Document:

Exhibit 10.29

 

EXECUTION COPY

 

DUANE READE HOLDINGS, INC.

 

2004 MANAGEMENT STOCK OPTION PLAN

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

THIS OPTION AGREEMENT
(the “Agreement”), dated as of July 30, 2004, is made by and between Duane
Reade Holdings, Inc., a Delaware corporation (the “Company”), and Anthony J.
Cuti (“Optionee”), such date, being the “Effective Date” of the amended and
restated employment agreement, dated March 16, 2004, and amended June 18,
2004 (“Employment Agreement”) between Optionee, the Company, Duane Reade Inc.
and Duane Reade Shareholders, LLC.

 

WHEREAS, the Company
adopted the Duane Reade Holdings 2004 Management Stock Option Plan (the “Plan”),
pursuant to which stock options may be granted to purchase Common Stock of the
Company; and

 

WHEREAS, the Company
desires to grant the Optionee a Nonqualified Stock Option to purchase the
number of shares of the Common Stock provided for herein.

 

NOW, THEREFORE, in
consideration of the recitals and the mutual agreements herein contained, the
parties hereto agree as follows:

 

1.                                       Grant
of Option.

 

(a)                                  The
Company hereby grants to the Optionee an option (“Option”) to purchase 115,277 shares of Common Stock of the Company (such shares,
the “Option Shares”) on the terms and conditions set forth in this Agreement
and as otherwise provided in the Plan. 
This Option is not intended to be treated as an Incentive Stock Option,
as such term is defined in Section 422 of the Internal Revenue Code of
1986, as amended.

 

(b)                                 Incorporation
by Reference, Etc.  The provisions of
the Plan are hereby incorporated herein by reference.  Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement
shall have the meaning set forth in the Plan or in the absence of a definition
in the Plan shall have the meaning set forth in the Employment Agreement.

 

2.                                       Terms
and Conditions.

 

(a)                                  Purchase
Price.  The price at which the
Optionee shall be entitled to purchase Option Shares upon the exercise of all
or any portion of this Option shall be $100.00 per Option Share (the “Exercise
Price”).

 

 

(b)                                 Expiration
Date.  The Option shall expire at
11:59 p.m. Eastern Standard Time on the tenth anniversary of the Effective Date
(the “Expiration Date”).

 

(c)                                  Exercisability
of Option.  Except as may otherwise
be provided herein, subject to the Optionee’s continued employment with the
Company or its Affiliates: (i)
one-third of 33-1/3% of the shares of Common Stock underlying the Option shall
vest on the first, second and third anniversary of the Effective Date; (ii)
one-third of 33-1/3% of the shares of Common Stock underlying the Option shall
vest on the second, third and fourth anniversary of the Effective Date; and (iii)
one-third of 33-1/3% of the shares of Common Stock underlying the Options shall
vest on the third, fourth and fifth anniversary of the Effective Date.

 

(d)                                 Change
In Control.  Notwithstanding Section 2(c)
hereof, immediately prior to a “Change in Control” (as defined in the
Employment Agreement) occurring prior to the IPO, the Option shall become
vested and exercisable to the extent necessary for the Optionee (i) to exercise
his rights pursuant to a Tag-Along Sale (as defined in the Stockholders Agreement)
(the “Tag-Along Right”) and (ii) to satisfy the Company’s rights with respect
to a Drag-Along Sale (as defined in the Stockholders Agreement) (the “Drag-Along
Right”), in each case, as provided in the Stockholders Agreement. Accordingly,
the Option shall vest (in addition to the portion vested pursuant to Section 2(c)
hereof) in the case of a Drag-Along Sale in an amount such that after giving
effect to such acceleration, the Option shall be vested in the aggregate as to
the same percent as the Parent Transfer Percentage Interest proposed to be
transferred pursuant to such Drag-Along Sale. 
Similarly, the Option shall vest (in addition to the portion vested
pursuant to Section 2(c) hereof) in the case of a Tag-Along Sale in an
additional amount such that after giving effect to such acceleration, the
Option shall be vested in the aggregate as to the excess, if any, of (A) the
number of shares of Common Stock to be acquired through the exercise of the
Option equal to the product of (x) the Optionee’s Percentage Interest as
of such date (the numerator of such Percentage Interest to be calculated only
as to the Optionee’s Option and not shares of Common Stock held by the
Optionee) multiplied by (y) the number of shares of Common Stock
proposed to be transferred by the Parent Stockholders (or the Parent Transfer
Units in the case of a Parent Tag-Along Sale) over (B) the number
of shares of Common Stock underlying the vested portion of the Option (without
regard to this section) as of the date of such Tag-Along Sale.

 

For purposes of this Agreement, the terms “Parent
Stockholders,” “Percentage Interest,” “Parent Transfer Percentage Interest,” “Parent
Transfer Units” and “Parent Tag-Along Sale” shall have the meaning ascribed
such terms in the Stockholders Agreement.

 

(e)                                  Method
of Exercise.  The Option may be
exercised only by written notice, in a form to be provided by the Committee,
and delivered by the Optionee in person or sent by mail in accordance with Section 4(a)
hereof and, in either case, accompanied by payment therefor.  The Option Price shall be payable (i) in cash
and/or shares of Stock valued at the Fair Market Value at the time the Option
is exercised (including by means of attestation of ownership of a sufficient
number of shares of Stock in lieu of actual delivery of such shares to the
Company) (provided, however, that such

 

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shares are not subject to
any pledge or other security interest and have either been held by the Optionee
for six months, previously acquired by the Optionee on the open market or meet
such other requirements as the Committee may determine necessary in order to
avoid an accounting earnings charge in respect of the Option), (ii) by means of
a cashless exercise whereby the number of shares of Common Stock of the Company
to be received by the Optionee shall equal the difference between (A) the
number of shares of Common Stock that would be received by the Optionee upon
such exercise had the Optionee paid the Exercise Price in respect of the
underlying shares in cash less (B) a number of shares of Common Stock of the
Company, the aggregate fair market value of which is equal to the aggregate
Exercise Price that would have been paid as determined pursuant to the
immediately preceding clause (A) (provided, however, that this
clause (ii) shall only apply in connection with the IPO, Distribution (each as
defined in the Employment Agreement) or the exercise of a Tag-Along Right or
Drag-Along Right, unless the Company elects or has elected to account for stock
options in accordance with FAS 123), (iii) in the discretion of the Committee,
either (A) in other property having a fair market value on the date of exercise
equal to the Option Price or (B) if there shall be a public market for the Stock,
by delivering to the Committee a copy of irrevocable instructions to a
stockbroker to deliver promptly to the Company an amount of loan proceeds, or
proceeds of the sale of the Stock subject to the Option, sufficient to pay the
Option Price or (iv) by such other method as the Committee may allow.  Notwithstanding the foregoing, in no event
shall the Optionee be permitted to exercise an Option in any manner described
in this sub-section 2(e) if the Committee determines that exercising an
Option in such manner would violate applicable law, the applicable rules and
regulations of the Securities and Exchange Commission and the applicable rules
and regulations of any securities exchange or inter-dealer quotation system on
which the securities of the Company or any of its affiliates are listed or
traded.

 

(f)                                    Exercise
Upon Termination of Employment.  In
the event that the Optionee ceases to be employed by the Company and its
Affiliates the Option held by the Optionee (to the extent then outstanding)
shall terminate as follows:

 

(i)                                     Without
Cause or With Good Reason. If the Company or its Affiliates terminates the
Optionee’s employment without Cause or the Optionee resigns for Good Reason,
then the Option (to the extent not exercisable at the time of the Optionee’s
termination of employment) shall become fully vested and exercisable and,
subject to Section 11(d) of the Employment Agreement, shall remain
exercisable until the earlier of (x) the Expiration Date or (y) a period of
ninety (90) days following such termination of employment, and shall thereafter
terminate.

 

(ii)                                  For
Cause or Without Good Reason.  If the
Optionee’s employment is terminated by the Company or its Affiliates for Cause
or the Optionee resigns without Good Reason, then the Option (to the extent
exercisable at the time of the Optionee’s termination of employment) shall
remain exercisable, subject to Section 11(d) of the Employment Agreement,
until the earlier of (x) the Expiration Date or (y) a period of ninety (90)
days following such termination of employment, and shall thereafter
terminate.  Any portion of the Option
which is not exercisable at the time of the Optionee’s termination of

 

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employment
pursuant to this Section 2(f)(ii) (after taking into account any
acceleration of the exercisabilty pursuant to Section 2(d) above) shall
terminate upon such termination of employment.

 

(iii)                               Death or Disability.  If the Optionee’s employment with the Company
or its Affiliates is terminated by reason of his death or Disability, then the
Option (to the extent not exercisable at the time of the Optionee’s termination
of employment) shall become fully vested and, subject to Section 11(d) of
the Employment Agreement, exercisable and shall remain exercisable until the
earlier of (x) the Expiration Date or (y) the first anniversary of such
termination of employment, and shall thereafter terminate.

 

(g)                                 Transferability.  Other than as provided in Section 2.2 of
the Stockholders Agreement and Section 8(h) of the Plan, the Option may
not be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Optionee other than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company; provided, that, the designation of a beneficiary shall
not constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.  No such permitted transfer
of the Option to heirs or legatees of the Optionee shall be effective to bind
the Company unless the Committee shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions hereof. 
During the Optionee’s lifetime, the Option is exercisable only by the
Optionee or his or her legal representative or a Permitted Transferee.  For purposes of this Agreement, Permitted
Transferee shall have the meaning set forth in both the Plan and Section 2.2
of the Stockholders Agreement.

