AMERICAN GOLDFIELDS INC
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>form8k102204ex10-1.txt
<TEXT>

                            PROPERTY OPTION AGREEMENT

THIS AGREEMENT made and entered into as of the 22nd day of October, 2004

BETWEEN: MinQuest Inc., a company having a mailing address at 4235 Christy
                  Way, Reno, Nevada, 89509, U.S.A.

                  (herein called the "Optionor")

                                                               OF THE FIRST PART


AND:     American  Goldfields  Corporation,  a company  having an office at #200
         4170 Still Creek Drive Burnaby, B.C., Canada V5C 6C6


                  (herein called the "Optionee")

                                                              OF THE SECOND PART

WHERAS the Optionor has represented  that it is the sole recorded and beneficial
owner  in and  to  properties  called  the  Hercules  Project.  (the  "Property)
described in Schedule "A" attached hereto;

AND WHEREAS the  Optionor,  subject to the Net Smelter  Royalty  reserved to the
Optionor,  now wishes to grant to the Optionee the exclusive right and option to
acquire an  undivided  100% right,  title and interest in and to the Property on
the terms and conditions hereinafter set forth;

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of
the premises,  the mutual  covenants  herein set forth and the sum of One Dollar
($1.00)  of  lawful  money  of U.S.  currency  now paid by the  Optionee  to the
Optionor (the receipt  whereof is hereby  acknowledged),  the Parties  hereto do
hereby mutually covenant and agree as follows:

1.       DEFINITIONS

 The following words, phrases and expressions shall have the following meanings:

         (a)      "After  Acquired   Properties"   means  any  and  all  mineral
                  interests staked, located, granted or acquired by or on behalf
                  of either of the parties  hereto  during the  currency of this
                  Agreement which are located,  in the whole or in part,  within
                  two miles of the existing perimeter of the Property;

         (b)      "Exchange" means OTCBB Venture Exchange;

         (c)      "Expenditures"  includes all direct or indirect  expenses [net
                  of government  incentives  and not  including  payments to the
                  Optionor  pursuant to section 4, paragraphs  (a),  (b)(i)(ii),
                  (c)(i)(ii),  (d)(i)(ii),  (e)(i)(ii),  (f)(i)(ii), (g)(i)(ii),
                  (h)(i)(ii),  (i)(i)(ii), (j)(i)(ii), (k)(i)(ii) hereof ] of or
                  incidental  to  Mining  Operations.  The  certificate  of  the
                  Controller  or  other  financial   officer  of  the  Optionee,
                  together with a statement of Expenditures in reasonable detail
                  shall  be  prima  facie  evidence  of such  Expenditures;  the
                  parties  hereto  agree that  Property  payments  and  Property
                  expenditures are separate payments as outlined in paragraph 4;

         (d)      "Facilities"  means all mines and  plants,  including  without
                  limitation,  all pits, shafts, adits, haulageways,  raises and
                  other  underground  workings,   and  all  buildings,   plants,
                  facilities and other  structures,  fixtures and  improvements,
                  and all other property, whether fixed or moveable, as the same
                  may exist at any time in, or on the  Property  and relating to
                  the operator of the Property as a mine or outside the Property
                  if for the exclusive benefit of the Property only;

         (e)      "Force  Majeure" means an event beyond the reasonable  control
                  of the Opionee that prevents or delays it from  conducting the
                  activities  contemplated  by this  Agreement  other  than  the
                  making of  payments  referred  to in  Section  4 herein.  Such
                  events shall  include but not be limited to acts of God,  war,
                  insurrection,  action of governmental  agencies  reflecting an
                  instability in government  procedures,  or delay in permitting
                  unacceptable to both Optionor and Optionee;

         (f)      "Mineral  Products" means the commercial end products  derived
                  from operating the Property as a mine:

         (g)      "Mining Operations" includes:

                  (i)      every  kind of work  done on or with  respect  to the
                           Property by or under the  direction  of the  Optionee
                           during the Option  Period or  pursuant to an approved
                           Work Program; and

