Document:

Exhibit 4.66

                               DEBENTURE AGREEMENT

THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN  RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR  RESOLD  EXCEPT  AS  PERMITTED  UNDER  SUCH LAWS PURSUANT TO
REGISTRATION  OR  AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS  OF  THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
ANY  REPRESENTATION  TO  THE  CONTRARY  IS  UNLAWFUL.

FACE  AMOUNT                                        $375,600
PRICE                                               $313,000
DEBENTURE  NUMBER                                   April  -  2006-101
ISSUANCE  DATE                                      April  3,  2006
MATURITY  DATE                                      April  3,  2011

     FOR  VALUE  RECEIVED,  Xtreme  Companies,  Inc.,  a Nevada corporation (the
"Company"),  hereby  promises  to  pay  DUTCHESS  PRIVATE EQUITIES FUND, LP (the
"Holder")  by April 3, 2011 (the "Maturity Date"), the principal amount of THREE
HUNDRED  AND  SEVENTY-FIVE  THOUSAND SIX HUNDRED Dollars ($375,600) U.S., and to
pay  interest  and  redemption  on  the principal amount hereof, and any accrued
penalties,  in  such  amounts, at such times and on such terms and conditions as
are  specified  herein.

     The  Debenture  set  forth  in  this  Agreement  is  subject  to  automatic
conversion  at the end of five (5) years from the date of issuance at which time
the Debenture outstanding will be automatically converted based upon the formula
set  forth  in  Section  3.2  (c).

Article  1          Interest

     The  Company  shall  pay ten percent (10%) annual coupon on the unpaid Face
Amount of this Debenture (this "Debenture") at such times and in such amounts as
determined  by  the Holder.  The Holder shall have the right to request interest
payments  on  the  Face  Amount anytime after closing and each month thereafter.
The  Holder  shall  submit  to  the Company a notice requesting a payment in the
amount  equal  to  the  interest  accruing  for that month on the balance of the
Debenture.  The  Interest  shall  be  compounded  daily.

     Any monies paid to the Holder in excess of the interest due when paid shall
be  credited  toward  the  Redemption  of  the  Face  Amount  of  the Debenture.

Article  2          Method  of  Payment

Section  2.1     Cash  Payments

     If  requested  by  the Holder, the Company will make amortizing payments to
the  Holder (a "Payment," or collectively, the "Payments") on a monthly basis on
the  first  day of each business day of each month while there is an outstanding
balance  on  the  Debenture, in an amount to be determined by the Holder and the
Company  based  on  the  Company's  then  current financial position.  ("Payment
Amount" or collectively, the "Payment Amounts").  In no event, shall the Payment
be  less than the Interest accruing on the outstanding balance of the Debenture.

Notwithstanding any provision to the contrary in this Debenture, the Company may
pay  in full to the Holder the Face Amount, or any balance remaining thereon, in
readily  available  funds,  at  any  time and from time to time without penalty.

     Section  2.2     Conversion  Payments

     The  Holder,  at  its sole option, shall be entitled to either i) request a
Payment from the Company in the amounts set forth in Section 2.1, above; or, ii)
the  Holder  may elect to convert a portion of the Debenture pursuant to Article
3,  below,  in  an  amount equal to or greater than the Payment Amount.   In the
event the Holder is unable to convert that portion of the debenture equal to the
Payment Amount during a calendar month, the Company shall make a Payment in cash
in  an amount equal to the difference between the amount converted by the Holder
and  the  Payment  Amount  due  for  that  month.

     Nothing  contained  in this Article 2 shall limit the amount the Holder can
elect  to  convert during a calendar month except as defined in Section 3.2 (i),
below.

     All  Payments  made  in  under  Article  2,  shall  be  applied  toward the
Redemption  Amount  as  outlined  in  Article  14,  herein.

     Section  2.3  No  Penalty  for  Prepayment.

The  Company  may  make  additional  payments  toward  Redemption ("Prepayment")
without  any  penalties.

Section  2.4  Accelerated  Repayment in the Event of a Subsequent Financing by a
Third  Party.

If, at any time after Closing, the Company receives financing from a third party
(excluding the Holder), the Company is required to pay to the Holder 100% of the
proceeds  raised  from  the  third  party  in  excess  of an aggregate amount of
$500,000  (the  "Threshold Amount").  The Threshold Amount shall also pertain to
any  assets sold, transferred or disposed of by the Company.  The Company agrees
to pay one hundred percent (100%) of any proceeds raised by the Company over the
Threshold Amount toward the accelerated repayment of the Debenture with Interest
until  such time as the Face Amount of the Debenture has been paid in full.  The
accelerated  Repayment shall be made to the Holder upon the Company's receipt of
the  financing. Failure to do so will result in an Event of Default as set forth
herein.

Article  3          Conversion

Section  3.1     Conversion  Privilege

(a)     The Holder of this Debenture shall have the right to convert any and all
     amounts  owing under this Debenture into shares of Common Stock at any time
following  the  Closing  Date  and  which is before the close of business on the
Maturity  Date,  except  as  set  forth  in Section 3.2(c) below.  The number of
shares  of  Common  Stock  issuable  upon  the  conversion  of this Debenture is
determined  pursuant to Section 3.2 and rounding the result to the nearest whole
share.

(b)     This Debenture may not be converted, whether in whole or in part, except
     in  accordance  with  this  Article  3.

(c)     In the event all or any portion of this Debenture remains outstanding on
     the  Maturity  Date,  the  unconverted  portion  of  such  Debenture  will
automatically  be  converted  into  shares  of  Common Stock on such date in the
manner  set  forth  in  Section  3.2.

Section  3.2     Conversion  Procedure

(a)     Conversion Procedures. The unpaid Face Amount of and accrued interest on
     this Debenture may be converted, in whole or in part, at any time following
the Closing Date.  Such conversion shall be effectuated by the Holder sending to
the  Company  a  facsimile  or  electronic  mail version of the signed Notice of
Conversion  which  evidences  the  Holder's  intention  to convert the Debenture
indicated.  The date on which the Notice of Conversion is delivered ("Conversion
Date")  shall  be deemed to be the date on which the Holder has delivered to the
Company  a  facsimile  or  electronic  mail  of the signed Notice of Conversion.
Notwithstanding  the  above, any Notice of Conversion received by 5:00 P.M. EST,
shall  be  deemed  to have been received the previous business day, with receipt
being  via  a  confirmation  of  time  of  facsimile  of  the  Holder.

(b)     Common  Stock  to  be  Issued.     Upon  the  Holder's conversion of any
Debenture, the Company shall issue the number of shares of Common Stock equal to
     the  Conversion.  If, at the time of conversion, the Registration Statement
has  ben  declared  effective,  the Company shall instruct its transfer agent to
issue  stock  certificates  without  restrictive  legend  (other  than  a legend
referring  to  the  registration  statement and prospectus delivery requires) or
stop  transfer  instructions.  If  at  the  time  of  Holder's  conversion,  the
Registration  Statement  has  not  been  declared  effective,  the Company shall
instruct  the  transfer  agent  to  issue  the  certificates with an appropriate
legend.  The  Company  shall  act as Registrar and shall maintain an appropriate
ledger  containing the necessary information with respect to each Debenture. The
Company  warrants that no instructions, other than these instructions, have been
given  or  will  be  given to the transfer agent and that the Common Stock shall
otherwise  be  freely  resold,  except  as  may  be  otherwise set forth herein.

(c)     Conversion  Price.  Holder is entitled to convert the unpaid Face Amount
of  this Debenture, plus accrued interest, any time following a Closing Date, at
the  lesser  of  (i) 75% of the lowest closing bid price of the Common Stock for
the  fifteen  trading  day period prior to a Conversion; or, (ii) at eight cents
($.08).  The  lower  of  (i)  or  (ii)  being referred to as a "Fixed Conversion
Price".  No  fractional shares or scrip representing fractions of shares will be
issued  on conversion, but the number of shares issuable shall be rounded up, as
the case may be, to the nearest whole share.  The Holder shall retain all rights
     of  conversions  during  any  partial  trading  days.

(d)     Maximum  Interest.  Nothing  contained in this Debenture shall be deemed
to  establish  or require the Company to pay interest to the Holder at a rate in
excess  of  the  maximum rate permitted by governing law.  In the event that the
rate  of  interest  required  to  be  paid exceeds the maximum rate permitted by
governing  law,  the  rate  of  interest required to be paid thereunder shall be
automatically  reduced to the maximum rate permitted under the governing law and
such  excess,  if so ordered, shall be credited on any remaining balances due to
the  Holder  with  reasonable  promptness  by the Holder to the Company.  In the
event  this  Section  3.2  (d) applies, the Parties agree that the terms of this
Debenture  remain  in  full  force and effect except as is necessary to make the
interest  rate  comply  with  applicable  law.

(e)     Opinion  Letter.  It  shall  be the Company's responsibility to take all
necessary  actions  and  to  bear  all  such  costs to issue the Common Stock as
provided  herein,  including  the  responsibility  and  cost  for delivery of an
opinion  letter  to the transfer agent, if so required.  The person or entity in
whose  name the certificate of Common Stock is to be registered shall be treated
as  a  shareholder of record on and after the conversion date. Upon surrender of
any  Debentures that are to be converted in part, the Company shall issue to the
Holder  a  new  Debenture  equal  to  the unconverted amount, if so requested in
writing  by  Holder.

(f)     Delivery of Shares.  Within three (3) business days after receipt of the
     documentation  referred  to  above  in  Section  3.2(a),  the Company shall
deliver  a  certificate,  in  accordance  with  Section 3.2(c) for the number of
shares  of  Common Stock issuable upon the conversion.  In the event the Company
does  not  make  delivery  of  the Common Stock, as instructed by Holder, within
three  (3)  business  days  after  the Conversion Date, the Company shall pay to
Holder  in cash, as liquidated damages, an additional three percent (3%) per day
of  the  dollar  value  of  the  Debentures  being  converted.

     If  the  failure  of the Company to issue the Common Stock pursuant to this
Section  3.2  (f)  is  due  to the unavailability of authorized shares of Common
Stock,  the  provisions of this Section 3.2 (f) shall not apply, but instead the
provisions  of  Section  3.2  (k)  shall  apply.

              The  Company  shall  make any payments required under this Section
3.2(f)  in  immediately  available funds within three (3) business days from the
date  the  Common  Stock  is  fully  delivered.  Nothing  herein shall limit the
Holder's  right  to  pursue  actual  damages  or  cancel  the conversion for the
Company's  failure  to issue and deliver Common Stock to the Holder within three
(3)  business  days  after  the  Conversion  Date.

     The  Company  shall  at  all  times  reserve  (or  make alternative written
arrangements  for  reservation or contribution of shares) and have available all
Common  Stock  necessary  to  meet conversion of the Debentures by Holder of the
entire  amount  of  Debentures  then  outstanding.  If,  at any time, the Holder
submits  a  Notice  of  Conversion  and  the  Company  does  not have sufficient
authorized  but unissued shares of Common Stock (or alternative shares of Common
Stock  as  may  be  contributed by Stockholders) available to effect, in full, a
conversion  of  the Debentures (a "Conversion Default", the date of such default
being  referred  to  herein as the "Conversion Default Date"), the Company shall
issue  to the Holder all of the shares of Common Stock which are available.  Any
Convertible  Debentures or any portion thereof, which cannot be converted due to
the  Company's  lack  of  sufficient  authorized  common stock (the "Unconverted
Debentures"), may be deemed null and void upon written notice sent by the Holder
to  the  Company.  The  Company  shall provide notice of such Conversion Default
("Notice  of  Conversion  Default")  to the Holder, by facsimile, within one (1)
business  days  of  such  default.

     In  the event of Conversion Default, the Company will pay to the Holder the
amount of (N/365) x (.24) x the initial issuance price of the outstanding and/or
tendered  but  not converted Debentures held by each Holder where N = the number
of days from the Conversion Default Date to the date that the Company authorizes
a  sufficient  number  of  shares  of  Common  Stock to effect conversion of all
remaining  Debentures (the "Authorization Date").  The Company shall send notice
to  Holder  of outstanding Debenture that additional shares of Common Stock have
been  authorized;  stating  the  Authorization  Date  and the amount of Holder's
accrued  Conversion  Default  Payments  ("Authorization  Notice").  The  accrued
Conversion  Default  shall  be  paid in cash or shall be convertible into Common
Stock  at  the  Conversion  Rate,  upon written notice sent by the Holder to the
Company,  as  follows:   (i) in the event the Holder elects to take such payment
in  cash,  cash  payment  shall  be made to the Holder  within five (5) business
days,  or  (ii)  in  the  event Holder elects to take such payment in stock, the
Holder  may  convert  at  the conversion rate set forth in the first sentence of
this  paragraph  within  five  (5)  business  days  until  the expiration of the
conversion  period

     The  Company  acknowledges that its failure to maintain a sufficient number
of authorized but unissued shares of Common Stock to effect in full a conversion
of  the  Debenture  will  cause  the Holder to suffer irreparable harm, and that
damages  will be difficult to ascertain.  Accordingly, the parties agree that it
is  appropriate to include in this Agreement a provision for liquidated damages.
The  parties  acknowledge  and  agree  that the liquidated damages provision set
forth in this section represents the parties' good faith effort to quantify such
damages  and, as such, agree that the form and amount of such liquidated damages
are  reasonable  and  will  not constitute a penalty.  The payment of liquidated
damages shall not relieve the Company from its obligations to deliver the Common
Stock  pursuant  to the terms of this Debenture.  Nothing herein shall limit the
Holder's  right to pursue actual damages for the Company's failure to maintain a
sufficient  number  of  authorized  shares  of  Common  Stock.

     If,  by the third (3rd) business day after the Conversion Date, any portion
of  the  shares  of  the  Convertible  Debentures have not been delivered to the
Holder  and  the  Holder  purchases, in an open market transaction or otherwise,
shares  of  Common  Stock  (the "Covering Shares") necessary to make delivery of
shares  which  would  have been delivered if the full amount of the shares to be
converted and delivered to the Holder, then the Company shall pay to the Holder,
in  addition  to  any  other  amounts due to Holder pursuant to this Convertible
Debenture,  and  not  in  lieu thereof, the Buy-In Adjustment Amount (as defined
below).  The  "Buy  In  Adjustment Amount" is the amount equal to the excess, if
any,  of (x) the Holder's total purchase price (including brokerage commissions,
if  any)  for  the  Covering  Shares  over (y) the net proceeds (after brokerage
commissions,  if  any)  received by the Holder from the sale of the Sold Shares.
The  Company shall pay the Buy-In Adjustment Amount to the Holder in immediately
available  funds  within five (5) business days of written demand by the Holder.
By  way  of  illustration  and not in limitation of the foregoing, if the Holder
purchases  shares  of  Common  Stock  having  a  total purchase price (including
brokerage  commissions)  of  $11,000 to cover a Buy-In with respect to shares of
Common  Stock  it sold for net proceeds of $10,000, the Buy-In Adjustment Amount
which  the  Company  will  be  required  to  pay  to  the Holder will be $1,000.

(g)     Prospectus and Other Documents. The Company shall furnish to Holder such
     number  of  prospectuses and other documents incidental to the registration
of the shares of Common Stock underlying the Debentures, including any amendment
of  or  supplements  thereto.  Any  filings  submitted via EDGAR will constitute
fulfillment  of  the  Company's  obligation  under  this  Section.

(h)     Limitation  on Issuance of Shares. If the Company's Common Stock becomes
listed  on  the  Nasdaq SmallCap Market after the issuance of the Debenture, the
Company  may  be limited in the number of shares of Common Stock it may issue by
virtue  of  (A)  the number of authorized shares or (B) the applicable rules and
regulations  of  the  principal  securities  market on which the Common Stock is
listed  or  traded,  including,  but  not  necessarily  limited  to, NASDAQ Rule
4310(c)(25)(H)(i)  or  Rule  4460(i)(1), as may be applicable (collectively, the
"Cap  Regulations").  Without  limiting  the  other  provisions thereof; (i) the
Company  will  take  all steps reasonably necessary to be in a position to issue
shares of Common Stock on conversion of the Debentures without violating the Cap
     Regulations  and  (ii)  if,  despite  taking  such steps, the Company still
cannot  issue such shares of Common Stock without violating the Cap Regulations,
the Holder cannot convert as result of the Cap Regulations (each such Debenture,
an  "Unconverted  Debenture")  shall  have  the  right  to  elect  either of the
following  remedies:

     (x)  if  permitted  by  the  Cap  Regulations, require the Company to issue
shares of Common Stock in accordance with the Holder's Notice of Conversion at a
conversion  purchase  price  equal  to  the average of the closing bid price per
share  of  Common  Stock  for  any five (5) consecutive Trading Days (subject to
certain  equitable  adjustments for certain events occurring during such period)
during the sixty (60) Trading Days immediately preceding the Conversion Date; or

     (y)  require the Company to redeem each Unconverted Debenture for an amount
(the  "Redemption Amount"), payable in cash, equal to the sum of (i) one hundred
thirty-three  percent  (133%) of the principal of an Unconverted Debenture, plus
(ii)  any  accrued but unpaid interest thereon through and including the date on
which  the  Redemption  Amount  is  paid  to the holder (the "Redemption Date").

     The  Holder of an Unconverted Debenture may elect one of the above remedies
with  respect  to  a  portion of such Unconverted Debenture and the other remedy
with  respect  to  other  portions  of the Unconverted Debenture.  The Debenture
shall  contain  provisions  substantially  consistent with the above terms, with
such additional provisions as may be consented to by the Holder.  The provisions
of  this section are not intended to limit the scope of the provisions otherwise
included  in  the  Debenture.

(i)     Limitation  on  Amount  of  Conversion  and  Ownership.  Notwithstanding
anything  to  the  contrary  in  this Debenture, in no event shall the Holder be
entitled  to convert that amount of Debenture, and in no event shall the Company
permit  that  amount of conversion, into that number of shares, which when added
to  the sum of the number of shares of Common Stock beneficially owned, (as such
term  is  defined  under Section 13(d) and Rule 13d-3 of the Securities Exchange
Act  of  1934, as may be amended, (the "1934 Act")), by the Holder, would exceed
4.99%  of  the  number  of  shares of Common Stock outstanding on the Conversion
Date,  as  determined  in  accordance with Rule 13d-1(j) of the 1934 Act. In the
event  that  the  number  of shares of Common Stock outstanding as determined in
accordance  with  Section  13(d)  of the 1934 Act is different on any Conversion
Date  than it was on the Closing Date, then the number of shares of Common Stock
outstanding  on  such  Conversion  Date shall govern for purposes of determining
whether the Holder would be acquiring beneficial ownership of more than 4.99% of
     the  number  of shares of Common Stock outstanding on such Conversion Date.

(j)     Legend.  The  Holder acknowledges that each certificate representing the
Debentures,  and the Common Stock unless registered pursuant to the Registration
Rights  Agreement,  shall  be  stamped  or  otherwise  imprinted  with  a legend
substantially  in  the  following  form:

THE  SECURITIES  EVIDENCED  BY  THIS  CERTIFICATE  MAY  NOT  BE OFFERED OR SOLD,
TRANSFERRED,  PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT
TO  AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,  (ii)  TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR
ANY  SIMILAR  RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(iii)  PURSUANT  TO  AN  AVAILABLE  EXEMPTION  FROM REGISTRATION UNDER SUCH ACT.

     (k)  Prior to conversion of the Debenture, if at any time the conversion of
all  the Debentures and exercise of all the Warrants outstanding would result in
an  insufficient  number of authorized shares of Common Stock being available to
cover all the conversions, then in such event, the Company will move to call and
hold  a shareholder's meeting or have shareholder action with written consent of
the proper number of shareholders within thirty (30) days of such event, or such
greater  period  of  time  if  statutorily  required  or reasonably necessary as
regards  standard brokerage house and/or SEC requirements and/or procedures, for
the  purpose  of authorizing additional shares of Common Stock to facilitate the
conversions.   In such an event management of the Company shall recommend to all
shareholders  to  vote their shares in favor of increasing the authorized number
of  shares  of  Common  Stock.  Management  of the Company shall vote all of its
shares of Common Stock in favor of increasing the number of shares of authorized
Common  Stock  to an amount equal to three hundred percent (300%) of the balance
on  the DebentureThe Company represents and warrants that under no circumstances
will  it  deny  or  prevent  the  Holder's  right  to  convert the Debentures as
permitted  under  the  terms  of this Subscription Agreement or the Registration
Rights  Agreement.  Nothing  in  this  Section shall limit the obligation of the
Company  to  make  the payments set forth in this Section 3.  The Holder, at his
option,  may request the company to authorize and issue additional shares if the
Holder  feels  it  is  necessary for conversions in the future. In the event the
Company's  shareholder's meeting does not result in the necessary authorization,
the  Company  shall redeem the outstanding Debentures for an amount equal to the
sum of the principal of the outstanding Debentures plus accrued interest thereon
multiplied  by  133%.

