Common use of EXPLORATION PROGRAMS Clause in Contracts

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the Operator shall prepare draft Programs for consideration by the Shareholders’ Committee. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted to the Shareholders’ Committee no later than October 31 of each year. 7.02 The Shareholders’ Committee shall review the Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws. 7.08 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Costs incurred and paid by the Operator; or (b) no more than 30 days in advance of requirements, for an advance of that Participant's Proportionate Share of Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share within the 30-day period referred to in paragraph 7.08 the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation under this Agreement to the other Participant, and if more than one then in proportion to their respective Share Participations. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 If any Program is altered, suspended or terminated prematurely so that the Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Costs originally proposed, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator. 7.12 If the effect of the application of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share Participations, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurred.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, 8.1 Draft Programs submitted by the Operator shall prepare draft Programs for consideration by to the Shareholders’ Committee. The draft Program Management Committee shall contain a statement in reasonable detail of the proposed Mining Operations Program and estimates of all Exploration Costs to be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted to the Shareholders’ Committee no later than October 31 of each year. 7.02 8.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program same with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs 10% of a Program budget and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 8.3 The Operator shall forthwith submit the adopted approved Program to the partiesParties. Each party Party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for on that Program. A party Party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 8.4 If any party elects or is deemed to have elected not to contribute to a Program, an approved Program the amounts to be contributed by the parties Participants who elected to contribute to that Program shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 by them. If a party elected Participant elects not to contribute more than the amount initially committed the Operator may elect not to proceed with the Costs of any approved Program the Share Participation of that party shall be decreased or may prepare an amended Program and the Share Participation provisions of each Participant contributing in excess of its Proportionate Share of the Costs this Article shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent apply to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsamended Program. 7.08 8.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, monthly for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no in advance of requirements but not more than 30 days in advance of requirements, for an advance of that Participant's Proportionate Share of Exploration Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the paymentpayment subject to later adjustment if such protest is sustained. 7.09 8.6 If after electing to participate any Participant elects to contribute to a Program and then (the "Defaulting Party") fails to pay its Proportionate Share within the 30-30 day period referred to in paragraph 7.08 Paragraph 8.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant notice the Interest of the Defaulting Party shall be deemed to be less than 20% and that interest will be converted to a 5% Net Profits Royalty to be calculated and paid in accordance with Appendix II hereto, and that Party shall have forfeited all its right and Share Participation under this Agreement to no further Interest. The Interests of the other Participant, and if more than one then in proportion to their respective Share ParticipationsParties shall be increased pro rata. 7.10 8.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, Program any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 8.8 If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent 80% of the Exploration Costs originally proposed, any party Party which elected or which is deemed to have elected not to contribute to its Proportionate Share of the Exploration Costs incurred on that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party Party within the 30 days aforesaid it shall forfeit its right to contribute to that Program shall, without a demand for payment being required to be made thereafter by the OperatorManagement Committee, forfeit its right to contribute to that Program. 7.12 8.9 If the effect of the application of paragraph 7.07 a Party elects or is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation elected not to contribute to the Participants, if more than one, then Exploration Costs of any Program the Interest of that Party shall be decreased and the Interest of each Participant contributing in proportion excess of its Proportionate Share of the Exploration Costs shall be increased so that at all times during the Exploration Period the Interest of each Party will be equal to their respective Share Participations, its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all Parties. The party whose Interest has been reduced shall be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration then Interest. 8.10 If a Party's Interest is reduced to 20% or less, that Interest will be converted to a 5% Net Profits Royalty to be calculated and benefit paid in consideration accordance with Appendix II hereto, and that Party shall have no further Interest. The Interests of that assignment the other Parties shall be increased pro rata. 8.11 If the Operator fails to submit a draft Program for an Operating Year by November 30 of the year preceding such Operating Year: (a) the Operator shall not be entitled to submit a draft Program for the Operating Year; (b) the other Party, and conveyanceif there is more than one, the Net Smelter Returns Royalty. If more than one party is Party with the greatest Interest, may submit a draft Program (the "Non-Operator's Program") for the Operating Year for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's draft Program and, if it deems fit (the Operator not being entitled to receive vote with respect thereto), adopt the Net Smelter Returns Royalty pursuant Program with such modifications, if any, as the Management Committee deems necessary and the adopted Program shall then be submitted to the parties according to this paragraph Article; (d) if the Operator is a Party and subparagraph 10.02(belects not to contribute to the Program it shall cease to be the Operator and the Management Committee shall appoint a new Operator (the former Operator not being entitled to vote with respect thereto). 8.12 If the Management Committee for any reason fails to adopt a Program for an Operating Year by December 31 of the preceding year, then the Net Smelter Returns Royalty shall be allocated Operator shall, subject to direction to the contrary by the Management Committee and paid the receipt of the necessary funds, carry out such work and make such disbursements as to them meet the minimum requirements to maintain the Property in proportion to their respective Costs incurredgood standing.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 4.01 The Operator shall prepare draft Programs for consideration by the Shareholders’ CommitteeOptionee. Unless otherwise agreed to by the Optionee, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee Optionee by no later than October 31 March 1st of each yearyear to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for the Optionee to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 4.02 The Shareholders’ Committee Optionee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee Optionee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun overruns of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws. 7.08 4.03 The Operator shall be entitled to invoice each Participantthe Optionee: (a) no more frequently than monthly, for its Proportionate Share of the Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 120 days in advance of requirements, for an advance of that Participant's Proportionate Share of Coststhe Costs estimated to be incurred and paid by the Operator in carrying out a Program or portion thereof. Each invoice shall be signed by some responsible official an officer of the Operator. Each Participant The Optionee shall pay to the Operator the amount invoiced, invoiced within 30 20 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant Optionee protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 4.04 If any Participant elects to contribute to a Program and then the Optionee fails to pay its Proportionate Share an invoice within the 3020-day period referred to in paragraph 7.08 Section 4.03, the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant Optionee shall be deemed to have forfeited all its right elected to terminate the Program then in effect, and Share Participation accordingly, the Operator shall have no further obligations under this Agreement to the other Participant, and if more than one then in proportion to their respective Share Participationsrespect of that Program. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. 4.05 If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 30 days of the suspension or premature termination. Unless approved by the Optionee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Costs. 7.11 4.06 Unless otherwise directed by the Optionee, the Operator may suspend or terminate prematurely any Program, by delivering notice to that effect to the Optionee, when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. The Optionee may suspend or terminate prematurely any Program at any time by delivering notice to that effect to the Operator. If any Program is alteredterminated prematurely, suspended or terminated prematurely so that the Costs incurred on that Program as alteredOperator shall, suspended or terminated are less than 80 percent within 30 days of such termination, refund to the Costs originally proposed, any party Optionee the amount by which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination amounts advanced by the Optionee to the Operator on account of projected Costs exceeds the sum of such Costs and the amounts payable to the Operator under Section 5 of this Schedule. 4.07 If the Operator fails to submit a draft Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to contribute its Proportionate Share of submit a draft Program for the Costs incurred on that subject period; (b) the Optionee may submit a draft Program by payment thereof to (the Operator within 30 days after receipt of “Non-Operator's Program”) for the notice. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand subject period for payment being required to be made thereafter consideration by the Operator.; 7.12 If (c) if the effect Operator elects to proceed with the Non-Operator's Program, it shall remain as the operator for the duration of the application Non-Operator's Program; and (d) if the Operator elects not to proceed with the Non-Operator’s Program, it shall cease to be the Operator for the duration of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share ParticipationsNon-Operator's Program, and the Optionee shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, carry out the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredNon-Operator Program itself.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each party to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. During the first year of each yearthis program expenditures for exploration by this Joint Venture will be planned on a more short-term basis rather than annual. Certain expenditures will be required to be made with dispatch in order to ensure that the mineral claims are maintained. Accordingly, parties acknowledge and agree to short notice periods of 30 days for notice and including advance of funds in the time immediately subsequent to the commencement of this Joint Venture. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent 20% in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 30-day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 its Proportionate Share. If a one or more party elected not so elects to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of no more than its Proportionate Share and the other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in Section 7.3, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be increased so that at all times re-submitted to the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed Management Committee as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, draft Program pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of SharesSection 7.1, and the corresponding increase procedure set out in the other party's Share Participation Sections 7.1 to 7.4 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's ’s Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.6 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then Section 7.3, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 Section 7.5, the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in Sections 7.9 and 10.2(b). 7.10 7.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's ’s Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 120% of any budgeted Exploration Costs. 7.11 7.8 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent 80% of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Management Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.9 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs expressed as a percentage of the Exploration Costs of all parties. Notwithstanding the foregoing but subject to Section 7.10 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to Section 7.6) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties’ respective Interests and Prior Exploration Costs shall be deemed to be as follows: Thunder $1,000,000 50% Source $1,000,000 50% 7.10 If the effect of the application of paragraph 7.07 Section 7.9 is to reduce the Share Participation Interest of any party to less than 10% 1%, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, a cash payment of $25,000.00. This payment shall be made within 60 days of it being due and so declared due by the Net Smelter Returns Royalty. Management Committee. 7.11 If more than one party is the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to receive submit a draft Program or revised Program for the Net Smelter Returns Royalty subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator’s draft Program or revised Program was due, submit a draft Program (the “Non-Operator’s Program”) for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator’s Program and, if it deems fit (the Operator being entitled to vote with respect thereto), adopt the Non-Operator’s Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to this paragraph Section 7.3; (d) if the Operator is a party and subparagraph 10.02(belects to contribute to the Non-Operator’s Program, it shall remain as the Operator for the duration of the Non-Operator’s Program; (e) if the Operator is a party and elects not to contribute to the Non-Operator’s Program, it shall cease to be the Operator for the duration of the Non-Operator’s Program, and the Management Committee shall appoint another party as Operator (the former Operator being entitled to vote with respect thereto); (f) following the completion of the Non-Operator’s Program the former Operator shall, then subject to the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredprovisions of Section 5.1, automatically become the Operator.