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Exhibit 10.1  

 
 

2005 Annual Incentive Plan Summary    
    

        The Partnership's Annual Incentive Compensation Plan ("Plan") was adopted by its general partner in 2002 in order to improve overall performance of the
Partnership by motivating its employees to collectively produce outstanding results, encourage superior performance, increase productivity, and aid in attracting and retaining key employees. All
employees of the Partnership's managing general partner and its affiliates are eligible for participation in the Plan. Pursuant to the terms of the Plan, performance measures and targets are to be
established on an annual basis for determining the bonus amounts to be paid in accordance with the Plan. The Board of Directors has, for calendar year 2005, established performance categories,
including business unit and total company financial objectives, operational performance criteria, and personal productivity goals. In addition, a threshold has been established below which no
incentive for the Financial Objectives component will be paid. The 2005 program payout will be based on combinations of the following components, depending on salary grade level: 

        Financial Objectives:    60%—70% of award 

        Operational Integrity & Safety:    15%—30% of award 

        Personal Productivity Goals:    0%—25% of award 

        Threshold,
target and maximum Financial Objectives have been established for each group of employees (grouped by salary grade). 

        Financial
Objectives are based on a combination of business unit distributable cash flow objectives and total company distributable cash flow per limited partner unit. Payments at the
various performance levels are based on a percentage of employees' eligible earnings. Eligible earnings include regular base pay earnings for the period in which an employee is a participant in the
Plan. 

        If
target financial performance is achieved, 50% of the maximum payout attributable to the Financial Objectives component is eligible to be paid under the Plan. If maximum financial
performance is achieved, 100% of the maximum payout attributable to the Financial Objectives component is eligible to be paid. If threshold financial performance is achieved, 25% of the maximum payout
attributable to the Financial Objectives component is eligible to be paid. If financial performance falls below the threshold objective, no payment is made for the financial component of the Plan. The
calculated payout percentage for performance between threshold and target, or between target and maximum, will be prorated. 

        The
Board of Directors may, at its discretion, adjust the award based on quantitative factors by plus or minus 20%. All employees begin participation in the Plan on the first day of
employment in the Plan year. To be eligible to receive an award, an employee must be employed during the Plan year, including the last day of the Plan year. Exceptions to this requirement will be made
where a participant's employment is terminated as a result of retirement or death, or the participant becomes eligible for long-term disability after the first day of the Plan year. Such
employees will be eligible for a prorated award based on the portion of the year worked prior to the employment termination event. 

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2005 Annual Incentive Plan SummaryFiled by Automated Filing Services Inc. (604) 609-0244 - Taskeo Mines Limited - Exhibit 10.3

 GIBRALTAR MINES LTD.

ROYALTY AGREEMENT

 

 

  

SEPTEMBER 29, 2004

Table of Contents

	 1	 INTERPRETATION	 2
	 	 	 
	 2	 ROYALTY	 9
	 	 	 
	 3	 PUT OPTION FOR UNITS OF RLP	 14
	 	 	 
	 4	 REPRESENTATIONS, WARRANTIES, COVENANTS
      AND EVENTS OF DEFAULT OF RESOURCE COMPANY	16 
	  	  	  
	 5	 REPRESENTATIONS AND COVENANTS OF RLP, RMRF
      AND GENERAL PARTNERS OF RLP AND RMRF	22 
	  	  	  
	 6	 MISCELLANEOUS	 24

 

 - 1 -

THIS ROYALTY AGREEMENT executed the 29TH day of September, 2004, effective as of June 15, 2004. 

 BETWEEN:

	 	GIBRALTAR MINES LTD., a corporation incorporated
        under the laws of British Columbia (the “Resource Company”);
      

	 	 
	 	OF THE FIRST PART,
	 	 
	 	 - and –
	 	 
	 	 WILSHIRE (GP) NO. 2 CORPORATION,
        in its own capacity and in its capacity as general partner on behalf of
        all the limited partners of RED MILE RESOURCES NO. 2 LIMITED PARTNERSHIP,
        being a limited partnership established under the Limited Partnership
        Act (British Columbia) (“RLP”); 

	 	 
	 	OF THE SECOND PART, 
	 	 
	 	- and –

	 	 
	 	RED MILE RESOURCES INC., in
        its own capacity and in its capacity as general partner on behalf of all
        the limited partners of RED MILE RESOURCES FUND LIMITED PARTNERSHIP,
        being a limited partnership established under the Limited Partnership
        Act (Alberta) (“RMRF”);

	 	 
	 	 OF THE THIRD PART.

WHEREAS Resource Company and RLP have entered into an
  interim participation agreement dated as of February 3, 2004 (the “Interim
  Participation Agreement”), related to the acquisition of a royalty interest
  in the production of Ore from any and all Mines now or hereafter located on
  the Mineral Tenures currently owned by Resource Company near Williams Lake,
  British Columbia, known as the Gibraltar Mine; 

 AND WHEREAS on June 15, 2004, Resource Company and
  RLP came to an agreement with respect to both the Purchase Price and the Mineral
  Tenures to which this royalty agreement applies; 

 AND WHEREAS Resource Company wishes to grant to RMRF,
  as the sole limited partner of RLP, an option to require Resource Company to
  acquire the limited partnership units of RLP owned by RMRF in certain circumstances;

 - 2 -

 AND WHEREAS Resource Company, RLP and RMRF wish to
  memorialize the terms of the royalty interest on the terms and conditions set
  out in this royalty agreement;

 NOW THEREFORE in consideration of the premises and
  mutual covenants and agreements hereinafter contained and for other good and
  valuable consideration, the receipt and sufficiency of which are hereby acknowledged
  by each party, the parties hereto agree as follows: 

	 1      	 INTERPRETATION 
	 
	 1.1      	 Definitions 
	 
	 	 In this Agreement, unless there is something in
        the subject matter or context inconsistent therewith, the following expressions
        shall have the following meanings, respectively: 

	 
	 	 “Adjustment Amount” has the meaning
        set forth in Subsection 2.3(2); 

	 
	 	 “this Agreement”, “hereto”,
        “herein”, “hereby”, “hereunder”, “hereof”
        and similar expressions refer to this Agreement and not to any particular
        Article, Section, Subsection, Clause, Subdivision or other portion hereof
        and include any and every instrument supplemental or ancillary hereto;
      

	 
	 	 “Alberta Trust” means Alberta
        Capital Trust Corporation, a corporation incorporated pursuant to the
        laws of the Province of Alberta; 

	 
	 	 “Alberta Trust Default” means
        a breach, that remains unremedied for ten (10) Business Days, by Alberta
        Trust of its payment obligation under section 8(a)(i) of the pledge, priorities
        and direction agreement dated September 29, 2004 among inter alia Alberta
        Trust and the parties hereto; 

	 
	 	 “Alberta Trust Note” has the
        meaning set out in Section 4.3; 

	 
	 	 “Annual Mine Plan” means the
        annual plan that Resource Company is required to prepare in accordance
        with Subsection 2.8 for all Mines located on the Mineral Tenures in any
        calendar year and that outlines Resource Company’s plan to mine
        Ore from such Mines during the following calendar year, which plan shall
        be in the form of the plan outlined in Schedule B, except that
        the Annual Mine Plan for the period from the Commencement Date of Commercial
        Production until December 31, 2004 is as outlined in Schedule C;
      

	 
	 	 “Assets” means the Mineral Tenures
        listed on Schedule I, all Mines situated on the Mineral Tenures,
        all Production from any Mine, all accounts receivable arising from the
        sale of Production, and all proceeds of the foregoing; 

	 
	 	 “Basic Royalty” means the portion
        of the Royalty payable by Resource Company to RLP as set out in Subsection
        2.3(1); 

	 
	 	 “Basic Royalty Payment” means
        an Interim Basic Royalty Payment or a Final Basic Royalty Payment, as
        the case may be; 

	 

 - 3 -

	 	“Basic Royalty Rate” is the number
        of dollars per pound of copper for each Royalty Period as set forth in
        Schedule A: 

	 	

	 	 “Basic Royalty Report” has the
        meaning set out in Subsection 2.6(1); 

	 	

	 	 “Business Day” in any jurisdiction
        means a day, other than a Saturday or Sunday, on which banks in such jurisdiction
        are generally open for business; 

	 	

	 	 “Call Option” means the call
        option granted to Optionee pursuant to the Call Option Agreement; 

	 	

	 	 “Call Option Agreement” means
        the agreement among RLP, RMRF and Optionee dated the date hereof whereby
        RMRF granted an option to Optionee to purchase RMRF’s limited partnership
        units in RLP; 

	 	

	 	“CIM” means the Canadian Institute
        of Mines and Metallurgy; 

	 	

	 	 “Closure or Shutdown” means that
        period of time where no Production occurs that continues for a period
        of 45 or more consecutive days;  

	 	

	 	 “Commencement Date of Commercial Production”
        means the first day, after the Effective Date, where Concentrate or processed
        Ore from a Mine at an average of 60% of its rated processing capacity
        over a 30 day period has been shipped, but no period of time during which
        Ore or Concentrate is shipped from the Mine for testing purposes, and
        no period of time during which milling operations are undertaken as initial
        commissioning and start-up, will be taken into account in determining
        the date of Commencement of Commercial Production; 

	 	

	 	 “Concentrate” means the valuable
        fraction of the Ore left after worthless material has been removed in
        processing; 

	 	

	 	 “Consultant” means Watts, Griffis
        and McOuat Limited or such other consultant as may be proposed by Resource
        Company and acceptable to RLP acting reasonably; 

	 	

	 	“Effective Date” means June 15,
        2004; 

	 	

	 	 “Eighth Royalty Period” means
        that period of time commencing on January 1, 2011 and ending on December
        31, 2011; 

	 	

	 	 “Eleventh Royalty Period” means
        that period of time commencing on January 1, 2014 and ending on December
        31, 2014; 

	 	

	 	 “Environmental Claims” means
        any and all administrative, regulatory or judicial actions, suits, demand
        letters, claims, liens, notices of non-compliance or violation, investigations
        conducted in the context of an administrative, regulatory or judicial
        proceeding or proceedings relating in any way to any Environmental Laws
        or any permit or authorization issued under any Environmental Laws, including
        without limitation: (a) any and all such claims by any Governmental Authority
        or enforcement, cleanup, 

 - 4 -

	 	removal, response, remedial or other actions or damages
        pursuant to any applicable Environmental Laws; and (b) any and all such
        claims by any third party seeking damages, contribution, indemnification,
        cost recovery, compensation or injunctive relief resulting from any Environmentally
        Regulated Material arising from alleged injury or threat of injury to
        health, safety or the environment; 

	 	

	 	 “Environmental Laws” means all
        applicable Canadian federal, provincial, territorial, municipal and local
        laws and regulations relating to pollution or protection of human health
        or the environment (including, without limitation, ambient air, surface
        water, ground water, land surface or subsurface strata), including without
        limitation, laws and regulations relating to emissions, discharges, releases
        or threatened releases of chemicals, pollutants, contaminants, wastes,
        toxic substances, petroleum, petroleum products and other substances of
        environmental concern, or otherwise relating to the manufacture, processing,
        distribution, use, treatment, storage, disposal, transport or handling
        of chemicals, pollutants, contaminants, wastes, toxic substances, petroleum
        products and other substances of environmental concern, reclamation and
        rehabilitation; 

	 	

	 	 “Environmentally Regulated Material”
        means any pollutant, contaminant, waste, hazardous waste or material or
        dangerous waste or material or dangerous good as defined by any applicable
        Environmental Laws or any substance that when released to the natural
        environment may cause, at some indeterminate future time, material harm
        or degradation to the natural environment or material risk to human health,
        and, without restricting the generality of the whole of the foregoing,
        (a) any petroleum or petroleum products, radioactive materials, asbestos
        in any form that is or could become friable, urea formaldehyde foam insulation,
        transformers or other equipment that contains dielectric fluid containing
        levels of polychlorinated biphenyls, and radon gas; (b) any chemicals,
        materials or substances defined as or included in the definition of the
        “hazardous substances”, “hazardous waste”, “hazardous
        materials”, “extremely hazardous waste”, “restricted
        hazardous waste”, “toxic substances”, “toxic pollutants”,
        “contaminants” or “pollutants”, or words of similar
        import, under any applicable Environmental Laws; and (c) any other chemical,
        material or substance, exposure to which is prohibited, limited or regulated
        by any Governmental Authority which could give rise to any Environmental
        Claims; 

	 	

	 	 “Event of Default” has the meaning
        set out in Section 4.4; 

	 	

	 	 “Fair Market Value” means the
        fair market value of the limited partnership units of RLP owned by RMRF
        determined in accordance with Section 3.2; 

	 	

	 	 “Fifth Royalty Period” means
        that period of time commencing on January 1, 2008 and ending on December
        31, 2008; 

	 	

	 	 “Final Basic Royalty Payment”
        in respect of a Royalty Period has the meaning set out in Subsection 2.6(6);
      

	 	

	 	 “Final Basic Royalty Payment Date”
        in respect of a Royalty Period has the meaning set out in Subsection 2.6(6);
      

 - 5 -

	 	“First Royalty Period” means that
        period of time commencing on the day after the Commencement Date of Commercial
        Production and ending on December 31, 2004;  

	 	

	 	 “Fourth Royalty Period” means
        that period of time commencing on January 1, 2007 and ending on December
        31, 2007; 