 

(h)                                 Rights
as Stockholder.  The Optionee shall
not be deemed for any purpose to be the owner of any of the Option Shares
subject to this Option unless, until and to the extent that (i) the Option
shall have been exercised pursuant to its terms and (ii) the Company shall have
issued and delivered to the Optionee the Option Shares.  The Option Shares shall be subject to the
terms and conditions set forth in the Stockholders Agreement.

 

(i)                                     Repurchase/Put,
Drag-Along, Tag-Along, Registration and Related Rights.  Notwithstanding anything herein to the
contrary, the vested portion of the Option and all of the Option Shares
acquired upon the exercise of the Option shall be subject to the Repurchase
Right set forth in the Employment Agreement and to all of the applicable terms
and conditions set forth in the Stockholders Agreement and the Preemptive
Rights Agreement dated as of July 30, 2004, by and among OH, DRS LLC, the
Company, the Optionee and certain other members of the management of Duane
Reade, Inc. (the “Preemptive Rights Agreement”).

 

(i)                                     In
connection with the IPO, the Optionee may elect to convert the Option into an
option to purchase an Equity Security of the IPO Entity or a Subsidiary of the
Company, with the terms of such Option (including

 

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its Exercise
Price) being equitably adjusted by the Committee in accordance with Section 9
of the Plan (the “Converted Option”).

 

(ii)                                  Within
a reasonable time following the IPO, the applicable IPO Entity shall use its
commercially reasonable efforts to register under the Securities Act, the
Equity Securities of the applicable IPO Entity to be acquired upon the exercise
of the Converted Option, or the shares of Common Stock sufficient to cover the
Option, as applicable, by filing a Registration Statement on Form S-8 (or any
successor or similar forms thereto);
unless in the reasonable judgment of the Board or the Board of Directors of the
applicable IPO Entity (or of the managing underwriter in the IPO) such a
registration could reasonable be expected to have an adverse effect on the
market for the securities being registered in the IPO; provided, however,
that the resale of any shares of Common Stock distributed pursuant to an Award
shall be restricted as if the volume and manner of sale restrictions of Rule
144 (without regard to Rule 144 (k)) were applicable.

 

(iii)                               In connection with a
Drag-Along Sale (as defined in the Stockholders Agreement), the Company may
require the Optionee to, and the Optionee in such event shall, exercise
(pursuant to the method or methods that may be elected by the Optionee pursuant
to Section 2(e) hereof) the vested portion of the Option (after giving
effect to Section 2(d) hereof) to the extent necessary to satisfy the
Company’s Drag-Along Right as provided in Sections 2.3 and 2.6 of the
Stockholders Agreement.

 

(iv)                              In connection with a Tag-Along Sale (as
defined in the Stockholders Agreement) if the Optionee delivers the Tag-Along
Exercise Notice (as defined in the Stockholders Agreement) then he shall
exercise (pursuant to the method or methods that he so elects pursuant to Section 2(e)
hereof) the vested portion of the Option (after giving effect to Section 2(d)
hereof) to the extent necessary to satisfy his participation in the Tag-Along
Sale as provided in Sections 2.4 and 2.6 of the Stockholders Agreement.

 

(j)                                     Withholding
Taxes.  Prior to the delivery of a
certificate or certificates representing the Option Shares, and immediately
following the exercise of the Option the Optionee must pay to the Company any
amount that the Company determines it is required to withhold under applicable
federal, state or local tax laws in respect of the exercise of the Option or
the transfer of Option Shares. 
Notwithstanding the foregoing, the Optionee may satisfy such withholding
obligation by any other method described in Section 8(d) of the Plan or
any combination of methods described in Section 8(d) of the Plan; provided,
however, that such other method does not violate the terms of any credit
agreement to which the Company or any of its Affiliates is a party or cause a
default thereunder.

 

3.                                       Purchase
for Investment; Other Representations of Optionee.

 

(a)                                  Investment
Intent.  In the event that the
offering of Option Shares with respect to which the Option is being exercised
is not registered under the

 

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Securities Act, but an
exemption is available that requires an investment representation or other
representation, the Optionee, if electing to purchase Option Shares, will be
required to represent that such Option Shares are being acquired for investment
and not with a view to distribution thereof, and to make such other reasonable
and customary representations regarding matters relevant to compliance with
applicable securities laws as are deemed necessary by counsel to the Company.  Stock certificates evidencing such
unregistered Option Shares that are acquired upon exercise of the Options shall
bear restrictive legends as are required or advisable under the provisions of
any applicable laws or in the Stockholders Agreement.

 

(b)                                 Other
Representations.  The Optionee hereby
represents and warrants to the Company as follows:

 

(i)                                     Access
to Information.  Because of the
Optionee’s business relationship with the Company and with the management of
the Company, the Optionee has had access to all material and relevant
information concerning the Company, thereby enabling the Optionee to make an
informed investment decision with respect to his investment in the Company, and
all pertinent data and information requested by the Optionee from the Company
or its representatives concerning the business and financial condition of the
Company and the terms and conditions of this Agreement have been
furnished.  The Optionee acknowledges
that the Optionee has had the opportunity to ask questions of and receive
answers from and to obtain additional information from the Company and its
representatives concerning the present and proposed business and financial
condition of the Company.

 

(ii)                                  Financial
Sophistication.  The Optionee has
such knowledge and experience in financial and business matters that the
Optionee is capable of evaluating the merits and risks of investing in the
Option Shares.

 

(iii)                               Understanding the
Investment Risks.  The Optionee
understands that:

 

A.                                   An
investment in the Option Shares represents a highly speculative investment, and
there can be no assurance as to the success of the Company in its business; and

 

B.                                     There
is at present no market for the Option Shares and there can be no assurance
that a market will develop in the future.

 

(iv)                              Understanding
of the Nature of the Option Shares. 
The Optionee understands and agrees that:

 

A.                                   Other
than as reflected herein or in the Stockholders Agreement there can be no
assurance that the Option Shares will be registered under the Securities Act or
any state securities laws and if they are not so registered, they will only be
issued and sold in reliance upon certain exemptions contained in the Securities
Act and applicable state securities laws, and the representations and
warranties of the Optionee

 

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contained herein,
which will have to be renewed as to the Option Shares at the times of exercise
of the Option, are essential to any claim of exemption by the Company under the
Securities Act and such state laws.  It
is understood that the Company’s intent is that the purchase of the Option
Shares pursuant to an exercise of the Option not be covered by Rule 701
under the Securities Act, and that another exemption, if necessary, will need
to be found in respect of the exercise of the Option; provided that the Company
may determine at time of the exercise of the Option (which determination must
be in writing) that Rule 701 does apply to such exercise;

 

B.                                     If
the Option Shares are not so registered, the Option Shares will be “restricted
securities” as that term is defined in Rule 144 promulgated under the
Securities Act;

 

C.                                     The
Option cannot be exercised and the Option Shares will not be sold to the
Optionee and the Optionee cannot resell or transfer the Option Shares without
registration under the Securities Act and applicable state securities laws
unless the Company receives an opinion of counsel acceptable to it (as to both
counsel and the opinion) that such registration is not necessary, the cost of
such opinion to be borne by the Company;

 

D.                                    Only
the Company can register the Option Shares under the Securities Act and
applicable state securities laws;

 

E.                                      Other
than as provided in the Stockholders Agreement and Section 2(i) hereof,
the Company has not made any representations to the Optionee that the Company
will register the Option Shares under the Securities Act or any applicable
state securities laws, or with respect to compliance with any exemption
therefrom;

 

F.                                      The
Optionee is aware of the conditions for the Optionee’s obtaining an exemption
for the resale of the Option Shares under the Securities Act and any applicable
state securities laws; and

 

G.                                     The
Company may, from time to time, make stop transfer notations in its transfer
records to ensure compliance with the Securities Act and any applicable state
securities laws, and any additional restrictions imposed by state securities
administrators.

 

4.                                       Miscellaneous.

 

(a)                                  Notices.  Any and all notices, designations, consents,
offers, acceptances and any other communications provided for herein shall be
given in writing and shall be delivered either personally or by registered or
certified mail, postage prepaid, which shall be addressed, in the case of the
Company to the Secretary of the Company at the principal office of the Company
and, in the case of the Optionee, to

 

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Optionee’s address
appearing on the books of the Company or to Optionee’s residence or to such
other address as may be designated in writing by the Optionee.

 

(b)                                 No
Right to Continued Employment. 
Nothing in the Plan or in this Agreement shall confer upon the Optionee
any right to continue in the employ of the Company or its Affiliates or shall
interfere with or restrict in any way the right of the Company or its Affiliates,
which are hereby expressly reserved, to remove, terminate or discharge the
Optionee at any time for any reason whatsoever. 
Notwithstanding the foregoing, nothing in this Section 4(b) shall
be construed as interfering with an Optionee’s rights under the Employment
Agreement or any other agreement between the Optionee and the Company or an
Affiliate.

 

(c)                                  Bound
by Plan.  By signing this Agreement,
the Optionee acknowledges that he has received a copy of the Plan and has had
an opportunity to review the Plan and agrees to be bound by all the terms and
provisions of the Plan.

 

(d)                                 Adjustments.  Notwithstanding any provision of the Plan or
this Agreement to the contrary, no adjustment shall be made to the Option, as
to the number, price or kind of share of stock or other consideration subject
to such Option in connection with a dividend or distribution in which the
Optionee participates as a member of Duane Reade Shareholders, LLC.

 

(e)                                  Successors.  The terms of this Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and
of the Optionee and the beneficiaries, executors, administrators, heirs and
successors of the Optionee.