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, 8.1 Draft Programs submitted by the Operator shall prepare draft Programs for consideration by to the Shareholders’ Committee. The draft Program Management Committee shall contain a statement in reasonable detail of the proposed Mining Operations Program and estimates of all Exploration Costs to be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted to the Shareholders’ Committee no later than October 31 of each year. 7.02 8.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program same with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs 10% of a Program budget and any Costs so incurred shall be deemed to be included in the Program. In the event of a Cost overrun of greater than 10% of the Program budget, as adopted. 7.03 The the Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, liable for all Costs in excess of amounts actually expended. Such continuing obligations the Overrun unless such Costs are those that are or will be incurred as a result of unanimously approved by the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate accountManagement Committee. 7.04 8.3 The Operator shall forthwith submit the adopted approved Program to the partiesParties. Each party Party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for on that Program. A party Party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 8.4 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification Party elects or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be is deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party have elected not to contribute to a an approved Program, the amounts to be contributed by the parties Participants who elected to contribute to that Program shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 by them. If a party elected Participant elects not to contribute more than the amount initially committed, the Operator may elect not to proceed with the Costs of any approved Program the Share Participation of that party shall be decreased or may prepare an amended Program and the Share Participation provisions of each Participant contributing in excess of its Proportionate Share of the Costs this Article shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent apply to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsamended Program. 7.08 8.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, monthly for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no in advance of requirements, but not more than 30 days in advance of requirementsadvance, for an advance of that Participant's Proportionate Share of Exploration Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice invoice, it shall nevertheless be required to make the paymentpayment subject to later adjustment if such protest is sustained. 7.09 If 8.6 If, after electing to participate, any Participant elects to contribute to a Program and then fails to pay its Proportionate Share within the 30-30 day period referred to in paragraph 7.08 Paragraph 8.5 (the "Defaulting Party"), the Operator may, by notice, demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant the Interest of the Defaulting Party shall be deemed to be less than 20% and that Interest will be converted to a ◆ % Net Profits Royalty to be calculated and paid in accordance with Appendix II hereto, and that Party shall have forfeited all its right and Share Participation under this Agreement to no further Interest. The Interests of the other Participant, and if more than one then in proportion to their respective Share ParticipationsParties shall be increased pro rata. 7.10 8.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 8.8 If any Program is altered, suspended or terminated prematurely prematurely, so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent 80% of the Exploration Costs originally proposed, any party Party which elected or which is deemed to have elected not to contribute to its Proportionate Share of the Exploration Costs incurred on that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party Party within the 30 days aforesaid it shall forfeit its right to contribute to that Program shall, without a demand for payment being required to be made thereafter by the OperatorManagement Committee, forfeit its right to contribute to that Program. 7.12 8.9 If the effect of the application of paragraph 7.07 a Party elects or is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation elected not to contribute to the ParticipantsExploration Costs of any Program, if more than one, then the Interest of that Party shall be decreased and the Interest of each Participant contributing in proportion excess of its Proportionate Share of the Exploration Costs shall be increased so that at all times during the Exploration Period the Interest of each Party will be equal to their respective Share Participations, its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all Parties. The Party whose Interest has been reduced shall be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration then Interest. 8.10 If a Party's Interest is reduced to 20% or less, that Interest will be converted to a 2% Net Profits Royalty to be calculated and benefit paid in consideration accordance with Appendix II hereto, and that Party shall have no further Interest. The Interests of that assignment and conveyancethe other Parties shall be increased pro rata. 8.11 If the Management Committee for any reason fails to adopt a Program for an Operating Year by December 31 of the preceding year, the Net Smelter Returns Royalty. If more than one party is entitled Operator shall, subject to receive direction to the Net Smelter Returns Royalty pursuant contrary by the Management Committee and the receipt of the necessary funds, carry out such work and make such disbursements as to this paragraph and subparagraph 10.02(b), then meet the Net Smelter Returns Royalty shall be allocated and paid minimum requirements to them maintain the Property in proportion to their respective Costs incurredgood standing.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each Subject to sub-paragraph 7.04, each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.04 ▇▇▇▇▇▇ shall not be required to contribute to the initial Program until Baymont has expended Exploration costs of $12,000 US on the Property, which expenditure shall be made on or before December 31, 2002. This $12,000 US expenditure by Baymont shall not be included in the calculation of Baymont's Proportionate Share of the initial or any Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.03, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.01, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.01 to 7.04 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.06 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.07 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.03, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 7.06 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.10 and 10.02(b). 7.10 7.08 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.09 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Management Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.10 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.11, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.11 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to paragraph 7.07) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties' respective Interests and Prior Exploration Costs shall be deemed to be as follows: ------------------------------------------------------------------ Prior Exploration Costs Interest ------------------------------------------------------------------ ▇▇▇▇▇▇ Nil 25 % ------------------------------------------------------------------ Baymont Nil 75 % ------------------------------------------------------------------ 7.11 If the effect of the application of paragraph 7.07 7.10 is to reduce the Share Participation Interest of any party to less than 10% 15%, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 5% of Net Proceeds of Production, subject to adjustment as provided in paragraph 7.13. 7.12 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator's draft Program or revised Program was due, submit a draft Program (the "Non- Operator's Program") for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator's Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph 7.03; (d) If the Operator is a party and elects to contribute to the Non- Operator's Program, it shall remain as the Operator for the duration of the Non-Operator's Program. (e) if the Operator is a party and elects not to contribute to the Non- Operator's Program, it shall cease to be the Operator for the duration of the Non-Operator's Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator's Program the former Operator shall, subject to the provisions of paragraph 5.01, automatically become the Operator. 7.13 Each of Baymont and ▇▇▇▇▇▇ hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 5% of Net Smelter Returns RoyaltyProceeds of Production. If more than one For example, if: (a) ▇▇▇▇▇▇ assigns a part of its Interest to a third party is pursuant to this Agreement, and (b) ▇▇▇▇▇▇ then becomes entitled to receive the 5% of Net Smelter Returns Royalty Proceeds of Production pursuant to this paragraph and 7.11 or subparagraph 10.02(b); and (c) the said third party then also becomes entitled to receive Net Proceeds of Production pursuant to paragraph 7.11 or subparagraph 10.02(b), then ▇▇▇▇▇▇ and such third party shall collectively be entitled to receive 5% of Net Proceeds of Production, allocated between them on a proportionate basis based upon the Net Smelter Returns Royalty shall be allocated respective Prior Exploration Costs and paid to them in proportion to their respective Exploration Costs incurredof each of ▇▇▇▇▇▇ and such third party at the time that the assignment and conveyance of its Interest took place.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, 7.1 Draft Programs submitted by the Operator shall prepare draft Programs for consideration by to the Shareholders’ Committee. The draft Program shall Management Committee will contain a statement in reasonable detail of the proposed Mining Operations Program and estimates of all Exploration Costs to be incurred. Unless otherwise determined . 7.2 Within thirty (30) days of the draft Program being submitted by the Shareholders’ Operator to the Management Committee, each draft Program shall cover a calendar year, and shall be submitted to the Shareholders’ Management Committee no later than October 31 of each year. 7.02 The Shareholders’ Committee shall will review the draft Program prepared and, if it deems fit, adopt the Program same with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall will be entitled to an allowance for a Cost overrun of 10 Ten percent in addition to any budgeted Exploration Costs (10%) of a Program budget and any Costs so incurred shall will be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, . Any overruns in excess of amounts actually expended. Such continuing obligations are those that are or ten percent (10%) of a Program budget incurred without the prior written approval of the Management Committee will be incurred as a result borne by and will be for the sole account of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate accountOperator. 7.04 7.3 The Operator shall will forthwith submit the Program adopted Program under Section 7.2 to the parties. Each party may, within 30 thirty (30) days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for on that Program. A party which fails to give that notice within the 30 thirty (30) day period shall or which gives notice to contribute but fails to pay its Proportionate Share within the thirty (30) day period referred to in Section 7.5, will be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elects or is deemed to have elected not to contribute to a Program, the amounts to be contributed by the parties Participants who elected contribute to contribute shall that Program will be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 Section 7.3 hereof. 7.07 . If a party elected Participant elects not to contribute more than the amount initially committed, the Operator may elect not to proceed with the Costs of any Program the Share Participation of that party shall be decreased or may prepare an amended Program and the Share Participation provisions of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party this Article 7 will be that percentage which is equivalent apply to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsamended Program. 7.08 7.5 The Operator shall will be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no more than 30 days in advance of requirementsrequirements but not more than thirty (30) days, for an advance of that Participant's Proportionate Share of Exploration Costs. Each invoice shall will be signed by some responsible official of the Operator. Each Participant shall will pay to the Operator the amount invoiced, within 30 thirty (30) days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall will nevertheless be required to make the payment, subject to later adjustment if such protest is sustained. 7.09 If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share within the 30-day period referred to in paragraph 7.08 the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation under this Agreement to the other Participant, and if more than one then in proportion to their respective Share Participations. 7.10 7.6 The Operator shall will expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall will be refunded forthwith. 7.11 7.7 If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 eighty percent (80%) of the Exploration Costs originally proposed, any party which elected or which is deemed to have elected not to contribute to that Program shall will be given notice of the alteration, suspension or termination by the Operator and shall will be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 thirty (30) days after receipt of the notice. If payment is not made by that party within the 30 thirty (30) days aforesaid it shall forfeit its right to contribute to that Program will, without a demand for payment being required to be made thereafter by the OperatorManagement Committee, relinquish its right to contribute to that Program. 7.12 If the effect of the application of paragraph 7.07 7.8 Subject to Section 7.7, if a party with an Interest elects or is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation elected not to contribute to the ParticipantsExploration Costs of any Program, if more than onethe Interest of that party will be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs will be increased so that at all times during the Exploration Period the Interest of each party with an Interest will be that percentage which is equivalent to the sum of that party's Exploration Costs and Initial Contribution divided by the sum of the Exploration Costs of all parties with an Interest, then in proportion multiplied by one hundred (100). Notwithstanding the foregoing but subject to their respective Share ParticipationsSection 7.9, and shall the party whose Interest has been reduced will be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration and benefit then Interest. Realignment of interests of Participants in consideration accordance with this section shall be made at the conclusion of that assignment and conveyancethe Program with respect to which such realignment was occasioned. 7.9 If the Operator fails to submit a draft Program for an Operating Year by the sixtieth day preceding such Operating Year, the Net Smelter Returns Royalty. If more than one party is following will apply: (a) the Operator will not be entitled to receive submit a draft Program for the Net Smelter Returns Royalty pursuant subject Operating Year; (b) any Participant or Participants other than the Operator may submit a draft Program (the "Non-Operator's Program") for the subject Operating Year for consideration by the Management Committee; (c) the Management Committee will review the Non-Operator's draft Program or Programs, and, if it deems fit (the Operator not being entitled to this paragraph and subparagraph 10.02(bvote with respect thereto), adopt the same with such modifications, if any, as the Management Committee deems necessary; the adopted Program will then be submitted to the Net Smelter Returns Royalty shall parties according to Section 7.3 hereof; and (d) if the Operator is a Party and elects not to contribute to the said Program, it will cease to be allocated the Operator hereunder, and paid the Management Committee will appoint a new Operator (the former Operator not being entitled to them vote with respect thereto). 