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ex4-19.htm

    
      

      

    

    EXHIBIT 4.19

     

    
      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        

         

        
          
            
            

          

          
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                        - 3 -ex4-21.htm

    
      

      

    

    
      
        EXHIBIT
4.21

      

       

      
        
           

        

      

    

    

     

    GOLDEN
PROMISE

     

    OPTION
AND JOINT VENTURE AGREEMENT

     

    BETWEEN

     

    CROSSHAIR
EXPLORATION & MINING CORP.

     

    AND

     

    PARAGON
MINERALS CORPORATION

     

    

     

     

    DATED AS
OF APRIL April 8, 2009

     

    

     

    
      
        
          50651077.7

        

         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    PAGE

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
      
	
                                1.     DEFINITIONS

                              	
                                1

                              
	
                                2.     ASSOCIATION OF
      PARTICIPANTS

                              	
                                15

                              
	
                                3.     INITIAL OPTION

                              	
                                18

                              
	
                                4.     ADDITIONAL
    OPTION

                              	
                                18

                              
	
                                5.     REPRESENTATIONS, WARRANTIES AND
      CONDITIONS

                              	
                                19

                              
	
                                6.     EXECUTIVE
    COMMITTEE

                              	
                                23

                              
	
                                7.     MEETINGS OF EXECUTIVE
      COMMITTEE

                              	
                                25

                              
	
                                8.     THE OPERATOR

                              	
                                27

                              
	
                                9.     EXPLORATION
    PERIOD

                              	
                                29

                              
	
                                10.   FEASIBILITY PERIOD

                              	
                                30

                              
	
                                11.   DEVELOPMENT PERIOD

                              	
                                31

                              
	
                                12.   OPERATING PERIOD

                              	
                                33

                              
	
                                13.   PROGRAMS AND BUDGETS

                              	
                                34

                              
	
                                14.   ADJUSTMENT OF
INTERESTS

                              	
                                37

                              
	
                                15.   DISPOSITION OF
    PRODUCTION

                              	
                                40

                              
	
                                16.   AUDIT

                              	
                                40

                              
	
                                17.   AREA OF COMMON
INTEREST

                              	
                                41

                              
	
                                18.   SHARING OF AND CONFIDENTIAL NATURE OF
      INFORMATION

                              	
                                42

                              
	
                                19.   LIMITED CHARGING

                              	
                                42

                              
	
                                20.   RESTRICTIONS ON
    ALIENATION

                              	
                                43

                              

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          	
                  21.   LIABILITY OF THE OPERATOR AND OPERATOR’S
      INDEMNITIES

                	
                  45

                
	
                  22.   NON-BINDING DISPUTE
      RESOLUTION

                	
                  46

                
	
                  23.   ENCUMBRANCE, PARTITION AND
      INDEMNIFICATION

                	
                  46

                
	
                  24.   NOTICES

                	
                  46

                
	
                  25.   TERMINATION

                	
                  47

                
	
                  26.   FORCE MAJEURE

                	
                  48

                
	
                  27.   DEFAULT

                	
                  50

                
	
                  28.   GENERAL

                	
                  51

                

        

      

    

    
 

    
      
        
          50651077.7

        

         

      

      
         
i

        
          

        

      

      
         

      

    

     

    Schedules

     

    
      
        	
                Schedule 1.1(47)

              	
                Fair Market Value

              
	
                Schedule 1.1(68)

              	
                Net Smelter Royalty

              
	
                Schedule 1.1(86)

              	
                Permitted Encumbrances

              
	
                Schedule 1.1(90)

              	
                Description of Properties

              
	
                Schedule 1.1(102)

              	
                Underlying Agreements

              
	
                Schedule 14.7

              	
                Dilution Formula Illustration

              
	
                Schedule 17.1

              	
                Area of Common
Interest

              

      

    

    

    

    
      
        
          50651077.7

        

         

      

      
        ii 

        
          

        

      

      
         

      

    

    THIS
OPTION AND JOINT VENTURE AGREEMENT is dated as of the 8th  day
of April, 2009

     

    BETWEEN:

     

    CROSSHAIR EXPLORATION & MINING
CORP., a British Columbia company having an office at Suite 1240, 1140
West Pender Street, Vancouver, British Columbia, Canada, V6E 4G1

     

    (“Crosshair”)

     

    AND:

     

    PARAGON MINERALS CORPORATION,
a company incorporated under the Canada Business Corporations Act having an
office at Suite 1500 – 701 West Georgia Street, Vancouver, British Columbia,
Canada, V7Y 1C6

     

    (“Paragon”)

     

    WHEREAS:

     

    
      	
              A.

            	
              Paragon
      is the legal holder of an undivided 100% title and interest (subject to
      the Underlying Agreements, Joint Venture Agreement and Purchase and Sale
      Agreement) in the listed interests in the mining claims and associated
      assets set out in Schedule 1.1(90) attached hereto (collectively, the
      “Properties”);

            

    

     

    
      	
              B.

            	
              Paragon
      wishes to grant Crosshair the exclusive right and option to acquire up to
      a 70% interest in the Properties;
and

            

    

     

    
      	
              C.

            	
              Paragon
      and Crosshair wish to enter into this Agreement in connection with the
      exploration and development of the Properties and other related
      matters.

            

    

     

    NOW,
THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the payment by each
Participant to the other of the sum of $10.00 and other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged by
each participant) and of the mutual covenants and agreements contained herein,
the Participants agree as follows:

     

    
      	
              1.

            	
              DEFINITIONS
      

            

    

     

    
      	
              1.1

            	
              In
      this Agreement and in the Schedules and the recitals hereto, unless the
      context otherwise requires, the following expressions will have the
      following meanings:

            

    

     

    
      	
               
      

            	
              (1)

            	
              “Acquiring Participant”
      shall have the meaning provided in
  section 17.1;

            

    

     

    
      	
               
      

            	
              (2)

            	
              “Additional Exploration
      Costs” shall have the meaning provided in section
    4.1;

            

    

     

    
      	
               
      

            	
              (3)

            	
              “Additional Option” shall
      have the meaning provided in section
4.1;

            

    

     

     

     

    
      
        
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                (4)

              	
                “Additional Properties”
      shall have the meaning provided in section 17.2;

              

      

    

     

    
      	
               
      

            	
              (5)

            	
              “Agreement” means this
      Option and Joint Venture Agreement as it may be amended from time to
      time;

            

    

     

    
      	
               
      

            	
              (6)

            	
              “Applicable Law” means
      any applicable domestic or foreign, federal, provincial or local law
      including any statute or subordinate legislation or treaty and any
      applicable rule, regulation, ordinance, requirement, order, permit,
      judgment, injunction, award or decree or other binding requirement of a
      Governmental Authority or arbitrator having the force of
    law;

            

    

     

    
      	
               
      

            	
              (7)

            	
              “Area of Common Interest”
      means the area on the ground outlined on Schedule 17.1 which extends
      two kilometres from the boundaries of the Properties; provided that any
      mining claims which would otherwise be within the Area of Common Interest
      in which, on the date hereof, Crosshair or Paragon has any interest, or
      any right to acquire an interest is excluded from the Area of Common
      Interest;

            

    

     

    
      	
               
      

            	
              (8)

            	
              “Assets” mean the
      Properties, Other Tenements, Product, Facilities, Supplies, Contingency
      Fund the contents of the Business Account and all other assets acquired or
      held by the Participants with respect to such assets or pursuant to this
      Agreement as the same may exist from time to
  time;

            

    

     

    
      	
               
      

            	
              (9)

            	
              “Associated Company”
      means:

            

    

     

    
      	
               
      

            	
              (a)

            	
              any
      corporation which owns directly or through any other means not less than
      50% of the outstanding capital stock of a
  Participant;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      corporation of which a Participant owns directly or through any other
      means not less than 50% of the outstanding capital stock; or
    

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      corporation of which either of the corporations referred to in
      paragraphs (a) and (b) owns directly or through any other means not
      less than 50% of the outstanding capital
stock.

            

    

     

    
      	
               
      

            	
              (10)

            	
              “Auditing
      Participant” shall have the
      meaning provided in
section 16.2;

            

    

     

    
      	
               
      

            	
              (11)

            	
              “Auditor” means an
      independent firm of chartered accountants appointed as the auditor of the
      Joint Venture by the Executive
Committee;

            

    

     

    
      	
               
      

            	
              (12)

            	
              “Budget” means, in
      respect of any Program, a detailed budget document which shall stipulate
      all Costs and other estimated monthly and cumulative cash expenditures for
      such Program and which is approved by the Executive Committee and such
      budget document as amended and approved by the Executive Committee from
      time to time;

            

    

     

    
      	
               
      

            	
              (13)

            	
              “Business” means the
      contractual relationship of the Participants under this
      Agreement;

            

    

     

     

    
 

    
      
        
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              (14)

            	
              “Business Account” shall
      have the meaning provided in
section 13.10;

            

    

     

    
      	
               
      

            	
              (15)

            	
              “Canadian GAAP” means
      Canadian generally accepted accounting principles consistently applied and
      shall be deemed to mean International Financial reporting Standards
      (“IFRS”) to the extent that IFRS replace Canadian GAAP during the term of
      this Agreement;

            

    

     

    
      	
               
      

            	
              (16)

            	
              “Chairman” means the
      person appointed, from time to time, to be chairman of the Executive
      Committee pursuant to
section 6.4;

            

    

     

    
      	
               
      

            	
              (17)

            	
              “Change of Control”
      means, in respect of any corporation,
either:

            

    

     

    
      	
               
      

            	
              (a)

            	
              a
      transaction:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      effect of which is that a person or combination of persons acting in
      concert becomes the holder of more than 50% of the shares in the capital
      stock of such corporation which carry a voting right either under all
      circumstances or under certain circumstances that have occurred and are
      continuing; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              such
      person or combination of persons did not previously hold such number of
      shares; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      merger, arrangement, share exchange, take-over bid or other similar
      transaction resulting in the shareholders of a corporation or other entity
      holding less than 50% of such corporation’s aggregate issued and
      outstanding shares which carry a voting right either under all
      circumstances or under certain circumstances that have occurred and are
      continuing to occur;

            

    

     

    
      	
               
      

            	
              (18)

            	
              “Chargee” shall have the
      meaning provided in
section 19.1.

            

    

     

    
      	
               
      

            	
              (19)

            	
              “CIM Val” means the
      Standards and Guidelines For Valuation of Mining Properties of the Special
      Committee of the Canadian Institute of Mines, Metallurgy and Petroleum on
      Valuation of Mineral Properties;

            

    

     

    
      	
               
      

            	
              (20)

            	
              “Commercial Production”
      means the commercial exploitation of Ore but does not include milling for
      the purpose of testing or milling by a pilot plant or during the initial
      tune-up period of a plant.  Commercial Production will be deemed
      to have commenced:

            

    

     

    
      	
               
      

            	
              (a)

            	
              if
      a plant is located on the Properties, on the first day of the month
      following the first period of 30 consecutive days during which Ore has
      been processed through such plant at an average rate of not less than 60%
      of the milling rate specified in the Full Feasibility Study recommending
      placing the Properties into Commercial Production;
  or

            

    

     

     

    
 

    
      
        
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              (b)

            	
              if
      no plant is located on the Properties, on the first day of the month
      following the first period of 30 consecutive days during which Ore has
      been shipped from the Properties on a commercially reasonably regular
      basis for the purpose of earning
revenue;

            

    

     

    
      	
               
      

            	
              (21)

            	
              “Contingency Fund” means
      the fund which will be established by the Operator pursuant to
      section 12.3, the moneys in which will be used to satisfy all legal
      obligations of the Operator in connection with the permanent or temporary
      shutdown in whole or in part of any of the Facilities on the Properties;
      including, without limitation, posting any reclamation bonds or deposits
      required by any Governmental Authority, all anticipated costs of
      Environmental Compliance and dealing with any Environmental Liabilities
      and Continuing Obligations, and any obligation for severance pay, pensions
      and similar payments to employees and all of which obligations are to be
      recognized in the accounts of the
Operator;

            

    

     

    
      	
               
      

            	
              (22)

            	
              “Continuing Obligations”
      mean obligations or responsibilities that are reasonably expected to
      continue or arise after Operations on a particular area of the Properties
      have ceased or are suspended, such as future monitoring, stabilization, or
      Environmental Compliance;

            

    

     

    
      	
               
      

            	
              (23)

            	
              “Contributing Budget”
      means any Program and Budget (including any revision or amendments
      thereto) in respect of which each Participant has an obligation to fund
      its Cost Share pursuant to this
Agreement;

            

    

     

    
      	
               
      

            	
              (24)

            	
              “Contributing
      Participant” shall have the meaning provided in
      section 13.9;

            

    

     

    
      	
               
      

            	
              (25)

            	
              “Cost Share” means the
      respective share of Costs and other liabilities to be borne by each
      Participant in respect of the Properties in accordance with the terms of
      this Agreement and, except as otherwise provided herein, will be
      proportionate to the respective Interests of each Participant as
      determined from time to time;

            

    

     

    
      	
               
      

            	
              (26)

            	
              “Costs” means Exploration
      Costs, Feasibility Costs, Development Costs and Operating Costs, as
      applicable;

            

    

     

    
      	
               
      

            	
              (27)

            	
              “Crosshair Shares” means
      common shares in the capital of
Crosshair;

            

    

     

    
      	
               
      

            	
              (28)

            	
              “Development Costs” means
      the sum of adding (A) the aggregate amount of all direct costs, outlays
      and expenses of whatever kind or nature spent or incurred by the
      Participants in accordance with all Programs and Budgets during the
      Development Period in order to prepare the Properties (or any portion
      thereof) for Commercial Production; including, without limitation, all
      insurance costs, all permitting costs, costs associated with
      rehabilitation including, without limitation, reclamation funds and other
      costs associated with compliance with Environmental Laws, all associated,
      non-recoverable sales taxes, the reasonable costs incurred by
      representatives of the Participants in attending meetings of the Executive
      Committee during the Development Period, an amount equal to the estimated
      working capital required for the two months immediately following
      achievement of Commercial Production and contributions to the Contingency
      Fund required by

            

    

     

     

    
 

    
      
        
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    the
Operator pursuant to section 12.3 and any and all costs, payments,
royalties, interests, or similar arrangements arising at any time during the
Development Period associated with compensation to local groups including as
compensation for native land claims, and (B) an amount in respect of Indirect
Costs equal to 1.5% of all direct Development Costs which are incurred by the
Operator during the Development Period;

    

    
      	
               
      

            	
              (29)

            	
              “Development Decision”
      means a decision made by the Executive Committee, based on the Full
      Feasibility Study, to proceed with the development of a mine on the
      Properties or a portion thereof;

            

    

     

    
      	
               
      

            	
              (30)

            	
              “Development Finance”
      means the financing arrangements required to fund the Development
      Costs;

            

    

     

    
      	
               
      

            	
              (31)

            	
              “Development Finance
      Expense” means, for any period, in respect of each Participant, the
      sum of all principal, interest, fees and other costs associated with the
      Development Finance obtained by such Participant which is payable by such
      Participant to the lender of such Development Finance in respect of such
      period;

            

    

     

    
      	
               
      

            	
              (32)

            	
              “Development Finance
      Notice” shall have the meaning provided in
      section 11.5;

            

    

     

    
      	
               
      

            	
              (33)

            	
              “Development Period”
      means the period commencing when a Development Decision has been made and
      ending upon the commencement of Commercial
  Production;

            

    

     

    
      	
               
      

            	
              (34)

            	
              “Diluted Participant”
      shall have the meaning provided in
  section 14.1;

            

    

     

    
      	
               
      

            	
              (35)

            	
              “Diluted Participant’s
      Interest” shall have the meaning provided in
      section 14.1;

            

    

     

    
      	
               
      

            	
              (36)

            	
              “Effective Date” means
      April 8, 2009;

            

    

     

    
      	
               
      

            	
              (37)

            	
              “Eligible Matter” means,
      in respect of matters considered by the Executive Committee, those matters
      that arise from a dispute between the Participants other than in respect
      of one Participant being out-voted upon any motion considered by the
      Executive Committee;

            

    

     

    
      	
               
      

            	
              (38)

            	
              “Encumbrances” means all
      interests, mortgages, charges, royalties, security interests, liens,
      encumbrances, actions, claims, demands and equities of any nature
      whatsoever or however arising and any rights or privileges capable of
      becoming any of the foregoing;

            

    

     

    
      	
               
      

            	
              (39)

            	
              “Environmental
      Compliance” means actions performed during or after Operations to
      comply with the requirements of all Environmental Laws or contractual
      commitments related to reclamation of the Properties or other compliance
      with Environmental Laws;

            

    

     

     

    
 

    
      
        
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              (40)

            	
              “Environmental Laws”
      means all applicable federal, provincial, municipal and local laws,
      statutes, ordinances, by-laws, regulations, orders, directives and
      decisions, rendered by any Governmental Authority relating to the
      protection of the environment, or the control of pollutants, contaminants,
      chemicals, or industrial, toxic or hazardous wastes or
      substances;

            

    

     

    
      	
               
      

            	
              (41)

            	
              “Environmental
      Liabilities” means any and all claims, actions, causes of action,
      damages, losses, liabilities, obligations, penalties, judgments, amounts
      paid in settlement, assessments, costs, disbursements, or expenses
      (including, without limitation, attorneys’ fees and costs, experts’ fees
      and costs, and consultants’ fees and costs) of any kind or of any nature
      whatsoever that are asserted against any Participant, by any person or
      entity other than the other Participants, alleging liability (including,
      without limitation, liability for studies, testing or investigatory costs,
      cleanup costs, response costs, removal costs, remediation costs,
      containment costs, restoration costs, corrective action damages, business
      losses, personal injuries, penalties or fines) arising out of based on or
      resulting from (i) the presence, release, threatened release,
      discharge or emission into the environment of any hazardous materials or
      substances existing or arising on, beneath or above the Properties and/or
      emanating or migrating and/or threatening to emanate or migrate from the
      Properties to off-site properties; (ii) physical disturbance of the
      environment; or (iii) the violation or alleged violation of any
      Environmental Laws;

            

    

     

    
      	
               
      

            	
              (42)

            	
              “Executive Committee”
      means the committee formed pursuant to section 6 to supervise the
      activities on the Properties;

            

    

     

    
      	
               
      

            	
              (43)

            	
              “Expansion” means, at any
      time, as the context requires either (i) an increase in excess of 10%
      in the Stated Capacity of all Facilities on the Properties which, as of
      such time, have entered into Commercial Production, or (ii) the
      opening and equipping of any additional Facility on the
      Properties;

            

    

     

    
      	
               
      

            	
              (44)

            	
              “Exploration Costs” means
      the sum of adding (A) the aggregate amount of all direct costs,
      outlays and expenses of whatever kind or nature spent or incurred by the
      Operator in accordance with all Programs and Budgets, in connection with
      the exploration of the Properties in the Exploration Period including
      without limitation, moneys expended in maintaining the Properties in good
      standing and costs incurred in connection with complying with
      Environmental Laws, all costs relating to the securing of good relations
      with communities in the area surrounding the Properties, including,
      without limitation, all costs associated with the negotiation and
      implementation of any impact and benefit agreement or access agreement and
      any services provided in aid of consultation between aboriginal people and
      Governmental Authorities relating to Operations, all insurance costs,
      moneys expended in doing and filing assessment work, expenses paid for or
      incurred in connection with any program of surface or underground
      prospecting, exploring, geophysical, geochemical and geological surveying,
      drilling, drifting, raising and other underground work, assaying and
      engineering, bulk sampling, environmental studies, data preparation and
      analysis, submissions to

            

    

     

     

    
 

    
      
        
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      Governmental
Authorities, all associated, non-recoverable sales taxes, the reasonable costs
incurred by no more than one representative of each of Crosshair and Paragon
attending meetings of the Executive Committee, paying the fees, wages, salaries,
travelling expenses and fringe benefits, including, without limitation, medical
and dental benefits provided by Crosshair, of all persons engaged in work with
respect to and for the benefit of the Properties, and (B) an amount in
respect of Indirect Costs equal to 8% of all direct Exploration Costs which are
incurred by the Operator during the Exploration Period. For greater certainty,
any issuances of Crosshair Shares pursuant to sections 3.4 or 4.1(6) shall not
considered to be Exploration Costs;

    

    

    
      	
               
      

            	
              (45)

            	
              “Exploration Period”
      means the period commencing on the Effective Date and ending on the
      Feasibility Date;

            

    

     

    
      	
               
      

            	
              (46)

            	
              “Facilities” means all
      mines and plants including, without limitation, all pits, shafts, haulage
      ways and other underground workings, and all buildings, plants and other
      structures, fixtures and improvements, mobile equipment, stores of a
      capital and consumable nature, and all other property, whether fixed or
      moveable, as the same may exist at any time, in or on the Properties or
      outside the Properties if it materially benefits the
      Properties;

            

    

     

    
      	
               
      

            	
              (47)

