Purchase Option.

         1.2 Minimum Royalty. Unless and until this Agreement is sooner
terminated or Madison exercises the Purchase Option as provided herein, Madison
shall pay Lewis the following "Minimum Royalty, " it being expressly understood
that should this Agreement be terminated or the Purchase Option exercised,
Madison shall have no obligation to pay any Minimum Royalty pursuant to this
Section, the due date of which occurs after termination or exercise of the
Purchase Option:

                                       -2-
<PAGE>

         Date of Payment                                    Amount of Payment
         ---------------                                    -----------------

         Upon execution of this Agreement:                $27,000.00

         From July 1, 2002 through December 1, 2002:      $ 2,000.00 per month

         From January 1, 2003 until the Property is
           purchased or this Agreement is terminated
           by Madison                                     $ 3,000.00 per month

         Madison shall pay the Minimum Royalty in advance on the first day of
each month, commencing July 1, 2002.

         1.3 Work Commitment. Madison shall spend, as the "Initial Work
Commitment," TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) in "On Site
Expenditures" (hereinafter defined) on the Property, in accordance with the
following schedule, which Initial Work Commitment shall be completed, or payment
made to Lewis in lieu thereof, regardless of any termination of this Agreement:

         Period                                            On Site Expenditures
         ------                                            --------------------
         Between Effective Date and December 31, 2002:        $250,000.00

         If this Agreement remains in effect after January 1, 2003, Madison
shall spend ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000.00) in "On Site
Expenditures" or make payment to Lewis in lieu thereof, regardless of any
termination of this Agreement.

         Thereafter, unless and until this Agreement is sooner terminated or
Madison exercises the Purchase Option as provided herein, for each calendar year
in which this Agreement remains in effect after January 1, 2004, Madison shall
spend, as an "Additional Work Commitment, " TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000.00)

                                       -3-
<PAGE>

in On Site Expenditures. It is expressly understood that should this Agreement
be terminated or the Purchase Option exercised prior to January 1 of any year,
Madison shall have no obligation to make the Additional Work Commitment for that
or any subsequent calendar year.

         Excess On Site Expenditures in any period shall be carried forward and
credited against the amount of any and all future On Site Expenditures due in
any subsequent period(s). If Madison fails to spend the required amount of
Initial Work Commitment by December 31, 2002, or subsequently fails to spend the
required amount of any Additional Work Commitment, Madison shall, within thirty
(30) days of the end of such work commitment period, pay the shortfall to Lewis
and thereby satisfy the expenditure commitment as to such shortfall.

         "On Site Expenditures" as used herein shall include:

                  a. Actual field salaries and wages (or the allocable portion
thereof), including benefit costs and payroll taxes, of employees or contractors
of Madison actually performing On Site Expenditures and related activities.

                  b. Costs and expenses for the use of machinery, facilities,
equipment and supplies required for On Site Expenditures, reclamation, and
related activities.

                  c. Travel expenses and transportation of employees and
contractors, materials, equipment and supplies necessary or convenient for the
conduct of On Site Expenditures.

                                       -4-
<PAGE>

                  d. All payments to contractors for On Site Expenditures,
reclamation, and related activities.

                  e. Costs of assays and other costs incurred to determine the
quality and quantity of minerals.

                  f. Costs incurred to obtain permits, rights-of-way and other
similar rights as may be incurred in connection with On Site Expenditures.

                  g. Costs incurred in preparation and acquisition of
environmental permits necessary to commence, carry out or complete On Site
Expenditures.

                  h. Costs and expenses of performing feasibility and other
studies to evaluate the economic feasibility of mining.

                  i. All costs of insurance incurred by Madison pursuant to
Section 1.9.

                  j. All personal and real property taxes assessed against the
Property by the Lander County Assessor or other government entity and paid by
Madison pursuant to Section 1.15.

                  k. All federal claim maintenance fees and county recording
fees paid by Madison pursuant to Section 1.16.

         On Site Expenditures shall not include off-site corporate costs,
corporate legal fees, accounting fees, officers' salaries, or promotional
expenses of any kind. However, to the extent that corporate officers are
qualified to provide geological or mining-related services, their salaries,
pro-rated to account for time spent for benefit of the Property, shall qualify

                                       -5-
<PAGE>

as On Site Expenditures. Geological or engineering work done off-site for the
benefit of the Property shall also be included as On Site Expenditures.

         The entire depths of all holes shall be assayed for gold and silver on
5-foot intervals. At Madison's discretion, Madison may assay holes at shorter
intervals. Any drill hole sample showing greater than 0.01 ounce per ton gold or
0.75 ounce per ton silver and not initially assayed by fire assay shall be
check-assayed by fire assay methods.

         All drill holes shall have the collar locations surveyed, including
elevations, by a Nevada registered land surveyor. Any reverse circulation drill
hole greater than 800 feet deep and all core holes regardless of depth shall
have down hole surveys taken at regular intervals, not to exceed 200 feet.

         Copies of all data generated for the Property, including, but not
limited to, drill hole logs, exploration information, including interpretive
information, maps, metallurgical studies, geophysical studies, all assay data,
drill hole check assays, survey records, down hole surveys and other information
of any sort (the "Data") shall be provided to Lewis on a semi-annual basis. At
Madison's discretion, Madison may furnish Data to Lewis on a more frequent
basis. To the extent practical all Data shall be provided in electronic format
as well as hard copy. All colored maps shall be furnished in color. Madison
makes no representation or warranty, express or implied, of any kind or nature
whatsoever with respect to the accuracy or reliability of the Data. All Data
provided hereunder is Confidential Information, subject to the provisions of
Section 4.18 of this Agreement.

                                       -6-
<PAGE>

         In the event that Madison does not exercise the Purchase Option, upon
termination of this Agreement all core and drill sample pulps not consumed in
assaying or metallurgical tests shall be delivered to Lewis at an address in
Reno, Nevada specified by Lewis. Duplicates of all sample cuttings shall be
saved in a building or in tightly closed barrels on the Property, or at such
other location as may be mutually acceptable to the parties.

         1.4 Environmental Evaluation. Madison has completed an environmental
evaluation of the Property and accepts the Property in its current environmental
condition. In the event Madison exercises the Purchase Option, Madison shall
assume all of Lewis' environmental reclamation and clean-up liability on the
Property, if any, which pre-dates the Effective Date of this Agreement. In the
event Madison does not exercise the Purchase Option, Madison shall be
responsible solely for that reclamation and clean-up liability on the Property
associated with Madison's activities under this Agreement.

         Madison shall reclaim any disturbance, including drilling, created by
its activities under this Agreement in accordance with applicable rules and
regulations of the appropriate state and federal agencies.

         1.5 Right to Explore Only. Upon execution of this Agreement, Madison
shall have the exclusive right to explore the Property, including, without
limitation, the right to conduct geological and geophysical investigations and
surveys, drilling, trenching, and related activities to evaluate the mineral
potential of the Property. Madison shall not have the right to develop or mine
the Property in any form prior to exercising the Purchase

                                       -7-
<PAGE>

Option. Madison may take samples up to five hundred (500) pounds each for
metallurgical testing.

         1.6 Data. Upon execution of this Agreement Lewis shall make available,
for copying by Madison, all maps, deeds, and other documents pertaining to the
title, boundaries, prior work, production history, and similar material
associated with the Property which Madison requests and which are in Lewis'
possession (but subject to the warranty disclaimers of Sections 4.3 and 4.4
below). All copies shall be made at Madison's expense.

         1.7 Area of Interest. Should Madison locate any fractional claims
("Fractional Claims") within the perimeter of the claims comprising the
Property, the Fractional Claims shall be located in the name of Lewis, and Lewis
hereby appoints Madison as its agent to perform such claim staking. The
Fractional Claims shall become part of the Property, subject to all terms and
conditions of this Agreement. Lewis and Madison shall execute such additional
agreements as necessary to document the addition of the Fractional Claims to
this Agreement.

         1.8 Conduct of Work. Madison shall perform its exploration activities
under this Agreement and any mining activities on the Property after exercise of
the Purchase Option in accordance with all applicable laws and regulations
relating to the performance of exploration and mining operations on the
Property, including those relating to environmental reclamation and clean-up,
and in compliance with applicable workers' compensation laws of the State of
Nevada.

                                      -8-
<PAGE>

         Madison shall have the sole right to determine the nature, scope and
extent of On Site Expenditures conducted to satisfy its Initial Work Commitment
and any Additional Work Commitment.

         1.9 Liability and Insurance. During the term of this Agreement and
after exercise of the Purchase Option, Madison shall indemnify and hold Lewis
harmless from any claims, demands, liabilities or liens arising out of Madison's
activities on the Property, unless arising from the sole negligence of Lewis.
During the term of this Agreement, Madison shall obtain and carry a policy of
public liability insurance in the amount of at least ONE MILLION DOLLARS
($1,000,000) for personal injury and ONE HUNDRED THOUSAND DOLLARS ($100,000) for
property damage, protecting Lewis against any claims for injury to persons or
damage to property resulting from Madison's activities under this Agreement. The
insurance policy shall name Lewis as an additional insured and evidence of such
shall be delivered to Lewis within thirty (30) days of the Effective Date of
this Agreement.

         1.10 Liens. Madison shall keep the Property free and clear from any and
all mechanics' or laborers' liens arising from labor performed on, or material
furnished to the Property at Madison's request. However, a lien on the Property
shall not constitute a default if Madison, in good faith, disputes the validity
of the claim, in which case the existence of the lien shall constitute a default
thirty (30) days after the validity of the lien has been adjudicated adversely
to Madison. Lewis shall record a Notice of Non- Responsibility on behalf of
Lewis in accordance with applicable law.

