Document:

Untitled Document

Exhibit 4.2

WARRANT NO. ___ 

 To Purchase
  100,000 Shares of Common Stock

  of

  WITS BASIN PRECIOUS MINERALS INC. 

      	This Warrant and the Securities issuable upon exercise of this Warrant have not been registered under the Securities Act of 1933 (the “1933 Act”) or under any state securities or “Blue Sky” laws
(“Blue Sky Laws”).  No transfer, sale, assignment, pledge, hypothecation or other disposition of this Warrant or the Securities issuable upon exercise of this Warrant or any interest therein may be made except (a) pursuant to an effective
registration statement under the 1933 Act and any applicable Blue Sky Laws or (b) if the Corporation has been furnished with an opinion of counsel for the holder, which opinion and counsel shall be reasonably satisfactory to the Corporation, to the
effect that no registration is required because of the availability of an exemption from registration under the 1933 Act and applicable Blue Sky laws. 

      	THIS CERTIFIES THAT, for good and valuable consideration [	], a Minnesota resident (the “Holder”), or the Holder’s registered assigns, is entitled to subscribe for and purchase
from Wits Basin Precious Minerals Inc., a Minnesota corporation (the “Corporation”), at any time on or after May 28, 2004, to and including May 28, 2009 (subject to the limitations provided in Section 10 below), 100,000 fully paid and
nonassessable shares of the Common Stock of the Corporation at the price of $0.40 per share (the “Warrant Exercise Price”), subject to the anti-dilution and price protection provisions, and the special adjustments in Section 11, of this
Warrant. 

     The shares which may be acquired upon exercise of this Warrant are referred to herein as the “Warrant Shares.”  As used herein, the term “Holder” means the Holder, any party who acquires all or a part of this
Warrant as a registered transferee of the Holder, or any record holder or holders of the Warrant Shares issued upon exercise, whether in whole or in part, of the Warrant. The term “Common Stock” means the common stock, $0.01 par value per
share, of the Corporation. 

     This Warrant is subject to the following provisions, terms and conditions: 

 1.     Exercise;
  Transferability.
  

     (a) 	The rights represented by this Warrant may be exercised by the Holder hereof, in whole or in part (but not as to a fractional share of Common Stock), by written notice of exercise (in the form attached hereto) delivered to
the Corporation at the principal office of the Corporation prior to the expiration of this Warrant and accompanied or preceded by the surrender of this Warrant along with a check in payment of the Warrant Exercise Price for such Warrant Shares.

     (b) 	Except as provided in Section 7 hereof, this Warrant may not be sold, transferred, assigned, hypothecated or divided into two or more Warrants of smaller denominations, nor may any Warrant Shares issued pursuant to exercise
of this Warrant be transferred. In no event may this Warrant be transferred and divided (without any exercise hereof) into any denomination(s) of less than 100 Warrant Shares. 

 2.     Exchange
  and Replacement.
  Subject to Sections 1 and 7 hereof, this Warrant is exchangeable upon the surrender
  hereof by the Holder to the Corporation at its office for new Warrants of like
  tenor and date representing in the aggregate the right to purchase the number
  of Warrant Shares purchasable hereunder, each of such new Warrants to represent
  the right to purchase such number of Warrant Shares (not to exceed the aggregate
  total number purchasable hereunder) as shall be designated by the Holder at
  the time of such surrender. Upon receipt by the Corporation of evidence reasonably
  satisfactory to it of the loss, theft, destruction or mutilation of this Warrant,
  and, in case of loss, theft or destruction, of indemnity or security reasonably
  satisfactory to it, and upon surrender and cancellation of this Warrant, if
  mutilated, the Corporation will make and deliver a new Warrant of like tenor,
  in lieu of this Warrant. This Warrant shall be promptly canceled by the Corporation
  upon the surrender hereof in connection with any exchange or replacement. The
  Corporation shall pay all expenses, taxes (other than stock transfer taxes),
  and other charges payable in connection with the preparation, execution, and
  delivery of Warrants pursuant to this Section 2. 

 3.     Issuance
  of the Warrant Shares.
  

     (a) 	The Corporation agrees that the Warrant Shares shall be and are deemed to be issued to the Holder as of the close of business on the date on which this Warrant shall have been surrendered and the payment made for such
Warrant Shares as aforesaid.  Subject to the provisions of paragraph (b) of this Section 3, certificates for the Warrant Shares so purchased shall be delivered to the Holder within a reasonable time after the rights represented by this Warrant shall
have been so exercised, and, unless this Warrant has expired, a new Warrant representing the right to purchase the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be delivered to the
Holder. 

      (b)
  Notwithstanding the foregoing, however, the Corporation shall not be required
  to deliver any certificate for Warrant Shares upon exercise of this Warrant
  except in accordance with exemptions from the applicable securities registration
  requirements or registrations under applicable securities laws. Except as described
  in Section 9, nothing herein shall obligate the Corporation to effect registrations
  under federal or state securities laws. If registrations are not in effect and
  if exemptions are not available when the Holder seeks to exercise the Warrant,
  the Warrant exercise period will be extended, if need be, to prevent the Warrant
  from expiring, until such time as either registrations become effective or exemptions
  are available, and the Warrant shall then remain exercisable for a period of
  at least 30 calendar days from the date the Corporation delivers to the Holder
  written notice of the availability of such registrations or exemptions. The
  Holder agrees to execute such documents and make such representations, warranties
  and agreements as may be required solely to comply with the exemptions relied
  upon by the Corporation, or the registrations made, for the issuance of the
  Warrant Shares. 

 4.      Covenants
  of the Corporation. The
  Corporation covenants and agrees that all Warrant Shares will, upon issuance,
  be duly authorized and issued, fully paid, non-assessable and free from all
  taxes, liens and charges with respect to the issue thereof. The Corporation
  further covenants and agrees that during the period within which the rights
  represented by this Warrant may be exercised, the Corporation will at all times
  have authorized and reserved for the purpose of issue or transfer upon exercise
  of the subscription rights evidenced by this Warrant a sufficient number of
  shares of Common Stock to provide for the exercise of the rights represented
  by this Warrant. 

 5.      Anti-dilution
  Adjustments. The
  provisions of this Warrant are subject to adjustment as provided in this Section
  5. 

     (a) 	Stock Splits, Dividends and Combinations. The Warrant Exercise Price shall be adjusted from time to time such that in case the Corporation shall hereafter: 

           (i)
  pay any dividends on any class of stock of the Corporation payable in Common
  Stock or securities convertible into Common Stock; 

           (ii)
  subdivide its then outstanding shares of Common Stock into a greater number
  of shares; or 

           (iii)
  combine outstanding shares of Common Stock, by reclassification or otherwise;
  

 then, in any such event,
  the Warrant Exercise Price in effect immediately prior to such event shall (until
  adjusted again pursuant hereto) be adjusted immediately after such event to
  a price (calculated to the nearest full cent) determined by dividing (A) the
  number of shares of Common Stock outstanding immediately prior to such event,
  multiplied by the then existing Warrant Exercise Price, by (B) the total number
  of shares of Common Stock outstanding immediately after such event (including
  in each case the maximum number of shares of Common Stock issuable in respect
  of any securities convertible into Common Stock), and the resulting quotient
  shall be the adjusted Warrant Exercise Price per share. An adjustment made pursuant
  to this Subsection shall become effective immediately after the record date
  in the case of a dividend or distribution and shall become effective immediately
  after the effective date in the case of a subdivision, combination or reclassification.
  If, as a result of an adjustment made pursuant to this
  Subsection, the Holder of any Warrant thereafter surrendered for exercise shall
  become entitled to receive shares of two or more classes of capital stock or
  shares of Common Stock and other capital stock of the Corporation, the Board
  of Directors (whose determination shall be conclusive) shall determine the allocation
  of the adjusted Warrant Exercise Price between or among shares of such classes
  of capital stock or shares of Common Stock and other capital stock. All calculations
  under this Subsection shall be made to the nearest cent or to the nearest 1/100
  of a share, as the case may be. In the event that at any time as a result of
  an adjustment made pursuant to this Subsection, the holder of any Warrant thereafter
  surrendered for exercise shall become entitled to receive any shares of the
  Corporation other than shares of Common Stock, thereafter the Warrant Exercise
  Price of such other shares so receivable upon exercise of any Warrant shall
  be subject to adjustment from time to time in a manner and on terms as nearly
  equivalent as practicable to the provisions with respect to Common Stock contained
  in this Section. 

     (b) 	Mechanics of Adjustment for Stock Splits, Dividends and Combinations. Upon each adjustment of the Warrant Exercise Price pursuant to Section 5(a) above, the Holder
of each Warrant shall thereafter (until another such adjustment) be entitled to purchase at the adjusted Warrant Exercise Price the number of shares, calculated to the nearest full share, obtained by multiplying the number of shares specified in
such Warrant (as adjusted as a result of all adjustments in the Warrant Exercise Price in effect prior to such adjustment) by the Warrant Exercise Price in effect prior to such adjustment and dividing the product so obtained by the adjusted Warrant
Exercise Price. 