 

(f)                                    Invalid
Provision.  The invalidity or
unenforceability of any particular provision hereof shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision had been omitted.

 

(g)                                 Modifications.  No change, modification or waiver of any
provision of this Agreement shall be valid unless the same be in writing and
signed by the parties hereto.

 

(h)                                 Entire
Agreement.  This Agreement, the Plan,
the Employment Agreement, the Stockholders Agreement and the Preemptive Rights
Agreement including all exhibits thereto, contain the entire agreement and
understanding of the parties hereto with respect to the subject matter
contained herein and therein and supersede all prior communications,
representations and negotiations in respect thereto.

 

(i)                                     Governing
Law.  This Agreement and the rights
of the Optionee hereunder shall be construed and determined in accordance with
the laws of the State of New York.

 

(j)                                     Headings.  The headings of the Sections hereof are
provided for convenience only and are not to serve as a basis for
interpretation or construction, and shall not constitute a part, of this
Agreement.

 

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(k)                                  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, this
Agreement has been executed and delivered by the parties hereto on the first
date set forth above.

 

 

	
   

  	
   

  	
  DUANE READE HOLDINGS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ ANDREW J. NATHANSON

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ANTHONY J. CUTI

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ ANTHONY J. CUTIFiled by Automated Filing Services Inc. (604) 609-0244 - Miranda Gold Corp. - Exhibit 10.1

 MINING LEASE

      This MINING LEASE (“Agreement”)
  is hereby made and entered into as of the 27th day of May, 2004 (the “Effective
  Date”) by and between: NEVADA NORTH RESOURCES (U.S.A.), INC., hereinafter
  called “Lessor”, and MIRANDA U.S.A., INC., a Nevada corporation
  hereinafter called “Lessee or Miranda”. Lessor and Lessee agree
  that their previous agreement, which encompassed four properties (Red Hill,
  CONO, BPV and Coal Canyon), shall be terminated, and superceded by this Agreement,
  which covers the Coal Canyon property separately, and three similar agreements
  covering the other three properties separately. Accordingly, Lessor and Lessee
  covenant and mutually promise as set forth below.

 WITNESSETH:

      In consideration of the mutual
  promises and covenants set forth herein, Ten Dollars ($10.00) in hand paid
  and other good and valuable consideration, the receipt and suffciency of which
  are hereby acknowledged, Lessee and Lessor (sometimes referred to hereinafter
  as a “Party” or collectively as the “Parties”) agree
  as follows:

I. Grant of Lease

1.1 Grant of Lease.

 Lessor hereby grants and conveys unto Lessee, its successors
  and assigns, subject to Section 5.1 below, an exclusive lease unto the Property
  on the terms and conditions set forth in this Agreement. As used in this Agreement,
  the term “Property” means Lessor’s entire interest in the
  Coal Canyon property described in Exhibit A, attached hereto and made a part
  hereof, together with all minerals, mineral substances, mineral rights, water
  rights and all surface, access, and other rights associated with or appurtenant
  to such Property.

1.2 Term.

 The initial term of this Agreement shall be twenty (20) years
  from the Effective Date, unless sooner terminated according to the provisions
  of this Agreement. This Agreement shall remain in effect after the initial term
  for so long as mining, processing, construction of mine facilities, development
  of ore reserves or exploration activities (“Mining Related Activities”)
  continue on the Property or other adjacent or contiguous properties owned or
  controlled by Lessee while this agreement remains in effect It shall not be required
  that Mining Related Activities be continuous in order for this Agreement to
  be extended beyond the initial term hereof.

 Minimum term. Miranda commits to a two (2) year option
  on the property made up of the initial payment and the first year anniversary
  payments.

1.3 Grant of Rights.

 During the term of this Agreement, Lessor grants to Lessee
  the following exclusive rights:

(a) the right of entry;

 (b) by whatever method is now known or subsequently
  developed, to survey, explore, prospect, sample, drill, develop, mine (including
  without limitation by surface, open pit, underground, solution or any other
  method whatsoever), cross-mine, stockpile, remove, transport, leach, concentrate,
  mill, smelt, beneficiate, process, treat, ship, market and sell all minerals,
  whether extracted or removed from the Property or other properties;

 (c) to construct, use, maintain, repair, replace and
  relocate buildings, roads, pipelines, ore bins, shafts, declines, inclines,
  tunnels, drifts, adits, open pits, openings, haulage ways, mine workings, leach
  pads, mineral treatment facilities, tailings ponds, waste dumps, ore stockpiles,
  reservoirs, power and communication lines and any other structures, facilities
  or improvements of any kind or description whatsoever;

 (d) to use the Property for the storage or permanent
  disposal of minerals, overburden, waste, tailings, water or other by-products
  of materials produced from the Property or from other properties;

 (e) to use all easements, rights-of-way and means of
  access for ingress and egress to, from, across and through the Property;

 (f) to take, develop, or use water, whether surface,
  underground, or artesian, by any lawful taking or development, without restriction
  as to the place or places of Lessee’s use of the waters;

 (g) to extract, process, test, remove and dispose of
  any minerals and mineral substances for testing purposes (including, without
  limitation, for bulk samples) without payment of any Production Royalty or other
  additional consideration whatsoever to Lessor, provided that Lessee shall pay
  Production Royalty on any such minerals removed from the Property for testing
  purposes for which it receives actual sales revenues;

 (h) to use the Property for all of the purposes stated
  in this Section 1.3 in connection with or in furtherance of Lessee’s activities
  on other properties; and

 (i) to exercise all other rights that are incidental
  to or customarily associated with any or all of the rights granted expressly
  or implicitly to Lessee in this Agreement.

II. Payments to Lessor

2.1 Advance Minimum Royalties.

 Advance royalties as used herein means the amount required
  to be paid by Lessee to Lessor, as set forth below, to provide for a specific
  minimum payment in such periods. During the term of this Agreement, Lessee shall
  pay to Lessor advance minimum royalties (“Advance Royalties”) as
  follows:

	 Upon exercise of this Lease: (already paid)  	 $6,250 
	 On or before the first anniversary of the Effective Date 
    	 $6,250 
	 On or before the second anniversary of the Effective Date 
    	 $6,250 
	 On or before the third anniversary of the Effective Date 
    	 $10,000 
	 On or before the fourth anniversary of the Effective Date 
    	 $10,000 
	 On or before the fifth anniversary of the Effective Date 
    	 $12,500 
	 On or before the sixth anniversary of the Effective Date 
    	 $15,000 
	 On or before the seventh anniversary of the Effective Date 
    	 $30,000 
	 On or before the eighth anniversary of the Effective Date 
    	 $30,000 
	 On or before the ninth anniversary of the Effective Date 
    	 $40,000 
	 On or before the tenth anniversary of the Effective Date 
    	 $40,000 
	 On or before each subsequent anniversary of the Effective Date 
    	 $50,000* 

 *Beginning on the eleventh anniversary of the Agreement, the
  Advance Royalty of $50,000 shall be adjusted for inflation increases according
  to the United States Department of Labor Consumer Price Index. The beginning
  index shall be the index published for April 2015. However, in no case will
  the Advance Royalty drop below the Advance Royalty base amount of $50,000.

      Advance Royalties shall be paid
  on or before the date due. Advance Royalties paid hereunder shall be credited
  against and fully recoupable from any and all Production Royalty that may accrue
  under Section 2.2, regardless of whether such Production Royalty accrues or
  is made in the same or any subsequent year to the year of payment of the Advance
  Royalties.

2.2 Production Royalty.

 (a) Percentage and Calculation. Subject to applicable
  credits and adjustments, Lessee, in accordance with its usual practice, shall
  pay to Lessor a production royalty (the “Production Royalty”) equal
  to the applicable percentage of Net Value as defined, calculated and paid as
  set forth in Exhibit B, attached hereto and by this reference made a part hereof.
  Said percentages shall be as follows:

 

	 Gold Price  	 Royalty Percentage 
	 $275 or less per ounce  	 2.5% 
	 $275.01 to $ 375  per ounce  	 3.0% 
	 $375.01 to $ 475 per ounce  	 4.0% 
	 $475.01 or greater  	 5.0% 

 (b) Option to Reduce Production Royalty. At any time
  during the term of this Lease and as to all Production Royalty payments not
  yet paid, Lessee shall have the right to reduce the Production Royalty by purchasing
  a portion of the Lessors Production Royalty such that the Lessor retains a minimum
  2% Production Royalty. The purchase price of the Production Royalty shall be
  $1,000,000 US for each 1% Production Royalty, $500,000 for each 0.5% Production
  Royalty, and $250,000 for each 0.25% Production Royalty. Such a Production Royalty
  buy down may take place all at one time or piecemeal. 

     The right to purchase the said
  Production Royalty interest shall be exercised by Lessee providing the Lessor
  with notice of the purchase accompanied by payment in full for the amount of
  the Production Royalty interest being purchased. 

     If only a portion of the Production
  Royalty is purchased, then in the event of changes in the gold price the Lessor
  shall retain the remaining unpurchased Production Royalty percentage points
  on the sliding scale Production Royalty, as outlined in Section 2.2(a) herein.

Example: Example: Gold is selling at $370.00 an ounce.
  Lessee purchases 1.0% of the Production Royalty for 1 million dollars reducing
  the Production Royalty from 3.0% to 2.0%. Later Gold rises to $500 an ounce
  and the effective Production Royalty becomes 4.0%. Gold then falls to $250.00
  an ounce. The effective Production Royalty would be 2.0% not 1.5%.