                  (ii)     without  limiting the  generality  of the  foregoing,
                           including  all work capable of  receiving  assessment
                           credits  pursuant  to the Mines and  Minerals  act of
                           Nevada  and  the  work  of  assessment,  geophysical,
                           geochemical  and  geological  surveys,   studies  and
                           mapping,    investigating,    drilling,    designing,
                           examining  equipping,   improving,  surveying,  shaft
                           sinking,   raising,   cross-cutting   and   drifting,
                           searching for, digging,  trucking,  sampling, working
                           and procuring minerals, ores and metals, in surveying
                           and bringing  any mineral  claims to lease or patent,
                           in doing  all other  work  usually  considered  to be
                           prospecting,  exploration, development, a feasibility
                           study,    mining   work,    milling    concentration,
                           beneficiation  or ores and  concentrates,  as well as
                           the separation and extraction of Mineral Products and
                           all    reclamation,    restoration   and   permitting
                           activities;

         (h)      "Net  Smelter  Royalty"  means  that Net  Smelter  Royalty  as
                  defined in Schedule "B" attached hereto ("NSR");

         (i)      "Option"  means the  option  granted  by the  Optionor  to the
                  Optionee  to  acquire,  subject  to the  NSR  reserved  to the
                  Optionor,  an undivided 100% right,  title and interest in and
                  to the Property as more particularly set forth in Section 4;

         (j)      "Option  Period"  means the period from the date hereof to the
                  date at which the Optionee has  performed its  obligations  to
                  acquire  its  100%  interest  in the  Property  as set  out in
                  Section 4 hereof, which ever shall be the lesser period;

         (k)      "Property" means the mineral claims described in Schedule "A";

         (l)      "Work Program" means a program of work  reasonably  acceptable
                  to both parties in respect of a particular Property, contained
                  in a written document setting out in reasonable detail;

                  (i)      An outline of the Mining  Operations  proposed  to be
                           undertaken    and    conducted   on   the   Property,
                           specifically  stating the period of time during which
                           the work  contemplated by the proposed  program is to
                           be done and performed

                  (ii)     The   estimated   cost  of  such  Mining   Operations
                           including a proposed  budget  providing for estimated
                           monthly  cash  requirements  in  advance  and  giving
                           reasonable details; and

                  (iii)    The identity and credentials of the person or persons
                           undertaking the Mining  Operations so proposed if not
                           the Optionor,

                  reasonably acceptable to both parties hereto.

2.       HEADINGS

         Any  heading,  caption or index  hereto shall not be used in any way in
construing or interpreting any provision hereof.

3.       SINGULAR, PLURAL

         Whenever the singular or masculine or neuter is used in this Agreement,
the same shall be  construed  as meaning  plural or feminine or body  politic or
corporate or vice versa, as the context so requires.

4.       OPTION

         The Optionor hereby grants to the Optionee the sole and exclusive right
and option (the "Option") to earn a 100% interest in the Property exercisable as
follows:

(a) The Optionee paying the sum of $20,000 USD to the Optionor by way of cash;

(b) On or before Nov. 25th, 2005

                  (i)      The Optionee  incurring  Expenditures of $150,000 USD
                           on the property;

                  (ii) The Optionee paying $20,000 USD to the Optionor;

(c) On or before Nov 25th, 2006

                  (i)      The Optionee  incurring  Expenditures of $200,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred to in clause (b)(i);

                  (ii)     The Optionee paying $20,000 U.S to the Optionor;

(d) On or before Nov.25th, 2007

                  (i)      The Optionee  incurring  Expenditures of $300.000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred to in clauses (b)(i) and (c)(i) hereof; and

                  (ii)     The Optionee paying $20,000 USD to the Optionor;

(e) On or before Nov 25th, 2008

                  (i)      The Optionee  incurring  Expenditures of $400,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred  to in  clauses  (b)(i),  (c)(i)  and (d)(i)
                           hereof; and

                  (ii)     The Optionee paying $20,000 USD to the Optionor; and

(f) On or before Nov. 25th, 2009

                  (i)      The Optionee  incurring  Expenditures of $500,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred  to in clauses  (b)(i),  (c)(i),  (d)(i) and
                           (e)(i) hereof;

(ii) The Optionee paying $20,000 USD to the Optionor.


