Document:

EXHIBIT 4

EXHIBIT 4.2

AMENDMENT TO ASSET PURCHASE AGREEMENT

This Amendment dated March 23, 2001 is made

Between

MINERA SAN AUGUSTO, S.A. de C.V.

(“MSA”)

And

O. N. C. de MEXICO S.A. de C.V.

(“ONCM”)

And

NATIONAL GOLD CORPORATION

(“National Gold”)

RECITALS

A.

MSA, ONCM and National Gold entered into an Asset Purchase Agreement dated December 21, 2000 (the “Asset Purchase Agreement”) under which MSA agreed to sell and ONCM agreed to purchase certain assets of MSA;

B.

The Asset Purchase Agreement contemplated that ONCM would make certain payments at Closing;

C.

ONCM wishes to extend the time for payment of certain payments under the Asset Purchase Agreement, and MSA has agreed to such extension on the terms and conditions set forth herein;

D.

The parties previously agreed to extend the Closing Date to March 15, 2001 and have now agreed to further extend the Closing Date as set forth herein; and

E.

MSA may assign all rights and benefits which in the future will accrue to it under this Amendment.

NOW THEREFORE THIS AGREEMENT witnesses that in consideration of the payment by each of the parties hereto to the other parties the sum of $10.00 (the receipt and sufficiency of which are hereby acknowledged) and the representations, warranties and covenants set out herein and other good and valuable consideration, the parties covenant and agree as follows:

1.

Defined Terms.  Terms and phrases in this Amendment with an initial capital letter and not otherwise defined herein will have the meanings ascribed to them in the Asset Purchase Agreement.

2.

Extension Fee.  Upon execution of this Amendment ONCM shall pay to MSA the amount of $200,000 plus the Deposit for an aggregate amount of $250,000 as an extension fee (the “Extension Fee”) in consideration of MSA entering into this Amendment and not as a partial prepayment of the Expense Reimbursement or any other amount owing under the Asset Purchase Agreement provided that if Closing occurs at the Closing Time, the Extension Fee shall be credited towards the Deposit and the Closing Payment in accordance with the terms of the Asset Purchase Agreement, as amended by this Amendment.

3.

Legal Fees.  Within 5 Business Days of receipt of an invoice from MSA or its Assignees specifying the amount owing pursuant to this section, ONCM shall pay to MSA all reasonable legal fees and disbursements incurred by MSA from time to time in preparation of this Amendment and any other agreement, document or instrument delivered in conjunction with or pursuant to this Amendment.

4.

Subsection 1.2(2).  Subsection (2) of Section 1.2 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“(2)

by payment at Closing to MSA or its Assignees of the amount of $200,000 (the “Closing Payment”);”

5.

Subsection 1.2(6).  Subsection (6) of Section 1.2 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“(6)

by delivery at Closing to MSA or its Assignees of a promissory note in the amount of $1,575,000 in the form attached hereto as Schedule R (the “IVA Promissory Note”) in respect of value added tax payable in connection with ONCM’s purchase of the Assets (the “IVA Payment”);”

6.

Subsection 1.2(8).  The following paragraph is included in Section 1.2 of the Asset Purchase Agreement as subsection (8):

“(8)

by delivery at Closing to MSA or its Assignees of a promissory note in the amount of $250,000 in the form attached hereto as Schedule S (the “Deferred Closing Payment”).”

7.

Section 1.3.  Subsections (2) and (3) of Section 1.3 of the Asset Purchase Agreement are deleted in their entirety and the following paragraph is inserted as subsection (2):

“(2)

if Closing does not occur at the Closing Time for any reason, then the Deposit plus accrued interest shall be paid to MSA or its Assignees without prejudice to any other rights and remedies that MSA or its Assignees may have and Blake, Cassels & Graydon LLP is hereby irrevocably directed to pay the Deposit plus accrued interest to MSA, or as MSA or its Assignees may direct, upon receipt of a written request from MSA or its Assignees confirming that Closing did not occur at the Closing Time and requesting payment of the Deposit pursuant to this subsection.”

8.

Section 1.4.  Section 1.4 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“1.4

Reconciliation of Accounts. The Parties agree that, conditional upon the Closing, the benefits from the Assets and liability for costs arising from the Assumed Liabilities shall be deemed to have passed to ONCM as of the Effective Date and ONCM shall be responsible for all payments and the liabilities in respect of the Assets on or after the Effective Date.  Notwithstanding ONCM’s liability for all costs incurred after the Effective Date, at ONCM’s request MSA will pay on behalf of ONCM the following amounts which are payable after the Effective Date and prior to the Closing Date in connection with the Mulatos Project:

(1)

the sum of US$335,000 payable in January, 2001 under the Ejido Agreements; 

(2)

the sum of US$80,000 payable in January, 2001 in respect of mineral concession taxes;

(3)

the sum of US$5,000 payable in January and February, 2001 in connection with the Ejido Agreements; and

(4)

any other reasonable costs incurred by MSA on behalf of ONCM, including any adjustments of the foregoing, from the Effective Date until the Closing Date,

all of which payments are collectively referred to as the “Advanced Amount”.

At Closing ONCM shall deliver to MSA or its Assignees a promissory note in the principal amount of the Advanced Amount in the form attached hereto as Schedule T (the “Advanced Amount Promissory Note”) to reimburse MSA for the Advanced Amount.  If this Agreement is terminated after the Effective Date, the expenses incurred by ONCM after the Effective Date will be for its account and will not be reimbursed by MSA and ONCM will indemnify MSA and its Affiliates for all liabilities, including environmental liabilities, incurred by ONCM in connection with the Mulatos Project after the Effective Date until the date of termination.”

1.

Subsection 2.2(4).  Subsection (4) of Section 2.2 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“(4)

registrable transfer documents to effect the transfer to ONCM of the Concessions except the Concession Continuación de la Virgencita;”

2.

Subsection 2.2(9).  The following paragraph is inserted in Section 2.2 of the Asset Purchase Agreement as subsection (9):

“(9)

transfer documents to effect the transfer to ONCM of all of MSA’s right, title and interest in and to the Concession Continuación de la Virgencita;”

3.

Section 2.3.  Section 2.3 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following paragraph:

“2.3

ONCM’s Closing Deliveries.  At the Closing, ONCM shall deliver or cause to be delivered to MSA the following documents and payments, each in a form acceptable to MSA and duly executed where applicable:

(1)

a certificate of the President or other senior officer of ONCM dated as of the Closing Date in the form of Schedule J;

(2)

a certified copy of resolutions of the directors of ONCM authorizing the execution and delivery of this Agreement and the purchase of the Assets and all documents required to be executed by ONCM pursuant hereto;

(3)

the Certificate Evidencing Assumption of Liabilities;

(4)

the Deposit;

(5)

the Closing Payment;

(6)

the Debentures;

(7)

the RTE;

(8)

the IVA Promissory Note;

(9)

the Promissory Notes;

(10)

the Advanced Amount Promissory Note;

 

(11)

the Deferred Closing Payment;

(12)

a security agreement in registerable form acceptable to MSA evidencing MSA’s security interest in the Mulatos Project;

 

(13)

an opinion of counsel to ONCM addressed to MSA, the shareholders of MSA and counsel to MSA in respect of those matters which MSA may reasonably require; and

 

(14)

all such other assurances, consents, agreements, documents and instruments as may reasonably be required by MSA to complete the transactions provided for in this Agreement.”

4.

Section 2.4.  Section 2.4 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following paragraph:

“2.4

National Gold’s Closing Deliveries. At the Closing, National Gold shall deliver or cause to be delivered to MSA the following documents, each in a form acceptable to MSA and duly executed where applicable:

(1)

a certificate of the President or other senior officer of National Gold dated as of the Closing Date in the form of Schedule K;

(2)

a certified copy of resolutions of the directors of National Gold authorizing the execution and delivery of this Agreement and the purchase of the Assets, the issuance and delivery of the Blanket Guarantee and all documents required to be executed by National Gold pursuant hereto;

(3)

the Blanket Guarantee;

(4)

a share pledge agreement pledging all of the shares of ONCM to MSA or its Assignees in a form acceptable to MSA;

(5)

one or more share certificates representing all of the issued and outstanding shares of ONCM duly endorsed for transfer;

(6)

a general security agreement evidencing MSA’s security interest in the assets of National Gold, which agreement shall permit National Gold to grant security ranking pari passu with that of MSA with MSA’s prior written consent, which may not be unreasonably withheld;

(6)

an opinion of counsel to National Gold addressed to MSA, the shareholders of MSA and counsel to MSA in respect of those matters which MSA may reasonably require; and

(7)

all such other assurances, consents, agreements, documents and instruments as may reasonably be required by MSA to complete the transactions provided for in this Agreement.”

5.

Section 3.3.  The following sentence shall be inserted as the concluding sentence of Section 3.3 of the Asset Purchase Agreement:

“For greater certainty, the Extension Fee contemplated by the Amendment to Asset Purchase Agreement shall not be refunded by MSA to ONCM under any circumstances.”

6.

Subsection 4.7(4).  Subsection (4) of Section 4.7 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“(4)

Either before or after Closing MSA may assign to other parties (“Assignees”) some or all of the benefits derived by MSA under this Agreement, or any document or instrument contemplated hereby, including the Debentures, the Promissory Notes, the RTE, the IVA Promissory Note, the Deferred Closing Payment and the Advanced Amount Promissory Note.  National Gold and ONCM further acknowledge and agree that any Assignee of an interest of MSA hereunder will have all of the rights and privileges of MSA under this Agreement as if it was a party hereto.  In furtherance of any such assignment MSA may request that ONCM deliver at Closing one or more Promissory Notes, Debentures, IVA Promissory Notes, Deferred Closing Payment or Advanced Amount Promissory Notes in such denominations and in either Canadian or United States currency (at a fixed exchange rate) as may be directed by MSA prior to Closing.  MSA may request that any document or instrument to be delivered by National Gold or ONCM at Closing be registered in the name of and delivered to an Assignee of MSA; and”

7.

Section 4.8.  The words “under any of the Promissory Notes or the Debentures” in each of subsections (1) and (2) of Section 4.8 of the Asset Purchase Agreement are deleted and replaced by the following:

“under any of the Promissory Notes, the Debentures, the IVA Promissory Note, the Deferred Closing Payment or the Advanced Amount Promissory Note”

8.

Subsection 4.8(5).  The following paragraph is included in Section 4.8 of the Asset Purchase Agreement as subsection (5):

“(5)

so long as any amount remains outstanding under any of the IVA Promissory Note, the Deferred Closing Payment or the Advanced Amount Promissory Note, neither ONCM nor any of its Affiliates will, except with the prior written consent of MSA or all of its Assignees (which consent may be withheld for any reason), issue or permit to be issued any shares, warrants, options or other security (as such term is defined in the Securities Act (British Columbia), R.S.B.C. 1996, c. 418) in the capital of ONCM.”

9.

Section 4.9.  The words “under any of the Promissory Notes or the Debentures neither it nor any of its Affiliates will” in each of subsections (1) and (2) of Section 4.9 of the Asset Purchase Agreement are deleted and replaced by the following:

“under any of the Promissory Notes, the Debentures, the IVA Promissory Note, the Deferred Closing Payment or the Advanced Amount Promissory Note neither it nor any of its Affiliates will (nor will it vote any of the shares held by it in the capital of ONCM so as to permit)”

10.

Subsection 4.9(4). The following paragraph is included in Section 4.9 of the Asset Purchase Agreement as subsection (4):

“(4)

so long as any amount remains outstanding under any of the IVA Promissory Note, the Deferred Closing Payment or the Advanced Amount Promissory Note, neither National Gold nor any of its Affiliates will, except with the prior written consent of MSA and each of its Assignees (which consent may be withheld for any reason), issue or permit to be issued any shares, warrants, options or other security (as such term is defined in the Securities Act (British Columbia), R.S.B.C. 1996, c. 418) in the capital of ONCM.”

11.

Section 5.5.  The words “then owed to MSA, or its Assignees, under the terms of the Promissory Notes, the Debentures or the RTE” are deleted from Section 5.5 of the Asset Purchase Agreement and replaced by the words “then owed to MSA, or its Assignees, under the terms of the Promissory Notes, the Debentures, the RTE, the IVA Promissory Note, the Deferred Closing Payment or the Advanced Amount Promissory Note”.

12.

Section 6.2.  Subsection (3) of Section 6.2 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“(3)

not do any act or omit to do any act that would cause a breach of any representation, warranty, covenant or agreement of MSA contained in this Agreement.”

13.