(c) Disputes. Lessor shall be deemed to have waived
  any right it may have had to dispute any payment of Production Royalty unless
  Lessor notifies Lessee in writing of such dispute within six (6) months after
  the date of Lessee’s payment, providing reasonable detail as to the nature
  of the dispute.

III. OPERATIONS

3.1 No Implied Covenants.

Lessee does not make, and the Advance Royalties and other obligations
  of Lessee under this Agreement exclude and negate, any express or implied covenant
  or duty of Lessee to conduct any activity upon or for the benefit of the Property,
  including without limitation any activities related to the exploration, development
  or mining of the Property. Whether or not any such exploration, development,
  mining or other activities shall at any time (including, without limitation,
  during the primary term or any extended term of this Agreement) be

 conducted and the location, manner, method, extent, rate and
  timing of such activities (if any) shall be determined within the sole and absolute
  discretion of Lessee.

3.2 Compliance with Law: Reclamation.

 In connection with its activities upon the Property, Lessee
  shall endeavor in good faith to comply with applicable provisions of Federal,
  State and local laws and regulations. Upon expiration or termination of this
  Agreement, Lessee shall reclaim all portions of the Property disturbed by its
  operations (i.e., to the extent and only to the extent of Lessee’s disturbance)
  in accordance with all applicable governmental laws, regulations and orders.
  Lessee shall have the right, without payment of any additional consideration
  to Lessor, to enter upon the Property subsequent to termination of this Agreement
  for purposes of performing such reclamation work.

3.3 Permits and Approvals.

 Lessor understands that Lessee may make efforts to obtain permits,
  licenses, rights, approvals or authorizations from governmental or private persons
  or entities in connection with the exercise by Lessee of its rights under this
  Agreement. Upon request by Lessee, Lessor shall assist and cooperate fully with
  Lessee in any such endeavor, including, without limitation, the execution of
  pertinent documents and the making of verbal endorsements for Lessee’s
  related activities.

3.4 Liens.

 Lessee shall keep the title to the Property free and clear
  of all mechanic’s and supplier’s liens resulting from its operations
  under this Agreement. Lessee may refuse, however, to pay any claims asserted
  against it which Lessee disputes in good faith. Lessee may contest any suit
  commenced to enforce such a claim, but under no circumstances shall Lessee allow
  the Property or any portion thereof to be sold as a result of foreclosure of
  such a lien.

3.5 Indemnity.

 Each Party covenants and agrees to indemnify the other from
  and against any and all liability, claims, damages (including attorneys’
  fees) and causes of action for injury to or death of persons, and damage to
  or loss or destruction of property and environmental liabilities resulting from
  the indemnifying Party’ s use or occupancy of the Property or its operations
  hereunder.

3.6 Commingling.

 Lessee shall have the right to commingle minerals produced
  from the Property (“Subject Ore”) with minerals produced from other
  tracts (“Other Ore”) for any purposes whatsoever,

 including, without limitation, processing or conversion to
  another product. In the event that Lessee commingles Subject Ore with Other
  Ore pursuant to this Section 3.6, Lessee shall perform suffcient sampling, weighing
  and assaying, in accordance with standards and practices generally accepted
  or employed within the industry, to determine the grades and quantities of minerals
  removed and sold from the Property. Without limiting the foregoing, in the event
  that Lessee commingles Subject Ore with Other Ore then, for purposes of determining
  Production Royalty payable to Lessor, the percentages of valuable minerals ultimately
  recovered from the commingled ore (i.e., from the commingled Subject Ore and
  Other Ore as a whole) shall conclusively be deemed applicable to the Subject
  Ore included therein. Lessor has the right, at its own expense, to take independent
  samples of commingled ores, upon reasonable advance notice to Lessee and in
  a manner that will not interrupt Lessee’s operations.

3.7 Taxes, Cooperation and Maintenance Payments.

 (a) Taxes. Lessor shall promptly pay when due all ad
  valorem and real property taxes and assessments levied upon, assessed against
  or relating to the Property, provided, however, that Lessee shall reimburse
  Lessor for any increases in or advance payments of such real property taxes
  or assessments that are attributable to any enhancement in the value of the
  Property resulting from Lessee’s activities under this Agreement, including,
  without limitation, deferred agricultural property taxes. Each of Lessee and
  Lessor shall be responsible for all taxes and assessments levied or assessed
  upon or against their respective personal property located on or about the Property.
  Each of Lessee and Lessor shall be responsible for payment of income taxes on
  their own respective incomes. If Lessor fails to timely pay such taxes, Lessee
  shall have the right, but not the duty, to pay such taxes on Lessor’s
  behalf and deduct such amounts from any amounts due Lessor hereunder.

 (b) Cooperation. Lessor shall promptly furnish to Lessee
  all bills, demands, notices, assessments or statements received by Lessor which
  relate to any tax, assessment or fee for which Lessee is responsible, in whole
  or in part, pursuant to this Section 3.7 Each Party shall provide the other
  Party with copies of all checks and other documentation evidencing the timely
  payment of all taxes, assessments and fees for which it is responsible pursuant
  to Section 3.7(a) .

 (c) Maintenance Payments. Lessee shall pay those federal
  claim maintenance fees due on the Property by September 1, 2004 and any associated
  county recordation fees. For each year this Agreement remains in effect past
  June 1 of the then current year, Lessee shall timely and properly pay federal
  maintenance fees and county recordation fees pertaining to the Property leased
  hereunder to Lessee.

IV. Title

4.1 Provision of Information.

 Upon request by Lessee, Lessor shall furnish to Lessee copies
  of all information in its possession or under its control relating to title
  to or description of the Property, including without limitation copies of all
  abstracts, certificates of title, title insurance policies, commitments for
  title insurance, title reports, memorandum or opinions of counsel, prior deeds,
  contracts, maps, surveys and documents filed with any local, state or federal
  governmental agency. Lessee shall promptly reimburse Lessor for the costs of
  such copies. Upon execution of this Agreement, Lessor shall provide to Lessee
  any and all information in its possession or under its control regarding any
  existing or past industrial, milling, manufacturing, waste storage, exploration,
  development, mining, processing or beneficiating use of the Property. Pursuant
  to this Section 4.1, Lessor shall only be obligated to provide to Lessee information
  that is in its possession or under its control and Lessor shall not be obligated
  to obtain or provide any other information or documents.

4.2 Representations.

 Lessor represents to Lessee that to the best of Lessor’s
  knowledge and belief, as of the Effective Date and as of the date of execution
  of this Agreement that:

 (a) Subject to the paramount title of the United States,
  Lessor is the sole legal and equitable owner of a one hundred percent (100%)
  undivided ownership interest in those unpatented lode mining claims described
  as Property herein, without limitation or restriction whatsoever;

 (b) The Property is free and clear of all leases, liens,
  encumbrances, adverse claims, burdens on production and royalty interests;

 (c) Any and all taxes and assessments that have been
  levied or assessed against or upon the Property that are due and owing have
  been paid;

 (d) Lessor (and the individual who is executing this
  Agreement on Lessors behalf) has the full right, power and authority to execute
  and enter into this Agreement and such execution and performance shall not violate
  any contract or other obligation of Lessor;

 (e) Lessee shall have the quiet and peaceful possession
  and enjoyment of the Property, and, upon request by Lessee, Lessor shall defend
  title to the Property, and Lessee’s quiet and peaceful possession and
  enjoyment thereof against any and all persons or entities who may claim any
  right, title or interest in or to the Property or any portion thereof;

 (f) There is and has been no violation of any applicable
  federal, state or local law or regulation, including, without limitation, those
  concerning zoning, land use or environmental protection, with respect to the
  Property or activities relating thereto;

 (g) No actions, claims or proceedings have been brought,
  asserted or threatened concerning the ownership or right to possession of the
  Property or any portion thereof or otherwise concerning the Property or activities
  relating thereto; and

 (h) All unpatented mining claims included in the Property
  have been properly staked according to industry standards and maintained and
  are validly existing in accordance with applicable law.

4.3 Indemnity.

 In the event that any of Lessor’s representations set
  forth in Section 4.2 is less than represented, Lessor shall indemnify and hold
  Lessee harmless from and against any and all damage, liability, obligation,
  claim, demand, judgment, action, cost, loss and expense, including, without
  limitation, reasonable attorneys’ fees arising directly or indirectly
  as a result of said misrepresentation.

4.4 Title Curative Measures.

 (a) Title Defects. If title to any part of the Property
  is defective or less than as represented in Section 4.2, Lessee shall have the
  right, but not the obligation, to undertake to cure any such defects or to defend
  or to initiate litigation to perfect, defend or cure title to the Property,
  but only after Lessor has been offered the opportunity to take any necessary
  curative measures.

 (b) Crediting of Costs. Lessee shall have the right
  to credit against any and all payments to Lessor under this Agreement (“Payments”),
  including without limitation Advance Royalties, Production Royalty and all costs
  and expenses incurred by Lessee at Lessor’s request in connection with
  any action to cure, defend or perfect title pursuant to Section 4.4(a) . Such
  costs and expenses may include, without limitation, those relating to title
  research, court costs, surveying and attorneys’ fees.

 (c) Redemption. Lessee, at its option, shall have the
  right to pay off, discharge or redeem, in whole or in part, any or all mortgages,
  liens, encumbrances or unpaid taxes on, against or affecting the Property. If
  Lessee pays any such mortgage, lien, encumbrance or unpaid taxes created or
  caused by Lessor, Lessee shall be subrogated to the rights of the holder thereof
  and shall have the right to retain and repay itself from any or all Payments
  to Lessor hereunder.