      (c)
  Consolidations,
  Mergers and Reorganization Events.
  In case of any consolidation or merger to which the Corporation is a party other
  than a merger or consolidation in which the Corporation is the continuing corporation,
  or in case of any sale or conveyance to another corporation of the property
  of the Corporation as an entirety or substantially as an entirety, or in the
  case of any statutory exchange of securities with another corporation (including
  any exchange effected in connection with a merger of a third corporation into
  the Corporation), there shall be no adjustment under Subsection (a) of this
  Section 5; but the Holder of each Warrant then outstanding shall have the right
  thereafter to convert such Warrant into the kind and amount of shares of stock
  and other securities and property which he would have owned or have been entitled
  to receive immediately after such consolidation, merger, statutory exchange,
  sale or conveyance had such Warrant been converted immediately prior to the
  effective date of such consolidation, merger, statutory exchange, sale or conveyance
  and, in any such case, if necessary, appropriate adjustment shall be made in
  the application of the provisions set forth in this Section with respect to
  the rights and interests thereafter of any Holders of the Warrant, to the end
  that the provisions set forth in this Section shall thereafter correspondingly
  be made applicable, as nearly as may reasonably be, in relation to any shares
  of stock and other securities and property thereafter deliverable on the exercise
  of the Warrant. The provisions of this Subsection
  shall similarly apply to successive consolidations, mergers, statutory exchanges,
  sales or conveyances. 

     (d) 	Adjustments for Diluting Issues.  In addition to the adjustments of the Warrant Exercise Price provided above, the Warrant Exercise Price shall be subjected to
further adjustment from time to time as follows (the main operative provision hereof is in Section 5(d)(iii) below): 

           (i)
  Special Definitions:
  

                (A)
  “Options”
  shall mean rights, options or warrants (other than as excluded by Section 5(d)(i)(D)
  below) to subscribe for, purchase or otherwise acquire either Common Stock or
  Convertible Securities (as defined herein). 

                (B)
  “Original Issue
  Date” shall
  mean the date hereof.

                (C)
  “Convertible
  Securities”
  shall mean securities (other than as excluded by (4) below) convertible, either
  directly or indirectly, into or exchangeable for Common Stock. 

                (D)
  “Additional
  Shares of Common Stock”
  shall mean all shares of Common Stock issued (or, deemed to be issued) by the
  Corporation after the Original Issue Date other than shares of Common Stock
  issued (or deemed to be issued): 

                     1.
  to employees, consultants or directors pursuant to stock option, stock grant,
  stock purchase or similar plans or arrangements approved by the Corporation’s
  Board of Directors; 

                     2.
  as a dividend or other distribution in connection with which an adjustment to
  the Warrant Exercise Price is made; 

                     3.
  in a merger, consolidation, acquisition or similar business combination that
  is approved by the Corporation’s Board of Directors; 

                     4.
  pursuant to credit, lease or other commercial financing arrangements with parties
  not affiliated with the Corporation that are approved by the Corporation’s
  Board of Directors; 

                     5.
  in exchange for technology or other non-cash assets as approved by the Corporation’s
  Board of Directors; 

                     6.
  pursuant to any rights or agreements outstanding on the Original Issue Date;
  or 

                     7.
  if the Holder agrees in writing that such shares shall not constitute Additional
  Shares of Common Stock. 

           (ii)
  Deemed Issue of
  Additional Shares of Common Stock.
  Except as otherwise provided in Section 5(d), in the event the Corporation at
  any time or from time to time after the Original Issue Date shall issue any
  Options or Convertible Securities or shall fix a record date for the determination
  of any holders of any class of securities entitled to receive any such Options
  or Convertible Securities, then the maximum number of shares (as set forth in
  the instrument relating thereto without regard to any provisions contained therein
  for a subsequent adjustment of such number) of Common Stock issuable upon the
  exercise of such Options or, in the case of Convertible Securities and Options
  therefor, the conversion or exchange of such Convertible Securities, shall be
  deemed to be Additional Shares of Common Stock issued as of the time of such
  issue or, in case such record date shall have been fixed, as of the close of
  business on such record date, provided that in any such case in which Additional
  Shares of Common Stock are deemed to be issued: 

                (A)
  no further adjustment in the Warrant Exercise Price shall be made upon the subsequent
  issue of such Convertible Securities or shares of Common Stock upon the exercise
  of such Options or conversion or exchange of such Convertible Securities; 

                (B)
  if such Options or Convertible Securities by their terms provide, with the passage
  of time or otherwise, for any increase or decrease in the consideration payable
  to the Company, or increase or decrease in the number of shares of Common Stock
  issuable upon the exercise, conversion or exchange thereof, the Warrant Exercise
  Price computed upon the original issue thereof or upon the occurrence of a record
  date with respect thereto, and any subsequent adjustments based thereon, shall,
  upon any such increase or decrease becoming effective, be recomputed to reflect
  such increase or decrease; 

                (C)
  upon the expiration of any such Option or any rights of conversion or exchange
  under such Convertible Securities which shall not have been exercised, the Warrant
  Exercise Price computed upon the original issue thereof or upon occurrence of
  a record date with respect thereto, and any subsequent adjustments based thereon,
  shall, upon such expiration: 

                     1.
  in the case of Convertible Securities or Options for Common Stock, be recomputed
  as though the only Additional Shares of Common Stock issued were shares of Common
  Stock, if any, actually issued upon the exercise of such Options or the conversion
  or exchange of such Convertible Securities, and the consideration received therefor
  was the consideration actually received by the Company for the issue of all
  such Options, whether or not exercised, plus the consideration actually received
  by the Company upon such exercise, or for the issue of all such Convertible
  Securities, whether or not converted or exchanged, plus the additional consideration,
  if any, actually received by the Company upon such conversion or exchange; and
  

                     2.
  in the case of Options for Convertible Securities, be recomputed as though only
  the Convertible Securities, if any, actually issued upon the exercise
  thereof were issued at the
  time of issue of such Options and the consideration received by the Company
  for the Additional Shares of Common Stock deemed to have been then issued was
  the consideration actually received by the Company for the issue of all such
  Options, whether or not exercised, plus the consideration deemed to have been
  received by the Company upon the issue of the Convertible Securities with respect
  to which such Options were actually exercised. 

                (D)
  no readjustment pursuant to Section 5(d) shall have the effect of increasing
  the Warrant Exercise Price to an amount which exceeds the Warrant Exercise Price
  existing immediately prior to the original adjustment with respect to the issuance
  of such Options or Convertible Securities, as adjusted for any Additional Shares
  of Common Stock issued (or deemed to be issued) between such original adjustment
  date and such readjustment date; and 

                (E)
  in the case of any Option or Convertible Security with respect to which the
  maximum number of shares of Common Stock issuable upon exercise or conversion
  or exchange thereof is not determinable, no adjustment to the Warrant Exercise
  Price shall be made until such number becomes determinable. 

           (iii)
  Adjustments for
  Issuance of Additional Shares of Common Stock. If
  the Company, at any time after the issuance of this Warrant, shall issue any
  Additional Shares of Common Stock (otherwise than as provided in the Sections
  5(a) and 5(c) above) at a price per share less than the applicable Warrant Exercise
  Price then in effect or without consideration, then the applicable Warrant Exercise
  Price upon each such issuance shall be adjusted to that price (rounded to the
  nearest cent) determined by multiplying the applicable Warrant Exercise Price
  then in effect by a fraction, (i) the numerator of which shall be equal to the
  sum of (A) the number of shares of Common Stock outstanding immediately prior
  to the issuance of such Additional Shares of Common Stock plus
  (B) the number of shares of Common Stock (rounded to the nearest whole share)
  which the aggregate consideration for the total number of such Additional Shares
  of Common Stock so issued would purchase at a price per share equal to the applicable
  Warrant Exercise Price then in effect, and (ii) the denominator of which shall
  be equal to the number of shares of Common Stock outstanding immediately after
  the issuance of such Additional Shares of Common Stock. 

      The
  provisions of this Section 5(d)(iii) shall not apply under any of the circumstances
  for which an adjustment is provided in Sections 5(a), 5(b) or 5(c) above. No
  adjustment of the applicable Warrant Exercise Price shall be made under this
  Section 5(d) upon the issuance of any Additional Shares of Common Stock which
  are issued pursuant to any Options or Convertible Securities if upon the issuance
  of such Options or Convertible Securities (x) any adjustment shall have been
  made pursuant to Section 5(d)(ii) above or (y) no adjustment was required pursuant
  to this Section 5(d)(iii). No adjustment of the applicable Warrant Exercise
  Price shall be made under this Section 5(d)(iii) in an amount less than $.01
  per share, but any such lesser adjustment shall be carried forward and shall
  be made at the time and together with the next subsequent adjustment, if any,
  which together with any adjustments so carried
  forward shall amount to $.01 per share or more; provided,
  however,
  that upon any adjustment of the applicable Warrant Exercise Price as a result
  of any dividend or distribution payable in Common Stock or Convertible Securities
  or the reclassification, subdivision or combination of Common Stock into a greater
  or smaller number of shares, the foregoing figure of $.01 per share (or such
  figure as last adjusted) shall be adjusted (to the nearest one-half cent) in
  proportion to the adjustment in the applicable Warrant Exercise Price. 

