Document:

ESCROW AGREEMENT - PROPERTY

         THIS AGREEMENT is made as of the 24th day of December, 1992.

BETWEEN:

                        MONTREAL TRUST COMPANY OF CANADA,
                        --------------------------------
                               510 Burrard Street,
                      Vancouver, British Columbia, V6C 3B9

                     (hereinafter called the "Escrow Agent")

                                OF THE FIRST PART

AND:

                      CONSOLIDATED CAPROCK RESOURCES LTD.,
                       -----------------------------------
                          Suite 900, 777 Hornby Street,
                      Vancouver, British Columbia, V6Z 1S4

                       (hereinafter called the "Company")

                               OF THE SECOND PART

AND:

                         THE UNDERSIGNED SHAREHOLDERS IN
                       CONSOLIDATED CAPROCK RESOURCES LTD.

                 (hereinafter individually called "Shareholder"
                   and collectively called the "Shareholders")

                                OF THE THIRD PART

WHEREAS:

A.   The Shareholder has acquired or is about to acquire shares,  of the Company
     and has  agreed  to enter  into  this  Escrow  Agreement  on the  terms and
     conditions hereinafter provided;

<PAGE>

B.   The Escrow Agent has agreed to undertake  and perform its duties  according
     to the terms and conditions hereof.

         NOW THEREFORE THIS AGREEMENT  WITNESSES  that in  consideration  of the
aforesaid  agreements and the mutual  covenants and conditions  herein contained
and  other  good  and  valuable  consideration,  the  Shareholders  jointly  and
severally  covenant  and agree with the  Company  and the Company and the Escrow
Agent covenant with the other and with the Shareholders jointly and severally as
follows:

1.        In this Agreement:

         (a)      "Exchange" shall mean the Vancouver Stock Exchange;

         (b)      "lost or  alienated"  shall mean that  circumstance  where the
                  Company  has lost,  alienated,  or has not  obtained a good or
                  marketable  title to, or that the  Company  has  abandoned  or
                  discontinued  development  of, any or all of the  property  or
                  asset,  or that any or all of the property or asset has become
                  of little or no value;

          (c)     "property   or  asset"   shall  mean  the  property  or  asset
                  transferred  to the Company in whole or in part  consideration
                  for the  issuance  of the  shares  referred  to in  Schedule A
                  attached hereto;

         (d)      "Shares"  shall  mean  the  shares  of  each  Shareholder  set
                  opposite his name in Schedule A attached hereto, together with
                  any  additional  shares  issued by way of a  dividend  paid in
                  shares  which  accrues to the  Shares,  and shall be deemed to
                  refer to the  certificate or  certificates  representing  such
                  shares;

          (e)     "Superintendent"  shall mean the  Superintendent of Brokers of
                  the Province of British Columbia or any Deputy  Superintendent
                  of Brokers of the  Province of British  Columbia,  or any duly
                  authorized  person  performing his duties under the Securities
                  Act of the  Province of British  Columbia as from time to time
                  amended; and

          (f)     "Superintendent or Exchange" means the Superintendent,  if the
                  shares of the Company are not listed on the  Exchange,  or the
                  Exchange  if the  shares  of the  Company  are  listed  on the
                  Exchange.

2.   Each Shareholder hereby places and deposits in escrow with the Escrow Agent
     the number of Shares of the Company set forth opposite his name in Schedule
     A attached hereto.

3.   The parties hereby agree that the Shares and the beneficial ownership of or
     any interest in them shall not be sold, assigned, hypothecated,  alienated,
     released from escrow,  transferred with escrow,  or otherwise in any manner
     dealt with except as may be  required by reason of the death or  bankruptcy
     of any  Shareholder,  in which case the Escrow  Agent shall hold the Shares

<PAGE>

     subject to this Agreement,  for whatever person,  firm or corporation shall
     be legally entitled to be or become the registered owner thereof.

4.   The Shareholders hereby direct the Escrow Agent to retain their Shares, and
     not to do or cause  anything  to be done to release the same from escrow or
     to allow any  transfer,  hypothecation  or alienation  thereof.  The Escrow
     Agent hereby accepts the responsibilities placed on it hereby and agrees to
     perform the same in accordance with the terms hereof and in accordance with
     any order or direction of the  Superintendent or Exchange,  subject only to
     any right of appeal  against  any such order or  direction  as  referred to
     herein.

5.   If,  during the period in which any of the  Shares are  retained  in escrow
     pursuant hereto, any dividend,  other than a dividend paid in shares of the
     Company,  is  received  by the Escrow  Agent in  respect  of  Shares,  such
     dividend  shall  be  paid  or  transferred  forthwith  to the  Shareholders
     entitled  thereto.  Any  shares  received  by the  Escrow  Agent  by way of
     dividend  in  respect  of the  Shares  shall be dealt  with as if they were
     Shares hereunder.

6.   All voting  rights  attached to the Shares may at all times be exercised by
     the respective registered owners thereof.

7.   The Company hereby  acknowledges the terms and conditions of this Agreement
     and agrees to take all reasonable steps to facilitate its performance.

8.   The written consent,  order or direction of the  Superintendent or Exchange
     to a release from escrow of all or part of the Shares shall  terminate this
     Agreement  only in  respect  to  those  Shares  so  released.  For  greater
     certainty this clause does not apply to Shares transferred within escrow.

9.   It is understood and acknowledged by the Company and the Shareholder that a
     portion of the consideration for the issuance of the Shares is to encourage
     the  Shareholder  to act in the best  interests  of the Company and, if the
     Company becomes successful due in part for the efforts of the Shareholders,
     and in such case, and  notwithstanding  that the property or asset has been
     lost or  alienated,  the  Shareholder  shall be entitled to maintain  their
     ownership  of the Shares  and to a release of the Shares  from the terms of
     this Agreement from time to time in accordance with the general policies of
     the Superintendent or Exchange.

10.  In the event that the Company has lost or alienated  the property or asset,
     the Company and each  Shareholder  have the express  obligation  and hereby
     agree to declare  any such event or the  circumstance  and the  particulars
     thereof to the Superintendent or Exchange.

11.  Upon the Superintendent or Exchange being advised of the loss or alienation
     of the property or asset, they may, at their discretion, make such order or
     direction for the  cancellation of all or any portion of the Shares as they
     deem advisable,  provided however, that the fact that the property or asset
     has been lost or alienated shall not, in itself,  be cause for cancellation
     of all or a part of the shares.  It shall advise Escrow Agent of such order
     or direction and the Escrow Agent, subject to paragraph 15 hereof,  shall

<PAGE>

     cancel  such  Shares as the  Superintendent  or  Exchange  has  ordered  or
     directed.

12.  If the Company ceases to own any substantial  property or asset whatsoever,
     any  Shareholder or group of  Shareholders  of the Company,  holding in the
     aggregate not less than 5% of the issued and  outstanding  common shares of
     the Company  may, by notice in writing  directed to the  Superintendent  or
     Exchange,  request that the Superintendent or Exchange order or direct that
     all or a portion of the Shares be cancelled.  Any such shareholder or group
     of  shareholders  shall  have the same  right  of  appeal  as is set out in
     paragraph 15.

13.  If the Company ceases to own any substantial  property or assets whatsoever
     and  ceases  for a period  of three  (3)  months  or more to  engage in any
     substantial business Activity relating to its normal business,  then and in
     such  case,  the  Superintendent  or the  Exchange  may  make an  order  or
     direction to cancel all or any of the shares.

14.  Upon receipt of any order or direction  of the  Superintendent  or Exchange
     and subject as herein provided,  the Shareholder here irrevocably  appoints
     the Escrow  Agent their  attorney for the purpose of  cancelling,  selling,
     assigning  or  transferring  any  portion of the Shares for the  purpose of
     executing any necessary acts of assignment or transfer,  and with authority
     to substitute one or more persons with like full power.

15.  Upon  receipt  by the  Escrow  Agent  of any  order  or  direction  for the
     cancellation of any of the Shares,  the Escrow Agent shall forthwith advise
     the  Shareholders and shall not take any steps to cancel such Shares for 90
     days from receipt of the order or direction. The Company or any Shareholder
     shall  have the right to  appeal  the  decision  of the  Superintendent  or
     Exchange as if it were a decision of the  Superintendent in accordance with
     the provisions of the Securities Act of the Province of British Columbia.

16.  Any order or direction of the Superintendent or Exchange for the release of
     all or any of the Shares from the terms of this Agreement  shall be subject
     to the same right of appeal by the Company or any shareholder as is set out
     in  paragraph  15 above and the Escrow  Agent  shall not release any Shares
     from the terms of this Agreement until the expiry of ten (10) days from the
     receipt of the order or direction of the Superintendent or Exchange.

