NORTH AMERICAN GENERAL RESOURCES CORP
PROPERTY OPTION AGREEMENT DATED MARCH 1, 2004
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>exhibit10-1.htm
<DESCRIPTION>PROPERTY OPTION AGREEMENT DATED MARCH 1, 2004
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   <TITLE>Filed by Automated Filing Services Inc. (604) 609-0244 - North American General Resources Corporation - Exhibit 10.1</TITLE>


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<P align="right"> <B> March 1, 2004 </B> </P>
<P align="center">
<B><U>RJ 1 PROPERTY OPTION AGREEMENT</U></B>
</P>
<P align="center">
BETWEEN
</P>
<P align="center">
<B>4763 NWT LTD. </B>
</P>
<P align="center">
AND
</P>
<P align="center">
<B>NORTH AMERICAN GENERAL RESOURCES CORPORATION </B>
</P>

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<P> <B><U>TABLE OF CONTENTS</U></B> </P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_3">1.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_3">DEFINITIONS</a></TD>
    <TD width="5%" align="right"><a href="#page_3">2</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_4">2.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_4">OPTION</a></TD>
    <TD width="5%" align="right"><a href="#page_4">3</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_5">3.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_5">TITLE</a></TD>
    <TD width="5%" align="right"><a href="#page_5">4</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_6">4.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_6">GROSS OVERRIDING ROYALTY</a></TD>
    <TD width="5%" align="right"><a href="#page_6">5</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_6">5.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_6">EARN-IN OBLIGATIONS</a></TD>
    <TD width="5%" align="right"><a href="#page_6">5</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_7">6.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_7">ACCELERATION, FORCE MAJEURE</a></TD>
    <TD width="5%" align="right"><a href="#page_7">6</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_7">7.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_7">PERFORMANCE OF WORK</a></TD>
    <TD width="5%" align="right"><a href="#page_7">6</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_8">8.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_8">VESTING OF INTEREST</a></TD>
    <TD width="5%" align="right"><a href="#page_8">7</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_8">9.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_8">TERMINATION</a></TD>
    <TD width="5%" align="right"><a href="#page_8">7</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_9">10.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_9">RESTRICTION ON ASSIGNMENT</a></TD>
    <TD width="5%" align="right"><a href="#page_9">8</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_10">11.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_10">NOTICES</a></TD>
    <TD width="5%" align="right"><a href="#page_10">9</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_10">12.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_10">REPRESENTATIONS AND WARRANTIES</a></TD>
    <TD width="5%" align="right"><a href="#page_10">9</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_12">13.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_12">CONFIDENTIALITY</a></TD>
    <TD width="5%" align="right"><a href="#page_12">11</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="5%" align="right"><a href="#page_13">14.</a></TD>
    <TD width="5%">&nbsp;</TD>
    <TD><a href="#page_13">MISCELLANEOUS</a></TD>
    <TD width="5%" align="right"><a href="#page_13">12</a></TD>
    <TD width="5%">&nbsp;</TD>
  </TR>
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  <TR bgcolor="#EEEEEE">
    <TD width="20%"><a href="#page_15">SCHEDULE A</a></TD>
    <TD><a href="#page_15">PROPERTY</a></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="20%"><a href="#page_16">SCHEDULE B</a></TD>
    <TD><a href="#page_16">GROSS OVERRIDING ROYALTY</a></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="20%"><a href="#page_20">SCHEDULE C</a></TD>
    <TD><a href="#page_20">JOINT VENTURE AGREEMENT</a></TD>
  </TR>
</TABLE>

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<P> <B><U> RJ 1 PROPERTY OPTION AGREEMENT</U></B> </P>
<P>
THIS AGREEMENT is made the 1st day of March, 2004.
</P>
<P> BETWEEN:</P>
<div style="margin-left:10%">
  <p><strong><u>4763 NWT LTD.</u></strong>, a company incorporated under the laws
    of the Northwest Territories </p>
  <p>(hereinafter called the &#147;Optionor&#148;) </p>
</div>
<P> AND:</P>
<div style="margin-left:10%"><strong><u>NORTH AMERICAN GENERAL RESOURCES CORP.</u></strong>,
  a Company incorporated under the laws of British Columbia
  <p> (hereinafter called &#147;<b>NAGR</b>&#148;) </div>
<P align="justify"> THIS AGREEMENT WITNESSES that in consideration of the sum
  of $10 now paid by <B>NAGR</B> to the Optionor (the receipt and sufficiency
  of which is hereby acknowledged) and the covenants and agreements hereinafter
  set forth, the parties hereto agree as follows: </P>
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  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B><U>DEFINITIONS</U></B> </P>
      <P align="justify"> 1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Affiliate&#148;
        means a corporation which directly or indirectly controls, or is controlled
        by or is under common control with, a party. The term &#147;control&#148;
        as used herein means the rights to the exercise of, directly or indirectly,
        more than 50% of the voting rights attributable to the shares of the controlled
        company. </P>
      <P align="justify"> 1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Expenditures&#148;
        means without duplication all direct and indirect expenses of or incidental
        to Operations after March 1, 2004 together with any and all costs, fees
        and expenses which may be paid to obtain feasibility, engineering or other
        studies or reports on or with respect to the Property or any part of it.
        For greater certainty, the costs, fees and expenses of recording work
        for assessment credit under applicable legislation are included in Expenditures.
