Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Uranerz Energy Corporation - Exhibit 10.1

AMENDMENT AGREEMENT #1 

  

THIS AMENDMENT AGREEMENT is made as of the
1st day of January, 2007 

	BETWEEN: 	Uranerz Energy Corporation,
        a company having an office at Suite 1410, 800 West Pender Street, Vancouver,
        B.C., V6C 2V6 

	 	 
	  	(herein called the “Company”)
  
	  	OF THE FIRST PART 
	 	 
	AND: 	Ubex Capital Inc., of
      Suite 1410, 800 West Pender Street, Vancouver, B.C., V6C 2V6; 
	 	 
	  	(herein called the “Consultant”)
    
	 	 
	  	OF THE SECOND PART
  

WHEREAS: 

	A. 	
      The parties entered into a Consulting Agreement dated the
      1st day of July, 2005 (the “Agreement”) whereby the Consultant
      will continue to perform consulting services to the Company as defined in
      the Agreement; and

	 	 
	B. 	
      The parties now wish to amend the
  Agreement;

NOW THEREFORE THIS AMENDMENT AGREEMENT WITNESSES that the
Agreement is amended as follows: 

	1. 	
      By the deletion of Clause #3.1 of the Agreement in its
      entirety and the substitution therefor of the
following:

3.1          
The Company shall pay the Consultant a monthly consulting fee of Cdn $12,500.00
payable monthly. 

	2. 	
      The parties hereby ratify and confirm the Agreement in
      all other respects.

IN WITNESS WHEREOF the Parties hereto have duly executed
this Agreement effective as of the 1st day of January, 2007. 

   

    Uranerz Energy Corporation 

  Per: /s/ Benjamin Leboe                                          

            Authorized Signatory
  

   

   

  Ubex Capital Inc. 

  Per: /s/ Dennis Higgs                                              

            Authorized SignatoryFiled by Automated Filing Services Inc. (604) 609-0244 - Uranerz Energy Corporation - Exhibit 10.2

AMENDMENT AGREEMENT #1 

 

THIS AMENDMENT AGREEMENT is made as of the
1st day of January, 2007 

	BETWEEN: 	Uranerz Energy Corporation,
        a company having an office at Suite 1410, 800 West Pender Street, Vancouver,
        B.C., V6C 2V6 

	 	 
	  	(herein called the “Company”)
  
	 	 
	  	OF THE FIRST PART 
	 	 
	AND: 	Catchpole Enterprises
      Inc., of 222 Carriage Circle, Cheyenne, Wyoming, 82009; 
	 	 
	  	(herein called the “Consultant”)
    
	 	 
	  	OF THE SECOND PART
  

WHEREAS: 

	A. 	
      The parties entered into a Consulting Agreement dated the
      1st day of March, 2005 (the “Agreement”) whereby the Consultant
      will continue to perform consulting services to the Company as defined in
      the Agreement; and

	 	 
	B. 	
      The parties now wish to amend the
  Agreement;

NOW THEREFORE THIS AMENDMENT AGREEMENT WITNESSES that the
Agreement is amended as follows: 

	1. 	
      By the deletion of Clause #3.1 of the Agreement in its
      entirety and the substitution therefor of the
following:

3.1        The Company shall
pay the Consultant a monthly consulting fee of US $10,020.00 payable monthly.

	2. 	
      The parties hereby ratify and confirm the Agreement in
      all other respects.

IN WITNESS WHEREOF the Parties hereto have duly executed
this Agreement effective as of the 1st day of January, 2007. 

 

  Uranerz Energy Corporation 

  Per: /s/ Benjamin Leboe                              
    

          Authorized Signatory 

   

   

  Catchpole Enterprises Inc. 

  Per: /s/ Glenn Catchpole                               
    

           Authorized SignatoryFiled by Automated Filing Services Inc. (604) 609-0244 - Uranerz Energy Corporation - Exhibit 10.3

AMENDMENT AGREEMENT #1 

THIS AMENDMENT AGREEMENT is made as of the
1st day of January, 2007 

	
      BETWEEN: 
	
      SENATE CAPITAL GROUP INC., a company incorporated
      under the laws of British Columbia and having its head office at Suite
      1410 – 800 West Pender Street, Vancouver, B.C., V6C 2V6; 

	 	 
	  	(herein called “Senate”) 
	 	 
	  	OF THE FIRST PART 
	 	 
	AND: 	Uranerz Energy Corporation,
        a company having an office at Suite 1410, 800 West Pender Street, Vancouver,
        B.C., V6C 2V6; 

	  	  
	  	(herein called “Uranerz”) 
	 	 
	  	OF THE SECOND PART
  

WHEREAS: 

	A. 	
      The parties entered into an Office and Administration
      Services Agreement dated the 1st day of September, 2005 (the
      “Agreement”) whereby Senate will continue to perform office and
      administration services to the Company as defined in the Agreement;
    and

	 	 
	B. 	
      The parties now wish to amend the
  Agreement;

NOW THEREFORE THIS AMENDMENT AGREEMENT WITNESSES that the
Agreement is amended as follows: 

	1. 	
      By the deletion of Clause #2 of the Agreement in its
      entirety and the substitution therefor of the
following:

2.      
 In consideration of Senate providing the above-mentioned services, Uranerz
agrees to pay Senate $ 15,500 CDN per month, and reimburse Senate at cost for
investor relations, and financial and legal personnel hired to provide such
services to Uranerz, plus any proportionate increase in rent and operating costs
during the Term, and plus GST, payable in advance on the 1st day of each month.

	2. 	
      The parties hereby ratify and confirm the Agreement in
      all other respects.

IN WITNESS WHEREOF the Parties hereto have duly executed
this Agreement effective as of the 1st day of January, 2007. 

 

Senate Capital Group Inc. 

Per: /s/ Dennis
Higgs                                            

        Authorized Signatory 

 

 

Uranerz Energy Corporation 

Per: /s/ Benjamin
Leboe                                           
      
Authorized SignatoryFiled by Automated Filing Services Inc. (604) 609-0244 - Journey Resources Corp. - Exhibit

JOINT VENTURE AGREEMENT 

THIS AGREEMENT is dated effective December 18, 2006.

AMONG: 

  
    
      
        JOURNEY RESOURCES CORP., a corporation existing
          under the laws of the Province of British Columbia and having an office
          at #1208 – 808 Nelson Street, Vancouver, British Columbia V6Z 2H2

        (hereinafter referred to as “Journey”) 

      

    

  

AND: 

  
    
      
        MINERALES JAZZ S.A. DE C.V., a corporation duly
          organized pursuant to the laws of Mexico and having an office at Avenida
          del Mar No. 1022 Oficina 5, Zona Costera, Mazatlan, Sin MEXICO 82149
        

        (hereinafter referred to as “Jazz”, together
          with Journey, the “Operator”) 

      

    

  

AND: 

  
    
      
        WITS BASIN PRECIOUS MINERALS INC., a corporation
          existing under the laws of the State of Minnesota and having an office
          at 900 IDS Center, 80 South 8th Street, Minneapolis, Minnesota
          55402 

        (hereinafter referred to as “Wits”) 

      

    

  

WHEREAS: 

(A)          The
Operators are the recorded and beneficial owners of an undivided 100% interest
in and to certain mineral concessions situated in Guerrero State, Mexico, as
detailed in the specific description of the mineral concessions in Schedule “A”
hereto (the “Property”);

(B)         
Pursuant to an option agreement (the “Option Agreement”) dated June 28, 2006,
among the Operator and Wits, the Operator granted to Wits an exclusive right and
option to acquire up to an undivided 50% right, title and interest in and to the
Property; and 

(C)          The
Operator and Wits have agreed to form a joint venture with respect to their
interests in the Option Agreement and mineral claims thereunder on the terms and
conditions herein set forth. 

- 2 - 

NOW, THEREFORE, in consideration of the promises and the
mutual representations and covenants hereinafter set forth, the parties hereto
do hereby agree as follows: 

PART 1 

DEFINITIONS 

1.1                  
For the purposes of this Agreement: 

(a)         
“Accounting Procedure” means the accounting procedure prescribed from
time to time by the Management Committee, which will initially be the accounting
procedure forming part of this Agreement and set out in Schedule “C”; 

(b)          “Area
of Interest” means a part of the lands lying within two (2) kilometres from
the external perimeter of the Property in existence as of the Effective Date, as
described in Schedule “B”.; 

(c)         
“Assets” means the Property, other tenements, Facilities, Mineral
Products and Supplies and all other assets acquired or held by the Participants
with respect thereto or pursuant to this Agreement as the same may exist from
time to time; 

(d)         
“Associated Company” in relation to a person and/or entity means: 

(i)          an
operation which owns directly or through any other means more than 50% of the
outstanding capital stock of an entity, 

(ii)         a corporation
of which that person or entity owns directly or through any other means more
than 50% of the outstanding capital stock, and 

(iii)        a corporation of
which either of the persons or entities referred to in Sections 1.1(d)(i) and
1.1(d)(ii) owns directly or through any other means more than 50% of the
outstanding capital stock.; 

(e)         
“Commercial Production” means the commercial exploitation of Mineral
Products from the Property or any part of the Property as a mine, after
implementation of a Production Program, but does not include milling for the
purpose of testing or milling by a pilot plant; 

(f)          “Cost
Share” means the respective shares of Costs and other liabilities to be
borne by each Participant, which will be equal to the respective Interests of
each Participant as determined from time to time; 

(g)         
“Costs” means Expenditures, Program Overruns, Production Program Costs,
Production Program Overruns and Operating Costs, as applicable; 

- 3 - 

(h)         
“Effective Date” means the date first written above; 

(i)         
“Expenditures” means, without duplication, all costs, expenses,
obligations and liabilities of whatever kind of nature actually and directly
incurred by either Participant, up to the implementation of a Production
Program, in connection with the exploration and development of the Property,
including without limiting the generality of the foregoing, monies expended in
maintaining the Underlying Agreement in good standing, monies expended in
maintaining the Property in good standing by doing and filing assessment work,
in doing geophysical, geochemical, and geological surveys, drilling, drifting
and other underground work, assaying and metallurgical testing and engineering,
in acquiring Facilities, in paying the fees, wages, salaries, travelling
expenses, and fringe benefits (whether or not required by law) of all persons
engaged in work with respect to and for the benefit of the Property, in paying
for the food, lodging and other reasonable needs of such persons and including
all costs at prevailing charge out rates for any personnel or officers of the
Operator who from time to time are engaged directly or indirectly in work on the
Property and a charge made by the Operator as described in Section 6.2; 

(j)         
“Facilities” means all mines, plants and facilities including without
limitation, all pits, shafts, haulageways, and other underground workings, and
all buildings, plants, facilities and other structures, fixtures and
improvements and all other property, whether fixed or moveable, as the same may
exist at any time in, or on the Property and relating to the operation of the
Property as a mine or outside the Property if for the exclusive benefit of the
Property only; 

(k)         
“Feasibility Report” means a detailed report, showing the feasibility of
placing any part of the Property into Commercial Production at an acceptable
rate of return on capital, in such form and detail as is customarily required by
institutional lenders of major financing for mining projects, and includes a
reasonable assessment of the mineable ore reserves and their amenability to
metallurgical treatment, a complete description of the work equipment and
supplies required to bring such part of the Property into Commercial Production
and the estimated cost thereof, a description of the mining methods to be
employed and a financial appraisal of the proposed operations supported by
explanations of the information set out in Section 10.2; 

