Document:

Exhibit 10.2

                                        FACILITY AGREEMENT

                                        WESTERN MESQUITE MINES, INC.

                                        RMB INTERNATIONAL (DUBLIN) LIMITED

                                        EACH PARTY LISTED IN SCHEDULE 1

                                        and

                                        RMB RESOURCES LIMITED

                                        Freehills
                                      -------------

                                        QV.1  Building  250  St  Georges Terrace
                                        Perth  Western  Australia 6000 Australia
                                        Telephone  +61  8  9211  7777  Facsimile
                                        +61 8 9211 7878 www.freehills.com DX 104
                                        Perth

                                        SYDNEY MELBOURNE PERTH BRISBANE HANOI HO
                                        CHI MINH  CITY  SINGAPORE  Correspondent
                                        Offices JAKARTA KUALA LUMPUR

                                        Liability  limited  by  the  Solicitors'
                                        Limitation of Liability Scheme, approved
                                        Under  the  Professional  Standards  Act
                                        1994 (NSW)

                                        Reference DAW:CEP:80559145

<PAGE>

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TABLE OF CONTENTS

Clause                                                                    Page

1    DEFINITIONS AND INTERPRETATION                                          1

     1.1  Definitions                                                        1
     1.2  Interpretation                                                    14
     1.3  Accounting Principles                                             15
     1.4  Liability                                                         16

2    COMMITMENT, PURPOSE AND AVAILABILITY OF THE FACILITY                   16

     2.1  Provision of Commitment                                           16
     2.2  Purpose                                                           16
     2.3  Cancellation at end of Availability Period                        16

3    CONDITIONS PRECEDENT                                                   16

     3.1  Funding Portion                                                   16
     3.2  All Funding Portions                                              19
     3.3  Certified copies                                                  19
     3.4  Waiver of conditions precedent                                    19

4    FUNDING PROCEDURES                                                     19

     4.1  Delivery of Funding Notice                                        19
     4.2  Delivery by facsimile                                             20
     4.3  Provision of Funding Portions                                     20
     4.4  Selection of Funding Periods                                      20

5    BASE INTEREST                                                          21

     5.1  Payment of base interest                                          21
     5.2  General provisions in relation to interest                        21

6    VARIABLE INTEREST                                                      21

     6.1  Definitions                                                       21
     6.2  Payment of variable interest                                      22
     6.3  Delivery of information                                           22
     6.4  Determination of IRR                                              22

7    REPAYMENT AND PREPAYMENT                                               23

     7.1  Repayment                                                         23
     7.2  Mandatory prepayment                                              24
     7.3  Repayment of other Secured Money                                  24
     7.4  Prepayment                                                        24

8    PAYMENTS                                                               25

     8.1  Manner of payment                                                 25
     8.2  Payments to be made without set-off or deduction                  25
     8.3  Amounts payable on demand                                         25

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9    REPRESENTATIONS AND WARRANTIES                                         25

     9.1  Representations and warranties                                    25
     9.2  Survival and repetition of representations and warranties         28
     9.3  Reliance by the Finance Parties                                   28

10   COVENANTS                                                              28

     10.1 Terms of covenants                                                28
     10.2 General covenants                                                 29
     10.3 Project Covenants                                                 31
     10.4 Financial covenants                                               34
     10.5 Provision of information and reports                              36
     10.6 Reclamation Work                                                  37

11   TRANSACTION ACCOUNTS                                                   38

     11.1 Transaction Accounts                                              38
     11.2 Proceeds Account                                                  38
     11.3 Project Account                                                   38
     11.4 Priority of application - Proceeds Account                        38
     11.5 Priority of application - Project Account                         39

12   EVENTS OF DEFAULT                                                      40

     12.1 Events of Default                                                 40
     12.2 Effect of Default                                                 42
     12.3 Borrower to continue to perform                                   42
     12.4 Enforcement                                                       43

13   RELEASE OF OBLIGATIONS                                                 43

     13.1 Release of obligations                                            43
     13.2 Further assurances                                                43

14   INDEMNITIES                                                            44

     14.1 General indemnity                                                 44
     14.2 Foreign currency indemnity                                        45
     14.3 Conversion of currencies                                          45
     14.4 Continuing indemnities and evidence of loss                       45

15   FEES, TAX, COSTS AND EXPENSES                                          46

     15.1 Arrangement fee                                                   46
     15.2 Warrants                                                          46
     15.3 Tax                                                               46
     15.4 Costs and expenses                                                47

16   INTEREST ON OVERDUE AMOUNTS                                            47

     16.1 Payment of interest                                               47
     16.2 Accrual of interest                                               47
     16.3 Rate of interest                                                  47

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17   ASSIGNMENT                                                             48

     17.1 Assignment by Transaction Party                                   48
     17.2 Assignment by Finance Party                                       48
     17.3 References to a Finance Party                                     48
     17.4 Assist transfer or assignment                                     48
     17.5 Participation permitted                                           48
     17.6 Lending Office                                                    49
     17.7 Disclosure                                                        49

18   SAVING PROVISIONS                                                      49

     18.1 No merger of security                                             49
     18.2 Exclusion of moratorium                                           49
     18.3 Powers                                                            49
     18.4 Consents                                                          49
     18.5 Principal obligations                                             50
     18.6 Non-avoidance                                                     50
     18.7 Set-off authorised                                                50
     18.8 Certificates of Agent                                             50
     18.9 No reliance or other obligations and risk assumption              51
     18.10 Attorney                                                         51
     18.11 Opinion of a Finance Party                                       51

19   GENERAL                                                                52

     19.1 Confidential information                                          52
     19.2 Performance by the Agent of obligations                           52
     19.3 Transaction Party to bear cost                                    52
     19.4 Notices                                                           52
     19.5 Governing law and jurisdiction                                    53
     19.6 Prohibition and enforceability                                    53
     19.7 Waiver and Variation                                              53
     19.8 Attorneys                                                         54
     19.9 Counterparts                                                      54
     19.10 Service of process                                               54

SCHEDULE 1 - GUARANTORS                                                     55

SCHEDULE 2- FUNDING NOTICE                                                  56

SCHEDULE 3 - PERMITTED ENCUMBRANCES                                         57

SCHEDULE 4 - SECURITIES                                                     58

SCHEDULE 5 - FORM OF WARRANT                                                59

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THIS FACILITY AGREEMENT
          is dated as of 5 November 2003 between the following parties:

          1.   WESTERN MESQUITE MINES, INC.
               a corporation incorporated under the laws of Nevada
               of 7000 Independence Parkway
               Suite 160 #135
               Plano, Texas 75025
               United States of America
               (BORROWER)

          2.   EACH PARTY LISTED IN SCHEDULE 1
               (each a GUARANTOR)

          3.   RMB INTERNATIONAL (DUBLIN) LIMITED
               of 28 Shelbourne Road
               Ballsbridge
               Dublin 4 Ireland
               (LENDER)

          4.   RMB RESOURCES LIMITED
               of Level 3
               One Mitre Square
               London EC3A 5AN
               United Kingdom
               (AGENT)

RECITALS

          The  Borrower  and each of the Guarantors have requested the Lender to
          make  available  a  loan  to  the Borrower on the terms and conditions
          contained  in  this  agreement.

THE PARTIES AGREE

          in consideration of, among other things, the mutual promises contained
          in  this  agreement:

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1    DEFINITIONS AND INTERPRETATION

     1.1  DEFINITIONS

          In  this  agreement,  unless  the  contrary  intention  appears:

          ADJUSTED  EXCESS  CASH FLOW in relation to a Calculation Period, means
          Excess  Cash  Flow  for  the  Calculation  Period  less  any mandatory
          prepayment  which  is  paid  or  will  be  paid  with  respect to that
          Calculation  Period  in  accordance  with  clause  7.2;

          AHA  means  American  Home  Assurance;

          AISLIC means American International Specialty Lines Insurance Company;

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                                                                          page 1
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          ASSET  PURCHASE  AGREEMENT means the agreement so entitled dated on or
          about  the date of this agreement between Newmont, Hospah, WGI and the
          Borrower;

          AUTHORISATION  includes  any consent, registration, filing, agreement,
          certificate,  licence,  approval, permit, authority or exemption from,
          by  or  with  a  Governmental  Agency;

          AUTHORISED  OFFICER  means:

          (a)  in  relation to a Transaction Party, a chief executive officer or
               a  chief  financial  officer  for  the  time  being;  and

          (b)  in  relation  to  a  Finance  Party,  a  director,  an  associate
               director,  a company secretary, a president, a vice president, an
               officer  whose  title  contains the word "director", "manager" or
               "executive", or a person performing the functions of any of them,

          or  in  either  case,  a  person  appointed  by  a  party to act as an
          Authorised Officer for the purposes of the Facility or the Transaction
          Documents;

          AVAILABILITY  PERIOD  means  the  period  commencing  on  the  date of
          satisfaction  of  the  conditions  precedent set out in clause 3.1 and
          ending  on  the  earlier  of:

          (a)  31  December  2003;

          (b)  the  date  on  which  the  Facility  is  fully  drawn;  or

          (c)  the  date  on  which  the  Commitment  is  cancelled  in  full;

          BASE  REPAYMENT  AMOUNT  means  US$750,000;

          BOND  means  each  bond  issued  or  to be issued by AHA and which are
          described  in  Endorsement  No. 2 of the Reclamation Costs Policy, and
          BONDS  means  all  of  them;

          BUSINESS  DAY  means a day on which banks are open for general banking
          business  in  both  London,  England  and  Denver,  Colorado excluding
          Saturdays,  Sundays  and  public  holidays;

          CALCULATION  PERIOD  means:

          (a)  the  period  from and including the date of this agreement to and
               including the Quarterly Date first occurring after that date; and

          (b)  thereafter,  each  successive  Quarter;

          CALUMET means Calumet Mining Company, a corporation incorporated under
          the  laws  of  Idaho;

          CASHFLOW  MODEL  means  the cashflow projections for the Project for a
          period  of at least 30 months or any other period of time specified to
          the  Borrower  by  the  Agent;

          COLLATERAL  SECURITY  means  any present or future Encumbrance, Surety
          Obligation  or  other  document  or  agreement  entered  into  by  the
          Borrower,  another Transaction Party or another person as security for
          the  payment  of  the  Secured  Money;

          COMMITMENT means the maximum aggregate amount agreed to be provided by
          the  Lender  under  the  Facility  being  US$6,000,000,  as reduced or
          cancelled  in  accordance  with  this  agreement;

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          COMMUTATION  ACCOUNT  means the account established in the name of the
          Borrower  in  accordance  with Endorsement 3 of the Reclamations Costs
          Policy;

          CORPORATE  BUDGET  means  the  corporate  budget  for  non-Project
          expenditure  of  the  Borrower  and  the Guarantors for a period of 18
          months  or  any  other  period  approved  by  the  Agent;

          DEFAULT  means  the  occurrence  of  an  event of default described in
          clause  12.1;

          DISPOSE  in  relation  to any asset, property or right, means to sell,
          transfer,  assign,  surrender, convey, lease, licence, discount, lend,
          farm-out  or  otherwise dispose of any interest in the asset, property
          or  right;

          DOCUMENTS  means  the Transaction Documents and the Project Documents;

          ENCUMBRANCE  means  an  interest  or  power:

          (a)  reserved  in  an interest in any asset including, but not limited
               to,  any  retention  of  title;  or

          (b)  created or otherwise arising in any interest in any asset under a
               mortgage,  charge,  bill  of  sale, lien, pledge, trust or power,

          by  way  of  security  for  the  payment  of  a debt, another monetary
          obligation or the performance of another obligation, and includes, but
          is  not  limited to, an agreement to grant or create any of the above;

          ENVIRONMENTAL  APPROVALS  means  all  consents, approvals, licences or
          other  authorisations  of  any  kind  required  by  Environmental Law;

          ENVIRONMENTAL  LAW  means  any  law,  whether  deriving  from  statute
          (including, but not limited to, the relevant laws of the United States
          of  America  and  the  State  of  California) or otherwise, concerning
          environmental  matters,  and  includes,  but  is  not  limited to, law
          concerning land use, development, pollution, waste disposal, toxic and
          hazardous  substances,  conservation  of natural or cultural resources
          and resource allocation including any law relating to exploration for,
          and development or exploitation of, any natural resource including the
          rehabilitation  of  any  land,  and  including  any  and  all  rules,
          regulations  or  ordinances  promulgated  pursuant  to  those  laws;

          ENVIRONMENTAL  LIABILITIES  means  any obligation, expense, penalty or
          fine  under  an Environmental Law which would or could be imposed on a
          Transaction  Party,  or  an  Authorised  Officer  or  employee  of  a
          Transaction  Party, or any occupier of the Project Area as a result of
          activities  carried  on  during  the  ownership  or  occupation of the
          Project  Area  by  the  Borrower,  or  by  its  predecessors in title;

          EQUITY  FUNDING AMOUNT means equity funding for the acquisition of the
          Project  in  the  amount  of  not  less  than  US$3,250,000;

          EXCESS  CASH  FLOW  for the Quarter ending on 31 January 2004 and each
          subsequent  Quarter,  means  the  aggregate  of:

          (a)  the  Project  Cash  Flow  for  that  Quarter;  and

          (b)  money deposited to the credit of the Proceeds Account during that
               Quarter  (but  with  no  double  counting  of  amount),

          less  the  following  amounts  paid  during  that  Quarter  or  on the
          Quarterly  Date  at  the  end  of  that  Quarter:

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                                                                          page 3
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               (1)  interest  payable  in  relation to the Facility under clause
                    5.1;

               (2)  each  payment of the Principal Outstanding under clause 7.1;
                    and

               (3)  money  payable  under  a  Hedging  Contract;

          FACILITY  means  the  term  loan  to  be provided by the Lender to the
          Borrower  under  this  agreement;

          FINAL  REPAYMENT  DATE  means  31  October  2005;

          FINANCE  PARTY  means  each  of  the  following:

          (a)  the  Lender;  and

          (b)  the  Agent,

          and  FINANCE  PARTIES  means  both  of  them;

          FINANCIAL  INDEBTEDNESS  means any debt or other monetary liability in
          respect  of  moneys  borrowed  or  raised  or  financial accommodation
          including,  but  not  limited  to,  under  or  in  respect  of  any:

          (a)  bill,  bond, debenture, note, letter of credit, bank guarantee or
               similar  instrument;

          (b)  acceptance,  endorsement  or  discounting  arrangement;

          (c)  Surety  Obligation;

          (d)  finance  lease;

          (e)  deferred  purchase  price  for  more than 90 days of any asset or
               service;

          (f)  obligation  to  deliver  goods  or  provide  services paid for in
               advance  by  any  financier  or  in relation to another financing
               transaction;  or

          (g)  amount  of  capital  and  premium  payable in connection with the
               redemption  of  preference shares or an amount of purchaser price
               payable  for  or in connection with the acquisition of redeemable
               preference  shares,

          and  irrespective  of  whether  the  debt  or  liability:

               (1)  is  present  or  future;

               (2)  is  actual,  prospective,  contingent  or  otherwise;

               (3)  is  at  any  time  ascertained  or  unascertained;

               (4)  is  owed  or  incurred alone or severally or jointly or both
                    with  another  person;  or

               (5)  is  a  combination  of  the  above;

          FINANCING  PLAN  means  the  plan  which details the sources of funds,
          including the Equity Funding Amount and the Working Capital Amount, to
          pay  the costs of the acquisition of the Project and the costs set out
          in  the  Project  Budget  and  the  Corporate  Budget;

          FINANCING  STATEMENTS  means:

          (a)  the  UCC  Financing  Statement given by the Borrower in favour of
               the  Lender;  and

          (b)  the UCC Financing Statement given by WGI in favour of the Lender;

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                                                                          page 4
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          FORCE MAJEURE EVENT means:

          (a)  an  act  of  God;

          (b)  war,  revolution,  or any other unlawful act against public order
               or  authority;

          (c)  a  restraint  by  a  Governmental  Agency;

          (d)  any  other  event  which a reasonable person could not foresee or
               reasonably  make  provision  for  or  insure  against,

          which  wholly  or  partially  prevents,  hinders, obstructs, delays or
          interferes  with  the  development  or operation of the Project or the
          sale  of  Product;

          FUNDING  DATE  means  the date on which a Funding Portion is, or is to
          be,  provided  to  the  Borrower  under  this  agreement;

          FUNDING NOTICE means a notice requesting a Funding Portion in the form
          of  schedule  2,  specifying  the  matters indicated in that schedule;

          FUNDING  PERIOD  means  a  period  for  the  fixing  of interest rates
          determined  under  clause  4.4;

          FUNDING  PORTION  means  each portion of the Commitment provided under
          this  agreement;

          FUNDING  RATE  for  a Funding Portion, means the sum of LIBOR for that
          Funding  Period  plus  the  Margin;

          GOOD  INDUSTRY PRACTICE means the degree of care and skill, diligence,
          prudence (financial and operational), foresight and operating practice
          which  would  reasonably  and  ordinarily  be  expected from a skilled
          operator  engaged in the same time of undertaking as the Project under
          the  same  or  similar  circumstances;

          GOVERNMENTAL  AGENCY  means  a  government  or  a  governmental,
          semi-governmental,  administrative,  fiscal  or  judicial  body,
          department,  commission,  authority,  tribunal,  agency  or  entity;

          HEDGING  CONTRACT  means  any agreement or arrangement entered into by
          the Borrower with the Lender or any other financial institution to the
          satisfaction  of  the  Agent,  in  connection  with the management and
          protection  of  commodity risk, foreign currency risk or interest rate
          risk;

          HOSPAH  means Hospah Coal Company a corporation incorporated under the
          laws  of  Delaware;

          HOSPAH  NET  OPERATING CASH FLOW ROYALTY AGREEMENT means the agreement
          so entitled dated on or about 5 November 2003 between the Borrower and
          Hospah;

          HOSPAH NSR AGREEMENT means the NSR Royalty Agreement dated on or about
          5  November  2003  between  the  Borrower  and  Hospah;

          INSOLVENCY  EVENT  means  the  happening  of  any of these events with
          respect  to  a  Transaction  Party:

          (a)  an application or petition is made to a court for an order, or an
               order  or  decree  is made under the Bankruptcy Code or under any
               other  applicable bankruptcy, insolvency or similar law in effect
               now  or  from time to time, that a Transaction Party be wound up,
               put  into  administration or dissolved and the order or decree is
               not  stayed or any similar relief is granted under any applicable
               federal  or  state  law  and  is  not  stayed;

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                                                                          page 5
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          (b)  an  application  is  made  to  a  court for an order appointing a
               liquidator  or provisional liquidator in respect of a Transaction
               Party,  or  one  of  them  is  appointed, whether or not under an
               order;

          (c)  a  receiver, administrator, controller, liquidator, sequestrator,
               trustee,  custodian  or  similar  official  is  appointed  in any
               jurisdiction  over  any  of  the  assets  or  undertaking  of  a
               Transaction  Party;

          (d)  the  directors  or  other officers of a Transaction Party request
               the  appointment  of  a  receiver, receiver and manager, official
               manager,  trustee, administrator, controller, liquidator, trustee
               in  bankruptcy,  judicial  custodian,  compulsory  manager,
               administrative  receiver  or  similar  official;

          (e)  except  to  reconstruct  or  amalgamate  while  solvent  on terms
               approved  by  the  Agent,  a  Transaction  Party  enters into, or
               resolves  to enter into, a scheme of arrangement, deed of company
               arrangement  or  composition  with, or assignment for the benefit
               of,  all  or  any  class  of  its  creditors,  or  it  proposes a
               reorganisation,  moratorium or other administration involving any
               of  them;

          (f)  a Transaction Party resolves, or a meeting of a Transaction Party
               is  convened  to  consider  any  resolution  for that Transaction
               Party,  to wind itself up, or otherwise dissolve itself, or gives
               notice of intention to do so, except to reconstruct or amalgamate
               while  solvent  on  terms  approved  by the Agent or is otherwise
               wound  up  or  dissolved;

          (g)  a  Transaction Party is or is deemed to be insolvent or is unable
               to pay its debts when they are due or states that it is insolvent
               or  is  insolvent;

          (h)  a  Transaction  Party  suspends payment of its debts generally or
               announces  an  intention  to  do  so;

          (i)  by  reason  of  actual  or  anticipated financial difficulties, a
               Transaction  Party  begins negotiations with any creditor for the
               rescheduling  of  any  of  its  indebtedness;

          (j)  a  Transaction  Party  takes  any  step  to  obtain  protection
               (including  a  moratorium)  or is granted protection (including a
               moratorium)  from  its  creditors under the law of any applicable
               jurisdiction  or  an  administrator is appointed to a Transaction
               Party  under  the  law  of  any  applicable  jurisdiction;

          (k)  a  warrant  of  attachment, execution or similar process has been
               issued  against  any  substantial  part  of  the  property  of  a
               Transaction  Party;  or

          (i)  anything  analogous  or  having a substantially similar effect to
               any  of  the  events specified above happens under the law of any
               applicable  jurisdiction, including with respect to the Borrower,
               the  laws  of  the  any  applicable  jurisdiction;

          INTER-COMPANY  CLAIMS  means  all  debts  and  liabilities  of  each
          Subordinated  Group  Member  to  any  and all other Subordinated Group
          Members  on  any  account and in any capacity, irrespective of whether
          the  debts  or  liabilities:

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                                                                          page 6
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          (a)  are  present  or  future;

          (b)  are  actual,  prospective,  contingent  or  otherwise;

          (c)  are  at  any  time  ascertained  or  unascertained;

          (d)  are  owed  or  incurred  by or on account of a Subordinated Group
               Member  alone  or  severally  or  jointly  with  another  person;

          (e)  are  owed  to or incurred for the account of a Subordinated Group
               Member  alone,  or  severally  or  jointly  with  another person;

          (f)  are  owed  to  another person as agent (whether disclosed or not)
               for  or  on  behalf  of  a  Subordinated  Group  Member;

          (g)  are  owed  or  incurred  as  principal,  interest, fees, charges,
               taxes,  duties  or  other imposts, damages (whether for breach of
               contract or tort or incurred on another ground), losses, costs or
               expenses,  or  on  any  other  account;

          (h)  are  owed  to or incurred for the account of a Subordinated Group
               Member  directly  or  as  a  result  of:

               (1)  the assignment or transfer to a Subordinated Group Member of
                    a  debt or monetary liability of a Subordinated Group Member
                    (whether  by  way  of assignment, transfer or otherwise); or

               (2)  another  dealing  with  a  debt  or  liability of that kind;

          (i)  are  owed  to or incurred for the account of a Subordinated Group
               Member  before the date of this agreement, before the date of any
               assignment  of  this  agreement to a Subordinated Group Member by
               another  person  or  otherwise;  or

          (j)  comprise  a  combination  of  the  above;

          LENDING OFFICE in respect of a Finance Party, means the office of that
          Finance  Party  set out on page 1 of this agreement, or another office
          notified  by  a  Finance  Party  under  this  agreement;

          LIBO  PAGE means the page entitled "LIBO" on the Reuters Monitor Money
          Rates  Service  or  any other page which may replace the LIBO page for
          the  purpose  of  displaying  offered  rates  for United States Dollar
          deposits;

          LIBOR in relation to a Funding Period for a Funding Portion, means the
          rate  per  cent  per  annum  determined  by  the  Agent  to  be:

          (a)  the  average  of  the  rates quoted on the LIBO Page as being the
               rate per annum at which United States Dollar deposits are offered
               for  a  period equivalent to the Funding Period at about 11.00 am
               (London  time) on the Value Date, eliminating the highest and the
               lowest  rates  and  rounding up the resultant figure to 4 decimal
               places;

          (b)  where  2 or fewer rates are quoted for the relevant period on the
               LIBO Page at the relevant time, the average of the rates notified
               to  the  Agent by each Reference Bank to be the rate per annum at
               which United States Dollar deposits are offered to that Reference
               Bank for a period equivalent to the Funding Period at about 11.00
               am  (London  time)  on  the Value Date, rounding up the resultant
               figure  to  4  decimal  places;  or

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                                                                          page 7
<PAGE>
          (c)  if  LIBOR  cannot be determined in accordance with paragraphs (a)
               or (b) of this definition, the rate most nearly approximating the
               rate  that  would  otherwise have been calculated by the Agent in
               accordance with paragraph (a) having regard to comparable indices
               then  available  in  the  financial  markets;

          LIBOR  BUSINESS  DAY  means  a day (not being a Saturday or Sunday) on
          which  banks  are  open for general banking business in London and New
          York;

          MANAGEMENT AGREEMENT means the operating management agreement dated on
          or  about  5  November  2003  between  Harrison  Western  Construction
          Corporation  and  the  Borrower;

          MANAGEMENT SIDE AGREEMENT means the management side agreement dated or
          about the date of this agreement between Harrison Western Construction
          Corporation,  the  Borrower,  the  Lender  and  the  Agent;

          MARGIN  means  6.0%  per  annum;

          MATERIAL  ADVERSE  EFFECT  means  a  material  adverse  effect  on:

          (a)  the ability of a Transaction Party to perform an obligation under
               a  Transaction  Document  to  which  it  is  a  party;

          (b)  the  value  of  the  Secured  Property;  or

          (c)  the  business  or  operations  of  a  Transaction  Party;

          MINERAL  LEASE  AND  LANDFILL  FACILITIES  LEASE  AGREEMENT  means the
          agreement  so  entitled dated 25 June 1993 between Hospah, Newmont (as
          successor  to Santa Fe Pacific Gold Corporation) and County Sanitation
          District  No.  2 of Los Angeles County (as successor to Hanson Natural
          Resources  Corporation) as amended by an amendment dated 24 April 1995
          and  an  amendment  dated  24  August  1998;

          MINERAL  RIGHTS  means:

          (a)  the  mining  claims  and  other mineral rights, including but not
               limited  to  those  relating to the existing heaps and processing
               facilities  at the date of this agreement and which are described
               in  the  Securities;

