Document:

MINING  VENTURE  AGREEMENT
                           --------------------------

                           (SUNNY SLOPE GOLD PROPERTY)

                                     BETWEEN

                            WESTERN GOLDFIELDS, INC.

                                       AND

                                  321GOLD, INC.

                            DATED: NOVEMBER 28, 2004

<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                -----------------

<S>                                                                              <C>
I -  DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.1      "Accounting Procedure". . . . . . . . . . . . . . . . . . . . . . .          6
     1.2      "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.3      "Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.4      "Area of Interest . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.5      "Assets". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.6      "Budgets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.7      "Development" . . . . . . . . . . . . . . . . . . . . . . . . . . .          6
     1.8      "Exploration" . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.9      "Initial Contribution". . . . . . . . . . . . . . . . . . . . . . .          7
     1.10     "Joint Account" . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.11     "Management Committee". . . . . . . . . . . . . . . . . . . . . . .          7
     1.12     "Manager" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.13     "Mining". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.14     "Operations". . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.15     "Participant" and "Participants". . . . . . . . . . . . . . . . . .          7
     1.16     "Participating Interest". . . . . . . . . . . . . . . . . . . . . .          7
     1.17     "Prime Rate". . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.18     "Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.19     "Program" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.20     "Properties". . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.21     "Transfer". . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7
     1.22     "Venture" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          8

II - REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS. . . . . . . . . . . . . . .          8
     2.1      Capacity of Participants. . . . . . . . . . . . . . . . . . . . . .          8
     2.2      Representations and Warranties. . . . . . . . . . . . . . . . . . .          8
     2.3      Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . .          9
     2.4      Record Title. . . . . . . . . . . . . . . . . . . . . . . . . . . .          9
     2.5      Joint Loss of Title . . . . . . . . . . . . . . . . . . . . . . . .          9

III - NAME, PURPOSES AND TERM . . . . . . . . . . . . . . . . . . . . . . . . . .          9
      3.1     General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          9
      3.2     Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          9
      3.3     Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          9
      3.4     Limitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .          9
      3.5     Effective Date and Term . . . . . . . . . . . . . . . . . . . . . .          9

IV -  RELATIONSHIP OF THE PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . .         10
      4.1     No Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . .         10
      4.2     Federal Tax Elections and Allocations . . . . . . . . . . . . . . .         10
      4.3     State Income Tax. . . . . . . . . . . . . . . . . . . . . . . . . .         10
      4.4     Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . .         10

                                        2
<PAGE>
      4.5     Other Business Opportunities. . . . . . . . . . . . . . . . . . . .         10
      4.6     Waiver of Right to Partition. . . . . . . . . . . . . . . . . . . .         10
      4.7     Transfer of Termination of Rights to Properties . . . . . . . . . .         11
      4.8     Implied Covenants . . . . . . . . . . . . . . . . . . . . . . . . .         11

V -   CONTRIBUTIONS  BY  PARTICIPANTS. . . . . . . . . . . . . . . . .. . . . . .         11
      5.1     Participants' Initial Contributions . . . . . . . . . . . . . . . .         11
      5.2     Company's Failure to Make Initial Contribution. . . . . . . . . . .         11
      5.3     Additional Cash Contributions . . . . . . . . . . . . . . . . . . .         11

VI -  INTERESTS OF PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . .         11
      6.1     Initial Participating Interests . . . . . . . . . . . . . . . . . .         11
      6.2     Changes in Participating Interests. . . . . . . . . . . . . . . . .         12
      6.3     Voluntary Reduction in Participation; WGI's NSR . . . . . . . . . .         12
      6.4     Default in Making Contribution. . . . . . . . . . . . . . . . . . .         12
      6.5     Elimination of Minority Interest. . . . . . . . . . . . . . . . . .         13
      6.6     Continuing Liabilities upon Adjustments of Participating Interests.         13
      6.7     WGI's Right to Increase Its Participating Interests . . . . . . . .         13

VII - MANAGEMENT COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . .         14
      7.1     Organization and Composition. . . . . . . . . . . . . . . . . . . .         14
      7.2     Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         14
      7.3     Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         14
      7.4     Action Without Meeting. . . . . . . . . . . . . . . . . . . . . . .         14
      7.5     Matters Requiring Approval. . . . . . . . . . . . . . . . . . . . .         14

VIII -MANAGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         14
      8.1     Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . .         14
      8.2     Powers and Duties of Manager. . . . . . . . . . . . . . . . . . . .         14
      8.3     Standard of Care. . . . . . . . . . . . . . . . . . . . . . . . . .         17
      8.4     Resignation; Deemed Offer to Resign . . . . . . . . . . . . . . . .         17
      8.5     Payments to Manager . . . . . . . . . . . . . . . . . . . . . . . .         18
      8.6     Transactions With Affiliates. . . . . . . . . . . . . . . . . . . .         18
      8.7     Activities During Deadlock. . . . . . . . . . . . . . . . . . . . .         18

IX -  PROGRAMS  AND  BUDGETS. . . . . . . . . . . . . . . . . . . . . . . . . . .         18
      9.1     Initial Program and Budget. . . . . . . . . . . . . . . . . . . . .         18
      9.2     Operations Pursuant to Programs and Budgets . . . . . . . . . . . .         18
      9.3     Presentation of Programs and Budgets. . . . . . . . . . . . . . . .         18
      9.4     Review and Approval of Proposed Programs and Budgets. . . . . . . .         18
      9.5     Election to Participate . . . . . . . . . . . . . . . . . . . . . .         19
      9.6     Deadlock on Proposed Programs and Budgets . . . . . . . . . . . . .         19
      9.7     Budget Overruns; Programs Changes . . . . . . . . . . . . . . . . .         19
      9.8     Emergency or Unexpected Expenditures. . . . . . . . . . . . . . . .         19

X -  ACCOUNTS AND SETTLEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .         19

                                        3
<PAGE>
      10.1    Monthly Statement . . . . . . . . . . . . . . . . . . . . . . . . .         19
      10.2    Cash Calls. . . . . . . . . . . . . . . . . . . . . . . . . . . . .         19
      10.3    Failure to Meet Cash Calls. . . . . . . . . . . . . . . . . . . . .         20
      10.4    Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         20

XI -  DISPOSITION OF PRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . .         20
      11.1    Taking in Kind. . . . . . . . . . . . . . . . . . . . . . . . . . .         20
      11.2    Failure of Participant to Take in Kind. . . . . . . . . . . . . . .         20

XII - WITHDRAWAL AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . .         20
      12.1    Termination by Expiration or Agreement. . . . . . . . . . . . . . .         20
      12.2    Termination by Deadlock . . . . . . . . . . . . . . . . . . . . . .         20
      12.3    Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .         21
      12.4    Continuing Obligations. . . . . . . . . . . . . . . . . . . . . . .         21
      12.5    Disposition of Assets on Termination. . . . . . . . . . . . . . . .         21
      12.6    Non-Compete Covenants . . . . . . . . . . . . . . . . . . . . . . .         21
      12.7    Right to Data After Termination . . . . . . . . . . . . . . . . . .         21
      12.8    Continuing Authority. . . . . . . . . . . . . . . . . . . . . . . .         22

XIII -ACQUISITIONS WITHIN AREA OFINTEREST. . . .  . . . . . . . . . . . . . . . .         22
      13.1    General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         22
      13.2    Notice to Non-acquiring Participant . . . . . . . . . . . . . . . .         22
      13.3    Option Exercised. . . . . . . . . . . . . . . . . . . . . . . . . .         22
      13.4    Option Not Exercised. . . . . . . . . . . . . . . . . . . . . . . .         22

XIV - ABANDONMENT AND SURRENDER OF PROERTIES. . . . . . . . . . . . . . . . . . .         23
      14.1    Surrender or Abandonment of Property. . . . . . . . . . . . . . . .         23
      14.2    Reacquisition . . . . . . . . . . . . . . . . . . . . . . . . . . .         23

XV -  TRANSFER OF INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . .         23
      15.1    General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         23
      15.2    Limitations on Free Transferability . . . . . . . . . . . . . . . .         23
      15.3    Preemptive Right. . . . . . . . . . . . . . . . . . . . . . . . . .         24
      15.4    Exceptions to Preemptive Right. . . . . . . . . . . . . . . . . . .         25

XVI - DISPUTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25
      16.1    General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25

XVII -CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25
      17.1    General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25
      17.2    Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .         25
      17.3    Duration of Confidentiality . . . . . . . . . . . . . . . . . . . .         26

XVIII GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .         26
      18.1    Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         26

                                        4
<PAGE>
      18.2    Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         26
      18.3    Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . .         26
      18.4    Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . .         26
      18.5    Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . .         27
      18.6    Rule Against Perpetuities . . . . . . . . . . . . . . . . . . . . .         27
      18.7    Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . .         27
      18.8    Survival of Terms and Conditions. . . . . . . . . . . . . . . . . .         27
      18.9    Entire Agreement; Successors and Assigns. . . . . . . . . . . . . .         27
      18.10   Memorandum... . . . . . . . . . . . . . . . . . . . . . . . . . . .         27
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS
--------

<S>                                                                       <C>
            EXHIBIT A -                                                   29
                  PART 1.             Properties and Title Exceptions
                  PART 2              Area of Interest
            EXHIBIT B                 ACCOUNTING PROCEDURE                30
            EXHIBIT C                 TAX MATTERS                         36
            EXHIBIT D                 INSURANCE                           42
            EXHIBIT E                 INITIAL PROGRAM AND BUDGET          43
</TABLE>

                                        5
<PAGE>
                            MINING VENTURE AGREEMENT
                            ------------------------

                           (Sunny Slope Gold Property)

THIS  AGREEMENT  made  as  of  the  28th  day  of November, 2004 between Western
Goldfields,  Inc.,  an  Idaho  corporation, ("WGI") and 321Gold, Inc., a Florida
Corporation  ,  ("Company").

                                    RECITALS
                                    --------

A.   WGI  owns  certain  Properties  in  Mineral  County,  State of Nevada which
Properties are described in Exhibit A and defined in Section 1.20.

B.   Company  wishes  to  participate  with  WGI in the exploration, evaluation,
development  and  mining of mineral resources within the Properties or any other
properties  acquired pursuant to the terms of this Agreement, and WGI is willing
to  grant  such  right  to  Company.

     NOW,  THEREFORE,  consideration  of  the covenants and agreements contained
herein,  WGI  and  Company  agree  as  follows:

                                    ARTICLE I
                                    ---------

                                   DEFINITIONS
                                   -----------

     1.1  "Accounting  Procedure"  means  the procedures set forth in Exhibit B.

     1.2  "Affiliate"  means any person, partnership, joint venture, corporation
or other form of enterprise which directly or indirectly controls, is controlled
by,  or  is  under  common  control  with,  a  Participant.  For purposes of the
preceding  sentence,  "control" means possession, directly or indirectly, of the
power  to direct or cause direction of management and policies through ownership
of  voting  securities,  contract,  voting  trust  or  otherwise.

     1.3  "Agreement" means this Venture Agreement, including all amendments and
modifications  thereof,  and  all schedules and exhibits, which are incorporated
herein  by  this  reference.

     1.4  "Area  of  Interest"  means the area described in Part 2 of Exhibit A.

     1.5 "Assets" means the Properties, Products and all other real and personal
property,  tangible  and  intangible,  held  for the benefit of the Participants
hereunder.

     1.6  "Budget"  means a detailed estimate of all costs to be incurred by the
Participants  with  respect  to  a Program and a schedule of cash advances to be
made  by  the  Participants.

                                        6
<PAGE>
     1.7  "Development"  means  all  preparation for the removal and recovery of
Products,  including  the  construction  or  installation  a  mill  or any other
improvements  to  be  used  for  the mining, or other beneficiation of Products.

     1.8  "Exploration"  means  all  activities directed toward ascertaining the
existence,  location,  quantity,  quality  or  commercial  value  of deposits of
Products.

     1.9  "Initial  Contribution"  means  that contribution each Participant has
made  or  agrees  to  make  pursuant  to  Section  5.1.

     1.10  "Joint  Account"  means the account maintained in accordance with the
Accounting  Procedure  showing  the  charges  and  credits  accruing  to  the
Participants.

     1.11  "Management  Committee" means the committee established under Article
VII.

     1.12  "Manager"  means the person or entity appointed under Article VIII to
manage  Operations,  or  any  successor  Manager.

     1.13 "Mining" means the mining, extracting, producing, handling, milling or
other  processing  of  Products.

     1.14  "Operations"  means  the activities carried out under this Agreement.

     1.15  "Participant"  and  "Participants"  mean the persons or entities that
from  time  to  time  have  Participating  Interests.

     1.16  "Participating  Interest"  means the percentage interest representing
the  operating  ownership  interest  of  a  Participant in Assets, and all other
rights  and  obligations arising under this Agreement, as such interest may from
time  to time be adjusted hereunder. Participating Interests shall be calculated
to  three  decimal  places  and  rounded to two (e.g., 1.519% rounded to 1.52%).
                                                 ----
Decimals  of .005 or more shall be rounded up to .01, than .005 shall be rounded
down.  The  initial  Participating  Interests  of the Participants are set forth
Section  6.1.

     1.17  "Prime Rate" means the interest rate quoted as "Prime" by the Bank of
America,  N.A.,  at  its  head  office,  as said rate may change from day to day
(which  quoted  rate  may not be the lowest rate at which the Bank loans funds).

     1.18  "Products"  means  all  ores, minerals and mineral resources produced
from  the  Properties  under  this  Agreement.

     1.19 "Program" means a description in reasonable detail of Operations to be
conducted  and  objectives  to  be accomplished by the Manager for a year or any
longer  period.

     1.20  "Properties" means those interests in real property described in Part
1  of  Exhibit  A  and  all  other interests in real property within the Area of
Interest which are acquired and held subject to this Agreement.

     1.21  "Transfer"  means  sell, grant, assign, encumber, pledge or otherwise
commit  or  dispose  of.

                                        7
<PAGE>
     1.22  "Venture"  means  the  business arrangement of the Participants under
this  Agreement.

                                   ARTICLE II
                                   ----------

                 REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS
                 -----------------------------------------------

     2.1  Capacity  of  Participants.  Each  of  the Participants represents and
          --------------------------
warrants  as  follows:

          (a) that it is a corporation duly incorporated and in good standing in
     its  state  of incorporation and that it is qualified to do business and is
     in  good standing in those states where necessary in order to carry out the
     purposes  of  this  Agreement;

          (b)  that it has the capacity to enter into and perform this Agreement
     and  all  transactions contemplated herein and that all corporate and other
     actions  required  to authorize it to enter into and perform this Agreement
     have  been  properly  taken;

          (c)  that  it  will  not  breach any other agreement or arrangement by
     entering  into  or  performing  this  Agreement;  and

          (d) that this Agreement has been duly executed and delivered by it and
     is  valid  and  binding  upon  it  in  accordance  with  its  terms.

     2.2 Representations and Warranties. WGI makes the following representations
         -------------------------------
and  warranties  effective  the  date  hereof:

          (a)  With  respect to unpatented mining claims located by WGI that are
     included  within  the Properties, except as provided in Part 1 of Exhibit A
     and subject to the paramount title of the United States: (i) the unpatented
     mining  claims  were  properly  laid  out and monumented; (ii) all required
     location and validation work was properly performed; (iii) location notices
     and  certificates  were  properly  recorded  and  filed  with  appropriate
     governmental  agencies;  (iv) all assessment work and fees required to hold
     the  unpatented  mining  claims  has  been  performed  or  paid in a manner
     consistent  with  that  of  the  Manager pursuant to Section 8.2(k) of this
     Agreement  through  the  assessment: year ending September 1, 2004; (v) all
     affidavits  of  assessment  work and other filings required to maintain the
     claims  in  good  standing  have been properly and timely recorded or filed
     with  appropriate governmental agencies; (vi) the claims are free and clear
     of  defects,  liens  and encumbrances arising by, through or under WGI; and
     (vii)  WGI  has no knowledge of conflicting claims. Nothing in this Section
     2.2(a),  however, shall be deemed to be a representation or a warranty that
     any  of  the  unpatented  mining  claims  contains a discovery of minerals.

          (b) With respect to the Properties, there are no pending or threatened
     actions,  suits,  claims  or  proceedings.

     The  representations  and  warranties  set  forth  above  shall survive the
execution  and  delivery  of  any  documents  of  Transfer  provided  under this
Agreement.