(l)         
“Interest” means the undivided beneficial percentage interest of a
Participant in the Assets and will be equal to its interest in the Property as
determined pursuant to this Agreement; 

(m)         
“Management Committee” means a committee formed pursuant to Part 11; 

(n)         
“Mineral Products” means minerals derived for the account of the
individual Participants from operating the Property as a mine to which has been
applied the least number of treatments or processes necessary to render the
minerals into a substance or state for which there is a commercially significant
market, either within or outside North America, of arm’s length sales or
purchases between unrelated parties; 

- 4 - 

(o)         
“Operating Costs” means, for any period after the commencement of
Commercial Production, all costs, expenses, obligations, liabilities and charges
of whatsoever kind or nature actually incurred or chargeable, directly by the
Operator in connection with the operation of the Property as a mine during such
period, which costs, expenses, obligations, liabilities and charges include,
without duplication and without limiting the generality of the foregoing, 

(i)          all
costs of or related to the mining and concentrating of ores or other products
and the operation of the Facilities and all costs of or related to marketing of
Mineral Products including transportation, commissions and/or discounts, 

(ii)         such amount
of cash for working capital as, in the opinion of Operator, is required for the
operation of the Property as a mine, 

(iii)        all costs of
or related to operating employee facilities, including housing, 

(iv)         all duties,
charges, levies, royalties, taxes (excluding taxes levied on the income of the
parties) and other payments imposed by a government or municipality or
department or agency thereof upon or in connection with operating the Property
as a mine, 

(v)          fees,
wages, salaries, traveling expenses and fringe benefits (whether or not required
by law) of all persons directly engaged in respect of and for the benefit of the
Property and all costs involved in paying for the food, lodging and other
reasonable needs of such persons, 

(vi)         a charge
made by Operator in accordance with Section 6.2 for unallocable overhead costs,

(vii)        all
reasonable costs of consulting, legal, accounting, insurance and other services,

(viii)       all exploration
expenditures incurred after the commencement of Commercial Production, 

(ix)         all
capital costs of operating the Property as a mine including all costs of
construction, equipment and mine development including maintenance, repairs and
replacements and all capital expenditures relating to an improvement, expansion,
modernization or replacement of the Facilities, 

(x)          all
costs for pollution control, reclamation costs and any other related costs
incurred or to be incurred by the Operator including deposits for such costs
required by a governmental body or authority, 

(xi)         any
costs or expenses incurred or to be incurred relating to the termination of the
operation of the Property as a mine, 

(xii)        uninsured losses
on the Facilities, and 

- 5 - 

(xiii)       all costs of
maintaining in good standing or renewing from time to time the Property and
other tenements or any interest therein, including payment of all government
royalties and taxes of any nature whatsoever in connection therewith, 

less the amount of all insurance recoveries and settlements
received during such period to the extent such recoveries and settlements were
not deducted in a previous period and, except where specific provision is made
otherwise, all Operating Costs will be determined in accordance with generally
accepted accounting principals applied consistently from year to year, but such
costs will not include any amount in respect of amortization of Costs, depletion
or depreciation; 

(p)         
“Operating Plan” means a plan presented by Operator pursuant to Part 13
herein; 

(q)         
“operating the Property as a mine” or “operation of the Property as a
mine” means any or all of the mining, milling, leaching, smelting, and
refining of ores, minerals, metals or concentrates derived from the Property.

(r)         
“Operator” means the party acting as operator pursuant to this Agreement,
and will be Journey, so long as Journey’s or one of its subsidiaries’ Interest
is at least 25% , and otherwise will be such party as is determined by the
Management Committee; 

(s)         
“Participant” means, Wits, Journey or Jazz, as the context requires, and
its successors and permitted assigns and “Participants” means collectively Wits,
Journey and Jazz, and their successors and permitted assigns; 

(t)         
“person” means an individual, proprietorship, partnership, unincorporated
organization or any other association, trust body corporate , firm, joint
venture, government or any agency or department thereof, and a natural person in
his or her capacity as trustee, executor, administrator or other legal
representative; 

(u)         
“Prime Rate” means, for a month, the annual rate of interest declared by
the Royal Bank of Canada as the reference rate of interest for determining
Canadian dollar loans in Canada at noon on the first business day in that month;

(v)         
“Production Program” means a Program contemplating achievement of
Commercial Production pursuant to a Feasibility Report; 

(w)         
“Production Program Costs” means all cash, outlays and expenses,
obligations and liabilities of whatever kind or nature spent or incurred
directly or indirectly by the Participants in connection with a Production
Program in order to equip the Property for Commercial Production, including
working capital required for the initial six (6) month operation of the Property
as a mine or such longer period as may be reasonably justified in the
circumstances, and including the overhead charge made by the Operator under
Section 6.2; 

(x)         
“Production Program Overruns” means all Production Program Costs which
exceed those estimated under a Production Program; 

- 6 - 

(y)         
“Program” means, as the context requires: 

(i)          a
program and budget to carry out work and incur Expenditures on the Property,

(ii)         a
document wherein there is specified in detail an outline of any and all
research, prospecting and exploration and development work proposed to be
carried out during such Program, the estimated Expenditures to be incurred in
carrying out such work and the area of the Property on which such work is to be
undertaken, 

(iii)        the
preparation of a Feasibility Report and the preparation of a Production Program,

(z)         
“Program Overruns” means Expenditures which exceed those estimated under
a Program; 

(aa)        “Property”
means the located mineral claims more particularly described in Exhibit “A” and
all other claims, leases and interests in minerals which are hereafter acquired
within the Area of Interest, together with the other tenements surface rights,
mineral rights, personal property and permits associated therewith, and will
include any renewal thereof and any other form of successor or substitute title
thereto or tenure derived from such mineral claims, leases and other tenements;

(bb)        “SEC”
means the United States Securities and Exchange Commission;

(cc)        “Supplies”
means tangible personal property of a non-capital nature (other than Mineral
Products or Facilities) acquired or held by the parties with respect to the
Property; and

(dd)        “Underlying
Agreement” means the option agreement dated June 28, 2006, by and among
Journey, Jazz and Wits. 

The following are Schedules to this
Agreement: 

Schedule
“A”                  
Description of Property; 

Schedule
“B”                  
Area of Interest; and 

Schedule
“C”                  
Accounting Procedure. 

- 7 - 

Interpretation 

1.2                  
For the purposes of this Agreement, except as otherwise expressly provided
herein: 

(a)          “this
Agreement” means this Joint Venture Agreement, including the Schedules hereto,
as it may from time to time be supplemented or amended; 

(b)          the
words “herein”, “hereof” and “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular Part, clause, subclause
or other subdivision or Schedule; 

(c)          the
singular of any term includes the plural and vice versa and the use of any term
is equally applicable to any gender and where applicable to a body corporate;

(d)          the word
“including” is not limiting (whether or not non-limiting language such as
“without limitation” or “but not limited to” or other words of similar import
are used with reference thereto); 

(e)          all
accounting terms not otherwise defined in this Agreement have the meanings
assigned to them in accordance with generally accepted accounting principles
applicable in Canada, applied on a consistent basis with prior years; 

(f)          a
reference to a Part is to a Part of this Agreement, and the word Section
followed by a number or some combination of numbers and letters refers to the
section, paragraph, subparagraph, clause or subclause of this Agreement so
designated; 

(g)          the
headings to the Parts and clauses of this Agreement are inserted for convenience
only and do not form a part of this Agreement and are not intended to interpret,
define or limit the scope, extent or intent of this Agreement or any provision
hereof; 

(h)          any
reference to a corporate entity includes and is also a reference to any
corporate entity that is a successor to such entity; and 

(i)          the
representations, warranties, covenants and agreements contained in this
Agreement will not merge at the Closing and will continue in full force and
effect from and after the Closing Date for the applicable period set out in this
Agreement. 

PART 2 

REPRESENTATIONS, WARRANTIES AND COVENANTS 

2.1                  
Wits hereby represents, warrants and covenants to Journey and Jazz as follows:

- 8 - 

(a)          it is a
company duly incorporated, organized and validly existing under the laws of the
State of Minnesota; 

(b)          it has
full power and authority to carry on its business and to enter into this
Agreement and any agreement or instrument referred to or contemplated by this
Agreement; 

(c)          neither
the execution and delivery of this Agreement nor any of the agreements referred
to herein or contemplated hereby, nor the consummation of the transactions
hereby contemplated conflict with, result in the breach of or accelerate the
performance required by, any agreement to which it is a party; 

(d)          the
execution and delivery of this Agreement and the agreements contemplated hereby
have been duly authorized by all necessary corporate action on its part and will
not violate or result in the breach of the laws of any jurisdiction applicable
or pertaining thereto or of its constating documents;

2.2                  
Each of Journey and Jazz, as the case may be, hereby represents, warrants and
covenants to Wits as follows: 

(a)          Journey
is a company duly incorporated, organized and validly existing under the laws of
the Province of British Columbia; 

(b)          Jazz is
a company duly incorporated, organized and validly existing under the laws of
Mexico; 

(c)          each of
Journey and Jazz has full power and authority to carry on its business and to
enter into this Agreement and any agreement or instrument referred to or
contemplated by this Agreement; 

(d)          neither
the execution and delivery of this Agreement nor any of the agreements referred
to herein or contemplated hereby, nor the consummation of the transactions
hereby contemplated conflict with, result in the breach of or accelerate the
performance required by, any agreement to which either Journey or Jazz is a
party; 

(e)          the
execution and delivery of this Agreement and the agreements contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Journey and Jazz and will not violate or result in the breach of the laws of any
jurisdiction applicable or pertaining thereto or of either of their constating
documents; 

(f)          Journey
is the holder of a valid and existing free miner certificate issued to it under
the Mineral Tenure Act (British Columbia); 

(g)          there is
no consent, approval or condition precedent to the performance of Journey or
Jazz under this Agreement that has not been obtained, as of the Effective Date,
other than acceptance of the Underlying Agreement by the TSX Venture Exchange;

- 9 - 

(h)          Journey
is the 100% beneficial holder of the Property free and clear of all liens,
claims and encumbrances, through its wholly owned subsidiary Jazz; 

(i)          the
Property has been accurately described in Schedule “A”, the claims comprising
the Property have been validly staked, located and recorded in the name of Jazz
and are in good standing pursuant to all applicable laws, and all taxes, rents,
charges and assessments with respect thereto have been paid or satisfied in full
as of the Effective Date; 

(j)          other
than the Underlying Agreement, there are no outstanding agreements or options to
acquire or purchase any of the mineral rights comprising the Property, no person
has any royalty or other interest whatsoever in any production therefrom, and to
the knowledge of either Journey or Jazz, there is no adverse claim or challenge
against or to the ownership of or title to the Property nor any basis therefor;

(k)          no
environmental audit, assessment, study or test has been conducted in relation to
the Property by or on behalf of Journey or Jazz nor is Journey or Jazz aware of
any of the same having been conducted by or on behalf of any other person
(including any governmental authority) and, to their knowledge after due
inquiry, there is no outstanding directive or order or similar notice issued by
any regulatory agency or authority, including any agency or authority
responsible for environmental matters, affecting the Property. There is not any
reason to believe that such an order, directive or similar notice is pending and
all work conducted on the Property to the date hereof has been conducted in full
compliance with all laws; 