Section  3.3     Fractional  Shares.  The  Company  shall  not  issue fractional
shares of Common Stock, or scrip representing fractions of such shares, upon the
     conversion of this Debenture.  Instead, the Company shall round up or down,
as  the  case  may  be,  to  the  nearest  whole  share.

Section  3.4     Taxes  on  Conversion.  The  Company shall pay any documentary,
stamp  or  similar  issue  or  transfer tax due on the issue of shares of Common
Stock  upon the conversion of this Debenture.  However, the Holder shall pay any
such  tax  which  is  due because the shares are issued in a name other than its
name.

Section  3.5     Company to Reserve Stock.  The Company shall reserve the number
of  shares  of Common Stock required pursuant to and upon the terms set forth in
the  Subscription  Agreement  to  permit  the conversion of this Debenture.  All
shares of Common Stock which may be issued upon the conversion hereof shall upon
     issuance by the Company be validly issued, fully paid and nonassessable and
free  from  all  taxes,  liens and charges with respect to the issuance thereof.

Section  3.6     Restrictions  on  Sale.  This Debenture has not been registered
under  the  Securities  Act  of 1933, as amended (the "Act") and is being issued
under Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the
     Act.  This  Debenture  and  the  Common  Stock issuable upon the conversion
thereof may only be sold pursuant to registration under or an exemption from the
Act.

     Section 3.7     Stock Splits, Combinations and Dividends.  If the shares of
Common  Stock  are  subdivided  or  combined into a greater or smaller number of
shares  of  Common Stock, or if a dividend is paid on the Common Stock in shares
of  Common  Stock, the Conversion Price shall be proportionately reduced in case
of  subdivision  of shares or stock dividend or proportionately increased in the
case  of  combination  of  shares,  in each such case, by the ratio of the total
number  of shares of Common Stock outstanding immediately after such event bears
to  the  total number of shares of Common Stock outstanding immediately prior to
such  event.

Article  4          Mergers
     The  Company shall not consolidate or merge into, or transfer any or all of
its assets to, any person, unless such person assumes in writing the obligations
of  the  Company  under this Debenture and immediately after such transaction no
Event  of  Default  exists.  Any  reference herein to the Company shall refer to
such  surviving  or  transferee  corporation  and the obligations of the Company
shall  terminate  only upon such written assumption of the Company's obligation.
The  Company  shall  make  notice  to  the  Holder  simultaneously  with  the
dissemination  of  a  Merger  to  the  public  markets.

Article  5       Security

     This  Debenture  is  secured  by  both  Security  Agreements (the "Security
Agreements")  between  the Company and the Holder and its affiliates, both dated
February  22,  2006.

Article  6          Defaults  and  Remedies

Section  6.1     Events  of Default.  An "Event of Default" occurs if any one of
the  following  occur:

     (a)  the  Company  does  not make the Payment of the principal, interest or
other sum due under this Debenture by the Holder's conversion into Common Stock,
within  five (5) business days of the Maturity Date, upon redemption, Conversion
Date  or  otherwise  described  herein;  or,

     (b)  the  Company does not make a Payment in cash for a period of three (3)
business  days  when  due  as  described  in  this  Agreement;  or,

     (c)  any  of  the  Company's representations or warranties contained in the
Transaction  Documents  or  this  Debenture  were false when made or the Company
fails  to comply with any of its other agreements and such failure continues for
a  period  of  five  (5)  business  days;  or,

     (d)  the  Company  pursuant to or within the meaning of any Bankruptcy Law:
(i)  commences  a  voluntary  case;  (ii)  consents to the entry of an order for
relief against it in an involuntary case; (iii) consents to the appointment of a
Custodian  (as hereinafter defined) of it or for all or substantially all of its
property  or (iv) makes a general assignment for the benefit of its creditors or
(v)  a  court  of  competent  jurisdiction  enters  an order or decree under any
Bankruptcy  Law  that:  (A)  is for relief against the Company in an involuntary
case; (B) appoints a Custodian of the Company or for all or substantially all of
its  property  or  (C)  orders  the liquidation of the Company, and the order or
decree  remains  unstayed  and  in  effect  for  sixty  (60)  calendar days; or,

     (e)  the  Company's  Common  Stock  is suspended or no longer listed on any
recognized  exchange  including  electronic  over-the-counter  bulletin  board
("Principal  Market")  for  in  excess  of  three  (3) consecutive Trading Days.
Failure  to  comply  with  the requirements for continued listing on a Principal
Market  for  a period of five (5) trading days; or notification from a Principal
Market  that  the  Company  is  not  in  compliance with the conditions for such
continued  listing  on  such  Principal  Market;  or,

     (f)  the  Company  breaches  any  covenant  or condition of the Transaction
Documents,  and  such breach, if subject to cure, continues for a period of five
(5)  business  days;  or,

Section  6.2     Remedies.  In  the  Event  of  Default, the Holder may elect to
secure  a  portion  of the Company's assets in Pledged Collateral (as defined in
the  Security Agreement).  The Holder may also elect to garnish Revenue from the
Company  in  an  amount  that will repay the Holder on the schedules outlined in
this  Agreement.

     In  the  Event  of  Default,  as outlined in this Agreement, the Holder can
exercise  its  right to increase the Face Amount of the Debenture by ten percent
(10%) as an initial penalty, and for each subsequent Event of Default under this
Agreement.  In addition, the Holder may elect to increase the Face Amount by two
and  one-half  percent (2.5%) per month (pro-rata for partial periods) paid as a
penalty  for liquated damages ("Liquidated Damages").  The Liquated Damages will
be  compounded  daily.  It  is the intention and acknowledgement of both parties
that  the  Liquidated  Damages not be deemed as interest under the terms of this
Agreement.

     The  Company  agrees that the date of consideration for the Debenture shall
remain  the  Issuance  Date stated herein.  The Company shall provide an opinion
letter  from  counsel  within  two  (2)  business days of written request by the
Holder  stating that the date of consideration for the Debenture is the Issuance
Date  and submission of proper Rule 144, promulgated under the Securities Act of
1933,  support  documentation  consisting of Form 144, a broker's representation
letter  and a seller's representation letter.  In the event the Company does not
deliver  the  opinion  letter  within  two business days, the Default Conversion
Price  shall  immediately  decrease by two percent (2%) for each business day an
opinion  letter fails to be delivered.  In the event that counsel to the Company
fails  or  refuses  to  render  an  opinion  as  required to issue the Shares in
accordance  with  this paragraph (either with or without restrictive legends, as
applicable),  then  the  Company irrevocably and expressly authorizes counsel to
the  Holder  to  render  such  opinion and shall authorize the Transfer Agent to
accept  and  to  rely  on  such  opinion  for the purposes of issuing the Shares
(which  is  attached  as  Exhibit  E  to  the Subscription Agreement between the
Company  and  the  Holder  of this date).  Any costs incurred by Holder for such
opinion  letter  shall  be  added  to  the  Face  Amount  of  the  Debenture.

Section  6.3     Acceleration.  If an Event of Default occurs, the Holder hereof
by  notice  to  the  Company  may declare the remaining principal amount of this
Debenture,  together with all accrued interest and any liquidated damages, to be
due  and  payable.

Section  6.4     Seniority.  No  indebtedness  of  the Company is senior to this
Debenture in right of payment, whether with respect to interest, damages or upon
     liquidation or dissolution or otherwise.  And, the Company warrants that it
has taken all necessary steps to subordinate its other obligations to the rights
of  the  Holder  hereunder.

     Section  6.5     Cost  of  Collections.  If an Event of Default occurs, the
Company  shall  pay  the Holder hereof reasonable costs of collection, including
reasonable  attorney's  fees.

Article  7          Registered  Debentures

Section  7.1     Record Ownership.  The Company, or its attorney, shall maintain
a  register of the Holder of the Debentures (the "Register") showing their names
and  addresses and the serial numbers and principal amounts of Debentures issued
to  them.  The  Register  may  be  maintained  in  electronic, magnetic or other
computerized form.  The Company may treat the person named as the Holder of this
     Debenture in the Register as the sole owner of this Debenture.   The Holder
of  this  Debenture  is  the  person exclusively entitled to receive payments of
interest  on  this  Debenture,  receive  notifications  with  respect  to  this
Debenture, convert it into Common Stock and otherwise exercise all of the rights
and  powers  as  the  absolute  owner  hereof.

     Worn  or  Lost  Debentures.  If  this  Debenture  becomes  worn, defaced or
mutilated but is still substantially intact and recognizable, the Company or its
agent  may  issue a new Debenture in lieu hereof upon its surrender.   Where the
Holder  of  this Debenture claims that the Debenture has been lost, destroyed or
wrongfully  taken,  the  Company  shall  issue  a  new Debenture in place of the
Debenture  if  the  Holder  so  requests  by  written  notice  to  the  Company.

Article  8          Notice.

     Any  notices,  consents,  waivers  or  other  communications  required  or
permitted  to  be given under the terms of this Debenture must be in writing and
will  be  deemed  to  have  been  delivered  (i)  upon  receipt,  when delivered
personally;  (ii)  upon receipt, when sent by facsimile (provided a confirmation
of  transmission is mechanically or electronically generated and kept on file by
the  sending  party);  or  (iii)  one  (1)  day  after deposit with a nationally
recognized  overnight  delivery  service, in each case properly addressed to the
party  to  receive  the  same.  The  addresses  and  facsimile  numbers for such
communications  shall  be:

If  to  the  Company:

Kevin  Ryan
Xtreme  Companies,  Inc.
300  Westlink  Dr
Washington,  MO  36090
Telephone:  (636)  390-9000
Facsimile:  (636)  390-2556

If  to  the  Investor:

Douglas  Leighton
Dutchess  Capital  Management
50  Commonwealth  Ave,  Suite  2
Boston,  MA  02116
Telephone:  617-301-4702
Facsimile:  617-249-0947

     Each  party  shall provide five (5) business days prior notice to the other
party  of  any  change  in  address,  phone  number  or  facsimile  number.

Article  9          Time

     Where  this  Note  authorizes  or  requires  the  payment  of  money or the
performance of a condition or obligation on a Saturday or Sunday or a holiday on
which  the  United  States  Stock Markets ("US Markets") are closed ("Holiday"),
such  payment  shall  be  made  or condition or obligation performed on the last
business day preceding such Saturday, Sunday or Holiday.  A "business day" shall
mean  a  day  on  which  the  US  Markets are open for a full day or half day of
trading.

Article  10          No  Assignment

     This  Debenture and the obligation hereunder shall not be assignable by the
Company  or  the  Holder.

Article  11          Rules  of  Construction.

     In  this  Debenture,  unless  the  context otherwise requires, words in the
singular  number include the plural, and in the plural include the singular, and
words  of the masculine gender include the feminine and the neuter, and when the
sense  so  indicates,  words  of the neuter gender may refer to any gender.  The
numbers  and  titles  of  sections  contained  in the Debenture are inserted for
convenience  of  reference  only, and they neither form a part of this Debenture
nor are they to be used in the construction or interpretation hereof.  Wherever,
in  this  Debenture, a determination of the Company is required or allowed, such
determination  shall  be  made  by  a  majority of the Board of Directors of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the  Company  and  the  Holder  of  this  Debenture.

Article  12          Governing  Law
     The validity, terms, performance and enforcement of this Debenture shall be
governed  and construed by the provisions hereof and in accordance with the laws
of  the  Commonwealth  of  Massachusetts  applicable  to  agreements  that  are
negotiated,  executed,  delivered  and  performed  solely in the Commonwealth of
Massachusetts.

Article  13          Disputes  Under  Agreement

     All  disputes  arising  under  this  agreement  shall  be  governed  by and
interpreted  in  accordance  with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws.  The parties to this agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall  be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an  attorney  admitted to practice law in the Commonwealth of Massachusetts.  No
party  to  this agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.

Article  14  Redemption

     The  Holder  shall  have  the  right  to be redeemed from the Debenture, in
whole  or  in part, at a price equal to one hundred and twenty percent (120%) of
the  outstanding  principal  amount of the Debenture, including accrued interest
(and  penalties  if  applicable).  Any  Payments, as defined in Article 2 above,
shall  apply  to  the  Redemption  Amount.

Article  15     Use  of  Proceeds

     For  general  corporate  purposes  and  working  capital.

Article  16     Structuring  and  Administration  Expense

     The Company agrees to pay for related expenses associated with the proposed
transaction  of  $20,000.  This  amount  shall cover, but is not limited to, the
following:  due  diligence  expenses, document creation expenses, closing costs,
and  transaction  administration  expenses.  This  shall  be  deducted  from the
Closing.

Article  17     Waiver

The  Holder's  delay or failure at any time or times hereafter to require strict
performance  by  the  Company of any undertakings, agreements or covenants shall
not  waive,  affect, or diminish any right of the Holder under this Agreement to
demand  strict  compliance and performance herewith. Any waiver by the Holder of
any  Event  of  Default  shall  not  waive or affect any other Event of Default,
whether  such Event of Default is prior or subsequent thereto and whether of the
same  or a different type. None of the undertakings, agreements and covenants of
the  Company  contained  in  this  Agreement,  and no Event of Default, shall be
deemed  to  have  been  waived by the Holder, nor may this Agreement be amended,
changed  or  modified,  unless such waiver, amendment, change or modification is
evidenced  by an instrument in writing specifying such waiver, amendment, change
or  modification  and  signed  by  the  Holder.

Article  18     Integration

This  Debenture  is  the FINAL AGREEMENT between the Company and the Holder with
respect  to  the  terms  and conditions set forth herein, and, the terms of this
Debenture  may  not  be  contradicted  by evidence of prior, contemporaneous, or
subsequent  oral  agreements of the Parties.  The execution and delivery of this
Debenture  shall  not alter the prior written agreements between the Company and
the  Holder.

Article  19     Failure  to  Meet  Obligations

           The  Company  acknowledges that its failure to timely meet any of its
obligations  hereunder,  including,  but without limitations, its obligations to
make  Payments,  deliver  shares  and,  as  necessary,  to register and maintain
sufficient  number  of  Shares, will cause the Holder to suffer irreparable harm
and,  that  the  actual  damage  to  the  Holder will be difficult to ascertain.
Accordingly,  the  parties  agree  that  it  is  appropriate  to include in this
Debenture a provision for liquidated damages.  The parties acknowledge and agree
that  the  liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form  and amount of such liquidated damages are reasonable and do not constitute
a penalty.  The payment of liquidated damages shall not relieve the Company from
its  obligations  to  deliver  the  Common  Stock  pursuant to the terms of this
Debenture.

Article  20     Registration

     The  Company  shall  file  a registration statement with the SEC, within 45
days  following  a  written  request by the Holder ("Filing Date"), covering the
Debenture.  The  number of shares of Stock registered shall be equivalent to the
sum  of:  1)  the Face Amount divided by the Fixed Conversion Price. The Company
agrees  that if such registration statement has not been submitted to the SEC by
the  Filing  Date,  the  Fixed  Conversion Price will initially drop ten percent
(10%)  and  an  additional  ten  percent (10%) for every fifteen (15) day period
thereafter  the  Company  fails to file the Registration Statement.  The Company
also agrees that if the Filing Date exceeds 45 days or the date the registration
statement  is declared effective (the "Effective Date") exceeds 90 days from the
Filing  Date ("Penalty Date" collectively the "Penalty Dates"), a penalty of two
percent  (2%)  per  month, of the Face Amount of the Debenture, shall accrue for
each  month  the Filing Date and/or the Effective Date exceeds the Penalty Date,
pro-rated  for  partial  periods.  The  Company  agrees not to include any other
registration  to  this  statement  without  the  Investor's  consent.

                                      *.*.*

<PAGE>

     IN  WITNESS WHEREOF, the Company has duly executed this Debenture as of the
date  first  written  above  and  duly  authorized  to  sign  on  behalf  of:

                         XTREME  COMPANIES,  INC.
                         ------------------------

     By:  /s/  Kevin  Ryan
          ----------------
   Name:     Kevin  Ryan
  Title:     Chief  Executive  Officer

     By:  /s/  Laurie  Phillips
          ---------------------
   Name:     Laurie  Phillips
  Title:     Chief  Financial  Officer

                              DUTCHESS  PRIVATE  EQUITIES  FUND,  L.P.
                              BY  ITS  GENERAL  PARTNER  DUTCHESS
                              CAPITAL  MANAGEMENT,  LLC

                         By:  /s/  Douglas  H.  Leighton
                              --------------------------
                       Name:  Douglas  H.  Leighton
                      Title:  A  Managing  Member

<PAGE>

                                    Exhibit A

                              NOTICE OF CONVERSION
                              --------------------

     (To be Executed by the Registered Owner in order to Convert Debenture)
TO  Xtreme  Companies,  Inc.,  Inc.

     The  undersigned  hereby  irrevocably  elects,  as  of ________________, to
convert  $________________  of  its convertible debenture (the "Debenture") into
Common  Stock  of  Xtreme  Companies, Inc., Inc.(the "Company") according to the
                   -----------------------------
conditions  set  forth  in  the  Debenture  issued  by  the  Company.

Date  of  Conversion________________________________________________

Applicable  Conversion  Price________________________________________

Number  of  Debentures  Issuable  upon  this  Conversion_______________________

Name(Print)___________Dutchess  Private  Equities  Fund,  LP  _________________
                      --------------------------------------

Address______________50  Commonwealth  Ave,  Boston,  MA  02116_____________
                     ------------------------------------------

Phone_____617-301-4700_____________  Fax________617-249-0947___________
          -------------------------             ------------

                    By:_______________________________________
                                  Douglas  LeightonExhibit 10.1

     

    THE
      PROPERTY OPTION AGREEMENT

    

     

    DORIAN
      LESLIE

    

    AND

    

    RAM
      EXPLORATION LTD.

    

    AND

    

    FRC
      EXPLORATION LTD.

    

     

    

    SNIPPAKER

    MINERAL
      PROPERTIES

    

    PROVINCE
      OF BRITISH COLUMBIA

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      	
               

              DEFINITIONS

            	
               

              3

            
	
               

              REPRESENTATIONS AND WARRANTIES
                OF DORIAN
                LESLIE

            	
               

              5

            
	
               

              REPRESENTATIONS AND WARRANTIES
                OFF
                FRC

            	
               

              6

            
	
               

              GRANT AND EXERCISE OF
                OPTION

            	
               

              6

            
	
               

              RIGHT OF
                ENTRY

            	
               

              8

            
	
               

              OBLIGATIONS OF LESLIE
                DURING
                PROPERTY OPTION PERIOD

            	
               

              8

            
	
               

              TERMINATION OF
                OPTION

            	
               

              9

            
	
               

              TRANSFERS

            	
               

              9

            
	
               

              FORCE MAJEURE 

            	
               

              10

            
	
               

              CONFIDENTIAL
                INFORMATION

            	
               

              10

            
	
               

              ARBITRATION

            	
               

              10

            
	
               

              DEFAULT AND
                TERMINATION

            	
               

              11

            
	
               

              NOTICES

            	
               

              11

            
	
               

              GENERAL

            	
               

              12

            

    

     

    SCHEDULE
“A”

    DESCRIPTION
      OF PROPERTY RIGHTS AND PROPERTY 

    

    SCHEDULE
“B”

    JOINT
      VENTURE AGREEMENT 

    

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

          
          

        

      

    

     

    OPTION
      AGREEMENT

    

    

    THIS
      AGREEMENT made
      effective as of the 24 day of May, 2006.

