Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - New Jersey Mining Company - Exhibit 10.5

 EXHIBIT 10.5 

 EXPLORATION AGREEMENT AND OPTION TO LEASE

  THIS EXPLORATION AGREEMENT AND OPTION TO LEASE dated
  as of September 5, 2003, is between PAYMASTER RESOURCES INCORPORATED
  ("Grantor"), and NEW JERSEY MINING COMPANY. ("Grantee") with the
  approval of J. W. BEASLEY INTERESTS LLC (“Owner”). 

 RECITALS 

	 	A.
   	Grantor leases certain real property
        more particularly described in Exhibit A attached hereto and by this reference
        made a part hereof ("Premises"). Grantor warrants and represents that
        it has a valid mining lease and agreement dated December 1, 2001, as amended,
        with Owner of which Exhibit B is a copy.

         

	 	B.
   	The parties agree for the purposes of
        this Agreement that the Premises shall be deemed to include, without limitation,
        the surface and subsurface of the Premises, all mines, ores, metals, mineral
        rights and minerals thereon and thereunder, all veins, lodes, extralateral
        rights and mineral deposits now controlled or hereafter acquired by Grantor
        extending from or onto or contained in the Premises; and all water and
        water rights therein, thereon or thereunder.

         

	 	C.
   	Grantor and Grantee desire to enter
        into this Agreement covering the Premises.

         

	 	D.	Grantor also desires to grant to Grantee
        an option to lease the Premises.

 AGREEMENT 

 IN CONSIDERATION of the sum of $10.00 and other good and valuable
  consideration, the receipt and sufficiency of which are hereby acknowledged,
  and the promises and covenants contained herein, the parties agree as follows:

      1. GRANT. Subject to
  Paragraph 8 below, Grantor grants exclusively to Grantee, its successors or
  assigns, the right to enter upon the Premises for the purpose of conducting
  a mineral evaluation of the Premises, including, without limitation, the right
  to drill and excavate holes, pits, shafts, and other excavations, construct
  roads and conduct surveys, explorations, sampling, investigations, and other
  operations in such a manner and to the extent that Grantee, in its sole judgment
  and discretion, may deem advisable for the purpose of ascertaining any and all
  facts related to the occurrence of Minerals (hereinafter defined) in and under
  the Premises and the metallurgical and physical properties of any Minerals discovered.
  The term "Minerals" shall mean all metallic and nonmetallic substances, whether
  now or at any time hereafter during the term of this Agreement, known as or
  considered minerals, including, without limitation, all base and precious metals,
  iron, and coal but excluding oil, gas and other liquid and gaseous hydrocarbons.

      2. OPTION TO LEASE. Grantor
  hereby grants to Grantee the irrevocable and exclusive option ("Option to Lease")
  during the term hereof to enter into a lease of the Premises, which lease shall
  be in the form of Exhibit C, attached hereto and by this reference made a part
  hereof, and herein referred to as "Said Lease," subject to the terms and conditions
  herein set forth. 

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      Lessee may exercise the Option
  to Lease from time to time at any time prior to the expiration of this Agreement.
  If and when Grantee shall elect to enter into Said Lease, it shall forward to
  Grantor executable copies of Said Lease together with 100,000 shares of Grantee’s
  common stock and within fifteen (15) days of receipt, Grantor shall execute
  and deliver Said Lease to Grantee together with a recordable short form thereof.

      3. PAYMENTS. Grantee
  agrees to pay Grantor 10,000 shares of its common stock every six months, during
  the term of this Agreement, starting June 13, 2003. Grantor acknowledges that
  the first payment has been made. 

      4. TERM. This Agreement
  is granted for a two and one half [2 1/2] year term, commencing on June 13,
  2003, unless sooner terminated under any of the provisions herein. 

      5. WORK COMMITMENT DURING
  EXPLORATION AGREEMENT. During the term of this Agreement, Grantee agrees
  to conduct an economic study of the resource identified by Newmont Exploration
  Limited on the Premises. Grantee agrees to calculate resources and produce an
  ultimate open pit design using Newmont’s drilling data with Gemcom software.
  Grantee agrees to conduct bench scale metallurgical tests, produce a conceptual
  engineering design of the mine, mineral processing plant, and tailings management
  system, and to construct an economic model with study quality capital and operating
  cost estimates using Lotus software. 

      6. PRODUCTION DURING TERM
  OF EXPLORATION AGREEMENT. During the term of this Agreement, Grantee may
  produce and sell Minerals derived from ores produced during exploration activities,
  including underground drifting and ramping. In addition, Grantee may produce
  and sell minerals from existing mine dumps which are more than 500 feet from
  the residence at 8601 Prichard Creek Road. Grantee shall pay Grantor a production
  royalty of 5% of the Net Smelter Return from such limited production. 

      7. TITLE TO PREMISES.
  This Agreement is executed and delivered expressly without warranty of any nature
  whatsoever on the part of Grantor, either expressed or implied, not even to
  the return of the consideration paid herefor. If Grantor controls less interest
  than the entire fee mineral estate, amounts to be paid Grantor may be reduced
  proportionately. 

      8. CONDUCT OF OPERATIONS.

      8.1 Use of Premises.
  Grantee may use only so much of the surface of the Premises as shall be reasonably
  necessary for the exploration and evaluation contemplated in this Agreement.
  Grantee recognizes the surface of the Premises has many uses, including mining,
  exploration, timber cultivation and production, and other activities. Owner
  expressly reserves the right to use and manage the Premises for all uses except
  exploration for, development and mining of Minerals as provided herein, provided
  Owner shall not conduct or permit others to conduct any activities on the Premises
  which unreasonably interfere with Grantee's rights hereunder. Grantee shall,
  wherever practicable, minimize interference to Owner's activities as a result
  of Grantee's activities. Owner reserves the right to (i) harvest timber on the
  Premises, (ii) and occupy the surface of that portion of the Premises commonly
  known as 8601 Prichard Creek Road during the term of this Agreement. 