(l)          neither
Journey nor Jazz has received any notice nor do they have any knowledge of any
proposal to terminate or vary the terms of or rights attaching to any of the
mineral rights comprising the Property from any governmental, regulatory agency
or authority; 

(m)          there is
no adverse claim or challenge against the right of Wits to earn up to a 50%
Interest in the Property, nor to the knowledge of Journey or Jazz after due
inquiry, is there any basis therefor; 

(n)          to the
knowledge of Journey and Jazz after due inquiry, there are no obligations or
commitments for reclamation, closure or other environmental corrective, clean-up
or remediation action directly or indirectly relating to the Property, to their
knowledge neither Journey nor Jazz has directly or indirectly caused, permitted
or allowed any contaminants, pollutants, wastes or toxic substances
(collectively in this subsection, “Hazardous Substances”) to be released,
discharged, placed, escaped, leached or disposed of on, into, under or through
the Property (including watercourses, improvements thereon and contents thereof)
or nearby land and, to their knowledge, no Hazardous Substances or underground
storage tanks are contained, harboured or otherwise present in or upon the
Property (including watercourses, improvements thereon and contents thereof) or
nearby land; 

- 10 - 

(o)          to the
knowledge of Journey and Jazz, there are no actions, suits, investigations or
proceedings before any court, arbitrator, administrative or regulatory agency or
authority or other tribunal or governmental authority, whether current, pending
or threatened, which directly or indirectly relate to or affect the Property
(including the ownership or existing or past uses thereof) or compliance with
laws nor is Journey or Jazz aware of any facts which would lead it to suspect
that the same might be initiated or threatened; 

(p)          Journey
and Jazz have fully complied with all laws, rules, assessment work and filing
requirements with respect to the Property, including without limitation,
applicable environmental laws, and has received no notice of any breach,
violation or default with respect to the Property; 

(q)          Journey
and Jazz have made available to Wits all material information in their
respective possession or control relating to the Property and will continue to
make available to Wits all information in their possession or control relating
to the Property;

(r)          Journey
and Jazz possess all such permits, authorizations and approvals and rights that
are necessary to engage in the transactions contemplated by this Agreement. Wits
has no reasonable basis to conclude that Journey and Jazz will not be able to
obtain any license, permit, authorization, approval, and right that may be
required to perform their respective obligations herein; and 

(s)          on a
regular basis and as activities of Operator dictate, Operator will provide
detailed drilling reports to Wits, the form of which will comply with “NI 43-101
requirements” governing international drilling reports. 

PART 3 

CONDITIONS 

3.1                  
In addition to making the payment to Journey as described in Section
5.1, Wits’ additional 25% Interest, for a total of a 50% interest,
will be subject to the satisfaction of the following conditions: 

(a)          pursuant
to the Underlying Agreement, on or before January 15, 2007, Wits will issue
500,000 fully paid, non-assessable shares of its common stock to Journey. Such
shares will have piggy back rights and will be the subject of a registration
statement with the SEC, within 60 days of issuance of same, or within such time
as is reasonably practical and mutually agreed by the parties; and 

(b)          pursuant
to the Underlying Agreement, on or before September 30, 2007, Wits will
contribute an additional aggregate amount of $500,000 to the joint venture to
assist the funding of a Phase II drilling project. 

- 11 - 

3.2                  
If the conditions set forth in Section 3.1(a) or Section 3.1(b) are not
satisfied, upon written demand by Journey to Wits, Wits will immediately forfeit
its right to earn an additional 25% Interest and will retain only a 25% interest
in and to the Property. 

3.3                  
Subject to the payment described in Section 5.1, if the conditions set forth in
Section 3.1(a) and Section 3.1(b) are satisfied, Wits will be deemed to have
earned an additional 25% Interest in and to the Property. For purposes of
clarity, if Wits satisfies Section 3.1(a) and 3.1(b), it will hold a 50%
Interest in and to the Property. 

3.4                  
The representations and warranties set forth in Sections 2.1 and 2.2 are
conditions on which the parties have relied on in entering this Agreement and
each of the parties will indemnify and save the other harmless from all loss,
damage, costs, actions and suits arising out of or in connection with any
material breach of any representation, warranty, covenant, agreement or
condition made by them and contained in this Agreement, except as otherwise set
forth herein. 

PART 4 

ASSOCIATION AND PARTICIPANTS 

4.1                  
Wits, Journey and Jazz hereby agree to associate as joint venturers under this
Agreement for the following limited functions and purposes: 

(a)          to
acquire additional interests in minerals within the Area of Interest and to
carry out work on the Property in accordance with the terms of this Agreement;

(b)          to
further explore and if deemed warranted as herein provided, to develop the
Property and equip it for Commercial Production; 

(c)          to
operate the Property as a mine; and 

(d)          to
engage in such other activity as may be considered by the Participants to be
necessary or desirable in connection with the foregoing. 

4.2                  
All transactions, contracts, employments, purchases, operations, negotiations
with third parties and any other matter or act undertaken on behalf of the
Participants in connection with the Assets will be done, transacted, undertaken
or performed in the name of the Operator only, and no party will do, transact,
perform or undertake anything in the name of the other parties or in the joint
names of the Participants. 

4.3                  
The rights and obligations of the Operator and Wits will be, in each case,
several, and will not be or be construed to be either joint or joint and
several. 

4.4                  
Nothing contained in this Agreement will, except to the extent specifically
authorized hereunder, be deemed to constitute a Participant as a partner, an
agent or legal representative of any other party. 

- 12 - 

4.5                  
It is intended that this Agreement will not create the relationship of a
partnership between Operator and Wits and that no act done by Operator or Wits
pursuant to the provisions hereof will operate to create such a relationship.

4.6                  
Each Participant will be liable for its Cost Share of Costs and any other debts
liabilities or obligations associated with the exploration, development or
operation of the Property as a mine at such time as the liability is incurred by
the Operator. 

4.7                  
Except as otherwise set forth herein, each Participant, in proportion to its
Interest, will indemnify and hold harmless the other Participants from any claim
of or liability to any third person asserted upon the ground that an action
taken under this Agreement has resulted in or will result in loss or damage to
such third person, to the extent, but only to the extent that such claim or
liability is paid by such other Participants in an amount in excess of such
other Participants’ Interests. 

4.8                  
Each Participant will devote such time as may be required to fulfill any
obligation assumed by it hereunder but, except for the parties’ respective
obligations hereunder in relation to the Property and the Area of Interest: 

(a)          each
Participant will be at liberty to engage in any other business or activity
outside the joint venture constituted hereby, including the ownership and
operation of any other mining permits, licenses, claims and leases; 

(b)          each
Participants will not be under any fiduciary or other obligation to the other
Participants which will prevent or impede such Participant from participating
in, or enjoying the benefits of, competing endeavours of a nature similar to the
business or activity undertaken by the Participants hereunder; and 

(c)          the
legal doctrines of “corporate opportunity” or “business opportunity” sometimes
applied to persons occupying a relationship similar to that of the Participants
will not apply with respect to participation by either Participant in any
business activity or endeavour outside the joint venture constituted hereby,
and, without implied limitation, a Participant will not be accountable to the
other for participation in any such business activity or endeavour outside the
joint venture constituted hereby which is in direct competition with the
business or activity undertaken by the joint venture. 

PART 5 

INTEREST OF PARTICIPANTS 

5.1                  
Subject to Sections 3.2 and 3.3 herein, as of the Effective Date, Wits will have
a 25% undivided Interest in the Property and Journey and Jazz, collectively,
will have a 75% undivided Interest in the Property. In consideration of Wit’s
Interest and upon execution of this Agreement by all parties hereto, Wits will
deliver the aggregate amount of One Hundred Twenty Thousand Dollars ($120,000)
by wire transfer to an account designated by Journey. 

- 13 - 

5.2                  
Each of the respective Participants will be deemed to have the following
respective Interests and to have incurred the following Expenditures as of the
Effective Date: 

	Participant 	Interest 	Deemed 
	  	  	Expenditures 
	  	  	  
	Wits 	25% 	$___[PV x 25%]____ 
	Operator 	75% 	$____[PV x 75%]___ 

5.3                  
The project will be run on a 75%/25% basis, in accordance with the terms
hereunder, with the Participants contributing to all Costs in operating the
joint venture in proportion to its percentage of undivided Interest. The
aggregate amount of Expenditures as at the Effective Date is deemed to be the
current value of the project (the “PV”). The PV will be updated each time
an additional expenditure is made. 

5.4                  
Except as set forth in Section3.2 and 3.3, the percentage level of the
respective Interests of Wits, Journey and Jazz will not change, so long as each
Participant contributes its respective Cost Share of Costs. 

5.5                  
If a Participant elects not to contribute, or fails to contribute its respective
Cost Share, then the other Participants have the right to contribute to the
non-contributing Participant’s Cost Share resulting in a diluted Interest of the
non-contributing Participant, and the percentage level of the Participants’
Interest will be adjusted pursuant to the following formula:

(a)          the
amount of such Participant’s contributions or deemed contributions to Costs,
divided by 

(b)          the
amount of all contributions or deemed contributions to Costs by all
Participants. 

5.6                  
If, as a result of adjustment pursuant to Section 5.5, a Participant’s Interest
is reduced to 10% or less, the Interest of such Participant will be
automatically converted to a 5% net project interest . 

PART 6 

OPERATOR 

6.1                  
Journey and Jazz, collectively, will act as the Operator under this Agreement,
so long as their collective Interest is 25% or more, or as otherwise set forth
in this Part 6. 

6.2                  
An Operator fee (the “Operator Fee”) will be paid based on a percentage of
Expenditures, as follows:

- 14 - 

	 	(a) 	
      to Operator during the Option Period: 
	10%;                         
    
	 	  	
       
	 
		(b) 	
      to Operator commencing on Effective Date: Expenditures
      incurred; and 
	5% of all qualified 
	 	  	
       
	 
		(c) 	
      to Operator after full Feasibility Report accepted:
      Expenditures during construction, development and operations of the mine.
      
	5% of all qualified
  

6.3                  
The Operator Fee will include, but not be limited to all Operator’s office
overhead costs and all general and administrative expenses including telephone,
faxes, and direct management salaries and wages.

6.4                  
the Operator Fee will be payable monthly in arrears for the Expenditures
incurred in that month, which charge will be an amount sufficient to reimburse
Operator fully for its services as Operator, but not sufficient to enable
Operator to profit thereby and such fees will be reviewed and if proven to be
excessive or insufficient will be adjusted by the Management Committee on the
basis that Operator should neither profit nor lose by acting as such; and 

6.5                  
prescribe the administrative and accounting procedure governing the conduct of
Programs or Production Programs or the operation of the Property as a mine,
including the basis for charges and credit related thereto, except where any
such procedure is in conflict with the provisions of this Agreement, in which
event the provisions of this Agreement will prevail. 

6.6                  
The initial Accounting Procedure, subject to change from time to time by the
Management Committee, is attached as Schedule “C”. 

6.7                  
Operator may resign at any time by giving thirty (30) days’ prior written notice
to Wits and within such 30-day period, the Management Committee will appoint
another party who covenants to act as the Operator upon such terms as the
parties will agree. 

6.8                  
If following its appointment as Operator, Operator fails to perform in a manner
consistent with its powers and duties under this Agreement, any Participant may
give to Operator written notice setting forth particulars of Operator’s default.

6.9                  
Operator will within thirty (30) days after receipt of such notice described in
Section 6.8 either dispute the occurrence of such default or commence to remedy
the default within the time limit aforesaid (and thereafter, in the latter case,
will proceed continuously and diligently to complete all required remedial
action). 