           (iv)
  Determination of
  Consideration.
  For purposes of this Section 5(d), the consideration received by the Corporation
  for any Additional Shares of Common Stock issued (or deemed to be issued) shall
  be computed as follows: 

                (A)
  Cash and Property.
  Such consideration shall: 

                     (i)
  insofar as it consists of cash, be computed at the aggregate amount of cash
  received by the Company; 

                     (ii)
  insofar as it consists of securities and the value of such securities is not
  determinable by reference to a separate agreement, (A) if the securities are
  then traded on a national securities exchange or the Nasdaq Stock Market (or
  a similar national quotation system), then the value shall be computed based
  on the average of the closing prices of the securities on such exchange or system
  over the thirty (30)-day period ending on the date of receipt by the Corporation,
  (B) if the securities are actively traded over-the-counter, then the value shall
  be computed based on the average of the closing bid prices over the thirty (30)
  day ending on the date of receipt by the Corporation, and (C) if there is no
  active public market, then the value shall be computed based on the fair market
  value thereof on the date of receipt by the Corporation, as determined in good
  faith by the Board of Directors; 

                     (iii)
  insofar as it consists of property other than cash and securities, be computed
  at the fair market value thereof at the time of such issuance, as determined
  in good faith by the Board of Directors; and 

                     (iv)
  if Additional Shares of Common Stock are issued (or deemed to be issued) together
  with other shares or securities or other assets of the Corporation for consideration
  which cover both, by the proportion of such consideration so received, computed
  as provided in the immediately preceding Sections 5(d)(iv)(A)(i), 5(d)(iv)(A)(ii)
  and 5(d)(iv)(A)(iii), as determined in good faith by the Board of Directors.
  

                (B)
  Options and Convertible
  Securities. The
  consideration received by the Corporation for Additional Shares of Common Stock
  deemed to have been issued pursuant to Section 5(d) relating to Option and Convertible
  Securities, shall be the sum of (x) the total amount, if any, received or receivable
  by the Corporation as consideration for the issue of such Options or Convertible
  Securities, plus (y) the minimum aggregate amount of additional consideration
  (as set forth in the instruments relating thereto, without regard to any provision
  contained therein for a subsequent adjustment of such consideration) payable
  to the Corporation upon the exercise of such Options or the conversion or exchange
  of such Convertible Securities, or in the case of Options for Convertible Securities,
  the exercise of such Options for Convertible Securities and the conversion or
  exchange of such Convertible Securities.

     (e) 	Default. For purposes of a secured convertible promissory note of this date (the “Note”) issued by the Corporation to the original Holder hereof, this Warrant is in
default if the Corporation fails by November 28, 2004 (the “Registration Deadline”) to obtain effectiveness under the 1933 Act and applicable state securities laws of a registration statement for the benefit of the Holder under the terms of a
Registration Rights Agreement of this date covering all of the Warrant Shares hereunder and all of the shares of Common Stock issuable as payment under or upon conversion of the Note. Despite the foregoing, if the Holder consents (as provided under
the Registration Rights Agreement) to an extension of the effective date of the Registration Statement beyond November 28, 2004, then the Registration Deadline hereunder shall be extended by a like period. 

     (f) 	Certificate as to Adjustments.  Upon the occurrence of each adjustment or readjustment of the Warrant Exercise Price or the number of Warrants covered hereby
pursuant to this Section 5 or pursuant to Section 11 below, the Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of the Holder, furnish or cause to be furnished to the Holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the Warrant Exercise Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received
upon the exercise of this Warrant.

 6.      No
  Voting Rights. This
  Warrant shall not entitle the Holder to any voting rights or other rights as
  a shareholder of the Corporation. 

 7.
       Notice
  of Transfer of Warrant or Resale of the Warrant Shares.
  

      (d)
  Subject to the sale, assignment, hypothecation or other transfer restrictions
  set forth in Section 1 hereof, the Holder, by acceptance hereof, agrees to give
  written notice to the Corporation before transferring this Warrant or transferring
  any Warrant Shares of such Holder’s intention to do so, describing briefly
  the manner of any proposed transfer. Promptly upon receiving such written notice,
  the Corporation shall present copies thereof to the Corporation’s counsel.
  If in the opinion of such counsel the proposed transfer may be effected without
  registration or qualification (under any federal or state securities laws),
  the Corporation, as promptly as practicable, shall notify the Holder of such
  opinion, whereupon the Holder shall be entitled to transfer this Warrant or
  to dispose of Warrant Shares received upon the previous exercise of this Warrant,
  all in accordance with the terms of the notice delivered by the Holder to the
  Corporation; provided that an appropriate legend may be endorsed on this Warrant
  or the certificates for such Warrant Shares respecting restrictions upon transfer
  thereof necessary or advisable in the opinion of counsel and satisfactory to
  the Corporation to prevent further transfers which would be in violation of
  Section 5 of the 1933 Act and applicable state securities laws; and provided
  further that the prospective transferee or purchaser shall execute such documents
  and make such representations, warranties and agreements as may be required
  solely to comply with the exemptions relied upon by the Corporation for the
  transfer or disposition of the Warrant or Warrant Shares. 

     (e) 	If, in the opinion of the Corporation’s counsel, the proposed transfer or disposition of this Warrant or such Warrant Shares described in the written notice given pursuant to this Section 7 may not be effected without
registration or qualification of this Warrant or such Warrant Shares, the Corporation shall promptly give written notice thereof to the Holder, and the Holder will limit its activities in respect to such transfer or disposition as, in the opinion of
such counsel, are permitted by law. 

 8.      Fractional
  Shares. Fractional
  shares shall not be issued upon the exercise of this Warrant, but in any case
  where the holder would, except for the provisions of this Section, be entitled
  under the terms hereof to receive a fractional share, the Corporation shall,
  upon the exercise of this Warrant for the largest number of whole shares then
  called for, pay a sum in cash equal to the sum of (a) the excess, if any, of
  the Market Price of such fractional share over the proportional part of the
  Warrant Exercise Price represented by such fractional share, plus (b) the proportional
  part of the Warrant Exercise Price represented by such fractional share. For
  purposes of this Section, the term “Market Price” with respect to
  shares of Common Stock of any class or series means the last reported sale price
  or, if none, the average of the last reported closing bid and asked prices on
  any national or regional securities exchange or quoted in the National Association
  of Securities Dealers, Inc.’s Automated Quotations System (“Nasdaq”),
  or if not listed on a national or regional securities exchange or quoted in
  Nasdaq, the average of the last reported closing bid and asked prices as reported
  by Metro Data Corporation, Inc. or the OTC Bulletin Board from quotations by
  market makers in such Common Stock on the Minneapolis-St. Paul local over-the-counter
  market, or if no quotations in such Common Stock are available, the fair market
  value of the shares as determined in good faith by the Board of Directors of
  the Corporation. 

 9.      Registration
  Rights. Holder
  shall have registration rights for the shares underlying its Warrants as described
  in the Registration Rights Agreement of this same date. 

 10.      Limitation
  of Exercise of this Warrant.
  Despite anything to the contrary in this Warrant,
  the Holder may not exercise this Warrant during the time period and to the extent
  that the shares of Common Stock that the Holder could acquire upon the exercise
  hereof would cause Holder’s Beneficial Ownership (as defined below) of
  the Corporation’s Common Stock to exceed 4.99%. These limitations on the
  right to exercise this Warrant shall first reduce the Holder’s Beneficial
  Ownership of the Corporation’s Common Stock before limitation of the Holder’s
  conversion rights, or the Corporation’s right to make payments in Common
  Stock, under the Note. The parties shall compute the Holder’s "Beneficial
  Ownership" of Common Stock in accordance with U.S. Securities and Exchange Commission
  Rule 13d-3. The Holder will, at the request of the Corporation, from time to
  time, notify the Corporation of the Holder’s computation of Holder’s
  Beneficial Ownership.

 11.      Special
  Adjustment in Warrant Exercise Price. Despite
  the foregoing provisions of this Warrant, if the U.S. Securities and Exchange
  Commission (the “SEC”) declares the Corporation’s Registration
  Statement on Form S-2, SEC File No. 333-110831 (the “S-2 Registration Statement”),
  effective on or before July 1, 2004 (the date of any such effectiveness being
  the "Effective Date”), the Warrant Exercise Price hereunder shall be adjusted
  (before any other adjustments otherwise provided in this Warrant) effective
  as of the 31st trading day after the Effective Date, as follows. The adjusted
  Warrant Exercise Price shall equal 115% (rounded to the nearest $0.01) of the
  greater of: 

        (i)
    $0.35 or 

        (ii)
    the lower of (x) $0.65 or (y) the average (rounded to the nearest $0.01) of
    the high closing bid prices of the Corporation’s Common Stock on the
    OTC Bulletin Board as reported by bigcharts.com (or if this service is discontinued,
    such other reporting service acceptable to Holder) for the 30 trading days
    immediately following the Effective Date. 