17.  Nothing  herein  shall  prevent  the Company  and the  Shareholder,  or any
     successors  or  permitted  assigns of the  Shareholder,  from  amending any
     agreement  pursuant to which the Shares were originally  issued,  including
     any amendment  which  substitutes one property or asset for the property or
     asset originally  blended to the Company,  PROVIDED HOWEVER,  that any such
     amendment  or  substitution   shall  be  subject  to  the  consent  of  the
     Superintendent or Exchange.

18.  Nothing herein shall prevent the Superintendent or Exchange from consenting
     to the  release  of Shares  from the terms of this  Agreement  from time to
     time,  even though all or a portion of the  property or asset for which the
     Shares  were  originally  issued  or  any  property  or  asset  substituted
     therefor, has been lost or alienated.

<PAGE>

19.  Notice of any order or direction of the Superintendent or Exchange shall be
     given by the Escrow  Agent to all  persons or parties  affected  thereby at
     their last known registered address.

20.  This  Agreement  may be executed in several parts in the same form and such
     parts as so executed shall together form one original  agreement,  and such
     parts, if more than one, shall be read together and construed as if all the
     signing parties hereto had executed one copy of this Agreement.

21.  Wherever  the singular or masculine  are used through this  Agreement,  the
     same shall be  construed as being the plural or feminine or neuter when the
     context so requires.

22.  This  Agreement  shall  enure to the  benefit  of and be  binding  upon the
     parties hereto, their and each of their heirs, successors,  administrators,
     successors and permitted assigns.

23.  The parties hereto agree that in  consideration  of the premises and of the
     Escrow Agent agreeing to act in such  capacity,  the  Shareholders  and the
     Company do hereby  jointly and  severally  covenant  and agree from time to
     time and at all times  hereafter  well and truly to save,  defend  and keep
     harmless and fully indemnify the Escrow Agent,  its successors and assigns,
     from and against all loss, costs, charges, suits, demands,  claims, damages
     and expenses which the Escrow Agent,  its  successors or assigns,  may from
     time to time  hereafter  bear,  sustain,  suffer  or be put  unto for or by
     reason or on  account  of its  acting as Escrow  Agent or  anything  in any
     manner  relating  thereto or by reason of the Escrow Agent's  compliance in
     good faith with the terms hereof.

24.  It is  further  agreed by and  between  the  parties  hereto,  and  without
     restricting  the  foregoing  indemnity,  that  in case  proceedings  should
     hereafter  be taken in any court  respecting  the Shares,  the Escrow Agent
     shall not be obliged to defend any such  action or submit its rights to the
     court  until it shall have been  indemnified  by other good and  sufficient
     security in addition to the indemnity hereinbefore given against its costs
     of such proceedings.

<PAGE>

         IN WITNESS  WHEREOF the parties hereto have executed these presents the
day and year first written above.

THE COMMON SEAL OF                                          )
MONTREAL TRUST COMPANY was hereunto                         )
affixed in the presence of:                                 )            C/S
                                                            )
/s/-------------------------------------                    )
Authorized Signatory                                        )
/s/_____________________________________                    )
Authorized Signatory                                        )
                                                            )
/s/-------------------------------------                    )
Witness                                                     )
                                                              Peter P.  Tsaparas

THE COMMON SEAL OF                                          )
CONSOLIDATED CAPROCK                                        )
RESOURCES LTD was hereunto                                  )
affixed in the presence of:                                 )           C/S
                                                            )
/s/-------------------------------------                    )
Peter P.  Tsaparas                                          )
                                                            )
/s/-------------------------------------                    )
Authorized Signatory                                        )

<PAGE>

                                   SCHEDULE A
                       TO THE ESCROW AGREEMENT - PROPERTY
                   DATED AS OF THE 24th DAY OF DECEMBER, 1992
                         AMONG MONTREAL TRUST COMPANY,
                     CONSOLIDATED CAPROCK RESOURCES, LTD.,
                             AND PETER P. TSAPARAS

Shares held in escrow are  subkject to rules,  regulations  and  policies of the
Superintendent of Brokers and the Vancouver Stock Exchange,  as may be in effect
during the currency of this Agreement.

Name and Address of Shareholder                          Number of Shares
--------------------------------                         ----------------
Peter P.  Tsaparas                                            194,276
c/o 900 - 5956 Howe Street
Vancouver, B.C.
V6C 2T5PERFORMANCE SHARES ESCROW AGREEMENT

     THIS AGREEMENT is dated for reference the 17th day of August, 1995 and
made

AMONG:

               MONTREAL TRUST COMPANY OF CANADA, of Montreal Trust
            Company of Canada, 510 Burrard Street, Vancouver, British
                                Columbia, V6C 3B9

                              (the "Escrow Agent")

AND:

             MINCO MINING AND METALS CORPORATION, a British Columbia
              company, having its registered and records office at
            Suite 1750, 1185 West Georgia Street, Vancouver, British
                               Columbia, V6E 4E6;

                                 (the "Issuer")

AND:

                 EACH SHAREHOLDER, as defined in this Agreement;

                         (collectively, the "Parties").

     WHEREAS the  Shareholder  has acquired or is about to acquire shares of the
Issuer;

     AND WHEREAS the Escrow Agent has agreed to act as escrow agent in
respect of the shares upon the acquisition of the shares by the Shareholder;

     NOW THEREFORE in consideration of the covenants contained in this agreement
and other good and valuable  consideration (the receipt and sufficiency of which
is acknowledged), the Parties agree as follows:

1.   INTERPRETATION

               In this agreement:

<PAGE>

     (a) "Acknowledgment"  means the acknowledgment and agreement to be bound in
the form attached as Schedule "A" to this agreement;

     (b) "Act" means the Securities Act, S.B.C. 1985, c. 83;

     (c) "Exchange" means the Vancouver Stock Exchange;

     (d) "IPO" means the initial public  offering of common shares of the Issuer
under a prospectus  which has been filed with,  and for which a receipt has been
obtained from, the Superintendent under section 42 of the Act;

     (e) "Local Policy  Statement 3-07" means the Local Policy Statement 3-07 in
effect as of the date of  reference of this  agreement  and attached as Schedule
"B" to this agreement;

     (f) "Shareholder"  means a holder of shares of the Issuer who executes this
agreement or an Acknowledgment;

     (g) "Shares" means the shares of the Shareholder  described in Schedule "C"
to this agreement, as amended from time to time in accordance with section 9;

     (h)  "Superintendent"  means the  Superintendent of Brokers appointed under
the Act; and

     (i)  "Superintendent  or the  Exchange"  means the  Superintendent,  if the
shares of the Issuer are not listed on the  Exchange,  or the  Exchange,  if the
shares of the Issuer are listed on the Exchange.

2.   PLACEMENT OF SHARES IN ESCROW

     The Shareholder places the Shares in escrow with the Escrow Agent and shall
deliver the certificates  representing the Shares to the Escrow Agent as soon as
practicable.

3.   VOTING OF SHARES IN ESCROW

     Except as provided by section 4(a), the Shareholder may exercise all voting
rights attached to the Shares.

4.   WAIVER OF SHAREHOLDER'S RIGHTS

     The Shareholder waives the rights attached to the Shares

          (a) to vote the Shares on a resolution to cancel any of the Shares,

<PAGE>

          (b) to receive dividends, and

          (c) to  participate  in the  assets  and  property  of the Issuer on a
     winding up or dissolution of the Issuer.

5.   ABSTENTION FROM VOTING AS A DIRECTOR

     A  Shareholder  that is or becomes a director of the Issuer  shall  abstain
from voting on a directors' resolution to cancel any of the Shares.

6.   TRANSFER WITHIN ESCROW

          (a)  The  Shareholder  shall not transfer any of the Shares  except in
               accordance with Local Policy  Statement 3-07 and with the consent
               of the Superintendent or the Exchange.

          (b)  The Escrow Agent shall not effect a transfer of the Shares within
               escrow unless the Escrow Agent has received

               (i)  a copy of an  Acknowledgment  executed by the person to whom
                    the Shares are to be transferred, and

               (ii) a letter from the Superintendent or the Exchange  consenting
                    to the transfer.

        (c)    Upon the death or bankruptcy of a  Shareholder,  the Escrow Agent
               shall hold the Shares  subject to this  agreement  for the person
               that is legally  entitled to become the  registered  owner of the
               Shares.

        (d)    In the  event  the  Shareholder  ceases  to be a  principal  or a
               promoter of the Issuer, he shall be entitled to retain all of the
               Shares and shall not be obligated to sell,  transfer or otherwise
               assign the Shares to anyone.

7.   RELEASE FROM ESCROW

        (a)    The  Shareholder  irrevocably  directs the Escrow Agent to retain
               the Shares until the Shares are released from escrow  pursuant to
               subsection  (2)  or  surrendered  for  cancellation  pursuant  to
               section 8.