	 	

	 	 “General Partner of RLP” means
        Wilshire (GP) No. 2 Corporation and its successors and assigns as provided
        for in the RLP Limited Partnership Agreement; 

	 	

	 	 “General Partner of RMRF” means
        Red Mile Resources Inc. and its successors and assigns as provided for
        in the RMRF Limited Partnership Agreement; 

	 	

	 	 “Government Levies” means any
        amount paid or payable by virtue of an obligation imposed by statute,
        ordinance or regulation or a contractual obligation substituted for such
        an obligation (and whether such statute, ordinance or regulation or contract
        is in force at the date hereof or comes into force during the term hereof)
        to any Governmental Authority as a royalty, tax, rent or fee, environmental
        levy or as an amount, however described, that may reasonably be regarded
        as being in lieu of any such amount, and that may reasonably be regarded
        as being in relation to the amount or value of production or processing
        of minerals from a mineral resource in Canada; 

	 	

	 	 “Governmental Authority” means
        any: (i) multinational, federal, provincial, territorial, municipal, local
        or other governmental or public department, central bank, court, commission,
        board, bureau, agency or instrumentality, domestic or foreign; (ii) any
        subdivision or authority of any of the foregoing; or (iii) any quasi-governmental
        or private body exercising any regulatory, expropriation or taxing authority
        under or for the account of any of the above; 

	 	

	 	“Insolvency Legislation” means
        any legislation in any jurisdiction relating to bankruptcy, insolvency,
        liquidation, winding-up, reorganization, arrangement or relief of debtors
        or the adjustment or composition of debt, including without limitation
        the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors
        Arrangement Act (Canada) and the Winding-Up and Restructuring Act
        (Canada); 

	 	

	 	 “Interim Basic Royalty Payment”
        in respect of a Royalty Period has the meaning set out in Subsection 2.6(3);

	 	

	 	 “Interim Basic Royalty Report”
        in respect of a Royalty Period has the meaning set out in Subsection 2.6(3);

	 	

	 	 “Limited Partner of RMRF” means
        a subscriber of units of RMRF; 

	 	

	 	 “Mill” means the facility for
        the crushing, sorting, concentrating or other processing of extracted
        minerals to produce upgraded ore, concentrate, ore or similar products
        short of the refining stage; 

 - 6 -

	 	“Mine” means all mineral deposits,
        shafts, adits, infrastructures, roads, tailings, waste piles, mill, buildings
        or other workings and related operations currently on or to be developed
        and operated on the Mineral Tenures; 

	 	

	 	 “Mineral Tenures” means the mining
        claims, mineral claims, leases, concessions or other forms of mineral
        tenure described in Schedule I attached hereto and includes
        any extension of time or renewal thereof and any permits, licenses or
        other interests in minerals or rights to occupy, use, exploit, operate
        or extract minerals therefrom; 

	 	

	 	 “Net Profits” has the meaning
        set out in Schedule L attached hereto; 

	 	

	 	 “Net Profits Interest” or
        “NPI” means the net profits interest described in Schedule
        L attached hereto; 

	 	

	 	“Ninth Royalty Period” means that
        period of time commencing on January 1, 2012 and ending on December 31,
        2012; 

	 	

	 	 “Optionee” means 688888 B.C.
        Ltd., a corporation incorporated pursuant to the laws of British Columbia;
      

	 	

	 	 “Option Period Notice” has the
        meaning set out in Subsection 2.6(2); 

	 	

	 	 “Ore” means naturally occurring
        material from which valuable minerals can be recovered whether resources
        or reserves as defined in National Instrument 43-101 constituting the
        Mine; 

	 	

	 	 “Partner” means the General Partner
        of RMRF, the General Partner of RLP, RMRF as the limited partner of RLP
        and the limited partners of RMRF; 

	 	

	 	 “Payout Amount” means, on any
        Payout Amount Calculation Date, the amount by which the Purchase Price
        plus a notional amount of interest that would have been earned thereon
        from the Purchase Price Payment Date to such Payout Amount Calculation
        Date at a rate of six per cent (6%) per annum exceeds the sum of (i) the
        aggregate of all amounts, each of which is a Basic Royalty Payment, and
        (ii) a notional amount of interest that would have been earned thereon
        from each respective Royalty Payment Date on the assumption that the Interim
        Basic Royalty Payment and the Final Basic Royalty Payment in respect of
        a Royalty Period were paid on the Royalty Payment Date to that Royalty
        Calculation Date at a rate of six per cent (6%) per annum; 

	 	

	 	 “Payout Amount Calculation Date”
        means the 31st day of December of each year subsequent to the Commencement
        of Commercial Production; 

	 	

	 	 “Payout Notice” has the meaning
        set out in Subsection 2.6(2); 

	 	

	 	 “Permitted Encumbrances” means
        the liens, mortgages, pledges, charges, royalties or other encumbrances
        or interests in or relating to the Assets as set out in Schedule J;
      

 - 7 -

	 	“Person” means a natural person,
        partnership, limited liability partnership, corporation, joint stock company,
        trust, unincorporated association, joint venture or other entity or Governmental
        Authority, and pronouns have a similarly extended meaning; 

	 	

	 	 “Production” means the extraction
        of Ore from any Mine after the Commencement Date of Commercial Production
        of the Mine and includes direct shipping of Ore for processing; 

	 	

	 	 “Production Results” means, with
        respect to Production in any Royalty Period, the pounds of copper, in
        any form, derived from Concentrate extracted from the Ore in the Mine;
      

	 	

	 	 “Purchase Price” means the purchase
        price of the Royalty, being $67,357,000; 

	 	

	 	“Purchase Price Payment Date”
        means September 29, 2004 or such other date or dates as the parties may
        agree; 

	 	

	 	 “Put Completion Date” has the
        meaning set out in Subsection 3.1(3); 

	 	

	 	“Put Notice” has the meaning set
        out in Subsection 3.1(3); 

	 	

	 	“Put Option” has the meaning set
        out Subsection 3.1(1); 

	 	

	 	“Put Purchase Price” has the meaning
        set out in Subsection 3.1(5); 

	 	

	 	“Reconciled Basic Royalty Report”
        has the meaning set out in Subsection 2.6(5); 

	 	

	 	 “RLP Limited Partnership Agreement”
        means the agreement dated September 29, 2004 between the General Partner
        of RLP and the limited partner of RLP;

	 	

	 	 “RMRF Limited Partnership Agreement”
        means the agreement dated June 1, 2004 between the General Partner of
        RMRF and 1111066 Alberta Ltd. as the initial limited partner to form RMRF;
         

	 	

	 	 “Royalty” means the Basic Royalty
        and the NPI; 

	 	

	 	 “Royalty Calculation Date” means
        the 15th day of each month subsequent to the Commencement of
        Commercial Production; 

	 	

	 	 “Royalty Payment Date” means
        February 15th in each calendar year commencing in February,
        2005;  

	 	

	 	 “Royalty Period” means any of
        the First to Twelfth Royalty Periods;  

	 	

	 	“Royalty Period Discrepancy”
        has the meaning set out in Subsection 2.6(6); 

	 	

	 	“Royalty Records” has the meaning
        set out in Subsection 2.7(1); 

 - 8 -

	 	“Second Royalty Period” means the period of time commencing
      on January 1, 2005 and ending on December 31, 2005; 
	 	 
	 	 “Seventh Royalty Period” means that period of time
      commencing on January 1, 2010 and ending on December 31, 2010; 
	 	 
	 	 “Sixth Royalty Period” means that period of time commencing
      on January 1, 2009 and ending on December 31, 2009; 
	 	 
	 	 “Tax Act” means the Income Tax Act (Canada)
      as amended from time to time; 
	 	 
	 	 “Tenth Royalty Period” means the period of time commencing
      on January 1, 2013 and ending on December 31, 2013; 
	 	 
	 	“Third Royalty Period” means that period of time commencing
      on January 1, 2006 and ending on December 31, 2006; 
	 	 
	 	 “Twelfth Royalty Period” means the period of time
      commencing on January 1, 2015 and continuing until the Basic Royalty terminates
      in accordance with Section 2.4; 
	 	 
	 	 “Valuation Report” means a report on the future value
      of the Royalty as contemplated in Subsection 3.2(2) . 
	 	 
	1.2 	 Gender and Number 
	 	 
	Unless herein otherwise
        expressly provided or unless the context otherwise requires, words importing
        the singular include the plural and vice versa and words importing gender
        include all genders. If any defined term herein is defined as a plural
        term, the use of such term as a defined term in the singular shall have
        a corresponding meaning, and vice-versa. 

	 	

	1.3	 Interpretation Not Affected by Headings, Etc.
        

	 	

	 The division of this Agreement
        into Articles and Sections, the provision of a table of contents and the
        insertion of headings are for convenience of reference only and shall
        not affect the construction or interpretation of this Agreement. 

	 	

	1.4 	 Day Not a Business Day 

	 	

	 In the event that any day
        on or before which any action is required to be taken hereunder is not
        a Business Day in the jurisdiction relevant to the action to be taken,
        then such action shall be required to be taken at or before the requisite
        time on the next succeeding day that is a Business Day in such jurisdiction.
      

	 	

	1.5 	 Applicable Law 

	 	

	 This Agreement shall be
        governed by and construed in accordance with the laws of the Province
        of British Columbia, and the federal laws of Canada applicable therein,
        and Resource Company, 

 - 9 -

 RMRF and RLP each hereby irrevocably attorn to the jurisdiction of the courts
  of the Province of British Columbia.

	1.6	Inclusive Terms and Statements 

The word “including”, when following any general term or statement,
  is not to be construed as limiting the general term or statement to the specific
  items or matters thereafter set forth or to similar items or matters, but rather
  as referring to all other items or matters that could reasonably fall within
  the broadest possible scope of the general term or statement.

	1.7 	Currency 

 Unless otherwise specifically stated, a reference herein to currency is a
  reference to Canadian currency.

	1.8 	Schedules 

 The following Schedules attached hereto form part of this Agreement:

	Schedule A	-	Basic Royalty Rates per Royalty Period 
	 	 	 
	Schedule B	-	Form of Annual Mine Plan
	 	 	 
	Schedule C	-	Annual Mine Plan for the period from the Commencement Date of Commercial
      Production until December 31, 2004 
	 	 	 
	Schedule D	-	Form of Basic Royalty Report under Subsection 2.6(1) of the Agreement
    
	 	 	 
	Schedule E	-	Payout Notice under Subsection 2.6(2) of the Agreement 
	 	 	 
	Schedule F	-	Form of Option Period Notice 
	 	 	 
	Schedule G	-	Form of Interim Royalty Payment Report under Subsection 2.6(3) of this
      Agreement 
	 	 	 
	Schedule H	-	Form of Reconciled Royalty Report under Subsection 2.6(5) of this Agreement
	 	 	 
	Schedule I	-	Description of Mineral Tenures 
	 	 	 
	Schedule J	-	Permitted Encumbrances 
	 	 	 
	Schedule K	-	 Valmin guidelines of CIM
	 	 	 
	Schedule L	-	 Definition and Calculation of NPI 

	 2      	 ROYALTY
	 
	 2.1      	 Confirmation of Grant of Royalty 

 Except as otherwise permitted hereunder, Resource Company
  hereby grants to RLP an undivided proportionate interest in and right to the
  minerals derived from any Mine and any Production therefrom to the extent of
  the Royalty payable hereunder. The Royalty shall be calculated and 

 - 10 -

 paid as provided herein. For the avoidance of doubt, RLP’s
  entitlement to the Royalty shall commence on the Effective Date, but the Production
  Results shall only begin to accumulate from the Commencement Date of Commercial
  Production.

	2.2 	Purchase Price, Interest and Entitlement 

 The parties confirm that the Purchase Price for the Royalty
  is $67,357,000 and that the Purchase Price shall bear interest, from the
  Effective Date until the Purchase Price Payment Date at the rate of twelve per
  cent (12%) per annum (the “Purchase Price Interest”). The Purchase
  Price, together with the Purchase Price Interest, shall be paid by RLP on the
  Purchase Price Payment Date. 

	 2.3      	 Royalty 
	 
	 1.      	 Basic Royalty - Subject to the
        application of Subsections 2.3(2), Resource Company shall pay to RLP for
        each Royalty Period an amount (the “Basic Royalty”) which
        shall be computed as follows: 

	 
	 	 Basic Royalty = A x B 

	 
	 	 where 

	 
	 	 A.      	 is the Basic Royalty Rate in effect for such Royalty
        Period; and 

	 
	 	 B.      	 is Production Results for such Royalty Period; 

	 
	 	 NPI - In addition to the Basic
        Royalty, Resource Company shall pay annually the percentage of Net Profits
        as set forth in Schedule L hereof in the manner set out in this
        Agreement commencing on January 1, 2011 up to and including December 31,
        2014. 

	 
	 2.      	 Where in any Royalty Period, there is
        a Closure or Shutdown of the Mine, the Basic Royalty Rate for the next
        subsequent Royalty Period will be increased for all purposes of this Agreement
        by an amount (the “Adjustment Amount”) which shall be computed
        as follows: 

	 
	 	 Adjustment Amount = A x (B / C) 

	 
	 	 where 
	 
	 	 A.      	 is the applicable Basic Royalty Rate in effect for
        the Royalty Period in which the Closure or Shutdown took place; 

	 
	 	 B.      	 is the actual number of days in the calendar year
        of the applicable Royalty Period where the Closure or Shutdown of the
        Mine occurred, and for the purposes of this calculation includes all days
        used in determining whether a Closure of Shutdown has occurred, and 

	 
	 	 C.      	 is the number of calendar days in that year. 

	 

 - 11 -

	 	 Such adjustment is to be made on the first day of the subsequent Royalty
      Period. 
	 