      The
  Warrant Exercise Price shall be adjusted simultaneously to equal 115% of the
  Computation Price (rounded to the nearest $0.01). 

     If on or before July 1, 2004, the SEC has not declared the S-2 Registration Statement effective, then there shall be no adjustment in the Warrant Exercise Price pursuant to this Section 11. 

      IN
  WITNESS WHEREOF,
  Wits Basin Precious Minerals Inc. has caused this Warrant to be signed by its
  duly authorized officer and this Warrant to be dated May 28, 2004.

	 	WITS BASIN
      PRECIOUS MINERALS INC.
	 	 	 
	 	By 	/s/ Mark
      D. Dacko 
	 	 	

	 	 	Mark D.
      Dacko,

      Chief Financial OfficerUntitled Document

Exhibit
  10.1

 PURCHASE
  AGREEMENT 

      THIS
  PURCHASE AGREEMENT
  (the “Agreement”)
  is entered into as of the 28th day of May, 2004, by and among Wits
  Basin Precious Minerals Inc.,
  a Minnesota corporation (the “Company”),
  and Pandora Select
  Partners L.P.,
  a British Virgin Islands limited partnership
  (the “Purchaser”).
  

 R E
  C I T A L S :

      WHEREAS,
  in consideration of $650,000, the Company proposes to issue to the Purchaser,
  and the Purchaser desires to purchase, a $650,000 secured convertible promissory
  note in the form attached as Exhibit A (the “Note”)
  and a warrant in the form of Exhibit B (the “Warrant”)
  to purchase particular shares of the Company’s common stock, $0.01 par
  value (the “Common
  Stock”);
  and 

      WHEREAS,
  conditioned on the Company’s timely satisfaction of particular milestones
  and conditions as described in a separate letter agreement in the form attached
  as Exhibit C (the "Call
  and Option Agreement"),
  the Purchaser shall purchase, and the Company shall issue to the Purchaser,
  an additional secured convertible promissory note of at least $350,000 (which,
  at Purchaser’s option, may be for up to $850,000 inclusive of the foregoing
  $350,000) and an additional warrant to purchase Common Stock; 

      NOW,
  THEREFORE, in consideration
  of the foregoing recitals and the mutual promises hereinafter set forth, the
  parties hereto agree as follows: 

 SECTION 1. AGREEMENT
  TO SELL AND PURCHASE
  

      1.1.
  Authorization of Transaction.
  On or prior to the closing of the transactions contemplated in this Agreement
  (the “Closing”),
  the Company shall have authorized the sale and issuance to the Purchaser of
  the Note, the Warrant and the shares of Common Stock issuable as payment under
  the Note, upon conversion of the Note and upon exercise of the Warrant (collectively,
  the “Shares”). 

      1.2.
  Sale and Purchase.
  Subject to the
  terms and conditions hereof, at the Closing, the Company hereby agrees to issue
  and sell to the Purchaser, and the Purchaser agrees to purchase from the Company,
  the Note and the Warrant for an aggregate purchase price of $650,000 (the “Purchase
  Price”). 

 SECTION 2. CLOSING, DELIVERY
  AND PAYMENT 

      2.1. Closing.
  The Closing shall take place at 10:00 a.m. on the date hereof at the offices of the Purchaser’s legal counsel, Messerli & Kramer
  P.A., in Minneapolis, Minnesota, or at such other time or place as the Company and the Purchaser may mutually agree (the “Closing
  Date”).
  At the Closing, subject to the terms and conditions hereof, the Company will issue, sell and deliver to the Purchaser the Note and the
  Warrant, against payment of the Purchase Price by certified check or wire transfer of immediately available funds. At that time, the
  Company shall also execute and deliver to the Purchaser the Registration Rights Agreement in the form attached as Exhibit D (the “Registration
  Rights Agreement”) and the Security Agreement in the form attached
  as Exhibit E (the “Security Agreement”).
  In addition, at the Closing, the Company shall cause Wayne W. Mills ("Mills")
  to execute and deliver to the Purchaser the Personal Guaranty in the form attached as Exhibit F (the "Mills
  Guaranty"). 

 SECTION 3. REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY
  

      The
  Company hereby represents and warrants to the Purchaser as of the Closing Date,
  and agrees, as follows: 

      3.1.
  Organization, Good Standing and Qualification.
  The Company is a corporation duly organized, validly existing and in good standing
  under the laws of the State of Minnesota. The Company’s only active subsidiaries
  are Active Hawk Minerals, LLC, a Minnesota limited liability company (“Active
  Hawk”),
  and Brazmin Ltda., a limited liability company organized under the laws of Brazil
  (“Brazmin,”
  and together with Active Hawk, the "Subsidiaries").
  Active Hawk is a limited liability company duly organized, validly existing
  and in good standing under the laws of the State of Minnesota. Brazmin is a
  limited liability company duly organized, validly existing and in good standing
  under the laws of Brazil. Each of the Company and the Subsidiaries has all requisite
  corporate or limited liability company power and authority to own and operate
  its respective properties and assets and to carry on its respective business
  as presented conducted and as presently proposed to be conducted. The Company
  has all requisite corporate power and authority to execute and deliver this
  Agreement, the Note, the Warrant, the Registration Rights Agreement and the
  Security Agreement (together, the “Transaction
  Documents”),
  to pledge the Company’s assets as described on the attached Exhibit G as
  security for the Note (the “Collateral”),
  to issue and sell the Shares as payment under the Note, upon conversion of the
  Note and upon exercise of the Warrant and to carry out the provisions of the
  Transaction Documents. Each of the Company and the Subsidiaries is duly qualified
  and is authorized to do business and is in good standing in each U.S. and foreign
  jurisdiction in which the nature of its respective activities and of its respective
  properties (both owned and leased) makes such qualification necessary, except
  for those jurisdictions in which failure to be so qualified would not have a
  materially adverse effect on the Company or its business, taken as a whole.
  

      3.2.
  Capitalization. The Company is authorized to issue 150,000,000 shares of
  Common Stock, par value $0.01 per share, of which 33,275,181 shares are issued and outstanding. Except as set forth on Schedule 3.2
  or in the Company’s current, quarterly, annual and other periodic filings (the “SEC
  Reports”) with the U.S. Securities and Exchange Commission (the
  “Commission”),
  the Company has no outstanding options, warrants or other rights to acquire any capital stock, or securities convertible or exchangeable
  for capital stock or for securities themselves convertible or exchangeable for capital stock (together, “Convertible
  Securities”). Except as set forth on Schedule 3.2 or in the SEC
  Reports, the Company has no agreement or commitment to sell or issue any shares of capital stock or Convertible Securities. All issued
  and outstanding shares of the Company’s capital stock (i) have been duly authorized and validly issued, (ii) are fully paid and
  nonassessable, (iii) are free from any preemptive and cumulative voting rights and (iv) were issued pursuant to an effective registration
  statement filed with the Commission and applicable state securities authorities or pursuant to valid exemptions under federal and state
  securities laws. Except as set forth on Schedule 3.2, there are no outstanding rights of first refusal or proxy or shareholder agreements
  of any kind relating to any of the Company’s securities to which the Company or any of its executive officers and directors is
  a party or as to which the Company otherwise has knowledge of. When issued in compliance with the provisions of the Note and the Warrant
  (and upon payment as provided by the Warrant), the Shares will be validly issued, fully paid and nonassessable, and will be free of
  any liens or encumbrances; provided, however,
  that the Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise
  required by such laws at the time a transfer is proposed.  

  -2- 

      3.3.
  Authorization; Binding Obligations. 
  All corporate action on the part of the Company, its officers, directors and
  shareholders necessary for the authorization of the Transaction Documents, the
  performance of all obligations of the Company hereunder and thereunder at the
  Closing, including the pledge of the Collateral as security for the Note, and
  the authorization, sale, issuance and delivery of the Shares as payment under
  the Note, upon conversion of the Note and upon exercise of the Warrant has been
  taken. The Transaction Documents, when executed and delivered, will be valid
  and binding obligations of the Company enforceable in accordance with their
  terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization,
  moratorium or other laws of general application affecting enforcement of creditors’
  rights, (ii) according to general principles of equity that restrict the availability
  of equitable remedies and (iii) to the extent that the enforceability of the
  indemnification provisions of the Registration Rights Agreement may be limited
  by applicable laws. The Mills Guaranty, when executed and delivered, will be
  a valid and binding obligation of Mills enforceable in accordance with its terms,
  except (i) as limited by applicable bankruptcy, insolvency, reorganization,
  moratorium or other laws of general application affecting enforcement of creditors’
  rights and (ii) according to general principles of equity that restrict the
  availability of equitable remedies. The sale of the Shares upon exercise of
  the Warrant, upon conversion of the Note or as payment under the Note is not
  and will not be subject to any preemptive rights or rights of first refusal.
  