 (d) Liability. Lessee at any time may withdraw from
  or discontinue any action or activity undertaken or initiated by it to cure,
  defend or perfect title to the Property pursuant to Section 4.4(a) . Lessee
  shall not be liable to Lessor in any way if Lessee is unsuccessful in, withdraws
  from or discontinues any such action or activity.

4.5 Additional and After-Acquired Title.

 If Lessor now owns or subsequently acquires any further right,
  title or interest in or to the Property, Lessor shall promptly provide Lessee
  with written notice thereof and such right, title and interest shall, without
  payment of additional consideration, be part of the Property subject to all
  of the terms and conditions of this Agreement.

4.6 Lesser Title.

 If Lessor owns less than the entire and undivided estate in
  those lands described as the Property (including, without limitation, the minerals
  therein, thereon and thereunder), as warranted in Section 4.2(a), then Lessee
  shall have the right to reduce all Payments to Lessor, so that such Payments
  are made to Lessor only in the proportion that Lessor’s actual interests
  bears to the entire undivided interest. Lessee shall be entitled to offset all
  overpayments or monies erroneously paid to Lessor against any and all subsequent
  Payments to Lessor.

4.7 Third Party Claims.

 In the event that any person or entity (other than Lessor)
  makes a bona fide claim or asserts or appears to hold any right, title or interest
  whatsoever in or to the Property (including, without limitation, the minerals
  therein, thereon or thereunder) production therefrom or this Agreement, then
  the following shall apply:

 (i) Lessee may deposit in a special escrow account
  any Payments otherwise due Lessor;

 (ii) the sum deposited shall remain in the special
  escrow account until the claim or controversy is resolved or until there has
  been a final determination by a court or administrative body of competent jurisdiction
  and all appeals have been exhausted or periods for appeal have expired; and

 (iii) Lessee shall have the right to deduct from any
  Payments to Lessor any amounts that Lessee is required to pay to such third
  parties or that Lessee reasonably elects to pay to such third parties in satisfaction
  of their claims.

 V. Lessor’s Use, Inspections, Records and Confidentiality

5.1 Lessor’s Use and Inspections.

 Subject to compliance with applicable federal, state and local
  health and safety laws and regulations, and requirements of Lessee’s health
  and safety program, Lessor shall have the right, upon not less than forty-eight
  (48) hours prior written notice to Lessee, at a mutually convenient time and
  during normal business hours, and at the sole risk of Lessor, to inspect the
  facilities, operations and mine workings of Lessee upon the Property. Lessee
  shall have the right to accompany Lessor upon any such inspection. Lessor agrees
  to assume all liability for, and to indemnify, protect and hold harmless Lessee
  from and against any and all damage, loss, liability, obligation, claim, demand,
  cost or expense (including attorneys’ fees) which it incurs or to which
  it becomes subject as a result of or arising out of any such inspection or the
  presence or actions of Lessor (or its agents or invitees) upon the Property,
  including, without limitation, those relating to death, personal injury or property
  damage.

5.2 Books and Records.

 Lessee shall keep accurate records of all minerals extracted
  and sold from the Property by Lessee, and of all calculations relative to Production
  Royalty payments hereunder for not less than two (2) calendar years. Such records
  may be inspected by Lessor or duly authorized representatives of Lessor once
  each calendar year at a mutually convenient time, during normal business hours,
  upon providing to Lessee not less than five (5) days prior written notice. Under
  no circumstances shall Lessee be obligated to provide access to Lessor to any
  confidential, interpretive or proprietary data, information or techniques. The
  indemnification and hold harmless provisions set forth in the last sentence
  of each of Section 5.1 and Section 5.4 shall also apply to any and all inspections
  of records pursuant to this Section 5.2.

5.3 Confidentiality.

 Lessor agrees that, during the term of this Agreement, Lessor
  shall treat all information related to or acquired under this Agreement, including,
  without limitation, any interpretive, proprietary or financial information,
  as confidential and shall not give, disclose or make available any such information
  to any third party or to the public without the prior written consent of Lessee,
  except if such disclosure is required by law or legal process, in which case
  Lessor shall make its best efforts to notify Lessee so that it may pursue a protective
  order. Lessor shall not make, disclose or issue any press release, statement
  or other disclosure, of any type whatsoever, pertaining to the Property, this
  Agreement or Lessee’s operations hereunder, without the express prior
  written consent of Lessee as to both the form and content thereof, such consent
  not to be unreasonably withheld.

5.4 Provision of Information.

 No later than thirty (30) days after termination, expiration
  or surrender of this Agreement, Lessee shall provide to Lessor copies of all
  information and data in its possession or under its control generated by and
  pertaining directly to Lessee’s operations upon the Property pursuant
  to this Agreement, provided however, that Lessee shall be under no obligation
  whatsoever to provide Lessor with any proprietary, interpretive or financial
  information whatsoever. Lessee makes no representations or warranties whatsoever
  as to the truth, accuracy or completeness of any information that may be provided
  to Lessor pursuant to this Agreement, provided such information is given in
  good faith. Lessor shall rely upon such information at its sole risk and shall
  indemnify, protect and hold harmless Lessee from and against any and all damage,
  loss, liability, obligation, claim, demand, cost or expense (including attorneys’
  fees) which it incurs or to which it becomes subject as a result of or arising
  out of any reliance upon such information by Lessor or by any person or entity
  obtaining such information directly or indirectly by or through Lessor.

VI. Termination

6.1 By Lessor.

 At the election of Lessor, the failure of Lessee to perform
  any material obligation according to the terms or provisions of this Agreement,
  which substantially affect the rights of the Lessor under this Agreement, shall
  constitute an event of default. Upon an event of default, Lessor shall give
  to Lessee written notice of default, specifying in reasonable detail the particular
  default or defaults relied on by Lessor. Lessee shall have thirty (30) days
  after receipt of Lessor’s notice in which to contest, cure, or commence
  to cure (and diligently thereafter proceed to cure) the alleged default or defaults.
  If Lessee contests that default occurred, it shall so advise Lessor in writing
  within thirty (30) days after receipt of Lessor’s notice. If, within fifteen
  (15) days after Lessor’s receipt of Lessee’s notice the Parties
  have not resolved the dispute by mutual agreement, the issue of default may
  be submitted to a court of competent jurisdiction, and Lessee shall not be deemed
  to be in default until the matter shall have been determined finally by the
  court and all appeals have been waived or exhausted and all periods for appeal
  have expired. If the judicial process results in a final finding of default,
  Lessee shall have thirty (30) days thereafter in which to cure or commence to
  cure (and diligently thereafter proceed to cure) the default. Upon Lessee’s
  failure to cure or commence to cure the default within the time periods allowed
  above, Lessor may declare, by written notice to Lessee, a termination of this
  Agreement. Lessor’s sole remedy shall be the recovery of actual compensatory
  damages, including attorneys fees.

6.2 By Lessee.

 Lessee shall have the right, at any time and from time to
  time, to surrender and terminate this Agreement by providing to Lessor written
  notice of such surrender. The termination

 shall take effect upon the date notice is given. Upon such
  termination, Lessee’s right, title, interest and obligations with respect
  to the Property shall terminate, except as provided in this Agreement to the
  contrary. All Payments which have accrued as of the date of termination shall
  be payable to Lessor by Lessee. Partial termination of select claims is not
  allowed without Lessors written consent.

6.3 Removal of Property.

 Lessee shall have the right, but not the obligation, for a
  period of one (1) year after expiration, surrender, or termination of this Agreement,
  to enter upon and remove from the Property any or all machinery, equipment,
  fixtures, buildings, improvements, concentrates, ore, tailings, residue and
  personal property of every kind and description erected or placed upon or extracted
  from the Property by Lessee. Any such property not removed by Lessee from the
  Property within the period allowed for removal shall become the exclusive property
  of Lessor and Lessee shall have no further right, title, obligation, or interest
  therein.

VII. Force Majeure

7.1 Force Majeure.

 The time for the exercise of rights or the performance of
  obligations hereunder, including, without limitation, the removal of property
  pursuant to Section 6.3, and the term of the Lease included herein, shall be
  extended for a period equal to the period or periods of Force Majeure. Lessee
  shall use reasonable diligence to remove Force Majeure. The term “Force
  Majeure” refers to any cause of any kind or nature whatsoever beyond Lessee’s
  reasonable control that prevents, inhibits or delays Lessee’s performance
  hereunder, including without limitation the following:

 (a) law, ordinance, governmental regulations, restraint
  or court orders;

 (b) action or inaction of civil or military authorities;

 (c) inability to obtain or delay in obtaining any license,
  permit or other authorization that may be necessary to any of Lessee’s
  activities hereunder;

 (d) unusually severe weather;

 (e) mining casualty, unavoidable mill shutdown, damage
  to or destruction of mine, plant or facility;

 (f) fire, explosion, flood, storm or other acts of
  God;

 (g) insurrection, war, riot, labor disputes;

 (h) inability after diligent effort to obtain workers,
  fuel or materials; or delay in transportation.

VIII. Assignment

8.1 Assignment.

 Upon providing written notice to the other Party in accordance
  with Section 9.2, either Party may assign its respective rights and obligations
  under this Agreement. No such assignment shall in any way enlarge or diminish
  the rights or obligations of Lessee or Lessor hereunder and the assigning Party
  shall remain liable for performance of this Agreement in the event that the
  assignee defaults in its performance hereunder following a written demand and
  reasonable time to cure such default. A fully-executed Memorandum of Assignment
  in recordable form shall be provided to the non-assigning Party by the assigning
  Party.