        (b)    The Escrow Agent shall not release the Shares from escrow  unless
               the Escrow Agent has received a letter from the Superintendent or
               the Exchange consenting to the release.
<PAGE>

        (c)    The approval of the  Superintendent  or the Exchange to a release
               from escrow of any of the Shares shall  terminate  this agreement
               only in respect of the Shares so released.

8.   SURRENDER FOR CANCELLATION

               The Shareholder  shall surrender the Shares for  cancellation and
the Escrow Agent shall deliver the  certificates  representing the Shares to the
Issuer

     (a)  at the time of a major  reorganization of the Issuer, if required as a
          condition of the consent to the  reorganization by the  Superintendent
          or the Exchange,

     (b)  where the  Issuer's  shares  have been  subject to a cease trade order
          issued under the Act for a period of 2 consecutive years,

     (c)  any shares not  released  from the escrow  hereby  created  before the
          expiration  of five  years  from the date the  Exchange  accepts  this
          agreement  for filing  shall be  surrendered  by the  shareholder  for
          cancellation  forthwith  and the Company and the Escrow  Agent  hereby
          agree to take all such actions as may be  necessary  to  expeditiously
          effect such cancellation,

     (d)  where required by section 6(4).

9.   AMENDMENT OF AGREEMENT

     (a)  Subject to  subsection  (2),  this  agreement may be amended only by a
          written  agreement  among the Parties and with the written  consent of
          the Superintendent or the Exchange.

     (b)  Schedule "C" to this agreement shall be amended upon

          (i)  a transfer of Shares pursuant to section 6,

          (ii) a release of Shares from escrow pursuant to section 7, or

          (iii)a  surrender  of Shares for  cancellation  pursuant to section 8,
               and the Escrow Agent shall note the amendment on the Schedule "C"
               in its possession.

10.  INDEMNIFICATION OF ESCROW AGENT

               The Issuer and the Shareholders,  jointly and severally, release,
indemnify  and save harmless the Escrow Agent from all costs,  charges,  claims,
demands,  damages,  losses  and  expenses  resulting  from  the  Escrow  Agent's
compliance in good faith with this agreement.

<PAGE>

11.  RESIGNATION OF ESCROW AGENT

     (a)  If the Escrow Agent wishes to resign as escrow agent in respect of the
          Shares, the Escrow Agent shall give notice to the Issuer.

     (b)  If the Issuer  wishes the  Escrow  Agent to resign as escrow  agent in
          respect  of the  Shares,  the Issuer  shall give  notice to the Escrow
          Agent.

     (c)  A notice  referred to in subsection (1) or (2) shall be in writing and
          delivered to

          (i)  the Issuer at Suite 1750,  1185 West Georgia  Street,  Vancouver,
               British Columbia, V6E 4E6; or

          (ii) the Escrow  Agent at 830 - 625 Howe  Street,  Vancouver,  British
               Columbia, V6C 3B8

               and the notice shall be deemed to have been  received on the date
of delivery. The Issuer or the Escrow Agent may change its address for notice by
giving notice to the other party in accordance with this subsection.

     (d)  A copy  of a  notice  referred  to in  subsection  (1)  or  (2)  shall
          concurrently be delivered to the Superintendent or the Exchange.

     (e)  The  resignation of the Escrow Agent shall be effective and the Escrow
          Agent  shall cease to be bound by this  agreement  on the date that is
          180 days  after  the date of  receipt  of the  notice  referred  to in
          subsection  (1) or (2) or on such other  date as the Escrow  Agent and
          the Issuer may agree upon (the "resignation date").

     (f)  The Issuer  shall,  before the  resignation  date and with the written
          consent of the Superintendent or the Exchange,  appoint another escrow
          agent and that  appointment  shall be  binding  on the  Issuer and the
          Shareholders.

12.  FURTHER ASSURANCES

               The Parties  shall  execute and deliver any documents and perform
any acts necessary to carry out the intent of this agreement.

13.  TIME

               Time is of the essence of this agreement.

<PAGE>

14.  GOVERNING LAWS

               This agreement shall be construed in accordance with and governed
by the laws of British  Columbia  and the laws of Canada  applicable  in British
Columbia.

15.  COUNTERPARTS

               This agreement may be executed in two or more counterparts,  each
of which shall be deemed to be an original and all of which shall constitute one
agreement.

16.  LANGUAGE

               Wherever a singular  expression is used in this  agreement,  that
expression is deemed to include the plural or the body corporate  where required
by the context.

17.  ENUREMENT

               This  agreement  enures to the  benefit  of and is binding on the
Parties and their heirs,  executors,  administrators,  successors  and permitted
assigns.

               The Parties have executed and delivered  this agreement as of the
date of reference of this agreement.

THE COMMON SEAL                                    )
of MONTREAL TRUST COMPANY                          )
CANADA was hereto affixed in the                   )
 presence of:                                      )  c/s
                                                   )
/s/ illegible                                      )
---------------------                              )
Authorized Signatory                               )
                                                   )
                                                   )
/s/ L. Buchley                                     )
---------------------                              )
Authorized Signatory                               )

<PAGE>

THE COMMON SEAL of MINCO                          )
MINING    AND    METALS                           )
CORPORATION was                                   )
hereto affixed in the presence of:                )   c/s
                                                  )
/s/ Peter P. Tsaparas                             )
-----------------------------                     )
Authorized Signatory                              )
                                                  )
/s/ Colin McAleenan                               )
 ----------------------------                     )
Authorized Signatory                              )

SIGNED, SEALED and DELIVERED by                   )
PETER P. TSAPAR                                   )
 in the presence of:                              )
/s/ Naomi Rochus                                  )       /s/ PETER P. TSAPARAS
-----------------------------                     )           -----------------
316-125 W. 19th St. N.VcR. BC                     )           Peter P.  Tsaparas
Occupation: Businesswoman                         )

SIGNED, SEALED and DELIVERED by                   )
HANS WICK in the presence of                      )

/s/ Manuel Beer                                   )       /s/ HANS WICK
----------------------------                      )           ---------------
8032 Zurich, Switzerland                          )            Hans Wick
Occupation:  Retired                              )

SIGNED, SEALED and DELIVERED by                    )
FOTIOS KANDIANIS in the  presence of:              )
                                                   )
/s/ A. Angelidis                                   )       /s/ FOTIOS KANDIANIS
----------------------------                       )           -----------------
8 Pliadon St., Athens 17561 Greece                 )           Fotios Kandianis
Occupation:  Engineer                              )

<PAGE>

SIGNED, SEALED and DELIVERED by                    )
PETROS S.E. TSAPARAS in the presence of:           )
                                                   )
/s/ Colin McAleenan                                )    /s/ PETROS S.E. TSAPARAS
----------------------------------------           )        --------------------
2596 Harrier Dr., Coquitlam BC                     )        Petros S.E. Tsaparas
Occupation:  Geologist                             )

SIGNED, SEALED and DELIVERED by                    )
 COLIN McALEENAN the presence of:                  )
                                                   )
/s/ Petros Tsaparas                                )       /s/ COLIN MCALEENAN
-----------------------------------------          )           ----------------
4112 Puget Dr., Vancouer B.C                       )           Colin McAleenan
Occupation:  Engineer                              )

<PAGE>

                        SCHEDULE "A" TO ESCROW AGREEMENT

                    ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND

To: Superintendor  of Brokers                   Vancouver Stock Exchange
#1100 - 865 Hornby Street                         609 Granville Street
Vancouver, B. C.                                    Vancouver, B. C.
V6Z 2H4                                                V7Y 1H1

(if the shares are not                         (if the shares are listed
listed on the Vancouver                        on the Vancouver Stock
Stock Exchange)                                      Exchange)

I acknowledge that

(a)     I have entered into an agreement with ____________________,  under which
        ___________ shares of MINCO MINING AND METALS CORPORATION (the "Shares")
        will be transferred to me upon receipt of regulatory approval, and

(b)     the Shares are held in escrow subject to an escrow  agreement  dated for
        reference _______,  2000, (the "Escrow  Agreement"),  a copy of which is
        attached as Schedule "A" to this acknowledgment.

In consideration of $1.00 and other good and valuable consideration (the receipt
and  sufficiency of which is  acknowledged)  I agree,  effective upon receipt of
regulatory  approval of the  transfer  to me of the  Shares,  to be bound by the
Escrow Agreement in respect of the Shares as if I were an original  signatory to
the Escrow Agreement.

Dated at ___________________, on ____________________, 2000.

