Document:

SECURITIES EXCHANGE AGREEMENT

 

dated effective as of June 10, 2015

by and among

ROYAL ENERGY RESOURCES, INC.

 

and

 

BLUE GROVE COAL, LLC

 

and

 

IAN GANZER and GARY GANZER

 

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SECURITIES EXCHANGE AGREEMENT

 

THIS SECURITIES
EXCHANGE AGREEMENT (the “Agreement”), dated effective as of June 10, 2015 (the “Effective
Date”), is entered into by and among Blue Grove Coal, LLC, a West Virginia limited liability company (“Blue
Grove” or the “Company”) and Ian Ganzer and Gary Ganzer, the members of Blue Grove (the
“Members”), at 304 Waitman Street, Morgantown, West Virginia 26501, and Royal Energy Resources, Inc.,
a Delaware corporation (“Royal”), at 56 Broad Street, Suite 2, Charleston, South Carolina 29401. Certain
capitalized terms used in this Agreement are defined in Section 8.3 hereof.

 

W I T N E S S E T H:

 

WHEREAS, as of the Effective
Date, the Members were the sole owners of all outstanding membership interests in the Company (the “Member Interests”);

 

WHEREAS, the Company is
the exclusive operator, duly licensed and permitted by the West Virginia Department of Environmental Protection (the “WVDEP”),
of that certain surface coal mine, located in the Bradshaw Area of the County of McDowell, State of West Virginia, encompassing
acreage leased or owned by the permittee, G.S. Energy, LLC (“GS Energy”), with an estimated 28.7 millions
tons of recoverable coal (the “Mine”);

 

WHEREAS, Closing, as defined
herein, shall be contingent on the execution of (i) a definitive agreement for the purchase of GS Energy, such that Royal shall
be the owner and operator of the Mine (the “GS Agreement”); and (ii) a management agreement with
a Member, Ian Ganzer, or an entity selected by Member, for the continual operations of the Mine in its ordinary course (the “Management
Agreement”);

 

WHEREAS, Royal proposes
to acquire all of the Member Interests in exchange for (i) the issuance of shares of its common stock, $0.00001 par value, with
an aggregate market value of $1,900,000 (the “Exchange”);

 

WHEREAS, the Boards of
Directors of Royal and the Members of the Company have determined that it is desirable to effect a plan of reorganization pursuant
to 26 U.S.C. §368(a)(1)(B).

 

NOW, THEREFORE, in consideration
of the foregoing premises and the mutual covenants, agreements, representations and warranties contained herein, the parties hereto
agree as follows:

 

ARTICLE I 

ISSUANCE AND EXCHANGE OF SECURITIES

 

1.1Issuance
and Exchange. At the Closing (as defined in Section 2.1 below), to be held in accordance with the provisions of Article II
below and subject to the terms and agreements set forth herein, Royal shall issue to the Members 350,000 shares of Royal
common stock, $0.00001 par value (the “Royal Stock”).

 

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ARTICLE II 

CLOSING

 

2.1Closing.
The consummation of the Exchange by Royal and the Members (the “Closing”) shall occur at a time and place
selected by Royal, subject to the satisfaction or waiver of all of the conditions to Closing, or at such other place as the parties
may agree upon, but in no event later than June 5, 2015 (the “Closing Date”).

 

2.2Deliveries.

 

		(a)	Royal shall deliver, the certificate(s) for the shares of Royal Stock
being exchanged, it being understood that the certificates will be prepared by Royal’s transfer agent and delivered as per
the instructions of the Members;

 

		(b)	Royal shall deliver an employment agreement for the Member, Ian Ganzer,
for a period of two (2) years, upon terms and conditions agreed to among the parties, including but not limited to: (i) gross compensation
in the amount of $250,000.00, of which $100,000 shall be a cash signing bonus and the remainder shall be shares of common stock
with a market value of $150,000 which shall be subject to a 24 month, pro rata vesting requirement; and (ii) the appointment to
the position of Chief Operating Officer of Royal (the “Employment Agreement”), the form of which is attached
hereto and incorporated herein by this reference as Exhibit A;

 

		(c)	Royal shall deliver a Management Agreement for the Member, Ian Ganzer,
or an entity controlled by Mr. Ganzer, to manage the Company for a period of two (2) years, upon terms and conditions agreed to
among the parties, the form of which is attached hereto and incorporated herein by this reference as Exhibit B;

 

		(d)	Blue Grove shall deliver an amendment to the operating agreement
for the Company (the “OA Amendment”) (i) substituting Royal for the Members as the sole member thereof;
and (ii) reconstituting the Board of Directors or Managers, however the case may be, to two (2) members, to which the Members and
Royal shall each be granted a nominee, which OA Amendment shall be attached hereto and incorporated herein as Exhibit C;

 

		(e)	Blue Grove shall deliver a copy of the operator agreement, or its
equivalent, with GS Energy, providing for its exclusive control of operations at the Mine (the “Operator Agreement”),
which Operator Agreement shall be attached hereto and incorporated herein as Exhibit D;

 

		(f)	Blue Grove shall deliver to Royal true and correct copies of all
the books and records of the Company.

 

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ARTICLE III 

REPRESENTATIONS AND WARRANTIES

OF THE MEMBERS AND THE COMPANY

 

The Company and the Members,
jointly and severally, represents and warrant to Royal as follows (it being acknowledged that Royal is entering into this Agreement
in material reliance upon each of the following representations and warranties, and that the truth and accuracy of each, as evidenced
by their signature set forth on the signature page, constitutes a condition precedent to the obligations of Royal hereunder):

 

3.1Ownership of
Member Interests. The Members are the lawful owners of the Member Interests to be transferred to Royal free and clear of all
preemptive or similar rights, Liens, and the delivery to Royal of the Member Interests pursuant to the provisions of this Agreement
will transfer to Royal valid title thereto, free and clear of all Liens.

 

3.2Organization,
Standing and Power. The Company is duly organized, validly existing and in good standing under the laws of the State of West
Virginia and has the requisite corporate power and authority to carry on its business as now being conducted. The Company is duly
qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure
to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect. For purposes of this
Agreement, the term “Blue Grove Material Adverse Effect” means any Material Adverse Effect with respect
to the Member or the Company, taken as a whole, or any change or effect that adversely, or is reasonably expected to adversely,
affect the ability of the Members or the Company to consummate the transactions contemplated by this Agreement in any material
respect or materially impairs or delays the Company’s ability to perform its obligations hereunder.