Subsection 7.3(6).  Clause (a) of subsection 7.3(6) of the Asset Purchase Agreement is deleted in its entirety.  Clauses (b) and (g) of subsection 7.3(6) of the Asset Purchase Agreement are deleted in their entirety and replaced by the following:

“(b)

the amount actually paid by ONCM to MSA or its Assignees in respect of the Deferred Closing Payment;”

“(g)

the sum equal to the amount actually paid by ONCM to MSA or its Assignees in respect of the Advanced Amount less the amount of the Expense Reimbursement;”

14.

Clause 7.3(6)(l).  The following paragraph is included in subsection 7.3(6) of the Asset Purchase Agreement as clause (l):

“(l)

the amount by which the Expense Reimbursement is less than the amount actually paid by ONCM to MSA or its Assignees in respect of the Advanced Amount.”

15.

Section 8.2.  Section 8.2 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:  

“8.2

Security.  As continuing collateral security for the payment and performance of the obligations of ONCM to MSA hereunder, there shall be deposited with MSA the following documents, each of which documents shall be in registerable form acceptable to MSA:

(a)

a security agreement duly created by ONCM in favour of MSA or its Assignees, which security agreement shall contain a first fixed and specific charge and security interest on the interest of ONCM in and to all its property, assets and undertaking and a floating charge on the interest of ONCM in all its other property and assets not otherwise charged under the security agreement;

(b)

the IVA Promissory Note;

(c)

the Deferred Closing Payment;

(d)

the Advanced Amount Promissory Note;

(e)

a Blanket Guarantee (defined below) duly created by National Gold in favour of MSA or its Assignees, including an assignment and postponement of claim in respect of indebtedness and liabilities of ONCM to National Gold thereunder;

(f)

in support of the Blanket Guarantee at item (b) above and any other guarantee granted by it, a security agreement duly created by National Gold in favour of MSA or its Assignees, which security agreement shall contain a first fixed and specific charge and security interest on the interest of National Gold in and to all its property, assets and undertaking and a floating charge on the interest of National Gold in all its other property and assets not otherwise charged under the security agreement;

(g)

in support of the Blanket Guarantee, a share pledge duly created by National Gold in favour of MSA or its Assignees of all shares in the capital of ONCM; and

(h)

the Debenture.”

16.

Section 8.3.  Section 8.3 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

National Gold hereby irrevocably and unconditionally guarantees the due and punctual performance and payment to MSA and its Assignees, whether at stated maturity, by acceleration or otherwise, of all obligations of ONCM to MSA, now or hereafter existing under or pursuant to this Agreement or any other Security Documents, whether for principal, interest, bonus, fees, expenses, indemnity or otherwise, incurred by MSA in enforcing any of its rights under this guarantee, and shall execute and deliver a blanket guarantee of all such obligations (the “Blanket Guarantee”).  National Gold agrees that MSA or its Assignees may grant extensions of time or other indulgences and otherwise deal with ONCM and others as MSA and its Assignees may see fit without prejudice to or in any way limiting or lessening the liability of National Gold under this guarantee and the Blanket Guarantee, and MSA and its Assignees shall not be bound to exhaust their recourses against ONCM or others before being entitled to payment from National Gold under this guarantee and the Blanket Guarantee.  This guarantee and the Blanket Guarantee shall remain in full force and effect notwithstanding any act, omission to act, operation of any Law (including without limitation any Law that may extinguish the indebtedness, obligations or liabilities of ONCM before full payment and performance thereof) or any other circumstance which might otherwise constitute a defence available to, or a discharge of, ONCM in respect of such obligations or of National Gold in respect of this guarantee and the Blanket Guarantee, until such time as MSA and its Assignees have received the full benefits contemplated by Sections 1.2 and 1.4.”

17.

Section 8.5.  The following paragraph is inserted in the Asset Purchase Agreement as Section 8.5:

“8.5 Principal Obligor.  National Gold hereby acknowledges and confirms that it is a principal obligor under this Agreement.”

18.

Section 9.1.  The phrase “Subject to Section  of the Amendment to Asset Purchase Agreement titled “Legal Fees”,” shall be inserted at the beginning of Section 9.1 of the Asset Purchase Agreement.

19.

Section 9.3.  The words “by this Agreement, the Debentures, the Promissory Notes or the RTE” in Section 9.3 of the Asset Purchase Agreement shall be deleted and replaced by the following words:

“by this Agreement, the Debentures, the Promissory Notes, the RTE, the IVA Promissory Note, the Deferred Closing Payment or the Advanced Amount Promissory Note”

20.

Subsection 9.5(1).  The following paragraphs are inserted at the end of clause (a) of subsection 9.5(1) of the Asset Purchase Agreement:

“provided that after the first assignment of this Agreement, any notice delivered pursuant to or under this Agreement or any certificate, document, instrument or agreement delivered pursuant hereto shall be delivered to:

Tenedoramex, S.A. de C.V.

Guerrero 109 Sur-altos entre Jalisco y Puebla

Hermosillo, Sonora, México

C.P. 83000

Attention: 

Mark Isto

with a copy to:

Placer Dome America

1125 Seventeenth Street

Suite 2310

Denver, Colorado

U.S.A.

80202

Facsimile:

(303) 675-0707

Attention: 

Ralph Godell

and to:

Kennecott Minerals Company

224 North 2200 West

Salt Lake City, Utah

U.S.A.

84116

Facsimile:

(801) 238-2488

Attention: 

President

with a copy to:

Blake, Cassels & Graydon LLP

Suite 2600, Three Bentall Centre

595 Burrard Street, P.O. Box 49314

Vancouver, BC

Canada

V7X 1L3

Facsimile:

(604) 631-3309

Attention:

Peter J. O’Callaghan”

21.

Section 9.9.  Section 9.9 of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“9.9

Grace Period.  ONCM may remedy any default in payment for any cash payment under this Agreement by making the payment in full to the applicable party within 14 days after the date such payment was due and such payment when so paid shall be deemed to have been made in a timely manner and on the due date for all purposes.  For greater certainty, where any document, instrument or agreement delivered pursuant to this Agreement provides for a grace period, such period shall run concurrently with this grace period and not consecutively.” 

22.

Section 9.12.  The words “and in sections  and  of the Amendment to Asset Purchase Agreement” shall be inserted immediately following the words “Section 1.3 and Section 1.5” of Section 9.12 of the Asset Purchase Agreement.

23.

Section 9.19.  The following paragraphs are inserted in the Asset Purchase Agreement as Section 9.19:  

“9.19

Cure of Default.  MSA shall have the right, but shall not be obligated:

(a)

at any time and from time to time to take, in its name or in the name of ONCM or otherwise, such action as MSA shall consider necessary or desirable to cure or rectify any default on the part of ONCM under any Licences and Permits, the Ejido Agreements, any surface rights contracts to which ONCM is a party or any other contract material to the Mulatos Project, or other agreement; or

(b)

from time to time while a default under this Agreement or any of the Security Documents shall have occurred and remain continuing, to take in its name or in the name of ONCM or otherwise such action as MSA shall consider necessary or desirable to cure or rectify such default;

and, in either case, in so doing MSA shall not incur any liability to ONCM if any such action taken by MSA or on ONCM’s behalf in good faith shall prove to be in whole or in part inadequate or invalid and ONCM shall indemnify and hold MSA harmless from and against any loss, cost, liability or expense (including, without limitation, reasonable fees on a solicitor and a solicitor’s own client basis and disbursements of counsel) paid, suffered or incurred by MSA in connection therewith or arising therefrom, except for any loss, cost, liability or expense resulting from gross negligence, wilful misconduct or bad faith on the part of MSA.

The liability of ONCM to indemnify MSA as set out in this Section shall survive the payment of the Purchase Price or any portion thereof or any promissory note described in Section 1.2 or Section 1.4 herein, the satisfaction and release of the Security, the payment and satisfaction of indebtedness and liability of ONCM to MSA pursuant to this Agreement or the Security Documents or any termination of this Agreement.”

24.

Section 10.7.  The following paragraphs are inserted in the list of schedules contained in Section 10.7 of the Asset Purchase Agreement and in the list of Schedules immediately preceding the Schedules:

“Schedule R - IVA Promissory Note 

 Schedule S - Deferred Closing Payment

 Schedule T - Advanced Amount Promissory Note”

25.

Schedule A(5).  Subsection (5) of Schedule A of the Asset Purchase Agreement is deleted in its entirety and replaced by the following:

“(5)

“Agreement” means this asset purchase agreement, including the Schedules to this asset purchase agreement, as it or they may be amended, supplemented or otherwise modified, extended, renewed or replaced from time to time by any agreement supplemental or ancillary hereto, and the expression “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement and not to any particular Section or other portion of this Agreement.”

26.

Schedule A(17).  The words “February 28, 2001” are deleted from section (17) of Schedule A of the Asset Purchase Agreement and the words “March 23, 2001” are inserted in replacement therefore.

27.

Schedule A(22). Subsection (22) of Schedule A of the Asset Purchase Agreement is deleted in its entirety and replaced by the following paragraph:

“(22)

“Conversion Rate” means the noon rate for U.S. Dollars as reported by the Bank of Canada on the date of issuance of the Debentures.”

28.

Schedule A(24).  Clause (e) of subsection (24) of Schedule A of the Asset Purchase Agreement is deleted in its entirety.  Clauses (q) and (r) of subsection (24) of Schedule A of the Asset Purchase Agreement are deleted in their entirety and replaced by the following paragraphs:

“(q)

San Lorenzo (Title 210,493);

  (r)

San Lorenzo (Title 211,573);”

29.

Schedule A(56).  Subsection (56) of Schedule A of the Asset Purchase Agreement is deleted in its entirety and replaced by the following paragraph:

“(56)

“Security” means the security given to MSA or its Assignees, at any time and from time to time to secure the obligations of ONCM and National Gold to MSA hereunder, including, without limitation, the security referred to in Article 8 hereof.”  

30.

Schedule A(57).  Subsection (57) of Schedule A of the Asset Purchase Agreement is deleted in its entirety and replaced by the following paragraph:

“(57)

“Security Documents” means the documents referred to in Article 8, and the agreements, instruments and documents delivered from time to time to MSA, by ONCM, National Gold and other Persons, for the purpose of establishing, perfecting, preserving and protecting the Security including any amendments, modifications, substitutions or replacements thereof.”

31.

Schedule A.  The following subsections are inserted in Schedule A of the Asset Purchase Agreement:

“(2a)

“Advanced Amount Promissory Note” has the meaning given in Section 1.4.

(27a)

“Deferred Closing Payment” has the meaning given in Section 1.2(8).

(42a)

“IVA Promissory Note” has the meaning given in Section 1.2(6).

32.

Schedule D(11)(a).  Subsections (t) through (x) of section 11 of Schedule D of the Asset Purchase Agreement are deleted in their entirety and replaced by the following paragraphs:

“(t)

San Lorenzo (Title 210,493);

 (u)

San Lorenzo (Title 211,573);

 (v)

San Miguel 1;

 (w)

San Miguel 2;

 (x)

Tequila;

 (y)

El Carricito 2;

 (z)

Cerro Pelon; and

(aa)

Cerro Pelon 2.”

33.

Schedule E.  The words “Subject to Section 8 of this Note,” are deleted from section 1 of Schedule E to the Asset Purchase Agreement.  Section 8 of Schedule E to the Asset Purchase Agreement is deleted in its entirety.  Section 9 of Schedule E of the Asset Purchase Agreement is renumbered section 8.

34.

Schedule G.  The list of contracts set out at Schedule G-1 hereto is included in section (d) of Schedule G to the Asset Purchase Agreement as Assumed Liabilities.  

35.

Schedule Q.

(a)

Footnote 1 to the Concession named El Carricito in Schedule Q of the Asset Purchase Agreement is deleted in its entirety.

(b)

The following paragraphs are inserted as footnote 1 to the Concession named Continuación de la Virgencita in Schedule Q of the Asset Purchase Agreement:

“1.  MSA is not the registered owner of this Concession.  MSA is the beneficial and legal owner of this Concession pursuant to an option agreement granting MSA an option to purchase this Concession.  MSA has taken all steps and made all payments necessary to exercise its option for the purchase of this Concession.”

(c)

The following paragraph is inserted in the list of Concessions in Schedule Q of the Asset Purchase Agreement:  

	“El Carricito 2

	212,507

	Exploration

	100 hectares

	October 31, 2000 to October 30, 2006

	Unknown.”

36.

Additional Concessions.  MSA has applied for two additional minerals concessions consisting of Cerro Pelon and Cerro Pelon 2 (the “Additional Concessions”) by way of application files numbered 82/26815 dated September 7, 2000 and 82/26914 dated October 30, 2000.  If MSA is granted the Additional Concessions, MSA shall attempt to transfer the Additional Concessions to ONCM but shall not be liable to ONCM or National Gold in any circumstances whatsoever if the transfer of the Additional Concessions does not occur for any reason.  Subject to (i) effective registration of the Additional Concessions in favour of MSA in the records of the DGM and (ii) transfer of the Additional Concessions from MSA to ONCM, the Additional Concessions shall be deemed to be included in the list of Concessions in Schedule Q of the Asset Purchase Agreement effective as of the time that the Additional Concessions are granted in favour of MSA.