    BETWEEN:

    DORIAN
      LESLIE,
      an
      individual having a residence at 401 - 345 Water Street, Vancouver ,the Province
      of British Columbia ,V6B 1B8, Canada. 

    

    (hereafter
      “Leslie”)

    

    AND:

    

    RAM
      EXPLORATION LTD.,
      a body
      corporate, incorporated under the laws of British Columbia and having offices
      located at 1124 - 470 Granville Street, Vancouver in the Province of British
      Columbia, V6C 1V5, Canada

    

    (hereafter
      “Ram”)

    

    AND:

    

    

    FRC
      EXPLORATION LTD..,
      a body
      corporate, incorporated under the laws of British Columbia and having offices
      located at 305 - 3495 Cambie Street, Vancouver, in the Province of British
      Columbia, V5Z 3W6, Canada

    

    (hereafter
      “FRC”)

     

    

    WHEREAS:

    

    A.
       Leslie
      is
      the holder of all Property Rights related to the Property; and

    

    B.
       Leslie
      has agreed to grant an Option to FRC to acquire an interest in and to the
      Property Rights and the Property, on the terms and conditions hereinafter set
      forth;

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH that
      in
      consideration of the sum of $1.00 now paid by FRC to Leslie and the sum of
      $1.00
      now paid by FRC to Ram (the receipt and sufficiency of which Leslie and Ram
      hereby acknowledges), the parties agree as follows:

    

    DEFINITIONS

    

    1.1
       For
      the
      purposes of this Agreement the following words and phrases shall have the
      following meanings, namely:

    

    
      	
              a)
                

            	
              “Agreement”
                means this agreement and any amendments thereto from time to
                time;

            

    

     

    
      	
              b)
                

            	
              “Commencement
                Date” means the date of this
                Agreement;

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	
              c)
                

            	
              “Completion
                Date” means the date on which FRC fulfills all of its obligations with
                respect to proper exercise of the Option as contemplated in Article
                4
                hereof;

            

    

    

    
      	
              d)
                

            	
              “Exploration
                Expenditures” means the sum of 

            

    

    
      	(i)  	
              all
                costs of acquisition and maintenance of the Property, all exploration
                and
                development expenditures and all other costs and expenses of whatsoever
                kind or nature including those of a capital nature, incurred or chargeable
                by Ram with respect to the exploration and development of the Property
                and
                the placing of the Property into Commercial Production and
                

            

    

    
      	(ii)  	
              any
                compensation for general overhead expenses which Ram , as Operator,
                will
                charge to FRC, an amount equal to 5% of all amounts included in
                subparagraph (i) involving aggregate payments by it in excess of
                $10,000,
                and 7.5% of all other amounts included in subparagraph (i) involving
                aggregate payments by it less than
                $10,000

            

    

    

    
      	
              e)
                

            	
              “Feasibility
                Report” means a detailed written report of the results of a comprehensive
                study on the economic feasibility of placing the Property or a portion
                thereof into Commercial Production and shall include a reasonable
                assessment of the mineral ore reserves and their amenability to
                metallurgical treatment, a description of the work, equipment and
                supplies
                required to bring the Property or a portion thereof into Commercial
                Production and the estimated cost thereof, a description of the mining
                methods to be employed and a financial appraisal of the proposed
                operations supported by an explanation of the data used
                therein;

            

    

    

    
      	
              f)
                

            	
              “FRC”
                means FRC Exploration Ltd.;

            

    

    

    
      	
              g)
                

            	
              “Joint
                Venture Agreement” means the agreement substantially in the form as
                attached hereto as Schedule “B”;

            

    

    

    
      	
              h)

            	
              “Leslie”
                means Dorian Leslie

            

    

    

    
      	
              i)
                

            	
              “Mine”
                means the workings established and assets acquired, including, without
                limiting the generality of the foregoing, development headings, plant
                and
                concentrator installations, infrastructure, housing, airport and
                other
                facilities in order to bring the Property into Commercial
                Production;

            

    

    

    
      	
              j)
                

            	
              “Mineral
                Products” means the end products derived from operating the Property as a
                Mine;

            

      	
              k)
                

            	
              “Mining
                Operations” means every kind of work
                done:

            

    

    

    
      	 	
              i)
                

            	
              on
                or in respect of the Property in accordance with a Feasibility Report;
                or

            

    

    
      	 	
              ii)
                

            	
              if
                not provided for in a Feasibility Report, unilaterally and in good
                faith
                to maintain the Property in good standing, to prevent waste or to
                otherwise discharge any obligation which is imposed upon it pursuant
                to
                this Agreement;

            

    

    

    including,
      without limiting the generality of the foregoing, investigating, prospecting,
      exploring, developing, property maintenance, preparing reports, estimates and
      studies, designing, equipping, improving, surveying, construction and mining,
      milling, concentrating, rehabilitation, reclamation, and environmental
      protection;

    

    
      	
              l)
                

            	
              “Option”
                means the irrevocable option for FRC to earn in and acquire a net
                undivided interest in and to the Property as provided in this
                Agreement;

            

    

    

    
      	
              m)
                

            	
              “Option
                Period” means the period commencing on the Commencement Date to and
                including December 31, 2009;

            

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	
              n)
                

            	
              “Property”
                means the exploration properties and lands located in the Province
                of
                British Columbia, all as more particularly described in Schedule
“A”
                hereto;

            

    

     

    
      	o)	
              “Property
                Rights” means all applications for permits for general reconnaissance,
                permit for general reconnaissance, interim approvals, applications
                for
                contracts of work, contracts of work, licenses, permits, easements,
                rights-of-way, certificates and other approvals obtained by either
                of the
                parties either before or after the date of this Agreement and necessary
                for the exploration and development of the Property, or for the purpose
                of
                placing the Property into production or continuing production therefrom,
                and;

            

    

     

    
      
        	p)	
                “Ram”
                  means Ram Explorations Ltd., a British Columbia
                  corporation.

              

      

       

    

     

    REPRESENTATIONS
      AND WARRANTIES OF LESLIE

    

    2.1
       Leslie
      hereby acknowledges and confirms that it holds the Property Rights related
      to an
      undivided one hundred (100%) percent interest in the Property as at the date
      hereof.

    
       

      2.2 
        Leslie represents and warrants to RFC that: 

      
        
          
            	
                  	a)	
                    Leslie
                      is lawfully authorized to hold his interest in the Property
                      and will
                      remain so entitled until 85% of the interests of Leslie in
                      the Property
                      have been duly transferred to FRC as contemplated by the terms
                      hereof;

                  

          

          
            
              
                
                  	
                        	b)	
                          Leslie
                            is
                            an individual, has attained the age of majority and is
                            legally competent
                            to execute this agreement and to take all actions required
                            pursuant
                            thereto and that upon the execution and delivery, this
                            agreement, will
                            constitute a legal, valid and binding contract of Leslie
                            enforceable
                            against Leslie in accordance with its
                            terms;

                        

                

                
                  
                    
                      
                        	
                              	c)	
                                as
                                  at the date hereof and at the time of transfer
                                  to FRC of an interest in
                                  the mineral claims and/or exploration licenses
                                  comprising the Property
                                  Leslie is and will be the beneficial owner of its
                                  interest in the Property
                                  free and clear of all liens, charges, claims, royalties
                                  or net profit
                                  interests of whatsoever nature, and no taxes or
                                  rentals will be due in
                                  respect of any thereof;

                              

                      

                      
                        
                          
                            
                              	
                                    	d)	
                                      Leslie
                                        has the right and capacity to deal with the
                                        Property and the right to
                                        enter into this Agreement and to dispose
                                        of his right, title and interest
                                        in the Property as herein
                                        contemplated;

                                    

                            

                            
                              
                                
                                  
                                    	
                                          	e)	
                                            there
                                              is no adverse claim or challenge against
                                              or to Leslie’s interest in the
                                              Property, nor to the knowledge of Leslie
                                              is there any basis therefor, and
                                              there are no outstanding agreements
                                              or options to acquire or purchase such
                                              interest in the Property or any portion
                                              thereof other than this
                                              Agreement;

                                          

                                  

                                  
                                    
                                      
                                        
                                          	
                                                	f)	
                                                  no
                                                    person has any royalty, net profit
                                                    interests or other interest whatsoever
                                                    in the Property;

                                                

                                        

                                        
                                          
                                            
                                              
                                                	
                                                      	g)	
                                                        Leslie
                                                          is duly authorized to execute
                                                          this Agreement and for
                                                          the performance of
                                                          this Agreement by him,
                                                          and the consummation of
                                                          the transactions herein
                                                          contemplated will not conflict
                                                          with or result in any breach
                                                          of any
                                                          covenants or agreements
                                                          contained in, or constitute
                                                          a default under, or
                                                          result in the creation
                                                          of any encumbrance under
                                                          the provisions of its
                                                          articles or constating
                                                          documents or any indenture,
                                                          agreement or other
                                                          instrument whatsoever to
                                                          which Leslie is a party
                                                          or by which he is bound
                                                          or to which he or the Property
                                                          may be
                                                          subject;

                                                      

                                              

                                              
                                                
                                                  
                                                    
                                                      	
                                                            	h)	
                                                              no
                                                                proceedings are pending
                                                                for, and it is unaware
                                                                of any basis for
                                                                the
                                                                institution of any
                                                                proceedings leading
                                                                to, the placing of
                                                                Leslie in
                                                                bankruptcy or subject
                                                                to any other laws
                                                                governing the affairs
                                                                of and
                                                                insolvent person;

                                                            

                                                    

                                                    
                                                      
                                                        
                                                          
                                                            	
                                                                  	i)	
                                                                    there
                                                                      are no claims,
                                                                      proceedings,
                                                                      actions or
                                                                      lawsuits in
                                                                      existence and
                                                                      to the
                                                                      best of Leslie’s information
                                                                      and belief
                                                                      none are contemplated
                                                                      or
                                                                      threatened
                                                                      against or
                                                                      with respect
                                                                      to the right,
                                                                      title, estate
                                                                      and
                                                                      interest of
                                                                      Leslie in the
                                                                      Property;

                                                                  

                                                          

                                                          
                                                            
                                                              
                                                                
                                                                  	
                                                                        	j)	
                                                                          to
                                                                            the best
                                                                            of his
                                                                            information
                                                                            and belief,
                                                                            all laws,
                                                                            regulations
                                                                            and orders
                                                                            of all
                                                                            governmental
                                                                            agencies
                                                                            having
                                                                            jurisdiction
                                                                            over
                                                                            the Property
                                                                            have
                                                                            been
                                                                            complied
                                                                            with
                                                                            by Leslie;

                                                                        

                                                                

                                                                 

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

      
        
           

          
            	
                  	k) 	
                    to
                      the best of his information and belief Leslie is in good standing
                      under
                      all agreements and instruments affecting the Property to which
                      he is a
                      party or is bound.

                  

          

           

        

      

    

    2.3
      The
      representations and warranties contained in this section are provided for the
      exclusive benefit of FRC, and a breach of any one or more thereof may be waived
      by FRC in whole or in part at any time without prejudice to its rights in
      respect of any other breach of the same or any other representation or warranty,
      and the representations and warranties contained in this section shall survive
      the execution hereof.

    

    2.4
      The
      representations and warranties contained in this section shall be deemed to
      apply to all assignments, transfers, conveyances or other documents transferring
      to FRC the interest to be acquired hereunder and there shall not be any merger
      of any covenant, representation or warranty in such assignments, transfers,
      conveyance or documents, any rule or law, in equity or statute to the contrary
      notwithstanding.

    

    REPRESENTATIONS
      AND WARRANTIES OF FRC

    

    3.1
      FRC
      represents and warrants to Leslie that:

    
      	a)  	
              it
                has been duly incorporated and validly exists as a corporation in
                good
                standing under the laws of its jurisdiction of
                incorporation;

            

    

    
      	b)  	
              it
                is or will be prior to acquiring any undivided interest in the Property
                hereunder, lawfully authorized to hold mineral claims and real property
                under the laws of the jurisdiction in which the Property is
                situate;

            

    

    
      	c)  	
              it
                has duly obtained all corporate authorizations for the execution
                of this
                Agreement and for the performance of this Agreement by it, and the
                consummation of the transaction herein contemplated by it will not
                conflict with or result in any breach of any covenants or agreements
                contained in, or constitute a default under, or result in the creation
                of
                any encumbrance under the provisions of the articles or the constating
                documents of it or any shareholders' or directors' resolution, indenture,
                agreement or other instrument whatsoever to which it is a party or
                by
                which they are bound or to which it or the Property may be subject;
                and,

            

    

    
      	d)  	
              no
                proceedings are pending for, and it is unaware of any basis for the
                institution of any proceedings leading to, the dissolution or winding
                up
                of FRC or the placing of FRC in bankruptcy or subject to any other
                laws
                governing the affairs of insolvent corporations.
                

            

    

    

    3.2
      The
      representations and warranties contained in this section are provided for the
      exclusive benefit of Leslie and a breach of any one or more thereof may be
      waived by Leslie in whole or in part at any time without prejudice to its rights
      in respect of any other breach of the same or any other representation or
      warranty, and the representations and warranties contained in this section
      shall
      survive the execution hereof.

    

    3.3
      The
      representations and warranties contained in this section shall be deemed to
      apply to all assignments, transfers, conveyances or other documents transferring
      to Leslie the interest to be acquired hereunder and there shall not be any
      merger of any covenant, representation or warranty in such assignments,
      transfers, conveyance or documents, any rule or law, in equity or statute to
      the
      contrary notwithstanding.

     

    GRANT
      AND EXERCISE OF OPTION

    

    4.1
      Leslie hereby irrevocably grants to FRC the sole and exclusive right and Option
      to acquire up to and including a eighthly five percent (85%) right, title,
      estate and interest of Leslie’s one hundred (100%) 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    percent
      net undivided interest) in and to the Property Rights and Property, free and
      clear of all charges, encumbrances, claims, royalties and net profit interests
      of whatsoever nature. 

    

    4.2
      If at
      any time after the date hereof determines in its sole discretion to commission
      a
      Feasibility Report recommending the Construction of a Mine, FRC shall give
      written notice thereof to Leslie. 

    

    4.3
      The
      Option may be exercised at any time (subject to the terms as stated herein)
      by
      FRC: 

    a)
      paying
      Leslie two thousand and five hundred ($2,500) dollars upon the execution of
      this
      agreement;

    b)
      paying
      Leslie two thousand and five hundred ($2,500) dollars on or before June 30,
      2007;

    c)
      paying
      Leslie forty thousand ($40,000) dollars on or before June 30, 2008.

    d)
      paying
      Leslie fifty five thousand ($55,000) dollars on or before June 30,
      2009.

    e)
      incurring Exploration Expenditures on the Property as follows:

    i)
      aggregate Exploration Expenditures of not less than twelve thousand dollars
      ($12,000) on or before June 30, 2007; 

    ii)
      aggregate Exploration Expenditures (including Exploration Expenditures as
      described in paragraph 

    4.3(c)(i)
      above) of not less than twenty four thousand dollars ($24,000) on or before
      June
      30, 2008;

    iii)
      aggregate Exploration Expenditures (including Exploration Expenditures as
      contemplated in paragraph 4.3(c)(i) and (ii) above) of not less than one hundred
      and sixty thousand ($160,000) dollars on or before June 30, 2009;
      and

    iv)
      aggregate Exploration Expenditures (including Exploration Expenditures as
      contemplated in paragraph 4.3(c)(i), (ii) and (iii) above) of not less than
      four
      hundred and fifty thousand dollars ($450,000) on or before June 30,
      2010.

    

    4.4
      Prior
      to the exercise of the Option as herein provided, Ram is hereby appointed as
      operator of the

    Property
      and shall carry out exploration and development programs on the Property on
      the
      following terms:

    a)
      Ram
      shall have the same powers, duties and obligations in carrying out such programs
      asset out in Article 7 of the Joint Venture Agreement attached hereto as
      Schedule “B”, excepting thereout Section 7.5 and 7.6 thereof;

    b)
      For
      income tax purposes, all Exploration Expenditures incurred by Ram pursuant
      to
      such programs shall be incurred for the benefit of FRC; and

    c)
      Until
      such time as the Option is exercised in accordance with the terms hereof, FRC
      shall have no interest of whatsoever nature in the Property Rights or the
      Property, and;

    d)
      indemnify and save FRC harmless in respect of any and all costs, claims,
      liabilities and expenses arising out of Ram’s activities on the
      Property.

    

    4.5
      If
      and when the Option has been exercised in accordance with Section 4.3 and
      commencing on the

    Completion
      Date:

    a)
      The
      undivided right, title and interest of the parties in the Property shall be
      as
      follows:

     

    
      	 Before Completion Date
              (net)	After Completion Date
              (net)
	Leslie 100%	Leslie 15%
	FRC 0%	FRC 85%
	Total 100%	Total 100%

    

          

    b)
      the
      undivided right, title and interest in and to the Property Rights and the
      Property acquired by upon the Completion Date shall vest in FRC free and clear
      of all charges, encumbrances, claims, royalties or net profit interests of
      whatsoever nature other than as set forth and described in the Joint Venture
      Agreement substantially in the form attached hereto as Schedule
“B”;

    d)
      for
      the purposes of the Joint Venture Agreement:

    i)
      Leslie
      will be deemed to have contributed sixty seven thousand and five hundred dollars
      ($67,500)and FRC will be deemed to have contributed three hundred and eighty
      two
      thousand and five hundred ($382,500) dollars of Costs to the Joint Venture
      for
      purposes thereof;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    ii)
      Ram
      will be the initial operator of the Joint Venture and will have the option
      to
      remain as operator of the Joint Venture for so long as Leslie holds a
      participating interest of fifteen (15%) percent or greater in the Joint
      Venture;

    iii)
      Ram
      will be entitled on a calendar year basis to a fee equal to:

    A.
      5% of
      the value of Costs in excess of ten thousand ($10,000) dollars; and

    B.
      7.5%
      of the value of Costs less than ten thousand ($10,000) dollars; 

    iv)
      any
      royalties on production from the Property payable to third parties will be
      payable pro rata in accordance with each party's participating interest in
      the
      Joint Venture.

    

    4.6
      Within 30 days after the Completion Date, Leslie shall deliver to FRC's counsel
      such number of duly executed transfers which in the aggregate convey Leslie's
      interest to be acquired hereunder in the Property in favour of FRC. In the
      event
      that Leslie shall deliver notice to FRC's counsel that it has exercised the
      Option pursuant to the terms hereof, FRC shall be entitled to receive and to
      record such of the transfers contemplated hereby at its own cost with the
      appropriate governmental office to effect legal transfer of such interest in
      the
      Property into the name of FRC.

    

    4.7
      If,
      during the Option Period, Ram:

    a)
      makes
      a voluntary or involuntary assignment into bankruptcy or takes advantage of
      any
      legislation for the winding-up or liquidation of the affairs of insolvent or
      bankrupt companies or has a bankruptcy petition filed against it; or

    b)
      fails
      to perform in a manner that is consistent with good mining practice or fails
      to
      perform in a manner consistent with its duties and responsibilities under this
      Agreement and does not remedy such default within 30 days of receipt of written
      notice from FRC specifying such default;

    FRC
      shall
      have the right, upon thirty (30) days written notice to Ram, to terminate Ram
      as
      the Operator of the Property.

    

    RIGHT
      OF ENTRY

    

    5.1
      During the term of this Agreement, the directors and officers of Ram and their
      servants, agents and independent contractors, shall have the sole and exclusive
      right in respect of the Property to:

    a)
      enter
      thereon at their sole risk and expense;

    b)
      do
      such prospecting, exploration, development and other mining work thereon and
      thereunder as Ram, as operator and under the direction of FRC, in its sole
      discretion may determine advisable;

    c)
      bring
      upon and erect upon the Property such buildings, plant, machinery and equipment
      as Ram may deem advisable and for a period of six months following the
      termination of this Agreement, to remove such buildings, plant, machinery and
      equipment; and

    d)
      remove
      therefrom and dispose of reasonable quantities of ores, minerals and metals
      for
      the purposes of obtaining assays or making other tests. 