      3.4. Financial Statements. The
  Company’s audited consolidated balance sheets at, and the audited consolidated statements of operations, cash flows and shareholders’
  equity of the Company for the years ended, December 31, 2003 (as restated) and 2002 and the Company’s unaudited consolidated balance
  sheet at, and the unaudited consolidated statements of operations and cash flows of the Company for the three months ended March 31,
  2004 (all of the foregoing together, the “Financial Statements,”
  with March 31, 2004 being the “Latest Statement Date” and
  the consolidated financial statements at and for the three months ended March 31, 2004 being the “Latest
  Financial Statements”), as contained in the SEC Reports, fairly
  present in all material respects the consolidated financial position, results
  of operations, cash flows and shareholders’ equity of the Company as of the respective dates and for the respective periods covered
  thereby in accordance with generally accepted accounting principles consistently applied and the rules and regulations of the Commission.
  

  -3- 

      3.5.
  Liabilities. The
  Company has no material liabilities and, to the best of its knowledge, the Company
  knows of no material contingent liabilities, not disclosed in the Latest Financial
  Statements or SEC Reports, except current liabilities incurred in the ordinary
  course of business subsequent to the Latest Statement Date that have not been,
  either in any individual case or in the aggregate, materially adverse. 

      3.6.
  Certain Agreements and Actions. Except
  as disclosed in the SEC Reports, the Company has not (i) declared or paid any
  dividends, or authorized or made any distribution upon or with respect to any
  class or series of its capital stock, (ii) since the Latest Statement Date,
  incurred any indebtedness for money borrowed or any other material liabilities
  out of the ordinary course of business, (iii) made any loans or advances to
  any person, other than ordinary advances for travel or entertainment expenses
  or (iv) sold, exchanged or otherwise disposed of any of its assets or rights,
  other than in the ordinary course of business. 

      3.7.
  Obligations of or to Related Parties. Except
  as disclosed on Schedule 3.7 or in the SEC Reports, there are no obligations
  of the Company to officers, directors, shareholders, employees or consultants
  of the Company, or to any members of their immediate families or other affiliates,
  other than (i) for payment of salary for services rendered since the commencement
  of the Company’s most recent payroll period, (ii) reimbursement for expenses
  reasonably incurred on behalf of the Company and (iii) for other standard employee
  benefits made generally available to all employees (including stock option agreements
  outstanding under any stock option plan approved by the Board of Directors of
  the Company). Except as disclosed on Schedule 3.7 or in the SEC Reports, none
  of the officers, directors, shareholders, employees or consultants of the Company,
  or any members of their immediate families or other affiliates, are indebted
  to the Company or have any direct or indirect ownership interest in any firm,
  corporation or other entity with which the Company is affiliated or with which
  the Company has a business relationship, or any firm, corporation or other entity
  that competes with the Company. Except as disclosed in the SEC Reports, no officer,
  director, shareholder, employee or consultant of the Company, or, to the Company’s
  knowledge, any member of their immediate families or other affiliates, is, directly
  or indirectly, interested in or a party to any material contract with the Company.
  Except as disclosed on Schedule 3.7 or in the SEC Reports, the Company is not
  a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.
  

      3.8.
  Changes. Since
  the Latest Statement Date, and except as disclosed in the SEC Reports, there
  has not been, to the Company’s knowledge, any event or condition of any
  character that, either individually or cumulatively, has materially and adversely
  affected the business, assets, liabilities, financial condition, operations
  or prospects of the Company. 

 -4-

      3.9.
  Title to Properties and Assets; Liens. 
  Except as set forth on Schedule 3.9 or in the SEC Reports, the Company has good
  and marketable title to its properties and assets, including the properties
  and assets reflected in the Latest Financial Statements and (directly or through
  its joint venture interests) the gold exploration rights in South Africa, Canada
  and South America as described in the SEC Reports, and good title to its leasehold
  estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance
  or charge, other than (i) those resulting from taxes that have not yet become
  delinquent, (ii) minor liens and encumbrances that do not materially detract
  from the value of the property subject thereto or materially impair the operations
  of the Company and (iii) those that have otherwise arisen in the ordinary course
  of business. All facilities, machinery, equipment, fixtures and other properties
  owned, leased or used by the Company are in good operating condition and repair
  and are reasonably fit and usable for the purposes for which they are being
  used, reasonable wear and tear excepted. 

      3.10.
  Patents and Trademarks.
  Except as set forth on Schedule 3.10 or in the SEC Reports, the Company owns
  or licenses all patents, trademarks, service marks, trade names, copyrights,
  trade secrets, information and other proprietary rights and processes necessary
  for its business as now conducted and as proposed to be conducted, without any
  known infringement of the rights of others. The Company is not aware that any
  of its employees is obligated under any contract (including licenses, covenants
  or commitments of any nature) or other agreement, or subject to any judgment,
  decree or order of any court or administrative agency, that would interfere
  with their duties to the Company or that would conflict with the Company’s
  business as proposed to be conducted. None of the execution or delivery of,
  or the performance of the transactions contemplated by, the Transaction Documents,
  the pledge of the Collateral by the Company to secure the Note, the carrying
  on of the Company’s business by the employees of the Company nor the conduct
  of the Company’s business as currently conducted or proposed will conflict
  with or result in a breach of the terms, conditions or provisions of, or constitute
  a default under, any contract, covenant or instrument under which any employee
  is now obligated. The Company does not believe it is or will be necessary to
  utilize any inventions, trade secrets or proprietary information of any of its
  employees made prior to their employment by the Company, except for inventions,
  trade secrets or proprietary information that have been assigned to the Company.
  

      3.11.
  Compliance with Other Instruments. Except as disclosed in the SEC Reports,
  the Company is not in violation or default of any term of its Articles of Incorporation or Bylaws, or of any provision of any mortgage,
  indenture, contract, agreement, instrument or contract to which it is party or by which it is bound or of any judgment, decree, order,
  writ or, to its knowledge, any statute, rule or regulation applicable to the Company that would materially and adversely affect the
  business, assets, liabilities, financial condition, operations or prospects of the Company. The execution and delivery of, and the performance
  of and compliance with the transactions contemplated by, the Transaction Documents, and the issuance and sale of the Shares as payment
  under the Note, upon conversion of the Note or upon exercise of the Warrant, will not, with or without the passage of time or giving
  of notice, result in any such material violation, or be in conflict with or constitute a default under any such term, or result in the
  creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets
  of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval
  applicable to the Company, its business or operations or any of its assets or properties. 

  -5- 

      3.12.
  Litigation. Except
  as disclosed in the SEC Reports, there is no action, suit, proceeding or investigation
  pending or, to the Company’s knowledge, currently threatened against the
  Company that questions the validity of this Agreement or the other agreements
  contemplated hereby or the right of the Company to enter into any of such agreements,
  or to consummate the transactions contemplated hereby or thereby. Except as
  disclosed in the SEC Reports, there is no action, suit, proceeding or investigation
  or, to the Company’s knowledge, currently threatened against the Company
  that might result, either individually or in the aggregate, in any material
  adverse change in the assets, condition, affairs or prospects of the Company,
  financial or otherwise, or any change in the current equity ownership of the
  Company, nor is the Company aware that there is any basis for the foregoing.
  The foregoing includes, without limitation, actions pending or threatened (or
  any basis therefor known to the Company) involving the prior employment of any
  of the employees of the Company, their use in connection with the Company’s
  business of any information or techniques allegedly proprietary to any of their
  former employers or their obligations under any agreements with prior employers.
  Except as disclosed in the SEC Reports, the Company is not a party or subject
  to the provisions of any order, writ, injunction, judgment or decree of any
  court or government agency or instrumentality.

      3.13.
  Tax Returns and Payments.
  The Company has timely filed all tax returns (federal, state and local) required
  to be filed by it. All taxes shown to be due and payable on such returns, any
  assessments imposed, and, to the Company’s knowledge, all other taxes due
  and payable by the Company on or before the Closing have been paid or will be
  paid prior to the time they become delinquent. The Company has not been advised
  (i) that any of its returns, federal, state or other, have been or are being
  audited as of the date hereof or (ii) of any deficiency in assessment or proposed
  judgment to its federal, state or other taxes. The Company has no knowledge
  of any liability of any tax to be imposed upon the properties or assets of the
  Company as of the date of this Agreement that is not adequately provided for.
  

      3.14.
  Employees. The Company has no collective bargaining agreements with any
  of its employees. There is no labor union organizing activity pending or, to the Company’s knowledge, threatened with respect to
  the Company. Except as set forth on Schedule 3.14 or in the SEC Reports, no employee has any agreement or contract, written or verbal,
  regarding his employment. Except as disclosed on Schedule 3.14 or in the SEC Reports, the Company is not a party to or bound by any
  currently effective employment contract, deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement
  agreement or other employee compensation plan or agreement. To the Company’s knowledge, no employee of the Company, nor any consultant
  with whom the Company has contracted, is in violation of any material term of any employment contract, proprietary information agreement
  or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company because of the
  nature of the business to be conducted by the Company; and, to the Company’s knowledge, the continued employment by the Company
  of its present employees, and the performance of the Company’s contracts
  with its independent contractors, will not result in any such violation. The Company has not received any notice alleging that any such
  violation has occurred. Except as disclosed on Schedule 3.14 or in the SEC Reports, no employee of the Company has been granted the
  right to continued employment by the Company or to any material compensation following termination of employment with the Company. The
  Company is not aware that any officer or key employee, or that any group of key employees, intends to terminate their employment with
  the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of key
  employees. 