37.

Schedules R, S and T.  The schedules attached hereto as Schedules R, S and T are inserted in the Asset Purchase Agreement as Schedules R, S and T, respectively.

38.

Hedge.  On or before March 30, 2001, National Gold shall enter into one or more hedging agreements (the “Hedge”) to protect National Gold and its affiliates against any risk of loss in respect of currency exchange or devaluation on the amount of the IVA Payment converted into Mexican pesos on the Closing Date and shall maintain the Hedge in full force and effect until the IVA Promissory Note and any replacements or substitutions therefor have been paid in full.  On or before March 30, 2001, National Gold shall assign to MSA or its Assignees all of the benefit, right, title and interest in and to any monetary gains realized under the Hedge up to the amount outstanding under the IVA Promissory Note and any substitutions or replacements therefor.

39.

Disclosure.  Each of National Gold and ONCM shall deliver to MSA or each of its Assignees within 10 days of the preparation of such document (i) one copy of each financial statement, whether quarterly, annual, interim or other, prepared by it, (ii) one copy of each disclosure document or other material delivered to its shareholders, (iii) one copy of each document filed by it with any stock exchange, the British Columbia Securities Commission and any similar regulatory authorities in any jurisdiction, and (iv) evidence of timely payment of all Taxes owing on the Concessions.

40.

IVA Procedures.  On or before April 17, 2001, ONCM shall submit to the Mexican government tax authorities all documents, certificates, facturas and all other items required to be filed or submitted to the Mexican government tax authorities in order to obtain a refund of the IVA Payment.  ONCM shall promptly deliver evidence of such filing to MSA or each of its Assignees.

41.

Representations and Warranties.  Each of the parties to this Amendment represents and warrants to each other party that:

(1)

it is a company duly formed, validly existing and in good standing pursuant to the laws of its jurisdiction of incorporation and has all necessary corporate power to enter into this Amendment and to perform its obligations hereunder;

(2)

the entering into this Amendment and the performance of its obligations hereunder will not conflict with or result in a violation or breach of or default under or accelerate the performance required by its constating document, any Applicable Law applicable to it or any contract or other commitment to which they are parties or by which they are bound; and

(3)

it has full power, legal right and authority to execute and deliver this Amendment and to perform its obligations hereunder and the execution of this Amendment and the performance of its terms have been duly authorized by all necessary corporate actions on its part and this Amendment has been duly executed and delivered by it.

42.

Further Assurances.  The parties hereto agree to execute such further and other assurances and/or documents as may be necessary to complete the true intent and meaning of this Amendment.

43.

Governing Law.  This Amendment will be governed by and construed and enforced in accordance with the laws of the Province of British Columbia.

44.

Ratification and Confirmation.  Each of the parties hereby ratifies and confirms all of the terms and conditions of the Asset Purchase Agreement except to the extent expressly amended hereby.

45.

Entire Agreement.  No amendment or modification of this Amendment will become effective unless and until the same will have been reduced in writing and duly signed, executed and sealed by the parties.  This Amendment supersedes all previous agreements, written or oral, in respect of the subject matter hereof.

46.

47.

Counterparts.  This Amendment and any certificate or other writing delivered in connection herewith may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment or such other writing as the case may be, taken together will be deemed to be one and the same instrument.  The execution of this Amendment or any other writing by any party hereto will not become effective until all counterparts hereof have been executed by all the parties hereto.

IN WITNESS WHEREOF the parties have executed this Amendment in the city of Mexico City, United Mexican States on this 23rd day of March, 2001.

MINERA SAN AUGUSTO, S.A. de C.V.

By:

(signed) “Mark Isto”

By:

(signed)

O. N. C. de MEXICO S.A. de C.V.

By:

(signed) “Albert Matter”

NATIONAL GOLD CORPORATION

By:

(signed) “Albert Matter”

SCHEDULE G-1

ADDITIONAL ASSUMED LIABILITIES

(x)

the option agreement pursuant to which MSA was granted an option to purchase the Concession Continuación de la Virgencita and any transfer of the said Concession to MSA by exercise of the option thereunder.

(xi)

the contracts and liabilities set out in the attached spreadsheet to the extent they are not already included herein.

MINERA SAN AUGUSTO, S.A. DE C.V.

	Description

	Owner and/or Contact

	Address

	Phone

	Observations

	Office’s

	Ana Maria Insus Masó

	Guerrero No. 111-3, Co. Centro, C.P. 83000, Hermosillo, Son.

	0115262121120

	 
	Warehouse

	Victor Manual Ojedo Borchardt

	Garcia Conde No. 408, Col. Pitic, Hermosillo, Son.

	0115262143327

	 
	Mulatos Agreements

	Ejido Mulatos, contact Pedro Hurtado

	Ave. Etchojoa No. 1277, Col. Camino Real, Hermosillo, Son.

	0115262196688

	 
	Mulatos House’s

	Josefina Heras de Camargo

	Justo Sierra No. 36, Col. Constitucion, C.O. 83150, Hermosillo, Son.

	0115262101222

	 
	Matarachi Camp

	Ejido Matarachi, contact Evigael Carrasco

	Know Address, Matarachi, Son.

	 	 
	Land Matarachi Camp

	Felipe Rascon Amaya

	Know Address, Matarachi, Son.

	 	 
	INE-MIA

	Victor Lichtinger Walsman

	Mexico City

	 	Permit MIA – Federal Government Agency

	SEMARNAT-Use Land

	Lic. Jose Luis Luna Urquidez

	Centro Gobierno, Hermosillo Building, Floor 2, C.P. 83260, Hermosillo, Son.

	0115262592701

	Permit CUS – Local Government Agency

	SEMARNAT-Power Line

	Lic. Jose Luis Luna Urquidez

	Centro Gobierno, Hermosillo Building, Floor 2, C.P. 83260, Hermosillo, Son.

	0115262592701

	Permit LE – Local Government Agency

	SIUE-Access Road (Gravel Borrow Pit)

	Arq. Manuel Ibarra Legarreta

	Blvd. Hidalgo y Comonfort, Floor 3

	 	Permit CA – Government Agency

	Bureau of Mines Hermosillo

	Ing. Juan Antonio Calzada Castra

	Nafinsa Build, Blvd. Luis Encinas y Monteverde

	115262108278

	Mining Concession – Local Government Agency

	SEMMSA

	Jose Luis Talamantes Reyes

	Tehuantepec No. 114, Col. Centenario, C.P. 83260, Hermosillo, Son.

	0115262122622

	Renewal of the contracts

	Landowner Access Road

	Martin Serrano Almeida

	« Los Pericos » Ranch, Yecora, Son.

	 	 
	Landowner Access Road

	Rosendo Torres Garner

	“El Progreso” Ranch, Yecora, Son.

	 	 
	Landowner Access Road

	Emilio Acuña Amaya

	Adolfo de la Huerta No. 282, Yecora, Son.

	 	 
	Landowner Access Road

	Lorgia Apodaca Nuñez de Lopez

	Know Address, Yecora, Son.

	 	 
	Landowner Access Road

	Manuel y Octavio Apodaca Nuñez

	Know Address, Yecora, Son.

	 	 
	Landowner Access Road

	Ruben Garner Amaya

	Know Address, Yecora, Son.

	 	 
	Landowner Access Road

	Octavio Apodaca Nuñez

	Know Address, Yecora, Son.

	 	 
	Landowner Access Road

	Francisco Soto Oros

	Know Address, El Trigo de Corodepe, Sahuaripa, Son.

	 	 
	Landowner Access Road

	Trinidad Soto Oros

	Know Address, Matarachi, Son.

	 	 
	Landowner Access Road

	Jose Evigael Carrasco Cordero

	Know Address, Matarachi, Son.

	 	 
	Landowner Access Road

	Pedro Moises Aguilar Peña

	Aleman Private No. 8, Hermosillo, Son.

	 	 
	Landowner Access Road

	Ejido Matarachi, contact Evigael Carrasco

	Know Address, Matarachi, Son.

	 	 
	Street Access Road

	H. Ayuntamiento de Yecora, Sonora

	Cajeme St. And Juarez Ave., Yecora, Son.

	 	 
	Agreement to extraction of water well

	H. Ayuntamiento de Yecora, Sonora

	Cajeme St. And Juarez Ave., Yecora, Son.

	 	 

Whit out Contract or agreement, but transfer the obligations

	Suharipe Muncipality

	Hermes Biebrich Guevara

	Avenida Rafael Meneses s/n, Sahuaripa, Son.

	0115263430014

	No exist contract with the Company for the service of the Medical and Nurse

	Phone Company

	Local Office

	Garmendia y Morelia, Colonia Centro, C.P. 83000

	0115262187788

	No exist contract, only change the name of the Company

	Water company

	Local Office

	Luis Donaldo Colosio y Guerrero, Colonia Centro, C.P. 83000

	0115262591188

	No exist contract, only change the name of the Company

	Electrical Power Company

	Local Office

	Matamoros y San Luis Potosi, Colonia Centro, C.P. 83000

	0115262591278

	No exist contract, only change the name of the Company

	Medical Mulatos

	Nepomuceno Silva Madrid

	Ave. Paredes esquina Juarez, Sahuaripa, Son.

	0115263430096

	No contract exist, made a individual contract or with Sahuaripa Municipality

	Nurse Mulatos (Practical)

	Guadalupe Guzman Cruz

	Know Address, Mulatos, Son.

	0115251513410

	No exist contract, made a individual contract or with Suharipa Municipality

	Servicio El Salto, S.A. de C.V. (Gasoline Dr.)

	Hermes Biebrich Torres

	Hidalgo St. No. 41, Sahuaripa, Son

	0115263430003

	No exist contract, only change the name of the Company

	Medipac, S.A. de C.V. (Mulatos Medicines)

	Noe Sandoval Vizcarra

	Margarita Maza de Juarez No. 20, Hermosillo, Son.

	011526205926

	No exist contract, only change the name of the Company

	Cybernet de Mexico, S.A. de C.V.

	Local Office

	Esteban Baca Calderon No. 397, Hermosillo, Sonora

	0115262606247

	No exist contract, only change the name of the Company

	Copy Machine

	Local Office

	Blvd. Navarrete No. 216, Col. Villa Satelite, C.P. 83200, Hermosillo, Son.

	0115262606060

	No exist contract, only change the name of the Company

SCHEDULE R

IVA PROMISSORY NOTE

PROMISSORY NOTE

	$1,575,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note (“pagare"), .the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes Sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Minera San Augusto, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, or at such other place- as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $1,575,000 (the "Principal Amount"), together with interest on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $1,575,000 on the earlier of (i) July 15, 2001 and (ii) the date on which the value added tax arising from ONCM's purchase under an asset purchase agreement dated December 21, 2000, as amended, among the Holder, ONCM and National Gold Corporation (the "Asset Purchase Agreement") is refunded by the Government of the United Mexican States to ONCM and ('tit') the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with the Asset Purchase Agreement including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terns are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Kennecott Minerals Company and Tenedoramex, S.A. de C.V. or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date". The Principal Amount may be prepaid in whole or in part at any - time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM . to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Interest. (1) The Principal Amount hereof remaining from time to time unpaid and outstanding shall bear simple interest from March 23, 2001 to and including the Due Date at a rate per annum equal to twelve (12%) percent. Such interest shall accrue and be calculated monthly, and shall be payable monthly, in arrears, on the last business day of each month, commencing on March 30, 2001. Any amount of principal, interest or .other amounts payable hereunder on any amount which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest (both before and after cult and judgment), from the date on which such amount is due until such amount is paid in full, payable on demand, at the rate per annum set out in this Section.

(2)

All computations of interest shall be made on the basis of a year of 365 days and the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Holder of an amount of interest payable by ONCM shall be conclusive and binding for all purposes absent manifest error.

4.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at, the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

5.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of the Asset Purchase Amt and the- documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and ink of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

6.

Usury. Notwithstanding any other provision cones in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be, applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

7.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount owing under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent

8.

Miscellaneous. ON ,CM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evil by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

9.

Conflicts. In the event of a conflict between the provisions of this Note and .the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S.A. de C.V.

By : _________________________________

Title :  ________________________________S

SCHEDULE S

DEFERRED CLOSING PAYMENT

PROMISSORY NOTE

	$250,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note (“pagaré”), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM”) whose address is Insurgentes Sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Minera San Augusto, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada; the principal sum of $250,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $250,000 on the earlier of (i) July 15, 2001 and (ii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among the Holder, ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Kennecott Minerals Company and Tenedoramex, S.A. de C.V. or (B) a debenture dated as of January 1, 2001 granted by ONCM to the Holder together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any singe or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys fees and costs.