                                        8
<PAGE>
     2.3  Disclosures.  Each of the Participants represents and warrants that it
          -----------
is  unaware of any material facts or circumstances which have not been disclosed
in  this  Agreement, which should be disclosed to the other Participant in order
to  prevent  the  representations  in  this  Article  II  from  being materially
misleading.

     2.4  Record  Title.  Title  to  the Assets shall be held in the name of WGI
          -------------
until  Company  completes  its  Initial Contribution and its final Participating
Interest  is  determined.

     2.5  Joint  Loss  of Title. Any failure or loss of title to the Assets, and
          ----------------------
all costs of defending title, shall be charged to the Joint Account, except that
all  costs  and  losses  arising  out  of  or  resulting  from  breach  of  the
representations and warranties of WGI shall be charged to WGI.

                                   ARTICLE III
                                   -----------

                             NAME, PURPOSES AND TERM
                             -----------------------

     3.1  General.  WGI  and  Company  hereby  enter into this Agreement for the
          -------
purposes  hereinafter stated, and they agree that all of their rights and all of
the  Operations  on or in connection with the Properties or the Area of Interest
shall  be  subject  to  and  governed  by  this  Agreement.

     3.2  Name.  The name of this Venture shall be the Sunny Slope Gold Property
          ----
Venture.  The  Manager  shall accomplish any registration required by applicable
assumed  or  fictitious  name  statutes  and  similar  statutes.

     3.3 Purposes. This Agreement is entered into for the following purposes and
         --------
for no others, and shall serve as the exclusive means by which the Participants,
or  either  of  them,  accomplish  such  purposes:

          (a)  to  conduct  Exploration  within  the  Area  of  Interest,

          (b)  to  acquire  additional  Properties  within the Area of Interest,

          (c)  to  evaluate  the  possible  Development  of  the  Properties,

          (d)  to engage in Development and Mining Operations on the Properties,

          (e)  to  engage  in  marketing  Products,  to  the extent permitted by
               Article  XI,  and

          (f)  to  perform  any  other  activity  necessary,  appropriate,  or
               incidental  to  any  of  the  foregoing.

     3.4  Limitation.  Unless  the  Participants otherwise agree in writing, the
          ----------
Operations  shall  be  limited  to  the  purposes  described in Section 3.3, and
nothing in this Agreement shall be construed to enlarge such purposes.

     3.5  Effective Date and Term. The effective date of this Agreement shall be
          ------------------------
the  date  first recited above. The term of this Agreement shall be for 20 years
from the effective date and for so long thereafter as Products are produced from
the  Properties,  unless the Agreement is earlier terminated as herein provided.

                                        9
<PAGE>
                                   ARTICLE IV
                                   ----------

                        RELATIONSHIP OF THE PARTICIPANTS
                        --------------------------------

     4.1  No Partnership. Nothing contained in this Agreement shall be deemed to
          ---------------
constitute either Participant the partner of the other, nor, except as otherwise
herein  expressly  provided, to constitute either Participant the agent or legal
representative  of  the  other, nor to create any fiduciary relationship between
them.  It  is  not  the  intention of the Participants to create, nor shall this
Agreement  be  construed to create, any mining, commercial or other partnership.
Neither  Participant  shall  have  any  authority  to  act  for or to assume any
obligation  or  responsibility  on  behalf  of  the other Participant, except as
otherwise  expressly  provided  herein.  The  rights,  duties,  obligations  and
liabilities  of  the  Participants shall be several and not joint or collective.
Each  Participant:  shall  be responsible only for its obligations as herein set
out and shall be liable only for its share of the costs and expenses as provided
herein,  it  being  the  express  purpose and intention of the Participants that
their  ownership of Assets and the rights acquired hereunder shall be as tenants
in  common.  Each  Participant  shallindemnify,  defend  and  hold  harmless the
Participant,  its directors, officers, managers, employees, agents and attorneys
from and against any and all losses, claims, damages and liabilities arising out
of  any  act  or any assumption of liability by the indemnifying Participant, or
any  of  its directors, officers, managers, employees, agents and attorneys done
or  undertaken,  or  apparently  done  or  undertaken,  on  behalf  of the other
Participant,  except  pursuant  to  the authority expressly granted herein or as
otherwise  in  writing  between  the  Participants.

     4.2  Federal  Tax Elections and Allocations. Without changing the effect of
          --------------------------------------
Section  4.1,  the Participants agree that their relationship shall constitute a
tax  partnership  within  the  meaning  of  Section  761(a) of the United States
Internal  Revenue  Code of 1954, as amended. Tax elections and allocations shall
be  made  as  set  forth  in  Exhibit  C.

     4.3  State  Income  Tax.  The  Participants  also agree that, to the extent
          ------------------
permissible  under applicable law, their relationship shall be treated for state
income tax purposes in the same manner as it is for Federal income tax purposes.

     4.4  Tax  Returns.  The Tax Matters Partner, as defined in Exhibit C, shall
          ------------
prepare  and  shall  file,  after  approval of the Management Committee, any tax
returns  or  other  tax  forms  required.

     4.5  Other  Business  Opportunities.  Except  as expressly provided in this
          ------------------------------
Agreement,  each Participant shall have the right independently to engage in and
receive  full benefits from business activities, whether or not competitive with
the  Operations,  without  consulting  the  other.  The  doctrines of "corporate
opportunity:"  or  "business  opportunity"  shall  not  be  applied to any other
activity,  venture, or operation of either Participant, and, except as otherwise
provided  in  Section 12.6, neither Participant shall have any obligation to the
other  with  respect to any opportunity to acquire any property outside the Area
of  Interest  at  any  time, or within the Area of Interest after termination of
this  Agreement.  Unless otherwise agreed in writing, no Participant: shall have
any obligation to mill, beneficiate or otherwise treat any Products or any other
Participant's  share  of  Products  in  any facility owned or controlled by such
Participant.

     4.6 Waiver of Right to Partition. The Participants hereby waive and release
         ----------------------------
all  rights  of  partition,  or  of  sale  in lieu thereof, or other division of
Assets,  including  any  such  rights  provided  by  statute.

                                       10
<PAGE>
     4.7  Transfer  or  Termination of Rights to Properties. Except as otherwise
          -------------------------------------------------
provided  in  this Agreement, neither Participant shall Transfer all or any part
of  its  interest  in  the Assets or this Agreement or otherwise permit or cause
such  interests  to  terminate.

     4.8  Implied  Covenants.  There  are no implied covenants contained in this
          ------------------
Agreement other than those of good faith and fair dealing.

                                    ARTICLE V
                                    ---------

                          CONTRIBUTIONS BY PARTICIPANTS
                          -----------------------------

     5.1  Participants' Initial Contributions. WGI, as its Initial Contribution,
          -----------------------------------
hereby  contributes the Properties to the purposes of this Agreement. The agreed
value  of  WGI's  Initial  Contribution  is  $1,000,000. Company, as its Initial
Contribution,  shall  contribute the first $1,000,000 hereunder, which sum shall
be  used to fund Programs and Budgets approved pursuant to Article IX. Company's
Initial  Contribution  shall  be  expended  on  approved  programs by the end of
calendar  year  2006.

     5.2  Company's  Failure  to Make Initial Contribution. Company's failure to
          ------------------------------------------------
make  its  Initial  Contribution  in  accordance  with  the  provisions  of this
Agreement shall be deemed to be a decision by Company not to exercise its option
to earn a Participating Interest and a withdrawal of Company from this Agreement
and  the  termination  of its Participating Interest hereunder. Upon such event,
Company  shall  have  no  further  right,  title  or interest in the Assets, and
Company  shall thereupon execute a written disclaimer of interest in the assets.
If  Company  fail to do so, WGI may execute the disclaimer as Company's attorney
in  fact.  Company's  withdrawal  shall be effective upon such failure, but such
withdrawal shall not relieve Company of its obligation to WGI to fund Operations
up  to  the  amount  of  Company's agreed contribution to an adopted Program and
Budget,  nor shall such withdrawal relieve Company of its responsibility to fund
and  satisfy  its  share  of  liabilities to third persons (whether such accrues
before  or  after  such withdrawal) arising out of Operations conducted prior to
Company's  withdrawal.  Company  shall fund and satisfy 100% of such liabilities
until  it  has  contributed  the  full  amount  of its Initial Contribution, and
thereafter  it  shall  fund  and  satisfy  such liabilities in proportion to its
initial  Participating  Interest set forth in Section 6.1. Except as provided in
the preceding two sentences, Company's withdrawal shall relieve Company from any
other  obligation  to  make  contributions  hereunder.

     5.3  Additional Cash Contributions. At such time as Company has contributed
          -----------------------------
the  full  amount  of its Initial Contribution, the Participants, subject to any
election  permitted  by  Section  6.3, shall be obligated to contribute funds to
adopted Programs in proportion to their respective Participating Interests.

                                   ARTICLE VI
                                   ----------

                            INTERESTS OF PARTICIPANTS
                            -------------------------

     6.1  Initial  Participating  Interests.  The  Participants  shall  have the
          ---------------------------------
following initial Participating Interests:

          WGI          -      49%

          Company      -      51%

                                       11
<PAGE>
     6.2  Changes  in  Participating  Interests.  A  Participant's Participating
          -------------------------------------
Interest  shall  be  changed  as  follows:

          (a)  Company's  Participating  Interest  shall  be  increased  to  70%
     provided  it  has  made  its Initial Contribution and produced at least 500
     ounces  of  gold  from  the Property on or before three years from the date
     hereof,  and  provided  further that WGI has not been called upon to make a
     cash  contribution.

          (b)  As  provided  in  Section  5.2  or  6.5;  or

          (c)  Upon  an  election  by,  a Participant pursuant to Section 6.3 to
     contribute  less  to  an  adopted  Program  and  Budget than the percentage
     reflected  by,  its  Participating  Interest;  or

          (d) In the event of default by a Participant in making its agreed-upon
     contribution  to  an adopted Program and Budget, followed by an election by
     the  other  Participant  to  invoke  Section  6.4(b);  or

          (e)  Transfer  by  a  Participant  of  less than all its Participating
     Interest  in  accordance  with  Article  XV;  or

          (f)  Acquisition of less than all of the Participating Interest of the
     other  Participant,  however  arising.

     6.3  Voluntary Reduction in Participation; WGI's NSR. WGI has the right and
          -----------------------------------------------
option  at  any  time  to convert its Participating Interest to a 4% of 100% Net
Smelter Returns (NSR) interest by written notice to Company. After such election
WGI shall have no obligation to make any further expenditures hereunder.

     Except  with  respect  to  a  Participant's  obligation to make its Initial
Contribution,  as to which no election is permitted, a Participant may elect, as
provided  in  Section  9.5, to limit its contributions to an adopted Program and
Budget  as  follows:

          (a)  To some lesser amount than its respective Participating Interest;
               or

          (b)  Not  at  all.

If  a  Participant  elects  to  contribute to an adopted Program and Budget some
lesser  amount  than  its respective Participating, Interest, or not at all, the
Participating  Interest of that Participant shall be recalculated at the time of
election  by dividing:  (i) the sum of (a) the agreed value of the Participant's
Initial  Contribution  under  Section  5.1,  (b)  the  total  of  all  of  the
Participant's  contributions  under Section 5.3, and (c) the amount, if any, the
Participant  elects to contribute to the adopted Program and Budget; by (ii) the
sum  of  (a),  (b)  and (c) above for all Participants; and then multiplying the
result  by  one  hundred.  The  Participating  Interest of the other Participant
shall  thereupon  become  the  difference  between  100%  and  the  recalculated
Participating  Interest.

     6.4  Default  in Making Contributions.
          --------------------------------

          (a)  If  a  Participant defaults in making a contribution or cash call
     required  by an approved Program and Budget, the non-defaulting Participant
     may  advance  the  defaulted  contribution  on  behalf  of  the  defaulting
     Participant  and  treat the same, together with any, accrued interest, as a
     demand  loan  bearing  interest  from  the  date of the advance at the rate
     provided  in  Section  10.3.  The  failure  to  repay  said  loan

                                       12
<PAGE>
     upon demand shall be a default. Each Participant hereby grants to the other
     a  lien  upon its interest in the Properties and a security interest in its
     rights  under  this  Agreement  and  in its Participating Interest in other
     Assets,  and  the  proceeds  therefrom,  to secure any loan made hereunder,
     including  interest  thereon,  reasonable  attorneys  fees  and  all  other
     reasonable costs and expenses incurred in recovering the loan with interest
     and  in enforcing such lien or security interest, or both. A non-defaulting
     Participant  may  elect  the applicable remedy under this Section 6.4(a) or
     under  6.4(b),  or,  to  the  extent  a  Participant has a lien or security
     interest  under  applicable  law,  it  shall  be entitled to its rights and
     remedies  at  law and in equity. All such remedies shall be cumulative. The
     election  of one or more remedies shall not waive the election of any other
     remedies.  Each  Participant  hereby  irrevocably  appoints  the  other its
     attorney-in-fact  to  execute, file and record all instruments necessary to
     perfect  or  effectuate  the  provisions  hereof.

          (b)  The  Participants  acknowledge  that if a Participant defaults in
     making  a  contribution, or a cash call, or in repaying a loan, as required
     hereunder,  it will be difficult to measure the damages resulting from such
     default.  In  the  event of such default, as reasonable liquidated damages,
     the  non-defaulting  Participant  may, with respect to any such default not
     cured  within  30  days  after notice to the defaulting Participant of such
     default,  elect  in  writing  to  have  the  defaulting  Participant's
     Participating Interest permanently reduced as provided in Section 6.3.

     6.5  Elimination  of  Minority  Interest.  Upon  the  reduction  of  its
          -----------------------------------
Participating  Interest  to less than 10%, a Participant shall be deemed to have
withdrawn  from  this  Agreement  and  shall relinquish its entire Participating
Interest.  Such  relinquished  Participating  Interest  shall  be deemed to have
accrued  automatically to the other Participant. If WGI's Participating Interest
is  reduced to 10%, such Participating Interest shall automatically be converted
to  the  NSR  provided  in  Section  6.3.

     6.6 Continuing Liabilities Upon Adjustments of Participating Interests. Any
         ------------------------------------------------------------------
reduction  of a Participant's Participating Interest under this Article VI shall
not  relieve  such Participant of its share of any liability, whether it accrues
before  or  after  such  reduction, arising out of Operations conducted prior to
such  reduction.  For  purposes  of this Article VI, such Participant's share of
such  liability  shall  be  equal to its Participating Interest at the time such
liability  was  incurred.  The  increased  Participating  Interest accruing to a
Participant  as  a  result  of  the  reduction  of  the  other  Participant's
Participating  Interest  shall be free of royalties, liens or other encumbrances
arising  by,  through or under such other Participant, other than those provided
herein  or those to which both Participants have given their written consent. An
adjustment  to a Participating Interest need not be evidenced during the term of
this  Agreement  by  the execution and recording of appropriate instruments, but
each  Participant's  Participating  Interest  shall be shown in the books of the
Manager.  However, either Participant, at any time upon the request of the other
Participant,  shall  execute  and  acknowledge instruments necessary to evidence
such  adjustment  in form sufficient for recording in the jurisdiction where the
Properties  are  located.

     6.7  WGI's  Right  to Increase Its Participating Interests. WGI retains the
          -----------------------------------------------------
right  to  increase  its  Participating  Interest  to  70%  and reduce Company's
Participating  Interest  to  30%  for  a  period  of  time  as  outlined in this
paragraph.  This  right  shall  be  exercised by written notice to Company on or
before  the  first  anniversary  of Company vesting at 70%. Within 60 days after
such  notice,  WGI  shall  pay  Company 2.5 times the amount of Company's actual
expenditures  on  Exploration  and  Development Expenditures on the Property. If
such  right  is exercised, WGI, and not Company, shall thereafter have the right
to  break  deadlocks  on  Management  Committee  decisions.

                                       13
<PAGE>
                                   ARTICLE VII
                                   -----------

                              MANAGEMENT COMMITTEE
                              --------------------

     7.1  Organization  and  Composition.  The  Participants  hereby establish a
          ------------------------------
Management  Committee  to  determine  overall  policies, objectives, procedures,
methods and actions under this Agreement. The Management Committee shall consist
of  two  members, one appointed by WGI and one member appointed by Company. Each
Participant  may  appoint  one  or  more  alternates  to act in the absence of a
regular  member.  Any alternate so acting shall be deemed a member. Appointments
shall be made or changed by notice to the other Participant.