SIGNED, SEALED and DELIVERED by                    )
*transferee in the presence of:                    )
                                                   )
--------------------------------------             )
Name                                               )      *transferee
--------------------------------------             )
Address                                            )
--------------------------------------             )
Occupation                                         )

<PAGE>

                        SCHEDULE "B" TO ESCROW AGREEMENT
LOGO

Province of
British ColumbiBRITISH COLUMBIA SECURITIES COMMISSION

OFFICE OF THE CHAIRMAN
--------------------------------------------------------------------------------

                           LOCAL POLICY STATEMENT 3-07

                  POLICY GUIDELINES RESPECTING TRADING SHARES,
                   PERFORMANCE SHARES AND OTHER CONSIDERATION

-------------------------------------------------------------------------------

                                TABLE OF CONTENTS

PART                  TITLE                                                PAGE
----                  ---------------------------------------------------  ----

1.                    IMPLEMENTATION                                        1

2.                    APPLICATION                                           1

                      2.1 Pre-prospectus
                      2.2 Reactivations and reorganizations

3.                    TRANSITION                                            2

                      3.1 Agreements made under former policy statement
                      3.2 Option of conforming with new policy statement

4.                    DEFINITIONS                                           2

                      4.1 Defined terms
                      4.2 Terms defined in legislation

5.                    GENERAL MATTERS                                       5

                      5.1 Review of opinions  and reports
                      5.2  Requirement  for valuation opinion
                      5.3 Out of pocket costs
                      5.4 Confirmation of fair value

<PAGE>

PART                  TITLE                                                PAGE
----                  ---------------------------------------------------  ----

6.                    ISSUANCE OF TRADING SHARES                              6

                      6.1 Minimum price and maximum aggregate value
                      6.2 Interest in  operating  subsidiary
                      6.3 Value  assigned to non-cash  assets
                      6.4 Purchase of interest in mineral  property
                      6.5 Accumulated  deficit  related to issuer's
                          stated business
                      6.6 Exclusion of amounts by Superintendent

7.                    ISSUANCE OF PERFORMANCE SHARES                          8

                      7.1 Issuance to principals
                      7.2 Natural resource issuer
                      7.3 Industrial issuer
                      7.4 Escrow requirement
                      7.5 Escrow agreement
                      7.6 Limitations on rights of holders of
                          performance shares
                      7.7 Rights on ceasing to be a principal
                      7.8 Undertaking of holding company

8.                    TRANSFER OF PERFORMANCE SHARES WITHIN ESCROW            10

                      8.1 Permitted transferees
                      8.2 Request for consent to transfer
                      8.3 Documents  to be filed with  request
                          for  consent to  transfer
                      8.4 Letter  of  consent  or  objection
                      8.5 No transfer  during  period  between  prospectus
                          receipt and listing

9.                    RELEASE OF  PERFORMANCE SHARES FROM ESCROW              11

                      9.1  Release  of shares of  natural  resource
                           issuer
                      9.2  Reduction  in  release  for  natural
                           resource  issuer
                      9.3  Release of shares of industrial  issuer
                      9.4  Adjustment of release  calculation
                      9.5  Requirements  for  release
                      9.6  Annual   release   based  on  annual
                           audited   financial statements
                      9.7  Request  for  consent  to  release
                      9.8  Documents  to be filed with request for
                           consent to release
                      9.9  Letter of consent or objection
                     9.10  Request by holder of performance shares for
                           consent to release

<PAGE>

PART                  TITLE                                                PAGE
----                  ---------------------------------------------------  ----

10.                   SURRENDER OF PERFORMANCE SHARES
                      FOR CANCELLATION                                      14

11.                   OTHER CONSIDERATION                                   14

                      11.1 Natural resource issuer
                      11.2 Industrial issuer

Appendix A     Escrow Agreement

Appendix B     Examples of earn-out prices for performance
                shares issued by an industrial issuer

Appendix C     Undertaking Required from Non-Reporting or
                Closely Held Company

PART 1 IMPLEMENTATION

1.1     The  following  local policy  statements  are hereby  rescinded and this
        local policy statement substituted therefor, effective March 1, 1990:

          (a)  Local Policy  Statement 3-07, dated February 6, 1987 (the "Former
               Policy Statement"), and

          (b)  Local Policy  Statements 3-08, 3-09 and 3-10, each dated February
               1, 1987.

PART 2 APPLICATION

2.1     Pre-prospectus--This  local policy  statement  sets out  guidelines  for
        issuance of shares and payment of consideration  for assets by an issuer
        intending to do an initial  public  offering and obtain a listing on the
        Vancouver Stock Exchange. This local policy statement addresses

        (a)    the issuance of trading shares, which are common shares issued as
               consideration  for cash or assets  contributed to the issuer and,
               in certain  cases,  expenses  incurred to advance the business of
               the issuer,

        (b)    the issuance of and escrow  restrictions  imposed on  performance
               shares,  which are common shares  issued to directors,  officers,
               promoters and other principals of the issuer to provide them with
               both a reasonable assurance of control during the

<PAGE>

               formative stages of the issuer's development and an incentive to
               support the   issuer, and

        (c)    the payment of other consideration by the issuer for assets or
services.

2.2  Reactivations  and  reorganizations--This  local policy statement  applies,
     with the necessary  changes, to

        (a)    the reactivation of an issuer by way of a prospectus, carried out
               in accordance  with Local Policy  Statement 3-35 and the policies
               of the Vancouver Stock Exchange, and

        (b)    a major  reorganization  of an issuer,  including a reverse  take
               over,  carried out in accordance with the policies of the British
               Columbia Securities Commission and the Vancouver Stock Exchange.

PART 3 TRANSITION

3.1  Agreements  made under  former  policy  statement--Subject  to section 3.2,
     shares issued in accordance with the Former Policy  Statement will continue
     to be governed by any agreements  made in accordance with the Former Policy
     Statement.   Such  shares,   however,  will  be  subject  to  the  transfer
     restrictions  and procedures set out in Part 8 and the release criteria and
     procedures  set out in  sections  9.5  through  9.10 of this  local  policy
     statement.

3.2  Option of conforming with new policy  statement--An  issuer that has issued
     shares in accordance  with the Former Policy  Statement may  reorganize its
     capital to fully conform with this local policy statement. Before doing so,
     the issuer must obtain the  approval  of its  shareholders  and the written
     consent of the  Superintendent  of Brokers,  if the issuer's shares are not
     listed on the Vancouver Stock Exchange, or the Vancouver Stock Exchange, if
     the  issuer's  shares are listed on that  exchange.  Both the  approval and
     consent must be obtained by March 1, 1991.

PART 4 DEFINITIONS

4.1  Defined terms--In this local policy  statement:  "Act" means the Securities
     Act,  S.B.C.  1985, c. 83; "arm's length  transaction"  means a transaction
     other than a non-arm's length transaction;  "cash flow" means net income or
     loss before tax, adjusted to add back the following expenses:

     (a)  depreciation,
     (b)  amortization of goodwill and deferred research and development  costs,
          excluding general and administrative costs,
     (c)  expensed  research  and  development  costs,   excluding  general  and
          administrative costs, and

<PAGE>

     (d)  any other amounts permitted or required by the Superintendent:

          "cumulative  cash flow" means, at any time, the aggregate cash flow of
          an issuer up to that time  from a date no  earlier  than the  issuer's
          financial year end  immediately  preceding the date of its IPO, net of
          any negative cash flow;

          "earn-out   factor"   means  the  number   obtained  by  squaring  the
          performance share percentage,  expressed as a decimal, and multiplying
          by four;

          "earn-out  price"  means  the IPO  price  multiplied  by the  earn-out
          factor;

          "escrow agreement" means an agreement in the form attached as Appendix
          A to this local policy statement;

          "Exchange" means the Vancouver Stock Exchange;

          "industrial  issuer"  means an issuer  other  than a natural  resource
          issuer;

          "IPO" means the initial public  offering of common shares of an issuer
          under a prospectus  which has been filed with, and for which a receipt
          has been obtained  from,  the  Superintendent  under section 42 of the
          Act;

          "IPO  price"  means  the  price  per  share  paid by the  public on an
          issuer's IPO;

          "non-arm's length  transaction" means a transaction between the issuer
          and a person that, at any time from the date of the transaction  until
          the date of completion of the issuer's IPO, is

               (a) an insider, associate, affiliate or principal of the issuer,

               (b) a person that

                    (i)  has a control  person,  insider or  promoter  that is a
                         control person, insider or promoter of the issuer; or

                    (ii) has a control  person,  insider or promoter  that is an
                         associate or affiliate of a control person,  insider or
                         promoter of the issuer

               except  where  the  person's   insiders  that  are  described  in
               paragraphs (i) and (ii) hold in total less than 10% of the voting
               securities of the person, or

               (c) determined by the Superintendent not to be at arm's length to
                   the issuer;

<PAGE>

               "performance  shares"  means common shares of an issuer issued in
               accordance with Part 7 of this local policy statement, so long as
               they are held in escrow in  accordance  with  this  local  policy
               statement;