4.

Security . This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of the Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof; all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury . Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note; if the Holder ever receives as interest under this Note or the Asset Purchase Amt an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM' shall jam and deliver new promissory notes having the same terms and conditions as this Note (the “Replacement Notes”) except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebted evidenced by this Note consent to all ions of time; renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other Provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law.  This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement. .

8.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S.A. de C.V.

By : _________________________________

Title :  _______________________________

SCHEDULE T

ADVANCED AMOUNT PROMISSORY NOTE

PROMISSORY NOTE

	U.S. $420,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagaré"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. dal Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Minera San Augusto, S.A. de C.V. (the "Holder”) at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, is lawful money of the United States of America, the principal sum of $420,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $420,000 on the earlier of (i) July 15, 2001 and (ii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among the Holder, ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Kennecott Minerals Company and Tenedoramex, S.A. de C.V. or (B) a debenture dated as of January 1, 2001 granted by ONCM to the Holder together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account. and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that as event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shell any singe or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security, This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of the Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or, transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Tune is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of  the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of air alleged oral agreement.

8.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions, of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico. 

	 	O.N.C. de MEXICO S.A. de C.V.

By : _________________________________

Title :  ________________________________Exhibit 4

Exhibit 4.3

SECOND AMENDMENT

TO

ASSET PURCHASE AGREEMENT

DATED

DECEMBER 21, 2000,

FIRST AMENDED

MARCH 23, 2001

KEY

	Defined Terms

	Party

	MSA

	Minera San Augusto, S.A. de C.V.

	ONCM

	O.N.C. de Mexico S.A. de C.V.

	National Gold

	National Gold Corporation

	Blakes

	Blake, Cassels & Graydon LLP

	SMVV

	Sanchez-Mejorada, Velasco y Valencia

	IWJ

	Irwin, White & Jennings

	Larios

	Larios, Rodriguez del Bosque y de Buen

	T-Mex

	Tenedoramex S.A. de C.V.

	Kennecott

	Kennecott Minerals Company

INDEX

	Tab

	Document

	A.

	Pre-Closing

	1.

	Letter of Intent

	B.

	Closing

	1.

	Second Amendment Agreement

	2.

	T-Mex Advanced Amount Promissory Note – US$294,000

	3.

	Kennecott Advanced Amount Promissory Note – US$126,000

	4.

	T-Mex IVA Promissory Note - $1,102,500

	5.

	Kennecott IVA Promissory Note - $472,500

	6.

	T-Mex Deferred Closing Payment - $175,000

	7.

	Kennecott Deferred Closing Payment - $75,000

	8.

	T-Mex $1,225,000 Note

	9.

	Kennecott $525,000 Note

	10.

	T-Mex $525,000 Note

	11.

	Kennecott $225,000 Note

	12.

	T-Mex Debenture - $5,250,000

	13.

	Kennecott Debenture - $2,225,000

	14.

	RTE

	15.

	Confirmatory Letter

	C.

	Post-Closing

	1.

	Acknowledgement

	2.

	Registrable Security Agreements (to be prepared

Letter of Intent

To Amend

Various Mulatos Asset Purchase Agreement Documents

Effective July 15 2001

Parties to the Amendments

Seller/Debt Holder: Tenedoramex, S.A. de C.V. (TMEX)

Seller/Debt Holder: Kennecott Minerals Company (Kennecott)

Seller/Debt Holder: Accessions Mining (Accession)

Buyer/Debtor: National Gold, Inc. (National Gold)

Buyer/Debtor: ORC de Mexico, S.A de C.V. (ONCM)

Related Party: Mr. Albert Matter

Amendments

The following amendments to the specified documents that support the Mulatos Asset Purchase Agreement dated December 21, 2000 are described with respect to each document that requires a change. In the event that other changes to current documents or additional documents are require to properly record the intent of the concepts being addressed by the changes, all parties agree that such changes or document additions can be made. Unless otherwise qualified, all monetary amounts are presented on a 100% basis with respect to the combined interests of TMEX and Kennecott.

Advance Payment Promissory Notes Amendments

(USS294,000 TMEX, US$126,000 Kennecott)

Clause 1(i) of these promissory notes will be changed to reflect a new due date. The date will be changed from July 15, 2001 to December 31, 2001.

A new clause will be added which states that ONCM will pay TMEX and Kennecott on the designated 70/30 split, twenty percent (20%) of all debt or equity financing completed by National Cold until the Advance Payment Promissory Notes obligations are satisfied, and at least US$150,000 will have been cumulatively paid to TMEX and Kennecott by October 15, 2001. Payment received from any financing will be presented to TMEX and Accessions in the form of a cashiers check or wire transfer in dollars of the United States of America within 5 calendar days of receiving final approval for such financing from the Canadian Venture Exchange. Payment not made within that time period will be considered an act of default. The same obligation will apply to any National Gold proposed merger partner-that may merge with National Gold prior to National Gold meeting all of its financial obligations with respect to the Advance Payment Promissory Notes  - (the "Merger Partner”) provided that the obligations of the Merger Partner are contingent upon the completion of the merger and such obligations will become due and payable at closing of the merger.

IVA Promissory Notes Amendments

(C$1,102,500 TMEX, C$472,500 Kennecott)

Clause 1(i) of this promissory notes will be changed to reflect a new due. date. The due date will be changed from July 15, 2001 to October 15, 2001. However, in the event a refund is received prior to October 15, 2001, the payment is due, as per Clause 1 (ii) of the IVA Promissory Note.

National Gold shall maintain hedging agreements, as defined in Clause 46 of the Amendment to Asset Purchase Agreement, to protect National Gold and its affiliates against any risk of loss in respect of currency exchange or devaluation on the amount of the IVA Payment converted into Mexican pesos on the Closing Date and shall maintain the Hedge in full force and effect until the IVA Promissory Note and any replacements or substitutions therefore have been paid in full.

Any net gain on IVA refund and hedge transaction will be applied to the Advance Payment Promissory Note payment of US$150,000 due on October 15, 2001. The net gain determination will be net of all the costs National Gold incurred in setting up the hedge. Net gain/loss determinations will be made in Canadian dollars.

C$250 000 Promissory Notes Amendments 

(C$175,000 TMEX, C$75,000 Kennecott)

Clause 1(i) of the promissory notes will be changed to reflect a new due date. The due date of July 15, 2001 will be replaced with a due date triggered by gold price. The notes will be due and payable on the earlier of the date which is 60-days after the 6-month trailing average gold price equals or exceeds US$300%z or December 31, 2008.

C$750,000 Promissory Notes

(C$25,000 TMEX, C$225,000 Kennecott)

Clause 1(i) of the promissory notes will be changed to reflect a new due date. The due date of September 26, 2001 will be replaced with a due date triggered by gold price. The notes will be due and payable on the earlier of the date which is 60-days after the 6­month trailing average gold price equals or exceeds US$300/oz or December 31, 2008.

C$1,750,000 Promissory Notes Amendments

(C$1,225,000 TMEX and C$525,000 Kennecott)

Clause 1(i) of the promissory notes will be changed to reflect a new due date. The due date of March 18, 2002 will be replaced with a due date triggered by gold price. The notes will be due and payable on the earlier of the date which is 60-days after the 9-­month trailing average gold price equals or exceeds US$300/oz or December 31, 2008.

C$7,500,000 Debentures Amendments

C$5,250,000 TMEX Debenture, C$2,250,000 Kennecott Debenture)

Clause 2.2, which refers to the payment of interest, will be changed to reflect a zero interest rate.

The "Maturity Date" of the debenture will be changed from December 31, 2004. The Maturity Date will be replaced with a due date triggered by gold price. The debentures will be due and payable on the earlier of the date which is 90-days after the 9-month trailing average gold price equals or exceeds US$325/oz or December 31, 2010. If the "trigger price" is reached before October 1, 2004, the due date will be December 31, 2004.

The debentures will be amended to secure all obligations of ONCM and National Gold.

Royalty for Technical Expertise ("RTE") Amendments (TMEX and Kennecott) Amendments

Clause 1 of these agreements will be modified to reflect a sliding scale royalty structure with respect to the gold price for gold and silver production. However, the royalty structure for all other metals and minerals produced (e.g. copper) will remain at 2% NSR, as per the established terms and conditions in the existing royalty agreement. The revised gold and silver royalty structure will be as follows:

	Gold Price Range

	Net Smelter Return Royalty

100% Basis

	<=US$300/oz

	1.0%

	>US$300/oz <US=$325/oz

	1.5%

	>US$325/oz <US=$350/oz

	2.0%

	>US$350/oz <=US$375/oz

	3.0%

	>US$375/oz <=US$400/oz

	4.0%

	>US$400/oz

	5.0%

A clause addressing the required payment of royalty reserve will be added to the agreements. A royalty reserve will be paid quarterly based on the average gold price for the quarter, as expressed in the following table. Payment will be made by the fifth calendar day of the month following the end of the prior quarter for which the royalty reserve payment was due. Royalty reserve payments will be used to offset some or all of the RTE royalty payment due in any particular month. RTE royalties due in excess of the royalty reserve payment can be subtracted from any carry forward balance of royalty reserve payments made in prior quarters.

	Gold Price Range

	Royalty Reserve Quarterly

Payment 100% Basis

(C$)

	>=US$275/oz

	$25,000

	>US$275/oz <=US$325/oz

	$75,000

	>US$325/oz <=$350/oz

	$112,500

	>US$350/oz

	$150,000

ONCM will be given the election to apply the accumulated balance of quarterly royalty reserve payments minus RTE payments to promissory note obligations or debenture obligations.

The royalty reserve will go into effect January 1, 2002 with the first quarterly payment due on or before April 5, 2002. The royalty reserve will stay in effect until all financial obligations defined by the promissory notes, debentures and the Asset Purchase Agreement and subsequent amendments have been met. The RTE will continue to be payable in accordance with its terms. Under no circumstance will the royalty reserve be refunded or returned.

Non-payment of the royalty reserve payments, as scheduled, will be considered a default with TMEX and Kennecott having all security provided by the following documents: Asset Purchase Agreement and Amendment to the Asset Purchase Agreement between ONCM and MSA; National Gold's Blanket Guarantee to MSA; National Gold's Security Agreement to MSA; and ONCM's Security Agreement.

Asset Purchase Agreement Amendments

An amendment will be drafted to assist ONCM in meeting outstanding payment obligations. The essence of the amendment will be that a .certain amount of money will be paid quarterly by ONCM for each ounces of gold produced (or gold equivalent ounce produced) from the mining concessions sold to ONCM. The following schedule will apply. 

	Gold Price Range

	Capital Payment

(US$/oz)

	<=$275/oz

	$5.00

	>US$275/oz <=US$300/oz

	$7.50

	>US$300/oz <=$325/oz

	$10.00

	>U$325/oz <=US$350/oz

	$12.50

	> US$350/oz

	$15.00

For calculation purposes, metals other than gold or mineral produced would be converted to a gold equivalent based on market price relationships between gold and the other commodities under consideration.

The payments made by ONCM will consider all payable mineral products produced regardless of the fact that they may be produced in a startup phase, testing mining phase or pilot plant phase.

The required payment amount per ounce of gold equivalent production will be based on the gold price defined for use in the calculation of Royalty for Technical Expertise (RTE). In the event that a royalty was not due on production under the RTE agreement, the determination of the gold price would be determined according to the RTE agreement.

Such payments will be paid to TMEX and Kennecott quarterly and will be allocated in priority to those debt obligations of ONCM with the earliest maturity dates. Payment shall be -made no later than the fifth calendar day of the month following the end of the quarter.

The capital payment obligation will be fulfilled upon National Gold and ONCM meeting all of their payment obligations to TMBX and Accessions, as defined by promissory notes, debentures) er the Asset Purchase Agreement and associated amendments.

Other Conditions

National Gold and ONCM agree that they will not us the names Placer Dome; Placer Dome Inc. or Kennecott in any press releases. The agreements are with Tenedoramex, S.A. de C.V. not Placer Dome.