            	
              “Fair Market Value” shall
      have the meaning set out in
  Schedule 1.1(47);

            

    

     

    
      	
               
      

            	
              (48)

            	
              “Feasibility Costs” means
      the sum of adding (A) the aggregate amount of all direct costs, outlays
      and expenses of whatever kind or nature spent or incurred by the Operator
      in accordance with all Programs and Budgets in connection with the
      production of a Full Feasibility Study including, without limitation, all
      costs, outlays and expenses of whatever kind or nature spent or incurred
      in preparation of the Full Feasibility Study during the Feasibility
      Period, and (B) an amount in respect of Indirect Costs equal to 8% of all
      direct Feasibility Costs which are incurred by the Operator during the
      Feasibility Period;

            

    

     

    
      	
               
      

            	
              (49)

            	
              “Feasibility Date” means
      the date the Executive Committee determines to commence the preparation of
      the Full Feasibility Study in accordance with
    section 6;

            

    

     

    
      	
               
      

            	
              (50)

            	
              “Feasibility Period”
      means the period commencing on the Feasibility Date and ending on the date
      on which the Executive Committee make a Development
    Decision;

            

    

     

    
      	
               
      

            	
              (51)

            	
              “Fiscal Year” means the
      period commencing on May 1 of each year and ending on the next succeeding
      April 30;

            

    

     

    
      	
               
      

            	
              (52)

            	
              “Full Feasibility Study”
      means a comprehensive study approved by the Executive Committee in
      accordance with this Agreement that covers all material aspects of a
      proposed Program and Budget to investigate the technical and economic
      viability of commencing Commercial Production on the Properties,
      or

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    

    any part
thereof, in sufficient detail and to a degree of accuracy that is accepted by
Crosshair and:

    

    
      	
               
      

            	
              (a)

            	
              is
      sufficiently detailed in content and presented in a form that would be
      normally acceptable to a provider of development finance as a basis for
      providing the Development Finance on commercially reasonable
      terms;

            

    

     

    
      	
               
      

            	
              (b)

            	
              is
      based on work conducted in accordance with the Program and
      Budget;

            

    

     

    
      	
               
      

            	
              (c)

            	
              is
      based on appropriate sampling programmes and provides estimates of the
      tonnes and grade of proven and probable Ore reserves and resources
      expressed on both a mineable and recoverable
  basis;

            

    

     

    
      	
               
      

            	
              (d)

            	
              provides
      details of all technical or other work and analysis on which the study is
      based including but not limited to geological, geotechnical, hydrological,
      metallurgical, processing, mining, survey, waste disposal, power and water
      requirements;

            

    

     

    
      	
               
      

            	
              (e)

            	
              includes
      studies of environmental, archaeological, social, cultural, community and
      aboriginal title and treaty impacts of sufficient detail to be acceptable
      to the relevant authorities;

            

    

     

    
      	
               
      

            	
              (f)

            	
              sets
      out the details of and analyses the security and adequacy of tenure and
      ownership;

            

    

     

    
      	
               
      

            	
              (g)

            	
              includes
      a study and analysis of relevant infrastructure, infrastructure access,
      ore beneficiation, waste disposal, product price forecasting and financial
      aspects;

            

    

     

    
      	
               
      

            	
              (h)

            	
              includes
      sufficient details of official arrangements for the purchase of all
      Product as to be acceptable to a provider of Development
      Finance;

            

    

     

    
      	
               
      

            	
              (i)

            	
              plans
      for and provides a Budget for the implementation of Commercial Production
      and includes but is not limited to a schedule
  of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              relevant
      government, statutory and any other approval necessary;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              activities,
      resources personnel, equipment, materials etc. and
      expenditures;

            

    

     

    
      	
               
      

            	
              (j)

            	
              includes
      estimates of both capital and operating costs likely to be incurred in
      establishing and conducting development and operations, including costs to
      be incurred in development, construction, pre-production, mining, crushing
      and treatment or other beneficiation, as the case may be, and all working
      capital requirements;

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (k)

            	
              analyses
      how to proceed with development and operations to economically and
      commercially maximize the return on funds invested on the assumption that
      the Properties will be funded solely on an equity
  basis;

            

    

     

    
      	
               
      

            	
              (l)

            	
              includes
      a financial model for, and states the commercial viability, including risk
      and sensitivity analysis of the proposed development and operations on the
      assumption that the Properties will be funded solely on an equity
      basis;

            

    

     

    
      	
               
      

            	
              (m)

            	
              is
      of such detail and scope as to be acceptable to any Governmental Authority
      to which reports must be provided or applications must be
      made;

            

    

     

    
      	
               
      

            	
              (n)

            	
              contemplates
      and identifies additional resources, any potential further project
      expansion and/or exploration potential (if
  applicable);

            

    

     

    
      	
               
      

            	
              (o)

            	
              includes
      estimates of further exploration costs for ongoing exploration of the
      Properties both during the Feasibility Period and Development Period and
      after the commencement of Commercial Production within and outside the
      boundaries of the Subject Area;

            

    

     

    
      	
               
      

            	
              (p)

            	
              includes
      a description of that part of the Properties to be covered by the proposed
      mine contemplated in the Full Feasibility
Study;

            

    

     

    
      	
               
      

            	
              (q)

            	
              is
      prepared or independently reviewed by an internationally recognized and
      mutually agreed to engineering
firm;

            

    

     

    
      	
               
      

            	
              (r)

            	
              includes
      estimates of all ongoing capital costs such as the purchase and
      replacement of equipment, tailings dam replacements and items of a similar
      nature;

            

    

     

    
      	
               
      

            	
              (53)

            	
              “Governmental Authority”
      means any domestic or foreign, federal, provincial, municipal or local
      legislative, executive, judicial or administrative body or person having
      jurisdiction in the relevant
circumstances;

            

    

     

    
      	
               
      

            	
              (54)

            	
              “Gross Revenue” in
      respect of any period shall mean the sum of adding (A) gross receipts
      from sale of Product, less any charges for sampling, assaying, or
      penalties for such period; (B) gross receipts from the sale or other
      disposition of Assets for such period; (C) insurance proceeds for
      such period; (D) compensation for expropriation of Assets for such
      period; and (E) judgment proceeds for such
  period.

            

    

     

    
      	
               
      

            	
              (55)

            	
              “Independent Valuator”
      has the meaning provided in
  Schedule 1.1(47);

            

    

     

    
      	
               
      

            	
              (56)

            	
              “Indirect Costs” means
      all costs incurred by the Operator associated with secretarial support,
      offices and facilities, selected field support equipment, accounting
      services, computers, administration, health and safety, legal
      support,

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 9
-

        
          

        

      

      
         

        
          -  -

        

      

    

    

    lands
department support, printers and plotters and other similar indirect costs
associated with the Costs;

    

    
      	
               
      

            	
              (57)

            	
              “Indemnified Participant”
      has the meaning set out in
section 5.4;

            

    

     

    
      	
               
      

            	
              (58)

            	
              “Indemnifying
      Participant” has the meaning set out in
      section 5.4;

            

    

     

    
      	
               
      

            	
              (59)

            	
              “Initial Deemed
      Investment” means the sum of
      $2.3 Million;

            

    

     

    
      	
               
      

            	
              (60)

            	
              “Initial Exploration
      Costs” has the meaning set out in section
  3.3;

            

    

     

    
      	
               
      

            	
              (61)

            	
              “Initial Option” has the
      meaning set out in section 3.2;

            

    

     

    
      	
               
      

            	
              (62)

            	
              “Interest” means, at any
      time, the undivided beneficial percentage interest representing the
      ownership interest of a Participant in the Assets, at such time and all
      other rights and obligations arising under this Agreement, as such
      interest may from time to time be adjusted
      hereunder.  Participating Interests shall be calculated to three
      decimal places and rounded to two decimal places as
      follows:  Decimals of .005 or more shall be rounded up (e.g.,
      1.519% to 1.52%); decimals of less than .005 shall be rounded down (e.g.,
      1,514% rounded to 1.51%).

            

    

     

    
      	
               
      

            	
              (63)

            	
              “Intervening Event” shall
      have the meaning provided in
section 26.1;

            

    

     

    
      	
               
      

            	
              (64)

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

            

    

     

    
      	
               
      

            	
              (65)

            	
              “Joint Venture Agreement”
      means the May 1, 2006 Golden Promise Property Agreement between Rubicon
      Minerals Corporation and Crosshair, as amended on April 18, 2008, as
      assigned from Rubicon Minerals Corporation to Paragon effective December
      8, 2006;

            

    

     

    
      	
               
      

            	
              (66)

            	
              “Material Loss” has the
      meaning set out in
section 5.4;

            

    

     

    
      	
               
      

            	
              (67)

            	
              “Net Cash Flow” for any
      period means the sum of adding:

            

    

     

    
      	
               
      

            	
              (a)

            	
              cash
      and cash equivalents of the Joint Venture (which for the avoidance of
      doubt includes any overdrafts) at the beginning of such period;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      difference resulting from the
subtracting:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Operating
      Costs paid during such period, from

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Gross
      Revenue received during such
period;

            

    

     

    
      	
               
      

            	
              (68)

            	
              “Net Smelter Royalty”
      shall have the meaning set out in Schedule 1.1(68) attached
      hereto;

            

    

     

    
      	
               
      

            	
              (69)

            	
              “Non-Acquiring
      Participant” shall have the meaning provided in
      section 17.1;

            

    

     

    
      	
               
      

            	
              (70)

            	
              “Non-Approving
      Participant” shall have the meaning provided in
      section 6.9;

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (71)

            	
              “Non-Contributing
      Participant” shall have the meaning provided in
      section 13.9;

            

    

     

    
      	
               
      

            	
              (72)

            	
              “Offer” shall have the
      meaning provided in
section 20.4;

            

    

     

    
      	
               
      

            	
              (73)

            	
              “Offeror” shall have the
      meaning provided in
section 20.3;

            

    

     

    
      	
               
      

            	
              (74)

            	
              “Offeree” shall have the
      meaning provided in
section 20.3;

            

    

     

    
      	
               
      

            	
              (75)

            	
              “Operations” means the
      activities carried out under this
Agreement;

            

    

     

    
      	
               
      

            	
              (76)

            	
              “Operating Costs” means,
      for any period after commencement of Commercial Production, the result of
      subtracting the sum of (a) and the sum of (b) from the sum of
      (c):

            

    

     

    
      	
               
      

            	
              (a)

            	
              all
      direct costs, outlays and expenses of whatsoever kind or nature actually
      incurred or chargeable directly by the Operator in connection with the
      operation of the Properties as a mine during such period, which costs,
      expenses, obligations, liabilities and charges include, without
      duplication and without limitation, the
  following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              all
      costs of or related to the mining and processing of the Ore and the
      operation of the Facilities and all costs of or related to the Product,
      including marketing, transportation, commissions and/or discounts at rates
      which are normal and customary in the
industry;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              all
      costs and expenses of replacing, expanding, modifying, altering or
      changing from time to time the Facilities.  Costs and expenses
      of improvements (such as haulage ways or mill facilities) that are also
      used in connection with workings other than the Properties shall be
      charged to the Properties only in the proportion that their use in
      connection with the Properties bears to their total
  use;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              such
      amount of cash for working capital as is required for the operation of the
      Properties as a mine pursuant to
  section 13.11;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              all
      costs of or related to operating employee facilities, including
      housing;

            

    

     

    
      	
               
      

            	
              (v)

            	
              all
      duties, charges, levies, royalties, interests, taxes (excluding taxes
      levied on the income of the Participants) applicable to mining of the
      Properties, including, without limitation, all provincial mining taxes,
      non-recoverable sales taxes, severance taxes, licence fees and
      governmental levies of a similar nature, and other payments imposed by any
      Governmental Authority upon or in connection with operating the Properties
      as a mine or which are paid or payable to any local groups including as
      benefits to be

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    

    provided
or paid in respect of any aboriginal claims to aboriginal or treaty rights or
payable to any other third party;

    

    
      	
               
      

            	
              (vi)

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

            

    

     

    
      	
               
      

            	
              (vii)

            	
              all
      costs of consulting, legal, accounting, insurance and other services
      incurred by the Operator and directly related to the operation of the
      Facilities;

            

    

    
       

      
        	
                 
      

              	
                (viii)

              	
                all
      approved exploration expenditures incurred with respect to the Properties
      after commencement of Commercial Production from a mine on the Properties
      including both exploration within the area of such mine and outside the
      area of such mine;

              

      

    

     

    
      	
               
      

            	
              (ix)

            	
              all
      annual capital costs for the normal efficient operation of the Properties
      as a mine including, without limitation, all costs of construction,
      equipment and mine development including maintenance, repairs and
      replacements and all costs, including capital costs, associated with an
      Expansion;

            

    

     

    
      	
               
      

            	
              (x)

            	
              all
      costs in connection with or as a result of Environmental Laws incurred by
      the Operator;

            

    

     

    
      	
               
      

            	
              (xi)

            	
              any
      costs or expenses incurred by the Operator relating to the termination of
      the operation of the Properties as a mine, including all contributions to
      the Contingency Fund pursuant to
  section 12.3;

            

    

     

    
      	
               
      

            	
              (xii)

            	
              the
      reasonable costs incurred by the representatives of the Participants
      attending meetings of the Executive
Committee;

            

    

     

    
      
        	
                 
      

              	
                (xiii)

              	
                
                  allowance
      for overhead;

                

              

      

       

      
        	
                 
      

              	
                (xiv)

              	
                
                  all
      amounts payable to the Participants during
  mining;

                

              

      

    

     

    
      	
               
      

            	
              (xv)

            	
              interest
      on monies borrowed or advanced for costs and expenses, but in no event in
      excess of the maximum permitted by
law;

            

    

     

    
      
        	
                 
      

              	
                (xvi)

              	
                
                  costs
      of funding the Contingency Fund as provided in section 12.3;
      and

                

              

      

       

      
        	
                 
      

              	
                (xvii)

              	
                rental,
      royalty, production, and purchase
payments.

              

      

    

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 12
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (b)

            	
              an
      amount in respect of Indirect Costs equal to 2.5% of all direct Operating
      Costs which are incurred by the Operator during the Operating
      Period.

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      amount of all insurance recoveries and settlements received during such
      period to the extent such recoveries and settlements were not deducted in
      any previous period; provided that, except where specific provision is
      made otherwise, all Operating Costs will be determined in accordance with
      Canadian GAAP but such costs shall not include any amount in respect of
      amortization of Costs, depletion or
  depreciation;

            

    

     

    
      	
               
      

            	
              (77)

            	
              “Operating Period” means
      the period commencing on the date on which Commercial Production is
      commenced on the Properties or a portion thereof and terminating upon the
      termination of such Commercial
Production;

            

    

     

    
      	
               
      

            	
              (78)

            	
              “Operator” means the
      Participant acting as Operator with respect to the Properties pursuant to
      this Agreement and the “Non-Operator” means any
      Participant that is not the Operator at any given
  time;

            

    

     

    
      	
               
      

            	
              (79)

            	
              “Ore” means all minerals
      from the Properties, the nature and composition of which provides economic
      justification for mining or removing from place and shipping and selling
      such material, or delivering such material to a plant for further
      processing;

            

    

     

    
      	
               
      

            	
              (80)

            	
              “Other Tenements” means
      all surface rights of and to any lands within or outside the Properties
      including surface rights held in fee or under lease, licence, easement,
      right of way or other rights of any kind (and all renewals, extensions and
      amendments thereof or substitutions therefor) acquired by or on behalf of
      the Participants with respect to the
Properties;

            

    

     

    
      	
               
      

            	
              (81)

            	
              “Overruns” means, in
      respect of any Budget, all Costs which exceed those estimated under such
      Budget;

            

    

     

    
      	
               
      

            	
              (82)

            	
              “Participant” means
      either of Crosshair or Paragon and their successors and permitted assigns
      and any other entity which becomes a party to this Agreement pursuant to
      section 20 and the successors and permitted assigns thereof that may
      own an Interest from time to time, as the case may be, and “Participants” means
      together Crosshair, Paragon, any such additional Participant and their
      successors and permitted assigns, as the case may
  be;

            

    

     

    
      	
               
      

            	
              (83)

            	
              “Participants’ Net Cash
      Flow” has the meaning provided in
    section 12.4(6);

            

    

     

    
      	
               
      

            	
              (84)

            	
              “Parties” means Crosshair
      and Paragon;

            

    

     

    
      	
               
      

            	
              (85)

            	
              “Periods” means
      collectively the Exploration Period, the Development Period and the
      Feasibility Period;

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 13
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (86)

            	
              “Permitted Encumbrances”
      means the Encumbrances described on Schedule
  1.1(86);

            

    

     

    
      	
               
      

            	
              (87)

            	
              “Product” means Ore at
      its highest stage of processing as effected by or on behalf of the Joint
      Venture constituted with respect to the
  Properties;

            

    

     

    
      	
               
      

            	
              (88)

            	
              “Program” means a
      document approved by the Executive Committee outlining the work proposed
      to be carried out during a given period of
time;

            

    

     

    
      	
               
      

            	
              (89)

            	
              “Program/Budget Phase”
      shall have the meaning provided in
  section 13.1;

            

    

     

    
      	
               
      

            	
              (90)

            	
              “Properties” means,
      collectively, the mining claims described in
      Schedule 1.1(90);

            

    

     

    
      	
               
      

            	
              (91)

            	
              “Purchase and Sale
      Agreement” means the Purchase and Sale Agreement between Gemini
      Metals Corp., Crosshair and Paragon dated June 4th,
  2008;

            

    

     

    
      	
               
      

            	
              (92)

            	
              “Recommendation” means
      the recommendation of Crosshair to the Executive Committee based on the
      results of and delivered with a Full Feasibility Study
  to:

            

    

     

    
      	
               
      

            	
              (a)

            	
              proceed
      to develop a mine on a Subject
Area;

            

    

     

    
      	
               
      

            	
              (b)

            	
              postpone,
      delay or abandon development of such a mine;
or

            

    

     

    
      	
               
      

            	
              (c)

            	
              undertake
      or continue further work to provide further information as a basis for the
      Full Feasibility Study;

            

    

     

    
      	
               
      

            	
              (93)

            	
              “Remaining Participant”
      shall have the meaning provided in
  section 14.1;

            

    

     

    
      	
               
      

            	
              (94)

            	
              “Revenue” means cash
      received from the sale of the
Product;

            

    

     

    
      	
               
      

            	
              (95)

            	
              “Rights” shall have the
      meaning provided in
section 20.1;

            

    

     

    
      	
               
      

            	
              (96)

            	
              “Stated Capacity” shall
      have the meaning provided in the Full Feasibility
  Study;

            

    

     

    
      	
               
      

            	
              (97)

            	
              “Subject Area” means the
      portion of the Properties covered by a Full Feasibility Study which shall
      include sufficient area for all Facilities and rights of access and which
      for the avoidance of doubt will have boundaries in three dimensions
      including boundaries indicating the depth of such portion of the
      Properties;

            

    

     

    
      	
               
      

            	
              (98)

            	
              “Supplies” means all
      tangible personal property of a non-capital nature (other than Product or
      Facilities) acquired or held by the Participants with respect to a
      Properties;

            

    

     

    
      	
               
      

            	
              (99)

            	
              “Transfer” shall have the
      meaning provided in
section 20.1;

            

    

     

    
      
        	
                 
      

              	
                (100)

              	
                
                  
                    “Transferee” shall have
      the meaning provided in
  section 20.2;

                  

                

              

      

       

      
        	
                 
      

              	
                (101)

              	
                
                  
                    “Transferor” shall have
      the meaning provided in
  section 20.1;

                  

                

              

      

    

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 14
-

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                (102)

              	
                
                  “Underlying Agreements”
      means the agreements with various optionors relating to Crosshair and
      Paragon’s interests in the Properties described in Schedule 1.1(102);
      and

                

              

      

       

      
        	
                 
      

              	
                (103)

              	
                
                  “Vesting Time” means the date on
      which Crosshair earns a 60% Interest pursuant to
      section 3.2.