 

3.3Authority to
Execute and Perform Agreement; No Breach. The Members and the Company have the full legal right and power and all authority
and approval required to enter into, execute and deliver this Agreement, and to sell, assign, transfer and convey the Member Interests
and to perform fully the respective obligations hereunder. This Agreement has been duly executed and delivered by the Member and
the Company, assuming due execution and delivery by, and enforceability against, Royal, constitutes the valid and binding obligation
of the Members and Company enforceable in accordance with its terms, subject to the qualifications that enforcement of the rights
and remedies created hereby is subject to (a) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other laws of general application affecting the rights and remedies of creditors, and (b) general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at law). No approval or consent of, or filing with, any
Governmental Entity, and no approval or consent of, or filing, with any other Person is required to be obtained by the Member or
the Company or in connection with the execution and delivery by the Members and the Company of this Agreement and consummation
and performance by them of the transactions contemplated hereby.

 

3.4No Violations.
The execution, delivery and performance of this Agreement by the Members and the Company and the consummation of the transactions
contemplated hereby, in accordance with the terms and conditions hereof, will not:

 

		(a)	violate, conflict with or result in the breach of any of the terms
of, or constitute (or with notice or lapse of time or both would constitute) a default under, any contract, lease, agreement or
other instrument or obligation to which the Members or the Company is a party;

 

		(b)	violate any order, judgment, injunction, award or decree of any court,
arbitrator, governmental or regulatory body, by which the Members or the Company or the securities, assets, properties or business
of the Members or the Company is bound; or

 

		(c)	violate any statute, law or regulation to which the Members or the
Company is subject.

 

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3.5Securities Matters.
The Members hereby represents, warrants and covenant to Royal as follows:

 

		(a)	The Members have been advised that the Royal Stock has not been registered
under the Securities Act, or any state securities act in reliance on exemptions therefrom.

 

		(b)	The Members agree that the certificate or certificates representing
the Royal Stock will be inscribed with substantially the following legend:
	 	 	 
	 	 	“The securities represented
by this certificate have not been registered under the Securities Act of 1933. The securities have been acquired for investment
and may not be sold, transferred or assigned in the absence of an effective registration statement for these securities under the
Securities Act of 1933 or an opinion of counsel acceptable to the issuer of the securities represented by this certificate that
registration is not required under said Act.”

  

		(c)	The Members acknowledge that an investment in Royal is subject to
a high degree of risk and that, even though Royal’s common stock is quoted on the OTC Markets, there exists a limited established
trading market for the Royal Stock.

 

		(d)	The Members are acquiring the Royal Stock for their own account and
not with a view toward the gifting, distribution or resale thereof, and the Members agree that the Members will not sell or offer
to sell any portion of the Royal Stock, or negotiate in respect thereof with any person or persons whomsoever, so as thereby to
bring the transaction in which the Members acquired the Royal Stock within the provisions of Section 5 of the Securities Act
of 1933, as amended, or the registration requirement of any other federal or state securities statute.

 

		(e)	The
                                         Members further represent and warrant to Royal that (i) the Members have reviewed the
                                         financial statements of Royal, the reports filed by Royal with the Securities and Exchange
                                         Commission (available at www.sec.gov), and have been presented with and has acted
                                         upon the opportunity to ask questions of and receive answers from Royal relating to the
                                         business and financial condition of Royal and to obtain any additional information necessary
                                         to verify the accuracy of the information made available to Members; (ii) Members have
                                         had the opportunity to fully negotiate the terms and conditions of this Agreement; (iii)
                                         Members understand and acknowledge that the Royal Stock Members are acquiring hereby
                                         are a speculative security and involves a high degree of risk and that no federal or
                                         state agency has made any finding or determination as to the fairness for public or private
                                         investment in, nor any recommendations or endorsement of, such Royal Stock as an investment;
                                         (iv) the Members have such knowledge and experience in business and financial matters
                                         that Members are capable of evaluating the merits and risks of an investment in the Royal
                                         Stock; (v) Members’ financial situation is such that Members can afford the
                                         risks of an investment in the Royal Stock; and (vi) Members also represent that they
                                         have (i) adequate means of providing for his, her or its current needs and possible personal
                                         contingencies, and (ii) has no need for liquidity in the Royal Stock. 

 

		(f)	The Members have become aware of the offering of the Royal Stock
other than by means of general advertising or general solicitation.

 

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3.6Capital Structure.
As of the Effective Date, the Members are the sole owners of the Member Interests, which constitute all of the issued and outstanding
membership interests of the Company. All such Member Interests have been duly authorized and validly issued, and are fully paid
and nonassessable and not subject to preemptive or similar rights. No bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) are issued or outstanding.
The Company does not have and, at or after Closing will not have, any outstanding options, warrants, calls, subscriptions or other
rights, agreements or commitments which either (a) obligates the Company to issue, sell or transfer, repurchase, redeem or otherwise
acquire or vote any membership units of the Company, or (b) restricts the voting, disposition or transfer of the membership units
of the Company. There are no outstanding appreciation rights or similar derivative securities or rights of the Company.

 

3.7Subsidiaries.
The Company does not own, directly or indirectly, any of the capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture or other entity.

 

3.8Intellectual
Property. The Company does not own or use any trademarks, trade names, service marks, patents, copyrights or any applications
with respect thereto. Neither the Members nor the Company have Knowledge of any claim that, or inquiry as to whether, any product,
activity or operation of the Company infringes upon or involves, or has resulted in the infringement of, any trademarks, trade
names, service marks, patents, copyrights or other proprietary rights of any other Person, corporation or other entity; and no
proceedings have been instituted, are pending or are threatened with respect thereto.

 

3.9Books and Records. The books
of account and other financial records of the Company, all of which have been made available to Royal, are complete and correct
and represent actual, bona fide transactions.

 

3.10No Employees or Benefit Plans.
The Company has no (a) no employees, (b) non-qualified deferred or incentive compensation or retirement plans or arrangements,
(c) qualified retirement plans or arrangements, (d) other employee compensation, severance or termination pay or welfare benefit
plans, programs or arrangements or (e) any related trusts, insurance contracts or other funding arrangements maintained, established
or contributed to by the Company.

 

3.11Compliance with Applicable Laws.
The Company has and after giving effect to the transactions contemplated hereby will have in effect all Permits necessary for it
to own, lease or operate its properties and assets and to carry on its business as now conducted, and to the Knowledge of the Members
and the Company, no default has occurred under any such Permit. A true and correct copy of the Permit to operate the Mine by the
WVDEP is attached hereto and incorporated herein by this reference as Exhibit E (the “Mine Permit”).
To the Members and the Company’s Knowledge, the Company is in compliance with, and has no liability or obligation under,
any applicable statute, law, ordinance, rule, order or regulation of any Governmental Entity, including any liability or obligation
to undertake any remedial action under Hazardous Substances Laws (as hereinafter defined), except for instances of non-compliance,
liabilities or obligations, which individually or in the aggregate would not have a Blue Grove Material Adverse Effect.

 

3.12Insurance.
The Company’s insurance policies in effect at the time of Closing, are attached hereto and incorporated herein by this
reference as Exhibit F.