          (b)  all  entitlements  of the Borrower or any Transaction Party under
               the  provisions of the Mining Law to conduct mining activities on
               the  Project  Area;

          (c)  any  present  or  future interest from time to time held by or on
               behalf of the Borrower or any Transaction Party in any present or
               future  right,  lease,  licence, claim, permit or other authority
               which confers or may confer a right to prospect or explore for or
               mine  any  metals  or  minerals  in any part of the Project Area;

          (d)  any  present  or  future  renewal,  extension,  modification,
               substitution,  amalgamation  or  variation  of any of the mineral
               rights  described  above  (whether  extending  over the same or a
               greater  or  lesser  area);  and

          (e)  any  present  or future application for or interest in any of the
               above, which confers or which, when granted, will confer the same
               or  similar  rights;

          MINING  LAW  means  any law, whether deriving from statute (including,
          but  not  limited  to,  the relevant laws of the United States and the
          State  of  California) or otherwise, concerning the acquisition by any
          allowed  means  of  interests  in  state

                                                                          page 8
<PAGE>
          and  federal  public  lands  or  private  lands  for  the  purpose  of
          conducting  mining  exploration,  mine development, mining operations,
          reclamation  and  related  operations  on that land, together with the
          rights  necessary  to  conduct  those  activities,  including  but not
          limited to laws relating to public land use, development, conservation
          of  natural or cultural resources and resource allocation and includes
          any  laws  concerning permits, licences and authorisations required to
          be received before conducting any of those activities and includes any
          and all rules, regulations or ordinances promulgated pursuant to or in
          respect  of  these  laws;

          NEWMONT  means  Newmont  USA Limited dba Newmont Mining Corporation, a
          corporation  incorporated  under  the  laws  of  Delaware;

          OPERATING  COSTS  means  all  expenses (including, but not limited to,
          capital  and recurrent expenditure of a routine nature and head office
          administration  costs,  but  excluding  all other capital expenditure)
          incurred  and  paid by the Borrower in the ordinary course of business
          in  connection  with  the  day  to  day  activities of the Project but
          excluding  any  payments to third parties in respect of liabilities to
          them  covered  by  third  party  insurance;

          OVERDUE  RATE  in  relation to an unpaid amount on any date, means the
          rate  which  is  the  sum of 2.0% per annum and the Funding Rate for a
          Funding Portion equal to the unpaid amount and having a Funding Period
          of  90  days;

          PAYMENT  CURRENCY  means the currency in which any payment is actually
          made;

          PERFECTION  CERTIFICATE  means  the  perfection  certificate  of  the
          Borrower,  WGI  and  Calumet  dated  5  November  2003;

          PERMITTED ENCUMBRANCES means the Encumbrances described in schedule 3;

          POTENTIAL  DEFAULT  means  an  event or condition which with notice or
          lapse  of  time  or  satisfaction  of  some  other  condition  or  any
          combination  of  the  foregoing  would  become  a  Default;

          POWER  means a right, power, authority, discretion or remedy conferred
          on  a  Finance  Party  by a Transaction Document, an applicable law or
          otherwise;

          PRINCIPAL  OUTSTANDING  at  any time, means the sum of all outstanding
          Funding  Portions  drawn  under  the  Facility  at  that  time;

          PROCEEDS  ACCOUNT  means  the  account  described  in  clause 11.1(a);

          PRODUCT  means  the  Borrower's  present  and  future right, title and
          interest  in  and  to  all  gold  (including, without limitation, gold
          bearing  material, dore bullion or metallic gold and refined gold) and
          other metals and minerals mined, extracted or derived from the Project
          Area;

          PROJECT  means  the Mesquite leach heap extraction project in Imperial
          County,  State  of  California  in  the  United  States  of  America;

          PROJECT  AREA  means  the  areas  the  subject  of the Mineral Rights;

          PROJECT  ACCOUNT  means  the  account  described  in  clause  11.1(b);

          PROJECT  ASSETS  means  all the right, title and interest both present
          and  future  of  the Borrower which is attributable to the Project and
          includes  all the right, title and interest both present and future of
          the  Borrower  in,  to,  under  or  derived  from:

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                                                                          page 9
<PAGE>
          (a)  the  Mineral  Rights;

          (b)  the  Product;

          (c)  the  Project Area, including any title to or interest in the land
               included  in  the Project Area now or at a later time held by the
               Borrower;

          (d)  the  Sales  Contracts;

          (e)  every  contract  for  the  use  by  any third party of any of the
               assets  and  property  included  in  the  Project;

          (f)  Authorisations  in  relation  to  the  Project;

          (g)  any  other  contract, agreement, permit, lease, licence, consent,
               easement,  right  of  way  and other rights or interests in land,
               which  relates  to  the construction, operation or maintenance of
               the  Project,  or  to  the  mining,  production,  transportation,
               storage,  treatment,  processing  or  marketing  of  the Product;

          (h)  all exploration and mining information, documents, maps, reports,
               records,  studies  and  other  written  data,  including all data
               stored  on  magnetic  tapes,  disks  or  diskettes  or  any other
               computer  storage  media, relating to geological, geochemical and
               geophysical  work,  feasibility  studies  and  other  operations
               conducted  with  respect  to  the  Project  Area;

          (i)  all  buildings,  improvements,  structures,  systems,  fixtures,
               plant,  machinery,  barges,  tools and other personal property at
               any  time  used  or  intended  for  use  in  connection  with  or
               incidental  to the exploration, mining, storage, transporting and
               processing  of  Product,  and  all  associated  facilities  and
               infrastructure  (including  any  treatment  or processing plant);

          PROJECT  BUDGET  means  the budget prepared by the Borrower which sets
          out  the annual operating and financing budget and activities plan for
          the  next  financial  year;

          PROJECT  CASH  FLOW  in  relation  to  a Calculation Period, means the
          Revenue for the Calculation Period less the aggregate of the following
          amounts  actually  paid by the Borrower during that Calculation Period
          (or, where not actually paid at the date of any calculation, projected
          or  estimated  by the Agent to be actually paid by the Borrower during
          that  Calculation  Period):

          (a)  Operating  Costs  in  accordance  with  the  current  Budget;

          (b)  any  capital  expenditure  in  respect  of  the Project as may be
               approved  by  the  Agent;

          (c)  any  fees or Taxes paid to the Government of the United States of
               America or the State of California or to a Governmental Agency in
               respect  of  the  Project (whether currently payable or levied or
               imposed  after  the  date  of  this  agreement);  and

          (d)  any  payments  to  Hospah  in respect of the Hospah Net Operating
               Cash  Flow  Royalty  Agreement;

          PROJECT DOCUMENTS will be on terms acceptable to the Agent and include
          the  following:

          (a)  the  Reclamation  Costs  Policy;

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                                                                         page 10
<PAGE>
          (b)  the  Mineral  Lease  and  Landfill  Facilities  Lease  Agreement;

          (c)  the  Asset  Purchase  Agreement;

          (d)  the  Hospah  Net  Operating  Cash  Flow  Royalty  Agreement;

          (e)  the  Hospah  NSR  Agreement;

          (f)  the  Management  Agreement;

          (g)  all  instruments  and  indicia of title to the Mineral Rights and
               all  other  documentation  under  which  the  Borrower  or  any
               Transaction  Party  derives  the  right  to  explore  or mine the
               Project  Area;

          (h)  any  Sales  Contract;  and

          (i)  any  other  document  executed from time to time by any person in
               respect  of  the  documents  described  in  paragraphs (a) to (c)
               inclusive  or  which  is  collateral, supplementary or related to
               those  documents;

          QUARTER  means  the  period  of  3  months preceding a Quarterly Date;

          QUARTERLY  DATE  means  each  of  31 January, 30 April, 31 July and 31
          October  in  each  year;

          RECLAMATION  COSTS  POLICY  means  the  Reclamation  Costs  Policy  as
          constituted  by:

          (a)  the  Reclamation  Costs  Policy dated on or about 5 November 2003
               made  between  AISLIC,  the  Lender  and  the  Borrower;  and

          (b)  the  Surety  Side  Agreement;

          RECLAMATION  PLAN  means  the  mine  reclamation and cost closure plan
          dated  February  2002  prepared  by  Newmont;

          RECLAMATION WORK has the meaning given to that term in the Reclamation
          Costs  Policy;

          REFERENCE  BANK  means  the  principal London offices of Barclays Bank
          plc,  JPMorgan  Chase  Bank  and  National  Westminster  Bank  plc;

          REVENUE  for  any  Calculation  Period,  means  the  aggregate  of the
          following  amounts  actually  received  (or, where not received at any
          date  of calculation, projected or estimated by the Agent as likely to
          be  actually  received)  during  that  Calculation  Period:

          (a)  Sales  Proceeds;

          (b)  interest  credited  to  any  Transaction  Account;

          (c)  liquidated  damages  and other amounts received under any Project
               Document;

          (d)  moneys received under or in relation to any Hedging Contract; and

          (e)  any  other  money  received  in  connection  with  the  Project
               (including,  without  limitation, proceeds of sales of assets and
               insurance  proceeds)  and for any purpose whatsoever, which money
               is  not  subject  to  any  escrow  or  like  conditions,

          but  excluding:

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                                                                         page 11
<PAGE>
               (1)  the  proceeds  of  a  Funding  Portion  and  any  financial
                    accommodation (other than a Hedging Contract) made available
                    by  the  Lender;

               (2)  the  proceeds  of  any  equity contribution or loan or other
                    financial  accommodation  provided  to  the  Borrower  by  a
                    Guarantor  or  any  other  person;  and

               (3)  the  proceeds  of any insurance in respect of liabilities to
                    third  parties;

          SALES  CONTRACTS  means any contract, agreement or arrangement for the
          sale,  transfer  or  other  disposal,  or  any  contract, agreement or
          arrangement  for  any  agency  for  sale,  exchange, transfer or other
          disposal,  of  Product;

          SALES  PROCEEDS  means  moneys  received  from  the  sale  of  Product
          including,  but  not  limited  to,  moneys  received  under  any Sales
          Contract;

          SAME  DAY  FUNDS  means  a  bank cheque or other immediately available
          funds;

          SECURED MONEY means all debts and monetary liabilities of the Borrower
          and  each  other  Transaction  Party  to  a  Finance Party under or in
          relation  to  a  Transaction Document in any capacity, irrespective of
          whether  the  debts  or  monetary  liabilities:

          (a)  are  present  or  future;

          (b)  are  actual,  prospective,  contingent  or  otherwise;

          (c)  are  at  any  time  ascertained  or  unascertained;

          (d)  are  owed or incurred by or on account of the Borrower or another
               Transaction  Party  alone  or  severally  or jointly with another
               person;

          (e)  are owed to or incurred for the account of a Finance Party alone,
               or  severally  or  jointly  with  another  person;

          (f)  are  owed  to  another person as agent (whether disclosed or not)
               for  or  on  behalf  of  a  Finance  Party;

          (g)  are  owed  or  incurred  as  principal,  interest, fees, charges,
               taxes,  duties  or  other imposts, damages (whether for breach of
               contract or tort or incurred on another ground), losses, costs or
               expenses,  or  on  any  other  account;

          (h)  are  owed  to  or  incurred  for  the  account of a Finance Party
               directly  or  as  a  result  of:

               (1)  the  assignment  or transfer to a Finance Party of a debt or
                    monetary  liability  of  the  Borrower  (whether  by  way of
                    assignment,  transfer  or  otherwise) or another Transaction
                    Party;  or

               (2)  another  dealing  with  a debt or monetary liability of that
                    kind;

          (i)  are owed to or incurred for the account of a Finance Party before
               the  date of this agreement, before the date of any assignment of
               this agreement to a Finance Party by another person or otherwise;
               or

          (j)  comprise  a  combination  of  the  above;

          SECURED  PROPERTY means the property the subject of the Securities and
          each  Collateral  Security;

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                                                                         page 12
<PAGE>
          SECURITIES  means  the  securities  described  in  schedule  4;

          SHARES  means  fully  paid  common  shares  in  the  capital  of  WGI;

          SUBORDINATED  GROUP  means  the  WGI  Group;

          SUBORDINATED GROUP MEMBER means each member of the Subordinated Group;

          SUBSIDIARY of an entity, means another entity which is a subsidiary of
          the  first within the meaning of any applicable law or is a subsidiary
          of  or  otherwise  controlled  by  the  first  within  the  meaning of
          generally  accepted  accounting  standards and principles as in effect
          from  time  to  time  in  the  United  States  of  America;

          SURETY  OBLIGATION  means  a  guarantee, suretyship, letter of credit,
          letter  of  comfort  or  another  obligation  (whatever  called and of
          whatever  nature):

          (a)  to provide funds (whether by the advance or payment of money, the
               purchase  of  or subscription for shares or other securities, the
               purchase  of assets or services, or otherwise) for the payment or
               discharge  of;

          (b)  to  indemnify a person against the consequences of default in the
               payment  of;  or

          (c)  to  be  responsible  for,

          a  debt  or  monetary liability of another person or the assumption of
          any  responsibility  or obligation in respect of the insolvency or the
          financial  condition  of  another  person;

          SURETY  SIDE  AGREEMENT  means  the  agreement so entitled dated on or
          about  5  November  2003  between  AHA,  the  Lender and the Borrower;

          TAX  means:

          (a)  a  tax,  levy,  charge,  impost, duty, fee, deduction, compulsory
               loan  or  withholding;  or

          (b)  income,  stamp  or  transaction  duty,  tax  or  charge,

          which  is  assessed, levied, imposed or collected by, or payable to, a
          Governmental  Agency,  except if imposed in respect of the overall net
          income  of  a  Finance  Party  and  includes,  but  is not limited to,
          interest,  fines,  penalties,  charges, fees, value added tax or other
          amounts  imposed  on  or  in  respect  of  any  of  the  above;

          TRANSACTION  ACCOUNTS  means:

          (a)  the  Project  Account;  and

          (b)  the  Proceeds  Account;

          TRANSACTION  DOCUMENTS  means:

          (a)  this  agreement;

          (b)  the  Securities;

          (c)  the  Hedging  Contract;

          (d)  the  Management  Side  Agreement;

          (e)  the  Perfection  Certificate;

          (f)  the  Financing  Statements;  and

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                                                                         page 13
<PAGE>
          (g)  each  document  which  the  Borrower  and  the  Agent  agree is a
               Transaction  Document;

          TRANSACTION  PARTY  means:

          (a)  the  Borrower;

          (b)  each  Guarantor;

          (c)  any  other  person  the  Borrower  and  the  Agent  agree  is  a
               Transaction  Party;

          UNDRAWN COMMITMENT at any time, means the Commitment at that time less
          the  Principal  Outstanding  at  that  time;

          UNITED  STATES DOLLARS and US$ means the currency of the United States
          of  America;

          US  SECURITIES  means:

          (a)  Security  Agreement  dated  as  of  5  November  2003 between the
               Borrower,  the  Lender  and  the  Agent;

          (b)  Mortgage,  Security Agreement, Assignment and Financing Statement
               dated  as of 5 November 2003 between the Borrower, the Lender and
               the  Agent;

          (c)  Pledge  Agreement  dated  as  of 5 November 2003 between WGI, the
               Lender  and  the  Agent;  and

          (d)  Deposit  Account  Control  Agreement  dated as of 5 November 2003
               between  the  Lender,  the  Agent,  the  Borrower and Baker Boyer
               National  Bank.

          VALUE  DATE  means  the date 2 Business Days before the first day of a
          Funding  Period;

          WARRANTS means 780,000 warrants to purchase Shares to be issued to the
          Agent  or  the  Agent's  nominee  in  accordance  with  clause  15.2;

          WARRANT  CERTIFICATE means the certificate in relation to the warrants
          substantially  in  the  form  set  out  in  schedule  5;

          WGI  means  Western Goldfields, Inc., a company incorporated under the
          laws  of  Idaho;

          WGI  GROUP  means  each  of:

          (a)  the  Borrower;  and

          (b)  each  Guarantor;  and

          WORKING  CAPITAL AMOUNT means the amount of US$500,000 to be deposited
          into  the  Project  Account  in  accordance  with  clause  11.3.

     1.2  INTERPRETATION

          In  this  agreement,  unless  the  context  otherwise  requires:

          (a)  clause  headings  do  not  affect  the  interpretation  of  this
               agreement  and  a reference to clauses, paragraphs, schedules and
               annexures  is  a  reference to the clauses, paragraphs, schedules
               and  annexures  in  this  agreement;

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                                                                         page 14
<PAGE>
          (b)  a  reference to a statute, regulation, proclamation, ordinance or
               by-law  includes  all  statutes,  regulations,  proclamations,
               ordinances  or  by-laws  amending, consolidating or replacing it,
               and  a  reference  to  a  statute  includes  all  regulations,
               proclamations,  ordinances and by-laws issued under that statute;

          (c)  a  reference  to any agreement, instrument or document includes a
               reference  to  the  agreement, instrument or document as amended,
               varied,  supplemented  or  replaced  from  time  to  time;

          (d)  words  indicating the singular include the plural and vice versa,
               expressions  indicating  natural  persons  include  a  company,
               corporation  or other body corporate, partnership, joint venture,
               association  and  a  Governmental  Agency;

          (e)  a  reference  to  a  party  includes  that  party's  executors,
               administrators,  successors, substitutes and assigns, including a
               person  taking  by  way  of  novation;

          (f)  a  reference  to  a  month means a calendar month (whether or not
               beginning  on  the  first  day  of  any  month);

          (g)  a reference to an agreement other than this agreement includes an
               undertaking,  deed,  agreement or legally enforceable arrangement
               or  understanding  whether  or  not  in  writing;

          (h)  a  reference  to  an  asset  includes all property of any nature,
               including,  but  not  limited  to,  a  business,  and all rights,
               revenues  and  benefits;

          (i)  a  reference  to a document includes any agreement in writing, or
               any  certificate,  notice,  instrument  or  other document of any
               kind;

          (j)  other  parts  of speech and grammatical forms of a word or phrase
               defined  in  this  agreement  have  a  corresponding  meaning;

          (k)  where  the  day on or by which a matter or thing is to be done is
               not  a  Business  Day, that matter or thing must be done on or by
               the  preceding  Business  Day;  and

          (l)  a  reference  to  liquidation  includes  official  management,
               appointment of an administrator, compromise, arrangement, merger,
               amalgamation, reconstruction, winding-up, dissolution, assignment
               for  the benefit of creditors, scheme, composition or arrangement
               with creditors, insolvency, bankruptcy, or any similar procedure.

     1.3  ACCOUNTING  PRINCIPLES

          In  this  agreement,  unless  the  context  otherwise  requires:

          (a)  all  computations and determinations as to financial matters, and
               all  financial  statements  to be delivered under this agreement,
               must  be  made  or prepared in accordance with generally accepted
               accounting  practices  of  the  jurisdiction  applicable  to  the
               Borrower  and  to  each Guarantor respectively and principles for
               the  time  being  consistently  applied;  and

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                                                                         page 15
<PAGE>
          (b)  all  accounting  terms  used  in this agreement have the meanings
               respectively  ascribed  to  those  terms  by  those practices and
               principles  for  the  time  being.

     1.4  LIABILITY

          The  obligations  of  the  Borrower  and  each  Guarantor  under  this
          agreement  bind  each  of  them  jointly  and  severally.

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

     2    COMMITMENT,  PURPOSE  AND  AVAILABILITY  OF  THE  FACILITY

     2.1  PROVISION  OF  COMMITMENT

          Subject  to  this  agreement,  the  Lender  will  make  the Commitment
          available  to  the  Borrower during the Availability Period subject to
          the  following  terms  and  conditions:

          (a)  the  Borrower may at any time during the Availability Period give
               a  Funding  Notice  in accordance with clause 4.1 to the Agent in
               respect  of  the  Commitment;  and

          (b)  the  Funding  Notice  given  by  the  Borrower  in respect of the
               Commitment  must  request  all  of  the  Commitment.

     2.2  PURPOSE

          (a)  The  Borrower must use the proceeds of all Funding Portions under
               the  Facility  to  fund  part  of its acquisition of the Project,
               including  to  establish  the  Commutation  Account  under  the
               Reclamation  Costs  Policy.

          (b)  All  Funding  Portions  drawn  by  the  Borrower for the purposes
               referred  to in clause 2.2(a) will be transmitted by the Agent in
               United  States  Dollars  to an account at a financial institution
               nominated  by  the  Borrower.

          (c)  The  Finance  Parties  have  no  responsibility in respect of the
               application  of  the  proceeds  of  a  Funding  Portion.

     2.3  CANCELLATION  AT  END  OF  AVAILABILITY  PERIOD

          The  Undrawn  Commitment  is cancelled at 5.00 pm (London time) on the
          last  day  of  the  Availability  Period.

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

     3    CONDITIONS  PRECEDENT

     3.1  FUNDING  PORTION

          The  Lender  is  not obliged to provide the Commitment until the Agent
          has  received  all  of  the  following  in  form  and  of  substance
          satisfactory  to  the  Agent:

          (a)  ARTICLES  OF  INCORPORATION:  a certified copy of the articles of
               incorporation  or other constituent documents of the Borrower and
               each  Guarantor;

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                                                                         page 16
<PAGE>
          (b)  TRANSACTION  DOCUMENTS:  an  original  copy  of  each  of  the
               Transaction  Documents,  executed, and, where applicable, stamped
               and  in  registrable  form  together  with  all  fully  executed
               documents and other things necessary to carry out registration of
               them;

          (c)  PROJECT  DOCUMENTS:  a  certified  copy  of  each  of the Project
               Documents  executed by all parties to them and, where applicable,
               stamped,  each  on  terms  acceptable  to  the  Agent;

          (d)  CORPORATE  AUTHORISATION: a certified copy of a resolution of the
               directors  or  other Authorised Officers of the Borrower and each
               Guarantor  approving  the  provision  of  the  Facility  and  the
               transactions  contemplated  by  the  Transaction  Documents,
               authorising  execution  by the Borrower and each Guarantor of the
               Transaction Documents to which each is a party, and authorising a
               person  or  persons  (being Authorised Officers) to sign notices,
               certificates  or  other  documents  in  connection  with  the
               Transaction  Documents  on  behalf  of  the  Borrower;

          (e)  AUTHORISED SIGNATORIES: a certified copy of the signatures of all
               Authorised  Officers  of  the Borrower who are authorised to sign
               notices,  certificates  or other documents in connection with the
               Transaction  Documents  on  its  behalf;

          (f)  CERTIFICATE  REGARDING  MATERIAL  ADVERSE  EFFECT:  a certificate
               stating  that  since  the  end  of  the accounting period for the
               accounts referred to in clause 3.1(p), no event has occurred (and
               is continuing) which has, or may have, a Material Adverse Effect;

          (g)  MINERAL  RIGHTS:  evidence  that  following  completion under the
               Asset  Purchase  Agreement:

               (1)  the  Borrower  will  have  good  title to the Mineral Rights
                    necessary  for  the operation of the Project and the Mineral
                    Rights  held  by  the  Borrower  will  be  valid and in good
                    standing;  and

               (2)  the  Mineral  Rights  held by the Borrower give the Borrower
                    all  material  rights  required  to  enable  the Borrower to
                    operate  the  Project as contemplated by the Project Budget;

          (h)  INSURANCE:  evidence  of  compliance  with  clauses  10.3(i);

          (i)  CASHFLOW  MODEL:  the  Cashflow  Model;

          (j)  BUDGETS:  the  Project  Budget  and  the  Corporate  Budget;

          (k)  FINANCING  PLAN:  the  Financing  Plan;

          (l)  EQUITY  FUNDING  AMOUNT:  evidence that the Equity Funding Amount
               has  been expended, or will be expended at the time of completion
               under  the  Asset  Purchase  Agreement,  in  accordance  with the
               Financing  Plan on the acquisition costs relating to the Project;

          (m)  HEDGING  PROGRAM:  evidence  that the Borrower and the Agent have
               agreed  the  terms of a gold hedging program between the Borrower
               and  the  Lender,  and  have  entered  into any Hedging Contracts
               required  by  that  program;

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                                                                         page 17
<PAGE>
          (n)  PROJECT  MANAGEMENT:  evidence that the Borrower has entered into
               the  Management  Agreement on terms which are satisfactory to the
               Agent;

          (o)  DUE  DILIGENCE: reports in respect of the technical and legal due
               diligence  in  respect  of the Project to the satisfaction of the
               Agent;

          (p)  ACCOUNTS:  a  certified  copy  of  each  of  the  following:

               (1)  WGI's  audited  balance  sheet  as  at  31  December  2002;

               (2)  WGI's audited profit and loss statement for the period ended
                    31  December  2002;  and

               (3)  the  Borrower's  and  WGI's  management  accounts  as  at 30
                    September  2003;

          (q)  SEARCHES  AND  ENQUIRIES:  results  of  searches,  enquiries  and
               requisitions  concerning:

               (1)  the  Borrower and each Guarantor and their capacity to enter
                    into  and  perform  their  obligations under the Transaction
                    Documents  to  which  each  is  a  party;

               (2)  the  assets  of  the  Borrower  and  each  Guarantor;

          (r)  TITLE OPINION: title opinion of Carver & Kirchhoff in relation to
               the  mineral  rights  titles  for  existing  heaps and processing
               facilities  located  on  the  Project  Area;

          (s)  LEGAL  OPINIONS:

               (1)  legal  opinion of Jenkens & Gilchrist LLP as special counsel
                    for  the  Borrower;  and

               (2)  legal  opinion  of  Rodney  Knutson  as  counsel  for  the
                    Transaction  Parties;

          (t)  ESTOPPEL CERTIFICATE: a certified copy of an Estoppel Certificate
               of  Newmont  in  relation  to  the  Mineral  Lease  and  Landfill
               Facilities  Lease  Agreement;

          and

          (u)  AUTHORISATIONS:  evidence  that  all Authorisations necessary for
               the  Project  and  the transactions contemplated by the Documents
               have  been  obtained,  including  any  necessary  approval of the
               Securities  by  the  relevant  Governmental  Agencies;

          (v)  FEES:  evidence  that all fees have been paid, including fees for
               legal  counsel;

          (w)  ARRANGEMENT  FEE:  the  arrangement fee described in clause 15.1;

          (x)  WARRANTS: the warrants described in clause 15.2 have been issued;

          (y)  ACCOUNTS:  evidence  that  the  Project  Account and the Proceeds
               Account  have  been  established;

          (z)  ENVIRONMENTAL  BONDS:  evidence  that  the  Borrower  has  lodged
               environmental  bonds  at  any  relevant  Governmental  Agency  in
               relation  to

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                                                                         page 18
<PAGE>
               the Project in accordance with the requirements of any applicable
               law  relating  to  the  Project  and  the  Project  Area;

          (aa) OTHER  APPROVALS: evidence that all other approvals necessary for
               the  transactions  contemplated by the Transaction Documents have
               been  obtained;

          (bb) WORKING  CAPITAL AMOUNT: evidence that the Working Capital Amount
               has  been  paid  into  the  Project  Account;  and

          (cc) OTHER MATTERS: any other certificates, Authorisations, documents,
               matters  or  things which the Agent, in its discretion, requires.