                

              

      

       

    

    
      	
              1.2

            	
              Interpretation
      in this Agreement, unless something in the subject matter or context is
      inconsistent therewith:

            

    

     

    
      	
               
      

            	
              (1)

            	
              “this Agreement” means
      this agreement as it may from time to time be supplemented or amended and
      in effect and includes the schedules
hereto;

            

    

     

    
      	
               
      

            	
              (2)

            	
              all
      references in this Agreement to “Articles”, “sections” and other
      subdivisions or Schedules are to the designated articles, sections or
      other subdivisions or Schedules of or attached to this
      Agreement;

            

    

     

    
      	
               
      

            	
              (3)

            	
              the
      words “herein”,
      “hereof” and
      “hereunder” and
      other words of similar import refer to this Agreement as a whole and not
      to any particular section or other
subdivision;

            

    

     

    
      	
               
      

            	
              (4)

            	
              the
      headings are for convenience only and do not form part of this Agreement
      and are not intended to interpret, define or limit the scope, extent or
      intent of this Agreement;

            

    

     

    
      	
               
      

            	
              (5)

            	
              the
      singular of any term includes the plural, and vice versa, the use of any
      term is equally applicable to any gender and, where applicable, a body
      corporate, the word “or” is not exclusive and
      the word “including” is not
      limiting (whether or not non-limiting language is used with reference
      thereto);

            

    

     

    
      	
               
      

            	
              (6)

            	
              the
      words “written” or
      “in writing”
      include printing, typewriting or any electronic means of communication
      capable of being visibly reproduced at the point of reception including
      telex, telegraph or telecopy;

            

    

     

    
      	
               
      

            	
              (7)

            	
              any
      reference to a statute is a reference to the applicable statute and to any
      regulations made pursuant thereto and includes all amendments made thereto
      and in force from time to time and any statute or regulation that has the
      effect of supplementing or superseding such statute or
      regulation;

            

    

     

    
      	
               
      

            	
              (8)

            	
              all
      accounting terms not defined in this Agreement have those meanings
      generally ascribed to them in accordance with Canadian GAAP;
      and

            

    

    
       

      
        	
                 
      

              	
                (9)

              	
                a
      “day” shall refer
      to a calendar day and in calculating all time periods the first day of a
      period is not included and the last day is included and references to a
      “business day”
      shall refer to days on which banks are ordinarily open for business in
      Vancouver, British Columbia, but if a period ends on a day on which the
      banks are not open for business in Vancouver, British Columbia, the
      period

              

      

       

       

       

      
        
          
            50651077.7

          

        

        
          - 15
-

          
            

          

        

        
          
          

        

      

      
 

      will be
deemed to expire on the next calendar day on which banks are open for business
in Vancouver, British Columbia.

       

    

    
      	
              2.

            	
              ASSOCIATION OF
      PARTICIPANTS 

            

    

     

    
      	
              2.1

            	
              Paragon
      hereby grants to Crosshair the exclusive right and option to acquire up to
      70% Interest (which Interest may be adjusted to a lesser or greater
      Interest as set out in this Agreement) in the Assets, free and clear of
      all Encumbrances other than the Permitted Encumbrances, in accordance with
      the terms of this Agreement.

            

    

     

    
      	
              2.2

            	
              The
      participants are hereby associated for the following limited functions and
      purposes:

            

    

     

    
      	
               
      

            	
              (1)

            	
              to
      explore and, if deemed warranted as herein provided, to develop the
      Properties and develop all or any part thereof for Commercial
      Production;

            

    

     

    
      	
               
      

            	
              (2)

            	
              to
      operate the Properties as one or more mines;
and

            

    

     

    
      	
               
      

            	
              (3)

            	
              to
      engage in such other activities as may be considered by the Participants
      to be necessary or desirable in connection with the
    foregoing.

            

    

     

    
      	
              2.3

            	
              All
      transactions, contracts, employments, purchases, operations, negotiations
      with any person 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
      Participant will do, transact, perform or undertake anything in the name
      of the Operator or any other Participant or in the joint names of the
      Participants except as expressly stipulated in this
    Agreement.

            

    

     

    
      	
              2.4

            	
              Except
      as otherwise expressly stipulated in this Agreement, the rights and
      obligations of the Participants will be, in each case, several, and will
      not be or be construed to be either joint or joint and
      several.  Nothing contained in this Agreement will, except to
      the extent specifically authorized hereunder, be deemed to constitute a
      Participant a partner, an agent or legal representative of the other
      Participants.  It is intended that this Agreement will not
      create the relationship of a partnership among the Participants and that
      no act done by any Participant pursuant to the provisions hereof will
      operate to create such a
relationship.

            

    

     

    
      	
              2.5

            	
              Each
      of the Participants will devote such efforts and resources as maybe
      required to fulfil any obligation assumed by them
      hereunder.  Except as specifically provided
      hereunder:

            

    

     

    
      	
               
      

            	
              (1)

            	
              each
      Participant will be at liberty to engage, for its own account and without
      duty to account to the other Participants, in any other business or
      activity outside the subject matter of this Agreement, including, without
      limitation, the ownership and operation of any other mining permits,
      licences, claims and leases wherever located except in the Properties or
      the Area of Common Interest;

            

    

     

    
      	
               
      

            	
              (2)

            	
              no
      Participant will be under any fiduciary or other duty or obligation to the
      other Participant which will prevent or impede such Participant from
      participating in, or enjoying the benefits of competing endeavours of a
      nature similar to the Business

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 16
-

        
          

        

      

      
         

      

    

    or
activity undertaken by the Participants wherever vested except in respect of the
Properties and the Area of Common Interest; and

    

    
      	
               
      

            	
              (3)

            	
              the
      legal doctrines of “corporate opportunity”
      or “business
      opportunity” sometimes applied to persons occupying a relationship
      similar to that of the Participants as contemplated in this Agreement will
      not apply to any business activities or endeavours of one of the
      Participants carried on with respect to lands located outside of the
      Properties and the Area of Common Interest, and that does not relate to
      the Joint Venture, and, without limitation, a Participant will not be
      accountable to the other Participants for participation in any such
      business activity or endeavour outside the subject matter of this
      Agreement which is in direct competition with the business activities or
      endeavours undertaken by the Joint
Venture.

            

    

     

    
      	
              2.6

            	
              Any  rebate
      of taxes, fees or other payments by a Governmental Authority and any
      credits granted by any Governmental Authority in respect of such taxes,
      fees or other payments, shall be entirely to the credit of Crosshair at
      any time that Crosshair is self-funding the Operations but shall be shared
      to the credit of Crosshair and Paragon in accordance with their respective
      Interests at any time that the Participants are sharing funding of the
      Operations; provided that such Interests shall be calculated for purposes
      of determination of the allocation of such rebates, credits, or proceeds
      at any time that the Participants are sharing funding of the Operations
      after any change in such Interests which results from one Participant not
      funding its share of any Budget after such change of
    Interest.

            

    

     

    
      	
              2.7

            	
              Each
      Participant shall, from time to time, take all necessary actions,
      including execution of appropriate agreements, to pledge and subordinate
      its Interest, any hypothecs, liens or security interests it may hold which
      are created under this Agreement, and any other right or interest it holds
      with respect to the Assets (other than any statutory lien of the Operator)
      to any secured borrowings for Operations approved by the Executive
      Committee.

            

    

     

    
      	
              2.8

            	
              Subject
      to Section 2.6, each Participant, in proportion to its Interest, from time
      to time:

            

    

     

    
      	
               
      

            	
              (1)

            	
              will
      own its share of all Product to be disposed of pursuant to
      section 15; and

            

    

     

    
      	
               
      

            	
              (2)

            	
              will
      severally bear all expenditures, debts, losses (including capital losses),
      obligations and liabilities of the Joint
  Venture.

            

    

     

    
      	
              2.9

            	
              Each
      Participant expressly waives every right which it may have to call for the
      partition or transfer of any of the
Assets.

            

    

     

    
      	
              2.10

            	
              Paragon
      shall be the registered holder of the Properties until the Vesting Time.
      At the Vesting Time, Paragon will cause the Properties to be recorded in
      Crosshair’s name in trust for the Participants in proportion to their
      respective Interests.

            

    

     

    
      	
              2.11

            	
              Except
      as otherwise provided in this Agreement, the Assets are owned by the
      Participants in undivided shares as tenants in common in proportion to
      their respective Interests.

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 17
-

        
          

        

      

      
         

      

    

    

    Each
Participant must make available its Interest in the Assets for the purposes of
the Joint Venture.

    

    
      	
              2.12

            	
              If,
      at any time, any of the Assets are not owned by the Participants in
      proportion to their respective Interests but are owned by one of the
      Participants, the Participant that owns those Assets must hold those
      respective Assets for the use and benefit of the Participants in
      proportion to their Interests and, if determined by the Executive
      Committee, must (at the expense of the Participants in proportion to their
      respective Interests) take all such steps as may be necessary to vest
      those Assets in the Participants in proportion to their respective
      Interests.

            

    

     

    
      	
              2.13

            	
              All
      property (real or personal) held, developed, constructed or acquired under
      this Agreement by or on behalf of the Operator for or on behalf of the
      Participants, or any of them, will be Assets.  The Operator will
      not have any interest in any of the Assets or in any money collected by
      the Operator for the Participants except as the trustee of the
      Participants.

            

    

     

    
      	
              2.14

            	
              Assets
      other than the Properties may be held by the Operator as nominee for the
      Participants as tenants in common in proportion to their respective
      Interests.

            

    

     

    
      	
              2.15

            	
              As
      far as reasonably practical, all contracts entered into by the Operator
      with third parties in respect of the Joint Venture shall specify that the
      Operator is acting as agent for the Participants involved in an
      unincorporated joint venture comprising the Participants the liabilities
      of which are several in proportion to their respective
      Interests.

            

    

     

    
      	
              2.16

            	
              Upon
      the Effective Date of this Agreement, the Joint Venture Agreement and
      Purchase and Sale Agreement shall be terminated.  Crosshair
      shall cause Gemini Metals Corp. to execute and deliver to Paragon, an
      acknowledgement that the Purchase and Sale Agreement is terminated as of
      the Effective Date.

            

    

     

    
      	
              3.

            	
              INITIAL OPTION
      

            

    

     

    
      	
              3.1

            	
              The
      Participants will each have such Interest as is determined from time to
      time in accordance with this
Agreement.

            

    

     

    
      	
              3.2

            	
              In
      order for Crosshair to acquire a 60% Interest (the “Initial Option”) it
      shall, within 30 days of the Effective Date issue 2,655,000 Crosshair
      Shares to Paragon and upon issuance of such Crosshair Shares, Crosshair
      shall earn a 60% Interest and Paragon shall have its Interest reduced to
      40% and the Joint Venture between Paragon and Crosshair will be
      formed.

            

    

     

    
      	
              3.3

            	
              Crosshair
      shall use its commercially reasonable efforts to incur a minimum of
      $2,000,000 in Exploration Costs (the “Initial Exploration
      Costs”) on or before the date that is 48 months after the Vesting
      Time. Crosshair shall also be responsible for all Costs required in order
      to maintain the Properties in good standing during this
      period.  During this period, Paragon’s Interest shall be a
      carried Interest and accordingly Paragon shall not be required to
      contribute its Cost Share of any Programs and
  Budgets.

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 18
-

        
          

        

      

      
         

      

    

    

    
      	
              3.4

            	
              If
      Crosshair has not incurred the Initial Exploration Costs on or before the
      date that is 48 months after the Vesting Time, then Crosshair shall issue
      250,000 Crosshair Shares to Paragon and shall then have an additional 12
      months to incur the Initial Exploration Costs.  If Crosshair has
      not completed the Initial Exploration Costs after the 12 month extension,
      the Additional Option automatically
expires.

            

    

     

    
      	
              4.

            	
              ADDITIONAL
      OPTION

            

    

     

    
      	
              4.1

            	
              Crosshair
      has an option to earn an additional 10% Interest (the “Additional Option”) and
      in order to obtain such additional 10% Interest it
  must:

            

    

     

    
      	
               
      

            	
              (1)

            	
              exercise
      the Initial Option;

            

    

     

    
      	
               
      

            	
              (2)

            	
              incur
      the Initial Exploration Costs;

            

    

     

    
      	
               
      

            	
              (3)

            	
              if
      required by section 3.4, issue 250,000 Crosshair Shares to
      Paragon;

            

    

     

    
      	
               
      

            	
              (4)

            	
              provide
      notice to Paragon within 90 days of Crosshair’s incurrence of the Initial
      Exploration Costs that it desires to earn the additional 10%
      Interest;

            

    

     

    
      	
               
      

            	
              (5)

            	
              incur
      a minimum of $1,000,000 in additional Exploration Costs (the “Additional Exploration
      Costs”); and

            

    

     

    
      	
               
      

            	
              (6)

            	
              if
      Crosshair has not incurred the Additional Exploration Costs on or before
      the date that is 24 months after the date it gives notice to Paragon in
      accordance with section 4.1(4), Crosshair shall be required to issue
      100,000 Crosshair Shares to Paragon and
      shall  then  have a further 12 months to incur the
      Additional Exploration Costs.  If Crosshair has not fully
      incurred the Additional Exploration Costs, after the 12 month extension,
      it, may purchase the additional 10% Interest by (i) paying in cash to
      Paragon the difference between the $1,000,000 in Additional Exploration
      Costs and actual Additional Exploration Costs incurred by Crosshair, and
      (ii) issuing 50,000 Crosshair Shares to Paragon.  If Crosshair
      does not elect to purchase the additional 10% Interest in accordance with
      this Section 4.1(6), the Additional Option shall
  expire.

            

    

     

    
      	
               
      

            	
              (7)

            	
              Crosshair
      shall also be responsible for all Costs required in order to maintain the
      Properties in good standing during this period.  During this
      period, Paragon’s Interest shall be a carried Interest and accordingly
      Paragon shall not be required to contribute its Cost Share of any Programs
      and Budgets.

            

    

     

    
      	
              5.

            	
              REPRESENTATIONS,
      WARRANTIES AND
CONDITIONS

            

    

     

    
      	
              5.1

            	
              Crosshair
      represents and warrants to Paragon that, as of the date of this
      Agreement:

            

    

     

    
      	
               
      

            	
              (1)

            	
              it
      is a valid and subsisting corporation duly existing under the laws of the
      Province of British Columbia;

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 19
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (2)

            	
              it
      has full corporate power and authority to execute and deliver this
      Agreement any agreement or instrument referred to or contemplated in this
      Agreement and to carry out and perform its covenants and obligations
      hereunder;

            

    

     

    
      	
               
      

            	
              (3)

            	
              it
      has taken all necessary corporate proceedings and obtained all necessary
      approvals in respect thereof;

            

    

     

    
      	
               
      

            	
              (4)

            	
              upon
      execution and delivery of this Agreement by Crosshair, this Agreement will
      constitute a legal, valid and binding obligation of Crosshair enforceable
      against Crosshair in accordance with its terms except
  that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              enforceability
      may be limited by bankruptcy, insolvency or other laws affecting
      creditors’ rights generally;

            

    

     

    
      	
               
      

            	
              (b)

            	
              equitable
      remedies, including the remedies of specific performance and injunctive
      relief are available only in the discretion of the applicable
      court;

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      court may stay proceedings before them by virtue of equitable or statutory
      powers; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              rights
      of indemnity and contribution hereunder may be limited under applicable
      law;

            

    

     

    
      	
               
      

            	
              (5)

            	
              execution,
      delivery and performance of this Agreement does not and will not conflict
      with, accelerate the performance required by, result in any breach or
      contravention of, constitute a default under or result in the creation of
      any encumbrance, lien or charge under or pursuant to the provisions of
      (i) its constating documents of any resolutions of its shareholders
      or directors, or any indenture, agreement or other instrument whatsoever
      to which it is a party, by which it is bound or to which it may be subject
      or (ii) any Applicable Laws;
and

            

    

     

    
      	
               
      

            	
              (6)

            	
              no
      representation or warranty made by it in this Agreement or any statement,
      schedule, certificate or other document delivered by it pursuant to or in
      connection with this Agreement or in connection with any transaction
      contemplated hereby contains any untrue statement of a material fact or
      omits to state a material fact required to be stated herein or therein or
      necessary to make the statements contained herein or therein not
      misleading.

            

    

     

    
      	
              5.2

            	
              Paragon
      represents and warrants to Crosshair that, as of the date of this
      Agreement:

            

    

     

    
      	
               
      

            	
              (1)

            	
              it
      is a valid and subsisting corporation duly existing under the federal laws
      of Canada;

            

    

     

    
      	
               
      

            	
              (2)

            	
              it
      has full corporate power and authority to execute and deliver this
      Agreement and any agreement or instrument referred to or contemplated in
      this Agreement and to carry out and perform its covenants and obligations
      hereunder;

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 20
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (3)

            	
              it
      has taken all necessary corporate proceedings and obtained all necessary
      approvals in respect thereof;

            

    

     

    
      	
               
      

            	
              (4)

            	
              upon
      execution and delivery of this Agreement by it, this Agreement will
      constitute a legal, valid and binding obligation of it enforceable against
      it in accordance with its terms except
that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              enforceability
      may be limited by bankruptcy, insolvency or other laws affecting
      creditors’ rights generally;

            

    

     

    
      	
               
      

            	
              (b)

            	
              equitable
      remedies, including the remedies of specific performance and injunctive
      relief; are available only in the discretion of the applicable
      court;

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      court may stay proceedings before them by virtue of equitable or statutory
      proceedings; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              rights
      of indemnity and contribution hereunder may be limited under applicable
      law;

            

    

     

    
      	
               
      

            	
              (5)

            	
              execution,
      delivery and performance of this Agreement does not and will not conflict
      with, accelerate the performance required by, result in any breach or
      contravention of, constitute a default under or result in the creation of
      any encumbrance, lien or charge under or pursuant to the provisions of
      (i) its constating documents or any resolutions of its shareholders
      or directors, or any indenture, agreement or other instrument whatsoever
      to which it is a party, by which it is bound or to which it may be subject
      or (ii) any Applicable Laws;

            

    

     

    
      	
               
      

            	
              (6)

            	
              Schedule
      1.1(90) accurately sets out all the lands, mineral claims and other
      interests that comprise the
Properties;

            

    

     

    
      	
               
      

            	
              (7)

            	
              it
      is lawfully authorized to hold mineral claims in the Province of
      Newfoundland & Labrador;

            

    

     

    
      	
               
      

            	
              (8)

            	
              all
      the mineral claims constituting the Properties have been duly and properly
      staked and recorded, and have been and are validly held in accordance with
      the laws of Newfoundland &
Labrador;

            

    

     

    
      	
               
      

            	
              (9)

            	
              except
      as set out in the Underlying Agreements, Joint Venture Agreement and
      Purchase and Sale Agreement, Paragon is the beneficial and registered
      owner of a 100% undivided interest in the Properties which
      are  in good standing under the laws of Newfoundland &
      Labrador up to and including the date hereof and are free and clear of all
      liens, charges, encumbrances or other rights of third parties, except for
      Permitted Encumbrances;

            

    

     

    
      	
               
      

            	
              (10)

            	
              the
      parties hereto may enter the Properties for all purposes of this Agreement
      without making any payment or accounting to, or obtaining the permission
      of, any other person;

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 21
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (11)

            	
              other
      than as disclosed to Crosshair, there is no adverse claim or challenge by
      any person against or to the ownership of or entitlement to the Properties
      and no basis therefor, and there are no outstanding agreements or options
      to acquire or purchase the Properties and no other person has any royalty
      or other interest whatsoever in production or profits
      therefrom;

            

    

     

    
      	
               
      

            	
              (12)

            	
              full
      and complete copies of all exploration information and data, including all
      geological, geophysical and geochemical information and data (including
      all drill, sample and assay results and all maps) concerning the
      Properties in its possession or control have been provided to
      Crosshair;

            

    

     

    
      	
               
      

            	
              (13)

            	
              there
      are no actions, suits or proceedings pending or to its knowledge,
      threatened, against or adversely affecting or which could adversely affect
      the Properties before any federal, provincial, municipal or other
      Governmental Authority, court, department, commission, board, bureau,
      agency or instrumentality, domestic or foreign, whether or not insured,
      and which might involve the possibility of any judgement or liability
      against the Properties;

            

    

     

    
      	
               
      

            	
              (14)

            	
              all
      work carried out on the Properties by it and, to its knowledge, by any
      person has been carried out in compliance with all Applicable Laws,
      including Environmental Laws, and neither it, nor to its knowledge any
      person, has received any notice of any breach of any such law and it has
      no knowledge of any facts which would lead a well informed operator in the
      mining industry to believe there are any Environmental Liabilities
      associated with the Properties and, to its knowledge, there are no
      environmental audits, evaluations or studies relating to
    it;

            

    

     

    
      	
               
      

            	
              (15)

            	
              no
      consent or approval is required to permit the execution and delivery of
      this Agreement by it or the performance of its obligations
      hereunder;

            

    

     

    
      	
               
      

            	
              (16)

            	
              it
      has all material permits, authorizations, licences, registrations and
      certificates necessary to carry on its business as currently conducted and
      as contemplated by this agreement;

            

    

     

    
      	
               
      

            	
              (17)

            	
              no
      representation or warranty made by it in this Agreement or any statement,
      schedule, certificate or other document delivered by it pursuant to or in
      connection with this Agreement or in connection with any transaction
      contemplated hereby contains any untrue statement of a material fact or
      omits to state a material fact required to be stated herein or therein or
      necessary to make the statements contained herein or therein not
      misleading;

            

    

     

    
      	
               
      

            	
              (18)

            	
              there
      is no claim, complaint or other proceeding initiated by or on behalf of
      any aboriginal group or to which any aboriginal group is legally a
      necessary party pending or, to the knowledge of Paragon, threatened by any
      aboriginal group with respect to Paragon’s exploration of the Properties
      and the Other Tenements or the proposed Operations and Paragon has not
      engaged in any negotiations with any aboriginal group in respect of the
      Properties and the Other Tenements or
entered

            

    

     

     

     

    
      
        
          50651077.7

        

      

      
        - 22
-

        
          

        

      

      
        
        

      

    

     

    into any
impact and benefits agreement with any aboriginal group in respect of the
Properties and Other Tenements; and

    

    
      	
               
      

            	
              (19)

            	
              Paragon
      has made full disclosure to Crosshair of all material facts of which
      Paragon has knowledge relating to the Assets and all relevant information
      that Paragon possesses which relates to the Assets which could have any
      effect upon Crosshair determining whether it shall enter into this
      Agreement and this Agreement does not contain any untrue statement by
      Paragon of a material fact of which Paragon has knowledge and Paragon has
      not omitted to state in this Agreement a material fact necessary in order
      to make the statements contained herein not
  misleading.