	 3.      	 The Basic Royalty shall continue to be paid until terminated in accordance
      with Section 2.4. 
	 	 
	2.4	Termination 

  The Basic Royalty shall terminate on the later of: 

	 	 (a)      	 the date which is five years after the last Production from any Mine
      situate on the Mineral Tenures; and 
	 
	 	 (b)      	 December 31, 2014. 
	 	 	 
	2.5 	Taxes 

 Resource Company shall be responsible for payment of all Government
  Levies on Production (including Production subject to the Royalty) and no deduction
  shall be made from the Basic Royalty Payments or the NPI on account of such
  Government Levies. Resource Company shall not be liable for any income tax imposed
  on the Partners of RLP with respect to the receipt by RLP of the Royalty Payments
  or any transaction in respect of the Royalty. Subject to section 6.3, Resource
  Company shall, at its own expense, provide to RLP such information as may be
  reasonably necessary from time to time, on a timely basis, in respect of the
  Royalty in connection with the filing of income tax returns or the preparation
  of financial statements or information returns under the Tax Act or under similar
  provincial legislation. 

	 2.6      	 Calculation of Royalty 
	 
	 1.      	 On each Royalty Calculation Date, Resource Company
        shall estimate the Basic Royalty relating to the immediately preceding
        calendar month and shall provide a report in the form of Schedule D
        (the “Basic Royalty Report”) to RLP. For greater certainty,
        no amount shall be due and owing by Resource Company on a Royalty Calculation
        Date (other than where a Royalty Calculation Date falls on a Royalty Payment
        Date) and the only purpose of completing the calculation contemplated
        by this Subsection 2.6(1) is to advise RLP of the Basic Royalty which
        it has earned in the previous calendar month. 

	 
	 2.      	 On or before the Payout Amount Calculation Date
        in each calendar year, RLP shall provide a notice, in the form of Schedule
        E (the “Payout Notice”), to Resource Company, Optionee
        and to RMRF of the Payout Amount for that year. In the event that the
        Payout Amount as set forth in the Payout Notice is less than 72% of the
        Purchase Price, RMRF may (but shall not be obligated to) deliver to Resource
        Company and Optionee a written notice (the “Option Period Notice”)
        within five (5) days of the Payout Amount Calculation Date in the form
        set out in Schedule F. In the event that the Payout Amount as set
        forth in the Payout Notice is less than 15% of the Purchase Price, RLP
        must indicate on the Payout Notice that Optionee has the right to exercise
        its Call Option in accordance with the Call Option Agreement. 

	 

 - 12 -

	 3.      	 Provided that RLP has delivered the Payout Notice
        that corresponds to the applicable Royalty Period to Resource Company
        and to Optionee, Resource Company shall forward a report in the form of
        Schedule G (the “Interim Basic Royalty Report”) to
        RLP on or before February 1st of each year setting out the amount and
        the calculations with respect to the Basic Royalty relating to the immediately
        preceding Royalty Period and NPI owing, if any, for such corresponding
        period. On each Royalty Payment Date, Resource Company shall make a payment
        of the Basic Royalty as set forth in the Interim Basic Royalty Report
        to RLP (the “Interim Basic Royalty Payment”) and a payment
        of NPI owing for such corresponding period in the manner described in
        Section 2.11. Such statement shall be certified by Resource Company's
        Chief Financial Officer as having been prepared, and the calculations
        therein made, in accordance with the terms of this Agreement and shall
        set out in reasonable detail the basic of such calculation. All such payments
        shall be subject to verification by audit, and adjustment if applicable,
        pursuant to this Section 2.5. For greater certainty, Resource Company
        shall have no obligation to make the Interim Basic Royalty Payment until
        and unless RLP has delivered a copy of the applicable Payout Notice. 

	 
	 4.      	 In the event that the Optionee exercises the Call
        Option on or after October 1, 2014, Resource Company shall make an Interim
        Basic Royalty Payment on or before the Call Completion Date (as defined
        in the Call Option Agreement) to RLP in respect of the Basic Royalty to
        which RLP is entitled for the portion of the Royalty Period ending on
        the date that the Call Option is exercised. For the purposes of this Subsection,
        the Interim Basic Royalty Report for this Interim Basic Royalty Payment
        shall be delivered on or before December 1, 2014. 

	 
	 5.      	 Not later than 140 days after each Royalty Period,
        Resource Company will forward to RLP a statement in the form of Schedule
        H, (the “Reconciled Basic Royalty Report”) from Resource
        Company's Chief Financial Officer based on Resource Company’s most
        recently completed financial statements setting out the calculation of
        the Basic Royalty for that Royalty Period as well as the Production Results
        for that Royalty Period. Such statement shall set out in reasonable detail
        the basis of the calculation of the Basic Royalty and reconciliation with
        the Interim Basic Royalty Payments paid in accordance with Subsection
        2.6(3). Such statement shall be certified by Resource Company's Chief
        Financial Officer as having been prepared, and the calculations therein
        made, in accordance with the terms of this Agreement. 

	 
	 6.      	 If a Reconciled Basic Royalty Report discloses any
        discrepancy between the Basic Royalty calculated therein for the Royalty
        Period and the Interim Basic Royalty Payment paid in respect of such Royalty
        Period (the “Royalty Period Discrepancy”), Resource Company
        shall pay on a day (the “Final Basic Royalty Payment Date”)
        no later than 150 days after each Royalty Period to RLP the amount of
        any such discrepancy which is in RLP's favour (the “Final Basic
        Royalty Payment”) in respect of the Royalty Period. 

	 
	 	 Resource Company shall concurrently pay to RLP interest
        on the discrepancy calculated from the date such payment should have been
        made to RLP as part of an Interim Basic Royalty Payment to the date of
        payment. The rate of interest shall be 6% per annum. 

	 

 - 13 -

	 7.      	 If the Royalty Period Discrepancy for a Royalty
        Period is in Resource Company's favour, Resource Company shall be entitled
        to reduce the following Interim Royalty Payment by the amount of the discrepancy,
        without any interest adjustment. 

	 
	 2.7      	 Royalty Records and Audits 

	 
	 1.      	 Resource Company will at all times maintain complete
        and accurate books, records and accounts in accordance with generally
        accepted accounting principles and consistent with good management accounting
        practice relating to operations at any Mine, the Production Results and
        the calculation and payment of the Royalty (collectively the “Royalty
        Records”). RLP or its authorized representative may from time to
        time, upon reasonable notice to Resource Company and during business hours,
        inspect, review and copy any of the Royalty Records and supporting materials.
        RLP may, at its expense, appoint an auditor to review and audit the Royalty
        Records to verify the calculation of the Royalty or any other matter relating
        to its interests as holder of the Royalty. Resource Company shall fully
        cooperate with any such review or audit and shall provide such auditor
        full access to all of the Royalty Records and all applicable records.
      

	 
	 2.      	 If any such audit determines that an amount which
        is the subject of the audit and which should have been paid by Resource
        Company to RLP pursuant to this Agreement in respect of the period under
        audit exceeds the amount actually paid prior to such audit in respect
        of such period, RLP shall so notify Resource Company and if the difference
        has not been resolved to their mutual satisfaction within 30 days after
        such notice, RLP or Resource Company may refer the matter to arbitration
        pursuant to Section 6.3 hereof. 

	 
	 3.      	 If the arbitrator determines that the Basic Royalty
        Payment or the NPI which should have been paid hereunder exceeded the
        Basic Royalty Payment or the NPI actually paid, Resource Company shall
        immediately pay the amount of such discrepancy to RLP, together with interest
        on such discrepancy from the date such amount should have been paid to
        the date of payment, at the rate of six percent (6%) per annum plus an
        amount equal to 10% of the discrepancy. In addition, if the discrepancy
        exceeds the Basic Royalty Payment or the NPI actually paid, Resource Company
        shall also reimburse RLP for the costs of such audit within 30 days of
        the determination of the discrepancy by the auditor. Any amount paid on
        account of a Basic Royalty pursuant to this Subsection 2.7(3) shall be
        deemed to be a Final Basic Royalty Payment for the purposes of this Agreement.
      

	 
	 2.8      	 Annual Mine Plan and Reserve and Resource
        Reports 

	 
	 1.      	 Prior to December 15 of each calendar year, Resource
        Company shall prepare and provide to RLP an Annual Mine Plan. 

	 
	 2.      	 In addition, Resource Company shall provide to RLP,
        if and as available, an updated report on the Ore reserves and resources
        as defined in Canadian Institute of Mining and Metallurgy Standards as
        adopted in National Instrument 43-101 and other mineralization relating
        to the Mines and Mineral Tenures as at the end of each Royalty Period,
        if applicable, prepared by management of Resource Company. Such report
        shall set out 

	 

 - 14 -

	 	management's reasonable estimate of such Ore reserves
        and other mineralization made in accordance with good industry practice
        and a reconciliation and explanation of the reserve estimates and other
        mineralization contained in such report with those reported as at the
        end of the previous Royalty Period.

	 	 
	2.9 	 Confidential Information 

 All information furnished to or obtained by RLP pursuant to
  this Agreement concerning Resource Company, including information to be provided
  to RLP under Sections 2.6, 2.7 and 2.8 shall, subject to any law or legal proceeding
  requiring disclosure, be held in confidence and shall not be photocopied or
  provided to any other person by RLP, unless and until it has been publicly disclosed
  or is otherwise in the public domain at the time of such disclosure or use (otherwise
  than as a result of a breach of this provision by RLP); provided, however
  that RLP shall not in any way be restricted in the use of such information in
  order to enforce compliance with the terms and conditions of this Agreement
  or to protect or preserve its rights hereunder or the rights of any of the Partners
  and may provide information to its consultants, agents and advisors on a need-to-know
  basis provided that such information is kept confidential. 

	2.10 	Limitation of Obligations

 For greater certainty, this Agreement does not constitute
  a loan by RLP to Resource Company and nothing in this Agreement shall be construed
  as creating a liability on Resource Company to repay the Purchase Price of the
  Royalty paid by RLP pursuant to Section 2.2. The only payment obligation that
  Resource Company has is to pay the Royalty contemplated by this Article 2.

	2.11 	Payment and Notices

 All payments to be made to RLP and all documents to be delivered
  to RLP shall be made or delivered to the General Partner of RLP or as the General
  Partner of RLP shall otherwise direct.

	2.12 	Security

 Resource Company agrees to provide security for its obligations to pay the
  Basic Royalty in a form satisfactory to the parties.

	 3      	 PUT OPTION FOR UNITS OF RLP
	 
	 3.1      	 Put Option
	 
	 1.      	 Resource Company hereby grants to RMRF the right
        (the “Put Option”) to require Resource Company to purchase
        all, but not less than all, of RLP’s limited partnership units owned
        by RMRF in accordance with the terms and conditions contained herein.

	 
	 2.      	 The Put Option may be exercised by RMRF by providing
        written notice to Resource Company of its intention to exercise the Put
        Option on or after the earlier of November 1, 2014 or the occurrence of
        any of the following events (provided that Optionee has not previously
        exercised its Call Option pursuant to, and in compliance with, the Call
        Option Agreement):

	 

 - 15 -

	 	 a)      	 15 days have elapsed from the date that RMRF delivered an Option Period
      Notice to Resource Company and to Optionee; or 
	 
	 	 b)      	 Resource Company commits an Event of Default. 
	 
	 3.      	 Any written notice of the exercise by
        RMRF of the Put Option (the “Put Notice”) shall state the
        Business Day on which RMRF will complete the purchase (the “Put
        Completion Date”). Subject to Subsection 3.1(4), the Put Completion
        Date shall be not less than 10 days and not more than 30 days following
        the date of the Put Notice. 

	 
	 4.      	 In the event that RMRF exercises the Put
        Option in accordance with Clause 3.1(2)(a), it may only do so during the
        10-day period immediately following the period described in Clause 3.1(2)(a).
        In the event that RMRF exercises the Put Option after November 1, 2014,
        the Put Completion Date shall be December 10, 2014. 

	 
	 5.      	 The purchase price in respect of the Put
        Option (the “Put Purchase Price”) will be equal to the Fair
        Market Value of the limited partnership units of RLP on the last day of
        the month prior to the month in which the Put Completion Date occurs.
        Resource Company shall purchase the interest of RMRF in RLP on the Put
        Completion Date by paying to RMRF the Put Purchase Price. 

	 
	 6.      	 In the event that the Put Option is exercised
        on or after November 1, 2014, Resource Company shall make an Interim Basic
        Royalty Payment to RLP in respect of the Basic Royalty to which RLP is
        entitled for the portion of Royalty Period ending on the date of the Put
        Notice and shall pay directly to RMRF any Final Basic Royalty Payment
        in respect of such Royalty Period for the purposes of this Section, the
        Interim Basic Royalty Report for this Interim Basic Royalty Payment shall
        be delivered on or before December 1, 2014. For greater certainty, RMRF
        will have all the rights and obligations to question subsequently and
        challenge the amount of such Royalty Payment that RLP would have had had
        Resource Company not purchased RMRF’s interest in RLP and to be
        paid (or to refund) any amount by which the Basic Royalty for such Royalty
        Period ultimately determined exceeds (or is less than) the Royalty Payment
        for such Royalty Period. 