     7.2  Decisions. Each Participant, acting through its appointed member shall
          ---------
have  one  vote  on  the  Management Committee. The Participant with the largest
Participating  Interest  shall  break any deadlock. Unless otherwise provided in
this  Agreement,  the vote of the Participant with a Participating Interest over
50% shall determine the decisions of the Management Committee.

     7.3 Meetings. The Management Committee shall hold regular meetings at least
         --------
annually  in Reno, Nevada, or at other mutually agreed places. The Manager shall
give 30 days' notice to the Participants of such regular meetings. Additionally,
either  Participant  may  call  a  special  meeting  upon 15 day's notice to the
Manager  and the other Participant. In case of emergency, reasonable notice of a
special  meeting  shall  suffice. There shall be a quorum if at least one member
representing each Participant is present. Each notice of a meeting shall include
an  itemized agenda prepared by the Manager in the case of a regular meeting, or
by the Participant calling the meeting in the case of a special meeting, but any
matters  may  be  considered  with  the consent of all Participants. The Manager
shall  prepare  minutes  of  all  meetings  and  shall distribute copies of such
minutes  to the Participants within 30 days after the meeting. The minutes, when
signed  by  all Participants, shall be the official record of the decisions made
by  the  Management  Committee  and  shall  be  binding  on  the Manager and the
Participants.  If  personnel  employed  in  Operations  are required to attend a
Management  Committee meeting, reasonable costs incurred in connection with such
attendance  shall  be  a  Venture  cost.  All  other  costs shall be paid by the
Participants  individually.

     7.4  Action  Without Meeting. In lieu of meetings, the Management Committee
          ------------------------
may  hold telephone conferences, so long as all decisions are within twenty-four
(24) hours confirmed in writing by the Participants.

     7.5  Matters  Requiring  Approval.  Except  as  otherwise  delegated to the
          ----------------------------
Manager  in Section 8.2, the Management Committee shall have exclusive authority
to determine all management matters related to this Agreement.

                                  ARTICLE VIII
                                  ------------

                                     MANAGER
                                     -------

     8.1  Appointment.  The  Participants hereby appoint WGI as the Manager with
          -----------
overall  management  responsibility  for  Operations. WGI hereby agrees to serve
until it resigns as provided in Section 8.4.

     8.2  Powers  and  Duties of Manager. Subject to the terms and provisions of
          -------------------------------
this  Agreement,  the  Manager  shall have the following powers and duties which
shall be discharged in accordance with adopted Programs and Budgets:

                                       14
<PAGE>
          (a)  The  Manager  shall  manage,  direct  and  control  Operations.

          (b)  The  Manager  shall  implement  the  decisions  of the Management
     Committee,  shall  make  all  expenditures  necessary  to carry out adopted
     Programs,  and  shall  promptly advise the Management Committee if it lacks
     sufficient funds to carry out its responsibilities under this Agreement.

          (c) The Manager shall: (i) purchase or otherwise acquire all material,
     supplies,  equipment,  water,  utility and transportation services required
     for  Operations,  such  purchases  and  acquisitions to be made on the best
     terms  available, taking into account all of the circumstances; (ii) obtain
     such  customary  warranties  and  guarantees as are available in connection
     with  such  purchases  and acquisitions; and (iii) keep the Assets free and
     clear  of all liens and encumbrances, except for those existing at the time
     of,  or  created  concurrent  with,  the  acquisition  of  such  Assets, or
     mechanic's  or materialmen's liens which shall be released or discharged in
     a  diligent  manner, or liens and encumbrances specifically approved by the
     Management  Committee.

          (d)  The  Manager  shall conduct such title examinations and cure such
     title  defects  as  may  be  advisable  in  the  reasonable judgment of the
     Manager.

          (e)  The  Manager shall: (i) make or arrange for all payments required
     by leases, licenses, permits, contracts and other agreements related to the
     Assets;  (ii) pay all taxes, assessments and like charges on Operations and
     Assets except taxes determined or measured by a Participant's sales revenue
     or net income. If authorized by the Management Committee, the Manager shall
     have  the  right  to  contest  in  the courts or otherwise, the validity or
     amount of any taxes, assessments or charges if the Manager deems them to be
     unlawful, unjust, unequal or excessive, or to undertake such other steps or
     proceedings  as  the  Manager  may  deem  reasonably  necessary to secure a
     cancellation,  reduction,  readjustment  or equalization thereof before the
     Manager  shall  be  required to pay them, but in no event shall the Manager
     permit  or  allow  title  to  the  Assets  to  be lost as the result of the
     nonpayment  of  any  taxes, assessments or like charges; and (iii) shall do
     all other acts reasonably necessary to maintain the Assets.

          (f)  The  Manager shall: (i) apply for all necessary permits, licenses
     and  approvals;  (ii)  comply with applicable federal, state and local laws
     and  regulations;  (iii)  notify  promptly  the Management Committee of any
     allegations of substantial violation thereof; and (iv) prepare and file all
     reports  or  notices  required  for Operations. The Manager shall not be in
     breach  of  this  provision  if  a  violation  has occurred in spite of the
     Manager's good faith efforts to comply, and the Manager has timely cured or
     disposed  of  such  violation  through performance, or payment of fines and
     penalties.

          (g)  The  Manager  shall  prosecute and defend, but shall not initiate
     without  consent  of  the  Management  Committee,  all  litigation  or
     administrative  proceedings  arising  out  of  Operations. The non-managing
     Participant  shall  have  the  right to participate, at its own expense, in
     such litigation or administrative proceedings. The non-managing Participant
     shall  approve in advance any settlement involving payments, commitments or
     obligations  in  excess  of  $10,000  in  cash  or  value.

          (h)  The  Manager  shall  provide  insurance  for  the  benefit of the
     Participants  as  provided  in  Exhibit  D.

                                       15
<PAGE>
          (i)  The  Manager  may  dispose  of  Assets,  whether  by abandonment,
     surrender  or  Transfer  in  the  ordinary  course of business, except that
     Properties may be abandoned or surrendered only as provided in Article XIV.
     However,  without  prior  authorization  from the Management Committee, the
     Manager  shall  not:  (i) dispose of Assets in any one transaction having a
     value  in  excess  of  $10,000;  (ii)  enter  into  any  sales contracts or
     commitments for Product, except as permitted in Section 11.2; (iii) begin a
     liquidation of the Venture; or (iv) dispose of all or a substantial part of
     the  Assets  necessary  to  achieve  the  purposes  of  the  Venture.

          (j) The Manager shall have the right to carry out its responsibilities
     hereunder through agents, Affiliates or independent contractors.

          (k) The Manager shall perform or cause to be performed during the term
     of this Agreement all assessment and other work required by law in order to
     maintain  the unpatented claims included within the Properties. The Manager
     shall  have  the  right  to  perform the assessment work required hereunder
     pursuant  to a common plan of exploration and continued actual occupancy of
     such  claims  and  sites  shall  not  be required. The Manager shall not be
     liable  on account of any determination by any court or governmental agency
     that  the work performed by Manager does not constitute the required annual
     assessment  work or occupancy for the purposes of preserving or maintaining
     ownership  of  the claims, provided that the work is in accordance with the
     adopted  Program  and  Budget.  The  Manager  shall  timely record with the
     appropriate  county  and  file  with  the appropriate United States agency,
     affidavits  in  proper form attesting to the performance of assessment work
     or  notices of intent to hold in proper form, and allocating therein, to or
     for  the benefit of each claim, at least the minimum amount required by law
     to  maintain  such  claim  or  site.

          (l)  If  authorized  by the Management Committee, the Manager may: (i)
     locate,  amend  or  relocate  any  unpatented  mining claim or mill site or
     tunnel  site,  (ii)  locate  any fractions resulting from such amendment or
     relocation,  (iii)  apply  for  patents  or mining leases or other forms of
     mineral  tenure  for  any such unpatented claims or sites, (iv) abandon any
     unpatented  mining  claims  for  the  purpose  of  locating  mill  sites or
     otherwise  acquiring  from  the  United States rights to the ground covered
     thereby,  (v) abandon any unpatented mill sites for the purpose of locating
     mining  claims  or otherwise acquiring from the United States rights to the
     ground  covered  thereby, (vi) exchange with or convey to the United States
     any  of  the  Properties  for the purpose of acquiring rights to the ground
     covered  thereby or other adjacent ground, and (vii) convert any unpatented
     claims  or  mill  sites  into  one or more leases or other forms of mineral
     tenure  pursuant  to  any  federal  law  hereafter  enacted.

          (m)  The  Manager  shall keep and maintain all required accounting and
     financial  records  pursuant  to the Accounting Procedure and in accordance
     with customary cost accounting practices in the mining industry.

          (n)  The  Manager  shall  keep the Management Committee advised of all
     Operations  by  submitting  in  writing  to  the  Management Committee: (i)
     quarterly  progress  reports  which  include statements of expenditures and
     comparisons  of  such  expenditures  to  the  adopted Budget; (ii) periodic
     summaries  of data acquired; (iii) copies of reports concerning Operations;
     (iv)  a  detailed  final  report  within  30  days after completion of each
     Program  and  Budget,  which  shall  include comparisons between actual and
     budgeted expenditures and comparisons between the objectives and results of
     Programs;  and  (v)  such  other  reports  as  the Management Committee may
     reasonably,  request. At all reasonable times the Manager shall provide the
     Management  Committee  or  the  representative of any Participant, upon the

                                       16
<PAGE>
     request of any member of the Management Committee, access to, and the right
     to  inspect  and  copy  all maps, drill logs, core tests, reports, surveys,
     assays, analyses, production reports, operations, technical, accounting and
     financial  records,  and  other  information  acquired  in  operations.  In
     addition,  the  Manager  shall  allow  the non-managing Participant, at the
     latter's  sole  risk  and  expense,  and  subject  to  reasonable  safety
     regulations,  to inspect the Assets and Operations at all reasonable times,
     so  long as the inspecting Participant does not unreasonably interfere with
     Operations.

          (o)  The  Manager  shall  undertake  all  other  activities reasonably
     necessary  to  fulfill  the  foregoing.

The  Manager  shall  not be in default of any duty under this Section 8.2 if its
failure  to  perform results from the failure of the non-managing Participant to
perform acts or to contribute amounts required of it by this Agreement.

     8.3  Standard  of Care. The Manager shall conduct all Operations in a good,
          -----------------
workmanlike  and  efficient  manner,  in  accordance with sound mining and other
applicable  industry  standards  and practices, and in accordance with the terms
and  provisions  of  leases,  licenses,  permits, contracts and other agreements
pertaining  to  Assets.  The  Manager  shall  not  be  liable to the nonmanaging
Participant  for  any  act or omission resulting in damage or loss except to the
extent  caused  by  or attributable to the Manager's willful misconduct or gross
negligence.

     8.4  Resignation; Deemed Offer to Resign. The Manager may resign upon three
          -----------------------------------
months'  prior  notice  to  the  other  Participant,  in  which  case  the other
Participant  may  elect  to  become  the  new Manager by notice to the resigning
Participant  within  30  days  after  the  notice  of resignation. If any of the
following  shall  occur,  the Manager shall be deemed to have offered to resign,
which  offer  shall  be  accepted by the other Participant, if at all, within 90
days  following  such  deemed  offer:

          (a)  After  the  Company  has  made  its  Initial  Contribution,  the
     Participating Interest of the Manager becomes less than 50%; or

          (b) The Manager fails to perform a material obligation imposed upon it
     under  this  Agreement  and  such failure continues for a period of 60 days
     after notice from the other Participant demanding performance; or

          (c) The Manager fails to pay or contest in good faith its bills within
     60  days  after  they  are  due;  or

          (d) A receiver, liquidator, assignee, custodian, trustee, sequestrator
     or  similar  official for a substantial part of its assets is appointed and
     such  appointment is neither made ineffective nor discharged within 60 days
     after  the  making  thereof, or such appointment is consented to, requested
     by,  or  acquiesced  in  by  the  Manager;  or

          (e)  The  Manager  commences  a  voluntary  case  under any applicable
     bankruptcy,  insolvency  or  similar  law  now  or  hereafter in effect; or
     consents  to  the entry of an order for relief in an involuntary case under
     any  such  law or to the appointment of or taking possession by a receiver,
     liquidator,  assignee,  custodian,  trustee,  sequestrator or other similar
     official  of  any  substantial  part  of  its  assets;  or  makes a general
     assignment  for  the benefit of creditors; or fails generally to pay its or
     Venture  debts as such debts become due; or takes corporate or other action
     in  furtherance  of  any  of  the  foregoing;  or

                                       17
<PAGE>
          (f)  Entry  is made against the Manager of a judgment, decree or order
     for  relief  affecting  a  substantial  part  of  its  assets by a court of
     competent  jurisdiction  in  an  involuntary  case  commenced  under  any
     applicable  bankruptcy, insolvency or other similar law of any jurisdiction
     now  or  hereafter  in  effect.

     8.5  Payments To Manager. The Manager shall be compensated for its services
          ---------------------
and  reimbursed  for  its  costs  hereunder  in  accordance  with the Accounting
Procedure.

     8.6  Transactions  With  Affiliates.  If  the Manager engages Affiliates to
          ------------------------------
provide services hereunder, it shall do so on terms no less favorable than would
be the case with unrelated persons in arm's-length transactions.

     8.7  Activities During Deadlock. If the Management Committee for any reason
          ---------------------------
fails  to  adopt  a Program and Budget, subject to the contrary direction of the
Management  Committee  and  to the receipt of necessary funds, the Manager shall
continue  Operations  at  levels  comparable  with  the last adopted Program and
Budget.  For  purposes  of  determining  the  required  contributions  of  the
Participants  and  their  respective  Participating  Interests, the last adopted
Program  and  Budget  shall  be  deemed  extended.

                                   ARTICLE IX
                                   ----------

                              PROGRAMS AND BUDGETS
                              --------------------

     9.1  Initial  Program and Budget. The initial Program and Budget, which has
          ---------------------------
been adopted by the Participants, is attached as Exhibit E.

     9.2  Operations  Pursuant  to  Programs  and Budgets. Except as provided in
          ------------------------------------------------
Section  9.8  and Article XIII, Operations shall be conducted, expenses shall be
incurred,  and  Assets  shall be acquired only pursuant to approved Programs and
Budgets.

     9.3  Presentation  of  Programs  and Budgets. Proposed Programs and Budgets
          ----------------------------------------
shall  be prepared by the Manager for a period of one year or any longer period.
Each  adopted  Program  and  Budget,  regardless of length, shall be reviewed at
least  once a year at the annual meeting of the Management Committee. During the
period encompassed by any Program and Budget, and at least 3 months prior to its
expiration,  a  proposed  Program  and Budget for the succeeding period shall be
prepared  by  the  Manager and submitted to the Participants. Each such proposed
Program and Budget shall be in a form and degree of detail substantially similar
to  Exhibit  F.

     9.4  Review  and  Approval of Proposed Programs and Budgets. Within 30 days
          -------------------------------------------------------
after submission of a proposed Program and Budget, each Participant shall submit
to  the  Management  Committee:

          (a)  Notice  that  the  Participant  approves the proposed Program and
               Budget;  or

          (b)  Proposed  modifications  of  the  proposed Program and Budget; or

          (c)  Notice  that  the  Participant  rejects  the proposed Program and
               Budget.

If  a  Participant  fails  to  give  any  of  the foregoing responses within the
allotted  time, the failure shall be deemed to be an approval by the Participant
of  the  Manager's  proposed  Program  and  Budget.  If  a  Participant  makes a

                                       18
<PAGE>
timely submission to the Management Committee pursuant to Section 9.4(b) or (c),
then  the  Management  Committee  shall  seek  to  develop  a Program and Budget
acceptable  to  the  Participants.

     9.5  Election  to Participate. By notice to the Management Committee within
          -------------------------
20  days  after  the final vote adopting a Program and Budget, a Participant may
elect  to  contribute  to such Program and Budget in some lesser amount than its
respective Participant Interest, or not at all, in which cases its Participating
Interest shall be recalculated as provided in Article VI. If a Participant fails
to  so  notify the Management Committee, the Participant shall be deemed to have
elected to contribute to such Program and Budget in proportion to its respective
Participating  Interest as of the beginning of the period covered by the Program
and  Budget.

     9.6  Deadlock on Proposed Programs and Budgets. If the Participants, acting
          ------------------------------------------
through  the  Management  Committee, fail to approve a Program and Budget by the
beginning  of  the  period to which the proposed Program and Budget applies, the
provisions  of  Sections  8.7  and  12.2  shall  apply.