     3.2  ALL  FUNDING  PORTIONS

          The  Lender  is  not  obliged to provide any Funding Portion until the
          following conditions are fulfilled to the complete satisfaction of the
          Agent:

          (a)  FUNDING  NOTICE:  the  Borrower has delivered a Funding Notice to
               the  Agent  in  respect of the Funding Portion in accordance with
               clause  4;

          (b)  FUNDING  DATE:  the  Funding  Date  for  the Funding Portion is a
               Business  Day  within  the  Availability  Period;

          (c)  COMMITMENT:  the  Commitment is not, and will not be, exceeded if
               that  Funding  Portion  is  provided;

          (d)  NO  DEFAULT:  no Default or Potential Default has occurred and is
               continuing  and no Default or Potential Default will arise if the
               proposed  Funding  Portion  is  provided;  and

          (e)  NO  MATERIAL  ADVERSE  EFFECT:  since  the  end of the accounting
               period  for  the  accounts referred to in clause 3.1(p), no event
               has occurred which has, or may have, a Material Adverse Effect in
               the  opinion  of  the  Agent.

     3.3  CERTIFIED  COPIES

          Where a certified copy of a document is to be given to the Agent under
          clause  3.1  or  clause  3.2,  an  Authorised  Officer of the relevant
          Transaction  Party  must  certify  the copy to be a true, complete and
          up-to-date  copy  of  the original document as at a date acceptable to
          the  Agent.

     3.4  WAIVER  OF  CONDITIONS  PRECEDENT

          A  requirement in this clause 3 is for the benefit only of the Finance
          Parties and may only be waived by the Agent on the instructions of the
          Lender.

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4    FUNDING  PROCEDURES

     4.1  DELIVERY  OF  FUNDING  NOTICE

          (a)  If  the  Borrower  requires a Funding Portion, it must deliver to
               the Agent a duly completed Funding Notice which must be signed by
               an  Authorised  Officer of the Borrower and received by the Agent
               not  later  than 12.00

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                                                                         page 19
<PAGE>
               noon  (London  time)  3 Business Days (or any lesser period which
               the  Agent  may  agree)  before  the  proposed  Funding  Date.

          (b)  Promptly after receipt of a Funding Notice, the Agent will notify
               the  Lender  of  its  contents.

          (c)  If  a  Funding  Notice  is  received  by  the Agent after 4.00 pm
               (London  time)  on  any  Business Day the Agent is not obliged to
               notify  the  Lender  under  clause 4.1(b) until the next Business
               Day.

          (d)  A  Funding  Notice  is  irrevocable.

     4.2  DELIVERY  BY  FACSIMILE

          (a)  A  Funding  Notice may be delivered to the Agent by facsimile, in
               which case the Borrower will deliver the original of that Funding
               Notice  to  the  Agent by posting it within 1 Business Day of the
               date  of  the  facsimile  transmission.

          (b)  The  Borrower  acknowledges  that  the  Agent  is  not:

               (1)  bound to enquire whether the facsimile transmission has been
                    inaccurately transmitted or received, or, if on its face the
                    facsimile  transmission  appears  to  have been signed by an
                    Authorised  Officer  of  the  Borrower  or  any other person
                    authorised by the Borrower in writing to sign notices on its
                    behalf,  whether the facsimile transmission has been sent by
                    an  unauthorised  person;  or

               (2)  liable  for  loss  or  expense that may result from falsity,
                    inaccuracy,  insufficiency,  illegality  or  forgery  of  a
                    Funding  Notice  sent  by  facsimile  where  on its face the
                    facsimile  transmission  appears  to  have been signed by an
                    Authorised  Officer  of  the  Borrower  or  any other person
                    authorised by the Borrower in writing to sign notices on its
                    behalf.

     4.3  PROVISION  OF  FUNDING  PORTIONS

          (a)  If  the  Borrower gives a Funding Notice for a Funding Portion in
               accordance  with  this agreement, the Lender must, subject to the
               provisions  of  the  Transaction  Documents,  give  the Agent the
               Funding  Portion  in  Same Day Funds in United States Dollars not
               later  than  12  noon (London time) on the specified Funding Date
               and  in  accordance  with  that  Funding  Notice.

          (b)  On  receipt  of  the  funds paid to it by the Lender under clause
               4.3(a),  the  Agent  will  pay  those  funds in Same Day Funds in
               United  States  Dollars  to  the  Borrower  or as directed by the
               Borrower  in  the  relevant  Funding  Notice.

     4.4  SELECTION  OF  FUNDING  PERIODS

          (a)  Subject  to  the  subsequent provisions of this clause, a Funding
               Period  must  be  of  90 or 180 days or any other period that the
               Agent  agrees  with  the  Borrower.

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                                                                         page 20
<PAGE>
          (b)  The  initial  Funding  Period for a Funding Portion is the period
               specified  in  the Funding Notice. Each subsequent Funding Period
               is  a  period  notified  by  the Borrower to the Agent at least 3
               Business  Days before the last day of the current Funding Period.
               If  the  Borrower  does  not  give  notice the subsequent Funding
               Period  is to be of the same duration as the Funding Period which
               immediately  precedes  it.

          (c)  If a Funding Period ends on a day which is not a Business Day, it
               is  regarded as ending on the next Business Day in the same month
               or,  if  none,  the  preceding  Business  Day.

          (d)  A  Funding  Period  for a Funding Portion commences either on the
               first Funding Date for that Funding Portion or on the last day of
               the  immediately  preceding  Funding  Period  for  that  Funding
               Portion.

          (e)  Each  Funding  Period prior to the end of the Availability Period
               which commences prior to a Quarterly Date and would otherwise end
               after  that  Quarterly  Date,  ends  on  that  Quarterly  Date.

          (f)  No  Funding  Period for a Funding Portion may end after the Final
               Repayment  Date.

          (g)  If  the  Borrower  fails  to select a Funding Period, the Funding
               Period  will  be  a  period  selected  by  the  Agent.

          (h)  If  the  Borrower selects a Funding Period in a manner which does
               not comply with this clause 4.4, the Agent may select the Funding
               Period.

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

5    BASE  INTEREST

     5.1  PAYMENT  OF  BASE  INTEREST

          (a)  The  Borrower  must  pay interest on the principal amount of each
               Funding  Portion  at  the  Funding  Rate for each Funding Period.

          (b)  The  Borrower must pay accrued interest with respect to a Funding
               Portion  to the Agent for the account of the Lender in arrears on
               each  Quarterly  Date  and  on  the Final Repayment Date with the
               first  payment  to  be  made  on  31  January  2004.

     5.2  GENERAL  PROVISIONS  IN  RELATION  TO  INTEREST

          Interest  is  calculated  on  daily balances on the basis of a 360 day
          year  and for the actual number of days elapsed from and including the
          first  day  of  each Funding Period to, but excluding, the last day of
          the  Funding  Period.

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

6    VARIABLE  INTEREST

     6.1  DEFINITIONS

          In  this  clause:

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                                                                         page 21
<PAGE>
          (a)  IRR  means  the  Lender's internal rate of return with respect to
               the  Facility  calculated  by the Agent in accordance with clause
               6.3;  and

          (b)  VARIABLE  INTEREST RATE REDUCTION DATE means the last date of the
               Quarter  in  relation  to  which the Agent first determines under
               clause  6.3  that  the  IRR  has  equalled  or  exceeded  20%.

     6.2  PAYMENT  OF  VARIABLE  INTEREST

          (a)  The  Borrower  must  pay variable interest calculated at the rate
               provided  in  clause  6.2(b) on the Adjusted Excess Cash Flow for
               each  Quarter.

          (b)  The  Borrower  must  pay  variable  interest:

               (1)  at  the  rate  of 20% to and including the Variable Interest
                    Rate  Reduction  Date;  and  then

               (2)  at  the  reduced rate of 10% from the Variable Interest Rate
                    Reduction  Date until economic exhaustion of gold production
                    from  the ore currently located on the heap leach facilities
                    on  the  Project  Area.

          (c)  Variable interest for a Quarter is to be paid at the same time as
               the  delivery  of  the  accounts  and reports under clause 6.3 in
               relation  to  that  Quarter, with the first payment to be paid at
               the  time  of  the delivery of that information at the end of the
               Quarter  ended  31  January  2004.

          (d)  The  obligation  to  pay  variable  interest  continues after the
               Principal  Outstanding  has  been  repaid  in  full.

     6.3  DELIVERY  OF  INFORMATION

          (a)  No  later than 21 days after the end of each Quarter the Borrower
               must  provide  the  Agent  with:

               (1)  its  calculation  of  the variable interest payment for that
                    Quarter;

               (2)  details  of  the manner in which the Borrower has calculated
                    that  amount;  and

               (3)  all  documentation  and information required by the Agent to
                    enable  the  Agent  to  calculate  and  verify  that amount.

          (b)  To  the  extent  that  the reports provided by the Borrower under
               clauses  10.5(c),  10.5(f) and 10.5(g) provide the Agent with the
               information  required  by clause 6.3(a)(3), then the provision of
               that  information  will  be  adequate compliance with this clause
               6.3.

     6.4  DETERMINATION  OF  IRR

          (a)  After each Quarterly Date, the Agent will determine the IRR as at
               the  relevant  Quarterly  Date  with  respect  to  the  sum  of
               US$6,000,000  made  available  under the Facility. The Agent will
               determine  the IRR in accordance with the Agent's usual practices
               for  the  calculation  of  an  internal rate of return and having
               regard  to:

               (1)  repayment  and prepayment of the Principal Outstanding under
                    clauses  7.1  and  7.4;

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                                                                         page 22
<PAGE>
               (2)  interest paid on the Principal Outstanding under clause 5.1;

               (3)  mandatory  prepayments  paid  under  clause  7.2;  and

               (4)  variable  interest  payments  made  under  clause  6.2,

               which  have  been  paid with respect to the Facility on or before
               that  Quarterly  Date.

          (b)  For  the  avoidance  of doubt when calculating the IRR, no regard
               will  be  had  to:

               (1)  fees  received by the Agent or the Lender, including without
                    limitation,  the  arrangement  fee  in  clause  15.1;

               (2)  the  Warrants  issued  under  clause  15.2  and  any  amount
                    received  by  the Agent or the Lender in connection with the
                    Warrants;

               (3)  any  indemnity  payments received by the Agent or the Lender
                    under  any  of  the  Transaction  Documents;  and

               (4)  any  costs,  expenses, reimbursible amounts or other amounts
                    received  by  the  Agent  or  the  Lender.

          (c)  The  Agent  will  notify  the  Borrower:

               (1)  after  each  Quarterly  Date,  the  IRR as at that Quarterly
                    Date;  and

               (2)  when  the  Variable  Interest  Rate  Reduction  Date occurs.

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

7    REPAYMENT  AND  PREPAYMENT

     7.1  REPAYMENT

          (a)  The Borrower must repay to the Agent on account of the Lender the
               Principal  Outstanding  in  accordance  with  this  clause  7.1.

          (b)  On each Quarterly Date during the period commencing on 31 January
               2004  and  ending  on the Final Repayment Date, the Borrower must
               pay  to  the  Agent the Base Repayment Amount in reduction of the
               Principal  Outstanding.

          (c)  All money in the Proceeds Account as at a Quarterly Date which is
               available  for  payment  of  the  Principal  Outstanding  as
               contemplated under clause 11.4(a)(6) must be used to pay the Base
               Repayment  Amount.

          (d)  If  the  money in the Proceeds Account is insufficient to pay the
               Base  Repayment  Amount, then the Borrower must pay the shortfall
               from  the  Project  Account.

          (e)  If there are insufficient funds in the Project Account to pay the
               shortfall,  then  any  part  of  the  Base Repayment Amount which
               remains  unpaid  must  be  paid  on  the  next  Quarterly  Date.

          (f)  If the Borrower defers payment of part of a Base Repayment Amount
               to the next Quarterly Date under clause 7.1(e), then the Borrower
               must  on  that next Quarterly Date pay to the Agent under clauses
               7.1(b),  7.1(c)  and  7.1(d)  in  reduction  of  the  Principal
               Outstanding  an  amount  not less than

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                                                                         page 23
<PAGE>
               the  Base  Repayment  Amount.  For the avoidance of doubt, if the
               Borrower  fails  to  pay  not less than the Base Repayment Amount
               from  funds  available  in  the  Proceeds Account and the Project
               Account  on  two consecutive Quarterly Dates, then that will be a
               Default  under  this  agreement.

     7.2  MANDATORY  PREPAYMENT

          (a)  The Borrower must pay 50% of Excess Cash Flow for each Quarter as
               a  prepayment  of  the  Principal  Outstanding.

          (b)  The  prepayment is to be paid at the same time as the delivery of
               the  accounts  and  reports  under  clauses  10.5(c), 10.5(f) and
               10.5(g) in relation to that Quarter, with the first payment to be
               paid  at the time of the delivery of those accounts at the end of
               the  Quarter  ended  31  January  2004.

          (c)  All  mandatory  prepayments  must  be  applied  in or towards the
               Principal  Outstanding  in  inverse  order  of  maturity.

     7.3  REPAYMENT  OF  OTHER  SECURED  MONEY

          (a)  The  Borrower must repay the balance of the Secured Money in full
               to  the Agent for the account of the Finance Party entitled to it
               on the dates provided in the Transaction Documents, or if no date
               is  specified  then  on  demand.

          (b)  All  unpaid  Secured  Money must in all events be paid before the
               Final  Repayment Date or on any other date on which the Principal
               Outstanding  is  or  is  required  to  be  repaid  in  full.

     7.4  PREPAYMENT

          (a)  The  Borrower may prepay all or part of the Principal Outstanding
               on  any Quarterly Date during the period commencing on 31 January
               2004  and  ending on the Final Repayment Date by giving the Agent
               at  least  5  Business  Days' prior written notice, but a partial
               prepayment  may  only be made in an amount which is not less than
               US$200,000  and  is  an  integral  multiple  of  US$100,000.

          (b)  A  notice  given  under  clause  7.4(a)  is  irrevocable.

          (c)  On the prepayment date specified in the notice given under clause
               7.4(a)  the Borrower must prepay the full amount of the Principal
               Outstanding  specified  in the notice and all unpaid interest and
               fees  accrued  to  the  prepayment date in respect of the prepaid
               amount.

          (d)  The amount of Principal Outstanding prepaid under this clause may
               not  be  redrawn.

          (e)  If  the  Agent  elects  to  cancel  all  or part of the Principal
               Outstanding  as  contemplated  by  clause 1.1 of the Warrant, the
               amount  of  the  Principal Outstanding which is cancelled will be
               taken  to  be  a  prepayment  under  this  agreement.

          (f)  All  prepayments  must  be in applied in or towards the Principal
               Outstanding  in  inverse  order  of  maturity.

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                                                                         page 24
<PAGE>
--------------------------------------------------------------------------------

8    PAYMENTS

     8.1  MANNER  OF  PAYMENT

          All  payments  by  the  Borrower  to  the  Agent under the Transaction
          Documents  must  be  made:

          (a)  in  Same  Day  Funds  in  United  States  Dollars  to the account
               specified  by  the Agent or in any other manner the Agent directs
               from  time  to  time;  and

          (b)  not  later than 11.00 am at the local time of the place where the
               account  specified  by  the  Agent  is  located, on the due date.

     8.2  PAYMENTS  TO  BE  MADE  WITHOUT  SET-OFF  OR  DEDUCTION

          All  payments  which  a  Transaction Party is required to make under a
          Transaction  Document  must  be:

          (a)  without  set-off,  counterclaim  or  condition;  and

          (b)  without deduction or withholding for present or future Tax unless
               the  Transaction  Party is compelled by law to deduct or withhold
               the  Tax,  in  which  event the Transaction Party will pay to the
               Agent  additional  amounts  necessary  to  enable  the  Agent  to
               receive,  after  deduction  and  withholding  for  the Tax, a net
               amount  equal  to the full amount which would otherwise have been
               payable had no deduction or withholding been required to be made.

     8.3  AMOUNTS  PAYABLE  ON  DEMAND

          If  an  amount  payable  by  a  Transaction  Party under a Transaction
          Document  is  not  expressed  to  be payable on a specified date, that
          amount  is  payable  on  demand  by  the  Agent.

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

9    REPRESENTATIONS  AND  WARRANTIES

     9.1  REPRESENTATIONS  AND  WARRANTIES

          The Borrower and each Guarantor represents and warrants to and for the
          benefit  of  each  Finance  Party  that:

          (a)  INCORPORATION:  it  is  duly incorporated, registered and validly
               existing  under  the  laws of the State of Nevada (in the case of
               the  Borrower)  and  the  State  of  Idaho  (in  the  case of the
               Guarantors)  and  it  has  done  everything necessary to keep its
               corporate  existence  in  good  standing;

          (b)  CORPORATE POWER: it has the corporate power to own its assets and
               to  carry  on  its  business  as  it  is  now  being  conducted;

          (c)  CORPORATE  AUTHORISATIONS:  it  has  full  power and authority to
               enter  into  the  Documents to which it is a party and to perform
               its  obligations  under  them;

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                                                                         page 25
<PAGE>
          (d)  CORPORATE  AUTHORISATIONS:  it  has taken all necessary action to
               authorise  the  execution,  delivery  and  performance  of  the
               Documents  to which it is a party in accordance with their terms;

          (e)  BINDING  OBLIGATIONS:  the  Documents  to  which  it  is  a party
               constitute  its legal, valid and binding obligations and, subject
               to  any  necessary  stamping and registration, are enforceable in
               accordance  with  their  terms;

          (f)  TRANSACTIONS  PERMITTED:  the execution, delivery and performance
               by it of the Documents to which it is a party do not and will not
               violate,  breach,  or  result  in  a  contravention  of:

               (1)  any  law,  regulation,  authorisation,  ruling,  consent,
                    judgment,  order  or  decree  of  a  Governmental  Agency;

               (2)  its  articles  of  incorporation  as amended, its by-laws as
                    amended  or  any  other  constituent  documents;  or

               (3)  an  Encumbrance or document which is binding on it or on its
                    assets;

          (g)  AUTHORISATIONS:  any  Authorisations  required in connection with
               the  execution  and  performance  by  it and the validity and the
               enforceability against it of each of the Documents to which it is
               a  party, and its performance of the transactions contemplated by
               those  Documents,  have  been  obtained and are in full force and
               effect  and there has been no default by it in the performance of
               any  of  the  terms  and  conditions  of  those  Authorisations;

          (h)  NO  DEFAULT  OR  BREACH:

               (1)  it is not in breach in a material respect under an agreement
                    or  document  binding  on  it;

               (2)  it is not in default in the payment of a material sum, or in
                    the  compliance  with  a  material  obligation in respect of
                    Financial  Indebtedness  or  a  Surety  Obligation;

          (i)  NO  LITIGATION:  no  litigation,  arbitration,  dispute  or
               administrative  proceeding  has  been commenced, is pending or to
               its knowledge is threatened, which if adversely determined would,
               or  may  have,  a  Material  Adverse  Effect;

          (j)  ACCOUNTS:  its  most  recent  accounts  delivered  to  the Agent:

               (1)  were  prepared  in accordance with the applicable accounting
                    standards;  and

               (2)  contain  all  information  necessary to give a true and fair
                    view  of its financial condition and state of affairs at the
                    date  to  which  the  accounts relate and the results of its
                    operations  for  the accounting period to which the accounts
                    relate;

          (k)  NO  CHANGE  IN  AFFAIRS: there has been no change in its state of
               affairs  since  the  end  of  the  accounting period to which the
               accounts  referred  to  in clause 9.1(j) relate which has, or may
               have,  a  Material  Adverse  Effect;

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                                                                         page 26
<PAGE>
          (l)  NO  DEFAULT: no event has occurred which constitutes a Default or
               a  Potential  Default;

          (m)  DISCLOSURE:

               (1)  all  information provided to a Finance Party by or on behalf
                    of  it  in  respect  of  the  Documents,  the  transactions
                    contemplated  by  them,  the  Transaction  Parties  and  the
                    assets,  business and affairs of the Transaction Parties, is
                    true  and correct as at the time it is given in all material
                    respects  and  is not, whether by omission of information or
                    otherwise,  misleading  in  a  material  respect;

               (2)  it has fully disclosed in writing to the Finance Parties all
                    facts  relating  to  it,  the  Documents,  the  transactions
                    contemplated  by  them, the Transaction Parties, the assets,
                    business  and  affairs  of  the  Transaction Parties and any
                    thing  in  connection  with  them  which are material to the
                    assessment  of  the nature and amount of the risk undertaken
                    by  the  Finance  Parties  in  entering into the Transaction
                    Documents,  the  transactions  contemplated  by  them,  the
                    Transaction  Parties  and the assets and business affairs of
                    the  Transaction  Parties;

          (n)  LAWS:  it  has  complied  in all material respects with all laws,
               statutes  and  regulations  which  are  applicable  to it and the
               business  carried  on  by  it;

          (o)  NO ENCUMBRANCE: there is no Encumbrance over the Secured Property
               other  than an Encumbrance created by a Transaction Document or a
               Permitted  Encumbrance;

          (p)  NO  IMMUNITY: it does not, nor do its assets, enjoy immunity from
               suit  or  execution;

          (q)  NOT  A  TRUSTEE:  it  is  not a trustee of a trust or settlement;

          (r)  SOLVENCY:  it is solvent and is able to pay its debts as and when
               they  become  due;

          (s)  COMMERCIAL  BENEFIT: the entry into, and performance by it of its
               obligations  under,  the  Transaction  Documents to which it is a
               party  is  for  its  commercial  benefit and is in its commercial
               interests;

          (t)  ASSETS: it is the sole beneficial owner of all assets included in
               the  accounts  referred  to  in  clause  9.1(j)  free  of  all
               Encumbrances  other  than  the  Permitted  Encumbrances;

          (u)  TAXES:  it  has  complied  with  all  tax  laws in all applicable
               jurisdictions  and  it  has paid all Taxes due and payable by it,
               and  no  claims  are  being asserted against it in respect of any
               Taxes;

          (v)  SHARES:  the entire share capital of the Borrower consists of one
               class  of  shares, denominated common stock, and WGI is the legal
               owner of all issued and outstanding shares, free and clear of all
               Encumbrances;

          (w)  MINERAL  RIGHTS:  at  and  from  the time of the provision of the
               Commitment  under  this  agreement:

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               (1)  the  Mineral  Rights  are  legal,  valid and continuing, and
                    confer  on  the  Borrower  all  material  rights required to
                    enable  it  to  operate  the  Project in accordance with the
                    Project  Budget;  and

               (2)  the  Borrower  has in all material respects satisfied all of
                    its  obligations  under  the  Mineral  Rights  to the extent
                    required  to  preserve  the  Mineral  Rights  to  date;

          (x)  PROJECT  AUTHORISATIONS:  the  Borrower has obtained all material
               Authorisations  which  are  necessary  for  the  operation of the
               Project;

          (y)  PROJECT  OPERATION:  there  has  been no change in the conduct or
               operation  of  the  Project  which  has,  or may have, a Material
               Adverse  Effect;

          (z)  PROJECT  DOCUMENTS:  no  event  has  occurred or condition exists
               which  would  permit the cancellation, termination, forfeiture or
               suspension  of  a  Project Document nor is any party to a Project
               Document  in  default  under  any  term  of  a  Project Document;

          (aa) ENVIRONMENTAL LIABILITIES: there are no Environmental Liabilities
               affecting  the Project or the Project Area which might reasonably
               be  expected  to  have a Material Adverse Effect and there are no
               factors  affecting  the  Project  or  the  Project Area which are
               likely  to  give  rise  to  any  Environmental  Liability;

          (bb) ENVIRONMENTAL  APPROVALS:  the  operation of the Project complies
               with  all  applicable  Environmental  Laws  and  Environmental
               Approvals;  and

          (cc) LAND  CLAIMS:  no  caveats, land claims or other claims have been
               made  in  respect  of  the  Project  or  the  Project  Area.

     9.2  SURVIVAL  AND  REPETITION  OF  REPRESENTATIONS  AND  WARRANTIES

          The representations and warranties in, or given under, this agreement:

          (a)  survive  the  execution  of  each  Transaction  Document;  and

          (b)  are repeated on each Quarterly Date, on the date a Funding Notice
               is given and on each Funding Date with reference to the facts and
               circumstances  applicable  from  time  to  time.

     9.3  RELIANCE  BY  THE  FINANCE  PARTIES

          The  Borrower  and  each Guarantor acknowledge that each Finance Party
          has  entered  into each Transaction Document to which it is a party in
          reliance  on  the  representations  and  warranties  given  under this
          agreement,  including,  but  not  limited  to,  clause  9.1.

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

10   COVENANTS

     10.1 TERMS  OF  COVENANTS

          The  Borrower  and each Guarantor must, while any of the Secured Money
          remains  outstanding  or  any  Commitment  is  available, at all times
          comply  with,  or  cause to be complied with, the undertakings in this
          clause  10.