IX. Payments and Notices

9.1 Payments.

 All payments provided for in this Agreement may be made by
  mailing or delivering company checks of the Lessee to Lessor at the address
  set forth in Section 9.2. Notwithstanding any provision of this Agreement to
  the contrary or any assignment pursuant to Section 8.1, under no circumstances
  shall Lessee be required to make any payment hereunder, except by mailing or
  delivering one check to a single address. Upon making such payment, Lessee shall
  be relieved of any and all responsibility for the division or distribution of
  the amount paid. Payments shall be deemed made upon delivery (in cases of personal
  delivery of checks) or upon mailing (in cases of mailing of checks by U.S. mail).

9.2 Notices.

 Any notice or other instrument required or desired to be given
  under this Agreement shall be effective only if in writing and served personally
  or by certified or registered mail (postage prepaid, return receipt requested)
  on the Parties at the following addresses:

	 Lessor:  	 Nevada North Resources (U.S.A.) Inc.  
	  	 501 South 1St Avenue – Suite N  
	  	 Arcadia, California 91006-3888  
	  	 Attn: Larie Richardson  
	  	 Telephone: 626-821-9630  
	  	 Facsimile: 626-821-9635  

 

	 Lessee:  	 Miranda U.S.A., Inc.  
	  	 1140 Homer Street  
	  	Suite 306 
	  	 Vancouver, BC V6B 2X6  
	  	 Attn: Dennis Higgs  
	  	 Telephone: 604-689-1659  
	  	 Facsimile: 604-689-1722  
	  	 
	 With copy to:  	 Miranda U.S.A., Inc.  
	  	 5900 Philoree Lane  
	  	 Reno, Nevada 89511  
	  	 Attn: Ken Cunningham  
	  	 Telephone: 775-849-2347  
	  	 Facsimile: 775-849-2336  

  Notices shall be deemed given upon delivery (in cases of personal service) or
  mailing (in cases of notice by U.S. mail) as provided in the preceding sentence.
  Upon giving notice to Lessor at the address shown above, Lessee shall be deemed
  to have given notice to all of the individuals and/or entities comprising Lessor,
  and Lessee shall be relieved of any and all responsibility for further distribution
  of the notice. Either Party may change its address by giving written notice
  of the change to the other Party in accordance with the provisions of this Section
  9.2. Any notice from Lessor hereunder shall be effective only if executed by
  each of the individuals and/or entities comprising Lessor. 

X. Miscellaneous

10.1 Severability.

 Whenever possible, each provision of this Agreement shall
  be interpreted in such a manner as to be effective and valid under applicable
  law, and if any provision of this Agreement shall be or becomes prohibited or
  invalid in whole or in part for any reason whatsoever, that provision shall
  be ineffective only to the extent of such prohibition or invalidity without invalidating
  the remaining portion of that provision or the remaining provisions of this
  Agreement.

 10.2 Binding Effect; Construction and Enforcement.

 Subject to the provisions of Section 8.1, all covenants, conditions
  and terms of this Agreement shall be deemed to run with the land and shall be
  binding upon and inure to the benefit of the Parties and their respective heirs,
  successors, personal representatives and assigns. The headings in this Agreement
  are for convenience only; they form no part of this Agreement and shall not
  affect its interpretation.

10.3 Sole Agreement.

 This Agreement sets forth the complete, entire and final agreement
  between the Parties with respect to the subject matter hereof and supersedes
  all previous agreements or understandings, whether written or otherwise. No
  modification or alteration of this Agreement shall be effective unless in writing
  and executed by the Parties. No waiver of any right hereunder shall be effective
  unless in writing and executed by the Party to be bound thereby.

10.4 Legal Advice.

 Lessor expressly acknowledges that it has sought (or has had
  the opportunity to seek) the advise of Lessor’s own legal counsel to assist
  Lessor in negotiating and reviewing this Agreement. Lessor expressly acknowledges
  that Lessor is not relying on any oral or written statement (not expressly set
  forth in this Agreement) made by Lessee, its employees or agents regarding any
  matters pertaining to this Agreement.

10.5 Further Assurances.

 Upon request by Lessee, and without cost to Lessee, Lessor
  agrees to execute and/or furnish Lessee with such additional formal assurances
  or other written documents, in proper and recordable form, as may be reasonably
  necessary to carry out the intent, purposes and terms of this Agreement.

10.6 Counterparts.

 This Agreement may be executed in counterparts, all of which
  taken together shall constitute a single and complete contract.

10.7 Rights Not Suspended.

 No dispute between the Parties shall result in a suspension
  of this Agreement or the rights of the Parties hereunder.

10.8 Governing Law.

 This Agreement and any disputes arising hereunder shall be
  governed by and construed in accordance with the laws of the State of Nevada.

10.9 Joint and Several Liability.

 In the event that either Party is now or in the future comprised
  of more than one person or entity, then all the liabilities, obligations, duties,
  covenants, representations and warranties of such Party shall be the joint and
  several undertakings of each of such persons and entities.

 10.10 Set Off.

 Lessee shall have the right to set off and deduct from any or all Payments
  to Lessor hereunder, any and all amounts owed to Lessee by Lessor.

 SIGNATURE PAGE

  MINING LEASE

  BY AND BETWEEN

  NEVADA NORTH RESOURCES (U.S.A.), INC.

  AND

  MIRANDA U.S.A., Inc.

	NEVADA NORTH RESOURCES (U.S.A.), INC.	MIRANDA U.S.A., Inc.
	 	 
	 By:  ______________________________	 By:  ______________________________
	 	 
	 Title:  _____________________________________	 Title:  _____________________________________
	 	 
	 Tax ID No.  _________________________________	  

 

	 STATE OF  	 )  	  
	  	 )  	 §  
	 COUNTY OF  	 )  	  

On _____________, before me, __________________________________________, personally
appeared ____________________________________________________________, proved
to me on the basis of satisfactory evidence to be the person whose name is subscribed
to the within instrument and acknowledged that he executed the same in his authorized
capacity, and that by his signature on the instrument the entity on behalf of
which he acted, executed the instrument.
 WITNESS my hand and offcial seal.

	_________________________________________	 
	 	 
	Notary Public	[Seal]

	 STATE OF  	 )  	  
	  	 )  	 §  
	 COUNTY OF  	 )  	  

On _____________, before me, __________________________________________, personally
  appeared ____________________________________________________________, proved
  to me on the basis of satisfactory evidence to be the person whose name is subscribed
  to the within instrument and acknowledged that he executed the same in his authorized
  capacity, and that by his signature on the instrument the entity on behalf of
  which he acted, executed the instrument.

 WITNESS my hand and official seal.

	_________________________________________	 
	 	 
	Notary Public	[Seal]

 EXHIBIT A

  TO THAT MINING LEASE

  BY AND BETWEEN

  NEVADA NORTH RESOURCES (U.S.A.), INC.

  AND

  MIRANDA U.S.A. Inc.

 COAL

 The following unpatented lode mining claims:

	 Claim Name  	 BLM-NMC  	 Loc. Date  	 County  	 Book  	 Page  
	  	 	 	 	 	 
	 Coal  1	 847957  	 24-May-03  	 Eureka  	 361  	 279  
	 Coal  2	 847958  	 24-May-03  	 Eureka  	 361  	 280  
	 Coal  3	 847959  	 24-May-03  	 Eureka  	 361  	 281  
	 Coal  4	 847960  	 24-May-03  	 Eureka  	 361  	 282  
	 Coal  5	 847961  	 24-May-03  	 Eureka  	 361  	 283  
	 Coal  6	 847962  	 24-May-03  	 Eureka  	 361  	 284  
	 Coal  7	 847963  	 24-May-03  	 Eureka  	 361  	 285  
	 Coal  8	 847964  	 09-Apr-03  	 Eureka  	 361  	 286  
	 Coal  9	 847965  	 09-Apr-03  	 Eureka  	 361  	 287  
	 Coal  10	 847966  	 09-Apr-03  	 Eureka  	 361  	 288  
	 Coal  11	 847967  	 09-Apr-03  	 Eureka  	 361  	 289  
	 Coal  12	 847968  	 09-Apr-03  	 Eureka  	 361  	 290  
	 Coal  13	 847969  	 09-Apr-03  	 Eureka  	 361  	 291  
	 Coal  14	 847970  	 09-Apr-03  	 Eureka  	 361  	 292  
	 Coal  15	 847971  	 24-May-03  	 Eureka  	 361  	 293  
	 Coal  16	 847972  	 09-Apr-03  	 Eureka  	 361  	 294  
	 Coal  17	 847973  	 09-Apr-03  	 Eureka  	 361  	 295  
	 Coal  18	 847974  	 09-Apr-03  	 Eureka  	 361  	 296  
	 Coal  19	 847975  	 09-Apr-03  	 Eureka  	 361  	 297  
	 Coal  20	 847976  	 09-Apr-03  	 Eureka  	 361  	 298  
	 Coal  21	 847977  	 09-Apr-03  	 Eureka  	 361  	 299  
	 Coal  22	 847978  	 09-Apr-03  	 Eureka  	 361  	 300  
	 Coal  23	 847979  	 08-Apr-03  	 Eureka  	 361  	 301  
	 Coal  24	 847980  	 08-Apr-03  	 Eureka  	 361  	 302  
	 Coal  25	 847981  	 08-Apr-03  	 Eureka  	 361  	 303  
	 Coal  26	 847982  	 08-Apr-03  	 Eureka  	 361  	 304  
	 Coal  27	 847983  	 08-Apr-03  	 Eureka  	 361  	 305  
	 Coal  28	 847984  	 08-Apr-03  	 Eureka  	 361  	 306  
	 Coal  29	 847985  	 08-Apr-03  	 Eureka  	 361  	 307  