               "performance  share percentage" means the percentage,  determined
               on the date the issuer's shares are listed, posted and called for
               trading on the Exchange,  that the issued  performance  shares of
               the  issuer  are of  the  total  issued  and  outstanding  voting
               securities of the issuer;

               "principal" means, in relation to an issuer,

                    (a)  a promoter of the issuer,

                    (b)  a director of the issuer or of an operating  subsidiary
                         of the issuer,

                    (c)  a full time management employee of the issuer, or of an
                         operating  subsidiary  of the issuer,  whose  direct or
                         indirect   employment   is  with  the   issuer  or  the
                         subsidiary,

                    (d)  a person who has provided key services or contributed a
                         fundamental  asset to the issuer and has  elected to be
                         treated as a principal, or

                    (e)  a company all the voting  securities of which are owned
                         by  one  or  more  of  the   persons   referred  to  in
                         subsections (a) through (d);

               "Regulation" means the Securities Regulation, B.C. Reg. 270/86;

               "Superintendent or the Exchange" means the Superintendent, if the
               issuer's shares are not listed on the Exchange, and the Exchange,
               if the issuer's shares are listed on the Exchange;

               "trading  shares"  means  shares of the  class of  common  shares
               issued on an issuer's IPO, excluding performance shares issued in
               accordance with Part 7 of this local policy statement;

               "valuation opinion" means, in respect of

                    (a)  a natural  resource  issuer, a written opinion prepared
                         by a qualified  expert as to the fair market value of a
                         resource   property,   determined  either  through  the
                         computation  of present value or some other  recognized
                         method of valuation  acceptable to the  Superintendent,
                         and

                    (b)  an industrial  issuer,  a written  opinion  prepared in
                         accordance with generally applied valuation  approaches
                         by a Chartered  Business  Valuator,  or another  expert

<PAGE>

                         acceptable  to the  Superintendent,  as to the  highest
                         price  available for the issuer's  business,  assets or
                         shares  in an  open  and  unrestricted  market  between
                         informed,  prudent parties,  acting at arm's length and
                         under no compulsion to act, expressed in terms of money
                         or money's worth.

4.2  Terms defined in legislation - Subject to section 4.1, terms defined in the
     Act, the Regulation and the Interpretation  Act, R.S.B.C.  1979, c. 206 and
     used in this local  policy  statement  have the same meaning as in the Act,
     the Regulation and the Interpretation Act.

PART 5 GENERAL MATTERS

5.1     Review of  opinions  and  reports  - The  Superintendent  may,  with the
        agreement  of an issuer,  seek the  opinion of an  engineer,  appraiser,
        business   valuator,   accountant  or  other  expert  to  determine  the
        acceptability  of a valuation  opinion or other report filed pursuant to
        this local policy statement and, in such circumstances,  the issuer will
        be  liable  for the fees  charged  by such  person  in  connection  with
        providing the opinion.

5.2     Requirement for valuation opinion - The Superintendent  may, at the time
        of reviewing  an issuer's  prospectus  for its IPO,  require a valuation
        opinion in support of the value attributed to any non-cash assets.

5.3     Out of pocket costs - Where this local policy  statement  provides  that
        the value of  trading  shares  issued or other  consideration  paid to a
        person by an issuer for a non-cash asset must be calculated on the basis
        of the out of pocket  costs  incurred  by the  person in  respect of the
        non-cash asset, those out of pocket costs must

          (a)  be reasonable,

          (b)  have  contributed or be reasonably  expected to contribute to the
               future operations of the issuer,

          (c)  be supported by an audited statement of costs, and

          (d)  in respect of a resource  property,  be restricted to acquisition
               costs  and  such  other  costs  as  are  necessary  to  secure  a
               preliminary  evaluation  of the resource  property and to lead to
               the identification of exploration targets.

5.4     Confirmation  of  fair  value  - The  onus  will  be on  an  issuer,  if
        questioned,  to satisfy the Superintendent  that fair value was received
        for  costs  or   expenditures   associated   with  a  non-arm's   length
        transaction.

<PAGE>

PART 6 ISSUANCE OF TRADING SHARES

6.1  Minimum price and maximum  aggregate value - Although in most cases trading
     shares  will  be  paid  for in  cash,  trading  shares  may be  issued  for
     consideration  other than cash.  Subject to sections  6.2  through  6.6, an
     issuer may issue trading  shares at a minimum price of $.25 per share up to
     an aggregate value equal to:

          (a)  the amount of cash paid in as share capital; plus

          (b)  the fair market value of any non-cash assets contributed as share
               capital; plus

          (c)  the issuer's retained earnings, if any; less

          (d)  where the issuer has an accumulated deficit,  that portion of the
               accumulated deficit that does not directly relate to the issuer's
               stated business purpose at the time of its IPO.

6.2  Interest  in  operating  subsidiary  -- Where an  issuer  has an  operating
     subsidiary,  or is proposing to issue trading shares in order to acquire an
     operating  subsidiary,  and the value of that  operating  subsidiary is not
     supported by a current valuation opinion,  the principles of this Part will
     apply to the operating subsidiary for the purpose of determining the number
     of  trading  shares  that may be issued by the  issuer  in  respect  of its
     interest in the operating subsidiary.

6.3  Value  assigned  to non-cash  assets -- For the purpose of section  6.1(b),
     where  non-cash  assets  are  contributed  to an  issuer  by a person  in a
     non-arm's  length  transaction,  the fair market  value  attributed  to the
     non-cash assets must be either

          (a)  supported by a valuation opinion, or

          (b)  limited to an amount equal to the out of pocket costs incurred by
               the person in  respect  of the  non-cash  assets,  determined  in
               accordance with section 5.3.

6.4  Purchase of interest in mineral property -- A natural resource issuer that,
     in  an  arm's  length  transaction,  agrees  to  issue  trading  shares  as
     consideration  for a mineral  property or an option on a mineral  property,
     the value of which is not supported by a current  valuation  opinion,  will
     generally be required to meet the following conditions:

          (a)  The  consideration  must consist of not more than 200,000 trading
               shares  issuable  in  no  fewer  than  four  blocks,  each  block
               consisting of not more than 50,000 trading shares.

<PAGE>

        (b)    One block of shares may be issued  prior to the date the issuer's
               shares are listed, posted and called for trading on the Exchange.

        (c)    The  remaining  blocks of shares may be issued in stages upon the
               filing with the Exchange of  engineering  reports,  acceptable to
               the Exchange, recommending further work on the mineral property.

6.5  Accumulated  deficit related to issuer's stated business purpose -- For the
     purpose of section 6.1(d), that portion of the issuer's accumulated deficit
     that directly  relates to the issuer's stated business  purpose at the time
     of its IPO includes

        (a)    for a natural resource issuer, expenses incurred

               (i)    in exploring and developing the resource properties upon
                      which the issuer's IPO proceeds are to be spent, and

               (ii)   in exploring and  developing  other  resource  properties,
                      provided  that these  expenses do not exceed the  expenses
                      referred to in paragraph (i), and

        (b)    for an  industrial  issuer,  expenses  incurred in respect of the
               project or business to be financed by the issuer's IPO proceeds.

6.6  Exclusion of amounts by  superintendent -- The  Superintendent  may require
     that an amount be excluded from the  determination of the number of trading
     shares  that may be  issued  under  this  Part if in the  circumstances  he
     considers  that to  include  any  such  amount  would be  inappropriate  or
     unconscionable.   For  example,   the  Superintendent  would  question  the
     appropriateness  of issuing trading shares for non-cash assets unrelated to
     the  issuer's  stated  business  purpose  at the  time  of  its  IPO or for
     excessive administrative expenses.

PART 7 ISSUANCE OF PERFORMANCE SHARES

7.1  Issuance to principals -- Performance  shares may be issued for cash to the
     principals of an issuer

     (a)  to provide the principals  with a measure of control to facilitate the
          development of the issuer in an orderly fashion,

     (b)  to provide an incentive for the  principals to diligently  support the
          affairs of the issuer, and

     (c)  to provide an incentive for the  principals  to contribute  management
          services or fundamental assets to the issuer.

<PAGE>

7.2  Natural  resource  issuer -- A  natural  resource  issuer  may issue to its
     principals up to a total of 750,000  performance shares, at a minimum price
     of $.01 per share.

7.3  Industrial issuer -- An industrial  issuer may issue performance  shares to
     its  principals,  at a minimum  price of $.01 per share,  provided that the
     resulting performance share percentage does not exceed 65%.

7.4  Escrow  requirement -- Performance  shares are required to be escrowed.  It
     should be noted that the higher the performance share percentage,  the more
     difficult  it becomes to obtain a release of the  performance  shares  from
     escrow.  The table  attached as Appendix B to this local  policy  statement
     provides  some  examples of the  operation  of the release  provisions  for
     industrial issuers set out in Part 9 of this local policy statement.