                                       -9-
<PAGE>

         1.11 Assignment. Prior to exercising the Purchase Option, MNP or GAME,
as the case may be, may license, sell, assign, sublease or joint venture
("Transfer") this Agreement or interests therein to another party ("Transferee")
only upon the occurrence of all of the following:

                  a. Payment to Lewis of ten percent (10 %) of any fees or
payments received by MNP or GAME, as the case may be, for the Transfer, except
in the case of transfer to a wholly-owned subsidiary or affiliate of MNP or
GAME, as the case may be.

                  b. Approval by Lewis of the mining expertise of the
Transferee; and

                  c. Approval by Lewis of the fiscal responsibility of the
Transferee.

         Notwithstanding anything herein to the contrary, no Transfer of the
Property shall relieve MNP or GAME, as the case may be, of its responsibility
for performance of all obligations under this Agreement. MNP or GAME, as the
case may be, and each Transferee shall be jointly and severally liable for the
performance of all obligations hereunder of MNP or GAME, as the case may be.

         In the event Lewis determines that the expertise or fiscal
responsibility of the Transferee does not meet acceptable commercial standards,
Lewis may withhold approval of the Transfer and such Transfer shall be void. It
is understood between the parties that the payment to Lewis of a portion of the
payments received by MNP or GAME, as the case may be, for the Transfer shall not
constitute a penalty for Transfer, but shall constitute payment to Lewis for
investigation of the professional expertise and financial trustworthiness of the
proposed Transferee.

                                      -10-
<PAGE>

         Prior to exercise of the Purchase Option, no Transfer shall be effected
without full compliance with the provisions of this Section, including the
written consent of Lewis. Notwithstanding anything contained in this Section 1.
11 to the contrary, this Section 1.11 shall not apply to transfers between MNP
and GAME pursuant to the Madison Joint Venture Agreement or any successor
agreement thereto.

         After exercise of the Purchase Option, MNP and GAME, as the case may
be, may Transfer any and all interest in the Property without approval or
restriction or payment to Lewis, but MNP or GAME, as the case may be, shall be
subject to the terms and conditions set forth in the Deed described in Section
2.2 below.

         1.12 Installation of Equipment. During the term of this Agreement,
Madison may install, maintain, replace, and remove any and all mining machinery,
equipment, tools and facilities ("Equipment") which it places on the Property to
use in connection with its exploration activities under the Agreement or mining
activities after exercise of the Purchase Option. In the event Madison does not
exercise the Purchase Option, upon termination of this Agreement for any reason
Madison shall have a period of thirty (30) days following such termination
during which it shall remove all of the Equipment at its sole cost and expense.

         1.13 Acquisition of Permits. Madison shall acquire all federal, state
and local permits required for its operations under this Agreement, including
without limitation those pertaining to reclamation and the posting of a
reclamation bond, as may be required by law.

                                      -11-
<PAGE>

         Madison shall simultaneously deliver to Lewis copies of all permit
applications filed with regulatory agencies pertaining to the Property or its
operations hereunder. Madison shall, promptly upon their receipt, deliver to
Lewis copies of all permits, amendments, and modifications issued for the
Property or its operations hereunder.

         1.14 Inspection of Property. Lewis, or its authorized agents or
representatives, shall be permitted to enter the Property at all reasonable
times for the purpose of inspection, surveying and sampling, but shall enter the
Property at their own risk and so as not to unreasonably hinder the operations
of Madison. Lewis shall give reasonable notice before any visit and shall
indemnify and hold Madison harmless from any damage, claim or demand by reason
of injury to Lewis or its agents or representatives, including death or damage
to or destruction of any property of Lewis or said agents or representative
while on the Property or the approaches thereto.

         1.15 Taxes. Madison shall pay all taxes levied or assessed against the
Property and any improvements placed on the Property by Madison. Lewis shall
provide promptly to Madison copies of all documents relating to such taxes.
Madison may take such action, at its expense, as it deems proper to obtain a
reduction or refund of taxes paid or payable by it, and Lewis shall cooperate in
such action, including but not limited to allowing such action to be taken and
prosecuted in Lewis' name. In the event Madison does not exercise the Purchase
Option, upon termination of this Agreement, taxes shall be apportioned between
Lewis and Madison on a calendar year basis for the remaining portion of the

                                      -12-
<PAGE>

calendar year. Lewis shall not be liable for taxes on any Equipment placed on
the Property under this Agreement.

         1.16 Maintenance of Claims. Madison shall be responsible for the
payment of all required federal claim maintenance fees, or performance and
filing of assessment work (if such should ever be reinstated), and payment of
the necessary fees and recordation of the required documents with the
appropriate county offices for all unpatented mining claims included in the
Property (including those which may be located under Section 1.7 of this
Agreement) for the assessment year ending September 1, 2003 (i. e., 2002-2003),
and for the year ending September 1, 2004 (i. e., 2003-2004), and for every
assessment year thereafter in which Madison continues this Agreement beyond
January 1 of the assessment year. The BLM fees due September 1, 2002 shall be
paid by Madison to Richard Harris, Attorney, in trust, within thirty (30) days
of signing this Agreement and is an allowable credit to the minimum work
commitment expenditure. Madison shall deposit the BLM fees due in 2003 with
Richard Harris, Attorney, in trust; this payment shall be made to Mr. Harris
within one hundred eighty (180) days following the Effective Date.

         Madison shall make the federal claim maintenance fee payments at least
ninety (90) days prior to the due date, and shall file in the appropriate county
office, at least thirty (30) days prior to the due date, an affidavit of such
compliance required by federal or state law. Copies of all such filings and
recordings shall be furnished to Lewis within fifteen (15) days of their
receipt.

                                      -13-
<PAGE>

         In the event that assessment work is required in the future, Madison
shall complete the work at least sixty (60) days prior to the date that the work
is required by statute to be completed, and the necessary filings and/or
recordings with the BLM and county shall be made at least sixty (60) days prior
to the date that such filings and recordings are required. Copies of all such
filings and recordings shall be furnished to Lewis within fifteen (15) days of
their receipt.

         Notwithstanding anything herein to the contrary, Madison shall pay all
federal maintenance rental payments and make the required filings associated
therewith for the assessment year ending September 1, 2003.

         1.17 Relocation, Amendment and Patent. During the term of this
Agreement Madison may, at Madison's sole expense and subject to Lewis' prior
written consent, relocate, amend, or apply for patent on any of the unpatented
claims included in the Property. Any such relocated, amended or patented claims
shall be deemed to be part of the Property, subject to all terms of this
Agreement.

         1.18 Mining Law Revision. In the event the General Mining Law is
repealed or substantially changed, Madison shall have whatever rights may be
afforded to Lewis under the new laws, including, but not limited to, whatever
preferred right Lewis might have to a lease or other form of tenure in the lands
covered by the Property, all of which rights shall be subject to the terms of
this Agreement.

         1.19 Termination. Subject to the other terms of this Agreement, Madison
shall have the right to terminate this Agreement at its sole discretion at any
time after com-

                                      -14-
<PAGE>

pleting the Initial Work Commitment by providing written notice to Lewis. Upon
termin-tion Lewis shall retain all payments previously made and this Agreement
shall cease and terminate. Within thirty (30) days after termination, Madison
shall provide to Lewis all Data developed by Madison about the Property. To the
extent practical all Data shall be provided in electronic format as well as hard
copy. Madison makes no representation or warranty, express or implied of any
kind or nature whatsoever with respect to the accuracy or reliability of the
Data. Termination by Madison shall be effective as of the date Madison transmits
to Lewis a written notice of termination and a quitclaim deed conveying to Lewis
all of Madison's right, title and interest in the Property and to any additional
claims located pursuant to Section 1.7.

         1.20 Default. Prior to exercise of the Purchase Option or termination
by Madison, if Madison fails to perform its obligations under this Agreement,
and in particular fails to make any payment due Lewis hereunder, Lewis may
declare Madison in default by giving Madison written notice specifying the
obligation(s) which Madison has failed to perform. If Madison fails to remedy a
default in payment within fifteen (15) days of receiving notice of such default,
or has not begun to cure any other default within thirty (30) days and
thereafter diligently prosecute such action to completion, Lewis may terminate
this Agreement and Madison shall peaceably surrender possession of the Property
to Lewis. However, if Madison disputes in writing that any default has occurred,
the matter shall be determined by litigation in a court of competent
jurisdiction. If Madison is found to be in default hereunder, Madison shall have
a reasonable time to cure such default, and if so

                                      -15-
<PAGE>

cured, Lewis shall have no right to terminate this Agreement by reason of such
default. Madison shall promptly respond in writing to any notice of default
served on Madison, either by curing the default or providing a written
explanation as to why, in Madison's opinion, a condition of default does not
exist.

         1.21 Obligations Following Termination. In the event of any termination
of this Agreement, except a termination under Section 4.6 hereof, Madison shall
surrender possession of the Property to Lewis. In the event of any termination
of this Agreement, Madison shall have no further liability or obligations under
this Agreement, except for any obligations: (1) to pay its apportioned share of
taxes as provided in Section 1.15 hereof, (2) to pay any production royalty or
other payments owed to Lewis upon the effective date of termination, (3) to
remove Equipment as provided in Section 1.12, hereof, (4) to fulfill its
reclamation obligations pursuant to Sections 1.4 and 2.9, hereof, and (5) to
satisfy any other accrued obligations or liabilities imposed by this Agreement
or by operation of law.