 

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3.13Litigation, etc. As of the
Effective Date, (a) there is no suit, claim, action or proceeding (at law or in equity) pending or, to the Knowledge of the Members
or the Company, threatened against the Company before any court or governmental or regulatory authority or body, and (b) the Company
is not subject to any outstanding order, writ, judgment, injunction, order, decree or arbitration order that, in any such case
described in clauses (a) and (b), (i) could reasonably be expected to have, individually or in the aggregate, a Blue Grove Material
Adverse Effect or (ii) involves an allegation of criminal misconduct or a violation of the Racketeer and Influenced Corrupt Practices
Act. As of the Closing, there are no suits, actions, claims or proceedings pending or, to Members or the Company’s Knowledge,
threatened, seeking to prevent, hinder, modify or challenge the transactions contemplated by this Agreement.

 

3.14Environmental Matters. As
of the Effective Date, neither the Members nor the Company has received any written notice from any Governmental Entity that there
exists any violation of any Hazardous Substances Law (as hereinafter defined). Neither the Members nor the Company has any Knowledge
(a) of any Hazardous Substances (as hereinafter defined) present on, under or about any of the GS Energy Mine, which are subject
to the Operator Agreement, and to Knowledge of the Members or the Company, no discharge, spillage, uncontrolled loss, seepage or
filtration of Hazardous Substances has occurred on, under or about any portion of the GS Energy Mine, (b) that GS Energy violates,
or has at any time violated, any Hazardous Substance Laws, and (c) that there is a condition on any asset other than the GS Energy
Mine, for which the Company has or had an obligation to undertake any remedial action pursuant to Hazardous Substance Laws. For
purposes hereof, “Hazardous Substances” means, without limitation (i) those substances included within
definitions of any one or more of the terms “Hazardous Substance,” and “Hazardous Waste,” “Toxic
Substance” and “Hazardous Material” in the Comprehensive Environmental Response Compensation and Liability Act,
42 U.S.C. § 90,601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., the Toxic Substances
Control Act, 15 U.S.C. § 2601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et
seq., the Occupational Safety and Health Act, 29 U.S.C. § 651, et seq., (insofar as it relates to employee health and safety
in relation to exposure to Hazardous Substances) and any other local, state, federal or foreign laws or regulations related to
the protection of public health or the environment (collectively, “Hazardous Substances Laws”); (ii)
such other substances, materials or wastes as are or become regulated under, or as are classified as hazardous or toxic under Hazardous
Substance Laws; and (iii) any materials, wastes or substances that can be defined as (v) petroleum products or wastes; (w) asbestos;
(x) polychlorinated biphenyl; (y) flammable or explosive; or (z) radioactive.

 

3.15Intangible Assets of the Company.
The Company is an operator, and engages contract miners in the performance of its operations at the Mine. The Company has no real
or personal property, except for the following intangible assets in furtherance of the business and operations of the Company:
(i) that certain Contract Mining Agreement, dated May 3, 2015, between the Company and Eagle Creek Mining, LLC, for the mining
of coal at the Mine (the “Mining Agreement”); and (ii) that certain Purchase Order, No. 104021, dated
May 8, 2015, between the Company and Riverside Energy Company, LLC, for the purchase and sale of coal from the Mine (the “Purchase
Agreement”), each of which are attached hereto and incorporated herein by this reference as Exhibits G and H
respectively.

 

3.16Financial Statements
of Company. The Company is a newly formed limited liability company, formed under the laws of the state of West Virginia on May
4, 2015, with no present assets or liabilities, and with revenue scheduled subsequent to the Closing Date, upon the consummation
of the sale of coal pursuant to the Purchase Agreement. To the extent any assets, liabilities, or revenue is incurred or generated
prior to the Closing Date, the Members agree to deliver to Royal the financial statements of the Company for such interim period
(the “Financial Statements”), which shall be incorporated herein by reference.

 

3.17Absence of Material
Adverse Change. Except as disclosed in or reflected in the Financial Statements, if applicable, the Company has not (i) suffered
any Material Adverse Effect, or (ii) suffered any damage, destruction or loss to any of their assets or properties (whether or
not covered by insurance).

 

3.18Disclosure.
The representations and warranties and statements of fact made by the Members and the Company in this Agreement are, as applicable,
accurate, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements and information contained herein not false or misleading.

 

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ARTICLE IV 

REPRESENTATIONS AND WARRANTIES OF ROYAL

 

Royal hereby represents
and warrants to the Members and the Company as follows (it being acknowledged that the Members and the Company are entering into
this Agreement in material reliance upon each of the following representations and warranties, and that the truth and accuracy
of each, as evidenced by the execution of this Agreement by a duly authorized officer of Royal, constitutes a condition precedent
to the obligations of the Members and the Company hereunder):

 

4.1Organization,
Standing and Power. Royal is duly organized, validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business as now being conducted. Royal is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) would not have a Royal Material Adverse Effect. For purposes of this Agreement,
the term “Royal Material Adverse Effect” means any Material Adverse Effect with respect to Royal, taken
as a whole, or any change or effect that adversely, or is reasonably expected to adversely, affect the ability of Royal to consummate
the transactions contemplated by this Agreement in any material respect or materially impairs or delays Royal’s ability to
perform its obligations hereunder. Royal has made available to the Members and the Company complete and correct copies of its charter
documents and bylaws.

 

4.2Capital Structure.
As of the Effective Date, the authorized capital stock of Royal consists of 500,000,000 shares of common stock and 10,000,000 shares
of preferred stock, of which 11,718,230 shares of common stock and 51,000 shares of preferred stock were issued and outstanding.
All outstanding shares of capital stock of Royal will have been duly authorized and validly issued, and will be fully paid and
nonassessable and not subject to preemptive or similar rights.

 

4.3Authority; Noncontravention.
Royal has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance of this Agreement by Royal and the consummation by Royal of the transactions
contemplated hereby have been duly authorized by all necessary corporate action on the part of Royal. This Agreement has been duly
executed and delivered by Royal and, assuming this Agreement constitutes the valid and binding agreement of the Members and the
Company, constitutes a valid and binding obligation of Royal, enforceable against Royal in accordance with its terms, subject to
(a) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors, and (b) general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity). The execution and delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions hereof, will not, (x) conflict with any of the provisions of
the charter documents or bylaws of Royal, (y) subject to the governmental filings and other matters referred to in the following
sentence, conflict with, result in a breach of or default (with or without notice or lapse of time, or both) under, or give rise
to a right of first refusal, termination, cancellation or acceleration of any obligation (including to pay any sum of money) or
loss of a benefit under, or require the consent of any Person under, any indenture or other agreement, Permit, concession, ground
lease or similar instrument or undertaking to which Royal is a party or by which Royal or any of its assets are bound or affected,
result in the creation or imposition of a Lien against any material asset of Royal, which, singly or in the aggregate, would have
a Royal Material Adverse Effect, or (z) subject to the governmental filings and other matters referred to in the following sentence,
contravene any law, rule or regulation, or any order, writ, judgment, injunction, decree, determination or award binding on Royal
currently in effect, which in the case of clauses (y) and (z) above, singly or in the aggregate, would have a Royal Material Adverse
Effect.  No consent, approval or authorization of, or declaration or filing with, or notice to, any Governmental Entity or
any third party which has not been received or made is required by or with respect to Royal in connection with the execution and
delivery of this Agreement by Royal or the consummation by Royal of the transactions contemplated hereby, except for consents,
approvals, authorizations, declarations, filings and notices that, if not obtained or made, will not, individually or in the aggregate,
result in a Royal Material Adverse Effect.