     (g) On or before Nov. 25th, 2010

                  (i) The Optionee incurring Expenditures of $500,000 USD on the
         Property in addition to the expenditures referred to in clauses (b)(i),
         (c)(i), (d)(i) and (e)(i) and (f)(i) hereof

                  (ii) The Optionee paying $20,000 USD to the Optionor; and


     (h) On or before Nov. 25th, 2011

                  (i)      The Optionee  incurring  Expenditures of $500,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred  to  in  clauses  (b)(i),   (c)(i),  (d)(i),
                           (e)(i), (f)(i) and (g)(i) hereof;

(ii) The Optionee paying $20,000 USD to the Optionor; and

    (i) On or before Nov. 25th, 2012

                  (i)      The Optionee  incurring  Expenditures of $500,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred  to  in  clauses  (b)(i),   (c)(i),  (d)(i),
                           (e)(i), (f)(i), (g)(i) and (h)(i) hereof;

                  (ii) The Optionee paying $20,000 USD to the Optionor; and


(j) On or before Nov. 25th, 2013


                  (i)      The Optionee  incurring  Expenditures of $500,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred  to  in  clauses  (b)(i),   (c)(i),  (d)(i),
                           (e)(i), (f)(i), (g)(i), (h)(i) and (i)(i) hereof;

                  (ii)     The Optionee paying $20,000 USD to the Optionor; and


(k) On or before Nov. 25th, 2014

                  (i)      The Optionee  incurring  Expenditures of $500,000 USD
                           on the  Property  in  addition  to  the  expenditures
                           referred  to  in  clauses  (b)(i),   (c)(i),  (d)(i),
                           (e)(i), (f)(i), (g)(i), (h)(i) and (i)(i) hereof;

                  (ii)     Optionee paying $20,000 USD to the Optionor; and
Following  which the Optionee  shall be deemed to have exercised the Option (the
"Exercise  Date") and shall be entitled to an  undivided  100% right,  title and
interest in and to the Property  with the full right and  authority to equip the
Property for production and operate the Property as a mine subject to the rights
of the Optionor to receive the NSR.
The Property  individually  known as Hercules as more particularly  described in
Schedule  "A".  The  Optionee  has the one time  right  exercisable  for 90 days
following  completion  of a bankable  feasibility  study to buy up to two thirds
(66.7%) of the Optionor NSR interest  (i.e.  an amount equal to 2% NSR interest)
for  $3,000,000  USD.  The  right to  purchase  the said NSR  interest  shall be
exercised by the  Optionee  providing  the Optionor  with notice of the purchase
accompanied by payment in the amount of $2,000,000 USD.

The Optionor and Optionee understand and confirm that all Expenditures  incurred
in a  particular  period,  including  any excess in the  amount of  Expenditures
required  to be incurred to maintain  the Option  during such  period,  shall be
carried  over and  included  in the  aggregate  amount of  Expenditures  for the
subsequent period.

Notwithstanding  paragraphs (c)(i),  (d)(i),  (e)(i),  (f)(i),  (g)(i),  (h)(i),
(j)(i) and (k)(i) if the Optionee has not incurred the requisite Expenditures to
maintain its option in good  standing  prior to November 25th of any given year,
the Optionee may pay to the Optionor within 60 days following the expiry of such
period,  the amount of the deficiency and such amount shall  thereupon be deemed
to have been Expenditures incurred by the Optionee during such period.

         (g)      The doing of any act or the incurrence of any cash payments by
                  the Optionee shall not obligate the Optionee to do any further
                  acts or make any further payments

         (h)      The   Property   individually   know  as   Hercules   as  more
                  particularly described in Schedule "A". The cash consideration
                  referred  to in this  Section 4 will not  change if project is
                  terminated.

5.       TRANSFER OF TITLE

         Upon  Optionee's  completion of all  requirements to earn a 100 percent
interest in the Property,  the Optionor will deliver or cause to be delivered to
the Optionee's  solicitors a duly executed  transfer of Property in favor of the
Optionee (the "Optionee Transfer"). The Optionee shall be entitled to record the
Optionee Transfer with the appropriate  government offices to effect transfer of
legal  title  of the  Property  into its own  name  upon  the full and  complete
exercise of the Option by the  Optionee.  In the event the Optionee  Transfer is
recorded the Optionor shall be entitled to record notice of its NSR interest.