 

	 Coal  30 	 847986  	 08-Apr-03  	 Eureka  	 361  	 308  
	 Coal  31 	 847987  	 09-Apr-03  	 Eureka  	 361  	 309  
	 Coal  32 	 847988  	 09-Apr-03  	 Eureka  	 361  	 310  
	 Coal  33 	 847989  	 09-Apr-03  	 Eureka  	 361  	 311  
	 Coal  34 	 847990  	 09-Apr-03  	 Eureka  	 361  	 312  
	 Coal  35 	 847991  	 08-Apr-03  	 Eureka  	 361  	 313  
	 Coal  36 	 847992  	 08-Apr-03  	 Eureka  	 361  	 314  
	 Coal  37 	 847993  	 08-Apr-03  	 Eureka  	 361  	 315  
	 Coal  38 	 847994  	 08-Apr-03  	 Eureka  	 361  	 316  
	 Coal  39 	 847995  	 08-Apr-03  	 Eureka  	 361  	 317  
	 Coal  40 	 847996  	 08-Apr-03  	 Eureka  	 361  	 318  
	 Coal  41 	 847997  	 08-Apr-03  	 Eureka  	 361  	 319  
	 Coal  42 	 847998  	 10-Apr-03  	 Eureka  	 361  	 320  
	 Coal  43 	 847999  	 10-Apr-03  	 Eureka  	 361  	 321  
	 Coal  44 	 848000  	 11-Apr-03  	 Eureka  	 361  	 322  
	 Coal  45 	 848001  	 11-Apr-03  	 Eureka  	 361  	 323  
	 Coal  46 	 848002  	 11-Apr-03  	 Eureka  	 361  	 324  
	 Coal  47 	 848003  	 11-Apr-03  	 Eureka  	 361  	 325  
	 Coal  48 	 848004  	 11-Apr-03  	 Eureka  	 361  	 326  
	 Coal  49 	 848005  	 11-Apr-03  	 Eureka  	 361  	 327  
	 Coal  50 	 848006  	 11-Apr-03  	 Eureka  	 361  	 328  
	 Coal  51 	 848007  	 11-Apr-03  	 Eureka  	 361  	 329  
	 Coal  52 	 848008  	 11-Apr-03  	 Eureka  	 361  	 330  
	 Coal  53 	 848009  	 11-Apr-03  	 Eureka  	 361  	 331  
	 Coal  54 	 848010  	 11-Apr-03  	 Eureka  	 361  	 332  
	 Coal  55 	 848011  	 11-Apr-03  	 Eureka  	 361  	 333  
	 Coal  56 	 848012  	 11-Apr-03  	 Eureka  	 361  	 334  
	 Coal  57 	 848013  	 11-Apr-03  	 Eureka  	 361  	 335  
	 Coal  58 	 848014  	 11-Apr-03  	 Eureka  	 361  	 336  
	 Coal  59 	 848015  	 11-Apr-03  	 Eureka  	 361  	 337  
	 Coal  60 	 84806  	 12-Apr-03  	 Eureka  	 361  	 338  
	 Coal  61 	 848017  	 12-Apr-03  	 Eureka  	 361  	 339  
	 Coal  62 	 848018  	 12-Apr-03  	 Eureka  	 361  	 340  
	 Coal  63 	 848019  	 12-Apr-03  	 Eureka  	 361  	 341  
	 Coal  64 	 848020  	 12-Apr-03  	 Eureka  	 361  	 342  

 EXHIBIT B

  TO THAT MINING LEASE

  BY AND BETWEEN

  NEVADA NORTH RESOURCES (U.S.A.), INC.

  AND

  MIRANDA U.S.A., Inc.

PRODUCTION ROYALTY

1 Production Royalty.

 The Production Royalty provided for in Section 2.2 of the
  Agreement and payable to Lessor shall be based upon: (a) the value of doré
  produced from ores and minerals mined from the Property, determined at the Property
  or at such other facility producing such doré, sold or deemed sold, determined
  by reference to published prices for refined gold and silver and other Precious
  Metals (as hereinafter defined), and (b) the value of all other Products produced
  from ores and minerals mined from the Property, determined at the Property or
  at such other facility producing such Product, sold or deemed sold, determined
  by reference to published prices for such “Other Products” all as
  hereinafter provided. It is acknowledged that it will be necessary to process,
  treat or upgrade Precious Metals or Other Products at a location or locations
  not on the Property before they are sold or deemed to be sold; and that to determine
  the value of such Precious Metals or Other Products of the Property or other
  facility producing doré or Other Products, all costs incurred or deemed
  to be incurred by Miranda in paying the Production Royalty with respect to the
  transporting, processing, treatment or upgrading of the Precious Metals or Other
  Products after they have been processed shall be deducted from the proceeds
  received or deemed to be received by Miranda as hereinafter set forth.

      Miranda shall pay to Lessor
  a Production Royalty as set forth in Section 2.2 of the Agreement as a percentage
  of the Net Value (as hereinafter defined) of Precious Metals or Other Products
  mined, removed and sold (or deemed sold as hereinafter described) from the Property.
  For purposes of this Agreement, the term “Precious Metals” shall
  mean gold, silver, platinum and palladium and “Other Products” shall
  mean all other metallic and non-metallic minerals of every kind except: (a)
  Precious Metals and (b) oil, gas, casinghead gas and associated liquid and gaseous
  hydrocarbon substances. The Production Royalty shall run with the land described
  as the Property. The Production Royalty shall specifically apply to unpatented
  lode mining claims that are a part of the Property and to any relocation or
  amendment thereof, to any patent issued covering such land and to any other
  right, title or interest acquired by, for, or on behalf of Miranda with respect
  to such land. The obligation to pay the Production Royalty shall accrue upon
  and not before: (a) the outturn of refined Precious Metals meeting the requirements
  of the specified published price and a credit for which is made to Miranda’s
  account (or to a third-party account for the benefit of Miranda) or (b) the
  sale of unrefined metals, doré, concentrates, ores or Other Products,
  as hereinafter provided, whichever is sooner.

 2 Net Value Definition.

 As used herein, “Net Value” means the Gross Value of Precious
  Metals or Other Products, less all costs, charges and expenses paid or incurred
  by Miranda after production of doré, or, in the case of Other Products,
  after production of concentrates, whether at the Property or elsewhere with
  respect to the transportation, processing, treatment or upgrading of the doré
  or concentrates such costs, charges and expenses to include, without limitation,
  the following: 

     (a) charges for treatment in
  the smelting and refining processes (including handling, processing, interest
  and provisional settlement fees, sampling, assaying and representation costs,
  penalties and other processor deductions); 

     (b) actual costs of transportation
  (including freight, insurance, security, transaction taxes, handling, port,
  demurrage, delay, and forwarding expenses incurred by reason of or in the course
  of such transportation) of doré or concentrates from the Property or
  other facility producing doré or concentrates to the place of additional
  treatment and to the place of sale; 

     (c) actual sales and brokerage
  costs of Precious Metals or Other Products for which the Production Royalty
  is based on proceeds received by the Lessee as hereinafter provided in Section
  3(d) below, and an allowance for reasonable sales and brokerage costs for refined
  Precious Metals subject to the Production Royalty hereinafter provided in Sections
  3(a), (b) and (c) below; 

     (d) all royalties payable to
  any governmental agency, and sales, use, severance, net proceeds of mine, ad
  valorem taxes applicable under state, federal or local law and any other tax
  or governmental levy or fee on or measured by mineral production from the Property
  (other than taxes based on income).

3 Gross Value Definition.

“Gross Value” shall have the following meaning:

      (a) If Miranda causes refined
  gold which meets or exceeds generally accepted commercial standards for the
  sale of refined gold (it being understood that the specifications for refined
  gold published by the London Metal Exchange presently meet such standards) to
  be produced from ores and minerals mined from the Property and, if Section 3(d)
  shall not be applicable, for purposes of determining the Production Royalty,
  the refined gold shall be deemed to have been sold at the Monthly Average Gold
  Price for the month in which it was refined, and the Gross Value shall be determined
  by multiplying Gold Production during the calendar month by the Monthly Average
  Gold Price. As used in this Agreement, “Gold Production” means the
  quantity of refined gold in troy ounces outturned to Miranda’s pool account
  (or to a third-party account for the benefit of Miranda) by an independent third-party
  refinery from ores and minerals mined from the Property on either a provisional
  or final settlement basis

 each calendar month. As used herein, “Monthly Average
  Gold Price” means the average London Bullion Market Association P.M. Gold
  Fix for a troy ounce of refined gold of a quality that is equal to or less than
  the quality of refined gold produced from the ores and minerals and meeting
  the standards applicable to the refined gold for which the Gross Value is to
  be determined hereunder, calculated by dividing the sum of all such prices reported
  for the month in question by the number of days for which such prices were reported.

      In the event that the London
  Bullion Market Association P.M. Gold Fix ceases or quotes prices for refined
  gold of a quality that is greater than the quality of refined gold for which
  the Gross Value is being determined hereunder, all such references shall be
  replaced with references to prices of gold of a comparable quality for immediate
  delivery in the most nearly comparable established market selected by Miranda
  as such prices are published in “Metals Week” or a similar publication.