        There shall be added to and included in &#147;Expenditures&#148; reasonable
        charges by <B>NAGR</B> for services provided in connection with Operations
        by geologists or others in the employment of <B>NAGR</B> and reasonable
        charges for machinery, tools, equipment and camp facilities owned by <B>NAGR</B>
        and used or employed in Operations. There shall be added to and included
        in &#147;Expenditures&#148; a charge for <B>NAGR</B>&#146;s </P>
</td>
  </tr>
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<P align="right">2 </P>
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    <td><P align="justify">administrative expenses equal to 10% of all direct
        and indirect expenses and charges. </P>
      <P align="justify"> 1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Force
        Majeure&#148; means any cause beyond <B>NAGR</B>&#146;s reasonable control,
        including law or regulation, action or inaction of civil or military authority,
        interference by Natives, Native rights groups, environmentalists or other
        activists, inability to obtain any licence, permit or other authorization
        that may be required, unusually severe weather, fire, explosion, flood,
        insurrection, riot, labour dispute, inability after diligent effort to
        obtain workmen or material, delay in transportation and acts of God, but
        not including lack of funds. </P>
      <P align="justify"> 1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;GOR&#148;
        or Gross Overriding Royalty&#148; means the royalty in favour of the Optionor
        described in Section 4.1, in the form attached hereto as Schedule B. </P>
      <P align="justify"> 1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Operations&#148;
        includes any and every kind of work which <B>NAGR</B> in its sole discretion
        elects to do or to have done on or in respect of the Property or the products
        derived therefrom and all expenditures in respect of or incidental to
        such work. </P>
      <P align="justify"> 1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Property&#148;
        means the mining claims described in Schedule A to this Agreement, and
        all rights, licences and permits incidental or ancillary thereto and any
        substitutions or replacements therefor including any mining leases that
        may replace such mining claims, all of which are located in the District
        of Mackenzie, Northwest Territories, Canada. </P>
      <P align="justify"> 1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;$&#148;
        means Canadian dollars. </P>
      <P align="justify"> 1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Attached
        to and forming part of this Agreement are the following Schedules: </P>
</td>
  </tr>
</table>
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<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">Schedule A -</TD>
    <TD>Property</TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">Schedule B -</TD>
    <TD>Gross Overriding Royalty</TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">Schedule C -</TD>
    <TD>Joint Venture Agreement</TD>
  </TR>
</TABLE>
<br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;<B><U>OPTION</U></B>
      </P>
      <P align="justify"> 2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Optionor
        hereby grants to <B>NAGR</B> the sole and exclusive right and option (the
        &#147;Option&#148;) exercisable in the manner described in Section 8,
        to acquire a 70% undivided interest in the Property, free and clear of
        all liens, charges, encumbrances, security interests and adverse claims
        except for the GOR, and any Aboriginal rights or interests, all of which
        shall be borne by the Optionor and <B>NAGR</B> in proportion to their
        respective Participating Interests from time to time under the Joint Venture
        Agreement. </P>
      <P align="justify"> 2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;The Optionor
        hereby grants to <B>NAGR</B>, its servants, agents and independent contractors,
        the sole and exclusive right and option to: </P>
</td>
  </tr>
</table>
<P align="right">
3
</P>

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    <td width="5%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">2.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; enter
        upon and have immediate possession of the Property; </P>
      <P align="justify"> 2.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; carry
        out Operations on the Property as <B>NAGR</B> may in its sole discretion
        determine; </P>
      <P align="justify"> 2.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; bring
        and install on the Property and remove from time to time such buildings,
        plant, machinery, equipment, tools, appliances and supplies as <B>NAGR</B>
        may deem necessary; and </P>
      <P align="justify"> 2.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; remove
        from the Property reasonable quantities of rocks, ores, minerals and metals
        and to transport the same for the purpose of sampling, testing and assaying.
      </P>
      <P align="justify"> 2.2.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>NAGR</B>
        will be the exclusive operator of the Property as provided in this Agreement;
        and </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Any diamonds and samples from the Property may be used by <B>NAGR</B>
        for exploration, development and valuation purposes. If <B>NAGR</B> does
        not exercise the Option, any diamonds taken from samples from the Property
        that have not been destroyed by processing or testing will be returned
        to the Optionor. </P>
      <P align="justify"> 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;<B><U>TITLE</U></B>
      </P>
      <P align="justify"> 3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Optionor
        shall hold the Property in trust for the parties in accordance with their
        respective interests therein and subject to the terms of this Agreement.
      </P>
      <P align="justify"> 3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the
        Optionor&#146;s title to the Property is now or at any time hereafter
        deficient, defective or encumbered in any way other than as provided by
        Section 2.1 then, without limiting <B>NAGR</B>&#146;s rights and remedies
        provided hereunder or by law, such deficiency, defect or encumbrance may
        be remedied or removed by <B>NAGR</B> in which event the cost and related
        expenses thereof may at <B>NAGR</B>&#146;s option be deducted from any
        amounts or payments which may be or become due or payable to the Optionor
        hereunder or may be credited against the Expenditures contemplated by
        Section 5.1. </P>
      <P align="justify"> 3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>NAGR</B>
        may at any time and from time to time during the currency of the Option
        abandon, surrender, allow to lapse, reduce the area of or otherwise deal
        with any part or parts of the Property as it may determine, provided that
        <B>NAGR</B> shall give to the Optionor not less than 90 days&#146; notice
        of its intention to do so and shall ensure that the mining claims then
        comprised in the Property shall be in good standing for 180 days at a
        minimum, commencing at the expiry of the 90 day notice period. If requested
        by the Optionor by notice to <B>NAGR</B> within that period of time, NAGR
        shall deliver forthwith to the Optionor duly executed transfers of the
        part or parts of the Property so intended to be dealt with. Any part or
        parts of the Property so dealt with shall cease to be included in the
        Property and shall cease to be subject to this Agreement for all purposes.