 

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ARTICLE V

INDEMNIFICATION

 

5.1Indemnification
of the Members and the Company.

 

		(a)	Royal shall, from and after the Closing, indemnify, defend and hold
harmless the Members, and the Company’s officers, directors, Affiliates or agents, and any other Person acting on its behalf
(the “Blue Grove Indemnified Parties”) against all losses, claims, damages, costs, expenses (including
reasonable attorneys’ fees and expenses), liabilities or judgments or amounts that are paid in settlement with the approval
of the indemnifying party (the “Blue Grove Indemnified Liabilities”) based on, or arising out of, or
pertaining to a breach of any representation, warranty or covenant made by Royal in this Agreement, in each case, to the fullest
extent permitted under the laws of the State of Delaware.

 

		(b)	The Blue Grove Indemnified Parties shall have the right to conduct
the defense of any action giving rise to a claim for indemnity under this Agreement with counsel of their own choosing.  The
Members, the Company and Royal agree that all rights to indemnification, including provisions relating to advances of expenses
incurred in defense of any action or suit, existing in favor of the Blue Grove Indemnified Parties with respect to matters occurring
through the Closing, shall survive the Exchange and shall continue in full force and effect for a period of not less than one year
from the Closing; provided, however, that all rights to indemnification in respect of any Blue Grove Indemnified Liabilities
asserted or made within such period shall continue until the disposition of such Blue Grove Indemnified Liabilities.

 

		(c)	The provisions of this Section 5.1 are intended to be for the benefit
of, and shall be enforceable by, each Blue Grove Indemnified Party, his or her heirs and his or her personal representatives and
shall be binding upon all successors and assigns of Royal, the Members and the Company.

 

5.2Indemnification
of Royal.

 

		(a)	The Members and the Company, jointly and severally shall, from and
after the Closing, indemnify, defend and hold harmless Royal and Royal’s officers, directors, Affiliates or agents, and any
other Person acting on its behalf (the “Royal Indemnified Parties”) against all losses, claims, damages,
costs, expenses (including reasonable attorneys’ fees and expenses), liabilities or judgments or amounts that are paid in
settlement with the approval of the indemnifying party (the “Royal Indemnified Liabilities”) based on,
or arising out of, or pertaining to a breach of any representation, warranty or covenant made by the Members or the Company in
this Agreement, in each case, to the fullest extent permitted under the laws of the State of Delaware. 

 

		(b)	The Royal Indemnified Parties shall have the right to conduct the
defense of any action giving rise to a claim for indemnity under this Agreement with counsel of their own choosing.  The Members,
the Company and Royal agree that all rights to indemnification, including provisions relating to advances of expenses incurred
in defense of any action or suit, existing in favor of the Royal Indemnified Parties with respect to matters occurring through
the Closing, shall survive the Exchange and shall continue in full force and effect for a period of not less than one year from
the Closing; provided, however, that all rights to indemnification in respect of any Royal Indemnified Liabilities
asserted or made within such period shall continue until the disposition of such Royal Indemnified Liabilities.

 

		(c)	The provisions of this Section 5.2 are intended to be for the benefit
of, and shall be enforceable by, each Royal Indemnified Party, his or her heirs and his or her personal representatives and shall
be binding upon all successors and assigns of Royal, the Members and the Company.

 

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ARTICLE VI

CONDITIONS PRECEDENT

 

6.1Conditions to
Each Party’s Obligation to Effect the Exchange. The respective obligation of each party to effect the Exchange is subject
to the satisfaction or written waiver of the following conditions:

 

		(a)	No Injunctions or
                                                                                                                                                                                                                                 Restraints. No statute, rule, regulation, temporary restraining order, preliminary or permanent injunction or other order
                                                                                                                                                                                                                                 issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the
                                                                                                                                                                                                                                 Exchange shall be in effect; provided, however, that the party invoking this condition shall use its best efforts
                                                                                                                                                                                                                                 to have any such temporary restraining order, injunction, order, restraint or prohibition vacated.

 

		(b)	Governmental and Regulatory Consents. All material filings
required to be made prior to the Closing with, and all material consents, approvals, permits and authorizations required to be
obtained prior to the Closing from, Governmental Entities, in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by the Members, the Company and Royal will have been made or obtained
(as the case may be).

 

		(c)	Board Representation. At the Closing and pursuant to
a written consent to action of the Board of Directors of Blue Grove, (i) the Board of Directors or Managers, however the case may
be, shall be reconstituted to two (2) members, one to which shall be the nominee of the Company, initially selected as Gary Ganzer,
and the other, to which shall be the nominee of Royal, initially selected as William Tuorto; and (ii) which members shall serve
for an initial two-year period, unless terminated sooner as a result of the Members exercise of the Call Option or Royal’s
exercise of the Put Option as provided herein.

 

6.2Conditions to
Obligations of the Members and the Company. The obligations of the Members and the Company to effect the Exchange are further
subject to the satisfaction or written waiver on or prior to the Closing of the following conditions:

 

		(a)	Representations and Warranties. The representations
and warranties of Royal set forth in Article IV that are qualified as to materiality or Material Adverse Effect shall be true and
correct and the representations and warranties of Royal set forth in Article IV that are not so qualified shall be true and correct
in all material respects, in each case as of the Closing, except to the extent such representations and warranties speak as of
an earlier date. In addition, all such representations and warranties shall be true and correct as of the Closing, except to the
extent such representation or warranty speaks of an earlier date (without regard to any qualifications for materiality or Material
Adverse Effect) except to the extent that any such failure to be true and correct (other than any such failure the effect of which
is immaterial) individually and in the aggregate with all such other failures would not have a Material Adverse Effect, and the
Members shall have received a certificate signed on behalf of Royal by the chief executive officer of Royal to the effect set forth
in this paragraph.

 

		(b)	Performance of
                                                                                                                                                                                                                                 Obligations of Royal. Royal shall have performed in all material respects all obligations required to be performed by it
                                                                                                                                                                                                                                 under this Agreement at or prior to the Closing.