	 
	 	 Notwithstanding the completion of the
        Put Option, Resource Company shall also provide the Reconciled Basic Royalty
        Report as required by Subsection 2.6(5) hereof for such Basic Royalty
        Payment and in the event that the Reconciled Basic Royalty Report discloses
        any Royalty Period Discrepancy, the Put Purchase Price shall be increased
        by such amount which shall be paid in accordance with Subsection 2.6(6)
        hereof. 

	 
	 7.      	 For greater certainty, it is understood
        that Resource Company is not purchasing, or paying for, and RMRF is not
        selling, or receiving, any amount in respect of RLP’s interest in
        the NPI and that RLP has the right to distribute to RMRF the NPI prior
        to the Put Completion Date. 

	 
	 3.2      	 Valuation Report and Fair Market
        Value 

	 
	 1.      	 For the purposes of Subsection 3.1(5),
        Fair Market Value shall mean the value determined by RMRF and Resource
        Company to be the highest price available in an open and unrestricted
        market between informed, prudent arm's length parties under no 

	 

 - 16 -

	 	 compulsion to act having regard for the fact that
        Resource Company is not buying, and RLP is not selling, RLP’s interest
        in the NPI. 

	 
	 2.      	 In the event that RMRF and Resource Company are
        not able to agree as to the Fair Market Value of RMRF’s limited
        partnership units in RLP, the parties shall procure a valuation report
        (the “Valuation Report”) by the Put Completion Date. Each
        of RMRF and Resource Company shall pay one-half of the cost of the Valuation
        Report. 

	 
	 3.      	 The Valuation Report shall be prepared by the Consultant
        in accordance with the Valmin guidelines of CIM (a copy of which is attached
        hereto as Schedule K), whose experience and reputation in the Canadian
        mining industry generally and in particular whose experience in the valuation
        of properties and royalties the parties hereto expressly recognize. The
        Valuation Report shall indicate that it is based on information as of
        a date not more than 30 days prior to the date on which the Valuation
        Report is delivered to RLP in accordance with Sections 3.1 and 3.2. Resource
        Company shall make available to the Consultant all information within
        its possession or control which the Consultant considers relevant in preparing
        the Valuation Report. The Valuation Report shall set out any material
        assumptions on which the Consultant is relying and shall contain the Consultant's
        confirmation that in its view all such assumptions are reasonable in the
        circumstances in determining the Fair Market Value of RMRF’s limited
        partnership interest in RLP, and similar to the methodology used in evaluating
        the Basic Royalty as at the date hereof. The Valuation Report shall set
        out a dollar amount which in the Consultant's opinion is the Fair Market
        Value of RMRF’s limited partnership interest in RLP as at the date
        of the Put Notice, which amount shall be deemed to be the Fair Market
        Value. 

	 	 
	3.3 	 Payment and Notices 

 All payments to be made to RMRF and all documents to be delivered
  to RMRF shall be made or delivered to the General Partner of RMRF or as the
  General Partner of RMRF shall otherwise direct.

	3.4 	Security 

 Resource Company agrees to provide security for its obligations to pay the
  Put Purchase Price, as applicable, in a form satisfactory to the parties.

	4 	REPRESENTATIONS, WARRANTIES, COVENANTS AND EVENTS OF DEFAULT OF
      RESOURCE COMPANY  
	 	 
	4.1 	Representations and Warranties 

Resource Company represents and warrants to RLP and RMRF that:

	 	 	 (a)      	 Resource Company is a corporation duly incorporated
        and validly existing under the laws of British Columbia and is duly qualified
        and holds all necessary licenses, permits and authorizations to carry
        on business in all 

	 

 - 17 -

	 	 	 	 jurisdictions where it currently carries on business,
        including the business of owning and operating any Mines on the Mineral
        Tenure; 

	 
	 	 	 (b)      	 this Agreement has been duly authorized, executed
        and delivered by Resource Company, no approval or authorization by its
        shareholders is required in connection therewith and this Agreement is
        a legally binding obligation of Resource Company enforceable against it
        in accordance with its terms, subject to bankruptcy, insolvency, and other
        laws generally affecting the enforceability of creditors rights and subject
        to equitable remedies such as injunction and specific performance being
        available only in the discretion of the court; 

	 
	 	 	 (c)      	 the execution, delivery and performance by Resource
        Company of this Agreement does not: (i) contravene Resource Company's
        articles or by- laws or any resolution of the board of directors or shareholders
        of Resource Company; (ii) violate any provision of any law, regulation,
        ordinance, rule, order, writ, judgement, injunction decree, determination
        or award applicable to Resource Company or any of its property; (iii)
        result in a breach of or constitute a default under or require the consent
        of or notice to any third party pursuant to any indenture, agreement,
        lease or instrument to which Resource Company is a party or by which it
        is bound (except for any required consents or notices which Resource Company
        has given or obtained); or (iv) result in, or require, the creation or
        imposition of any mortgage, pledge, lien, security interest or other charge
        or encumbrance of any nature upon or with respect to any of Resource Company's
        property except as contemplated by this Agreement; 

	 
	 	 	 (d)      	 no authorization, consent, approval or other action
        by, and no notice to or filing with, any Governmental Authority is required
        for the due execution, delivery and performance of this Agreement by Resource
        Company; 

	 
	 	 	 (e)      	 Resource Company is the sole recorded and beneficial
        holder of the Assets; the Assets are not subject to any mortgage, pledge,
        lien, security interest or other charge or encumbrance other than those
        Permitted Encumbrances appearing in Schedule J hereof and except
        for the Royalty hereby granted as contemplated by this Agreement; 

	 
	 	 	 (f)      	 the Mine, the Mill and all operations thereat comply
        in all material respects with all applicable laws, ordinances, rules,
        regulations, orders, directions and policies of all Governmental Authorities
        having jurisdiction including all applicable laws, ordinances, rules,
        regulations, orders, directions and policies relating to environmental,
        reclamation and workplace health and safety matters; 

	 
	 	 	 (g)      	 Resource Company holds all material agreements,
        permits, licenses and authorizations which are necessary to own and operate
        the Mine and the Mill, all of which are in good standing and it is not
        in breach of any of the 

	 

 - 18 -

	 	 	 	 material provisions, terms or conditions thereof
        and is not aware of any fact, circumstance or event which could result
        in any such material agreement, permit, license or authorization being
        revoked or cancelled or not renewed upon substantially the same terms
        upon expiry; 

	 
	 	 	 (h)      	 there is no adverse claim or challenge against or
        to the ownership of or title to the Assets nor is there any basis therefor
        and there are no outstanding agreements, options or other rights to acquire
        or purchase any Assets or any interest therein; and except for the Royalty,
        no person other than Resource Company has any royalty or other interest
        whatsoever in the minerals or Production therefrom except as set out in
        the list of Permitted Encumbrances attached hereto as Schedule J;
      

	 
	 	 	 (i)      	 there is no pending or, to the knowledge of Resource
        Company, threatened action or proceeding affecting Resource Company or
        any of the Assets or any interest therein, before any court, government
        agency or arbitrator which may have a materially adverse effect on the
        Assets or the financial condition or operations of Resource Company generally;
        and 

	 
	 	 	 (j)      	 Resource Company has remitted to all appropriate
        Governmental Authorities having jurisdiction all payments which if not
        paid when due could result in the creation of a lien, encumbrances, deemed
        trust or any other claim against any of its properties. 

 The foregoing representations and warranties shall survive and continue for
  the benefit of RLP, RMRF and the limited partners of RMRF throughout the term
  of this Agreement.

	4.2 	General Covenants 

	1.  	     Resource Company covenants with
      RLP and RMRF that so long as the Resource Company is required to make payment
      on account of the Royalty it will: 
	 
	 	 	(a) 	 do or cause to be done all things necessary to preserve
        and maintain in full force and effect its corporate existence and rights
        in its jurisdiction of incorporation, and in each other jurisdiction in
        which such qualification is necessary or desirable in view of its business
        and operations or ownership of property; 

	 
	 	 	(b) 	 furnish or cause to be furnished to RLP or RMRF,
        as the case may be, such information relating to the Assets, the calculation
        of the Royalty, Production Results and the operation of the Mine and the
        Mill as RLP or RMRF may reasonably require; 

	 
	 	 	(c) 	 punctually pay the Royalty to RLP or RMRF, as the
        case may be, when due; 

	 
	 	 	(d) 	 operate, or cause the operation of the Mine and
        the Mill in all material respects in accordance with good mining practice
        (provided that the 

	 

 - 19 -

	 	 	 	 foregoing shall not require the Resource Company
        to operate the Mine or the Mill in the event it would not be economical
        to do so), sell all Production upon the extraction and milling thereof
        and maintain all necessary permits as required under applicable mining
        legislation to operate the Mine; 

	 
	 	 	 (e)      	 comply in all material respects with all applicable
        laws, ordinances, regulations, rules, orders and policies, including Environmental
        Laws, ensure that there will not be any release, discharge or emission
        of any Environmentally Regulated Material from or on the Mineral Tenures
        in violation or which may reasonably be anticipated to result in the violation
        of any applicable Environmental Laws or which poses a threat or nuisance
        to safety, health or the environment, and provide a certificate from an
        officer of Resource Company that there are no environmental liabilities;
      

	 
	 	 	 (f)      	 carry, with respect to the Assets and all operations
        and activities at the Mine and the Mill, such public liability and property
        damage insurance with responsible and reputable insurance companies and
        in such amounts and against all such hazards as are customarily insured
        against by prudent owners and operators in the mining industry (other
        than those who self insure) in owning and/or operating similar properties
        and to use the proceeds of such insurance to repair or replace any damage
        insured against; 

	 
	 	 	 (g)      	 maintain and preserve the Assets in good working
        order and condition, ordinary wear and tear excepted; 

	 
	 	 	 (h)      	 pay or discharge or cause to be paid or discharged,
        before the same shall become delinquent, (i) all taxes, assessments, Government
        Levies or governmental charges imposed upon it or upon its income, profits
        or property, and (ii) all lawful claims for labour, materials and supplies
        which, if unpaid, might by law become a lien upon its property; provided,
        however that Resource Company shall not be required to pay or discharge
        or cause to be paid or discharged any such tax, assessment, charge or
        claim whose amount, applicability or validity is being contested in good
        faith by appropriate proceedings if Resource Company shall have set aside
        on its books adequate reserves with respect thereto in accordance with
        generally accepted accounting principles; 

	 
	 	 	 (i)      	 promptly and duly execute and deliver to RLP or
        RMRF, as the case may be, such documents and assurances and take such
        further action as RLP or RMRF may from time to time reasonably request
        in order to carry out more effectively the intent and purpose of this
        Agreement and the documents delivered pursuant hereto and to establish
        and protect the rights and remedies created or intended to be created
        in favour of RLP or RMRF; and 

	 

 - 20 -

	 	 	 (j)      	 promptly and diligently perform and carry out all of the acts or things
      to be done by it as provided in this Agreement. 
	 
	2. 	Resource Company shall, as necessary, comply with
      all applicable securities regulatory requirements in connection with the
      issue of the Royalty hereunder. 
	 	 
	4.3 	 Negative Covenants 

 Resource Company covenants with RLP and RMRF that so long
  as Resource Company is required to make payments on account of the Royalty,
  Resource Company will not: (a) create or permit, or allow to be created, a security
  interest, pledge, lien or other encumbrance in the promissory note to be issued
  by Alberta Trust on December 15, 2004 (“Alberta Trust Note”), unless
  otherwise contemplated in the pledge, priorities and direction agreement to
  be entered into as of the date hereof by Alberta Trust and the parties hereto
  or (b) sell or dispose of its Mineral Tenures, or any interest in such property,
  except as follows: (i) Resource Company may sell interests in any Mine or Mineral
  Tenures or to any purchaser provided that the purchaser assumes the obligations
  of Resource Company hereunder and under all documents related to the transactions
  contemplated hereby in proportion to the interest being purchased; (ii) Resource
  Company may enter into an operating agreement, joint ventures, earn-ins or similar
  arrangements with third parties in respect of any Mine or Mineral Tenures, provided
  that, except with respect to the joint venture agreement dated September 28,
  2004 among Resource Company, Taseko Mines Limited and Ledcor Mining Ltd. and
  the services agreement dated October 31, 2001 among Resource Company, Taseko
  Mines Limited and Procorp Services Limited Partnership, the third party acknowledges
  in a notice to RLP and RMRF that its interest is subordinate to the Royalty;
  and (iii) Resource Company may, with the prior written consent of RLP (the consent
  of RLP is not required with respect to an operating credit facility or a credit
  facility for long term debts related to capital expenditures), which shall not
  be unreasonably withheld, grant any further security on any Mine or Mineral
  Tenures or any part thereof ranking in priority to the Royalty for the purposes
  of obtaining, securing and maintaining any financing which, in the opinion of
  Resource Company acting reasonably, may be necessary to commence, to continue
  or to increase Production or to prevent any defaults under this Agreement, and
  RLP and RMRF hereby expressly agrees to subordinate the Royalty and the security
  to any security granted for such financing; provided that Resource Company shall
  not grant any security on the Alberta Trust Note or the proceeds thereof.