    

    OBLIGATION
      OF LESLIE DURING OPTION
      PERIOD

    

    6.1
      During the term of this Agreement, Leslie shall:

    a)
      maintain in good standing those mineral claims and/or exploration licenses
      comprised in the Property by the doing and filing of assessment work or the
      making of payments in lieu thereof, and the performance of all other actions
      which may be necessary in that regard and in order to keep such mineral claims
      free and clear of all liens and other charges arising from Ram’s activities
      thereon except those at the time contested in good faith by FRC; 

    b)
      permit
      the directors, officers, employees and designated consultants of FRC, at their
      own risk and expense, access to the Property at all reasonable times, and FRC
      agrees to indemnify Leslie against and to save it harmless from all costs,
      claims, liabilities and expenses that FRC may incur or suffer as a result of
      any
      injury (including injury causing death) to any director, officer, employee
      or
      designated consultant of FRC while on the Property;

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    c)
      permit
      FRC, at its own expense, reasonable access to the results of the work done
      on
      the Property during the last completed calendar year;

    d)
      do all
      work on the Property in a good and workmanlike fashion and in accordance with
      all applicable laws, regulations, orders and ordinances of any governmental
      authority;

    e)
      indemnify and save FRC harmless in respect of any and all costs, claims,
      liabilities and expenses arising out of Leslie’s activities on the
      Property;

    

    TERMINATION
      OF OPTION

    

    7.1
      Provided that FRC is not in default pursuant to the provisions hereof, FRC
      shall
      have the right at any time during the term of this Agreement to terminate the
      Option by providing not less than forty five (45) days written notice to Ram
      and
      to Leslie.

    7.2
      Notwithstanding the termination of the Option, FRC shall have the right, within
      a period of one hundred and eighty (180) days following the end of the Option
      Period, to remove from the Property all buildings, plant, equipment, machinery,
      tools, appliances and supplies which have been brought upon the Property by
      or
      on behalf of FRC, and any such property not removed within such 180 day period
      shall thereafter become the property of Leslie.

    

    TRANSFERS

    

    8.1
      If
      Leslie (the “Proposed Seller”) should receive a bona fide offer from an
      independent third party (the “Proposed Purchaser”) dealing at arm's length with
      the Proposed Seller to purchase all or a part of its interest in the Property,
      which offer the Proposed Seller desires to accept, or if the Proposed Seller
      intends to sell all or a part of its interest in the Property: 

    a)
      The
      Proposed Seller shall first offer (the “Offer”) such interest in writing to FRC
      upon terms no less favourable than those offered by the Proposed Purchaser
      or
      intended to be offered by the Proposed Seller, as the case may be;

    b)
      The
      Offer shall specify the price, terms and conditions of such sale, the name
      of
      the Proposed Purchaser and shall, in the case of an intended offer by the
      Proposed Seller, disclose the person or persons to whom Leslie intends to offer
      its interest and, if the offer received by the Proposed Seller from the Proposed
      Purchaser provides for any consideration payable to the Proposed Seller
      otherwise than in cash, the Offer shall include the Proposed Seller's good
      faith
      estimate of the cash equivalent of the non-cash consideration; 

    c)
      If
      within a period of sixty (60) days of the receipt of the Offer and FRC notifies
      the Proposed Seller in writing that it will accept the Offer, the Proposed
      Seller shall be bound to sell such interest to FRC on the terms and conditions
      of the Offer. If the Offer so accepted by FRC contains the Proposed Seller's
      good faith estimate of the cash equivalent of the non-cash consideration as
      aforesaid, and if FRC disagrees with the Proposed Seller's best estimate, FRC
      shall so notify Leslie at the time of acceptance and FRC shall, in such notice,
      specify what it considers, in good faith, the fair cash equivalent to be and
      the
      resulting total purchase price. If FRC so notifies the Proposed Seller, the
      acceptance by FRC shall be effective and binding upon FRC, and the cash
      equivalent of any such non-cash consideration shall be determined by binding
      arbitration and shall be payable by FRC, subject to prepayment as hereinafter
      provided, within 60 days following its determination by arbitration. FRC shall
      in such case pay to the Proposed Seller, against receipt of an absolute transfer
      of clear and unencumbered title to the interest of the Proposed Seller being
      sold, the total purchase price which is specified in its notice to the Proposed
      Seller and such amount shall be credited to the amount determined following
      arbitration of the cash equivalent of any non-cash consideration;

    d)
      If FRC
      fails to notify the Proposed Seller before the expiration of the time limited
      therefor that it will purchase the interest offered, the Proposed Seller may
      sell and transfer such interest to the Proposed Purchaser at the price and
      on
      the terms and conditions specified in the Offer for a period of sixty (60)
      days,
      but the terms of this paragraph shall again apply to such interest if the sale
      to the Proposed Purchaser is not completed within such sixty (60)
      days;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    e)
      Any
      sale hereunder shall be conditional upon the Proposed Purchaser delivering
      to
      the nonselling party, its agreement related to this Agreement and to the
      Property, containing: 

    i)
      a
      covenant by the Proposed Purchaser to perform all the obligations of the
      Proposed Seller to be performed under this Agreement in respect of the interest
      to be acquired by it from the Proposed Seller to the same extent as if this
      Agreement had been originally executed by the Proposed Purchaser;
      and

    ii)
      a
      provision subjecting any further sale, transfer or other disposition of such
      interest

    in
      the
      Property and this Agreement or any portion thereof to the restrictions contained
      in this paragraph (e).

    8.2
      The
      provision of Section 8.1 shall apply to a proposed sale by FRC of its interest
      in the Property

    mutatis
      mutandis such
      that
      Leslie shall have a right of first refusal to acquire such interest in
      proportion to the then current interest.

    8.3
      No
      assignment by a party of any interest less than its entire interest in this
      Agreement and in the

    Property
      shall discharge it from any of its obligations hereunder, but upon the transfer
      by a party of the entire interest at the time held by it in this Agreement,
      whether to one or more transferees and whether in one or in a number of
      successive transfers, the party shall be deemed to be discharged from all
      obligations hereunder save and except for fulfilment of contractual commitments
      accrued due prior to the date on which the party shall have no further interest
      in this Agreement.

    

    FORCE
      MAJEURE

    

    9.1
      If
      Ram is at any time either during the term of this Agreement or thereafter
      prevented or delayed in complying with any provisions of this Agreement by
      reason of strikes, lock-outs, labour shortages, power shortages, fuel shortages,
      fires, wars, acts of God, governmental regulations restricting normal
      operations, shipping delays or any other reason or reasons, other than lack
      of
      funds, beyond the control of Ram, the time limits for the performance by FRC
      of
      its obligations hereunder shall be extended by a period of time equal in length
      to the period of each such prevention or delay, but nothing herein shall
      discharge Ram from its obligations hereunder to maintain the Property in good
      standing.

    9.2
      Ram
      shall give prompt notice to FRC and to Leslie of each event of force majeure
      under Section 9.1 and upon cessation of such event shall furnish to FRC and
      to
      Leslie with notice to that effect together with particulars of the number of
      days by which the obligations of FRC and to Leslie hereunder have been extended
      by virtue of such event of force majeure and all preceding events of force
      majeure.

    

    CONFIDENTIAL
      INFORMATION

    

    10.1
      The
      parties to this Agreement shall keep confidential all books, records, files
      and
      other information supplied by any party to one of the other parties or to their
      employees, agents or representative in connection with this Agreement or in
      respect of the activities carried out on the Property by a party, or related
      to
      the sale of minerals, or other products derived from the Property, including
      all
      analyses, reports, studies or other documents prepared by a party or its
      employees, agents or representatives, which contain information from, or
      otherwise reflects such books, records, files or other information. The parties
      shall not and shall ensure that their employees, agents or representatives
      do
      not disclose, divulge, publish, transcribe, or transfer such information, all
      or
      in part, without the prior written consent of the other parties, which may
      not
      be arbitrarily withheld and which shall not apply to such information or any
      part thereof to the extent that: 

    a)
      prior
      to its receipt by a party such information was already in the possession of
      such
      party or its employees, agents or representatives; or

    b)
      in
      respect of such information required to be publicly disclosed pursuant to
      applicable securities or corporate laws.

    

    ARBITRATION

    

    11.1
      Leslie and FRC agree that all questions or matters in dispute with respect
      to
      any dispute shall be settled by arbitration and shall be submitted to
      arbitration pursuant to the terms hereof. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    11.2
      It
      shall be a condition precedent to the right of Leslie and FRC, to submit any
      matter to arbitration pursuant to the provisions hereof, that any party
      intending to refer any matter to arbitration shall have given not less than
      ten
      (10) days' prior notice of its intention to do so to the other party, together
      with particulars of the matter in dispute. On the expiration of such ten (10)
      days, the party who gave such notice may proceed to refer the dispute to
      arbitration as provided in 11.3.

    11.3
      The
      party desiring arbitration shall appoint one arbitrator, and shall notify the
      other party of such appointment, and such other party shall, within fifteen
      (15)
      days after receiving such notice, either consent to the appointment of such
      arbitrator which shall then carry out the arbitration or appoint an arbitrator,
      and the two arbitrators so named, before proceeding to act, shall, within thirty
      (30) days of the appointment of the last appointed arbitrator, unanimously
      agree
      on the appointment of a third arbitrator to act with them and be chairman of
      the
      arbitration herein provided for. If the other parties shall fail to appoint
      an
      arbitrator within fifteen (15) days after receiving notice of the appointment
      of
      the first arbitrator, the first arbitrator shall be the only arbitrator, and
      if
      the two arbitrators appointed by the party shall be unable to agree on the
      appointment of the chairman, the chairman shall be appointed under the
      provisions of the Arbitration
      Act of
      British Columbia. Except as specifically otherwise provided in this section,
      the
      arbitration herein provided for shall be conducted in accordance with such
      Act.
      The chairman, or in the case where only one arbitrator is appointed, the single
      arbitrator, shall fix a time and place in Vancouver, British Columbia, for
      the
      purpose of hearing the evidence and representations of the parties, and he
      shall
      preside over the arbitration and determine all questions of procedure not
      provided for under such Act or this section. After hearing any evidence and
      representations that the parties may submit, the single arbitrator, or the
      arbitrators, as the case may be, shall make an award and reduce the same to
      writing, and deliver one copy thereof to each of the parties. The expense of
      the
      arbitration shall be paid as specified in the award 

    11.4
      The
      arbitrating parties agree that the award of a majority of the arbitrators,
      or in
      the case of a single arbitrator, of such arbitrator, shall be final and binding
      upon each of them.

    

    DEFAULT
      AND TERMINATION

    

    12.1
      If
      at any time during the term of this Agreement FRC fails to perform any
      obligation required to be performed by it hereunder or is in breach of a
      warranty given by it hereunder, which failure or breach materially interferes
      with the implementation of this Agreement, Leslie may terminate this Agreement
      but only if:

    a)
      it
      shall have first given to the defaulting FRC a notice of default containing
      particulars of the obligation which the defaulting FRC has not performed, or
      the
      warranty breached; and

    b)
      the
      defaulting FRC has not, within forty-five (45) days following delivery of such
      notice of default, cured such default or commenced proceedings to cure such
      default by appropriate payment or performance, the defaulting FRC hereby
      agreeing that should it so commence to cure any default it will prosecute the
      same to completion without undue delay, provided however, that this paragraph
      shall not be extended to a default by FRC to exercise an Option pursuant to
      Article 4 thereof.

    12.2
      Notwithstanding Section 12.1 hereof, if at any time FRC fails to perform a
      condition precedent to the exercise of the Option, Leslie shall be entitled
      to
      forthwith terminate this Agreement.

    

    NOTICES

    

    13.1
      Each
      notice, demand or other communication required or permitted to be given under
      this Agreement shall be in writing and shall be sent by prepaid registered
      mail
      deposited in a Post Office in Canada addressed to the party entitled to receive
      the same, or delivered, telexed, telegraphed or telecopied to such party at
      the
      address for such party specified on the face page hereof. The date of receipt
      of
      such notice, demand or other communication shall be the date of delivery thereof
      if delivered, telexed, telegraphed or telecopied, or, if given by registered
      mail as aforesaid, shall be deemed conclusively to be the third business day
      after the same shall have been so mailed except in the case of interruption
      of
      postal services for any reason whatever, in which case the date of receipt
      shall
      be the date on which the notice, demand or other communication is actually
      received by the addressee.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    13.2
      Either party may at any time and from time to time notify the other party in
      writing of a change or address and the new address to which notice shall be
      given to it thereafter until further change.

    

    GENERAL

    

    14.1
      This
      Agreement shall supersede and replace any other agreement or arrangement,
      whether oral or written, heretofore existing between the parties in respect
      of
      the subject matter of this Agreement. 

    14.2
      No
      consent or waiver expressed or implied by any party in respect of any breach
      or
      default by any other party in the performance by such other of its obligations
      hereunder shall be deemed or construed to be a consent to or a waiver of any
      other breach of default.

    14.3
      The
      parties shall promptly execute or cause to be executed all documents, deeds,
      conveyances and other instruments of further assurance and do such further
      and
      other acts which may be reasonably necessary or advisable to carry out fully
      and
      effectively the intent and purpose of this Agreement or to record wherever
      appropriate the respective interest from time to time of the parties in the
      Property.

    14.4
      This
      Agreement shall enure to the benefit of and be binding upon the parties and
      their respective successors and permitted assigns.

    14.5
      This
      Agreement shall, (i) be governed by and construed in accordance with the laws
      of
      British Columbia and the parties hereby irrevocably attorn to the jurisdiction
      of the said province and (ii) be subject to the approval of all securities
      regulatory authorities having jurisdiction, such approvals to be sought in
      a
      timely and diligent manner.

    14.6
      Time
      shall be of the essence in this Agreement.

    14.7
      Wherever the neuter and singular is used in this Agreement it shall be deemed
      to
      include the plural, masculine and feminine, as the case may be.

    14.8
      The
      rights and obligations of each party shall be in every case several and not
      joint or joint and several.

    

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

    

    
      
        	DORIAN LESLIE	 
	
                 

                
                  /s/ Dorian Leslie

                   

                

              	
                 

                 

                /s/ Carl von Einsiedel

                witness

              
	
                 

              	
                 

                Carl von Einsiedel 

                name of witness

              
	
                 

                 

              	 
	RAM
                EXPLORATION LTD.	 
	
                 

                /s/ Carl von Einsiedel

                Carl von Einsiedel,
                  Pres.

              	 
	
                 

                 

              	 
	FRC EXPLORATION
                LTD.	 
	
                 

                /s/ Kent Kirby

                Kent A. Kirby, Pres. &
                  CE0

              	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE
“A”

    

    THE
      OPTION AGREEMENT

    

    

    DESCRIPTION
      OF PROPERTY RIGHTS AND PROPERTY

    dated
      May
      24, 2006

    

    

    The
      Snippaker mineral claims are located within the Eskay Creek Area, Northwestern
      British Columbia.

    130’
55”
      00 West / 56’ 35” 00 North

    UTM
      6272650N / 382400E

     

    
      	
              Tenure

            	
              Name

            	
              Owner

            	
              Map
                

              Number

            	
              Expiry

            	
              Status

            	
              Cells

            	
              Area
                

              (Hectares)

            
	
              525504

            	
              Snippaker

            	
              202528

            	
              104B056

            	
              Jan.
                14, 2007

            	
              GOOD

            	 	
              356.365

            
	
              525505

            	
              “

            	
              202528

            	
              104B056

            	
              Jan
                14, 2007

            	
              GOOD

            	 	
              455.650

            
	
              529951

            	
              “

            	
              202528

            	
              104B056

            	
              Mar
                13, 2007

            	
              GOOD

            	 	
              124.828

            
	
              529952

            	
              “

            	
              202528

            	
              104B056

            	
              Mar
                13, 2007

            	
              GOOD

            	 	
              124.847

            
	 	 	 	 	 	
              Totals

            	
              50
                full & 9 fractional

            	
              1,051.690

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
“B”

    TO

    THE
      PROPERTY OPTION AGREEMENT

    

    

     

    JOINT
      VENTURE AGREEMENT

    

    between

    

    LESCO
      (a corporation to be formed)

    

    and

    

    FRC
      EXPLORATION LTD.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    TABLE
      OF CONTENTS

    
 

    
      	
               

              DEFINITIONS

            	
               

              4

            
	
               

              REPRESENTATIONS AND
                WARRANTIES

            	
               

              6

            
	
               

              PURPOSE AND CREATION OF THE JOINT
                VENTURE

            	
               

              6

            
	
               

              DILUTION

            	
               

              8

            
	
               

              MANAGEMENT COMMITTEE

            	
               

              8

            
	
               

              OPERATOR

            	
               

              10

            
	
               

              POWER, DUTIES AND OBLIGATIONS OF
                OPERATOR

            	
               

              11

            
	
               

              PROGRAMS

            	
               

              13

            
	
               

              MINE FINANCING

            	
               

              14

            
	
               

              CONSTRUCTION OF MINE

            	
               

              14

            
	
               

              OPERATION OF MINE

            	
               

              14

            
	
               

              PAYMENT OF CONSTRUCTION AND OPERATING
                COSTS

            	
               

              15

            
	
               

              DISTRIBUTION IN KIND

            	
               

              15

            
	
               

              SURRENDER OF INTEREST

            	
               

              16

            
	
               

              TERMINATION OR SUSPENSION OF MINING
                OPERATIONS

            	
               

              16

            
	
               

              INFORMATION AND DATA

            	
               

              17

            
	
               

              PARTITION

            	
               

              17

            
	
               

              TAXATION

            	
               

              18

            
	
               

              RIGHT OF FIRST REFUSAL

            	
               

              18

            
	
               

              FORCE MAJEURE

            	
               

              19

            
	
               

              NOTICE

            	
               

              19

            
	
               

              WAIVER

            	
               

              20

            
	
               

              FURTHER ASSURANCES

            	
               

              20

            
	
               

              USE OF NAME

            	
               

              20

            
	
               

              ENTIRE AGREEMENT

            	
               

              20

            

    

    
 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 

                AMENDMENT

              	
                 

                20

              
	
                 

                ARBITRATION

              	
                 

                20

              
	
                 

                RIGHT TO AUDIT

              	
                 

                20

              
	
                 

                TIME

              	
                 

                21

              
	
                 

                RULE AGAINST
                  PERPETUITIES

              	
                 

                21

              
	
                 

                DOCUMENT RETENTION ON
                  TERMINATION

              	
                 

                21

              
	
                 

                ENUREMENT

              	
                 

                21

              
	
                 

                GOVERNING LAW

              	
                 

                21

              
	
                 

                NUMBER AND GENDER

              	
                 

                21

              
	
                 

                HEADINGS

              	
                 

                21

              
	
                 

                TIME OF THE ESSENCE

              	
                 

                21

              

      

    

    

    SCHEDULE
“A”

    DESCRIPTION
      OF PROPERTY RIGHTS AND PROPERTY

    

    SCHEDULE
“B”

    DEFINITION
      OF NET PROFITS

    

    SCHEDULE
“C”

    ACCOUNTING
      PROCEDURES

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    JOINT
      VENTURE AGREEMENT

    

    THIS
      AGREEMENT made
      as
      of the ___ day of ___________, 20__.

    

    BETWEEN:

    

    LESCO,
      a
      corporation to be formed having offices at 401 - 345 Water Street, in the City
      of Vancouver, in the Province of British Columbia, (hereafter referred to as
      “Lesco”);

    

    OF
      THE
      FIRST PART

    

    AND:

    

    FRC
      EXPLORATION LTD.,,
      a body
      corporate, incorporated under the laws of British Columbia and having offices
      located at 305 - 3495 Cambie Street, Vancouver, British Columbia, V5Z 3W6,
      Canada (hereafter
      referred to as “FRC”);

    

    OF
      THE
      SECOND PART

    

    WHEREAS:

    A.
      Lesco
      owns a 15 % and FRC owns a 85% undivided right, title and interest in and to
      the
      Property;

    B.
      The
      parties wish to create a joint venture to carry out the continued operation
      of
      the Property on the terms and subject to the conditions hereinafter set
      forth.