 

6.3Conditions
to Obligations of Royal. The obligation of Royal to effect the Exchange is further subject to the satisfaction or written
waiver on or prior to Closing of the following conditions:

 

		(a)	Representations and Warranties. The representations and warranties
of the Members and the Company set forth in Article III that are qualified as to materiality or Material Adverse Effect shall be
true and correct and the representations and warranties of the Members and the Company set forth in Article III set forth in Article
III that are not so qualified shall be true and correct in all material respects, in each case as of the Closing. In addition,
all such representations and warranties shall be true and correct as of the Closing, except to the extent such representation or
warranty speaks of an earlier date (without regard to any qualifications for materiality or Material Adverse Effect) except to
the extent that any such failure to be true and correct (other than any such failure the effect of which is immaterial) individually
and in the aggregate with all such other failures would not have a Material Adverse Effect, and Royal shall have received a certificate
signed on behalf of the Company by the Members of the Company to the effect set forth in this paragraph.

 

		(b)	Performance of Obligations of the Members and the Company.
The Members and the Company shall have performed in all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing.

 

    	10

    	 

    

 

ARTICLE VII

CONDITIONS SUBSEQUENT

 

7.1Call
Option.

 

		(a)	Royal hereby grants to the Members the right and option to purchase
the Member Interests (the “Call Option”) for the Exercise Price (as hereinafter defined, the “Exercise
Price”). The Call Option may only be exercised by the Members delivering a written notice of exercise of the Call
Option to Royal at its executive offices, located at 56 Broad Street, Suite 2, Charleston, SC 29401, or such other place as Royal
may designate by written notice to the Members, together with the Exercise Price, duly endorsed by the Members. The Call Option
granted hereunder may only be exercised in whole. Except as set forth in Sections 7.1(b) and (g), the Call Option may be exercised
at any time, and for any reason in the Members sole discretion, during the period commencing ten (10) months after the Closing
Date and ending twenty-four (24) months after the Closing Date herein (the “Exercise Term”).

 

		(b)	The Call Option shall automatically terminate when any of the following
conditions occur during the Exercise Term: (i) the Members terminate the Call Option in writing to Royal; (ii) if Royal pays the
Members $1,900,000 cash in exchange for the Royal Stock; or (iii) the Call Option under the GS Agreement is terminated. 

 

		(c)	For purposes of this Section 7.1 the term “Exercise Price”
shall mean as follows:

 

		(i)	During the portion of the Exercise Term from ten (10) months after
the Closing Date to and through sixteen (16) months after the Closing Date, the Exercise Price shall be (i) Fifty Thousand Dollars
And No Cents ($50,000.00), less any dividends or distributions received by Royal from the Company (but not below $0), plus (ii)
ninety percent (90%) of the Royal Stock issuable to the Members hereunder; and

 

		(ii)	During the portion of the Exercise Term from sixteen (16) months
after the Closing Date to and through twenty-four (24) months after the Closing Date, eighty percent (80%) of the Royal Stock issuable
to the Members hereunder. 

 

		(d)	The Call Option shall be deemed to have been exercised, and the Members
shall be deemed to be the owner and holder of record of all of the Member Interests, as of the date of the notice of exercise of
the Call Option (the “Exercise Date”). 

 

		(e)	In the event the Members exercise the Call Option, they agree that
they will take the Member Interests and the Company, “AS IS”, without any representation or warranty of any kind or
nature whatsoever, and that there is no obligation to reconvey the Member Interests or the Company to the Members in the same legal
or financial condition that it existed as of the Closing Date, except for the warranty set forth in subsection (f) below. 

 

		(f)	Royal hereby agrees that it shall not sell, assign, pledge, hypothecate,
or otherwise grant any lien or encumbrance on the Member Interests during the Exercise Term without the prior written consent of
the Members.

 

		(g)	Notwithstanding the foregoing, the parties agree that the Members
may, at any time during the Exercise Term, exercise the Call Option, with notice, (i) upon the institution by or against Royal
of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of Royal’s debts, (ii)
upon Royal making an assignment for the benefit of creditors, or (iii) upon Royal’s dissolution or ceasing to do business.

 

		(h)	Royal hereby agrees that the Members may exercise the Call Option,
with notice, if Royal does not close under the GS Energy Agreement within forty-five (45) days from the Closing Date herein.

 

7.2Put Option.The Members hereby grants to Royal
the right and option to sell the Member Interests (the “Put Option”), for a term of twenty-four (24)
months, by delivery to the Members of the Membership Units. The Put Option may only be exercised by delivering a written notice
of exercise of the Put Option to the Members at their executive offices, located at 304 Waitman Street, Morgantown, West Virginia
26501, or such other place as the Members may designate by written notice to Royal, together with the Membership Units, duly endorsed
by Royal. The Put Option granted hereunder may only be exercised in whole. The Put Option may be exercised at any time, and for
any reason in Royal’s sole discretion, during the period from the Closing Date and ending twenty-four (24) months after the
Closing Date herein. To the extent Royal exercises its Put Option from ten (10) months after the Closing Date to and through sixteen
(16) months after the Closing Date, the Members shall be entitled to retain ten (10) percent of the Royal Stock, and from sixteen
(16) months after the Closing Date to and through twenty-four (24) months after the Closing Date, twenty percent (20%) of the Royal
Stock issuable to the Members hereunder.

 

    	11

    	 

    

 

ARTICLE VIII

GENERAL PROVISIONS

 

8.1Survival of Representations
and Warranties. Except as otherwise contemplated herein, the representations and warranties in this Agreement and in any instrument
delivered pursuant to this Agreement shall survive the Closing for a period of one year.

 

8.2Fees and Expenses.
Each party agrees to pay for its own expenses associated with this Agreement and the consummation of the transactions contemplated
hereby.

 

8.3Definitions.
For purposes of this Agreement, and except as otherwise defined in this Agreement:

 

		(a)	“Affiliate” of any person means another
person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control
with, such first person;

 

		(b)	“Governmental Entity” means any domestic
or foreign governmental agency or regulatory authority;

 

		(c)	“Knowledge” means actual knowledge.  In
order for an individual to have Knowledge of a fact or matter, the individual must be actually aware of that fact or matter.  A
Person (other than an individual) will be deemed to have Knowledge of a particular fact or matter if any individual who is serving,
or who has at any time served, as a director, officer, partner, executor or trustee of that Person (or in any similar capacity)
has, or at any time had, Knowledge of that fact or matter.