	4.4 	Event of Default 

Each of the following events constitute an Event of Default under this Agreement:

	 	 	 (a)      	 Resource Company fails to make a Basic Royalty payment
        for any reason, other than as a result of an Alberta Trust Default, or
        fails to make an NPI payment when such payments becomes due and such failure
        remains unremedied for a period of 10 Business Days, unless such Alberta
        Trust Default was caused by an action or inaction of the Resource Company;
      

	 

 - 21 -

	 	 	 (b)      	 Resource Company is unable to, or admits in writing
        its inability to, pay its debts generally as they become due, after a
        30 day notice period is provided to Resource Company; 

	 
	 	 	 (c)      	 Resource Company ceases to carry on business for
        three consecutive years following the Commencement Date of Commercial
        Production due to an inability to comply with industry standards or as
        a result of the cancellation or suspension of any mine permits; 

	 
	 	 	 (d)      	 Resource Company makes a general assignment for
        the benefit of creditors; or any proceeding or filing is instituted or
        made by Resource Company seeking relief on its behalf as debtor, or to
        adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up,
        reorganization, arrangement, adjustment or composition of it or its debts
        under any Insolvency Legislation or seeking appointment of a receiver,
        trustee, liquidator, custodian or other similar official for it or for
        any of the Assets; or if Resource Company takes any corporate action to
        authorize any of the actions set forth in this paragraph; 

	 
	 	 	 (e)      	 any proceeding or filing is instituted or made against
        Resource Company seeking to have an order for relief entered against it
        as debtor or to adjudicate it a bankrupt or insolvent, or seeking liquidation,
        winding-up, reorganization, arrangement, adjustment or composition of
        it or its debts under any Insolvency Legislation, or seeking appointment
        of a receiver, trustee, custodian or other similar official for it or
        any of the Assets, unless the same is being contested actively and diligently
        in good faith by appropriate and timely proceedings and is dismissed,
        vacated or permanently stayed within 30 days of institution; 

	 
	 	 	 (f)      	 a receiver, liquidator, trustee, or other person
        or officer with like powers shall be appointed either by private appointment
        or by order of a court of competent jurisdiction with respect to, or an
        encumbrancer shall take possession of, all or any portion of any of the
        Assets of the Resource Company; 

	 
	 	 	 (g)      	 any execution, sequestration or similar process
        of any court shall become enforceable against Resource Company, or if
        a distress or any analogous process shall be levied against any of the
        Assets; and the aggregate amount claimed pursuant to all such executions
        or other processes which are not being actively and diligently contested
        in good faith or in which the creditors are not being effectively restrained
        from enforcing such executions or other processes exceeds $250,000;
        or 

	 
	 	 	 (h)      	 any event occurs which would require Resource Company
        to give the notice contemplated by Section 4.5 (whether or not such notice
        is given) 

	 

 - 22 -

	4.5 	Notice of Insolvency Proceedings 

 If Resource Company intends to take the benefit of any Insolvency
  Legislation, including without limitation making an assignment for the general
  benefit of creditors, making a proposal or filing a notice of intention to make
  a proposal under the Bankruptcy and Insolvency Act (Canada) or bringing
  proceedings under the Companies Creditors Arrangement Act (Canada), Resource
  Company covenants and agrees to provide RLP and RMRF with ten Business Days'
  prior written notice before any of the aforementioned proceedings are commenced.
  As soon as possible prior to the commencement of any such proceedings, Resource
  Company shall provide to RLP and RMRF copies of all relevant filing materials,
  including, without limitation, copies of draft court orders, plans of compromise,
  proposals and notices of intention. During this notice period RLP and RMRF may,
  in their sole discretion, elect to exercise any and all rights and remedies
  as set out in this Agreement in addition to any other rights or remedies it
  may have hereunder.

	4.6 	Indemnification 

The Resource Company indemnifies and holds harmless RLP, the
  General Partner of RLP, RMRF and the General Partner of the RMRF (the “Indemnified
  Parties”) from and against all actions, liabilities, claims losses, fines,
  penalties and expenses (“Claims”) incurred by any Indemnified Party
  relating to a breach or default by Resource Company under this Agreement.

	5 	REPRESENTATIONS AND COVENANTS OF RLP, RMRF AND GENERAL PARTNERS
      OF RLP AND RMRF  
	 	 
	5.1 	Representations of RLP and General Partner of RLP 

RLP and General Partner of RLP hereby represent and warrant
  to Resource Company that: 

	 	 	 (a)      	 RLP has been established under the laws
        of the Province of British Columbia and is duly qualified to carry on
        its business and to own the Royalty and the General Partner of RLP has
        been incorporated pursuant to the laws of the Province of British Columbia
        and has full corporate right, power and authority to enter into this agreement
        and perform its obligations as General Partner of RLP; 

	 
	 	 	 (b)      	 the execution, delivery and performance
        by RLP of this Agreement does not: 

	 
	 	 	 	 (i)      	 contravene the RLP Limited Partnership Agreement;
        or 

	 
	 	 	 	 (ii)      	 violate any provision of any law, regulation, ordinance,
        rule, order, writ, judgement, injunction decree, determination or award
        applicable to RLP or any of its property; 

	 
	 	 	 (c)      	 no authorization, consent, approval or
        other action by, and no notice to or filing with, any Governmental Authority
        is required for the due execution, delivery and performance of this Agreement
        by RLP; 

	 

 - 23 -

	 	 	 (d)      	 this Agreement has been duly executed and delivered
        by RLP and constitutes a legally binding obligation of RLP enforceable
        against it in accordance with its terms, subject to bankruptcy, insolvency
        and other laws generally affecting the enforceability of creditors rights
        (other than those pertaining to fraudulent assignments and preferences)
        and subject to equitable remedies such as injunction and specific performance
        being available only in the discretion of the court; 

	 
	 	 	 (e)      	 RMRF is the sole limited partner of RLP and no other
        limited partners will be admitted without the prior written consent of
        Resource Company, such consent not to be unreasonably withheld; and 

	 
	 	 	 (f)      	 each of the General Partner of RLP and RMRF, is
        a resident of Canada for purposes of the Tax Act. 

 The foregoing representations and warranties shall survive and continue for
  the benefit of Resource Company throughout the term of this Agreement.

	5.2 	Covenants of RLP and General Partner of RLP 

RLP and the General Partner of RLP each covenants with Resource Company that: 

	 	 	 (a)      	 so long as the Royalty remains outstanding it will
        promptly and duly execute and deliver to Resource Company, at the request
        and expense of Resource Company, such documents and take such further
        action as Resource Company may from time to time reasonably request in
        order to carry out more effectively the intent and purpose of this Agreement
        and the documents delivered pursuant hereto; and 

	 
	 	 	 (b)      	 in the event that RMRF exercises its Put Option
        pursuant to Subsection 3.1(1) hereof, RLP shall pay or discharge, prior
        to the Put Completion Date, all liabilities, provided however that RLP
        shall not be required to pay or discharge any such liability so long as
        its validity or quantum is contested in good faith by appropriate proceedings,
        and a reserve has been established in its books and records in accordance
        with generally accepted accounting principles in an amount satisfactory
        to the Resource Company in its sole discretion, acting reasonably. 

	 	 	 	 
	5.3 	 Representations of RMRF and General
      Partner of RMRF 

RMRF and General Partner of RMRF hereby represent and warrant to Resource Company that: 

	 	 	 (a)      	 RMRF has been established under the laws of Alberta
        and is duly qualified to carry on its business and to own the limited
        partnership units of RLP and General Partner of RMRF has been incorporated
        pursuant to the laws of the Province of Alberta and has full corporate
        right, power and authority to enter into this agreement and perform its
        obligation as General Partner of RMRF; 

	 

 - 24 -

	 	 	 (b)      	 the execution, delivery and performance by RMRF of this Agreement
      does not 
	 
	 	 	 	 (i)      	 contravene the RMRF Limited Partnership Agreement; 
	 
	 	 	 	 (ii)      	 violate any provision of any law, regulation, ordinance, rule, order,
      writ, judgement, injunction decree, determination or award applicable to
      RMRF or any of its property; 
	 
	 	 	 (c)      	 no authorization, consent, approval or
        other action by, and no notice to or filing with, any Governmental Authority
        is required for the due execution, delivery and performance of this Agreement
        by RMRF; 

	 
	 	 	 (d)      	 this Agreement has been duly executed
        and delivered by RMRF and constitutes a legally binding obligation of
        RMRF enforceable against it in accordance with its terms, subject to bankruptcy,
        insolvency and other laws generally affecting the enforceability of creditors
        rights (other than those pertaining to fraudulent assignments and preferences)
        and subject to equitable remedies such as injunction and specific performance
        being available only in the discretion of the court; and 

	 
	 	 	 (e)      	 each of the limited partner of RMRF and
        the General Partner of RMRF is a resident of Canada for purposes of the
        Tax Act. 

 The foregoing representations and warranties shall survive and continue for
  the benefit of Resource Company throughout the term of this Agreement.

	5.4 	Covenants of RMRF and General Partner of RMRF 

 The RMRF and the General Partner of the RMRF each covenants
  with Resource Company that so long as RMRF is holding the limited partnership
  units of RLP, it will promptly and duly execute and deliver to Resource Company,
  at the request and expense of Resource Company, such documents and take such
  further action as Resource Company may from time to time reasonably request
  in order to carry out more effectively the intent and purpose of this Agreement
  and the documents delivered pursuant hereto and it shall not create or permit,
  or allow to be created a security interest, pledge, lien or other encumbrance
  on the limited partnership units which it holds in RLP without the prior written
  consent of Resource Company.

	6 	MISCELLANEOUS
	 	 
	6.1 	Term 

 This Agreement shall continue in full force and effect until
  the later of the time at which (a) the Basic Royalty is terminated in accordance
  with Section 2.4, or (b) the NPI is no longer payable provided that at such
  time all amounts, if any, payable in respect of the Call Purchase Price (as
  defined in the Call Option Agreement) or Put Purchase Price have been paid,
  set off or otherwise satisfied and, provided that the indemnity in Section 4.6
  shall survive such termination for the benefit of RLP, Partners and former Partners.

 - 25 -

	6.2 	Notices  

 Any notice, direction or other instrument required or permitted
  to be given under this Agreement by or to any of the parties hereto shall be
  in writing and may be given by delivering or mailing same by registered mail
  or sending by facsimile or other telecommunication device or other similar form
  of communication to the following addresses: 

	 Resource Company:  	 Gibraltar Mines Ltd  	  
	  	 1020 - 800 W Pender St.  	  
	  	 Vancouver, British Columbia  	  
	  	 V6C 2V6  	  
	  	 	 
	  	 Attention:  	 President  
	  	 Fax:  	(604) 681-2741  
	  	 	 
	 With a copy to:  	 Lang Michener LLP  	  
	  	1500 Royal Centre	 
	  	 P.O. Box 11117  	  
	  	 1055 West Georgia Street  	  
	  	 Vancouver, British Columbia  	  
	  	 V6E 4N7  	  
	  	 	 
	  	 Attention:  	 Bernard J. Zinkhofer  
	  	 Fax:  	(604) 893-2395  
	  	 	 
	  	 	 
	 RLP  	 Red Mile Resources No. 2 Limited Partnership 
    	 
	  	 c/o Wilshire (GP) No. 2 Corporation  	  
	  	 Suite 920 – 1040 West Georgia Street 
    	 
	  	 Vancouver, British Columbia  	  
	  	 V6E 4H1  	  
	  	 	 
	  	 Attention:  	 Robert C. Strother  
	  	 Fax:  	 (604) 669-9485  
	  	 	 
	 And:  	 Attention:  	 Michael Simonetta  
	  	 Fax:  	 (416) 920-1947  
	  	 	 
	 With a copy to:  	 Heenan Blaikie LLP  	  
	  	 P.O. Box 185  	  
	  	 Suite 2600, 200 Bay Street,  	  
	  	 South Tower, Royal Bank Plaza  	  
	  	 Toronto, Ontario  	  
	  	 M5J 2J4  	  
	  	 	 
	  	 Attention:  	 Norman Bacal  
	  	 Fax:  	 (416) 360 8425  

 - 26 -

	 RMRF  	 Red Mile Resources Fund Limited Partnership 
    	 
	  	 c/o Red Mile Resources Inc.  	  
	  	 Suite 620 – 1001 13th Avenue S.W., 
    	  
	  	Calgary, Alberta	 
	  	 T2R 0L5  	  
	  	 	 
	  	 Attention:  	 President  
	  	 Fax:  	 (604) 669-9485  

	 	Any notice, direction or instrument aforesaid shall: 

	 	 	 (a)      	 if delivered, be deemed to have been given or made
        at the time of delivery; 

	 
	 	 	 (b)      	 if sent by facsimile or other telecommunication
        device or other similar form of communication, be deemed to have been
        given or made on the day following the Business Day on which it was sent.
      

Any party may give written notice of change of address in the
  same manner, in which event such notice or communication shall thereafter be
  given to it as above provided at such changed address.