      </P>
</td>
  </tr>
</table>
<P align="right">
4
</P>

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<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
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    <td width="5%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B>NAGR</B> shall: </div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td><P align="justify">3.4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; record
        for assessment credit under the Canada Mining Regulations sufficient work
        to maintain the Property in good standing until at least 180 days subsequent
        to notice of termination of the Option as provided in Section 9 of this
        Agreement; and </P>
      <P align="justify"> 3.4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; subject
        to section 3.3 keep the Property free of all liens and encumbrances arising
        out of Operations on the Property. </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">4.<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <U>GROSS OVERRIDING ROYALTY</U> </B> </P>
      <P align="justify"> 4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition
        to the consideration provided in Section 5.1, the Optionor reserves for
        itself and shall be entitled to receive a gross overriding royalty equal
        to 2.5% of all products mined and removed from the Property, to be calculated
        and paid in accordance with Schedule B to this Agreement. At the discretion
        of NAGR, it may buy down 1% of the Gross Overriding Royalty for $2.5 million,
        leaving a 1.5% Gross Overriding Royalty to the Optionor. </P>
      <P align="justify"> 5.<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>EARN-IN
        OBLIGATIONS</U> </B> </P>
      <P align="justify"> 5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NWT, in
        consideration of the sum of $10, the receipt and sufficiency of which
        is hereby acknowledged, hereby grants to the Optionors the exclusive right
        and option (the Option") to acquire a 70% undivided interest in and to
        the Property in consideration of: </P>
      <P align="justify"> 5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In order
        to exercise the Option as to an undivided 70% interest in consideration
        of exploration and mining rights to the Property <B>NAGR</B> must: </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td><P align="justify">5.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; pay
        the sum of $2000.00 to the Optionor on or before March 1 2004; </P>
      <P align="justify"> 5.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; pay
        the sum of $3,000.00 to the Optionor on or before April 30, 2004; </P>
      <P align="justify"> 5.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; incur,
        as operator, Expenditures on the Property totalling $4000.00 per year
        for four years after the date of this Agreement; and </P>
      <P align="justify"> 5.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; issue
        to the Optionor 20,000 common shares of <B>NAGR</B> on signing of this
        Agreement; all such shares to be subject to such restrictions as to their
        transferability by the Optionor as may be applicable. </P></td>
  </tr>
</table>
<P align="right">5 </P>
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  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>ACCELERATION,
        FORCE MAJEURE</U></B> </P>
      <P align="justify"> 6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>NAGR</B>
        may accelerate any or all of the activities, Expenditures or share issuances
        contemplated by Sections 5.2. <B>NAGR</B> may at any time from time to
        time pay to the Optionor money in lieu of conducting activities, issuing
        shares or incurring Expenditures under Section 5.2 in which event <B>NAGR</B>
        shall be deemed to have incurred additional Expenditures in the same amount
        as the amount of any such activity or payment and in satisfaction of such
        of the provisions of Section 5.2 as indicated by <B>NAGR</B> at the time
        of the making of such payment. Any excess payments or Expenditures made
        or incurred in any period will be carried forward and applied as a credit
        against the payment or Expenditures, as the case may be, to be made in
        the next succeeding period or periods. </P>
      <P align="justify"> 6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If from
        time to time <B>NAGR</B> is prevented by Force Majeure from conducting
        activities or incurring Expenditures in the amounts and times provided
        in Section 5.1 then <B>NAGR</B> shall have such additional time as is
        reasonable in the circumstances to conduct activities, issue shares or
        incur Expenditures in such amounts and times, the amount of such additional
        time not to exceed the duration of the Force Majeure. </P>
      <P align="justify"> 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>PERFORMANCE
        OF WORK</U></B> </P>
      <P align="justify"> 7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In exercising
        its rights under Section 2.2 <B>NAGR</B> shall comply with all applicable
        laws, rules and regulations and shall carry out Operations in a good and
        workmanlike manner in accordance with generally accepted mining practice.
      </P>
      <P align="justify"> 7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>NAGR</B>
        shall indemnify and save harmless the Optionor and its officers, directors,
        employees, agents and representatives from and against any and all claims,
        debts, demands, suits, actions and causes of action whatsoever which may
        be brought or made against the Optionor and its officers, directors, employees,
        agents and representatives by any person, firm or corporation and all
        loss, cost, damages, expenses and liabilities which may be suffered or
        incurred by the Optionor and its officers, directors, employees, agents
        and representatives arising out of or in connection with or in any way
        referable to, whether directly or indirectly, the entry on, presence on,
        or activities on the Property or the approaches thereto by <B>NAGR</B>
        or its servants or agents including without limitation bodily injuries
        or death at any time resulting therefrom or damage to property, unless
        and to the extent due to the acts or omissions of the Optionor or its
        servants, agents or representatives. </P>
      <P align="justify"> 7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Optionor
        shall at all reasonable times have access to the Property on reasonable
        notice to <B>NAGR</B>, provided that the Optionor shall not interfere
        with <B>NAGR</B>&#146;s operations hereunder and that <B>NAGR</B> shall
        be under no liability to the Optionor for any personal injuries including
        death or for any damage to the property of the Optionor unless such injury
        or damage is due to the gross </P>
</td>
  </tr>
</table>
<P align="right">6 </P>
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  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">negligence or wilful default of <B>NAGR</B>, its servants,
        agents or representatives. The Optionor shall have access to all technical
        data pertaining to the property. </P>
      <P align="justify"> 7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>NAGR</B>
        will provide to the Optionor quarterly reports showing in reasonable detail
        the work performed in connection with the Property, the results obtained