7.5  Escrow  agreement  --  Prior  to or at the  time of  acquiring  performance
     shares,  principals  must  execute an escrow  agreement.  The  certificates
     representing the performance  shares must be registered in the names of the
     holders of the shares and  deposited  with the escrow  agent in  accordance
     with the terms of the escrow  agreement.  Only a trust company  carrying on
     business in British  Columbia or a company  approved by the  Superintendent
     may act as an escrow agent.

7.6  Limitations  on rights  of  holders  of  performance  shares -- The  escrow
     agreement  requires  that the  parties to it set out in the  agreement  any
     rights or  obligations  of a person who ceases to be a  principal,  dies or
     becomes  bankrupt  to  retain,  transfer  or  surrender  to the  issuer for
     cancellation any performance shares then held by the person.

7.7  Rights on ceasing to be a principal -- The escrow  agreement  requires that
     the parties to it set out in the agreement any rights or  obligations  of a
     person who ceases to be a  principal,  dies or becomes  bankrupt to retain,
     transfer or surrender to the issuer for cancellation any performance shares
     then held by the person.

7.8  Undertaking of holding company -- Where performance shares are to be issued
     to a non- reporting or closely held company,  wherever situate, rather than
     to an  individual,  the company must,  prior to or at the time of acquiring
     the  performance  shares,  execute an  undertaking  in the form attached as
     Appendix C to this local policy statement. In the undertaking,  the company
     agrees not to effect or permit any  transfer of  ownership of shares of the
     company nor to issue further shares of any class in the company without the
     consent  of the  Superintendent  or the  Exchange,  so long as the  company
     continues to hold any of the issuer's  performance  shares.  An application
     for consent should be made in the same manner as an application for consent
     to a transfer of performance shares pursuant to Part 8 of this local policy
     statement.

<PAGE>

PART 8 TRANSFER OF PERFORMANCE SHARES WITHIN ESCROW

8.1  Permitted transferees - Performance shares may be transferred only to

     (a)  other principals, including incoming principals,

     (b)  the issuer of the performance shares, or

     (c)  an offeror under a formal bid (as defined in section 74 of the Act).

8.2  Request for consent to transfer - In order to transfer  performance shares,
     the holder of performance  shares must deliver to the Superintendent or the
     Exchange a written  request  for consent to the  transfer.  The request for
     consent to the transfer must include:

     (a)  the name of the  escrow  agent and the  reference  date of the  escrow
          agreement,

     (b)  an explanation of the reason for the transfer,

     (c)  a  description  of the  consideration  to be paid for the  performance
          shares,

     (d)  where the  performance  shares are to be  transferred  to a principal,
          confirmation  that the  transferee  is a  principal  or will  become a
          principal on or before the date of the proposed transfer, and

     (e)  a description of the exemptions in the Act or the Regulation,  if any,
          being relied upon to make the transfer.

8.3  Documents  to be filed with  request  for consent to transfer - The request
     for consent to the transfer must be accompanied by:

     (a)  a copy of the transfer agreement,

     (b)  an  acknowledgment  and  agreement to be bound in the form attached as
          Schedule A to the escrow agreement, executed by the transferee,

     (c)  where the performance  shares are to be transferred to a non-reporting
          or  closely  held  company,   wherever  situate,  rather  than  to  an
          individual,  an  undertaking  by the  company in the form  attached as
          Appendix C to this local policy statement;

     (d)  where  applicable,  evidence  that the proposed  change of control has
          been approved by the shareholders of the issuer, and

     (e)  the appropriate application fee.

<PAGE>

8.4  Letter of consent or objection - Upon  receiving a request for consent to a
     transfer and accompanying  documents that comply with sections 8.2 and 8.3,
     the  Superintendent  or the Exchange  will issue to the  applicant a letter
     that either consents or objects to the transfer. A letter consenting to the
     transfer will be copied to the escrow agent.

8.5  No transfer  during  period  between  prospectus  receipt and listing - The
     Superintendent   will  generally   refuse  to  consent  to  a  transfer  of
     performance  shares  during the period  between the date of the receipt for
     the issuer's  prospectus  for its IPO and the date the issuer's  securities
     are listed, posted and called for trading on the Exchange.

PART 9 RELEASE OF PERFORMANCE SHARES FROM ESCROW

9.1  Release  of shares of  natural  resource  issuer - Holders  of  performance
     shares  of a natural  resource  issuer  will be  entitled  to the  pro-rata
     release  of those  performance  shares on the basis of 15% of the  original
     number of performance shares for every $100,000 expended on exploration and
     development of a resource property by

     (a)  the issuer, or

     (b)  a person  other  than the issuer in order to earn an  interest  in the
          resource  property,  but only in  respect  of that  proportion  of the
          expenditure equal to the issuer's remaining  proportionate interest in
          the resource  property  after the  person's  interest has been earned,
          provided that

     (c)  no more than 50% of the original  number of performance  shares may be
          released in any 12 month period, and

     (d)  no expenditure on exploration and  development  made prior to the date
          of the  receipt  for  the  issuer's  prospectus  for  its  IPO  may be
          included. December 21, 1989

9.2  Reduction  in release for natural  resource  issuer - Where  administrative
     expenses  exceed 33% of total  expenditures  during the period on which the
     calculation in section 9.1 is based,

     (a)  the pro-rata  release  factor of 15% will be reduced to 7.5%,  and

     (b)  the percentage of the original number of performance  shares available
          for release in any 12 month period will be reduced to 25%.

9.3  Release of shares of industrial  issuer - Holders of performance  shares of
     an industrial  issuer will be entitled to the pro-rata  release of a number
     of  performance  shares  equal to the amount of  cumulative  cash low,  not
     previously applied towards release, divided by the earn-out price.

<PAGE>

9.4  Adjustment  of  release  calculation  -  On a  consolidation,  subdivision,
     amalgamation  or  reclassification  of the  issuer's  shares,  the  release
     calculation  must be adjusted  so that the  proportion  of the  outstanding
     performance   shares   available   for   release  is   unaffected   by  the
     consolidation, subdivision, amalgamation or reclassification.

9.5  Requirements  for  release - No  performance  shares may be  released  from
     escrow unless, at the time of the application for release,

     (a)  the issuer is meeting its current  obligations in the ordinary  course
          of business as they generally  become due, as evidenced by a statutory
          declaration of the president or chief financial officer of the issuer,

     (b)  the issuer's  shares are listed,  posted and called for trading on all
          stock exchanges having  jurisdiction  over it, as evidenced by letters
          from those stock exchanges,

     (c)  the  issuer is not in  default  of any  requirement  of the Act or the
          Regulation,  as evidenced by a certificate  issued by the  Commission,
          and

     (d)  the issuer is in good  standing  with respect to its filing of returns
          with the  Registrar  of  Companies  under the  Company  Act or, if the
          issuer is incorporated, organized or continued in a jurisdiction other
          than  British  Columbia,  with the  registrar  of companies or similar
          authority in that  jurisdiction,  as evidenced by a certificate issued
          by the Registrar of Companies or by that similar authority.

9.6  Annual release based on annual audited  financial  statements - Performance
     shares may be released  only once during an issuer's  financial  year.  The
     release  calculation must be based on the issuer's annual audited financial
     statements for the year or years during which the release requirements were
     met in respect of the performance shares to be released.

9.7  Request  for  consent  to  release  - In  order  to  obtain  a  release  of
     performance  shares,  the issuer must deliver to the  Superintendent or the
     Exchange a written  request  for  consent to the  release.  The request for
     consent to the release  must  include the name of the escrow  agent and the
     reference date of the escrow agreement.

9.8  Documents to be filed with request for consent to release - The request for
     consent to the release must be accompanied by:

     (a)  written evidence of compliance with the requirements of section 9.5,

     (b)  annual  audited  financial  statements of the issuer for the financial
          year or  years  during  which  the  release  requirements  were met in
          respect of the performance shares to be released,

<PAGE>

     (c)  where  expenditures on a resource property were made by a person other
          than the issuer, an audited statement of costs,

     (d)  a  calculation,  prepared by the  issuer's  auditor,  of the number of
          performance shares to be released, and

     (e)  the appropriate application fee.

9.9  Letter of consent or objection - Upon  receiving a request for consent to a
     release and  accompanying  documents that comply with sections 9.7 and 9.8,
     the  Superintendent  or the Exchange will issue to the issuer a letter that
     either  consents  or objects to the  release.  A letter  consenting  to the
     release will be copied to the escrow agent.