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH that
      in
      consideration of the premises, and of the mutual covenants and agreements herein
      contained, the parties hereto have agreed and do hereby agree as
      follows:

    

    DEFINITIONS

    1.1
      In
      this Agreement, including the Recitals and Schedules hereto the following words
      and expressions shall have the following meanings: 

    
      	a)  	
              “Accounting
                Procedure” means the accounting procedure attached to this Agreement as
                Schedule “C”;

            

    

    
      	b)  	
              “Affiliate”
                shall have the same meaning as under the Business
                Corporations Act (Alberta)
                as at the date hereof;

            

    

    
      	c)  	
              “Agreement”
                means this Joint Venture Agreement as amended from time to time;
                

            

    

    
      	d)  	
              “Commercial
                Production” means the operation of the Property as a producing mine and
                the production of Mineral Products therefrom (excluding bulk sampling,
                pilot plant or test

            

    

    
      	e)  	
              operations);

            

    

    
      	f)  	
              “Completion
                Date” means the date on which it is demonstrated to the satisfaction of
                the Management Committee that the preparing and equipping of a Mine
                for
                Commercial Production is complete;

            

    

    
      	g)  	
              “Construction”
                means every kind of work carried out during the Construction Period
                by the
                Operator in accordance with a Feasibility Report approved by the
                Management Committee;

            

    

    
      	h)  	
              “Construction
                Period” means the period beginning on the date of a Feasibility Report and
                ending on the Completion Date;

            

    

    
      	i)  	
              “Costs”
                means all items of outlay and expense whatsoever, direct or indirect,
                with
                respect to Mining Operations in accordance with this Agreement, without
                limiting the generality of the foregoing, the following categories
                of
                Costs shall have the following
                meanings

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	j)  	
              “Feasibility
                Report” means a detailed written report of the results of a comprehensive
                study on the economic feasibility of placing the Property or a portion
                thereof into Commercial Production and shall include a reasonable
                assessment of the mineral ore reserves and their amenability to
                metallurgical treatment, a description of the work, equipment and
                supplies
                required to bring the Property or a portion thereof into Commercial
                Production and the estimated cost thereof, a description of the mining
                methods to be employed and a financial appraisal of the proposed
                operations supported by an explanation of the data used
                therein;

            

    

    
      	k)  	
              ”FRC”
                means FRC Exploration Ltd. 

            

    

    
      	l)  	
              “Interest”
                means the undivided beneficial percentage interest from time to time
                of a
                party in the Joint Venture and the Property, and Mineral Products,
                as set
                out hereunder; 

            

    

    
      	m)  	
              “Joint
                Venture” means the joint venture created pursuant to this Agreement;
                

            

    

    
      	n)  	
              “Lesco”
                means a company to be formed by Dorian
                Leslie.

            

    

    
      	o)  	
              “Management
                Committee” means the management committee constituted in
                accordance

            

    

    with
      the
      provisions of Article 5 hereof to manage or supervise the management of the
      business and affairs of the Joint Venture;

    
      	p)  	
              “Mine”
                means the workings established and assets acquired, including, without
                limiting the generality of the foregoing, development headings, plant
                and
                concentrator installations, infrastructure, housing, airport and
                other
                facilities in order to bring the Property into Commercial
                Production;

            

    

    
      	q)  	
              “Mine
                Construction Costs” means those Costs incurred during the Construction
                Period;

            

    

    
      	r)  	
              “Mine
                Costs” means Mine Construction Costs and Operating Costs;
                and

            

    

    
      	s)  	
              “Mineral
                Products” means the end products derived from operating the Property as a
                Mine;

            

    

    
      	t)  	
              “Mining
                Operations” means every kind of work done by the Operator: 
                i)on
                  or in respect of the Property in accordance with a Feasibility
                  Report;
                  or

                ii)
                  if not provided for in a Feasibility Report, unilaterally and in
                  good
                  faith to maintain the Property in good standing, to prevent waste
                  or to
                  otherwise discharge any obligation which is imposed upon it pursuant
                  to
                  this Agreement and in respect of which the Management Committee
                  has not
                  given it directions; including, without limiting the generality
                  of the
                  foregoing, investigating, prospecting, exploring, developing, property
                  maintenance, preparing reports, estimates and studies, designing,
                  equipping, improving, surveying, Construction and mining, milling,
                  concentrating, rehabilitation, reclamation, and environmental
                  protection.

              

            

    

    
      	u)  	
              “Net
                Profits” shall mean net profits calculated in accordance with Schedule “B”
                hereto;

            

    

    
      	v)  	
              “Operator”
                means the operator appointed pursuant to Article
                6;

            

    

    
      	w)  	
              “Operating
                Costs” means those Costs incurred subsequent to the Completion
                Date;

            

    

    
      	x)  	
              “Operating
                Year” shall mean a twelve-month period, the first Operating Year to
                commence on the Completion Date and each succeeding Operating Year
                commencing at the expiration of the preceding Operating
                Year.

            

    

    
      	y)  	
              “Operating
                Plan” shall mean a plan in accordance with Section
                11.2.;

            

    

    
      	z)  	
              “Option
                Agreement” means the option agreement, made as of the 6th
                day of April, 2006. between Dorian Leslie, Ram Exploration Ltd. and
                FRC;
                

            

    

    
      	aa)  	
              “Other
                Tenements” means (i) all surface rights of and to any lands within or
                outside the Property including surface held in fee or under lease,
                licence, easement, right of way or other rights of any kind (and
                all
                renewals, extensions and amendments thereof or substitutions therefor)
                acquired by or on behalf of the parties with respect to the Property,
                (ii)
                all information obtained from Mining Operations, and (iii) those
                rights
                and benefits appurtenant to the Property that are acquired for the
                purpose
                of conducting Mining Operations;

            

    

    
      	bb)  	
              “party”
                or “parties” means the parties to this Agreement and their respective
                successors and permitted assigns which become parties to this
                Agreement;

            

    

    
      	cc)  	
              “Program”
                means a plan, including budgets, for the Project or any part thereof
                as
                approved by the Management Committee pursuant to this
                Agreement;

            

    

    
      	dd)  	
              “Project”
                means the exploration and development of the Property, preparation
                and
                delivery of a Feasibility Report and the Construction and operation
                of
                facilities to put the Property into CommFRCial
                Production;

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    
      	ee)  	
              “Property”
                means those certain mining claims and related rights and interests
                set out
                and more particularly described in Schedule “A” hereto and Other Tenements
                and shall include any renewal thereof and any form of substitute
                or
                successor title thereto;

            

    

    
      	ff)  	
              “Royalty”
                means a royalty on the Net Profits calculated in accordance with
                Schedule
                “B” hereto;

            

    

    
      	gg)  	
              “Simple
                Majority” means a decision made by the parties hereof or the Management
                Committee by greater than 50% of the votes entitled to be cast.
                

            

    

    

    REPRESENTATIONS
      AND WARRANTIES

    2.1
      Each
      of the parties represents each to the other that

    :a)
      it is
      the legal and beneficial owner of the Interest as set forth and described in
      the
      recitals hereto free and clear of all liens, charges and encumbrances except
      as
      set forth in Schedule “A” attached hereto and the Option Agreement;
      and

    b)
      save
      and except as set out herein, there is no adverse claim or challenge against
      or
      to the ownership of or title to its Interest or any portion thereof, nor is
      there any basis therefor, and there are no outstanding agreements or options
      to
      acquire or purchase its Interest or any portion thereof.

    2.2
      Each
      of the parties represents each to the other that:

    a)
      it is
      a company duly incorporated, organized and validly subsisting under the laws
      of
      its incorporating jurisdiction;

    b)
      it has
      full power and authority to carry on its business and enter into this Agreement
      and any agreement or instrument referred to or contemplated by this Agreement
      and to carry out and perform all of its obligations hereunder; and

    c)
      it has
      duly obtained all corporate authorizations for the execution, delivery and
      performance of this Agreement and the consummation of the transactions herein
      contemplated will not conflict with or result in any breach of any covenants
      or
      agreements contained in, or constitute a default under, or result in the
      creation of any encumbrance, lien or charge under the provisions of its
      constating documents or any indenture, agreement or other instrument whatsoever
      to which it is a party or by which it is bound or to which it may be subject
      and
      will not contravene any applicable laws.

    2.3
      The
      representations and warranties hereinbefore set out are conditions on which
      the
      parties have relied in entering into this Agreement, are to be construed as
      both
      conditions and warranties and shall, regardless of any investigation which
      may
      have been made by or on behalf of any party as to the accuracy of such
      representations and warranties, survive the closing of the transactions
      contemplated hereby and each of the parties will indemnify and save the other
      harmless from all loss, damage, costs, actions and suits arising out of or
      in
      connection with any breach of any representation or warranty contained in this
      Agreement and each party shall be entitled, in addition to any other remedy
      to
      which it may be entitled, to set off any such loss, damage or costs suffered
      by
      it as a result of any such breach against any payment required to be made by
      it
      to the other party hereunder.

    

    PURPOSE
      AND CREATION OF THE JOINT VENTURE

    3.1
      The
      parties agree each with the other to use their best efforts to develop and
      operate the Property with the goal of eventually putting the Property into
      Commercial Production should a Feasibility Report recommending Commercial
      Production be obtained and a decision to commence Commercial Production be
      made,
      and for this purpose the parties hereby agree to associate and participate
      in a
      single purpose joint venture to carry out all such acts which are necessary
      or
      appropriate, directly or indirectly, to carry out the Project.

    

    3.2
      The
      parties have not created a partnership and nothing contained in this Agreement
      shall in any manner whatsoever constitute a party the partner, agent or legal
      representative of any other party or create any fiduciary relationship between
      them for any purpose whatsoever. No party shall have any authority to act for
      or
      to assume any obligations or responsibility on behalf of any other party except
      as may be, from time to time, agreed upon in writing between the parties or
      as
      otherwise expressly provided. 

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3.3
      The
      rights and obligations of each party shall be in every case several and not
      joint or joint and several.

    

    3.4
      Beneficial ownership of the Property shall remain in each party in proportion
      to
      its respective Interest and any legal title to the Property held by any party
      shall be subject to this Agreement. All property held, acquired or contributed
      by or on behalf of the parties under or pursuant to this Agreement shall be
      beneficially owned by the parties as tenants in common in proportion to their
      respective Interests. 

    

    3.5
      Each
      party shall make available its Interest for the purposes of the Project and,
      in
      particular, each party agrees to grant a mortgage, charge, lien, encumbrance
      on,
      or a security Interest in, its Interest to and in favour of any lender or party
      hereto to facilitate financing of the Project or any portion
      thereof.

    

    3.6
      The
      rights and obligations of the parties created under this Agreement shall be
      strictly limited to the Property and shall not be extended by implication or
      otherwise, except with the unanimous written consent of the
      parties.

    

    3.7
      Except as may be otherwise expressly provided in this Agreement, nothing herein
      shall restrict in any way the freedom of any party, except with respect to
      its
      Interest, to conduct as it sees fit any business or activity whatsoever,
      including the development or application of any process, and the exploration
      for, development, mining, extraction, production, handling, processing or any
      treatment, transportation or marketing of any ore, mineral or other product
      for
      any other purpose, without any accountability to any other party.

    

    3.8
      Each
      party shall do all things and execute all documents necessary in order to
      maintain the Property and the Property Rights in good standing.

     

    3.9
      Except as may be otherwise expressly specified in this Agreement, each party,
      in
      proportion to its Interest, shall indemnify and hold harmless each other party
      and each director, officer, employee, agent and representative of each other
      party, from and against any claim of or liability to any third person asserted
      on the ground that action taken under this Agreement has resulted in or will
      result in any loss or damage to such third person to the extent, but only to
      the
      extent that such claim or liability is paid by such other party in the amount
      in
      excess of that amount payable by reason of such other party's Interest, but
      the
      foregoing shall not prejudice any claim of any party against the
      Operator.

    

    3.10
      Each
      party covenants and agrees with the others:

    
      	(a)  	
              to
                perform or cause to be performed its obligations and commitments
                under
                this Agreement and, without limiting the generality of the foregoing,
                to
                pay Costs in proportion to its Interest except as may be otherwise
                provided in Article 4 and Article 9 hereof;
                and

            

    

    
      	(b)  	
              not
                to engage either alone or in association with others in any activity
                in
                respect of the Property or the Project except as provided or authorized
                by
                this Agreement.

            

    

    

    3.11
      For
      administrative convenience, and without, altering or affecting the rights,
      titles and interests created hereby, the parties agree that the Operator may
      hold the Property, in trust, for the use and benefit of the parties in
      accordance with the terms and provisions of this Agreement and in proportion
      to
      their respective Interests as adjusted from time to time, until such times
      as
      the Management Committee shall determine that it is appropriate or advisable
      for
      the Property to be held or registered in the name of the parties, another
      trustee or nominee which the Management Committee may select. Such holding
      of
      the Property in trust shall not prevent the vesting of the legal and beneficial
      title hereto in the parties in the manner and at the times as otherwise herein
      provided.

    

    DILUTION

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.1
      Upon
      formation of the Joint Venture, Lesco
      will be deemed to have contributed sixty seven thoursand and five hundred
      dollars ($65,500)and FRC will be deemed to have contributed three hundred and
      eighty two thousand and five hundred dollars ($382,500) of Costs to the Joint
      Venture for purposes thereof 

    

    4.2
      The
      respective Interests of the parties shall be subject to variation from time
      to
      time in the event: a) of failure by a party to pay its proportionate share
      of
      Costs;

    
      	
              a)

            	
              subject
                to Section 4.5 and Section 8.7 hereof, of the election by a party
                not to
                participate in a Program, or;

            

    

    
      	
              b)

            	
              subject
                to Section 4.5 and Section 8.7 hereof, of the election by a party
                to pay
                less than its proportionate share of Costs in respect of a Program
                adopted
                by the Management Committee.

            

    

    

    4.3
      Upon
      the happening of any of the events set forth in subsection 4.2(a)-(b), inclusive
      hereof, each party's Interest shall be varied to equal the product obtained
      by
      multiplying 100% by a fraction of which the numerator shall be the amount of
      Costs paid by such party and of which and the denominator shall be the total
      amount of Costs paid by all parties. For the purposes of this section, the
      amount of Costs paid by a party shall include the amount of Costs deemed to
      have
      been paid by that party as set forth in Section 4.1.

    

    4.4
      In
      the event that a party's Interest is reduced to five (5%) percent or less by
      the
      operation of Section 4.3 hereof, such party shall forthwith relinquish its
      Interest and shall transfer such Interest to the other parties hereto in
      proportionate shares and shall receive as consideration therefor a Royalty
      equal
      to two and one-half (2.5%) percent of Net Profits. In the event of such
      relinquishment, such party shall have no further right to participate in any
      Programs and shall have no further Interest in the Property, except the
      Royalty.

    

    4.5
      A
      party which forfeits or reduces its Interest in the Property pursuant to Section
      4.2 shall have the rights to redeem its position if the actual Costs expended
      is
      less costly by at least 25% than the budget as set out in the Program to which
      the party had not agreed, otherwise the forfeiture is final. The Operator shall
      not later than thirty (30) days after completion of a Program, provide a
      complete statement of expenditures incurred to date and an estimate of
      expenditures to be incurred to completion of the Operating Year (such
      expenditures to be verified by audit within six (6) months if the forfeiting
      party request and agrees to pay for same) to all parties including the
      forfeiting party. Within twenty (20) days of receipt of the foregoing statement,
      the forfeiting party shall inform the Operator of its wish to redeem its
      Interest or to require an audit. A party redeeming its Interest shall pay the
      Costs it would have paid had it participated in the Program, plus interest
      thereon at a rate per annum of prime plus one percent thereon from the date
      of
      the Operator's invoices to the date of payment to the Operator. Payment shall
      be
      made by the redeeming party to the Operator within thirty (30) days of providing
      notice of such redemption. The Operator shall pay the proceeds to the other
      parties in proportion to the manner in which their Interests related to the
      participation in the subject Program.

    

    MANAGEMENT
      COMMITTEE

    5.1
      A
      Management Committee, consisting of one representative of each party, and one
      or
      more alternate representatives, shall be constituted and appointed within
      fourteen (14) days after the formation of the Joint Venture. The Management
      Committee shall manage, or supervise the management of, the business and affairs
      of the Joint Venture and shall exercise all such powers and do all such acts
      as
      the Joint Venture may exercise and do. The Management Committee shall meet
      within fifteen (15) days of its constitution (at which time a chairman shall
      be
      elected from among their number) and may otherwise meet at such places as it
      thinks fit for the dispatch of business, adjourn and otherwise regulate its
      meetings and proceedings as the members thereof deem fit. Unless otherwise
      provided herein, questions arising at any meeting of the Management Committee
      shall be decided by a Simple Majority of votes with each party's representatives
      being entitled to cast that number of votes which is equal to that party's
      Interest. Unless agreed to in writing by the parties hereto, all meetings of
      the
      Management Committee 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    shall
      be
      held in Vancouver, British Columbia or such other place as the parties may
      agree. Any meetings may, if the parties so consent, be held by conference
      telephone.

    

    5.2
      Management Committee Quorum:

    
      	a)  	
              A
                quorum for any meeting of the Management Committee shall consist
                of a
                representative or representatives of a party or parties whose Interests
                aggregate one hundred (100%) percent. No business other than the
                election
                of a chairman, if any, and the adjournment or termination of the
                meeting
                shall be dealt with if a quorum is not present at the commencement
                of the
                meeting but the quorum need not be present throughout the
                meeting;

            

    

    
      	b)  	
              If
                a quorum is not present at the opening of a meeting, the parties
                present
                or represented shall adjourn the meeting for a period of seven (7)
                days
                from the date of the adjourned meeting, but shall not transact any
                other
                business. A quorum for any such adjourned meeting shall consist of
                a
                representative or representatives of a party or parties who attend
                such
                reconvened meeting.

            

    

    

    5.3
      A
      meeting of the Management Committee at which a quorum is present shall be
      competent to exercise all or any of the authorities, powers and discretion
      bestowed upon the Management Committee in this Agreement.

    

    5.4
      No
      questions submitted to the Management Committee need be seconded and the
      chairman, if any, of the meeting shall be entitled to submit the questions
      to a
      vote during the meeting.

    

    5.5
      The
      decision on any question by consent in writing of the representatives of all
      parties shall be as valid as if it had been decided at a duly called and held
      meeting of the Management Committee. Each decision may be in counterparts each
      consented to in writing by one or more representatives which together shall
      be
      deemed to constitute one decision.

    

    5.6
      At
      the time of any decision by the Management Committee to adopt a Program, the
      parties shall pay, subject to the provisions of Article 8 hereof, their
      proportionate share of the estimated Costs of such Program by depositing the
      same into the interest bearing bank account opened and maintained pursuant
      to
      Section 5.7 hereof.

    

    5.7
      The
      Management Committee shall open and maintain an interest bearing bank account
      with a Canadian Chartered bank in the name of the Joint Venture and shall use
      the funds on deposit therein for the purposes of the Joint Venture. The
      Management Committee shall appoint signing officers on the said account as
      shall
      be required and shall advise the parties of the particulars of the said
      account.

    

    5.8
      Each
      of the parties hereby agrees that:

    
      	a)  	
              any
                interest earned on any sums deposited in the bank account opened
                and
                maintained pursuant to Section 5.7 hereof shall be shared in proportion
                to
                their respective Interests; and

            

    

    
      	b)  	
              each
                shall, following formation of the Joint Venture, deposit in such
                account
                in proportion to their Interests any of the actual Costs in excess
                of the
                estimated Costs when requested to do so by the Management
                Committee.

            

    

    

    5.9
      Any
      party (the “Paying Party”) may pay any reasonable Costs due to maintain the
      Property or the Project in good standing and the other parties shall, in
      proportion to their Interest and within fifteen (15) days of being given notice
      of such payment, reimburse the Paying Party for such payment, failing such
      reimbursement the parties not paying shall, for purposes of Section 4.2 hereof,
      be deemed to have elected not to participate in a Program in accordance with
      Section 8.3 hereof, and the provisions of Article 4 hereof shall
      apply.

    

    5.10
      In
      the event that the Operator or the consultant appointed pursuant to Section
      7.4
      recommends that further work be conducted on the Property, then the Management
      Committee shall prepare or cause to be prepared a Program.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    5.11
      At
      any time during the currency of this Agreement the Management Committee may
      cause a Feasibility Report to be prepared by a substantial and well recognized
      engineering firm in such form as the Management Committee may require. The
      Management Committee shall, forthwith upon receipt of a Feasibility Report,
      provide each of the parties with a copy thereof. Upon request of any party
      and
      at reasonable intervals and times the parties shall meet in order to discuss
      such a report.