        and the Expenditures incurred. <B>NAGR</B> will provide a summary report
        of all such activities annually within 60 days of the conclusion of each
        program of work. <B>NAGR</B> will not be required to disclose or report
        information or data that pertains to mining claims that do not form part
        of the Property. </P>
      <P align="justify"> 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>VESTING
        OF INTEREST</U></B> </P>
      <P align="justify"> 8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Upon <B>NAGR</B>
        satisfying the conditions in Section 5.2 and giving notice to the Optionor,
        <B>NAGR</B> shall without any further payment or action be deemed to have
        exercised the Option and it will thereupon acquire and be deemed to have
        acquired and be vested with a 70% undivided right, title and interest
        in the Property free and clear of all liens, charges, encumbrances, security
        interests and adverse claims, except as provided in Section 2.1. </P>
      <P align="justify"> 8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Upon receipt
        of notice from NAGR stating that NAGR has incurred Exploration Expenditures
        required per section 5.2.2 of this agreement and delivering the shares
        to NWT as required by article 5.2.3 their future relationship shall be
        governed by a Joint Venture Agreement among the parties, as attached hereto
        as Schedule &#147;C&#148;, which shall come into effect without it having
        been executed by any party. The joint venture shall be determined mutually
        by both parties at a future date. A principal element of the Joint Venture
        Agreement will be that once the Joint Venture is achieved then the parties
        will participate in future expenditures on the property proportional to
        each party&#146;s interest. </P>
      <P align="justify"> 8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Once the
        Joint Venture is in effect, if <B>4763</B> NWT Ltd chooses not to participate
        in proposed programs under the Joint Venture Agreement, they will dilute
        and once diluted to 10% or less they will revert to a 2.5% G.O.R. </P>
      <P align="justify"> 8.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The dilution
        formula in the Joint Venture Agreement, to be detailed in Schedule &#147;C&#148;,
        will be based on the expenditure of approximately $16,000.00. </P>
      <P align="justify"> 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>TERMINATION</U></B>
      </P>
      <P align="justify"> 9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The parties
        acknowledge and agree that <B>NAGR</B> has the right and option but not
        the obligation to conduct the activity and incur the Expenditures referred
        to in Section 5.2 and neither anything which <B>NAGR</B> might do nor
        any payment which it makes or Expenditure which it incurs will obligate
        it to do anything more or to incur any further Expenditures. </P>
      <P align="justify"> 9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subject
        to Section 9.1, <B>NAGR</B> may at any time let the Option lapse by notice
        to the Optionor or by not satisfying any of the conditions referred to
        in </P>
</td>
  </tr>
</table>
<P align="right"> 7 </P>
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    <td width="5%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">Section 5.1 whereupon this
        Agreement except Sections 3.3 and 9.3 shall terminate. </P>
      <P align="justify"> 9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If this
        Agreement is terminated pursuant to Section 9.2 before <B>NAGR</B> has
        exercised the Option as described in Section 5.2, <B>NAGR</B> shall: </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td><P align="justify">9.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; within
        180 days remove from the Property any machinery, buildings, structures,
        facilities, equipment and all other property of every nature and description
        erected, placed or situated thereon by <B>NAGR</B>; any property not so
        removed at the end of the 180 day period shall at the option of the Optionor
        become the property of the Optionor; and </P>
      <P align="justify"> 9.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; within
        the said 180 days leave the working and camp site in a clean and environmentally
        acceptable condition. </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        If <B>NAGR</B> is prevented from or delayed in performing its obligations
        in Subsections 9.3.1or 9.3.2 by Force Majeure, the relevant period of
        180 days referred to therein shall be extended by the period of Force
        Majeure. </P>
      <P align="justify"> 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>RESTRICTION
        ON ASSIGNMENT</U></B> </P>
      <P align="justify"> 10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Neither
        party shall sell, assign, transfer, convey or otherwise dispose of or
        deal with or agree to sell, assign, transfer, convey or otherwise dispose
        of or deal with its rights and interests in or with respect to the Property
        or under or by virtue of this Agreement in whole or in part without the
        prior written consent of the other party, not to be unreasonably withheld.
      </P>
      <P align="justify"> 10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A party
        shall have the right without restriction under Section 10.1 to assign,
        transfer, convey or otherwise dispose of all its rights and interests
        to an Affiliate of such party. </P>
      <P align="justify"> 10.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the
        event of an assignment, conveyance, transfer or other disposition as contemplated
        in Section 10.2, the party making the same shall not be relieved or discharged
        of any of its obligations or liabilities hereunder, and the other party
        may continue to look to it for the performance thereof. </P>
      <P align="justify"> 10.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A party
        transferring its rights and interests as permitted hereby shall require
        any transferee to execute a counterpart of this Agreement and thereby
        to agree to be bound by the terms hereof in the same manner and to the
        same extent as though a party hereto in the first instance, all without
        in any way derogating from the provisions of Section 10.3. </P></td>
  </tr>
</table>
<P align="right">8 </P>
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  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B><U>NOTICES</U></B> </P>
      <P align="justify"> 11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All notices,
        payments and other required communications (&#147;Notices&#148;) to one
        of <B>NAGR</B> or the Optionor by the other shall be in writing and shall
        be addressed respectively as follows: </P>
      <P align="justify"> <U>If to </U><B><U>NAGR</U></B>: </P>
      <P align="justify"> 80-8190 King George Highway <br>
        Surrey, B. C. V3W 5B7 </P>
      <P align="justify"> <U>If to the Optionor</U>: </P>
      <P align="justify"> 3502 Raccine Road <br>
        Yellowknife, NWT X1A 3J2 </P>
      <P align="justify"> All Notices shall be given (1) by personal delivery
        to the addressee, or (2) by electronic communication, with a confirmation
        sent by registered or certified mail return receipt requested, or (3)
        by registered or certified mail or commercial carrier return receipt requested.