TMEX and Kennecott have an interest in investigate the marketability of the debt instruments and royalties they hold regarding the Mulatos Project, ONCM and National Gold. In connection therewith, National Gold agrees to provide on request a waiver to any party, which may have a confidentiality agreement ("CA") with National Gold regarding the Mulatos Project upon the request of the party in question. The letter will state National Gold has waived its rights under the CA with respect to discussions with TMEX or Kennecott regarding the Mulatos Project. The form letter will-be provided at Closing in a form suitable to both TMFX and Kennecott. The Waiver will not restrict in any fashion the discussion TMEX or Kennecott may have with the party in question- National Gold will be obligated to respond to a request for a waiver within five calendar days of being requested to do so by the party covered by the CA. National Gold will also provide to TMEX and Kennecott a letter stating that National Gold has made this contractual commitment, which can be used by TMEX and Kennecott to initiate discussion with third parties covered by a National Gold CA. Such Waivers will be available to parties that currently have confidentiality agreements with National Gold or ONCM and parties that may enter into such agreements with National Gold or ONCM in the future. In the event that National Gold or ONCM commit a material default under any of its agreements with TMEX and Kennecott then National Gold shall forthwith upon request forward particulars of all parties under confidentiality agreements regarding the Mulatos Project.

The amended agreements will include a cross default provision, which will state that upon a default of any obligation under the Asset Purchase Agreement, the associated promissory notes and debentures or any amendment to those documents that all financial obligations will become due and payable.

All parties agree that it is not the intent of this term sheet or the amendment that may result from this term sheet to change the underlying financial security provisions of the Asset Purchase Agreement and supporting documents and agreements.

Conditions of Closing

The obligation of TMEX and Kenneeott to complete the amendments to the Mulatos Asset Purchase Agreement and supporting documents shall be subject to the following Closing Conditions:

1. Receipt of outstanding payments by TIMEX and Kennecott from ONCM for the interest on the IVA promissory note through June 30, 2001;

2. ONCM has paid the concession taxes for all mineral concessions listed in the Asset Purchase Agreement;

3. National Gold will issue a letter to Kennecott Minerals Company regarding their intent to default on the July 15, 2001 payments, identical to the letter supplied to TMEX; and

4. No conditions of default exist at the time of Closing, which have not been addressed by this term sheet.

Closing Date

Amendment documents to any and all documents requiting amendments will be completed and signed by all appropriate parties on or before August 21, 2001 in a place or manner mutually agreeable to all parties. TMEX, Kennecott, ONCM and National Gold shall use all commercially reasonable efforts to satisfy all requirements for Closing.

Disclaimer

This term sheet does not constitute a binding or enforceable agreement and does not create or impose any obligations on any of the parties hereto. Any agreement between the parties in respect of the subject matter of this term sheet will only become binding and enforceable upon execution by the parties of definitive agreements. Each of TMEX, Kennecott and Accessions hereby specifically reserves all of their respective rights under all of the existing agreements with National Gold and ONCM in respect of the Mulatos Project (the "Existing Agreements").

TMEX, Kennecott and Accessions hereby acknowledge that ONCM and National Cold are in default under the Existing Agreements. Notwithstanding that default, each of TMEX, Kennecott  and Accessions hereby confirms, on its own behalf and not on behalf of the others, that it will not exercise its rights to enforce its security under any of the Existing Agreements without further notice to National Gold and ONCM (the "Waiver"). However; each of TMEX, Kennecott and Accessions hereby expressly reserves the right, at any time, to give notice to National Gold and ONCM confirming that it has revoked the Waiver and intends to enforce its rights under the Existing Agreements.

Acceptance

The parties below agree to the above-amended terms and conditions to the Mulatos Asset Purchase Agreement dated December 21, 2001 and its supporting documents.

	Tenedoramex, S.A. de C.V.

(signed)  “Mark Isto”

	

Date:  July 27, 2001

	Kennecott Minerals Company

(signed) 

	

Date :  July 30, 2001

	Accessions Mining

(signed) 

	

Date : July 30, 2001

	O.N.C. de Mexico, S.A. de C.V. 

(signed) “Albert Matter”

	

Date :  July 27, 2001

	National Gold Corporation

(signed)  ”Albert Matter”

	

Date :  July 27, 2001

	Albert Matter

(signed)  ”Albert Matter”

	

Date :  July 27, 2001

SECOND AMENDMENT AGREEMENT

Amendment Agreement dated August 21, 2001 made by O.N.C. de MEXICO S.A. de C.V. (“ONCM”), a corporation incorporated under the laws of the United States of Mexico, TENEDORAMEX, S.A. de C.V. (“T-Mex”), a corporation incorporated under the laws of the United States of Mexico, KENNECOTT MINERALS COMPANY (“Kennecott”), a corporation incorporated under the laws of the State of Delaware, in their own capacity and T-Mex in its capacity as security agent, NATIONAL GOLD CORPORATION (“National Gold”), a corporation organized and subsisting under the laws of Alberta and ALBERT MATTER.

WHEREAS Minera San Augusto, S.A. de C.V. (“MSA”) (originally a direct and indirect subsidiary of T-Mex and Accessions Mining Inc., an affiliate of Kennecott) owned certain mineral concessions and other assets used in connection with exploration and development activities on those concessions in the area of Mulatos in the United Mexican States (the “Mulatos Project”);

AND WHEREAS ONCM, a direct wholly-owned subsidiary of National Gold, entered into an asset purchase agreement dated as of December 21, 2000 amended on March 23, 2001, among MSA, ONCM and National Gold including, without limitation, the grant by ONCM to MSA of a 2% royalty for technical expertise (the “RTE”) (as such agreement is amended hereby and as may at any time or from time to time be further amended, supplemented or otherwise modified or restated, and together with all instruments, documents and ancillary agreements delivered pursuant thereto from time to time, the “Asset Purchase Agreement”) and MSA agreed to sell the Mulatos Project to ONCM on the terms and conditions set out in the Asset Purchase Agreement;

AND WHEREAS as a condition of the sale of the Mulatos Project by MSA, ONCM executed and delivered certain promissory notes (the “MSA Promissory Notes”) and a debenture (the “MSA Debenture”) (collectively, the “MSA Security”);

AND WHEREAS pursuant to an assignment and assumption agreement dated March 23, 2001 among MSA, National Gold, T-Mex and Kennecott (the “Assignment and Assumption Agreement”), MSA assigned a 70% interest in its right, title and interest in the Asset Purchase Agreement and the MSA Security to T-Mex and a 30% interest in its right, title and interest in the Asset Purchase Agreement and the MSA Security to Kennecott;

AND WHEREAS pursuant to the Assignment and Assumption Agreement, ONCM executed and delivered the following promissory notes issued in replacement and substitution of the MSA Promissory Notes in the principal amount of:

(a)

US$294,000 to T-Mex (the “T-Mex Advanced Amount Promissory Note”);

(b)

US$126,000 to Kennecott (the “Kennecott Advanced Amount Promissory Note”);

(c)

Cdn.$1,102,500 to T-Mex (the “T-Mex IVA Promissory Note”);

(d)

Cdn.$472,500 to Kennecott (the “Kennecott IVA Promissory Note”);

(e)

Cdn.$175,000 to T-Mex (the “T-Mex Deferred Closing Payment”);

(f)

Cdn.$75,000 to Kennecott (the “Kennecott Deferred Closing Payment”);

(g)

Cdn.$1,225,000 to T-Mex (the “T-Mex $1,225,000 Note”);

(h)

Cdn.$525,000 to Kennecott (the “Kennecott $525,000 Note”);

(i)

Cdn.$525,000 to T-Mex (the “T-Mex $525,000 Note”); and

(j)

Cdn.$225,000 to Kennecott (the “Kennecott $225,000 Note”);

(collectively, the T-Mex $1,225,000 Note, the Kennecott $525,000 Note, the T-Mex $525,000 Note, the Kennecott $225,000 Note, the T-Mex IVA Promissory Note, the Kennecott IVA Promissory Note, the T-Mex Advanced Amount Promissory Note, the Kennecott Advanced Amount Promissory Note, the T-Mex Deferred Closing Payment and the Kennecott Deferred Closing Payment are hereinafter referred to as the “Promissory Notes”);

AND WHEREAS pursuant to the Assignment and Assumption Agreement, ONCM executed and delivered the following debentures issued in replacement and substitution of the MSA Debenture in the principal amount of:

(a)

Cdn.$5,250,000 to T-Mex (the “T-Mex Debenture”);

(b)

Cdn.$2,250,000 to Kennecott (the “Kennecott Debenture”);

(collectively, the T-Mex Debenture and the Kennecott Debenture are hereinafter referred to as the “Debentures”);

AND WHEREAS on July 30, 2001 the parties entered into a non-binding letter of intent for the purpose of setting out their intention with respect to amending the Asset Purchase Agreement, the Promissory Notes and the Debentures;

AND WHEREAS National Gold guaranteed all obligations of ONCM under and in connection with the Asset Purchase Agreement pursuant to the Asset Purchase Agreement and a blanket guarantee dated March 23, 2001 (collectively, the “Guarantee”);

AND WHEREAS ONCM has requested certain amendments to the Asset Purchase Agreement, the Promissory Notes and the Debentures, and T-Mex and Kennecott have consented to and agreed to make such amendments on certain terms and conditions;

AND WHEREAS the parties wish to set out the terms of their agreement;

NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the foregoing premises, the further advance of the said credit facilities, the sum of $2.00 in lawful money of Canada now paid by T-Mex and Kennecott to ONCM and National Gold and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereby agree as follows:

Section 1.  Definitions.  All terms not otherwise defined herein and defined in the Asset Purchase Agreement shall have the same meaning herein as in the Asset Purchase Agreement.

Section 2.  Asset Purchase Agreement Amendments.

(a)

Notwithstanding Section 46 of the Amendment to Asset Purchase Agreement dated March 23, 2001, any net gain on the IVA refund or the Hedge will be applied to the U.S.$105,000 payment by ONCM to T-Mex under the T-Mex Advanced Amount Promissory Note due on October 15, 2001 and the U.S.$45,000 payment by ONCM to Kennecott under the Kennecott Advanced Amount Promissory Note due on October 15, 2001, and will be credited against the principal amounts outstanding thereunder.

(b)

The determination of the net gain on each of the IVA refund and the Hedge will be calculated net of all costs incurred by National Gold in setting up the Hedge and will be made in Canadian dollars.

(c)

National Gold shall, or shall cause ONCM to, pay T-Mex and Kennecott an amount equal to 14% and 6%, respectively, of the net proceeds received by National Gold, or any successor, assignee or merger partner of National Gold (the “Merger Partner”) whether by way of amalgamation, merger, corporate reorganization or business combination or any similar business transaction with any arms length third party (each a “Business Combination”), in respect of any public or private offering of securities (as defined in the Securities Act (British Columbia)) or any other debt or equity financing made by National Gold or such Merger Partner until such time as the Advanced Amount Promissory Notes have been satisfied in full.  Such amount is to be paid to each of T-Mex and Kennecott in the form of a cashier cheque or wire transfer in lawful money of the United States of America within 5 calendar days of National Gold Corporation or the Merger Partner receiving final approval for such debt or equity financing from the Canadian Venture Exchange, or if such approval is not required, within 5 calendar days of the closing of such financing.  National Gold shall impose a similar obligation on any proposed Merger Partner of National Gold provided that (i) the Business Combination is completed with the Merger Partner and (ii) the payment obligations of such Merger Partner shall not arise until the closing of the Business Combination.

Section 3.  Capital Payments.  Until all the obligations of ONCM under the Promissory Notes, the Debentures and the Asset Purchase Agreement as amended from time to time are satisfied in full,

(a) 

during each quarter in which any ore, mineral, or other commercially valuable product (“Product”) is mined from the Concessions, ONCM shall pay quarterly capital payments per ounce of gold or gold equivalent produced (the “Capital Payments”) to T-Mex and Kennecott based on the Gold Price as defined in the RTE as follows:

	Gold Price Range

	Capital Payment

(US$/oz)

	US$0.00/oz to US$274.99/oz

	$5.00

	US$275.00/oz to US$299.99/oz

	$7.50

	US$300.00/oz to US$324.99/oz

	$10.00

	US$325.00/oz to US$349.99/oz

	$12.50

	US$350.00/oz or higher

	$15.00

(b) 

for purposes of calculating the Capital Payment due, Products other than gold shall be converted to a gold equivalent price based upon market price relationships between gold and other Products, calculated in a manner satisfactory to T-Mex and Kennecott, acting reasonably.

(c) 

Capital Payments shall be paid in respect of all Product mined from the Concessions, including without limitation during any start-up phase, testing mining phase and pilot plant phase.

(d) 

ONCM shall pay the Capital Payments to T-Mex and Kennecott on or before the fifth calendar day of the month following the end of the prior quarter.

(e) 

Capital Payments shall be credited against outstanding obligations of ONCM owing under the following agreements or instruments until each is satisfied in full according to its terms in the following order: (i) firstly, the Advanced Amount Promissory Notes; (ii) the IVA Promissory Notes; (iii) the Deferred Closing Payment; (iv) the $750,000 Promissory Notes; (v) the $1,750,000 Promissory Notes; (vi) the $7,500,000 Debentures; and lastly, (vii) at T-Mex’s and Kennecott’s discretion, against any other amounts owing from ONCM to T-Mex or Kennecott from time to time.