6.10                 
Operator may take action to remedy an alleged default under Section 6.8 without
prejudice to its right to dispute the occurrence of the default and to claim
recovery of expenses incurred in remedial work not occasioned by its default.

6.11                  
If Operator disputes any alleged default under Section 6.8 or if the Participant
alleging a default provides to Operator a further written notice that Operator
has failed to proceed continuously and diligently to complete all required
remedial action to remedy a default 

- 15 - 

previously alleged by such Participant, then the matter will be
referred to arbitration under Section 20.7. 

6.12                  
Operator will be deemed to have offered its resignation upon the occurrence of
any of the following events: 

(a)          if an
attachment in respect to any material liability of Operator is made on the
Property which is not related to the business of the joint venture; 

(b)          If
Operator: 

(i)          admits
in writing its inability to pay its debts as they become due other than
indebtedness (“non-recourse financing”) for money borrowed or guaranteed where
the recourse of the holder thereof is restricted to realization upon specific
assets none of which consist of any Interest, and whether failure to pay the
indebtedness does not result in the creation of an unsecured obligation of
Operator, 

(ii)         makes an
assignment for the benefit of creditors, 

(iii        consents to the
appointment of a receiver (other than a receiver appointed under non-recourse
financing) for all or a substantial part of its assets, 

(iv)         files a
petition in bankruptcy or for a reorganization or an arrangement under
applicable bankruptcy, insolvency or creditors’ relief laws, or otherwise seeks
the relief therein provided, or 

(v)          is
adjusted bankrupt or insolvent; 

(c)          if a
court order is pronounced in respect to Operator appointing a receiver or
trustee for all or a substantial part of its property (other than property
securing non-recourse financing), or approving a petition in bankruptcy or for a
reorganization under applicable bankruptcy, insolvency or creditor’s relief laws
or for any judicial modification or alteration of the rights of creditors; or

(d)          the
Interest of the Operator is reduced to less than 25% for thirty (30) consecutive
days. 

6.13                  
Upon ceasing to be Operator, the former Operator will forthwith deliver to its
successor all Assets, books, records and other property both real and personal
relating to this Agreement or its role as Operator under this Agreement. 

6.14                  
The former Operator will use its best efforts to transfer to its successor, as
of the effective date of the former Operator’s resignation or removal, its
rights and obligations, if any, as Operator under all contracts relating to the
Assets, and pending such transfer and in relations to all other contracts
relating to the Assets, the former Operator will hold its right and interest as
Operator from the date of resignation or removal for the account and to the
order of the new Operator. 

- 16 - 

6.15                  
All reasonable costs of termination of employment of employees of the Operator
arising from any removal, but not resignation, of the Operator will be deemed to
be Expenditures and the former Operator will be reimbursed therefor by the
Participants promptly after submission of invoices to the successor Operator.

6.16                  
The successor Operator will be under no obligation to provide alternative
employment to any employee engaged or primarily engaged by the former Operator.

6.17                  
As soon as practicable after the effective date of resignation or removal of
Operator, the Management Committee will have the accounts of Operator relating
to the Assets audited by an independent auditor (who may be the auditor of a
Participant), and will conduct an inventory of all Assets and such inventory
will be used in the return of and the accounting for the Assets by the Operator
who has resigned or has been removed. 

6.18                  
All costs and expenses incurred in connection with such audit and inventory will
be deemed to be Expenditures. 

6.19                  
Operator will not act or hold itself out as agent for any of the parties nor
make any commitments on their individual behalf unless specifically permitted by
this Agreement or directed in writing by a party. 

PART 7 

POWER AND AUTHORITY OF OPERATOR 

7.1                  
Subject to the control and direction of the Management Committee, Operator will
have full right, power and authority to do everything necessary or desirable in
accordance with good mining practice in connection with the exploration and
development of the Property and to determine the manner of operation of the
Property as a mine, including and without limiting the generality of the
foregoing, the right, power and authority to: 

(a)          prepare
and present to the Management Committee Programs, Production Programs, Operating
Plans and any Feasibility Report in respect of the Property, as applicable; 

(b)         
implement any Program in accordance with Part 9 and any Production Program in
accordance with a Feasibility Report approved by the Participants in accordance
with Part 10; 

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

(d)          employ
and engage such employees, agents, and independent contractors as it may
consider necessary or advisable to carry out its duties and obligations
hereunder and in this connection to delegate any of its powers and rights to
perform its duties and 

- 17 - 

obligations hereunder, but Operator
  will not enter into contractual relationships with an Associated Company except
  on terms which are commercially competitive; 

PART 8 

DUTIES AND OBLIGATIONS OF OPERATOR 

8.1                  
Operator will have such duties and obligations as the Management Committee may
from time to time determine including, without limiting the generality of the
foregoing, the following duties and obligations: 

(a)          to
propose to the Participants and, if approved, to implement Programs, Operating
Plans and the Production Program; 

(b)          to
manage, direct and control all exploration, development and producing operations
in and under the Property, in a prudent and workmanlike manner, and in
compliance with all applicable Federal, Provincial and local laws, rules, order
and regulations; 

(c)          to
prepare and deliver to the Participants during periods of active field work
monthly progress reports of the work in progress, which include statements of
Costs and comparisons of such Costs to the approved Programs or Production
Program and comprehensive annual reports, on or before February 28 of each year
covering the activities hereunder and results obtained during the calendar year
ending on December 31 immediately preceding and timely current reports and
information on any material results obtained together with such other reports as
either Participant may reasonably request; 

(d)          subject
to the terms and conditions of this Agreement, to keep the Property in good
standing free of liens, charges and encumbrances of every character arising from
operations (except liens for taxes not yet due, other inchoate liens and liens
contested in good faith by Operator, and to proceed with all diligence to
contest or discharge any lien that is filed; 

(e)          to
account to the Participants for all contributions to Costs and to use all
reasonable efforts to limit or curtail Program Overruns or Production Program
Overruns; 

(f)          to
maintain true and correct books, accounts and records of operations hereunder;

(g)          to
permit the Participants, at their own expense, to inspect, have access to, take
abstracts from or audit all maps, drill logs, core tests, reports, surveys,
essays, analyses, production reports, operations, technical, accounting and
financial records, including any or all of the records and accounts referred to
in Section 8.1(f), during normal business hours; 

- 18 - 

(h)          to
obtain and maintain, or cause any contractor engaged hereunder to obtain and
maintain, during any period in which active work is carried out hereunder,
adequate insurance coverage with a reasonable bodily injury, death and property
damage limit per occurrence; 

(i)          to
permit the Participants or their representatives so appointed, at their own
expense and risk, access to the Property and all data derived from carrying out
work thereon; 

(j)          to
arrange for and maintain workers’ compensation or equivalent coverage for all
eligible employees engaged by Operator in accordance with applicable statutory
requirements; 

(k)          to
perform its duties and obligations in a manner consistent with good exploration
and mining practices; and 

(l)          to
transact, undertake and perform all transactions, contracts, employments,
purchases, operations and negotiations on behalf of the parties in the
Operator’s name. 

PART 9 

PROGRAMS 

9.1                  
Following one hundred and twenty (120) days after the Effective Date,
Expenditures will only be incurred under and pursuant to Programs prepared by
Operator and delivered to the Management Committee as provided in this Part 9.

9.2                  
If no Program has been approved or completed in a calendar year, Operator will
prepare and submit to the Management Committee a Program proposed by Operator.

9.3                  
Within thirty (30) days after the approval of a Program by the Management
Committee, each Participant will give written notice to the Operator stating
whether or not it elects to contribute its Cost Share of such Program. 

9.4                  
Failure to give notice pursuant to Section 9.3 within such thirty (30) day
period will be deemed to be an election by a Participant not to contribute its
Cost Share of such Program. 

9.5                  
If a Participant elects or is deemed to have elected not to contribute its Cost
Share of a Program approved by the Management Committee, the other Participant
(the “Contributing Participant”) may give notice in writing to Operator that
such Contributing Participant will contribute the Cost Share of the
non-contributing Participant to be incurred under, or pursuant to such Program
and thereafter the Operator will proceed with such Program. 

9.6                  
In such event, the Participants’ respective Interests will thereafter be
adjusted pursuant to the formula set forth in Section 5.5. 

- 19 - 

9.7                  
Operator will not proceed with any Program which is not fully subscribed. 

9.8                  
An election to fund a Program will make a Participant liable to pay its Cost
Share of all of the Expenditures actually incurred under or pursuant to such
Program, including Program Overruns up to but not exceeding 10% of estimated
Expenditures. 

9.9                  
After having elected to fund a Program which is proceeded with, each Participant
will, within thirty (30) days after being requested in writing to do so by
Operator, pay such amount of Expenditures incurred or to be incurred under or
pursuant to such Program as Operator may require, but Operator will not require
payment of any funds more than one month in advance of the period during which
the same are to be expended. 

9.10                  
Monthly Expenditure projections will be delivered by Operator to the
Participants once each calendar quarter for the next succeeding three (3)
months. 

9.11                  
If it appears that Expenditures will exceed by more than 30% those estimated
under a Program, Operator will immediately give written notice to the
Participants outlining the nature and extent of the Program Overruns. 

9.12                  
If such Program Overruns are accepted by the Participants then, within thirty
(30) days after the receipt of a written request from Operator, each Participant
will pay to the Operator its Cost Share of such Program Overruns. 

9.13                  
If a Participant does not accept such Program Overruns, or fails to pay the
same, Operator will be entitled to curtail or abandon such Program and any of
the other Participants will be entitled to pay the Cost Share of such
Participant. 

9.14                  
If a Participant pays such Cost Share of another Participant for such Program
Overruns, it will be entitled to recoup such amount, together with interest at
the Prime Rate pursuant to Section 14.3, and such amount will not be included in
the calculation of each Participant’s Interest under Section 5.5.

9.15                  
If a Participant at any time fails to pay such amount of Expenditures as is
requested by Operator in accordance with Section 9.9 after having elected to do
so or accepted Program Overruns in accordance with Section 9.12, Operator may
give written notice to such Participant demanding payment, and if such
Participant has not paid such amount within thirty (30) days after receipt of
such notice, such Participant will be deemed to 

(i)          be in
default under Section 9.9 or Section 9.12, as applicable, and 

(ii)         have lost its
right to contribute to such Program, 

and thereafter the other Participants will have the right to
contribute all Costs to be incurred under or pursuant to that Program, and
Operator will have the right to curtail or abandon that Program. 

- 20 - 

PART 10 

PRODUCTION PROGRAMS 

10.1                  
If Operator determines that the economic potential of any part of the Property
warrants the preparation of a Feasibility Report, the Operator will present a
Program in accordance with Part 9 contemplating the preparation of a Feasibility
Report. 