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      8.2 Use of Roads. Grantee
  shall have the right to use Owner's existing road networks, whether currently
  existing or subsequently constructed, as are necessary to its exercise of the
  rights conveyed hereunder. The foregoing grant of rights is subject to any restriction
  or prohibition contained in any easements, permits or licenses granting Owner
  the right to utilize such roadways, including but not limited to absolute prohibitions
  against assignment, if any, hauling fees, traffic regulations, maintenance costs,
  construction costs, or other restrictions. Grantee in its use of roads, whether
  currently existing or hereafter constructed by either party, shall comply with
  all reasonable regulations promulgated by Grantor or Owner. Nothing contained
  herein shall prohibit Owner from modifying or terminating any easement, license,
  or permit granting Owner a right to use any road. 

      8.3 Caretakers. Caretakers
  retained by Grantor and Owner shall have the right to conduct recreational-type
  placer mining and metal detecting activities on the lower portion of Reeder
  Gulch below 3,050 feet elevation on the Premises, but such activities shall
  not involve any mechanized earthmoving equipment such as dozers, excavators
  or other mechanized equipment. In addition, this right is subject to and shall
  not conflict with exploration and mining operations conducted by Grantee. 

      8.4 Exclusion of Residential
  Area. Grantee shall not conduct any exploration or mining operations in
  the Residential Area without the written permission of Grantor. The Residential
  Area is part of the Premises and is described as 8601 Prichard Creek Road, and
  includes the residence, all outbuildings and any property on the Premises within
  500 feet to the west, south, east, and north of the structures, except the north
  boundary shall not extend past the Newmont Road which lies to the north of the
  structures. 

      8.5 Exclusion of Trespassers.
  The Individuals listed in Exhibit D attached hereto shall not be allowed
  on the Premises under any circumstances. In the event any of the Individuals
  are seen or known to have been on the Premises by Grantee, Grantee shall request
  that the Sheriff file criminal trespass charges against those Individuals. If
  Grantee knowingly allows said Individuals to trespass on the Premises, this
  Exploration Agreement and Option to Lease shall be in default and Grantor can
  terminate this Agreement immediately. 

      9. TECHNICAL DATA. Grantee
  shall furnish Grantor, on a quarterly basis, with copies of all technical data
  pertaining to its operations hereunder, including but not limited to all geological,
  geophysical, geochemical, mapping, drilling, sampling, assay, and other data
  or information pertaining to Grantee's exploration operations hereunder. Such
  data shall be treated as confidential. Notwithstanding the foregoing, Grantee
  shall not be obligated to disclose to Grantor any interpretive data or information
  nor shall Grantee be obligated to disclose any information obtained from Newmont
  Exploration which might conflict with a confidentiality agreement between Newmont
  and Grantee dated June 17, 2003. 

      10. CONTROL OF EXPLORATION.
  Grantee shall have full discretion in the exploration of the Premises and shall
  in no event be obliged to pursue a specific schedule to explore for, develop,
  drill, mine, mill, or concentrate Minerals. 

      11. LESSER INTEREST.
  If Grantor controls less than the entire undivided interest in the Minerals,
  or in any tract included in the Premises, then any payments due Grantor under
  this Agreement shall be due Grantor only in the proportion that its interest
  bears to the whole undivided fee mineral interest. Any interest in the Premises
  and/or Minerals hereafter acquired by Grantor shall be automatically subject
  to this Agreement. If any such acquisition changes Grantor's interest in the
  Premises or Minerals, an appropriate adjustment will be made after Grantee receives
  written notice thereof from Grantor.

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      12. INDEMNITY. Grantee
  shall assume all liability in connection with its operations on the Premises
  and shall hold Grantor and Owner harmless from any and all liability which may
  arise out of Grantee's operations on the Premises. Grantee shall use its best
  efforts to ensure that the work performed by Grantee hereunder shall be in compliance
  with applicable environmental, safety and health requirements of federal, state
  and local governments. Upon the termination of this Agreement, Grantee shall
  return the Premises to Grantor free and clear of liens for labor done or work
  performed upon the Premises or materials furnished to it for the exploration
  thereof under this Agreement, but Grantee shall have the right to dispute or
  contest the validity of such liens. Grantee's liability under this Section shall
  terminate upon termination of this Agreement except for obligations incurred
  before the date of termination. 

      13. INSURANCE. Grantee
  will maintain general liability insurance, subject to availability at reasonable
  cost, during the term of this agreement in the amount of $2,000,000. Grantee
  will instruct its insurance agent to issue certificates showing Grantor and
  Owner as additional insured parties. Grantee will require all subcontractors,
  including drillers and mining contractors, to supply evidence of insurance and
  name Grantee, Grantor, and Owner as additional insured parties. 