        All Notices shall be effective and shall be deemed delivered (1) if by
        personal delivery on the date of delivery if delivered during normal business
        hours and, if not delivered during normal business hours, on the next
        business day following delivery, (2) if by electronic communication on
        the next business day following receipt of the electronic communication,
        and (3) if solely by mail or commercial carrier on the next business day
        after actual receipt. A party may change its address by Notice to the
        other party. </P>
      <P align="justify"> 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>REPRESENTATIONS
        AND WARRANTIES</U></B> </P>
      <P align="justify"> 12.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Optionor
        represents and warrants to <B><U>NAGR</U></B> that: </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td><P align="justify">12.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>4763</B>
        NWT Ltd. owns and possesses and has good and marketable title to the Property
        free and clear of all mortgages, liens, charges, pledges, security interests,
        encumbrances or other claims whatsoever except for the GOR. Without limiting
        the generality of the foregoing, the Optionor has not entered into and
        there are not any agreements or options to grant or convey any interest
        in the Property or to pay any royalties with respect to the Property except
        as provided in Section 2.3; </P>
      <P align="justify"> 12.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the
        mining claims comprised in the Property have been duly and validly staked,
        located and recorded pursuant to all applicable laws and regulations in
        the Northwest Territories and are in good standing and the information
        in Schedule A is accurate; and no person has protested and there is no
        basis for protesting the recording of any such claims pursuant to section
        28 of the <I>Canada Mining Regulations</I>;</P></td>
  </tr>
</table>
<P align="right">9 </P>
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    <td width="5%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">12.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to
        the best of the Optionor&#146;s knowledge after due inquiry all activities
        on or in relation to the Property up to the date hereof have been in compliance
        with all applicable laws, regulations and permits including those for
        the protection of the environment and no conditions exist which could
        give rise to the making of a remediation order or similar order in respect
        of the Property or which could subject <B><U>NAGR</U></B> to liability;
      </P>
      <P align="justify"> 12.1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the
        Optionor has full power and authority to grant to <B><U>NAGR</U></B> the
        rights provided in this Agreement; </P>
      <P align="justify"> 12.1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the
        execution and delivery of this Agreement and the exercise by <B><U>NAGR</U></B>
        of the rights granted to it under this Agreement will not conflict with
        or be in contravention of any law, regulation or order of any government,
        government department or other competent authority including Ministerial
        orders and Orders-in-Council or conflict with rights of third parties
        or result in a breach of or default under any agreement or other instrument
        of obligation to which the Optionor is a party or by which the Optionor
        or the Property may be bound; </P>
      <P align="justify"> 12.1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; this
        Agreement constitutes a legal, valid and binding obligation of the Optionor;
      </P>
      <P align="justify"> 12.1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to
        the best of the Optionor&#146;s knowledge after due inquiry, there are
        not any material suits, actions, prosecutions, investigations or proceedings,
        actual, pending or threatened, against or affecting the Optionor or that
        relates to or has a material adverse effect on the Property; </P>
      <P align="justify"> 12.1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to
        the best of the Optionor&#146;s knowledge after due inquiry, all taxes,
        rates or other levies of every nature and kind heretofore levied against
        the Property have been fully paid and satisfied; </P>
      <P align="justify"> 12.1.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; neither
        the granting of the Option nor the exercise of it constitutes a disposition
        by the Optionor of all or substantially all of its property or undertaking;
        and </P>
      <P align="justify"> 12.1.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the
        Optionor is unaware of any material facts or circumstances which have
        not been disclosed in this Agreement, which should be disclosed to <B><U>NAGR</U></B>
        in order to prevent the representations in this Section 12.1 from being
        materially misleading. </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">12.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B><U>NAGR</U></B> represents and warrants to the Optionor that: </div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td><div align="justify">12.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B><U>NAGR</U></B> has full power and authority to enter into this Agreement
        and the execution and delivery of this Agreement and the exercise by the
        Optionor of the rights granted to it under this Agreement will not conflict
        with or result in a breach of or default under </div></td>
  </tr>
</table>
<P align="right">10 </P>
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    <td width="5%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">any agreement or other instrument of obligation to
        which <B><U>NAGR</U></B> is a party or by which it may be bound; and </P>
      <P align="justify"> 12.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; this
        Agreement constitutes a legal, valid and binding obligation of <B><U>NAGR</U></B>.
      </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">12.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        The representations and warranties contained in Section 12.1 are provided
        for the exclusive benefit of <B><U>NAGR</U></B> and a breach of any one
        or more of them may be waived by <B><U>NAGR</U></B> in writing in whole
        or in part at any time without prejudice to its rights in respect of any
        other breach of the same or any other representation or warranty. </P>
      <P align="justify"> 12.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The representations
        and warranties contained in Section 12.2 are provided for the exclusive
        benefit of the Optionor and a breach of any one or more of them may be
        waived by the Optionor in whole or in part at any time without prejudice
        to its rights in respect of any other breach of the same or any other
        representation or warranty. </P>
      <P align="justify"> 12.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is
        agreed between the parties that any technical, economic or geological
        information of any nature, including without limitation any studies, reports,
        mining models, assays, drill hole data, geochemical reports, recovery
        reports and other information concerning the Property and the existence,
        location, quantity, quality or value of any minerals thereon or therein,
        provided to, or made available by one party to the other under this Agreement
        or prior to the effective date hereof, is provided without representation
        or warranty and is at the sole risk of the party receiving the same. Such
        information is provided &#147;AS IS, WHERE IS&#148; and EACH PARTY EXPRESSLY
        DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES CONCERNING THE SAME, AND EXPRESSLY
        EXCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
        PURPOSE. </P>
      <P align="justify"> 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>CONFIDENTIALITY</U></B>
      </P>
      <P align="justify"> 13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subject
        to Section 13.2 all information received or obtained by <B><U>NAGR</U></B>
        or the Optionor hereunder or pursuant hereto shall be kept confidential
        by it and no part thereof may be disclosed or published without the prior
        written consent of the other except such information as may be required
        to be disclosed or published by regulatory bodies having jurisdiction;
        provided that a party may disclose in confidence information to any person
        or persons with whom it proposes to contract pursuant to Section 10.1.