     9.7  Budget Overruns; Program Changes. The Manager shall immediately notify
          ---------------------------------
the  Management  Committee of any material departure from an adopted Program and
Budget.  If  the  Manager  exceeds  an adopted Budget by more than 10%, then the
excess  over  10%,  unless  directly  caused  by  an  emergency  or  unexpected
expenditure  made  pursuant to Section 9.8 or unless otherwise authorized by the
Management  Committee,  shall  be  for  the sole account of the Manager and such
excess shall not be included in the calculations of the Participating Interests.
Budget  overruns of 10% or less shall be borne by the Participants in proportion
to  their  respective Participating Interests as of the time the overrun occurs.

     9.8 Emergency or Unexpected Expenditures. In case of emergency, the Manager
         ------------------------------------
may  take  any  reasonable  action  it  deems necessary to protect life, limb or
property,  to protect the Assets or to comply with law or government regulation.
The  Manager  may  also make reasonable expenditures for unexpected events which
are beyond its reasonable control and which do not result from a breach by it of
its  standard of care. The Manager shall promptly notify the Participants of the
emergency or unexpected expenditure, and the Manager shall be reimbursed for all
resulting  costs  by  the  Participants  in  proportion  to  their  respective
Participating Interests at the time the emergency or unexpected expenditures are
incurred.

                                    ARTICLE X
                                    ---------

                            ACCOUNTS AND SETTLEMENTS
                            ------------------------

     10.1  Monthly  Statements.  The  Manager  shall  promptly  submit  to  the
           -------------------
Management  Committee  monthly  statements  of  account reflecting in reasonable
detail  the charges and credits to the Joint Account during the preceding month.

     10.2  Cash  Calls.  On  the  basis  of  the adopted Program and Budget, the
           -----------
Manager  shall submit to each Participant prior to the last day of each month, a
billing for estimated cash requirements for the next month. Within 10 days after
receipt  of  each  billing,  each  Participant  shall advance to the Manager its
proportionate  share  of the estimated amount. Time is of the essence of payment
of  such  billings.  The  Manager  shall  at  all  times maintain a cash balance
approximately  equal to the rate of disbursement for up to 90 days. All funds in
excess  of  immediate  cash  requirements  shall be invested in interest-bearing
accounts  with  Bank  of  America,  N.A.,  for the benefit of the Joint Account.

                                       19
<PAGE>
     10.3  Failure  to  Meet  Cash  Calls. A Participant that fails to meet cash
           ------------------------------
calls  in  the  amount  and  at  the times specified in Section 10.2 shall be in
default, and the amounts of the defaulted cash call shall bear interest from the
date due at an annual rate equal to 5 percentage points over the Prime Rate, but
in no event shall said rate of interest exceed the maximum permitted by law. The
non-defaulting  Participant  shall  have  those  rights,  remedies and elections
specified  in  Section  6.4.

     10.4  Audits.  Upon  request  made  by  any  Participant  within  24 months
           ------
following  the  end  of  any  calendar year (or, if the Management Committee has
adopted  an  accounting  period  other  than the calendar year, within 24 months
after  the  end  of  such  period),  the  Manager  shall  order  an audit of the
accounting  and  financial  year  (or  other  accounting  period).  All  written
exceptions  to  and  claims upon the Manager for discrepancies disclosed by such
audit  shall  be  made not more than 3 months after receipt of the audit report.
Failure to make any such exception or claim within the 3 month period shall mean
the  audit  is  correct  and  binding upon the Participants. The audits shall be
conducted  by  a  firm  of certified public accountants selected by the Manager,
unless  otherwise  agreed  by  the  Management  Committee.

                                   ARTICLE XI
                                   ----------

                            DISPOSITION OF PRODUCTION
                            -------------------------

     11.1  Taking  In  Kind.  Each  Participant shall take in kind or separately
           ----------------
dispose  of  its  share  of  all  Products  in accordance with its Participating
Interest.  Any  extra  expenditure  incurred  in  the taking in kind or separate
disposition  by  any Participant of its proportionate share of Products shall be
borne  by  such  Participant.  Nothing  in  this Agreement shall be construed as
providing,  directly  or  indirectly,  for any joint or cooperative marketing or
selling  of  Products  or  permitting  the processing of Products of any parties
other  than  the  Participants  at  any processing facilities constructed by the
Participants pursuant to this Agreement. The Manager shall give the Participants
notice  at  least  10  days  in  advance  of  the delivery date upon which their
respective  shares  of  Products  will  be  available.

     11.2 Failure of Participant to Take In Kind. If a Participant fails to take
          --------------------------------------
in  kind,  the Manager shall have right, but not the obligation, for a period of
time  consistent  with  the minimum needs of the industry, but not to exceed one
year,  to  purchase  the Participant's share for its own account or to sell such
share  as agent for the Participant at not less than the prevailing market price
in  the  area.  Subject  to  the  terms  of  any  such  contracts  of  sale then
outstanding,  during  any  period  that  the  Manager is purchasing or selling a
Participant's  share  of  production, the Participant may elect by notice to the
Manager  to  take in kind. The Manager shall be entitled to deduct from proceeds
of  any sale by it for the account of a Participant reasonable expenses incurred
in  such  a  sale.

                                   ARTICLE XII
                                   -----------

                           WITHDRAWAL AND TERMINATION
                           --------------------------

     12.1 Termination by Expiration or Agreement. This Agreement shall terminate
          --------------------------------------
as  expressly  provided  in this Agreement, unless earlier terminated by written
agreement.

     12.2  Termination by Deadlock. If the Management Committee fails or refuses
           -----------------------
to  adopt  a  Program  and  Budget  for three months after the expiration of the
latest  adopted  Program  and  Budget, either Participant may elect to terminate
this  Agreement  by  giving  notice  of  termination  to  the other Participant.

                                       20
<PAGE>
     12.3 Withdrawal. A Participant may, elect to withdraw as a Participant from
          ----------
this  Agreement  by giving notice to the other Participant of the effective date
of  withdrawal,  which shall be the later of the end of the then current Program
and  Budget  or  at  least  30  days  after  the  date  of the notice. Upon such
withdrawal,  this  Agreement  shall  terminate,  and the withdrawing Participant
shall  be  deemed to have transferred to the remaining Participant, without cost
and free and clear of royalties, liens or other encumbrances arising by, through
or  under  such  withdrawing  Participant,  except  those  exceptions  to  title
described in Part 1 of Exhibit A and those to which both Participants have given
their written consent after the date of this Agreement, all of its Participating
Interest  in the Assets and in this Agreement. Any withdrawal under this Section
12.3  shall  not relieve the withdrawing Participant of its share of liabilities
to  third persons (whether such accrues before or after such withdrawal) arising
out  of  Operations  conducted  prior  to  such withdrawal. For purposes of this
Section  12.3,  the withdrawing Participant's share of such liabilities shall be
equal  to  its  Participating  Interest at the time such liability was incurred.

     12.4 Continuing Obligations. On termination of this Agreement under Section
          ----------------------
12.1  or  12.2,  the Participants shall remain liable for continuing obligations
hereunder  until final settlement of all accounts and for any liability, whether
it  accrues  before  or after termination, if it arises out of Operations during
the  term  of  the  Agreement.

     12.5 Disposition of Assets on Termination. Promptly after termination under
          ------------------------------------
Section 12.1 or 12.2, the Manager shall take all action necessary to wind up the
activities  of  the  Venture,  and all costs and expenses incurred in connection
with the termination of the Venture shall be expenses chargeable to the Venture.
In  accordance  with  Exhibit  C,  any  Participant  that has a negative Capital
Account  balance  when the Venture is terminated for any reason shall contribute
to the Assets of the Venture an amount sufficient to raise such balance to zero.
The  Assets  shall first be paid, applied, or distributed in satisfaction of all
liabilities  of  the  Venture  to  third  parties and then to satisfy any debts,
obligations,  or  liabilities  owed to the Participants. Before distributing any
funds  or  Assets to Participants, the Manager shall have the right to segregate
amounts  which, in the Manager's reasonable judgment, are necessary to discharge
continuing  obligations or to purchase for the account of Participants, bonds or
other  securities  for  the performance of such obligations. The foregoing shall
not  be  construed  to  include  the  repayment  of  any  Participant's  capital
contributions  or  Capital  Account balance. Thereafter, the properties shall be
distributed  to  WGI,  all  other  assets  shall  be sold, and all cash shall be
distributed  to  the Participants, first in the ratio and to the extent of their
respective  Capital  Accounts  and  then  in  proportion  to  their  respective
Participating  Interests,  subject to any dilution, reduction, or termination of
such  Participating Interests as may have occurred pursuant to the terms of this
Agreement.  No  Participant  shall  receive  a  distribution  of any interest in
Products  or  proceeds from the sale thereof if such Participant's Participating
Interest  therein  has  been  terminated  pursuant  to  this  Agreement.

     12.6  Non-Compete  Covenants.  A  Participant  that  withdraws  pursuant to
           ----------------------
Section  12.3,  or  is  deemed to have withdrawn pursuant to Section 5.2 or 6.5,
shall  not  directly  or  indirectly acquire any interest in property within the
Area  of  Interest  for  12  months after the effective date of withdrawal. If a
withdrawing Participant, or the Affiliate of a withdrawing Participant, breaches
this  Section 12.6, such Participant or Affiliate shall be obligated to offer to
convey  to  the  non-withdrawing Participant, without cost, any such property or
interest so acquired. Such offer shall be made in writing and can be accepted by
the  non-withdrawing Participant at any time within 45 days after it is received
by  such  non-withdrawing  Participant.

     12.7  Right  to Data After Termination. After termination of this Agreement
           ---------------------------------
pursuant  to  Section 12.1 or 12.2, each Participant shall be entitled to copies
of  all  information  acquired  hereunder  before  the  effective  date

                                       21
<PAGE>
of  termination not previously furnished to it, but a terminating or withdrawing
Participant shall not be entitled to any such copies after any other termination
or  any  withdrawal.

     12.8  Continuing-Authority.  On termination of this Agreement under Section
           --------------------
12.1  or 12.2 or the deemed withdrawal of a Participant pursuant to Section 5.2,
6.4(b)  or  6.5 or the withdrawal of a Participant pursuant to Section 12.3, the
Manager shall have the power and authority, subject to control of the Management
Committee,  if  any,  to  do  all things on behalf of the Participants which are
reasonably  necessary  or convenient to: (a) wind up Operations and (b) complete
any  transaction  and  satisfy any obligation, unfinished or unsatisfied, at the
time  of such termination or withdrawal, if the transaction or obligation arises
out  of  Operations  prior  to such termination or withdrawal. The Manager shall
have  the  power  and authority to grant or receive extensions of time or change
the  method of payment of an already existing liability or obligation, prosecute
and  defend  actions  on  behalf  of  the Participants and the Venture, mortgage
Assets, and take any other reasonable action in any matter with respect to which
the  former  Participants  continue to have, or appear or are alleged to have, a
common  interest  or  a  common  liability.

                                  ARTICLE XIII
                                  ------------

                      ACQUISITIONS WITHIN AREA OF INTEREST
                      ------------------------------------

     13.1  General.  Any  interest  or  right  to  acquire  any interest in real
           -------
property  within the Area of Interest acquired during the term of this Agreement
by  or on behalf of a Participant or any Affiliate shall be subject to the terms
and  provisions  of  this  Agreement.

     13.2  Notice  to  Nonacquiring  Participant.  Within  30  days  after  the
           -------------------------------------
acquisition  of  any  interest  or  the  right  to  acquire any interest in real
property  wholly  or partially within the Area of Interest (except real property
acquired  by the Manager pursuant to a Program), the acquiring Participant shall
notify  the  other  Participant of such acquisition. The acquiring Participant's
notice  shall describe in detail the acquisition, the lands and minerals covered
thereby,  the  cost  thereof,  and  the  reasons  why  the acquiring Participant
believes  that  the  acquisition of the interest is in the best interests of the
Participants  under  this  Agreement.  In addition to such notice, the acquiring
Participant  shall make any and all information concerning the acquired interest
available  for  inspection  by  the  other  Participant.

     13.3  Option  Exercised.  If,  within 30 days after receiving the acquiring
           -----------------
Participant's  notice,  the other Participant notifies the acquiring Participant
of  its  election  to  accept  a proportionate interest in the acquired interest
equal  to  its Participating Interest, the acquiring Participant shall convey to
the  other Participant, by special warranty deed, such a proportionate undivided
interest  therein.  The  acquired interest shall become a part of the Properties
for  all  purposes  of  this  Agreement  immediately  upon  notice of such other
Participant's  election to accept the proportionate interest therein. Such other
Participant  shall  promptly  pay to the acquiring Participant its proportionate
share  of  the  latter's  actual  out-of-pocket  acquisition  costs.

     13.4  Option  Not  Exercised.  If  the other Participant does not give such
           ----------------------
notice  within  the  30  day  period set forth in Section 13.3, it shall have no
interest in the acquired interest, and the acquired interest shall not be a part
of  the  Properties  or  be  subject  to  this  Agreement.

                                   ARTICLE XIV
                                   -----------

                                       22
<PAGE>
                     ABANDONMENT AND SURRENDER OF PROPERTIES
                     ---------------------------------------

     14.1  Surrender  or  Abandonment  of Property. The Management Committee may
           ---------------------------------------
authorize  the Manager to surrender or abandon part or all of the Properties. If
the  Management  Committee authorizes any such surrender or abandonment over the
objection of a Participant, the Participant that desires to abandon or surrender
shall  assign to the objecting Participant, by special warranty deed and without
cost  to  the  surrendering  Participant,  all of the surrendering Participant's
interest  in  the  property  to  be  abandoned  or surrendered, and abandoned or
surrendered  property  shall  cease  to  be  part  of  the  Properties.

     14.2  Reacquisition.  If  any Properties are abandoned or surrendered under
           -------------
the  provisions  of  this  Article  XIV,  then, unless this Agreement is earlier
terminated,  neither  Participant  nor  any  Affiliate thereof shall acquire any
interest  in  such Properties or a right to acquire such Properties for a period
of  one  year  following  the  date  of  such  abandonment  or  surrender.  If a
Participant  reacquires  any  Properties  in violation of this Section 14.2, the
other  Participant  may elect by notice to the reacquiring Participant within 45
days  after  it has actual notice of such reacquisition, to have such properties
made  subject  to  the terms of this Agreement. In the event such an election is
made,  the  reacquired properties shall thereafter be treated as Properties, and
the  costs of reacquisition shall be borne solely by the reacquiring Participant
and  shall  not  be  included  for  purposes  of  calculating  the Participants'
respective  Participating  Interests.

                                   ARTICLE XV
                                   ----------

                              TRANSFER OF INTEREST
                              --------------------

     15.1  General.  A Participant shall have the right to Transfer to any third
           -------
party all or any part of its interest in or to this Agreement, its Participating
Interest,  or  the  Assets  solely  as  provided  in  this  Article  XV.

     15.2  Limitations  on  Free  Transferability.  The  Transfer  right  of  a
           --------------------------------------
Participant  in  Section  15.1  shall  be  subject  to  the  following terms and
conditions:

          (a)  No transferee of all or any part of the interest of a Participant
     in this Agreement, any Participating Interest, or the Assets shall have the
     rights  of  Participant  unless  and until the transferring Participant has
     provided  to  the  other  Participant notice of the Transfer, and except as
     provided  in  Sections  15.2(g)  and  15.2(h),  the  transferee, as of this
     effective  date  of  the  Transfer, has committed in writing to be bound by
     this Agreement to the same extent as the transferring Participant;

          (b)  No  Participant,  without  the  consent of the other Participant,
     shall  make a Transfer which shall cause termination of the tax partnership
     established  by  the  provisions  of  Section  4.2;

          (c)  No  Transfer  permitted  by  this  Article  XV  shall relieve the
     transferring  Participant  of  its share of any liability, whether accruing
     before  or  after  such  Transfer, which arises out of Operations conducted
     prior  to  such  Transfer;

          (d)  As provided in Exhibit C, Article IV the transferring Participant
     and  the  transferee  shall  bear  all  tax  consequences  of the Transfer;

          (e)  In  the  event  of a Transfer of less than all of a Participating
     Interest,  the transferring Participant and its transferee shall act and be
     treated  as  one  Participant;

                                       23
<PAGE>
          (f)  No  Participant  shall Transfer any interest in this Agreement or
     the Assets except by Transfer of part or all of its Participating Interest;

          (g)  If the Transfer is the grant, of a security interest by mortgage,
     deed  of  trust,  pledge, lien or other encumbrance of any interest in this
     Agreement,  any  Participating  Interest  or the Assets to secure a loan or
     other  indebtedness  of  a  Participant  in  a  bona fide transaction, such
     security  interest  shall be subordinate to the terms of this Agreement and
     the  rights  and  interests  of  the  other Participant hereunder. Upon any
     foreclosure  or  other  enforcement  of rights in the security interest the
     acquiring  third  party shall be deemed to have assumed the position of the
     encumbering  Participant  with  respect  to  this  Agreement  and the other
     Participant,  and  it  shall  comply  with  and  be  bound by the terms and
     conditions  of  this  Agreement;

          (h)  If  a  sale  or  other  commitment  or disposition of Products or
     proceeds from the sale of Products by a Participant upon distribution to it
     pursuant  to  Article  XI  creates  in a third party a security interest in
     Products  or  proceeds  therefrom  prior  to such distribution, such sales,
     commitment  or  disposition shall be subject to the terms and conditions of
     this  Agreement;  and

          (i)  If,  contrary to Section 15.2(b), a Transfer is made which causes
     termination  of  the  tax  partnership  established  by  Section  4.2,  the
     transferring  Participant  shall  indemnify,  defend  and hold harmless the
     other  Participant  from  and  against  any  and all loss, cost, expense or
     damage  arising  from  such  termination;

          (j)  Only  United  States  currency  shall  be  used for Transfers for
     consideration.