      14. FORCE MAJEURE. Grantee
  shall not be liable or in default under any provisions of this Agreement for
  failure to perform any of its obligations hereunder during periods in which
  performance is prevented by any cause reasonably beyond Grantee's control, which
  causes hereinafter are called "force majeure." For the purposes of this Agreement
  the term "force majeure" shall include, but not be limited to, fires, floods,
  windstorms and other damage from the elements; strikes, war, insurrection, mob
  violence and riots; unavailability of materials, labor and transportation; unavailability
  of smelting or refining facilities; interference, action, legislation or regulation
  by governmental or military authority, including a requirement by such authority
  that an environmental impact statement, plan of operation or similar statement
  or document be prepared or approved; litigation; and acts of God or acts of
  the public enemy. The duration of this Agreement and of the time for completion
  of performance by Grantee of its rights and obligations hereunder shall be extended
  for a period equal to the period of disability as a result of the event of force
  majeure, provided Grantee gives Grantor written notice of the existence of the
  event of force majeure. All periods of force majeure shall be deemed to begin
  at the time Grantee stops performance hereunder by reason of force majeure.
  Notwithstanding the foregoing, the parties understand that an event of force
  majeure shall not excuse any obligation to make a payment of common stock required
  by this Agreement. 

      15. FIRST RIGHT OF REFUSAL.
  If, at any time during the term of this Agreement, Grantor shall, in response
  to a bona fide offer to purchase all or part of its interest in the Premises
  from a third party, desire to sell or otherwise dispose of such interest, it
  shall notify Grantee in writing of the party to whom it desires to sell such
  interest and the price at which and the terms upon which it desires to sell
  the same, and Grantee shall, within 30 days of receipt of the notice, notify
  Grantor in writing whether it wishes to purchase such interest at the price
  and on the terms set forth in the notice. If Grantee elects to purchase such
  interest, Grantor shall be bound to convey, assign, or otherwise transfer such
  interest to Grantee promptly thereafter at such price and on such terms. If
  Grantee elects not to purchase such interest or fails to give notice of its
  intention within the 30-day period, Grantor shall be 

 4

 free to convey, assign, or otherwise transfer such interest
  to the third party at a price not less than stated in the notice or on terms
  more favorable than those stated in the notice. Any conveyance by Grantor to
  a third party shall be subject to the terms of this Agreement, including without
  limitation Grantee's right to lease the Premises. If Grantor shall not have
  so disposed of such interest to said third party within 90 days after receipt
  of notice that Grantee elects not to exercise its right of first refusal or
  after expiration of that party's 30 day period within which to give notice,
  the provisions of this Section shall again apply to the disposition by Grantor
  of any such interest. 

      16. ASSIGNMENT. Subject
  to the provisions of Section 15 above, Grantor may assign this Agreement whether
  or not Grantee’s consent is given. Grantee may not assign this Agreement
  without the consent of Grantor, which consent shall not be unreasonably withheld,
  except Grantee may assign this Agreement to an affiliate without Grantor’s
  consent. In the event of any assignment, the rights of either party hereunder
  and the provisions hereof shall extend to their successors and assigns, but
  no change or division in ownership of the Premises, however accomplished, shall
  operate to enlarge the obligations or diminish the rights of either party under
  this Agreement, and neither Grantee nor its successors or assigns shall ever
  be required to make payments or to render reports or notices to more than one
  party. In the event Grantor's interest in the Premises is now or hereafter owned
  by more than one party, Grantee may withhold further payments until all such
  owners have designated a single party to act for all of them hereunder in all
  respects, including but not limited to the giving and receiving of all notices
  and the receipt of all payments and reports. No such change or division in the
  ownership of the Premises shall be binding upon Grantee for any purpose until
  such person acquiring any interest has further furnished Grantee with the instrument
  or instruments, or certified copies thereof, constituting his claim of title
  from the original Grantor. Grantee shall have the right to subcontract with
  others for the performance of exploration work hereunder, subject to all of
  the terms of this Agreement, but no such subcontract shall relieve Grantee of
  its obligations to Grantor hereunder. Grantee hereby discloses to Grantor, which
  disclosure shall be kept confidential, that it has entered into a confidentiality
  agreement with Newmont North America Exploration Limited [Newmont] that requires
  Grantee to allow Newmont the right of first offer if Grantee proposes to dispose
  of its interest in this Agreement. 

      17. TERMINATION OF AGREEMENT.

      17.1 By Grantor. If Grantee
  fails to keep and perform all of the terms and conditions of this Agreement
  on its part to be kept and performed, then Grantor may notify Grantee of the
  default in writing specifying the default. If within ten days after Grantee's
  receipt of such notice, in case of default arising through failure to make any
  payments required by this Agreement, and within 30 days in the case of any other
  default, except as provided in Paragraph 8.5, Grantee shall make such payments,
  or commence and diligently thereafter proceed to correct such other default,
  this Agreement shall continue in good standing. However, upon failure of Grantee
  to make such payment within ten days or to commence within 30 days to cure any
  other default and diligently thereafter proceed to correct the same, Grantor
  may then, by written notice or demand, forthwith terminate this Agreement and
  fully repossess itself of the Premises, and without prejudice to any other rights
  which might otherwise accrue to Grantor for the violation of the terms hereof.
  After such default and termination of this Agreement, Grantee shall have no
  further rights in or right to the possession of the Premises or any part thereof
  or to exercise the Option to Lease. 

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      17.2 By Grantee. Grantee
  may terminate this Agreement in whole or in part at any time following the completion
  of the economic study set forth in Section 5 of this Agreement upon delivering
  written notice to Grantor. Said notice shall be effective upon delivery. Upon
  such termination, all right, title and interest of Grantee under this Agreement
  shall terminate as to that part of the Premises covered by the notice, and Grantee
  shall not be required to make any further payments, or to perform any further
  obligations hereunder as to said portion of the Premises, except payments or
  obligations which then have accrued under the express provisions of this Agreement
  and which have not been paid or performed. 