7.10 If the Management Committee for any reason fails to adopt a Program for an Operating Year by the thirtieth day preceding such Operating Year, subject to direction to the contrary by the Management Committee and the receipt of the necessary funds, the Operator will carry out such work and make such disbursements as to meet the minimum requirements to maintain the Property in proportion to their respective Costs incurredgood standing.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 15 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.3, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program . If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.1, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.1 to 7.4 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 15 days in advance of requirements, for an advance of that Participant's ’s Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 15 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.6 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.3, fails to pay its Proportionate Share an invoice within the 3015-day period referred to in paragraph 7.08 7.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 7 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.9 and 10.2(b). 7.10 7.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's ’s Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. 7.11 7.8 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Management Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.9 If a party elected not to contribute to the effect of the application of paragraph 7.07 is to reduce the Share Participation Exploration Costs of any party to less than 10% such Program the Interest of that party shall be deemed decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to have assigned paragraph 7.10, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and conveyed its Share Participation Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.10 hereof, the Participants, if more party whose Interest has been reduced (other than one, then in proportion a party who has forfeited the right to their respective Share Participations, and contribute pursuant to paragraph 7.6) shall be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration and benefit in consideration of that assignment and conveyancethen Interest. On the Operative Date, the Net Smelter Returns Royaltyparties’ respective Interests and Prior Exploration Costs shall be deemed to be as follows: Brookmount $1,500,000 50% Pana $1,500,000 50% 7.10 The application of paragraph 7.9 shall be limited to a reduction of the Interest of any party to not less than 25% (the “Reduced Party”) In the event that the costs as defined in 7.9 would reduce any party below 25% then those costs will be carried by the party contributing the costs (the “Contributing Party”) as a loan to the party who shall accrue interest at the prime interest rate based on the U.S. Prime Interest Rate of the Bank of New York plus 10%. The Reduced Party shall receive 50% of their allocated proceeds from production, less all costs of production, until the loan is paid in full. (For example: If more than one party the Reduced Party is reduced to 25% then the Reduced Party shall receive 12.5% of the total proceeds from production less all costs and the Contributing Party shall receive 87.5% of the total proceeds from production of which 12.5% shall be applied against the loan to the Reduced Party. 7.11 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to receive submit a draft Program or revised Program for the Net Smelter Returns Royalty subject period; (b) any Participant other than the Operator whose Interest is not less than 50% may, within 30 days following the date by which the Operator’s draft Program or revised Program was due, submit a draft Program (the “Non-Operator’s Program”) for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator’s Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator’s Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to this paragraph 7.3; (d) If the Operator is a party and subparagraph 10.02(belects to contribute to the Non-Operator’s Program, it shall remain as the Operator for the duration of the Non-Operator’s Program. (e) if the Operator is a party and elects not to contribute to the Non-Operator’s Program, it shall cease to be the Operator for the duration of the Non-Operator’s Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator’s Program the former Operator shall, then subject to the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredprovisions of paragraph 5.1, automatically become the Operator.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement state-ment in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.04 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.03, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program . If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.01, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.01 to 7.04 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.05 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.06 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.03, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 7.05 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.09 and 10.02(b). 7.10 7.07 The Operator shall expend all monies advanced by a Participant rateably Parti-cipant ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.08 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely premature-ly so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid afore-said it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Manage-ment Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.09 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased on a straight-line basis and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.10, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.10 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to paragraph 7.06) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties' respective Interests and Prior Exploration Costs shall be deemed to be as follows: (a) if Revelstoke has exercised only the First Option under the Head Agreement: Petaquilla US$4,000,000 40% Revelstoke US$6,000,000 60% (b) if Revelstoke has exercised both the First Option and the Second Option under the Head Agreement: Petaquilla US$3,857,143 30% Revelstoke US$9,000,000 70% 7.10 If the effect of the application of paragraph 7.07 7.09 is to reduce the Share Participation Interest of any party to less than 10% %, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 5% of Net Proceeds of Production, subject to adjustment as provided in paragraph 7.12. 7.11 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator's draft Program or revised Program was due, submit a draft Program (the "Non-Operator's Program") for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator's Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph 7.03; (d) If the Operator is a party and elects to contribute to the Non-Operator's Program, it shall remain as the Operator for the duration of the Non-Operator's Program. (e) if the Operator is a party and elects not to contribute to the Non-Operator's Program, it shall cease to be the Operator for the duration of the Non-Operator's Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator's Program the former Operator shall, subject to the provisions of paragraph 5.01, automatically become the Operator. 7.12 Each of Revelstoke and Petaquilla hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 5% of Net Smelter Returns RoyaltyProceeds of Production. If more than one For example, if: (a) Petaquilla assigns a part of its Interest to a third party is pursuant to this Agreement, and (b) Petaquilla then becomes entitled to receive the 5% of Net Smelter Returns Royalty Proceeds of Production pursuant to this paragraph and 7.10 or subparagraph 10.02(b); and (c) the said third party then also becomes entitled to receive 5% Net Proceeds of Production pursuant to paragraph 7.10 or subparagraph 10.02(b), then Petaquilla and such third party shall collectively be entitled to receive 5 % of Net Proceeds of Production, allocated between them on a proportionate basis based upon the Net Smelter Returns Royalty shall be allocated respective Prior Exploration Costs and paid to them in proportion to their respective Exploration Costs incurredof each of Petaquilla and such third party at the time that the assignment and conveyance of its Interest took place.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 15 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.3, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program . If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.1, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.1 to 7.4 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 15 days in advance of requirements, for an advance of that Participant's ’s Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 15 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.6 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.3, fails to pay its Proportionate Share an invoice within the 3015-day period referred to in paragraph 7.08 7.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 7 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.9 and 10.2(b). 7.10 7.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's ’s Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. 7.11 7.8 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Management Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.9 If a party elected not to contribute to the effect of the application of paragraph 7.07 is to reduce the Share Participation Exploration Costs of any party to less than 10% such Program the Interest of that party shall be deemed decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to have assigned paragraph 7.10, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and conveyed its Share Participation Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.10 hereof, the Participants, if more party whose Interest has been reduced (other than one, then in proportion a party who has forfeited the right to their respective Share Participations, and contribute pursuant to paragraph 7.6) shall be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration and benefit in consideration of that assignment and conveyancethen Interest. On the Operative Date, the Net Smelter Returns Royaltyparties’ respective Interests and Prior Exploration Costs shall be deemed to be as follows: Flueck $1,500,000 50% Coastal $1,500,000 50% 7.10 The application of paragraph 7.9 shall be limited to a reduction of the Interest of any party to not less than 25% (the “Reduced Party”) In the event that the costs as defined in 7.9 would reduce any party below 25% then those costs will be carried by the party contributing the costs (the “Contributing Party”) as a loan to the party who shall accrue interest at the prime interest rate based on the U.S. Prime Interest Rate of the Bank of New York plus 10%. The Reduced Party shall receive 50% of their allocated proceeds from production, less all costs of production, until the loan is paid in full. (For example: If more than one party the Reduced Party is reduced to 25% then the Reduced Party shall receive 12.5% of the total proceeds from production less all costs and the Contributing Party shall receive 87.5% of the total proceeds from production of which 12.5% shall be applied against the loan to the Reduced Party. 7.11 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to receive submit a draft Program or revised Program for the Net Smelter Returns Royalty subject period; (b) any Participant other than the Operator whose Interest is not less than 50% may, within 30 days following the date by which the Operator’s draft Program or revised Program was due, submit a draft Program (the “Non-Operator’s Program”) for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator’s Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator’s Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to this paragraph 7.3; (d) If the Operator is a party and subparagraph 10.02(belects to contribute to the Non-Operator’s Program, it shall remain as the Operator for the duration of the Non-Operator’s Program. (e) if the Operator is a party and elects not to contribute to the Non-Operator’s Program, it shall cease to be the Operator for the duration of the Non-Operator’s Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator’s Program the former Operator shall, then subject to the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredprovisions of paragraph 5.1, automatically become the Operator.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a period of six months. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current six-month period and, to the extent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program Program, with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent percent, in addition to any budgeted Exploration Costs Costs, and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. All contributions hereunder by the parties shall be by way of subscriptions for further shares of the J.V. Company at a price of $2.00 per share. Notwithstanding the above the Initial Investment shall be applied to fund the initial Programs and the obligations of the parties to contribute their Proportionate Share of the Exploration Costs in respect of any Program shall only arise once the Initial Investment has been fully spent by the J.V. Company as evidenced by notice in writing by the Operator to the parties. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties party who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.3, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof7.1, and the procedure set out in paragraph 7.1 to 7.4 inclusive shall be repeated. 7.07 If a party elected not 7.5 On the basis of the approved Program and Budget, the Operator shall submit to contribute each Participant prior to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation last day of each month, a billing for estimated cash requirements for the next month. Within 10 days after receipt of each billing, each Participant contributing in excess of shall advance to the Operator its Proportionate Share of the Costs estimated amount. The Operator shall be increased so that at all times the Share Participation of promptly submit to each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. Participant ▇▇▇▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to for all other authorized expenditures as they are incurred. Time is of the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. essence in payment of such ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations ▇▇▇▇. 7.6 If any Participant, after having committed to contribute pursuant to this paragraph 7.077.3, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws. 7.08 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Costs incurred and paid by the Operator; or (b) no more than 30 days in advance of requirements, for an advance of that Participant's Proportionate Share of Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share a cash call within the 3010-day period referred to in paragraph 7.08 7.