  -6- 

      3.15.
  Registration Rights. Except as to a registration statement on Form S-2,
  SEC File No. 333-110831, filed by the Company with the Commission (the "S-2
  Registration Statement"), or as disclosed on Schedule 3.15 or required
  pursuant to the Registration Rights Agreement, the Company is presently not under any obligation, and has not granted any rights, to
  register (as defined in the Registration Rights Agreement) any of the Company’s presently outstanding securities or any of its
  securities that may hereafter be issued. 

      3.16.
  Compliance with Laws; Permits. Except
  as disclosed in the SEC Reports, the Company is not in violation of any applicable
  statute, rule, regulation, order or restriction of any domestic or foreign government
  or any instrumentality or agency thereof in respect of the conduct of its business
  or the ownership of its properties that would materially and adversely affect
  the business, assets, liabilities, financial condition, operations or prospects
  of the Company. No governmental orders, permissions, consents, approvals or
  authorizations are required to be obtained and no registrations or declarations
  are required to be filed in connection with the execution and delivery of, and
  the performance of the transactions contemplated by, the Transaction Documents,
  the pledge of the Collateral to secure the Note or the issuance of the Shares
  as payment under the Note, upon conversion of the Note or upon exercise of the
  Warrant, except such as has been duly and validly obtained or filed, or with
  respect to any filings that must be made after the Closing, as will be filed
  in a timely manner. The Company has all franchises, permits, licenses and any
  similar authority necessary for the conduct of its business as now being conducted
  by it, the lack of which could materially and adversely affect the business,
  properties, prospects or financial condition of the Company and the Company
  believes it can (and covenants to Purchaser that it will) obtain any similar
  authority for the conduct of its business as planned to be conducted. 

      3.17.
  Environmental and Safety Laws. Except
  as disclosed in the SEC Reports, to the Company’s knowledge, the Company
  is not in violation of any applicable statute, law or regulation relating to
  the environment or occupational health and safety, and to the Company’s
  knowledge, no material expenditures are or will be required in order to comply
  with any such existing statute, law or regulation. Without limiting the foregoing,
  and except as disclosed in the SEC Reports: 

      (a) with respect to any real property owned, leased
  or otherwise utilized by the Company (“Real Property”),
  the Company is not or has not in the past been in violation of any Hazardous Substance Law which violation could reasonably be expected
  to result in a material liability to the Company or its properties and assets;
  

  -7- 

 

      (b)
  the Company nor, to the knowledge of the Company, any third party has used,
  Released, generated, manufactured, produced or stored, in, on, under, or about
  any Real Property, or transported thereto or therefrom, any Hazardous Substances
  that could reasonably be expected to subject the Company to material liability,
  under any Hazardous Substance Law; 

      (c)
  to the knowledge of the Company, there are no underground tanks, whether operative
  or temporarily or permanently closed, located on any Real Property that could
  reasonably be expected to subject the Company to material liability under any
  Hazardous Substance Law; 

      (d)
  there are no Hazardous Substances used, stored or present at, or on, or to the
  knowledge of the Company that could reasonably be expected to migrate onto any
  Real Property, except in compliance with Hazardous Substance Laws; and 

      (e)
  to the knowledge of the Company, there neither is nor has been any condition,
  circumstance, action, activity or event that could reasonably be expected to
  be a material violation by the Company of any Hazardous Substance Law, or to
  result in liability to the Company under any Hazardous Substance Law. 

      For purposes hereof, “Hazardous
  Substances” means (statutory acronyms and abbreviations having the
  meaning given them in the definition below of “Hazardous Substances
  Laws”) substances defined as “hazardous substances,”
  “pollutants” or “contaminants” in Section 101 of the CERCLA; those substances defined as “hazardous waste,”
  “hazardous materials” or “regulated substances” by the RCRA; those substances designated as a “hazardous substance”
  pursuant to Section 311 of the CWA; those substances defined as “hazardous materials” in Section 103 of the HMTA; those substances
  regulated as a hazardous chemical substance or mixture or as an imminently hazardous chemical substance or mixture pursuant to Sections
  6 or 7 of the TSCA; those substances defined as “contaminants” by Section 1401 of the SDWA, if present in excess of permissible
  levels; those substances regulated by the Oil Pollution Act; those substances defined as a pesticide pursuant to Section 2(u) of the
  FIFRA; those substances defined as a source, special nuclear or by-product material by Section 11 of the AEA; those substances defined
  as “residual radioactive material” by Section 101 of the UMTRCA; those substances defined as “toxic materials” or
  “harmful physical agents” pursuant to Section 6 of the OSHA; those substances defined as hazardous wastes in 40 C.F.R. Part
  261.3; those substances defined as hazardous waste constituents in 40 C.F.R. Part 260.10, specifically including Appendix VII and VIII
  of Subpart D of 40 C.F.R. Part 261; those substances designated as hazardous substances in 40 C.F.R. Parts 116.4 and 302.4; those substances
  defined as hazardous substances or hazardous materials in 49 C.F.R. Part 171.8; those substances regulated as hazardous materials, hazardous
  substances, or toxic substances in 40 C.F.R. Part 1910; any chemical, material, toxin, pollutant, or waste regulated by or in any other
  Hazardous Substances Laws; and in the regulations adopted and publications promulgated pursuant to said laws, whether or not such regulations
  or publications are specifically referenced herein. 

  -8- 

      “Hazardous
  Substances Law”
  means any of: 

      (i)
  the Comprehensive Environmental Response, Compensation, and Liability Act of
  1980, as amended (42 U.S.C. Section 9601 et
  seq.) (“CERCLA”);
  

      (ii)
  the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et
  seq.) (“Clean
  Water Act”
  or “CWA”);
  

      (iii) the Resource Conservation and Recovery Act (42
  U.S.C. Section 6901 et seq.)
   (“ RCRA”);
  

      (iv)
  the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et
  seq.) (“AEA”);
  

      (v)
  the Clean Air Act (42 U.S.C. Section 7401 et
  seq.) (“CAA”);
  

      (vi)
  the Emergency Planning and Community Right to Know Act (42 U.S.C. Section 11001
  et seq.)
  (“EPCRA”);
  

      (vii)
  the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136
  et seq.)
  (“FIFRA”);
  

      (viii)
  the Oil Pollution Act of 1990 (33 U.S.C.A. Section 2701 et
  seq.); 

      (ix)
  the Safe Drinking Water Act (42 U.S.C. Sections 300f et
  seq.) (“SDWA”);
  

      (x)
  the Surface Mining Control and Reclamation Act of 1974 (30 U.S.C. Sections 1201
  et seq.)
  (“SMCRA”);
  

      (xi)
  the Toxic Substances Control Act (15 U.S.C. Section 2601 et
  seq.) (“TSCA”);
  

      (xii) the Hazardous Materials Transportation Act (49
  U.S.C. Section 5101 et seq.)
   (“HMTA”);

      (xiii)
  the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. Section 7901
  et seq.) (“UMTRCA”);
  

      (xiv) the Occupational Safety and Health Act (29 U.S.C.
  Section 651 et seq.)  (“OSHA”);
  and 

      (xv)
  all other federal, state and local governmental rules which govern Hazardous
  Substances, and the regulations adopted and publications promulgated pursuant
  to all such foregoing laws. 

 -9-

      3.18.
  Offering Valid. Assuming
  the accuracy of the representations and warranties of the Purchaser contained
  in Section 4, the offer, sale and issuance of the Note and the Warrant (and
  the Shares issuable as payment under the Note, upon conversion of the Note or
  upon exercise of the Warrant) will be exempt from the registration requirements
  of the Securities Act of 1933, as amended (the “Securities
  Act”),
  and will have been registered or qualified (or are exempt from registration
  and qualification) under the registration, permit or qualification requirements
  of the State of Minnesota. 

      3.19.
  Full Disclosure.
  None of the Transaction Documents nor the SEC Reports contain any untrue statement
  of a material fact nor, to the Company’s knowledge and belief, omit to
  state a material fact necessary in order to make the statements contained herein
  or therein not misleading. There are no facts that (individually or in the aggregate)
  materially adversely affect the business, assets, liabilities, financial condition
  or operations of the Company that have not been set forth in the Transaction
  Documents, the SEC Reports or in other documents delivered to the Purchaser
  or its attorneys or agents in connection herewith. 

      3.20.
  Insurance.  The
  Company has fire and casualty insurance policies with coverage customary for
  companies similarly situated to the Company. 

