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Under the terms of a Mining Lease Agreement dated August 15, 2000
between the Issuer and Platoro West Inc., the Issuer leased a100% interest in the Castle/Black Rock
Project from Platoro West. Terms of the lease include: (i) the issuance of 5,000 common shares of
the Issuer to Platoro West on execution of the agreement; (ii) Platoro West being granted a net
smelter royalty ranging from 3% when gold is less than US$320 per ounce, to 5% when gold is greater
than US$500 per ounce; and (iii) annual advance royalty payments paid by the Issuer to Platoro West
commencing at US$7,500 and escalating by US$5,000 per annum to a maximum of US$25,000 per annum.
Additionally, the Issuer is required to maintain the 2,500-acre claim block in good standing at an
estimated annual cost of US$15,000. The Issuer retains the right to buy back half of the royalty at
any time for US$1.8 million.
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