                                   SECTION TWO
                         Option to Purchase the Property

         2.1 Grant of Option to Purchase Property. At any time, on or before
December 31, 2007, Madison shall have the exclusive right and option to purchase
all of Lewis' right, title and interest in and to the Property (the "Purchase
Option"), by giving written notice as provided in this Agreement. Upon receipt
of such notice, Lewis and Madison shall set a closing date (the "Purchase
Closing Date"), which shall in no event be later than thirty (30) days from the
receipt of such notice. The Purchase Option will be deemed to

                                      -16-
<PAGE>

have been exercised on the date that Madison transmits to Lewis a written notice
of exercise of the Purchase Option.

         2.2 Purchase Price. The purchase price shall be TWO MILLION DOLLARS
($2,000,000.00), which shall be paid in cash on the Purchase Closing Date, upon
delivery by Lewis to Madison of a Quitclaim Deed with Reserved Royalty in the
form attached hereto as Exhibit B, conveying Lewis' title (as specified in
Section 4.3) to the Property, free and clear of all liens and encumbrances
except those noted in Section 4.3, subject only to a reservation to Lewis of the
Production Royalty (the "Royalty"), as defined in Section 2.5 below, and those
terms of this Agreement which expressly continue after exercise of the Purchase
Option.

         2.3 Right to Develop and Mine. Upon exercise of the Purchase Option,
Madison shall have exclusive ownership of the Property together with all rights,
title (as noted in Section 4.3), and privileges incident thereto, subject only
to the Royalty interest retained by Lewis under Section 2.5 hereof and the right
of Lewis to reacquire the Property in the event Madison elects to abandon it in
accordance with Section 4.6 hereof. Madison shall have no obligation to develop
the Property, and any decision as to the scope or timing of any development of
the Property shall be at Madison's sole discretion.

         If Madison stockpiles any concentrates or dorebullion produced from the
Property for a period greater than two (2) months, then Madison shall pay to
Lewis the Royalty described in Section 2.5 below with respect to such
concentrates or dore bullion. For

                                      -17-
<PAGE>

 purposes of calculating the Royalty due hereunder, the value of any stockpiled
 concentrate or dore shall be the same price for which Madison sold its last
 concentrate or dore.

         Madison may, at its sole discretion, stockpile any mineralized rock
mined from the Property in separate stockpiles situated on the Property or upon
other property owned by Madison, provided that Madison shall provide Lewis, in
writing, with the location, tonnage and grade of any such stockpile, and
provided further that if the stockpile is not situated on the Property, Madison
agrees to recognize the interest of Lewis, pursuant to the terms of this
Agreement, in any such stockpile.

         Madison shall be responsible to Lewis for its Royalty from the theft or
loss of any bullion, precipitate or other product, while the material is in the
care of Madison, its agents, assigns or contractors.

         2.4 Advance Minimum Royalty. Unless and until Madison exercises the
Royalty Purchase Option or Madison gives notice under Section 4.6 hereof (either
of which is referred to as the "Advance Minimum Royalty Termination Notice"),
Madison shall pay to Lewis, commencing on the Purchase Closing Date and annually
on each anniversary thereafter, an Advance Minimum Royalty of SIXTY THOUSAND
DOLLARS ($60,000.00). It is expressly understood that Madison shall have no
obligation to make any Advance Minimum Royalty payment, the due date of which
occurs after the date of the Advance Minimum Royalty Termination Notice.
Notwithstanding the preceding, if Lewis notifies Madison within thirty (30) days
of receiving the Advance Minimum Royalty Termination Notice that Madison has
failed to make any payment to Lewis as required

                                      -18-
<PAGE>

under the Agreement, in order to be relieved of Advance Royalty payment due
after such Advance Minimum Royalty Termination Notice, Madison must, within
thirty (30) days of receiving such notice from Lewis: i) make such payment, or
ii) notify Lewis in writing, that it disputes that such payment is delinquent
and promptly thereafter pursue resolution of such dispute in a court of
competent jurisdiction in Reno, Nevada.

         The Advance Minimum Royalty payments shall be credited against any
Royalty due from production in the same Contract Year, defined as each
twelve-month period beginning on the anniversary of the Effective Date set forth
in Section 1.1 above. Madison shall not be allowed to carry forward to future
Contract Years any unrecaptured amounts of the Advance Minimum Royalty payment.
No other costs or payments of any kind or form may be deducted from the Royalty
payable hereunder.

         Commencing with the first Advance Minimum Royalty due after exercise of
the Purchase Option, each Advance Minimum Royalty shall be adjusted annually by
a cost of living adjustment pursuant to the following formula:

                              R = $60,000.00 x A/P

         Where "R" represents the adjusted Advance Minimum Royalty; "P"
represents the Consumer Price Index for all Urban Consumers, "All Items"
("CPI"), as published last previous to the Effective Date of this Agreement by
the United States Department of Labor for the San Francisco-Oakland Area; and
"A" represents the same CPI published last previous to the date of the current
Advance Minimum Royalty payment. Should such CPI be discontinued or modified,
the parties agree that the most nearly similar index shall be

                                      -19-
<PAGE>

used or, in the absence of a similar index, then as set by arbitration in
accordance with the Uniform Arbitration Act of Nevada, taking into consideration
changes in the cost of living. Unless and until Madison exercises the Royalty
Purchase Option or Madison gives notice under Section 4.6 hereof, in no event
shall the Advance Minimum Royalty be reduced below SIXTY THOUSAND DOLLARS
($60,000.00).

         2.5 Production Royalty. Upon commencing production of valuable minerals
from the Property, Madison shall pay Lewis a royalty on production as follows:

                  a. Madison shall pay to Lewis a Royalty on all gold or silver
produced, or shipped, or sold by Madison from the leased premises of FIVE
PERCENT (5%) of the metal produced delivered to the refiner and deposited into
the account of Lewis free and clear of any costs.

                  b. For all other minerals such as lead, zinc, copper, etc.,
Lewis shall receive a royalty of FOUR PERCENT (4%) of the Net Smelter Return.
Net smelter return shall be defined as the sum received by Madison for any lot
of ore or concentrates from the custom mill, custom smelter, or custom reduction
works purchasing the ores or concentrates after deducting the costs of usual
treatment charges. In the event ores or concentrates are shipped to a mill,
smelter, or reduction works owned or controlled by Madison and/or a Joint
Venture associated with Madison directly or indirectly, as parent, subsidiary,
either wholly-owned or through ownership of shareholder interests, then in that
event no deductions shall be made from Lewis' share of royalty and Lewis shall
receive Lewis' FOUR PERCENT (4%) share of product or payment produced from
these premises

                                      -20-
<PAGE>

free and clear of all costs of any kind. The refiner or smelter shall be
instructed by Lewis to pay Lewis' FOUR PERCENT (4%) Royalty directly into the
account of Lewis or as Lewis may otherwise direct.

                  c. Lewis shall pay its share of the Nevada State Net Proceeds
of Mines tax and its own income taxes. All other taxes, charges, assessments,
fees, and fines of any nature assessed or imposed by any agency or entity shall
be borne by Madison.

         The refiner or smelter shall make payment of production royalties
directly into Lewis' account. All payments shall be accompanied by a statement
explaining the manner in which the payment was calculated.

         2.6 Commingling. Madison shall not commingle any ores from the Property
with ores from other properties unless and until Madison has negotiated a
separate Commingling Agreement with Lewis. However, this provision shall not
obligate Lewis to enter into a commingling agreement.

         2.7 Accounting. Lewis shall be entitled to hire such accountants and
engineers as Lewis requires to evaluate Madison's payment procedures and to
ensure that Lewis is properly paid its Royalty. At Lewis' request, Madison and
Lewis shall jointly agree on an engineering company (the "Royalty Consultant")
such as Kappes Cassiday to audit the computation and payment of the Royalty to
Lewis. The Royalty Consultant shall be engaged to perform audits annually to
ensure that Lewis is properly paid its Royalty. At Lewis' option, the Royalty
Consultant shall certify in writing to Lewis annually that Lewis has been
properly and adequately paid its Royalty, in the Royalty Consultant's opinion.

                                      -21-
<PAGE>

In the event that an annual shortage of payment to Lewis of one-half percent
(0.5%) or more is found to exist in payments due Lewis and provided such
shortage is a result of Madison's error, then in that event, Madison shall
reimburse Lewis for all reasonable costs of such accountants and engineers, or
other necessary professionals for that year, including the Royalty Consultant.

         Madison shall maintain books of account relating to production from the
Property and make them available to Lewis, or its agent, on request at Reno,
Nevada. The books shall show the amount of ores and minerals shipped, sold or
treated, and the amount of money received or receivable from the sale of said
ores and minerals from the Property. Said books of account, as well as Madison's
maps, assays, mill and smelter returns, and all other records pertaining to the
Property shall be made available at all reasonable times during normal business
hours to Lewis and Lewis' representatives for the purpose of ascertaining and
checking the compliance of Madison with the terms of this Agreement. Copies of
accounting, production and sales records and net proceeds of mines relating to
the Property shall be furnished promptly to Lewis quarterly. Madison shall
provide Lewis, on a quarterly basis, a financial report relating to Madison's
production operations on the Property. Madison shall maintain its records in
accordance with generally accepted accounting principles. Madison shall perform
an annual audit of accounts, using an accounting firm of national reputation or
such other firm as Lewis may agree to in writing.

         2.8 Late Payments. After exercise of the Purchase Option, in the event
that any payments due to Lewis, whether Advance Minimum Royalty, Royalty or
otherwise,

                                      -22-
<PAGE>

become delinquent by more than thirty (30) days, Lewis shall have the right, in
addition to any other remedies available in law or at equity, to charge interest
on the delinquent amount at the rate of two percent (2%) per month from the date
due of such delinquent payment; provided, however, that if Madison shall dispute
that payment is delinquent, no interest shall be due unless and until the
payment is adjudicated delinquent by a court of competent jurisdiction.