     15.3  Preemptive  Right. Except as otherwise provided in Section 15.4, if a
           -----------------
Participant  desires  to  Transfer  all  or  any  part  of  its interest in this
Agreement,  any  Participating  Interest,  or  the Assets, the other Participant
shall  have  a  preemptive  right  to acquire such interests as provided in this
Section  15.3.

          (a)  A  Participant  intending  to  Transfer  all  or  any part of its
     interest in this Agreement, any Participating Interest, or the Assets shall
     promptly  notify  the other Participant of its intentions. The notice shall
     state  the  price  and  all  other  pertinent  terms  and conditions of the
     intended  Transfer,  and  shall  be  accompanied  by a copy of the offer or
     contract  for  sale. The other Participant shall have 30 days from the date
     such  notice is delivered to notify the transferring Participant whether it
     elects  to  acquire  the offered interest at the same price and on the same
     terms  and  conditions as set forth in the notice. If it does so elect, the
     Transfer  shall  be consummated promptly after such notice of such election
     is  delivered  to  the  transferring  Participant.

          (b)  If  the  other  Participant  fails  to so elect within the period
     provided for in Section 15.3(a), the transferring Participant shall have 30
     days  following the expiration of such period to consummate the Transfer to
     a  third party at a price and on terms no less favorable than those offered
     by  the  transferring  Participant  to  the other Participant in the notice
     required  in  Section  15.3(a).

          (c)  If  the transferring Participant fails to consummate the Transfer
     to  a  third  party  within  the  period  set forth in Section 15.3(b), the
     preemptive right of the other Participant in such offered interest shall be
     deemed  to  be  revived.  Any subsequent proposal to Transfer such interest
     shall  be  conducted  in accordance with all of the procedures set forth in
     this  Section  15.3.

                                       24
<PAGE>
     15.4  Exceptions  to  Preemptive Right. Section 15.3 shall not apply to the
           --------------------------------
following:

          (a)  Transfer  by  a Participant of all or any part of its interest in
     this  Agreement, any Participating Interest, or the Assets to an Affiliate;

          (b)  Incorporation  of  a  Participant,  or  corporate  merger,
     consolidation, amalgamation or reorganization of a Participant by which the
     surviving  entity  shall  possess substantially all of the stock, or all of
     the  property  rights and interests, and be subject to substantially all of
     the  liabilities  and  obligations  of  that  Participant;

          (c)  The  grant by a Participant of a security in any interest in this
     Agreement,  any  Participating Interest, or the Assets by mortgage, deed of
     trust,  pledge,  lien  or  other  encumbrance;  or

          (d)  A sale or other commitment or disposition of Products or proceeds
     from  sale of Products by a Participant upon distribution to it pursuant to
     Article  XI.

                                   ARTICLE XVI
                                   -----------

                                    DISPUTES
                                    --------

     16.1  General.  The  courts  of  the  State  of Nevada shall have exclusive
           -------
jurisdiction  to  settle  disputes  between  the  Participants.

                                  ARTICLE XVII
                                  ------------

                                 CONFIDENTIALITY
                                 ---------------

     17.1  General.  The  financial  terms of this Agreement and all information
           -------
obtained  in  connection  with  the  performance  of this Agreement shall be the
exclusive  property of the Participants and, except as provided in Section 17.2,
shall  not  be  disclosed  to  any  third  party or the public without the prior
written  consent  of  the  other  Participant,  which  consent  shall  not  be
unreasonably  withheld.

     17.2  Exceptions. The consent required by Section 17.1 shall not apply to a
           ----------
disclosure:

          (a)  To an Affiliate, consultant, contractor or subcontractor that has
     a  bona  fide  need  to  be  informed;

          (b) To any third party to whom the disclosing Participant contemplates
     a  Transfer of all or any part of its interest in or to this Agreement, its
     Participating  Interest,  or  the  Assets;  or

          (c)  To  at  governmental agency or to the public which the disclosing
     Participant  believes  in  good  faith  is  required  by  pertinent  law or
     regulation  or  the  rules  of  any  stock  exchange;

In any case to which this Section 17.2 is applicable, the disclosing Participant
shall  give notice to the other Participant concurrently with the making of such
disclosure.  As  to any disclosure pursuant to Section 17.2(a) or (b), only such
confidential  information  as  such third party shall have a legitimate business
need  to  know  shall  be

                                       25
<PAGE>
disclosed  and  such  third  party  shall  first agree in writing to protect the
confidential  information  from  further  disclosure  to  the same extent as the
Participants  are  obligated  under  this  Article  XVII.

     17.3 Duration of Confidentiality. The provisions of this Article XVII shall
          ---------------------------
apply  during  the term of this Agreement and for one year following termination
of  this Agreement pursuant to Section 12.1 or 12.2, and shall continue to apply
to  any  Participant  who  withdraws,  who  is  deemed to have withdrawn, or who
Transfers  its  Participating Interest, for two years following the date of such
occurrence.

                                  ARTICLE XVIII
                                  -------------

                               GENERAL PROVISIONS
                               ------------------

     18.1  Notices.  All  notices,  payments  and  other required communications
           -------
("Notices")  to  the  Participants  shall  be  writing,  and  shall be addressed
respectively  as  follows:

<TABLE>
<CAPTION>
<S>       <C>
WGI:      Western Goldfields, Inc.
          961 Matley Lane, Suite 120
          Reno, NV  89502
          Attn:  Vice President Exploration

Company:  321Gold, Inc.
          6884 North Kendall Drive, Suite C-301
          Miami, FL  33156
          Attn:  President
</TABLE>

All  Notices shall be given (i) by personal delivery to the Participant, or (ii)
by electronic communication, with a confirmation sent by registered or certified
mail  return  receipt requested, or (iii) by registered or certified mail return
receipt requested.  All Notices shall be effective and shall be deemed delivered
(i)  if  by personal delivery on the date of delivery if delivered during normal
business  hours, and, if not delivered during normal business hours, on the next
business day following delivery, (ii) if by electronic communication on the next
business  day  following  receipt  of the electronic communication, and (iii) if
solely by mail on the next business day after actual receipt.  A Participant may
change  its  address  by,  Notice  to  the  other  Participant.

     18.2  Waiver.  The  failure  of  a  Participant  to  insist  on  the strict
           ------
performance  of  any provision of this Agreement or to exercise any right, power
or remedy upon a breach hereof shall not constitute a waiver of any provision of
this  Agreement  or  limit  the  Participant's  right  thereafter to enforce any
provision  or  exercise  any  right.

     18.3  Modification. No modification of this Agreement shall be valid unless
           -------------
made in writing and duly executed by the Participants.

     18.4  Force  Majeure.  Except  for the obligation to make payments when due
           ---------------
hereunder, the obligations of a Participant shall be suspended to the extent and
for  the  period that performance is prevented by any cause, whether foreseeable
or  unforeseeable, beyond its reasonable control, including, without limitation,
labor  disputes  (however arising and whether employee demands are reasonable or
within  the  power  of  the

                                       26
<PAGE>
participant  to  grant);  acts of God; laws, regulations, orders, proclamations,
instructions  or requests governmental entity; judgments or orders of any court;
inability  to  obtain  on  reasonably  acceptable  terms  any  public or private
license,  permit or other authorization; curtailment or suspension of activities
to  remedy  or  avoid  an actual or alleged, present or prospective violation of
federal,  state  or  local  environmental  standards;  acts of war or conditions
arising  out  of  or  attributable to war, whether declared or undeclared; riot,
civil  strife,  insurrection  or  rebellion; fire, explosion, earthquake, storm,
flood,  sink holes, drought or other adverse weather condition; delay or failure
by  suppliers  or  transporters  of  materials,  parts,  supplies,  services  or
equipment  or  by  contractors'  or subcontractors' shortage of, or inability to
obtain,  labor,  transportation,  materials,  machinery,  equipment,  supplies,
utilities  or  services;  accidents;  breakdown  of  equipment,  machinery  or
facilities;  or  any other cause whether similar or dissimilar to the foregoing.
The  affected Participant shall promptly give notice to the other Participant of
the suspension of performance, stating therein the nature of the suspension, the
reasons  therefor,  and the expected duration thereof.  The affected Participant
shall  resume  performance as soon as reasonably possible.  During the period of
suspension  the  obligations  of  the  Participants to advance funds pursuant to
Section  10.2  shall  be  reduced  to  levels  consistent  with  Operations.

     18.5  Governing Law. This Agreement shall be governed by and interpreted in
          --------------
accordance with the laws of the State of Nevada, except for its rules pertaining
to  conflicts  of  laws.

     18.6 Rule Against Perpetuities. Any right or option to acquire any interest
          -------------------------
in  real or personal property under this Agreement must be exercised, if at all,
so  as to vest such interest in the acquirer within 21 years after the effective
date  of  this  Agreement.

     18.7  Further Assurances. Each of the Participants agrees to take from time
           -------------------
to  time  such  actions  and  execute  such  additional  instruments  as  may be
reasonably  necessary  or  convenient  to implement and carry out the intent and
purpose  of  this  Agreement.

     18.8 Survival of Terms and Conditions. The following Sections shall survive
          --------------------------------
the  termination  of  this  Agreement  to  the  full  extent necessary for their
enforcement  and  the  protection  of  the  Participant in whose favor they run:
Sections 2.2, 4.5, 6.4, 6.6, 10.3, 12.3, 12.4, 12.5, 12.6, 12.7 and 12.8.

     18.9  Entire Agreement; Successors and Assigns. This Agreement contains the
           -----------------------------------------
entire understanding of the Participants and supersedes all prior agreements and
understandings  between  the Participants relating to the subject matter hereof.
This  Agreement shall be binding upon and inure to the benefit of the respective
successors  and  permitted  assigns  of  the  Participants.  In the event of any
conflict  between  this  Agreement and any Exhibit attached hereto, the terms of
this Agreement shall be controlling. 321Gold, Inc. LLC acquired all right, title
and  interest  of 321 Gold and Robert J. Moriarity in the Letter of Intent dated
April  26,  2004,  which letter is hereby terminated and of no further force and
effect.

     18.10  Memorandum.  At  the  request of either Participant, a Memorandum or
            ----------
short form of this Agreement, as appropriate, which shall not disclose financial
information  contained  herein,  shall be prepared and recorded by Manager. This
Agreement  shall  not  be  recorded.

     IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement as of
the  date  first  above  written.

                                       27
<PAGE>
                                          WESTERN GOLDFIELDS, INC.

                                          By /s/ Thomas E. Callicrate
                                             ---------------------------------
                                               Vice President Exploration

                                          321GOLD, INC.

                                          By /s/ Robert J. Moriarty
                                             ---------------------------------
                                                   President

                                       28
<PAGE>
                                    EXHIBIT A

                    Sunny Slope Gold Property List of Claims

                             Mineral County, Nevada

PROPERTIES AND TITLE EXCEPTIONS

The  sixteen (16) Sunny Slope lode claims are located in T11N, R28E sections 28,
and  29,  and  33,  Mineral  County,  Nevada.

<TABLE>
<CAPTION>
BLM                 COUNTY                   COUNTY
1.   CLAIM ID     CLAIM NAME  BOOK  PAGE  DOCUMENT NO.
     -------------------------------------------------
<S>  <C>          <C>         <C>   <C>   <C>

NMC      822445.  SS-1         187   505        124407
NMC      822446   SS-2         187   506        124408
NMC      822447.  SS-3         187   507        124409
NMC      822448.  SS-4         187   508        124410
NMC      845095.  SS 16                         127991
NMC      845096.  SS 15                         127992
NMC      845097   SS 14                         127993
NMC      845098.  SS 13                         127994
NMC      845099.  SS 12                         127995
NMC      845100.  SS 11                         127996
NMC      845101   SS 10                         127997
NMC      845102   SS 9                          127998
NMC      845103   SS 8                          127999
NMC      845104.  SS 7                          128000
NMC      845105.  SS 6                          128001
NMC      845106.  SS 5                          128002
</TABLE>

There are no title exceptions.

2.        THE  PROPERTY  AND  AREA  OF  INTEREST
          There  shall  be  an  "Area  of Interest" for the Mining Joint Venture
          Agreement,  that  includes all lands within approximately one (1) mile
          beyond  the  boundary  of  the  Claims,  which  is  more  particularly
          described  by legal description as follows: T10N, R28E sections 4N1/2,
          3N1/2; T11N, R28E sections 20S1/2, 21S1/2, 22SW1/4, 27NW1/4, S1/2, and
          sections  28,  29,  32,  33,  and  34.

                                       29
<PAGE>
                                    EXHIBIT B
                                    ---------

                              ACCOUNTING PROCEDURE
                              --------------------

     The  financial  and accounting procedures to be followed by the Manager and
the  Participants  under  the Agreement are set forth below.  References in this
Accounting  Procedure  to  Sections  and  Articles  are to those located in this
Accounting  Procedure  unless it is expressly stated that they are references to
the  Venture  Agreement.

                                    ARTICLE I
                                    ---------

                               GENERAL PROVISIONS
                               ------------------

     1.1  General  Accounting  Records.  The Manager shall maintain detailed and
           ----------------------------
comprehensive  cost  accounting  records  in  accordance  with  this  Accounting
Procedure,  including  general  ledgers,  supporting  and  subsidiary, journals,
invoices,  checks  and  other  customary  documentation, sufficient to provide a
record  of  revenues  and  expenditures  and  periodic  statements  of financial
position  and the results of operations for managerial, tax, regulatory or other
financial reporting purposes. Such records shall be retained for the duration of
the  period allowed the Participants for audit or the period necessary to comply
with  tax  or  other  regulatory  requirements.  The  records  shall reflect all
obligations,  advances  and  credits  of  the  Participants.

     1.2  Bank  Accounts.  The  Manager shall maintain one or more separate bank
          --------------
accounts  for  the  payment of all expenses and the deposit of all cash receipts
for  the  Venture.

     1.3  Statements and Billings. The Manager shall prepare statements and bill
          ------------------------
the  Participants as provided in Article X of the Agreement. Payment of any such
billings  by  any  Participant,  including the Manager, shall not prejudice such
Participant's  right to protest or question the correctness thereof for a period
not  to  exceed twenty-four (24) months following the calendar year during which
such  billings  were  received by the Participant. All written exceptions to and
claims  upon  the Manager for incorrect charges, billings or statements shall be
made upon the Manager within such twenty-four (24) month period. The time period
permitted  for  adjustments  hereunder  shall not apply to adjustments resulting
from  periodic  inventories  as  provided  in  Article  V.

                                   ARTICLE II
                                   ----------

                            CHARGES TO JOINT ACCOUNT
                            ------------------------

Subject to the limitations hereinafter set forth, the following:

     2.1  Rentals,  Royalties  and  Other Payments. All property acquisition and
          ----------------------------------------
holding  costs,  including  filing  fees,  license  fees,  costs  of permits and
assessment  work,  delay  rentals,  production royalties, including any required
advances,  and  all  other  payments  made by the Manager which are necessary to
acquire  or  maintain  title  to  the  Assets.

