Document:

OPTION
AGREEMENT

      

      AMONG

      

      CORE
VALUES MINING & EXPLORATION COMPANY,

      

      CORE
VALUES MINING & EXPLORATION COMPANY SUCURSAL COLOMBIA,

      

      AND

      

      UNIVERSAL
GOLD HOLDINGS (CAYMAN), LIMITED

      

      DATED
AS OF

      

      April
23, 2010

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      OPTION
AGREEMENT

      

      THIS
AGREEMENT IS made as of the 23rd day of April 2010

      

      AMONG:

      

      CORE
VALUES MINING & EXPLORATION COMPANY, a corporation continued under the laws
of the Cayman Islands

      

      (hereinafter
called “CVME”)

      

      OF THE
FIRST PART

      

      CORE
VALUES MINING & EXPLORATION COMPANY SUCURSAL COLOMBIA, a corporation
incorporated under the laws of Colombia

      

      (hereinafter
called “CVMEC”)

      

      OF THE
SECOND PART

      

      AND

      

      UNIVERSAL
GOLD HOLDINGS (CAYMAN), LIMITED a limited company incorporated under the laws of
the Cayman Islands

      

      (hereinafter
called lip “PARTNER”)

      

      OF THE
THIRD PART

      

      WHEREAS:

      

      
        	
                (A)

              	
                CVME
      is a Corporation incorporated under the laws of the Cayman
      Islands;

              

      

      

      
        	
                (B)

              	
                CVMEC
      is a wholly-owned subsidiary of
CVME;

              

      

      

      
        	
                (C)

              	
                CVME
      owns all of the issued and outstanding shares in the capital of
      CVMEC;

              

      

      

      
        	
                (D)

              	
                CVMEC
      holds or has the right to acquire or intends to acquire the Property (as
      defined below);

              

      

      

      
        	
                (E)

              	
                CVME:
      and CVMEC desire to grant PARTNER, an option to earn a 50% interest in the
      Property.

              

      

      

      NOW
THEREFOR THIS AGREEMENT WITNESSES that in consideration of the recitals and of
the mutual covenants and agreements hereinafter contained, the parties hereto
agree as follows:

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -3-

          

      

      ARTICLE
1

      DEFINITIONS
AND INTERPRETATION

      

      
        	
                Section
      1.1

              	
                Definitions.

              

      

      

      In this
Agreement, unless there is something in the subject matter or context
inconsistent therewith, the following terms have the following
meanings:

      

      "Additional Property" has the
meaning set forth in Section 11.3.

      

      "Acquired Interest" has the
meaning set forth in Section 11.1.

      

      "Acquiring Party" has the
meaning set forth in Section 11.1.

      

      “Agreement", "herein", "hereby",
"hereof", ,"hereunder" and similar expressions mean or refer to this
agreement or any instrument supplementary or ancillary hereto; and the
expressions "article", "paragraph" or "subparagraph" followed by a number mean
and refer to the specified article, paragraph or subparagraph of this
Agreement.

      

      "Affiliate" means any person,
partnership, joint venture, corporation or other form of enterprise which
directly or indirectly controls, is controlled by, or is under common control of
a Party. For purposes of the preceding sentence, "control" means possession,
directly or indirectly, of the power to direct or cause direction of management
and policies through ownership of voting securities, contract, voting trust or
otherwise.

      

      "Area of Interest" means the
area beginning at a point two (2) kilometres south and one (1) kilometre west of
the southwest corner of the Property (license GEWM-12) and extending from that
point, five (5) kilometres east and 15 kilometres ,north encompassing an area of
approximately 7,500 hectares.

      

      "assignor" has the meaning set
forth in Section 10.2.

      

      "CVME Group" means CVME and
CVMEC, collectively and their respective Affiliates.

      

      "Business Day" means any day
of the year, other than Saturday, Sunday or any day on which banks are required
or authorized to close in Toronto, Canada.

      

      "cash price" has the meaning
set forth in Section 10.2.

      

      "Closing" means the date of
signing of this Agreement.

      

      "confidential information" has
the meaning set forth in Section 9.1.

      

      "Costs" means all costs and
expenses incurred and monies expended by the parties

      in
carrying out the Work, which will include, but not be limited to, all costs and
expenses incurred and monies expended (and including any value added tax which
must be remitted thereon):

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -4-

          

      

      
        	
                 
      

              	
                (i)

              	
                in
      doing geophysical, geochemical, land Of geological examinations and
      surveys;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                in
      searching for, digging, trenching" sampling, assaying" testing, working,
      developing, )mining or extracting Ore, minerals and
  metals;

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                in
      doing diamond and other drilling;

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                in
      erecting and installing mining plant, milling plant, ancillary facilities,
      buildings, machinery, tools, appliances or equipment and constructing
      access roads, railroads and other transportation facilities for use in
      relation to the Property, on or off the
  Property;

              

      

      

      
        	
                 
      

              	
                (v)

              	
                in
      transporting Ore, minerals" metals, personnel, supplies, mining or milling
      plant, buildings, machinery, tools, appliances or equipment in, to or from
      the Property;

              

      

      

      
        	
                 
      

              	
                (vi)

              	
                in
      paying wages and salaries (including "fringe benefits") of personnel and
      consultants directly engaged in performing
Work;

              

      

      

      
        	
                 
      

              	
                (vii)

              	
                in
      paying assessments or contributions under worker's compensation,
      employment insurance, pension or other similar legislation or ordinances
      relating to such personnel;

              

      

      

      
        	
                 
      

              	
                (viii)

              	
                in
      supplying food, lodging and other reasonable needs for
      personnel;

              

      

      

      
        	
                 
      

              	
                (ix)

              	
                in
      obtaining independent legal and accounting and support services directly
      relating to Work;

              

      

      

      
        	
                 
      

              	
                (x)

              	
                in
      keeping the Property in good standing under the mineral tenure legislation
      in Colombia or under the Underlying Agreements, including establishment
      and/or maintenance of a regional office and its staff to support this and
      all other exploration and development
  operations;

              

      

      

      
        	
                 
      

              	
                (xi)

              	
                for
      improving, protecting or perfecting title to the
  Property;

              

      

      

      
        	
                 
      

              	
                (xii)

              	
                in
      Property payments and Property acquisition and maintenance costs including
      those under the Underlying
Agreements;

              

      

      

      
        	
                 
      

              	
                (xiii)

              	
                in
      preparing engineering, geological, financial or marketing studies and
      reports and activities related
thereto:

              

      

      

      
        	
                 
      

              	
                (xiv)

              	
                in
      connection with any applications and necessary studies for the obtaining
      of permits, licenses, and other regulatory approvals including the
      preparation for and attendance at hearings and other meetings relating to
      the Property;

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      -5-

        

      
        	
                 
      

              	
                (xv)

              	
                in
      preparing a Preliminary Feasibility Study and any reports supplementary
      thereto;

              

      

      

      
        	
                 
      

              	
                (xvi)

              	
                the
      amount of any Differential Payment;
and

              

      

      

      
        	
                 
      

              	
                (xvii)

              	
                including,
      without duplication, any amounts paid to CVME as cash calls under Section
      7.4;

              

      

      

      plus an
amount to offset general overhead and administration expenses of CVME as equal
to $30,000 per month payable to CVME, allocated to the Costs of the Property on
which CVME is Operator.

      

      "Differential Payment" shall
have the meaning set forth in Section 4.1.

      

      “Effective Date” of this
Agreement shall be April 23, 2010.

      

      "Feasibility Study" means a
"feasibility study" as defined in NI 43-101 "Standards of Disclosure for Mineral
Projects", provided that if the Feasibility Study is prepared by PARTNER or one
of its Affiliates! it will be reviewed by an independent firm of international
mining engineers and the cost of such review will be included as qualified Costs
incurred by PARTNER toward the exercise of the Option.

      

      "Fair Market Value" is the
greater of: (i) the value determined for the Property and its assets, reserves
and resources, or a portion thereof as determined by applying current market
conditions, prices and costs to the model used as a determinant of
commerciability within a Preliminary Feasibility Study or Feasibility Study
performed by a qualified third party On the Property; or (ii) the estimated
auction value of Mineral Reserves & Mineral Resources (per NI 43-101) and
assets of the property as determined by qualified third party; or (iii) a
combination thereof.

      

      “Governmental Authority” means
any foreign, domestic, national, federal, provincial, territorial, state,
regional, municipal or local government or authority, quasi government
authority, fiscal or judicial body, government or self regulatory organization,
commission, board, tribunal, organization, or any regulatory, administrative or
other agency, or any political or other subdivision, department, or branch of
any of the foregoing.

      

      "Interest" means the undivided
right, title arid interest of a Party in the Property.

      

      "Laws" means all statutes,
,codes ordinances, decrees, rules, regulations, municipal by-laws, judicial or
arbitral or administrative or ministerial or departmental or regulatory
judgments, orders, decisions, rulings Or awards, policies, voluntary restraints,
guidelines, or any provisions of such Laws, including general principles common
and civil Law and equity, binding on or affecting the Person referred to in the
context in which such word is used, and "Law" means anyone of
foregoing.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -6-

          

      

      "NI 43-101" shall mean
National Instrument 43-101 "Standard of Disclosure for Mineral Projects" of the
Consolidated Ontario Securities Act, Regulations and Rules as the same has been
amended from time to time.