         2.9 Reclamation. During the term of this Agreement, Madison shall
conduct its activities on the Property in accordance with all applicable
federal, state and local laws and regulations, including, without limitation,
those regulations pertaining to permitting, bonding and reclamation.

                                  SECTION THREE
                         Option to Purchase the Royalty

         3.1 Grant of Option to Purchase Royalty. At any time, for a period of
thirty-five (35) years after exercise of the Purchase Option, Madison shall have
the exclusive right and option to purchase the Royalty (the "Royalty Purchase
Option"), by giving written notice as provided in this Agreement. Upon receipt
of such notice, Lewis and Madison shall set a closing date (the "Royalty Closing
Date"), which shall in no event be later than thirty (30) days from the receipt
of such notice. The Royalty Purchase Option shall be deemed to have been
exercised on the date that Madison transmits to Lewis a written notice of
exercise of the Royalty Purchase Option.

                                      -23-
<PAGE>

         3.2 Royalty Purchase Price. From the date of exercise of the Purchase
Option until one year (1) thereafter, the purchase price for the Royalty (the
"Royalty Purchase Price") shall be FOUR MILLION DOLLARS ($4,000,000.00).

         Commencing on the first anniversary of the exercise of the Purchase
Option, and on each anniversary thereafter, the Royalty Purchase Price shall be
increased by FIVE HUNDRED THOUSAND DOLLARS ($500,000.00).

         The Royalty Purchase price shall be paid in cash on the Royalty Closing
Date, upon delivery by Lewis to Madison of a Quitclaim Deed Relinquishing
Royalty Interest in the form attached hereto as Exhibit C, conveying all right
title and interest in the Royalty, free and clear of all liens and encumbrances
caused by Lewis.

         3.3 Effect of Exercising Royalty Purchase Option. In the event Madison
exercises the Royalty Purchase Option, this Agreement shall terminate in its
entirety, and Lewis will have no further rights or interest in the Property, or
obligations in the Property, except those obligations that have accrued prior to
such date. No Royalty shall be due Lewis after the Royalty Purchase Option has
been exercised by Madison, except for Royalty on minerals received by the
refiner or other purchaser prior to such exercise date.

         3.4 Right of Lewis to Sell Royalty. Prior to Madison's exercising the
Royalty Purchase Option, Lewis shall be free to sell the Royalty to any buyer;
provided, however, that such conveyance of the Royalty shall be subject to all
of the obligations of Lewis set forth in this Agreement, including without
limitation Madison's Royalty Purchase Option.

                                      -24-
<PAGE>

                                  SECTION FOUR
                            Miscellaneous Provisions

         The following miscellaneous provisions shall apply to all parts of this
Agreement.

         4.1 Notices. All notices to MNP or GAME, as the case may be, or Lewis
shall be in writing and may be delivered or sent by Federal Express, or similar
overnight delivery service, or certified or registered mail, return receipt
requested, to the addresses below, and such notices shall be deemed effective:
i) if by Federal Express, or similar overnight delivery service, the day after
it is deposited with such service, postage prepaid; or ii) if by certified or
registered U. S. mail, the date it is received or three (3) days after
deposited, postage prepaid, whichever first occurs. Notice of any change in
address shall be given in the same manner.

         TO LEWIS:            F. W. Lewis, Inc.
                              120 Greenridge Drive
                              Reno, NV 89509-3927

         TO GAME:             Great American Minerals Exploration (Nevada), LLC
                              9051 South 1075 West, Suite B 301 West
                              Jordan, Utah 84088

         TO MNP:              Madison Enterprises Corp.
                              Suite 2000, Guinness Tower 1055
                              W. Hastings Street Vancouver,
                              British Columbia Canada V6E 2E9

                                      -25-
<PAGE>

         4.2 Payments in U. S. Currency. All payments shall be made in U. S.
currency by check or wire transfer of immediately available funds, payable to
Lewis at the address above.

         4.3 Title. Lewis represents and warrants that the Property is not, by
any act or instrument of Lewis, nor to Lewis' knowledge as to any act or
instrument of any other party, subject to (1) any prior existing agreement,
encumbrance, burden or restriction; (2) any liens and encumbrances and other
adverse claims by third parties or (3) any royalties, overriding royalties, net
profits interests, or payments on production, excepting as noted herein.

                  a. An Agreement with Duval Corporation entered into August 27,
1982 establishing a vertical boundary agreement of some of the claims that
abutted Duval. See Document Number 113805 at Book 215 Page 544; Book 244 Page
390; Book 393 Page 244. These recordings are in Lander County, Nevada.

                  b. An Agreement of perpetual easement granted to Battle
Mountain Gold Company recorded at Book 423 Page 050; and also the deed recorded
at Book 423, Page 046 relating to the Alps, October, Hoosac, and Weimer Burr
patented claims deeded to Lewis that reserved certain easements and other rights
to Battle Mountain Gold including easements. There are also easements over
portions of the Buena Vista 7, 8, 12, and 13, Surprise 9 and Surprise 10
unpatented claims recorded at Book 423, Pages 046. A copy of these agreements
are on file with Lewis and Madison is invited to study these documents. All of
these filings are in Lander County, Nevada.

                                      -26-
<PAGE>

                  c. Lewis purchased the Styles patented land from an estate.
With respect to the Styles' water rights, one of the family heirs may not have
signed a quitclaim deed to Lewis conveying the water rights.

                  Madison will take title to the Property in reliance upon
Madison's own investigation of Lewis' title. Madison further agrees there shall
be no recourse against Lewis by suit, setoff, recoupment, or otherwise in the
event of any title deficiencies which result in litigation or loss of any of the
Property.

         4.4 No Warranties or Representations as to Value. From time to time,
Lewis and other parties have prepared estimates of cash flow and mineral value
with respect to portions of the Property. This information shall be made
available to Madison following exectution of this Agreement.

         WITH RESPECT TO SUCH INFORMATION AND DATA, MADISON ACKNOWLEDGES AND
AGREES, AS A CONDITION OF THIS AGREEMENT, THAT:

         A. LEWIS MAKES NO WARRANTY OR REPRESENTATION WHATSOEVER AS TO THE
COMPLETENESS OR ACCURACY OF THE INFORMATION AND DATA PERTAINING TO THE REAL
PROPERTY AND PERSONAL PROPERTY.

         B. MADISON AND ANY THIRD PARTIES SHALL MAKE THEIR OWN INDEPENDENT
ASSESSMENT AND EVALUATION REGARDING ASSAYS, ORE

                                      -27-
<PAGE>

VALUES, ECONOMIC PROJECTIONS REGARDING THE REAL PROPERTY AND PERSONAL PROPERTY.

         C. MADISON AND ANY THIRD PARTIES SHALL NOT RELY UPON INFORMATION
SUPPLIED BY LEWIS OR AVAILABLE IN THE LEWIS FILES.

         D. ANY INFORMATION FURNISHED BY MADISON TO THIRD PARTIES, INCLUDING
PROSPECTIVE INVESTORS AND STOCK EXCHANGES, SHALL INCLUDE THE FOLLOWING EXPRESS
LIMITATION WITH REGARD TO LEWIS, WHICH SHALL BE IN THE FORM OF A SHEET ATTACHED
TO EACH DOCUMENT, MAP, ASSAY REPORT, AND OTHER INFORMATION:

         CAUTION: THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE ANY
         REPRESENTATION OF ECONOMIC VALUE OR DEVELOPMENT POTENTIAL BY F. W.
         LEWIS, INC., FRANK W. LEWIS, SHARON LEWIS, OR THE SF LEWIS TRUST.

         E. MADISON WILL DEFEND, INDEMNIFY, AND HOLD LEWIS HARMLESS FROM ANY
CLAIMS, DEMAND, OR LIABILITIES ARISING FROM USE OF THE INFORMATION.

         4.5 Bankruptcy of Madison. In the event the business or assets of both
MNP and GAME are taken over by an assignee for the benefit of creditors or by a
receiver or other court custodian and remains unreleased for twenty (20) days,
Lewis may, at its option, terminate this Agreement.

         4.6 Abandonment. After exercise of the Purchase Option and before
exercise of the Royalty Purchase Option, if Madison decides to abandon the
Property it shall offer,

                                      -28-
<PAGE>

at least ninety (90) days prior to such abandonment, to quitclaim its interest
in the Property to Lewis, free and clear of any cost. Lewis shall have a period
of thirty (30) days after such notice to elect to accept the quitclaim on the
Property. Such election to accept the Property will be indicated by Lewis
recording the deed. In the event Lewis does not make such an election, this
Agreement shall terminate and Madison shall be free to abandon the Property, at
its sole discretion.

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

         4.8 Applicable Law. The terms and provisions of this Agreement shall be
governed by and interpreted in accordance with the laws of the State of Nevada
applicable to agreements made and to be performed wholly within such State. With
respect to any litigation proceedings arising between the parties under this
Agreement or relating to the Property, the parties each irrevocably submit to
the exclusive jurisdiction of either the Second Judicial District Court for the
State of Nevada, in Reno, Nevada, or the United States District Court for the
District of Nevada, in Reno, Nevada. Each party waives any claim that such
proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such proceedings, that such courts do not have
personal jurisdiction over such party; provided, however, that neither party
waives the right to seek the removal of any proceeding initiated in the Second
Judicial District Court for the State of Nevada to the United States District
Court for the District of Nevada. The parties may conduct discovery pursuant to
the Nevada Rules of Civil Procedure or the

                                      -29-
<PAGE>

Federal Rules of Civil Procedure and any other applicable local rules, as
applicable. The parties may elect to resolve their dispute by arbitration, in
which case the arbitration proceedings shall be governed by the rules of the
American Arbitration Association, or otherwise as the parties shall mutually
agree.