      3.21.
  Investment Company Act.
  The Company is not, and will not use the proceeds from the Note in a manner
  so as to become, an “investment company,” or a company “controlled”
  by an “investment company,” within the meaning of the Investment Company
  Act of 1940, as amended. 

      3.22.
  Security Interest in Collateral. The
  Company owns the Collateral free and clear of all claims, liens or encumbrances
  of any kind. Upon consummation of the transactions as contemplated hereby, the
  Purchaser will have a first priority security interest in the Collateral. 

      3.23.
  NASDAQ Compliance. The
  Company’s Common Stock is registered pursuant to Section 12(g) of the Securities
  Exchange Act of 1934, as amended (the “Exchange
  Act”),
  and is listed on the Over-the-Counter Bulletin Board administered by The Nasdaq
  Stock Market, Inc. (the “OTCBB”).
  The Company has taken no action designed to, or likely to have the effect of,
  and the transactions contemplated by this Agreement will not have the effect
  of, terminating the registration of the Common Stock under the Exchange Act
  or de-listing of the Common Stock from the OTCBB. The Company has not received
  any notification that the Commission, the National Association of Securities
  Dealers, Inc., the OTCBB or any other self-regulatory organizational body is
  contemplating terminating such registration or listing. Without limiting the
  foregoing, the Transaction Documents and the transactions contemplated by them
  require no shareholder approval under the rules or interpretations of the OTCBB.
  

      3.24. Reporting Status. The
  Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the 12 months
  preceding the date of this Agreement. The SEC Reports complied in all material respects with the Commission’s requirements as of
  their respective filing dates, and the information contained therein as of
  the date thereof did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein
  or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date
  hereof, the Company satisfies the eligibility requirements for the use of Form S-2 under the Securities Act of 1933, as amended. 

 -10- 

      3.25. No Manipulation of Stock.
  Neither the Company, nor any of its directors, officers or controlling persons, has taken or will, in violation of applicable law, take,
  any action designed to or that might reasonably be expected to cause or result in, or which has constituted, stabilization or manipulation
  of the price of the Common Stock to facilitate the sale or resale of the securities issued or issuable in connection with the transactions
  contemplated hereunder. 

      3.26. Foreign Corrupt
  Practices; Sarbanes-Oxley.

      (a)
  Neither the Company, nor to the knowledge of the Company, any agent or other
  person acting on behalf of the Company, has (i) directly or indirectly, used
  any corrupt funds for unlawful contributions, gifts, entertainment or other
  unlawful expenses related to foreign or domestic political activity, (ii) made
  any unlawful payment to foreign or domestic government officials or employees
  or to any foreign or domestic political parties or campaigns from corporate
  funds, (iii) failed to disclose fully any contribution made by the Company (or
  made by any person acting on its behalf of which the Company is aware) which
  is in violation of law, or (iv) violated in any material respect any provision
  of the Foreign Corrupt Practices Act of 1977, as amended. 

      (b)
  The Company is in compliance in all material respects with all provisions of
  the Sarbanes-Oxley Act of 2002 that are applicable to it as of the Closing Date.
  

 SECTION 4. REPRESENTATIONS
  AND WARRANTIES OF THE PURCHASER
  

      The
  Purchaser hereby represents and warrants to the Company as of the Closing Date,
  and agrees, as follows: 

      4.1.
  Investment Representations. The
  Purchaser understands that neither the offer nor the sale of the Note, the Warrant
  or the Shares has been registered under the Securities Act. The Purchaser also
  understands that the Note and Warrant are being offered and sold pursuant to
  an exemption from registration contained in the Securities Act based in part
  upon the Purchaser’s representations contained in the Agreement. The Purchaser
  hereby represents and warrants as follows: 

      (a)
  Purchaser Bears Economic Risk.  The Purchaser has substantial experience
  in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable
  of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. The Purchaser
  must bear the economic risk of this investment indefinitely unless the Note or Warrant (or the Shares) are registered
  pursuant to the Securities Act, or an exemption from registration is available. Except as contemplated by the Registration Rights Agreement,
  the Purchaser has no present intention of selling or otherwise transferring the Note, the Warrant or the Shares, or any interest therein.
  The Purchaser also understands that there is no assurance that any exemption from registration under the Securities Act will be available
  and that, even if available, such exemption may not allow the Purchaser to transfer all or any portion of the Note, the Warrant or the
  Shares under the circumstances, in the amounts or at the times the Purchaser might propose. 

 -11- 

      (b)
  Acquisition for Own Account.
  Except as contemplated by the Registration Rights Agreement, the Purchaser is
  acquiring the Note, the Warrant and the Shares for the Purchaser’s own
  account for investment only, and not with a view towards their public distribution.
  

      (c)
  Purchaser Can Protect Its Interest. The
  Purchaser represents that by reason of its, or of its management’s, business
  or financial experience, the Purchaser has the capacity to protect its own interests
  in connection with the transactions contemplated in this Agreement, the Note,
  the Warrant and the Registration Rights Agreement. Further, the Purchaser is
  aware of no publication of any advertisement in connection with the transactions
  contemplated in the Agreement. 

      (d)
  Accredited Investor. The
  Purchaser represents that it is an accredited investor within the meaning of
  Regulation D of the Securities Act. 

      (e)
  Residence. The
  Purchaser represents that it is organized under the laws of the British Virgin
  Islands and that its principal office is located in the State of Minnesota.
  

      (f)
  Rule 144. The Purchaser
  acknowledges and agrees that the Note and Warrant, and, if issued, the Shares,
  must be held indefinitely unless they are subsequently registered under the
  Securities Act or an exemption from such registration is available. The Purchaser
  has been advised or is aware of the provisions of Rule 144 promulgated under
  the Securities Act, which permits limited resale of shares purchased in a private
  placement subject to the satisfaction of certain conditions, including, among
  other things: the availability of certain current public information about the
  Company, the resale occurring not less than one year after a party has purchased
  and paid for the security to be sold, the sale being through an unsolicited
  “broker’s transaction” or in transactions directly with a market
  maker (as such term is defined under the Securities Exchange Act of 1934, as
  amended) and the number of shares being sold during any three-month period not
  exceeding specified limitations. 

      4.2.
  Transfer Restrictions. 
  The Purchaser acknowledges and agrees that the Note and Warrant and, if issued,
  the Shares, are subject to restrictions on transfer and will bear restrictive
  legends. 

      4.3.
  Acquisition of Shares. Until the Note is paid in full, the Purchaser may
  not acquire “beneficial ownership” (as defined by Rule 13d-3 of the Securities Exchange Act of 1934,
  as amended) of Shares except for those which are or may be acquired as payment on the Note or upon exercise of the Warrant. The foregoing
  covenant shall lapse if the Company defaults in the timely payment of any amount due under the Note. 

 -12- 

 SECTION 5. CONDITIONS FOR CLOSING
  

      5.1.
  Conditions for the Company to Satisfy.
  The obligation of the Purchaser to purchase the Note and Warrant as contemplated
  by this Agreement is subject to satisfaction of the following contingencies
  at or prior to Closing: 

      (a)
  The Company shall have obtained all third party consents required in connection
  herewith, including consents to pledge the Collateral to the Purchaser as security
  for the Note. 

      (b)
  The Company shall have executed and delivered to the Purchaser at Closing the
  Transaction Documents. 

      (c)
  The Company shall have paid Gary S. Kohler and Scot W. Malloy, together, a $40,000
  cash origination fee related to the transactions contemplated hereby and shall
  have issued warrants (in form substantially similar to that of the Warrant)
  to purchase 100,000 shares of the Company’s Common Stock to each of Messrs.
  Kohler and Malloy. Purchaser acknowledges that the Company has previously paid
  $20,000 of the cash origination fee to Whitebox Advisors, LLC pursuant to a
  letter agreement dated May 13, 2004 and that only the $20,000 balance is due
  to Messrs. Kohler and Malloy at Closing. 

      (d)
  Mills shall have executed and delivered the Mills Guaranty to the Purchaser.
  

      (e)
  Maslon Edelman Borman & Brand, LLP, legal counsel to the Company, shall
  have delivered an opinion to the Purchaser with respect to the following matters:
  

           (i) The Company is a
  corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota. To such firm’s knowledge,
  the Subsidiaries are the only operating subsidiaries of the Company. Active Hawk is a limited liability company duly organized, validly
  existing and in good standing under the laws of the State of Minnesota. Each of the Company, Active Hawk and, to such firm’s knowledge,
  Brazmin has all requisite corporate or limited liability company power and authority to own and operate its respective properties and
  assets and to carry on its respective business as presently conducted and as presently proposed to be conducted. The Company has all
  requisite corporate power and authority to execute and deliver the Transaction Documents, to pledge the Collateral as security for the
  Note, to issue and sell the Shares, to carry out the provisions of the Transaction Documents. Each of the Company and Active Hawk is
  duly qualified and is authorized to do business and is in good standing in each U.S. and foreign jurisdiction in which the nature of
  its respective activities and of its respective properties (both owned and leased) makes such qualification necessary, except for those
  jurisdictions in which failure to be so qualified would not have a materially adverse effect on the Company or its business, taken as
  a whole. 