Section 4. T-Mex Advanced Amount Promissory Note Amendment.  T-Mex and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the T-Mex Advanced Amount Promissory Note shall be deemed to be amended by deleting Section 1 in its entirety and substituting in its place and stead the following new Section 1:

1.

Payment.  (a)  ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$105,000 on the earlier of (i) October 15, 2001 and (ii) the date on which there is a Cross Default (the “First Payment Due Date”) and ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$189,000 on the earlier of (i) December 31, 2001 and (ii) the date on which there is a Cross Default (the “Second Payment Due Date”) (collectively, the First Payment Due Date and the Second Payment Due Date hereinafter referred to herein as “Due Date”).  The Principal Amount may be prepaid in whole or in part at any time without premium or penalty.  Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.  The term “Cross Default” as used herein means anytime when ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the “Asset Purchase Agreement”) including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to the Holder and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture;

(b)  14% of the net proceeds received in respect of or arising out of any debt or equity financing completed in respect of any public or private offering of securities (as defined in the Securities Act (British Columbia)) or any other debt or equity financing made by ONCM shall be paid by ONCM to the Holder in the form of a cashier check or wire transfer in lawful money of the United States of America within 5 calendar days of National Gold Corporation or ONCM receiving final approval for such debt or equity financing from the Canadian Venture Exchange or if such approval is not required within 5 calendar days of the closing of such financing, for application to the outstanding obligations under this Note.  Any payments required, pursuant to this Section and not made within such 5 day period will constitute a default under Section 3.

Section 5.  Kennecott Advanced Amount Promissory Note Amendment.  Kennecott and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Kennecott Advanced Amount Promissory Note shall be deemed to be amended by deleting Section 1 in its entirety and substituting in its place and stead the following new Section 1:

1.

Payment.  (a)  ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$45,000 on the earlier of (i) October 15, 2001 and (ii) the date on which there is a Cross Default (the “First Payment Due Date”) and ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$81,000 on the earlier of (i) December 31, 2001 and (ii) the date on which there is a Cross Default (the “Second Payment Due Date”) (collectively, the First Payment Due Date and the Second Payment Due Date hereinafter referred to herein as “Due Date”).  The Principal Amount may be prepaid in whole or in part at any time without premium or penalty.  Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.  The term “Cross Default” as used herein means anytime when ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the “Asset Purchase Agreement”) including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated as of January 1, 2001 to the Holder and Kennecott Minerals Company or (B) a debenture dated the date hereof granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture;

(b)  6% of the net proceeds received in respect of or arising out of any debt or equity financing completed in respect of any public or private offering of securities (as defined in the Securities Act (British Columbia)) or any other debt or equity financing made by ONCM shall be paid by ONCM to the Holder in the form of a cashier check or wire transfer in lawful money of the United States of America within 5 calendar days of National Gold Corporation or ONCM receiving final approval for such debt or equity financing from the Canadian Venture Exchange or if such approval is not required, within 5 calendar days of the closing of such financing, for application to the outstanding obligations under this Note.  Any payments required pursuant to this Section and not made within such 5 day period will constitute a default under Section 3.

Section 6.  T-Mex IVA Promissory Note Amendment.  T-Mex and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the T-Mex IVA Promissory Note shall be deemed to be amended by deleting from the second line of Section 1 the words, “July 15, 2001” and substituting in their place and stead the words, “October 15, 2001”.

Section 7.  Kennecott IVA Promissory Note Amendment.  Kennecott and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Kennecott IVA Promissory Note shall be deemed to be amended by deleting from the second line of Section 1 the words, “July 15, 2001” and substituting in their place and stead the words, “October 15, 2001”.

Section 8.  T-Mex Deferred Closing Payment Promissory Note Amendment.  T-Mex and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the T-Mex Deferred Closing Payment Promissory Note shall be deemed to be amended by deleting from the second line of Section 1, the words “July 15, 2001” and substituting in its place and stead the words “the Trigger Date (as defined below)” and adding the following sentence to the end of Section 1:

“The term “Trigger Date” as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 6-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$300/oz. and (ii) December 31, 2008.”

Section 9.  Kennecott Deferred Closing Payment Promissory Note Amendment.  Kennecott and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Kennecott Deferred Closing Payment Promissory Note shall be deemed to be amended by deleting from the second line of Section 1, the words “July 15, 2001” and substituting in its place and stead the words “the Trigger Date (as defined below)” and adding the following sentence to the end of Section 1:

“The term “Trigger Date” as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 6-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$300/oz. and (ii) December 31, 2008.”

Section 10.  T-Mex $1,225,000 Promissory Note Amendment.  T-Mex and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the T-Mex $1,225,000 Promissory Note shall be deemed to be amended by deleting from the second line of Section 1, the words “March 18, 2002” and substituting in its place and stead the words “the Trigger Date (as defined below)” and adding the following sentence to the end of Section 1:

“The term “Trigger Date” as used herein means the earlier of the date which is (i) 60 days after the date upon which the 9-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 9-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$300/oz. and (ii) December 31, 2008.”

Section 11.  Kennecott $525,000 Promissory Note Amendment.  Kennecott and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Kennecott $525,000 Promissory Note shall be deemed to be amended by deleting from the second line of Section 1, the words “March 18, 2002” and substituting in its place and stead the words “the Trigger Date (as defined below)” and adding the following sentence to the end of Section 1:

“The term “Trigger Date” as used herein means the earlier of the date which is (i) 60 days after the date upon which the 9-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 9-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$300/oz. and (ii) December 31, 2008.”

Section 12.  T-Mex $525,000 Promissory Note Amendment.  T-Mex and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the T-Mex $525,000 Promissory Note shall be deemed to be amended by deleting from the second line of Section 1, the words “September 26, 2001” and substituting in its place and stead the words “the Trigger Date (as defined below)” and adding the following sentence to the end of Section 1:

“The term “Trigger Date” as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 6-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$300/oz. and (ii) December 31, 2008.”

Section 13.  Kennecott $225,000 Promissory Note Amendment.  Kennecott and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Kennecott $225,000 Promissory Note shall be deemed to be amended by deleting from the second line of Section 1, the words “September 26, 2001” and substituting in its place and stead the words “the Trigger Date (as defined below)” and adding the following sentence to the end of Section 1:

“The term “Trigger Date” as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 6-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$300/oz. and (ii) December 31, 2008.”

Section 14.  Amendments to the T-Mex Debenture.  T-Mex and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the T-Mex Debenture shall be deemed to be amended as follows:

(a) 

Section 1.1 of the T-Mex Debenture shall be amended by:

(i)

adding at the last line of the definition of “Advanced Amount Promissory Note” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(ii)

adding at the last line of the definition of “Deferred Closing Payment” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(iii)

adding at the last line of the definition of “IVA Promissory Note” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(iv)

adding at the sixth line of the definition of “Promissory Notes” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(v)

deleting the definition of “Maturity Date” in its entirety and substituting in its place and stead the following:

“Maturity Date” means the earlier of the date which is (i) 90 days after the date upon which the 9-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 9-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$325/oz. (the “Trigger Price”); (ii) December 31, 2010; and (iii) the date upon which a declaration is made pursuant to Section 5.2 hereof and the entire balance of this Debenture becomes due and payable (whether by acceleration or otherwise).  In the event that the Trigger Price is reached prior to October 1, 2004 the Maturity Date will be deemed to be December 31, 2004;

(b) 

Section 2.2 of the T-Mex Debenture shall be amended by deleting from the second line of Section 2.2 the words “7%”, and inserting the words “nil %”;

(c) 

Section 3.2 of the T-Mex Debenture shall be amended by adding to the fifth line of Section 3.2 after the words “Asset Purchase Agreement” the words “including, without limitation, the RTE”;

Section 15.  Amendments to the Kennecott Debenture.  Kennecott and ONCM agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Kennecott Debenture shall be deemed to be amended as follows:

(a) 

Section 1.1 of the Kennecott Debenture shall be amended by:

(i) 

adding at the last line of the definition of “Advanced Amount Promissory Note” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(ii) 

adding at the last line of the definition of “Deferred Closing Payment” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(iii) 

adding at the last line of the definition of “IVA Promissory Note” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(vi) 

adding at the sixth line of the definition of “Promissory Notes” after the word “Kennecott”, the words “together with all amendments, supplements, extensions or other modifications or restatements thereof”;

(v) 

deleting the definition of “Maturity Date” in its entirety and substituting in its place and stead the following:

“Maturity Date” means the earlier of the date which is (i) 90 days after the date upon which the 9-month trailing average gold price, listed by “London P.M. gold fix”, and if not so published by “London P.M. gold fix”, the 9-month trailing average gold price listed by “the Wall Street Journal”, equals or exceeds US$325/oz. (the “Trigger Price”); (ii) December 31, 2010; or (iii) the date upon which a declaration is made pursuant to Section 5.2 hereof and the entire balance of this Debenture becomes due and payable (whether by acceleration or otherwise).  In the event that the Trigger Price is reached prior to October 1, 2004 the Maturity Date will be deemed to be December 31, 2004;

(b) 

Section 2.2 of the Kennecott Debenture shall be amended by deleting from the second line of Section 2.2 the words “7%”, and inserting the words “nil %”;

(c) 

Section 3.2 of the Kennecott Debenture shall be amended by adding to the fifth line of Section 3.2 after the words “Asset Purchase Agreement” the words “including, without limitation, the RTE”.

Section 16.  Amendments to Royalty for Technical Expertise.  National Gold, ONCM, T-Mex and Kennecott agree that upon satisfaction by ONCM of the conditions set out in Section 17 hereof, the Royalty for Technical Expertise Agreement (the “RTE”) shall be deemed to be amended as follows:

(a) 

Section 1 of the RTE shall be amended by deleting it in its entirety and substituting in its place and stead the following:

“1.

From the date of Commencement of Commercial Production until such time as the first 2,000,000 ounces of gold have been mined, processed and sold (or deemed sold) from the Property, ONCM shall pay to MSA or its Assignee (the “Holder”) a royalty for technical expertise (“RTE”) as a result of MSA providing geological and technical information on the Mulatos Project to ONCM at the time of Closing, equal to:

(a)

2% of the Net Smelter Returns in respect of all Products mined and sold (or deemed sold) by ONCM from the Property; and

(b) 

the applicable percentage based upon the Gold Price as published in the Wall Street Journal for the calendar quarter in which the royalty is payable of the Net Smelter Returns in respect of all Silver and Gold Products mined and sold (or deemed sold) by ONCM from the Property as follows:

	Gold Price Range

	Net Smelter Return Royalty

100% Basis

	US$0.00/oz to US$299.99/oz

	1.0%

	US$300.00/oz to US$324.99/oz

	1.5%

	US$325.00/oz to US$349.99/oz

	2.0%

	US$350.00/oz to US$374.99/oz

	3.0%

	US$375.00/oz to  US$399.99/oz

	4.0%

	US$400.00/oz or higher

	5.0%

(b) 

The following shall be inserted as Section 1.1 of the RTE:

“1.1. (a)  ONCM shall pay to the Holder on or before the fifth calendar day of the month following the end of the prior quarter a royalty reserve quarterly payment (the “Royalty Reserve”) based upon the Gold Price in the prior quarter as set out below:

	Gold Price Range

	Royalty Reserve

(C$)

	US$0.00/oz to US$274.99/oz

	$25,000

	US$275.00/oz to US$324.99/oz

	$75,000

	US$325.00/oz to US$349.99/oz

	$112,500

	US$350.00/oz to higher

	$150,000

(b)

The Royalty Reserve will be credited towards (i) firstly, any amounts then owing in respect of the RTE; and (ii) secondly, at ONCM’s election towards outstanding obligations under the Promissory Notes or Debentures.  Any portion not so credited shall be retained by the Holder without interest and may at the election of ONCM be credited against future amounts owing from ONCM to the Holder, provided that the Royalty Reserve may not be credited against future amounts owing in respect of the Royalty Reserve;

(c)

The Royalty Reserve will be paid by ONCM commencing on April 5, 2002 in respect of the first calendar quarter of 2002 and shall continue until all financial obligations of ONCM and National Gold pursuant to the Asset Purchase Agreement, the Promissory Notes and the Debentures as amended from time to time have been satisfied in full;

(d)

The Holder will hold the Royalty Reserve for its own benefit and not as agent or trustee for ONCM.  The Royalty Reserve shall not be refunded or returned to ONCM in any circumstances whatsoever but may be credited against outstanding obligations of ONCM to the Holder as set out in paragraph (b) above.