         4.9 Attorney Fees and Costs. Should any litigation arise out of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
and court costs, in addition to any other relief the court may grant.

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

         4.11 Memorandum of Agreement. The parties hereto agree to execute a
memor andum of this Agreement, which shall be recorded in the official records
of Lander County, Nevada for the purpose of providing constructive notice of
this Agreement, pursuant to the laws of the State of Nevada.

         4.12 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
remaining provisions, covenants and conditions of this Agreement, and all
applications thereof, not held invalid, void or unenforceable, shall continue in
full force and effect and shall in no way be affected, impaired or invalidated
thereby.

                                      -30-
<PAGE>

         4.13 Waiver. No waiver of any breach of any covenant herein shall be
construed to be a waiver of the covenant itself, or any subsequent breach
thereof.

         4.14 Amendment. All amendments of this Agreement must be in writing
signed by all parties.

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

         4.16 No Partnership or Implied Covenants. This Agreement shall not be
construed under any circumstances as creating a partnership between Lewis and
Madison or either of them and any other party. There shall be no implied
covenants or duties under this Agreement, except for the covenant of good faith
and fair dealing.

         4.17 Force Majeure. If Madison should be prevented or delayed from
performing any of the obligations of this Agreement, in whole or in part, by
reason or act of nature, strike, fire, flood, delay in transportation, war
insurrection or mob violence, requirement or regulation of government,
unavoidable casualties, unavoidable accidents, any local, state or federal law,
regulation or order, the judgment or order of any court, any such failure to
perform shall not be deemed a breach of this Agreement, but performance of said
obligations shall be suspended during such period of disability and performance
of said obligations shall be resumed immediately after such disability has been
removed. Force majeure shall not be applicable to the obligations of Madison (1)
to perform assessment work or to pay the federal claim maintenance fees and
county recording fees, as prescribed in Section 1.16; (2) to make the minimum
royalty or advance minimum royalty payments

                                      -31-
<PAGE>

described in this Agreement; and (3) to make all other payments due to Lewis
pursuant to this Agreement.

         4.18 Confidentiality. Except for the recording of a Memorandum of
Agreement, as provided in Section 4.11, and except as otherwise provided in this
Section, the terms and conditions of this Agreement, and all data, reports,
records, and other information of any kind whatsoever developed or acquired by
any party in connection with this Agreement shall be treated by the parties as
confidential (hereinafter called "Confidential Information") and no party shall
reveal or otherwise disclose such Confidential Information to third parties
without the prior written consent of the other party. Confidential Information
that is available or that becomes available in the public domain, other than
through a breach of this provision by a party, shall no longer be treated as
Confidential Information.

         The foregoing restrictions shall not apply to the disclosure of
Confidential Information to any affiliate; to any public or private financing
agency or institution; to any contractors or subcontractors which the parties
may engage; to employees and consultants of the parties; or to any third party
to which a party contemplates the transfer, sale, assignment, encumbrance or
other disposition of all or part of its interest in this Agree-meet; provided,
however, that in any such case only such Confidential Information as such third
party shall have a legitimate business need to know shall be disclosed and the
person or company to whom disclosure is made shall first undertake in writing to
protect the

                                      -32-
<PAGE>

confidential nature of such information at least to the same extent as the
parties are obligated under this Section.

         In the event that a party is required to disclose Confidential
Information to any federal, state or local government, any court, agency or
department thereof, or any stock exchange, to the extent required by applicable
law, rule or regulation, or in response to a legitimate request for such
Confidential Information, the party so required shall immediately notify the
other party hereto of such requirement and the terms thereof, and the proposed
form and content of the disclosure prior to such submission. The other party
shall have the right to review and comment upon the form and content of the
disclosure and to object to such disclosure to the court, agency, exchange or
department concerned, and to seek confidential treatment of any Confidential
Information to be disclosed on such terms as such party shall, in its sole
discretion, determine.

         Madison has been informed that the S. F. Lewis Trust, which owns all of
the stock of F. W. Lewis, Inc., is presently offering to sell all of the stock
of F. W. Lewis, Inc. to interested parties. Such parties, after signing a
Confidentiality Agreement to protect the confidential nature of such information
at least to the same extent as the parties are obligated under this Section,
shall be entitled to review all Confidential Information which relates to the
Property: i) in the possession of Lewis and ii) to which Lewis is entitled under
the terms of this Agreement but which Confidential Information Lewis has not yet
received, provided that such review shall be made in accordance with the
provisions of this

                                      -33-
<PAGE>

Section 4.18. The purpose of such examination shall be to assist in valuation of
the stock of F. W. Lewis, Inc.

         4.19. Counterparts and Facsimile Signatures. This Agreement may be
executed in counterparts, and signature pages transmitted by facsimile shall be
treated as original and binding signatures (provided, however, that a
fully-executed original Agreement is delivered to Lewis within fourteen (14)
days of the Effective Date).

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

                                           F. W. LEWIS, INC.

                                           By: /s/ Frank W. Lewis
                                               ---------------------------------
                                               FRANK W. LEWIS, President

                                           GREAT AMERICAN MINERALS
                                             EXPLORATION (NEVADA), LLC, a
                                             Nevada limited liability company

                                           By: /s/ Donald James McDowell
                                           -------------------------------------
                                           Name: Donald James McDowell
                                           Title: Manager

                                           MADISON ENTERPRISES CORP., a British
                                             Columbia corporation

                                           By: /s/ Chet Idziszek
                                           -------------------------------------
                                           Name: Chet Idziszek
                                           Title: President

                                      -34-

<PAGE>

STATE OF NEVADA             )
                            ) ss.
COUNTY OF WASHOE            )

         On this 4th day of June, 2002, personally appeared before me, a Notary
Public, Frank W. Lewis, a duly qualified and acting officer of F. W. LEWIS,
INC., personally known or proved to me to be the person whose name is subscribed
to the above instrument who acknowledged to me that he executed the above
instrument on behalf of said corporation.

                                                /s/ Richard W. Harris
                                               ---------------------------------
                                               Notary Public

STATE OF NEVADA              )
                             ) ss.
COUNTY OF WASHOE             )

         On this 5th day of June, 2002, personally appeared before me, a Notary
Public, Donald James McDowell duly qualified and acting officer of GREAT
AMERICAN MINERALS EXPLORATION (NEVADA), LLC, a Nevada limited liability company,
personally known or proved to me to be the person whose name is subscribed to
the above instrument who acknowledged to me that he executed the above
instrument on behalf of said corporation.

                                                /s/ Richard W. Harris
                                               ---------------------------------
                                               Notary Public

PROVINCE OF BRITISH COLUMBIA    )
                                ) ss.
CITY OF VANCOUVER               )

         On this 5th day of June, 2002, personally appeared before me, a Notary
Public, Chet Idziszek a duly qualified and acting officer of MADISON ENTERPRISES
CORP., a British Columbia corporation, personally known or proved to me to be
the person whose name is subscribed to the above instrument who acknowledged to
me that he executed the above instrument on behalf of said corporation.

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

                                      -35-
<PAGE>

Battle Mt

                                    EXHIBIT A
                              LANDER COUNTY, NEVADA
                        BATTLE MOUNTAIN MINING DISTRICT

Patented property of F. W. Lewis, Inc.

New Silver dream #6 U. S. Survey No. 5048
Robert Emmett U. S. Survey No. 59 Parcel No. 98-702-21
Eureka U. S. Survey No. 60 Parcel No. 98-702-22
October U. S. Survey No. 4380 Parcel No. 98-702-41
Alps Mine and Company U. S. Survey No. 3742 Parcel No. 98-701-95
Weimer Burr US. Survey No, 3074 Parcel No. 98-702-37
Hoosac Lode and Company U. S. 3742 (excepting a small portion of this claim that
is South and not contiguous to the other property) Parcel No. 98-701-94

Styles Farm Parcel No. 10-420-01. Approximately 5 acres with water rights as
follows: T. 31, N, R. 43 E., MDBM, Section 11 SE 1/4 NW 1/4 SW 1/4 SW 1/4; N 1/2
NE 1/4 SW 1/4 SW 1/4 SW 1/4; E 1/2 SW 1/4 NW 1/4 SW 1/4 SW 1/4.