10.2                  
Operator will deliver to the Management Committee any internal or draft report
or reports on the economics of Commercial Production and on completion of the
Feasibility Report pursuant to such Program, Operator will deliver to the
Participants a Feasibility Report and if in the opinion of Operator it is
warranted based on the conclusions reached in the Feasibility Report, a
Production Program in respect to such part of the Property which will include at
least the following: 

(a)          a
description of that part of the Property to be covered by the proposed mine,

(b)          the
estimated recoverable reserves of minerals and the estimated composition and
content thereof, 

(c)          the
proposed procedure for development, mining and production, 

(d)          results
of ore amenability test (if any), 

(e)          the
nature and extent of the Facilities proposed to be acquired which may include
mill facilities, if the size, extent and location of the ore body makes such
mill facilities feasible, in which event the study will also include a
preliminary design for such mill, 

(f)          the
total costs, including capital budget, which are reasonably required to obtain
permitting for and to purchase, construct and install all structures, machinery
and equipment required for the proposed mine, including a schedule of timing of
such requirements, 

(g)          all
environmental, socio-economic and heritage baseline impact studies and costs,

(h)          the
period in which it is proposed the Property will be brought to Commercial
Production, 

(i)          such
other data and information as are reasonably necessary to substantiate the
existence of an ore deposit of sufficient size and grade to justify development
of a mine, taking into account all relevant business, tax and other economic
consideration, and 

(j)          working
capital requirements for the initial six (6) month operations as a mine or such
longer period as may be reasonably justified in the circumstances. 

- 21 - 

10.3                  
So long as it has not lost its right to contribute to Programs and to Production
Programs, a Participant may at any time request Operator to present a Program
contemplating the preparation of a Feasibility Report. 

10.4                  
Upon completion of a Feasibility Report, a Production Program will be presented
to Participants if, in the opinion of Operator, it is warranted based on the
conclusions reached in the Feasibility Report. 

10.5                  
If the Participant who did not contribute to the preparation of the Feasibility
Report and the Production Program elects pursuant to Section 9.3 to participate
in a Production Program based on the Feasibility Report prepared by another
Participant, the Participant who did not contribute will reimburse the other an
amount in respect of the cost of the Feasibility Report equal to such
Participant’s Cost Share before taking the cost of the Feasibility Report into
account together with interest from the date contributed at a per annum rate of
the Prime Rate plus 2% per year. 

10.6                  
Within thirty (30) days after the delivery to the Participants of a Production
Program and Feasibility Report,pursuant to either Section 9.3 or Section 9.5,
each Participant will give written notice to Operator stating whether it elects
to contribute its Cost Share of the Production Program. 

10.7                  
Failure to give such notice within such thirty (30) day period will be deemed to
be an election not to contribute to such Production Program and the provisions
of Section 9.5 will apply. 

10.8                  
If all Participants elect to contribute their respective Cost Shares of the
Production Program, Operator will implement the Production Program. 

10.9                  
Operator will not proceed with any Production Program which is not fully
subscribed. 

10.10                  
An election to fund a Production Program will make a Participant liable to pay
its Cost Share of: 

(a)          all of
the Production Program Costs actually incurred under or pursuant to such
Production Program, including Production Program Overruns up to but not
exceeding 10% of estimated Production Program Costs, 

(b)         
Operating Costs and any other costs associated with establishing and operating
the Property as a mine at such time as the liability is incurred by Operator;
and 

(c)          any
debts, liabilities or obligations arising from operations hereunder, except
financing costs incurred by the other Participant in connection with such other
Participants’ contributions to the Production Program. 

10.11                  
Commencing thirty (30) days after having elected to fund a Production Program
which is proceeded with, each Participant will, within thirty (30) days after
being requested in writing to do so by the Operator, pay such amount of
Production Program Costs incurred or to be 

- 22 - 

incurred under or pursuant to such Production Program as
Operator may require, but Operator will not require of any funds more than one
(1) month in advance of the period during which they are to be expended. 

10.12                  
If it appears that Production Program Costs will exceed by more than 30% those
estimated under a Production Program, Operator will immediately give written
notice to the Participants outlining the nature and extent of the Production
Program Overruns. 

10.13                  
If such Production Program Overruns are accepted by the Participants then,
within thirty (30) days after the receipt of a written request from Operator,
each Participant will pay to Operator its Cost Share of such Production Program
Overruns. 

10.14                  
If any Participant does not accept such Production Program Overruns, or fails to
pay the same, any other Participant will be entitled to pay the Cost Share of
such Participant. 

10.15                  
If a Participant pays such Cost Share, it will be entitled to recoup such amount
together with interest at the Prime Rate pursuant to Section 14.3.

10.16                  
If a Participant: 

(a)          at any
time fails to pay such amount of Production Program Costs as is requested by the
Operator in accordance with Section 9.9, or 

(b)          at any
time fails to pay such amount of Production Program Overruns as was accepted by
such Participant in accordance with Section 9.12, 

Operator may give written notice to such Participant demanding
payment, and if such Participant has not paid such amount within thirty (30)
days after receipt of such notice, such Participant will be deemed to be in
default under Section 9.9 or Section 9.12 and have lost its right to contribute
to the Production Program and the other Participant will have the right to
contribute all Production Program Costs to be incurred under or pursuant to the
Production Program and the Operator will proceed with the Production Program and
the Participants’ respective Interests will thereafter be adjusted in accordance
with Section 5.5. 

PART 11 

MANAGEMENT COMMITTEE 

11.1                  
The Participants will, as soon as is practicable following the Effective Date,
establish a Management Committee consisting of one (1) member and one (1)
alternate member of each Participant. 

11.2                  
Each Participant will designate in writing to the other the names of its member
and alternate member of the Management Committee. 

11.3                  
A Participant may from time to time revoke in writing the appointment of its
member to the Management Committee and appoint in writing another in his place.

- 23 - 

11.4                  
A Participant may from time to time in writing appoint one alternate member for
any member theretofore appointed by such Participant. 

11.5                  
Alternate members may attend meetings of the Management Committee, and in the
absence of the member, his alternate member votes or acts, his votes or actions
will for all purposes of this Agreement be considered the actions of the
Participant whom he represents. 

11.6                  
The Participants will give written notice to each other from time to time as to
names, addresses, telephone numbers and facsimile numbers of their respective
members and alternates on the Management Committee. 

11.7                  
Meetings of the Management Committee will be held at such times as the
Management Committee deems appropriate, but in any event not less frequently
than once every three (3) months. 

11.8                  
A meeting of the Management Committee may take place by means of counterpart
resolutions delivered by facsimile, mail or courier or by means of conference
telephones or other communication facilities by which means all Participants or
their alternates participating in the meeting can hear each other. 

11.9                  
The persons participating in a meeting in accordance with Section 11.8 will be
deemed to be present at the meeting and to have so agreed and will be counted in
the quorum therefor and be entitled to speak and vote thereat. 

11.10                  
Notwithstanding Section 11.7, meetings of the Management Committee may be called
by Operator or any Participant by giving thirty (30) days’ notice in writing to
the other Participants, except that thirty (30) days’ notice will be given in
respect of a meeting to consider a pre-Feasibility Report or Feasibility Report
and Production Program, unless otherwise agreed to by the Participants. 

11.11                  
Operator’s representative will be designated as the chairman of the Management
Committee (the “Chairman”). 

11.12                  
Operator will consult freely with the Management Committee and the members
thereof, and keep them fully advised of the present and prospective operations
and plans and will furnish the Management Committee with quarterly reports
relating to the status of the Property together with timely current reports and
information on any material results relating to the Property. 

11.13                  
Voting by the Management Committee may be conducted by verbal, written,
facsimile or telex ballot. 

11.14                  
Except as hereinafter provided, a quorum of any meeting of the Management
Committee will consist of two (2) members, two (2) alternate members or any
combination consisting of one (1) member or one (1) alternate of each
Participant. 

11.15                  
If a quorum is not present within sixty (60) minutes after the time fixed for
holding any such meeting, the meeting will be adjourned to the same day in the
next week 

- 24 - 

(unless such day is not a business day in which case it will be
adjourned to the next business day) at the same time and place. 

11.16                  
At the adjourned meeting the members or alternate members present in person
(which may include only one person) will form a quorum and may transact the
business for which the meeting was originally convened. 

11.17                  
Decisions of the Management Committee will be made by simple majority of the
votes cast at meetings. The representative of each Participant in the Management
Committee will have such number of votes as equals such party’s Participating
Interest at the time of the vote 

11.18                  
All decisions of the Management Committee will be by the affirmative vote of a
majority of the votes entitled to be cast by members. 

11.19                  
In the case where the parties have an equal Interest, or there is an equity of
votes which can not be resolved, the representative of the Operator will have
the deciding vote of the Management Committee.

11.20                  
There will be included with a notice of meeting such material and data as may be
reasonably required to enable the members of the Management Committee to
determine the position they should take in respect of any vote or election to be
made at such meeting. 

11.21                  
Operator will have the responsibility of preparing and distributing notices and
agendas of meetings and keeping records of the proceedings at such meetings and
distributing same to the parties. 

PART 12 

POWERS OF MANAGEMENT COMMITTEE 

12.1                  
The Management Committee will, without limiting any of its powers as specified
elsewhere in this Agreement, have the exclusive right, power and authority to:

(a)          approve,
modify, or reject any Program, Feasibility Report or Production Program proposed
by Operator or any Feasibility Report or Production Program proposed by a
Participant; 

(b)          appoint
a new Operator if the Operator is terminated , resigns pursuant to Section 6.7
or is deemed to have resigned pursuant to Section 6.12; 

(c)         
determine the terms of engagement of Operator, including any remuneration
payable to Operator on the basis that the Operator should neither profit nor
suffer a loss for acting as such; 

(d)          approve
or reject the sale, abandonment or disposition of any part of the Assets (other
than the Property), which, in the case of any assets or series of related assets

- 25 - 

having a value in excess of $100,000,
will require the consent of a Participant or Participants holding at least a 51%
Interest; and 

(e)         
establish accounting procedures from time to time for Operator. 

PART 13 

OPERATING PROGRAMS, BUDGETS AND PAYMENTS 

13.1                  
As of the Effective Date, all mining operations and the Property will be planned
and conducted and all estimates, reports and statements will be prepared and
made on the basis of an operating year and in accordance with the Accounting
Procedure. 

13.2                  
The first operating year will be the period from commencement of Commercial
Production to December 31 of the same calendar year and thereafter each
operating year will coincide with the calendar year (an “Operating Year”). 

13.3                  
Before the beginning of each Operating Year, Operator will prepare and deliver
to the Participants an Operating Plan for that Operating Year. 

13.4                  
The Operating Plan applicable to the initial Operating Year will be submitted
not later than three months prior to the date estimated by the Operator as the
date of commencement of Commercial Production.

13.5                  
Each Operating Plan will contain, with reference to the Operating Year to which
it relates, the following: 

(a)          a plan
of proposed mining operations including, without limiting the generality of the
foregoing, particulars of any special items such as: 

(i)          an
increase of 10% or more in the capacity or through put of the concentrating mill
or mining capacity, 

(ii)         additional
general exploration of the Property outside the mine, 

(iii)        opening and
equipping an additional mine or mines on the Property, 

(iv)         any departure
from development or mining plans previously followed by Operator, 

(v)          any
plans for stockpiling of Mineral Products, or 

(vi)         any
development work to be completed in any Operating Year, if such work is not
required in the ordinary course to continue mining as contemplated by the
approved Operating Plan and Costs therefor are reasonably estimated by Operator
to exceed $50,000; 

- 26 - 

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

(c)          an
estimate of the quantity of Mineral Products to be produced from the
Property;

(d)          such
other facts and figures as may be necessary to give the other parties a
reasonably complete picture of the results Operator plans to achieve; and

(e)          and
Operator will promptly supply to each Participant any additional or supplemental
information which that Participant may reasonably require in respect to the
Operating Plan. 