      

      "Mineral Rights"
means:

      

      
        	
                 
      

              	
                (a)

              	
                prospecting
      licenses, exploration licenses, mining leases, mining license, mineral
      concessions, permits and claims and other forms of mineral tenure or other
      rights to Ore, or to work upon lands for the purpose of searching for,
      developing or extracting Ore under any form of mineral title recognized
      under the laws applicable in Colombia, whether contractual statutory or
      otherwise; or

              

      

      

      
        	
                 
      

              	
                (b)

              	
                any
      interest in any Mineral Right.

              

      

      

      "Non-Operator" means PARTNER
or a PARTNER Affiliate.

      

      "Other Rights" means any
interest in real property, whether freehold, leasehold, license, right of way,
easement, any other surface or other right ill relation to real property, and
any right, licence or permit in relation to the use or diversion of water, but
excluding any Mineral Rights.

      

      "Operator" means CVME (or it’s
designate in the CVME Group).

      

      “Option" means the rights and
options granted to PARTNER to earn art Interest in the Property pursuant to
Article 4.

      

      "Option Period" means, in
relation to the Option, the period of time between the granting of the Option
and the date that the Option is exercised.

      

      “Ore" means all materials
containing a mineral or minerals of commercial economic value extracted or
derived from the Property.

      

      "PARTNER Work Codes" has the
meaning set forth in Section 2.1.

      

      “Party” or “Parties” means the initial
parties to this Agreement and their respective successors and permitted assigns
which become parties to this Agreement and, where the context requires, means
the CVME Group.

      

      “Preliminary Feasibility
Study” means a “preliminary feasibility study" as defined in NI 43-101
“Standards of Disclosure for Mineral Projects", provided that if the Preliminary
Feasibility Study is prepared by PARTNER or one of its Affiliates, it will be
reviewed by an independent firm of international mining engineers and the cost
of such review will be included as qualified Costs incurred by PARTNER toward
the exercise of the Option.

      

      "Products" means any
marketable Ore, concentrates, precipitates, dare, metal or other product
produced from the Property.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      -7-

        

      "Property" means as of the
date of Closing, the Property described as such in Schedule" A", as to which
CVMEC now holds or which it has the right to acquire.

      

      "Qualified Person" has the
meaning set forth in Section 4.1(1)(c).

      

      "Shareholders' Agreement"
means a shareholders' agreement in substantially the form set forth in Schedule
"B".

      

      "Technical Committee" means
the technical committee established pursuant to Section 3.1.

      

      "Term" has the meaning set
forth in Section 16.1.

      

      "Underlying Agreements" means
any agreement under which an interest in the Property is originally acquired
from the Underlying Owner.

      

      "Underlying Owner" means a
party to an Underlying Agreement other than any of the CVME Group or PARTNER or
its Affiliates.

      

      "Vesting Date" has the meaning
set forth in Section 4.1(2).

      

      "Work" means prospecting,
exploration, development or other mining work approved by the Technical
Committee and performed on or in relation to the Property, including the
preparation of a Preliminary Feasibility Study.

      

      "Year 1" has the meaning set
forth in Section 4.1(1)(a).

      

      "Year 2" has the meaning set
forth in Section 4.1(1)(b).

      

      "Year 3" has the meaning set
forth in Section 4.1(1)(c).

      

      
        	
                Section
      1.2

              	
                Interpretation.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Words
      importing the singular number will mean and include the plural and vice
      versa, and words importing the masculine gender will include the feminine
      and neuter genders.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Any
      schedule attached hereto is hereby incorporated by reference and forms
      part of this Agreement.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Any
      statement of or reference to dollar amounts in this Agreement means coin
      or currency of the United States of
America.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      division of this Agreement into articles and paragraphs, the provision of
      any index hereto and the insertion of headings are for convenience
      reference only and are not intended to affect the construction or
      interpretation hereof.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      -8-

        

      
        	
                 
      

              	
                (e)

              	
                All
      representations, warranties, covenants and agreements of any of CVME,
      CVMEC or CVMEC in this Agreement will be deemed to be joint and several
      representations, warranties, covenants and agreements of each of CVME,
      CVMEC and CVMEC.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Any
      reference in this Agreement to CVME's interest in the Property will apply
      to any interest held directly by CVME and indirectly through CVMEC and/or
      CVMEC.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Any
      right or privilege that any of CVME, CVMEC, CVMEC or the CVME Group may
      have hereunder may be exercised by any of them, and any election made,
      notice or waiver given or agreement entered into by anyone of CVME, CVMEC
      or CVMEC pursuant to this Agreement will be binding on all of them for the
      purposes of this Agreement.

              

      

      

      ARTICLE
2

      OPERATOR

      

      
        	
                Section
      2.1

              	
                CVME
      as Operator.

              

      

      

      
        	
                (1)

              	
                Designation
      of Operator. CVME shall carry out Work as Operator in accordance
      with PARTNER's codes for work practice (the "PARTNER Work Codes")
      including, without limitation, in relation to communities, sustainable
      development, health and safety and the environment. So long as CVME is the
      Operator of the Property, PARTNER shall reimburse CVME for its Costs to be
      incurred annually for administration and overhead in the amount of $30,000
      per month, which reimbursement shall constitute "Costs" incurred by
      PARTNER.

              

      

      

      
        	
                (2)

              	
                PARTNER
      Personnel. On the Property where CVME is the Operator, PARTNER
      shall have tile right to designate personnel from its own resources to be
      used for the projects on the Property, including the project geologist and
      site manager and other personnel, which personnel shall report either to
      tile CVME country manager or project manager, as applicable, and shall
      take directions from such person.

              

      

      

      
        	
                (3)

              	
                Consultants.
      CVME will notify PARTNER with respect to any outside consultant that CVME
      wishes to use in connection with the Property; provided, however, that
      PARTNER shall have the right to promptly object to any such consultant, in
      which case, the same will not be
used.

              

      

      

      ARTICLE
3

      TECHNICAL
COMMITTEE

      

      
        	
                Section
      3.1

              	
                Formation.

              

      

      

      Upon the
Closing, CVME and PARTNER will form a technical committee (the "Technical Committee") in
accordance with this Article 3. Each of CVME and PARTNER has the right to
appoint one (1) member each to the Technical Committee. Such committee will be
responsible during the Option Period for determining Work programs to be
conducted on the Property under Option and any significant program amendments;
for receiving and reviewing the technical reports of the Operator summarizing
the results of the Work; and for approving the material terms of or any
modifications to the Underlying Agreements of the Property under
Option.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -9-

          

      

      
        	
                Section
      3.2

              	
                Work.

              

      

      

      No Work
will be carried out and no Costs will be incurred except in accordance with Work
programs and budgets approved from time to time by the Technical
Committee.

      

      
        	
                Section
      3.3

              	
                Approval.

              

      

      

      If the
members of the Technical Committee are unable to agree on any matter to be
approved or decided by the Technical Committee, Gustavson Associates, LLC ("GA")
of Lakewood, Colorado, will be retained to review the matter and make the
deciding vote within fifteen (15) days, CVME and PARTNER will hold GA harmless
and recognize GA as an independent 3rd party, notwithstanding that GA prepared a
technical report, dated March 31, 2010, with respect to the Property and may
perform work for the Parties in the future.

      

      
        	
                Section
      3.4

              	
                Meetings

              

      

      

      The
Technical Committee will meet at least twice in each year, unless otherwise
agreed.

      

      ARTICLE
4

      OPTION
ON PROPERTY

      

      
        	
                Section
      4.1

              	
                Option
      on Property.