 

		(d)	“Liens” means, collectively, all material
pledges, claims, liens, charges, mortgages, conditional sale or title retention agreements, hypothecations, collateral assignments,
security interests, easements and other encumbrances of any kind or nature whatsoever;

 

		(e)	“Material Adverse Effect” with respect
to any Person means an event that has had or would reasonably be expected to have a material adverse effect on the business, financial
condition or results of operations of such Person and its subsidiaries taken as a whole;

 

		(f)	“Permits” means federal, state, local and
foreign governmental approvals, authorizations, certificates, filings, franchises, licenses, notices, permits an rights; and

 

		(g)	“Person” means an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or other entity.

 

		(h)	“Record” means information that is inscribed
on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

 

		(i)	“Securities Act” means the Securities Act
of 1933, as amended.

 

8.4Usage. In
this Agreement, unless a clear contrary intention appears:

 

		(a)	the singular number includes the plural number and vice versa;

 

		(b)	reference to any Person includes such Person’s successors and
assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person
in a particular capacity excludes such Person in any other capacity or individually;

 

		(c)	reference to any gender includes each other gender or, in the case
of an entity, the neuter;

 

		(d)	reference to any agreement, document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof, and shall be
deemed to refer as well to all addenda, exhibits and schedules;

 

		(e)	reference to a Section or Schedule, such reference shall be to a
Section of, or a Schedule to, this Agreement unless otherwise indicated

 

		(f)	reference to any law means such law as amended, modified, codified,
replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder
and reference to any section or other provision of any law means that provision of such law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

 

		(g)	the table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

		(h)	“hereunder”, “hereof”, “hereto”
and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section
or other provision thereof;

 

    	12

    	 

    

 

		(i)	“including” (and with correlative meaning “include”)
means including without limiting the generality of any description preceding such term;

 

		(j)	“or” is used in the inclusive sense of “and/or;”
and

 

		(k)	with respect to the determination of any period of time, “from”
means “from and including” and “to” means “to but excluding.”

 

8.5Counterparts.
This Agreement may be executed in two or more counterparts.

 

8.6Entire Agreement;
Third-Party Beneficiaries. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of this Agreement. This Agreement is not intended to
confer upon any Person other than the parties hereto and the third party beneficiaries referred to in the following sentence, any
rights or remedies.

 

8.7Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of West Virginia.

 

8.8Assignment.
Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part,
by operation of law or otherwise by any of the parties without the prior written consent of the other parties, and any such assignment
that is not consented to shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

 

8.9Enforcement.
The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State of Idaho, this being in addition to any other remedy to which
they are entitled at law or in equity.

 

    	13

    	 

    

 

8.10Severability.
Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective
and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any jurisdiction, so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially adverse to any party, such invalidity, illegality
or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will
be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.

 

IN WITNESS WHEREOF, Royal
and Blue Grove have executed this Agreement to be effective as of the Effective Date.

 

	ROYAL ENERGY RESOURCES, INC.	 
	 	 
	By:	 	 
	William
L. Tuorto, CEO	 
	 	 
	BLUE GROVE COAL, LLC	 
	 	 
	By:	 	 
	Ian Ganzer, Authorized Member	 
	 	 
	IAN GANZER	 
	 	 
	By:	 	 
	Ian Ganzer	 
	 	 
	GARY GANZER	 
	 	 
	By:	 	 
	Gary Ganzer	 

 

    	14

    	 

    

 

EXHIBIT
A

 

(“Employment
Agreement”)

 

    	15

    	 

    

 

EXHIBIT
B

 

(“Management
Agreement”)

 

    	16

    	 

    

 

EXHIBIT C

 

(“Operating
Agreement Amendment”)

 

    	17

    	 

    

 

EXHIBIT D

 

(“Operator
Agreement”)

 

    	18

    	 

    

 

EXHIBIT E

 

(“Mine Permit
“)

 

    	19

    	 

    

 

EXHIBIT F

 

(“Insurance”)

 

    	20

    	 

    

 

EXHIBIT G

 

(“Mining
Agreement”)

 

    	21

    	 

    

 

EXHIBIT H

 

(“Purchase
Agreement”)

 

    	22Exhibit
10.1

 

 

 

May 31,
2015

 

	Fognani
    & Faught, PLLC	 	VIA
    EMAIL
	1801 Broadway	 	 
	Suite 800	 	 
	Denver, CO 80202	 	 

 

Attention:
John Fognani

 

Dear Mr.
Fognani:

 

Re:
Binding Letter of Intent In Connection With the Acquisition of a Base Metal Project

 

Thank
you for the opportunity to meet with you and your client in connection with our discussions regarding a strategy to acquire and
operate a Base Metal mine located in North America (the “Base Metal Mine”), currently owned and operated by a third
party (the “Mine Owner”) which your client has the exclusive right to acquire pursuant to an option with a third party
(the “Option”). A copy of the Option has been previously provided to us.

 

For
the purposes of this Binding Letter of Intent (“LOI”), we have discussed the prospect of working together with your
client (who is referred to as “Seller” or “Party” (in context) herein even though in certain instances
if may be more appropriate to reference “your client” given the context) by way of a merger to develop and thereafter
to own and operate the Base Metal Mine (the “Base Metal Mine Opportunity”). This LOI shall serve to confirm our agreement
to pursue a transaction to accomplish the Base Metal Mine Opportunity (the “Transaction”).

 

We
are excited by the opportunity to further enhance Star Mountain Resources, Inc. (“SMRS” or “Buyer”) by
joining with Seller in the development of its key assets, and coalescing the human talent and the goodwill and associated intangible
value accumulated over the years of the professional careers of your client’s managers and advisors.

 

As
such, SMRS and your client (each a “Party” and together the “Parties” hereunder) intend to enter into
this LOI to pursue a Transaction, the material terms of which shall include, but not be limited, to the following:

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

 

    	 

    	 

    

 

Fognani
& Faught, PLLC

June 10,
2015

Page 2

 

1. Definitive
Merger Agreement. Except as provided below in paragraph 7 (regarding purchase rights) and in the second sentence of
paragraph 9 (regarding confidentiality), the Parties’ obligations hereunder are contingent upon the negotiation,
execution and delivery of a definitive agreement to effect the Transaction that is satisfactory to each of the Parties,
acting reasonably (a “Merger Agreement”). SMRS’s legal counsel will prepare and circulate the initial draft
of a Merger Agreement, which will contain, among other things, typical representations and warranties relating to each of the
Parties and their respective rights, undertakings and expectations under the Transaction.