      </P>
      <P align="justify"> 13.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Confidential
        information shall not include the following: </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top"><div align="justify">13.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        information that, at the time of disclosure, is in the public domain;
      </div></td>
  </tr>
</table>
<P align="right">11 </P>
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    <td width="5%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">13.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; information
        that, after disclosure, is published or otherwise becomes part of the
        public domain through no fault of the recipient; </P>
      <P align="justify"> 13.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; information
        that the recipient can show already was in the possession of the recipient
        at the time of disclosure; </P>
      <P align="justify"> 13.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; information
        that the recipient can show was received by it after the time of disclosure,
        from a third party who was under no obligation of confidence to the disclosing
        party at the time of disclosure. </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">13.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Except as required by law or regulatory authority, neither <B><U>NAGR</U></B>
        nor the Optionor shall make any public announcements or statements concerning
        this Agreement or the Property without the prior approval of the other,
        not to be unreasonably withheld. </P>
      <P align="justify"> 13.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The text
        of any public announcements or statements including any news release which
        the Optionor intends to make pursuant to the exception in Section 13.2
        shall be made available to <B><U>NAGR</U></B> not less than 24 hours prior
        to publication and <B><U>NAGR</U></B> shall have the right to make suggestions
        for changes therein. If <B><U>NAGR</U></B> is identified in such public
        announcement or statement it shall not be released without the consent
        of <B><U>NAGR</U></B> in writing, not to be unreasonably withheld. </P>
      <P align="justify"> 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><U>MISCELLANEOUS</U></B>
      </P>
      <P align="justify"> 14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Applicable
        Law</U>. The terms and provisions of this Agreement shall be interpreted
        in accordance with the laws of British Columbia. </P>
      <P align="justify"> 14.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Regulatory
        Approval</U>. This Agreement is subject to regulatory approval. </P>
      <P align="justify"> 14.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Entire
        Agreement</U>. This Agreement terminates and replaces all prior agreements,
        either written, oral or implied, between <B><U>NAGR</U></B> and the Optionor
        with respect to the Property, and constitutes the entire agreement between
        the parties with respect to the Property. </P>
      <P align="justify"> 14.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Void
        or Invalid Provision</U>. If any term, provision, covenant or condition
        of this Agreement, or any application thereof, should be held by a court
        of competent jurisdiction to be invalid, void or unenforceable, all provisions,
        covenants and conditions of this Agreement, and all applications thereof
        not held invalid, void or unenforceable shall continue in full force and
        effect and in no way be affected, impaired or invalidated thereby. </P>
      <P align="justify"> 14.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Additional
        Documents</U>. The parties shall do and perform all such acts and things,
        and execute all such deeds, documents and writings, and give all such
        assurances, as may be necessary to give effect to this Agreement. </P></td>
  </tr>
</table>
<P align="right">12 </P>
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<A name="page_14"></A> <br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">14.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Good
        Faith</U>. All parties shall act in good faith to fulfil their respective
        duties and obligations under this Agreement. </P>
      <P align="justify"> 14.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Binding
        Effect</U>. This Agreement shall enure to the benefit of and be binding
        upon the parties hereto and their respective successors and permitted
        assigns. </P>
</td>
  </tr>
</table>
<P>IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
  day and year first above written. </P>
<P>
<B>NORTH AMERICAN GENERAL RESOURCES CORP. </B>
</P>
<P> By: &nbsp;&nbsp;&nbsp;<u>/s/ Paul Cowley</u><br>
  Title: Vice President Exploration</P>
<P>
<B>4763 NWT LTD. </B>
</P>
<P> By: &nbsp;&nbsp;&nbsp;<u>/s/ Louis Cavello</u><br>
  Title: President</P>
<P align="right">
13
</P>

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<A name="page_15"></A>

<P>
<B><U>SCHEDULE </U></B><B>A </B>
</P>
<P>
Description of Property
</P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD>Claim Name</TD>
    <TD width="20%" align="left">Tag No.</TD>
    <TD width="20%" align="left">NTS</TD>
    <TD width="30%">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgcolor="#E6EFFF">RJ 1</TD>
    <TD width="20%" align="left" bgcolor="#E6EFFF">F83120</TD>
    <TD width="20%" align="left" bgcolor="#E6EFFF">75 N/04</TD>
    <TD width="30%">&nbsp;</TD>
  </TR>
</TABLE>
<P align="justify"> The RJ 1 claim was staked July 21, 2003 and recorded August
  7, 2003 under the terms of the Canadian Mining Regulations by the Mining Recorders
  Office in Yellowknife, NWT. The RJ 1 claim consists of 206.6 acres and is located
  approximately 260 kilometres east northeast of Yellowknife, NWT. </P>
<P align="right">
14
</P>

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<A name="page_16"></A>

<P> <B><U>SCHEDULE </U></B><u><B>B</B></u><B> </B> </P>
<P>
<B>Definition of Gross Overriding Royalty </B>
</P>
<P> <B><U>Base Metals</U></B> </P>
<P align="justify"> In respect of base metals, the phrase "Gross Overriding Royalty"
  means 2.5% of <B>NAGR</B>&#146;s interest in the Base Net Smelter Returns from
  all ores mined from any of the Properties which have a base metal or combination
  of base metals as the contained element of greatest economic value and all concentrates
  and other mineral products, metals or minerals which are derived therefrom prior
  to their sale (the "Base Products"), where Base Net Smelter Returns equals the
  Base Gross Proceeds from sales of such Base Products less Base Allowable Deductions,
  where: </P>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B>"Base Gross Proceeds"</B> for any Base Product means the actual proceeds
        received for the sale of such Base Product (for greater certainty, including
        insurance proceeds in respect of any loss); and </P>
      <P align="justify"> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>"</B><B>Base
        Allowable Deductions"</B> for any Base Product means the following costs,
        charges and expenses paid, incurred, or deemed incurred by or on behalf
        of <B>NAGR</B> with respect to such Base Product: </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td><P align="justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; charges
        for treatment in the smelting, refining and other beneficiation process
        (including handling, processing, interest, and provisional settlement
        fees, weighing, sampling, assaying umpire and representation costs, penalties,
        and other processor deductions); </P>
      <P align="justify"> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;actual
        costs of transportation (including loading, freight, insurance, security,
        transaction taxes, handling, port, demurrage, delay, and forwarding expenses
        incurred by reason of or in the course of transportation) of Base Product
        from the Properties to the place of treatment; </P>
      <P align="justify"> (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;costs or charges
        of any nature for or in connection with insurance, storage, or representation
        at a facility where Base Product is treated; and </P>
      <P align="justify"> (iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sales,
        use, severance, excise, net proceeds of mine, and ad valorem taxes and
        any tax on or measured by mineral production, insofar as such taxes are