      (b) If Miranda causes refined
  silver which meets or exceeds generally accepted commercial standards for the
  sale of refined silver (it being understood that the specifications for refined
  silver published by Handy & Harman presently meet such standards) to be
  produced from ores and minerals mined from the Property and, if Section 3(d)
  shall not be applicable, for purposes of determining the Production Royalty,
  the refined silver shall be deemed to have been sold at the Monthly Average
  Silver Price for the month in which it was refined, and the Gross Value shall
  be determined by multiplying Silver Production during the calendar month by
  the Monthly Average Silver Price. As used herein, “Silver Production”
  means the quantity of refined silver in troy ounces outturned to Miranda’s
  pool account (or to a third-party account for the benefit of Miranda) by an
  independent third-party refinery from ores and minerals mined from the Property
  on either a provisional or final settlement basis each calendar month. As used
  herein, “Monthly Average Silver Price” means the average New York
  Silver Price as published daily by Handy & Harman for a troy ounce of refined
  silver of a quality that is equal to or less than the quality of refined silver
  produced from the ores and minerals meeting the standards applicable to the
  refined silver for which the Gross Value is to be determined hereunder, calculated
  by dividing the sum of all such prices reported for the calendar month in question
  by the number of days for which such prices were reported.

      In the event that the Handy
  & Harman quotation ceases or quotes prices for refined silver of a quality
  that is greater than the quality of refined silver for which the Gross Value
  is being determined hereunder, all such references shall be replaced with references
  to prices of silver of a comparable quality for immediate delivery in the most
  nearly comparable established market selected by Miranda as published in “Metals
  Week” or a similar publication.

      (c) If Miranda causes refined
  or processed Precious Metals, other than refined gold and refined silver, which
  meets or exceeds commercial standards for the sale of such Precious Metals,
  or refined or processed Other Products, to be produced from ores and minerals
  mined from the Property, and if Section 3(d) shall not be applicable, for purposes
  of determining the Gross Value of such Precious Metals (other than refined gold
  and refined silver) or refined or processed Other Products hereunder the same
  shall be deemed to have been sold at the Monthly Average Price for the same
  for the month in which it was refined, and the Gross

 Value shall be determined by multiplying Production of the
  same during the calendar month by the Monthly Average Price for the same. As
  used herein, Production means the quantity of such Precious Metals (other than
  refined gold and refined silver) or refined or processed Other Products in standard
  commercial units outturned to Miranda’s pool account (or to a third-party
  account for the benefit of Miranda by an independent third-party refinery from
  ores and minerals mined from the Property on either a provisional or final settlement
  basis each calendar month. As used herein, “Monthly Average Metal Price”
  means the price for each such standard commercial unit of such Precious Metals
  (other than refined gold and refined silver) or refined or processed Other Products
  for immediate delivery in an established market selected by Miranda as such
  price is published in “Metals Week” or a similar publication.

      (d) In the event Miranda sells
  raw ores of Precious Metals or Other Products or concentrates or doré
  produced from such ores and minerals mined from the Property, then the Gross
  Value shall be calculated as set forth in Section 3(a), (b) and (c), except
  that Gold Production, Silver Production or other Production shall, in each case,
  be equal to the amount of gold, silver, other Precious Metals and Other Products
  contained in such raw ores, concentrates or doré sold in the specified
  month multiplied by (i) the recovery rate for such gold, silver, other Precious
  Metals and Other Products contractually determined between Miranda and a third
  party processor or (ii) if there is not a specifically contracted recovery rate,
  then by an assumed recovery rate equal to the average actual recovery rate experienced
  by Miranda from the beneficiation of such ores and minerals for such gold, silver,
  other Precious Metals and Other Products for the latest calendar quarter ended
  prior to such month. In the event that such ores and minerals have not been
  so beneficiated by Miranda during any such calendar quarter, the recovery rate
  shall be the actual recovery rate experienced by the purchaser of such ores
  and minerals determined in good faith by Miranda.

      (e) Where outturn of Precious
  Metals or Other Products is made by an independent third-party refinery on a
  provisional basis, the Gross Value shall be based upon the amount of such provisional
  settlement, but shall be adjusted in subsequent statements to account for the
  amount of such Precious Metals or Other Products established by final settlement
  by such refinery.

4 Forward Sales.

 Lessor acknowledges that Miranda shall have the right to market
  and sell or refrain from selling ores and minerals mined from the Property and
  Precious Metals and Other Products produced from ores and minerals mined from
  the Property in any manner it may elect. Accordingly, Gross Value shall be determined
  as provided in Section 3 above irrespective of any actual selling arrangements
  entered into by Miranda, specifically including, but not limited to, forward
  sales, futures trading or commodity options trading, and any other price hedging,
  price protection and speculative arrangements which may involve the possible
  delivery of ores and minerals and Precious Metals or Other Products produced
  from ores and minerals mined from the Property.

5 Processing by Miranda.

 Miranda may, but is not obligated to, beneficiate, mill, sort,
  concentrate, refine, smelt or otherwise process or upgrade the ores and minerals
  mined from the Property, Precious Metals ores and concentrates or Other Products
  ores and concentrates produced from ores and minerals mined from the Property
  prior to sale, transfer or conveyance to any purchaser, user, or consumer. Miranda
  shall not be liable for any mineral values, including, without limitation, any
  ores and minerals, Precious Metals or Other Products, lost in any manner or
  at any time or times except and only to the extent any such losses resulted
  exclusively from the bad faith or gross negligence of Miranda.

6 Sales to Affliated Party.

 Miranda shall be permitted to sell ores and minerals mined
  from the Property in the form of raw ore, doré, or concentrates to an
  Affliate, provided that such sales shall be considered, solely for the purpose
  of computing Net Value, to have been sold at prices and on terms no less favorable
  than those which would be extended to a non-affliated third party under similar
  circumstances. Nothing contained herein shall preclude or restrain Miranda in
  any way or at any time or times from selling or otherwise disposing of ores
  and minerals, Precious Metals or Other Products mined from the Property to any
  third party or any Affliates.

7 Measurement of Products.

 All ores and minerals mined from the Property for which a
  Net Smelter Returns Royalty is payable hereunder shall be weighed or measured
  and sampled in accordance with sound mining and metallurgical practices, after
  which Miranda may mix or commingle such ores and minerals, Precious Metals or
  Other Products mined from the Property with ores or other materials from properties
  other than the Property.

8 Calculation of Net Value.

 Net Value shall be determined on a calendar month basis (except
  the first month, which shall be calculated based upon Gross Value and costs,
  charges and expenses incurred with respect to the month in which the Agreement
  date occurs, pro-rated based upon the number of days remaining in such month
  as of the Agreement date). Production Royalty shall be paid on the tenth business
  day following the last day of the calendar quarter in which the same accrued.
  At the time of payment of Production Royalty, Miranda shall deliver to Lessor
  a statement showing, in reasonable detail, the quantities and grades of the
  refined Precious Metals, doré, concentrates, Other Products or ores and
  minerals produced and sold or deemed to be sold by Miranda in the preceding
  quarter; the Average Monthly Price determined, as herein provided, for refined
  Precious Metals and Other Products on which

 the Production Royalty is due; costs and other deductions;
  and other pertinent information, in reasonable detail, to explain the calculation
  of Production Royalty payment with respect to each month in such quarter. Payment
  to Lessor shall be made in cash or by check, or upon 48 hours prior written
  notice from Lessor, by wire transfer to the account specified by Lessor in such
  notice. In the event a Production Royalty payment is not due for any quarter,
  Miranda shall not be required to provide Lessor with any statement hereunder.

      Such quarterly statement shall
  also list the quantity and quality of any Precious Metals doré in inventory,
  if any, for more than ninety (90) days. No Production Royalty shall be due with
  respect to ores and minerals, Precious Metals or Other Products mined from the
  Property or stockpiles of the same unless and until the same are actually sold
  or deemed sold as expressly set for the above.

9 Sales.

 All Production Royalty payments shall be considered final
  and in full satisfaction of all obligations of Miranda with respect thereto,
  unless Lessor gives Miranda written notice describing and setting forth a specific
  objection to the calculation thereof within ninety (90) days after receipt by
  Lessor of the quarterly statement herein provided for.

10 Miranda’s Duty to Inform.

 Miranda shall be under no obligation to provide Lessor with
  any ore reserve calculations (including, but not limited to, any information
  that would be required to be included in documents filed with the Securities
  and Exchange Commission or such other regulatory body regarding ore reserve
  calculations), mine plans, forecasts or other information relating to its operations
  other than as expressly set forth in this Agreement.

11 Assignment of Production Royalty.

 Subject to the provisions of this Agreement Lessor may transfer,
  pledge, mortgage, charge or otherwise encumber all or any part of its right,
  title and interest in and to the Production Royalty; provided, however, that
  Miranda shall be under no obligation to make its payments hereunder to any such
  assignee, transferee, pledgee or other third party until Miranda’s receipt
  of written notice concerning the transfer, pledge, mortgage, charge or other
  encumbrance and provided further that in no event shall Miranda be obligated
  to deliver payment or notices pursuant to this Agreement to more than one entity
  or location.

12 No Duty to Mine.

 Miranda shall have the sole and exclusive right to determine
  the timing and the manner of any Mining or production from the Property and
  all related exploration, development and mining activities. Nothing in this
  Exhibit or the remainder of this Agreement shall require Miranda to explore,
  develop, mine or continue operations on the Property or to process ores and
  minerals from the Property. The mining of ores from any properties not subject
  to the Production Royalty to the exclusion of ores and minerals that are subject
  to the Production Royalty shall not violate any provision of this Exhibit or
  the remainder of this Agreement and there shall not be any express or implied
  covenant, duty or obligation of Miranda to undertake any exploration, development
  or mining.

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