            

    

     

    
      	
              5.3

            	
              The
      representations, warranties and covenants hereinbefore set out are
      conditions on which the Participants have relied in entering into this
      Agreement and each of the Participants will indemnify and save the other
      harmless from all loss, damage, costs, actions and suits arising out of or
      in connection with any breach of any representation, warranty, covenant,
      agreement or condition made by it and contained in this
      Agreement.

            

    

     

    
      
        	
                5.4

              	
                (1)

              	
                Each
      Participant shall indemnify the other Participants, their respective
      directors, officers, employees, agents and representatives (collectively
      “Indemnified
      Participant”) from and against the entire amount of any Material
      Loss.  A “Material Loss” shall
      mean all costs, expenses, damages or liabilities, including lawyers’ fees
      and other costs of litigation (either threatened or pending) arising out
      of or based on a breach by a Participant (“Indemnifying
      Participant”) of any representation, warranty or covenant contained
      in this Agreement, including without
limitation:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              failure
      of a Participant or its Affiliates to comply with the Area of Interest
      provisions of section 17; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              failure
      of a Participant or its Affiliates to comply with the restrictions on
      alienation under section 20.

            

    

     

    A
Material Loss shall not be deemed to have occurred until, in the aggregate, an
Indemnified Participant incurs losses, costs, damages or liabilities in excess
of $100,000 relating to breaches of warranties, representations and covenants
contained in this Agreement.

     

    
      	
               
      

            	
              (2)

            	
              If
      any claim or demand is asserted against an Indemnified Participant in
      respect of which such Indemnified Participant may be entitled to
      indemnification under this Agreement, written notice of such claim or
      demand shall promptly be given to the Indemnifying
      Participant.  The Indemnifying Participant shall have the right,
      but not the obligation, by notifying the Indemnified Participant within 30
      days after its receipt of the notice of the claim or demand, to assume the
      entire control of (subject to the right of the Indemnified Participant to
      participate, at the Indemnified Participant’s expense and with counsel of
      the Indemnified Participant’s choice), the defence, compromise, or
      settlement of the matter,

            

    

     

     

     

    
      
        
          50651077.7

        

      

      
        - 23
-

        
          

        

      

      
        
        

      

    

     

     

    including,
at the Indemnifying Participant’s expense, employment of counsel of the
Indemnifying Participant’ s choice.

    

    
      	
               
      

            	
              (3)

            	
              Any
      damages to the assets or business of the Indemnified Participant caused by
      a failure by the Indemnifying Participant to defend, compromise, or settle
      a claim or demand in a reasonable and expeditious manner requested by the
      Indemnified participant, after the Indemnifying Participant has given
      notice that it will assume control of the defence, compromise, or
      settlement of the matter, shall be included in the damages for which the
      Indemnifying Participant shall be obligated to indemnify the Indemnified
      Participant.

            

    

     

    
      	
               
      

            	
              (4)

            	
              Any
      settlement or compromise of a matter by the Indemnifying Participant shall
      include a full release of claims against the Indemnified Participant which
      has arisen out of the indemnified claim or
  demand.

            

    

     

    
      	
              6.

            	
              EXECUTIVE
      COMMITTEE 

            

    

     

    
      	
              6.1

            	
              The
      Executive Committee will supervise the activity pursuant to this Agreement
      of the Joint Venture.  At anytime that Crosshair shall have an
      Interest of at least 50%, the Executive Committee shall consist of two
      members appointed by Crosshair and one member appointed by
      Paragon.  At anytime that Crosshair does not have an Interest of
      at least 50%, the Executive Committee shall consist of two members
      appointed by Paragon and one member appointed by Crosshair.  The
      voting rights of the members will be as set out by this
      section 6.

            

    

     

    
      	
              6.2

            	
              Except
      as otherwise stipulated in this Agreement, all resolutions of the
      Executive Committee shall be passed if approved by a simple majority of
      the members of the Executive Committee or their alternates present at the
      meeting at which the motion in respect of such resolution is moved,
      considered and voted on.  Subject to section 6.6, if, at
      any time, the members of the Executive Committee become deadlocked in
      their consideration of a matter being considered by them as evidenced by a
      vote upon a motion which results in an equal number of votes for and
      against such motion, the Chairman shall have a second, additional or
      casting vote.

            

    

     

    
      	
              6.3

            	
              Prior
      to the Vesting Time, the Participants’ nominees shall have an equal number
      of votes (i.e. the nominees of Crosshair shall have in the aggregate 50%
      of the votes and the nominee of Paragon shall have 50% of the
      votes).  Subsequent to the Vesting Time, the Participants’
      nominees shall have a number of votes pro rata to the Participants’
      respective Interests at such time. (i.e. immediately after the Vesting
      Time, the nominees of Crosshair shall have in the aggregate 60% of the
      votes and the nominee of Paragon shall have 40% of the
    votes).

            

    

     

    
      	
              6.4

            	
              Prior
      to the Vesting Time, one of the Crosshair representatives shall serve as
      the Chairman of the Executive Committee.  Subsequent to the
      Vesting Time, the Chairman will be a representative of Crosshair at any
      time that Crosshair shall have an Interest of at least 50% but if, at any
      time, Crosshair does not have an Interest of at least 50%, a
      representative of Paragon shall be the
Chairman.

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 24
-

        
          

        

      

      
         

      

    

    

    
      	
              6.5

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

            

    

     

    
      	
               
      

            	
              (1)

            	
              ensure
      that all work is carried out in accordance with sound industry practice
      and in adherence to a safety, health and environmental policy which is
      approved by the Executive Committee and in adherence to applicable
      law;

            

    

     

    
      	
               
      

            	
              (2)

            	
              approve,
      modify, or reject or request the revision of, any Program and Budget, as
      maybe amended from time to time;

            

    

     

    
      	
               
      

            	
              (3)

            	
              approve
      a form of accounting procedure;

            

    

     

    
      	
               
      

            	
              (4)

            	
              consider
      those items specified in
section 6.6;

            

    

     

    
      	
               
      

            	
              (5)

            	
              commence
      a scoping study, pre-feasibility study and the Full Feasibility
      Study;

            

    

     

    
      	
               
      

            	
              (6)

            	
              make
      the Development Decision; and

            

    

     

    
      	
               
      

            	
              (7)

            	
              subject
      to the limitations contained in section 8.5(12), prosecute or defend
      all litigation arising out of operations conducted hereunder, or settle
      any lawsuit, claim or demand.

            

    

     

    
      	
              6.6

            	
              Notwithstanding
      anything else in this Agreement except sections 6.7 and 6.8, the
      following decisions of the Executive Committee shall require the approval
      of 100% of the votes cast by the Participants’ representatives on such
      Executive Committee:

            

    

     

    
      	
               
      

            	
              (1)

            	
              any
      additional program of capital expenditures during a period that is at
      least 20% above the capital expenditures previously approved as part of
      the Program in respect of such period and in the Budget for such
      period;

            

    

     

    
      	
               
      

            	
              (2)

            	
              any
      cessation of Operations in respect of any mine developed on the Properties
      for a period exceeding 20 business days other than as a result of an
      Intervening Event;

            

    

     

    
      	
               
      

            	
              (3)

            	
              any
      re-commencement of Operations of any mine developed on the Properties
      after a cessation of Operations described in
      section 6.6(2);

            

    

     

    
      	
               
      

            	
              (4)

            	
              incurring
      any Overruns which exceed more than 10% of any Contributing
      Budget;

            

    

     

    
      	
               
      

            	
              (5)

            	
              the
      disposition of any Assets or obligations not in the ordinary course of
      business which have a value in excess of $5 million;
  and

            

    

     

    
      	
               
      

            	
              (6)

            	
              any
      Expansion.

            

    

     

    
      	
              6.7

            	
              If
      a matter referred to in sections 6.6(1) to (3), inclusive, receives
      the approval of less than 100% of the votes cast but more than 0% of the
      votes cast, the members of the Executive Committee shall use good faith
      efforts for 20 days to reach a consensus on
the

            

    

     

     

     

    
      
        
          50651077.7

        

      

      
        - 25
-

        
          

        

      

      
        
        

      

    

     

    matter.
If such good faith efforts are not successful, the resolution approving of such
matter shall be deemed to be passed.

    

    
      	
              6.8

            	
              If
      a matter referred to in sections 6.6(4) or (5) receives the approval
      of less than 100% of the votes cast but more than 0% of the votes cast,
      the matter shall be referred to the consideration of the Chief Executive
      Officers of the Parties who shall use good faith efforts to reach a
      consensus on the matter for a period of 20 days. If such good faith
      efforts are not successful, the resolution approving of such matter shall
      be deemed to be passed.

            

    

     

    
      	
              6.9

            	
              If
      a matter referred to in sections 6.6(1) or (5), inclusive, is deemed
      to be passed pursuant to either of sections 6.7 or 6.8, the
      Participant, the representatives of which are not approving such matter
      (the “Non-Approving
      Participant”), shall have the option during a period of 180 days
      following such 20-day period to require the other Participant, by written
      notice, to purchase the Non-Approving Participant’s Interest for the Fair
      Market Value of such Interest.  Upon the exercise of that
      option, the other Participant shall complete the purchase of the Interest
      of the Non-Approving Participant within 180 days of receipt of notice of
      the exercise of such option.  Upon the closing of such
      transaction of purchase and sale, the Non-Approving Participant will
      execute and deliver to the other participant all such documents as may
      reasonably be necessary to transfer to the other Participant all the
      interest of the Non-Approving Participant and the other Participant shall
      deliver to the Non-Approving Participant the cash amount in immediately
      available funds determined in accordance with
      Schedule 1.1(47).

            

    

     

    
      	
              7.

            	
              MEETINGS OF
      EXECUTIVE COMMITTEE 

            

    

     

    
      	
              7.1

            	
              Either
      Participant may, from time to time, revoke in writing the appointment of
      its nominees to the Executive Committee and appoint in writing others in
      their place.  Either Participant may, from time to time, in
      writing appoint an alternate member who may attend as an alternate for a
      member of the Executive Committee previously appointed by such
      Participant.  Representatives or agents of the Participants may
      attend meetings of the Executive Committee but shall have no voting
      rights.  Alternate members may attend meetings of the Executive
      Committee, and in the absence of a member, the alternate of such member of
      the Executive Committee may vote and otherwise act in the stead and place
      of such member of the Executive Committee.  Whenever any such
      member or such 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.  The Participants will give
      written notice to each other, from time to time, as to names, addresses
      and telephone numbers of their respective members and alternates on the
      Executive Committee.

            

    

     

    
      	
              7.2

            	
              Meetings
      of the Executive Committee will be held as required but in any event not
      less frequently than every three months.  A meeting of the
      Executive Committee may take place by means of conference telephones or
      other communication facilities by which means the members or their
      alternates participating in the meeting can hear each
      other.  The persons participating in a meeting in accordance
      with this section 7 will be
deemed

            

    

     

     

     

    
      
        
          50651077.7

        

      

      
        - 26
-

        
          

        

      

      
        
        

      

    

     

    to be
present at the meeting and to have so agreed and will be counted in the quorum
thereof and be entitled to speak and vote thereat.

    

    
      	
              7.3

            	
              Voting
      by the Executive Committee may be conducted by verbal, written, electronic
      or facsimile ballot.  A resolution in writing approving a matter
      to be acted upon by the Executive Committee, signed by all the members of
      the Executive Committee or their alternates, is as valid as if it had been
      passed at a meeting of the Executive Committee.  Electronic and
      facsimile signatures evidencing consent to any such written resolution
      shall be accepted to be as valid as original signatures in such
      documents.

            

    

     

    
      	
              7.4

            	
              A
      quorum of any meeting of the Executive Committee will consist of not less
      than one member from Crosshair and one member from Paragon.  If
      a quorum is not present within 120 minutes after the time fixed for
      holding any such meeting, such meeting will be adjourned to the next
      following business day at the same time and place.  At the
      adjourned meeting, the members or alternate members present (which may be
      only one person) will form a quorum and may transact the business for
      which the meeting was originally
convened.

            

    

     

    
      	
              7.5

            	
              Meetings
      of the Executive Committee may be called by any Participant by giving ten
      business days’ written notice to the other Participant.  The
      Participants may unanimously agree to abridge this notice period and any
      member of the Executive Committee attending a meeting called with less
      than ten business days’ notice shall be deemed to have waived the notice
      requirement unless such member states that his sole purpose for attending
      such meeting is to object to the lack of adequate notice.  All
      meetings will be held in Vancouver, British Columbia, Canada unless
      otherwise unanimously agreed to by both
      Participants.   There will be included with a notice of
      meeting such material and data as may be reasonably required to enable the
      members of the Executive Committee to determine the position they should
      take in respect of any matter to be discussed or determined at such
      meeting.  Any member of the Executive Committee may request, at
      any time prior to a meeting, such additional information from the Operator
      as is reasonably required for the purposes of the meeting and such
      information shall be provided by the Operator to all member’s of the
      Executive Committee.

            

    

     

    
      	
              7.6

            	
              The
      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 such records to the
      Non-Operator.  The Operator shall have the responsibility of
      keeping records of the proceedings.  Draft minutes of meetings
      of the Executive Committee shall be distributed within five business days
      after any meeting.  If a member of the Executive Committee has
      any material comments on, or proposed material revisions to, the draft
      minutes they shall be sent to the Operator within five business days of
      the receipt of the draft minutes.  The Operator shall circulate
      revised minutes within five business days thereafter.  If a
      member of the Executive Committee does not provide material comments on
      draft minutes or revised minutes within five business days then such
      member shall be deemed to have approved such
  minutes.

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 27
-

        
          

        

      

      
         

      

    

    

    
      	
              8.

            	
              THE OPERATOR
      

            

    

     

    
      	
              8.1

            	
              Subject
      to section 8.2, Crosshair shall be the
  Operator:

            

    

     

    
      	
               
      

            	
              (1)

            	
              during
      the Exploration Period (provided that Crosshair earns the Initial Option
      pursuant to section 3.2 and continues to have an Interest of at least
      50%); and

            

    

     

    
      	
               
      

            	
              (2)

            	
              at
      any time in any other Period during which Crosshair has an Interest of at
      least 50%;

            

    

     

    however,
if at any time during any other Period, Crosshair ceases to have an Interest of
at least 50%, then Paragon shall become the Operator for so long as the Interest
of Crosshair remains less than 50%.

     

    
      	
              8.2

            	
              If
      Crosshair transfers its Interest to a person that is not an Associated
      Company pursuant to section 20, Crosshair may resign as the Operator
      upon not less than 60 days’ prior written notice to the Non-Operator, in
      which case the successor Operator shall be appointed by a simple majority
      vote at a subsequently called meeting of the Executive
      Committee.

            

    

     

    
      	
              8.3

            	
              The
      Operator shall be responsible for the preparation for submission to the
      Executive Committee, and, for the execution of each Program and Budget to
      be considered and, if so determined by the Executive Committee, approved
      by the Executive Committee

            

    

     

    
      	
              8.4

            	
              The
      Operator shall consult freely with the Non-Operator and keep it advised of
      all material developments and
results.

            

    

     

    
      	
              8.5

            	
              Subject
      to the control and direction of the Executive Committee, the Operator
      shall have full authority as agent acting for and on behalf of the
      Participants to do everything necessary or desirable in accordance with
      good practice in connection with the exploration, development or
      operations of the Properties.  Without limitation, the Operator
      shall have the authority and the obligation
to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              implement
      the Programs and Budgets approved by the Executive Committee in accordance
      with this Agreement;

            

    

     

    
      	
               
      

            	
              (2)

            	
              provide
      all information regarding operations necessary to allow the Participants
      to meet their continuous disclosure obligations under applicable
      law;

            

    

     

    
      	
               
      

            	
              (3)

            	
              proceed
      with the testing, assaying and analysis of all samples in an expeditious
      manner;

            

    

     

    
      	
               
      

            	
              (4)

            	
              employ
      and engage such employees, agents, and independent contractors as the
      Operator may consider necessary or advisable to carry out his duties and
      obligations hereunder;

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 28
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (5)

            	
              manage,
      direct and control all exploration, development and production operations
      in, on and under the Properties in a prudent and workmanlike manner, and
      in compliance with all applicable laws, rules, orders, regulations and
      policies;

            

    

     

    
      	
               
      

            	
              (6)

            	
              prepare
      and deliver to each of the members of the Executive
    Committee:

            

    

     

    
      	
               
      

            	
              (a)

            	
              within
      ten business days of the end of each calendar month, written monthly
      progress reports of the work undertaken in the prior calendar month and
      results obtained in a form acceptable to the Executive Committee, which
      form shall require a comparison, and analysis of any material variance
      between actual and cumulative progress relative to the Program and
      Budget;

            

    

     

    
      	
               
      

            	
              (b)

            	
              an
      annual summary on or before the day which is 60 business days following
      the end of the Fiscal Year describing the Operations of the results
      obtained during the Fiscal Year immediately preceding, accompanied by such
      copies of data, reports and other information on or with respect to the
      Properties as are acceptable to the Executive Committee;
    and

            

    

     

    
      	
               
      

            	
              (c)

            	
              during
      periods of active field work, timely information on any material matters,
      results obtained, accompanied by copies of relevant data, reports and
      other information concerning such results; provided that the Non- Operator
      shall have the right at any time, upon at least 24 hours’ written notice
      to the Operator to attend upon the offices of the Operator in order to
      review and take copies of all relevant data, reports and other information
      concerning the Operations;

            

    

     

    
      	
               
      

            	
              (7)

            	
              account
      to the Participants for all contributions to
  Costs;

            

    

     

    
      	
               
      

            	
              (8)

            	
              maintain,
      in accordance with Canadian GAAP consistently applied, true and correct
      books, accounts and records of operations hereunder and such other
      information as a Participant may reasonably request in order to allow it
      to prepare its financial statements in accordance with its regulatory
      requirements and to cause to be prepared and delivered to the relevant
      Executive Committee, as applicable, audited financial statements of the
      Joint Venture on or before 45 business days following the end of each
      Fiscal Year;

            

    

     

    
      	
               
      

            	
              (9)

            	
              permit
      each Participant or its professional advisors upon reasonable notice, at
      its own expense, access to the Properties and the Facilities to inspect,
      take abstracts from or audit any or all of the records and accounts during
      normal business hours;

            

    

     

    
      	
               
      

            	
              (10)

            	
              keep
      the Properties in good standing free and clear of all Encumbrances except
      Permitted Encumbrances arising from operations
  hereunder;

            

    

     

    
      	
               
      

            	
              (11)

            	
              obtain
      and maintain, or cause any contractor or consultant engaged hereunder to
      obtain and maintain, adequate insurance coverage with respect to
      activities on or with respect to the Properties, and to provide proof of
      such insurance coverage to

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 29
-

        
          

        

      

      
         

      

    

    the
Participants on request, and to reflect the addition of any mortgagee as
permitted by this Agreement;

    

    
      	
               
      

            	
              (12)

            	
              after
      giving notice to the Participants, prosecute or defend all litigation
      arising out of operations conducted hereunder, but the Operator will not
      incur legal expenses in excess of $100,000 without the approval of the
      Non-Operator;

            

    

     

    
      	
               
      

            	
              (13)

            	
              permit
      each Participant or its representatives duly appointed in writing, at its
      own expense and risk, access to all data derived from carrying out work
      hereunder;

            

    

     

    
      	
               
      

            	
              (14)

            	
              arrange
      for and maintain workers’ compensation or equivalent coverage for all
      eligible employees engaged by the Operator on behalf of the Participants
      in accordance with local statutory requirements;
  and

            

    

     

    
      	
               
      

            	
              (15)

            	
              perform
      its duties and obligations in a manner consistent with good exploration
      and mining industry practices.

            

    

     

    
      	
              8.6

            	
              Notwithstanding
      the foregoing, the Operator shall have full authority to take such action
      as it in its professional judgement deems necessary or advisable in order
      to safeguard and protect the environment, life or the
    Assets.