    

    OPERATOR

    6.1
      The
      initial Operator shall be Services co. An Operator shall continue as Operator
      until changed pursuant to the terms hereof or by a decision of the Management
      Committee with parties representing a Simple Majority voting in favour if the
      Operator has failed to perform in a manner that is consistent with good mining
      practice or has failed to perform in a manner consistent with its duties and
      responsibilities under this Agreement, and the Management Committee has given
      to
      the Operator written notice setting forth particulars of the Operator's default
      and the Operator has not within 30 days of receipt of such notice commenced
      to
      remedy the default and thereafter to proceed continuously and diligently to
      complete all required remedial action. 

     

    6.2
      The
      Operator may at any time on sixty (60) days notice to the Management Committee
      resign as Operator, in which event the Management Committee shall select another
      party or person to be Operator (hereinafter called the “new Operator”) upon the
      thirtieth (30th) day after receipt of the Operator's notice of resignation
      or
      such sooner date as the Management Committee may establish and give notice
      of to
      the resigning Operator. The resigning Operator shall thereupon be released
      and
      discharged from all its duties and obligations as Operator upon the appointment
      of the new Operator except those duties and obligations that it theretofore
      should have performed.

    

    6.3
      Upon
      the Operator making a voluntary or involuntary assignment into bankruptcy or
      taking advantage of any legislation for the winding-up or liquidation of the
      affairs of insolvent or bankrupt companies the Operator shall automatically
      be
      terminated as operator and the other party or its nominee appointed as
      Operator.

    

    6.4
      The
      new Operator shall assume all of the rights, duties, obligations and status
      of
      the Operator as provided in this Agreement, other than the previous Operator's
      Interest, if any, without obligation to retain or hire any of the employees
      of
      the former Operator or to indemnify the former Operator for any costs or
      expenses which the previous Operator will incur as a result of the termination
      of employment of any of its employees resulting from this change of Operator,
      and shall continue to act as Operator until its replacement or
      resignation.

    

    6.5
      Upon
      the effective time of a resignation, removal or cessation, the departing
      Operator shall within sixty (60) days of such resignation, removal or cessation,
      turn over to its successor, or if no successor has been designated, to the
      Management Committee, control and possession of the Property together with
      (i)
      all documents, books, records and accounts (or copies thereof) pertaining to
      the
      performance of its functions as Operator and (ii) all monies held by it in
      its
      capacity as the Operator. Upon transfer and delivery thereof, the departing
      Operator shall be released and discharged from, and the successor Operator
      shall
      assume, all duties and obligations of Operator except the unsatisfied duties
      and
      obligations of the departing Operator accrued prior to the effective date of
      the
      change of Operator and for which the departing Operator shall, notwithstanding
      its release or discharge, continue to remain liable, it being understood and
      agreed that the departing and successor Operators respectively shall co-operate
      in finalizing all outstanding matters and completing the transition. If the
      title to any real or personal property included in the Property is held in
      the
      name of the departing Operator, it shall transfer such property to the successor
      Operator in trust for the parties hereto unless otherwise directed by the
      Management Committee.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    6.6
      Within sixty (60) days of the effective time of an Operator's resignation,
      removal or cessation as Operator, the Management Committee may cause an audit
      to
      be made of the records maintained by the departing Operator and the cost of
      such
      audit shall be for the joint account of the parties hereto. 6.7 Except as
      authorized by the Management Committee or as otherwise herein provided, the
      Operator shall not assign its operating rights or obligations under this
      Agreement.

    

    POWER,
      DUTIES AND OBLIGATIONS OF OPERATOR

    7.1
      Subject to the control and direction of the Management Committee, the Operator
      shall have full right, power and authority to do everything necessary or
      desirable to carry out a Program and the Project and to determine the manner
      of
      exploration and development of the Property and, without limiting the generality
      of the foregoing, the right, power and authority to: 

    
      	a)  	
              regulate
                access to the Property subject only to the right of representatives
                of the
                parties to have access to the Property at all reasonable times for
                the
                purpose of inspecting work being done thereon but at their own risk
                and
                expense;

            

    

    
      	b)  	
              employ
                and engage such employees, agents and independent contractors as
                it may
                consider necessary or advisable to carry out its duties and obligations
                hereunder and in this connection to delegate any of its powers and
                rights
                to perform its duties and obligations hereunder, but the Operator
                shall
                not enter into contractual relationships with another person except
                on
                terms which are commercially
                competitive;

            

    

    
      	c)  	
              execute
                all documents, deeds and instruments, do or cause to be done all
                such acts
                and

            

    

    
      	d)  	
              things
                and give all such assurances as may be necessary to maintain good
                and
                valid title to the Property. Each party hereby irrevocably constitutes
                the
                Operator its true and lawful attorney to give effect to the foregoing
                and
                hereby agrees to indemnify and save the Operator harmless from any
                and all
                costs, loss or damage sustained or incurred without gross negligence
                or
                bad faith by the Operator directly or indirectly as a result of its
                exercise of its powers pursuant to this subsection;
                and

            

    

    
      	e)  	
              conduct
                such title examination and cure such title defects as may be advisable
                in
                the reasonable judgment of the
                Operator.

            

    

    

    7.2
      The
      Operator shall have the following duties and obligations during the term
      hereof:

    
      	a)  	
              to
                diligently manage, direct and control all exploration, development
                and
                producing operations in and under the Property in a prudent and
                workmanlike manner and in compliance with all applicable laws, rules,
                orders and regulations;

            

    

    
      	b)  	
              to
                prepare and deliver to each of the parties during the periods of
                active
                field work, monthly progress and expense reports of the work in progress,
                on or before the day which is forty-five (45) days following each
                calendar
                month with respect to work done in such month and on or before the
                first
                day of every calendar year, comprehensive annual reports covering
                the
                activities and expenses hereunder and such report shall include the
                results obtained during the twelve (12) month period ending on !
                immediately preceding;

            

    

    
      	c)  	
              to
                provide and deliver to each of the parties, together with the reports
                referred to in subparagraph (b), copies of all assays, maps and drill
                logs;

            

    

    
      	d)  	
              subject
                to the terms and conditions of this Agreement, to keep the Property
                in
                good standing, free and clear of all liens, charges and encumbrances
                of
                every character arising from operations (except for those which are
                in
                effect on the date of this Agreement or are created pursuant to this
                Agreement, liens for taxes not yet due, other inchoate liens and
                liens
                contested in good faith by the Operator) and to proceed with all
                diligence
                to contest or discharge any lien that is filed by reason of the Operator's
                failure to perform its obligations
                hereunder;

            

    

    
      	e)  	
              to
                maintain true and correct books, accounts and records of operations
                hereunder in accordance with the Accounting Procedure, separate and
                apart
                from any other books, accounts and records maintained by the Operator,
                provided that the judgment of the Operator as to matters related
                to
                accounting, for which provision is not made in the Accounting Procedure
                shall govern if the Operator's accounting practices are in accordance
                with
                accounting principles generally accepted in the mining industry in
                Canada;

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    
      	f)  	
              to
                permit one representative of the parties appointed in writing at
                all
                reasonable times and at their expense to inspect, audit and copy
                the
                Operator's accounts and records relating to the accounting for production
                or to the determination of the proceeds from the sale thereof for
                any
                fiscal year of the Operator within 9 months following the end of
                such
                fiscal year. The Operator shall maintain its accounts and records
                for a
                period of at least two (2) years or such longer period as required
                by the
                laws of Canada or its Provinces. The parties shall be entitled to
                inspect,
                audit and copy the accounts and records upon giving the Operator
                ten (10)
                days notice of their intention to do
                so;

            

    

    
      	g)  	
              to
                obtain and maintain or cause any contractor engaged hereunder to
                obtain
                and maintain during any period in which active work is carried out
                hereunder such insurance coverage as the Management Committee deems
                advisable;

            

    

    
      	h)  	
              to
                permit the parties or their representatives appointed in writing,
                at all
                reasonable times, at their own expense and risk, reasonable access
                to the
                Property and all data derived from carrying out work
                thereon;

            

    

    
      	i)  	
              to
                open and maintain on behalf of the Joint Venture such bank account
                or bank
                accounts as the Management Committee may direct with a Canadian chartered
                bank;

            

    

    
      	j)  	
              to
                prosecute and defend, but not to initiate without the consent of
                the
                Management Committee, all litigation or administrative proceedings
                arising
                out of the Property, or Project;

            

    

    
      	k)  	
              to
                transact, undertake and perform all transactions, contracts, employments,
                purchases, operations, negotiations with third parties and any other
                matter or thing undertaken by or on behalf of the Joint Venture hereunder
                in the Operator's name and to pay all expenditures incurred in connection
                therewith promptly when due;

            

    

    
      	l)  	
              to
                transact, undertake and perform all transactions, contracts, employments,
                purchases, operations, negotiations with third parties and any other
                matter or thing undertaken on behalf of the parties in the Operators
                name;
                m) to maintain in good standing those mineral claims comprised in
                the
                Property by the doing and filing of all assessment work or the making
                of
                payments in lieu thereof and by the payment of all taxes and other
                like
                charges;

            

    

    
      	m)  	
              to
                take all proper and reasonable steps for the protection of rights
                of
                surface owners against damage occasioned by operations to be conducted
                hereunder and pay such damages as may lawfully be determined as resulting
                from such operations.

            

    

    

    7.3
      Subject to any specific provisions of this Agreement, the Operator, in carrying
      out its duties and obligations hereunder, shall at all times be subject to
      the
      direction and control of the Management Committee and shall perform its duties
      hereunder in accordance with the instructions and directions as from time to
      time communicated to it by the Management Committee and shall make all reports
      to the Management Committee except where otherwise specifically provided
      herein.

    

    7.4
      The
      Operator shall commence and diligently complete the Project and without limiting
      the generality of the foregoing, may retain an independent consulting geologist
      acceptable to the Management Committee to prepare a report in respect of the
      Project, the results thereof, the conclusions derived therefrom and the
      recommendation as to whether or not further work should be conducted on the
      Property.

    

    7.5
      Subject to Section 7.3, the Operator may charge the following sums in return
      for
      its head office overhead functions which are not charged directly as provided
      in
      the Accounting Procedure: a) with respect to Mine Construction, an amount equal
      to 5.0% of all Construction Costs; and b) subsequent to the Completion Date,
      an
      amount equal to 2.5% of all Operating Costs.

    

    7.6
      Notwithstanding Section 7.5, if a party gives notice in writing to the
      Management Committee that the party holds a bona fide belief that the sums
      charged under Section 7.5 are either excessive or insufficient then the
      Management Committee shall call a meeting to be held within ninety (90) days
      of
      receipt of such notice for the purpose of amending or ratifying the amounts
      charged under Section 7.5 hereof.

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    

    PROGRAMS

    8.1
      Expenditures shall only be incurred under and pursuant to Programs prepared
      by
      the Operator and approved by the Management Committee. Any Feasibility Report
      shall be prepared pursuant to a separate Program.

    

    8.2
      The
      Operator shall prepare and submit to the Management Committee a Program within
      90 days of the completion of the previous Program. If the Operator does not
      prepare a Program within the time limited, then the other parties shall have
      the
      right to prepare a Program for submission to the Management Committee at which
      time the party submitting the Program shall become the Operator. 

    

    8.3
      Within sixty (60) days of the approval by the Management Committee of a Program,
      each party shall give written notice to the Operator stating whether or not
      it
      elects to contribute its respective Costs of such Program or requesting the
      Operator to revise this Program provided that each party may only make such
      requests once in respect of each Program. Subject to Section 8.7, failure by
      any
      of the parties to give notice pursuant to this subsection within such sixty
      (60)
      day period shall be deemed an election by that party not to contribute to such
      Program.

    

    8.4
      If
      the party elects or is deemed to have elected not to contribute its Costs of
      a
      Program, the other parties may give notice in writing to the Operator stating
      that it or they will contribute all expenditures under or pursuant to such
      Program and the Operator will proceed with such Program and thereafter the
      interests of the parties shall be adjusted in accordance with Article 4. The
      Operator will not proceed with any Program which is not fully
      subscribed.

    8.5
      If
      the parties elect or contribute their respective Costs of a Program, the
      Operator will proceed with the Program. 

    8.6
      If
      any party requests the Operator to revise a Program in accordance with Section
      8.3, the Operator will revise such Program at once and resubmit the revised
      Program to the parties on the same terms and conditions as any other Program,
      except that the parties shall not have the right to request any further
      revisions.

    

    8.7
      If
      any party elects or is deemed to have elected not to contribute to a Program
      its
      Interest will not be subject to adjustment if, within sixty (60) days of such
      election or deemed election it elects to pay to the contributing party or
      parties one hundred and fifty (150%) percent of what would otherwise have been
      its contribution to such Program, but any amount so paid in excess of what
      would
      otherwise have been its contribution to such Program shall be deemed not to
      be a
      contribution to Costs by the party making it.

    

    8.8
      An
      election by a party to contribute to a Program shall make that party liable
      to
      pay its proportionate share of Costs actually incurred under or pursuant to
      the
      Program including Program Overruns, as herein after defined, of up to but not
      exceeding ten (10%) percent.

    

    8.9
      After
      having elected to contribute to a Program which is proceeded with, a party
      shall, within 30 days after being invoiced therefor by the Operator, pay such
      portion of its share of Costs as the Operator may require but the Operator
      shall
      not require payment of any funds more than one month in advance.

    

    8.10
      If
      it appears that Costs will exceed by greater than ten (10%) percent those
      estimated under a program the Operator shall immediately give written notice
      to
      the party or parties contributing to that program outlining the nature and
      extent of the additional costs and expenses (hereinafter called “Program
      overruns”). If Program Overruns are approved by the party or parties
      contributing to that Program, then within thirty (30) days after the receipt
      of
      a written request from the Operator, the party or parties contributing to that
      Program shall provide the Operator with their respective shares of such Program
      overruns. If Program Overruns are not approved by the party or parties
      contributing to that Program, the Operator shall have a right to curtail or
      abandon such Program. Any costs incurred by the Operator due to 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    a
      curtailment or abandonment of the Program shall be paid by the parties pursuant
      to their respective Interests in the Program.

    

    8.11
      If
      any party at any time fails to pay its share of Costs in accordance with
      Sections 8.9 or 8.10, the Operator may give written notice to that party
      demanding payment, and if the party has not paid such amount within fifteen
      (15)
      days of the receipt of such notice, that party shall be deemed to: 

     

    
      	(a)  	
              be
                in default under Section 8.9 or 8.10 as applicable;
                and

            

    

    
      	(b)  	
              have
                elected not to contribute to that Program for the purpose of Article
                4 and
                the Interest of the parties shall be adjusted in accordance with
                Article 4
                and the Operator shall have the right to curtail or abandon the Program
                and that party shall not be entitled to contribute to any subsequent
                Programs.

            

    

    

    MINE
      FINANCING

    9.1
      The
      parties hereto shall be responsible for providing or arranging the financing
      of
      a Mine. In providing or arranging the financing for a Mine, the Property and
      Mine may be pledged, hypothecated, mortgaged, charged, or otherwise encumbered
      in order to secure monies borrowed and used for the sole purpose of enabling
      the
      Mine to be financed. Subject to this Article any party may pledge, mortgage,
      hypothecate, charge or otherwise encumber its interest in order to secure by
      way
      of floating charge as a part of the general corporate assets of that party's
      money borrowed for its general corporate purposes, provided that the pledgee,
      mortgagee, holder of the charge or encumbrance (in this paragraph referred
      to as
      a “Chargee”) shall hold the same subject to the provisions of this Agreement and
      that if the Chargee realizes upon any of its security it will comply with this
      Agreement. The agreement between the party, as borrower, and the Chargee shall
      contain specific provisions to the same effect as the provisions of this
      Article.

    

    CONSTRUCTION
      OF MINE

    10.1
      Upon
      approval by the Management Committee of the Feasibility Report recommending
      the
      Construction of a Mine, the Management Committee shall cause the Operator to,
      and the Operator shall, proceed with Construction with all reasonable dispatch.
      Construction shall be substantially in accordance with the Feasibility Report
      subject to any variations agreed upon by the parties and subject also to the
      right of the Management Committee to cause such other reasonable variations in
      Construction to be made as the Management Committee deems
      advisable.

    

    OPERATION
      OF MINE

    11.1
      Commencing with the Completion Date, all Mining Operations shall be planned
      and
      conducted and all estimates, reports and statements shall be prepared and made
      on the basis of an Operating Year.

    

    11.2
      With
      the exception of the first Operating Year, an Operating Plan for each Operating
      Year shall be submitted by the Operator to the parties not later than ninety
      (90) days prior to the end of the year immediately preceding the Operating
      Year
      to which the Operating Plan relates. Each Operating Plan shall contain the
      following:

     

    
      	a)  	
              a
                plan for the proposed Mining
                Operations;

            

    

    
      	b)  	
              a
                detailed estimate of all Mine Costs plus a reasonable allowance for
                contingencies;

            

    

    
      	c)  	
              an
                estimate of the quantity and quality of the ore to be mined and the
                concentrates or metals to be produced; and such other facts as may
                be
                necessary to reasonably illustrate the results intended to be achieved
                by
                the Operating Plan; and upon request of any party the Operator shall
                meet
                with that party to discuss the Operating Plan and shall provide such
                additional or supplemental information as that party may reasonably
                require with respect thereto.

            

    

    

    11.3
      The
      Management Committee shall adopt each Operating Plan, with such changes as
      it
      deems necessary, on or prior to ninety (90) days prior to the end of the year
      immediately preceding the Operating Year to which the Operating Plan relates;
      provided, however, that the Management Committee may from time to time and
      at
      any time amend any Operating Plan.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    11.4
      The
      Operator shall be entitled to include in the estimate of Mine Costs referred
      to
      in Section 11.2 hereof the reasonably estimated costs of satisfying continuing
      obligations that may remain after this Agreement terminates, in excess of
      amounts actually expended. Such continuing obligations are or will be incurred
      as a result of the Joint Venture and shall include such things as monitoring,
      stabilization, reclamation or restoration obligations, severance and other
      employee benefit costs and all other obligations incurred or imposed as a result
      of the Joint Venture which continue or arise after termination of this Agreement
      and settlement of all accounts. The amount accrued from time to time for the
      satisfaction of such continuing obligations shall be classified as Costs
      hereunder but shall be segregated into a separate account.

    

    PAYMENT
      OF CONSTRUCTION AND OPERATING COSTS

    12.1
      The
      parties hereto shall, from time to time, pay for all Mine Construction Costs
      incurred to the date of invoice, or at the beginning of each month for an
      advance equal to the estimated cash disbursements to be made during the month.
      Each party shall pay the Mine Construction Costs or the estimated cash
      disbursements within thirty (30) days after receipt of the invoice.

    

    12.2
      The
      Operator may invoice the parties, from time to time, for Operating Costs
      incurred to the date of the invoice, or at the beginning of each month for
      an
      advance equal to the estimated cash disbursements to be made during the month.
      The parties shall pay the Operating Costs or the estimated cash disbursements
      aforesaid to the Operator within thirty (30) days after receipt of the invoice.
      If the payment or advance requested is not so made, the amount of the payment
      or
      advance shall bear interest calculated monthly not in advance from the 30th
      day
      after the date of receipt of the invoice thereof by the parties at a rate
      equivalent to the weighted average prime rate for the month plus two percent
      until paid. The Operator shall have a lien on a party or parties' aggregate
      Interest in order to secure any payment or advance required hereunder together
      with interest which has accrued thereon. 12.4 If a party or parties fail (i)
      to
      pay an invoice contemplated in Section 9.3 within the time period herein
      provided, or (ii) to pay an invoice contemplated in Section 12.3 within the
      thirty (30) day period aforesaid, the Operator may, by notice, demand payment.
      If no payment is made within fifteen (15) days of the Operator's demand notice,
      the Operator may, without limiting its other rights at law, enforce the lien
      created by Section 12.3 by taking possession of all or any part of the parties'
      aggregate Interest. The Operator may sell and dispose of the Interest which
      it
      has so taken into its possession by:

    
      	a)  	
              first
                offering that Interest to the other parties, if more than one then
                in
                proportion to the respective Interests of the parties which wish
                to accept
                that offer, for that price which is the fair market value stated
                in the
                lower of two appraisals obtained by the Operator from independent,
                well
                recognized appraisers competent in the appraisal of mining properties;
                and

            

    

    
      	b)  	
              if
                the parties have not purchased all or part of that Interest as aforesaid,
                then by selling the balance, if any, either in whole or in part or
                in
                separate parcels at public auction or by private tender (the parties
                being
                entitled to bid) at a time and on whatever terms the Operator shall
                arrange, having first given notice to the parties of the time and
                place of
                the sale. As a condition of the sale as contemplated in Article 12.4(b),
                the purchaser shall agree to be bound by this Agreement and, prior
                to
                acquiring the Interest, shall deliver notice to that effect to the
                parties, in form acceptable to the Operator. The proceeds of the
                sale
                shall be applied by the Operator in payment of the amount due from
                the
                parties and interest as aforesaid, and the balance remaining, if
                any,
                shall be paid to the parties after deducting reasonable costs of
                the sale.
                Any sale or disposal made as aforesaid shall be a perpetual bar both
                at
                law and in equity by the parties and its successors and assigns against
                all other parties and the Operator.