      18. RECORDING OF SHORT-FORM
  NOTICE. The parties hereby agree to execute a short-form counterpart of
  this Agreement contemporaneous herewith for the sole purpose of recordation
  in the real property records sufficient to give record notice, pursuant to the
  laws of the state where the Premises are located of the existence of this Agreement.
  This Agreement shall not be recorded without the consent of Grantee. 

      19. NOTICES. Any notice
  required or permitted to be given hereunder shall be in writing and shall be
  delivered in person or sent by regular mail. Notices so mailed shall be deemed
  effective on the third business day after mailing. Until change of address is
  communicated, all notices shall be addressed to: 

	 	Grantor:	Paymaster Resources Incorporated
	 	 	P. O. Box 387
	 	 	Murray, Idaho 83874
	 	 	 
	 	Grantee:	New Jersey Mining Company
	 	 	P.O. Box 1019
	 	 	Kellogg, Idaho 83837

      20. GENERAL. 

      20.1 Modification. The
  parties hereto by mutual written agreement may, at any time and from time to
  time, amend this Agreement and any of the terms hereof. 

      20.2 Further Documents.
  The parties hereto further agree to execute all such further documents and do
  all such further things as may be necessary to give full effect to these presents.

      20.3 Entire Agreement.
  This is the entire agreement between the parties and no modification shall be
  effective unless in writing and executed by the parties hereto. 

      20.4 Law. The terms and
  provisions of this Agreement shall be interpreted in accordance with the laws
  of the state where the Premises are located. 

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      20.5 Signing.  Each party
  may rely upon the signature of each other party on this Agreement, which is
  transmitted by facsimile as constituting a duly authorized, irrevocable, actual,
  current delivery of this Agreement with the original ink signature of the transmitting
  party. 

 IN WITNESS WHEREOF, this instrument is executed as of the date above written.

	GRANTOR:	GRANTEE:
	 	 	 	 
	PAYMASTER RESOURCES INCORPORATED	NEW JERSEY MINING COMPANY
	 	 	 	 
	By:	/s/ John W. Beasley	By:	/s/ Fred W. Brackebusch
	 	John W. Beasley, President	 	Fred W. Brackebusch, President
	 	 	 	 
	OWNER:	 	 
	 	 	 	 
	J. W. BEASLEY INTERESTS LLC	 	 
	 	 	 	 
	By:	/s/ John W. Beasley	 	 
	 	John W. Beasley, President/Manager	 	 

  

[The balance of this page has been intentionally left blank.]

  

 7

	STATE OF WISCONSIN	)
	 	)ss.
	COUNTY OF Waushara	)

 On this 8th day of September , 2003, before me, the undersigned,
  a Notary Public in and for the State of Wisconsin, personally appeared John
  W. Beasley , known to me and to me known to be the President of PAYMASTER
  RESOURCES INCORPORATED, a corporation whose name is subscribed to the foregoing
  instrument and acknowledged to me that said individual executed the same. 

 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal
  the day in this certificate first above written. 

	 	   /s/ Judy Berglund      
	 	Notary Public for the State of Wisconsin
	 	Residing at Waushara County, Poy Sippi, WI
	 	My commission expires: 05/06/07

 
	STATE OF IDAHO	)
	 	) ss.
	COUNTY OF SHOSHONE	)

 On this 5th day of September , 2003, before
  me, the undersigned, a Notary Public in and for the State of Idaho, personally
  appeared Fred W. Brackebusch , known to me and to me known to be the President
  of NEW JERSEY MINING COMPANY, a corporation whose name is subscribed to the
  foregoing instrument and acknowledged to me that said officer executed the same.

 IN WITNESS WHEREOF, I have hereunto set my hand and affixed
  my notarial seal the day in this certificate first above written. 

	 	Debra L. Hammerberg
	 	Notary Public for the State of Idaho
	 	Residing at Mullan, Idaho
	 	My commission expires: 09/17/07

 8

 

	STATE OF WISCONSIN	)
	 	)ss.
	COUNTY OF Waushara	)

 On this 8th day of September , 2003, before
  me, the undersigned, a Notary Public in and for the State of Wisconsin, personally
  appeared John W. Beasley , known to me and to me known to be the President/Manager
  of J.W. BEASLEY INTERESTS LLC, a corporation whose name is subscribed to the
  foregoing instrument and acknowledged to me that said individual executed the
  same. 

 IN WITNESS WHEREOF, I have hereunto set my hand and affixed
  my notarial seal the day in this certificate first above written. 

	 	   /s/ Judy Berglund      
	 	Notary Public for the State of Wisconsin
	 	Residing at Waushara County, Poy Sippi, WI
	 	My commission expires: 05/06/07

  

[The balance of this page has been intentionally left blank.]

 

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 EXHIBIT A 

 GOLDEN CHEST MINE PROPERTIES 

 PARCEL 1:  

 Golden Chest Patented Mining Claim, M.S. 4 (sometimes referred
  to as Lot 40) situated in the Summit Mining District in Section 4, Township
  49 North, Range 5 East, B.M., Shoshone County, State of Idaho. Patent recorded
  in Book X, Deeds, at page 278. 

 PARCEL 2:  

 Euphernia Patented Mining Claim, M.S. 994 situated in the
  Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book 4, Deeds, at page 530.

 PARCEL 3:  

 A.D. Coplen, No. 2, Thomas Kearn and Brile Placer Mining Claims,
  M.S. 995 situated in the Summit Mining District in Section 4, Township 49 North,
  Range 5 East, B.M. Shoshone County, State of Idaho. Patent recorded in Book
  4, Deeds, at page 533. 