            

    

     

    
      	
              8.7

            	
              The
      Operator may only engage an Associated Company of itself to provide
      services, supplies, equipment or machinery hereunder with the prior
      written approval of the Non- Operator, such approval not to be
      unreasonably withheld.  For the avoidance of doubt, the
      Non-Operator shall not withhold its approval if the Operator demonstrates
      that the Associated Company has been engaged on terms no more favourable
      to the Associated Company than those that could be obtained from a
      participant dealing at arm’s length to the Operator and with substantially
      the same experience and expertise as the Associated
    Company.

            

    

     

    
      	
              9.

            	
              EXPLORATION
      PERIOD  

            

    

     

    
      	
              9.1

            	
              Exploration
      Costs will only be incurred under and pursuant to a Program and Budget
      approved by the Executive Committee in accordance with section 6;
      provided,
      however,
      that the Initial Exploration Costs and Additional Exploration Costs will
      be incurred as determined by Crosshair in its sole
    discretion.

            

    

     

    
      	
              9.2

            	
              Crosshair
      will provide Paragon with details of its plan for the Initial Exploration
      Costs and Additional Exploration Costs in a form similar to a Program and
      Budget and Paragon may provide its comments on the proposed Initial
      Exploration Costs and Additional Exploration Costs within 15 business days
      of being received by Paragon. It is in Crosshair’s sole discretion, acting
      reasonably, as to whether it makes any modifications to its proposed
      Initial Exploration Costs and Additional Exploration Costs based on
      Paragon’s comments.

            

    

     

    
      	
              9.3

            	
              Crosshair
      shall be solely responsible for funding the Initial Exploration Costs and
      the Additional Exploration Costs and Crosshair and Paragon shall be
      jointly responsible to

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 30
-

        
          

        

      

      
         

      

    

     fund
their respective Cost Shares of all other Exploration Costs which are contained
in respect of Programs and Budgets in the Exploration Period.

    

    
      	
              9.4

            	
              During
      the period that Crosshair is required to incur the Initial Exploration
      Costs, and if it makes the election pursuant to section 4.1, the
      Additional Exploration Costs, Crosshair shall be solely responsible for
      making any royalty or other payments required under the Underlying
      Agreements and such payments shall be included in the Initial Exploration
      Costs and Additional Exploration Costs, as
  applicable.

            

    

     

    
      	
              10.

            	
              FEASIBILITY
      PERIOD

            

    

     

    
      	
              10.1

            	
              The
      Feasibility Period will comprise the following
  stages:

            

    

     

    
      	
               
      

            	
              (1)

            	
              preparation
      of such scoping and pre-feasibility studies and the undertaking of such
      further exploration as the Executive Committee may deem
      advisable;

            

    

     

    
      	
               
      

            	
              (2)

            	
              preparation
      and delivery of a Full Feasibility Study;
and

            

    

     

    
      	
               
      

            	
              (3)

            	
              making
      the Development Decision.

            

    

     

    
      	
              10.2

            	
              Feasibility
      Costs will only be incurred pursuant to a Program and Budget approved by
      the Executive Committee in accordance with section 6.  Each
      Participant shall be responsible for its Cost Share of all Feasibility
      Costs.

            

    

     

    
      	
              10.3

            	
              Crosshair
      may deliver a Full Feasibility Study to the Executive Committee at any
      time.  Crosshair shall also deliver with such Full Feasibility
      Study its Recommendation to the Executive Committee based on the results
      of the Full Feasibility Study.  A meeting of the Executive
      Committee will be held 10 days following the delivery to Paragon of the
      Full Feasibility Study to consider the
  Recommendation.

            

    

     

    
      	
              11.

            	
              DEVELOPMENT
      PERIOD

            

    

     

    
      	
              11.1

            	
              Development
      Costs will only be incurred pursuant to a Program and Budget approved by
      the Executive Committee in accordance with section 6.  Each
      Participant shall be responsible for its Cost Share of all Development
      Costs.

            

    

     

    
      	
              11.2

            	
              Upon
      a Development Decision, Paragon may elect either
  to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              obtain
      its own Development Finance; or

            

    

     

    
      	
               
      

            	
              (2)

            	
              request
      Crosshair to use commercially reasonable endeavours to arrange Development
      Finance for Paragon’s Cost Share of Development Costs.  Such
      Development Finance will be at a level which is consistent with finance
      coverage, ratios and maturities prevailing in the market at that time for
      a conventional mining project finance funding similar for the project
      being contemplated.  Crosshair shall have satisfied its
      obligation to use reasonable endeavours to arrange Development Finance if
      Crosshair:

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 31
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (a)

            	
              provides
      the applicable Full Feasibility Study to not less than three financial
      institutions who are in the business of providing project finance for
      projects similar to the project being
  contemplated;

            

    

     

    
      	
               
      

            	
              (b)

            	
              provides
      such financial institutions details of the planned construction, operation
      and other technical information regarding the project in sufficient detail
      to enable the financial institutions to make a decision as to whether it
      will provide financing for Paragon’s Cost Share of Development
      Costs;

            

    

     

    
      	
               
      

            	
              (c)

            	
              assists
      in the negotiation of term sheets and if applicable, definitive
      agreements, between Paragon and the financial
  institutions;

            

    

     

    
      	
               
      

            	
              (d)

            	
              assists
      in meetings between Paragon and those financial institutions who are
      interested in providing project finance in order to provide information
      regarding the project which the financial institutions may reasonably
      require; and

            

    

     

    
      	
               
      

            	
              (e)

            	
              assists
      Paragon in arranging due diligence site visits requested by financial
      institutions, including providing access to key Crosshair personnel, and
      to field data including drill logs and drill
  core.

            

    

     

    
      	
              11.3

            	
              For
      the avoidance of doubt, if Crosshair is requested by Paragon to use
      reasonable endeavours to arrange Development Finance for Paragon,
      Crosshair shall not be obligated, without limitation,
  to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              provide
      any guarantees, including performance or completion
      guarantees;

            

    

     

    
      	
               
      

            	
              (2)

            	
              enter
      into forward sales, hedging contracts, puts, calls or similar derivative
      contracts for any reason including in order to obtain Development Finance;
      or

            

    

     

    
      	
               
      

            	
              (3)

            	
              provide
      price support, political risk insurance or title
  insurance.

            

    

     

    
      	
              11.4

            	
              The
      Participants agree to use reasonable endeavours to ensure that the terms
      of any Development Finance shall allow for 10% of Net Cash Flow to be
      available for distribution to the Participants pro rata to their
      respective Interests.

            

    

     

    
      	
              11.5

            	
              Within
      60 days of receiving notice from Paragon of any election it makes to
      request Crosshair to use reasonable endeavours to arrange Development
      Finance for Paragon under section 11.2, Crosshair shall send a notice
      to Paragon stating whether it has been able to obtain Development Finance
      for Paragon’s Cost Share of all Development Costs and, if it has, the
      notice shall contain a description of the terms of such Development
      Finance in sufficient detail to enable Paragon to decide whether it shall
      accept the Development Finance (the “Development Finance
      Notice”).

            

    

     

    
      	
              11.6

            	
              If,
      having used reasonable endeavours to obtain Development Finance for
      Paragon in response to any request made by Paragon pursuant to
      section 11.2 during the 60 days before Crosshair is required to send
      the notice to Paragon pursuant to
  section 11.5,

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 32
-

        
          

        

      

      
         

      

    

    
      

       Crosshair
does not obtain such Development Finance and provides a Development Finance
Notice to Paragon to that effect pursuant to section 11.5, Crosshair shall
have no further duty to take any steps to obtain such Development Finance for
Paragon.

       

    

    
      	
              11.7

            	
              Within
      30 days of Paragon receiving the Development Finance Notice in a form that
      describes Development Finance that Crosshair has found to be obtainable
      for Paragon, Paragon shall send a written notice to Crosshair electing
      to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              accept
      the terms of any Development Finance described in the Development Finance
      Notice; or

            

    

     

    
      	
               
      

            	
              (2)

            	
              arrange
      its own Development Finance; or

            

    

     

    
      	
               
      

            	
              (3)

            	
              not
      fund its Cost Share of Development Costs and be diluted in accordance with
      the terms of section 14.

            

    

     

    A failure
by Paragon to provide notice to Crosshair of its election under this
section 11.7 shall result in Paragon being deemed to have made the election
described in section 11.7(3).

     

    
      	
              11.8

            	
              Each
      Participant must have raised its Cost Share of the Development Costs, and
      provided the other Participant with evidence of such, within 180 days of
      the Development Decision.  If a Participant has not raised its
      Cost Share of Development Costs, and provided the other Participant with
      evidence of such within such period, it shall lose its right to contribute
      to the Development Costs and shall be diluted in accordance with
      section 14.

            

    

     

    
      	
              11.9

            	
              Subject
      to section 19, any Development Finance may be secured by one or more
      Encumbrances on the Properties, provided that the extent of the security
      interest of the lender of Development Finance over the Properties to any
      Participant shall be limited to the pro rata Interest of
      such Participant.

            

    

     

    
      	
              11.10

            	
              Any
      Development Finance obtained by Paragon, whether it is found by Crosshair
      or by Paragon, shall be entirely with recourse to Paragon and entirely
      without recourse to Crosshair.

            

    

     

    
      	
              11.11

            	
              Any
      Development Finance obtained by Crosshair, whether it is found by
      Crosshair or by Paragon, shall be entirely with recourse to Crosshair and
      entirely without recourse to
Paragon.

            

    

     

    
      	
              11.12

            	
              The
      Participants shall inform the Operator of their respective Development
      Finance Expenses as soon as they can be ascertained and promptly
      thereafter upon any change thereof.

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 33
-

        
          

        

      

      
         

      

    

    

    
      	
              12.

            	
              OPERATING PERIOD
      

            

    

     

    
      	
              12.1

            	
              Operating
      Costs will only be incurred pursuant to a Program and Budget approved by
      the Executive Committee in accordance with section 6.  Each
      Participant shall be responsible for its Cost Share of all Operating
      Costs.

            

    

     

    
      	
              12.2

            	
              Each
      Program and Budget in the operating Period will
  contain:

            

    

     

    
      	
               
      

            	
              (1)

            	
              a
      plan of Proposed Operations;

            

    

     

    
      	
               
      

            	
              (2)

            	
              an
      estimate of the quantity of Product to be produced and available for
      sale;

            

    

     

    
      	
               
      

            	
              (3)

            	
              a
      detailed estimate of all monthly Revenue and monthly Operating Costs plus
      a reasonable allowance for
contingencies;

            

    

     

    
      	
               
      

            	
              (4)

            	
              such
      other facts and figures as may be necessary to give the Non-Operator a
      reasonably complete picture of the results the Operator plans to achieve,
      and the Operator will promptly supply to the Non-Operator any additional
      or supplemental information which the Non-Operator may reasonably require
      in respect of the Program and
Budget;

            

    

     

    
      	
               
      

            	
              (5)

            	
              a
      forecast for the results of the current Fiscal Year;
  and

            

    

     

    
      	
               
      

            	
              (6)

            	
              an
      indicative forecast of the annual Revenue and, annual Operating Costs and
      results for the next two Fiscal
Years.

            

    

     

    
      	
              12.3

            	
              The
      Operator will establish and administer a Contingency Fund to which the
      Participants will be obligated to contribute in accordance with their
      respective Interests and as specified in the approved Programs.
      Contingency Fund moneys, if any, will be invested and re-invested by the
      Operator in such liquid investments as the Executive Committee may, from
      time to time, authorize.  To the extent possible under then
      existing tax laws, the Contingency Fund wilt be set up and administered in
      such a manner as to provide the most beneficial tax treatment to the
      Participants.

            

    

     

    
      	
              12.4

            	
              If
      the Net Cash Flow for any month is positive, such Net Cash Flow will be
      dedicated in accordance with the respective Interests of the Parties as
      follows:

            

    

     

    
      	
               
      

            	
              (1)

            	
              to
      make the required payments of the sum of the Development Finance
      Expenses;

            

    

     

    
      	
               
      

            	
              (2)

            	
              to
      make any payments in arrears in connection with
      section 12.5;

            

    

     

    
      	
               
      

            	
              (3)

            	
              to
      satisfy each Participant’s obligations under section 13.9 for the
      next month;

            

    

     

    
      	
               
      

            	
              (4)

            	
              with
      respect to a Participant’s pro rata share of the Net Cash Flow, to satisfy
      that Participant’s obligations to the other Participant under this
      Agreement including, without limitation, the Cost Share of Paragon in
      respect of all other amounts funded by Crosshair hereunder on behalf of
      Paragon;

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 34
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (5)

            	
              to
      satisfy the Business Account set out in section 13.11;
      and

            

    

     

    
      	
               
      

            	
              (6)

            	
              to
      be distributed to the Participants pro rata to the respective Interests of
      the Participants, (the amounts available for distribution pursuant to this
      section 12.4(6) are collectively referred to as the “Participants’ Net Cash
      Flow”).

            

    

     

    
      	
              12.5

            	
              If
      the Net Cash Flow for any month is negative, each Participant must
      contribute its Cost Share of such shortfall together with its Cost Share
      of any required payments of interest, fees and other costs associated with
      the Development Finance.  If a Participant fails to make such a
      contribution within 30 days, it will be diluted in accordance with
      section 14.

            

    

     

    
      	
              13.

            	
              PROGRAMS AND
      BUDGETS

            

    

     

    
      	
              13.1

            	
              The
      Operator shall:

            

    

     

    
      	
               
      

            	
              (1)

            	
              on
      or before 75 days prior to the end of each Fiscal Year, prepare and submit
      to the Executive Committee all Programs and Budgets (other than that for
      the Initial Exploration Costs and Additional Exploration Costs) after
      consultation with the members of the Executive Committee, for the
      immediately following Fiscal Year;

            

    

     

    
      	
               
      

            	
              (2)

            	
              notwithstanding
      anything else in this Agreement, call a meeting of the Executive Committee
      to be held on or before 45 days prior to the end of each Fiscal Year;
      and

            

    

     

    
      	
               
      

            	
              (3)

            	
              present
      for consideration at such meeting the Program and Budget for the
      immediately following Fiscal Year, the forecast for the then current
      Fiscal Year and an indicative forecast for the immediately following
      Fiscal Year; provided that any Program and its associated Budget may be
      prepared on the basis of two or more distinct phases, the commencement and
      termination of which shall be stipulated by the Operator (each, a “Program/Budget
      Phase”).

            

    

     

    
      	
              13.2

            	
              All
      Programs and Budgets commencing on the first day of each Fiscal Year shall
      be approved by the 30th
      day prior to the end of the immediately preceding Fiscal
    Year.

            

    

     

    
      	
              13.3

            	
              Each
      Participant must elect whether to fund its Cost Share of any approved
      Program and Budget in which it is required by this Agreement to share the
      Costs by the 15th
      day prior to the end of the Fiscal Year immediately preceding that to
      which such Program and Budget shall apply and a failure to make such
      election shall be deemed to be an election not to fund such Cost Share of
      such Budget.

            

    

     

    
      	
              13.4

            	
              With
      respect to the Program and Budget for the Development Period and the first
      Program and Budget for the Operating Period, the Operator will submit the
      Programs and Budgets sufficiently in advance of the anticipated
      commencement of, respectively, the Development Period and the Operating
      Period to provide each of the Participants a reasonable amount of time to
      consider the same and raise its Cost Share of anticipated
      Costs.

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 35
-

        
          

        

      

      
         

      

    

    

    
      	
              13.5

            	
              Each
      Participant will have 15 business days after receipt of a proposed Program
      and Budget to consider it, following which a meeting of the Executive
      Committee will be held to address any objections to such Program and
      Budget or alternative proposals. A Participant that objects to a Program
      or Budget must specify the reasons for its objections and promptly provide
      the suggested amendments or modifications in writing to the Operator and
      Executive Committee.  The Executive Committee will instruct the
      Operator to make any amendments and resubmit the proposed Program and
      Budget.  The Operator shall immediately notify the Participants
      and call a meeting of the Executive Committee pursuant to section 7.5
      to consider such amendment.  Such amendment may also be agreed
      to in writing by the members of the Executive Committee pursuant to
      section 7.3.

            

    

     

    
      	
              13.6

            	
              If
      a Participant elects not to participate in a Program in which the other
      Participants may participate as contemplated in this Agreement by the
      deadline described in section 13.3, the other Participant may elect
      within l5 business days to bear that Participant’s Cost Share to be funded
      by the Participant which chose not to fund its Cost Share, in which event
      such Participant will have its Interest diluted pursuant to
      section 14.  A Program which is not fully subscribed shall
      not proceed.  If a Program does not proceed on that basis, the
      Participants shall remain responsible for the costs of the care and
      maintenance of the Properties and the Assets in accordance with the terms
      of this Agreement.  Failure to give notice pursuant to this
      section within such 15 business day period will be deemed to be an
      election by a Participant not to contribute its Cost Share of such
      Contributing Budget.

            

    

     

    
      	
              13.7

            	
              An
      election to fund a Contributing Budget will make a Participant liable to
      pay its Cost Share of all of the Costs actually incurred under or pursuant
      to such Contributing Budget, including Overruns.  The Operator
      may not incur Overruns exceeding 10% of the applicable Contributing Budget
      unless such Overruns are approved by the Executive Committee in accordance
      with section 6.6.

            

    

     

    
      	
              13.8

            	
              Based
      upon the projection to implement an approved Program and Budget submitted
      to and approved by the Executive Committee as the same may be revised from
      time to time, the Operator will submit to the Non-Operator on or before
      the 15th day of each month an estimate of the cash requirements for the
      next month which will show:

            

    

     

    
      	
               
      

            	
              (1)

            	
              separately,
      the estimated cash disbursements which the Participants will be required
      to make for Costs and any other approved
  expenditures;

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      extent, if any, to which such disbursements will be satisfied out of cash
      in the Operating Fund after allowing for the cash balance to be maintained
      in the Operating Fund;

            

    

     

    
      	
               
      

            	
              (3)

            	
              the
      amounts, if any, which were credited to each Participant in the
      immediately preceding month;

            

    

     

    
      	
               
      

            	
              (4)

            	
              the
      Cost Share of the Costs which each Participant will be required to furnish
      for such disbursements,  or to be advanced by the Operator on
      behalf of the Non- Operators; and

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 36
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (5)

            	
              the
      account into which the required funds are to be
  deposited.

            

    

     

    
      	
              13.9

            	
              Within
      10 days after the receipt of each such cash estimate, the Participants
      will each remit their respective Cost Share and if one Participant fails
      to pay all or any part of its Cost Share (the “Non-Contributing
      Participant”) the other Participant (the “Contributing
      Participant”), will be entitled to pay the unpaid Cost Share of
      that Non- Contributing Participant.  If the Contributing
      Participant pays such unpaid share, the Non-Contributing Participant will
      be diluted in accordance with
section 14.

            

    

     

    
      	
              13.10

            	
              Prior
      to incurring any Costs pursuant to a Contributing Budget hereunder or as
      soon as reasonably practicable thereafter, the Operator will open an
      account or accounts with bank(s) approved by the Executive Committee for
      the purpose of establishing and maintaining therein at all times a cash
      fund (the “Business
      Account) from which Costs will be paid by the Operator or from
      which the Operator may be reimbursed for Costs spent by
  it.

            

    

     

    
      	
              13.11

            	
              All
      money contributed by the Participants will be deposited in the Business
      Account.  The total amount of deposits in the Business Account,
      regardless of the source thereof will be equal to the estimated gross
      Costs of the Operator for the then current and next succeeding month as
      estimated in the Program and Budget then in
  effect.

            

    

     

    
      	
              13.12

            	
              If
      a Participant has elected not to contribute its Cost Share of a
      Contributing Budget pursuant to section 13.1 and 13.6 then within 90
      days after the conclusion of the period covered by the Program and Budget,
      the Operator shall report the total amount of Costs incurred for such
      Program and Budget.  If less than 80% of the Costs specified in
      a Program and Budget were expended, the Participant who elected not to
      contribute its Cost Share may notify in writing the other Participant
      within 15 days of receipt of the notification of the total amount of the
      Operating Costs incurred of its election to reimburse the other
      Participant for 120% of its own Cost Share of the Costs expended in order
      to maintain the Interest it had in the Properties prior to being diluted
      as a result of its failure to contribute its Cost Share of such Program
      and Budget. All recalculations under this section 13.12 shall be
      effective as of the first day of the applicable Program and
      Budget.  The Operator on behalf of the Participants shall make
      such reimbursements, reallocations, contributions and other adjustments as
      are necessary so that each Participant will be placed in the same position
      had it originally paid its Cost Share of the applicable Program and
      Budget.  For the purposes of future calculations under
      section 14, each participant will be deemed to have contributed its
      Cost Share (and only its Cost Share) of the relevant Program and
      Budget.

            

    

     

    
      	
              13.13

            	
              The
      Operator shall promptly submit to the Executive Committee monthly
      statements of account reflecting in reasonable detail the charges and
      credits to the Business Account during the preceding
  month.

            

    

     

    
      	
              13.14

            	
              The
      Operator shall record all funds received pursuant to section 13.9 in
      the Business Account.  All funds in excess of immediate cash
      requirements shall be invested by the Operator for the benefit of the
      Business in cash management accounts and
  investments

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
        - 37
-

        
          

        

      

      
         

      

    

    selected
at the discretion of the Operator, which accounts may include, but are not
limited to, money market investments and money market funds.