 

2. Merger. The Merger Agreement will provide for the Seller to exchange 100% of its ownership interest for
2,100,000 shares (the “Initial Share Issuance”) of the common stock of SMRS, with a par value of $0.001 per share
(the “SMRS Common Stock”), inclusive of the 100,000 shares of common stock specified in paragraph 3 below (such
exchange sometimes referred to hereafter as the “Merger”). In the event SMRS subsequently issues any of its
common stock at a price less than $3.00 per share (the “Target Market Price”) from the date of the Initial Share
Issuance until the completion date of a Qualified Financing Transaction (as hereinafter defined) (the “Measurement
Period”), then the total number of shares of SMRS Common Stock granted to Seller shall be increased by 15,000 shares
for each $.10 increment below the Target Market Price (with pro rata adjustment for increments less than $.10) (the
“Share Increase”). For clarity, the Share Increase shall only apply to the total number of shares to be conveyed
to Seller and not the total number of shares to be conveyed to Fognani & Faught, PLLC (“Fognani”) pursuant to
paragraph 3 below. The term “Qualified Financing Transaction” shall mean any one transaction or series of
transactions during the Measurement Period through which SMRS receives gross proceeds of up to $10,000,000 from the issuance
of its common stock. Subject to paragraph 5(j) below, the shares associated with the Initial Share Issuance will be issued to
Seller (and to Fognani) concurrently with the closing of Seller’s acquisition of the Base Metal Mine Opportunity while
any additional shares associated with a Share Increase will be issuable to Seller concurrently with the closing of the
underlying Qualified Financing Transaction.

 

3. Partial
Settlement of Legal Fees Incurred. The Merger Agreement may provide for your firm to accept from the SMRS as a
partial payment of legal fees due to them 100,000 shares of SMRS common stock or perhaps additional shares as agreed on
between the Parties and Fognani prior to the date of execution of the Merger Agreement with any such additional shares being
allocated to Fognani in addition to those shares specified in paragraph 2 above.

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

 

    	 

    	 

    

 

Fognani
& Faught, PLLC

June 10,
2015

Page 3

 

4. Adequate Financing. The Parties hereto recognize that time is of the essence in obtaining the financing
identified herein. Within 60 days of execution of this LOI by the undersigned on behalf of the Buyer (the date of such
execution being the “Effective Date”) (or 90 days if the Option Period has been extended pursuant to paragraph
7), or as soon as reasonably possible prior thereto, SMRS will provide proof satisfactory
to the Seller, acting reasonably, that SMRS has adequate financing sufficient to cover the payments required under paragraphs
5(e), (f), (g) (h) and (i), below. If SMRS fails to provide such proof, or if financing is otherwise obtained prior to that
time by Seller from a third party, this LOI will be terminable by Seller within 5 business days of written notice to SMRS.
In addition, within 60 days from the Effective Date (or 90 days if the Option Period has been extended pursuant to paragraph
7), SMRS will deposit $3.5 million into its legal counsel’s trust account as a good faith deposit to be applied to
the purchase price pursuant to the terms included in the Option (the “Deposit”), whereupon SMRS’s legal
counsel will provide written notification of the Deposit to Fognani. Such Deposit will remain in the trust account of
SMRS’s legal counsel until the time of the closing of the Transaction or termination of this LOI. If SMRS’s legal
counsel does not receive such Deposit from SMRS, or if such Deposit is removed from the trust account of SMRS’s legal
counsel before the time of the closing of the Transaction, this LOI and the Merger Agreement (if it has been executed by
then) will be terminable by Seller within 5 business days of written notice to SMRS. Forthwith upon notice of the Deposit
being given to the Seller in accordance with the terms hereof and provided that Seller has not already entered into a binding
agreement with a third party to finance the acquisition of the Base Metal Mine Opportunity, Seller shall discontinue any
efforts to further market or sell its interest in and to the Base Metal Mine Opportunity to any third party and shall
thereafter work in good faith with SMRS to conclude a Merger Agreement as contemplated by paragraph 6 below.

 

5. Additional
Terms and Conditions. Additional terms and conditions of the Transaction to be reflected in a Merger Agreement shall
include the following:

 

a) Net
Smelter Return Royalty. Your client will enter into an agreement with SMRS to receive a net smelter return royalty on all
base metals produced for the life of the Base Metal Mine, beginning on the recommencement of mining activities at the
Base Metal Mine (the “Royalty Agreement”). In addition, for the same period of time the Royalty Agreement shall
provide for payment to the Seller of an amount equal to a percentage of the gross receipts from the sale of all minerals
(including all metals and non-metals and any saleable waste material) other than base metals from the Base Metal Mine. The
Royalty Agreement will provide that the Seller will have the right to record its royalty interest and that all royalty
payments to the Seller will be measured monthly based on receipt of sales proceeds from sales of the respective production
and minerals and paid within 30 days after the end of each fiscal quarter. The Merger Agreement shall include a buy-out right
whereby SMRS will be entitled to buy out the Seller’s interest in the Royalty Agreement according to a method of
valuation and other terms and conditions acceptable to the Seller in its sole discretion.

 

b) SMRS
Board Seat. The Seller will be entitled to designate one member to SMRS’ Board of Directors for a period of at
least three years following the Merger.

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

 

    	 

    	 

    

 

Fognani
& Faught, PLLC

June 10,
2015

Page 4

 

c) Advisory
Board. Each of the principal individuals representing the ownership interests in Seller who do not enter into an
employment agreement with SMRS pursuant to paragraph 5(d) below will be offered a position as a member of an advisory board
for a period of at least 3 years after the Merger that will make recommendations to the SMRS Board of Directors regarding
subsequent mergers and acquisitions and provide technical advice regarding mining related issues. Such Advisory Board members
shall be entitled to receive industry standard monetary compensation and share options in SMRS as from time to time are
approved by the Board of SMRS.

 

d) Employment
Agreements. SMRS shall enter into employment agreements with certain principals of the Seller to be agreed on by the
Parties as a part of the Transaction. Such employment agreements will provide for industry standard salaries, benefits and
other entitlements, as well as access to SMRS’s stock option plan and other such perquisites as from time to time are
approved by the Board of SMRS.

 

e) Finance
Charge Contribution. Upon closing of the Merger, SMRS will pay the Seller $250,000 as reimbursement for amounts
committed by the Seller or its members for finance charges due on the funds it has deposited in escrow as per the
Option.

 

f) Overhead
Expense Reimbursement. Upon closing of the Merger, SMRS will pay the Seller $500,000 as reimbursement for amounts loaned
to Seller by its members to make payments for overhead expenses for holding the Base Metal Mine Opportunity. To the maximum
extent allowable under the Option, such payments will be treated as advances towards the total purchase price to be paid to
the owner of the Base Metal Mine.

 

g) Due
Diligence Reimbursement. Upon closing of the Merger, SMRS will pay the Seller $100,000 as reimbursement for the
out-of-pocket expenses incurred by Seller in connection with due diligence and mine plan development activities of the Base
Metal Mine.

 

h) Legal
Fees Disbursement.Upon closing of the Merger, SMRS shall pay Fognani the remaining balance of any legal fees up to a
total capped amount of $540,000 as owed by Seller and that is not otherwise covered by the Seller’s payment of SMRS
Common Stock to Fognani as described in paragraph 3 above.