 -13- 

           (ii) The Company is authorized to issue 150,000,000
  shares of Common Stock, par value $0.01 per share, of which, to the firm’s knowledge, 33,275,181 shares are issued and outstanding.
  To the firm’s knowledge, the Company has no outstanding Convertible Securities or any agreement or commitment to sell or issue
  any shares of capital stock or Convertible Securities, except as described herein. All issued and outstanding shares of the Company’s
  capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, (c) are free from any preemptive
  and cumulative voting rights and (d) were issued pursuant to an effective registration statement filed with the Commission and applicable
  state securities authorities or pursuant to valid exemptions under federal and state securities laws. To the firm’s knowledge,
  there are no outstanding rights of first refusal or proxy or shareholder agreements of any kind relating to any of the Company’s
  securities to which the Company or any of its executive officers and directors is a party. When issued in compliance with the provisions
  of the Note and the Warrant (and upon payment as provided by the Warrant), the Shares will be validly issued, fully paid and nonassessable,
  and will be free of any liens or encumbrances; provided, however,
  that the Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise
  required by such laws at the time a transfer is proposed. 

           (iii)
  All corporate action on the part of the Company, its officers, directors and
  shareholders necessary for the authorization of the Transaction Documents, the
  performance of all obligations of the Company under the Transaction Documents
  at the Closing, including the pledge of the Collateral as security for the Note,
  and the authorization, sale, issuance and delivery of the Shares as payment
  under the Note, upon conversion of the Note or upon exercise of the Warrant
  has been taken. The Transaction Documents, when executed and delivered, will
  be valid and binding obligations of the Company enforceable in accordance with
  their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization,
  moratorium or other laws of general application affecting enforcement of creditors’
  rights, (b) according to general principles of equity that restrict the availability
  of equitable remedies; and (c) to the extent that the enforceability of the
  indemnification provisions of the Registration Rights Agreement may be limited
  by applicable laws. Although it is not representing Mr. Mills in connection
  with the transactions contemplated by this Agreement and the Transactions Documents,
  nothing has come to such firm’s attention in connection with its regular
  representation of the Company that would cause it to believe that the Mills
  Guaranty, when executed and delivered, will not be a valid and binding obligation
  of Mills enforceable in accordance with its terms, except (a) as limited by
  applicable bankruptcy, insolvency, reorganization, moratorium or other laws
  of general application affecting enforcement of creditors’ rights and (b)
  according to general principles of equity that restrict the availability of
  equitable remedies. The sale of the Shares upon exercise of the Warrant or upon
  payment under the Note is not and will not be subject to any preemptive rights
  or rights of first refusal. 

 -14-

           (iv)
  The execution and delivery to the Purchaser of the Transaction Documents does
  not violate or constitute a default under the Articles of Incorporation or Bylaws,
  as amended, of the Company, or under any agreement known to such firm to which
  the Company or the Subsidiary is a party or by which any of their respective
  properties or assets are bound. 

           (v)
  To such firm’s knowledge, except as disclosed in the SEC Reports, there
  is no action, suit, proceeding or investigation pending or currently threatened
  against the Company, including any that questions the validity of the Agreement
  or the other agreements contemplated thereby or the right of the Company to
  enter into any of such agreements, or to consummate the transactions contemplated
  thereby. To such firm’s knowledge, except as disclosed in the SEC Reports,
  there is no action, suit, proceeding or investigation or, to such firm’s
  knowledge, currently threatened against the Company that might result, either
  individually or in the aggregate, in any material adverse change in the assets,
  condition, affairs or prospects of the Company, financial or otherwise, or any
  change in the current equity ownership of the Company, nor is such firm aware
  that there is any basis for the foregoing. To such firm’s knowledge, and
  except as disclosed in the SEC Reports, the Company is not a party or subject
  to the provisions of any order, writ, injunction, judgment or decree of any
  court or government agency or instrumentality. 

           (vi)
  Upon tender of the funds by the Purchaser to the Company as contemplated by
  the Agreement and filing of a UCC Financing Statement covering the Collateral,
  a security interest in the Collateral will attach in favor of the Purchaser.
  

 SECTION 6. MISCELLANEOUS
  

      6.1.
  Governing Law. This
  Agreement shall be governed by the laws of the State of Minnesota as such laws
  are applied to agreements between Minnesota residents entered into and performed
  entirely in Minnesota. 

      6.2.
  Survival. The representations,
  warranties, covenants and agreements made herein shall survive any investigation
  made by the parties and the closing of the transactions contemplated hereby.
  All statements as to factual matters contained in any certificate or other instrument
  delivered by or on behalf of the Company pursuant hereto in connection with
  the transactions contemplated hereby shall be deemed to be representations and
  warranties by the Company hereunder solely as of the date of such certificate
  or instrument. 

      6.3.
  Successors and Assigns.
  Except as otherwise expressly provided herein, the provisions hereof shall inure
  to the benefit of, and be binding upon, the successors, assigns, heirs, executors
  and administrators of the parties hereto and shall inure to the benefit of and
  be enforceable by each person who shall be a holder of the Note, the Warrant
  or the Shares from time to time. 

      6.4.
  Entire Agreement. The Transaction Documents, the Mills Guaranty and the
  other documents delivered pursuant hereto constitute the full and entire understanding and agreement
  between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations,
  warranties, covenants and agreements except as specifically set forth herein and therein.

 -15- 

 

      6.5.
  Severability. In
  case any provision of the Agreement shall be invalid, illegal or unenforceable,
  the validity, legality and enforceability of the remaining provisions shall
  not in any way be affected or impaired thereby. 

      6.6.
  Amendment and Waiver. This
  Agreement may be amended or modified, and any provision hereunder may be waived,
  only upon the written consent of the Company and the Purchaser. 

      6.7.
  Notices. All notices, requests, consents, and other communications hereunder
  shall be in writing and shall be deemed effectively given and received when delivered in person or by national overnight courier service
  or by certified or registered mail, return receipt requested, or by telecopier, addressed as follows: 

	 	(a)	if to the Company, at
	 	 	 
	 	 	Wits Basin Precious Minerals Inc.
	 	 	520 Marquette Avenue, Suite 900
	 	 	Minneapolis, Minnesota 55402
	 	 	Attention: H. Vance White, Chief Executive Officer
	 	 	Facsimile: (612) 371-2077
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Maslon Edelman Borman & Brand, LLP
	 	 	90 South Seventh Street, Suite 3300
	 	 	Minneapolis, Minnesota 55402
	 	 	Attention: William M. Mower, Esq.
	 	 	Facsimile: (612) 642-8358
	 	 	 
	 	(b)	if to the Purchaser, in care of:
	 	 	 
	 	 	Whitebox Advisors, LLC
	 	 	3033 Excelsior Boulevard, Suite 300
	 	 	Minneapolis, Minnesota 55416
	 	 	Attention: Jonathan Wood, Chief Financial Officer
	 	 	Facsimile: (612) 253-6151

-16-

  
     with a copy to: 

     Messerli & Kramer P.A.

      150 South Fifth Street, Suite 1800

      Minneapolis, Minnesota 55402

      Attention: Jeffrey C. Robbins, Esq.

      Facsimile: (612) 672-3777. 

  

      6.8.
  Indemnification by the Company. The
  Company agrees to indemnify and hold the Purchaser harmless against any loss,
  liability, damage or expense (including reasonable legal fees and costs) that
  the Purchaser may suffer, sustain or become subject to as a result of or in
  connection with the breach by the Company of any representation, warranty, covenant
  or agreement of the Company contained in any of the Transaction Documents, or
  by Mills of any representation, warranty, covenant or agreement of Mills contained
  in the Mills Guaranty. 

      6.9.
  Expenses. At Closing, the Company shall pay the Purchaser’s counsel,
  Messerli & Kramer P.A., $10,000 for its legal fees and expenses in
  representing the Purchaser in connection with the transactions contemplated hereby. In addition, the Purchaser agrees to pay or reimburse
  the Purchaser for its reasonable legal fees and expenses that it may incur after the date hereof in connection with the granting of
  any waiver with respect to, the modification of any of the terms or provisions of, or the enforcement of any of the Transaction Documents
  or the Mills Guaranty. 

       6.10. Titles and Subtitles.
  The titles of the
  sections and subsections of the Agreement are for convenience of reference only
  and are not to be considered in construing this Agreement. 

      6.11.
  Counterparts. This
  Agreement may be delivered via facsimile or other means of electronic communication,
  and may be executed in counterparts, each of which shall be an original, but
  all of which together shall constitute one instrument. 

      IN WITNESS WHEREOF,
  the parties hereto have hereunto affixed their signatures. 

	Wits Basin Precious Minerals Inc.	Pandora Select Partners L.P.
	 	 	 	 
	 	 	 	 
	By	/s/ Mark D. Dacko	By	 
	 	
      
	 	

	 	Mark D. Dacko, Chief Financial Officer	 	 
	 	 	Its	 
	 	 	 	
      

 -17-

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