Unpatented property of F. W. Lewis, Inc.
----------------------------------------

Claim Names                                Book           Page            NMC
-----------                                ----           ----            ---
Antler Ext. No. 1                          275            417            385042
Antler Ext. No. 2                          275            418            385043
Antler Ext. No. 3                          275            419            385044
Antler Ext. No. 4                          275            420            385045
Antler Ext. No. 5                          275            421            385046
Antler Ext. No. 6                          275            422            385047
Antler Ext. No. 7                          275            423            385048
Antler Ext. No. 8                          275            424            385049
Antler Ext. No. 9                          275            425            385050
Antler Ext. No. 10                         275            426            385051
Antler No. 1                               189            443            181854
Antler No. 2                               189            444            181855
Antler No. 3                               189            445            181856
Antler No. 4                               189            446            181857
Antler No. 5                               189            447            181858

                                       1
<PAGE>

Antler No. 6                               189            448            181859
Antler No. 7                               189            449            181860
Antler No. 8                               189            450            181861
Antler No. 9                               189            451            181862
Antler No. 10                              189            452            181863
Antler No. 11                              189            453            181864
Antler No. 12                              189            454            181865
Antler No. 13                              189            455            181866
Antler No. 14                              189            456            181867
Antler No. 15                              189            457            181868
Antler No. 16                              189            458            181869
Antler No. 17                              189            459            181870
Antler No. 18                              189            460            181871
Antler No. 19                              189            461            181872
Antler No. 20                              189            462            181873
Antler No. 21                              189            463            181874
Antler No. 22                              189            464            181875
Antler No. 23                              189            465            181876
Antler No. 24                              189            466            181877
Antler No. 25                              189            467            181878
Antler No. 26                              189            468            181879
Antler No. 27                              189            469            181880
Antler No. 28                              196            278            200025
Antler No. 29                              196            279            200026
Antler No. 30                              196            280            200027
Antler No. 31                              196            281            200028
Antler No. 32                              196            282            200029
Antler No. 33                              196            283            200030
Antler No. 34                              196            284            200031
Antler No. 35                              196            285            200032
Antler No. 36                              196            286            200033
AP No. 1 PL                                212            344            241342
AP No. 2 PL                                212            345            241343
AP No. 3 PL                                212            346            241344
AP No. 4 PL                                212            347            241345
AP No. 5 PL                                212            348            241346
April                                      4              64             97906
Battle                                     210            185            241290
Battle No. 1                               210            186            241291
Battle No. 2                               210            187            241292
Bear Paw                                   9              281            102415

                                       2
<PAGE>

         Amended                           221            553
Bear Paw No. 1                             9              282            102416
         Amended                           221            554
Bear Paw No. 2                             210            190            241293
Bear Paw No. 3                             210            191            241294
Bear Paw No. 4                             9              373            102417
         Amended                           221            557
Bear Paw No. 5                             9              374            102418
         Amended                           221            558
Bear Paw No. 6                             11             400            102419
         Amended                           221            559
Buena Vista Fr. No. 1                      214            197            245427
Buena Vista Fr. No. 2                      214            198            245428
Buena Vista Fr. No. 3                      221            412            260267
Buena Vista Fr. No. 4                      221            413            260268
Buena Vista Fr. No. 5                      221            414            260269
Buena Vista Fr. No. 6                      221            415            260270
Buena Vista Fr. No. 7                      221            416            260271
Buena Vista No. 1                          177            314            151268
Buena Vista No. 2                          177            315            151269
Buena Vista No. 3                          177            316            151270
Buena Vista No. 4                          177            317            151271
Buena Vista No. 5                          177            318            151272
Buena Vista No. 6                          177            319            151273
Buena Vista No. 7                          177            320            151274
Buena Vista No. 8                          177            321            151275
Buena Vista No. 9                          177            322            151276
Buena Vista No. 10                         177            323            151277
Buena Vista No. 11                         177            324            151278
Buena Vista No. 12                         177            325            151279
Buena Vista No. 13                         177            326            151280
Buena Vista No. 14                         180            28             159544
Buena Vista No. 15                         180            29             159545
Buena Vista No. 16                         180            30             159546
Buena Vista No. 17                         189            482            181887
Buena Vista No. 18                         189            483            181888
Buena Vista No. 19                         189            484            181889
Buena Vista No. 20                         189            485            181890
Buena Vista No. 21                         189            486            181891
Buena Vista No. 22                         189            487            181892
Buena Vista No. 23                         189            488            181893

                                       3
<PAGE>

BVD No. 1 PL                               212            324            241352
BVD No. 2 PL                               212            325            241353
BVD No. 3 PL                               212            326            241354
BVD No. 4 PL                               212            327            241355
BVD No. 5 PL                               212            328            241356
BVD No. 6 PL                               212            329            241357
BVD No. 7 PL                               212            330            241358
BVD No. 8 PL                               212            331            241359
BVD No. 9 PL                               212            332            241360
BVD No. 10 PL                              212            333            241361
BVD No. 11 PL                              212            334            241362
Driscol Ext. No. 5                         210            180            241287
Driscol Ext. No. 6                         210            181            241288
Driscol Ext. No. 7                         210            182            241289
Driscol Ext. No. 8                         177            306            151260
Driscol Ext. No. 9                         177            307            151261
Driscol Ext. No. 10                        177            308            151262
Driscol Ext. No. 11                        177            309            151263
         Amended                           224            300
Driscol Ext. No. 12                        177            310            151264
         Amended                           224            301
Driscol Ext. No. 13                        177            311            151265
         Amended                           224            302
Driscol Ext. No. 14                        177            312            151266
Driscol Ext. No. 15                        177            313            151267
Driscol Ext. No. 16                        190            151            183430
Driscol Ext. No. 17                        190            152            183431
Driscol Ext. No. 18                        190            153            183432
Driscol Ext. No. 19                        190            154            183433
Driscol Ext. No. 20                        190            155            183434
Driscol Ext. No. 21                        190            156            183435
Driscol Ext. No. 22                        190            157            183436
Driscol Ext. No. 23                        190            158            183437
Driscol Ext. No. 24                        190            159            183438
Driscol Ext. No. 25                        190            160            183439
Driscol Ext. No. 26                        190            161            183440
Driscol Ext. No. 27                        190            162            183441
Driscol Ext. No. 28                        190            163            183442
         Amended                           224            303
Driscol Ext. No. 29                        190            164            183443
         Amended                           224            304

                                       4
<PAGE>

Driscol Ext. No. 30                        190            165            183444
         Amended                           224            305
Driscol Ext. No. 31                        190            166            183445
         Amended                           224            306
Driscol Ext. No. 32                        190            167            183446
         Amended                           224            307
Driscol Ext. No. 33                        190            168            183447
         Amended                           224            308
Driscol Ext. No. 34                        190            169            183448
         Amended                           224            309
Driscol Ext. No. 37                        190            170            183449
         Amended                           224            310
Driscol Ext. No. 38                        190            171            183450
         Amended                           224            311
Driscol Ext. No. 39                        190            172            183451
         Amended                           224            312
Driscol Ext. No. 40                        190            173            183452
         Amended                           224            313
Driscol Ext. No. 41                        190            174            183453
Driscol Ext. No. 42                        190            175            183454
         Amended                           224            314
Driscol Ext. No. 43                        212            342            241347
Driscol Ext. No. 44                        224            316            271305
Driscol Ext. No. 45                        224            317            271306
Driscol Ext. No. 46                        224            318            271307
Driscol Ext. No. 47                        224            319            271308
Driscol Ext. No. 48                        224            320            271309
Driscol Ext. No. 49                        224            321            271310
Driscol High Grade                         22             248            70523
Driscol No. 1                              22             249            70524
         Amended                           221            560
Driscol No. 2                              22             249            70525
         Amended                           221            561
Driscol No. 3                              22             250            70526
         Amended                           221            562
Driscol No. 4                              2              34             70527
         Amended                           221            563
Driscol No. 5                              2              62             70528
         Amended                           221            564
Driscol No. 6                              2              63             70529
         Amended                           221            565

                                       5
<PAGE>

Driscol No. 7                              2              64             70530
         Amended                           221            566
Driscol No. 8                              2              65             70531
Driscoll No. 9                             7              234            70532
Driscoll No. 10                            7              235            70533
Driscoll No. 11                            7              236            70534
Driscoll No. 12                            7              237            70535
Driscoll No. 13                            7              238            70536
         Amended                           221            567
Driscoll No. 14                            7              239            70537
         Amended                           221            568
         Amended                           408            467
Driscoll No. 15                            7              240            70538
         Amended                           221            569
Duck Fraction                              277            463            387880
Honey Bear No. 1                           217            143            251629
Honey Bear No. 2                           217            144            251630
Honey Bear No. 3                           217            145            251631
Honey Bear No. 4                           217            146            251632
Honey Bear No. 5                           217            147            251633
Honey Bear No. 6                           217            148            251634
Honey Bear No. 7                           217            149            251635
Honey Bear No. 8                           217            150            251636
Honey Bear No. 9                           217            151            251637
Honey Bear No. 10                          217            152            251638
Honey Bear No. 11                          217            153            251639
Honey Bear No. 12                          217            154            251640
Honey Bear No. 13                          217            155            251641
Honey Bear No. 14                          217            156            251642
Honey Bear No. 15                          217            157            251643
Honey Bear No. 16                          217            158            251644
Honey Bear No. 17                          217            159            251645
Honey Bear No. 18                          217            160            251646
Honey Bear No. 19                          217            161            251647
Honey Bear No. 20                          217            162            251648
Honey Bear No. 21                          217            163            251649
Honey Bear No. 22                          217            164            251650
Honey Bear No. 23                          217            165            251651
Honey Bear No. 24                          217            166            251652
LC No. 1                                   212            350            241315
LC  No. 2                                  212            351            241316

                                       6
<PAGE>

LC No. 3A                                  212            352            241317
LC No. 3B                                  212            353            241318
LC No. 4                                   212            354            241319
LC No. 5                                   212            355            241320
LC No. 6                                   212            356            241321
LC No. 7                                   212            357            241322
LC No. 8                                   212            358            241323
         Amended                           224            295
LC No. 9                                   212            359            241324
         Amended                           224            359
LC No. 10                                  212            360            241325
LC No. 11                                  212            361            241326
LC No. 12                                  212            362            241327
LC No. 13                                  212            363            241328
LC No. 14                                  212            364            241329
LC No. 15                                  212            365            241330
LC No. 16                                  212            366            241331
LC No. 17                                  212            367            241332
LC No. 18                                  212            368            241333
LC No. 19                                  212            369            241334
LC No. 20                                  212            370            241335
LC No. 21                                  212            371            241336
LC No. 22                                  212            372            241337
LC No. 23                                  212            373            241338
LC No. 24                                  212            374            241339
LC No. 25                                  212            375            241340
         Amended                           224            297
LC No. 26                                  212            376            241341
         Amended                           224            298
LC No. 27                                  224            287            271311
LC No. 28                                  224            288            271312
LC No. 29                                  224            289            271313
LC No. 30                                  224            290            271314
LC No. 31                                  224            291            271315
LC No. 32                                  224            292            271316
NKL No. 1                                  190            214            183881
NKL No. 2                                  190            215            183882
NKL No. 3                                  190            216            183883
NKL No. 4                                  190            217            183884
NKL No. 5                                  190            218            183885
NKL No. 6                                  190            219            183886