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     10.2 GENERAL  COVENANTS

          (a)  NOTICES  TO  THE  AGENT:  The  Borrower  and  each Guarantor must
               promptly  notify  the Agent as soon as it becomes aware of any of
               the  following:

               (1)  a  Default or a Potential Default occurring, details of that
                    Default  or Potential Default (as required by the Agent) and
                    any  action  being taken to remedy that Default or Potential
                    Default;

               (2)  any  representation,  warranty, action or statement made, or
                    taken  to  be made, by it is or becomes false, misleading or
                    incorrect;

               (3)  any  litigation, arbitration or administrative proceeding in
                    respect  of  it or its assets being commenced or threatened;

               (4)  any  Surety  Obligations  enforceable  against a Transaction
                    Party;  and

               (5)  a  change  in  the persons authorised by it to sign notices,
                    certificates  or  other  documents  in  connection  with the
                    Facility,  giving  specimen signatures of any new authorised
                    person, and giving satisfactory evidence, where requested by
                    the  Agent,  of  the  authority  of  that  person.

          (b)  PROPER ACCOUNTS: The Borrower and each Guarantor must keep proper
               books of account which give a true and fair view of its financial
               condition  and its state of affairs, and ensure that the accounts
               provided  by it under clause 10.5 are prepared in accordance with
               the  requirements  of  the  applicable  accounting  standards and
               practices  for  financial  statements  for  a  financial  year.

          (c)  CORPORATE  EXISTENCE: The Borrower and each Guarantor must ensure
               that  it  does  all  things  necessary  to maintain its corporate
               existence  in  good standing and not transfer its jurisdiction of
               incorporation  or  enter  into  any  merger,  amalgamation,
               consolidation  or reconstruction without the prior consent of the
               Agent.

          (d)  REGISTRATION:  Neither  the Borrower nor a Guarantor may transfer
               its  place  of  registration without the prior written consent of
               the  Agent.

          (e)  CONDUCT  OF  BUSINESS: The Borrower and each Guarantor must carry
               on  and  conduct its business in a proper and efficient manner in
               accordance  with  all  applicable  laws.

          (f)  COMPLIANCE  WITH  LAWS: The Borrower and each Guarantor must duly
               and  punctually  comply  with  all laws, statutes and regulations
               which  are  applicable  to  it and the business carried on by it.

          (g)  PAY TAXES AND OUTGOINGS: The Borrower and each Guarantor must pay
               when due all Taxes and outgoings payable by it and at the request
               of  the  Agent,  deliver  to  the Agent copies of all receipts or
               documents  evidencing  payment.

          (h)  MAINTAIN  AUTHORISATIONS:  The  Borrower  and each Guarantor must
               obtain,  renew  prior  to  expiry  and maintain in full force and
               effect  all Authorisations, approvals and consents necessary for:

               (1)  the  carrying  on  of its business and operations generally;

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                                                                         page 29
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               (2)  the  entry  into,  and performance of its obligations under,
                    the  Transaction  Documents.

          (i)  PAY  DEBTS:  The Borrower and each Guarantor must pay or cause to
               be paid its financial obligations, including, without limitation,
               all  rates,  rents  and other outgoings payable by it as and when
               they  respectively  become  due  and  payable.

          (j)  PERFECTION  OF  SECURITIES:  The Borrower and each Guarantor must
               create,  perfect and maintain in force the Securities to which it
               is a party and it must do all things necessary to ensure that the
               Securities  to  which it is a party are effective and enforceable
               in  the  jurisdiction  in which they are registered, or are to be
               registered.

          (k)  COMPLIANCE  WITH  TRANSACTION  DOCUMENTS:  The  Borrower and each
               Guarantor  must  duly  and  punctually  comply  with  each of its
               obligations  under  or in respect of the Transaction Documents to
               which  it  is  a  party;

          (l)  CORPORATE  BUDGET:  The  Borrower  and each Guarantor must ensure
               that its businesses are operated in accordance with the Corporate
               Budget  approved  by  the  Agent  from  time  to  time.

          (m)  ARM'S  LENGTH  TRANSACTIONS: The Borrower and each Guarantor must
               ensure  that  all  transactions  and  arrangements  of  any  kind
               continuing  in  effect,  or  entered into between them or between
               them  and  any  other  person are conducted on terms which are no
               less  favourable  than they would have been if conducted on arm's
               length  terms  in  the  ordinary  course  of  business.

          (n)  NO  PARTNERSHIP  OR  JOINT  VENTURE: Neither the Borrower nor any
               Guarantor  may  enter  into  any  profit  sharing  arrangement in
               relation to its property or any partnership or joint venture with
               any  other  person, other than Newmont or a Subsidiary of Newmont
               under the Hospah Net Operating Cash Flow Royalty Agreement or the
               Hospah  NSR  Agreement,  without the prior written consent of the
               Agent.

          (o)  NO  DISPOSAL  OF  SHARES:

               (1)  WGI  must  not Dispose of any of its shares in the Borrower.

               (2)  The  Borrower  must not issue any shares of any class to any
                    person  other  than  WGI  and  the Borrower must give to the
                    Agent,  before it issues any shares to WGI, a written notice
                    containing  details  of  the  number  and  type of shares it
                    proposes  to  issue.

          (p)  NO  CHANGE TO NATURE OF BUSINESS: The Borrower and each Guarantor
               must  not change the nature of its business or operations, and it
               must  not  conduct  any  business  activities other than business
               activities  which  are described in the Budget as approved by the
               Agent  from  time  to  time.

          (q)  NO  NEW  SUBSIDIARIES:  Neither  the Borrower nor a Guarantor may
               incorporate  any new Subsidiary without the prior written consent
               of  the  Agent,  which consent will not be unreasonably withheld.

          (r)  LAWS:  The  Borrower  and each Guarantor must duly and punctually
               comply  with  all  laws,  statutes  and  regulations  which  are
               applicable  to  it  and  the  businesses  carried  on  by  it.

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                                                                         page 30
<PAGE>
          (s)  WARRANTS:

               (1)  WGI  must  use  its  best  efforts  to  file  a registration
                    statement  on Form S-1, Form SB-2 or other available form in
                    relation to all securities which are issuable on exercise of
                    the Warrant (REGISTRATION STATEMENT) within 60 days from the
                    date  the  Lender  has  provided  the  Commitment.

               (2)  WGI  must  use  its  best  efforts to cause the Registration
                    Statement  to become effective within 6 months from the date
                    on  which  it  was  filed.

               (3)  A  registration  statement filed by WGI may deal solely with
                    the securities which are issuable on exercise of the Warrant
                    or  may  include  those securities in any other registration
                    statement  relating  to the registration of other securities
                    of  WGI.

               (4)  WGI  must  register  any  securities  under  any  applicable
                    securities  or  "blue  sky" laws of each State of the United
                    States  which  the  Agent  reasonably  requests.

     10.3 PROJECT  COVENANTS

          (a)  NOTICES TO THE AGENT: The Borrower and each Guarantor must notify
               the  Agent  as  soon  as  possible  after  it  becomes  aware of:

               (1)  any pending or threatened dispute in relation to the Project
                    or  any  Project  Documents,  including  particulars  of the
                    dispute  and  the  action  (if  any) proposed to be taken in
                    respect  of  it;

               (2)  any  material notices given or received by the Borrower or a
                    Guarantor  under  any  Project  Documents;

               (3)  a  Force  Majeure  Event  affecting  the  Project;

               (4)  a  decision  to accelerate materially or expand the level of
                    production  from  the  Project;

               (5)  a  proposed material change in processing methods in respect
                    of  the  operation  of  the  Project;

               (6)  a  proposed material change in the operation of the Project;

               (7)  a  change  in the proposed arrangements, terms or conditions
                    for  the  sale  of  Product;

               (8)  any  dispute  or default by any party under or in respect of
                    any  Project  Document;  and

               (9)  any  matter which it may be anticipated may, or will have, a
                    Material  Adverse  Effect.

          (b)  AUTHORISATIONS:  The  Borrower  and  each  Guarantor must obtain,
               maintain  and observe all necessary Authorisations, approvals and
               consents  necessary  for:

               (1)  it  to  enter  into,  and perform its obligations under, the
                    Documents;

               (2)  the  construction,  development and operation of the Project
                    (including,  but  not  limited to, Environmental Approvals);
                    and

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                                                                         page 31
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               (3)  the  sale  of  Product.

          (c)  DISPOSAL  OF PROJECT ASSETS: The Borrower must not Dispose of any
               of  its  interests  in  the  Project  Assets,  other  than:

               (1)  Product;

               (2)  plant  or  equipment  which  is  worn  out  or  obsolete; or

               (3)  with  the  prior  written  consent  of  the  Agent.

          (d)  COMPLIANCE  WITH  PROJECT  DOCUMENTS:  The  Borrower  and  each
               Guarantor  must  ensure  at  all  times  that:

               (1)  it duly and punctually complies with each of its obligations
                    under  or in respect of the Project Documents to which it is
                    a  party;  and

               (2)  it  must  not  waive  any  of its rights under, agree to any
                    variation  or  termination  of, terminate or take any action
                    which  affects  the ability of a Finance Party to enforce, a
                    Project Document, without the Agent's prior written consent.

          (e)  INSPECTION  OF  PROJECT:

               (1)  The  Borrower  and  each  Guarantor  must  permit,  and  the
                    Borrower  must procure that the manager under the Management
                    Agreement  permits,  representatives  of  the  Agent  to:

                    (A)  visit  the  Project  site and any of the premises where
                         the  business  of  the  Borrower  is  conducted;

                    (B)  inspect  all  facilities, plant and equipment comprised
                         in  the  Project  and  the  Project  Assets;

                    (C)  have  access  to  the  Borrower's  books of account and
                         records;  and

                    (D)  have  access to those employees, agents and contractors
                         of  the  Borrower  who  have  or  may have knowledge of
                         matters  with  respect  to  which  the  Agent  seeks
                         information.

               (2)  The  Borrower  must  provide  the access described in clause
                    10.3(e)(1)  on  request from the Agent. That request will be
                    made  with reasonable prior notice to the Borrower except if
                    a  Default  or  Potential  Default  has  occurred  and  is
                    continuing  or  if  special circumstances (in the opinion of
                    the  Agent)  require  that  access.

               (3)  The  Agent must pay all costs and expenses in respect of the
                    Borrower providing the access described in clause 10.3(e)(1)
                    if  the  access  is  requested  by the Agent or is otherwise
                    provided  by  the  Borrower  to  the  Agent  in  the Agent's
                    discretion.

               (4)  The  Borrower  must pay all costs and expenses in respect of
                    the  Borrower  providing  the  access  described  in  clause
                    10.3(e)(1) if the access is requested by the Borrower or any
                    Governmental Agency or is otherwise provided by the Borrower
                    to  the  Agent  in  the  Borrower's  discretion.

          (f)  ENVIRONMENTAL  MATTERS:  The  Borrower  and  each Guarantor must:

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                                                                         page 32
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               (1)  comply  with  all  Environmental  Laws  with  respect to the
                    Project;

               (2)  obtain  and comply with all Environmental Approvals required
                    in  connection  with  the  operation  of  the  Project;

               (3)  comply  with  international  mining  industry  best practice
                    standards  in relation to the environment, public health and
                    workers  safety;  and

               (4)  immediately  notify  the  Agent of all claims, complaints or
                    notices  concerning  its compliance with Environmental Laws,
                    Environmental  Approvals  and  the  standards  described  in
                    clause  10.3(f)(3);

          (g)  OPERATION OF PROJECT: The Borrower and each Guarantor must ensure
               that:

               (1)  the  Project is diligently equipped, operated and maintained
                    in  accordance  with  the  Project Budget and all applicable
                    laws,  Authorisations  and  Good  Industry  Practice;  and

               (2)  all its material assets are maintained in good and efficient
                    operating  condition.

          (h)  MINERAL  RIGHTS:  The  Borrower  and each Guarantor must take, or
               procure  to  be  taken,  all  action necessary to ensure that all
               conditions  and  requirements  relating to the Mineral Rights are
               observed  or  performed  in  all  material  respects and that the
               Mineral  Rights  remain  valid  and are in full force and effect.

          (i)  INSURANCE:  The  Borrower  and  each  Guarantor  must:

               (1)  insure all its assets of an insurable nature (including, but
                    not  limited  to,  the Project Assets) and keep them insured
                    with  a reputable, responsible and solvent insurer on terms,
                    against  risks  in accordance with Good Industry Practice or
                    any  higher  standard  which  the  Agent  may  request;

               (2)  take  out and maintain construction, accident, consequential
                    loss,  force  majeure,  business  interruption  and  public
                    liability  insurances  with  respect  to  its  assets with a
                    reputable,  responsible  and  solvent  insurer in accordance
                    with Good Industry Practice or any higher standard which the
                    Agent  may  request;

               (3)  not  do  anything  or omit anything or permit anything to be
                    done which may adversely affect the Reclamation Costs Policy
                    or  any  other  environmental  risk  insurance  policy;

               (4)  ensure  that  each insurance policy has noted on it the name
                    of  each  Finance  Party  as  an  interested  party;

               (5)  duly  and  punctually  pay  all premiums, commissions, stamp
                    duties,  charges and other expenses necessary for keeping in
                    force  each  insurance  policy;

               (6)  on  request deliver to the Agent certificates of currency in
                    respect  of  insurances  and  all  other  details  as to the
                    insurances  the  Agent  requires;

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                                                                         page 33
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               (7)  not  do or omit anything or permit anything to be done which
                    may  adversely  affect  an  insurance  policy;

               (8)  do  all things necessary and provide all documents, evidence
                    and  information necessary to enable the Agent to collect or
                    recover money due or to become due under an insurance policy
                    relating  to  the  Secured  Property,

               and,  if  a Transaction Party fails to keep in force an insurance
               policy  with  respect to its assets or if an insurance policy for
               any  reason  becomes  void or voidable, the Agent may (but is not
               obliged  to) effect or keep in force that insurance policy at the
               cost  of  that  Transaction  Party.

          (j)  MATERIAL  CONTRACTS:  The Borrower and each Guarantor must ensure
               that  no  Project Document or any other agreement with a contract
               value  or consideration over the term of that agreement in excess
               of  US$250,000  is entered into without the prior written consent
               of  the  Agent, which consent is not to be unreasonably withheld.

          (k)  PROJECT  MANAGEMENT:  The  Borrower  must  not  terminate  the
               Management  Agreement  without  the  prior written consent of the
               Agent,  and any replacement or other agreement to be entered into
               by  the  Borrower  in relation to the operation and management of
               the  Project  must  be  on  terms  satisfactory  to  the  Agent.

          (l)  ESTOPPEL  CERTIFICATE: The Borrower must provide to the Agent, in
               a  form and substance satisfactory to the Agent, a certified copy
               of an Estoppel Certificate of County Sanitation District No. 2 of
               Los  Angeles County in relation to the Mineral Lease and Landfill
               Facilities  Lease  Agreement  as  soon  as  that  certificate  is
               executed.

     10.4 FINANCIAL  COVENANTS

          (a)  NEGATIVE  PLEDGE:  The  Borrower  and  each  Guarantor  must not:

               (1)  Dispose  of;

               (2)  create, permit, allow to exist, or agree to, any interest or
                    Encumbrance,  other  than  a  Permitted Encumbrance over; or

               (3)  attempt to do anything listed in clause 10.4(a)(1) or clause
                    10.4(a)(2)  in  respect  of,

               any  of  its  assets  other  than:

               (4)  a  Disposal (other than a Disposal of Project Assets) in the
                    ordinary  course  of  its  ordinary business and at a market
                    value of less than US$250,000 in aggregate for all Disposals
                    during  any  12  month  period;

               (5)  a  Disposal  of  Project  Assets  which  is  permitted  in
                    accordance  with  clause  10.3(c);  or

               (6)  with  the  prior  written  consent  of  the  Agent.

          (b)  FINANCIAL  INDEBTEDNESS: The Borrower and each Guarantor must not
               incur  any  Financial  Indebtedness in excess of US$250,000 other
               than:

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                                                                         page 34
<PAGE>
               (1)  Financial  Indebtedness  under the Transaction Documents; or

               (2)  with  the  prior  written  consent  of  the  Agent.

          (c)  FINANCIAL  ACCOMMODATION:  Neither the Borrower nor any Guarantor
               may  lend  money or otherwise provide any financial accommodation
               to  any  person  other than with the prior written consent of the
               Agent.

          (d)  SURETY  OBLIGATIONS:  Neither  the Borrower nor any Guarantor may
               incur  any  Surety  Obligations other than with the prior written
               consent  of  the  Agent.

          (e)  PERMITTED  EXPENDITURE:  The Borrower and each Guarantor must not
               incur  any non-Project expenditure, except in accordance with the
               Corporate  Budget  as  approved  by  the  Agent from time to time
               except,  provided that no Default has occurred and is continuing,
               any  money  borrowed  by the Borrower or a Guarantor from another
               member  of the WGI Group or raised by the Borrower or a Guarantor
               can  be  used  for  the general corporate purposes of that party.

          (f)  TRANSFER  OF  FUNDS:  The  Borrower  and  each Guarantor must not
               provide  loans  or  financial accommodation to any person without
               the  prior  written  consent  of  the  Agent.

          (g)  SUBORDINATION:  The Borrower and each Guarantor must ensure that:

               (1)  all  the  Inter-Company  Claims  and  payment (from whatever
                    source)  of,  and the rights and claims of each Subordinated
                    Group Member in respect of, all the Inter-Company Claims are
                    subordinated  and  postponed  and  made  subject in right of
                    payment  to all the Secured Money and payment (from whatever
                    source) of, and the rights and claims of the Finance Parties
                    in  respect  of,  all  the  Secured  Money;

               (2)  until  all  the  Secured  Money  has  been  paid  in  full:

                    (A)  the  Inter-Company  Claims  must not (without the prior
                         written  consent  of  the Agent) be paid or repaid; and

                    (B)  no  Subordinated  Group  Member  may  receive, and each
                         Subordinated Group Member must not pay or repay, any of
                         the  Inter-Company  Claims  to, or at the direction of,
                         another Subordinated Group Member or any person acting,
                         or purporting to act, on behalf of a Subordinated Group
                         Member;

               (3)  the  subordination  effected  by  this clause applies at all
                    times  including if and while a Subordinated Group Member is
                    in  liquidation;

               (4)  if,  on liquidation of a Subordinated Group Member, there is
                    a  distribution  of  a  Subordinated  Group  Member's assets
                    including  payment  in  cash,  property  or  securities,  to
                    creditors  of that Subordinated Group Member on liquidation,
                    all of the Secured Money must be paid in full in cash before
                    a  payment  is  made  for or on account of the Inter-Company
                    Claims;

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                                                                         page 35
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               (5)  until the Secured Money and all money due or owing under the
                    Transaction  Documents  has  been  paid  in  full, until the
                    subordination  under  this  clause  has  been terminated and
                    until  this  agreement  has  been  fully  discharged,  no
                    Subordinated  Group  Member  may:

                    (A)  make  a  claim  or  exercise  a  right, power or remedy
                         against  another  Subordinated  Group  Member under any
                         agreement,  document  or  otherwise;

                    (B)  accept,  or  ensure  the  grant  of,  or  permit  any
                         Encumbrance  or  Surety  Obligation from a Subordinated
                         Group  Member  or  any  surety  in  favour  of  another
                         Subordinated  Group  Member  to  exist;

                    (C)  exercise,  or attempt to exercise, any right of set-off
                         against,  nor  realise  any  Encumbrance  from,  a
                         Subordinated  Group  Member  or  any  surety;  or

                    (D)  raise  any  defence  or  counterclaim  in  reduction or
                         discharge  of  any  obligation  owed  by a Subordinated
                         Group  Member  to  another Subordinated Group Member or
                         any  surety;  and

               (6)  despite  anything contained in this clause, the Borrower may
                    make  payments  to  WGI  as  contemplated by clause 11.4(b).

     10.5 PROVISION  OF  INFORMATION  AND  REPORTS

          The Borrower and each Guarantor must promptly provide to the Agent all
          of  the  following:

          (a)  AUDITED  ACCOUNTS:  as soon as practicable, and no later than 120
               days  after  the  end  of  the  financial  year  a  copy  of  the
               consolidated  audited  financial  statements  of  WGI  and  its
               Subsidiaries;

          (b)  UNAUDITED  ACCOUNTS: as soon as practicable, and no later than 90
               days  after  the  end  of  the  financial half year a copy of the
               unaudited  consolidated  management  accounts  of  WGI  and  its
               Subsidiaries;

          (c)  MONTHLY  REPORTS:  as  soon  as practicable, and no later than 21
               days  after  the  end  of  each month, a management report on the
               development and operation of the Project, including all financial
               information  and  cash  flow  reports  as  the Agent may require;

          (d)  PROJECT BUDGET: as soon as practicable, and no later than 30 days
               prior  to  the  commencement  of  the financial year, the Project
               Budget;

          (e)  CORPORATE  BUDGET:  as  soon as practicable, and no later than 30
               days prior to the commencement of the financial year, a Corporate
               Budget  for  approval  by  the  Agent;

          (f)  TRANSACTION  ACCOUNTS:  as soon as practicable, and no later than
               21  days  after  each  Quarterly Date a statement summarising all
               deposits  to,  and  withdrawals  from,  each Transaction Account;

          (g)  CASHFLOW  AND  LIQUIDITY  REPORT:  as soon as practicable, and no
               later  than  21  days after the end of each month, a cashflow and
               liquidity  report  setting

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                                                                         page 36
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               out  for  the  Borrower and WGI the previous month's opening cash
               balances, itemised expenditures and cash inflows for the previous
               month,  closing  balances,  and  forecast  expenditures  and cash
               inflows  of  the Borrower and WGI for the following 6 months; and

          (h)  OTHER  INFORMATION:  at  the  request  of  the  Agent,  any other
               information  about the financial condition or state of affairs of
               a Transaction Party, the Project, the Project Assets or assets of
               a  Transaction  Party  as  the  Agent  may  reasonably  require.

     10.6 RECLAMATION  WORK

          (a)  RECLAMATION  PLAN:  The Borrower and each Guarantor must carry on
               and  conduct  all  Reclamation  Work  which  is  required  by the
               Reclamation  Plan.

          (b)  COMPLIANCE  WITH BONDS: The Borrower and each Guarantor must make
               all  payments  and  do  all  other  things as may be necessary or
               desirable under the terms of the Bonds so that no claims are made
               under  any  of  the  Bonds.

          (c)  NOTICE  TO THE AGENT: The Borrower must promptly notify the Agent
               as  soon  as  it becomes aware of any notice, order, requisition,
               demand,  complaint,  claim  or any other direction concerning its
               compliance with the Reclamation Plan from a relevant Governmental
               Agency  who is holding a Bond (BONDING AGENCY), including without
               limitation, California Department of Conservation, Office of Mine
               Reclamation,  Imperial  County,  California,  United  States
               Department of the Interior, Bureau of Land Management, California
               State  Lands  Commission  and  California  Regional Water Quality
               Control  Board.

          (d)  RECLAMATION  WORK:  The  Borrower and each Guarantor must consult
               with  the  Agent  as  to  the conduct of the Reclamation Work and
               compliance  with  orders,  requisitions,  notices, demands or any
               other  directions  issued  by  a  Bonding  Agency.

          (e)  CLAIMS:

               (1)  If a claim is made under the Bonds by a Bonding Agency, then
                    the  Borrower  must  either  cure  or  pay  that  claim  as
                    contemplated  by  the  Surety  Side  Agreement.

               (2)  if  AHA  pays  that claim under the terms of the Surety Side
                    Agreement,  then  the Borrower must reimburse AHA within the
                    30  day  period provided for in clause 3F of the Surety Side
                    Agreement.

          (f)  RECTIFICATION:  If the Borrower fails to do any thing or fails to
               procure  any  thing  required  under  or  in  relation  to  the
               Reclamation  Plan,  Reclamation  Costs  Policy  or  the  Bonds,
               including  without  limitation,  complying  with  an  order,
               requisition,  notice,  demand  or  other direction from a Bonding
               Authority  (BOND  DEFAULT)  or  at  any  time after a Default has
               occurred  and  while  it  is  continuing,  then:

               (1)  the  Agent  may,  without affecting any Power, do all things
                    necessary or desirable, in the opinion of the Agent, to make
                    good  or  attempt  to  make  good  a  Bond  Default  to  the
                    satisfaction  of  the  Agent;

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               (2)  the  Lender may give AISLIC and AHA a notice under clause 10
                    of  the  Reclamation  Costs  Policy within the 30 day period
                    provided  for in clause 3F of the Surety Side Agreement; and

               (3)  clause  18.10 will apply to any action taken by the Agent in
                    these  circumstances as if reference to Transaction Document
                    in  that  clause  included  the  Reclamation  Costs  Policy,
                    Reclamation  Plan  and  Bonds  and  a  reference  to Default
                    included  Bond  Default.

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11   TRANSACTION  ACCOUNTS

     11.1 TRANSACTION  ACCOUNTS

          The  Borrower  covenants  and  agrees  with  each  Finance  Party:

          (a)  to establish and maintain for the Borrower in Washington a United
               States  Dollar  denominated  interest  bearing  account  with the
               Agent,  or  another bank or financial institution approved by the
               Agent,  that account to be called "Western Mesquite Mines, Inc. -
               Proceeds  Account";

          (b)  to establish and maintain for the Borrower in Washington a United
               States  Dollar  denominated  interest  bearing  account  with the
               Agent,  or  another bank or financial institution approved by the
               Agent,  that account to be called "Western Mesquite Mines, Inc. -
               Project  Account";

          (c)  to  maintain  the Transaction Accounts with the bank or financial
               institution  at  which those accounts were originally established
               and  not  change  those  accounts  to  another  bank or financial
               institution  without  the  Agent's  prior  written  consent;

          (d)  to cause all interest and other earnings on a Transaction Account
               to  be  credited  to  that  Transaction  Account;

          (e)  to deal with the moneys standing to the credit of the Transaction
               Accounts  in  accordance  with this clause 11, and not otherwise;
               and

          (f)  that  no  moneys  may  be  withdrawn  by  the  Borrower  from the
               Transaction  Accounts  after a Default or a Potential Default has
               occurred  and  while  it  is  continuing.