9.10 Request by holder of  performance  shares for consent to release - A holder
     of performance  shares may apply to the  Superintendent or the Exchange for
     release  where the issuer is unable or unwilling to do so. If the president
     or chief  financial  officer of the issuer refuses to provide the statutory
     declaration  referred  to in  section  9.5(a),  the  Superintendent  or the
     Exchange may waive that requirement.

PART 10 SURRENDER OF PERFORMANCE SHARES FOR CANCELLATION

10.1 Performance shares must be surrendered to the issuer for cancellation

     (a)  at the time of a major  reorganization of the issuer, if required as a
          condition of the consent to the  reorganization by the  Superintendent
          or the Exchange,

     (b)  where the  issuer's  shares  have been  subject to a cease trade order
          issued under the Act for a period of 2 consecutive years, or

     (c)  10 years from the later of the date of issue of the performance shares
          and the date of the receipt for the issuer's prospectus for its IPO.

PART 11 OTHER CONSIDERATION

11.1 Natural  resource  issuer - Where a natural  resource  issuer  proposes  to
     acquire  from a person a  resource  property  or an  option  on a  resource
     property,  the value of which is not supported by a valuation opinion,  the
     following principles apply:

     (a)  In an arm's  length  transaction,  the issuer may pay the person  cash
          consideration.

     (b)  In an arm's length transaction, the issuer may agree to pay the person
          additional  consideration  at  such  time  as  the  resource  property
          commences commercial  production.  Such additional  consideration may,
          depending on the circumstances,

<PAGE>
          consist  of cash  consideration,  reasonable  payments  from  net
          profits, securities, or any combination of these.

     (c)  In a non-arm's length transaction,  the issues may pay the person cash
          consideration  up to the amount of the out of pocket costs incurred by
          the  person  in  respect  of  the  resource  property,  determined  in
          accordance with section 5.3.

     (d)  In a  non-arm's  length  transaction,  the issuer may agree to pay the
          person additional  consideration at such time as the resource property
          commences  commercial  production,  where the person has  carried  out
          extensive  exploration  with results that  indicate  that the resource
          property appears to have substantial merit. The extent of the person's
          effort,  skill and risk in  developing  the resource  property will be
          taken  into  account  by the  Superintendent  in  determining  whether
          additional  consideration is justified.  Such additional consideration
          may,  depending on the circumstances,  consist of cash  consideration,
          reasonable payments from net profits,  securities,  or any combination
          of these.  A 15% net profits  interest  would  normally be  considered
          reasonable.

11.2 Industrial  issuer - Where an industrial  issuer proposes to acquire from a
     person non-cash assets, the value of which are not supported by a valuation
     opinion, the following principles apply:

     (a)  In an arm's  length  transaction,  the issuer may pay the person  cash
          consideration, a royalty or a combination of these.

     (b)  In a non-arm's length transaction,  the issuer may pay the person cash
          consideration  up to the amount of the out of pocket costs incurred by
          the person in respect of the non-cash assets, determined in accordance
          with section 5.3.

DATED at Vancouver, British Columbia, this 21st day of December 1989.

/s/ DOUGLAS M. HYNDMAN
   -------------------------------
   Douglas M. Hyndman, Chairman

<PAGE>

                    APPENDIX A TO LOCAL POLICY STATEMENT 3-07

                                ESCROW AGREEMENT

        THIS AGREEMENT is dated for reference ________________________, 2000,
and made

AMONG:

                              (the "Escrow Agent");

AND:

                                 (the "Issuer");

AND: EACH SHAREHOLDER, as defined in this Agreement

                         (collectively, the "Parties").

WHEREAS  the  Shareholder  has  acquired  or is about to  acquire  shares of the
Issuer;

AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of the
shares upon the acquisition of the shares by the Shareholder;

NOW THEREFORE in consideration of the covenants  contained in this agreement and
other good and valuable  consideration  (the receipt and sufficiency of which is
acknowledged), the Parties agree as follows:

1.      INTERPRETATION

In this agreement:

(a)  "ACKNOWLEDGMENT"  means the acknowledgment and agreement to be bound in the
     form attached as Schedule A to this agreement;

(b)  "ACT" means the Securities Act, S.B.C. 1985, c. 83;

(c)  "EXCHANGE" means the Vancouver Stock Exchange;

(d)  "IPO" means the  initial  public  offering  of common  shares of the Issuer
     under a prospectus  which has been filed with,  and for which a receipt has
     been obtained from, the Superintendent under section 42 of the Act;

<PAGE>

(e)  "Local  Policy  Statement  3-07" means the Local Policy  Statement  3-07 in
     effect  as of the date of  reference  of this  agreement  and  attached  as
     Schedule B to this agreement;

(f)  "Shareholder"  means a holder of shares of the  Issuer  who  executes  this
     agreement or an Acknowledgment;

(g)  "Shares"  means the shares of the  Shareholder  described  in Schedule C to
     this agreement, as amended from time to time in accordance with section 9;

(h)  "Superintendent"  means the  Superintendent  of Brokers appointed under the
     Act; and

(i)  "Superintendent or the Exchange" means the Superintendent, if the shares of
     the Issuer are not listed on the Exchange,  or the Exchange,  if the shares
     of the Issuer are listed on the Exchange.

2.   PLACEMENT OF SHARES IN ESCROW

The  Shareholder  places  the Shares in escrow  with the Escrow  Agent and shall
deliver the certificates  representing the Shares to the Escrow Agent as soon as
practicable.

3.   VOTING OF SHARES IN ESCROW

Except as provided by section  4(a),  the  Shareholder  may  exercise all voting
rights attached to the Shares.

4.      WAIVER OF SHAREHOLDER'S RIGHTS

The Shareholder waives the rights attached to the Shares

(a)  to vote the Shares on a resolution to cancel any of the Shares,

(b)  to receive dividends, and

(c)  to  participate in the assets and property of the Issuer on a winding up or
     dissolution of the Issuer.

5.   ABSTENTION FROM VOTING AS A DIRECTOR

A  Shareholder  that is or becomes a director of the Issuer  shall  abstain from
voting on a directors' resolution to cancel any of the Shares.

<PAGE>

6.   TRANSFER WITHIN ESCROW

     (1)  The  Shareholder  shall  not  transfer  any of the  Shares  except  in
          accordance  with Local Policy  Statement  3-07 and with the consent of
          the Superintendent or the Exchange.

     (2)  The Escrow  Agent  shall not effect a  transfer  of the Shares  within
          escrow unless the Escrow Agent has received

          (a)  a copy of an  Acknowledgment  executed  by the person to whom the
               Shares are to be transferred, and

          (b)  a letter from the  Superintendent  or the Exchange  consenting to
               the transfer.

     (3)  Upon the death or bankruptcy of a Shareholder,  the Escrow Agent shall
          hold the Shares  subject  to this  agreement  for the  person  that is
          legally entitled to become the registered owner of the Shares.

     (4)  [SET  OUT  IN  THIS   SUBSECTION  THE  RIGHTS  AND  OBLIGATIONS  OF  A
          SHAREHOLDER  WHO CEASES TO BE A PRINCIPAL,  AS THAT TERM IS DEFINED IN
          LOCAL POLICY  STATEMENT 3-07,  DIES, OR BECOMES  BANKRUPT,  TO RETAIN,
          TRANSFER OR SURRENDER TO THE ISSUER FOR  CANCELLATION  ANY SHARES HELD
          BY THE SHAREHOLDER.]

7.   RELEASE FROM ESCROW

(1)  The Shareholder  irrevocably  directs the Escrow Agent to retain the Shares
     until the Shares are released  from escrow  pursuant to  subsection  (2) or
     surrendered for cancellation pursuant to section 8.

(2)  The Escrow Agent shall not release the Shares from escrow unless the Escrow
     Agent  has  received  a letter  from  the  Superintendent  or the  Exchange
     consenting to the release.

(3)  The approval of the Superintendent or the Exchange to a release from escrow
     of any of the Shares shall  terminate this agreement only in respect of the
     Shares so released.

8.   SURRENDER FOR CANCELLATION

The Shareholder shall surrender the Shares for cancellation and the Escrow Agent
shall deliver the certificates representing the Shares to the Issuer

     (a)  at the time of a major  reorganization of the Issuer, if required as a
          condition of the consent to the  reorganization by the  Superintendent
          or the Exchange;

<PAGE>

     (b)  where  the  Issuer's  shares  have  been  subject  to  a  cease  trade
          order-issued under the Act for a period of 2 consecutive years;

     (c)  10 years  from the  later of the date of issue of the  Shares  and the
          date of the receipt for the Issuer's prospectus on its IPO; or

     (d)  where required by section 6(4).

9.   AMENDMENT OF AGREEMENT

(1)  Subject to subsection  (2), this agreement may be amended only by a written
     agreement   among  the  Parties  and  with  the  written   consent  of  the
     Superintendent or the Exchange.