                                       7
<PAGE>

NKL No. 7                                  190            220            183887
NKL No. 8                                  190            221            183888
NKL No. 9                                  190            222            183889
NKL No. 10                                 190            223            183890
NKL No. 11                                 190            224            183891
NKL No. 12                                 190            225            183892
NKL No. 13                                 190            226            183893
NKL No. 14                                 190            227            183894
NKL No. 15                                 190            228            183895
NKL No. 16                                 190            229            183896
NKL No. 17                                 190            230            183897
NKL No. 19                                 190            232            183899
NKL No. 20                                 190            233            183900
NKL No. 21                                 190            234            183901
NKL No. 22                                 212            339            241348
NKL No. 22                                 214            187            245418
NKL No. 23                                 212            340            241349
NKL No. 23                                 214            188            245419
NKP No. 1 PL                               190            259            183860
NKL No. 2 PL                               190            260            183861
NKL No. 3 PL                               190            261            183862
NKL No. 4 PL                               190            262            183863
NKL No. 5 PL                               190            263            183864
NKL No. 6 PL                               190            264            183865
NKL No. 7 PL                               190            265            183866
NKL No. 8 PL                               190            266            183867
NKL No. 9 PL                               190            267            183868
NKL No. 10 PL                              190            268            183869
NKL No. 11 PL                              190            269            183870
NKL No. 12 PL                              190            270            183871
NKL No. 13 PL                              190            271            183872
NKL No. 14 PL                              190            272            183873
NKL No. 15 PL                              190            273            183874
NKP No. 16 PL                              190            274            183875
NKL No. 17 PL                              190            275            183876
NKL No. 19 PL                              190            277            183878
NKL No. 20 PL                              190            278            183879
NKL No. 21 PL                              190            279            183880
NKL No. 22 PL                              212            336            241350
NKL No. 23 PL                              212            337            241351
Perspiration Ext. No. 1                    275            409            385034

                                       8
<PAGE>

Perspiration Ext. No. 2                    275            410            385035
Perspiration Ext. No. 3                    275            411            385036
Perspiration Ext. No. 4                    275            412            385037
Perspiration Ext. No. 5                    275            413            385038
Perspiration Ext. No. 6                    275            414            385039
Perspiration Ext. No. 7                    275            415            385040
Perspiration Ext. No. 8                    275            416            385041
Perspiration No. 1                         2              66             97903
Perspiration No. 2                         13             155            97904
Perspiration No. 3                         13             156            97905
Perspiration No. 4                         190            177            183455
Perspiration No. 5                         190            178            183456
Perspiration No. 6                         190            179            183457
Perspiration No. 7                         190            180            183458
Perspiration No. 8                         190            181            183459
Perspiration No. 9                         190            182            183460
Perspiration No. 10                        190            183            183461
Perspiration No. 11                        190            184            183462
Perspiration No. 12                        190            185            183463
Perspiration No. 13                        190            186            183464
Perspiration No. 14                        190            187            183465
Perspiration No. 15                        190            188            183466
Perspiration No. 16                        190            189            183467
Perspiration No. 17                        190            190            183468
Perspiration No. 18                        190            191            183469
Perspiration No. 19                        190            192            183470
Perspiration No. 20                        190            193            183471
Perspiration No. 21                        190            194            183472
Perspiration No. 22                        190            195            183473
Perspiration No. 23                        190            196            183474
Perspiration No. 24                        190            197            183475
Perspiration No. 25                        190            198            183476
Perspiration No. 26                        190            199            183477
Perspiration No. 27                        190            200            183478
Perspiration No. 28                        190            201            183479
Perspiration No. 29                        190            202            183480
Perspiration No. 30                        190            203            183481
Perspiration No. 31                        190            204            183482
Perspiration No. 32                        190            205            183483
Perspiration No. 33                        190            206            183484
Perspiration No. 34                        190            207            183485

                                       9
<PAGE>

Perspiration No. 35                        190            208            183486
Perspiration No. 36                        190            209            183487
Perspiration No. 37                        190            210            183488
Perspiration No. 38                        190            211            183489
Perspiration No. 39                        190            212            183490
Roid No. 1 Fraction                        293            28             418380
Roid No. 2 Fraction                        293            29             418381
SC No. 1                                   224            270            271317
SC No. 2                                   224            271            271318
SC No. 3                                   224            272            271319
SC No. 4                                   224            273            271320
SC No. 5                                   224            274            271321
SC No. 6                                   224            275            271322
SC No. 7                                   224            276            271323
SC No. 8                                   224            277            271324
SC No. 9                                   224            278            271325
SC No. 10                                  224            279            271326
SC No. 11                                  224            280            271327
SC No. 12                                  224            281            271328
SC No. 13                                  224            282            271329
SC No. 14                                  224            283            271330
SC No. 15                                  224            284            271331
SC No. 16                                  224            285            271332
Silver Dream No. 1                         213            261            243533
New Silver Dream No. 2                     343            196            589457
New Silver Dream No. 3                     343            198            589458
Silver Dream No. 4                         213            264            243536
Silver Dream No. 5                         213            265            243537
Silver Dream No. 7                         213            266            243538
Silver Dream No. 8                         213            267            243539
Silver Dream No. 9                         177            302            151241
Silver Dream No. 10                        177            303            151242
Silver Dream No. 11                        177            304            151243
Surprise Fraction No. 1                    214            190            245420
Surprise Fraction No. 2                    214            191            245421
Surprise Fraction No. 3                    214            192            245422
Surprise Fraction No. 4                    214            193            245423
Surprise Fraction No. 5                    214            194            245424
Surprise Fraction No. 6                    214            195            245425
Surprise Fraction No. 7                    214            196            245426
Surprise No. 5                             180            24             159540

                                       10
<PAGE>

Surprise No. 6                             180            25             159541
Surprise No. 7                             180            27             159542
Surprise No. 8                             180            28             159543
Surprise No. 9                             181            584            166987
         Amended                           221            571
Surprise No. 10                            181            585            166988
         Amended                           221            572
         Amended                           343            200

Willow Fraction                            293            30             418382
Willow Fraction No. 1                      293            31             418383
Willow Fraction No. 2                      293            32             418384
Willow Fraction No. 3                      293            33             418385
Goldfield Concentrates Mill Site           8              423            102449
McBear 1                                   408            582            700644
(360 unpatened)

Battle Mountain
Water rights Including the following:
Water right certificate to Galena Spring No. 7592
Water right certificate to Shiloh Shaft No. 759375
Styles water permits No. s 7665, 7684, 28960, 9811.

Water right applications No.s
49038, 49039, 49053.

                                       11
<PAGE>

Recorded at the request of                                             Exhibit B
and return to:

                      QUITCLAIM DEED WITH RESERVED ROYALTY
                             ON MINERAL PRODUCTION

         THIS QUITCLAIM DEED WITH RESERVED ROYALTY ON MINERAL PRODUCTION is made
this_______________________day of_____________________, 200_ by and between F.
W. LEWIS, INC., a Nevada corporation ("Lewis"); and MADISON ENTERPRISES CORP., a
British Columbia corporation, and GREAT AMERICAN MINERALS EXPLORATION (NEVADA),
LLC., a Nevada limited liability company (referred to collectively as
"Madison").

                                   WITNESSETH:

         1. Conveyance of Real Property. Lewis, in consideration of Ten Dollars
and other valuable consideration paid to it by Madison, does hereby remise,
release and forever quitclaim to Madison all of Lewis' right, title and interest
in and to the patented and unpatented lode mining claims situated in Lander
County, Nevada, which are more particularly described on Exhibit A attached
hereto (the "Property").

         TOGETHER with all and singular the tenements, hereditaments and
appurtenances thereunto belonging, or in anywise appertaining, and the reversion
and reversions, remainder and remainders, rents, issues and profits thereof.

                                       -1-
<PAGE>

         TOGETHER with all minerals and all veins and lodes of mineral-bearing
rock therein and all dips, spurs and angles thereof.

         TO HAVE AND TO HOLD all of the right, title and interest of Lewis in
and to the Property, together with the appurtenances, unto Madison, its
successors and assigns forever.

         2. Minimum Advance Royalties. Commencing
on_____________________________________________, 200_____, and on every
anniversary thereafter, Madison will pay to Lewis minimum advance royalties in
the amount of SIXTY THOUSAND DOLLARS ($60,000.00) in cash. Madison shall be
allowed to deduct the SIXTY THOUSAND DOLLAR ($60,000.00) minimum advance
royalties from production royalties in the current Contract Year (defined as
each twelve-month period beginning on the anniversary of the Effective Date
of_______________________________________, 2002) in which such payment is made.
Madison shall not be allowed to carry forward any unrecaptured amounts of the
$60,000.00 minimum advance royalties or other payments hereunder. No other costs
or payments of any kind or form may be deducted from the production royal-ties
payable hereunder.

         The cash amount of the advance royalties payable pursuant to this
Section 2 shall be adjusted annually pursuant to the following formula:

                  a. For the purpose of the adjustments referred to herein and
the application of the formula herein set forth, the base minimum royalty
payment shall be SIXTY THOUSAND DOLLARS ($60,000.00) per year.