13.6                  
Each Participant will have thirty (30) days after receipt of any annual
Operating Plan within which to consider such Operating Plan, following which a
meeting of the Management Committee will be called to deal with any objections
and alternative proposals. 

13.7                  
The proposed Operating Plan will then be voted on by the Management Committee.

13.8                  
If a Participant objects to an Operating Plan on the basis of any of the items
as set out in Section 13.5(a)(i) to Section 13.5(a)(vi), Operator will have the
rights to either modify the Operating Plan or to bear all of the Operating Costs
relating to such items, in which event it will be entitled to recoup such amount
together with interest at the Prime Rate plus 1%. 

13.9                  
Based upon the budgets submitted to and approved by the Management Committee, as
the same may be revised from time to time, Operator will submit to each
Participant an estimate of the case requirements.

13.10                  
Within thirty (30) days after receipt of each such cash estimate, the
Participants will remit to the Operator their respective Cost Shares required
under Section 13.9 and if any Participant fails to pay all or any part of its
Cost Share pursuant to Section 13.9 the Operator will be entitled to pay the
unpaid share of that Participant. 

13.11                  
Before incurring any Operating Cost hereunder or as soon as reasonably
practicable thereafter, the Operator will open an account or accounts in bank(s)
approved by the Participants for the purpose of establishing and maintaining
therein at all times a cash fund (the “Operating Fund”) from which Operating
Costs will be paid by Operator or from which Operator may be reimbursed for
Operating Costs spent by it. 

13.12                  
All money received by Operator from the Participants and the payment of
Operator’s invoices for accrued Operating Costs will be deposited in the
Operating Fund and, in addition, each Participant will deposit or cause to be
deposited in the Operating Fund at the times and in the manner provided in
Section 13.9 the sums provided for therein. 

13.13                  
The total amount of deposits in the Operating Fund, regardless of the source
thereof, will at no time exceed the gross Operating Costs of Operator for the
then current and next succeeding month as estimated in the Operating Plan then
in effect. 

- 27 - 

13.14                  
As soon as reasonably possible following the commencement of Commercial
Production, Operator will establish and administer a contingency fund (the
“Contingency Fund”), in addition to all required statutory funds, to be
maintained as a separate account for the purpose of paying all costs, outlays,
expenses, obligations, liabilities and charges of whatever kind or nature
incurred or chargeable, directly or indirectly, by the Participants for
environmental protection, reclamation, pollution control, testing, monitoring,
clean-up, containment and removal of hazardous substances from the Property,
remediation, decommissioning, shutdown and other similar matters (“Reclamation
and Remediation Costs”), severance pay and pensions for employees arising as a
result of operations and in connection with the permanent or temporary shutdown
in whole or in part of any mine on the Property. 

13.15                  
At the time such Contingency Fund is established, Operator will estimate the
amount required to be contributed by each Participant in accordance with its
Interest on an annual basis or from time to time in the case of special or
unexpected Reclamation and Remediation Costs. 

13.16                  
Such Contingency Fund will be invested and reinvested by Operator in such liquid
investments as the Management Committee may from time to time authorize. 

PART 14 

DISPOSITION OF PRODUCTION 

14.1                  
Subject to the provisions of Section 14.3 and Section 14.4, following the
commencement of Commercial Production and provided that each Participant has
paid to Operator its respective Cost Share of Operating Costs for that period,
the Participants will take in kind and separately dispose of Mineral Products in
the ratio of their respective Interests. 

14.2                  
For purposes of determining the value of Mineral Products taken in kind pursuant
to Section 14.3 or Section 14.4, each Participant’s share of Mineral Products
will be valued at the time of delivery to the Participants (or purchase or sale
by Operator pursuant to Section 14.6) and at a value equal to that received by
the Participant acting as Operator for its share of such Mineral Products after
deduction of: 

(a)          all
costs of transporting Mineral Products, including insurance, from the Property
to the place of delivery designated by the purchaser of such Mineral Products,

(b)          such
reasonable charge for marketing Mineral Products as is consistent with generally
accepted industry marketing practices, and 

(c)          all
taxes (other than income taxes), royalties or other charges or imposts provided
for pursuant to any law or legal obligation imposed by any governmental if paid
by such Participant in connection with the disposition of Mineral Products taken
in kind. 

- 28 - 

14.3                  
If Operator makes any payment on behalf of a Participant pursuant to Section
13.10, it will have the prior and preferred right to receive that Participant’s
share of Mineral Products pursuant to Section 14.1, until Operator has received
Mineral Products in kind of a value equal to 50% of the actual payment made as
provided in Section 14.2. 

14.4                  
If a Participant makes any payment on behalf of a Participant pursuant to
Section 9.5 or Section 10.16, it will have the prior and preferred right to
receive that Participant’s share of Mineral Products pursuant to Section 14.1
until the Contributing Participant has received Mineral Products in kind of a
value equal to the actual payment made by the Contributing Participant pursuant
to Section 9.5 or Section 10.16, together with interest at the Prime Rate,
calculated on the outstanding balance from time to time from the date of advance
of such funds. 

14.5                  
Any extra Expenditure incurred by reason of the taking in kind or separate
disposition by a Participant of its proportionate share of Mineral Products will
be borne by that Participant and that Participant will be required to construct,
operate and maintain, at its own expense, any and all facilities which may be
necessary to receive, store and dispose of its share of Mineral Products. 

14.6                  
If any Participant fails to make the necessary arrangements to take in kind or
separately dispose of its proportionate share of Mineral Products, Operator as
agent may purchase for its own account or sell such share, subject to the right
of the Participant owning such share to revoke at will Operator’s authority
under this Section 14.6 in respect of Mineral Products not then purchased by
Operator or committed for sale to others, and Operator will be entitled to
deduct from the sale proceeds all costs of or related to marketing such Mineral
Products including, without limitation, transportation, storage, commissions,
and discounts but all contracts of sale executed by Operator for a Participant’s
share of Mineral Products will be only for such reasonable periods of time as
are consistent with the minimum needs of the industry under the circumstances
and in no event will any such contract be for a period in excess of one (1)
year. 

14.7                  
Proceeds, if any, from the sale by Operator of Mineral Products pursuant to
Section 14.6 will be calculated by Operator separately for each Participant at
the end of each calendar month and will be paid monthly within five (5) days
after the end of each such calendar month following payment to Operator by each
Participant of its respective Cost Share of Operating Costs outstanding as at
the end of that calendar month. 

14.8                  
If a Participant, any Associated Company of a Participant or any person with
whom a Participant is not dealing at arm’s length is a purchaser of Mineral
Products from a Participant, and if the value of such Mineral Products is to be
used to determine any matter arising under this Part 14, such Participant will
be deemed to receive prevailing market prices for all Mineral Products so sold.

- 29 - 

PART 15 

AUDIT 

15.1                  
The records relating to Mineral Products taken in kind or to the calculation of
proceeds from the sale thereof will be audited annually at the end of each
fiscal year of Operator and: 

(a)          any
adjustments required by such audit will be made forthwith, and 

(b)          a copy
of the audited statements will be delivered to the Participants, 

and all such accounts and records will be deemed to be correct
and accurate unless questioned by a party within six (6) months after the end of
the calendar year to which the accounts relate. 

15.2                  
The Participants, or any of them, at reasonable times and upon notice in writing
to Operator, will have the right to inspect, audit and copy Operator’s accounts
and records relating to the accounting for Mineral Products taken in kind or to
the determination of proceeds from the sale thereof for any calendar year within
three (3) months after the end of such calendar year. 

15.3                  
The Participants will make all reasonable efforts to conduct audits in a manner
which will result in a minimum inconvenience to Operator and any such audit will
be conducted at that Participant’s sole cost and expense. 

PART 16 

INFORMATION SHARING AND CONFIDENTIALITY 

16.1                  
Subject to Section 16.2, each party agrees that all information obtained
hereunder will be the exclusive property of the parties and not publicly
disclosed or used other than for the activities contemplated hereunder, except
as required by law or by the rules and regulations of any regulatory authority
or stock exchange having jurisdiction, or with the written consent of the other
parties, such consent not to be unreasonably withheld. 

16.2                  
Consent to disclosure of information pursuant to Section 16.1 will not be
unreasonably withheld where a party wishes to disclose any such information to a
third party for the purpose of arranging bona fide financings for its
contributions to Costs hereunder or for the purpose of selling its Interest,
provided that such third party gives its undertaking to the parties that any
such information not theretofore publicly disclosed will be kept confidential
and not disclosed to others. 

16.3                  
No party will be liable to any other for the fraudulent or negligent disclosure
of information by any of its employees, servants or agents, provided that such
Participant has taken reasonable steps to ensure the preservation of the
confidential nature of such information. 

- 30 - 

PART 17 

LIMITED CHARGING 

17.1                  
Each Participant hereby covenants and agrees with the other to cooperate fully
in connection with any production financing for the Property which is presented
on reasonable commercial terms for projects of a similar nature, size and
financial risk and to hold its Interest free and clear of all liens, charges and
encumbrances including any floating charge (except liens for taxes not yet due
and other inchoate liens and arising from operations on the Property being
contested in good faith), and each Participant will, if so required by the terms
of such project financing and upon the written consent of all Participants,
issue to any lender providing such financing, bonds, debentures or other
security instruments charging its Interest, inter alia, by way of a specific
first mortgage and charge limited to its Interest. 

17.2                  
No such project financing will require a Participant to give any guarantee to
any third party on behalf of the other Participant, to be jointly and severally
liable for the repayment of such financing or to give security to any lender in
respect of such financing in an amount greater than its Interest. 

17.3                  
If a joint financing for the Production Program is not arranged as contemplated
in Section 17.1, then notwithstanding the provisions of Part 17, for the purpose
of financing its Cost Share of the Production Program a Participant may, at any
time and upon the written consent of all Participants, mortgage, charge or
otherwise encumber the whole or any party of its Interest, but only upon the
condition that the holder of such encumbrance, (hereinafter called the
“Chargee”), first enters into a written agreement with the other party in form
satisfactory to counsel for such other party, binding upon the Chargee, to the
effect that: 

(a)          the
Chargee will not enter into possession or institute any proceedings for
foreclosure or partition of the encumbering Participant’s Interest and that such
encumbrances will be subject to the provisions of this Agreement; 

(b)          the
Chargee’s remedies under the encumbrance will be limited to the sale of the
whole, (but only of the whole), of the encumbering party’s Interest to the other
Participants, or failing such disposition, at a public auction to be held after
sixty (60) days’ notice to the other party, such sale to be subject to the
purchaser entering into a written agreement with the other party whereby such
purchaser assumes all obligations of the encumbering party under the terms of
this Agreement; and 

(c)          if the
Interest of any Participant is forfeited, the right of such Participant to act
as Operator will cease. 

PART 18 

RESTRICTIONS ON ALIENATION 

18.1                  
Except in accordance with this Agreement, each Participant will not transfer,
convey, assign, mortgage or grant an option in respect of or grant a right to
purchase or in any 

- 31 - 

manner transfer or alienate any or all of its Interest or
transfer or assign any of its rights under this Agreement. 

18.2                  
Each Participant will not sell any of its respective Interest or transfer or
assign any of its rights under this Agreement except upon the written consent of
all Participants and: 

(a)          in its
entirety, unless specifically provided otherwise hereunder, 

(b)          as a
single transaction not directly or indirectly part of some other sale or
purchase or agreement for any additional consideration of any nature whatsoever,
and 

(c)          when
there is no default of any of the covenants and agreements herein contained by
such party. 