     11.2 PROCEEDS  ACCOUNT

          The Borrower undertakes to deposit, or cause to be deposited, into the
          Proceeds  Account  all  Revenue.

     11.3 PROJECT  ACCOUNT

          The Borrower undertakes to deposit, or cause to be deposited, into the
          Project  Account  the  Working  Capital  Amount.

     11.4 PRIORITY  OF  APPLICATION  -  PROCEEDS  ACCOUNT

          (a)  All  money standing to the credit of the Proceeds Account must be
               applied  in  the  following  order  of  priority:

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                                                                         page 38
<PAGE>
               (1)  first,  in  or towards paying or meeting the Operating Costs
                    properly  incurred  as  and  when  those amounts for due for
                    payment;

               (2)  next,  in  or  towards paying or meeting the payments due to
                    Hospah  under  the  Hospah  Net  Operating Cash Flow Royalty
                    Agreement;

               (3)  next,  capital  expenditure  in  respect  of  the  Project,
                    properly  incurred,  as  may be approved by the Agent as and
                    when  those  amounts  fall  due  for  payment;

               (4)  next,  in  or  towards  paying  or meeting any fees or Taxes
                    payable to the Government of the United States of America or
                    the  State  of  California  or to any Governmental Agency in
                    respect  of  the  Project as and when those amounts fall due
                    for  payment;

               (5)  next,  on  31  January 2004 and on each subsequent Quarterly
                    Date,  in  payment  of  interest in relation to the Facility
                    under  clause  5.1;

               (6)  next,  on  31  January 2004 and on each subsequent Quarterly
                    Date,  in paying the Principal Outstanding under clause 7.1;

               (7)  next,  on  31  January 2004 and on each subsequent Quarterly
                    Date, in paying the mandatory prepayment under clause 7.2 as
                    and  when  that  amount  is  due  for  payment;

               (8)  next,  on  31  January 2004 and on each subsequent Quarterly
                    Date,  in  paying the variable interest payment under clause
                    6.2  as  and  when  that  amount  is  due  for  payment; and

               (9)  next, to the extent that money standing to the credit of the
                    Project  Account  is  less  than the Working Capital Amount,
                    then  in or towards paying money into the Project Account so
                    that  the  balance  is at least equal to the Working Capital
                    Amount.

          (b)  Any  money credited to the Proceeds Account after all payments in
               clause  11.4(a)  have  been  paid  and  subject  to:

               (1)  no  Default  or  Potential  Default  having  occurred;  and

               (2)  the  Agent  being satisfied that the Borrower has sufficient
                    funds  in the Proceeds Account after the proposed withdrawal
                    is  to  be  made,  to  meet all forecast Operating Costs and
                    Project  Costs  (in  accordance with the Project Budget) for
                    the  succeeding  28  days  after  the  proposed  withdrawal,

               the  aggregate  balance  (if  any)  standing to the credit of the
               Proceeds  Account  may  be withdrawn for the Borrower's corporate
               purposes  or,  despite anything else contained in this agreement,
               be  paid  to  WGI.

     11.5 PRIORITY  OF  APPLICATION  -  PROJECT  ACCOUNT

          Funds  standing  to the credit of the Project Account may be used for:

          (a)  general  working  capital  purposes,  but only to the extent that
               money  is  not  available  in  the Proceeds Account to meet those
               working  capital  requirements as contemplated by clause 11.4(a);
               and

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                                                                         page 39
<PAGE>
          (b)  payment  of  Principal  Outstanding and interest which is payable
               under  clauses  5.1 and 7.1, but only to the extent that money is
               not  available  in  the  Proceeds Account to make those payments.

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

12   EVENTS  OF  DEFAULT

     12.1 EVENTS  OF  DEFAULT

          It  is  a  Default,  whether  or  not  it  is  within the control of a
          Transaction  Party,  if:

          (a)  FAILURE  TO PAY BY A TRANSACTION PARTY: a Transaction Party fails
               to  pay  any  part  of  the Secured Money payable by it when due;

          (b)  NON-REMEDIABLE  FAILURE: a Transaction Party fails to comply with
               any undertaking, obligation or agreement in, or given in relation
               to,  a  Transaction Document (other than as referred to in clause
               12.1(a))  and  that  failure is not, in the opinion of the Agent,
               remediable;

          (c)  REMEDIABLE  FAILURE:  if  the failure described in clause 12.1(c)
               is,  in the opinion of the Agent, remediable, and the Transaction
               Party  does  not  remedy  the failure within 10 days, or a longer
               period  determined by the Agent, after receipt by the Transaction
               Party  of  a  notice  from  the  Agent  specifying  the  failure;

          (d)  MINERAL  RIGHTS:  a  material  Mineral  Right  is  terminated  or
               otherwise  ceases  to  be  in  full  force  and  effect;

          (e)  PROJECT  DOCUMENTS:  a  Transaction  Party  fails  to  perform or
               observe  any  of  its undertakings or obligations under a Project
               Document  and  the  Transaction Party does not remedy the failure
               within  the  grace  period stated in a Project Document or, if no
               grace  period  is  stated,  within  10  days;

          (f)  AMENDMENT  TO  PROJECT  DOCUMENTS:  there  is  a  revocation  or
               variation  to  the conditions in relation to any Project Document
               or  any  Mineral  Right;

          (g)  ABANDONMENT:  all  or  any  part  of  the Project is abandoned or
               placed  on  a  "care  and  maintenance"  basis;

          (h)  AUTHORISATIONS:  an  Authorisation  necessary  to  enable  a
               Transaction Party to comply with its obligations under a Document
               to  which  it  is  a party ceases to be in full force and effect;

          (i)  MISREPRESENTATION:  a  warranty, representation or statement by a
               Transaction  Party  is  or becomes false, misleading or incorrect
               when  made  or  regarded  as  made by a Transaction Party under a
               Transaction  Document  or  under  a  document  contemplated  by a
               Transaction  Document;

          (j)  ACCELERATION OF PAYMENTS: a Transaction Party does anything which
               constitutes  an  event,  whatever called, which causes or enables
               the acceleration of a payment to be made under a Document, or the
               enforcement,  termination  or  rescission  of  a  Document;

          (k)  CROSS  DEFAULT: any Financial Indebtedness of a Transaction Party
               in  an  amount  in  excess  of  US$100,000:

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                                                                         page 40
<PAGE>
               (1)  becomes  due  and  payable,  or  becomes  capable  of  being
                    declared  due  and  payable,  before  the scheduled date for
                    payment;  or

               (2)  is  not  paid  when  due  (after  taking  into  account  any
                    applicable  grace  period);

          (l)  ENCUMBRANCE:  any Encumbrance is enforceable against any asset of
               a  Transaction  Party;

          (m)  SURETY  OBLIGATION: a Surety Obligation of a Transaction Party is
               not  discharged  within  5  days  of:

               (1)  its  maturity;  or

               (2)  when  it  is  called;

          (n)  JUDGMENT:  a  judgment  in an amount exceeding US$100,000 (or its
               equivalent in another currency) is obtained against a Transaction
               Party,  and  is not stayed, set aside or satisfied within 7 days;

          (o)  EXECUTION:  distress, attachment, execution or other process of a
               Governmental  Agency  in  an  amount exceeding US$100,000 (or its
               equivalent  in  another  currency)  is  issued against, levied or
               enforced  on  any  part  of  the Secured Property, and is not set
               aside  or  satisfied  within  7  days;

          (p)  INSOLVENCY  EVENT:  an  Insolvency Event occurs with respect to a
               Transaction  Party;

          (q)  AMENDMENT  OF CONSTITUTION: the constitution or other constituent
               document  of  a  Transaction  Party is amended, without the prior
               written  consent  of  the  Agent;

          (r)  DEFAULT:  a  Default (as that expression is defined in any of the
               Securities)  occurs;

          (s)  CEASING  BUSINESS:  a  Transaction  Party  ceases or threatens to
               cease  to  carry  on  business;

          (t)  INVESTIGATION:  a  person  is  appointed under any legislation in
               respect  of companies to investigate the affairs of a Transaction
               Party;

          (u)  VITIATION  OF DOCUMENTS: all or part of a provision of a Document
               is or becomes illegal, void, voidable, unenforceable or otherwise
               of limited force or effect, or a person is or becomes entitled to
               terminate,  rescind  or  avoid all or a material part or material
               provision  of  a  Document;

          (v)  EXPROPRIATION:  any  assets  of  the  Borrower  or  ore  reserves
               available  for  the  purposes of the Project or any other part of
               the  Secured Property are seized, nationalised or expropriated by
               a  Governmental  Agency or a restraint, restriction, prohibition,
               intervention, law, decree or other order of a Governmental Agency
               or  any  other  matter  or thing occurs which wholly or partially
               prevents  or  hinders:

               (1)  the  performance  by  a  Transaction  Party  of  any  of its
                    obligations  under  a  Document;  or

               (2)  the  construction,  development or operation of the Project;

          (w)  DESTRUCTION  OF  SECURED  PROPERTY: all or a material part of the
               Secured  Property  is destroyed, lost or damaged beyond repair or
               proves to be

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                                                                         page 41
<PAGE>
               materially  defective  in  circumstances  not  covered  by  any
               insurance  in  favour  of  a  Transaction  Party;

          (x)  ADVERSE  CHANGE:  a  Material  Adverse  Effect (in the reasonable
               opinion  of  the  Agent)  occurs;

          (y)  BREACH  OF  UNDERTAKING:  an  undertaking  given  in writing to a
               Finance  Party  or  its  solicitors  by  a  Transaction Party, or
               another  person  for  or  on  behalf  of  a Transaction Party, in
               connection  with a Transaction Document is breached or not wholly
               performed  within  the period specified in the undertaking or, if
               no  period  is  specified,  within  10  days from the date of the
               undertaking;

          (z)  CHANGE  OF  CORPORATE STATUS: after the ordinary share capital of
               WGI  or  any  company of which WGI is the wholly owned Subsidiary
               (the  LISTED  ENTITY)  is listed on a stock exchange, except with
               the  prior written consent of the Agent, the Listed Entity ceases
               to  have  its  ordinary  shares currently listed and trading on a
               stock  exchange,  other  than  as  a  result  of  an  involuntary
               suspension  extending  for  a  period of not more than 10 trading
               days;  or

          (aa) SECURITIES:  a  Security  is  enforceable  against  an asset of a
               Transaction  Party.

     12.2 EFFECT  OF  DEFAULT

          (a)  On or after the occurrence of a Default, the Agent may, by notice
               to  the  Borrower:

               (1)  declare  that  the  Secured  Money  is  immediately  due and
                    payable;

               (2)  declare  that  the  Commitment  is  cancelled;

               (3)  take  any  action  or  proceedings necessary or desirable in
                    order  to  exercise  any  Power conferred by the Transaction
                    Documents,

               or  a  combination  of  any  of  those  things.

          (b)  The  Borrower  must  following  receipt  of a notice under clause
               12.2(a)(1)  immediately  repay  in  full the Secured Money to the
               Agent  for  the  account  of  the  Lender.

          (c)  Where a Security provides that the Security may be enforced after
               a  Default  (as  defined  in  that  Security)  occurs without the
               requirement  of  notice  to  any  person,  then  nothing  in this
               agreement  is  to be construed as inferring that the Security can
               only be enforced after a notice has first been given under clause
               12.2(a).

     12.3 BORROWER  TO  CONTINUE  TO  PERFORM

          If  the  Agent  makes  a  declaration  under clause 12.2 then, without
          affecting  the  obligations  of  the  Borrower  under clause 12.2, the
          Borrower  must  continue  to  perform  its  obligations  under  the
          Transaction Documents as if the declaration had not been made, subject
          to  the  directions  that may be given by the Agent from time to time.

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                                                                         page 42
<PAGE>
     12.4 ENFORCEMENT

          (a)  The  Transaction  Documents  may be enforced without notice to or
               consent  by  a  Transaction  Party  or  another  person even if a
               Finance  Party  accepts  any  part  of  the Secured Money after a
               Default  or  there  has  been  another  Default.

          (b)  No Finance Party is liable to a Transaction Party for any loss or
               damage  a  Transaction  Party becomes liable for arising out of a
               Finance  Party  exercising  a Power under a Transaction Document.

          (c)  Without  prejudice  to a Finance Party's rights under a Security,
               the  parties  agree  that on the Agent giving notice under clause
               12.2,  the  rights of the Borrower in relation to the Transaction
               Accounts  cease  and  all moneys held in the Transaction Accounts
               may  be  used  to  pay  the  Secured  Money.

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

13   RELEASE  OF  OBLIGATIONS

     13.1 RELEASE  OF  OBLIGATIONS

          Despite  anything contained in this agreement, as soon as the Agent is
          satisfied  that:

          (a)  no  further  Secured  Money,  other  than  payments  of  variable
               interest  under  clause  6.2,  is  owed  by  a  Transaction Party
               contingently  or  otherwise  to  the  Agent or the Lender under a
               Transaction  Document;

          (b)  no  amount  paid  by  a  Transaction  Party  under  a Transaction
               Document  is  capable  of being avoided or otherwise set aside on
               the  liquidation or administration of the payer or otherwise; and

          (c)  no  Default  has  occurred  and  is  continuing,

          (the  date  on which the Agent notifies the Borrower that the Agent is
          satisfied  as  to  these things is the RELEASE DATE), the Borrower and
          each  Guarantor  is,  from  the  Release  Date,  released  from  all
          representations  and  warranties,  covenants  and  obligations in this
          agreement  and the Securities, other than in the case of the Borrower:

               (1)  the  obligation  to  make  variable  interest payments under
                    clause  6;

               (2)  clause  8  relating  to  the  manner  of  making  payments;

               (3)  the  general  undertakings  in  clauses  10.2(b),  10.2(c),
                    10.2(o)  and  10.2(r);

               (4)  the  project  undertakings  in  clauses  10.3(b),  10.3(c),
                    10.3(e),  10.3(f), 10.3(g) (on the basis that the words "the
                    Project  Budget  and"  are  deleted  from  that  clause) and
                    10.3(h);

               (5)  clause  16  relating  to  default  interest  payments;  and

               (6)  clauses  17.1,  17.2,  17.3 and 17.4 relating to assignment.

     13.2 FURTHER  ASSURANCES

          The  Agent  must  after  the  Release  Date:

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                                                                         page 43
<PAGE>
          (a)  give  a  notice  to  AISLIC  as contemplated in the definition of
               "Facility  Release  Date"  in  the  Reclamation  Costs  Policy;

          (b)  give  a  notice  of  termination  required  by  clause 4.5 of the
               Management  Side  Agreement;  and

          (c)  at the written request of the Borrower or a Guarantor and at that
               party's  cost  execute  any  other  document or do any other act,
               matter  or  thing  which  the Borrower or a Guarantor requests to
               complete  or  give  effect  to  the  release of the Securities in
               clause  13.1.

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

14   INDEMNITIES

     14.1 GENERAL  INDEMNITY

          (a)  The  Borrower  indemnifies  each Finance Party against any claim,
               action,  damage,  loss  (including  currency  exchange  loss),
               liability,  Environmental  Liability,  cost,  expense  or payment
               which  that Finance Party pays, suffers, incurs or is liable for,
               in  respect  of  the  following:

               (1)  a  Funding  Portion  required  by a Funding Notice not being
                    provided  for  any  reason  including, but not limited to, a
                    failure  by  a  Transaction  Party  to  fulfil  a  condition
                    precedent  contained in clause 3, but excluding a default by
                    that  Finance  Party;

               (2)  a  repayment  or  prepayment  of  all  or  part of a Funding
                    Portion  being  made  on a date other than the last day of a
                    Funding  Period (on the basis that despite clause 7.4(a) the
                    Borrower  repays or prepays all or part of a Funding Portion
                    on  a  date  other  than  the last day of a Funding Period);

               (3)  a  payment  being  made or received in a currency other than
                    the  currency  in  which the Borrower is obliged to make the
                    relevant  payment;

               (4)  the  occurrence  of  a  Potential  Default  or  a  Default;

               (5)  that  Finance  Party  exercising its Powers consequent on or
                    arising  out  of  the occurrence of a Potential Default or a
                    Default;

               (6)  financial  accommodation  under a Transaction Document being
                    repaid, discharged or made payable for any reason other than
                    at its maturity in accordance with the Transaction Documents
                    or  any  other  payment  required  to  be  made  under  any
                    Transaction  Document  not  being  made  on its due date; or

               (7)  any  failure  by  a  Transaction Party to perform any of its
                    obligations under clause 10.6, including for any work or any
                    other act which is performed by the Agent as a result of the
                    failure  by  a Transaction Party to comply with clause 10.6.

          (b)  Without  limitation to the indemnity contained in clause 14.1(a),
               that  indemnity  includes:

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                                                                         page 44
<PAGE>
               (1)  the  amount  determined  by  the  Finance  Parties  as being
                    incurred  by  reason  of the liquidation or re-employment of
                    deposits  or  other  funds acquired or contracted for by the
                    Finance  Parties  to  fund  or  maintain the Commitment, the
                    Principal  Outstanding  or  the relevant Funding Portion and
                    includes,  but  is  not  limited  to,  loss  of  margin; and

               (2)  reasonable  legal  costs  and  expenses  on a full indemnity
                    basis.

     14.2 FOREIGN  CURRENCY  INDEMNITY

          If  at  any  time:

          (a)  a  Finance  Party  receives  or  recovers any amount payable by a
               Transaction  Party  for any reason including, but not limited to:

               (1)  any  judgment  or  order  of  any  Governmental  Agency;

               (2)  any  breach  of  any  Transaction  Document;

               (3)  the  liquidation or bankruptcy of a Transaction Party or any
                    proof  or  claim  in  that  liquidation  or  bankruptcy;  or

               (4)  any  other thing into which the obligations of a Transaction
                    Party  may  have  become  merged;  and

               (5)  the  Payment  Currency  is  not  in  United  States Dollars,

          the  Borrower  indemnifies  that  Finance  Party against any shortfall
          between  the  amount  payable  in United States Dollars and the amount
          actually  received  or  recovered  by  that  Finance  Party, after the
          Payment Currency is converted or translated into United States Dollars
          under  clause  14.3.

     14.3 CONVERSION  OF  CURRENCIES

          In  making  any currency conversion under clause 14.2, a Finance Party
          may  itself or through its bankers purchase one currency with another,
          whether  or  not  through  an  intermediate  currency, whether spot or
          forward, in the manner and amounts and at the times it thinks fit, but
          that  purchase  must  be  on  competitive  arms  length  terms.

     14.4 CONTINUING  INDEMNITIES  AND  EVIDENCE  OF  LOSS

          (a)  Each  indemnity  of the Borrower contained in this agreement is a
               continuing  obligation  of  the  Borrower  despite:

               (1)  a  settlement  of  account;  or

               (2)  the  occurrence  of  any  other  thing,

               and  remains  in  full  force  and  effect  until:

               (3)  all  money  owing,  contingently  or  otherwise,  under  the
                    Transaction  Documents  has  been  paid  in  full;

               (4)  the  Secured  Money  is  fully  and  finally  repaid;  and

               (5)  each  of  the  Transaction  Documents  has  been  finally
                    discharged.

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                                                                         page 45
<PAGE>
          (b)  Each  indemnity of the Borrower contained in this agreement is an
               additional,  separate  and independent obligation of the Borrower
               and  no one indemnity limits the generality of another indemnity.

          (c)  Each  indemnity  of  the  Borrower  contained  in  this agreement
               survives  the  termination  of  a  Transaction  Document.

          (d)  A  certificate signed by an Authorised Officer of a Finance Party
               detailing the amount of damage, loss, liability, cost, expense or
               payment covered by any indemnity in this agreement is prima facie
               evidence  of  the matter certified. The Borrower has the right to
               review  that certificate for any inaccuracy or manifest error and
               the  Borrower has the right to request a Finance Party to provide
               to  the  Borrower  details  of  the  calculation of the amount of
               damage,  loss,  liability,  cost, expense or payment specified in
               that  certificate.

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

15   FEES,  TAX,  COSTS  AND  EXPENSES

     15.1 ARRANGEMENT  FEE

          The Borrower must pay to the Agent, as consideration for arranging the
          provision of the Facility, an arrangement fee (which is not refundable
          in  any  circumstances)  of  US$360,000.

     15.2 WARRANTS

          The  Borrower  must  issue  to  the  Agent  or the Agent's nominee, as
          consideration  for  arranging  the  provision of the Facility, 780,000
          Warrants  on  the  following  terms:

          (a)  each  Warrant entitles the holder to purchase 1 Share (subject to
               customary  adjustments);

          (b)  the  Warrants  may  be  exercised  at any time during a period of
               three  years  commencing  on  the  date  of  this  agreement;

          (c)  the  exercise  price  is  US$1.00  for  each  Share;  and

          (d)  the  Warrants are to be substantially on the terms set out in the
               Warrant  Certificate.

     15.3 TAX

          (a)  The  Borrower  must  pay  any  Tax,  in respect of the execution,
               delivery, performance, release, discharge, amendment, enforcement
               or  attempted  enforcement  or otherwise in respect of any of the
               following:

               (1)  a  Transaction  Document;

               (2)  an  agreement  or  document  entered  into or signed under a
                    Transaction  Document;  or

               (3)  a  transaction  contemplated under a Transaction Document or
                    an  agreement  or  document  described in clause 15.3(a)(2).

--------------------------------------------------------------------------------
                                                                         page 46
<PAGE>
          (b)  The  Borrower must pay fines, penalties or other costs in respect
               of  a  failure to pay a Tax described in clause 15.3(a) except to
               the  extent  that  a fine, penalty or other cost is caused by the
               Agent's  failure to lodge money received from the Borrower before
               the  due  date  for  lodgement.

          (c)  The  Borrower  indemnifies  each  Finance Party against an amount
               payable  under  clause  15.3(a)  or  15.3(b)  or  both.

     15.4 COSTS  AND  EXPENSES

          The Borrower must pay all costs and expenses of each Finance Party and
          any  employee, Authorised Officer, agent or contractor of each Finance
          Party  in  relation  to:

          (a)  the  legal  due  diligence, technical due diligence, negotiation,
               preparation,  execution,  delivery,  stamping,  registration,
               completion,  variation  and  discharge of a Transaction Document;

          (b)  the  enforcement,  protection or waiver, or attempted enforcement
               or  protection,  of  any  rights  under  a  Transaction Document;

          (c)  the  consent  or  approval  of  a  Finance  Party  given  under a
               Transaction  Document;  and

          (d)  any  enquiry by a Governmental Agency involving the Borrower or a
               Guarantor,

          including, but not limited to, administration costs of a Finance Party
          in  connection  with  the  matters  referred to in clauses 15.4(b) and
          15.4(d)  and  legal  costs  and expenses and professional consultant's
          fees  for  any  of  the  above  on  a  full  indemnity  basis.

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

16   INTEREST  ON  OVERDUE  AMOUNTS

     16.1 PAYMENT  OF  INTEREST

          The  Borrower  must  pay interest on any part of the Secured Money due
          and  payable,  but  unpaid.

     16.2 ACCRUAL  OF  INTEREST

          Interest  payable  under  clause  16.1:

          (a)  accrues  from  day  to  day  from  and including the due date for
               payment  up  to  the  actual  date  of payment, before and, as an
               additional  and  independent  obligation, after judgment or other
               thing  into  which the liability to pay the Secured Money becomes
               merged;  and

          (b)  may  be  capitalised  by  the  Agent  at  90  day  intervals.

     16.3 RATE  OF  INTEREST

          The  rate  of  interest  payable  under  clause  16 on any part of the
          Secured  Money  is  the  higher  of:

          (a)  the  Overdue  Rate  determined  by  the  Agent:

--------------------------------------------------------------------------------
                                                                         page 47
<PAGE>
               (1)  on  the  date that part of the Secured Money becomes due and
                    payable  but  is  unpaid;  and

               (2)  on  each  date  which  is  30  days  after  the  immediately
                    preceding  date  on  which  the  Overdue Rate was determined
                    under  this  clause  16.3(a);  and

               (3)  the  rate  fixed  or payable under a judgment or other thing
                    referred  to  in  clause  16.2(a).

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

17   ASSIGNMENT

     17.1 ASSIGNMENT  BY  TRANSACTION  PARTY

          A  Transaction  Party must not transfer or assign any of its rights or
          obligations  under  a  Transaction  Document without the prior written
          consent  of  the  Agent.

     17.2 ASSIGNMENT  BY  FINANCE  PARTY

          A  Finance  Party  may  at  any  time,  without  the  consent  of  any
          Transaction  Party,  assign  any of its rights or transfer by novation
          any  of its rights and obligations under a Transaction Document to any
          person  in the RMB group of companies (which term includes any person,
          partnership  or corporate entity in that group) or to a reputable bank
          or  financial  institution  or to a combination of reputable banks and
          financial  institutions.

     17.3 REFERENCES  TO  A  FINANCE  PARTY

          (a)  If  a Finance Party transfers its rights, benefits or obligations
               under  the  Transaction  Documents in accordance with clause 17.2
               any  reference in the Transaction Documents to that Finance Party
               (unless  provided otherwise) is a reference to that Finance Party
               and  its  transferee.

          (b)  If  a  Finance  Party  transfers  all of its rights, benefits and
               obligations  by novation then any reference to that Finance Party
               is  a  reference  to  its  transferee.

     17.4 ASSIST  TRANSFER  OR  ASSIGNMENT

          At  the  request  of  a Finance Party, the Borrower and each Guarantor
          must  do  any  thing  including,  but  not  limited  to, executing any
          documents or amending any Transaction Document, to effect any transfer
          or  assignment  under  this  clause  17.