     2.2  Labor  and  Employee  Benefits.
          ------------------------------

          (a)  Salaries and wages of the Manager's employees directly engaged in
Operations,  including  salaries  or  wages  of  employees  who  are temporarily
assigned  to  and  directly  employed  by  same.

                                       30
<PAGE>
          (b)  The  Manager's cost of holiday, vacation, sickness and disability
benefits,  and  other  customary allowances applicable to the salaries and wages
chargeable  under Sections 2.2(a) and 2.12. Such costs may be charged on a "when
and  as  paid basis" or by "percentage assessment" on the amount of salaries and
wages.  If  percentage assessment is used, the rate shall be applied to wages or
salaries  excluding  overtime  and  bonuses.  Such  rate  shall  be based on the
Manager's  cost  experience  and  it  shall  be  periodically  adjusted at least
annually  to  ensure  that  the total of such charges does not exceed the actual
cost  thereof  to  the  Manager.

          (c)  The  Manager's  actual  cost  of established plans for employees'
group  life  insurance,  hospitalization,  pension,  retirement, stock purchase,
thrift, bonus (except production or incentive bonus plans under a union contract
based  on actual rates of production, cost savings and other production factors,
and  similar  non-union  bonus  plans  customary in the industry or necessary to
attract  competent  employees, which bonus payments shall be considered salaries
and  wages  under Sections 2.2(a) or 2.12; rather than employees' benefit plans)
and  other  benefit  plans  of  a  like  nature applicable to salaries and wages
chargeable under Sections 2.2(a) or 2.12, provided that the plans are limited to
the  extent  feasible  to  those  customary  in  the  industry.

          (d)  Cost  of  assessments imposed by, governmental authority which is
applicable  to  salaries  and  wages  chargeable under Sections 2.2(a) and 2.12,
including  all  penalties  except those resulting from the willful misconduct or
gross  negligence  of  the  Manager.

     2.3 Materials, Equipment and Supplies. The cost of materials, equipment and
         ---------------------------------
supplies (herein called "Material") purchased from unaffiliated third parties or
furnished  by  the  Manager  or  any Participant as provided in Article III. The
Manager  shall  purchase or furnish only so much Material as may be required for
immediate  use  in  efficient  and economical Operations. The Manager shall also
maintain  inventory levels of Material at reasonable levels to avoid unnecessary
accumulation  of  surplus  stock.

     2.4  Equipment  and Facilities Furnished by Manager. The cost of machinery,
          ----------------------------------------------
equipment  and facilities owned by the Manager and used in Operations or used to
provide  support or utility services to Operations charged at rates commensurate
with  the  actual  costs of ownership and operation of such machinery, equipment
and  facilities.  Such  rates shall include costs of maintenance, repairs, other
operating expenses, insurance, taxes, depreciation and interest at a rate not to
exceed  ten  percent  (10%)  per  annum. Such rates shall not exceed the average
commercial  rates  currently  prevailing  in  the  vicinity  of  the Operations.

     2.5  Transportation. Reasonable transportation costs incurred in connection
           -------------
with  the transportation of employees and material necessary for the Operations.

     2.6  Contract  Services  and  Utilities.  The cost of contract services and
          ----------------------------------
utilities  procured  from  outside  sources,  other  than  services described in
Sections  2.9  and 2.13. If contract services are performed by the Manager or an
Affiliate  thereof,  the  cost charged to the Joint Account shall not be greater
than  that for which comparable services and utilities are available in the open
market  within  the  vicinity  of  the  Operations.  The  cost  of  professional
consultant services procured from outside sources in excess of $10,000 shall not
be  charged  to  the  Joint Account unless approved by the Management Committee.

     2.7  Insurance  Premiums.  Net  premiums  paid for insurance required to be
          -------------------
carried  for  Operations  for  the  protection  of  the  Participants.  When the
Operations  are  conducted  in  an  area  where  the Manager may self-insure for
Workmen's  Compensation and/or Employer's Liability under state law, the Manager
may  elect  to  include  such

                                       31
<PAGE>
risks  in its self-insurance program and shall charge its costs of self-insuring
such  risks  to  the  Joint  Account provided that such charges shall not exceed
published  manual  rates.

     2.8 Damages and Losses. All costs in excess of insurance proceeds necessary
         ------------------
to  repair  or  replace  damage or losses to any Assets resulting from any cause
other  than  the  willful  misconduct  or  gross  negligence of the Manager. The
Manager shall furnish the Management Committee with written notice of damages or
losses  as  soon  as practicable after a report thereof has been received by the
Manager.

     2.9  Legal  and Regulatory Expense. Except as otherwise provided in Section
          -----------------------------
2.13,  all legal and regulatory costs and expenses incurred in or resulting from
the Operations or necessary to protect or recover the Assets of the Venture. All
attorney's  fees  and  other  legal  costs  to  handle,  investigate  and settle
litigation  or  claims,  including  the  cost  of legal services provided by the
Manager's  legal  staff,  and  amounts  paid in settlement of such litigation or
claims  in  excess  of  $10,000 shall not be charged to the Joint Account unless
approved  by  the  Management  Committee.

     2.10  Audit.  Cost  of  annual  audits  under  Section  10.4 of the Venture
           -----
Agreement if approved by all of the Participants.

     2.11  Taxes.  All  taxes  (except  income  taxes)  of every kind and nature
           -----
assessed  or  levied  upon  or  in connection with the Assets, the production of
Products  or  Operations, which have been paid by the Manager for the benefit of
the  Participants.  Each  Participant is separately responsible for income taxes
which  are  attributable  to  its  respective  Participating  Interest.

     2.12 District and Camp Expense (Field Supervision and Camp Expenses). A pro
          ---------------------------------------------------------------
rata  portion  of  (i) the salaries and expenses of the Manager's superintendent
and  other  employees serving Operations whose time is not allocated directly to
such  Operations,  and  (ii)  the  costs  of maintaining and operating an office
(herein  called "the Manager's Project Office") and any necessary sub office and
(iii)  all necessary camps, including housing facilities for employees, used for
Operations.  The expense of those facilities, less any revenue there from, shall
include  depreciation  or  a  fair monthly rental in lieu of depreciation of the
investment. The total of such charges for all properties served by the Manager's
employees  and facilities shall be apportioned to the Joint Account on the basis
of  a  ratio, the numerator of which is the direct labor costs of the Operations
and  the  denominator  of  which  is  the  total  direct  labor  costs  incurred
for  all  activities  served  by  the  Manager.

     2.13  Administrative  Charge.
           ----------------------

               (a)  Each month, the Manager shall charge the Joint Account a sum
for  each  phase  of  Operations  as provided below, which shall be a liquidated
amount  to  reimburse  the  Manager for its home office overhead and general and
administrative expenses to conduct each phase of the Operations, and which shall
be  in  lieu  of  any  management  fee:

                    (1)  Exploration Phase - three percent (3%) Allowable Costs.
                         -----------------

                    (2)  Development Phase - three percent (3%) Allowable Costs.
                         -----------------

                    (3)  Mining  Phase  -  three  percent  (3%) Allowable Costs.
                         -------------

                                       32
<PAGE>
               (b) The term "Allowable Costs" as used in this Section 2.13 for a
particular  phase  of  Operations  shall  mean all charges to the Joint Account:
excluding  (i)  the administrative charge referred to herein; (ii) depreciation,
depletion  or  amortization  of  tangible  or  intangible  assets; (iii) amounts
charged  in  accordance  with  Sections 2.1 and 2.9. The Manager shall attribute
such  Allowable  Costs  to  a  particular  phase  of  Operations by applying the
following  guidelines:

                    (1)  The  exploration  phase  shall  cover  those activities
     conducted  to  ascertain the existence, location, extent or quantity of any
     deposit  of  ore  or  mineral.  Such  phase shall cease when a commercially
     recoverable  reserve  is  determined  to  exist.

                    (2)  The  development  phase  shall  cover  those activities
     conducted  to  access  a  commercially  feasible  ore  body  or  to-extend
     production  of-an  existing  ore  body, and to construct or install related
     fixed  assets.

                    (3)  The  major  construction  phase  shall  include  all
     activities  involved  in  the  construction of a mill, smelter or other ore
     processing  facilities.

                    (4)  The  mining  phase  shall  include  all other otherwise
     covered  above, including activities conducted after mining operations have
     ceased.

               (c)  The  monthly administration charge determined for each phase
of  Operations shall be equitably apportioned among all of the monthly period on
the  basis  of a ratio, the numerator of which is the direct labor costs charged
to  a particular property and the denominator of which is the total direct labor
costs  incurred  for  all  properties  served  by  the  Manager.

               (d)  The  following  is a representative list of items comprising
the  Manager's  principal business office expenses that are expressly covered by
the  administrative  charge  provided  in  this  Section  2.13:

                    (1)  Administrative  supervision,  which  includes  services
     rendered by managers, department supervisors, officers and directors of the
     Manager for Operations, except to the extent that such services represent a
     direct  charge  to  the  Joint  Account,  as  provided  for in Section 2.2;

                    (2)  Accounting,  data processing, personnel administration,
     billing  and record keeping in accordance with governmental regulations and
     the  provisions  of  the  Venture  Agreement,  and  preparation of reports;

                    (3)  The  services  of  tax  counsel  and tax administration
     employees  for  all tax matters, including any protests, except any outside
     professional  fees  which  the Management Committee may approve as a direct
     charge  to  the  Joint  Account;

                    (4)  Routine  legal services rendered by outside sources and
     the  Manager's legal staff not otherwise charged to the Joint Account under
     Section  2.9;  and

                    (5) Rentals and other charges for office and records storage
     space,  telephone  service,  office  equipment  and  supplies.

                                       33
<PAGE>
               (e)  The  Management  Committee  shall  annually  review  the
administration  charges  and  shall  amend  the  methodology  or  rates  used to
determine  such  charges  if  they  are  found  to be insufficient or excessive.

     2.14  Other  Expenditures.  Any  reasonable  direct expenditure, other than
           ------------------
expenditures  which  are  covered  by  the foregoing provisions, incurred by the
Manager for the necessary and proper conduct of Operations.

                                   ARTICLE III
                                   -----------

                        BASIS OF CHARGES TO JOINT ACCOUNT
                        ---------------------------------

     3.1  Purchases. Material purchased and services procured from third parties
          ---------
shall be charged to the Joint Account by the Manager at invoiced cost, including
applicable  transfer  taxes,  less  all  discounts  taken.  If  any  Material is
determined  to be defective or is returned to a vendor for any other reason, the
Manager  shall  credit the Joint Account when an adjustment is received from the
vendor.

     3.2  Material  Furnished by or Transferred to the Manager or a Participant.
          ---------------------------------------------------------------------
Any  Material  furnished  by  the  Manager  or  Participant  from  its stocks or
transferred  to  the  Manager  or  Participant  shall be priced on the following
basis:

          (a)  New  Material:  New  Material  transferred  from  the  Manager or
               -------------
Participant shall be priced F.O.B. the nearest reputable supply store or railway
receiving  point,  where  like Material is available, at the current replacement
cost of the same kind of Material, exclusive of any available cash discounts, at
the  time  of  the  transfer  (herein  called,  "New  Price").

          (b)  Used  Material.
               --------------

               (1) Used Material in sound and serviceable condition and suitable
     for reuse without reconditioning shall be priced as follows:

                    (a)  Used  Material  transferred  by  the  Manager  or  a
     Participant shall be priced at seventy-five percent (75%) of the New Price;

                    (b)  Used Material transferred to the Manager or Participant
     shall  be priced (i) at seventy-five percent (75%) of the New Price if such
     Material  was  originally  charged to the Joint Account as new Material, or
     (ii)  at  sixty-five  percent  (65%)  of the New Price if such Material was
     originally  charged  to  the  Joint  Account  as  good  used  Material  at
     seventy-five  percent  (75%)  of  the  New  Price.

               (2)  Other  used  Material  which,  after  reconditioning will be
     further  serviceable  for original function as good secondhand Material, or
     which  is  serviceable for original function but not substantially suitable
     for  reconditioning  shall  be priced at 50 percent (50%) of New Price. The
     cost  of  any  reconditioning  shall  be  borne  by  the  transferee.

               (3)  All  other  Material,  including  junk, shall be priced at a
     value commensurate with its use or at prevailing prices. Material no longer
     suitable  for  its original purpose but usable for some other purpose shall
     be  priced  on  a  basis comparable with items normally used for such other
     purposes.

                                       34
<PAGE>
                    (c) Obsolete Material. Any Material which is serviceable and
                        -----------------
usable  for  its  original function, but its condition is not equivalent to that
which  would justify a price as provided above shall be priced by the Management
Committee.  Such  price shall be set at a level which will result in a charge to
the  Joint  Account  equal  to  the  value of the service to be rendered by such
Material.

     3.3  Premium  Prices.  Whenever  Material  is  not  readily  obtainable  at
          ---------------
published  or  listed  prices  because of national emergencies, strikes or other
unusual  circumstances over which Manager has no control, the Manager may charge
the  Joint  for  the required Material on the basis of the Manager's direct cost
and expenses incurred in procuring such Material and making it suitable for use.
The Manager shall give written notice of the proposed charge to the Participants
prior  to  the  time when such charge is to be billed, whereupon any Participant
shall  have  the right, by notifying the Manager within ten days of the delivery
of  the  notice from the Manager, to furnish at the usual receiving point all or
part  of  its  share of Material suitable for use and acceptable to the Manager.

     3.4  Warranty of Material Furnished by the Manager or Participants. Neither
          -------------------------------------------------------------
the  Manager  nor  any  Participant  warrants  the Material furnished beyond any
dealer's  or  manufacturer's  warranty and no credits shall be made to the Joint
Account  for  defective  Material  until adjustments are received by the Manager
from  the  dealer,  manufacturer  or  their  respective  agents.

                                   ARTICLE IV
                                   ----------

                              DISPOSAL OF MATERIAL
                              --------------------

     4.1 Disposition Generally. The Manager shall have no obligation to purchase
         ---------------------
a  Participant's  interest in Material. The Management Committee shall determine
the  disposition  of major items of surplus Material, provided the Manager shall
have  the  right  to  dispose of normal accumulations of junk and scrap Material
either  by  sale  or by transfer to the Participants as provided in Section 4.2.

     4.2  Distribution  to  Participants.  Any Material to be distributed to the
          ------------------------------
Participants  shall  be  made  in  proportion  to their respective Participating
Interests,  and  corresponding credits shall be made to the Joint Account on the
basis  provided  in  Section  3.2.

     4.3  Sales.  Sales  of  Material  to third parties shall be credited to the
          -----
Joint Account at the net amount received. Any damages or claims by the Purchaser
shall be charged back to the Joint Account if and when paid.

                                    ARTICLE V
                                    ---------

                                   INVENTORIES
                                   -----------

     5.1  Periodic  Inventories,  Notice  and  Representations.  At  reasonable
          ----------------------------------------------------
intervals,  inventories  shall  be taken by the Manager, which shall include all
such  Material  as  is ordinarily considered controllable by operators of mining
properties  and  the  expense  of  conducting such periodic inventories shall be
charged  to  the  Joint  Account.  The  Manager shall give written notice to the
Participants  of  its  intent to take any inventory at least 30 days before such
inventory  is  scheduled  to  take  place. A Participant shall be deemed to have
accepted  the  results  of any inventory taken by the Manager if the Participant
fails  to  be  represented  at  such  inventory.

     5.2  Reconciliation  and  Adjustment  of  Inventories.  Reconciliation  of
          ------------------------------------------------
inventory  with  charges  to  the  Joint  Account  shall  be made, and a list of
overages  and  shortages  shall  be  furnished  to  the  Management:

                                       35
<PAGE>
Committee  within  6 months after the inventory is taken.  Inventory adjustments
shall  be  made  by the Manager to the Joint Account for overages and shortages,
but  the Manager shall be held accountable to the Venture only for shortages due
to  lack  of  reasonable  diligence.

                                    EXHIBIT C
                                    ---------

                                   TAX MATTERS
                                   -----------

                                    Article I
                                    ---------

                               Tax Matters Partner
                               -------------------

     1.1  Designation of Tax Matters Partner.  The  Manager is hereby designated
          ----------------------------------
tax  matters partner (hereinafter "TMP") as defined in Section 6231(a)(7} of the
Code.  In the event of any change in Manager, the Participant serving as manager
at  the  end of a taxable year shall continue as TMP with respect to all matters
concerning  such  year.  The  TMP  and  other  Participants shall use their best
efforts  to  comply  with  the  responsibilities outlined in this section and in
Sections  6222  through  6232  of  the  Code (including any Treasury regulations
promulgated  hereunder)  and  in  doing so shall incur no liability to any other
party.