 PARCEL 4:  

 Dora Patented Mining Claim, M.S. 996 situated in the Summit
  Mining District in Section 5, Township 49 North, Range 5 East, B.M., Shoshone
  County, State of Idaho. Patent recorded in Book A, Patents, at page 61. 

 PARCEL 5;  

 Katie Burnett Patented Mining Claim, M.S. 997 situated in
  the Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book A, Patents, at page
  58. 

 PARCEL 6:  

 Littlefield Bar Placer Patented Mining Claim, M.S. 1062
  situated in the Summit Mining District in Sections 4 and 9, Township 49 North,
  Range 5 East, B.M., Shoshone County, State of Idaho. Patent recorded in Book
  10, Deeds, at page 72.  

 PARCEL 7:  

 Paymaster Patented Mining Claim, M.S. 1078 situated in the
  Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book A, Patents, at page
  1. 

 PARCEL 8:  

 Coumerilh Fraction Patented Mining Claim, M.S. 1162 situated
  in the Summit Mining District in Section 4, Township 49 North, Range 5 East,
  B.M., Shoshone County, State of Idaho. Patent recorded in Book A, Patents, at
  page 7. 

 PARCEL 9:  

 Red Star Patented Mining Claim, M.S. 1745 situated in the
  Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book A, Patents, at page
  364. 

 EXCEPT: That portion of Red Star Patented Mining Claim
  conveyed to C.E. Kingman by deed recorded in Book 22, Deeds, at page 312 described
  as follows: 

 Beginning at a point where Corner No. 6 Red Star Lode, M.S.
  1745 bears South 31° 53" West, 465.91 feet; thence 

  South 62° 42" West, 240.25 Feet; thence 

  South 46° 18" West, 251.9 feet; thence 

  South 31° 02" East, 373.88 feet; thence 

  North 27° 50" East, 434.47 feet to the place of beginning. 

 10

 PARCEL 10: 

 Stevens Fraction, Jim and Timberking Patented Mining Claims,
  M.S. 1732 situated in the Summit Mining District in Section 4, Township 49 North,
  Range 5 East, B.M., Shoshone County, State of Idaho. Patent recorded in Book
  A, Patents, at page 391. 

 PARCEL 11:  

 Stevens Bar Patented Mining Claim, M.S. 1735 situated in the
  Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book 26, Deeds, at page
  481. 

 PARCEL 12:  

 Hot Stuff Group consisting of Hot Stuff, Empire, Montana,
  Utah, Blister and Skookum Patented Mining Claims, M.S. 1826 situated in the
  Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book 38, Deeds, at page
  200. 

 EXCEPTION: Except that portion of Hot Stuff Group consisting
  of the Empire and Montana Patented Mining Claims, M.S. 1826 situated in the
  Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho, Patent recorded in Book 38, Deeds, at page
  200 and except that portion of the Hot Stuff Group consisting of that portion
  of Utah Patented Mining Claim, M.S. 1826 situated in the Summit Mining District
  in Section 4, Township 49 North, Range 5 East, B.M., Shoshone County, State
  of Idaho, Patent recorded in Book 38, Deeds, at page 200 with the said excepted
  portion of Utah, described more particularly at that portion of Utah Patented
  Mining Claim lying to the South and East of a straight line from the Northeast
  corner of Utah to the Southwest corner of Utah, a portion of M.S. 1826 situated
  in the Summit Mining District in Section 4, Township 49 North, Range 5 East,
  B.M., Shoshone County, State of Idaho, patent recorded in Book 38, Deeds, at
  page 200. 

 PARCEL 13:  

 Golden Bricks Patented Mining Claim, M.S. 2247 situated in
  the Summit Mining District in Section 4, Township 49 North, Range 5 East, B.M.,
  Shoshone County, State of Idaho. Patent recorded in Book 43, Deeds, at page
  493. 

 PARCEL 14:  

 That 30' wide road way currently existing and commonly known
  as the Newmont Road which is located in the Southwest corner of the Ivy claim
  in Section 9, Township 49 North, Range 5 East, B.M., Shoshone County, State
  of Idaho which initiates on the Shoshone County road right-of-way and runs Westerly
  into the Littlefield Bar, M.S. 1062 Patented Mining Claim. 

  EXHIBIT B  

 Mining Lease between Paymaster Resources Incorporated and J. W. Beasley Interests
  LLC 

 EXHIBIT C 

 Mining Lease Form. 

 EXHIBIT D 

 List of Individuals Not Allowed on the Premises 

	1.	Christopher Nick Kalatzes
	2.	Nick Kalatzes
	3.	Brenda Migliaccio Kalatzes
	4.	Jack Riddle
	5.	Dale Miller
	6.	David Miller

	7.	Sadie Miller
	8.	Warren Yeager
	9.	Sabrina Yeager

11Filed by Automated Filing Services Inc. (604) 609-0244 - New Jersey Mining Company - Exhibit 10.6

EXHIBIT 10.6 

 EXPLORATION AGREEMENT AND OPTION TO LEASE

  THIS EXPLORATION AGREEMENT AND OPTION TO LEASE dated
  as of November 7, 2003, is between PRICHARD CREEK RESOURCE PARTNERS
  LLC ("Grantor"), and NEW JERSEY MINING COMPANY. ("Grantee"). 