                                       -2-
<PAGE>

                  b. The minimum royalty for the twelve months following the
adjustment shall be increased according to increases in the cost of living as
herein set forth. The formula for computing the adjusted annual payment
according to the cost of living fluctuation shall be as follows:

                  R = $60,000 x A/P

         Where "R" represents the adjusted Advance Minimum Royalty; "P"
represents the Consumer Price Index for all Urban Consumers, "All Items"
("CPI"), as published last previous to the effective date of this Agreement by
the United States Department of Labor for the San Francisco-Oakland Area; and
"A" represents the same CPI published last previous to the date of the current
Advance Minimum Royalty payment. Should such CPI be discontinued or modified,
the parties agree that the most nearly similar index shall be used or, in the
absence of a similar index, then as set by arbitration in accordance with the
Uniform Arbitration Act of Nevada, taking into consideration changes in the cost
of living. Unless and until Madison exercises the Royalty Purchase Option or
abandons the property, in no event shall the Advance Minimum Royalty be reduced
below SIXTY THOUSAND DOLLARS ($60,000).

         3. Reserved Royalty on Production. Upon commencing production of
valuable minerals from the Property, Madison shall pay Lewis a royalty on
production ("Royalty") as follows:

                                       -3-
<PAGE>

                  a. Madison shall pay to Lewis a royalty on all gold or silver
produced, shipped, or sold by Madison from the Property equal to five percent
(5%) of the value of gold and silver produced and delivered to a refiner, free
and clear of any costs.

                  b. For all other minerals such as lead, zinc, copper, etc.,
Lewis shall receive a royalty of four percent (4%) of the Net Smelter Returns.
The term "Net Smelter Returns" as used herein shall be the amount received by
Madison for any lot, ore or concentrates from the custom mill, smelter or
reductions works purchasing the ores or concentrates after deducting the costs
of usual treatment charges. In the event ores or concentrates are shipped to a
mill, smelter or reduction works owned or controlled by Madison and/or any joint
venture associated with Madison, directly or indirectly, as parent, subsidiary
or under common ownership, either wholly owned or through ownership of
shareholder interest, then in that event no deductions shall be made from the
Royalty to Lewis, and Lewis shall receive four percent (4%) of such minerals
produced from the Property free and clear of all costs. The refiner shall be
instructed by Lewis to pay the Royalty directly into the account of Lewis or as
Lewis may otherwise direct.

                  c. Lewis shall pay its share of the Nevada State Net Proceeds
of Mines tax and its own income taxes, and all other taxes, charges,
assessments, fees, and fines of any nature assessed or imposed by any agency or
entity shall be borne by Madison.

                  d. Payment of production royalties shall be made by the
refiner or smelter directly into Lewis' account or as Lewis may otherwise
direct. All payments

                                       -4-
<PAGE>

shall be accompanied by a statement explaining the manner in which the payment
was calculated.

         4. Commingling of Ore. Madison shall not commingle any ores from the
Property with ores from other properties unless and until Madison has negotiated
a separate Commingling Agreement with Lewis. However, this provision shall not
obligate Lewis to enter into a commingling agreement.

         5. Accounting and Audits. Lewis shall be entitled to hire such
accountants and engineers as Lewis requires to evaluate Madison's payment
procedures and to ensure that Lewis is properly paid for minerals and ores. In
the event that an annual shortage of payment to Lewis of one-half percent (0.5%)
or more is found to exist in payments due to Lewis, Madison shall reimburse
Lewis for all costs of such accountants and engineers, or other necessary
professionals as a cost of the operation of the mine.

         Madison shall maintain books of account relating to the production from
the Property and make them available to Lewis, or its agents, on request at
Reno, Nevada. The books shall show the amount of ores and minerals shipped, sold
or treated, and the amount of money received or receivable from the sale of said
ores and minerals. The books of account, as well as Madison's maps, assays, mill
and smelter returns, and all other records shall be made available at all
reasonable times to Lewis and its representatives for the purpose of
ascertaining and checking the compliance of Madison with the terms of this
Agreement.

                                       -5-
<PAGE>

         Copies of accounting, production and sales records and net proceeds of
mines statements relating to the Property shall be furnished promptly to Lewis
quarterly, and at other times on request. Madison shall provide Lewis, on a
quarterly basis, a financial report relating to Madison's production operations
on the Property. Madison shall maintain its records in accordance with generally
accepted accounting principles.

         At Lewis' request, Madison and Lewis shall jointly agree on an
engineering company such as Kappes Cassiday to audit the computation and payment
of the Royalty to Lewis. The consultant shall be engaged to perform audits
annually or more often to ensure that Lewis is properly paid its Royalty. The
consultant shall be required to certify in writing to Lewis annually that Lewis
has been properly and adequately paid its Royalty, in the consultant's opinion.
The audit shall be an expense of Madison.

         8. Late Payments. In the event that any payments due to Lewis, whether
advance royalties, production royalties, or otherwise, should become delinquent
by thirty (30) days or more, Lewis shall have the following options:

         a. Lewis may charge interest at the rate of two percent (2%) per month
from the date or dates due; or,

         b. In the event that there is a good faith dispute concerning the
amount of delinquency, Madison must (1) place the full amount in dispute into an
interest bearing escrow account within thirty (30) days, and (2) file a
declaratory relief action to determine the rights and obligations of the parties
in a court of competent jurisdiction within ninety (90) days of the amount
coming due.

                                       -6-
<PAGE>

         9. Reclamation. Madison shall conduct environmental reclamation as may
be required by statute, and, in addition, shall undertake all reclamation
measures which can be performed on the Property on any areas on which mining
shall have been completed, whether required by statute or not.

         Prior to commencing mining operations, Madison shall obtain a bond
secured by cash, a bonding agency, or the Nevada Bond Pool to reclaim all areas
disturbed by Madison on the Property. In the event of posting a cash bond, the
cash may be released to contractors performing the reclamation.

         10. Storage of Concentrates. If Madison stockpiles any ores, minerals,
con centrates, or dore bullion produced from the Property for a period greater
than two (2) months, then Madison shall pay to Lewis the Royalty described in
Paragraph 3 above with respect to such stockpiled ores, minerals, concentrates,
or dore bullion.

         Madison shall be responsible to Lewis for its Royalty from the theft of
any bullion, precipitate or other product, while the material is in the care of
Madison, its agents, assigns or contractors.

         11. Option to Purchase Royalty. Madison has the exclusive right and
option to purchase the royalty from Lewis for an initial price of FOUR MILLION
DOLLARS ($4,000,000.00) payable in cash and stock. The option shall continue for
35 years from _______________________________, 200_____. The purchase price for
the royalty shall increase by $500,000.00 on each anniversary
of____________________________________, 200_.

                                       -7-
<PAGE>

         12. Additional Claims. Any property or claims located or acquired by
Madison or its successors within the exterior boundary of the properties
described on Exhibit A shall be subject to the foregoing provisions and the
Royalty.

         13. Covenants Running with the Land. The provisions set forth in
Paragraphs 2 through 12 above shall be covenants and conditions touching upon
the land, and such covenants and conditions shall be binding upon all successors
in interest.

         IN WITNESS WHEREOF, Lewis has executed this Quitclaim Deed with
Reserved Royalty on Mineral Production the day and year first above written.

                                         F. W. LEWIS, INC., a Nevada corporation

                                         By_____________________________________
                                            F. W. LEWIS, President

STATE OF NEVADA      )
                     ) ss
COUNTY OF WASHOE     )

                  On the_____________day of______________________, 200______,
personally appeared before me, a Notary Public within and for said county,
personally appeared F. W. LEWIS, President of F. W. Lewis, Inc. who acknowledged
that he executed the foregoing QUITCLAIM DEED WITH RESERVED ROYALTY ON MINERAL
PRODUCTION, and to me known or proved to be the person described in and who
executed the same.

                                                    ____________________________
                                                     NOTARY PUBLIC

                                       -8-
<PAGE>

Recorded at the request of                                             Exhibit C
and return to:

                  QUITCLAIM DEED RELINQUISHING ROYALTY INTEREST

         THIS QUITCLAIM DEED RELINQUISHING ROYALTY INTEREST is made
this_________day of_____________________, 2002 by and between F. W. LEWIS, INC.,
a Nevada corporation ("Lewis"); and MADISON ENTERPRISES CORP., a British
Columbia corporation, and GREAT AMERICAN MINERALS EXPLORATION (NEVADA), LLC., a
Nevada limited liability company (referred to collectively as "Madison").

                                   WITNESSETH:

         1. Conveyance of Real Property. Lewis, in consideration of the sum of
Ten Dollars ($10.00) and other valuable consideration, hereby relinquishes and
conveys to Madison the reserved royalty on production set forth in the
"Quitclaim Deed with Reserved Royalty on Mineral Production" dated
_________________________________________________, 200_____and recorded in
Book____________________of the Official Records of Lander County,
Pages_______________________________ (Document No. _________________) (the
"Royalty Deed"). Lewis has no remaining right, title, or interest in the mining
claims described in the Royalty Deed or in any proceeds therefrom.

                                       -1-
<PAGE>

         IN WITNESS WHEREOF, Lewis has executed this Quitclaim Deed
Relinquishing Royalty Interest the day and year first above written.

                                         F. W. LEWIS, INC., a Nevada corporation

                                         By_____________________________________
                                             F. W. LEWIS, President

STATE OF NEVADA      )
                     ) ss
COUNTY OF WASHOE     )

                  On the_____________day of_______________________, 200_____,
personally appeared before me, a Notary Public within and for said county,
personally appeared F. W. LEWIS, President of F. W. Lewis, Inc. who acknowledged
that he executed the foregoing QUITCLAIM DEED RELINQUISHING ROYALTY INTEREST,
and to me known or proved to be the person described in and who executed the
same.

                                                   _____________________________
                                                     NOTARY PUBLIC

                                       -2-

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