	6.3 	Arbitration 

 In the event of any dispute between the parties as to any
  matter under this Agreement, other than the establishment of the Fair Market
  Value hereunder which shall be determined in accordance with Section 3.3 on
  the basis of the Valuation Report (which shall be conclusive and binding on
  the parties in the absence of manifest error), such dispute shall be settled
  by arbitration as hereinafter provided. Any such matter or matters may be submitted
  by either party to arbitration by a single arbitrator. Except as specifically
  provided in this Section, the arbitration shall be governed by the Commercial
  Arbitration Act, R.S.B.C. 1996, c. 55 as it may be amended from time to
  time (in this Section 6.3, the “Act”) and for that purpose the provisions
  of this Section shall be deemed to be a submission to arbitration within the
  meaning of that Act or any amendment or successor thereto. The party desiring
  arbitration shall so notify the other party and such notice shall set out the
  names of three proposed arbitrators all of whom shall be independent of the
  proposing party and experienced with matters similar to the matter in dispute.
  The other party shall within 7 days after receiving such notice select one of
  the proposed arbitrators to act as the arbitrator and shall within such 7 day
  period so notify the party proposing the arbitration. If such notice is not
  given by the other party by the end of such 7 day period then the party desiring
  arbitration may apply to a Judge of the Supreme Court of British Columbia for
  the appointment of a single arbitrator as contemplated by the Act. The arbitrator
  shall fix the time and place (which, unless the parties otherwise agree, shall
  be within the City of Vancouver and shall commence not later than 10 Business
  Days following the arbitrator's appointment) for hearing such evidence and representations
  as the parties may present and may determine any matters of procedure for the
  arbitration not specified herein. The parties shall 

 - 27 -

 present to the arbitrator and the arbitrator shall conclusively
  determine all outstanding issues between the parties with respect to the aforesaid
  matters. The arbitrator shall deliver his decision in writing to the parties
  within 30 days following the hearing of all evidence and representations. The
  decision of the arbitrator shall be final and binding on the parties and the
  parties shall, within 10 days following delivery of the arbitrator’s decision,
  give effect to that decision by implementing its terms in accordance with the
  provisions of this Agreement. The costs of the arbitration (including the remuneration
  of the arbitrator, the parties’ costs of legal and other professional
  representation in preparing for and attending at the arbitration, the costs
  of expert witnesses or Consultants, etc.) shall be borne by the parties thereto
  as may be specified in the decision.

	6.4 	Assignment and Enurement 

 This Agreement shall not be assignable by Resource Company
  without the prior written consent of RLP. RLP may not assign the Royalty except
  that, where Optionee exercises the Call Option or RMRF exercises the Put Option,
  RLP may assign its interest in the NPI to RMRF prior to the purchase by Resource
  Company from RMRF of RLP. RMRF may not assign its interest in RLP without the
  prior written consent of Resource Company. This Agreement shall enure to the
  benefit of and shall be binding upon Resource Company and its successors and
  assigns and upon RLP and the heirs, executors, successors and assigns of each
  Partner, as the case may be.

	6.5 	No Partnership 

The parties do not hereby intend to create, and this Agreement shall not be
  construed as creating, a partnership or to render parties liable as partners.

	6.6 	No Waiver 

 No failure on the part of Resource Company or RLP in exercising
  any right or remedy hereunder shall operate as a waiver thereof, nor shall any
  single or partial exercise of any such right or remedy, preclude any other or
  further exercise thereof or the exercise of any other right or remedy of law
  or in equity or otherwise. Except as otherwise expressly provided herein, no
  waiver of any provision of this Agreement, including this Section, shall be
  effective otherwise than by an instrument in writing executed by duly authorized
  representatives of the party making such waiver.

	6.7 	Further Assurances 

 The parties hereto shall, at the expense of Resource Company,
  execute and deliver such further and other assurances, deeds, acts and conveyances
  as may be necessary to properly carry out the intention of this Agreement and
  the transactions contemplated hereby.

	6.8 	Severability 

 If any provision of this Agreement is determined by a court
  of competent jurisdiction to be invalid or unenforceable in whole or in part,
  such invalidity or unenforceability shall attach only to such provision or part
  thereof and the remaining part of such provision and all other provisions hereof
  shall continue in full force and effect. 

 - 28 -

	6.9 	Amendment 

 This Agreement may only be amended by agreement in writing duly executed by
  Resource Company, RMRF and RLP.

	6.10 	Counterparts 

This Agreement may be extended in several counterparts, each of the counterparts
  shall be deemed to be an original and together shall consolidate one and the
  same thereof.

	6.11 	Time of the Essence 

Time shall be the essence of this Agreement.

 [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 - 29 -

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

	 	GIBRALTAR MINES LTD. 
	 	 
	 	 By:                                                                          
	 	By:                                                                          
	 	 
	 	 WILSHIRE (GP) NO. 2 CORPORATION, in its own
        capacity and in its capacity as general partner on behalf of all the limited
        partners of RED MILE RESOURCES NO. 2 LIMITED PARTNERSHIP 

	 	 
	 	By:                                                                          
	 	 
	 	 RED MILE RESOURCES INC., in its own capacity
        and in its capacity as general partner on behalf of all the limited partners
        of RED MILE RESOURCES FUND LIMITED PARTNERSHIP 

	 	 
	 	By:                                                                          

 - 30 -

 Schedule A

 BASIC ROYALTY RATES PER ROYALTY PERIOD

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the “Royalty Agreement”)

Unless otherwise defined in this Schedule, all capitalized terms
  used herein, shall

  have the meanings ascribed to them in the Royalty Agreement.

	 $  0.0100000  for the First Royalty Period after
      Commencement of  Commercial Production
	 $  0.0617473  for the Second Royalty Period
	 $  0.0604072  for the Third Royalty Period
	 $  0.0538028  for the Fourth Royalty Period
	 $  0.0573150  for the Fifth Royalty Period
	 $  0.0686045  for the Sixth Royalty Period
	 $  0.0800711  for the Seventh Royalty Period
	 $  0.1013504  for the Eighth Royalty Period
	 $  0.1232185  for the Ninth Royalty Period
	 $  0.1381625  for the Tenth Royalty Period
	 $  0.1397788  for the Eleventh Royalty Period
	 $  0.1397788  for the Twelfth Royalty Period

 - 31 -

 Schedule B

 FORM OF ANNUAL MINE PLAN

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership

[please provide draft]

 - 32 -

 Schedule C

 ANNUAL MINE PLAN FOR THE PERIOD FROM THE COMMENCEMENT
  DATE OF

  COMMERCIAL PRODUCTION UNTIL DECEMBER 31, 2004

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership

[please provide draft]

 - 33 -

Schedule D 

 FORM OF BASIC ROYALTY REPORT UNDER SUBSECTION 2.6(1)

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the “Royalty Agreement”)

	
Re: 
		
Basic Royalty Report 
	
	 

		
under Subsection 2.6(1) of the Royalty Agreement 
	

Unless otherwise defined in this Schedule, all capitalized terms used herein,
shall have the meanings ascribed to them in the Royalty Agreement.
 We hereby estimate that the Basic Royalty entitlement of RLP as of __[month]
  15th, 20__ the Royalty Calculation Date for the monthly period
  ending on _____________________(“Month”) is $[_________] ________________________,
  calculated as set out below:

	 Royalty Calculation Date:  	  	 
	 Month:  	  	 
	 Basic Royalty Rate in effect for the Royalty Period 
    	 (A) 	 
	 Production Results:  	 (B) 	 
	 Estimated Basic Royalty: [A x B]  	  	 

 - 34 -

 Schedule E

 FORM OF PAYOUT NOTICE UNDER SUBSECTION 2.6(2)

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the “Royalty Agreement”)

	Re: 	Payout Notice 
	 	under Subsection 2.6(2) of the Royalty Agreement 

Unless otherwise defined in this Schedule, all capitalized terms used herein,
  shall have the meanings ascribed to them in the Royalty Agreement. 

 We hereby confirm that as of December 31, 20___, the Payout Amount is $[_________]
  ________________, calculated as set out below: 

	 Payout Amount Calculation Date:  	 	 
	 Purchase Price:  	 	 
	 Payout Amount:  	 	 

	 Is Payout Amount < 72% of the Purchase Price?  	 ̈ 	 ̈ 	 
	  	 Yes*  	No	 
	 * If yes, is RMRF concurrently delivering an Option Period
      Notice?  	 	 	 
	  	 ̈ 	 ̈ 	 
	  	 Yes  	 No  	 
	  	 	 	 
	 Is Payout Amount < 15% of the Purchase Price?  	 ̈ 	 ̈ 	 
	  	 Yes**  	 No  	 

** If yes, then RLP hereby notifies Optionee that Optionee has the right to exercise
its Call Option in accordance with Subsection 2.1(3)(a) of the Call Option Agreement.

 - 35 -

 Schedule F

 FORM OF OPTION PERIOD NOTICE

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the “Royalty Agreement”)

	
Re: 
		
Option Period Notice 
	
	 

		
under Subsection 2.6(2) of the Royalty Agreement 
	

  Unless otherwise defined in this Schedule, all capitalized terms used herein,
  shall have the meanings ascribed to them in the Royalty Agreement. 

 Pursuant to the Payout Notice delivered to Resource Company,
  Optionee and RMRF in accordance with section 2.6(2) of the Royalty Agreement
  whereby RLP advised Resource Company, Optionee and RMRF that the Payout Amount
  is less than 72% of the Purchase Price, RMRF hereby provides Resource Company
  and Optionee with this notice. Optionee has the right to exercise its Call Option
  in accordance with Subsection 2.1(3)(d) of the Call Option Agreement within
  20 days of receipt of this Option Period Notice. 

 In the event that Optionee does not exercise the Call Option
  within 20 days of receipt of this Option Period Notice, RMRF shall have the
  right to exercise its Put Option under the Royalty Agreement. 

	 	 RED MILE RESOURCES INC., in its capacity as general
      partner on behalf of all of the partners of  
	 	RED MILE RESOURCES FUND LIMITED PARTNERSHIP
	 	  
	 	 By:  
	 	       Authorized Signing Officer  

 - 36 -

 Schedule G

 FORM OF INTERIM ROYALTY PAYMENT REPORT UNDER SUBSECTION
  2.6(3)

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the “Royalty Agreement”)

	
Re: 
		
Interim Royalty Payment 
	
	 

		
under Subsection 2.6(3) of the Royalty Agreement 
	

  Unless otherwise defined in this Schedule, all capitalized terms used herein,
  shall have the meanings ascribed to them in the Royalty Agreement. 

 We hereby confirm that for the Royalty Period commencing on
  _____________________and terminating on _________________________________, RLP
  is entitled to an Interim Royalty Payment of $[_________] _______________________
  calculated as set out below: 

	 Royalty Period:  	  	 
	 Basic Royalty Rate applicable to Royalty Period 
    	 (A)	 
	 Production Results for the Royalty Period: 
    	 (B) 	 
	 Interim Basic Royalty Payable to RLP: [(A x B)] 
    	 (C) 	 
	 NPI:  	 (D) 	 
	 Total Amount Owing [C + D]:  	  	 

 - 37 -

 Schedule H

 FORM OF CERTIFIED RECONCILED ROYALTY REPORT UNDER SUBSECTION
  2.6(4)

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the “Royalty Agreement”)

	
Re: 
		
Reconciled Royalty Report 
	
	 

		
under Section 2.6(4) of the Royalty Agreement 
	

Unless otherwise defined in this Schedule, all capitalized terms used herein,
shall have the meanings ascribed to them in the Royalty Agreement.
 We hereby confirm that for the Royalty Period commencing on
  __________________and terminating on ________________, RLP is entitled to a
  Final Royalty Payment of $[___________] _____________________________calculated
  as set out below in respect of the deficient Interim Royalty Payment: 

	 Royalty Period:  	  	 
	 Basic Royalty Rate applicable to Royalty Period: 
    	 (A)  	 
	 Production Resluts:  	 (B)  	 
	 Final Basic Royalty Payable for the Royalty Period:
      [A x B]  	 (C)  	 
	 Interim Basic Royalty Paid for the Royalty Period 
    	 (D)  	 
	 Unpaid Basic Royalty Payment for the Royalty Period:
      [C - D]  	 (E)  	 
	 Interest on Unpaid Basic Royalty at •
      %:  	 (F)  	 
	 NPI  	 (G)  	 
	 NPI Paid for the Royalty Period  	 (H)  	 
	 Unpaid NPI for the Royalty Period: [G – H] 
    	 (I)  	 
	 Interest on Unpaid NPI at • %: 
    	 (J)  	 
	 Final Basic Royalty and NPI Payment and Interest 
    	  	 
	 Total Amount Owing: (E + F + I + J)  	 $[•]
    	 

 - 38 -

 Schedule I

 DESCRIPTION OF MINERAL TENURES

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership

	 Gibraltar Mine - Leases and
      Claims   	              
       27-Jul-04  
	 Mineral Claims and Leases located in Cariboo Mining Division,
      British
	  	 	 	 	 