18.3                  
Nothing in this Part 18 will prevent: 

(a)          a sale
by a Participant of all of its Interest or an assignment of all its rights under
this Agreement to an Associated Company provide that such Associated Company
first complies with the provisions of Section 18.11 and agrees with the other
Participants in writing to retransfer such Interest to the originally assigning
party before ceasing to be an Associated Company of such party, or 

(b)          a joint
disposition of the Property, or all or any part of the other assets constituting
any part of the Assets to a third party by the parties as agreed to in writing.

18.4                  
Subject to Section 18.1 and Section 18.2, any Participant (in this Part 18
referred to as the “Offeror”) intending to sell its Interest or assign its
rights under this Agreement will first give notice in writing to the other party
hereto (in this Part 18 referred to as the “Offeree”) of such intention together
with the terms and conditions on which the Offeror intends to sell its Interest
or assign its rights under this Agreement. 

18.5                  
Subject to Section 18.7, if a Participant receives any offer to sell its
Interest or assign its rights under this Agreement which its intends to accept,
the Offeror will not accept the same unless and until the Offeror has first
offered to sell such Interest or rights to the other party hereto on the same
terms and conditions as in the offer received and the same has not been accepted
by the Offerees in accordance with Section 18.6. 

18.6                  
Any communication of an intention to sell pursuant to Section 18.4 and Section
18.5 (the “Offer” for the purposes of this Part 18 only) will be in writing
delivered in accordance with Section 20.4 and will: 

(a)          set out
fully and clearly all of the terms and conditions of any intended sale, 

(b)          if it is
made pursuant to Section 18.5, include a photocopy of the Offer and clearly
identify the offering party and include such information as is known by the
Offeror about such offering party, 

- 32 - 

and such communication will be deemed to constitute an Offer by
the Offeror to the Offeree to sell the Offeror’s Interest or transfer or assigns
its rights under this Agreement to the Offeree on the terms and conditions set
out in such Offer. 

18.7                  
In the event that a Participant receives an offer to sell its Interest that is
consideration other than cash or cash plus deferred payments of cash, the other
Participant or Participants, as the case may be, will have the right to pay the
cash equivalent of such other consideration. If the parties hereto cannot agree
on the amount of such cash equivalent within thirty (30) days of the offer to
sell such Interest to the other Participant or Participants, as the case may be,
either of such parties may, upon thirty (30) days written notice to the other,
initiate arbitration proceedings as contemplated under Part 20 for determination
of the cash equivalent 

18.8                  
Any Offer made as contemplated in Section 18.7 will be open for acceptance by
the Offeree for a period of thirty (30) days after the date of receipt by the
Offeree. 

18.9                  
If the Offeree accepts the Offer within the time limited such acceptance will
constitute a binding agreement of purchase and sale between the Offeror and the
Offeree for the Interest or its rights under this Agreement on the terms and
conditions set out in such Offer. 

18.10                  
If the Offeree does not accept the Offer within the time limited the Offeror may
complete a sale and purchase of its Interest or its rights under this Agreement
on exactly the same terms and conditions set out in the Offer as contemplated in
Section 18.5, and in any event such sale and purchase will be completed within
ninety (90) days after the expiration of the right of the Offeree to accept such
Offer or the Offeror must again comply with the provisions of this Part 18. 

18.11                  
While any Offer is outstanding no other Offer may be made until the first
mentioned Offer is disposed of and any sale resulting therefrom completed in
accordance with the provisions of this Part 18. 

18.12                  
Before the completion of any sale by a Participant of its Interest or rights
under this Agreement, to an Associated Company or otherwise, the purchasing
party will, at the election of the parties not selling enter into an agreement
with the party not selling on the same terms and conditions as set out in this
Agreement. 

18.13                  
Each party hereto agrees that its failure to comply with the restrictions set
out in this Part 18 would constitute an injury and damage to the other party
impossible to measure monetarily and, if there is any such failure the other
party will, in addition and without prejudice to any other rights and remedies
at law or in equity, be entitled to injunctive relief restraining or enjoining
any sale of any Interest or assignment of any rights under this Agreement save
in accordance with the provisions of this Part 18 and any party intending to
make a sale or making a sale contrary to the provisions of this Part 18 hereby
waives any defence it might have in law to such injunctive relief. 

18.14                  
If the Operator sells its Interest or transfers or assigns its rights under this
Agreement to a third party, its right as Operator under this Agreement will be
included in such sale only if the third party is acceptable to the remaining
Participant and is capable of assuming and performing the duties and obligations
of Operator imposed under this Agreement. 

- 33 - 

18.15                  
The provisions of this Part 17 will not prevent a party from entering into an
amalgamation or corporate reorganization which will have the effect in law of
the amalgamated or surviving company possessing all the property, rights and
interests and being subject to all the debts, liabilities and obligations of
each amalgamating or predecessor company. 

PART 19 

ENCUMBRANCE, PARTITION AND INDEMNIFICATION 

19.1                  
Except as provided in Parts 17 and 18, a Participant will not encumber or suffer
to exist any lien, charge or encumbrance on its Interest. 

19.2                  
No Participant will partition or seek partition, whether through order of any
court or otherwise, of the Property or other assets constituting any part of the
Assets. 

19.3                  
A Participant will not have authority to act for or assume any obligations or
liabilities on behalf of any other Participant except such as are specifically
authorized pursuant to and in accordance with the terms of this Agreement, and
each Participant will indemnify and hold the others, and their officers,
employees, and agents, harmless from and against any and all losses, claims,
damages and liabilities arising out of any act or any assumption of any
obligations by it done or undertaken on behalf of the other Participants other
than as provided herein. 

PART 20 

GENERAL 

20.1                  
Default. Notwithstanding anything in this Agreement to the contrary
(other than the provisions of this Agreement providing for elections to
contribute and contributions to any Program and any Production Program for which
no notice of default need be ), if any party (a “Defaulting Party”) is in
default of any requirement herein set forth the party affected by such default
will give written notice to the Defaulting Party specifying the default and the
Defaulting Party will not lose any rights under this Agreement, unless within
thirty (30) days after the giving of notice of default by the affected party the
Defaulting Party has failed to take reasonable steps to cure the default by the
appropriate performance and if the Defaulting Party fails within such period to
take reasonable steps to cure any such default, the affected party will be
entitled to seek any remedy it may have on account of such default. 

20.2                  
Further Agreement. After the commencement of Commercial Production,
either Participant may give notice to the other Participant requiring that
Participant to enter into negotiations to settle an operating agreement to
supersede this Agreement. 

20.3                  
Both Participants will endeavour to settle such an agreement but if they fail to
do so this Agreement will remain in full force and effect. 

20.4                  
Notice. Each notice, demand or other communication required or permitted
to be given under this Agreement (“Notice”) to the Operator or Wits by the other
will be in writing 

- 34 - 

and will be sent by personal delivery, fax or prepaid
registered mail to the addresses of the parties as follows: 

(a)          if to
Journey or Jazz: 

#1208 – 808 Nelson Street

Vancouver, British Columbia V6Z 2H2 
Facsimile: (604) 633-2462

Attention: Jack Bal 

(b)          if to
Wits: 

900 IDS Center, 80 South 8th Street

Minneapolis, Minnesota, USA 55402 
Facsimile: (612) 395-5276

Attention: H. Vance White 

20.5                  
The date of receipt of such Notice will be the date of delivery or fax thereof
if delivered or faxed during business hours, or, if given by registered mail as
aforesaid, will be deemed conclusively to be the third day after the same will
have been so mailed except in the case of interruption of postal services for
any reason whatever, in which case the date of receipt will be the date on which
the Notice is actually received by the addressee. 

20.6                  
Either party may at any time and from time to time notify the other party in
writing of a change of address and the new address to which Notices will be
given to it thereafter until further change. 

20.7                  
Arbitration. Any dispute arising between the parties in respect of the
interpretation of this Agreement or any matter to be agreed upon hereunder will
be determined by a single arbitrator to be appointed by both parties. 

20.8                  
Either party may, upon written notice to the other as provided in Section 20.4,
demand arbitration of any dispute hereunder. 

20.9                  
Upon such written demand and within thirty (30) days after the date of giving of
such demand, the parties will agree on the appointment of an arbitrator. 

20.10                  
The award of the arbitrator will be made within thirty (30) days after his
appointment subject to any reasonable delay due to unforeseen circumstances.

20.11                  
The award of the arbitrator will be in writing and signed by the arbitrator and
will be final and binding upon the parties who will abide by the award. 

20.12                  
If the parties cannot agree on a single arbitrator as provided herein the matter
in dispute will be determined by reference to the procedure set out in the
Commercial Arbitration Act (British Columbia). 

- 35 - 

20.13                  
Further Assurances. The parties will execute such further and other
documents and do such further and other things as may be necessary or convenient
to carry out and give effect to the intent of this Agreement. 

20.14                  
Currency. All references to monies hereunder will be in United States
Dollars. 

20.15                  
Method of Payment. All payments to be made to any party hereunder may be
made by check mailed or delivered to such party at its address for notice
purposes as provided herein, or wire transfer to the account of such party at
such bank as may be designated from time to time by written notice. 

20.16                  
Timing. Time will be of the essence in the performance of this Agreement.

20.17                  
Headings. The headings of the Parts and Sections of this Agreement are
for convenience only and do not form a part of this Agreement nor are they
intended to affect the construction or meaning of anything herein contained or
govern the rights and liabilities of the parties. 

20.18                  
Enurement. This Agreement will inure to the benefit of and be binding
upon the parties and their respective successors and permitted assigns. 

20.19                  
Force Majeure. No party will be liable for its failure to perform any of
its obligations under this Agreement due to a cause beyond its control (except
those caused by its own lack of funds and the monetary provisions of Parts 9 and
10 ) including, but not limited to, adverse weather conditions, environmental
protests or blockages, acts of God, fire, flood, explosion, strikes, lockouts or
other industrial disturbances, laws, rules and regulations or orders of any duly
constituted governmental authority or non-availability of materials or
transportation (each an “Intervening Event”). All time limits imposed by this
Agreement will be extended by a period equivalent to the period of delay
resulting from an Intervening Event described in this Section. 

20.20                  
A party relying on the provisions of Section 20.19 will take all reasonable
steps to eliminate any Intervening Event and, if possible, will perform its
obligations under this Agreement as fair and practical, but nothing herein will
require such party to settle or adjust any labour dispute or to question or to
test the validity of any law, rule, regulation or order of any duly constituted
governmental authority or to complete its obligations under this Agreement if an
Intervening Event renders completion impossible. 

20.21                  
Entire Agreement. Save and except for Part 9 of the Underlying Agreement,
this Agreement and the Schedules hereto constitutes the entire agreement between
the parties and, except as hereafter set out, and supersedes all previous
agreements, memoranda, correspondence, communications, negotiations and
representations, whether oral or written, express or implied, statutory or
otherwise between the parties with respect to the subject matter herein. 

20.22                  
Governing Law. This Agreement will be governed by and construed according
to the laws of the Province of British Columbia and the laws of Canada
applicable therein. 

- 36 - 

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

 

	JOURNEY RESOURCES CORP. 	 
	 	 
	 	 
	By: 	         “Jatinder (Jack)
      Bal” 	 
	  	Authorized Signatory 	 
	 	 	 
	 	 	 
	MINERALES JAZZ S.A. DE C.V. 	 
	 	 