(c) 

Section 2 of the RTE shall be amended by inserting the following:

(i)

the words “except any fraction thereof comprising or deemed to comprise Gold and Silver Products” shall be inserted immediately after the phrase “commercially valuable products” in the definition of Products;

(ii)

“(g)

“Gold Price” means the price per ounce equal to the average London p.m. gold price fix as published in The Wall Street Journal for the calendar quarter in which the royalty is payable;

(h)

“Gold and Silver Products” means ores, minerals, or other commercially valuable products containing gold or silver mined from the Property, provided that where such products contain a combination of gold or silver and other commercially valuable metals or minerals, Gold and Silver Products shall be deemed to comprise only that fraction of such products as represents the proportionate commercial value of the gold and silver contained in such products, with the remaining fraction of such products deemed to be Products.”

Section 17.  Conditions Precedent.  The obligations of T-Mex and Kennecott to amend the Asset Purchase Agreement, the Promissory Notes and the Debentures pursuant hereto are subject to the conditions precedent that as at the date hereof in respect of the said amendments with respect to the said consent (i) there is no Default or Event of Default under the Debentures which has occurred and is continuing including, without limitation, a failure to pay interest owing under the IVA Promissory Notes or a failure to pay all concession taxes in respect of the Concessions; and (ii) the representations and warranties of ONCM and National Gold set out in Article 4 of the Asset Purchase Agreement are true and correct in every material respect as of the date hereof.

Section 18.  No Use of Names.  Each of National Gold and ONCM covenants and agrees that it shall not use or make reference of any kind whatsoever in any news release, marketing document or other publication of any kind to the names “Placer Dome”, “Placer Dome Inc.”, “Kennecott” or any variations thereof without the prior written consent of Placer Dome Inc. or Kennecott Minerals Company (as applicable), which may be withheld for any reason.

Section 19.  Waiver of Confidentiality Agreements.  National Gold and ONCM covenant and agree that:

(a) 

within 5 calendar days of receiving a request for a waiver from T-Mex, Kennecott or a third party which is party to confidentiality provisions in an agreement with National Gold or ONCM, National Gold and ONCM will provide to T-Mex, Kennecott and the third party a written waiver in the form attached hereto as Schedule “A” agreeing to waive all confidentiality provisions and restrictive covenants of any such agreement between National Gold or ONCM and the third party;

(b) 

concurrent with the execution of this Agreement, National Gold and ONCM will provide to T-Mex and Kennecott a letter outlining National Gold and ONCM’s obligations pursuant to this section in the form attached hereto as Schedule “B”; and

(c) 

in the event there is a material Event of Default as defined in Section 5.1 of the Debentures, National Gold and ONCM shall immediately upon request by T-Mex or Kennecott provide T-Mex and Kennecott with a complete list of all third parties who have entered into agreements with National Gold or ONCM containing confidentiality provisions in respect of the Mulatos Project, ONCM or National Gold.

Section 20.  Confirmation.  National Gold hereby acknowledges, confirms and agrees that notwithstanding the terms and conditions hereof the amendments to the Asset Purchase Agreement, the Promissory Notes and the Debentures contained herein and the execution and delivery of this Agreement by the parties hereto and whether or not any conditions precedent contained herein have been fulfilled:

(a) 

all adjustments or modifications to the obligations underlying the Guarantee have been made and are permitted under the terms and conditions of such Guarantee; and

(b) 

the Guarantee and all security granted by National Gold in respect of the Guaranteed Obligations (as defined in the Guarantee) including, without limitation, a general security agreement dated March 23, 2001 and a share pledge dated March 23, 2001 shall remain in full force and effect as valid and binding continuing security in accordance with their terms without impairment or novation thereof for all present and future debts and liabilities, direct or indirect or otherwise now or at any time or from time to time hereafter due or owing from National Gold and ONCM to T-Mex and Kennecott.

Section 21.  Confirmation.  Albert Matter hereby acknowledges, confirms and agrees that notwithstanding the terms and conditions hereof the amendments to the Asset Purchase Agreement, the Promissory Notes and the Debentures contained herein and the execution and delivery of this Agreement by the parties hereto and whether or not any conditions precedent contained herein have been fulfilled the share pledge granted by Albert Matter to and in favour of MSA dated March 23, 2001 (the “Share Pledge”) in respect of the Obligations (as defined in the Share Pledge) shall remain in full force and effect as valid and binding continuing security in accordance with its terms without impairment or novation thereof for all present and future debts and liabilities, direct or indirect or otherwise now or at any time or from time to time hereafter due or owing from Albert Matter and ONCM to T-Mex and Kennecott.

Section. 22.  Acknowledgement.  The parties acknowledge that save as otherwise indicated herein, the Asset Purchase Agreement, the Promissory Notes and the Debentures and the other Security Documents shall continue unamended and remain in full force and effect and except as amended and supplemented by this Agreement, the Asset Purchase Agreement and the Security are in all respects confirmed, ratified and preserved.

Section 23.  Further Assurances.  ONCM and National Gold shall, at all times hereafter at the reasonable request of T-Mex and Kennecott execute and deliver to T-Mex and Kennecott all such further documents and instruments and shall do and perform such acts as may be necessary to give full effect to the intent and meaning of this Agreement including without limitation, all such further documents, certificates and instruments as considered necessary or desirable by T-Mex and Kennecott to preserve, protect or perfect the Security and ONCM acknowledges and agrees that a default hereunder shall constitute a Default and Event of Default under the Debentures.

Section 24.  Successors and Assigns.  This Agreement shall be binding upon ONCM and National Gold and their respective successors and permitted assigns and shall enure to the benefit of T-Mex and Kennecott and their respective successors and assigns.

Section 25.  Severability.  The provisions of this Agreement are intended to be severable.  If any provision hereof is held to be invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

Section 26.  Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and Canada applicable therein and shall be treated in all respects as a British Columbia contract.

Section 27.  Counterparts.  This Agreement may be executed in counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed an original and all of which, taken together, shall constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals as of the day and year first above written.

	O.N.C. de MEXICO S.A. de C.V.

	 	TENEDORAMEX S.A. de C.V.

	Per:

	(signed) “Albert Matter”

	Per:

	(signed) “Mark Isto”

	Authorized Signing Officer

	Authorized Signing Officer

	

Per:

	 	 	

Per:

	 
	 	Authorized Signing Officer

	 	 	Authorized Signing Officer

	KENNECOTT MINERALS COMPANY

	 	NATIONAL GOLD CORPORATION

	Per:

	(signed)

	Per:

	(signed) “Albert Matter”

	Authorized Signing Officer

	Authorized Signing Officer

	

Per:

	 	 	

Per:

	 
	 	Authorized Signing Officer

	 	 	Authorized Signing Officer

(signed)

(signed) “Albert Matter”

	Witness

	 	ALBERT MATTER

SCHEDULE “A”

FORM OF WAIVER

TO:

_________________________ [Name(s) of other party(ies) to Agreement] (the “Third Party”)

Tenedoramex S.A. de C.V. (“T-Mex”)

Kennecott Minerals Company (“Kennecott”)

National Gold Corporation (“National Gold”) and/or O.N.C. de Mexico S.A. de C.V. (“ONCM”) are party[ies] to a _________________________________________________ [Name of Agreement] dated _______________________ between and ________________________________ [Name(s) of other party(ies) to Agreement] (the “Agreement”).  T-Mex, Kennecott, National Gold and ONCM are parties to an Asset Purchase Agreement dated December 21, 2000, as amended (the “Asset Purchase Agreement”), pursuant to which ONCM purchased the Mulatos orebody and mineral exploration and development project, concessions and related assets located near the village of Mulatos in the state of Sonora, Mexico (the “Mulatos Project”).  

T-Mex and Kennecott have advised that the Third Party wishes to enter into discussions with T-Mex and Kennecott with respect to the potential acquisition of a direct or indirect interest in the Mulatos Project, in whole or in part, by way of an asset purchase, a share purchase, an assignment and assumption of debts owed by ONCM to T-Mex and Kennecott, an assignment and assumption of the Asset Purchase Agreement or related documents and instruments, an assignment and assumption of security or any similar business transaction through with the Third Party may acquire a direct or indirect interest in the Mulatos Project (together with any acts in furtherance of the foregoing, the “Potential Transaction”).  

As required by the terms of the Asset Purchase Agreement, National Gold and ONCM hereby irrevocably waive all confidentiality provisions of the Agreement with respect to a Potential Transaction and further acknowledge and agree that notwithstanding anything contained in the Agreement, the Third Party may enter into discussions, negotiate, enter into an agreement for and conclude a Potential Transaction and such actions shall not constitute a breach by the Third Party of the Agreement.  National Gold and ONCM irrevocably and permanently waive all provisions of the Agreement that may prohibit or restrict the Third Party from entering into a Potential Transaction for any period of time or at all and further release the Third Party from all liability in respect of pursuing, disclosing confidential information in respect of or entering into a Potential Transaction.

The undersigned acknowledge that in reliance upon giving this waiver, T-Mex, Kennecott and the Third Party have undertaken and will undertake trouble and expense in preparation for the Potential Transaction, and in consideration of these premises, covenants and agrees with each of T-Mex, Kennecott and the Third Party not to revoke this waiver.

As of this __ day of ________, 20__.

	O.N.C. de MEXICO S.A. de C.V.

	 	NATIONAL GOLD CORPORATION

	Per:

	(signed) “Albert Matter”

	Per:

	(signed) “Albert Matter”

	Authorized Signing Officer

	Authorized Signing Officer

SCHEDULE “B”

CONFIRMATORY LETTER

[LETTERHEAD OF NATIONAL GOLD]

TO WHOM IT MAY CONCERN:

Pursuant to a Second Amendment Agreement dated August ___, 2001 between National Gold Corporation (“National Gold”), O.N.C. de Mexico S.A. de C.V. (“ONCM”), Tenedoramex, S.A. de C.V. (“T-Mex”), Kennecott Minerals Company (“Kennecott”) and Albert Matter, National Gold and ONCM hereby acknowledge their obligation under section 19 of the Second Amendment Agreement to provide, within 5 calendar days of a request, a written waiver of all confidentiality provisions and restrictive covenants in any agreement between National Gold and/or ONCM on one hand and any third party(ies) on the other hand, in the form attached as Schedule “A” hereto.  

	O.N.C. de MEXICO S.A. de C.V.

	 	NATIONAL GOLD CORPORATION

	Per:

	 	Per:

	 
	Authorized Signing Officer

	Authorized Signing Officer

PROMISSORY NOTE

	US $294,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagaré"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Tenedoramex, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, C.P. 83000, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of the United States of America, the principal sum of $294,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. (a) ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$105,000 on the earlier of (i) October 15; 2001 and (ii) the date on which there is a Cross Default (the "First Payment Due Date") and ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$189,000 on the earlier of (i) December 31, 2001 and (ii) the date on which there is a Cross Default (the "Second Payment Due Date") (collectively, the First Payment Due Date and the Second Payment Due Date hereinafter referred to herein as "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Cross Default" as used herein means anytime when ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to the Holder and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture.

(b) 14% of the net proceeds received in respect of or arising out of any debt or equity financing completed in respect of any public or private offering of securities (as defined in Securities Act (British Columbia)) or any other debt or equity financing made by ONCM shall be paid by ONCM to the Holder in the form of a cashier check or wire transfer in lawful money of the United States of America within 5 calendar days of National Gold Corporation or ONCM receiving final approval for such debt or equity financing from the Canadian Venture Exchange or if such approval is not required, within 5 calendar days of the closing of such financing, for application to the outstanding obligations under this Note. Any payments required pursuant to this Section and not made within such 5 day period will constitute a default under Section 3.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest-shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8. 

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) Albert Matter

Title :

President

PROMISSORY NOTE

	U. S. $126,000

	  March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagaré"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Kennecott Minerals Company (the "Holder") at 224 North 2200 West, Salt Lake City, Utah, U.S.A. 84116, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of the United States of America, the principal sum of $126,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. (a) ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$45,000 on the earlier of (i) October 15, 2001 and (ii) the date on which there is a Cross Default (the "First Payment Due Date") and ONCM shall pay to the Holder and there shall become due the principal amount of U.S.$81,000 on the earlier of (i) December 31, 2001 and (ii) the date on which there is a Cross Default (the "Second Payment Due Date") (collectively, the First Payment Due Date and the Second Payment Due Date hereinafter referred to herein as "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Cross Default" as used herein means anytime when ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory -notes granted by ONCM dated -the date hereof to the Holder and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture.