     17.5 PARTICIPATION  PERMITTED

          A  Finance  Party may grant by way of sub-participation (being a right
          to share in the financial effects of this agreement without any rights
          against a Transaction Party) all or part of the Finance Party's rights
          and  benefits  under this agreement to any other person without having
          to obtain the consent of or to notify a Transaction Party or any other
          person.

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                                                                         page 48
<PAGE>
     17.6 LENDING  OFFICE

          (a)  A  Finance  Party  may  change  its  Lending  Office at any time.

          (b)  A  Finance Party must promptly notify any other Finance Party and
               the  Borrower  of  the  change.

     17.7 DISCLOSURE

          A  Finance  Party  may  disclose to a proposed assignee, transferee or
          sub-participant any information relating to a Transaction Party or the
          Transaction  Documents  whether or not confidential and whether or not
          the  disclosure would be in breach of any law or of any duty owed to a
          Transaction  Party.

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

18   SAVING  PROVISIONS

     18.1 NO  MERGER  OF  SECURITY

          (a)  Nothing  in  this  agreement  merges,  extinguishes,  postpones,
               lessens  or  otherwise prejudicially affects a Power, Encumbrance
               or  indemnity  in  favour  of  the  Finance  Parties.

          (b)  No  other Encumbrance or Transaction Document held by the Finance
               Parties  adversely  affects  any  Power  under  this  agreement.

     18.2 EXCLUSION  OF  MORATORIUM

          To  the  extent  not  excluded  by law, a provision of any legislation
          which  at  any time directly or indirectly lessens or otherwise varies
          or affects in favour of a Transaction Party any obligations under this
          agreement or any Collateral Security, or stays, postpones or otherwise
          prevents  or  adversely affects the exercise by the Finance Parties of
          any  Power,  is  negatived  and  excluded  from this agreement and any
          Collateral  Security  and  all  relief  and  protection conferred on a
          Transaction  Party  by or under that legislation is also negatived and
          excluded.

     18.3 POWERS

          (a)  The  Powers  are  cumulative  and do not exclude any other right,
               power,  authority,  discretion  or  remedy.

          (b)  Where  a  Power  is  inconsistent with a right, power, authority,
               discretion  or  remedy  conferred  by applicable law then, to the
               extent  not prohibited by that law, those conferred by applicable
               law  are  regarded  as  negatived  or varied to the extent of the
               inconsistency.

     18.4 CONSENTS

          Whenever the doing of any thing by a Transaction Party is dependent on
          the  consent  or  approval  of  a Finance Party, the Finance Party may
          withhold  its  consent  or  approval  or  give  it  conditionally  or
          unconditionally  in  its  absolute  discretion unless expressly stated
          otherwise  in  a Transaction Document. Any conditions must be complied
          with  by a Transaction Party. Any consent of a

--------------------------------------------------------------------------------
                                                                         page 49
<PAGE>
          Finance  Party  which may be required and which is not contemplated in
          any  Transaction  Document  will  not  be  unreasonably  withheld by a
          Finance  Party.

     18.5 PRINCIPAL  OBLIGATIONS

          This  agreement  and  each  Collateral  Security  is:

          (a)  a  principal  obligation and is not ancillary or collateral to an
               Encumbrance  (other  than  another  Collateral Security) or other
               obligation  however  created;  and

          (b)  independent  of,  and  unaffected  by  an  Encumbrance  or  other
               obligation  however created which the Finance Parties may hold at
               any  time  in  respect  of  the  Secured  Money.

     18.6 NON-AVOIDANCE

          If  a payment by a Transaction Party to a Finance Party is at any time
          avoided  for  any  reason  including,  but  not  limited  to,  a legal
          limitation,  disability  or incapacity of or affecting the Transaction
          Party,  and  whether  or  not:

          (a)  a  transaction relating to the Secured Money was illegal, void or
               substantially  avoided;  or

          (b)  any  thing  was  or  ought to have been within the knowledge of a
               Finance  Party,

          (c)  the  Borrower:

          (d)  as  an  additional,  separate  and  independent  obligation,
               indemnifies  that Finance Party against that avoided payment; and

          (e)  acknowledges  that the liability of a Transaction Party under the
               Transaction  Documents  and  the Powers of each Finance Party are
               the  same  as  if  that  payment  had  not  been  made.

     18.7 SET-OFF  AUTHORISED

          If a Transaction Party does not pay any part of the Secured Money when
          due  to a Finance Party, the Borrower authorises that Finance Party in
          the  name  of a Transaction Party or of a Finance Party, to do any act
          or  thing  including,  but  not  limited  to,  executing  documents or
          effecting  currency  conversions  which  may  be  required.

     18.8 CERTIFICATES  OF  AGENT

          A  certificate  signed  by an Authorised Officer of the Agent stating:

          (a)  the  amount  of  the  Secured  Money  (whether  currently due and
               payable  or  not)  or  an amount due and payable by a Transaction
               Party  under  a  Transaction  Document;  or

          (b)  the  opinion or determination of a Finance Party as to any thing,

          is  prima  facie  evidence  of  that  amount  or  that  opinion  or
          determination  (as  the  case  requires)  at  the  date  stated on the
          certificate  or  failing  that as at the date of that certificate. The
          Borrower  has  the right to review that certificate for any inaccuracy
          or  manifest error and the Borrower has the right to request the Agent

--------------------------------------------------------------------------------
                                                                         page 50
<PAGE>
          to  provide  to the Borrower details of the calculation of that amount
          or  details  of  that opinion or determination (as the case requires).

     18.9 NO  RELIANCE  OR  OTHER  OBLIGATIONS  AND  RISK  ASSUMPTION

          The  Borrower  and  each  Guarantor  acknowledges  and  confirms that:

          (a)  it  has  not entered into a Transaction Document in reliance on a
               representation,  warranty, promise or statement made by a Finance
               Party  or  a  person  on  behalf  of  a  Finance  Party;

          (b)  in  respect  of  the  transactions  evidenced  by the Transaction
               Documents,  the  Finance  Parties  have no obligations other than
               those  expressly  set  out  in  the  Transaction  Documents;  and

          (c)  in  respect  of  interest  rates  or  exchange rates, the Finance
               Parties  are  not  liable  for:

               (1)  movements  in  interest  rates  or  exchange  rates;  or

               (2)  information,  advice  or  opinions  provided  by the Finance
                    Parties  or  a person on behalf of the Finance Parties, even
                    if:

                    (A)  provided  at  the  request  of  a Transaction Party (it
                         being  acknowledged  by  each  of  the Borrower and the
                         Guarantor  that  such  matters  are  inherently
                         speculative);  or

                    (B)  relied  on  by  a  Transaction  Party.

     18.10  ATTORNEY

          In  consideration  of  the  Finance  Parties  agreeing  to provide the
          accommodation referred to in this agreement and on the occurrence of a
          Default,  the  Finance Parties and each of their respective Authorised
          Officers for the time being (each with a power to appoint a substitute
          or substitutes) is irrevocably appointed the attorney of a Transaction
          Party  to:

          (a)  execute  and  deliver  all  documents;  and

          (b)  do  all  things  (including  the signing and lodging of proofs of
               debt  and  similar  claims in the bringing and enforcing of legal
               proceedings,  the compromise of disputes, the enforcement of each
               Transaction  Document  or  any  of  them),

          which  the attorney thinks requisite or desirable for giving effect to
          the  provisions  of  each  Transaction  Document.

     18.11  OPINION  OF  A  FINANCE  PARTY

          Where  a Finance Party is required or entitled under this agreement to
          form  or  hold  an  opinion or view, this may be formed or held on its
          behalf  by  a  person  authorised  by that Finance Party to act on its
          behalf  in  relation to this agreement or by its board of directors or
          by  one  or  more  Authorised  Officers  of  that  Finance  Party.

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                                                                         page 51
<PAGE>
19   GENERAL

     19.1 CONFIDENTIAL  INFORMATION

          The  Finance Parties may disclose to a person documents or records of,
          or  information about, a Transaction Document, or the assets, business
          or  affairs  of  a  Transaction Party, whether or not confidential and
          whether or not the disclosure would be in breach of a law or of a duty
          owed  to  a  Transaction  Party:

          (a)  for  the  purpose  of  exercising  any  Power after a Default has
               occurred  and  while  it  is  continuing;  or

          (b)  if the person to whom disclosure is made first undertakes to keep
               the  relevant  documents,  records  or  information confidential.

     19.2 PERFORMANCE  BY  THE  AGENT  OF  OBLIGATIONS

          If  a Transaction Party defaults in fully and punctually performing an
          obligation  contained  or implied in a Transaction Document, the Agent
          may,  without  affecting  any  Power,  do  all  things  necessary  or
          desirable,  in  the  opinion  of the Agent, to make good or attempt to
          make  good  that  default  to  the  satisfaction  of  the  Agent.

     19.3 TRANSACTION  PARTY  TO  BEAR  COST

          Any  thing  which  must  be  done  by  a  Transaction  Party  under  a
          Transaction  Document,  whether  or  not  at  the request of a Finance
          Party,  must  be  done  at  the  cost  of  the  Transaction  Party.

     19.4 NOTICES

          Any  notice  or  other  communication including, but not limited to, a
          request,  demand,  consent  or  approval,  to  or  by  a  party  to  a
          Transaction  Document:

          (a)  must  be  in legible writing and in English addressed as follows:

               (1)  if  to  the  Borrower  or  a  Guarantor:

                    Address:  7000 Independence Parkway
                              Suite 160 # 135
                              Plano, Texas 75025
                              United States of America

                    Attention:  Mr Toby Mancuso

                    Facsimile:  +1 972 208 2155;

               (2)  if to the Agent or to the Lender:

                    Address:  Level 3
                              One Mitre Square
                              London EC3A 5AN
                              United Kingdom

                    Attention:  Mr  Michael  Schonfeld

--------------------------------------------------------------------------------
                                                                         page 52
<PAGE>
                    Facsimile:  +44  207  626  9041,

               or as specified to the sender by a party by notice;

          (b)  must  be signed by an Authorised Officer or under the common seal
               of  the  sender;

          (c)  is  regarded  as  being  given  by the sender and received by the
               addressee:

               (1)  if  by  delivery in person, when delivered to the addressee;

               (2)  if  by  post, 2 Business Days (if posted within one country)
                    or  10 Business Days (if posted from one country to another)
                    as  the case may be, from and including the date of postage;
                    or

               (3)  if  by  facsimile  transmission,  whether  or  not  legibly
                    received,  on  receipt  of  a transmission report confirming
                    successful  transmission,  without  error  or  omission,

               but  if  the  delivery  or  receipt  is  on  a day which is not a
               Business  Day  or  is  after  4.00  pm  (addressee's  time) it is
               regarded  as  received  at  9.00  am  (addressee's  time)  on the
               following  Business  Day;  and

          (d)  can be relied on by the addressee and the addressee is not liable
               to  another  person  for the consequences of that reliance if the
               addressee  believes  it  to be genuine, correct and authorised by
               the  sender.

     19.5 GOVERNING  LAW  AND  JURISDICTION

          (a)  This  agreement is governed by the laws of the State of Colorado.

          (b)  The  Borrower and each Guarantor irrevocably and unconditionally:

               (1)  submits to and accepts the non-exclusive jurisdiction of the
                    courts  of  the  State  of  Colorado;  and

               (2)  waives  any  objection  to the venue of any legal process on
                    the  basis  that  the  process  has  been  brought  in  an
                    inconvenient  forum.

     19.6 PROHIBITION  AND  ENFORCEABILITY

          (a)  A  provision  of,  or  the  application  of  a  provision  of,  a
               Transaction  Document  or  a  Power  which  is  prohibited  in  a
               jurisdiction  is,  in  that jurisdiction, ineffective only to the
               extent  of  that  prohibition.

          (b)  A  provision  of,  or  the  application  of  any  provision of, a
               Transaction Document which is void, illegal or unenforceable in a
               jurisdiction  does  not  affect  the  validity,  legality  or
               enforceability  of  that  provision in another jurisdiction or of
               the  remaining  provisions  in  that  or  another  jurisdiction.

     19.7 WAIVER  AND  VARIATION

          (a)  Waiver  of  a  Power  arising  under,  or  a  provision  of, this
               agreement  (including this clause), must be in writing and signed
               by  the  party  granting  the  waiver.

          (b)  A  failure  or delay in exercise, or partial exercise, of a Power
               (arising  on  the  occurrence of a Default or otherwise) does not
               operate  as a waiver of

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                                                                         page 53
<PAGE>
               that  Power  or  preclude  another or further exercise of that or
               another  Power.

          (c)  The  variation of a term of this agreement must be in writing and
               signed  by  the  parties.

     19.8 ATTORNEYS

          Each  of  the  attorneys  executing  this  agreement  states  that the
          attorney  has  no  notice  of  the revocation of the power of attorney
          appointing  that  attorney.

     19.9 COUNTERPARTS

          This  agreement  may  be  signed in any number of counterparts and all
          counterparts  together  constitute  one  and  the  same  instrument.

     19.10  SERVICE  OF  PROCESS

          Without  preventing  any  other  mode  of  service, any document in an
          action  (including any writ of summons or other originating process or
          any  third or other party service) may be served on any party by being
          delivered  to  or  left  for  that party at its address for service of
          notices  under  clause  19.4.

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                                                                         page 54
<PAGE>
--------------------------------------------------------------------------------

SCHEDULE 1 - -GUARANTORS

          1.   Western Goldfields, Inc., a company incorporated under the laws
               of Idaho.

          2.   Calumet Mining Company, a company incorporated under the laws of
               Idaho.

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                                                                         page 55
<PAGE>
--------------------------------------------------------------------------------

SCHEDULE 2- -FUNDING NOTICE

          To:  RMB RESOURCES LIMITED (AGENT)

               ATTENTION: MICHAEL SCHONFELD
          ----------------------------------------------------------------------

          We refer to the project facility agreement dated as of 5 November 2003
          between  Western  Mesquite  Mines,  Inc.,  RMB  International (Dublin)
          Limited,  each party described in schedule 1 to that agreement and the
          Agent  (FACILITY  AGREEMENT).

          Under  clause  4  of  the  Facility  Agreement:

          (a)  We  give  you  irrevocable  notice that we wish to draw under the
               Facility  by  means  of  a  Funding  Portion  to  be  provided
               on               2003 (FUNDING  DATE);

          (b)  The  aggregate  amount  to  be  drawn  is  [US$       ];

          (c)  The  proceeds  of  the Funding Portion are to be used for
              (insert proposed  usage).

          (d)  We  request  that the  proceeds  be  remitted  to  account number
               at                     ;

          (e)  We  represent  and  warrant  that:

               (1)  [EXCEPT  AS  DISCLOSED  IN  PARAGRAPH  (E)(3)]  each
                    representation  and  warranty  in  the Facility Agreement is
                    true,  correct and not misleading as though it had been made
                    at  the  date  of  this  Funding Notice and the Funding Date
                    specified  above  in  respect of the facts and circumstances
                    then  subsisting;  [AND]

               (2)  [(EXCEPT  AS  DISCLOSED  IN  PARAGRAPH (E)(3)] no Default or
                    Potential  Default  is  subsisting  or  will result from the
                    provision  of  a  Funding  Portion  [;  AND

               (3)  [DETAILS  OF  THE EXCEPTIONS TO PARAGRAPHS (E)(1) AND (E)(2)
                    ARE  AS FOLLOWS: , AND WE [ HAVE TAKEN/PROPOSE THE FOLLOWING
                    REMEDIAL  ACTION  ];]

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                                                                         page 56
<PAGE>
          Expressions  defined  in  the Facility Agreement have the same meaning
          when  used  in  this  Funding  Notice.

          Dated: [INSERT DATE]

          SIGNED for and on behalf of
          WESTERN MESQUITE MINES, INC.

          ___________________________
          Authorised Officer's signature

          ___________________________
          Name (please print)

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

SCHEDULE 3 - -PERMITTED ENCUMBRANCES

          A  Transaction  Document  which  is  an Encumbrance, including without
          limitation  the  Securities.

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                                                                         page 57
<PAGE>
--------------------------------------------------------------------------------

SCHEDULE 4 - -SECURITIES

          1.   US Securities.

          2.   Deed of Guarantee dated on or about the date of this agreement
               between the Agent  and  each  of  the parties described in the
               schedule to that deed.

          3.   Each Collateral Security.

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                                                                         page 58
<PAGE>
--------------------------------------------------------------------------------

SCHEDULE  5  -  FORM  OF  WARRANT

          THE  SECURITIES  EVIDENCED  BY  THIS  WARRANT HAVE NOT BEEN REGISTERED
          UNDER  THE  SECURITIES  ACT  OF  1933, AS AMENDED, OR APPLICABLE STATE
          SECURITIES  LAWS,  AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED,
          OFFERED,  PLEDGED  OR  OTHERWISE  TRANSFERRED  UNLESS  (A) THERE IS AN
          EFFECTIVE  REGISTRATION  STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
          SECURITIES  LAWS  COVERING  ANY  SUCH  TRANSACTION  INVOLVING  SAID
          SECURITIES,  (B)  THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR
          THE  HOLDER OF THE SECURITIES SATISFACTORY TO THE COMPANY STATING THAT
          SUCH  TRANSACTION  IS  EXEMPT  FROM  REGISTRATION  OR  (C) THE COMPANY
          OTHERWISE  SATISFIES  ITSELF  THAT  SUCH  TRANSACTION  IS  EXEMPT FROM
          REGISTRATION.

          --------------------------------------------------------------------
          No. W- [INSERT WARRANT NUMBER]      WARRANT TO PURCHASE
          780,000 WARRANTS
          ---------------------------------  ---------------------------------
          Issued: [Insert Date of Issuance]  $0.01 PAR VALUE COMMON STOCK
          --------------------------------------------------------------------

          Western Goldfields, Inc.

          Warrant
          -------

          THIS  IS  TO  CERTIFY  that, for cash consideration of $ 100 and other
          value  received,  and  subject  to  these  terms  and conditions, "RMB
                                                                             ---
          Resources  Limited",  a company incorporated under the laws of England
          -------------------
          and  Wales  ("Agent"), or such other person or entity to which or whom
                        -----
          this  Warrant  is  transferred (the "Holder"), is entitled to exercise
                                               ------
          this  Warrant to purchase [INSERT NUMBER OF WARRANT SHARES] fully paid
          and  nonassessable  shares  of  Western  Goldfields,  Inc.,  an  Idaho
          corporation  (the  "Company"),  $0.01 par value per share common stock
                              -------
          (the  "Warrant  Stock"),  at  a price per share of $1.00 (the Exercise
                 --------------                                         --------
          Price") (the number of shares, type of security and the Exercise Price
          -----
          being  subject  to  adjustment  as  provided  below).

          1.   Method  of  Exercise
               --------------------

          1.1  Cash Exercise Right. This Warrant may be exercised by the Holder,
               -------------------
               at  any  time  during the period (the "Exercise Period") that (a)
                                                      ---------------
               commences  on  the date of the facility agreement between Western
               Mesquite  Mines,  Inc.,  RMB  International (Dublin) Limited, the
               Company  and  each  other  party  described in schedule 1 to that
               agreement  and the Agent ("Facility Agreement") and (b) ends on a
                                          ------------------
               date  3 years from the date of the Facility Agreement. During the
               Exercise  Period the Holder may exercise this Warrant in whole or
               in  part,  by  delivering  to  the  Company  at 7000 Independence
               Parkway,  Suite 160 #135, Plano, Texas 75025 (or any other office
               or agency of the Company as it may designate by notice in writing
               to the Holder at the address of the Holder appearing on the books
               of  the Company) (x) this Warrant certificate, (y) a certified or
               cashier's  cheque  payable  to  the  Company,  or  cancelled
               indebtedness  of  the Company to the Holder, in the amount of the
               Exercise  Price  multiplied  by  the  number  of

--------------------------------------------------------------------------------
                                                                         page 59
<PAGE>
          shares  for  which  this  Warrant  is  being  exercised  (the Purchase
                                                                    ------------
          Price"),  and  (z)  the  Notice of Cash Exercise attached as Exhibit A
          -----                                                        ---------
          duly  completed  and  executed  by the Holder. On exercise, the Holder
          will  be  entitled  to receive from the Company a stock certificate in
          proper  form  representing  the  number  of  shares  of  Warrant Stock
          purchased.

          1.2  Net  Issuance  Right.  Despite  the  payment provisions described
               --------------------
          above,  the  Holder  may  elect  to  convert  all or a portion of this
          Warrant  into  shares of Warrant Stock by surrendering this Warrant at
          the  office  of the Company at the address set out in Section 1. 1 and
          delivering to the Company the Notice of Net Issuance Exercise attached
          as  Exhibit B duly completed and executed by the Holder, in which case
              ---------
          the  Company  will issue to the Holder the number of shares of Warrant
          Stock of the Company equal to the result obtained by (a) subtracting B
          from  A,  (b)  multiplying  the  difference by C, and (c) dividing the
          product  by  A  as  set  out  in  the  following  equation:

          X =  (A-B)x C  where:
              ---------
                  A

               X    =  the  number  of  shares  of Warrant Stock issuable on net
                    issuance exercise pursuant to the provisions of this Section
                    1.2.

               A    =  the  Fair Market Value (as defined below) of one share of
                    Warrant  Stock  on  the  date  of  net  issuance  exercise.

               B    =  the  Exercise  Price for one share of Warrant Stock under
                    this  Warrant  (as  adjusted  from  time to time pursuant to
                    Section  4  hereof).

               C    =  the  number  of  shares of Warrant Stock as to which this
                    Warrant  is  exercisable  pursuant to the provisions of this
                    Warrant  or,  if  only  a  portion  of this Warrant is being
                    exercised,  the  portion  of this Warrant being exercised as
                    set  out  in  the  Notice  of  Net  Issuance  Exercise.

          If  the  foregoing  calculation  results in a negative number, then no
          shares  of  Warrant  Stock  shall  be  issued on net issuance exercise
          pursuant  to  this  Section  1.2.

          "Fair  Market  Value"  of  a  share  of  Warrant  Stock  means:
           -------------------

          (a)  if  the net issuance exercise is in connection with a transaction
               specified  in  Section  4.1,  the  value  of  the  consideration
               (determined,  in the case of noncash consideration, in good faith
               by  the  Company's Board of Directors) to be received pursuant to
               such  transaction  by  the  holder of one share of Warrant Stock;

          (b)  if  the  net  issuance  exercise  is  after the occurrence of the
               initial  public  offering  of  the  Company's  Common  Stock:

               (1)  if the Company's Common Stock is traded on an exchange or is
                    quoted  on  the  Nasdaq  National Market, the average of

--------------------------------------------------------------------------------
                                                                         page 60
<PAGE>
                    the closing or last sale price reported for the ten business
                    days immediately preceding the date of net issuance exercise
                    multiplied  by  the  number  of  shares of Common Stock into
                    which such shares of Warrant Stock could be converted on the
                    date of net issuance exercise, if such Warrant Stock is then
                    convertible  into  Common  Stock;

               (2)  if  the  Company's Common Stock is not traded on an exchange
                    or  on  the  Nasdaq  National  Market,  but is traded in the
                    over-the-counter  market, the average of the closing bid and
                    asked  prices  reported  for the ten market days immediately
                    preceding  the  date  of net issuance exercise multiplied by
                    the  number  of  shares of Common Stock into which shares of
                    Warrant Stock could be converted on the date of net issuance
                    exercise,  if  that  Warrant  Stock is then convertible into
                    Common  Stock;  and

          (c)  in all other cases, the fair value as determined in good faith by
               the  Company's  Board  of  Directors.

          On  net  issuance  exercise  in  accordance with this Section 1.2, the
          Holder  shall  be  entitled  to  receive  from  the  Company  a  stock
          certificate  in  proper  form  representing  the  number  of shares of
          Warrant  Stock  determined  in  accordance  with  the  foregoing.

          2.   Delivery  of  Stock  Certificates;  No  Fractional  Shares
               ----------------------------------------------------------

               (a)  Within  10  days  after  the  payment  of the Purchase Price
                    following the exercise of this Warrant (in whole or in part)
                    or after notice of net issuance exercise and compliance with
                    Section  1.2,  the  Company at its expense will issue in the
                    name  of  and  deliver  to  the  Holder (i) a certificate or
                    certificates  for the number of fully paid and nonassessable
                    shares of Warrant Stock to which the Holder will be entitled
                    on  the  exercise of this Warrant, and (ii) a new Warrant of
                    like  tenor  to  purchase  up  to  that  number of shares of
                    Warrant Stock, if any, as to which this Warrant has not been
                    exercised  if  this Warrant has not expired. The Holder will
                    for  all  purposes  be  deemed  to have become the holder of
                    record  of  the  shares  of  Warrant  Stock on the date this
                    Warrant  was  exercised  (the  date  the  Holder  has  fully
                    complied  with  the  requirements  of  Section 1. 1 or 1.2),
                    irrespective  of  the date of delivery of the certificate or
                    certificates  representing the Warrant Stock; provided that,
                    if  the  date  this  Warrant is exercised is a date when the
                    stock  transfer  books  of  the Company are closed, a person
                    will  be  deemed to have become the holder of record of such
                    shares of Warrant Stock at the close of business on the next
                    succeeding  date on which the stock transfer books are open.

               (b)  No  fractional  shares  will  be issued upon the exercise of
                    this Warrant. In lieu of fractional shares, the Company will
                    pay  the Holder a sum in cash equal to the fair market value
                    of  the  fractional  shares  (as determined by the Company's
                    Board  of  Directors)  on the date of exercise such fraction
                    multiplied  by  the  Exercise  Price.