              

      

      

      
        	
                (1)

              	
                Grant of
      Option. PARTNER shall have the following expenditure and payment
      requirements with respect to the Property, subject to any termination
      under Section 4.2 or Section 8.2 with respect to the Property. In each
      case where PARTNER has not met the minimum expenditure commitment(s) in
      any year, PARTNER shall pay to CVME within thirty (30) days of the end of
      the applicable year the differential between the actual expenditures
      incurred and such minimum expenditure commitment(s)(a "Differential Payment")
      If Partner does not make the Differential Payment within forty five (45)
      days of the end of the applicable year, all rights of PARTNER with respect
      to the Property shall be terminated under Section 4,5. Any such
      Differential Payment shall constitute Costs incurred, rather than payments
      made to CVME.  Excess expenditures in anyone year above the
      minimum expenditure commitment for that year shall not be credited to the
      minimum expenditures commitment in following years (but shall be credited
      to the aggregate expenditures commitments). A phase of exploration shall
      be deemed complete by agreement between PARTNER and CVME, but shall occur
      no later than twelve (Ii) months after initiation of that phase, and any
      unexpended funds shall be added to funding for that Property required from
      PARTNER for the next phase of
exploration.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -10-

          

      

      In
accordance with the foregoing, the CVME Group hereby grants to PARTNER the right
and option to earn a 50.00 % Interest in the Property by completing all of the
following:

      

      
        	
                 
      

              	
                (a)

              	
                Within
      30 Business Days after Closing PARTNER shall have funded a minimum of
      $2,200,000 for Costs in Year 1 and shall have made a cash payment of
      $100,000 to CVME. At the end of this phase (Year 1), PARTNER Shall have
      earned a 25.00% Interest in the
Property;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Within
      30 Business Days after completion of Year 1, PARTNER shall have funded a
      minimum of $2,500,000 additional for Costs in Year 2 and shall have made a
      cash payment of $150,000 to CVME. At the end of this phase (Year 2),
      PARTNER shall have earned an additional 15,00% Interest in the Property,
      Of an aggregate of 40.00%;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Within
      30 Business Days after completion of Year 2, PARTNER shall have funded a
      minimum of $2;800,000 additional for Costs in Year 3, shall have made a
      cash payment of $250,000 to CVME in Year 3, and shall have funded an
      aggregate minimum of $8,000,000 of Costs and cash payments (including all
      Costs funded. and cash payments made in Year 1, Year 2 and Year 3), which
      includes funding for a Preliminary Feasibility Study that contains a
      resource calculated to NI 43-101 standards and is approved by an
      independent third party "Qualified Person" (as defined in NI 43-101). At
      the end of this phase (Year 3), PARTNER shall have earned an additional
      10.00% Interest in the Property, (or an aggregate of
    50.00%.

              

      

      

      
        	
                (2)

              	
                CVME
      Interest. CVME, at its sole discretion, Within forty five (45)
      calendar days of Year 3 and its receipt and acceptance of the Preliminary
      Feasibility Study, has the option of
either;

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Maintaining
      and managing its undivided 50% interest in the Property for its benefit by
      funding its share of agreed future program costs, or by disposing of all
      or part of its interest otherwise as CVME so determines;
  or

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Vending
      all or part of its undivided 50% interest in the Property for shares of a
      listed or unlisted company holding PARTNER's interest in the Property said
      shares being valued at the three (3) month average price for shares prior
      to said vend-in, based on the greater of the ‘Fair Market Value' of the
      Property or other valuation method as determined by a Qualified Person, at
      no more than an eight percent (8%) discount rate, and acceptable to
      relevant regulatory
authorities.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -11-

          

      

      
        	
                (3)

              	
                Vesting of
      Interest. The completion of the requirements in Section 4.1(1)
      shall be verified by (i) written notice delivered to CVME by PARTNER,
      signed by an officer of PARTNER, to which is attached a written statement
      in reasonable detail setting out the particulars of ail Costs, fundings
      and payments to CVME, prepared by the internal or independent accountants
      acting for Partner.  Such written notice and delivery will be
      conclusive evidence of the exercise of the Option. On the thirty first
      (3101) day after CVME's receipt of PARTNER's notice, unless a notice of
      objection has been given by CVME, PARTNER shall be deemed to have vested
      up to a 50.00% Interest, depending on elections made by PARTNER, in the
      Property, subject only to the terms of this Agreement, including the
      provisions of Article 5 (with the date of such vesting herein defined as
      the "Vesting
      Date").

              

      

      

      
        	
                Section
      4.2

              	
                CVME
      Options.

              

      

      

      Within
sixty (60) days of the Vesting Date, CVME may elect any of the following
options, by notice in writing given to PARTNER within sixty (60) days of such
Vesting Date:

      

      To
be determined by mutual agreement.

      

      
        	
                Section
      4.3

              	
                Funding
      Report.

              

      

      

      Subject
to prior termination pursuant to Section 4.2 or Section 8.2 hereof, and so long
as PARTNER has the Option to acquire any Interest in the Property, then, within
sixty (60) days of the end of the anniversary date of Closing, PARTNER will
deliver to CVME a written notice signed by an officer of PARTNER confirming that
PARTNER has funded the minimum Costs and payments required by the end of such
year with respect to the Property, attaching thereto a written statement in
reasonable detail prepared by the internal or independent accountants acting for
PARTNER setting out the particulars of such fundi.ngs and payments. Each such
written notice will be conclusive evidence of the Costs funded by PARTNER unless
CVME gives written notice to PARTNER questioning such Costs within thirty (30)
days of its receipt of PARTNER's notice.

      

      
        	
                Section
      4.4

              	
                Funding
      Audit.

              

      

      

      If CVME
delivers a notice of objection pursuant to this Section 4.4, then forthwith
after its delivery CVME will refer the matter to its auditors for confirmation.
If CVME's auditors do not confirm to CVME the amount of funding and payments
stated to have been incurred by PARTNER, then PARTNER will instruct its auditors
to confer and attempt to reach agreement with CVME's auditors as to the eligible
Costs. If the auditors do not reach agreement within sixty (60) days after the
date of CVME's notice of objection, then the matter will be referred to
arbitration pursuant to Article 15. The decision of the arbitrator or
arbitrators, as the case may be, will be final and binding on the Parties. If
the auditors of the Parties agree or the arbitrator(s) determine that the amount
of funding and payments incurred by PARTNER are less than the relevant amount
required under Section 4.1, then within fifteen (15) days thereafter PARTNER
will pay the amount of such deficiency into a trust account to be expended by
PARTNER on further Work. If PARTNER fails to pay such deficiency by the due
date, then the Option with respect to the Property will be
cancelled.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -12-

          

      

      
        	
                Section
      4.5

              	
                Failure
      to Acquire Interest.

              

      

      

      If
PARTNER fails to fund the minimum Costs and elects not to or fails to make the
applicable cash payments for Year 1, all within the time periods set out in
Section 4.1, then PARTNER's Interest in the Property immediately reverts to
CVME, with no encumbrances, liens or attachments. If PARTNER fails to incur the
aggregate minimum Costs, elects not to or fails to make the applicable aggregate
cash payments, or fails to deliver the Preliminary Feasibility Study, all within
the time periods set out in Section 4.1, then CVME shall give PARTNER
notification of same ("Notification"), from which
date PARTNER shall have thirty (30) days to correct and cure said deficiency.
Should said curative action not take place within the allotted time period, then
CVME shall have the right, but not the obligation, to reacquire any Interest
earned and held by PARTNER by paying PARTNER within one hundred and eighty (180)
days from Notification the lesser of (i) Fair Market Value of that Interest, or
(ii) one-and-one-half (1.5) times the documentable amount of funds provided to
the project under the terms of this Agreement. Upon receipt of payment, PARTNER
shall revert any and all Interest in the Property to CVME, free and clear of all
encumbrances, liens and attachments and this Agreement and the Option shall
terminate thereto in respect with Section 8.3. Notwithstanding the foregoing,
neither Party shall be deemed to be in default with respect to any of its
obligations under this Agreement if the non-performance or default is due to the
non-performance or default of the other Party.

      

      ARTICLE
5

      FORMATION
OF NEWCO CORPORATION

      

      
        	
                Section
      5.1

              	
                Formation
      of NEWCO Corporation.

              

      

      

      Unless
CVME chooses an option permitted under section 4.2, promptly after the Vesting
Date (or earlier by mutual consent) with respect to the Property, CVME and
PARTNER (or Affiliates) will form a separate corporation for the ownership,
operation and market-listing of the Property, which will enable each party to
the greatest extent possible to maximize value, liquidity and tax benefits while
minimizing environmental and other liabilities from its participation in: the
joint development and operation of the Property without significant detriment to
the other Party and with each Party owning shares or share capital, directly or
indirectly, in the corporation in proportion to their Interests. Promptly after
the formation of the Newco corporation, CVME will cause the titles to the
Property to be transferred to such Newco corporation free and clear of all
liens, charges and encumbrances, except for obligations arising from the
Underlying Agreements and any royalty or similar agreements existing on the date
hereof, by or through the CVME Group, and all Costs shall be borne by the Newco
corporation.

      

      
        	
                Section
      5.2

              	
                Shareholders'
      Agreement and Future Funding.

              

      

      

      Concurrently
with the formation o£ a Newco corporation pursuant to this Article 5, the
Parties' will forthwith enter into and execute the Shareholders' Agreement in
substantially the form attached as Schedule "B" to this Agreement pursuant to
which the Parties who are shareholders in such Colombian corporation will cause
the corporation to issue such number of shares or to designate such proportion
of share capital as is proportionate to their respective Interests in the
Property held by such Newco corporation.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      -13-

        

      
        	
                Section:
      5.3

              	
                Exclusion
      of Property.

              

      

      

      Upon the
effective date of the Shareholders' Agreement the Property related thereto and
the affairs of the parties with respect to the Property will be governed solely
by the Newco corporation and the Shareholders Agreement.

      

      ARTICLE
6

      RIGHT
TO ENTER AND DO WORK

      

      
        	
                Section
      6.1

              	
                Operator
      Access.