        attributable to Base Product, but not including income taxes of <B>NAGR</B>;
      </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">provided that when Base
        Product is treated, whether on or off the Properties, in a facility wholly
        or partially owned by <B>NAGR</B> or an affiliate of <B>NAGR</B>, Base
        Allowable Deductions will not include any costs that are in excess of
        those which </div></td>
  </tr>
</table>
<P align="right">15 </P>
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<A name="page_17"></A> <br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">would be incurred on an
        arm's length basis, or which would not be Base Allowable Deductions if
        those Base Products were treated by an independent third party . </div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" valign="top"><p align="justify"><b><u>Precious Metals</u></b>
      </p>
      <p align="justify"> In respect of precious metals, the phrase "Gross Overriding
        Royalty" means 2.5% of <b>NAGR</b>&#146;s interest in the Precious Net
        Smelter Returns from all ores mined from the Properties and having a precious
        metal or combination of precious metals as the contained element of greatest
        economic value, and all dor&eacute;, concentrates and other mineral products,
        metals or minerals which are derived therefrom prior to their sale (the
        "Precious Products"), where Precious Net Smelter Returns equals the Precious
        Gross Proceeds from sales of such Precious Products less Precious Allowable
        Deductions, where: </p></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <b>"Precious Gross Proceeds"</b> for any Precious Product means the proceeds
        received or deemed to have been received for the sale of such Precious
        Product, determined as follows: </div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top"><p align="justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        if there is a sale of Precious Product in the form of refined gold, then
        such gold will be deemed to have been sold at the average London Bullion
        Market Association of P.M. Gold Fix, calculated by dividing the sum of
        all such prices reported for the month in which it was produced by the
        number of days in that month for which such prices were reported; </p>
      <p align="justify"> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; if there
        is a sale of Precious Product in the form of refined silver, then such
        silver will be deemed to have been sold at the average New York Silver
        Price as published daily by Handy &amp; Harman (or, should that publication
        cease, another similar publication acceptable <b>4763</b> NWT Ltd. and
        <b>NAGR</b>, acting reasonably), calculated by dividing the sum of all
        such prices reported for the calendar month in which it was produced by
        the number of days in that month for which such prices were reported;
        and </p>
      <p align="justify"> (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if there is
        any other sale of Precious Product including, without limitation, a sale
        in the form of raw ore, dor&eacute;, concentrates, refined metals other
        than gold or silver, and any loss of Precious Product in any form, then
        the Precious Gross Proceeds will be equal to the amount of the proceeds
        actually received from the sale (for greater certainty , including insurance
        proceeds in respect of any loss). </p></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <b>"Precious Allowable Deductions"</b> for any Precious Product means
        the following costs, charges and expenses paid, incurred, or deemed incurred
        by or on behalf of <b>NAGR</b> with respect to such Precious Product:
      </div></td>
  </tr>
</table>
<P align="right">16 </P>
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<A name="page_18"></A> <br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; charges
        for treatment in the smelting, refining and other beneficiation process
        (including handling, processing, interest, and provisional settlement
        fees, weighing, sampling, assaying umpire and representation costs, penalties,
        and other processor deductions); </P>
      <P align="justify"> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;actual
        costs of transportation (including loading, freight, insurance, security,
        transaction taxes, handling, port, demurrage, delay, and forwarding expenses
        incurred by reason of or in the course of transportation) of Precious
        Product from the Properties to the place of treatment and then to the
        place of sale; </P>
      <P align="justify"> (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;costs or charges
        of any nature for or in connection with insurance, storage, or representation
        at a facility where Precious Product is treated; </P>
      <P align="justify"> (iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;actual
        sales and brokerage costs; and </P>
      <P align="justify"> (v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; sales,
        use, severance, excise, net proceeds of mine, and ad valorem taxes and
        any tax on or measured by mineral production, insofar as such taxes are
        attributable to Precious Product, but not including income taxes of <B>NAGR</B>
        or <B>4763</B> NWT Ltd.; </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">provided that when Precious
        Product is treated, whether on or off the Properties, in a facility wholly
        or partially owned by <B>NAGR</B> or an affiliate of <B>NAGR</B>, Precious
        Allowable Deductions will not include any costs that are in excess of
        those which would be incurred on an arm's length basis, or which would
        not be Precious Allowable Deductions if those Precious Products were treated
        by an independent third party. </div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" valign="top"><P align="justify"><B><U>Diamonds</U></B> </P>
      <P align="justify"> In respect of diamonds, the phrase "Gross Overriding
        Royalty" means 2.5 % of <B>NAGR</B>&#146;s interest in the Diamond Net
        Sales Returns from all diamonds mined from any of the Properties ("Diamonds"),
        where Diamond Net Sales Returns equals the Diamond Gross Proceeds less
        Diamond Allowable Deductions, where: </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><P align="justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        <B>"Diamond Gross Proceeds"</B> for any Diamond Product means the actual
        proceeds received for the sale of such Diamonds (for greater certainty,
        including insurance proceeds in respect of lost or damaged Diamonds);
        and </P>
      <P align="justify"> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>"Diamond
        Allowable Deductions"</B> means the following costs, charges and expenses
        paid, incurred, or deemed incurred by <B>NAGR</B>:</P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top"><div align="justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        cost and expenses for preparing rough Diamonds for sale including, without
        limitation, for sorting, weighing, grading, valuing, pricing, parceling
        ( any or all of the foregoing, "<B>sorting</B>") and cleaning; </div></td>
  </tr>
</table>
<P align="right">17 </P>
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<A name="page_19"></A> <br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;actual
        costs of shipping and transporting (including packaging, insurance, security
        , transaction taxes, handling, port, demurrage, delay, and forwarding
        expenses incurred by reason of or in the course of transportation) Diamonds
        from the Properties to the place of sale; </P>
      <P align="justify"> (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;costs and expenses
        for or in connection with insurance, security, packing, storage or representation
        at a facility where the sorting or cleaning of Diamonds takes place; </P></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><div align="justify">provided that when there
        is sorting or cleaning of Diamonds, whether on or off the Properties,
        in a facility wholly or partially owned by <B>NAGR</B> or an Affiliate
        of <B>NAGR</B>, Diamond Allowable Deductions will not include any costs
        that are in excess of those which would be incurred on an arm's length
        basis, or which would not be Diamond Allowable Deductions if the sorting
        or cleaning of the Diamonds was being done by an independent third party.