--------------------------------------------------------------------------------
                                                                         page 61
<PAGE>
          3.   Covenants  as  to  Warrant  Stock.
               ----------------------------------

               (a)  The  Company covenants that at all times during the Exercise
                    Period  there  will be reserved for issuance and delivery on
                    exercise  of  this  Warrant  the number of shares of Warrant
                    Stock  as  is necessary for exercise in full of this Warrant
                    and,  from time to time, it will take all steps necessary to
                    amend  its  Articles  of Incorporation to provide sufficient
                    reserves  of  shares of Warrant Stock. All shares of Warrant
                    Stock  issued pursuant to the exercise of this Warrant will,
                    on  their issuance, be validly issued and outstanding, fully
                    paid  and  nonassessable,  free  and  clear of all liens and
                    other  encumbrances  or  restrictions  on  sale and free and
                    clear of all pre-emptive rights, except restrictions arising
                    (i)  under federal and state securities laws, (ii) not by or
                    through  the  Company,  or  (iii)  by  agreement between the
                    Company  and  the  Holder  or  its  successors.

               (b)

                    (i)  The  Company  must  use  its  best  efforts  to  file a
                         registration  statement on Form S-1, Form SB-2 or other
                         available  form in relation to all securities which are
                         issuable  on  exercise  of  this  Warrant (REGISTRATION
                         STATEMENT)  within 60 days from the date the Lender has
                         provided  the  Commitment  (as  defined in the Facility
                         Agreement).

                    (ii) The  Company  must  use  its  best efforts to cause the
                         Registration  Statement  to  become  effective within 6
                         months  from  the  date  on  which  it  was  filed.

                    (iii) A registration statement filed by the Company may deal
                         solely  with  the  securities  which  are  issuable  on
                         exercise  of  this  Warrant  or  may  include  those
                         securities in any other registration statement relating
                         to the registration of other securities of the Company.

                    (iv) The  Company  must  register  any  securities under any
                         applicable  securities or "blue sky" laws of each State
                         of  the  United  States  which  the  Agent  reasonably
                         requests.

          4.   Adjustments;  Termination  of  Warrant  on  Certain  Events.
               -----------------------------------------------------------

          4.1  Effect  of  Reorganization.  On  a  merger,  consolidation,
               --------------------------
               acquisition of all or substantially all of the property or stock,
               liquidation or other reorganization of the Company (collectively,
               a  "Reorganization")  during  the Exercise Period, as a result of
               which  the  share  holders  of the Company receive cash, stock or
               other  property  in  exchange  for their shares of Warrant Stock,
               lawful  provision  will  be  made so that the Holder will then be
               entitled  to  receive, on exercise of this Warrant, the number of
               shares  of securities of the successor corporation resulting from
               the  Reorganization  (and  cash  and  other property), to which a
               holder  of  the  Warrant  Stock  issuable  upon  exercise of this
               Warrant  would  have  been entitled in the Reorganization if this
               Warrant  had  been  exercised  immediately  before  to  the
               Reorganization.  If  the  per  share consideration payable to the
               Holder  for  shares in connection with any Reorganisation is in a
               form  other than cash

--------------------------------------------------------------------------------
                                                                         page 62
<PAGE>
               or  marketable  securities,  then  the value of the consideration
               will  be  determined  in  good  faith  by  the Company's Board of
               Directors. In each case, appropriate adjustment (as determined in
               good  faith  by the Company's Board of Directors) will be made in
               the application of the provisions of this Warrant with respect to
               the rights and interest of the Holder after the Reorganization to
               the  end  that  the  provisions  of  this  Warrant  (including
               adjustments  of  the  Exercise  Price  and the number and type of
               securities  purchasable  pursuant  to  the terms of this Warrant)
               will  be  applicable  after that event, as near as reasonably may
               be, in relation to any shares deliverable after that event on the
               exercise  of  this  Warrant.

          4.2  Adjustments  for  Stock Splits, Dividends, Reclassification, etc.
               ----------------------------------------------------------------
               If the Company issues any shares of the same class as the Warrant
               Stock as a stock dividend or subdivides the number of outstanding
               shares  of  the same class into a greater number of shares, then,
               in  either case, the Exercise Price in effect before the dividend
               or  subdivision will be proportionately reduced and the number of
               shares  of  Warrant  Stock  at that time issuable pursuant to the
               exercise of this Warrant shall be proportionately increased; and,
               conversely,  if  the  Company contracts the number of outstanding
               shares of the same class as the Warrant Stock by combining shares
               of  the  same  class  into  a  smaller number of shares, then the
               Exercise  Price  in  effect  before  that  combination  will  be
               proportionately  increased  and  the  number of shares of Warrant
               Stock  at  that  time  issuable  pursuant  to  the  exercise  or
               conversion  of this Warrant will be proportionately decreased. If
               the  Company  at  any  time while this Warrant, or any portion of
               this  Warrant,  remains  outstanding  and  unexpired  will,  by
               reclassification  of  securities  or otherwise, change any of the
               securities  as  to which purchase rights under this Warrant exist
               into  the  same  or a different number of securities of any other
               class  or  classes, this Warrant will then represent the right to
               acquire  the  number  and  kind  of securities as would have been
               issuable as the result of a change with respect to the securities
               which  were  subject  to  the  purchase rights under this Warrant
               immediately prior to the reclassification or other change and the
               Exercise  Price  will  be  appropriately  adjusted all subject to
               further  adjustments as provided in Section 4. Each adjustment in
               the  number  of  shares  of Warrant Stock issuable will be to the
               nearest  whole  share.

          4.3  Adjustment  to  Exercise  Price  for Dilutive Issues. In case the
               ----------------------------------------------------
               Company  at  any  time  or from time to time before or during the
               Exercise  Period  issues  any shares of Warrant Stock (other than
               shares  issued  as a stock dividend or stock split as provided in
               Section  4.2) for a consideration per share that is less than the
               Exercise Price, then on the date of that issue the Exercise Price
               shall  be  reduced  to  a  price (calculated to the nearest cent)
               equal  to  the  quotient  of  (a)  the  sum  of (i) the per-share
               consideration received by the Company in that issue plus (ii) the
               product  of  the  number  of  fully  diluted  shares  of  equity
               securities  of  the  Company  outstanding  immediately before the
               issuance  times  the Exercise Price, divided by (b) the number of
               fully  diluted  shares  of  equity  securities  of  the  Company
               outstanding  immediately  after  the issuance. In the case of the
               issuance  of  options  to  purchase  or  rights  to subscribe for
               Warrant  Stock,  securities  by  their  terms convertible into or
               exchangeable  for Warrant Stock, or options

--------------------------------------------------------------------------------
                                                                         page 63
<PAGE>
               to  purchase  or  rights  to  subscribe  for  convertible  or
               exchangeable  securities,  the  following provisions shall apply:

               (a)  the  aggregate  maximum  number  of  shares of Warrant Stock
                    deliverable  on exercise of options to purchase or rights to
                    subscribe  for  Warrant  Stock  will  be deemed to have been
                    issued at the time those options or rights were issued for a
                    consideration  equal  to  the consideration received by this
                    corporation  on  the  issuance of the options or rights plus
                    the minimum purchase price provided in the options or rights
                    for  the Warrant Stock covered by the options or rights, but
                    no further adjustment to the Exercise Price will be made for
                    the  actual issuance of Warrant Stock on the exercise of the
                    options  or  rights  in  accordance  with  their  terms;

               (b)  the  aggregate  maximum  number  of  shares of Warrant Stock
                    deliverable  on  conversion  of  or  in  exchange  for  any
                    convertible or exchangeable securities or on the exercise of
                    options  to  purchase or rights to subscribe for convertible
                    or  exchangeable  securities  and  subsequent  conversion or
                    exchange  of  those  securities  will be deemed to have been
                    issued at the time the securities were issued or the options
                    or  rights  were  issued  for  a  consideration equal to the
                    consideration  received  by  this  corporation  for  any
                    convertible  or  exchangeable securities and related options
                    or  rights, plus the additional consideration, if any, to be
                    received  by  this corporation on the conversion or exchange
                    of  those  securities or the exercise of any related options
                    or  rights,  but no further adjustment to the Exercise Price
                    will be made for the actual issuance of Warrant Stock on the
                    conversion  or exchange of the securities in accordance with
                    their  terms;

               (c)  if options, rights or convertible or exchangeable securities
                    by  their  terms  provide,  with  the  passage  of  time  or
                    otherwise,  for any increase in the consideration payable to
                    this  corporation,  or  decrease  in the number of shares of
                    Warrant  Stock  issuable,  on  the  exercise,  conversion or
                    exchange of those securities, the Exercise Price computed on
                    the  original issue thereof, and any subsequent adjustments,
                    will,  on  that  increase or decrease becoming effective, be
                    recomputed  to reflect the increase or decrease with respect
                    to the options, rights and securities not already exercised,
                    converted  or  exchanged  before  the  increase  or decrease
                    became  effective,  but no further adjustment to the Warrant
                    Price  will be made for the actual issuance of Warrant Stock
                    on  the  exercise of any options or rights or the conversion
                    or  exchange  of  those  securities in accordance with their
                    terms;

               (d)  on  the expiration of any options or rights, the termination
                    of  any  rights  to convert or exchange or the expiration of
                    any options or rights related to convertible or exchangeable
                    securities,  the  Exercise Price will promptly be readjusted
                    to  the  Exercise  Price as would have been obtained had the
                    adjustment  which  was  made on the issuance of the options,
                    rights  or  securities or options or rights related to those
                    securities  been  made  on the basis of the issuance of

                                                                         page 64
<PAGE>
                    only  the  number of shares of Warrant Stock actually issued
                    on  the exercise of the options or rights, on the conversion
                    or  exchange  of  those securities or on the exercise of the
                    options  or  rights  related  to  those  securities.

          4.4  Calculation  of  Consideration.  In  the  case  of  an  issue  of
               ------------------------------
               additional  shares  of  Warrant Stock for cash, the consideration
               received  by  the  Company  will  be  deemed  to  be the net cash
               proceeds  received  for  the  shares.  In the case of an issue of
               additional shares of Warrant Stock for noncash consideration, the
               Company's  Board  of  Directors  will  determine the value of the
               consideration  and  the determination, unless shown by the Holder
               to  have  been made other than in good faith, will be conclusive.

          4.5  Certificate  as  to Adjustments. In the case of any adjustment in
               -------------------------------
               the  Exercise  Price or number and type of securities issuable on
               exercise  of this Warrant, the Company will promptly give written
               notice  to the Holder in the form of a certificate, certified and
               confirmed  by  an  officer  of  the  Company,  setting  out  the
               adjustment  in  reasonable  detail.

          5.   Securities  Laws  Restrictions;  Legend  on  Warrant  Stock
               -----------------------------------------------------------

               (a)  This  Warrant  and  the securities issuable on exercise have
                    not  been  registered  under  the Securities Act of 1933, as
                    amended  (the  "Securities  Act"),  or  applicable  state
                                    ---------------
                    securities  laws,  and no interest may be sold, distributed,
                    assigned,  offered,  pledged or otherwise transferred unless
                    (i)  there  is an effective registration statement under the
                    Securities Act and applicable state securities laws covering
                    any  transaction  involving the securities, (ii) the Company
                    receives  an  opinion of legal counsel for the holder of the
                    securities  satisfactory  to  the  Company  stating that the
                    transaction  is  exempt  from  registration,  or  (iii)  the
                    Company  otherwise  satisfies itself that the transaction is
                    exempt  from  registration. Despite any thing else contained
                    in  clause  5(a), the Company will not require the Holder to
                    provide a legal opinion for transfers of this Warrant or the
                    securities  issuable  on  exercise  of  this  Warrant  if  a
                    transfer  is  made  in  full compliance with Rule 144 of the
                    Securities  Act.

               (b)  A  legend  setting  out  or referring to the restrictions in
                    clause  5(a) will be placed on this Warrant, any replacement
                    and  any  certificate  representing the Warrant Stock, and a
                    stop  transfer  order  will  be  placed  on the books of the
                    Company and with any transfer agent until the securities may
                    be  legally  sold  or  otherwise  transferred.

          6.   Exchange  of  Warrant;  Lost or Damaged Warrant Certificate. This
               -----------------------------------------------------------
               Warrant  is  exchangeable  on  its surrender by the Holder at the
               office  of the Company. On receipt by the Company of satisfactory
               evidence  of  the  loss,  theft,  destruction  or  damage of this
               Warrant  and  either  (in the case of loss, theft or destruction)
               delivery  of  an  indemnity  agreement reasonably satisfactory in
               form  and substance to the Company or (in the case of damage) the
               surrender  of  this  Warrant  for  cancellation, the Company will
               execute  and deliver to the Holder, without charge, a new Warrant
               of  like  denomination.

          7.   Notices  of  Record  Date,  etc.
               -------------------------------

--------------------------------------------------------------------------------
                                                                         page 65
<PAGE>
               In the event of.

               (a)  any  taking  by  the  Company  of a record of the holders of
                    Warrant Stock for the purpose of determining the holders who
                    are  entitled to receive any dividend or other distribution,
                    or any right to subscribe for, purchase or otherwise acquire
                    any  shares or stock of any class or any other securities or
                    property,  or  to  receive  any  other  right;

               (b)  any  Reorganization  of the Company, or any reclassification
                    or  recapitalization  of  the  capital stock of the Company;

               (c)  any  voluntary  or  involuntary  dissolution, liquidation or
                    winding-up  of  the  Company;

               (d)  any proposed issue or grant by the Company to the holders of
                    Warrant  Stock  of  any  shares of stock of any class or any
                    other  securities, or any right or warrant to subscribe for,
                    purchase  or  otherwise  acquire  any shares of stock of any
                    class  or  any  other  securities;  or

               (e)  any  other event as to which the Company is required to give
                    notice  to  any  holders  of  Warrant  Stock,

               then  the Company will mail to the Holder a notice specifying (1)
               in relation to clause 7(a), the date on which any record is to be
               taken,  (ii) in relation to clause 7(b) and clause 7(c), the date
               on  which any Reorganization, reclassification, recapitalization,
               dissolution,  liquidation or winding-up is to take place, and the
               time, if any is to be fixed, as to which the holders of record of
               Warrant  Stock  or  securities  into  which  the Warrant Stock is
               convertible  will  be  entitled  to  exchange  their  shares  for
               securities  or other property deliverable on such Reorganization,
               reclassification,  recapitalization,  dissolution, liquidation or
               winding-up,  (iii)  in  relation  to  clause 7(d), the amount and
               character  of  any  stock  or  other  securities,  or  rights  or
               warrants, proposed to be issued or granted, the date the proposed
               issue  or  grant  and the persons or class of persons to whom the
               proposed  issue  or  grant  is  to be offered or made, and (v) in
               relation  to  clause  7(e),  in  reasonable  detail,  the  facts,
               including  the  proposed  date,  concerning any other event. Such
               notice  shall be delivered to the Holder at least twenty business
               days  prior  to  the  date  specified  in  the  notice.

          8.   Miscellaneous.
               -------------

          8.1  Holder  as  Owner.  The  Company may deem and treat the holder of
               -----------------
               record  of  this  Warrant  as the absolute owner for all purposes
               regardless  of  any  notice  to  the  contrary.

          8.2  No  Shareholder  Rights. This Warrant does not entitle the Holder
               -----------------------
               to  any voting rights or any other rights as a shareholder of the
               Company  or  to any other rights except the rights stated in this
               Warrant;  and  no  dividend  or  interest will be payable or will
               accrue  in  respect  of  this Warrant or the Warrant Stock, until
               this  Warrant  is  exercised.

          8.3  Notices. Unless otherwise provided, any notice under this Warrant
               -------
               will be given in writing and will be deemed effectively given (a)
               upon  personal  delivery  to  the  party  to  be notified, (b) on
               confirmation  of  receipt by fax by

--------------------------------------------------------------------------------
                                                                         page 66
<PAGE>
               the party to be notified, (c) one business day after deposit with
               a reputable overnight courier, prepaid for overnight delivery and
               addressed as set out in (d), or (d) three days after deposit with
               the  United  States  Post  Office, postage prepaid, registered or
               certified  with  return  receipt  requested  and addressed to the
               party  to  be  notified at the address indicated below, or at any
               such  other  address  as such party may designate by twenty days'
               advance  written notice to the other party given in the foregoing
               manner.

                    If to the Holder:

                    To the address last furnished
                    in writing to the Company by
                    the Holder

                    If to the Company:

                    Western Goldfields, Inc.
                    7000 Independence Parkway
                    Suite 160 #135
                    Plano, Texas 75025
                    TELEPHONE: + 1 972 208 0696
                    FAX: + 1 972 208 2155

          8.4  Amendments  and  Waivers. Any term of this Warrant may be amended
               ------------------------
               and the observance of any term may be waived (either generally or
               in  a  particular  instance  and  either  retroactively  or
               prospectively)  only  with the written consent of the Company and
               the  Holder.  Any amendment or waiver effected in accordance with
               this  Section  8.4  will be binding on each future Holder and the
               Company.

          8.5  Governing Law; Jurisdiction; Venue. This Warrant will be governed
               ----------------------------------
               by  and construed under the laws of the State of Colorado without
               regard to principles of conflict of laws. The parties irrevocably
               consent  to the exclusive jurisdiction and venue of the state and
               federal  courts  located  in  the  City  and  County  of  Denver,
               Colorado, in connection with any action relating to this Warrant.

          8.6  Successors  and Assigns. The terms and conditions of this Warrant
               -----------------------
               shall  inure  to  the benefit of and be binding on the respective
               successors  and  assigns  of  the  parties.

          IN  WITNESS  WHEREOF,  the Company has executed this Warrant as of the
          date  first  written  above.

                                                        Western Goldfields, Inc.

                                                        By: ____________________

                                                      Name: ____________________

                                                     Title: ____________________

--------------------------------------------------------------------------------
                                                                         page 67
<PAGE>
                       Exhibit A - NOTICE OF CASH EXERCISE

          To:  Western  Goldfields,  Inc.

          The  undersigned  hereby  irrevocably  elects  to  purchase [________]
          shares  of  $________  per  share  par  value  common stock of Western
          Goldfields,  Inc.  (the  "Company")  issuable  on  the exercise of the
          attached  Warrant and requests that ---- certificates for these shares
          be  issued  in  the  name  of  and  delivered  to  the  address of the
          undersigned,  at the address stated below and, if the number of shares
          set  out  in  this notice are not all the shares that may be purchased
          pursuant  to  the  attached Warrant, that a new Warrant evidencing the
          right  to purchase the balance of the shares be registered in the name
          of, and delivered to, the undersigned at the address stated below. The
          undersigned  agrees with and represents to the Company that the shares
          of the common stock of the Company are acquired for the account of the
          undersigned  for  investment  and  not  with a view to, or for sale in
          connection  with,  any  distribution  or  public  offering  within the
          meaning  of  the  Securities  Act of 1933, as amended (the "Securities
          Act").  In addition, the undersigned represents that he, she or it (as
          the  case  may be) is an "accredited investor" as such term is defined
          in  Rule  501  (a)  of  the  Securities  Act.
          [PAYMENT ENCLOSED IN THE AMOUNT OF $______.]
          [COMPANY DEBT CANCELLED IN THE AMOUNT OF $______.]

          Dated: ________________

          Name of Holder of Warrant:

                                            (please print)

          Address:

          Signature:

--------------------------------------------------------------------------------
                                                                          page 1
<PAGE>
                   Exhibit B - NOTICE OF NET ISSUANCE EXERCISE

          To:  Western Goldfields, Inc.

          The  undersigned  hereby  irrevocably elects to convert that amount of
          the  attached  Warrant as specified below into the specified number of
          shares  of  $________  per  share  par  value  common stock of Western
          Goldfields,  Inc. (the "Company") as is determined pursuant to Section
          1.2  of  the  attached  Warrant.  The  undersigned  requests  that
          certificates  for the net issuance shares be issued in the name of and
          delivered  to  the  address  of the undersigned, at the address stated
          below.  The undersigned agrees with and represents to the Company that
          the  shares  are  acquired  for  the  account  of  the undersigned for
          investment and not with a view to, or for sale in connection with, any
          distribution  or  public offering within the meaning of the Securities
          Act  of  1933,  as  amended  (the  "Securities Act"). In addition, the
          undersigned  represents  that he, she or it (as the case may be) is an
          "accredited  investor"  as  such term is defined in Rule 501(a) of the
          Securities  Act.

          Dated:________________

          Name of Holder of Warrant:

                                         (please print)

          Number of Shares to be Converted:

          Address:

          Signature:

--------------------------------------------------------------------------------
                                                                          page 2
<PAGE>
--------------------------------------------------------------------------------

EXECUTED AS AN AGREEMENT:

SIGNED for
WESTERN MESQUITE MINES, INC.
by:

/s/John P. Ryan
-------------------------------------------
Signature

/s/  Secretary
-------------------------------------------
Title

John P. Ryan
-------------------------------------------
Name  (please  print)

SIGNED for
WESTERN GOLDFIELDS, INC.
by:

/s/John P. Ryan
-------------------------------------------
Signature

/s/  Secretary
-------------------------------------------
Title

John P. Ryan
-------------------------------------------
Name  (please  print)

SIGNED for
CALUMET MINING COMPANY
by:

/s/John P. Ryan
-------------------------------------------
Signature

/s/  Secretary
-------------------------------------------
Title

John P. Ryan
-------------------------------------------
Name  (please  print)

--------------------------------------------------------------------------------
                                                                          page 3
<PAGE>
SIGNED for
RMB INTERNATIONAL (DUBLIN) LIMITED
by:

/s/ D. Cottzee                           /s/ S. Duplessis
------------------------------           ----------------------------------
Authorised Signatory                     Authorised Signatory

D. Cottzee                               S. Duplessis
------------------------------           ----------------------------------
Name (please print)                      Name (please print)

SIGNED  for
RMB  RESOURCES  LIMITED
by:

/s/ M.L. Shonfeld                        /s/ Robert Gray
------------------------------           ----------------------------------
Director                                 Director/Secretary

M.L.  Shonfeld                           Robert  Gray
------------------------------           ----------------------------------
Name (please print)                      Name (please print)

--------------------------------------------------------------------------------
                                                                          page 4
<PAGE>EXHIBIT 10.3

                               SECURITY AGREEMENT
                         (All Personal Property Assets)

     THIS SECURITY AGREEMENT, dated as of November 5, 2003 (the "Agreement"),
between WESTERN MESQUITE MINES, INC., a corporation organized under the laws of
the State of Nevada and having an address of 7000 Independence Parkway, Suite
160 #135, Plano, Texas 75025 ("WMMI" or "Debtor"), and RMB INTERNATIONAL
(DUBLIN) LIMITED, a corporations organized under the laws of the Republic of
Ireland and having an address of 28 Shelbourne Road, Ballsbridge, Dublin 4
Ireland, and its agent, RMB RESOURCES LIMITED, a corporation organized under the
laws of England and having an address of Level 3, One Mitre Square, London EC3A
5AN, United Kingdom (collectively, the "Secured Party").

     WHEREAS, Debtor has entered into a Facility Agreement made November 5, 2003
(as amended and in effect from time to time, the "Facility Agreement"), with the
Secured Party, pursuant to which the Secured Party has agreed to make loans to
Debtor in accordance with the terms and conditions contained in the Facility
Agreement; and

     WHEREAS, WMMI and Calumet Mining Company, an Idaho corporation having an
address of 7000 Independence Parkway, Suite 160 #135, Plano, Texas 75025 ("CMC")
are wholly-owned subsidiaries of Western Goldfields, Inc., an Idaho corporation
having an address of 7000 Independence Parkway, Suite 160 #135, Plano, Texas
75025 ("WGI"); and

     WHEREAS, WGI and CMC have entered into a Deed of Guarantee and Indemnity
made November 5, 2003 (as amended and in effect from time to time, the
"Guarantee"), with the Secured Party, pursuant to which WGI and CMC have agreed
to perform all of the obligations of WMMI under the Facility Agreement in
certain events, including without limitation any default of WMMI's duties and
obligations under the Facility Agreement; and

     WHEREAS, the parties have entered into the Facility Agreement and Guarantee
in connection with Debtor's acquisition of the Mesquite Mine in Imperial County,
California; and

     WHEREAS, it is a condition precedent to the Secured Party's making any
loans to the Debtor under the Facility Agreement that the Debtor execute and
deliver to the Secured Party a security agreement in substantially the form
hereof; and

     WHEREAS, the Debtor wishes to grant a security interest in favor of the
Secured Party as herein provided;

     NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1.     DEFINITIONS.  All capitalized terms used herein without definitions shall
       -----------
have the meaning given to them in the Facility Agreement.  All terms defined in
the Uniform Commercial Code of Colorado (Colorado Revised Statutes Sec. 4-9-101
et seq., the "Code") and used herein shall have

<PAGE>
the same meanings in this Agreement as specified in the Code. However, if a term
is defined in Article 9 of the Code differently than in another Article of the
Code, the term shall have the meaning specified in Article 9. The term
"Obligations," as used herein, means all of the indebtedness, obligations and
liabilities of the Debtor to the Secured Party, individually or collectively,
whether direct or indirect, joint or several, absolute or contingent, due or to
become due, now existing or hereafter arising under or in respect of the
Facility Agreement, or any other instruments or agreements executed and
delivered pursuant thereto or in connection therewith, or this Agreement, and
shall specifically include all future advances made by the Secured Party for
taxes, levies, insurance and repairs to or maintenance of the Collateral. The
term "Default," as used herein, means the failure of the Debtor to pay or
perform any of the Obligations as and when due to be paid or performed under the
terms of the Facility Agreement or this Agreement, and shall include, without
limitation, those events of Default specified in Section 12 of the Facilities
Agreement.

2.     GRANT OF SECURITY INTEREST.  To secure the payment and performance in
       --------------------------
full of all of the Obligations, the Debtor hereby grants to the Secured Party a
security interest in and so pledges and assigns to the Secured Party the
following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all additions and accessions
thereto and all substitutions therefore, and all proceeds and products thereof
(all of the same being hereinafter called the "Collateral"):  all personal and
fixture property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts, deposit accounts, chattel
paper (whether tangible or electronic), letter-of-credit rights (whether or not
the letter of credit is evidenced by a writing), commercial tort claims (whether
pending now or arising in the future), securities and all other investment
property, supporting obligations, any other contract rights or rights to the
payment of money, insurance claims and proceeds, all general intangibles
(including all payment intangibles), and all as-extracted collateral. The
Secured Party acknowledges that the attachment of its security interest in any
future or additional commercial tort claim as original collateral is subject to
the Debtor's compliance with Section 4.7.  The Collateral shall specifically
include those items specifically identified on Exhibit A attached hereto and by
this reference incorporated herein; provided, however, that the identification
of specific Collateral on Exhibit A shall not be construed to exclude any
property, right or interest not specifically identified on Exhibit A, including
those hereafter acquired, from inclusion in the "Collateral" secured hereby.