            

    

    

    DISTRIBUTION
      IN KIND

    13.1
      It
      is expressly intended that, upon approval of a Feasibility Report recommending
      the Construction of a Mine, the association of the parties shall be limited
      to
      the efficient production of Mineral Products from the Property and that each
      of
      the parties shall be entitled to use, dispose of or otherwise deal with its
      proportionate share of Mineral Products as it sees fit. Each party shall take
      in
      kind the Mineral Products 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    produced
      from the Mine, f.o.b. truck or railcar on the Property, and separately dispose
      of its proportionate share of the Mineral Product. Extra costs and expenses
      incurred by reason of the parties taking in kind and making separate
      dispositions shall be paid by each party directly and not through the Operator
      or Management Committee.

    

    13.2
      Each
      party shall construct, operate and maintain, all at its own cost and expense,
      any and all facilities which may be necessary to receive and store and dispose
      of its proportionate share of the Mineral Product at the rate the same are
      produced.

     

    13.3
      If a
      party has not made the necessary arrangements to take in kind and store its
      share of production as aforesaid the Operator shall, at the sole cost and risk
      of that party store, in any location where it will not interfere with Mining
      Operations, the production owned by that party. The Operator and the other
      parties shall be under no responsibility with respect thereto. All of the Costs
      involved in arranging and providing storage shall be billed directly to, and
      be
      the sole responsibility of the party whose share of production is so stored.
      The
      Operator's charges for such assistance and any other related matters shall
      be
      billed directly to and be the sole responsibility of the party. All such
      billings shall be subject mutatis mutandis to the provisions of Paragraphs
      12.3.

    

    SURRENDER
      OF INTEREST

    14.1
      Any
      party may, at any time upon notice, surrender its entire Interest to the other
      parties by giving those parties notice of surrender. The notice of surrender
      shall:

    
      	a)  	
              indicate
                a date for surrender not less than three months after the date on
                which
                the notice is given; and

            

    

    
      	b)  	
              contain
                an undertaking that the surrendering party
                will:

            

    

    
      	i)  	
              satisfy
                its proportionate share, based on its then Interest, of all obligations
                and liabilities which arose at any time prior to the date of
                surrender;

            

    

    
      	ii)  	
              if
                the Operator has not included in Mine Costs the costs of continuing
                obligations as set out in Section 11.4 hereof, pay its reasonably
                estimated proportionate share, based on the surrendering party's
                then
                Interest, of the Costs of rehabilitating the Mine site and of reclamation
                as at the date of surrender; and

            

    

    
      	iii)  	
              will
                hold in confidence, for a period of two years from the date of surrender,
                all information and data which it acquired pursuant to this
                Agreement.

            

    

    

    14.2
      Upon
      the surrender of its entire Interest as contemplated herein and upon delivery
      of
      a release in writing, in form acceptable to counsel for the Operator, releasing
      the other parties from all claims and demands hereunder, the surrendering party
      shall be relieved of all obligations or liabilities hereunder except for those
      which arose or accrued or were accruing due on or before the date of the
      surrender.

    

    14.3
      A
      party to whom a notice of surrender has been given as contemplated herein may
      elect, by notice within ninety (90) days to the party which first gave the
      notice, to accept the surrender, in which case Article 11.4 and 14.2 shall
      apply, or to join in the surrender.

    

    TERMINATION
      OR SUSPENSION OF MINING OPERATIONS

    15.1
      The
      Operator may, at any time subsequent to the Completion Date, on at least thirty
      (30) days notice to all parties, recommend that the Management Committee approve
      the suspension of Mining Operations. The Operator's recommendation shall include
      a plan and budget (in this Article 15 called the “Mine Maintenance Plan”) in
      reasonable detail of the activities to be performed to maintain the Property
      during the period of suspension and the Costs to be incurred. The Management
      Committee may, at any time subsequent to the Completion Date, cause the Operator
      to suspend Mining Operations in accordance with the Operator's recommendation
      with such changes to the Mine Maintenance Plan as the Management Committee
      deems
      necessary. The parties shall be committed to contribute their proportionate
      share of the Costs incurred in connection with the Mine Maintenance Plan. The
      Management Committee may cause Mining Operations to be resumed at any
      time.

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    15.2
      The
      Operator may, at any time following a period of at least ninety (90) days during
      which Mining Operations have been suspended, upon at least thirty (30) days
      notice to all parties, or in the events described herein, recommend that the
      Management Committee approve the permanent termination of Mining Operations.
      The
      Operator's recommendation shall include a plan and budget (in this Article
      15
      called the “Mine Closure Plan”) in reasonable detail of the activities to be
      performed to close the Mine and reclaim the Property. The Management Committee
      may, by unanimous approval of the representatives of all parties, approve the
      Operator's recommendation with such changes to the Mine Closure Plan as the
      Management Committee deems necessary.

    

    15.3
      If
      the Management Committee approves the Operator's recommendation as aforesaid,
      it
      shall cause the Operator to:

    
      	a)  	
              implement
                the Mine Closure Plan whereupon the parties shall be committed to
                pay, in
                proportion to their respective Interests, such Costs as may be required
                to
                implement that Mine Closure Plan;

            

    

    
      	b)  	
              remove,
                sell and dispose of such assets as may reasonably be removed and
                disposed
                of profitably and such other assets as the Operator may be required
                to
                remove pursuant to applicable environmental and mining laws; and
                sell,
                abandon or otherwise dispose of the Property. The disposal price
                for the
                Property shall be the best price obtainable and the net revenues,
                if any,
                from the removal and sale shall be credited to the parties in proportion
                to their respective Interests.

            

    

    

    15.4
      If
      the Management Committee does not approve the Operator's recommendation
      contemplated herein, the Operator shall maintain Mining Operations in accordance
      with the Mine Maintenance Plan pursuant to this Article 1

    

    INFORMATION
      AND DATA

    16.1
      At
      all times during the subsistence of this Agreement the duly authorized
      representatives of each party shall have access to the Property and the Project
      at its and their sole risk and expense and at reasonable intervals and times,
      and shall further have access at all reasonable time to all technical records
      and other factual engineering data and information relating to the Property
      and
      the Project in the possession of the Management Committee or the Operator.
      In
      exercising the right of access to the Property or the Project the
      representatives of a party shall abide by the rules and regulations laid down
      by
      the Management Committee and by the Operator relating to matters of safety
      and
      efficiency. If any representative of a party is not an employee, the party
      shall
      so advise the Operator so that the Operator may require the representative,
      before giving him access to the Property or the Project or to data or
      information relating thereto, to sign and undertaking in favour of the Joint
      Venture, in form and substance satisfactory to the Operator, to maintain
      confidentiality to the same extent as each party is required to do under Section
      16.2 hereof.

    

    16.2
      All
      records, reports, accounts and other documents referred to herein with respect
      to the Property and the Project and all information and data concerning or
      derived from the Property and the Project shall be kept confidential and each
      party shall take or cause to be taken such reasonable precautions as may be
      necessary to prevent the disclosure thereof to any person other than each party,
      the Operator, an Affiliate and any financial institution or other person having
      made, making or negotiating loans to one or more of the foregoing or any trustee
      for any such person, or as may be required by laws, by regulation or policy
      of
      any governmental agency, securities commission or stock exchange, or in
      connection with the filing of a prospectus or statement of material facts by
      a
      party, an Affiliate or the Operator or to a prospective assignee as permitted
      hereunder, or as may be required in the performance of obligations under this
      Agreement without prior consent of all parties, which consent shall not be
      unreasonably withheld.

    

    PARTITION

    17.1
      No
      party shall, during the term of this Agreement, exercise any right to apply
      for
      any partition of the Property or for sale thereof in lieu of
      partition.

    

    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    

    TAXATION

    18.1
      Each
      party on whose behalf any Costs have been incurred shall be entitled to claim
      all tax benefits, write-offs and deductions with respect thereto.

    

    RIGHT
      OF FIRST REFUSAL

    19.1
      Save
      and except as provided in Section 3.5 and Article 4 hereof, the parties shall
      not transfer, convey, assign, mortgage or grant an option in respect of or
      grant
      a right to purchase or in any manner transfer or alienate all or any portion
      of
      its Interest or rights under this Agreement otherwise in accordance with this
      Article.

    

    19.2
      Nothing in this Article shall prevent a sale by a party of all of its Interest
      or an assignment of all its rights under this Agreement to an Affiliate provided
      that such Affiliate first complies with the provisions of Section.

    

    19.10
      and
      agrees with the other party in writing to retransfer such interest to the
      originally assigning party before ceasing to be an Affiliate of such
      party;

     

    
      	a)  	
              a
                variation pursuant to Section 4.3;
                or

            

    

    
      	b)  	
              a
                disposition pursuant to an amalgamation or corporate reorganization
                which
                will have the effect in law of the amalgamating or surviving company
                possessing all the property, rights and interests and being subject
                to all
                the debts, liabilities and obligations of each amalgamating or predecessor
                company.

            

    

    

    19.3
      Should a party (the “transferring party”) intend to dispose of all or any
      portion of its Interest or rights under this Agreement it shall first give
      notice in writing to the parties (the “other parties”) of such intention
      together with the terms and conditions on which the transferring party intends
      to dispose of its Interest or a portion thereof or rights under this
      Agreement.

    

    19.4
      If a
      party (the “transferring party”) receives any offer to dispose of all or any
      portion of its Interest or rights under this Agreement which it intends to
      accept, the transferring party shall not accept the same unless and until it
      has
      first offered to sell such Interest or rights to the parties (the “other
      parties”) on the same terms and conditions as in the offer received and the same
      has not been accepted by the other parties in accordance with Section
      19.6.

    

    19.5
      Any
      communication of an intention to sell pursuant to Section 19.3 and 19.4 (the
      “Offer”) for the purpose of this Article only shall be in writing delivered in
      accordance with Article 21 and shall:

    
      	a)  	
              set
                out in reasonable detail all of the terms and conditions of any intended
                sale;

            

    

    
      	b)  	
              if
                it is made pursuant to Section 19.3, include a photocopy of the Offer;
                and

            

    

    
      	c)  	
              if
                it is made pursuant to Section 19.4, clearly identify the offering
                party
                and include such information as is known by the transferring party
                about
                such offering party; and such communication will be deemed to constitute
                an Offer by the transferring party to the other parties to sell the
                transferring party's Interest or its rights (or a portion thereof
                as the
                case may be) under this Agreement to the other parties on the terms
                and
                conditions set out in such Offer. For greater certainty it is agreed
                and
                understood that any Offer hereunder shall deal only with the disposition
                of the Interest or rights of the transferring party hereunder and
                not with
                any other interest, right or property of the transferring party and
                such
                disposition shall be made solely for a monetary
                consideration.

            

    

    

    19.6
      Any
      Offer made as contemplated in Section 19.5 shall be open for acceptance by
      the
      other parties in accordance with their respective Interests for a period of
      sixty (60) days from the date of receipt of the Offer by the transferring
      party.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    19.7
      If
      the other parties accept the Offer within the period provided for in Section
      19.6, such acceptance shall constitute a binding agreement of purchase and
      sale
      between the transferring party and the other parties for the Interest or its
      rights (or a portion thereof as the case may be) under this Agreement on the
      terms and conditions set out in such Offer.

     

    19.8
      If
      the other parties do not accept the Offer within the period provided for in
      Section 19.6 or do accept but fail to close the transaction contemplated thereby
      within ninety (90) days following receipt of such Offer, the transferring party
      may complete a sale and purchase of its Interest or a portion thereof on terms
      and conditions not less favourable to the transferring party than those set
      out
      in the Offer and, in the case of an Offer under Section 19.4, only to the party
      making the original offer to the transferring party and in any event such sale
      and purchase shall be completed within nine months from the expiration of the
      right of the other party to accept such Offer of the transferring party must
      again comply with the provisions of this Article.

    

    19.9
      While any Offer is outstanding no other Offer may be made until the first
      mentioned Offer is disposed of and any sale resulting therefrom completed or
      abandoned in accordance with the provisions of this Article.

    

    19.10
      Before the completion of any sale by the transferring party of its Interest
      or
      rights or any portion thereof under this Agreement, the purchasing party shall
      enter into an agreement with the parties agreeing not to sell except on the
      same
      terms and conditions as set out in this Agreement.

    

    FORCE
      MAJEURE

    20.1
      No
      party will be liable for its failure to perform any of its obligations under
      this Agreement due to a cause beyond its reasonable control (except those caused
      by its own lack of funds) including, but not limited to acts of God, fire,
      flood, explosion, strikes, lockouts or other industrial disturbances, laws,
      rules and regulations or orders of any duly constituted governmental authority
      or non-availability of materials or transportation (each an “Intervening
      Event”).

    

    20.2
      All
      time limits imposed by this Agreement, excepting those set out in Article 15,
      will be extended by a period equivalent to the period of delay resulting from
      an
      Intervening Event. 20.3 A party relying on the provisions of Section 20.1 will
      take all reasonable steps to eliminate any Intervening Event and, if possible,
      will perform its obligations under this Agreement as far as practical, but
      nothing herein will require such party to settle or adjust any labour dispute
      or
      to question or to test the validity of any law, rule, regulation or order of
      any
      duly constituted governmental authority or to complete its obligations under
      this Agreement if an Intervening Event renders completion
      impossible.

    

    NOTICE

    21.1
      Any
      notice, direction, cheque or other instrument required or permitted to be given
      under this Agreement shall be in writing and may be given by the delivery of
      the
      same or by mailing the same by prepaid registered or certified mail or by
      sending the same by telegram, telex, telecommunication or other similar form
      of
      communication, in each case addressed to the intended recipient at the address
      of the respective party set out on the front page hereof.

    

    21.2
      Any
      notice, direction, cheque or other instrument aforesaid will, if delivered,
      be
      deemed to have been given and received on the day it was delivered, and if
      mailed, be deemed to have been given and received on the third business day
      following the day of mailing, except in the event of disruption of the postal
      service in which event notice will be deemed to be received only when actually
      received and, if sent by telegram, telex, telecommunication or other similar
      form of communication, be deemed to have been given or received on the day
      it
      was so sent.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    21.3
      Any
      party may at any time give to the other notice in writing of any change of
      address of the party giving such notice and from and after the giving of such
      notice the address or addresses therein specified will be deemed to be the
      address of such party for the purposes of giving notice hereunder.

    

    WAIVER

    22.1
      If
      any provision of this Agreement shall fail to be strictly enforced or any party
      shall consent to any action by any other party or shall waive any provision
      as
      set out herein, such action by such party shall not be construed as a waiver
      thereof other than at the specific time that such waiver or failure to enforce
      takes place and shall at no time be construed as a consent, waiver or excuse
      for
      any failure to perform and act in accordance with this Agreement at any past
      or
      future occasion.

    

    FURTHER
      ASSURANCES

    23.1
      Each
      of the parties hereto shall form time to time and at all times do all such
      further acts and execute and deliver all further deeds and documents as shall
      be
      reasonably required in order to fully perform and carry out the terms of this
      Agreement. For greater certainty, this section shall not be construed as
      imposing any obligation on any party to provide guarantees.

    

    USE
      OF NAME

    24.1
      No
      party shall, except when required by this Agreement or by any law, by-law,
      ordinance, rule, order or regulation, use, suffer or permit to be used, directly
      or indirectly, the name of any other party for any purpose related to the
      Property or the Project.

    

    ENTIRE
      AGREEMENT

    25.1
      This
      Agreement embodies the entire agreement and understanding among the parties
      hereto and supersedes all prior agreements and undertakings, whether oral or
      written, relative to the subject matter hereof.

    

    AMENDMENT

    26.1
      This
      Agreement may not be changed orally but only by an agreement in writing, by
      the
      party or parties against which enforcement, waiver, change, modification or
      discharge is sought.

    

    ARBITRATION

    27.1
      If
      any question, difference or dispute shall arise between the parties or any
      of
      them in respect of any matter arising under this Agreement or in relation to
      the
      construction hereof the same shall be determined by the award of three
      arbitrators to be named as follows:

    
      	a)  	
              the
                party or parties sharing one side of this dispute shall name an arbitrator
                and give notice thereof to the party or parties sharing the other
                side of
                the dispute;

            

    

    
      	b)  	
              the
                party or parties sharing the other side of the dispute shall, within
                14
                days of receipt of the notice, name an arbitrator;
                and

            

    

    
      	c)  	
              the
                two arbitrators so named shall, within 15 days of the naming of the
                latter
                of them, select a third arbitrator. The decision of the majority
                of these
                arbitrators shall be made within 30 days after the selection of the
                latter
                of them. The expense of the arbitration shall be borne equally by
                the
                parties to the dispute. If the parties on either side of the dispute
                fail
                to name their arbitrator within the time limited or proceed with the
                arbitration, the arbitrator named may decide the question. The arbitration
                shall be conducted in accordance with the provisions of the Arbitration
                Act of
                British Columbia and the decision of the arbitrator or amajority
                of the
                arbitrators, as the case may be, shall be conclusive and binding
                upon all
                the parties.

            

    

    

    RIGHT
      TO AUDIT

    28.1
      Any
      party acquiring a Royalty pursuant to this Agreement shall have the right to
      audit at its expense the books and records in respect of such Royalty of the
      Operator or the other parties, if it is not the Operator in respect of such
      Royalty.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    TIME

    29.1
      Unless earlier terminated by agreement of all parties or as a result of one
      party acquiring a 100% Interest, the Joint Venture and this Agreement shall
      remain in full force and effect for so long as any part of the Property or
      Project is held in accordance with this Agreement. Termination of the Agreement
      shall not, however, relieve any party from any obligations theretofore accrued
      but unsatisfied.

    

    RULE
      AGAINST PERPETUITIES

    30.1
      If
      any right, power or interest of any party in any Property under this Agreement
      would violate the rule against perpetuities, then such right, power or interest
      shall terminate at the expiration of 20 years after the death of the survivor
      of
      all the lineal descendants of her late Majesty, Queen Elizabeth II of the United
      Kingdom, living on the date of execution of this Agreement.

    

    DOCUMENT
      RETENTION ON TERMINATION

    31.1
      Prior to the distribution of the Property or the Project or the net revenues
      received on the disposal thereof on termination of this Agreement, the
      Management Committee shall meet any may approve a procedure for the retention,
      maintenance and disposal of documents maintained by the Management Committee
      (the “Documents”) and shall appoint such party as may consent thereto to ensure
      that all proper steps are taken to implement and maintain that procedure. If
      a
      quorum is not present at the meeting or if he Management Committee fails to
      approve a procedure as aforesaid, the Operator, if a party, otherwise the party
      holding the largest Interest as at the day immediately preceding the date the
      Management Committee was called to meet, shall retain, maintain and dispose
      of
      the Documents according to such procedure, in compliance with all applicable
      laws, as it deems fit. The party entrusted with the retention, and expenses
      incidental thereto and shall be entitled to receive payment of those costs
      and
      expenses prior to any distribution being made of the Property and Project or
      the
      net revenues received on the disposal thereof.