 RECITALS 

	 	A.
   	Grantor owns certain unpatented lode
        claims more particularly described in Exhibit A attached hereto and by
        this reference made a part hereof ("Premises")

         

	 	B.
   	The parties agree for the purposes of
        this Agreement that, subject to the paramount title of the United States,
        the Premises shall be deemed to include, without limitation, the surface
        and subsurface of the Premises, all mines, ores, metals, mineral rights
        and minerals thereon and thereunder, all veins, lodes, extralateral rights
        and mineral deposits now controlled or hereafter acquired by Grantor extending
        from or onto or contained in the Premises; and all water and water rights
        therein, thereon or thereunder.

         

	 	C.
   	Grantor and Grantee desire to enter
        into this Agreement covering the Premises.

         

	 	D.	Grantor also desires to grant to Grantee
        an option to lease the Premises.

 AGREEMENT 

 IN CONSIDERATION of the sum of $10.00 and other good and valuable consideration,
  the receipt and sufficiency of which are hereby acknowledged, and the promises
  and covenants contained herein, the parties agree as follows: 

      1. GRANT. Grantor grants
  exclusively to Grantee, its successors or assigns, the right to enter upon the
  Premises, subject to Bureau of Land Management rules, for the purpose of conducting
  a mineral evaluation of the Premises, including, without limitation, the right
  to drill and excavate holes, pits, shafts, and other excavations, construct
  roads and conduct surveys, explorations, sampling, investigations, and other
  operations in such a manner and to the extent that Grantee, in its sole judgment
  and discretion, may deem advisable for the purpose of ascertaining any and all
  facts related to the occurrence of Minerals (hereinafter defined) in and under
  the Premises and the metallurgical and physical properties of any Minerals discovered.
  The term "Minerals" shall mean all metallic and nonmetallic substances, whether
  now or at any time hereafter during the term of this Agreement, known as or
  considered minerals, including, without limitation, all base and precious metals,
  iron, and coal but excluding oil, gas and other liquid and gaseous hydrocarbons.

 1

      2. OPTION TO LEASE. Grantor
  hereby grants to Grantee the irrevocable and exclusive option ("Option to Lease")
  during the term hereof to enter into a lease of the Premises, which lease shall
  be in the form of Exhibit B, attached hereto and by this reference made a part
  hereof, and herein referred to as "Said Lease," subject to the terms and conditions
  herein set forth. 

      Lessee may exercise the Option
  to Lease from time to time at any time prior to the expiration of this Agreement.
  If and when Grantee shall elect to enter into Said Lease, it shall forward to
  Grantor executable copies of Said Lease together with 30,000 shares of Grantee’s
  common stock and within fifteen (15) days of receipt, Grantor shall execute
  and deliver Said Lease to Grantee together with a recordable short form thereof.

      3. TERM. This Agreement
  is granted for a two and one half [2 1/2] year term, commencing on June 13,
  2003, unless sooner terminated under any of the provisions herein. 

      4. WORK COMMITMENT AND CLAIM
  FEES. Grantee agrees to pay all maintenance fees and perform all required
  work including filing of required forms on a timely schedule to keep the unpatented
  claims in good standing. Grantee shall provide to Grantor copies of all forms
  filed with the Bureau of Land Management and Shoshone County. In addition, Grantee
  agrees to perform an assessment to assure that the unpatented claims of the
  Premises are properly laid out and monumented, according to BLM rules, and will
  correct any deficiences in the name of Grantor. 

      5. PRODUCTION DURING TERM
  OF EXPLORATION AGREEMENT. During the term of this Agreement, Grantee may
  produce and sell Minerals derived from ores produced during exploration activities,
  including underground drifting and ramping. Grantee shall pay Grantor a production
  royalty of 5% of the Net Smelter Return from such limited production. 

      6. TITLE TO PREMISES.
  This Agreement is executed and delivered expressly without warranty of any nature
  whatsoever on the part of Grantor, either expressed or implied, not even to
  the return of the consideration paid herefor. If Grantor controls less interest
  than the entire fee mineral estate, amounts to be paid Grantor may be reduced
  proportionately. 

      7. TECHNICAL DATA. Grantee
  shall furnish Grantor, on a quarterly basis, with copies of all technical data
  pertaining to its operations hereunder, including but not limited to all geological,
  geophysical, geochemical, mapping, drilling, sampling, assay, and other data
  or information pertaining to Grantee's exploration operations hereunder. Such
  data shall be treated as confidential. Notwithstanding the foregoing, Grantee
  shall not be obligated to disclose to Grantor any interpretive data or information
  nor shall Grantee be obligated to disclose any information obtained from Newmont
  Exploration which might conflict with a confidentiality agreement between Newmont
  and Grantee dated June 17, 2003. 

      8. CONTROL OF EXPLORATION.
  Grantee shall have full discretion in the exploration of the Premises and shall
  in no event be obliged to pursue a specific schedule to explore for, develop,
  drill, mine, mill, or concentrate Minerals. 

 2

      9. LESSER INTEREST. If
  Grantor controls less than the entire undivided interest in the Minerals, or
  in any tract included in the Premises, then any payments due Grantor under this
  Agreement shall be due Grantor only in the proportion that its interest bears
  to the whole undivided fee mineral interest. Any interest in the Premises and/or
  Minerals hereafter acquired by Grantor shall be automatically subject to this
  Agreement. If any such acquisition changes Grantor's interest in the Premises
  or Minerals, an appropriate adjustment will be made after Grantee receives written
  notice thereof from Grantor. 