     1.2  Notice.  The  Participants shall furnish the TMP with such information
          ------
(including  information  specified  in  Section  6230(e)  of the Code) as it may
reasonably  request  to  permit  it to provide the Internal Revenue Service with
sufficient  information to allow proper notice to the Participants in accordance
with  Section  6223 of the Code. The TMP shall keep each Participant informed of
all  administrative  and  judicial  proceedings  for  the  adjustment  at  the
partnership level of partnership items in accordance with Section 6223(g) of the
Code.

     1.3  Inconsistent  Treatment  of  Partnership  Item.  If  an administrative
          ----------------------------------------------
proceeding contemplated under Section 6223 of the Code has begun, and the TMP so
requests,  the  Participants  shall  notify  the  TMP  of their treatment of any
partnership  item  on  their  federal  income  tax  return  in a manner which is
inconsistent  with  the  treatment  of  that  item  on  the  partnership return.

     1.4  Extensions  of  Limitation  Periods.  The TMP shall not enter into any
          -----------------------------------
extension  of  the  period  of limitations as provided under Section 6229 of the
Code without first giving reasonable advance notice to all other Participants of
such  intended  action.

     1.5  Requests  for  Administrative  Adjustments. No Participant shall file,
          ------------------------------------------
pursuant to Section 6227 of the Code, a request for an administrative adjustment
of  partnership  items  for any partnership taxable year without first notifying
all  other  Participants.  If  all  other  Participants agree with the requested
adjustment,  the  TMP  shall  file  the request for administrative adjustment on
behalf  of the partnership. If unanimous consent is not obtained within 30 days,
or  within  the  period  required  to timely file the request for administrative
adjustment,  if  shorter, any Participant, including the TMP, may file a request
for  administrative  adjustment  on  its  own  behalf.

     1.6  Judicial  Proceedings.  Any  Participant  intending to file a petition
          ---------------------
under  Section  6226,  6228  or  other  sections of the Code with respect to any
partnership  item,  or other tax matters involving the partnership, shall notify
the  other  Participants  of  such  intention and the nature of the contemplated
proceeding.  If the TMP is the Participant intending to file such petition, such
notice  shall  be given within a reasonable time to allow the other Participants
to  participate  in  the  choosing  of  the forum in which such petition will be
filed.  If  the

                                       36
<PAGE>
Participants  do  not agree on the appropriate forum, then the appropriate forum
shall  be  decided  by  majority  vote.  Each  Participant  shall have a vote in
accordance  with  its  Participating Interest in the partnership.  If a majority
cannot  agree,  the  TMP  shall choose the forum.  If any Participant intends to
seek  review  of  any  court  decision  rendered  as  a  result  of a proceeding
instituted  under the preceding part of this Section 1.6, such Participant shall
notify  the  other  Participants  of  such  intended  action.

     1.7  Settlements.  The  TMP shall not bind any Participant to at settlement
          -----------
agreement  without  first  obtaining  the  written  concurrence  of  any,  such
Participant.  Any  other Participant who enters into a settlement agreement with
respect  to any partnership items, as defined by Section 6231(a)(3) of the Code,
shall  notify  the other Participants of such settlement agreement and its terms
within  90  days  from  the  date  of  settlement.

     1.8  Fees  and  Expenses. The TMP shall not engage legal counsel, certified
          -------------------
public accountants, or others without the prior written consent of a majority of
the  Participants.  Any  Participant may, engage legal counsel, certified public
accountants,  or  others on its own behalf and at its sole cost and expense. Any
reasonable  item  of expense, including but not limited to fees and expenses for
legal  counsel, certified public accountants, and others which the TMP incurs in
connection with any audit, assessment, litigation, or other proceeding regarding
any  partnership  item, shall constitute proper charges to the Joint Account and
shall  be borne by the Participants as any other item which constitutes a direct
charge  to the Joint Account pursuant to the Agreement. Notwithstanding anything
in the Agreement to the contrary, the Joint Account allocation shall be borne by
the  Participants  based  upon  a  daily  weighted average of each Participant's
Participating  Interest,  in  the  partnership  for  the  tax  year in question.

     1.9  Survival.  The provisions of this Article I, including but not limited
          --------
to  the  obligation  to  pay  fees  and expenses contained in Section 1.8, shall
survive  the  termination  of  the  partnership  or  the  termination  of  any
Participant's  interest  in  the  partnership  and  shall  remain binding on the
Participants for a period of time necessary to resolve with the Internal Revenue
Service  or  the  Department  of  the Treasury any and all matters regarding the
federal  income  taxation  of  the  partnership  for the applicable tax year(s).

                                   Article II
                                   ----------

                          Tax Elections and Allocations
                          -----------------------------

     2.1  Tax  Partnership  Election.  It  is  understood  and  agreed  that the
          --------------------------
Participants  intend to create a partnership for United States federal and state
income  tax  purposes,  and,  unless  otherwise  agreed  to  hereafter  by  all
Participants,  no  Participant  shall  make  an  election  to  be,  or  have the
arrangement evidenced hereby, excluded from the application of any provisions of
Subchapter  K  of the Internal Revenue Code of 1954, as amended (the "Code"), or
any  equivalent state income tax provision. It is understood and agreed that the
Participants intend to create a partnership for federal and state and income tax
purposes  only.

     The  Manager shall file with the appropriate office of the Internal Revenue
Service,  a  partnership  income  tax  return  covering  the  Operations.  The
Participants  recognize  that  this Agreement may be subject to state income tax
statutes.  The  Manager  shall  file  with  the  appropriate office of the state
agencies  any  required  partnership  state  income  tax  returns.

     Each Participant agrees to furnish to the Manager such information which it
may  have  relating to Operations as shall be required for proper preparation of
such  returns.  The  Manager  shall  furnish  to  the  other

                                       37
<PAGE>
Participants for their review a copy of each proposed income tax return at least
two  weeks  prior  to  the  date  the  return  is  filed.

     2.2  Tax Elections. The Participants elect, for purposes of all partnership
          -------------
income  tax  returns:

          (a)  To  use  the  accrual  method  of  accounting,

          (b)  To  adopt  the  calendar  year  as  the annual accounting period,

          (c)  To  deduct  currently all exploration and development expenses to
     the extent possible under Sections 616, 617, and 291 of the Code, and

          (d)  Unless  the  Participants unanimously agree otherwise, to compute
     the allowance for depreciation in respect of all eligible recovery property
     under  this  Agreement  subject  to  depreciation  in  accordance  with the
     Accelerated  Cost  Recovery  System.  Allowances  for  depreciation will be
     computed  using  the  maximum  accelerated  tax  depreciation table and the
     shortest  life  permissible,  and

          (e) To treat advance royalties as deductions from gross income for the
     year  paid or accrued to the extent permitted by law. The Manager agrees to
     consult  with  the  other  Participants prior to making any other elections
     required  by  this  Agreement.

     2.3  Allocations  to Participants. Allocations for tax purposes shall be in
          ---------------------------
accordance  with  the  following:

          (a) Exploration and development costs shall be allocated as deductions
     among the Participants in accordance with their respective contributions to
     such  costs.

          (b)  Depreciation expenses shall be allocated as a deduction among the
     Participants  in  accordance  with  their  respective  contributions to the
     adjusted  basis  of the Asset which gives rise to the depreciation expense.

          (c)  The  qualified investment for investment tax credit purposes with
     respect  to  any  Asset  shall  be  allocated  among  the  Participants  in
     accordance  with their respective contributions to the qualified investment
     (as  defined  in  the  Code)  in  such  Asset.

          (d)  Production  and  operating costs shall be allocated as deductions
     among the Participants in accordance with their respective contributions to
     such  costs.

          (e)  Cost  depletion  shall  be  allocated  to  the  Participants  in
     accordance  with  their  respective contributions to the adjusted basis for
     depletion  purposes  of each depletable Asset (as defined in Section 614 of
     the  Code),  and  statutory  depletion in excess of cost depletion shall be
     allocated  to  each  Participant  in  ratio  to  the  respective  depletion
     allowance  which  would be allowable if each Participant were to be allowed
     depletion  on  the  sales  value of its share of Products sold, taking into
     account  its  share  of  costs  and expenses otherwise allocated hereunder,
     provided  that  the  amount  of  statutory  depletion  shall not exceed the
     respective  Participant's  gross  income  from the Properties as defined in
     Code  Section  613(c)  times  the  statutory depletion rate in Code Section
     613(b).

                                       38
<PAGE>
          (f)  All costs and expenses which are not described in (a) through (e)
     above,  shall  be allocated among the Participants in accordance with their
     respective  contributions  to  such  costs  and  expenses.

          (g) The provision for taking production in kind, as provided elsewhere
     in  this  Agreement, is recognized as each Participant's right to determine
     the  market  for  a  proportionate share of the sales. All items of income,
     deductions,  and credits arising from such marketing of production shall be
     recognized  by  the  partnership and shall be allocated respectively to the
     Participant  who  designated  such  market.

          (h)  Except  as  provided  in  (1) and (2) immediately below, items of
     income,  gain  and/or loss reported by the partnership on federal and state
     partnership  returns  shall  be  allocated to the Participants realizing or
     bearing  such  items  as  provided  in  this  Agreement:

               (1)  Gain  and/or  loss  arising  from each sale, abandonment, or
          other  disposition of Assets shall be allocated to each Participant in
          such  a  manner  as  will reflect the gain and/or loss that would have
          been  includable in such Participant's respective income tax return if
          the Participants hereto (a) had elected to be excluded from Subchapter
          K  of the Code and/or any similar provisions of applicable state laws,
          and  (b) had made the same elections that were made by the partnership
          pursuant  to  Section  1.2  above. The computation of gain and/or loss
          shall  take  into  account  each  Participant's  share of the proceeds
          derived  from each sale or other disposition, selling expenses and the
          Participant's respective contributions to the unadjusted cost basis of
          such  Asset,  less any allowed or allowable depreciation, amortization
          or  other  deductions  which  have been allocated to each Participant.

               (2)  If the application of the preceding paragraph (1) results in
          the  allocation  of  gains  and/or  losses  in  excess of the "ceiling
          limitation"  imposes by Treasury Regulation Section 1.704-1(c)(i), the
          Participants  agree  that  the  entire  gains  and/or  losses shall be
          determined  at  the partnership level. If such a determination results
          in a partnership gain, such gain shall be allocated to the Participant
          or  Participants  who otherwise would have been allocated a gain under
          the  provisions of such Paragraph. If such at determination results in
          a partnership loss, such loss shall be allocated to the Participant or
          Participants who otherwise would have been allocated a loss under such
          Paragraph.

          (i)  Any recapture of depreciation, exploration under Section 617, and
     any  other  item  of  deduction  or  credit  shall  be  allocated among the
     Participants  in  accordance  with  their  sharing  of  the  depreciation,
     exploration,  or  other  item  of  deduction or credit which is recaptured.

                                   Article III
                                   -----------

                                Capital Accounts
                                ----------------

     3.1  Charges  and  Credits. A separate capital account shall be established
          ---------------------
and  maintained  for  each Participant and shall be, from time to time, credited
with:

          (a)  the  tax  basis  of  the  Participant's  interest  in  the  Asset
contributed  to  the  partnership;

                                       39
<PAGE>
          (b)  all  amounts  contributed by the Participant to pay the costs and
expenditures  arising  pursuant  to  this  Agreement;

          (c)  all  income  or gains allocated to that Participant under Section
2.3  above  and  debited  with:

               (a)  all  losses,  expenses,  and  deductions  allocated  to that
          Participant  under  Section 2.3 above. However, statutory (percentage)
          depletion  deductions  shall not be charged to a Participant's capital
          account  to the extent that such statutory depletion deductions exceed
          the Participant's adjusted tax basis in each of the depletable Assets;

               (b) cash received by that Participant with respect to partnership
          Assets or by distribution from the partnership; and

               (c) the partnership's tax basis, if any, of Assets distributed by
          the partnership to that Participant.

     3.2  Liquidation. If, upon a liquidation of the partnership pursuant to the
          -----------
terms  of  this  Agreement,  the  capital  account  balance  of  each  and every
Participant  (stated  as  a  percentage  of  the capital account balances of all
Participants),  is not equal to each and every Participant's ownership interest,
all  the  Participants  hereby  agree  and  obligate  themselves  as  follows:

          (a)  Any Participant with a negative capital account balance, that is,
a  balance less than zero, shall contribute an amount of cash to the partnership
sufficient  to  achieve  a  zero  balance  capital  account.

          (b) Following the contribution pursuant to paragraph (a) above, if the
capital  account  balance  of  each  Participant  (stated as a percentage of the
capital  account  balances of all Participants) is not in the same ratio as each
such Participant's Participating Interest, then unless the participants mutually
agree that this paragraph will not apply, the partnership capital accounts shall
be  adjusted to reflect how any gain or loss would have been allocated (pursuant
to  Section  2.3(h), above) if such Assets had been sold at fair market value at
the time of liquidation. The Participants shall agree upon the fair market value
of  the  Assets  of  the  partnership,  provided, however, in the event that the
Participants fail to agree, a nationally recognized independent engineering firm
acceptable  to  all  Participants  shall determine the fair market value of such
Assets.

          (c) Following the preliquidation adjustments pursuant to paragraph (b)
above  (or if the Participants mutually agree, pursuant to paragraph (a) above),
if  the  capital account balances of each Participant (stated as a percentage of
the  capital  account  balances  of  all  Participants)  is  not  equal  to each
Participant's  Participating  Interest,  then  each  Participant  whose  capital
account  balance  is  less  than its Participating Interest shall, upon ten (10)
days  notice  by  the  Manager,  contribute  a  sufficient amount of cash to the
partnership  to  cause  such  Participant's  capital  account  balance  and
Participating  Interest  to  be  in  parity.

          (d) Notwithstanding anything contained in this Agreement, expressed or
implied  to  the  contrary,  it  is  expressly agreed and understood that, after
making  the  adjustments  and/or contributions provided for in this Article, all
remaining  partnership  Assets  shall  be  distributed  to  the  Participants in
accordance  with  their  capital  accounts.

                                   Article IV
                                   ----------

                                       40
<PAGE>
                               Sale or Assignment
                               ------------------

     4.1  Agreement  Not to Terminate. The Participants agree that if any one of
          ---------------------------
them  makes  a  sale  or  assignment  of  its  Participating Interest under this
Agreement,  such  sale  or  assignment  will  be structured so as not to cause a
termination under Section 708(b) (1)(B) of the Code. If a Section 708 (b) (1)(B)
termination  is  caused,  the  terminating  Participant  will  indemnify  the
nonterminating  Participant  and  save  it  harmless  for any increase in taxes,
interest, and penalties or decrease in credits to the nonterminating Participant
caused by the termination of the partnership. The indemnification, if any, shall
be computed in a cash flow basis taking into consideration the liability for tax
on  any  indemnification  proceeds  received by the nonterminating Participants.

                                    Article V
                                    ---------

                                 Correspondence
                                 --------------

     5.1  Correspondence.  All  correspondence  relating  to the preparation and
          --------------
filing of the partnership's income tax return(s) shall be forwarded to:

WGI:      Western Goldfields, Inc.
          961 Matley Lane, Suite 120
          Reno, NV  89502
          Attn: Vice President Exploration

Company:  321Gold, Inc.
          6884 North Kendall Drive, Suite C-301
          Miami, FL  33156
          Attn:  President

                                       41
<PAGE>
                                    EXHIBIT D
                                    ---------

                                    INSURANCE
                                    ---------

     The  Manager  shall, at all times while conducting Operations, comply fully
with  the  applicable  worker's  compensation  laws  and  purchase,  and provide
standard  form  insurance  policies  for  (i) comprehensive public liability and
property  damage  with  combined limits as agreed by the Participants for bodily
injury  and  property  damage;  (ii)  automobile  insurance  as  agreed  by  the
Participants;  and  (iii) adequate and reasonable insurance against risk of fire
and  other risks ordinarily insured against in similar operations.  The coverage
amounts  of  all  insurance  shall  be  approved  by  the  Participants.  Each
Participant  shall  self-insure  or purchase for its own account such additional
insurance  as  it  deems  necessary.

                                       42
<PAGE>
                                    EXHIBIT E
                                    ---------

                               SUNNY SLOPE PROJECT
                             MINERAL COUNTY, NEVADA
                            BY T. CALLICRATE 11-27-04

                 EXPLORATION AND DEVELOPMENT BUDGET AND SCHEDULE
                       SEPTEMBER 2004 THRU DECEMBER 2005.