    

    
      	
              14.

            	
              ADJUSTMENT OF
      INTERESTS

            

    

     

    
      	
              14.1

            	
              The
      level of the respective Interests of the Participants in the Properties
      will be as determined by section 3.1 of this Agreement so long as each
      Participant contributes its Cost Share of every Contributing
      Budget.  At any time and from time to time after a participant
      (the “Diluted
      Participant”) has elected or is deemed to have elected not to
      contribute its Cost Share of a Contributing Budget pursuant to
      section 13.3, 13.6 and 13.9 or, if a Participant fails to remit its
      Cost Share of the monthly cash requirements of a Contributing Budget in
      which it elected to participate in accordance with section 13.7, the
      percentage level of such Participant’s Interest in the Properties (the
      “Diluted Participant’s
      Interest”) will be calculated in accordance with the following
      formula:

            

    

     

     

    
      
        	
                 
      

              	
                (1)

              	
                DPI

              	
                =

              	
                A + B + C 
      x100  

              
	 	 	 	 	 
      

                D +
      E + F

              

      

    

     

    
      
      

    

               

     

    
      
        
          
            	 	 	
                    Where:

                     

                  	 	 
	 	 	
                    DPI

                  	
                    =

                  	
                    Diluted
      Participant’s Interest in the Properties after each calculation expressed
      as a percentage.

                     

                  
	 	 	
                    A

                  	
                    =

                  	
                    The
      expenditures deemed to be incurred by the Diluted Participant in respect
      of the Initial Deemed Investment, Exploration Costs and Feasibility Costs
      expended on the Properties;

                     

                  
	 	 	
                    B

                  	
                    =

                  	
                    The
      expenditures incurred by the Diluted Participant in connection with the
      Properties in funding all Contributing Budgets other than the current
      contributing Budget under which the Non-Contributing Participant’s
      Interest is being diluted.

                     

                  
	 	 	
                    C

                  	
                    =

                  	
                    The
      expenditures incurred by the Diluted Participant in connection with the
      Properties in funding the current Contributing Budget under which the
      Diluted Participant’s Interest is being diluted.

                     

                  
	 	 	
                    D

                  	
                    =

                  	
                    The
      total Initial Deemed Investment, Exploration Costs, Feasibility Costs
      incurred by all the Participants in connection with the
      Properties.

                     

                  
	 	 	
                    E

                  	
                    =

                  	
                    The
      total expenditures incurred by all the Participants in connection with the
      Properties in funding all Contributing Budgets other than the current
      contributing Budget under which

                  

          

        

      

    

     

     

     

    
      
        
        

      

      
        - 38
-

        
          

        

      

      
        
        

      

    

     

    
      
        
          	 	
                   

                	
                   

                	
                   the
      Diluted Participant’s Interest is being diluted.

                   

                
	 	
                  F

                	
                  =

                	
                  The
      total expenditures incurred by all the Participants in connection with the
      Properties in funding the current contributing Budget under which the
      Diluted Participant’s Interest is being
diluted;

                

        

      

     

    
      	
               
      

            	
              (2)

            	
              The
      Participant that is not the Diluted Participant (the “Remaining Participant”)
      shall have its Interest in the Properties increased by the transfer to it
      of that part of the Diluted Participant’s Interest equal to the percentage
      by which the Diluted Participant’s Interest is decreased by virtue of this
      section 14.1.

            

    

     

    
      	
               
      

            	
              (3)

            	
              For
      the purposes of this
section 14.1,

            

    

     

    
      	
               
      

            	
              (a)

            	
              if
      Crosshair exercises the Initial Option, it will be deemed to have incurred
      60% of the Initial Deemed Investment and Paragon shall be deemed to have
      incurred 40% of the Initial Deemed Investment;
  and

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      Crosshair exercises the Additional Option, it will be deemed to have
      incurred 70% of the Initial Deemed Investment and Paragon shall be deemed
      to have incurred 30% of the Initial Deemed
  Investment.

            

    

     

    
      	
               
      

            	
              (4)

            	
              For
      the purposes of this section 14.1, the amount of the Initial
      Exploration Costs and Additional Exploration Costs shall not be included
      in the amount of Exploration Costs.

            

    

     

    
      	
              14.2

            	
              Following
      a recalculation of Participants’ Interests under this Article 14, the
      Properties and any other Assets the legal title to which is held by the
      Participants as tenants in common, shall forthwith be transferred among
      the Participants as tenants in common in accordance with their revised
      Interests.

            

    

     

    
      	
              14.3

            	
              The
      consideration for any transfer referred to in section 14.2 is, for
      each Participant to which such transfer occurs, the advances made by such
      Participant under sections 13.3, 13.6 or
  13.9.

            

    

     

    
      	
              14.4

            	
              If
      as a result of an adjustment pursuant to section 14.1, the Interest
      of the Diluted Participant is reduced to 10% or less, the Diluted
      Participant will transfer its Interest to the Remaining Participant in
      consideration for, at the Diluted Participant’s election provided
      forthwith, either:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      Net Smelter Royalty; or

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      fair market value of the Net Smelter Royalty on the day the Diluted
      Participant had its Interest reduced to 10%, as determined definitively by
      an Independent Valuator selected by the Participants acting unanimously
      or, failing agreement within 10 days, by the President of the Canadian
      Institute of Mining, Metallurgy and
Petroleum.

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
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    Upon such
transfer, the Diluted Participant will forthwith execute and deliver to the
Remaining Participant all such documents as may reasonably be necessary to
transfer to the Remaining Participant all the Interest of the Diluted
Participant and if the Diluted Participant made the election under
section 14.4(2),the Remaining Participants shall deliver the cash amount in
immediately available funds determined by this section 14.2.

     

    
      	
              14.5

            	
              Any
      reduction or elimination of a Diluted Participant’s Interest pursuant to
      this Agreement shall not relieve that Diluted Participant of its share of
      any liability, including, without limitation, Continuing Obligations,
      Environmental Liabilities and Environmental Compliance, whether arising,
      before or after such reduction or elimination, out of acts or omissions
      occurring or conditions existing prior to the Effective Date or out of
      Operations conducted during the term of this Agreement but prior to such
      reduction or elimination, regardless of when any funds may be expended to
      satisfy such liability.  For purposes of this section 14.5,
      such Diluted Participant’s share of such liability shall be equal to its
      Interest at the time the act or omission giving rise to the liability
      occurred, after first taking into account any reduction, readjustment and
      restoration of Interests under this Agreement (or, as to such liability
      arising out of acts or omissions occurring or conditions existing prior to
      the Effective Date, equal to such Diluted Participant’s initial
      Interest).  Should the cumulative cost of satisfying Continuing
      Obligations be in excess of cumulative amounts accrued or otherwise
      charged to the Contingency Fund, each of the Participants shall be liable
      for its proportionate share (i.e., Interest at the time of the act or
      omission giving rise to such liability occurred), after first taking into
      account any reduction, readjustment and restoration of Participating
      Interests under this Agreement, of the cost of satisfying such Continuing
      Obligations, notwithstanding that any Participant has previously withdrawn
      from the Business or that its Interest has been reduced or converted to
      the Net Smelter Royalty.

            

    

     

    
      	
              14.6

            	
              An
      adjustment to an Interest need not be evidenced during the term of this
      Agreement by the execution and recording of appropriate instruments, but
      each Participant’s Interest will be shown in the books of the
      Operator.  However, any Participant, at any time upon the
      request of another Participant, will execute and acknowledge instruments
      necessary to evidence such adjustment in form sufficient for recording in
      the jurisdiction where the Property is
located.

            

    

     

    
      	
              14.7

            	
              The
      operation of the formula contained in section 14.1 is demonstrated in
      Schedule 14.7.

            

    

     

    
      	
              15.

            	
              DISPOSITION OF
      PRODUCTION

            

    

     

    
      	
              15.1

            	
              Crosshair
      shall, as agent and for the account and at the expense and risk of the
      Participants, sell all Product from the Properties in accordance with
      section 15.2, to Crosshair and/or other persons, or, in accordance
      with section 15.3, to Crosshair and/or other persons and
      Paragon.  In that capacity, the Operator shall calculate Net
      Cash Flow for each calendar month and distribute such Net Cash Flow in
      accordance with section 12.4 including, without limitation,
      distribution of the Participants’ Net Cash Flow for such calendar month,
      if any, within 10 days of the end of such calendar
  month.

            

    

     

     

    
      
        
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              15.2

            	
              Subject
      to section 15.3, Crosshair shall have the right to purchase all or
      any portion of the Product sold under section 15.1 on terms no more
      favourable to Crosshair than terms available from third
      Parties.

            

    

     

    
      	
              15.3

            	
              Notwithstanding
      anything else in this Agreement, the provisions of sections 15.1 will
      not apply and each Participant shall have the right to purchase Product in
      proportion to its Interest on terms no more favourable to it than terms
      available from third parties in the following
    circumstances:

            

    

     

    
      	
               
      

            	
              (1)

            	
              Crosshair
      or its permitted assigns and successors cease to be a Participant;
      or

            

    

     

    
      	
               
      

            	
              (2)

            	
              there
      is a Change of Control of Paragon;
or

            

    

     

    
      	
               
      

            	
              (3)

            	
              Paragon
      sells its Interest in the Subject Area to a third party within 120 days of
      the Development Decision with respect to such Subject
  Area.

            

    

     

    
      	
              16.

            	
              AUDIT

            

    

     

    
      	
              16.1

            	
              The
      Operator’s records relating to the Joint Venture will be audited in
      accordance with Canadian GAAP annually at the end of the Fiscal Year by
      the Auditor and upon completion of such
audit:

            

    

     

    
      	
               
      

            	
              (1)

            	
              any
      adjustments required by such audit will be made
  forthwith;

            

    

     

    
      	
               
      

            	
              (2)

            	
              a
      copy of the audited statements will be delivered to the Participants
      within 45 business days of the end of the Fiscal Year, and all such
      accounts and records will be deemed to be correct and accurate unless
      questioned by a Participant within 45 days following the delivery of such
      audited statements; and

            

    

     

    
      	
               
      

            	
              (3)

            	
              all
      information required by any Participant to this Agreement in order for
      such Participant to prepare its financial actuarials in accordance with
      Applicable Law shall be provided to such Participant at the expense of
      such Participant.

            

    

     

    
      	
              16.2

            	
              Each
      Participant that is a Non-Operator (the “Auditing Participant”),
      at reasonable times and upon not less than seven days’ written notice to
      the other Participant, will have the right to inspect, audit and copy the
      Operator’s accounts and records relating to the Joint Venture for any
      Fiscal Year within 15 days from the receipt of the audited financial
      statements for such Fiscal Year at its own expense.  The
      Auditing Participant will make all reasonable efforts to conduct audits in
      a manner which will result in a minimum of inconvenience to the
      Operator.  If the audit by an Auditing Participant is concluded
      within two months from the end of the Fiscal Year in question and
      indicates a difference of more than 2% of Costs prior to Commercial
      Production or 2% of Net Cash Flow after commencement of Commercial
      Production, before interest and tax from the amount determined by the
      Auditor, then the accounts will be re-audited by a third independent firm
      of chartered accountants, the decision of which will be
      final.  If the results of the third audit indicate a difference
      of more than 2% of Costs prior to Commercial production or 2% of Net Cash
      Flow after commencement of Commercial Production, before interest and tax
      from the amount determined by the Auditor, then
  appropriate

            

    

     

     

    
 

    
      
        
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    adjustments
to the audited financial statements will be made.  Any audit made on
behalf of the Auditing Participant of the audited financial statements of the
Joint Venture for any Fiscal Year will be at the expense of the Auditing
Participant unless an adjustment to the audited financial statements for such
Fiscal Year is made in accordance with this section in which case the expenses
will be Costs.

    

    
      	
              17.

            	
              AREA OF COMMON
      INTEREST

            

    

     

    
      	
              17.1

            	
              If
      any Participant, directly or indirectly, has the opportunity to stake or
      otherwise acquires any mineral interest or right of any nature whatsoever,
      located wholly or in part in the Area of Common Interest, the Participant
      who has such opportunity (the “Acquiring Participant”)
      shall promptly notify the other Participant (the “Non- Acquiring
      Participant”) in writing of that opportunity, including the terms
      on which such interest or right is able to be acquired and an assessment
      of the likely benefits to the Joint Venture.  An Acquiring
      Participant may stake or otherwise acquire such interest or right in its
      own name if the Acquiring Participant believes it is necessary to do so in
      order to preserve the opportunity to acquire such interest or
      right.  In such event, the Acquiring Participant will be staking
      or acquiring such interest or right subject to the rights of the
      Participant who is not the Acquiring Participant under this section and if
      a favourable decision is made pursuant to section 17.2, such interest
      or right shall become subject to this Agreement and form part of the
      Properties on the basis contemplated by
  section 17.2.

            

    

     

    
      	
              17.2

            	
              The
      Non-Acquiring Participant shall, within 20 days from the date that the
      notice is given by the Acquiring Participant pursuant to
      section 17.1, decide whether such interest or right should become
      subject to the terms of this Agreement.  If a favourable
      decision is made, the Participants shall use reasonable endeavours to
      acquire or stake such interest or right which shall become subject to this
      Agreement and form part of the Properties (the “Additional
      Properties”).  If it is determined to stake or otherwise
      acquire such interest or right, the costs associated with staking or
      acquiring the Additional Properties shall be costs of the Joint Venture
      which shall be Exploration Costs if the acquisition occurs during the
      Exploration Period, Feasibility Costs if the acquisition occurs during the
      Feasibility Period, Development Costs if the acquisition occurs during the
      Development Period and Operating Costs if the acquisition occurs during
      the Operating Period.

            

    

     

    
      	
              17.3

            	
              If
      the members of the Executive Committee who are nominees of the
      Non-Acquiring Participant decide not to participate in the acquisition or
      staking of such right or interest pursuant to section 17.2, the
      Acquiring Participant may itself acquire or stake such interest or right
      on terms not more favourable to the Acquiring Participant than those
      specified in the notice referred to in section 17.1 within 90 days of
      the giving of such notice.

            

    

     

    
      	
              17.4

            	
              The
      provisions of this section 17 shall continue to be binding on each
      Participant for a period of six months following the date on which this
      Agreement terminates.

            

    

     

     

    
      
        
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              18.

            	
              SHARING OF AND
      CONFIDENTIAL NATURE OF
INFORMATION

            

    

     

    
      	
              18.1

            	
              Subject
      to section 18.2, each Participant agrees that all information
      obtained or generated hereunder and the terms of this Agreement will be
      the exclusive property of the Participants and will not be publicly
      disclosed and this Agreement will not be provided to any third parties 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 (in which case the
      Participant being compelled to disclose such information shall give the
      other Participant reasonable notice), or with the written consent of the
      other Participant, such consent not to be unreasonably
      withheld.

            

    

     

    
      	
              18.2

            	
              Consent
      to disclosure of information pursuant to section 18.1 will not be
      unreasonably withheld where a Participant wishes to disclose any such
      information to a third party for the purpose of arranging financing for
      its contributions hereunder or for the purpose of selling its Interest or
      its rights as contemplated in this Agreement, provided that such third
      party first enters into a written agreement with the disclosing
      Participant that any such information not theretofore publicly disclosed
      will be kept confidential and not disclosed to
  others.

            

    

     

    
      	
              19.

            	
              LIMITED
      CHARGING

            

    

     

    
      	
              19.1

            	
              Notwithstanding
      the provisions of section 20, but solely following the commencement
      of the Development Period, a Participant may, at any time, hypothec,
      mortgage, charge or otherwise encumber the whole or any part of its
      Interest but only upon the condition that the holder of such Encumbrance
      (the “Chargee”),
      first enters into a written agreement with the other Participant in a form
      satisfactory to counsel for such other Participant, binding upon the
      Chargee, as set out in sections 19.2 and
  19.3.

            

    

     

    
      	
              19.2

            	
              If
      the Chargee is not engaged, directly or indirectly, in metal mining or
      exploration:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      Chargee may take possession of the encumbering Participant’s Interest
      subject to the terms of this Agreement;
and

            

    

     

    
      	
               
      

            	
              (2)

            	
              any
      disposition by the Chargee of the encumbering Participant’s Interest will
      be conducted in accordance with
section 20.

            

    

     

    
      	
              19.3

            	
              If
      the Chargee is engaged, directly or indirectly, in metal mining or
      exploration:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      Chargee will not enter into possession or institute any proceedings for
      foreclosure or partition of the encumbering Participant’s Interest unless
      the Chargee’s Encumbrance has become subject to the provisions of this
      Agreement; and

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      Chargee’s remedies under such Encumbrance will be limited to the sale of
      the whole (but only of the whole) of the encumbering Participant’s
      Interest to the other Participant in accordance with section 20, or
      failing such disposition, at a public auction to be held after 90 days
      prior notice to the other Participant, such sale to be subject to the
      purchaser entering into a written agreement with the
  other

            

    

     

     

    
 

    
      
        
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    Participant
whereby such purchaser assumes all obligations of the encumbering Participant
under the terms of this Agreement.

    

    
      	
              20.

            	
              RESTRICTIONS ON
      ALIENATION

            

    

     

    
      	
              20.1

            	
              No
      Participant (the “Transferor”) will,
      directly or indirectly, transfer, convey, assign, hypothec, mortgage or
      grant an option in respect of or grant a right to purchase or in any
      manner transfer or alienate or agree to transfer or alienate (a “Transfer”) any or all of
      its Interest or its rights under this Agreement or in the Properties
      (collectively, the “Rights”) except as
      provided in this section 20.

            

    

     

    
      	
              20.2

            	
              No
      Transfer of Rights will be effective unless the Transferor has given
      notice of the Transfer as required by this section 20, is not in
      default of any term or provision of this Agreement at the time of Transfer
      and until any proposed assignee, transferee, purchaser, grantee or
      encumbrancer of such Interest or rights under this Agreement (“Transferee”) has
      executed and delivered, in the case of the Transfer of all of a
      Participant’s Interest or rights under this Agreement, to the remaining
      Participant:

            

    

     

    
      	
               
      

            	
              (1)

            	
              An
      agreement in form and substance satisfactory to counsel for the remaining
      Participants, related to this Agreement, as applicable,
      containing:

            

    

     

    
      	
               
      

            	
              (a)

            	
              a
      covenant by such Transferee with the remaining Participants to perform all
      of the obligations of the Transferor to be performed under this Agreement,
      as applicable, in respect of the Interest or rights under this Agreement
      as applicable, to be received by the
Transferee;

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      provision subjecting any further Transfer of such Interest or rights under
      this Agreement, as applicable, to the provisions of this section 20;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              unless
      consented to by the remaining Participants (such consent can include
      reasonable conditions for the protection of the remaining Participants),
      the Transferor will remain liable for the performance of all obligations
      assumed by the Transferee in default of the performance thereof by the
      Transferee.  For greater certainty, any transfer of one
      Participant’s Interest must include an acknowledgement that the other
      Participants have an Interest and other rights under this
      Agreement.

            

    

     

    
      	
               
      

            	
              (2)

            	
              No
      transfer permitted by this section 20 will relieve the Transferor of
      any liability, whether accruing before or after such Transfer, which
      arises out of operations conducted prior to such
  Transfer.

            

    

     

    
      	
              20.3

            	
              Any
      Participant (the “Offeror”) intending to
      Transfer its Rights will first give notice to the other Participant (the
      “Offeree”) of such
      intention together with the terms and conditions on which the Offeror is
      willing to Transfer its Rights; provided that the disposition of all of
      the issued and outstanding shares in the capital stock of either
      Participant to one or more third parties shall not constitute a Transfer
      subject to the right of first refusal contemplated in this section
      20.3.

            

    

     

     

    
 

    
      
        
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              20.4

            	
              Any
      communication of an intention to sell pursuant to section 20 (the
      “Offer”) will be
      delivered in accordance with section 24 and will set out fully and
      clearly all of the terms and conditions of any intended
      Transfer.

            

    

     

    
      	
              20.5

            	
              Any
      Offer made as contemplated in section 20.4 will be open for
      acceptance by the Offeree for a period of 50 days from the date of receipt
      of the Offer by the Offeree.

            

    

     

    
      	
              20.6

            	
              If
      the Offeree accepts the Offer within the required time, such acceptance
      will constitute a binding agreement between the Offeror and the Offeree to
      Transfer the Rights on the terms and conditions set out in such
      Offer.

            

    

     

    
      	
              20.7

            	
              If
      the Offeree does not accept the Offer within the required time, the
      Offeror may complete a Transfer of Rights on terms and conditions no more
      beneficial to the transferee thereof than those set out in the
      Offer.  The Transfer must be completed within 90 days from the
      expiration of the right of the Offeree to accept such Offer or the Offeror
      must again comply with the provisions of this
    section 20.

            

    

     

    
      	
              20.8

            	
              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
  section 20.