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that the non-defaulting Participants may advance the defaulted amount on behalf of the defaulting Participant and in such instance the defaulting Participant shall be deemed to have forfeited all its right elected not to contribute to the Exploration Costs of such Program provided that, for the purposes of the application of paragraph 7.10 in such instance, the non-defaulting Participant's Proportionate Share of Exploration Costs in respect of such Program shall be deemed to include an amount equal to two times the amount advanced on behalf of the defaulting Participant and Share Participation the Exploration Costs will be similarly increased. 7.7 Any reduction of a Participant's Interest under this Agreement section 7 shall not relieve such Participant of its share of any liability, cost, penalty or fine whether it accrues before or after such reduction arising out of Operations conducted prior to such reduction. For purposes of this section 7, such Participant's share of any said liability, cost, penalty or fine shall be equal to its Interest at the time the liability, cost, penalty or fine was incurred. The increased Interest accruing to the non-defaulting Participants as a result of the reduction of the defaulting Participant's Interest shall be free of royalties, liens or other Participantencumbrances arising by, through or under such Participant other than those existing at the date of this Agreement or those to which all Participants have given their written consent. At any time upon the request of the non-defaulting Participants, a Participant whose Interest has been adjusted, shall execute and if more than one then acknowledge instruments and perform such acts necessary to evidence such adjustment in proportion to their respective Share Participationsform sufficient for recording in the jurisdiction where the Property is located. 7.10 7.8 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.9 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the OperatorManagement Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program. 7.12 7.10 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.11, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Proportionate Share of Exploration Costs and its Initial Costs on the Property expressed as a percentage of the Exploration Costs and Initial Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.11 hereof, the party whose Interest has been reduced shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties' respective Interests and Initial Costs shall be deemed to be as follows: Initial Costs Initial Interest Shares of J.V. Company Sierra $1,000,000 60% 1,000,000 MRT $666,667 40% 666,667 provided that, in circumstances where Sierra fails to secure the Line of Credit as contemplated by section 2.3(b) hereof, then the parties respective Interests, Initial Costs and shareholders in the J.V. Company shall be adjusted as follows: Initial Costs Initial Interest Shares of J.V. Company Sierra $1,000,000 30% 1,000,000 MRT $2,333,333 70% 2,333,333 7.11 If the effect of the application of paragraph 7.07 7.10 is to reduce the Share Participation Interest of any party to less than 10% 15%, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the remaining Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests and in connection therewith shall transfer the shares of the J.V. Company then held by it to the remaining Participants if more than one then in proportion to their Interests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 10% of Net Proceeds of Production, subject to adjustment as provided in paragraph 7.13. 7.12 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator's draft Program or revised Program was due, submit a draft Program (the "Non-Operator's Program") for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator's Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph 7.3; (d) if the Operator is a party and elects to contribute to the Non-Operator's Program, it shall remain as the Operator for the duration of the Non-Operator's Program; (e) if the Operator is a party and elects not to contribute to the Non-Operator's Program, it shall cease to be the Operator for the duration of the Non-Operator's Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator's Program the former Operator shall, subject to the provisions of paragraph 5.1, automatically become the Operator. 7.13 Each of Sierra and MRT hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 10% of Net Smelter Returns RoyaltyProceeds of Production. If more than one For example, if: (a) Sierra assigns a part of its Interest to a third party is pursuant to this Agreement, and (b) Sierra then becomes entitled to receive the 10% of Net Smelter Returns Royalty Proceeds of Production pursuant to this paragraph 7.11 or subparagraph 10.2(b); and (c) the said third party then also becomes entitled to receive 10% of Net Proceeds of Production pursuant to paragraph 7.11 or subparagraph 10.2(b),then Sierra and subparagraph 10.02(b)such third party shall collectively be entitled to receive 10% of Net Proceeds of Production, then allocated between them on a proportionate basis based upon the Net Smelter Returns Royalty shall be allocated respective Initial Costs and paid to them in proportion to their respective Exploration Costs incurredof each of Sierra and such third party at the time that the assignment and conveyance of its Interest took place or otherwise as they may agree.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a period of six months. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current six-month period and, to the extent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program Program, with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent percent, in addition to any budgeted Exploration Costs Costs, and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. All contributions hereunder by the parties shall be by way of subscriptions for further shares of the J.V. Company at a price of $2.00 per share. Notwithstanding the above the Initial Investment shall be applied to fund the initial Programs and the obligations of the parties to contribute their Proportionate Share of the Exploration Costs in respect of any Program shall only arise once the Initial Investment has been fully spent by the J.V. Company as evidenced by notice in writing by the Operator to the parties. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties party who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph , deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof, and the procedure set out in paragraph to inclusive shall be repeated. 7.07 If a party elected not 7.5 On the basis of the approved Program and Budget, the Operator shall submit to contribute each Participant prior to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation last day of each month, a billing for estimated cash requirements for the next month. Within 10 days after receipt of each billing, each Participant contributing in excess of shall advance to the Operator its Proportionate Share of the Costs estimated amount. The Operator shall be increased so that at all times the Share Participation of promptly submit to each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. Participant ▇▇▇▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to for all other authorized expenditures as they are incurred. Time is of the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. essence in payment of such ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations ▇▇▇▇. 7.6 If any Participant, after having committed to contribute pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws. 7.08 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Costs incurred and paid by the Operator; or (b) no more than 30 days in advance of requirements, for an advance of that Participant's Proportionate Share of Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share a cash call within the 3010-day period referred to in paragraph 7.08 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that the non-defaulting Participants may advance the defaulted amount on behalf of the defaulting Participant and in such instance the defaulting Participant shall be deemed to have forfeited all its right elected not to contribute to the Exploration Costs of such Program provided that, for the purposes of the application of paragraph in such instance, the non-defaulting Participant’s Proportionate Share of Exploration Costs in respect of such Program shall be deemed to include an amount equal to two times the amount advanced on behalf of the defaulting Participant and Share Participation the Exploration Costs will be similarly increased. 7.7 Any reduction of a Participant’s Interest under this Agreement section shall not relieve such Participant of its share of any liability, cost, penalty or fine whether it accrues before or after such reduction arising out of Operations conducted prior to such reduction. For purposes of this section , such Participant’s share of any said liability, cost, penalty or fine shall be equal to its Interest at the time the liability, cost, penalty or fine was incurred. The increased Interest accruing to the non-defaulting Participants as a result of the reduction of the defaulting Participant’s Interest shall be free of royalties, liens or other Participantencumbrances arising by, through or under such Participant other than those existing at the date of this Agreement or those to which all Participants have given their written consent. At any time upon the request of the non-defaulting Participants, a Participant whose Interest has been adjusted, shall execute and if more than one then acknowledge instruments and perform such acts necessary to evidence such adjustment in proportion to their respective Share Participationsform sufficient for recording in the jurisdiction where the Property is located. 7.10 7.8 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's ’s Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.9 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the OperatorManagement Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program. 7.12 7.10 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph , at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Proportionate Share of Exploration Costs and its Initial Costs on the Property expressed as a percentage of the Exploration Costs and Initial Costs of all parties. Notwithstanding the foregoing but subject to paragraph hereof, the party whose Interest has been reduced shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties’ respective Interests and Initial Costs shall be deemed to be as follows: Initial Costs Initial Interest Shares of J.V. Company Sierra $1,000,000 60% 1,000,000 MRT $666,667 40% 666,667 provided that, in circumstances where Sierra fails to secure the Line of Credit as contemplated by section hereof, then the parties respective Interests, Initial Costs and shareholders in the J.V. Company shall be adjusted as follows: Initial Costs Initial Interest Shares of J.V. Company Sierra $1,000,000 30% 1,000,000 MRT $2,333,333 70% 2,333,333 7.11 If the effect of the application of paragraph 7.07 is to reduce the Share Participation Interest of any party to less than 10% 15%, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the remaining Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests and in connection therewith shall transfer the shares of the J.V. Company then held by it to the remaining Participants if more than one then in proportion to their Interests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 10% of Net Proceeds of Production, subject to adjustment as provided in paragraph . 7.12 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator’s draft Program or revised Program was due, submit a draft Program (the “Non-Operator’s Program”) for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator’s Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator’s Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph ; (d) if the Operator is a party and elects to contribute to the Non-Operator’s Program, it shall remain as the Operator for the duration of the Non-Operator’s Program; (e) if the Operator is a party and elects not to contribute to the Non-Operator’s Program, it shall cease to be the Operator for the duration of the Non-Operator’s Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator’s Program the former Operator shall, subject to the provisions of paragraph , automatically become the Operator. 7.13 Each of Sierra and MRT hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 10% of Net Smelter Returns RoyaltyProceeds of Production. If more than one For example, if: (a) Sierra assigns a part of its Interest to a third party is pursuant to this Agreement, and (b) Sierra then becomes entitled to receive the 10% of Net Smelter Returns Royalty Proceeds of Production pursuant to this paragraph and or subparagraph 10.02(b); and (c) the said third party then also becomes entitled to receive 10% of Net Proceeds of Production pursuant to paragraph or subparagraph , then Sierra and such third party shall collectively be entitled to receive 10% of Net Proceeds of Production, allocated between them on a proportionate basis based upon the Net Smelter Returns Royalty shall be allocated respective Initial Costs and paid to them in proportion to their respective Exploration Costs incurredof each of Sierra and such third party at the time that the assignment and conveyance of its Interest took place or otherwise as they may agree.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ CommitteeManagement Committee during the Exploration Period in accordance with subparagraph 6.4 (h) above. The Each draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurredincurred during the calendar year in question. Unless otherwise determined If the Operator has not submitted a Program within sixty (60) days of any calendar year end, the non-Operator will be entitled to prepare, at its own expense (unless such Program is subsequently adopted by the Shareholders’ Management Committee, each draft Program shall cover a calendar yearwith or without modifications), and shall be submitted the non-Operator will submit such a Program to the Shareholders’ Management Committee no later than October 31 of each year.for its consideration; 7.02 7.2 The Shareholders’ Management Committee shall review the Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted.; Joint-Venture Agreement Azimut Exploration Inc. & Northwestern Mineral Ventures Inc. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute all or less than all of its Proportionate Share of the Exploration Costs for on that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute.; 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party has elected not to contribute to a Program or has elected to contribute less than its Proportionate Share to a Program, the amounts amount to be contributed by the parties party who elected to contribute its respective full Proportionate Share shall be increased pro rata, subject to the right of any of them such party to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 7.3 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation provisions of paragraph 7.9 shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws.apply; 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no more than 30 days . The Operator may also submit other invoices relating to reconciliations, bills, accounts or other requests for payment in advance respect of requirements, for an advance of that Participant's Proportionate Share of Costs. Each invoice shall be signed any Exploration Costs made by some responsible official of the Operator. Each Participant shall pay to the Operator under the Program or otherwise in accordance with this Agreement. Such invoices must set out the total amount invoicedincurred and/or paid, within multiplied by the non-Operator’s Proportionate Share. Within 30 days of receipt of such invoice, the non-Operator shall pay the Operator the invoice amount; (b) If the non-Operator elects to participate in a Program, the Operator may submit an invoice to the non-Operator 60 days preceding a calendar quarter in which Exploration Costs are to be incurred under a Program. The invoice must set out the estimated Exploration Costs under the Program for the immediately following calendar quarter, multiplied by the non-Operator’s Proportionate Share. Within 30 days of receipt of such invoice, the non-Operator shall pay the Operator the invoice amount; (c) If the non-Operator fails to make any payment to the Operator under this paragraph 7.5 within any applicable 30 day payment period, the non-Operator shall make such payment together with an interest payment, calculated at the rate equal to the prime lending rate of the Royal Bank of Canada, Montreal Main Branch, on Canadian dollar commercial loans in effect at the date of default in payment, plus 5% per annum, for the period commencing on the expiry of 30 day payment period and terminating on the date that full payment is made. If the non- Operator fails to make full payment or advance requested is not so made, the amount within 60 days of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paidperiod, paragraph 7.6 applies. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share within the 30. Joint-day period referred to in paragraph 7.08 the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation under this Venture Agreement to the other Participant, and if more than one then in proportion to their respective Share Participations. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 If any Program is altered, suspended or terminated prematurely so that the Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Costs originally proposed, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator. 7.12 If the effect of the application of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share Participations, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurred.Azimut Exploration Inc. & Northwestern Mineral Ventures Inc.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 60 days (unless otherwise agreed by the parties) prior to the date of the meeting of the Management Committee at which the Program is to be approved. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearParticipant to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent 10% in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the partiesParticipants. Each party Participant may, within 30 days of receipt of the Programdate on which the Program is adopted, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program in one of the following manners: (a) in proportion to its Interest by committing its Proportionate Share; (b) in some lesser proportion to its Interest by committing an amount less than its Proportionate Share; or (c) not at all, in which case the Participant elects not to contribute to the Program. A party Participant which fails to give that notice within the 30 30-day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 7.4 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program elected to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification contribute less than its Proportionate Share or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties Participants who elected to contribute their Proportionate Share shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 its Proportionate Share. If a party elected not one or more Participants so elect to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of no more than its Proportionate Share and the other Participants do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in Section 7.3, deliver to each Participant a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be increased so that at all times re-submitted to the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed Management Committee as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, draft Program pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of SharesSection 7.1, and the corresponding increase procedure set out in the other party's Share Participation Sections 7.1 to 7.4 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Elected Participation Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's Proportionate ’s Elected Participation Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official an officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.6 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then Section 7.3, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 Section 7.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be in default of this Agreement and the other Participant may, but is not obligated to, contribute the Costs that should have been paid by the defaulting Participant, the amount of which Costs shall be treated as a demand loan bearing interest at an annual rate of the Prime Rate plus 5%. If the defaulting Participant fails to repay the aforementioned loan (including all accrued interest thereon) within 10 days of demand, the Participant that is the lender (in this Section, the “Covering Participant”) may, as reasonable liquidated damages, convert any or all of the amount of shall the indebtedness (including interest) as a contribution of Costs by the Covering Participant, in which case the respective Interests of the Participants will be adjusted in accordance with Section 7.9, except that the Covering Participant will be deemed to have expended Costs equal to 200% of the amount of the indebtedness of the defaulting Participant. The Participants further acknowledge that if a Participant defaults under this Section 7.6 three times prior to any Production Notice, it shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and shall be deemed to the other Participant, have elected not to contribute to each Program subsequently conducted and if more than one then in proportion to their respective Share Participationsany Production Notice. 7.10 7.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate ’s Elected Participation Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall curtail the Program if it incurred Costs exceeding 110% of the amount of budgeted Exploration Costs for such Program. If the Operator fails to curtail the Program, it will be exclusively liable for the payment of all Costs incurred in excess of 110% of any budgeted Exploration Costs. 7.11 7.8 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent 80% of the Exploration Costs originally proposedset out in the adopted Program, any party Participant which elected to contribute less than its Proportionate Share or elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute up to its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party Participant within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the OperatorManagement Committee. If payment is made by that Participant within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program. 7.12 7.9 If a Participant elected to contribute less than its Proportionate Share or elected not to contribute to the Exploration Costs of any Program, the Interest of that Participant shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to Section 7.10, at all times during the Exploration Period the Interest of each Participant will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all Participants. Notwithstanding the foregoing but subject to Section 7.10 hereof, the Participant whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to Section 7.6) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties’ respective Interests and Prior Exploration Costs shall be deemed to be as follows: (a) if Evanachan did not exercise the Second Option (as defined in the Option Agreement): Evanachan $4,800,000 60% Rimfire $3,200,000 40% (b) if Evanachan has exercised the Second Option (as defined in the Option Agreement): Evanachan $4,800,000 plus the costs incurred by Evanachan to complete the Feasibility Report to exercise the Second Option 70% Rimfire $2,057,143 plus 3/7 of the Costs incurred by Evanachan to complete the Feasibility Report to exercise the Second Option 30% (c) if Evanachan has exercised the Financing Option in accordance with the Option Agreement prior to the Operative Date: Evanachan $4,800,000 plus the costs incurred by Evanachan to complete the Feasibility Report to exercise the Second Option and any Maintenance Costs incurred following completion of the Feasibility Report 75% Rimfire $2,057,143 plus 1/3 of the Costs incurred by Evanachan to complete the Feasibility Report to exercise the Second Option and any Maintenance Costs incurred following completion of the Feasibility Report 25% 7.10 If the effect of the application of paragraph 7.07 Section 7.9 is to reduce the Share Participation Interest of any party Participant to less than 10% %, such party Participant shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 1% of Net Smelter Returns, subject to adjustment as provided in Section 7.12, in accordance with the terms set out in Schedule C. 7.11 If the Operator fails to submit a draft Program or a revised Program by the relevant dates set out in Section 7.1 and 7.4 of this Agreement and fails to cure such default within 30 days of receiving notice of the default from a Participant, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is more than 10% may, within 15 days following the date by which the Operator’s draft Program or revised Program was due, submit a draft Program (the “Non-Operator’s Program”) for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator’s Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator’s Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the Participants pursuant to Section 7.3; (d) if the Operator is a Participant and elects to contribute to the Non-Operator’s Program, it shall remain as the Operator for the duration of the Non-Operator’s Program; (e) if the Operator is a Participant and elects not to contribute to the Non-Operator’s Program, it shall cease to be the Operator for the duration of the Non-Operator’s Program, and the Management Committee shall appoint another Participant as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator’s Program the former Operator shall, subject to the provisions of Section 5.1, automatically become the Operator. 7.12 Each of Rimfire and Evanachan hereby agrees that the maximum royalty to which it and its assigns may be collectively entitled pursuant to this Agreement is 1% of Net Smelter Returns. For example, if: (a) Rimfire assigns a part of its Interest to a third party pursuant to this Agreement, and (b) Rimfire then becomes entitled to receive 1% of Net Smelter Returns Royalty. If more than one pursuant to Section 7.10 or Section 11.2(b); and (c) the said third party is then also becomes entitled to receive the a royalty of 1% of Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(bSection 7.10 or Section 11.2(b), then the Rimfire and such third party shall collectively be entitled to receive 1% of Net Smelter Returns Royalty shall be Returns, allocated between them on a proportionate basis based upon the respective Prior Exploration Costs and paid to them in proportion to their respective Exploration Costs incurredof each of Rimfire and such third party at the time that the assignment and conveyance of its Interest took place.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rataPRO RATA, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute PRO RATA to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.3, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.1, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.1 to 7.4 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.6 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.3, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 7.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to have elected not to contribute to each Program subsequently conducted and to any Production Notice, its Interest will be reduced by 25% of its Interest at the date of default (which reduction will be credited to the other Participant, and if more than one then in proportion Interests of the non-defaulting Participants PRO RATA to their respective Share ParticipationsInterests at the date of default) and thereafter, its Interest will be reduced in the manner contemplated in paragraphs 7.9 and 10.2(b). 7.10 7.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.8 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the OperatorManagement Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants PRO RATA according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program. 7.12 7.9 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.10, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Proportionate Share of Exploration Costs and its Prior Exploration Costs on the Property expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.10 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to paragraph 7.6) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties' respective Interests and Prior Exploration Costs shall be deemed to be as follows: INITIAL PRIOR EXPLORATION COSTS INTEREST Goldrea $900,000* 50% Parkside $1,100,000* 50% * Deemed expenditures for each Participant will be determined at the time the joint venture is formed by taking the aggregate of actual expenditures by each Participant on the Property and multiplying it by the initial interest of such Participant as set out above. 7.10 If the effect of the application of paragraph 7.07 7.9 is to reduce the Share Participation Interest of any party to less than 10% or less, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 2% of the Net Smelter Returns Royalty. If more than one party is entitled Returns, subject to receive the Net Smelter Returns Royalty pursuant to this adjustment as provided in paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurred7.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, 8.1 Draft Programs submitted by the Operator shall prepare draft Programs for consideration by to the Shareholders’ Committee. The draft Program Management Committee shall contain a statement in reasonable detail of the proposed Mining Operations Program and estimates of all Exploration Costs to be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted to the Shareholders’ Committee no later than October 31 of each year. 7.02 8.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program same with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and 10% of a Program budget (the “Overrun”)and any Costs so incurred shall be deemed to be included in the Program. In the event of a Cost overrun of greater than 10% of the Program budget, as adopted. 7.03 The the Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, pay all Costs in excess of amounts actually expended. Such continuing obligations the Overrun unless such Costs are those that are or will be incurred as a result of unanimously approved by the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate accountManagement Committee. 7.04 8.3 The Operator shall forthwith submit the adopted approved Program to the partiesParties. Each party Party may, within 30 60 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for on that Program. A party Party which fails to give that notice within the 30 60 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 8.4 If any party elects or is deemed to have elected not to contribute to a Program, an approved Program the amounts to be contributed by the parties Participants who elected to contribute to that Program shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 by them. If a party elected Participant elects not to contribute more than the amount initially committed the Operator may elect not to proceed with the Costs of any approved Program the Share Participation of that party shall be decreased or may prepare an amended Program and the Share Participation provisions of each Participant contributing in excess of its Proportionate Share of the Costs this Article shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent apply to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsamended Program. 7.08 8.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, monthly for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no in advance of requirements but not more than 30 days in advance of requirements, for an advance of that Participant's Proportionate Share of Exploration Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the paymentpayment subject to later adjustment if such protest is sustained. 