              

      

      

      Subject
to the provisions of this Agreement and, in particular, the access rights of the
Non-Operator set forth in Section 6.2 hereof, an Operator will have the sole and
exclusive right during the Option Period:

      

      
        	
                 
      

              	
                (a)

              	
                to
      enter in, under and upon the
Property;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                to
      have exclusive tan quiet pos-session of the
  Property;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                to
      carry out all Work as may be required under the provisions of this
      Agreement, including bringing or erecting upon the Property machinery,
      equipment and ancillary facilities including, without limiting the
      generality of the foregoing, housing, utility services, roads, conveyors,
      plants, buildings, waste areas, tailing areas, disposal areas or systems
      and aircraft landing areas; and

              

      

      

      
        	
                 
      

              	
                (d)

              	
                to
      remove Ore, minerals or metals from the Property in reasonable quantities
      for the purpose of obtaining assays or making other
  tests.

              

      

      

      
        	
                Section
      6.2

              	
                Non-Operator's
      Access.

              

      

      

      During
the Option Period, a Non-Operator will have the rights of access described in
Section 7.3(f).

      

      
        	
                Section
      6.3

              	
                Title
      Matters.

              

      

      

      During
the Option Period, the Operator will have the right
and obligation to do such acts and things as are reasonably necessary to protect
and improve, any right, title or interest in and to the Property, which right
and obligation will include, without limitation, the right to obtain in the name
of CVMEC improved mineral tenures for the Property or any part thereof in
accordance with the provisions of the mining laws of Colombia, in which event
such improved mineral tenures will forthwith constitute part of the Property and
be subject to the terms and conditions of this Agreement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -14-

          

      

      ARTICLE
7

      REPRESENTATIONS,
WARRANTIES AND COVENANTS

      

      
        	
                Section
      7.1

              	
                CVME
      Representations and Warranties.

              

      

      

      CVME
hereby represents and warrants, to the best of its knowledge as of the Effective
Date, that, except to the extent disclosed to PARTNER

      

      
        	
                 
      

              	
                (a)

              	
                each
      of CVME and CVMEC is a corporation duly organized and in good standing in
      the jurisdiction in which it is organized and CVMEC is qualified to do
      business in Colombia;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                each
      of CVME and CVMEC has the right to enter into this Agreement, and all
      corporate and other actions required to authorize it to enter into and
      perform this Agreement have been properly
taken;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                subject
      to the Underlying Agreements, CVME through CVMEC is or has the right to
      become the beneficial and recorded owner of the mineral licences
      comprising the Property free and clear of all liens, charges and
      encumbrances except for this Agreement, the Underlying Agreements and all
      charges, encumbrances and liens that arise by operation of
      law;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                there
      is no adverse claim or challenge against or to the ownership of or title
      to the Property, nor to the knowledge of CVME is there any basis therefor,
      and there are no outstanding agreements or options between CVME, CVMEC or
      CVMEC and any third party whatsoever with respect to the Property Or any
      portion thereof except for the Underlying
  Agreements;

              

      

      

      
        	
                 
      

              	
                (e)

              	
                other
      than pursuant to the Underlying Agreements, no person, firm or corporation
      has any proprietary interest in the Property other than a Party hereto and
      no person is entitled to any royalty or other payment in the nature of
      rent or royalty on any minerals, Ores, metals or concentrates removed from
      the Property except for the Underlying
  Agreements;

              

      

      

      
        	
                 
      

              	
                (f)

              	
                all
      activities carried out on the Property by any of the CVME Group prior to
      the date of this Agreement were carried out in strict compliance with all
      applicable environmental laws and regulations; there is to the best of
      CVME's knowledge no hazardous waste is situated on or in the Property nor
      is there currently any significant reclamation work required in respect of
      any of the Property;

              

      

      

      
        	
                 
      

              	
                (g)

              	
                CVME
      has given PARTNER full access to all of the relevant correspondence,
      reports, studies, ,maps, results, analyses and documents in its possession
      or control relating to the
Property;

              

      

      

      
        	
                 
      

              	
                (h)

              	
                CVME
      CVMEC or CVMEC has the right to perform Work on and grant an ownership
      interest in all of the Property;
and

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -15-

          

      

      
        	
                 
      

              	
                (i)

              	
                no
      consent or approval to enter into this Agreement is necessary that has not
      been received.

              

      

      

      
        	
                Section
      7.2

              	
                PARTNER
      Representations and Warranties.

              

      

      

      PARTNER
hereby represents and warrants, as of the Effective Date, that:

      

      
        	
                 
      

              	
                (a)

              	
                it
      is a corporation duly incorporated and in good standing in its
      jurisdiction of incorporation and will become qualified to do business in
      Colombia if it becomes the Operator for the
  Property;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                it
      has the right to enter into this Agreement and all corporate and/ or other
      actions required to authorize it to enter into and perform this Agreement
      have been properly taken and this Agreement constitutes a legal, valid and
      binding obligation of PARTNER enforceable against it in accordance with
      its respective terms subject only to any limitation under applicable Laws
      relating to bankruptcy, winding-up, insolvency, arrangement and other
      similar Laws of general application affecting the enforcement of
      creditors’ rights, and the discretion that a court may exercise in the
      granting of equitable remedies such as specific performance and
      injunction;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                PARTNER
      has given CVME full access to all of the relevant correspondence, reports,
      studies, maps, results, analyses and documents in its possession or
      control relating of the Property;
and

              

      

      

      
        	
                 
      

              	
                (d)

              	
                no
      consent or approval to enter into this Agreement is necessary that has not
      been received.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                the
      execution, delivery and performance by PARTNER of this Agreement does not
      (or would not with the giving of notice, the lapse of time or the
      happening of any other event or condition) result in a breach or a
      violation of, or conflict with, any of the terms or provisions of its
      constating documents or by-laws or any contracts or instruments to which
      it is a party or pursuant to which any of its assets or property may be
      affected and will not result in the violation of any
  Law.

              

      

      

      
        	
                Section
      7.3

              	
                Operator's'
      Covenants.

              

      

      

      Each of
the Parties hereby covenants and agrees, so long as it is Operator under the
terms of this Agreement

      

      
        	
                 
      

              	
                (a)

              	
                to
      carry out Work in a prudent and workmanlike manner, with the degree of
      effort, skill and judgment that is in accordance with good exploration,
      construction, mining, processing and engineering practices generally
      prevailing in the Canadian mining industry and in accordance with all
      applicable laws and regulations and all agreements, permits and licenses
      relating to the Property;

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        -16-

          

      

      
        	
                 
      

              	
                (b)

              	
                to
      pay and discharge all wages and accounts for material and services and all
      other costs and expenses that may be incurred by the Operator in
      connection with its Work on the Property, and to save the Non-Operator
      harmless from and against all liens in respect of such Work which may be
      filed against the Property, and in the event of any liens being so filed;
      to proceed forthwith to have the same removed, provided that the foregoing
      provision will not prevent the Operator from properly contesting in good
      faith any claims for liens which the Operator considers
      unjustified;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                to
      maintain the Property or the rights to acquire the same in good standing
      under the Underlying Agreements and the mining laws of Colombia including;
      without limitation, making all payments and expenditures required under
      each of the Underlying Agreements, if
any;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                to
      indemnify and save the Non-Operator, its directors, officers, employees or
      representatives harmless from all claims and demands, costs (including
      reasonable attorneys' fees and expenses incurred by the Non-Operator),
      damages, actions, suits or other proceedings whatsoever arising out of or
      attributable to the negligent acts or omissions of the Operator, its
      employees of representatives under this
  Agreement;

              

      

      

      
        	
                 
      

              	
                (e)

              	
                to
      maintain and keep in force and, upon request by the Non-Operator, provide
      reasonable documentary verification of the following insurance in respect
      of its activities on the Property, which will protect the interests of the
      Non-Operator within the limits of such insurance and subject to
      availability in Colombia:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Automobile
      Liability Insurance - covering bodily injury (including passenger hazard)
      and property damage arising from the operation of any vehicles used in the
      operations and activities under this Agreement, with inclusive limits of
      not less than $20,000 for anyone occurrence. With respect to insurance on
      non-owned vehicles, the policy will provide coverage for liability assumed
      under this Agreement.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Comprehensive
      General Liability Insurance - covering liability for bodily injury and
      property damage arising from operations and activities under this
      Agreement. This insurance will include coverage {or the contingent
      liability with respect to the operations and activities of contractors and
      subcontractors, the contingent employer's liability of the Operator and
      the liability assumed by the Operator under this Agreement. The limits of
      such insurance will be not less than $200,000 inclusive for anyone
      occurrence.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Workers'
      Compensation Insurance - covering all employees engaged in the Work under
      this Agreement to the extent required by the laws of Colombia at any other
      governmental authority having jurisdiction over the operations under this
      Agreement,

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
       

      -17-

       

      
        	
                 
      

              	
                (iv)