      10. INDEMNITY. Grantee
  shall assume all liability in connection with its operations on the Premises
  and shall hold Grantor and Owner harmless from any and all liability which may
  arise out of Grantee's operations on the Premises. Grantee shall use its best
  efforts to ensure that the work performed by Grantee hereunder shall be in compliance
  with applicable environmental, safety and health requirements of federal, state
  and local governments. Upon the termination of this Agreement, Grantee shall
  return the Premises to Grantor free and clear of liens for labor done or work
  performed upon the Premises or materials furnished to it for the exploration
  thereof under this Agreement, but Grantee shall have the right to dispute or
  contest the validity of such liens. Grantee's liability under this Section shall
  terminate upon termination of this Agreement except for obligations incurred
  before the date of termination. 

      11. INSURANCE. Grantee
  will maintain general liability insurance, subject to availability at reasonable
  cost, during the term of this agreement in the amount of $2,000,000. Grantee
  will instruct its insurance agent to issue certificates showing Grantor as an
  additional insured party. Grantee will require all subcontractors, including
  drillers and mining contractors, to supply evidence of insurance and name Grantee
  and Grantor as additional insured parties. 

      12. FORCE MAJEURE. Grantee
  shall not be liable or in default under any provisions of this Agreement for
  failure to perform any of its obligations hereunder during periods in which
  performance is prevented by any cause reasonably beyond Grantee's control, which
  causes hereinafter are called "force majeure." For the purposes of this Agreement
  the term "force majeure" shall include, but not be limited to, fires, floods,
  windstorms and other damage from the elements; strikes, war, insurrection, mob
  violence and riots; unavailability of materials, labor and transportation; unavailability
  of smelting or refining facilities; interference, action, legislation or regulation
  by governmental or military authority, including a requirement by such authority
  that an environmental impact statement, plan of operation or similar statement
  or document be prepared or approved; litigation; and acts of God or acts of
  the public enemy. The duration of this Agreement and of the time for completion
  of performance by Grantee of its rights and obligations hereunder shall be extended
  for a period equal to the period of disability as a result of the event of force
  majeure, provided Grantee gives Grantor written notice of the existence of the
  event of force majeure. All periods of force majeure shall be deemed to begin
  at the time Grantee stops performance hereunder by reason of force majeure.
  Notwithstanding the foregoing, the parties understand that an event of force
  majeure shall not excuse any obligation to make a payment of common stock required
  by this Agreement. 

      13. FIRST RIGHT OF REFUSAL.
  If, at any time during the term of this Agreement, Grantor shall, in response
  to a bona fide offer to purchase all or part of its interest in the Premises
  from a third party, desire to sell or otherwise dispose of such interest, it
  shall notify Grantee in writing of the party to whom it desires to sell such
  interest and the price at which and the terms upon which it desires 

 3

 to sell the same, and Grantee shall, within 30 days of receipt of the notice,
  notify Grantor in writing whether it wishes to purchase such interest at the
  price and on the terms set forth in the notice. If Grantee elects to purchase
  such interest, Grantor shall be bound to convey, assign, or otherwise transfer
  such interest to Grantee promptly thereafter at such price and on such terms.
  If Grantee elects not to purchase such interest or fails to give notice of its
  intention within the 30-day period, Grantor shall be free to convey, assign,
  or otherwise transfer such interest to the third party at a price not less than
  stated in the notice or on terms more favorable than those stated in the notice.
  Any conveyance by Grantor to a third party shall be subject to the terms of
  this Agreement, including without limitation Grantee's right to lease the Premises.
  If Grantor shall not have so disposed of such interest to said third party within
  90 days after receipt of notice that Grantee elects not to exercise its right
  of first refusal or after expiration of that party's 30 day period within which
  to give notice, the provisions of this Section shall again apply to the disposition
  by Grantor of any such interest. 

      14. ASSIGNMENT. Subject
  to the provisions of Section 13 above, Grantor may assign this Agreement whether
  or not Grantee’s consent is given. Grantee may not assign this Agreement
  without the consent of Grantor, which consent shall not be unreasonably withheld,
  except Grantee may assign this Agreement to an affiliate without Grantor’s
  consent. In the event of any assignment, the rights of either party hereunder
  and the provisions hereof shall extend to their successors and assigns, but
  no change or division in ownership of the Premises, however accomplished, shall
  operate to enlarge the obligations or diminish the rights of either party under
  this Agreement, and neither Grantee nor its successors or assigns shall ever
  be required to make payments or to render reports or notices to more than one
  party. In the event Grantor's interest in the Premises is now or hereafter owned
  by more than one party, Grantee may withhold further payments until all such
  owners have designated a single party to act for all of them hereunder in all
  respects, including but not limited to the giving and receiving of all notices
  and the receipt of all payments and reports. No such change or division in the
  ownership of the Premises shall be binding upon Grantee for any purpose until
  such person acquiring any interest has further furnished Grantee with the instrument
  or instruments, or certified copies thereof, constituting his claim of title
  from the original Grantor. Grantee shall have the right to subcontract with
  others for the performance of exploration work hereunder, subject to all of
  the terms of this Agreement, but no such subcontract shall relieve Grantee of
  its obligations to Grantor hereunder. Grantee hereby discloses to Grantor, which
  disclosure shall be kept confidential, that it has entered into a confidentiality
  agreement with Newmont North America Exploration Limited [Newmont] that requires
  Grantee to allow Newmont the right of first offer if Grantee proposes to dispose
  of its interest in this Agreement. 