3.     AUTHORIZATION TO FILE FINANCING STATEMENTS.  The Debtor hereby
       ------------------------------------------
irrevocably authorizes the Secured Party at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of the Debtor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Code or the Uniform Commercial Code of any
other such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail; and (b) provide any other information required by Part 5 of
Article 9 of the Code, or the Uniform Commercial Code of any other such
jurisdiction, for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether the Debtor is an organization, the
type of organization and any organizational identification number issued to the
Debtor, and (ii) in the case of a financing statement filed as a fixture filing
or indicating Collateral as as-extracted collateral, a sufficient description of
real

<PAGE>
property to which the Collateral relates. The Debtor agrees to furnish any such
information to the Secured Party promptly upon the Secured Party's request. The
Debtor also ratifies its authorization for the Secured Party to have filed in
any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof.

4.     OTHER ACTIONS.  To further the attachment, perfection and first priority
       -------------
of, and the ability of the Secured Party to enforce, the Secured Party's
security interest in the Collateral, and without limitation on the Debtor's
other obligations in this Agreement, the Debtor agrees, in each case at the
Debtor's expense, to take the following actions with respect to the following
Collateral:

     4.1.     PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER.  If the Debtor shall
at any time hold or acquire any promissory notes or tangible chattel paper, the
Debtor shall forthwith endorse, assign and deliver the originals of the same to
the Secured Party, accompanied by such instruments of transfer or assignment
duly executed in blank as the Secured Party may from time to time specify.

     4.2.     DEPOSIT ACCOUNTS.  For each deposit account that the Debtor at any
time opens or maintains, the Debtor shall, at the Secured Party's request and
option, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (a) cause the depositary bank to comply at any time with
instructions from the Secured Party to such depositary bank directing the
disposition of funds from time to time credited to such deposit account, without
further consent of the Debtor; or (b) arrange for the Secured Party to become
the customer of the depositary bank with respect to the deposit account, with
the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such deposit account. The provisions of
this paragraph shall not apply to (i) any deposit account for which the Debtor,
the depositary bank and the Secured Party have entered into a cash collateral
agreement specially negotiated among the Debtor, the depositary bank and the
Secured Party for the specific purpose set forth therein; (ii) a deposit account
for which the Secured Party is the depositary bank and is in automatic control;
and (iii) deposit accounts specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of the
Debtor's salaried employees.

     4.3.     INVESTMENT PROPERTY.  If the Debtor shall at any time hold or
acquire any certificated securities, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of
transfer or assignment duly executed in blank as the Secured Party may from time
to time specify. If any securities now or hereafter acquired by the Debtor are
uncertificated and are issued to the Debtor or its nominee directly by the
issuer thereof, the Debtor shall immediately notify the Secured Party thereof
and, at the Secured Party's request and option, pursuant to an agreement in form
and substance satisfactory to the Secured Party, either (a) cause the issuer to
agree to comply with instructions from the Secured Party as to such securities,
without further consent of the Debtor or such nominee, or (b) arrange for the
Secured Party to become the registered owner of the securities.  If any
securities, whether certificated or uncertificated, or other investment property
now or hereafter acquired by the Debtor are held by the Debtor or its nominee
through a securities intermediary or commodity intermediary, the Debtor shall
immediately notify the Secured Party thereof and, at the Secured Party's request
and option, pursuant to an agreement in form and substance

<PAGE>
satisfactory to the Secured Party, either (i) cause such securities intermediary
or (as the case may be) commodity intermediary to agree to comply with
entitlement orders or other instructions from the Secured Party to such
securities intermediary as to such securities or other investment property, or
(as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Secured Party to such commodity intermediary, in
each case without further consent of the Debtor or such nominee, or (ii) in the
case of financial assets or other investment property held through a securities
intermediary, arrange for the Secured Party to become the entitlement holder
with respect to such investment property, with the Debtor being permitted, only
with the consent of the Secured Party, to exercise rights to withdraw or
otherwise deal with such investment property. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Secured Party is the securities intermediary.

     4.4.     COLLATERAL IN THE POSSESSION OF A BAILEE.  If any Collateral is at
any time in the possession of a bailee, the Debtor shall promptly notify the
Secured Party thereof and, at the Secured Party's request and option, shall
promptly obtain an acknowledgement from the bailee, in form and substance
satisfactory to the Secured Party, that the bailee holds such Collateral for the
benefit of the Secured Party, and that such bailee agrees to comply, without
further consent of the Debtor, with instructions from the Secured Party as to
such Collateral.

     4.5.     ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS.  If the Debtor
at any time holds or acquires an interest in any electronic chattel paper or any
"transferable record," as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, the Debtor shall promptly notify the Secured Party thereof and, at
the request and option of the Secured Party, shall take such action as the
Secured Party may reasonably request to vest in the Secured Party control, under
Section 9-105 of the Uniform Commercial Code, of such electronic chattel paper
or control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record.  The Secured Party agrees with the Debtor that the Secured
Party will arrange, pursuant to procedures satisfactory to the Secured Party and
so long as such procedures will not result in the Secured Party's loss of
control, for the Debtor to make alterations to the electronic chattel paper or
transferable record permitted under Section 9-105 of the Code or, as the case
may be, Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a
party in control to make without loss of control, unless a Default has occurred
and is continuing or would occur after taking into account any action by the
Debtor with respect to such electronic chattel paper or transferable record.

     4.6.     LETTER-OF-CREDIT RIGHTS.  If the Debtor is at any time a
beneficiary under a letter of credit, the Debtor shall promptly notify the
Secured Party thereof and, at the request and option of the Secured Party, the
Debtor shall, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (i) arrange for the issuer and any confirmer or other
nominated person of such letter of credit to consent to an assignment to the
Secured Party of the proceeds of the letter of credit, or (ii) arrange for the
Secured Party to become the transferee

<PAGE>
beneficiary of the letter of credit, with the Secured Party agreeing, in each
case, that the proceeds of the letter to credit are to be applied as provided in
the Facility Agreement.

     4.7     COMMERCIAL TORT CLAIMS.  If the Debtor shall at any time hold or
acquire a commercial tort claim, the Debtor shall immediately notify the Secured
Party in a writing signed by the Debtor of the particulars thereof and grant to
the Secured Party in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to the Secured Party.

     4.8.     OTHER ACTIONS AS TO ANY AND ALL COLLATERAL.  The Debtor further
agrees, at the request and option of the Secured Party, to take any and all
other actions the Secured Party may determine to be necessary or useful for the
attachment, perfection and first priority of, and the ability of the Secured
Party to enforce, the Secured Party's security interest in any and all of the
Collateral, including without limitation (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Code, to the extent, if any, that the Debtor's signature thereon is required
therefor; (b) causing the Secured Party's name to be noted as secured party on
any certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the Secured Party to
enforce, the Secured Party's security interest in such Collateral; (c) complying
with any provision of any statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of the Secured Party to
enforce, the Secured Party's security interest in such Collateral; (d) obtaining
governmental and other third party waivers, consents and approvals in form and
substance satisfactory to Secured Party, including, without limitation, any
consent of any licensor, lessor or other person obligated on Collateral; (e)
obtaining waivers from mortgagees and landlords in form and substance
satisfactory to the Secured Party; and (f) taking all actions under any earlier
versions of the Uniform Commercial Code or under any other law, as reasonably
determined by the Secured Party to be applicable in the Code or the Uniform
Commercial Code of any other jurisdiction, including any foreign jurisdiction.

5.     RELATION TO OTHER SECURITY DOCUMENTS.  The provisions of this Agreement
       ------------------------------------
supplement the provisions of any real estate mortgage or deed of trust granted
by the Debtor to the Secured Party which secures the payment or performance of
any of the Obligations.  Nothing contained in any such real estate mortgage or
deed of trust shall derogate from any of the rights or remedies of the Secured
Party hereunder.  In addition to the provisions of this Agreement being so read
and construed with any such mortgage or deed of trust, the provisions of this
Agreement shall be read and construed with the other Security Documents referred
to below in the manner so indicated.  Concurrently herewith, the Debtor is
executing and delivering to the Secured Party a Pledge Agreement pursuant to
which WGI is pledging to the Secured Party all the shares of the capital stock
or other securities of WMMI and CMC.  Such pledge shall be governed by the terms
of such Pledge Agreement, and not by the terms of this Agreement.

6.     REPRESENTATIONS AND WARRANTIES CONCERNING DEBTOR'S LEGAL STATUS.  The
       ---------------------------------------------------------------
Debtor has previously or concurrently herewith delivered to the Secured Party a
certificate signed by the Debtor and entitled "Perfection Certificate" (the
"Perfection Certificate").  The Debtor represents and warrants to the Secured
Party as follows:  (a) the Debtor's exact legal name is that indicated on the
Perfection Certificate and on the signature page hereof; (b) the Debtor is an
Organization

<PAGE>
of the type, and is organized in the jurisdiction set forth in the Perfection
Certificate; (c) the Perfection Certificate accurately sets forth the Debtor's
organizational identification number or accurately states that the Debtor has
none; (d) the Perfection Certificate accurately sets forth the Debtor's place of
business or, if more than one, its chief executive office, as well as the
Debtor's mailing address, if different; (e) all other information set forth on
the Perfection Certificate pertaining to the Debtor is accurate and complete,
and (f) that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by the Debtor.

7.     COVENANTS CONCERNING DEBTOR'S LEGAL STATUS.  The Debtor covenants with
       ------------------------------------------
the Secured Party as follows:  (a) without providing at least 30 days prior
written notice to the Secured Party, the Debtor will not change its name, its
place of business or, if more than one, chief executive office, or its mailing
address or organizational identification number if it has one; (b) if the Debtor
does not have an organizational identification number and later obtains one, the
Debtor shall forthwith notify the Secured Party of such organizational
identification number; and (c) the Debtor will not change its type of
organization, jurisdiction of organization or other legal structure.

8.     REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL, ETC.  The Debtor
       ---------------------------------------------------------
further represents and warrants to the Secured Party as follows:  (a) the Debtor
is the owner of or has other rights in or power to transfer the Collateral, free
from any right or claim of any person or any adverse lien, security interest or
other encumbrance, except for the security interest created by this Agreement
and other liens permitted by the Facility Agreement, if any; (b) none of the
account debtors or other persons obligated on any of the Collateral is a
governmental authority covered by the Federal Assignment of Claims Act or like
federal, state or local statute or rule in respect of such Collateral; (c) the
Debtor holds no commercial tort claim except as indicated on the Perfection
Certificate; and (d) the Debtor has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances; (e) all other information set forth on the
Perfection Certificate pertaining to the Collateral is accurate and complete;
and (f) that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by the Debtor.

9.     COVENANTS CONCERNING COLLATERAL, ETC.  The Debtor further covenants with
       ------------------------------------
the Secured Party as follows:  (a) the Collateral, to the extent not delivered
to the Secured Party pursuant to Section 4, will be kept at those locations
listed on the Perfection Certificate and the Debtor will not remove the
Collateral from such locations, without providing at least thirty days prior
written notice to the Secured Party; (b) the Debtor shall use the Collateral
exclusively in connection with Debtor's conduct of mining, leaching and
processing operations located at the Mesquite Mine in Imperial County,
California, and in connection with the marketing and sale of products derived
therefrom, except to the extent necessary to use the Collateral in other
locations in connection with such operations, marketing and sales, or except as
permitted by the Facility Agreement; (c) except for the security interest herein
granted and liens permitted by the Facility Agreement, if any, the Debtor shall
be the owner of or have other rights in the Collateral free from any right or
claim of any other person, lien, security interest or other encumbrance, and the
Debtor shall defend the same against all claims and demands of all persons at
any time claiming the same or

<PAGE>
any interests therein adverse to the Secured Party; (d) the Debtor shall not
pledge, mortgage or create, or suffer to exist any right of any person in or
claim by any person to the Collateral, or any security interest, lien or
encumbrance in the Collateral in favor of any person, other than the Secured
Party, except for liens permitted by the Facility Agreement, if any; (e) the
Debtor will keep the Collateral in good order and repair and will not use the
same in violation of law or any policy of insurance thereon; (f) as provided in
the Facility Agreement, the Debtor will permit the Secured Party, or its
designee, to inspect the Collateral at any reasonable time, wherever located;
(g) the Debtor will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement; (h)
the Debtor will continue to operate its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances; and (i) the Debtor will not sell or otherwise dispose,
or offer to sell or otherwise dispose, of the Collateral or any interest therein
except for (i) sales of inventory and licenses of general intangibles in the
ordinary course of business, and (ii) so long as no Default has occurred and is
continuing, sales or other dispositions of obsolescent items of equipment
consistent with past practices, and any other dispositions permitted by the
Facility Agreement.

10.     INSURANCE.  The Debtor will obtain and maintain with financially sound
        ---------
and reputable insurers insurance of such types, in such amounts, and on such
terms, as shall be required by the Facility Agreement.

11.     COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
        ----------------------------------------------------------

     11.1.     EXPENSES INCURRED BY SECURED PARTY.  In the Secured Party's
discretion, if the Debtor fails to do so, the Secured Party may discharge taxes
and other encumbrances at any time levied or placed on any of the Collateral,
maintain any of the Collateral, make repairs thereto and pay any necessary
filing fees or insurance premiums. The Debtor agrees to reimburse the Secured
Party on demand for all expenditures so made. The Secured Party shall have no
obligation to the Debtor to make any such expenditures, nor shall the making
thereof be construed as the waiver or cure of any Default.

     11.2.     SECURED PARTY'S OBLIGATIONS AND DUTIES.  Anything herein to the
contrary notwithstanding, the Debtor shall remain obligated and liable under
each contract or agreement comprised in the Collateral to be observed or
performed by the Debtor thereunder. The Secured Party shall not have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Secured Party of any payment
relating to any of the Collateral, nor shall the Secured Party be obligated in
any manner to perform any of the obligations of the Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times.  The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in its

<PAGE>
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
such Collateral in the same manner as the Secured Party deals with similar
property for its own account.

12.     SECURITIES AND DEPOSITS.  The Secured Party may at any time following
        -----------------------
and during the continuance of a Default, at its option, transfer to itself or
any nominee any securities constituting Collateral, receive any income thereon
and hold such income as additional Collateral or apply it to the Obligations.
Whether or not any Obligations are due, the Secured Party may following and
during the continuance of a Default demand, sue for, collect, or make any
settlement or compromise which it deems desirable with respect to the
Collateral.  Regardless of the adequacy of Collateral or any other security for
the Obligations, any deposits or other sums at any time credited by or due from
the Secured Party to the Debtor may at any time be applied to or set off against
any of the Obligations then due and owing.

13.     NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
        --------------------------------------------------------------
COLLATERAL.  If a Default shall have occurred and be continuing, the Debtor
----------
shall, at the request and option of the Secured Party, notify account debtors
and other persons obligated on any of the Collateral of the security interest of
the Secured Party in any account, chattel paper, general intangible, instrument
or other Collateral and that payment thereof is to be made directly to the
Secured Party or to any financial institution designated by the Secured Party as
the Secured Party's agent therefor, and the Secured Party may itself, if a
Default shall have occurred and be continuing, without notice to or demand upon
the Debtor, so notify account debtors and other persons obligated on Collateral.
After the making of such a request or the giving of any such notification, the
Debtor shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Debtor as trustee
for the Secured Party without commingling the same with other funds of the
Debtor and shall turn the same over to the Secured Party in the identical form
received, together with any necessary endorsements or assignments.  The Secured
Party shall apply the proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Secured Party to
the Obligations, such proceeds to be immediately credited after final payment in
cash or other immediately available funds of the items giving rise to them.

14.     POWER OF ATTORNEY.
        -----------------

     14.1.     APPOINTMENT AND POWERS OF SECURED PARTY.  The Debtor hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Debtor or in the Secured Party's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of the Debtor, without notice to or assent by the Debtor, to do the
following:

          (a)     upon the occurrence and during the continuance of a Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise dispose of or deal with any of the Collateral in such manner as is
consistent with the Code and as fully and completely as though the Secured Party
were the absolute owner thereof for all purposes, and to do, at the

<PAGE>
Debtor's expense, at any time, or from time to time, all acts and things which
the Secured Party deems necessary or useful to protect, preserve or realize upon
the Collateral and the Secured Party's security interest therein, in order to
effect the intent of this Agreement, all at least as fully and effectively as
the Debtor might do, including, without limitation, (i) the filing and
prosecuting of registration and transfer applications with the appropriate
federal, state, local or other agencies or authorities with respect to
trademarks, copyrights and patentable inventions and processes; (ii) upon
written notice to the Debtor, the exercise of voting rights with respect to
voting securities, which rights may be exercised, if the Secured Party so
elects, with a view to causing the liquidation of assets of the issuer of any
such securities; and (iii) the execution, delivery and recording, in connection
with any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to such
Collateral; and

          (b)     to the extent that the Debtor's authorization given in Section
3 is not sufficient, to file such financing statements with respect hereto, with
or without the Debtor's signature, or a photocopy of this Agreement in
substitution for a financing statement, as the Secured Party may deem
appropriate and to execute in the Debtor's name such financing statements and
amendments thereto and continuation statements which may require the Debtor's
signature.

     14.2.     RATIFICATION BY DEBTOR.  To the extent permitted by law, the
Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

     14.3.     NO DUTY ON SECURED PARTY.  The powers conferred on the Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose any duty upon it to exercise any such powers.  The Secured Party
shall be accountable only for the amounts that it actually receives as a result
of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Debtor for any act or
failure to act, except for the Secured Party's own gross negligence or willful
misconduct.

15.     RIGHTS AND REMEDIES.  If a Default shall have occurred and be
        -------------------
continuing, the Secured Party, without any other notice to or demand upon the
Debtor, shall have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Code and any additional rights and remedies which may be
provided to a secured party in any jurisdiction in which Collateral is located,
including, without limitation, the right to take possession of the Collateral,
and for that purpose the Secured Party may, so far as the Debtor can give
authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom.  The Secured Party may in its discretion
require the Debtor to assemble all or any part of the Collateral at such
location or locations within the jurisdiction(s) of the Debtor's principal
office(s) or at such other locations as the Secured Party may reasonably
designate.  Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, the Secured
Party shall give to the Debtor at least five Business Days prior written notice
of the time and place of any public sale of Collateral or of the time after
which any private sale or any other intended disposition is to be made.  The
Debtor hereby acknowledges that five Business Days prior written notice of such
sale or sales shall be reasonable notice. In addition, the Debtor

<PAGE>
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Secured Party's rights and remedies hereunder,
including, without limitation, its right following a Default to take immediate
possession of the Collateral and to exercise its rights and remedies with
respect thereto.

16.     STANDARDS FOR EXERCISING RIGHTS AND REMEDIES.  To the extent that
        --------------------------------------------
applicable law imposes duties on the Secured Party to exercise remedies in a
commercially reasonable manner, the Debtor acknowledges and agrees that it is
not commercially unreasonable for the Secured Party:  (a) to fail to incur
expenses reasonably deemed significant by the Secured Party to prepare
Collateral for disposition or otherwise to fail to complete raw material or work
in process into finished goods or other finished products for disposition; (b)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of; (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral; (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists; (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature; (f) to contact other persons, whether
or not in the same business as the Debtor, for expressions of interest in
acquiring all or any portion of the Collateral; (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature; (h) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets; (i) to dispose of assets in
wholesale rather than retail markets; (j) to disclaim disposition warranties;
(k) to purchase insurance or credit enhancements to insure the Secured Party
against risks of loss, collection or disposition of Collateral or to provide to
the Secured Party a guaranteed return from the collection or disposition of
Collateral; (l) to the extent deemed appropriate by the Secured Party, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition of
any of the Collateral; or (m) do any other thing which is permitted by the terms
of the Facility Agreement.  The Debtor acknowledges that the purpose of this
Section 16 is to provide non-exhaustive indications of what actions or omissions
by the Secured Party would fulfill the Secured Party's duties under the Code or
other Colorado law, or the law of any other relevant jurisdiction, in the
Secured Party's exercise of remedies against the Collateral and that other
actions or omissions by the Secured Party shall not be deemed to fail to fulfill
such duties solely on account of not being indicated in this Section 16.
Without limitation upon the foregoing, nothing contained in this Section 16
shall be construed to grant any rights to the Debtor or to impose any duties on
the Secured Party that would not have been granted or imposed by this Agreement
or by applicable law in the absence of this Section 16.

17.     NO WAIVER BY SECURED PARTY, ETC.  The Secured Party shall not be deemed
        -------------------------------
to have waived any of its rights or remedies in respect of the Obligations or
the Collateral unless such waiver shall be in writing and signed by the Secured
Party.  No delay or omission on the part of the Secured Party in exercising any
right or remedy shall operate as a waiver of such right or remedy or any other
right or remedy.  A waiver on any one occasion shall not be construed as a bar
to or waiver of any right or remedy on any future occasion.  All rights and
remedies of the

<PAGE>
Secured Party with respect to the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as the Secured Party deems expedient.

18.     SURETYSHIP WAIVERS BY DEBTOR.  The Debtor waives demand, notice,
        ----------------------------
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description.  With respect to
both the Obligations and the Collateral, the Debtor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable.  The Secured Party
shall have no duty as to the collection or protection of the Collateral or any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 11.2.  The Debtor further waives any and all other
suretyship defenses.

19.     MARSHALING.  The Secured Party shall not be required to marshal any
        ----------
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising.  To the extent that it lawfully may, the Debtor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Party's rights and
remedies under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Debtor hereby
irrevocably waives the benefits of all such laws.

20.     PROCEEDS OF DISPOSITIONS; EXPENSES.  The Debtor shall pay to the Secured
        ----------------------------------
Party on demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Secured Party in protecting, preserving
or enforcing the Secured Party's rights and remedies under or in respect of any
of the Obligations or any of the Collateral.  After deducting all of said
expenses, the residue of any proceeds of collection or sale or other disposition
of the Collateral shall, to the extent actually received in cash, be applied to
the payment of the Obligations in such order or preference as the Secured Party
may determine or in such order or preference as is provided in the Facility
Agreement, proper allowance and provision being made for any Obligations not
then due.  Upon the final payment and satisfaction in full of all of the
Obligations and after making any payments required by Sections 9-608(a)(1)(C) or
9-615(a)(3) of the Code, any excess shall be returned to the Debtor.  In the
absence of final payment and satisfaction in full of all of the Obligations, the
Debtor shall remain liable for any deficiency.

<PAGE>
21.     OVERDUE AMOUNTS.  Until paid, all amounts due and payable by the Debtor
        ---------------
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest set forth in the
Facility Agreement.

22.     GOVERNING LAW; CONSENT TO JURISDICTION.  THIS AGREEMENT SHALL BE
        --------------------------------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO.  The Debtor agrees that any action or claim arising out of, or any
dispute in connection with, this Agreement, any rights, remedies, obligations,
or duties hereunder, or the performance or enforcement hereof or thereof, may be
brought in the courts of the State of Colorado or any federal court sitting
therein and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the Debtor by mail at the
address specified for notices in the Facility Agreement.  The Debtor hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit is brought in an inconvenient court.

23.     WAIVER OF JURY TRIAL.  THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
        --------------------
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR THE
PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.  Except as prohibited by law, the
Debtor waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.  The Debtor:  (a) certifies that neither the Secured Party nor any
representative, agent or attorney of the Secured Party has represented,
expressly or otherwise, that the Secured Party would not, in the event of
litigation, seek to enforce the foregoing waivers or other waivers contained in
this Agreement; and (ii) acknowledges that, in entering into the Facility
Agreement and the other Transaction Documents to which the Secured Party is a
party, the Secured Party is relying upon, among other things, the waivers and
certifications contained in this Section 23.

24.     MISCELLANEOUS.  The headings of each section of this Agreement are for
        -------------
convenience only and shall not define or limit the provisions thereof.  This
Agreement and all rights and obligations hereunder shall be binding upon the
Debtor and its respective successors and assigns, and shall inure to the benefit
of the Secured Party and its successors and assigns.  If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein.  The Debtor acknowledges
receipt of a copy of this Agreement.

     IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused
this Agreement to be duly executed as of the date first above written.

WESTERN MESQUITE MINES, INC.

By:  /s/ John P. Ryan
   -------------------------
Title:  Secretary
      ----------------------
Printed Name: John P. Ryan
             ---------------

<PAGE>

ACCEPTED:

RMB INTERNATIONAL (DUBLIN)
LIMITED

By: /s/ D. Coetzee                       By: /s/ S. Duplessis
   -------------------------------          -----------------
Title:  Authorized Signatory             Title: Authorized Signatory
      ----------------------                    --------------------
Printed Name: D. Coetzee                 Printed Name: S. Duplessis
             -----------                              -------------

RMB RESOURCES LIMITED, AGENT

By: /s/ Robert Gray
   ----------------
Title:  Director
      ----------
Printed Name: Robert Gray
             ------------

Western Goldfields, Inc. and Calumet Mining Company, Guarantors, hereby consent
and agree to the terms of the foregoing Security Agreement:

WESTERN GOLDFIELDS, INC.                 CALUMET MINING COMPANY

By:  /s/ John P. Ryan                    By:  /s/ John P. Ryan
   ------------------------------           -------------------------------
Title:  Secretary                        Title:  Secretary
      ---------------------------              ----------------------------
Printed Name: John P. Ryan               Printed Name: John P. Ryan
             --------------------                     ---------------------

<PAGE>

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