              	
                All
      Risk Property Insurance - covering all real and personal property of the
      Non-Operator under the cafe, custody and/or control of the Operator, where
      the values thereof exceed a deductible amount of fiat mare than
      $5,000.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                to
      permit the Non-Operator, its employees or duly authorized representatives,
      on reasonable notice to the Operator, access to the Property, the
      information and data with respect to same, and the Operator's books and
      records in relation thereto in order to examine any Work carried out by or
      on behalf of the Operator and results obtained therefrom, provided that
      the Non-Operator will not materially interfere with or obstruct the
      operations of the Operator, its employees or agents on the Property, and
      provided further that the Non-Operator and its representatives will enter
      upon the Property at their own risk, and the Non-Operator hereby agrees to
      indemnify and save the Operator, its directors, officers, employees or
      representatives harmless from all claims and demands, costs (including
      reasonable attorneys' fees and expenses incurred by the Operator),
      damages, actions, suits or other proceedings whatsoever arising out of or
      attributable to the negligent activities of the Non-Operator, its
      employees or representatives on the
Property;

              

      

      

      
        	
                 
      

              	
                (g)

              	
                to
      keep the Non-Operator reasonably informed on a timely basis of significant
      results of Work performed Oft the Property and to supply the Non-Operator
      with at least monthly reports while Work is in progress, a general summary
      of Costs on a quarterly basis, and annual summary reports on or before
      January 31 of each year containing copies of maps and material data:
      compiled by the Operator and a statement of Costs incurred with respect to
      the Property during the previous calendar
year;

              

      

      

      
        	
                 
      

              	
                (h)

              	
                to
      the extent required, record all material Work done in any year on or with
      respect to the Property as assessment work or its equivalent in
      Colombia;

              

      

      

      
        	
                 
      

              	
                (i)

              	
                to
      respond promptly to all reasonable requests by the Non-Operator for
      information relating to Work and the activities on or relating to the
      Property;

              

      

      

      
        	
                 
      

              	
                (j)

              	
                without
      prejudice to Section 7'.3(b) hereof, to keep Property free and dear of all
      liens, encumbrances and charges save and except for this Agreement and the
      Underlying Agreements; and

              

      

      

      
        	
                 
      

              	
                (k)

              	
                if
      PARTNER or an Affiliate of PARTNER becomes Operator, to leave the Property
      upon termination of the Option or this Agreement in a condition that is in
      substantial compliance with the requirements of the Underlying Agreements
      and all applicable laws of Colombia including, without limitation,
      regulations pertaining to environmental
matters.

              

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -18-

       

      
        	
                Section
      7.4

              	
                Cash
      Calls.

              

      

      

      CVME, as
Operator is entitled to receive from PARTNER and PARTNER shall advance to CVME
for the Property> under an annual program and budget approved by the
Technical Committee under Section 3.1:

      

      
        	
                 
      

              	
                (i)

              	
                at
      the beginning of the first project year, its anticipated Costs to be
      incurred during such year; and

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                thereafter,
      quarterly for each project year, its anticipated Costs to be incurred
      during the ensuing three month period against an approve annual program
      and budget conforming with Section 3.1, except as otherwise agreed by the
      parties.

              

      

      

      ARTICLES
8

      ABANDONMENT
OR EXCLUSION OF PROPERTY AND TERMINATION

      

      
        	
                Section
      8.1

              	
                Notice
      to Abandon.

              

      

      

      If at any
time during the term of this Agreement either" of the CVME Group or PARTNER
wishes to abandon all or any portion of the Property, it will give the oilier
Party at least thirty (30) days notice prior to the intended abandonment date.
If the notified Party is interested in retaining an interest in such mineral
property, it will advise the notifying Party who must promptly transfer such
mineral property to the notified party at no cost save and except the
reimbursement in respect of any outstanding licence fee deposit or bonding
amounts related thereto If the notified party does not respond within the thirty
(30) day period, or is not interested in retaining an interest in such mineral
property, then such mineral property can be abandoned, Upon such abandonment the
abandoned mineral property will cease to be a part of the Property for the
purposes of this Agreement

      

      
        	
                Section
      8.2

              	
                PARTNER
      Termination.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                PARTNER
      may, in its sole discretion at any time and by notice (accompanied by any
      payment required by this Section 8.2 to CVME not less than ninety (90)
      days in advance of the effective date of such
  termination:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                terminate
      the Option, without further obligation (other than under Section 8.3 or as
      may have otherwise arisen prior to termination) in respect of the Property
      to which the Option relates, provided that it has funded with respect to
      the Property not less than the amounts required for Year 1 under Section
      4.1(1)(a) or made the Differential Payment to
  CVME;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                terminate
      this Agreement without further obligation hereunder (other than under
      Section 8.3 or as may have otherwise arisen prior to termination),
      provided that it has funded all amounts referred to in this Article 8, or
      in either case paid any unfunded balances to
  CVME.

              

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -19-

       

      
        	
                 
      

              	
                (b)

              	
                Upon
      any termination of the Option pursuant to this Section 8.2, PARTNER will
      have on further tights or interest in relation to the Property and the
      Property will no longer be subject to this Agreement, except as has been
      earned into as of the date of
termination.

              

      

      

      
        	
                Section.
      8.3

              	
                Certain
      Obligations.

              

      

      

      Upon arty
termination of the Option or this Agreement, in addition to the requirements of
Section 7.3(k):

      

      
        	
                 
      

              	
                (a)

              	
                each
      party must ensure that all core, maps, data, reports and records relating
      to the Property and any copies thereof are forthwith copied to the other
      party,

              

      

      

      
        	
                 
      

              	
                (b)

              	
                each
      party shall return to the other party any software and computer programs
      that ate then being used Of held by such party and thereafter shall cease
      the use of the same;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                if
      the termination relates to the Option, then PARTNER must pay or reimburse
      the CVME Group for the Costs of keeping the Property and Underlying
      Agreements in good standing as required under Section 7.3(c) for a period
      of not less than ninety (90) days after the effective date of termination;
      and

              

      

      

      
        	
                 
      

              	
                (d)

              	
                during
      such ninety (90) day period, PARTNER may at its own expense, enter upon
      and remove from the Property any and all buildings, plant, machinery,
      tools and equipment or other property of PARTNER, provided that any
      property not so removed within such period after termination will become
      the property of CVME.

              

      

      

      
        	
                Section
      8.4

              	
                Survival.

              

      

      

      The
provisions of Section 8.3 and of Article 9 survive any termination of this
Agreement.

      

      ARTICLE
9

      CONFIDENTIAL
INFORMATION

      

      
        	
                Section
      9.1

              	
                Confidential
      Information

              

      

      

      The
Parties agree to treat this Agreement and all terms and conditions hereof, and
all data, reports, records, and other information (hereafter, collectively, the
"confidential information") coming into the possession: of the Parties by virtue
hereof as confidential except if disclosure is required by law, by regulation or
by any securities commission or stock exchange or in connection with the filing
of a prospectus or exchange offering prospectus by a Party or any of its
Affiliates.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -20-

       

      
        	
                Section
      9.2

              	
                Permitted
      Disclosure.

              

      

      

      Notwithstanding
Section 9.1 a Party may disclose confidential information:

      

      
        	
                 
      

              	
                (a)

              	
                to
      its employees, representatives, contractors, subcontractors, consultants,
      financiers, governmental agents and regulators to the extent necessary to
      assist the Party in carrying out its obligations under this Agreement or
      for other legitimate business
purposes,

              

      

      

      
        	
                 
      

              	
                (b)

              	
                to
      potential acquirers of an Interest or of an interest in such Party or any
      of its Affiliates, provided that the disclosure of the confidential
      information has agreed to be bound by confidentiality provisions at least
      equivalent to those of this Agreement. The disclosing Party hereby assumes
      liability to the other Parties for any breach of such confidential
      obligations by the person, firm, company or other entity to which such
      disclosing Party disclosed such confidential information,
    or

              

      

      

      
        	
                 
      

              	
                (c)

              	
                to
      the extent required by law or by a lawful requirement of any Governmental
      Authority or stock exchanges having jurisdiction over a Party or its
      Affiliates.

              

      

      

      
        	
                Section
      9.3

              	
                Disclosure
      with Consent.

              

      

      

      Notwithstanding
any other provision of this Article 9, confidential information may be disclosed
by any of the CVME Group with the consent of PARTNER, and by PARTNER with the
consent of CVME, in either case which consent will not be unreasonably
withheld.

      

      
        	
                Section
      9.4

              	
                Notice
      of Excepted or Permitted
Disclosure.

              

      

      

      Each
Party agrees to inform the other Party in advance in the event that it intends
to make any public announcement or disclosure excepted or permitted hereunder in
sufficient time (not less than two (2) business days in the other Party's
country before the time of intended disclosure) when practicable to permit the
other Party to jointly or simultaneously make a similar public announcement or
disclosure if they so desire and with sufficient opportunity to request that
reasonable changes be made in such proposed announcement.

      

      ARTICLE
10

      TRANSFER
OF INTEREST IN MINERAL PROPERTIES

      

      
        	
                Section
      10.1

              	
                Definition.

              

      

      

      In this
Article, the term "assign" means to sell, assign, transfer, sublet, grant an
option, make a declaration of trust or otherwise convey an interest in the
Property.

       

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -21-

       

      
        	
                Section
      10.2

              	
                Right
      of First Offer.