      15. TERMINATION OF AGREEMENT.

      15.1 By Grantor. If Grantee
  fails to keep and perform all of the terms and conditions of this Agreement
  on its part to be kept and performed, then Grantor may notify Grantee of the
  default in writing specifying the default. If within ten days after Grantee's
  receipt of such notice, in case of default arising through failure to make any
  payments required by this Agreement, and within 30 days in the case of any other
  default, Grantee shall make such payments, or commence and diligently thereafter
  proceed to correct such other default, this Agreement shall continue in good
  standing. However, upon failure of Grantee to make such payment within ten days
  or to commence within 30 days to cure any other default and diligently thereafter
  proceed to correct the same, Grantor may then, by written notice or demand,
  forthwith terminate this Agreement and fully repossess itself of the Premises,
  and without prejudice to 

 4

 any other rights which might otherwise accrue to Grantor for the violation
  of the terms hereof. After such default and termination of this Agreement, Grantee
  shall have no further rights in or right to the possession of the Premises or
  any part thereof or to exercise the Option to Lease. 

      15.2 By Grantee. Grantee
  may terminate this Agreement in whole or in part at any time upon delivering
  written notice to Grantor. Said notice shall be effective upon delivery. Upon
  such termination, all right, title and interest of Grantee under this Agreement
  shall terminate as to that part of the Premises covered by the notice, and Grantee
  shall not be required to make any further payments, or to perform any further
  obligations hereunder as to said portion of the Premises, except payments or
  obligations which then have accrued under the express provisions of this Agreement
  and which have not been paid or performed. 

      16. RECORDING OF SHORT-FORM
  NOTICE. The parties hereby agree to execute a short-form counterpart of
  this Agreement contemporaneous herewith for the sole purpose of recordation
  in the real property records sufficient to give record notice, pursuant to the
  laws of the state where the Premises are located of the existence of this Agreement.
  This Agreement shall not be recorded without the consent of Grantee. 

      17. NOTICES. Any notice
  required or permitted to be given hereunder shall be in writing and shall be
  delivered in person or sent by regular mail. Notices so mailed shall be deemed
  effective on the third business day after mailing. Until change of address is
  communicated, all notices shall be addressed to: 

	 	Grantor:	Prichard Creek Resource Partners LLC
	 	 	P. O. Box 387
	 	 	Murray, Idaho 83874
	 	 	 
	 	Grantee:	New Jersey Mining Company
	 	 	P.O. Box 1019
	 	 	Kellogg, Idaho 83837

     18.GENERAL. 

      18.1 Modification. The
  parties hereto by mutual written agreement may, at any time and from time to
  time, amend this Agreement and any of the terms hereof. 

      18.2 Further Documents.
  The parties hereto further agree to execute all such further documents and do
  all such further things as may be necessary to give full effect to these presents.

      18.3 Entire Agreement.
  This is the entire agreement between the parties and no modification shall be
  effective unless in writing and executed by the parties hereto. 

      18.4 Law. The terms and
  provisions of this Agreement shall be interpreted in accordance with the laws
  of the state where the Premises are located.      

 5

      18.5 Signing.  Each party
  may rely upon the signature of each other party on this Agreement, which is
  transmitted by facsimile as constituting a duly authorized, irrevocable, actual,
  current delivery of this Agreement with the original ink signature of the transmitting
  party. 

 IN WITNESS WHEREOF, this instrument is executed as of the date above written.

	GRANTOR:	GRANTEE:
	 	 
	PRICHARD CREEK RESOURCE	NEW JERSEY MINING COMPANY
	PARTNERS LLC	 
	 	 
	By: /s/ John W. Beasley	By: /s/ Fred W. Brackebusch
	      John W. Beasley, Secretary	       Fred W. Brackebusch,
      President

  

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 6

 

	 	STATE OF WISCONSIN	)
	 	) ss.	 	 
	COUNTY OF Waushara	)	 
	 	 

 On this 13th day of November , 2003, before me, the undersigned,
  a Notary Public in and for the State of Wisconsin, personally appeared John
  W. Beasley , known to me and to me known to be the Secretary of PRICHARD
  CREEK RESOURCE PARTNERS LLC, a corporation whose name is subscribed to the foregoing
  instrument and acknowledged to me that said individual executed the same. 

 IN WITNESS WHEREOF, I have hereunto set my hand and affixed
  my notarial seal the day in this certificate first above written. 

	 	Pamela Strey
	 	Notary Public for the State of Wisconsin
	 	Residing at Fremont, WI
	 	My commission expires: 09/19/04

	STATE OF IDAHO	)
	 	) ss.
	COUNTY OF SHOSHONE	)

 On this 7th day of November , 2003, before me, the undersigned,
  a Notary Public in and for the State of Idaho, personally appeared Fred W. Brackebusch
  , known to me and to me known to be the President of NEW JERSEY MINING
  COMPANY, a corporation whose name is subscribed to the foregoing instrument
  and acknowledged to me that said officer executed the same. 

 IN WITNESS WHEREOF, I have hereunto set my hand and affixed
  my notarial seal the day in this certificate first above written. 

	 	Debra L. Hammerberg
	 	Notary Public for the State of Idaho
	 	Residing at Mullan, Idaho
	 	My commission expires: 9/17/07
	 	 

	EXHIBIT A

      PREMISES

          

	 	 	 
	Claim Name	IMC Number	 
	
	 
	Patti B No. 1	183078	 
	Patti B No. 2	183079	 
	Patti B No. 3	183080	 
	Patti B No. 4	183 081	 
	Patti B No. 5	183082	 
	Superintendent	183083	 
	Eveline	183084	 
	 	 	 
	EXHIBIT B
	 	 	 
	Mining Lease form	 	 

  

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 8

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