      </div></td>
  </tr>
</table>
<P align="right">18 </P>
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<A name="page_20"></A>

<P> <B><U>SCHEDULE </U></B><u><B>C </B></u> </P>
<P align="center">
<B>JOINT VENTURE AGREEMENT </B>
</P>
<P align="center">
Between
</P>
<P>
<B>4763 NWT LTD. (&#147;OPTIONOR&#148;),</B> a company incorporated under the laws of the Northwest Territories
</P>
<P>
and
</P>
<P>
<B>NORTH AMERICAN GENERAL RESOURCES CORP. (&#147;OPTIONEE&#148;),</B> a company duly incorporated under the laws of British Columbia.
</P>
<P align="center">
Dated this 1st day of March, 2004.
</P>
<P>
Upon the exercise of the option, North American General Resources Corp. (NAGR) and 4763 NWT LTD. (4763) will be deemed to have formed a joint venture with respect to further exploration, development and, if warranted, commercial production of the
Property, with the following initial interests:
</P>
<P align="center"> <B>NAGR (70%) </B>and <B>4763 (30%) </B> </P>
<P> Once the Joint Venture is in effect <B>the following terms will apply:</B>
</P>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">1 </td>
    <td width="5%" valign="top">a) </td>
    <td valign="top"><div align="justify">Relationship of the Parties.</div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">i.</td>
    <td valign="top"><div align="justify">The relationship of the participants
        will be as tenants-in-common in their respective participating interests.
        The liabilities of each of them and their responsibilities for costs in
        relation to the Property will be several and not joint nor joint and several
        and will be borne severally in proportion to their respective participating
        interests. Each participant will be entitled to its share of mineral production
        from the Property.</div></td>
  </tr>
</table>
<P align="right">19 </P>
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<A name="page_21"></A> <br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD valign="top"><div align="justify">1</div></TD>
    <TD valign="top"><div align="justify">b)</div></TD>
    <TD valign="top"> <div align="justify">Manager and Operator.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top" width="5%"><div align="justify"><BR>
        &nbsp;&nbsp;</div></TD>
    <TD valign="top" width="5%"><div align="justify">i.</div></TD>
    <TD valign="top"><div align="justify">A management committee will be constituted
        with responsibility for overseeing joint venture operations. Each of the
        participants will be entitled to appoint two representatives to the management
        committee, with each representative being entitled to vote in proportion
        to the participating interest of the participant that appointed him. A
        representative of the party who is the operator of the joint venture will
        be the chairman of the management committee.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">ii. </div></TD>
    <TD valign="top"><div align="justify">The participant with the largest participating
        interest will be the operator.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">iii. </div></TD>
    <TD valign="top"><div align="justify">The operator will have the right to
        cash call in advance to cover anticipated approved program expenditures,
        including a reasonable amount of working capital.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">iv.</div></TD>
    <TD valign="top"> <div align="justify">The operator will report to the management
        committee periodically as to the progress of work upon and the development
        of the Property.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top" width="5%">&nbsp;</TD>
    <TD valign="top" width="5%"><div align="justify">v.</div></TD>
    <TD valign="top"><div align="justify">The operator will have a lien on the
        participants&#146; interests to secure cost shares of committed expenditures,
        and the right to advance the cost of the share of a participant in default.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">vi. </div></TD>
    <TD valign="top"><div align="justify">The operator will market all diamonds
        produced from the Property on behalf of the Joint Venture.</div></TD>
  </TR>
  <TR>
    <TD valign="top" width="5%">&nbsp;</TD>
    <TD valign="top" width="5%">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top"><div align="justify">1</div></TD>
    <TD valign="top"><div align="justify">c)</div></TD>
    <TD valign="top"> <div align="justify">Initiation and Approval of Programmes.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">i.</div></TD>
    <TD valign="top"><div align="justify">The operator will propose and carry
        out programs as approved by the management committee.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">ii.</div></TD>
    <TD valign="top"> <div align="justify">Each of the participants may elect
        to participate in any such program and if it does so will be obliged to
        contribute to the costs and expenses of the program according to its respective
        participating interest.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">iii.</div></TD>
    <TD valign="top"><div align="justify">If a participant elects not to participate
        in an approved program, its interest will be diluted so as to be proportionate
        to the amount it has contributed as compared with the aggregate amounts
        contributed by all participants. If it elects to contribute and fails
        to do so, then its participating interest will be diluted doubly.</div></TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="top">&nbsp;</TD>
    <TD valign="top"><div align="justify">iv.</div></TD>
    <TD valign="top"> <div align="justify">If a participating interest of a participant
        has been diluted to 10% or less, then the participating interest will
        be automatically converted to a royalty of 2.5% of the Net Smelter Returns
        on base and/or precious metals and 2.5% Gross Over-riding Royalty on diamonds.
        The NSR and GOR are explained within the Option Agreement.</div></TD>
  </TR>
</TABLE>
<P align="right">
20
</P>

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<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">1</td>
    <td width="5%" valign="top">d) </td>
    <td><div align="justify">Transfer Restrictions.</div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">i.</td>
    <td><div align="justify">No participant will be entitled to dispose of its
        participating interest (other than to affiliate) without first offering
        it to the other participant.</div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">ii. </td>
    <td><div align="justify">No encumbrance of any participating interest will
        be permitted except for financing of development of the Property and then
        only subject to the joint venture agreement and the operator&#146;s lien.</div></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">1</td>
    <td valign="top">e) </td>
    <td><div align="justify">The Joint Venture Agreement will be subject to laws
        of British Columbia.</div></td>
  </tr>
</table>
<p align="right">21 </p>
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