	 OWNER  	 CLAIM NAME  	 TENURE  	 UNITS  	 EXPIRY DATE  
	  	 	 	 	 
	 Fee Simple Claims 
    	  	  	  	  
	 Gibraltar  	 Lot 3728  	  	  	  
	 Number of Fee Simple titles held: 1 (comprising
      units). 
	 Leased Claims	  	  	  	  
	 Gibraltar  	 L 4143  	 207515  	 29  	 11-Oct-04  
	 Gibraltar  	 L 4142  	 207516  	 73  	 11-Oct-04  
	 Gibraltar  	 L 4147  	 207517  	 153  	 11-Oct-04  
	 Gibraltar  	 L 4148  	 207518  	 34  	 11-Oct-04  
	 Gibraltar  	 L 4149  	 207519  	 21  	 11-Oct-04  
	 Gibraltar  	 L 4150  	 207520  	 38  	 11-Oct-04  
	 Gibraltar  	 L 4146  	 306737  	 9  	 11-Oct-04  
	 Gibraltar  	 L 4136  	 207511  	 65  	 23-Oct-04  
	 Gibraltar  	 L 4138  	 207513  	 59  	 23-Oct-04  
	 Gibraltar  	 L 4139  	 207514  	 114  	 23-Oct-04  
	 Gibraltar  	 L 4137  	 207512  	 109  	 11-Jun-05  
	 Gibraltar  	 L 12991  	 352646  	 61  	 25-Jun-05  
	 Gibraltar  	 L 3596  	 207491  	 117  	 26-Jul-05  
	 Gibraltar  	 L 3597  	 207492  	 36  	 26-Jul-05  
	 Gibraltar  	 L 3598  	 207493  	 83  	 26-Jul-05  
	 Gibraltar  	 L 3599  	 207494  	 58  	 26-Jul-05  
	 Gibraltar  	 L 3600  	 207495  	 70  	 26-Jul-05  
	 Gibraltar  	 L 3601  	 207496  	 67  	 26-Jul-05  
	 Gibraltar  	 L 3602  	 207497  	 74  	 26-Jul-05  
	 Gibraltar  	 L 3603  	 207498  	 144  	 26-Jul-05  
	 Gibraltar  	 L 3604  	 207499  	 96  	 26-Jul-05  
	 Gibraltar  	 L 3705  	 207500  	 13  	 26-Jul-05  
	 Gibraltar  	 L 3706  	 207501  	 17  	 26-Jul-05  
	 Gibraltar  	 L 3707  	 207502  	 4  	 26-Jul-05  
	 Gibraltar  	 L 3708  	 207503  	 120  	 26-Jul-05  
	 Gibraltar  	 L 3709  	 207504  	 1  	 26-Jul-05  
	 Gibraltar  	 L 3710  	 207505  	 29  	 26-Jul-05  
	 Gibraltar  	 L 3711  	 207506  	 173  	 26-Jul-05  
	 Gibraltar  	 L 3712  	 207507  	 1  	 26-Jul-05  
	 Gibraltar  	 L 3713  	 207508  	 37  	 26-Jul-05  
	 Number of Leased titles held: 30 (comprising
      1905 units). 

 - 39 -

	
Mineral Claims 
		 

		 

		 

		 

	
	 Gibraltar  	
TK 5 
		
406338 
		
20 
		
19-Oct-04 
	
	 Gibraltar  	
GL 1 
		
401834 
		
12 
		
22-Apr-05 
	
	 Gibraltar  	
TML 1 
		
403938 
		
1 
		
24-Jul-05 
	
	 Gibraltar  	
TML 2 
		
403939 
		
1 
		
24-Jul-05 
	
	 Gibraltar  	
TML 3 
		
403940 
		
1 
		
24-Jul-05 
	
	 Gibraltar  	
TML 4 
		
403941 
		
1 
		
24-Jul-05 
	
	 Gibraltar  	
TML 5 
		
403942 
		
1 
		
24-Jul-05 
	
	 Gibraltar  	
TML 6 
		
403943 
		
1 
		
24-Jul-05 
	
	 Gibraltar  	
ZIP #1 
		
203987 
		
1 
		
15-Feb-11 
	
	 Gibraltar  	
HY 1 
		
204104 
		
4 
		
15-Feb-11 
	
	 Gibraltar  	
HY 4 
		
204105 
		
6 
		
15-Feb-11 
	
	 Gibraltar  	
HY 6 
		
204106 
		
4 
		
15-Feb-11 
	
	 Gibraltar  	
HY 7 
		
204107 
		
3 
		
15-Feb-11 
	
	 Gibraltar  	
TIM 1 
		
204115 
		
2 
		
15-Feb-11 
	
	 Gibraltar  	
COLE 1 
		
204116 
		
9 
		
15-Feb-11 
	
	 Gibraltar  	
GEOFF 1 
		
204159 
		
9 
		
15-Feb-11 
	
	 

		 

		 

		 

		            Page
      1 of 6

 - 40 -

	 Gibraltar Mine - Leases and
      Claims   	              
       27-Jul-04
	 Mineral Claims and Leases located in Cariboo Mining Division,
      British
	  	 	 	 	 
	 OWNER  	 CLAIM NAME 	 TENURE  	 UNITS  	 EXPIRY DATE  
	  	 	 	 	 
	 Gibraltar  	 DOUG I 	 204160  	 3  	 15-Feb-11  
	 Gibraltar  	 RYAN I 	 204161  	 1  	 15-Feb-11  
	 Gibraltar  	 AARON I 	 204162  	 1  	 15-Feb-11  
	 Gibraltar  	 BARB I 	 204217  	 12  	 15-Feb-11  
	 Gibraltar  	 BRENT I 	 204218  	 6  	 15-Feb-11  
	 Gibraltar  	 JANIS I 	 204219  	 3  	 15-Feb-11  
	 Gibraltar  	 HY 8 	 204300  	 3  	 15-Feb-11  
	 Gibraltar  	 HY 9 	 204301  	 2  	 15-Feb-11  
	 Gibraltar  	 HY 10 	 204302  	 12  	 15-Feb-11  
	 Gibraltar  	 HY 11 	 204303  	 9  	 15-Feb-11  
	 Gibraltar  	 HY 12 	 204304  	 14  	 15-Feb-11  
	 Gibraltar  	 HY 13 	 204305  	 6  	 15-Feb-11  
	 Gibraltar  	 HY 14 	 204306  	 7  	 15-Feb-11  
	 Gibraltar  	 HY 15 	 204307  	 6  	 15-Feb-11  
	 Gibraltar  	 HY 16 	 204308  	 4  	 15-Feb-11  
	 Gibraltar  	 HY 17 	 204309  	 2  	 15-Feb-11  
	 Gibraltar  	 HY 5 	 204316  	 10  	 15-Feb-11  
	 Gibraltar  	 HY 3 	 204317  	 9  	 15-Feb-11  
	 Gibraltar  	 HY 18 	 204378  	 1  	 15-Feb-11  
	 Gibraltar  	 HY 19 	 204443  	 2  	 15-Feb-11  
	 Gibraltar  	 HY 20 	 204444  	 2  	 15-Feb-11  
	 Gibraltar  	 KATE I 	 204516  	 12  	 15-Feb-11  
	 Gibraltar  	 WD I 	 204517  	 6  	 15-Feb-11  
	 Gibraltar  	 BRUCE I 	 204518  	 12  	 15-Feb-11  
	 Gibraltar  	 PAUL I 	 204519  	 12  	 15-Feb-11  
	 Gibraltar  	 ZE 3 	 204539  	 20  	 15-Feb-11  
	 Gibraltar  	 HY 22 	 204914  	 2  	 15-Feb-11  
	 Gibraltar  	 ZE 7 	 204975  	 2  	 15-Feb-11  
	 Gibraltar  	 GUY #1 	 205678  	 18  	 15-Feb-11  
	 Gibraltar  	 TK 1 	 207143  	 2  	 15-Feb-11  
	 Gibraltar  	 TK 2 	 207144  	 2  	 15-Feb-11  
	 Gibraltar  	 TK 3 	 207198  	 4  	 15-Feb-11  
	 Gibraltar  	 TK 4 FR	 207199  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 29 	 207610  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 30 	 207611  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 31 	 207612  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 32 	 207613  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 33 	 207614  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 34 	 207615  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 35 	 207616  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 36 	 207617  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 37 	 207618  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 38 	 207619  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 39 	 207620  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 40 	 207621  	 1  	 15-Feb-11  

 - 41 -

	
Gibraltar 
		
GM 49 
		
207622 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 50 
		
207623 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 51 
		
207624 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 52 
		
207625 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 59 
		
207626 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 60 
		
207627 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 61 
		
207628 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 62 
		
207629 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GM 63 
		
207630 
		
1 
		
15-Feb-11 
	
	 

		 

		 

		 

		            Page
      2 of 6

 - 42 -

	 Gibraltar Mine - Leases and
      Claims  	              
       27-Jul-04
	 Mineral Claims and Leases located in Cariboo
      Mining Division, British
	  	 	 	 	 
	 OWNER  	 CLAIM NAME  	 TENURE  	 UNITS  	 EXPIRY DATE  
	  	 	 	 	 
	 Gibraltar  	 GM 65  	 207632  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 66  	 207633  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 67  	 207634  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 68  	 207635  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 69  	 207636  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 70  	 207637  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 71  	 207638  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 72  	 207639  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 73  	 207640  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 83  	 207642  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 85  	 207643  	 1  	 15-Feb-11  
	 Gibraltar  	 JAN NO. 5  	 207644  	 1  	 15-Feb-11  
	 Gibraltar  	 JAN NO. 6  	 207645  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #1  	 207646  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #2  	 207647  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #3  	 207648  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #4  	 207649  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #5  	 207650  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #6  	 207651  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #7  	 207652  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #8  	 207653  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #9  	 207654  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #10  	 207655  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #11  	 207656  	 1  	 15-Feb-11  
	 Gibraltar  	 AL #12  	 207657  	 1  	 15-Feb-11  
	 Gibraltar  	 SUMMIT NO.7  	 207658  	 1  	 15-Feb-11  
	 Gibraltar  	 SUMMIT NO.8  	 207659  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 103  	 207660  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 104  	 207661  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 105  	 207662  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #9  	 207682  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #10  	 207683  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #11  	 207684  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #12  	 207685  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #13  	 207686  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #14  	 207687  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #15  	 207692  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #16  	 207693  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #17  	 207694  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #18  	 207695  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #19  	 207696  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #20  	 207697  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD #5  	 207698  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD #6  	 207699  	 1  	 15-Feb-11  
	 Gibraltar  	 IT NO. 1  	 207700  	 1  	 15-Feb-11  

 - 43 -

	
Gibraltar 
		
IT NO. 4 
		
207701 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
IT NO. 5 
		
207702 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
IT NO. 6 
		
207703 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
IT NO. 8 
		
207704 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
VAL NO.1 
		
207705 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
VAL NO.2 
		
207706 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
VAL NO.3 
		
207707 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
VAL NO.4 
		
207708 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
VAL NO.5 
		
207709 
		
1 
		
15-Feb-11 
	
	 

		 

		 

		 

		          
         Page 3 of 6

 - 44 -

	 Gibraltar Mine - Leases and
      Claims	          
             27-Jul-04

	 Mineral Claims and Leases located in Cariboo
      Mining Division, British
	  	 	 	 	 
	 OWNER  	 CLAIM NAME  	 TENURE  	 UNITS  	 EXPIRY DATE  
	  	 	 	 	 
	 Gibraltar  	 VAL NO.6  	 207710  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.7  	 207711  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.8  	 207712  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.9  	 207713  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.10  	 207714  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.11  	 207715  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.12  	 207716  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.14  	 207717  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.19  	 207718  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.20  	 207719  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.21  	 207720  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.22  	 207721  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL NO.27  	 207722  	 1  	 15-Feb-11  
	 Gibraltar  	 FFE #13  	 207723  	 1  	 15-Feb-11  
	 Gibraltar  	 FFE #14  	 207724  	 1  	 15-Feb-11  
	 Gibraltar  	 FFE #15  	 207725  	 1  	 15-Feb-11  
	 Gibraltar  	 FFE #16  	 207726  	 1  	 15-Feb-11  
	 Gibraltar  	 FFE #17  	 207727  	 1  	 15-Feb-11  
	 Gibraltar  	 FFE #19  	 207728  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD 7  	 207729  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD 8  	 207730  	 1  	 15-Feb-11  
	 Gibraltar  	 EV 21  	 207731  	 1  	 15-Feb-11  
	 Gibraltar  	 EV 22  	 207732  	 1  	 15-Feb-11  
	 Gibraltar  	 HD #5  	 207733  	 1  	 15-Feb-11  
	 Gibraltar  	 HD #6  	 207734  	 1  	 15-Feb-11  
	 Gibraltar  	 HD #7  	 207735  	 1  	 15-Feb-11  
	 Gibraltar  	 HD #8  	 207736  	 1  	 15-Feb-11  
	 Gibraltar  	 HD #20  	 207737  	 1  	 15-Feb-11  
	 Gibraltar  	 GM 48  	 207748  	 1  	 15-Feb-11  
	 Gibraltar  	 PINE TREE #1  	 207749  	 1  	 15-Feb-11  
	 Gibraltar  	 PINE TREE #2  	 207750  	 1  	 15-Feb-11  
	 Gibraltar  	 FLO #2 FR.  	 207751  	 1  	 15-Feb-11  
	 Gibraltar  	 FLO #3 FR.  	 207752  	 1  	 15-Feb-11  
	 Gibraltar  	 FLO #4 FR.  	 207753  	 1  	 15-Feb-11  
	 Gibraltar  	 PINE TREE #3  	 207754  	 1  	 15-Feb-11  
	 Gibraltar  	 PINE TREE #4  	 207755  	 1  	 15-Feb-11  
	 Gibraltar  	 PINE TREE #5  	 207756  	 1  	 15-Feb-11  
	 Gibraltar  	 PINE TREE #6  	 207757  	 1  	 15-Feb-11  
	 Gibraltar  	 CAROL #4 FR  	 207758  	 1  	 15-Feb-11  
	 Gibraltar  	 CAROL #6 FR  	 207759  	 1  	 15-Feb-11  
	 Gibraltar  	 CAROL #7 FR  	 207760  	 1  	 15-Feb-11  
	 Gibraltar  	 H.A. #1  	 207763  	 1  	 15-Feb-11  
	 Gibraltar  	 H.A. #2  	 207764  	 1  	 15-Feb-11  
	 Gibraltar  	 H.A. #3  	 207765  	 1  	 15-Feb-11  
	 Gibraltar  	 H.A. #4  	 207766  	 1  	 15-Feb-11  