6.       MINING OPERATIONS DURING OPTION

         During  the  Option  Period,  the  Optionor  may  provide  its  mineral
exploration expertise on the Property, on a consultation basis for and on behalf
of the Optionee, at the election of the Optionee.  However, the Optionee has the
exclusive  right to determine what  Expenditures  and Mining  Operations it will
perform, when they will be performed, and by whom. If the Optionee elects to use
the mineral expertise and consulting services of the Optionor, then the Optionor
shall invoice for time for consulting  services and related travel expenses from
time to time and the prompt payment of such invoices when due shall constitute a
portion of Expenditures by the Optionee as contemplated under Section 4 hereof.

         During the currency of this  Agreement,  the  Optionee,  its  servants,
agents and workmen and any persons duly  authorized by the Optionee,  shall have
the  right of access to and from and to enter  upon and take  possession  of and
prospect, explore and develop the Property in such manner as the Optionee in its
sole  discretion  may deem advisable and shall have the right to remove and ship
therefrom  ores,  minerals,  metals,  or other products  recovered in any manner
therefrom.

7.       ASSIGNMENT

         During  the Option  Term,  both  parties  shall have the right to sell,
transfer,  assign, mortgage,  pledge its interest in this Agreement or its right
or interest in the Property. It will be a condition of any assignment under this
Agreement  that such assignee shall agree in writing to be bound by the terms of
this Agreement applicable to the assignor.

8.       TERMINATION

         This Agreement shall forthwith terminate in circumstances where:

         (a) The  Optionee  shall  fail to  comply  with any of its  obligations
hereunder,
                  subject to Force Majeure, and within 30 days of receipt by the
                  Optionee of written  notice from the Optionor of such default,
                  the Optionee has not:

                           (i)      cured such default, or commenced proceedings
                                    to cure such default and prosecuted  same to
                                    completion without undue delay; or

                           (ii)     given  the  Optionor  notice  that it denies
                                    that such default has occurred.






In the event that the  Optionee  gives  notice that it denies that a default has
occurred,  the  Opionee  shall not be deemed to be in  default  until the matter
shall have been determined  finally through such means of dispute  resolution as
such matter has been subjected to by either party; or

         (b)      The Optionee  gives  notice of  termination  to the  Optionor,
                  which  it  shall  be at  liberty  to do at any  timeafter  the
                  execution of this  Agreement.  If and when the Optionee elects
                  to terminate this Agreement,  or terminate one of the projects
                  comprising  the  Property,  at such time the  Property  or the
                  specific project will be returned to the Optionor.

Upon the  termination of this Agreement under this Section 8, the Optionee shall
cease to be liable to the Optionor in debt,  damages,  claim fees or  otherwise,
other than to pay the claim fees as described in paragraph (b) of this Section 8
and all liabilities referred to in Section 11

Upon  termination  of this  Agreement  under this Section 8, the Optionee  shall
return the property,  including all property  within the designated  boundary of
the area of interest,  to the Optionor.  The Optionee  shall vacate the Property
within a reasonable time after such  termination and  relinquishment,  but shall
have the right of access to the Property  for a period of six months  thereafter
for the purpose of removing its chattels, machinery, equipment and fixtures.

9.       REPRESENTATIONS, OPTIONIES AND COVENANTS OF THE OPTIONOR

         The Optionor represents, Options and covenants to and with the Optionee
as follows:

         (a)      The Optionor is a company duly organized  validly existing and
                  in good standing under the laws of Nevada;

         (b)      The  Optionor  has full  power and  authority  to carry on its
                  business and to enter into this Agreement and any agreement or
                  instrument referred to or contemplated by this Agreement;

         (c)      Neither the execution and delivery of this Agreement,  nor any
                  of the agreements  referred to herein or contemplated  hereby,
                  nor the consummation of the transactions  hereby  contemplated
                  hereby,  nor  the  consummation  of  the  transactions  hereby
                  contemplated  conflict  with,  result  in  the  breach  of  or
                  accelerate the performance required by, any agreement to which
                  it is a party;


         (d)      The  execution   and  delivery  of  this   Agreement  and  the
                  agreements  contemplated  hereby will not violate or result in
                  the  breach  of the  laws of any  jurisdiction  applicable  or
                  pertaining thereto or of its constating documents;
         (e)      The  Agreement   constitutes   a  legal,   valid  and  binding
                  obligation of the Optionor;

         (f)      The Property is  accurately  described in Schedule  "A", is in
                  good standing under the laws of the  jurisdiction  in which it
                  is  located  and is free and clear of all liens,  charges  and
                  encumbrances;