(2)  Schedule C to this agreement shall be amended upon

     (a)  a transfer of Shares pursuant to section 6,

     (b)  a release of Shares from escrow pursuant to section 7, or

     (c)  a surrender of Shares for cancellation pursuant to section 8,

and the Escrow Agent shall note the amendment on the Schedule C in its
possession.

     10.  INDEMNIFICATION OF ESCROW AGENT

The Issuer and the Shareholders,  jointly and severally,  release, indemnify and
save  harmless  the  Escrow  Agent  from all costs,  charges,  claims,  demands,
damages,  losses and expenses  resulting from the Escrow  Agent's  compliance in
good faith with this agreement.

11.  RESIGNATION OF ESCROW AGENT

(1)  If the  Escrow  Agent  wishes to resign as escrow  agent in  respect of the
     Shares, the Escrow Agent shall give notice to the Issuer.

(2)  If the Issuer  wishes the Escrow Agent to resign as escrow agent in respect
     of the Shares, the Issuer shall give notice to the Escrow Agent.

(3)  A notice  referred  to in  subsection  (1) or (2) shall be in  writing  and
     delivered to

     (a)  the Issuer at _________________________________, or

     (b)  the Escrow Agent at _______________________________

<PAGE>

          and the notice  shall be deemed to have been  received  on the date of
          delivery.  The Issuer or the Escrow  Agent may change its  address for
          notice by giving  notice to the other  party in  accordance  with this
          subsection.

(4)  A copy of a notice  referred to in subsection (1) or shall  concurrently be
     delivered to the Superintendent or the Exchange.

(5)  The resignation of the Escrow Agent shall be effective and the Escrow Agent
     shall  cease  to be bound by this  agreement  on the date  that is 180 days
     after the date of receipt of the notice  referred to in  subsection  (1) or
     (2) or on such other date as the Escrow Agent and the Issuer may agree upon
     (the "resignation date").

(6)  The Issuer shall,  before the resignation date and with the written consent
     of the  Superintendent  or the Exchange,  appoint  another escrow agent and
     that appointment shall be binding on the Issuer and the Shareholders.

12.  FURTHER ASSURANCES

The  Parties  shall  execute  and  deliver  any  documents  and perform any acts
necessary to carry out the intent of this agreement.

13.  TIME

Time is of the essence of this agreement.

14.  GOVERNING LAWS

This agreement shall be construed in accordance with and governed by the laws of
British Columbia and the laws of Canada applicable in British Columbia.

15.  COUNTERPARTS

This agreement may be executed in two or more counterparts,  each of which shall
be deemed to be an original and all of which shall constitute one agreement.

16.  LANGUAGE

Wherever a singular  expression is used in this  agreement,  that  expression is
deemed  to  include  the  plural or the body  corporate  where  required  by the
context.

17.  ENUREMENT

This Agreement  enures to the benefit of and is binding on the Parties and their
heirs, executors, administrators, successors and permitted assigns.

<PAGE>

The Parties  have  executed  and  delivered  this  agreements  as of the date of
reference of this agreement.

The Corporate/Common Seal of        )
[Escrow Agent] was affixed          )
in the presence of:                 )
_______________                     )_____________c/s
Authorized signatory                )
 -------------                      )
Authorized signatory                )

The Corporate/Common Seal of        )
[Escrow Agent] was affixed          )
in the presence of:                 )
_______________                     )    c/s
Authorized signatory                )
 --------------                     )
Authorized signatory                )

Where the Shareholder is an individual:

Signed, sealed and delivered by    )
 [Shareholder] in the presence of: )
---------------                    )
Name                               )      [Shareholder]
---------------                    )
Address                            )
---------------                    )
                                   )
---------------                    )
Occupation                         )

Where the Shareholder is a company:

The Corporate/Common Seal of        )
[Escrow Agent] was affixed          )
in the presence of:                 )
_______________                     )    c/s
Authorized signatory                )
 --------------                     )
Authorized signatory                )

<PAGE>
                         SCHEDULE A TO ESCROW AGREEMENT

                    ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND

To: Superintendor  of Brokers     or          Vancouver Stock Exchange
#1100 - 865 Hornby Street                      609 Granville Street
Vancouver, B. C.                                  Vancouver, B. C.
V6Z 2H4                                               V7Y 1H1

(if the shares are not                      (if the shares are listed
listed on the Vancouver                       on the Vancouver Stock
Stock Exchange)                                      Exchange)

I acknowledge that

(a)     I have entered into an agreement with ____________________,  under which
        ___________ shares of _______________ (the "Shares") will be transferred
        to me upon receipt of regulatory approval, and

(b)     the Shares are held in escrow subject to an escrow  agreement  dated for
        reference _______,  2000, (the "Escrow  Agreement"),  a copy of which is
        attached as Schedule A to this acknowledgment.

In consideration of $1.00 and other good and valuable consideration (the receipt
and  sufficiency of which is  acknowledged)  I agree,  effective upon receipt of
regulatory  approval of the  transfer  to me of the  Shares,  to be bound by the
Escrow Agreement in respect of the Shares as if I were an original  signatory to
the Escrow Agreement.

Where the transferee is an individual:

SIGNED, SEALED AND DELIVERED by                   )
*transferee in the presence of:                   )
--------                                          )
Name                                              )      *transferee
--------                                          )
Address                                           )
--------                                          )
Occupation                                        )

<PAGE>

Where the transferee is a company:

The Corporate/Common Seal of        )
[transferee] was affixed            )
in the presence of:                 )
_______________                     )    c/s
Authorized signatory                )
 --------------                     )
Authorized signatory                )

<PAGE>

                         SCHEDULE C TO ESCROW AGREEMENT

   --------------------------------------------------------------------------

                 NAME OF SHAREHONUMBER OF SHARES HELD IN ESCROW

   -------------------------------------------------------------------------

<PAGE>

                    APPENDIX B TO LOCAL POLICY STATEMENT 3-07

               EXAMPLES OF EARN-OUT PRICES FOR PERFORMANCE SHARES
                         ISSUED BY AN INDUSTRIAL ISSUER
          ------------------------------------------------------------
<TABLE>
<S>             <C>       <C>           <C>                  <C>               <C>

                                            EARN-OUT PRICE IN DOLLARS
--------------------------------------------------------------------------------------------------------
PERFORMANCE                   5%              25%               45%                   65%
SHARE PERCENTAGE
--------------------------------------------------------------------------------------------------------
EARN-OUT FACTOR               .01x            .25x              .81x                  1.69x
--------------------------------------------------------------------------------------------------------
I
P            $0.40            .004            .10               .324                   .676
O
              $0.60           .006            .15               .486                  1.014
P
R            $0.80            .008            .20               .648                  1.352
I
C            $1.00            .010            .25               .810                  1.690
E

</TABLE>

The earn-out price  represents the amount of cash flow that must be generated to
release  one  performance  share from  escrow.  The  following  definitions  are
applicable to the calculation.

Earn-out Price:

               The IPO price multiplied by the earn-out factor.

IPO Price:
               The price per share paid by the public on the issuer's IPO.

Earn-out Factor:
               The number obtained by squaring the performance share percentage,
               expressed as a decimal, and multiplying the result by four.

Performance Share Percentage:
               The  percentage,  determined on the date the issuer's  shares are
               listed,  posted and called for trading on the Exchange,  that the
               issued  performance  shares of the issuer are of the total issued
               and outstanding voting securities of the issuer.

<PAGE>

                    APPENDIX C TO LOCAL POLICY STATEMENT 3-07

                     UNDERTAKING REQUIRED FROM NON-REPORTING
                             OR CLOSELY HELD COMPANY
                -------------------------------------------------

To: Superintendor  of Brokers     or          Vancouver Stock Exchange
#1100 - 865 Hornby Street                      609 Granville Street
Vancouver, B. C.                                  Vancouver, B. C.
V6Z 2H4                                               V7Y 1H1

(if the shares are not                      (if the shares are listed
listed on the Vancouver                       on the Vancouver Stock
Stock Exchange)                                      Exchange)

_____________________________  (the "Company")  undertakes,  for the duration of
the  time  that  the  Company  is  the  registered   owner  of  escrowed  shares
of_________________________ (the "Issuer"),

(a)     to effect or permit transfer of ownership in the shares of the Company,
or

(b)     to allot and issue further shares of any class of shares of the Company

only upon receipt of the written consent of the  Superintendent  of Brokers,  if
the  Issuer's  shares  are not  listed  on the  Vancouver  Stock  Exchange  (the
"Exchange"), or the Exchange, if the Issuer's shares are listed on the Exchange.

Dated at ___________________, on ____________________, 2000.

The Corporate/Common Seal of        )
[Company] was affixed               )
in the presence of:                 )
_______________                     )    c/s
Authorized signatory                )
 --------------                     )
Authorized signatory                )

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