              

      

      

      If the
CVME Group or- PARTNER (the "assignor") wishes to assign
any part or all of its Interest in the Property or its interest in this
Agreement (either, the "Interest", for the purposes of this Article 10 only),
other than as described in Section 10.4 or Section 10.5, then it will give
written notice of such proposed assignment to the other Patty. Such notice will
specify the interest offered, the terms of assignment and the cash consideration
(the "cash price") which
the assignor will accept for such Interest. For a period of forty five (45) days
following receipt of such notice, the- other Party may elect, by notice in
writing to the assignor together with delivery of the cash consideration to
purchase the Interest or part thereof offered for the cash consideration and
otherwise substantially upon those terms specified in the notice. If the other
Party does not so elect, the assignor will be free to complete the assignment of
such Interest to one, but not more than one third party, subject to Section 10.3
and provided that such assignment must be completed within one hundred and
eighty (180) days from the date that the other Party declined or failed to elect
in timely fashion to purchase such Interest and must be for a price and upon
terms and conditions no less favourable to the assignor than those set out in
the assignor's notice. If an assignment is not completed within such one hundred
and eighty (180) day period then the provisions of this Article 10 will apply
with respect to any subsequent assignment or proposed assignment of such
Interest.

      

      
        	
                Section
      10.3

              	
                Assignment
      to Third Party.

              

      

      

      If an
assigning Party wishes to assign any part or all of its Interest to an assignee
who is not a Party or an Affiliate of a Party, the assigning Party must require
that such assignee enter into an agreement with the other Party concurrent with
such assignment containing:

      

      
        	
                 
      

              	
                (a)

              	
                a
      covenant by such assignee to be bound by this Agreement to the same extent
      as if this Agreement had been originally executed by the assigning Party
      and such assignee as joint and several obligors making joint and several
      covenants in relation. to the assigned
Interest;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                a
      provision expressly acknowledging that any further assignment of such
      assigned Interest will be subject to the restrictions contained in this
      Article 10; and

              

      

      

      the
assignor will thereupon be relieved from all obligations in respect of the part
of its Interest so assigned which thereafter accrue under this Agreement.
Notwithstanding the foregoing Of any other provision of this Agreement, no
assignment may be made by PARTNER (as the assigning Party) to any third party
assignee unless both PARTNER and the third party assignee provide CVME with
evidence, satisfactory to CVME in its sole discretion, as to the financial
strength and technical capability of such third party assignee to fulfill the
obligations set forth in this Agreement.

      

      
        	
                Section
      10.4

              	
                Affiliate
      Transfers.

              

      

      

      A Party
may assign all, but not less than all, of its Interest in the Property to an
Affiliate at any time without complying with the notice and first right
provisions of Section 10.2 hereof, provided that the Affiliate delivers to the
other Party concurrently with such assignment an agreement containing the
consent and acknowledgement described in Section 10.3 hereof, and that the
assigning Patty will continue to remain principally liable to the other Party
for the performance of its obligations under this Agreement.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -22-

       

      
        	
                Section
      10.5

              	
                Party
      to Party Transfers.

              

      

      

      A Party
may assign its Interest or any part thereof to another Party at any time without
complying with the notice and first right provisions of Section 10.2
hereof.

      

      
        	
                Section
      10.6

              	
                No
      Assignment.

              

      

      

      Notwithstanding
any other provisions of this Article 10, no assignment is permitted that would
violate any of the Underlying Agreements or jeopardize the rights of any party
thereto other than the Underlying Owner.

      

      ARTICLE
11

      AREA
OF INTEREST

      

      
        	
                Section
      11.1

              	
                Operator's
      Obligations Limited.

              

      

      

      The
Operator will not be under any obligation to stake or otherwise acquire any
mineral claims Or other Mineral Rights in relation to mineral properties in the
Area of Interest, except in accordance with this Article 11.

      

      
        	
                Section
      11.2

              	
                Limitation
      on Acquisitions.

              

      

      

      Each of
the CVME Group and PARTNER hereby covenants and agrees with the other Party that
it shall not acquire, nor shall it permit any Affiliate to acquire, any Mineral
Rights or Other Rights (or interest therein) located wholly or in part within
the Area of Interest (in this Article, the "Acquired Interest") unless me
Acquired Interest is made subject to the terms of this Agreement and the
acquiring Party (or, if an Affiliate of a Party has completed the acquisition,
then such Patty, in either case in this Article referred to as the "Acquiring Party") complies
with the provisions of this Article 11.

      

      
        	
                Section
      11.3

              	
                Acquisition
      of Acquired Interest.

              

      

      

      Forthwith
upon completing an acquisition of an Acquired Interest, the Acquiring Party
shall give notice thereof to the other Patty, setting out the location of the
Acquired Interest and all information known to the Acquiring Party and its
Affiliates about such Acquired Interest, the costs of acquisition and all other
pertinent details relating thereto.

      

      Upon
receipt of such notice, the notified Party shall have a period of thirty (30)
days to elect, by notice to the Acquiring Party, to include all of such Acquired
Interest in the Property and make it subject to the terms of this Agreement.
Upon such election such Acquired Interest shall constitute "Additional Property" for
inclusion in the Property thereafter for all purposes of this
Agreement.

      

      During
the Option Period, if the other Party elects to include the Acquired Interest as
part of the Property and if the Acquiring Party is PARTNER, the acquisition
costs shall be included as Costs and shall be credited to PARTNER's commitment
in respect of aggregate Costs tinder Section 4.1(1)(c). If the Acquiring Party
is CVME Group, PARTNER will reimburse it for its acquisition costs promptly upon
PARTNER's election to include the Additional Property. Notice of
Rejection.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -23-

       

      If,
within the SO-day period referred to in Section 11.3, the notified Party does
not give the notice referred to therein, it shall be deemed to have consented to
the exclusion of the Acquired Interest in question from the Area of Interest;
which may thereafter be held or dealt with by the Acquiring Patty and its
Affiliates free of the terms and conditions of this Agreement.

      

      
        	
                Section
      11.4

              	
                Further
      Assurances.

              

      

      

      Each of
the Parties will execute and deliver or cause to be executed and delivered such
further documents and instruments and give such further assurances as CVMEC may
reasonably require to evidence and give effect to any acquisition or transfer of
Mineral Rights contemplated in this Article 11.

      

      
        	
                Section
      11.5

              	
                Non-Compliance
      Constitutes Default.

              

      

      

      Non-compliance
with the provisions of this Article 11 by an Affiliate of a Party constitutes a
default under this Agreement by the Party with whom the acquiring party is
affiliated (the" parent") unless the parent can satisfy the other party hereto
that the Affiliate was acting independently and at arm's length from the parent,
without information from or direction by the parent and that the parent could
not reasonably have enforced compliance with the terms hereof by its Affiliate
in the circumstances.

      

      
        	
                Section
      11.6

              	
                Other
      Activities and Interests.

              

      

      

      Except as
expressly provided in this Agreement, each Party and its Affiliates will have
the right independently to engage in and receive the full benefit of its
business activities, whether or not competitive with the other Party without
consulting the other Party and the doctrines of “corporate opportunity” or
“business opportunity” will not apply to any other activity, venture or
operation of any Party or its Affiliates. A Patty will not have any obligation
to arty other Party with respect to any opportunity to acquire any Mineral
Rights or Other Rights outside of Colombia, or within Colombia after the
termination of this Agreement, unless otherwise specifically provided for
herein.

      

      ARTICLE
12

      ACQUISITIONS
IN COLOMBIA

      

      
        	
                Section
      12.1

              	
                Acquisitions
      in Colombia

              

      

      

      During
the term of this Agreement, none of PARTNER or its Affiliates may directly or
indirectly acquire, or allow any agent or other person to acquire on its behalf
or on behalf of any of its Affiliates, any Mineral Rights located in Colombia
unless:

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -24-

       

      
        	
                 
      

              	
                (a)

              	
                such
      acquisition is made subject to the terms of this Agreement and in
      compliance with the provisions this Article 12;
  or

              

      

      

      
        	
                 
      

              	
                (b)

              	
                such
      Mineral Rights ate a part of (i) art acquisition of a major operating mine
      or interest therein (that is; having annual gross revenues of at least
      $5,000,000 or, according to a feasibility report prepared by a third party
      in accordance with international industry standards, expected to produce
      such revenues) or (ii) pursuant to the acquisition of all or substantially
      all of the assets or share of another company having interests or property
      positions in Colombia, which are not the principal properties of such
      company and which company has annual gross revenues or net assets of at
      least $5,000,000; Northing herein shall preclude the acquisition of a
      non-controlling interest in any company a.th has properties or interests
      in Colombia.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                such
      Mineral Rights era for oil, gas, coal or
  uranium.

              

      

      

      ARTICLE
13

      NOTICES

      

      
        	
                Section
      13.1

              	
                Parties'
      Co-ordinates.

              

      

      

      All
payments, notices, reports or other communications required or permitted by this
Agreement will be in writing and will be deemed to have been properly given and
received when delivered by hand or sent by facsimile or registered mail with all
postage or delivery charges fully prepaid and addressed to the Parties,
respectively, as follows:

      

      To
PARTNER:

      

      Universal
Gold Holdings (Cayman), Limited

      c/o KDS
Capital,

      53 Davies
Street, Mayfair,

      London
W1K 5JH, U.K.