         (g)      The Optionor is the sole recorded and beneficial  owner of the
                  Property  and has the  exclusive  right  to  enter  into  this
                  Agreement and all necessary authority to transfer its interest
                  in  the  Property  in  accordance   with  the  terms  of  this
                  Agreement;

         (h)      No  Person,   firm  or  corporation  has  any  proprietary  or
                  possessorty  interest in the Property other than the Optionor,
                  and no person,  firm or corporation is entitled to any royalty
                  or other  payment  in the  nature  of rent or  royalty  on any
                  minerals,  ores,  metals or  concentrates  or any  other  such
                  products  removed from the Property  other than the government
                  of the state of Nevada  pursuant to  statute;  notwithstanding
                  any  Federal,  State or County  royalties  or net proceeds tax
                  derived from mining operations.

         (i)      Upon  request  by the  Optionee,  and at the sole  cost of the
                  Optionee,  the Optionor shall deliver or cause to be delivered
                  to  the  Optionee  copies  of all  available  maps  and  other
                  documents and data in its possession  respecting the Property.
                  Nothing will be withheld,  hidden,  or kept from the Optionee,
                  whether  the  data  or  information  is  held  or  not  by the
                  Optionor; and

         (j)      Subject to  performance  by the  Optionee  of its  obligations
                  under Section 4, during the Option  Period,  the Optionor will
                  keep the  Property  in good  standing,  free and  clear of all
                  liens,  charges  and  encumbrances,  will carry out all Mining
                  Operations  on the  Property  in a  miner-like  fashion if the
                  Optionee  elects to use the mining  expertise  and  consulting
                  services of the Optionor,  will obtain all necessary  licenses
                  and permits as shall be necessary and will file all applicable
                  work up to the legal limits as assessment work under the Mines
                  and Mineral Act (Nevada)








10.      REPRESENTATIONS, OPTIONIES AND COVENANTS OF THE OPTIONEE


The Optionee represents, Options and covenants to and with the Optionor that:

         (a)      The Optionee is a company duly organized  validly existing and
                  in good standing under the laws of the United States;

         (b)      The  Optionee  has full  power and  authority  to carry on its
                  business and to enter into this Agreement and any agreement or
                  instrument referred to or contemplated by this Agreement;

         (c)      Neither the execution and delivery of this Agreement,  nor any
                  of the agreements  referred to herein or contemplated  hereby,
                  nor the consummation of the transactions  hereby  contemplated
                  conflict  with,  result  in the  breach of or  accelerate  the
                  performance required by, any agreement to which it is a party;

         (d)      The  execution   and  delivery  of  this   Agreement  and  the
                  agreements  contemplated  hereby will not violate or result in
                  the  breach  of the  laws of any  jurisdiction  applicable  or
                  pertaining thereto or of its constating documents; and

         (e)      This  Agreement   constitutes  a  legal,   valid  and  binding
                  obligation of the Optionee.

11.      INDEMNITY AND SURVIVAL OF REPRESENTATION

         The representation and Optionies hereinbefore set out are conditions on
which the parties have relied in entering into this  Agreement and shall survive
the  acquisition of any interest in the Property by the Optionee and each of the
parties will indemnify and save the other harmless from all loss, damage, costs,
actions  and  suits  arising  out of or in  connection  with any  breach  of any
representation,  Optiony,  covenant,  agreement  or  condition  made by them and
contained in this Agreement.

         The Optionor  agrees to indemnify  and save  harmless the Optionee from
any  liability  to which it may be subject  arising  from any Mining  Operations
carried out by the Optionor or at its  direction on the  Property.  The Optionee
agrees to indemnify  and save  harmless the Optionor from any liability to which
it may be subject arising from any Mining Operations carried out by the Optionee
or at its direction on the Property.