            

    

     

    
      	
              20.9

            	
              If
      the Transfer is the grant of a security interest by hypothec, mortgage,
      deed of trust, pledge, lien or other encumbrance of the Interest of a
      Participant to secure a loan or other indebtedness, such security interest
      shall be expressly subordinate to the terms of this Agreement and the
      rights and interests of the other Participants hereunder in that the
      transferee pursuant to such Transfer shall covenant with the other
      Participants in the document evidencing such transfer or in a separate
      document ancillary thereto that upon any foreclosure or other enforcement
      of rights in the security interest, such transferee shall be deemed to
      have assumed the position of the encumbering Participant with respect to
      this Agreement and the other Participants, and such transferee shall
      comply with and be bound by the terms and conditions of this
      Agreement.

            

    

     

    
      	
              20.10

            	
              Each
      Participant agrees that its failure to comply with the restrictions set
      out in this section 20 would constitute an injury and damage to the
      other Participants impossible to measure monetarily and, in the event of
      any such failure the other Participants 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 Transfer of its
      Rights save in accordance with the provisions of this section 20, and
      a Participant intending to make a Transfer or making a Transfer contrary
      to the provisions of this section 20 hereby waives any defence it
      might have in law to such injunctive
relief.

            

    

     

    
      	
              20.11

            	
              Notwithstanding
      anything else in this Agreement, a Participant may Transfer its Rights, or
      part thereof, to an Associated Company without the consent of the other
      Participants but otherwise in compliance with this section 20
      provided that the Transferor and the Transferee are jointly and severally
      liable for the obligations of the Associated Company under this
      Agreement.

            

    

     

     

    
 

    
      
        
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              20.12

            	
              In
      the event that Crosshair undergoes a Change of Control, the surviving or
      acquiring corporation or entity shall be responsible for and assume
      Crosshair’s obligation to issue Crosshair Shares under sections 3.4 and
      4.1, and, Paragon shall be entitled to receive, and shall accept, in lieu
      of the number of Crosshair Shares to which Paragon was theretofore
      entitled under sections 3.4 and 4.1, the kind and amount of shares and
      other securities or property which Paragon would have been entitled to
      receive as a result of such Change of Control if, on the effective date
      thereof, Paragon had been the registered holder of the number of Crosshair
      Shares to which Paragon was theretofore entitled under sections 3.4 and
      4.1.

            

    

     

    
      	
              20.13

            	
              Notwithstanding
      anything else in this section 20, nothing in this Agreement shall
      prevent or restrict a Change of Control in either Participant or prevent
      either Participant from issuing securities and there will be no
      consequence to a Participant who issues securities or undergoes a Change
      of Control.

            

    

     

    
      	
              21.

            	
              LIABILITY OF THE
      OPERATOR AND OPERATOR’S
INDEMNITIES

            

    

     

    
      	
              21.1

            	
              The
      Operator will indemnify and save the other Participant harmless from and
      against any loss, cost, liability, claim, demand, damage, expense, injury
      and death (including, without limitation, legal fees and disbursements)
      resulting from fraud, negligence or wilful misconduct of the Operator or
      its directors, officers, employees, contractors or agents in conducting
      operations pursuant to this
Agreement.

            

    

     

    
      	
              21.2

            	
              The
      Operator will be indemnified by the Participants in accordance with their
      respective Interests, as part of the Costs, from the acts and omissions of
      the Operator and its directors, officers, contractors and agents provided
      that an Operator will not be indemnified nor held harmless by the other
      Participants from, and will be liable to the other Participants only for,
      any loss, cost, liability, claim, demand, damage, expense, injury or death
      (including, without limitation, legal fees and disbursements) resulting
      from fraud, negligence or wilful misconduct of the Operator or its
      directors, officers, employees, contractors or
  agents.

            

    

     

    
      	
              21.3

            	
              An
      act or omission of the Operator or its directors, officers, employees,
      contractors or agents done or omitted to be
  done:

            

    

     

    
      	
               
      

            	
              (1)

            	
              at
      the unanimous direction, or within the scope of the unanimous direction,
      of the relevant Executive Committee;
or

            

    

     

    
      	
               
      

            	
              (2)

            	
              with
      the unanimous concurrence of the relevant Executive Committee;
      or

            

    

     

    
      	
               
      

            	
              (3)

            	
              unilaterally
      and in good faith by the Operator to protect life or property, will be
      deemed not to be negligent or resulting from wilful
      misconduct.

            

    

     

    
      	
              21.4

            	
              The
      obligations of the Operator to indemnify and save harmless the other
      Participant pursuant to this section 21 will be in proportion to such
      other Participant’s Interest as at the date that the loss, cost,
      liability, claim, demand, damage, expense, injury or death occurred or
      arose.

            

    

     

     

    
      
        
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              22.

            	
              NON-BINDING DISPUTE
      RESOLUTION

            

    

     

    
      	
              22.1

            	
              If
      any Eligible Matter is referred to the provisions of this section 22,
      such Eligible Matter shall be referred to an executive of each Participant
      that has been appointed by their respective chief executive officers and
      such appointed executives shall use their best efforts to resolve the
      dispute within 20 business days of such appointment.  If such
      appointed executives cannot resolve the dispute within that period, the
      chief executive officer of each Participant shall use their reasonable
      best efforts to resolve the matter amicably within 30 business days after
      commencement of such chief executive officer’s resolution
      efforts.  All time periods contemplated will be suspended during
      the time that this non-binding dispute mechanism is
    invoked.

            

    

     

    
      	
              23.

            	
              ENCUMBRANCE, PARTITION AND
      INDEMNIFICATION

            

    

     

    
      	
              23.1

            	
              Except
      as otherwise provided in this Agreement, a Participant will not encumber
      or permit or suffer to exist any hypothec, lien, charge or other
      encumbrance on its Interest.

            

    

     

    
      	
              23.2

            	
              No
      Participant will partition or seek partition, whether through order of any
      court or otherwise, of the
Properties.

            

    

     

    
      	
              23.3

            	
              A
      Participant will not have authority to act for or assume any obligations
      or liabilities on behalf of the other Participants except such as are
      specifically authorized pursuant to and in accordance with the terms of
      this Agreement, and each Participant will defend, indemnify and hold
      harmless the other Participants, and their directors, officers, employees,
      contractors and agents, from and against any and all losses, expenses,
      claims, damages, suits and demands whatsoever 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.

            

    

     

    
      	
              23.4

            	
              Each
      Participant indemnifies each other Participant from and against any loss,
      damage, claim or expense which such other Participant may suffer or incur
      as a result of any negligence of, or material breach of this Agreement by,
      the first mentioned Participant, in connection with the Joint
      Venture.  This indemnity will continue after the expiry or
      termination of this Agreement for any
reason.

            

    

     

    
      	
              24.

            	
              NOTICES

            

    

     

    
      	
              24.1

            	
              Any
      notice, direction or other instrument required or permitted to be given
      under this agreement will be in writing and may be given by the delivery
      of the same or by mailing the same by prepaid registered or certified mail
      or by sending the same by telegram, telex, telecommunication, facsimile or
      other similar form of communication, in each case addressed as
      follows:

            

    

     

    
      	
               
      

            	
              (1)

            	
              If
      to Paragon at:

            

    

     

    Suite
1500 – 701 West Georgia Street

    Vancouver,
British Columbia, Canada V7Y 1C6

     

     

    
      
        
          50651077.7

        

         

      

      
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    Attention:
Michael J. Vande Guchte

    Facsimile
No.: 604-629-2489

     

    
      	
               
      

            	
              (2)

            	
              If
      to Crosshair at:

            

    

     

    Suite
1240 - 1140 West Pender Street

    Vancouver,
British Columbia, Canada V6E 4G1

     

    Attention:
Mark J. Morabito

    Facsimile
No.: 604-681-8039

     

    
      	
              24.2

            	
              Any
      notice, direction or other instrument
will:

            

    

     

    
      	
               
      

            	
              (1)

            	
              if
      delivered, be deemed to have been given and received on the day it was
      delivered; and

            

    

     

    
      	
               
      

            	
              (2)

            	
              if
      sent by telecommunication, facsimile or other similar form of
      communication, be deemed to have been given and received on the business
      day following the day it was so
sent.

            

    

     

    
      	
              24.3

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

            

    

     

    
      	
              25.

            	
              TERMINATION

            

    

     

    
      	
              25.1

            	
              Other
      than sections  17, 18, 21, 24 and 28.7 which provisions explicitly
      survive termination according to their terms, this Agreement will
      terminate in any of the following
circumstances:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      written agreement by the Participants to
  terminate;

            

    

     

    
      	
               
      

            	
              (2)

            	
              pursuant
      to section 27.1;

            

    

     

    
      	
               
      

            	
              (3)

            	
              if
      Crosshair does not earn the Initial Option in accordance with section 3.2;
      or

            

    

     

    
      	
               
      

            	
              (4)

            	
              such
      time as there is only one
Participant.

            

    

     

    
      	
              25.2

            	
              On
      termination of this Agreement, the Participants will remain liable for
      continuing obligations in respect of the Properties until final settlement
      of all accounts and for any liability, whether it accrues before or after
      termination, if it arises out of operations in respect of the Properties
      during the term of the Agreement.

            

    

     

    
      	
              25.3

            	
              Unless
      terminated pursuant to section 25.1(2) or 26.1(4), promptly after
      termination of this Agreement, the Operator will take all action necessary
      to wind up the activities of the Joint Venture and all costs and expenses
      incurred in connection with the termination of the Joint Venture will be
      chargeable to the Joint Venture.  The Assets of the
      Joint

            

    

     

     

    
      
        
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    Venture
shall first be paid, applied, or distributed in satisfaction of all liabilities
of the Joint Venture to third parties and then to satisfy any debts,
obligations, or liabilities owed to the Participants.  Before
distributing any Assets to Participants, the Operator may segregate amounts
which, in the Operator’s reasonable judgment, are necessary to discharge
continuing obligations or to purchase for the account of Participants, bonds or
other securities for the performance of such obligations.  Thereafter,
any remaining cash and Assets will be distributed in undivided interests unless
otherwise provided herein or otherwise agreed. Each Participant will have an
ongoing obligation to fund its share of any liabilities or obligations
(including, without limitation, to fund or contribute to the Contingency
Fund).  The share of a Participant’s obligation or liability shall be
pro rata to its
Interest on the date such liability or obligation was caused.

    

    
      	
              25.4

            	
              Unless
      terminated pursuant to section 25.1(2) or 26.1(4), on termination of
      this Agreement, the Operator will have the power and authority in respect
      of the Properties, subject to control of the relevant Executive Committee,
      to do all things on behalf of the Participants which are reasonably
      necessary or desirable to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              wind-up
      operations of this joint venture;
and

            

    

     

    
      	
               
      

            	
              (2)

            	
              complete
      any transaction and satisfy any obligation unfinished or unsatisfied at
      the time of such termination, if the transaction or obligation arises out
      of operations prior to such
termination.

            

    

     

    The
Operator will have the power and authority to grant or receive extensions of
time or change the method of payment of any already existing liability or
obligation, prosecute and defend actions on behalf of the Participants and the
Joint Venture, hypothec or mortgage Assets, and take any other reasonable action
in any matter with respect to which the former Participants continue to have, or
appear or are alleged to have, a common interest or a common
liability.

     

    
      	
              26.

            	
              FORCE
      MAJEURE

            

    

     

    
      	
              26.1

            	
              The
      obligations of a Participant pursuant to this Agreement shall be suspended
      to the extent and for the period that performance of any obligation of
      such Participant is prevented by any cause, whether foreseeable or
      unforeseeable, and beyond its reasonable control, including, without
      limitation:

            

    

     

    
      	
               
      

            	
              (1)

            	
              labour
      disputes (however arising and whether or not employee demands are
      reasonable or within the power of the Participant to
    grant);

            

    

     

    
      	
               
      

            	
              (2)

            	
              Acts
      of God, including, without limitation, excessive cold or warm temperatures
      or consistent periods of fog which prevent or render impractical the
      conduct of exploration or development activity on the Properties for a
      period of 30 days during any period of 90 consecutive
  days;

            

    

     

    
      	
               
      

            	
              (3)

            	
              laws,
      instructions or requests of any Governmental
  Authority;

            

    

     

    
      	
               
      

            	
              (4)

            	
              any
      litigation or administrative process which reasonably has the effect of
      delaying Operations and judgments or orders of any court or
      tribunal;

            

    

     

     

    
 

    
      
        
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              (5)

            	
              inability
      to obtain on reasonably acceptable terms any public or private licence,
      permit or other authorisation;

            

    

     

    
      	
               
      

            	
              (6)

            	
              curtailment
      or suspension of activities to remedy or avoid an actual or alleged,
      present or prospective violation of Environmental
  Laws;

            

    

     

    
      	
               
      

            	
              (7)

            	
              action
      or inaction by any Governmental Authority that delays or prevents the
      issuance or granting of any approval or authorization required to conduct
      operations beyond the reasonable expectations of a Participant seeking
      such approval or authorisation;

            

    

     

    
      	
               
      

            	
              (8)

            	
              acts
      of war or conditions arising out of or attributable to war, whether
      declared or undeclared;

            

    

     

    
      	
               
      

            	
              (9)

            	
              riot;

            

    

     

    
      	
               
      

            	
              (10)

            	
              civil
      strife, terrorism, insurrection or rebellion; including, without
      limitation, any steps taken by any Governmental Authorities in response to
      any such matters;

            

    

     

    
      	
               
      

            	
              (11)

            	
              fire,
      explosion, earthquake;

            

    

     

    
      	
               
      

            	
              (12)

            	
              delay
      or failure by suppliers or transporters of materials, parts, supplies,
      services or equipment or by contractors’ or subcontractors’ shortage of,
      or inability to obtain, labour, transportation, materials, machinery,
      equipment, supplies, utilities or
services;

            

    

     

    
      	
               
      

            	
              (13)

            	
              accidents;

            

    

     

    
      	
               
      

            	
              (14)

            	
              breakdown
      of equipment, machinery or
facilities;

            

    

     

    
      	
               
      

            	
              (15)

            	
              inability
      to obtain contractors or sub-contractors to provide materially time
      critical goods and services due to shortages of competent and competitive
      contractors or sub-contractors;

            

    

     

    
      	
               
      

            	
              (16)

            	
              actions
      by aboriginal groups, native rights groups, environmental groups, or other
      similar special interest groups, or any other cause whether similar or
      dissimilar to the foregoing,

            

    

     

    (each, an
“Intervening
Event”).  For greater certainty, the failure of any party to
obtain financing in and of itself shall not be an Intervening
Event.

     

    
      	
              26.2

            	
              A
      Participant relying on the provisions of section 26.1 will promptly
      give written notice to the other Participant of the particulars of the
      Intervening Event and all time limits imposed by this Agreement will be
      extended from the date of delivery of such notice by a period equivalent
      to the period of delay resulting from an Intervening
  Event,

            

    

     

    
      	
              26.3

            	
              Any
      Participant that receives a notice of an Intervening Event pursuant to
      section 26.4 shall have 30 days to dispute the validity of the
      substance of Intervening Event

            

    

     

     

    
 

    
      
        
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    documented
in such notice.  If such a notice is disputed, such dispute shall be
an Eligible Matter for the purposes of sections 22.

    

    
      	
              26.4

            	
              If
      an Intervening Event is not disputed pursuant to section 26.3 or if
      it is upheld in the processes under sections 22, then it will be
      entered in a register of Intervening Events to be maintained by the
      Operator which will set out all relevant details of each such Intervening
      Event including the time and date of its commencement and the time and
      date of its termination.  The contents of such register for each
      Fiscal Year shall form part of the project record approved by the
      Executive Committee after the completion of such Fiscal
      Year.  The Operator shall also maintain all supporting
      documentation relating to any Intervening Event until at least six years
      after the date that the Development Decision is made or, if any
      Intervening Event occurs after such date, for at least six years after
      such Intervening Event.

            

    

     

    
      	
              26.5

            	
              A
      Participant relying on the provisions of section 26.1 will take all
      reasonable steps to eliminate any Intervening Event and, if possible, will
      perform its obligations under this Agreement as far as commercially
      practicable, but nothing herein will require such Participant 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 commercially
      impracticable.

            

    

     

    
      	
              26.6

            	
              A
      Participant relying on the provisions of section 26.1 will give
      written notice to the other Participant as soon as such Intervening Event
      ceases to exist.

            

    

     

    
      	
              27.

            	
              DEFAULT

            

    

     

    
      	
              27.1

            	
              Notwithstanding
      anything in this Agreement to the contrary, if any Participant (a “Defaulting Participant”)
      is in default of any requirement herein set forth the Participant or
      Participants affected by such default will give written notice to the
      Defaulting Participant specifying the default and the Defaulting
      Participant will not lose any rights under this Agreement, unless within
      30 days after the giving of the first notice of default by an affected
      Participant the Defaulting Participant has failed to take reasonable steps
      to cure the default by the appropriate performance and if the Defaulting
      Participant fails within such period to take reasonable steps to cure any
      such default, the affected Participant will be entitled to seek any remedy
      it may have on account of such default including terminating this
      Agreement and/or seeking the remedies of specific performance, injunction
      or damages.

            

    

     

    
      	
              28.

            	
              GENERAL

            

    

     

    
      	
              28.1

            	
              The
      Participants 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.

            

    

     

    
      	
              28.2

            	
              All
      references to moneys hereunder will be in Canadian funds and all
      obligations will be in Canadian funds.  All payments to be made
      to any Participant hereunder may be made by cheque or bank draft mailed or
      delivered to such Participant at its address for
  notice

            

    

     

     

    
 

    
      
        
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    purposes
as provided herein, or deposited for the account of such Participant at such
bank or banks as such Participant may designate from time to time by notice to
the paying Participant.  Said bank or banks will be deemed the agent
of the designating Participant for the purpose of receiving, collecting and
receipting such payment.

    

    
      	
              28.3

            	
              Time
      is of the essence in the performance of this
  Agreement.

            

    

     

    
      	
              28.4

            	
              The
      headings of the 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
Participants.

            

    

     

    
      	
              28.5

            	
              This
      Agreement will enure to the benefit of and be binding upon the
      participants hereto and their respective successors and permitted assigns,
      provided that any Transfer not made in accordance with this Agreement will
      be null and void and of no force or
effect.

            

    

     

    
      	
              28.6

            	
              This
      Agreement (including the schedules thereto) and the Underlying Agreements
      constitute the entire agreement between the Participants and replaces and
      supersedes all prior agreements, memoranda, correspondence,
      communications, negotiations and representations, whether oral or written,
      express or implied, statutory or otherwise between the Participants with
      respect to the subject matter herein. There are no implied covenants
      contained in this Agreement other than those of good faith and fair
      dealing.

            

    

     

    
      	
              28.7

            	
              This
      Agreement will be governed by and construed according to the laws of the
      Province of British Columbia and the federal laws of Canada applicable
      therein and the Participants irrevocably submit to the exclusive
      jurisdiction of the courts of the Province of British
      Columbia.

            

    

     

    
      	
              28.8

            	
              This
      Agreement may be executed by facsimile or other means of electronic
      communication and in one or more counterparts, each of which will be
      deemed to be an original, but all of which will constitute one and the
      same instrument.

            

    

     

     

    
      
        
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              28.9

            	
              This
      Agreement may only be amended by the written agreement of all the
      Participants hereto and their permitted successors and
      assigns.

            

    

     

    IN
WITNESS WHEREOF the participants hereto have executed these presents as of the
day and year first above written,

     

     

     

    
      
        
          
            
              
                
                  	
                          CROSSHAIR
      EXPLORATION & MINING CORP.

                           

                        
	
                           

                          By:

                        	
                          “Mark
      J. Morabito”

                        
	 
      	
                          Mark
      J. Morabito

                        
	 
      	
                          President
      and Chief Executive Officer

                           

                           

                           

                        
	
                          PARAGON
      MINERALS CORPORATION

                           

                        
	
                           

                          By:

                        	
                          “Michael
      J. Vande Guchte”

                        
	 
      	
                          Michael
      J. Vande Guchte

                        
	 
      	
                          President
      and Chief Executive
Officer

                        

                

              

            

          

        

      

    

     

    
       

    

     

    
      
        
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    Schedule 1.1(47)

     

    Fair
Market Value

     

    
      	
              1.

            	
              The
      Fair Market Value of any Interest shall be calculated as the after tax net
      present value of such Interest.  The calculation shall assume
      the then prevailing market price of any applicable metals, and a nominal
      discount rate of 10%.  The Fair Market Value shall be calculated
      as of the date the notice is received by one party from the other that it
      intends to exercise its rights, to sell all or any part of its Interest to
      the other party under this
Agreement.

            

    

     

    
      	
              2.