7.09 8.6 If after electing to participate any Participant elects to contribute to a Program and then (the "Defaulting Party") fails to pay its Proportionate Share within the 30-30 day period referred to in paragraph 7.08 Paragraph 8.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant notice the Interest of the Defaulting Party shall be deemed to be less than 20% and that interest will be converted to a 5% Net Profits Royalty to be calculated and paid in accordance with Appendix II hereto, and that Party shall have forfeited all its right and Share Participation under this Agreement to no further Interest. The Interests of the other Participant, and if more than one then in proportion to their respective Share ParticipationsParties shall be increased pro rata. 7.10 8.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, Program any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 8.8 If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent 80% of the Exploration Costs originally proposed, any party Party which elected or which is deemed to have elected not to contribute to its Proportionate Share of the Exploration Costs incurred on that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party Party within the 30 days aforesaid it shall forfeit its right to contribute to that Program shall, without a demand for payment being required to be made thereafter by the OperatorManagement Committee, forfeit its right to contribute to that Program. 7.12 8.9 If the effect of the application of paragraph 7.07 a Party elects or is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation elected not to contribute to the Participants, if more than one, then Exploration Costs of any Program the Interest of that Party shall be decreased and the Interest of each Participant contributing in proportion excess of its Proportionate Share of the Exploration Costs shall be increased so that at all times during the Exploration Period the Interest of each Party will be equal to their respective Share Participations, its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all Parties. The party whose Interest has been reduced shall be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration then Interest. 8.10 If a Party's Interest is reduced to 20% or less, that Interest will be converted to a 5% Net Profits Royalty to be calculated and benefit paid in consideration accordance with Appendix II hereto, and that Party shall have no further Interest. The Interests of that assignment the other Parties shall be increased pro rata. 8.11 If the Operator fails to submit a draft Program for an Operating Year by December 31 of the year preceding such Operating Year: (a) the Operator shall not be entitled to submit a draft Program for the Operating Year; (b) the other Party, and conveyanceif there is more than one, the Net Smelter Returns Royalty. If more than one party is Party with the greatest Interest, may submit a draft Program (the "Non-Operator's Program") for the Operating Year for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's draft Program and, if it deems fit (the Operator not being entitled to receive vote with respect thereto), adopt the Net Smelter Returns Royalty pursuant Program with such modifications, if any, as the Management Committee deems necessary and the adopted Program shall then be submitted to the parties according to this paragraph Article; (d) if the Operator is a Party and subparagraph 10.02(belects not to contribute to the Program it shall cease to be the Operator and the Management Committee shall appoint a new Operator (the former Operator not being entitled to vote with respect thereto). 8.12 If the Management Committee for any reason fails to adopt a Program for an Operating Year by December 31 of the preceding year, then the Net Smelter Returns Royalty shall be allocated Operator shall, subject to direction to the contrary by the Management Committee and paid the receipt of the necessary funds, carry out such work and make such disbursements as to them meet the minimum requirements to maintain the Property in proportion to their respective Costs incurredgood standing.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ CommitteeManagement Committee during the Exploration Period in accordance with subparagraph 6.4 (h) above. The Each draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurredincurred during the calendar year in question. Unless otherwise determined If the Operator has not submitted a Program within sixty (60) days of any calendar year end, the non-Operator will be entitled to prepare, at its own expense (unless such Program is subsequently adopted by the Shareholders’ Management Committee, each draft Program shall cover a calendar yearwith or without modifications), and shall be submitted the non-Operator will submit such a Program to the Shareholders’ Management Committee no later than October 31 of each year.for its consideration; 7.02 7.2 The Shareholders’ Management Committee shall review the Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted.; Joint-Venture Agreement Azimut Exploration Inc. & Northwestern Mineral Ventures Inc. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute all or less than all of its Proportionate Share of the Exploration Costs for on that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute.; 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party has elected not to contribute to a Program or has elected to contribute less than its Proportionate Share to a Program, the amounts amount to be contributed by the parties party who elected to contribute its respective full Proportionate Share shall be increased pro rata, subject to the right of any of them such party to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 7.3 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation provisions of paragraph 7.12 shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws.apply; 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no more than 30 days . The Operator may also submit other invoices relating to reconciliations, bills, accounts or other requests for payment in advance respect of requirements, for an advance of that Participant's Proportionate Share of Costs. Each invoice shall be signed any Exploration Costs made by some responsible official of the Operator. Each Participant shall pay to the Operator under the Program or otherwise in accordance with this Agreement. Such invoices must set out the total amount invoicedincurred and/or paid, within multiplied by the non-Operator’s Proportionate Share. Within 30 days of receipt of such invoice, the non-Operator shall pay the Operator the invoice amount; (b) If the non-Operator elects to participate in a Program, the Operator may submit an invoice to the non-Operator 60 days preceding a calendar quarter in which Exploration Costs are to be incurred under a Program. The invoice must set out the estimated Exploration Costs under the Program for the immediately following calendar quarter, multiplied by the non-Operator’s Proportionate Share. Within 30 days of receipt of such invoice, the non-Operator shall pay the Operator the invoice amount; (c) If the non-Operator fails to make any payment to the Operator under this paragraph 7.5 within any applicable 30 day payment period, the non-Operator shall make such payment together with an interest payment, calculated at the rate equal to the prime lending rate of the Royal Bank of Canada, Montreal Main Branch, on Canadian dollar commercial loans in effect at the date of default in payment, plus 5% per annum, for the period commencing on the expiry of 30 day payment period and terminating on the date that full payment is made. If the non-Operator fails to make full payment or advance requested is not so made, the amount within 60 days of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paidperiod, paragraph 7.6 applies. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share within the 30. Joint-day period referred to in paragraph 7.08 the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation under this Venture Agreement to the other Participant, and if more than one then in proportion to their respective Share Participations. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 If any Program is altered, suspended or terminated prematurely so that the Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Costs originally proposed, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator. 7.12 If the effect of the application of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share Participations, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurred.Azimut Exploration Inc. & Northwestern Mineral Ventures Inc.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, 8.1 Draft Programs submitted by the Operator shall prepare draft Programs for consideration by to the Shareholders’ Committee. The draft Program Management Committee shall contain a statement in reasonable detail of the proposed Mining Operations Program and estimates of all Exploration Costs to be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted to the Shareholders’ Committee no later than October 31 of each year. 7.02 8.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program same with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs 10% of a Program budget and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 8.3 The Operator shall forthwith submit the adopted approved Program to the partiesParties. Each party Party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for on that Program. A party Party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 8.4 If any party elects or is deemed to have elected not to contribute to a Program, an approved Program the amounts to be contributed by the parties Participants who elected to contribute to that Program shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 by them. If a party elected Participant elects not to contribute more than the amount initially committed the Operator may elect not to proceed with the Costs of any approved Program the Share Participation of that party shall be decreased or may prepare an amended Program and the Share Participation provisions of each Participant contributing in excess of its Proportionate Share of the Costs this Article shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent apply to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsamended Program. 7.08 8.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, monthly for its Proportionate Share of Exploration Costs incurred and paid by the Operator; or (b) no in advance of requirements but not more than 30 days in advance of requirements, for an advance of that Participant's Proportionate Share of Exploration Costs. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the paymentpayment subject to later adjustment if such protest is sustained. 7.09 8.6 If after electing to participate any Participant elects to contribute to a Program and then (the "Defaulting Party") fails to pay its Proportionate Share within the 30-30 day period referred to in paragraph 7.08 Paragraph 8.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant notice the Interest of the Defaulting Party shall be deemed to be less than 10% and that interest will be converted to a 5% Net Profits Royalty to be calculated and paid in accordance with Appendix II hereto, and that Party shall have forfeited all its right and Share Participation under this Agreement to no further Interest. The Interests of the other Participant, and if more than one then in proportion to their respective Share ParticipationsParties shall be increased pro rata. 7.10 8.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, Program any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwith. 7.11 8.8 If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent 80% of the Exploration Costs originally proposed, any party Party which elected or which is deemed to have elected not to contribute to its Proportionate Share of the Exploration Costs incurred on that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party Party within the 30 days aforesaid it shall forfeit its right to contribute to that Program shall, without a demand for payment being required to be made thereafter by the OperatorManagement Committee, forfeit its right to contribute to that Program. 7.12 8.9 If the effect of the application of paragraph 7.07 a Party elects or is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation elected not to contribute to the Participants, if more than one, then Exploration Costs of any Program the Interest of that Party shall be decreased and the Interest of each Participant contributing in proportion excess of its Proportionate Share of the Exploration Costs shall be increased so that at all times during the Exploration Period the Interest of each Party will be equal to their respective Share Participations, its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all Parties. The party whose Interest has been reduced shall be entitled to receive as details of and to contribute to future Programs to the extent of its sole remuneration then Interest. 8.10 If a Party's Interest is reduced to 10% or less, that Interest will be converted to a 5% Net Profits Royalty to be calculated and benefit paid in consideration accordance with Appendix II hereto, and that Party shall have no further Interest. The Interests of that assignment the other Parties shall be increased pro rata. 8.11 If the Operator fails to submit a draft Program for an Operating Year by November 30 of the year preceding such Operating Year: (a) the Operator shall not be entitled to submit a draft Program for the Operating Year; (b) the other Party, and conveyanceif there is more than one, the Net Smelter Returns Royalty. If more than one party is Party with the greatest Interest, may submit a draft Program (the "Non-Operator's Program") for the Operating Year for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's draft Program and, if it deems fit (the Operator not being entitled to receive vote with respect thereto), adopt the Net Smelter Returns Royalty pursuant Program with such modifications, if any, as the Management Committee deems necessary and the adopted Program shall then be submitted to the parties according to this paragraph Article; (d) if the Operator is a Party and subparagraph 10.02(belects not to contribute to the Program it shall cease to be the Operator and the Management Committee shall appoint a new Operator (the former Operator not being entitled to vote with respect thereto). 8.12 If the Management Committee for any reason fails to adopt a Program for an Operating Year by December 31 of the preceding year, then the Net Smelter Returns Royalty shall be allocated Operator shall, subject to direction to the contrary by the Management Committee and paid the receipt of the necessary funds, carry out such work and make such disbursements as to them meet the minimum requirements to maintain the Property in proportion to their respective Costs incurredgood standing.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 4.01 The Operator shall prepare draft Programs for consideration by the Shareholders’ CommitteeOptionee. Unless otherwise agreed to by the Optionee, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee Optionee by no later than October 31 May 1st of each yearyear to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for the Optionee to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 4.02 The Shareholders’ Committee Optionee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee Optionee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun overruns of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws. 7.08 4.03 The Operator shall be entitled to invoice each Participantthe Optionee: (a) no more frequently than monthly, for its Proportionate Share of the Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 120 days in advance of requirements, for an advance of that Participant's Proportionate Share of Coststhe Costs estimated to be incurred and paid by the Operator in carrying out a Program or portion thereof. Each invoice shall be signed by some responsible official an officer of the Operator. Each Participant The Optionee shall pay to the Operator the amount invoiced, invoiced within 30 20 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant Optionee protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 4.04 If any Participant elects to contribute to a Program and then the Optionee fails to pay its Proportionate Share an invoice within the 3020-day period referred to in paragraph 7.08 Section 4.03, the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant Optionee shall be deemed to have forfeited all its right elected to terminate the Program then in effect, and Share Participation accordingly, the Operator shall have no further obligations under this Agreement to the other Participant, and if more than one then in proportion to their respective Share Participationsrespect of that Program. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. 4.05 If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 30 days of the suspension or premature termination. Unless approved by the Optionee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Costs. 7.11 4.06 Unless otherwise directed by the Optionee, the Operator may suspend or terminate prematurely any Program, by delivering notice to that effect to the Optionee, when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. The Optionee may suspend or terminate prematurely any Program at any time by delivering notice to that effect to the Operator. If any Program is alteredterminated prematurely, suspended or terminated prematurely so that the Costs incurred on that Program as alteredOperator shall, suspended or terminated are less than 80 percent within 30 days of such termination, refund to the Costs originally proposed, any party Optionee the amount by which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination amounts advanced by the Optionee to the Operator on account of projected Costs exceeds the sum of such Costs and the amounts payable to the Operator under Section 5 of this Schedule. 4.07 If the Operator fails to submit a draft Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to contribute its Proportionate Share of submit a draft Program for the Costs incurred on that subject period; (b) the Optionee may submit a draft Program by payment thereof to (the Operator within 30 days after receipt of “Non-Operator's Program”) for the notice. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand subject period for payment being required to be made thereafter consideration by the Operator.; 7.12 If (c) if the effect Operator elects to proceed with the Non-Operator's Program, it shall remain as the operator for the duration of the application Non-Operator's Program; and (d) if the Operator elects not to proceed with the Non-Operator’s Program, it shall cease to be the Operator for the duration of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share ParticipationsNon-Operator's Program, and the Optionee shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, carry out the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredNon-Operator Program itself.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 7.1 The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to each Participant on or before March 1 of each calendar year to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each party to evaluate and assess the results from the Program for the then current year and, to the Shareholders’ Committee no later than October 31 of each yearextent not previously delivered, from earlier Programs. 7.02 7.2 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 7.3 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.4 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.3, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program . If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.1, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.1 to 7.4 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.5 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.6 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.3, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 7.5 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.9 and 10.2(b). 7.10 7.7 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 30 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.8 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Management Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.9 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.10, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.10 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to paragraph 7.6) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties' respective Interests and Prior Exploration Costs shall be deemed to be as follows: Prior Exploration Costs Interest Optionor $1,870,000 85% Optionee $330,000 15% 7.10 If the effect of the application of paragraph 7.07 7.9 is to reduce the Share Participation Interest of any party to less than 10% %, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 1% of Net Smelter Returns, subject to adjustment as provided in paragraph 7.12. 7.11 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 30 days following the date by which the Operator's draft Program or revised Program was due, submit a draft Program (the "Non-Operator's Program") for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator's Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph 7.3; (d) if the Operator is a party and elects to contribute to the Non-Operator's Program, it shall remain as the Operator for the duration of the Non-Operator's Program; (e) if the Operator is a party and elects not to contribute to the Non-Operator's Program, it shall cease to be the Operator for the duration of the Non-Operator's Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator's Program the former Operator shall, subject to the provisions of paragraph 5.3, automatically become the Operator, save and except in the instance where the former Operator fails to pay an invoice within the 30-day period referred to in paragraph 7.5 and is subject to the consequences set out in paragraph 7.6. 7.12 Each of the Optionee and the Optionor hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 1% of Net Smelter Returns. For example, if: (a) the Optionor assigns a part of its Interest to a third party pursuant to this Agreement, and (b) the Optionor then becomes entitled to receive 0.5% of Net Smelter Returns Royalty. If more than one pursuant to paragraph 7.10; and (c) the said third party is then also becomes entitled to receive the 0.5% of Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b)7.10, then the Optionor and such third party shall collectively be entitled to receive 1% of Net Smelter Returns Royalty shall be Returns, allocated between them on a proportionate basis based upon the respective Prior Exploration Costs and paid to them in proportion to their respective Exploration Costs incurredof each of the Optionor and such third party at the time that the assignment and conveyance of its Interest took place.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of 60 days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each Subject to sub-paragraph 7.04, each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contributecontribute to that Program. 7.04 Mirko shall not be required to contribute to the initial Program until Delbrook has expended Exploration costs of $20,000 CDN. on the Property, which expenditure shall be made on or before December 31, 2002. This $20,000 CDN. expenditure by Delbrook shall not be included in the calculation of Delbrook's Proportionate Share of the initial or any Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.03, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program. If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.01, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.01 to 7.04 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.06 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 60 days in advance of requirements, for an advance of that Participant's Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.07 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.03, fails to pay its Proportionate Share an invoice within the 30-day period referred to in paragraph 7.08 7.06 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.10 and 10.02(b). 7.10 7.08 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 60 days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.09 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator.Management Committee. If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program 7.12 7.10 If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.11, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties. Notwithstanding the foregoing but subject to paragraph 7.11 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to paragraph 7.07) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. On the Operative Date, the parties' respective Interests and Prior Exploration Costs shall be deemed to be as follows: Prior Exploration Costs Interest Mirko Nil 25 % Delbrook Nil 75 % 7.11 If the effect of the application of paragraph 7.07 7.10 is to reduce the Share Participation Interest of any party to less than 10% 15%, such party shall then be deemed to have assigned and conveyed its Share Participation Interest to the Participants, if more than one, one then in proportion to their respective Share ParticipationsInterests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 5% of Net Proceeds of Production, subject to adjustment as provided in paragraph 7.13. 7.12 If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to submit a draft Program or revised Program for the subject period; (b) any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator's draft Program or revised Program was due, submit a draft Program (the "Non-Operator's Program") for the subject period for consideration by the Management Committee; (c) the Management Committee shall review the Non-Operator's Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator's Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph 7.03; (d) If the Operator is a party and elects to contribute to the Non-Operator's Program, it shall remain as the Operator for the duration of the Non-Operator's Program. (e) if the Operator is a party and elects not to contribute to the Non-Operator's Program, it shall cease to be the Operator for the duration of the Non-Operator's Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto); (f) following the completion of the Non-Operator's Program the former Operator shall, subject to the provisions of paragraph 5.01, automatically become the Operator. 7.13 Each of Delbrook and Mirko hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 5% of Net Smelter Returns RoyaltyProceeds of Production. If more than one For example, if: (a) Mirko assigns a part of its Interest to a third party is pursuant to this Agreement, and (b) Mirko then becomes entitled to receive the 5% of Net Smelter Returns Royalty Proceeds of Production pursuant to this paragraph and 7.11 or subparagraph 10.02(b); and (c) the said third party then also becomes entitled to receive Net Proceeds of Production pursuant to paragraph 7.11 or subparagraph 10.02(b), then Mirko and such third party shall collectively be entitled to receive 5% of Net Proceeds of Production, allocated between them on a proportionate basis based upon the Net Smelter Returns Royalty shall be allocated respective Prior Exploration Costs and paid to them in proportion to their respective Exploration Costs incurredof each of Mirko and such third party at the time that the assignment and conveyance of its Interest took place.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the 4.01 The Operator shall prepare draft Programs for consideration by the Shareholders’ CommitteeOptionee. Unless otherwise agreed to by the Optionee, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee Optionee by no later than October 31 March 1st of each yearyear to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for the Optionee to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 4.02 The Shareholders’ Committee Optionee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee Optionee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun overruns of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable laws. 7.08 4.03 The Operator shall be entitled to invoice each Participantthe Optionee: (a) no more frequently than monthly, for its Proportionate Share of the Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 120 days in advance of requirements, for an advance of that Participant's Proportionate Share of Coststhe Costs estimated to be incurred and paid by the Operator in carrying out a Program or portion thereof. Each invoice shall be signed by some responsible official an officer of the Operator. Each Participant The Optionee shall pay to the Operator the amount invoiced, invoiced within 30 20 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant Optionee protests the correctness of an invoice it shall nevertheless be required to make the payment, however it shall have the right to further dispute the payment subject to an independent review of the protest. 7.09 4.04 If any Participant elects to contribute to a Program and then the Optionee fails to pay its Proportionate Share an invoice within the 3020-day period referred to in paragraph 7.08 Section 4.03, the Operator may, by notice, demand payment. If no payment, with accrued interest, is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant Optionee shall be deemed to have forfeited all its right elected to terminate the Program then in effect, and Share Participation accordingly, the Operator shall have no further obligations under this Agreement to the other Participant, and if more than one then in proportion to their respective Share Participationsrespect of that Program. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. 4.05 If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin 30 days of the suspension or premature termination. Unless approved by the Optionee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Costs. 7.11 4.06 Unless otherwise directed by the Optionee, the Operator may suspend or terminate prematurely any Program, by delivering notice to that effect to the Optionee, when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. The Optionee may suspend or terminate prematurely any Program at any time by delivering notice to that effect to the Operator. If any Program is alteredterminated prematurely, suspended or terminated prematurely so that the Costs incurred on that Program as alteredOperator shall, suspended or terminated are less than 80 percent within 30 days of such termination, refund to the Costs originally proposed, any party Optionee the amount by which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination amounts advanced by the Optionee to the Operator on account of projected Costs exceeds the sum of such Costs and the amounts payable to the Operator under Section 5 of this Schedule. 4.07 If the Operator fails to submit a draft Program by the date set out in this Agreement, the following shall apply: (a) the Operator shall not be entitled to contribute its Proportionate Share of submit a draft Program for the Costs incurred on that subject period; (b) the Optionee may submit a draft Program by payment thereof to (the Operator within 30 days after receipt of “Non-Operator's Program”) for the notice. If payment is not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand subject period for payment being required to be made thereafter consideration by the Operator.; 7.12 If (c) if the effect Operator elects to proceed with the Non-Operator's Program, it shall remain as the operator for the duration of the application Non-Operator's Program; and (d) if the Operator elects not to proceed with the Non-Operator’s Program, it shall cease to be the Operator for the duration of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share ParticipationsNon-Operator's Program, and the Optionee shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, carry out the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredNon-Operator Program itself.