 - 45 -

	
Gibraltar 
		
HAS 2 
		
207767 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 12 
		
207768 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 13 
		
207769 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 14 
		
207770 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 15 
		
207771 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 16 
		
207772 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 17 
		
207773 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 18 
		
207774 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
HAS 19 
		
207775 
		
1 
		
15-Feb-11 
	
	 

		 

		 

		 

		            Page 4 of 6

 - 46 -

	 Gibraltar Mine - Leases and
      Claims   	              
       27-Jul-04
	 Mineral Claims and Leases located in Cariboo
      Mining Division, British
	  	 	 	 	 
	 OWNER  	 CLAIM NAME  	 TENURE  	 UNITS  	 EXPIRY DATE  
	  	 	 	 	 
	 Gibraltar  	 HAS 20  	 207776  	 1  	 15-Feb-11  
	 Gibraltar  	 VE 21  	 207777  	 1  	 15-Feb-11  
	 Gibraltar  	 VE 22  	 207778  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #37  	 207779  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #39  	 207780  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #41  	 207781  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #43  	 207782  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #45  	 207783  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #47  	 207784  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #49  	 207785  	 1  	 15-Feb-11  
	 Gibraltar  	 STU #1 FR.  	 207786  	 1  	 15-Feb-11  
	 Gibraltar  	 STU #2 FR.  	 207787  	 1  	 15-Feb-11  
	 Gibraltar  	 STU #3 FR.  	 207788  	 1  	 15-Feb-11  
	 Gibraltar  	 STU #4 FR.  	 207789  	 1  	 15-Feb-11  
	 Gibraltar  	 STU #5 FR.  	 207790  	 1  	 15-Feb-11  
	 Gibraltar  	 STU #6 FR.  	 207792  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #35  	 207793  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #36  	 207794  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #38  	 207795  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #40  	 207796  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #42  	 207797  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #44  	 207798  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #46  	 207799  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #48  	 207800  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #50  	 207801  	 1  	 15-Feb-11  
	 Gibraltar  	 IT 3  	 207844  	 1  	 15-Feb-11  
	 Gibraltar  	 GIB #18 FR.  	 207852  	 1  	 15-Feb-11  
	 Gibraltar  	 GIB #19 FR.  	 207853  	 1  	 15-Feb-11  
	 Gibraltar  	 GIB 20 FR.  	 207854  	 1  	 15-Feb-11  
	 Gibraltar  	 SAP #5 FR.  	 207855  	 1  	 15-Feb-11  
	 Gibraltar  	 G.J. 20  	 207871  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #3  	 207872  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD #2  	 207873  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #2  	 207874  	 1  	 15-Feb-11  
	 Gibraltar  	 EV #1  	 207875  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD #3  	 207876  	 1  	 15-Feb-11  
	 Gibraltar  	 FI #2  	 207877  	 1  	 15-Feb-11  
	 Gibraltar  	 FI #4 FR  	 207878  	 1  	 15-Feb-11  
	 Gibraltar  	 FLO #1  	 207879  	 1  	 15-Feb-11  
	 Gibraltar  	 HA #5  	 207880  	 1  	 15-Feb-11  
	 Gibraltar  	 HA #6  	 207881  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #23  	 207882  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #24  	 207883  	 1  	 15-Feb-11  
	 Gibraltar  	 BUD #4  	 207884  	 1  	 15-Feb-11  
	 Gibraltar  	 VAL #26  	 207885  	 1  	 15-Feb-11  

 - 47 -

	
Gibraltar 
		
VAL #25 
		
207886 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
BUD #1 
		
207887 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
EV #4 
		
207888 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
GUY 2 
		
320893 
		
20 
		
15-Feb-11 
	
	
Gibraltar 
		
GUY 3 
		
358114 
		
4 
		
15-Feb-11 
	
	
Gibraltar 
		
TM1 
		
372057 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
TM2 
		
372058 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
TM3 
		
372059 
		
1 
		
15-Feb-11 
	
	
Gibraltar 
		
TM4 
		
372060 
		
1 
		
15-Feb-11 
	
	 

		 

		 

		 

		            Page
      5 of 6

 - 48 -

	 Gibraltar Mine - Leases and
      Claims   	              
       27-Jul-04
	 Mineral Claims and Leases located in Cariboo
      Mining Division, British
	  	 	 	 	 
	 OWNER  	 CLAIM NAME  	 TENURE  	 UNITS  	 EXPIRY DATE  
	  	 	 	 	 
	 Gibraltar  	 TM5  	 372061  	1 	 15-Feb-11  
	 Gibraltar  	 TM6  	 372062  	1 	 15-Feb-11  
	 Gibraltar  	 TM7  	 372063  	1 	 15-Feb-11  
	 Gibraltar  	 TM8  	 372064  	1 	 15-Feb-11  
	 Gibraltar  	 HD1  	 374757  	1 	 15-Feb-11  
	 Gibraltar  	 HD2  	 374758  	1 	 15-Feb-11  
	 Gibraltar  	 HD3  	 374759  	1 	 15-Feb-11  
	 Gibraltar  	 HD4  	 374760  	1 	 15-Feb-11  
	 Gibraltar  	 HD5  	 374761  	1 	 15-Feb-11  
	 Gibraltar  	 HD6  	 374762  	1 	 15-Feb-11  
	 Gibraltar  	 HD 10  	 375871  	1 	 15-Feb-11  
	 Gibraltar  	 HD 11  	 375872  	1 	 15-Feb-11  
	 Gibraltar  	 HD 12  	 375873  	1 	 15-Feb-11  
	 Gibraltar  	 HD 13  	 375874  	1 	 15-Feb-11  
	 Gibraltar  	 HD 14  	 375875  	1 	 15-Feb-11  
	 Gibraltar  	 HD 15  	 375876  	1 	 15-Feb-11  
	 Gibraltar  	 HD 7  	 376489  	1 	 15-Feb-11  
	 Gibraltar  	 HD 8  	 376490  	1 	 15-Feb-11  
	 Gibraltar  	 HD 9  	 376491  	1 	 15-Feb-11  
	  	 Number of Mineral titles held: 251 (comprising
      520 units).	Page 6 of 6 

 - 49 -

 Schedule J

 PERMITTED ENCUMBRANCES

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership

 Security Agreement dated July 21, 1999 between Gibraltar Mines
  Ltd. (the Debtor) and Her Majesty the Queen in Right of the Province of British
  Columbia as represented by the Minister of Energy and Mines and Minister Responsible
  for Northern Development (the Secured Party); as amended by that Amending Agreement
  dated June 25, 2002. 

 Security in favour of Ledcor Mining Ltd. (“Ledcor”)
  constituting a charge on certain mobile mine equipment with a minimum appraised
  fair market value of $5.8 million, pursuant to that joint venture agreement
  between Ledcor Mining Ltd., Ledcor CMI Ltd. and the Company and Taseko Mines
  Limited (the “Ledcor Agreement”). Further, a first priority security
  interest in favour of Ledcor on the bank account to be established pursuant
  to the Ledcor Agreement into which the Company is to deposit all revenue from
  the sale of ore, minerals and concentrate produced from the Mineral Tenures
  and all Mines situated on the Mineral Tenures. [ 

 The $0.01/pound royalty to be paid to Procorp Services
  Limited Partnership (“Procorp”) on copper sold by Taseko Mines Limited
  (“Taseko”) pursuant to the services agreement among Gibraltar Mines
  Ltd., Taseko and Procorp dated October 31, 2000.

- 50 - 

Schedule K

 VALMIN GUIDELINES OF CIM

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership

- 51 - 

Schedule L

 DEFINITION OF NET PROFITS AND CALCULATION OF NPI

 To the Royalty Agreement

  Executed September 29, 2004, effective June 15, 2004 among

  Gibraltor Mines Ltd., Red Mile Resources Fund Limited Partnership

  and Red Mile Resources No. 2 Limited Partnership (the“Royalty Agreement”)

 NET PROFITS INTEREST

	 1.      	 RLP shall be entitled to receive the following Net Profits:
    
	 
	 	 (a)      	 Two percent (2%) of Net Profits where the spot price
        of copper announced on the London Mutual Exchange (the “LME”)
        averaged during the applicable Royalty Period is equal to or greater than
        US$2.50 but is less than US$2.75; 

	 
	 	 (b)      	 Three percent (3%) of Net Profits where the spot
        price of copper announced on the LME averaged during the applicable Royalty
        Period is equal to or greater than US$2.75 but is less than US$3.00;
        and 

	 
	 	 (c)      	 Four percent (4%) of Net Profits where the spot
        price of copper announced on the LME averaged during the applicable Royalty
        Period is equal to or greater than US$3.00; 

	 
	 	 provided, however that the US dollar amounts
        set out above, which are based upon an exchange rate of US$0.75 for
        CDN$1.00, shall be adjusted from time to time by the variation of
        such rate, and provided further that in no event shall RLP be entitled
        to receive any Net Profits during any Royalty Period until such time as
        Resource Company has reached the Break Point as measured at the end of
        each fiscal year of Resource Company that occurs during the applicable
        Royalty Period.

	 
	 2.      	 Unless otherwise defined, all capitalized
        terms used in this Schedule shall have the same meanings attributed to
        them in the Agreement, and the following words, phrases and expressions
        shall have the following meanings and the provisions of this Appendix
        are subject to the provisions of the Agreement :

	 
	 	 (a)      	 “Aggregate Revenues” means all Revenues generated by Resource
      Company after the Commencement of Commercial Production.
	 
	 	 (b)      	 “Aggregate Operating Costs” means all Operating Costs incurred
      by Resource Company after the Commencement of Commercial Production.
	 
	 	 (c)      	 “Break Point” means the point in time at which the Aggregate
      Revenues are equal to or greater than the following aggregate expenses:
	 

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	 	  	 (i)  	 Pre-production Expenditures;  
	 	  	 	 
	 	  	 (ii)  	 Post-production Capital Expenditures;  
	 	  	 	 
	 	  	 (iii)  	 Aggregate Operating Costs; and  
	 	  	 	 
	 	  	 (iv)  	 Reclamation Charges.  
	 	  	 	 
	 	 (d)  	 “Net Profits” means the amount, in
      any applicable Royalty Period, by which  Revenues exceed Operating
      Costs.  
	 	  	  	 
	 	 (e)  	 “Operating Costs”
        means, in respect of any Royalty Period, all costs of  commercial
        production categorized as "operating" costs by generally accepted 
        accounting practice incurred by Resource Company during that Royalty Period,
        including all offsite costs, including smelter, treatment and refining
        costs, trucking and rail transportation, port charges, storage, ocean
        freight and insurance, plus taxes, royalties and other levies including
        federal and provincial corporate income taxes, but not including any charges
        for depreciation, depletion or amortization. Operating Costs shall also
        include a reasonable charge for working capital, administration and management
        , but for greater certainty, shall not include Pre-production Expenditures,
        Post-production Capital Expenditures or Reclamation Charges.   
                    

	  	 	
	

	 	 (f)  	 “Post-production Capital
        Expenditures” means all expenditures made by Resource Company after
        the Commencement of Commercial Production to acquire or construct assets
        having a useful life of more than one year or on development or expansion
        of a Mine or any other mine developed by Resource Company or other production
        facilities the cost of which would be charged on a unit of production
        basis in accordance with generally accepted accounting principles. 
                    

	  	 	
	

	 	 (g)  	 “Pre-production Expenditures”
        means all money provided and spent by Resource Company on the Mineral
        Tenures from July 19, 1999, including, without limiting the generality
        of the foregoing, all money provided and spent by Resource Company exploring,
        developing and equipping the Mineral Tenures for production, completing
        feasibility reports, maintaining the Mineral Tenures in good standing,
        constructing all facilities necessary to commence commercial production
        on the Mineral Tenures, constructing or acquiring equipment, infrastructure
        or facilities on or off the Mineral Tenures but required for commercial
        production, and on making any other expenditures related to the achievement
        of Commercial Production, including capital expenditures.

	  	 	
	

	 	 (h)  	 “Reclamation Charges”
        means such portion of an amount to be established by estimating the cost
        of reclamation which will have to be spent after Commercial Production
        has terminated.    

	 	  	  	 

 - 53 -

	 	 (i)      	 “Revenues”, in respect of any Royalty
        Period, means all revenues generated by, or behalf of, Resource Company
        for the sale of minerals or any Production during that Royalty Period.

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