            	
              Fair
      Market Value shall be calculated with reference to CIM Val as the
      applicable principles of valuation by a panel of two qualified independent
      valuators who are employees of an international mining consultancy or
      engineering firm (each an “Independent Valuator”)
      retained by the Participants, one of which shall be designated by Paragon
      and the other of which shall be designated by Crosshair and each such
      Independent Valuator will base its determination on the life of a mine
      plan approved by a Qualified Person (as defined in National Instrument
      43-101) the identity of whom shall be agreed upon by the
      Participants.  If the Participant cannot agree as to the
      identity of the Qualified Person within 10 days, the President of the
      Canadian Institute of Mining, Metallurgy and Petroleum shall make such
      selection. Such designation shall be made as soon as practicable and if a
      Participant fails to appoint an Independent Valuator within 30 days of the
      Appraisal Date, the one appointed by the other Participant shall determine
      the Fair Market Value.

            

    

     

    
      	
              3.

            	
              Each
      Participant shall upon reasonable notice, provide to each Independent
      Valuator and its representatives full access during normal business hours
      to the Subject Area, the books and records of the Joint Venture that
      pertain to the Subject Area and shall cause such additional financial and
      operating data and other information as the Independent Valuators and
      their representatives shall from time to time reasonably request to be
      provided.

            

    

     

    
      	
              4.

            	
              Each
      Independent Valuator shall submit its written determination on the Fair
      Market Value to each Participant within 60 days after the date of its
      retention.

            

    

     

    
      	
              5.

            	
              If
      the higher determination of the two Independent Valuators is not greater
      than 110% of the lower determination, the Fair Market Value shall be the
      average of such two determinations.  If the higher determination
      is greater than 110% of the lower determination, then such two Independent
      Valuators shall attempt in good faith to alter their determinations of
      Fair Market Value so that the greater determination is within 110% of the
      lower determination.

            

    

     

    
      	
              6.

            	
              If
      the two Independent Valuators are unsuccessful they shall jointly select
      within 10 days after the date on which they were informed of such
      difference, a third Independent Valuator to be retained by the
      Participants.  Such third Independent Valuator shall deliver its
      written determination of the Fair Market Value in 30 days after its
      retention and the

            

    

     

     

    
      
        
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     Fair
Market Value of the Interest shall be the average to the two closest
determinations or, if there are not two closest determinations, the average of
all three determinations.

     

    
      	
              7.

            	
              The
      fees and expenses of such Independent Valuators shall be shared equally by
      the Participants.

            

    

     

     

    
      
        
          50651077.7

        

         

      

      
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    Schedule 1.1(68)

     

    Net
Smelter Royalty

     

    DEFINITION,
CALCULATION AND PAYMENT OF NSR ROYALTY

     

    The Net
Smelter Royalty is the percentage provided in this Schedule attached and
calculated and paid by Payor (as defined below) to the Royalty Holder (as
defined below) in accordance with the following provisions:

     

     1.           DEFINITIONS

     

    Unless
otherwise set forth below, all capitalized terns used in this Schedule shall
have the meaning ascribed to them in the Agreement.

     

    "Calendar Quarter" means each
three-month period ending March 31st, June
30th,
September 30th and
December 31st of each
calendar year.

     

    "Mineral Content" means all
marketable ores, concentrates, metals and minerals contained in Subject Ore as
separately estimated by the Payor using head grade or assays taken prior to
entering mill or heap leach facilities, mill or heap leach operation recovery
levels, and recoveries and other adjustments at the refinery, as key components
in the calculation of Mineral Content.

     

    "Mineral Price Quotation" for a
Product means the final sale price as quoted for the Product on the London
Metals Exchange, as published in Metals Week or a similar
publication. If publication of the final quotation on the London Metals Exchange
shall be discontinued, the parties shall select a comparable commodity quotation
for purposes of calculating the Smelter Returns. If such selection has not been
completed prior to the end of the calendar month following the month in which
the quotation is discontinued, the average quotation for the calendar month in
which the quotation is discontinued shall be used on an interim basis pending
such selection.

     

    "Net Smelter Royalty" for a
Calendar Quarter in respect of all of the Product means the sum of (i) for each
of the Products, the average Mineral Price Quotation for the Product for a
Calendar Quarter multiplied by the total number of appropriate units of
measurement of the Product beneficiated by the Payor or credited by the smelter,
refiner or other bona fide purchaser to the Payor during that Calendar Quarter;
less (ii) the deductions, adjustments and credits set forth in section 3, with
such sum multiplied by 1%.

     

    "Payor" means the Party who
produces and sells Products from the Properties from which the Royalty Holder is
entitled to a Royalty as provided in the agreement.

     

    "Product" shall have the
definition provided in the agreement.

     

    "Properties" shall have the
definition provided in the agreement.

     

    "Royalty Holder" means the
party or its successors or assigns that becomes entitled to a Royalty, as
provided in the Agreement.

     

     

    
      
        
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    "Smelter Returns" for a
Calendar Quarter in respect of all of the Products means, for each of the
Products, the average Mineral Price Quotation for the Product for a Calendar
Quarter multiplied by the total number of appropriate units of measurement of
the Product beneficiated by the Payor or credited by the smelter, refiner or
other bona fide purchaser to the Payor during that Calendar
Quarter.

     

    "Subject Ore" means all Ore
mined by the Payor from the Properties.

     

     2.           RESERVATION
OF ROYALTY

     

    The Payor
shall pay and the Royalty Holder shall be entitled to receive as the royalty, 1%
of Smelter Returns except as such percent is reduced pursuant to the
Agreement.

     

     3.           NSR
DEDUCTIONS

     

    In
calculating the Net Smelter Royalty, the Payor shall be entitled to deduct from
Smelter Returns the following costs, to the extent incurred and borne by the
Payor:

     

    
      	
               
      

            	
              (a)

            	
              all
      smelting, minting and refining costs, and treatment charges and penalties
      at the smelter or refinery including, but without being limited to,
      deductions charged for metal losses and penalties for
      impurities;

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      costs of transporting the Products from the Properties to a smelter, mint
      or refinery including, without restricting the generality of the
      foregoing, any and all costs of insurance in respect
    thereto;

            

    

     

    
      	
               
      

            	
              (c)

            	
              all
      sampling, assaying and representation charges in connection with sampling
      and assaying carried out after the Products have left the
      Properties;

            

    

     

    
      	
               
      

            	
              (d)

            	
              costs
      and expenses of marketing the Products, if any;
  and

            

    

     

    
      	
               
      

            	
              (e)

            	
              taxes
      levied by any government on the value of Products produced or sold, but
      excluding income taxes if such charges are actual costs payable out of the
      proceeds received from a bona fide purchaser or are shown as deductions
      therefrom.

            

    

     

     4.           GENERAL
PROVISIONS

     

    
      	
               
      

            	
              (a)

            	
              Arm's
      Length Provision

            

    

     

    If
smelting and/or refining are carried out in facilities owned or controlled by
the Payor, charges, costs and penalties for such operations, including
transportation, shall mean the amount that the Payor would have incurred if such
operations were carried out at facilities not owned or controlled by the Payor
then offering similar custom services for comparable products on prevailing
terms.

     

    
      	
               
      

            	
              (b)

            	
              Payment
      of the Royalty

            

    

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
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    All
royalty or provisional royalty payments will be payable on or before the 30th
day following each Calendar Quarter. Each such quarterly payment to the Royalty
Holder shall be accompanied by a statement in reasonable detail showing the
calculation of the payment. Each such quarterly payment shall be subject to
adjustment as provided below in the next quarterly payment or when the final
report for the year is issued as specified below.

     

    
      	
               
      

            	
              (c)

            	
              Provisional
      Payments

            

    

     

    If any
payment becomes due and payable to the Royalty Holder prior to the Payor's final
estimates of the total amount payable, then the Payor shall pay the Royalty
Holder a provisional royalty payment using the Payor's then current estimates of
the amount payable for Products produced during the Calendar
Quarter.

     

    
      	
               
      

            	
              (d)

            	
              Adjustments

            

    

     

    The
following adjustments shall be taken into account in determining the royalty
payments or provisional royalty payments and shall be specified in a statement
which will accompany each payment:

     

    
      	
               
      

            	
              (i)

            	
              Any
      adjustments to charges, costs, deductions or expenses imposed upon or
      given to the Payor but not taken into account in determining previous
      royalty payments;

            

    

     

    
      
        	
                 
      

              	
                (ii)

              	
                
                  Any
      adjustments in the number of appropriate units of measurement of Products,
      beneficiated by the Payor, or previously credited to the Payor by a
      smelter, refiner or bona fide purchaser of Products shipped or sold by the
      Payor;

                

              

      

       

    

    
      
        	
                 
      

              	
                (iii)

              	
                
                  Any
      adjustments in Mineral Content and average percentage recovery;
      and

                

              

      

      
         

        
          	
                   
      

                	
                  (iv)

                	
                  
                    Any
      payments that have not otherwise been credited against previous royalty
      payments.

                  

                

        

        
           

        

      

    

    
      	
               
      

            	
              (e)

            	
              Annual
      Final Report

            

    

     

    Within 90
days after the end of each calendar year, the Payor shall deliver or cause to be
delivered to the Royalty Holder a final report for the year certified as being
accurate by a responsible officer of the Payor showing in reasonable detail the
calculation of the royalty due the Royalty Holder for the prior year and all
adjustments to the quarterly or other periodic reports and payments for the
year. With such final report, the Payor shall, if applicable, make such
additional royalty payment as is required by the report. If such report
indicates that the Royalty Holder has received more than it should have been
paid in respect of the royalty due to the Royalty Holder, then the excess shall
be deducted from the next payment obligation owed pursuant to the provisions of
this Schedule or, in the

     

     

    
 

    
      
        
          50651077.7

        

         

      

      
        - 3
-  

        
          

        

      

      
         

      

    

     event
of a temporary or permanent cessation of production, the Royalty Holder shall
repay the excess within 15 days of the annual report.

     

    
      	
               
      

            	
              (f)

            	
              Assignment
      by Payor

            

    

     

    Upon any
assignment, conveyance, termination or abandonment of the Properties or any
portion thereof, as the case may be, by the Payor, the Payor shall have no
further obligation to the Royalty Holder in respect of the Properties or such
portion, as the case may be; provided that, in the case of assignment or
conveyance, it shall be a condition of any assignment or conveyance that the
assignee or transferee shall have agreed to assume the Payor's obligation to the
Royalty Holder to pay the royalty in respect of that portion of the Properties
acquired by such assignee or transferee.

     

    
      	
               
      

            	
              (g)

            	
              Assignment
      by Royalty Holder

            

    

     

    Notwithstanding
anything to the contrary herein contained, if any part of the right to receive
the Royalty is assigned by the Royalty Holder, it shall be a condition of such
assignment that the assignee agrees with the Payor and all other parties
entitled to receive any part of the Royalty as follows:

     

    
      	
               
      

            	
              (i)

            	
              the
      amount of any royalty payable hereunder shall be settled only with the
      Royalty Holder or an authorized nominee (herein collectively called the
      “Nominee”) as
      designated by notice to the Payor (such notice to be executed by all
      parties entitled to receive any part of the Royalty), and such settlement
      shall be final and binding upon all interested parties and the Payor shall
      not be required to make any accounting to any person save such
      Nominee;

            

    

    
       

      
        	
                 
      

              	
                (ii)

              	
                payment
      of the royalty shall be made only to or to the order of the Nominee “In Trust” and such
      payment shall constitute a full and complete discharge to the Payor and it
      shall have no obligation to see to the distribution of any such
      payment;

              

      

      
         

        
          	
                   
      

                	
                  (iii)

                	
                  the
      Payor may settle disputes arising hereunder with the Nominee and such
      settlement shall be final and binding upon all interested
      parties;

                

        

        
           

          
            	
                     
      

                  	
                    (iv)

                  	
                    
                      the
      Payor may rely upon any direction, advice or authorization signed by the
      Nominee and may act thereon as if the same was signed by all interested
      parties; and

                    

                  

          

          
             

            
              	
                       
      

                    	
                      (v)

                    	
                      the
      Payor shall not be required to deal with any person except the Nominee.
      Each interested party shall exercise all of their respective rights only
      through the Nominee and shall require each of their respective assignees
      to agree in writing to be bound by the provisions
  hereof.

                    

            

            
               

               

            

          

        

      

    

    
      
        
          50651077.7

        

         

      

      
        - 4
-  

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (h)

            	
              Records
      and Provision for Audit to Resolve
Objections

            

    

     

    All books
and records used by the Payor to calculate the royalty due hereunder shall be
kept in accordance with Canadian GAAP varied only by the specific provisions
hereof. The Payor shall maintain up-to-date and complete records of the
production of all Mineral Products. If treatment or smelting of Mineral Products
is performed off the Properties, accounts records, statements and returns
relating to such treatment and smelting arrangements shall be maintained by the
Payor. The Royalty Holder shall have the right at all reasonable times during
normal business hours to inspect such accounts, records, statements and returns
and make copies thereof at its own expense for the sole purpose of verifying the
amount of the royalty.

     

    All
payments of the royalty made pursuant to the final report that is to be issued
within 90 days of the end of each calendar year shall be considered final and in
full satisfaction of all obligations of the Payor with respect thereto, unless
the Royalty Holder gives the Payor written notice describing and setting forth a
specific objection to the calculation thereof within 90 days after receipt by
the Royalty Holder of the annual final report herein provided in subsection
4(e). If the Royalty Holder objects to a particular quarterly or annual
statement delivered hereunder, the Royalty Holder shall, for a period of 90 days
after the Payor's receipt of notice of such objection, have the right, upon
reasonable notice and at a reasonable time, to have the royalty payment in
question audited by a firm of chartered accountants acceptable to the Royalty
Holder and to the Payor (and if they cannot agree on a firm, by a firm of
chartered accountants selected by the auditors of the Royalty Holder). If such
audit determines that there has been a deficiency or an excess in the payment
made to the Royalty Holder such deficiency or excess shall be resolved by
adjusting the next quarterly payment due hereunder. The Royalty Holder shall pay
all costs of such audit unless a deficiency of 5% or more of the amount due for
the year under audit or $30,000, whichever is greater, is determined to exist.
The Payor shall pay the costs of such audit if a deficiency of 5% or more of the
amount due for the year under audit or $30,000, whichever is greater, is
determined to exist. Failure on the part of the Royalty Holder to make claim on
the Payor for adjustment in such 90-day period shall establish the correctness
of the final report and preclude the filing of exceptions thereto or making of
claims for adjustment thereon.

     

    
      	
               
      

            	
              (i)

            	
              Royalty
      Running With the Properties

            

    

     

    The
royalty created herein shall be a real property interest in all portions of the
Properties to which the royalty applies sufficient to secure the royalty
payments herein provided.

     

     

    
      
        
          50651077.7

        

         

      

      
        - 5
-  

        
          

        

      

      
         

      

    

    Schedule 1.1(86)

     

    Permitted
Encumbrances

     

    1.           2.0%
Net Smelter Return Royalty (“NSR”), of which 1.0% of the NSR is purchasable for
$1,000,000 (or $500,000 for each 0.5% NSR) with a right of first refusal on the
remaining 1% NSR, and annual advance royalty payments of $20,000 commencing June
1, 2007, to William Mercer under the May 22, 2002 Letter Agreement between
William Mercer and Rubicon Minerals Corporation on the Golden Promise Property,
as amended on July 17, 2003, July 27, 2003, and September 1, 2003. Areas of
interest (AOI’s) exist on the property.

     

    2.           2.0%
NSR granted to Stephen Courtney and Newfoundland & Labrador Minerals Ltd.
under the June 14, 2004 Purchase and Royalty Letter Agreement between Stephen
Courtney and Newfoundland & Labrador Minerals Ltd. and Rubicon Minerals
Corporation on the OB Property, NL. 1.0% of the NSR is purchasable for
$1,000,000 with a right of first refusal on the remaining 1% NSR.

     

     

    
      
        
          50651077.7

        

         

      

      
        - 1
-

        
          

        

      

      
         

      

    

    Schedule 1.1(90)

     

    Description
of Properties

     

    
      	
               
      Property

               

            	
               
      Licence

            	
               
      Claims

            	
               
      Sq. Km

            	
               
      Hectares

            	
               
      NTS AREA

            	
               
      Issuance Date

            	
               
      Renewal Date

            	
               
      Report Due

            
	
               
      GP

            	
               
      15169M

            	
               
      256

            	
               
      64

            	
               
      6400

            	
               
      12A/16

            	
               
      June 21, 2002

            	
               
      June 21, 2012

            	
               
      August 20, 2009

            
	
               
      GP

            	
               
      15170M

            	
               
      254

            	
               
      63.5

            	
               
      6350

            	
               
      12A/16

            	
               
      June 21, 2002

            	
               
      June 21, 2012

            	
               
      August 20, 2009

            
	
               
      GP

            	
               
      15171M

            	
               
      256

            	
               
      64

            	
               
      6400

            	
               
      12A/16

            	
               
      June 21, 2002

            	
               
      June 21, 2012

            	
               
      August 20, 2009

            
	
               
      GP

            	
               
      15172M

            	
               
      225

            	
               
      56.25

            	
               
      5625

            	
               
      2D/13, 12A/16

            	
               
      June 21, 2002

            	
               
      June 21, 2012

            	
               
      August 20, 2009

            
	
               
      GP

            	
               
      11057M

            	
               
      42

            	
               
      10.5

            	
               
      1050

            	
               
      12A/16

            	
               
      October 28, 2004

            	
               
      October 28, 2009

            	
               
      December 28, 2009

            
	 
      	
               
      Totals:

            	
               
      1033

            	
               
      258.25

            	
               
      25,825

            	 
      	 
      	 
      	 
      

    

    

     

    

     

    
      
        
          50651077.7

        

         

      

      
        - 1
-  

        
          

        

      

      
         

      

    

    Schedule 1.1(102)

     

    Underlying
Agreements

     

    

     

    
      	
              1.

            	
              May
      22, 2002 Letter Agreement between William Mercer and Rubicon Minerals
      Corporation on the Golden Promise Property, as amended on July 17, 2003,
      July 27, 2003, and September 1,
2003.

            

    

     

    
      	
              2.

            	
              June
      14, 2004 Purchase and Royalty Letter Agreement between Stephen Courtney
      and Newfoundland & Labrador Minerals Ltd. and Rubicon Minerals
      Corporation on the OB Property, NL.

            

    

     

    

    
      
        
          50651077.7

        

         

      

      
          - 1
-

        
          

        

      

      
         

      

    

    Schedule 14.7

     

    Dilution
Formula Illustration

     

    Example
1

     

    
      
        	
                 
      DPI = 

              	
                   A + B +
      C

              
	 	   D
      + E + F

      

    

     

    
      
      

    

    
      	
               
      

            	
              (a)

            	
              Assume
      that the parties maintain their respective 70% and 30% Interests and the
      Initial Deemed Investment + Exploration Costs + Feasibility Cost = $30
      million Crosshair will be deemed to have spent 0.7 x $30 million = $21
      million

            

    

     

    
      	
               
      

            	
              Paragon
      will be deemed to have spent 0.3 x $30 million = $9
    million.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Assume
      development is complete and each Participant funded its pro rata share of
      a $200 million budget so Crosshair contributed $140 million and Paragon
      contributed $60 million.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Assume
      the first budget for the Operating Period is $20 million, $20 million in
      costs is incurred and Paragon elects not to
  contribute.

            

    

     

     

     

    Then in
calculating Paragon' s Interest:

     

    A = $9
million

     

    B = $60
million

     

    C =
0

     

    D = $30
million

     

    E = $200
million

     

    F = $20
million

     

     

     

    
      
        
          
            	
                     DPI
      =

                  	
                      
      $9 million + $60 million + 0

                  	
                     
      x 100 =
      27.6% =
      Paragon's Interest

                  
	 	
                      
      $30 million + $200
      million + $20 million

                  	 
      

          

        

      

    

     

     

    Crosshair's
Interest =
100% - 27.6% =
72.4%

     

     

     

     

    Example
2

     

    
      	
               
      

            	
              (d)

            	
              Make
      same assumptions as in (a) and (b) in Example
1.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Assume
      the first Budget for the Operating Period is $20 million and Paragon only
      funds $3 million of its $6 million Cost
Share.

            

    

     

     

     

    Then in
calculating Paragon' s Interest:

     

    A = $9
million

     

     

    
      
        
          50651077.7

        

         

      

      
        - 1
-  

        
          

        

      

      
         

      

    

    

     

    B = $60
million

     

    C = $3
million

     

    D = $30
million

     

    B = $200
million

     

    F = $20
million

     

     

     

    
      
        
          
            	 DPI
      =	
                    $9
      million + $60 million +$3 million

                  	
                     
      x 100 = 28.8% = Paragon's Interest

                  
	 	
                    $30
      million + $200 million + $20 million

                  	 
      

          

        

      

    

     

     

    Crosshair’s
Interest = 100% - 28.8% = 71.2%

     

     

    
      
        
          50651077.7

        

         

      

      
        - 2
-  

        
          

        

      

      
         

      

    

    Schedule 17.1

     

    Area
of Common Interest

    

    

    
      
        
          50651077.7

        

      

       

      - 1 -

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