EXPLORATION PROGRAMS. 7.01 Until such time as 7.1. Within 45 days following the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02Operative Date, the Operator shall prepare and submit to the Management Committee, which shall, if it deems fit, adopt same within 30 days following its receipt, a draft Programs Program for consideration by the Shareholders’ period ending December 31 of the then current year. Thereafter, the Operator shall prepare and submit before October 1 of each year to the Management Committee, which shall, if it deems fit, adopt same before November 1 following, a draft Program for the period commencing on the next January 1 and ending on December 31 of the following year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. Unless otherwise determined by If the Shareholders’ Committee, each Operator fails to prepare and submit to the Management Committee a draft Program within the time frames prescribed, the non-Operator shall cover deliver a calendar year, and shall be submitted notice to the Shareholders’ Operator specifying such failure and the Operator shall have 45 days following receipt of such notice to prepare and submit a draft Program to the Management Committee. If the Operator fails to prepare and submit such Program to the Management Committee no later than October 31 of each within such additional time frame the non-Operator may prepare and submit such Program to the Management Committee within the following 45 days. If such Program is accepted, the non-Operator shall replace the Operator for the current year. 7.02 7.2. The Shareholders’ Management Committee shall review the Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 7.3. The Operator shall be entitled to include in as soon as practicable notify the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement Management Committee of all accountsexploration results as they become known and, if deemed appropriate by the Operator, prepare and submit to the Management Committee a revised draft Program for the current year taking into account such exploration results. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Costs for that Program. A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Management Committee shall review the nonAGNICO-Operator's EAGLE MINES LIMITED / AMERICAN BONANZA GOLD CORP. FRASER ▇▇▇▇▇▇ CASGRAIN LLP Option Agreement – ▇▇▇▇▇ / Noyon-▇▇▇▇▇▇▇▇ Properties November 15, 2007 revised Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. 7.4. The representative Operator shall forthwith submit the adopted Program to the Parties. Each Party must within (i) 90, (ii) 120 or (iii) 180 days of receipt of a Program adopted by the Management Committee for a total amount of (i) $1,000,000 or less, (ii) greater than $1,000,000 and less than or equal to $2,000,000 or (iii) greater than $2,000,000, respectively, give notice to the Operator committing to contribute its Proportionate Share, or some portion thereof, of the Operator Exploration Costs incurred on that Program. A Party which fails to give notice within the Shareholders’ Committee prescribed period shall not be entitled to vote with respect to receive a notice of default from the modification or adoption other Party and, if it has not remedied such default within 10 days following receipt of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure such notice, it shall be deemed to be an adopted Program for all purposes under this Agreementhave elected not to contribute to such Program. 7.06 7.5. If any party Party elected not to contribute to a Program, the amounts proportion to be contributed by the parties Parties who elected to contribute shall be increased pro rata, subject to the right of any of them may have to elect not to contribute more than the amount initially committed pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share and the Interest of the Costs each Party shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed recalculated as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction provided in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares, and the corresponding increase in the other party's Share Participation shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsSubsection 7.9. 7.08 7.6. The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, monthly for its Proportionate Share of Exploration Costs committed to by that Participant pursuant to Section 7.4 incurred and paid by the Operator; or (b) no more than 30 days reasonably in advance of requirements, requirements for an advance of that Participant's ’s Proportionate Share of CostsExploration Costs committed to by that Participant pursuant to Section 7.4. Each invoice shall be signed by some responsible official of the Operator. Each Participant shall pay to the Operator the amount invoiced, within 30 days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the paymentpayment subject to its right of refund. 7.09 7.7. If any Participant elects to contribute to a Program and then fails to pay its Proportionate Share committed to under Section 7.4 within the 30-day period referred to in paragraph 7.08 Subsection 7.6, the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right elected not to participate in the Program pursuant to Section 7.5, and the Participants’ Interest shall be adjusted in accordance with Section 7.9, except that the Interest of the Participants who contributed their Proportionate Share Participation under this Agreement to the other ParticipantProgram shall be entitled to include, and if more than one then in proportion addition to their respective Share Participations. 7.10 The Operator shall expend all monies advanced by a Participant rateably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of the Exploration Cost not contributed by the non-contributing Participant, a fee equal to 5% of their Proportionate Share of the Exploration Costs incurred prior not contributed by the non-contributing Participant, as part of their contribution to the suspension or premature termination shall be refunded forthwith.Exploration Costs. AGNICO-EAGLE MINES LIMITED / AMERICAN BONANZA GOLD CORP. FRASER ▇▇▇▇▇▇ CASGRAIN LLP Option Agreement – ▇▇▇▇▇ / Noyon-▇▇▇▇▇▇▇▇ Properties November 15, 2007 7.11 7.8. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposed, any party Party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice. If payment is not made by that party Party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the OperatorManagement Committee. 7.12 7.9. If a Party elected not to contribute to the Exploration Costs of any Program, then subject to Subsection 7.8, the Interest of that Party shall be decreased and the Interest of each Participant shall be increased so that, subject to Subsections 3.2 and 3.3, at all times during the Exploration Period the Interest of each Party will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all Parties. The Party whose Interest has been reduced shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest. If the preceding provisions have the effect of the application of paragraph 7.07 is to reduce the Share Participation of any party reducing a Party's Interest to less than 10% %, such party Party shall be deemed to have assigned and conveyed forfeited its Share Participation Interest to the Participants, Participants (if more than one, one then in proportion to their respective Share ParticipationsInterests) and that Party, and in exchange, shall be entitled have the right to receive as its sole remuneration and benefit consideration a NSR Royalty defined, calculated and paid in consideration of that assignment and conveyance, the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant manner set forth in Appendix II to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurredAgreement.

EXPLORATION PROGRAMS. 7.01 Until such time as the Shareholders’ Committee has adopted a Feasibility Report pursuant to paragraph 9.02, the The Operator shall prepare draft Programs for consideration by the Shareholders’ Management Committee. Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred. Unless otherwise determined by the Shareholders’ Committee, each draft Program shall cover a calendar year, and shall be submitted delivered to the Shareholders’ Committee each Participant by no later than October 31 of sixty (60) days prior to the period to which the draft Program relates. Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each yearparty to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs. 7.02 The Shareholders’ Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Management Committee deems necessary. The Operator shall be entitled to an allowance for a Cost overrun of 10 ten (10) percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted. 7.03 The Operator shall be entitled to include in the Program the reasonably estimated costs of satisfying continuing obligations that may remain after this Agreement terminates, in excess of amounts actually expended. Such continuing obligations are those that are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after termination of this Agreement and settlement of all accounts. The amount accrued from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account. 7.04 The Operator shall forthwith submit the adopted Program to the parties. Each party may, within 30 thirty (30) days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program. A party which fails to give that notice within the 30 thirty (30) day period shall be deemed to have elected not to contributecontribute to that Program. 7.05 If the Operator fails to submit a draft Program to the Shareholders’ Committee by the date set out in subparagraph 7.01 hereof, any Participant may submit a draft Program to the Shareholders’ Committee within 15 days of such date. The draft Program shall contain a statement in reasonable detail of the proposed Mining Operations and estimates of all Exploration Costs to be incurred. The Shareholders’ Committee shall review the non-Operator's Program and, if it deems fit, adopt the Program with such modifications, if any, as the Shareholders’ Committee deems necessary. The representative of the Operator on the Shareholders’ Committee shall not be entitled to vote with respect to the modification or adoption of the non-Operator's Program. A non-Operator's Program adopted pursuant to the foregoing procedure shall be deemed to be an adopted Program for all purposes under this Agreement. 7.06 7.04 If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rataPRO RATA, subject to the right of any of them to elect elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share. If one or more party so elects to contribute no more than its Proportionate Share and the amount initially committed other parties do not elect to contribute PRO RATA to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs. The Operator shall, within fifteen (15) days following the end of the thirty (30) day period set out in paragraph 7.03, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program . If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.04 hereof. 7.07 If a party elected not to contribute to the Costs of any Program the Share Participation of that party shall be decreased and the Share Participation of each Participant contributing in excess of its Proportionate Share of the Costs shall be increased so that at all times the Share Participation of each party will be that percentage which is equivalent to its Costs and Prior Exploration Costs expressed as a percentage of the aggregate Costs and Prior Exploration Costs of all parties. A Shareholder whose Share Participation has been reduced shall be entitled to receive details of and to contribute to future Programs. On the Operative Date, the parties' respective Share Participations and Prior Exploration Costs shall be deemed to be as follows: a. If, pursuant to the Original Agreement, the First Option alone has been exercised: Hi Ho Silver $ 2,000,000 51 % St. ▇▇▇▇▇ $ 1,921,568 49 % b. If, pursuant to the Original Agreement, the First Option and the Second Option have been exercised: Hi Ho Silver $ 5,000,000 70 % St. ▇▇▇▇▇ $ 2,142,857 30 % In the event of an adjustment of Share Participations pursuant to this paragraph 7.07, the reduction in a party's Share Participation shall take place by a redemption or repurchase, or surrender (without consideration) of Shares7.01, and the corresponding increase procedure set out in the other party's Share Participation paragraph 7.01 to 7.04 inclusive shall take place by an issuance of Shares, or in such other equitable manner as may be achieved in accordance with the charter documents of Holdco, and in compliance with all applicable lawsrepeated. 7.08 7.05 The Operator shall be entitled to invoice each Participant: (a) no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the OperatorOperator in carrying out a Program; or (b) no not more than 30 sixty (60) days in advance of requirements, for an advance of that Participant's Proportionate Share of CostsExploration Costs estimated to be incurred and paid by the Operator in carrying out a Program. Each invoice shall be signed by some responsible official a financial officer of the Operator. Each Participant shall pay to the Operator the amount invoiced, invoiced within 30 thirty (30) days of receipt of the invoice. If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance of the 30th day after the date of receipt of the invoice thereof by the Participant at a rate equivalent to the weighted average Prime Rate for the month plus four percent until paid. If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment. 7.09 7.06 If any Participant elects Participant, after having committed to contribute pursuant to a Program and then paragraph 7.03, fails to pay its Proportionate Share an invoice within the thirty (30-) day period referred to in paragraph 7.08 7.05 the Operator may, may by notice, notice demand payment. If no payment, with accrued interest, payment is made within the period of 30 thirty (30) days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited all its right and Share Participation to contribute to any further Costs under this Agreement and it shall be deemed to the other Participanthave elected not to contribute to each Program subsequently conducted and to any Production Notice, and if more than one then accordingly, shall have its Interest reduced in proportion to their respective Share Participationsthe manner contemplated in paragraphs 7.09 and 10.02(b). 7.10 7.07 The Operator shall expend all monies advanced by a Participant rateably ratably with the advances of the other Participants. If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded forthwithwithin sixty (60) days of the suspension or premature termination. Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs. 7.11 7.08 Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based. If any Program is altered, suspended or terminated prematurely so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs originally proposedset out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 thirty (30) days after receipt of the notice. If payment is , but shall not made by that party within the 30 days aforesaid it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Operator. 7.12 If the effect of the application of paragraph 7.07 is to reduce the Share Participation of any party to less than 10% such party shall be deemed to have assigned and conveyed its Share Participation to the Participants, if more than one, then in proportion to their respective Share Participations, and shall be entitled to receive as its sole remuneration and benefit in consideration review the results of that assignment and conveyance, the Net Smelter Returns Royalty. If more than one party is entitled to receive the Net Smelter Returns Royalty pursuant to this paragraph and subparagraph 10.02(b), then the Net Smelter Returns Royalty shall be allocated and paid to them in proportion to their respective Costs incurred.Program until it has made full