EXPLORATION  PLANS  AND  SCHEDULE  - The exploration program for the Sunny Slope
Project  has  been  divided  into  two  phases  which  will  be  conducted  over
approximately  one  year  and  four month period beginning in September 2004 and
ending December 2005.  The primary goal of this phased program is to explore and
develop  an  economic  gold-silver  deposit  with  a  minimum  of  500 ounces of
production.  Phase  I  Exploration  Program  is  designed to conduct surface and
underground exploration activities in the main Sunny Slope working area, as well
as  for exploring for additional new mineralization within the area of interest.
This  Phase  I  program  activities is designed to be followed up with a limited
Phase  II Drill Program drill program to test the lateral and down-dip extension
of  the  main  Sunny  Slope  vein system.  Phase II Drill program will either be
followed  up by additional development drilling and/or work would begin with the
development  of  a  small  underground  mine.

PHASE  I  -  EXPLORATION  PROGRAM  BUDGET - This phase of exploration activities
-----------------------------------------
would  consist  of  general  surface  and  underground  exploration  activities
including geologic mapping, rock chip and soil sampling, geophysical surveys and
drill  permitting.  The  breakdown  for  this  first  phase  of  the exploration
evaluation  will  occur  as  follows:

MAPPING AND SAMPLING ACTIVITIES - 4TH QUARTER 2004 AND 1ST QUARTER 2005

<TABLE>
<CAPTION>
<S>  <C>                                                                            <C>
  -  Data compilation of all current geological and geochemical data (1 week)      $  2,500
  -  Area reconnaissance of the entire property to explore for new mineralization
     and to determine if additional claims are warranted (incl. sampling
     expenses-5 days                                                                $  3,500
  -  Staking/recording of additional lode claims (est. possible 30 claims)          $  8,000
  -  Surface mapping and sampling by one geologist in the main Sunny Slope mine
     area (incl. rock chip and soil sampling expenses). (2 weeks)                   $ 15,000
  -  Underground mapping and sampling by two geologists. (incl. sampling exp.
     -1 week)                                                                       $ 10,000
     Petrographic studies (25 samples)                                              $  1,000
  -  Geophysical Surveys
          - Ground magnetic survey                                                  $ 15,000
          - Gravity survey.                                                         $ 15,000
          - Other potential geophysical surveys                                     $ 20,000
  -  Permitting/Bonding (est. 3-months for permit period)                           $ 10,000
                                                                                    --------

                                                                             TOTAL  $100,000
</TABLE>

EXPLORATION  DRILLING  ACTIVITIES  -  2ND  QUARTER  2005

<TABLE>
<CAPTION>
<S>  <C>                                                                          <C>
  -  Road building, drill sump construction and reclamation                       $ 20,000
  -  Drilling: 5,000 ft (8 RC holes at an ave. of 500 ft. ea. and one deep hole
     @1,000 ft.  Drill cost per ft. @ $15/ft. (Incl. supplies and misc. exp       $ 75,000
  -   Assaying of drill footage: 5,000 ft. each 5' foot interval (1,000 samples
     @ $20/ea)                                                                    $ 20,000
  -  Drill supervision: 1-months @ $500/day (incl. all exp.)                      $ 10,000
  -  Metallurgical studies and other misc. work                                   $ 20,000

                                       43
<PAGE>
                                                                           TOTAL  $125,000
</TABLE>

TOTAL  BUDGET  FOR  THE  PHASE  I  EXPLORATION  PROGRAM  -TOTAL  -  $225,000

PHASE II - DEVELOPMENT PROGRAM OF A SMALL UNDERGROUND MINE - 3RD AND 4TH
------------------------------------------------------------------------
QUARTERS 2005
-------------

This phase of exploration activities would be contingent upon encouraging drill
results obtained in Phase I. This phase would include additional permitting,
reverse circulation drilling, selective core drilling, metallurgical testing,
geotechnical investigations, ore calculations and purchasing of small mining
equipment to establish a small mining operation. The breakdown for this Phase II
Development Program to be established after Phase I activities.

<TABLE>
<CAPTION>
<S>                                                                        <C>    <C>
TOTAL  BUDGET  FOR  THE  PHASE  II  DEVELOPMENT  EXPLORATION  PROGRAM      TOTAL  $775,000

TOTAL BUDGET FOR THE PHASE I AND II EXPLORATION AND DEVELOPMENT PROGRAM    TOTA  $1,000,000
</TABLE>

                                       44
<PAGE><PAGE>
EXHIBIT 4.10

              AMENDMENT NO. 2 TO THE 9% CONVERTIBLE DEBENTURE, DUE
          MAY 15, 2006, ISSUED TO MIDSUMMER INVESTMENT LTD. AND WAIVER

         This Amendment No. 2 ("AMENDMENT") is made to that certain 9%
Convertible Debenture, due May 15, 2006, issued by Island Pacific, Inc. (the
"COMPANY") to Midsummer Investment Ltd. ("MIDSUMMER") (the "DEBENTURE").

         FOR VALUE RECEIVED, and in consideration for Midsummer (a) waiving all
outstanding accrued and unpaid liquidated damages, pursuant to the Debenture and
the Registration Rights Agreement dated as of March 15, 2004 among the Company,
Midsummer and the purchasers signatory thereto (the "Registration Rights
Agreement"), due and owing as of the date of this Amendment, (b) waiving all
such liquidated damages that may accrue prior to January 31, 2005, (c) forever
waiving and forbearing any and all rights and remedies with respect to the
Events of Default under the Debenture that occurred (i) on November 15, 2004 as
a result of the Company's failure to cause a registration statement to be
declared effective on or prior to such date pursuant to the terms of Amendment
No. 1 to the Debenture, dated July 30, 2004 (the "FIRST AMENDMENT") and (ii) on
October 29, 2004 as a result of the Company's failure to secure Shareholder
Approval for the issuance of the Debenture and related warrants (PROVIDED,
HOWEVER, that the waivers and forbearances in this subparagraph (c) shall not
apply to any other past, present or future Event of Default that may have, has
or does occur), and (d) agreeing to all other amendments to the Debenture set
forth herein, the parties agrees as follows:

         1. INTEREST PAYMENTS. The Preamble to the Debenture shall be amended
and restated as follows:

                  "FOR VALUE RECEIVED, the Company promises to pay to Midsummer
         Investment Ltd. or its registered assigns (the "HOLDER"), the principal
         sum of $1,250,000 on May 15, 2006 or such earlier date as the
         Debentures are required or permitted to be repaid as provided hereunder
         (the "MATURITY DATE") and to pay interest to the Holder on the
         aggregate unconverted and then outstanding principal amount of this
         Debenture at the rate of 9% per annum, payable monthly, beginning on
         the first day of the first month after the Original Issue Date and on
         each Conversion Date (as to that principal amount then being
         converted), on each Monthly Redemption Date (as to that principal
         amount then being redeemed) and on the Maturity Date (except that, if
         any such date is not a Business Day, then such payment shall be due on
         the next succeeding Business Day) (each such date, an "INTEREST PAYMENT
         DATE"), in cash or shares of Common Stock at the Interest Conversion
         Rate, or a combination thereof; PROVIDED, HOWEVER, payment in shares of
         Common Stock may only occur if during the 20 Trading Days immediately
         prior to the applicable Interest Payment Date ("CONDITION PERIOD") all
         of the Equity Conditions have been met and the Company shall have given
         the Holder notice in accordance with the notice requirements set forth
         below; PROVIDED, HOWEVER, if prior to any Condition Period the Company
         notifies the Holder that the Interest Conversion Rate as to such
         Condition Period shall be 80% of the lesser of (i) the average of the
         20 VWAPs immediately prior to the such applicable Interest Payment Date
         or (ii) the average of the 20 VWAPs immediately prior to the date such
         applicable interest payment shares are issued and delivered if after
         the Interest Payment Date, the Company shall not be required to meet
         clause (iii) of the Equity Conditions during such Condition Period
         regarding the effectiveness of the registration statements. The Company
         may indicate in such notice that such adjustment of the Interest
         Conversion Rate shall continue until such time as the Company provides
         the Holder with 20 Trading Days' prior written notice to the contrary.
         Subject to the terms and conditions herein, the decision whether to pay
         interest hereunder in shares of Common Stock or cash shall be at the
         discretion of the Company. Not less than 20 Trading Days prior to each
         Interest Payment Date, the Company shall provide the Holder with
         written notice of its election to pay interest hereunder either in cash
         or shares of Common Stock (the Company may indicate in such notice that
         the election contained in such notice shall continue for later periods
         until revised). Within 20 Trading Days prior to an Interest Payment
         Date, the Company's election (whether specific to an Interest Payment
         Date or continuous) shall be irrevocable as to the ensuing Interest
         Payment Date. Subject to the aforementioned conditions, failure to
         timely provide such written notice shall be deemed an election by the
         Company to pay the interest on such Interest Payment Date in cash.
         Interest shall be calculated on the basis of a 360-day year and shall
         accrue daily commencing on the Original Issue Date until payment in
         full of the principal sum, together with all accrued and unpaid
         interest and other amounts which may become due hereunder, has been
         made. Payment of interest in shares of Common Stock shall otherwise
         occur pursuant to Section 4(b) and for purposes of the payment of
         interest in shares only, the Interest Payment Date shall be deemed the
         Conversion Date for those shares. Interest shall cease to accrue with
         respect to any principal amount converted, provided that the Company in
         fact delivers the Conversion Shares within the time period required by
         Section 4(b)(i). Interest hereunder will be paid to the Person in whose
         name this Debenture is registered on the records of the Company
         regarding registration and transfers of Debentures (the "DEBENTURE
         REGISTER"). All overdue accrued and unpaid interest to be paid
         hereunder shall entail a late fee at the rate of 12% per annum (or such
         lower maximum amount of interest permitted to be charged under
         applicable law) ("LATE Fee") which will accrue daily, from the date
         such interest is due hereunder through and including the date of
         payment. Except as is set forth in Section 5(a) of this Debenture, the
         Company may not prepay any portion of the principal amount of this
         Debenture without the prior written consent of the holders."

         2. SET PRICE OF THE DEBENTURE. Section 4(c)(i) of the Debenture shall
be amended and restated as follows:

                  "(c)(i) CONVERSION PRICE. The conversion price in effect on
         any Conversion Date shall be equal to $0.37 (subject to adjustment
         herein)(the "SET PRICE")."

         Such reduction shall be automatic, effective immediately and not
require any further action by the Company or Midsummer to effect such
adjustment.

         3. ADDITIONAL WARRANT. Within 3 Trading Days of the date hereof, the
Company shall issue Midsummer an additional warrant, in the form of the Series A
Warrants, to purchase up to 200,000 shares of Common Stock at an exercise price
equal to $0.41 per share, subject to adjustment therein, with terms and
conditions otherwise identical to the Series A Warrants ("SECOND AMENDMENT
WARRANT").

         4. REGISTRATION OF COMMON STOCK ISSUABLE PURSUANT TO THIS AMENDMENT.
All shares of Common Stock issuable pursuant to the Debentures, the Series A
Warrants, the Series B Warrants, the First Amendment and the Second Amendment
Warrant shall be included in the next registration statement to be filed by the
Company. The Company shall use best efforts to have such registration statement
declared effective on or prior in January 31, 2005 ("AMENDMENT EFFECTIVENESS
DATE"). It is acknowledged and understood that any failure to cause such
registration statement to be declared effective on or before the Amendment
Effectiveness Date, or the occurrence of any Event under the Registration Rights
Agreement, shall result in the resumption of liquidated damages thereunder
accruing on and from February 1, 2005.

         5. EQUITY CONDITIONS. The definition of Equity Conditions set forth in
Section 6(b) of the Debenture is amended as follows:

         Subsection (vii) is deleted in its entirety and replaced as follows:

         "(vii) (A) any contemplated issuance, ignoring for such purposes any
         conversion or exercise limitations, does not violate the limitations
         set forth in Sections 4(a)(ii)(A) and (B) all of the shares issued or
         issuable pursuant to the Transaction Documents in full, ignoring for
         such purposes any conversion or exercise limitation therein, would not
         violate the limitations set forth in Sections 4(a)(ii)(B)"

         6. MIDSUMMER'S REPRESENTATIONS. In connection with the issuance of the
Second Amendment Warrant Midsummer represents and warrants the following:

                  (a) VIEW TO DISTRIBUTE. Midsummer is acquiring the Second
Amendment Warrant as principal for its own account and not with a view to or for
distributing or reselling such securities or any part thereof, without
prejudice, however, to Midsummer's right, subject to the provisions of the
Second Amendment Warrant, at all times to sell or otherwise dispose of all or
any part of such securities pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), or under an
exemption from such registration and in compliance with applicable federal and
state securities laws. Midsummer is acquiring the Second Amendment Warrant in
the ordinary course of its business and does not have any agreement or
understanding, directly or indirectly, with any person to distribute any of such
securities.

                  (b) MIDSUMMER STATUS. At the time Midsummer was offered the
Second Amendment Warrant, it was, and at the date hereof it is, and on each date
on which it exercises the Second Amendment Warrant it will be, an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Midsummer has not
been formed solely for the purpose of acquiring the Second Amendment Warrant.
Midsummer is not a registered broker-dealer under Section 15 of the Securities
and Exchange Act of 1934, as amended.

                  (c) EXPERIENCE OF MIDSUMMER. Midsummer, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Second Amendment
Warrant, and has so evaluated the merits and risks of such investment. Midsummer
is able to bear the economic risk of an investment in the Second Amendment
Warrant and, at the present time, is able to afford a complete loss of such
investment.

                  (d) GENERAL SOLICITATION. Midsummer is not purchasing the
Second Amendment Warrant as a result of any advertisement, article, notice or
other communication regarding the Second Amendment Warrant published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.

         7. SHAREHOLDER APPROVAL. The Company represents and warrants to
Midsummer that the conversion or exercise in full of all of the securities of
the Company held by Midsummer that were issued pursuant to the Transaction
Documents, ignoring for such purposes any conversion or exercise limitations,
does not require Shareholder Approval under the rules and regulations of the
Principal Market. If at any time hereafter the Company believes, or is notified
by Midsummer or the Principal Market that shareholder approval is required for
the exercise in full of all such securities, ignoring for such purposes any
conversion or exercise limitations, the Company shall hold a special meeting of
shareholders (which may also be at the annual meeting of shareholders) within
120 days of such date for the purpose of obtaining Shareholder Approval, with
the recommendation of the Company's Board of Directors that such proposal be
approved, and the Company shall solicit proxies from its shareholders in
connection therewith in the same manner as all other management proposals in
such proxy statement and all management-appointed proxyholders shall vote their
proxies in favor of such proposal.

         8. ADJUSTMENT TO SET PRICE. Subsection 4(c)(viii) is deleted and
replaced in its entirety as follows:

          "Prior to submitting the transactions contemplated by the Purchase
          Agreement to a vote for Shareholder Approval, the Company agrees that
          it is prohibited from taking any actions specified in Sections
          4(c)(iii)-(v) which would result in any adjustment to the Set Price
          that would cause the transactions contemplated under the Transaction
          Documents to violate the rules of the Principal Market. Whenever the
          Set Price is adjusted pursuant to any of Section 4(c)(ii) - (v), the
          Company shall promptly mail to each Holder a notice setting forth the
          Set Price after such adjustment and setting forth a brief statement of
          the facts requiring such adjustment."

         9. EFFECT ON DEBENTURE. Except as expressly set forth above, all of the
terms and conditions of the Debenture and the First Amendment shall continue in
full force and effect after the execution of this Amendment, and shall not be in
any way changed, modified or superseded by the terms set forth herein.

         10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. Execution of this Amendment may be
made by delivery by facsimile.

         11. DEFINITIONS. CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN HAVE
THE MEANINGS GIVEN TO SUCH TERMS IN THE DEBENTURE.

         Executed as of November 30, 2004 by the undersigned duly authorized
representatives of the Company and Midsummer:

ISLAND PACIFIC, INC.                    MIDSUMMER INVESTMENT LTD.

By: /s/ RAN FURMAN                      By: /s/ SCOTT D. KAUFMAN
    ----------------------------            ------------------------------
Name: Ran H. Furman                     Name: Scott D. Kaufman
Title: CFO                              Title: Managing Director,
                                               Midsummer Capital LLC
                                               Acting as investment manager of
                                               Midsummer Investment Ltd.

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