      

      Attention:
President

      Fax: 44
20 7152 6994 ; Tel: 442 07152 6995

      

      To CVME
or CVMEC:

      

      Core
Values Mining & Exploration Company

      3721
State Highway 74, Suite 14 (if by Courier)

      P.O. Box
3925 (if by Postal Service)

      Evergreen,
CO 80437-3925 (if by Courier: 80439)

      

      Attention:
President

      Fax:
1-303-670-9947 (Tel: 1-303-670-9945)

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -25-

       

      With a
copy to:

      

      Stikeman
Elliott LLP

      5300
Commerce Court West

      199 Bay
Street

      Toronto,
Ontario

      Canada

      M5L
1B9

      

      Attention:
D'Arcy Nordick

      Fax:
(416) 947-0866 (Tel: 1-416-869-5508)

      

      or to the
latest known address of the Party concerned, as furnished pursuant to Section
13.3.

      

      
        	
                Section
      13.2

              	
                Deemed
      Receipt.

              

      

      

      Any
payment, notice, report or communication which is sent by facsimile will be
deemed to have been received by the addressee on the first Business Day
following the electronic sending thereof. In all other instances, the date of
receipt by addressee will be the date of actual delivery.

      

      
        	
                Section
      13.3

              	
                Change
      of Address.

              

      

      

      A Party
may change its address, facsimile number or e-mail address for the purpose
hereof by giving written notice of such change to the other Party at the latest
address provided in accordance with this article.

      

      ARTICLE
14

      FORCE
MAJEURE

      

      
        	
                Section
      14.1

              	
                Definition.

              

      

      

      For the
purposes of this Article 14, "force majeure" means fire; power shortage; strike,
lockout or labour dispute; aboriginal disputes; inability to access to the
Property; .wars, terrorism, riots or civil disorders; Acts of God; governmental,
whether federal, provincial, state, regional, or municipal, laws, regulations or
requirements; of any other cause beyond the reasonable control of the Party
seeking to rely upon the force majeure. 'The settling of labour disputes will
for the purposes of this definition be deemed to be beyond the control of the
Party seeking to rely upon the labour dispute as a force majeure and nothing
herein contained will place any obligation upon it to settle any labour dispute.
The payment of monies from one Party to the other Party will be deemed to be
within the reasonable control of the Party who is to pay and the lack of funds
for any such payment will not be considered a force majeure.  The
Patty intending to rely on the force majeure will, upon occurrence of the force
majeure, provide prompt written notice to the other Party setting out the basis
upon which the Party intends to rely on the force majeure as well as the point
in time at which the force majeure occurred. For greater certainty, a force
majeure will only extend the period of time necessary for performance of
obligations under this Agreement that are directly affected by the force majeure
and the Party relying on the force majeure will continue to perform all of its
obligations under this Agreement that are not directly affected by the force
majeure.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -26-

       

      
        	
                Section
      14.2

              	
                Extension
      of Time.

              

      

      

      Time will
be of the essence of this Agreement, provided that the time or times within
which any right hereunder may be exercised, Work must be carried out 01' any
obligation performed by a Party wile so long as the Party uses reasonable
efforts to mitigate the effects of the force majeure, be extended by a period of
time equal to all periods of time during which such Party is prevented" hindered
or delayed in exercising such tight, doing such Work or performing such
obligation hereunder by reason of any event of force majeure.

      

      ARTICLE
15

      ARBITRATION

      

      
        	
                Section
      15.1

              	
                Arbitration
      of All Disputes.

              

      

      

      If any
dispute arises between the Parties or any of them in respect of any matter
relating to this Agreement or with respect to the interpretation of this
Agreement the same will be submitted to arbitration in accordance with the
following provisions.

      

      Ontario
Arbitration.  The dispute will be referred to and finally
resolved by arbitration in Toronto, Ontario in accordance with the applicable
provisions of the International Commercial Arbitration Act (Ontario) (the "ICAA"), so far as lawful
thereunder and in accordance with the provisions of this Article 15. The award
of the arbitrator will be final and binding. All disputes referred to
arbitration shall be governed by the substantive law of Ontario. The arbitral
tribunal will consist of a sole arbitrator selected by agreement of the Parties,
failing such agreement within twenty (20) days after the filing of the request
for arbitration the sole arbitrator will be appointed in accordance with the
ICAA from a list of ten (10) persons submitted to the Parties. Each of the
Parties will have the right to delete four (4) persons from such list and the
arbitrator will be one person not deleted from such list. Each person on such
list will have substantial experience and recognized expertise in the fields of
the matters in dispute. The Parties hereby stipulate that the arbitrator's fee
will be a reasonable hourly rate agreed to by the Parties, multiplied by the
total time of the arbitrator spent concerning the arbitration. The arbitrator
will be entitled to receive payment for reasonable disbursements. If the Parties
are unable to agree on a fee within thirty (30) days after the filing of the
request for arbitration, then the fee will be established in accordance with the
ICAA. The Parties further stipulate that the administrative charge will be a
reasonable average hourly rate agreed by the Parties for the services of the
personnel administering the arbitration, plus a reasonable percentage (not to
exceed 10%) for overhead, plus reasonable disbursements. Failing art agreement
of the Parties: within 30 days of the request for arbitration, the charge will
be determined in accordance with the ICAA. If any Party refuses to arbitrate or
institutes any proceeding to stay or enjoin arbitration, the other' Parties,
will be awarded reimbursement of all expenses and legal fees incurred in
connection with any such proceeding to stay or enjoin arbitration.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -27-

       

      
        	
                Section
      15.2

              	
                Arbitration
      Binding.

              

      

      

      The
decision of the arbitrator will be in writing and signed by the arbitrator and
will be final and binding upon the Parties as to any question or questions so
submitted to arbitration.

      

      
        	
                Section.
      15.3

              	
                Arbitrator's
      Costs.

              

      

      

      Unless
otherwise determined by the arbitrator, the compensation and expenses of such
arbitrator will be paid in equal proportions by the Parties involved in a
dispute.

      

      ARTICLE
16

      GENERAL

      

      
        	
                Section
      16.1

              	
                Non-competition.

              

      

      

      For the
duration of this Agreement and for a period of three (3) years following the
termination of this Agreement (the "Term"), PARTNER agrees not to
compete, directly or indirectly, on its own behalf or in connection with any
person, in any capacity whatsoever, including as an employer, employee,
principal, agent, joint venturer, partner, shareholder or other equity holder,
independent contractor, licensor, licensee or consultant or by and through any
corporation, cooperative, partnership, trust, unincorporated association or
otherwise ac on, be engaged in, have any financial or other interest in or be
otherwise commercially involved in any endeavour, activity or business in all or
any part of the Area of Interest.

      

      
        	
                Section
      16.2

              	
                Non-Solicitation.

              

      

      

      During
the Term, PARTNER shall not, on its own behalf or on behalf of or in connection
with any other person, directly or indirectly, in any capacity whatsoever
including as an employer, employee, principal, agent, joint venturer, partner,
shareholder or other equity holder, independent contractor, licensor, licensee,
franchiser, franchisee, distributor, consultant, supplier or trustee or by and
through any corporation, cooperative, partnership, trust, unincorporated
association or otherwise:

      

      
        	
                 
      

              	
                (a)

              	
                employ,
      offer employment to or solicit the employment or engagement of or
      otherwise entice away from the employment of tile CVME Group any
      individual who is employed by the CVME Group whether or not such
      individual would commit any breach of his contract or terms of employment
      by leaving tile employ of the CVME Group;
or

              

      

      

      
        	
                 
      

              	
                (b)

              	
                procure
      or assist any person to employ, offer employment or solicit the employment
      or engagement of or otherwise entice away from the employment of the CVME
      Group any such individual.

              

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -28-

       

      
        	
                Section
      16.3

              	
                Further
      Assurances.

              

      

      

      Each
Party will, from time to time, and at all times, perform sum acts, execute and
deliver such deeds and documents, and give such assurances as are reasonably
required in order to perform, carry out and give effect to the terms of this
Agreement.

      

      
        	
                Section
      16.4

              	
                Waivers.

              

      

      

      A waiver
of any breach or a provision of this Agreement will not be binding upon a Party
unless the waiver is in writing and such waiver will not affect such Party's
rights in respect of any subsequent breach or enforcement.

      

      
        	
                Section
      16.5

              	
                Entire
      Agreement.

              

      

      

      The terms
of this Agreement express and constitute the entire agreement between the
Parties with respect to the Property and no implied covenant or liability of any
kind is created or will arise by reason of anything contained in this Agreement.
This Agreement supersedes and replaces all previous agreements, whether written
or oral, between the Parties in respect of the Property.

      

      
        	
                Section
      16.6

              	
                Choice
      of Law.

              

      

      

      This
Agreement will be governed by and construed in accordance with the laws of the
Province of Ontario (excluding any conflict of laws rule or principle which
might refer such construction to the laws of another jurisdiction) and the laws
of Canada applicable therein.