    

    ENUREMENT

    32.1
      This
      Agreement shall enure to the benefit of and be binding upon the parties hereto
      and their respective successors and permitted assigns.

    

    GOVERNING
      LAW

    33.1
      This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the Province of British Columbia and the parties irrevocably attorn to the
      jurisdiction of the said province.

    

    SEVERABILITY

    34.1
      If
      any one or more of the provisions contained herein should be invalid, illegal
      or
      unenforceable in any respect in any jurisdiction, the validity, legality and
      enforceability of such provision shall not in any way be affected or impaired
      thereby in any other jurisdiction and the validity, legality and enforceability
      of the remaining provisions contained herein shall not in any way be affected
      or
      impaired thereby.

    

    NUMBER
      AND GENDER

    35.1
      Words used herein importing the singular number only shall include the plural,
      and vice versa, and words importing the masculine gender shall include the
      feminine and neuter genders, and vice versa, and words importing persons shall
      include firms and corporations.

    

    HEADINGS

    36.1
      The
      division of this Agreement into articles and sections and the insertion of
      headings are for convenience of reference only and shall not affect the
      construction or interpretation of this Agreement.

    

    TIME
      OF THE ESSENCE

    37.1
      Time
      shall be of the essence in the performance of this Agreement.

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

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

    

    

    

    LESCO

    

    

    per______________________________________

    Dorian
      Leslie, Pres. & CEO

    

    

    FRC
      EXPLORATION LTD.

    

    

    per______________________________________

    Kent
      A.
      Kirby, Pres. & CE0

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
“A”

    

    THE
      JOINT VENTURE AGREEMENT

     

    DESCRIPTION
      OF PROPERTY RIGHTS AND PROPERTY

    dated
      May
      24, 2006

    

    

    The
      Snippaker mineral claims are located within the Eskay Creek Area, Northwestern
      British Columbia.

    130’
55”
      00 West / 56’ 35” 00 North

    UTM
      6272650N / 382400E

    

    

    
      	
              Tenure

            	
              Name

            	
              Owner

            	
              Map
                

              Number

            	
              Expiry

            	
              Status

            	
              Cells

            	
              Area
                

              (Hectares)

            
	
              525504

            	
              Snippaker

            	
              202528

            	
              104B056

            	
              Jan.
                14, 2007

            	
              GOOD

            	 	
              356.365

            
	
              525505

            	
              “

            	
              202528

            	
              104B056

            	
              Jan
                14, 2007

            	
              GOOD

            	 	
              455.650

            
	
              529951

            	
              “

            	
              202528

            	
              104B056

            	
              Mar
                13, 2007

            	
              GOOD

            	 	
              124.828

            
	
              529952

            	
              “

            	
              202528

            	
              104B056

            	
              Mar
                13, 2007

            	
              GOOD

            	 	
              124.847

            
	 	 	 	 	 	
              Totals

            	
              50
                full & 9 fractional

            	
              1,051.690

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
“B”

    TO
      

    THE
      JOINT
      VENTURE AGREEMENT

     

    

    DEFINITION
      OF NET PROFITS

    

    1.
“Net
      Profits” means the aggregate of:

    
      	(a)  	
              all
                revenues from the sale or other disposition of ores, metals or minerals
                mined or extracted from the Property or any portion thereof and any
                concentrates produced therefrom;
                and

            

    

    
      	b)  	
              all
                revenues from the operation, sale or other disposition of any Facilities
                the cost of which is included in the definition of “Operating Expenses”,
                “Capital Expenses” or “Exploration Expenses”, less (without duplication)
                Working Capital, Operating Expenses, Capital Expenses and Exploration
                Expenses.

            

    

    

    2.
      “Working Capital” means the amount reasonably necessary to provide for the
      operation of the mining operation on the Property and for the operation and
      maintenance of the Facilities for a period of six months.

    

    3.
      “Operating Expenses” means all costs, expenses, obligations, liabilities and
      charges of whatsoever nature or kind incurred or chargeable directly or
      indirectly in connection with Commercial Production from the Property and in
      connection with the maintenance and operation of the Facilities, all in
      accordance with generally accepted accounting principles, consistently applied,
      including, without limiting the generality of the foregoing, all amounts payable
      in connection with mining, handling, processing, refining, transporting and
      marketing of ore, concentrates, metals, minerals and other products produced
      from the Property, all amounts payable for the operation and maintenance of
      the
      Facilities including the replacement of items which by their nature require
      periodic replacement, all taxes (other than income taxes), royalties and other
      imposts and all amounts payable or chargeable in respect of reasonable overhead
      and administrative services.

    

    4.
      “Capital Expenses” means all expenses, obligations and liabilities of whatsoever
      kind (being of a capital nature in accordance with generally accepted accounting
      principles) incurred or chargeable, directly or indirectly, with respect to
      the
      development, acquisition, redevelopment, modernization and expansion of the
      Property and the Facilities, including, without limiting the generality of
      the
      foregoing, interest thereon from the time so incurred or chargeable at a rate
      per annum from time to time equal to “prime rate” of the Royal Bank of Canada
      plus two (2%) percent per annum, but does not include Operating Expenses nor
      Exploration Expenses.

    

    5.
      “Exploration Expenses” means all costs, expenses, obligations, liabilities and
      charges of whatsoever nature or kind incurred or chargeable, directly or
      indirectly, in connection with the exploration and development of the Property
      including, without limiting the generality of the foregoing, all costs
      reasonably attributable, in accordance with generally accepted accounting
      principles, to the design, planning, testing, financing, administration,
      marketing, engineering, legal, accounting, transportation and other incidental
      functions associated with the exploration and mining operation contemplated
      by
      this Agreement and with the Facilities, but does not include Operating Expenses
      nor Capital Expenses.

    

    6.
      “Facilities” means all plant, equipment, structures, roads, rail lines, storage
      and transport facilities, housing and service structures, real property or
      interest therein, whether on the Property or not, acquired or constructed
      exclusively for the mining operation on the Property contemplated by this
      Agreement (all commonly referred to as “infrastructure”).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
“C”

    TO

    THE
      JOINT
      VENTURE AGREEMENT

    

     

    ACCOUNTING
      PROCEDURES

     

     

    TABLE
      OF CONTENTS

    

    

    
      
        	1. Interpretation
                	
                1

              
	2. Statements and
                Billings	
                2

              
	3. Direct
                Charges	
                2

              
	4. Purchase of
                Material	
                3

              
	5. Disposal of
                Material	
                4

              
	6. Inventories	
                4

              
	7. Adjustments	
                4
                  

              

      

    

     

    1.
      INTERPRETATION

    In
      this
      Schedule the following words, phrases and expressions shall have the following
      meanings:

    
      	a)  	
              “Agreement”
                means the Agreement to which this Accounting Procedure is attached
                as
                Schedule “C”.

            

    

    
      	b)  	
              “Count”
                means a physical inventory count.

            

    

    
      	c)  	
              “Employee”
                means those employees of the Operator who are assigned to and directly
                engaged in the conduct of Mining Operations, whether on a full-time
                or
                part-time basis.

            

    

    
      	d)  	
              “Employee
                Benefits” means the Operator's cost of holiday, vacation, sickness,
                disability benefits, field bonuses, paid to Employees and the Operator's
                costs of established plans for employee's group life insurance,
                hospitalization, pension, retirement and other customary plans maintained
                for the benefit of Employees and Personnel, as the case may be, which
                costs may be charged as a percentage assessment on the salaries and
                wages
                of Employees or Personnel, as the case may be, on a basis consistent
                with
                the Operator's cost experience.

            

    

    
      	e)  	
              “Field
                Offices” means the necessary sub-office or suboffices in each place where
                a Program or Construction is being conducted or a Mine is being
                operated.

            

    

    
      	f)  	
              “Government
                Contributions” means the cost or contributions made by the Operator
                pursuant to assessments imposed by governmental authority which are
                applicable to the salaries or wages of Employees or Personnel, as
                the case
                may be.

            

    

    
      	g)  	
              “Joint
                Account” means the books of account maintained by the Operator to record
                all costs, expenses, credits and other transactions arising out of
                or in
                connection with the Mining
                Operations.

            

    

    
      	h)  	
              “Material”
                means the personal property, equipment and supplies acquired or held,
                at
                the direction or with the approval of the Management Committee, for
                use in
                the Mining Operations and, without limiting the generality, more
                particularly “Controllable Material” means such Material which is
                ordinarily classified as Controllable Material, as that classification
                is
                determined or approved by the Management Committee, and controlled
                in
                mining operations.

            

    

    
      	i)  	
              “Personnel”
                means those management, supervisory, administrative, clerical or
                other
                personnel of the Operator normally associated with the Supervision
                Offices
                whose salaries and wages are charged directly to the Supervision
                Office in
                question.

            

    

    
      	j)  	
              “Reasonable
                Expenses” means the reasonable expenses of Employee or Personnel, as the
                case may be, for which those Employees or Personnel may be reimbursed
                under the Operator's usual expense account practice; including without
                limiting the generality of the foregoing, any relocation expenses
                necessarily incurred in order to properly staff the Mining Operations
                if
                the relocation is approved by the Management
                Committee.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    
      	k)  	
              “Supervision
                Office” means the Operator's offices or department within the Operator's
                offices from which the Mining Operations are generally
                supervised.

            

    

     

    2.
      STATEMENTS AND BILLINGS

    2.1
      The
      Operator shall, by invoice, charge each party with its proportionate share
      of
      Exploration Costs and Mine Costs in the manner provided in the
      Agreement.

    

    2.2
      The
      Operator shall deliver, with each invoice rendered for Costs incurred a
      statement indicating:

    a)
      all
      charges or credits to the Joint Account relating to Controllable Material in
      detail; and

    b)
      all
      other charges and credits to the Joint Account summarized by appropriate
      classification indicative of the nature of the charges and credits.

    

    2.3
      The
      Operator shall deliver with each invoice for an advance of Costs a statement
      indicating:

    
      	a)  	
              the
                estimated Exploration Costs or, in the case of Mine Costs, the estimated
                cash disbursements, to be made during the next succeeding
                month;

            

    

    
      	b)  	
              the
                addition thereto or subtraction therefrom, as the case may be, made
                in
                respect of Exploration Costs or Mine Costs actually having been incurred
                in an amount greater or lesser than the advance which was made by
                each
                party for the penultimate month preceding the month of the invoice;
                and

            

    

    
      	c)  	
              the
                advances made by each party to date and are Exploration Costs or
                Mine
                Costs incurred to the end of the penultimate month preceding the
                month of
                the invoice.

            

    

     

    3.
      DIRECT CHARGES

    3.1
      The
      Operator shall charge the Joint Account with the following items:

    
      	a)  	
              Contractor's
                Charges:

            

    

    All
      proper costs relative to the Mining Operations incurred under contracts entered
      into by the Operator with third parties.

    
      	b)  	
              Labour
                Charges:

            

    

    
      	i)  	
              The
                salaries and wages of Employees in an amount calculated by taking
                the full
                salary or wage of each Employee multiplied by that fraction which
                has as
                its numerator the total time for the month that the Employees were
                directly engaged in the conduct of Mining Operations and as its
                denominator the total normal working time for the month of the
                Employee;

            

    

    
      	ii)  	
              The
                Reasonable Expenses of the Employees;
                and

            

    

    
      	iii)  	
              Employee
                Benefits and Government Contributions in respect of the Employees
                in an
                amount proportionate to the charge made to the Joint Account in respect
                to
                their salaries and wages.

            

    

    
      	c)  	
              Office
                Maintenance:

            

    

    
      	i)  	
              The
                cost or a pro rata portion of the costs, as the case may be, of
                maintaining and operating the Offices. The basis for charging the
                Joint
                Account for Office maintenance costs shall be as
                follows:

            

    

    the
      expense of maintaining and operating Field Offices, less any revenue therefrom;
      and

    that
      portion of maintaining and operating the Supervision Offices which is equal
      to
      the anticipated total operating expenses of the Supervision Offices divided
      by
      the anticipated total staff man days for the Employees whether in connection
      with the Mining Operations or not; multiplied by the actual total time spent
      on
      the Mining Operations by the Employee expressed in man days.

    ii)
      Without limiting generality of the foregoing, the anticipated total operating
      expenses of the Supervision Offices shall include:

    A.
      the
      salaries and wages of the Operator's Personnel which have been directly charged
      to those Offices;

    B.
      the
      Reasonable Expenses of the Personnel; and

    C.
      Employee Benefits

    iii)
      The
      Operator shall make an adjustment in respect of the Office Maintenance cost
      forthwith after the end of each Operating Year upon having determined the actual
      operating expenses and actual total staff man days referred to in Clause
      3.1(c)(2)(b) of this Schedule “C”.

    
      	d)  	
              Material:
                

              Material
                purchased or furnished by the Operator for use on the Property as
                provided
                under Section 4 of this Schedule
“C”.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    
      	e)  	
              Transportation
                Charges:
                The
                  cost of transporting Employees and Material necessary for the Mining
                  Operations.

              

            

    

    
      	f)  	
              Service
                Charges:

            

    

    
      	i)  	
              The
                cost of services and utilities procured from outside sources other
                than
                services covered by Paragraph 3.1 h). The cost of consultant services
                shall not be charged to the Joint Account unless the retaining of
                the
                consultant is approved in advance by the Management Committee but
                if not
                so charged the cost of such services shall be included as Costs of
                the
                party retaining such consultant;
                and

            

    

    
      	ii)  	
              Use
                and service of equipment and facilities furnished by the Operator
                as
                provided in Subsection 4.5 of this Schedule
“C”.

            

    

    
      	g)  	
              Damages
                and Losses to Joint
                Property:

            

    

    All
      costs
      necessary for the repair or replacement of Assets made necessary because of
      damages or losses by fire, flood, storms, theft, accident or other cause. The
      Operator shall furnish each party with written particulars of the damages or
      losses incurred as soon as practicable after the damage or loss has been
      discovered. The proceeds, if any, received on claims against any policies of
      insurance in respect of those damages or losses shall be credited to the Joint
      Account. 
      
      	h)  	
              Legal
                Expense:

            

    

    All
      costs
      of handling, investigating and settling litigation or recovering the assets,
      including, without limiting generality, attorney's fees, court costs, costs
      of
      investigation or procuring evidence and amounts paid in settlement or
      satisfaction of any litigation or claims; provided, however, that, unless
      otherwise approved in advance by the Management Committee, no charge shall
      be
      made for the services of the Operator's legal staff or the fees and expenses
      of
      outside solicitors.

    i)
      Taxes:

    All
      taxes, duties or assessments of every kind and nature (except income taxes)
      assessed or levied upon or in connection with a Property, the Mining Operations
      thereon, or the production therefrom, which have been paid by the Operator
      for
      the benefit of the parties.

    j)
      Insurance:

    Net
      premiums paid for

    
      	i)  	
              such
                policies of insurance on or in Operations as may be required to be
                carried
                by law; and

            

    

    
      	ii)  	
              such
                other policies of insurance as the Operator may carry in accordance
                with
                the Agreement; and

            

    

    
      	iii)  	
              the
                applicable deductibles in event of an insured
                loss.

            

    

    k)
      Rentals:

    Fees,
      rentals and other similar charges required to be paid for acquiring, recording
      and maintaining permits, mineral claims and mining leases and rentals and of
      the
      Mining Operations.

    l)
      Permits:

    Permit
      costs, fees and other similar charges which are assessed by various governmental
      agencies.

    m)
      Other
      Expenditures:

    Such
      other costs and expenses which are not covered or dealt with in the foregoing
      provisions of this Subsection 3.1 of this Schedule “C” as are incurred with the
      approval of the Management Committee for Mining Operations or as may be
      contemplated in the Agreement.

     

    4.
      PURCHASE
      OF MATERIAL

    4.1
      Subject to Subsection 4.4 of this Schedule “C” the Operator shall purchase all
      Materials for Mining Operations.

    

    4.2
      Materials purchased and services procured by the Operator directly for the
      Mining Operations shall be charged to the Joint Account at the price paid by
      the
      Operator less all discounts actually received. 

    

    4.3
      So
      far as it is reasonably practical and consistent with efficient and economical
      operations, the Operator shall purchase, furnish or otherwise acquire only
      such
      Material and the Operator shall attempt to minimize the accumulation of surplus
      stocks of Material.

    

    4.4
      Any
      party may sell Material or services required in the Mining Operations to the
      Operator for such price and upon such terms and conditions as the Management
      Committee may approve.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4.5
      Notwithstanding the foregoing provisions of this Section 4, the Operator shall
      be entitled to supply for use in connection with the Mining Operations equipment
      and facilities which are owned by the Operator and to charge the Joint Account
      with such reasonable costs as are commensurate with the ownership and use
      thereof.

     

    5.
      DISPOSAL
      OF MATERIAL

    5.1
      The
      Operator, with the approval of the Management Committee may, from time to time,
      sell any Material which has become surplus to the reasonably foreseeable needs
      of the Mining Operations for such price and upon such terms and conditions
      as
      are available.

    

    5.2
      Any
      party may purchase from the Operator any Material which may from time to time
      become surplus to the reasonably foreseeable need of the Mining Operations
      for
      such price and upon such terms and conditions as the Management Committee may
      approve.

    

    5.3
      Upon
      termination of the Agreement, the Management Committee may approve the division
      of any Material held by the Operator at that date may be taken by the parties
      in
      kind or be taken by a party in lieu of a portion of its Proportionate Share
      of
      the net revenues received from the disposal of the Property. If such a division
      to a party be in lieu of a portion of its proportionate share, it shall be
      for
      such price and on such terms and conditions as the Management Committee may
      approve.

    

    5.4
      The
      net revenues received from the sale of any Material to third parties or to
      a
      party shall be credited to the Joint Account.

     

    6.
      INVENTORIES

    6.1
      The
      Operator shall maintain records of Material in reasonable detail and records
      of
      Controllable Material in detail.

    

    6.2
      The
      Operator shall perform Counts from time to time at reasonable intervals and
      in
      connection therewith shall give notice of its intention to perform a Count
      to
      each party at least 30 days in advance of the date set for performing of the
      Count. Each party shall be entitled to be represented at the performing of
      a
      Count upon giving notice thereof to the Operator within 20 days of the
      Operator's notice. A party who is not represented at the performing of the
      Count
      shall be deemed to have approved the Count as taken.

    

    6.3
      Forthwith after performing a Count, the Operator shall reconcile the inventory
      with the Joint Account and provide each party with a statement listing the
      overages and shortages of inventory except such shortages as may have arisen
      due
      to a lack of diligence on the part of the Operator.

     

    7.
      ADJUSTMENTS

    7.1
      Payment of any invoice by a party shall not prejudice the right of that party
      to
      protest the correctness of the statement supporting the payment; provided,
      however, that all invoices and statements presented to each party by the
      Operator during any Operating Year shall conclusively be presumed to be true
      and
      correct upon the expiration of 12 months following the end of the Operating
      Year
      to which the invoice or statement relates, unless within that 12 month period
      that party gives notice to the Operator making claim on the Operator for an
      adjustment to the invoice or statement.

    

    7.2
      The
      Operator shall not adjust any invoice or statement in favour of itself after
      the
      expiration of 12 months following the end of the Operating Year to which the
      invoice or statement relates. 

    

    7.3
      Notwithstanding Subsections 7.1 and 7.2 of this Schedule “C”, the Operator may
      make adjustments to an invoice or statement which arise out of a physical
      inventory of Material or Assets.

    

    7.4
      A
      party shall be entitled upon notice to the Operator to request that the
      independent external auditor of the Operator provide that party with its opinion
      that any invoice or statement delivered pursuant to the 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Agreement
      in respect of the period referred to in Subsection 7.1 of this Schedule “C” has
      been prepared in accordance with this Agreement.

    

    7.5
      The
      time for giving the audit opinion contemplated in Subsection 7.4 of this
      Schedule “C” shall not extend the time for the taking of exception to and making
      claims on the Operator for adjustment as provided in Subsection 7.1 of this
      Schedule “C”.

    

    7.6
      The
      cost of the auditor's opinion referred to in Subsection 7.4 of this Schedule
“C”
shall be solely for the account of the party requesting the auditor's opinion,
      unless the audit disclosed a material error adverse to that party, in which
      case
      the cost shall be solely for the account of the Operator.

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