(b) 6% of the net proceeds received in respect of or arising out of any debt or equity financing completed in respect of any public or private offering of securities (as defined in Securities Act (British Columbia)) or any other debt or equity financing made by ONCM shall be paid by ONCM to the Holder in the form of a cashier check or wire transfer in lawful money of the United States of America within 5 calendar days of National Gold Corporation or ONCM receiving final approval for such debt or equity financing from the Canadian Venture Exchange or if such approval is not required, within 5 calendar days of the closing of such financing, for application to the outstanding obligations under this Note. Any payments required pursuant to this Section and not made within such 5 day period will constitute a default under Section 3.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default  under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this-Note, together with any other amount due-under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any -single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this-Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$1,102,500

	  March 23, 2001

FOR VALUE RECEIVED and by this. promissory note ("pagaré"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Tenedoramex, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, C.P. 83000, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $1,102,500 (the "Principal Amount"), together with interest on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $1,102,500 on the earlier of (i) October 15, 2001 and (ii) the date on which the value added tax arising from ONCM's purchase under an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") is refunded by the Government of the United Mexican States to ONCM and (iii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with the Asset Purchase Agreement including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to the Holder and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Interest. (1) The Principal Amount hereof remaining from time to time unpaid and outstanding shall bear simple interest from March 23, 2001 to and including the Due Date at a rate per annum equal to twelve (12%) percent. Such interest shall accrue and be calculated monthly, and shall be payable monthly, in arrears, on the last business day of each month, commencing on March 30, 2001. Any amount of principal, interest or other amounts payable hereunder on any amount which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest (both before and after default and judgment), from the date on which such amount is due until such amount is paid in full, payable on demand, at the rate per annum set out in this Section.

(2) All computations of interest shall be made on the basis of a year of 365 days and the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Holder of an amount of interest payable by ONCM shall be conclusive and binding for all purposes absent manifest error.

4.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

5.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

6.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

7.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

8.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

9.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the. date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$472,500

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Kennecott Minerals Company (the "Holder") at 224 North 2200 West, Salt Lake City, Utah, U.S.A. 84116, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $472,500 (the "Principal Amount"), together with interest on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $472,500 on the earlier of (i) October 15, 2001 and (ii) the date on which the value added tax arising from ONCM's purchase under an asset purchase. agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") is refunded by the Government of the United Mexican States to ONCM and (iii) the date on which ONCM fails to pay or perform when due any of its - indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with the Asset Purchase Agreement including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the ''` Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to the Holder and Tenedoramex, S.A. de C.V. or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the. Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Interest. (1) The Principal Amount hereof remaining from time to time unpaid and outstanding shall bear simple interest from March 23, 2001 to and including the Due Date at a rate per annum equal to twelve (12%) percent. Such interest shall accrue and be calculated monthly, and shall be payable monthly, in arrears, on the last business day of each month, commencing on March 30, 2001. Any amount of principal, interest or other amounts payable hereunder on any amount which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest (both before and after default and judgment), from the date on which such amount is due until such amount is paid in full, payable on demand, at the rate per annum set out in this Section.

(2) All computations of interest shall be made on the basis of a year of 365 days and the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Holder of an amount of interest payable by ONCM shall be- conclusive and binding for all purposes absent manifest error.

4.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

5.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified. or amended from time to time.

6. 

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

7.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise; all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

8.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, -waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given. in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is- of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this, Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by.evidence of any alleged oral agreement.

9.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$175,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Tenedoramex, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, C.P. 83000, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $175,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM~shall pay to the Holder $175,000 on,the earlier of (i) the Trigger Date (as defined below) and (ii). the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to the Holder and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Trigger Date" as used herein means Ahe earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by "London P.M. gold fix", and if not so published by "London P.M. gold fix", the 6-month trailing average gold price listed by "the Wall Street Journal", equals or exceeds US$300/oz. and (ii) December 31, 2008.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an. event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive -interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's .rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM’s rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability 'or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has-executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$75,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Kennecott Minerals Company (the "Holder") at 224 North 2200 West, Salt Lake City, Utah, U.S.A. 84116, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $75,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $75,000 on the earlier of (i) the Trigger Date (as defined below) and (ii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to the Holder and Tenedoramex, S.A. de C.V. or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Trigger Date" as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by "London P.M. gold fix", and. if not so-published by "London P.M. gold fix", the 6-month trailing average gold price listed by "the Wall Street Journal", equals or exceeds US$300 oz. and (ii) December 31, 2008.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained- in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result. in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other -written agreement entered into in connection with this- Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$1,225,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Tenedoramex, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, C.P. 83000, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $1,225,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $1,225,000 on the-earlier of (i) the Trigger Date (as defined below) and (ii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated 'as of December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Tenedoramex, S.A. de C.V. and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term. "Trigger Date" as used herein means the earlier of the date which is (i) 60 days after the date upon which the 9-month trailing average gold price, listed by "London P.M. gold fix", and if not so published by "London P.M. gold fix", the 9-month trailing average gold price listed by "the Wall Street Journal", equals or exceeds US$300/oz. and (ii) December 31, 2008.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not mAde when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are. expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation .of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be­ modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this- Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8.

Conflicts . In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has- executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$525,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to .the order of Kennecott Minerals Company (the "Holder") at 224 North 2200 West, Salt Lake City, Utah, U.S.A. 84116, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $525,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $525,000 on the earlier of (i) the Trigger Date (as defined below) and (ii) the date on which ONCM fails to pay or perform when due any. of its indebtedness, liabilities of obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Tenedoramex, S.A. de C.V. and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Trigger Date" as used herein means the earlier of the date which is (i) 60 days after the date upon which the 9-month trailing average gold price, listed by "London P.M. gold fix", and if not so published by "London P.M. gold fix", the 9-month trailing average gold price listed by "the Wall Street Journal", equals or exceeds US$300%z. and (ii) December 31, 2008.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not made when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the. Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court. costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usurv. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note; if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer, all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British..Columbia law. This Note; the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has-executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$525,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Tenedoramex, S.A. de C.V. (the "Holder") at Guerrero 109 Sur-altos entre Jalisco y Puebla, Hermosillo, Sonora, Mexico, C.P. 83000, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, the principal sum of $525,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $525,000 on the earlier of (i) the Trigger Date (as defined below) and (ii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Minera San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred .Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Tenedoramex, S.A. de C. V. and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Minera San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Trigger Date" as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by "London P.M. gold fix", and if not so published by "London P.M. gold fix", the 6-month trailing average gold price listed by "the Wall Street Journal", equals or exceeds US$3001oz. and (ii) December 31, 2008.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default.  If any payment required under this Note is not made when due,  the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or' partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and' ancillary documents, as they may be modified or amended from time to time. 

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

 Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradicted by evidence of any alleged oral agreement.

8

Conflicts . In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has-executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

PROMISSORY NOTE

	$225,000

	March 23, 2001

FOR VALUE RECEIVED and by this promissory note ("pagare"), the undersigned O.N.C. de Mexico S.A. de C.V., a Mexican corporation ("ONCM") whose address is Insurgentes sur 800 Piso 16, Col. del Valle, Mexico, CP 03100, unconditionally promises to pay to the order of Kennecott Minerals Company (the "Holder") at 224 North 2200 West, Salt Lake City, Utah, U.S.A. 84116, or at such other place as the Holder of this Note may from time to time designate in writing, without deduction or setoff, in lawful money of Canada, .the principal sum of $225,000 (the "Principal Amount"), together with interest, if any, on such Principal Amount and any other amounts due under this Note.

1.

Payment. ONCM shall pay to the Holder $225,000 on the earlier of (i) the Trigger Date (as defined below) and (ii) the date on which ONCM fails to pay or perform when due any of its indebtedness, liabilities or obligations under or in respect of (A) any of the promissory notes issued in connection with an asset purchase agreement dated December 21, 2000, as amended, among Miners San Augusto, S.A. de C.V., ONCM and National Gold Corporation (the "Asset Purchase Agreement") including, without limitation, the Promissory Notes, the Advanced Amount Promissory Note, the IVA Payment Promissory Note and the Deferred Closing Payment (all as such terms are defined in the Asset Purchase Agreement) together with any promissory notes issued in replacement and substitution of the said promissory notes, including, without limitation, the promissory notes granted by ONCM dated the date hereof to Tenedoramex, S.A. de C.V. and Kennecott Minerals Company or (B) a debenture dated as of January 1, 2001 granted by ONCM to Miners San Augusto, S.A. de C.V. together with any debentures issued in replacement and substitution of the said debenture (the "Due Date"). The Principal Amount may be prepaid in whole or in part at any time without premium or penalty. Unless the Holder shall otherwise elect, each payment made under this Note shall be applied first to costs and expenses incurred in connection with the enforcement of this Note, next to interest accrued under this Note, if any, and any balance shall be applied to reduce the Principal Amount of this Note. The term "Trigger Date" as used herein means the earlier of the date which is (i) 60 days after the date upon which the 6-month trailing average gold price, listed by "London P.M. gold fix", and if not so published by "London P.M. gold fix", the 6-month trailing average gold price listed by "the Wall Street Journal", equals or exceeds US$300%z. and (ii) December 31, 2008.

2.

Late or Partial Payments. The acceptance by the Holder of any payment that is less than the entire amount then due under this Note shall be on account only and shall not constitute a waiver of the obligation of ONCM to pay such entire amount. The failure of ONCM to pay the entire amount then due under this Note shall be and continue to be an event of default under this Note, notwithstanding the acceptance by the Holder of less than such entire amount on account, and the Holder shall thereafter, until such entire amount is paid (and notwithstanding acceptance by the Holder thereafter of further sums on account or otherwise), be entitled to exercise all rights and remedies provided for in this Note on the occurrence of an event of default under this Note. The acceptance by the Holder of any amount due under this Note after the same is due shall not constitute a waiver of the right to require prompt payment, when due, of all other amounts due under this Note or to declare that an event of default has occurred under this Note with respect to any other amount not paid when due.

3.

Default. If any payment required under this Note is not mode when due, the entire unpaid Principal Amount of this Note, together with any other amount due under this Note, shall, at the option of the Holder, become due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived by ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note, and shall thereafter earn interest, both before and after judgment, at a nominal rate (the "Default Rate") of 12 percent per annum with interest upon overdue interest at the same rate. Any forbearance, failure or delay by the Holder in exercising any right or remedy under this Note or otherwise available to the Holder shall not be deemed to be a waiver of such right or remedy, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. ONCM shall pay all costs and expenses incurred by the Holder in connection with the enforcement of this Note (regardless of the particular nature of such costs and expenses and whether incurred before or after the initiation of suit or before or after judgment), including, without limitation, court costs and trustee's and attorneys' fees and costs.

4.

Security. This Note is secured by a security agreement and Blanket Guarantee issued pursuant to the terms of an Asset Purchase Agreement and the documents, agreements, certificates and instruments contemplated therein creating a lien and/or security interest on certain real and personal property rights and interests of ONCM hereof, all as contemplated in the said Asset Purchase Agreement and ancillary documents, as they may be modified or amended from time to time.

5.

Usury. Notwithstanding any other provision contained in this Note, in the Asset Purchase Agreement or in any other agreement entered into in connection with this Note, if the Holder ever receives as interest under this Note or the Asset Purchase Agreement an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid Principal Amount then outstanding under this Note, and not toward the payment of interest.

6.

Assignment. The Holder may assign or transfer all or any part of the Holder's rights or obligations under this Note and on request of the Holder ONCM shall issue and deliver new promissory notes having the same terms and conditions as this Note (the "Replacement Notes") except that the principal amount under the Replacement Notes shall equal in the aggregate the principal amount outstanding under this Note. ONCM may not assign or transfer, whether absolutely, by way of security or otherwise, all or any part of ONCM's rights or obligations under this Agreement without the Holder's prior written consent.

7.

Miscellaneous. ONCM and all endorsers, guarantors, sureties, accommodation parties and other persons at any time liable for all or any portion of the indebtedness evidenced by this Note consent to all extensions of time, renewals, waivers or modifications that may be granted by the Holder with respect to the payment or other provisions of this Note, the release of all or any portion of any security given in connection with this Note, with or without substitution, and the release of any party liable under this Note. Time is of the essence with respect to all obligations of ONCM under this Note. The unenforceability or invalidity of any provisions of this Note shall not affect the enforceability or validity of any other provision of this Note. The terms of this Note shall bind ONCM and inure to the benefit of the Holder. This Note shall be governed by British Columbia law. This Note, the Asset Purchase Agreement and any other written agreement entered into in connection with this Note are the final expression of the agreement between the Holder and ONCM and may not be contradict by evidence of any alleged oral agreement.

8.

Conflicts. In the event of a conflict between the provisions of this Note and the provisions of the Asset Purchase Agreement, the Asset Purchase Agreement shall prevail.

THE UNDERSIGNED has executed and delivered this Note on the date first set forth above in Mexico City, Mexico.

	 	O.N.C. de MEXICO S .A. de C.V.

By :

(signed) “Albert Matter”

Title :

President

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