         The Optionor  agrees to indemnify  and save  harmless the Optionee from
any liability arising form any and every kind of work done on or with respect to
the Property prior to the signing of this  Agreement  (the "Prior  Operations").
Without limiting the generality of the foregoing,  Prior Operations includes all
work capable of receiving  assessment credits pursuant to The Mines and Minerals
Act  of  Nevada  and  the  work  of  assessment,  geophysical,  geochemical  and
geological surveys,  studies and mapping,  investigating,  drilling,  designing,
examining equipping, improving, surveying, shaft sinking, raising, cross-cutting
and drifting,  searching for, digging, trucking, sampling, working and procuring
minerals, ores and metals, in surveying and bringing any mineral claims to lease
or  patent,  in doing all  other  work  usually  considered  to be  prospecting,
exploration,   development,   a  feasibility   study,   mining  work,   milling,
concentration, beneficiation of ores and concentrates, as well as the separation
and  extraction  of  Mineral  Products  and  all  reclamation,  restoration  and
permitting activities.

12.      CONFIDENTIALITY

         The parties hereto agree to hold in confidence all information obtained
in confidence  in respect of the Property or otherwise in  connection  with this
Agreement  other  than  in  circumstances  where a party  has an  obligation  to
disclose such information in accordance with applicable securities  legislation,
in which case such  disclosure  shall only be made after  consultation  with the
other party.

13.      NOTICE

         All notices, consents, demands and requests ( in this Section 13 called
the  "Communication")  required or  permitted  to be given under this  Agreement
shall be in writing and may be delivered  personally sent by telegram,  by telex
or  telecopier  or other  electronic  means or may be  forwarded  by first class
prepaid  registered  mail to the parties at their addresses first above written.
Any Communication delivered personally or sent by telegram,  telex or telecopier
or other electronic means including email shall be deemed to have been given and
received on the second  business  day next  following  the date of sending.  Any
Communication  mailed  as  aforesaid  shall be  deemed  to have  been  given and
received on the fifth business day following the date it is posted, addressed to
the parties at their  addresses  first above written or to such other address or
addresses  as either party may from time to time specify by notice to the other;
provided, however, that if there shall be a mail strike, slowdown or other labor
dispute  which might  effect  delivery of the  Communication  by mail,  then the
Communication  shall be effective  only if actually  delivered.  For purposes of
this  agreement  and as a definition  of address the  Optionor's  email shall be
defined  as   rrkern@chater.net   and  the  Optionor's   telecopier   number  is
775-746-0938.     The     Optionee's     email     shall    be     defined    as
info@americangoldfields.com    and   the   Optionee's   telecopier   number   is
604-925-5258.  Notice  will be provided to each party  should  their  respective
email address change.

14.      FURTHER ASSURANCES

         Each of the  parties to this  Agreement  shall from time to time and at
all times do all such further  acts and execute and deliver all  further.  deeds
and  documents  as shall be  reasonably  required in order to fully  perform and
carry out the terms of this Agreement






15.      ENTIRE AGREEMENT

         The parties  hereto  acknowledge  that they have  expressed  herein the
entire  understanding  and  obligation  of this  Agreement  and it is  expressly
understood and agreed that no implied covenant,  condition, term or reservation,
shall be read  into this  Agreement  relating  to or  concerning  any  matter or
operation provided for herein

16.      PROPER LAW AND ARBITRATION

This Agreement will be governed by and construed in accordance  with the laws of
the State of Nevada and the laws of the United  States of  America.  The parties
hereto hereby  irrevocably  attorn to the  jurisdiction of the Courts of Nevada.
All disputes arising out of or in connection with this Agreement,  or in respect
of any defined legal  relationship  associated  therewith or derived  therefrom,
shall be referred to and finally  resolved by a sole  arbitrator by  arbitration
under the rules of The Arbitration Act of Nevada.

17.      ENUREMENT

         This  Agreement  will ensure to the benefit of and be binding  upon the
parties hereto and their respective successors and permitted assigns.

18.      AFTER ACQUIRED PROPERTIES

         (i)      The parties covenant and agree,  each with the other, that any
                  and all After  Acquired  Properties  shall be  subject  to the
                  terms and  conditions of this  Agreement and shall be added to
                  and deemed,  for the  purposes  hereof,  to be included in the
                  Property.  Any costs  incurred  by the  Optionor  in  staking,
                  locating, recording or otherwise acquiring any "After Acquired
                  Properties"  will be deemed to be Mining  Operations for which
                  the Optionor will be entitled to reimbursements as part of the
                  Expenditures payable by the Optionee hereunder.