	 	 
	By: 	             “Jatinder
      (Jack) Bal” 	 
	  	Authorized Signatory 	 
	 	 	 
	 	 	 
	WITS BASIN PRECIOUS MINERALS INC. 	 
	 	 
	 	 
	By: 	           “Vance
      White” 	 
	  	Authorized Signatory 	 

SCHEDULE “A” 

Description of Property 

The Vianey Mine Concession located in Guerrero State, Mexico.

The concession constitutes 5,022 contiguous
hectares(1), centered on UTM coordinates 431,330m E, 1,987,020m N
(WGS 84, Zone 14), or -99.6485 degrees E, 17.9704 degrees N. The property is
held under Exploitation concession (Number 164151, Exp. No. 5929, issued March
5, 1979). 

Minerales Jazz S.A. de C.V. (a wholly owned subsidiary of
Journey Resources Corporation) acquired 100% interest in the property from
Minera LMX, Minera Chilpancingo, S.A. de C.V. and the underlying owner, Mr.
Jorge Briones de Garcia, in 2004. 

(1) Amended to include the additionally held claims
in the area of interest, notwithstanding that they may be held at this time
under the name of a third party. Such additional claims are currently in the
process of being transferred into the name of Minerales Jazz S.A. de C.V.

SCHEDULE “B”

Area of Interest 

The Area of Interest pertaining to the Vianey Mine Concession
located in Guerrero State, Mexico consists of those lands lying within two (2)
kilometres from the external perimeter of the Property in existence as of the
Effective Date, as that Property is described in Schedule “A”. 

- 39 - 

SCHEDULE “C” 
ACCOUNTING PROCEDURE 

INTERPRETATION 

20.23                  
In this Schedule, except as otherwise expressly provided or as the context
otherwise requires, 

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

(b)         
“Count” means a physical inventory count, 

(c)         
“Costs” means all expenditures and outlays of any kind which are made in
connection with the Mining Operations, 

(d)         
“Employees” mean those employees of the Operator who are assigned to and
directly engaged in the conduct of Mining Operations, whether on a full-time or
part-time basis, 

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

(f)         
“Field Offices” means the necessary sub-office or sub-offices in each
place where a Program is being conducted, 

(g)         
“Government Contributions” means the costs or contributions made by the
Operator pursuant to assessments imposed by governmental authority which are
applicable to the salaries or wages of employees or personnel, as the case may
be, 

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

(i)         
“Mining Operations” means every kind of work done by or on behalf of the
Operator: 

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(i)         
  on is in respect of the Property in accordance with a Program or Production
  notice; or 

(ii)         if not
provided for in a Program or Production Notice, unilaterally and in good faith
to maintain the Property in good standing, to prevent waste or to otherwise
discharge any obligation which is imposed upon it pursuant to this Agreement and
in respect of which the Management Committee has not given it directions; 

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

(j)         
“Personnel” means those management, supervisory, administrative, clerical
and other personnel of the Operator normally associated with the Supervision
Offices, 

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

(l)         
“Reasonable Expenses” means the reasonable expenses of employees or
personnel, as the case may be, for which those employees or personnel may be
reimbursed under the Operator’s usual expense account practice; including,
without limiting generality, any relocation expenses necessarily incurred in
order to properly staff the Mining Operations if the relocation is approved by
the Management Committee, and 

(m)         
“Supervision Offices” means the Operator’s offices or departments within
the Operator’s offices from which the Mining Operations are generally
supervised. 

1.2                  
Other capitalized words, terms and phrases in this Schedule shall have the same
meaning as provided in the Agreement 

PART 21 

STATEMENTS AND BILLINGS 

21.1                  
The Operator shall, by invoice charge each Participant pro rata to each
Participant’s interest in the Property for all costs incurred by it in
connection with the Mining Operations. 

21.2                  
The Operator shall deliver with each invoice rendered for Costs incurred a
statement indicating 

(a)          all
charges or credits to the Project Account relating to controllable material in
detail, and 

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(b)          all
other charges and credits to the Project Account summarized by appropriate
classifications indicative of the nature of the charges and credits. 

21.3                  
The Operator shall deliver with each invoice for an advance of Costs a statement
indicating 

(a)          the
estimated Costs, the estimated cash disbursements, to be made during the next
succeeding quarter, 

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

(c)          the
advance made by the Operator and the Costs incurred to the end of the
penultimate month preceding the month of the invoice. 

PART 22 

DIRECT CHARGES 

22.1                  
The Operator will charge the Project Account with the following items: 

(a)         
Contractor’s Charges. All proper costs relative to the Mining Operations
incurred under contracts entered into by the Operator with third parties; 

(b)         
Labour Charges. 

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

(ii)         the
reasonable expenses of the employees, and 

(iii)        employee
benefits and government contributions in respect of the employees in an amount
proportionate to the charge made to the Project Account in respect to their
salaries and wages; 

(c)         
Office Maintenance. 

(i)          the cost
or a pro rata portion of the cost, as the case may be, of maintaining and
operating the offices, charged to the Project Account on the following basis:

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(A)          the
expenses of maintaining and operating Field Offices, less any revenue therefrom;
and 

(B)          that
portion of maintaining and operating the Supervision Offices which is equal to

(I)          the
anticipated total operating expenses of the supervision offices for the year,

divided by 

(II)         the
anticipated total staff man-days for the employees whether in connection with
the Mining Operations or not, 

multiplied by 

(III)        the actual time
spent on the Mining Operations by the employee expressed in man-days, 

(ii)         without
limiting generality, the anticipated total Operating Expenses of the supervision
offices will include 

(A)          the
salaries and wages of the Operator’s Personnel which have been directly charged
to those offices, 

(B)          the
reasonable expense of the Personnel, and 

(C)          employee
benefits and government contributions in respect of Personnel, 

(iii)        the Operator
will make an adjustment in respect of the office maintenance cost forthwith
after the end of each operating year upon having determined the actual total
staff man-days invoiced; and 

(d)         
Material. Material purchased or furnished by the Operator for use on the
Project; 

(e)         
Transportation Charges. The cost of transporting employees and material
necessary for the Mining Operations, 

(f)         
Service Charges. 

(i)          cost of
services and utilities procured from outside sources, 

(ii)         use and
service of equipment and facilities furnished by the Operator, 

(g)         
Damages and Losses to Joint Property. All costs necessary for the repair
or replacement of assets made necessary because of damages or losses incurred by
fire, flood, storm, theft, accident or other causes. The Operator will furnish
each Participant with written particulars of the damages or losses incurred as
soon as practicable after the 

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damage or loss has been discovered. The
proceeds, if any, received on claims against any policies of insurance in
respect of those damages or losses will be credited to the Project Account; 

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

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

(j)         
Insurance. Net premiums paid for 

(i)          such
policies of insurance on or in connection with the Mining Operations as may be
required to be carried by law, and 

(ii)          such
other policies of insurance as the Operator may carry for the protection of the
parties in accordance with the Agreement, and 

the applicable deductibles in the event
of an insured loss, 

(k)         
Rentals. Fees, rentals and other similar charges required to be paid for
acquiring, recording and undertaking and maintaining permits, mineral claims and
mining leases and rentals and royalties which are paid as a consequent of the
Mining Operations; 

(l)         
Permits. Permit costs, fees and other similar charges which are assessed
by various governmental agencies; 

(m)          Other
Expenditures. Such other costs and expenses which are not covered or dealt
with in the foregoing provisions of this as are incurred with the approval of
the Board of the Operator for the necessary and proper conduct of the Mining
Operations or as may be contemplated in the Agreement. 

PART 23 

PURCHASE OF MATERIAL 

23.1                  
The Operator will purchase all materials and procure all services required in
the Mining Operations. 

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23.2                  
Material purchased and services procured by the Operator directly for the Mining
Operations will be charged to the Project Account at the price paid by the
Operator less deduction for all discounts actually received. 

23.3                  
So far as it is reasonably practical and consistent with efficient and
economical operations, the Operator will purchase, furnish or otherwise acquire
only such Material and the Operator shall attempt to minimize the accumulation
of surplus stocks of materials. 

23.4                  
The Operator shall be entitled to supply for use in connection with the Mining
Operations equipment and facilities which are owned by the Operator and the
charge the Project Account with such reasonable costs which is commensurate with
the ownership and use thereof. 

PART 24 

DISPOSAL OF MATERIAL 

24.1                  
The Operator, with the approval of the management Committee, may, from time to
time, sell any Material which has become surplus to the foreseeable needs of the
Mining Operations for such price and upon such terms and conditions as are
available. 

24.2                  
Any Participant may purchase from the Operator any Material which may from time
to time become surplus to the foreseeable need of the Mining Operations for such
price and upon such terms and conditions as the Management Committee may
approve. 

24.3                  
Upon termination of the Agreement, the Management Committee may approve the
division of any Material held by the Operator at that date which may be taken by
the Participants in kind or be taken by a Participant in lieu of a portion of
its proportionate share of the net revenues received from the disposal of the
assets and property. If such a division to a Participant be in lieu of a portion
of its proportionate share, it shall be for such price and on such terms and
conditions as the Management Committee may approve. 

24.4                  
The net revenues received from the sale of any Material to third parties or to a
Participant will be credited to the Project Account. 

PART 25 

INVENTORIES 

25.1                  
The Operator shall maintain records of Material in reasonable detail and records
of Controllable Material in detail. 

25.2                  
The Operator shall perform Counts from time to time at reasonable intervals and
in connection therewith shall give notice of its intention to perform a Count to
each 

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Participant as least 30 days in advance of the date set for
performing the Count. Each Participant shall be entitled to be represented at
the performing of a Count upon giving notice thereof to the Operator within 20
days of the Operator’s notice. A Participant who is not represented at the
performing of the Count shall be deemed to have approved the Count as taken.

25.3                  
Forthwith after performing a Count, the Operator shall reconcile the inventory
with the Project Account and provide each Participant with a statement listing
the overages and shortages of inventory except such shortages as may have arisen
due to a lack of diligence on the part of the Operator. 

PART 26 

ADJUSTMENTS 

26.1                  
Payment of any invoice by a Participant shall not prejudice the right of that
Participant to protest the correctness of the statement supporting the payment,
but all invoices and statements presented to each Participant by the Operator
during any Operating Year shall conclusively be presumed to be true and correct
upon the expiration of 12 months following the end of the Operating Year to
which the invoice or statement relates, unless within the 12 month period that
Participant gives notice to the Operator making claim on the Operator for an
adjustment to the invoice or statement. 

26.2                  
The Operator shall not adjust any invoice or statement in favour of itself after
the expiration of 12 months following the end of the Operating Year to which the
invoice or statement relates. 

26.3                  
Notwithstanding the foregoing, the Operator may make adjustments to an invoice
or statement which arise out of a Count. 

26.4                  
A Participant shall be entitled upon notice to the Operator to request that the
independent external auditor of the Operator provide that Participant with its
opinion that any invoice or statement delivered pursuant to the Agreement in
respect of the period has been prepared in accordance with the Agreement. 

26.5                  
The time for giving the audit opinion shall not extend the time for the taking
of exception to any statement or invoice and making claims on the Operator for
adjustment thereto. 

26.6                  
The cost of the auditor’s opinion shall be solely for the account of the
Participant requesting the auditor’s opinion, unless the audit disclosed a
material error adverse to that Participant, in which case the cost shall be
solely for the account of the Operator.

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