 

i) Delivery
of Segregated Audited Financials. Following written notice of the Deposit having been made, your client and SMRS will
continue its efforts to obtain within the time periods necessary to meet applicable SEC reporting requirements audited
financial statement for periods ended December 31, 2013 and 2014, and (only if required based on applicable materiality
thresholds) audited financial statements of Seller for the period ended December 31, 2014, as well as the closing balance
sheets for the period ended December 31, 2012, all of which must be prepared in accordance with U.S. generally accepted
accounting principles by an accounting firm registered with the Public Company Accounting Oversight Board
(“PCAOB”). In addition, Seller will deliver to SMRS unaudited interim financial statements for the period
concluding not more than 129 days prior to the closing date of the Merger. All expenses associated with the preparation of
such audited financial statements, balance sheets and interim financial statements shall be borne by SMRS.

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

 

    	 

    	 

    

 

Fognani
& Faught, PLLC

June 10,
2015

Page 5

 

j) Closing
on Purchase of the Base Metal Mine. The closing of the Merger under the Merger Agreement will be contingent on the
Seller completing the purchase of the Base Metal Mine substantially on terms and conditions set forth in the Option pursuant
to an agreement reasonably approved by the Parties.

 

k) Confirmations.
Any Merger Agreement will be contingent on confirmation by the Parties that the Transaction, including the Merger, will not
terminate or change, inclusive of all options for extension, any agreements related to the Base Metal Mine Opportunity or the
Seller’s right, title and interest in and to the Base Metal Mine Opportunity or any other material contract necessary
to allow Seller to operate and exploit the Base Metal Mine.

 

l) Non-Compete
Agreements. By virtue of their becoming employees of SMRS pursuant to paragraph 5(d) above, such individuals will enter
into non-compete agreements as are normal, customary, and appropriate in transactions of the type and size proposed herein
and as otherwise reasonably requested by SMRS.

 

6. Closing.
As long as Seller has not already entered into a binding agreement with a third party to finance the acquisition of the Base
Metal Mine Opportunity, the Parties will use best efforts to enter into a Merger Agreement within 60 days from the Effective
Date of this LOI (or 90 days if the Option Period has been extended pursuant to paragraph 7). In the event that the Parties
fail to enter into a Merger Agreement on or before such date, this LOI will be terminable by any Party upon written notice to
the other Parties. Following execution of a Merger Agreement, the Parties will use best efforts on a good-faith basis to
close the acquisition of the Base Metal Mine Opportunity within 45 days from the execution of the Merger Agreement, or such
earlier date as determined by SMRS in the event SMRS is able to obtain comfort from its auditors that it will be able to
complete the audit within the time period prescribed under Form 8-K to be filed with the Securities and Exchange Commission
within 71 days after the required filing date of such Form 8-K after the closing under the Merger Agreement. In the event the
Parties do not close under the terms of the Merger Agreement (other than by reason of SMRS’ default or failure to make
the Deposit as provided in paragraph in paragraph 4 above) or they fail to enter into a Merger Agreement within the time
provided in this LOI, the Deposit shall be promptly refunded to SMRS without deduction for any cost or expense of
Seller.

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

 

    	 

    	 

    

 

Fognani
& Faught, PLLC

June 10,
2015

Page 6

 

7. Purchase
Rights. Subject to paragraphs 4 and 6 above, and so long as Seller retains the Option and has not otherwise entered into
a binding agreement with the other party in which Seller is currently in negotiations to finance the acquisition of the Base
Metal Mine Opportunity, and so long as SMRS has deposited $250,000 (the “Termination Fee”) into the trust account
of SMRS’ legal counsel and SMRS’ legal counsel has provided confirmation to the Seller of the receipt of such
deposit, SMRS shall have the right to enter into the Merger Agreement on terms and conditions as provided for in this LOI for
the period specified in paragraph 4 above (the “Option Period”). This Option Period may be extended by SMRS for
one additional 30-day period provided that (i) SMRS provides Seller with 5 days advance written notice of its intention to
extend such Option Period and (ii) SMRS has deposited an additional $250,000 in the trust account of SMRS’ legal
counsel (increasing the Termination Fee to $500,000) and SMRS’ legal counsel has provided confirmation to Fognani and
Seller of the receipt of the additional $250,000 deposit. If for any reason by the end of the Option Period, SMRS has not
made the Deposit as provided in paragraph 4 above then the entire Termination Fee shall be immediately due and payable to
Seller and SMRS shall forthwith instruct its legal counsel to release the Termination Fee funds to Fognani by immediate wire
transfer to an account designated by Seller.

 

8. Securities
Laws. Each Party acknowledges that they are aware that the securities laws of the United States prohibit any person
who has material, non-public information concerning SMRS or its affiliates with respect to the intentions set forth in this
LOI from purchasing or selling securities of SMRS in reliance upon such information or from communicating such information to
any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell
such securities of SMRS or its affiliated entities in reliance upon such information.

 

9. Information
and Access. Each Party will afford, and will cause its independent certified public accountants to afford, each of
the other Parties and their respective accountants, counsel, agents and other authorized representatives, access to its
business and affairs including such mining plans, due diligence materials, accounting books and records and non-privileged
and non-confidential information. The foregoing investigations will be subject to the condition of confidentiality and the
Parties, their agents and employees involved in such due diligence investigations will be bound accordingly.

 

10. Publicity.
The Parties agree that, except as otherwise required by law or regulation, no press release or other public announcement
related to this LOI or the Transaction contemplated by this LOI will be issued by any of them without the prior written
approval of the other Parties.

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

 

    	 

    	 

    

 

Fognani
& Faught, PLLC

June 10,
2015

Page 7

 

11. Contract.
This LOI constitutes a binding contract between the Parties hereto and shall form the basis of a definitive Merger Agreement
for the completion of the Transaction.

 

12. Governing
Law. This Agreement and the Merger Agreement will be governed by the laws of the State of Nevada, without regard to
conflict of law principles.

 

If
the foregoing correctly sets forth our understanding, please sign all copies of this Binding Letter of Intent where indicated
below and return at least one copy to the undersigned.

 

Sincerely,

 

STAR
MOUNTAIN RESOURCES, INC.

 

	/s/ Mark
    Osterberg	 
	 	 
	Mark Osterberg, President & COO	 
	 	 
	Dated: 6/16/2015	 

 

Agreed
& Acknowledged by Fognani & Faught, PLLC and effective as of this 31st day of May 2015, at the City of Denver
in the State of Colorado.

 

Fognani
& Faught, PLLC

 

	By:	/s/
    John Fognani	 
	 	John Fognani,
    Esq.	 

 

Star
Mountain Resources, Inc. 605 W. Knox Rd., Suite 202 Tempe, AZ 85284

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