         (ii)     Any  additional  claims agreed by the Optionee to be staked by
                  the Optionor within 2 miles from the existing perimeter of the
                  Property  boundaries  shall form party of this Agreement.  The
                  Optionee will  reimburse the Optionor for the costs of staking
                  the additional  claims,  unless the Optionee does not elect to
                  have the additional claims subject to this Agreement.







20.      DEFAULT

         Notwithstanding anything in this Agreement to the contrary if any party
(a  "Defaulting  Party") is in default of any  requirement  herein set forth the
party affected by such default shall give written notice to the Defaulting Party
specifying the default and the Defaulting  Party shall not lose any rights under
this Agreement, unless thirty (30) days after the giving of notice of default by
the affected party the Defaulting  Party has failed to take reasonable  steps to
cure the default by the  appropriate  performance  and if the  Defaulting  Party
fails within such period to take reasonable steps to cure any such default,  the
affected  party  shall be  entitled to seek any remedy it may have on account of
such default including, without limiting, termination of this Agreement.

21.      PAYMENT

         All  references to monies herein shall be in US funds unless  otherwise
specified. The Optionee shall make payments for the Expenditures incurred by the
Optionor no later than 15 days after the receipt of  invoices  delivered  by the
Optionee to do any acts or make any payments  hereunder,  and any act or payment
or payments as shall be made hereunder  shall not be construed as obligating the
Optionee to do any further act or make any further payment or payments.

22.      SUPERSEDES PREVIOUS AGREEMENTS

         This  Agreement  supersedes  and replaces all previous  oral or written
agreements,  memoranda,  correspondence  or  other  communications  between  the
parties hereto relating to the subject matter hereof.





















IN  WITNESS  WHEREOF  the  Parties  hereto  have duly  executed  this  Agreement
effective as of the 22nd day of November, 2004

MinQuest Inc.




Per:___________________________
         Richard A. Kern, President



American Goldfields Corp.




Per:___________________________
         Donald Neal, President
























                                                      SCHEDULE "A"

Sections 13, 24, 25, T16N,  R22E and Sections 7, 18,  T16N,  R23E,  MDB&M,  Lyon
County, Nevada

CLAIM NAME                                                    NMC NUMBER
----------                                                    ----------
Apollo 7                                                      804993
Apollo 16                                                     804994
Apollo 17                                                     804995
Apollo 19                                                     804996
Apollo 21                                                     804997
Apollo 24                                                     804998
Hercules 2                                                    804978
Hercules 3                                                    804979
Hercules 48                                                   804984
Hercules 49                                                   804985
Hercules 52                                                   804987
Hercules 53                                                   804988
Apollo 1,3, 5, 9, 11, 18, 20, 22, 23, 25             832280-832289
Hercules 1, 4-8,12-14,19, 44-47, 50, 51, 54, 55      832290-832307


























                                  SCHEDULE "B"


"Net Smelter Return" shall mean the aggregate  proceeds received by the Optionee
from time to time from any smelter or other purchaser from the sale of any ores,
concentrates,  metals or any other material of commercial  value produced by and
from the Property after deducting from such proceeds the following  charges only
to the extent that they are not  deducted by the smelter or other  purchaser  in
computing the proceeds:

(a)      The cost of transportation of the ores, concentrates or metals from the
         Property  to  such  smelter  or  other  purchaser,   including  related
         insurance;
(b)      Smelting and refining charges including penalties; and

The  Optionee  shall  reserve and pay to the  Optionor a NSR equal to three (3%)
percent of Net Smelter Return.

Payment of NSR payable to the Optionor  hereunder shall be made quarterly within
thirty  (30)  days  after  the end of each  calendar  quarter  during  which the
Optionee  receives Net Smelter  Returns in USD dollars or in kind bullion at the
discretion  of the  Optionor.  Within  (60) days after the end of each  calendar
quarter for which the NSR for such year shall be audited by the Optionee and any
adjustments in the payments of NSR to the Optionor shall be made forthwith after
completion of the audit. All payments of NSR to the Optionor for a calendar year
shall  be  deemed  final  and in full  satisfaction  of all  obligations  of the
Optionee in respect thereof if such payments or the calculations thereof are not
disputed by the  Optionor of the same  audited  statement.  The  Optionee  shall
maintain  accurate  records  relevant  to the  determination  of the NSR and the
Optionor or its authorized  agent,  shall be permitted the right to examine such
records at all reasonable times.



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