      

      
        	
                Section
      16.7

              	
                Succession.

              

      

      

      This
Agreement will inure to the benefit of and be binding upon the Parties hereto,
their respective successors and their permitted assigns.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      -29-

       

      IN
WITNESS WHEREOF, the Parties hereto have entered into this Agreement the 23rd of
April 2010.

      

      
        
          	
                  CORE
      VALUES MINING &

                  EXPLORATION
      COMPANY

                	 
      	
                  CORE
      VALUES MINING &

                  EXPLORATION
      COMPANY SUCURSAL

                  COLOMBIA

                
	 
      	 
      	 
      
	
                  Per

                	 
      	
                  Per:

                
	 
      	
                  /s/
      R.C. Moores

                	 
      	 
      	
                  /s/
      R.C. Moores

                
	 
      	
                  c/s

                	 
      	 
      	
                  c/s

                
	 
      	
                     

                	 
      	 
      	
                     

                
	 
      	
                  Authorized
      Signatory

                  Richard
      C. Moores, II, President

                	 
      	 
      	
                  Authorized
      Signatory

                  Richard
      C. Moores, II, President,

                
	
                  Per

                	 
      	
                  Per:

                	
                  Gerente
      General CE 357270

                
	 
      	
                     

                	 
      	 
      	
                     

                
	 
      	
                  Name
      & Title

                	 
      	 
      	
                  Name
      & Title

                
	 
      	 
      	 
      	 
      	 
      
	
                  UNIVERSAL
      GOLD HOLDINGS 
(CAYMAN), LIMITED

                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  Per

                	 
      	 
      	 
      
	 
      	
                  /s/
      David S. Rector

                	 
      	 
      	 
      
	 
      	
                  c/s

                	 
      	 
      	 
      
	 
      	
                     

                	 
      	 
      	
                     

                
	 
      	
                  Authorized
      Signatory

                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  Per

                	 
      	 
      	 
      
	 
      	
                  David S. Rector, Director

                	 
      	 
      	
                     

                
	 
      	
                  Name
      & Title

                	 
      	 
      	 
      

        

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      SCHEDULE
“A”

      

      DESCRIPTION
OF PROPERTY

      

      PART
1.           TOLDAFRIA
PROJECT.

      

      The
Licenses for such project are attached as Schedule"A-1”.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      SCHEDULE
“A-1”

      

      TOLDAFRIA
PROJECT MINING LICENSE(S)

      

      [GRAPHIC]

      

      The
Toldafria prospect (license GEWM-12) is located approximately 10 km southeast of
the city of Manizales in the Villamaria municipality, Department of Caldas,
Colombia.

      

      Table 4-1
Toldafria Property Corners

      

      Point
Easting Northing Latitude Longitude

      1 848500 1039680 4
o 57’ 13.05” N 75o 26’ 36.20” W

      2 849340 1039680 4
o 57’ 13.10” N 75o 26’ 8.94” W

      3 849340 1039600 4
o 57’ 10.50” N 75o 26’ 8.93” W’

      4 849630 1039600 4
o 57’ 10.52” N 75o 25’ 59.42” W

      5 849630 1038200 4
o 56’ 24.95” N 75o 25’ 59.43” W

      6 848500 1038200 4
o 56’ 24.88” N 75o 26’ 36.10” WCANCELLATION
AGREEMENT

    

    CANCELLATION AGREEMENT, dated May 24,
2010 (this “Agreement”),
by and among, Universal Gold Mining Corp. (formerly known as Federal Sports
& Entertainment, Inc.), a Nevada corporation (the “Company”),
and Linda Farrell (the “Cancelling
Party”).

    

    BACKGROUND

    

    WHEREAS, the Cancelling Party is the
record and beneficial owner of a total of 150,200,000 shares (the "Subject
Shares") of the Company's common stock, par value $0.001 per
share;

    

    WHEREAS, in an effort to enhance the
Company’s ability to raise financing in order to proceed with the implementation
of its new business plan, and to induce certain prospective investors to acquire
securities of the Company in a proposed private placement that is expected to
close (the “Closing”)
on or about May 21, 2010, the Cancelling Party desires to have cancelled and the
Company desires to cancel all of the Subject Shares in exchange for $20,000 (the
"Cash
Consideration").

    

    AGREEMENT

    

    NOW, THEREFORE, in consideration of the
mutual promises herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

    

    1.           Consideration. In consideration
for cancellation of the Subject Shares, the Company agrees to pay to the
Cancelling Party the Cash Consideration, along with up to $1,500 of the
Cancelling Party’s legal fees relating to this Agreement, by wire transfer of
immediately available funds, concurrently with the Closing.

     

    2.           Cancellation of Subject
Shares.  The Cancelling Party has delivered to the Company for
cancellation stock certificates representing the Subject Shares along with duly
executed medallion guaranteed stock powers covering the Subject Shares (or such
other documents acceptable to the Company’s transfer agent) and hereby
irrevocably instructs the Company and the Company’s transfer agent to cancel the
Subject Shares, immediately following the Closing, such that the Subject Shares
will no longer be outstanding on the stock ledger of the Company and such that
the Cancelling Party shall no longer have any interest in the Subject Shares
whatsoever.  The Company shall immediately deliver to the Company’s
transfer agent irrevocable instructions providing for the cancellation of the
Subject Shares.

     

    3.           Release. For and in
consideration of the covenants and promises contained herein, the, Cancelling
Party, together with her heirs, executors, administrators, and assigns, does
hereby remise, release and forever discharge the Company, its respective
directors, officers, shareholders, employees and agents, and their respective
successors and assigns, of and from all claims, causes of action, suits and
demands whatsoever which the Cancelling Party ever had, now or may have
howsoever arising out of the original grant and this cancellation of the Subject
Shares.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    4.           Representations by the
Cancelling Party.

     

    (a)           The
Cancelling Party owns the Subject Shares, of record and beneficially, free and
clear of all liens, claims, charges, security interests, and encumbrances of any
kind whatsoever.  The Cancelling Party has sole control over the
Subject Shares or sole discretionary authority over any account in which they
are held.  Except for this Agreement, no person has any option or
right to purchase or otherwise acquire the Subject Shares, whether by contract
of sale or otherwise, nor is there a “short position” as to the Subject
Shares.

     

    (b)           The
Cancelling Party has full right, power and authority to execute, deliver and
perform this Agreement and to carry out the transactions contemplated
hereby.  This Agreement has been duly and validly executed and
delivered by the Cancelling Party and constitutes a valid, binding obligation of
the Cancelling Party, enforceable against it in accordance with its terms
(except as such enforceability may be limited by laws affecting creditor's
rights generally).

     

    5.           Further
Assurances.  Each party to this Agreement will use his or its
best efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including the execution and delivery of such
other documents and agreements as may be necessary to effectuate the
cancellation of the Subject Shares).

     

    6.           Amendment and
Waiver.  Any term, covenant, agreement or condition of this
Agreement may be amended, with the written consent of the Company and the
Cancelling Party, or compliance therewith may be waived (either generally or in
a particular instance and either retroactively or prospectively), by one or more
substantially concurrent written instruments signed by the Company and the
Cancelling Party.

     

    7.           Survival of Agreements,
Representations and Warranties, etc.  All representations and
warranties contained herein shall survive the execution and delivery of this
Agreement.

     

    8.           Successors and
Assigns.  This Agreement shall bind and inure to the benefit of
and be enforceable by the Company and the Cancelling Party, and their respective
successors and assigns.

     

    9.           Governing
Law.  This Agreement (including the validity thereof and the
rights and obligations of the parties hereunder and thereunder) and all
amendments and supplements hereof and thereof and all waivers and consents
hereunder and thereunder shall be construed in accordance with and governed by
the internal laws of the State of New York without regard to its conflict of
laws rules, except to the extent the laws of Nevada are mandatorily
applicable.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    10.           Miscellaneous.  This
Agreement embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating to the
subject matter hereof.  In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.  This Agreement may be executed in any number of counterparts
and by the parties hereto on separate counterparts but all such counterparts
shall together constitute but one and the same instrument.  This
Agreement may be reproduced by any electronic, photographic, photostatic,
magnetic, microfilm, microfiche, microcard, miniature photographic, facsimile or
other similar process and the original thereof may be destroyed.  The
parties agree that any such reproduction shall, to the extent permitted by law,
be as admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not the reproduction was made in the regular course of business) and
that any enlargement, facsimile or further reproduction shall likewise be
admissible in evidence.  Facsimile execution and delivery of this
Agreement is legal, valid and binding execution and delivery for all
purposes.

     

    [Signature Page
Follows]

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

     

    
      
        	
                UNIVERSAL
      GOLD MINING CORP.

              
	 
      
	
                By:

              	
                /s/ David Rector

              
	
                Name:
      David Rector

              
	
                Title:
      President and CEO

              
	 
      
	
                LINDA
      FARRELL

              
	 
      
	
                /s/ Linda
Farrell

              

      

    

     

    [Signature Page to Cancellation
Agreement]

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