LETTER OF CREDIT

LETTER OF CREDIT

LETTER OF CREDIT (“LOC”) dated the 2^nd day of February, 2013.

BETWEEN:

THEMIS PARTNERS LTD., (hereinafter, the "SUBSCRIBER")

AND:

U.S. TUNGSTEN, INC., a Nevada Domestic Corporation with offices located at, 000 Xxxxxxxx Xxxxxx Xxxxx,

Xxxxx #000, Xxxxxxxxx, Xxxxxx 00000. (Hereinafter, the "COMPANY")

WHEREAS:

SUBSCRIBER desires to loan funds to the COMPANY pursuant to the terms of this LOC in the principal

amount of up to One Million Dollars (US$1,000,000) by way of periodic advances as requested by the

COMPANY;

The amounts advanced and accrued interest is convertible (the “Conversion”) into common shares of the

COMPANY;

The SUBSCRIBER understands and acknowledges to the COMPANY that this LOC is being made

pursuant to an exemption (the “Exemption”) from registration provided by Section 4(2) of the United

States Securities Act of 1933, as amended (the “Securities Act”) and Rule 903 of Regulation S of the

Securities Act for the private offering of securities; and

The COMPANY desires to borrow funds from SUBSCRIBER on the terms and conditions set forth in this

Agreement.

NOW THEREFORE THIS LOC WITNESSES that the parties hereto agree as follows:

ARTICLE 1 - INTERPRETATION

SECTION 1.1. DEFINITIONS.

When used in this LOC (including the recitals and schedules hereto) or in any amendment hereto, the following

terms shall, unless otherwise expressly provided, have the meanings assigned to them herein:

"BANKING DAY" shall mean any day other than a Saturday, Sunday, public holiday under the laws of the State

of Nevada or other day on which banking institutions are authorized or obligated to close in Nevada.

"CHARTER DOCUMENTS" means contacting documents and by-laws, and all amendments thereto;

"CONSENT" means any permit, license, approval, consent, order, right, certificate, judgment, writ, injunction,

award, determination, direction, decree, authorization, franchise, privilege, grant, waiver, exemption and other

concession or by-law, rule or regulation;

"DOLLAR" or "$" means the currency of the United States of America.

ARTICLE 2 – LOAN AND CONVERSION

SECTION 2.1. AVAILABLE INVESTMENT.

The Subscriber shall make available to the Company in accordance with, and subject to the terms and conditions

of, this LOC, until 2^nd February, 2014 (the "COMPLETION DATE"), up to $1,000,000 by way of Advances in

accordance with this LOC. The Completion Date may be extended for an additional term of up to twelve months

only on a written agreement between the Company and the Subscriber prior to the terms of the original agreement.

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SECTION 2.2. THE ADVANCES.

On the terms and conditions set forth herein the Subscriber, from time to time, on any Banking Day, prior to the

Completion Date, agrees to make advances to the Company up to the maximum funding amount provided in

Section 2.1 ("ADVANCES"), provided the Subscriber is satisfied that the Company is processing in the right

direction.

SECTION 2.3. PROCEDURE TO REQUEST ADVANCES.

On approval by the Subscriber each Advance shall be made on or before five Banking Days following notice from

the Company. Each such notice shall be given by a notice to the Subscriber in the form substantially the same as

the form attached hereto in Schedule A (each a "NOTICE").

SECTION 2.4. INTEREST.

All funds outstanding under this LOC will bear annual interest of 5% until repaid or converted. (See Sec. 2.5). All

accrued interest shall be payable in cash or In-Kind (shares of the Company valued at the average price for the last

trading week of the year) at the sole discretion of the Company. If In-Kind shares are to be delivered they shall be

issued periodically or at the request of Subscriber.

SECTION 2.5. CONVERSION AND WARRANT ISSUANCE

The Investment represented by this LOC may at the Subscribers request be converted into Restricted Shares of

Common Stock (the "Conversion Shares") of the Company at a rate of $0.30 per common share. (the "Conversion

Right") Such conversion/exercise may be done on a pro rata basis no more than annually. (As an example; the

$1,000,000 could be converted into 3,333,333 Restricted Common Shares). Upon full Conversion of the amounts

outstanding under the LOC into Common Shares, the Company shall issue a Three-Year Term Warrant to

Purchase up to an additional 2,000,000 Restricted Common Shares at $0.80 per share.

SECTION 2.6. USE OF PROCEEDS.

The Company shall use all Advances to fund operating expenses, acquisitions, working capital and general

corporate activities.

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Subscriber:

(a)

Organization and Corporate Power. The Company has been duly incorporated and organized and is validly

subsisting and in good standing under the laws of its jurisdiction and has full corporate right, power and

authority to enter into and perform its obligations under the LOC to which it is or shall be a party and has

full corporate right, power and authority to own and operate its properties and to carry on its business;

(b)

Conflict with Other Instruments. The execution and delivery by the Company of the LOC and the

performance by the Company of its obligations thereunder, do not and will not: (i) conflict with or result

in a breach of any of the terms, conditions or provisions of: (A) the charter documents of the Company;

(B) any law applicable to or binding on the Company; or (C) any contractual restriction binding on or

affecting the Company or its properties the breach of which would have a material adverse effect on the

Company; or (ii) result in, or require or permit: (A) the imposition of any lien on or with respect to the

properties now owned or hereafter acquired by the Company; or (B) The acceleration of the maturity of

any debt of the Company, under any contractual provision binding on or affecting the Company;

(c)

Consents, Official Body Approvals. The execution and delivery of the LOC and the performance by the

Company of its obligations hereunder have been duly authorized by all necessary action on the part of the

Company, and no Consent under any applicable law and no registration, qualification, designation,

declaration or filing with any official body having jurisdiction over the Company is or was necessary

therefore. The Company possesses all Consents, in full force and effect, under any applicable Law which

are necessary in connection with the operation of its business, the non-possession of which could

reasonably be expected to have a material adverse effect on the Company;

(d)

Execution of Binding Obligation. The LOC has been duly executed and delivered by the Company and,

when duly executed by the Company and delivered for value, the LOC will constitute legal, valid and

binding obligations of the Company, enforceable against the Company, in accordance with its terms;

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(e)

No Litigation. There are no actions, suits or proceedings pending or, to the knowledge of the Company,

after due inquiry, threatened against or affecting the Company (nor, to the knowledge of the Company,

after due inquiry, any basis therefore) before any official body having jurisdiction over the Company

which purport to or do challenge the validity or propriety of the transactions contemplated by the Share

Issuance the Company, which if adversely determined could reasonably be expected to have a material

adverse effect on the Company;

(f)

Absence of Changes. Since the date of the most recently delivered financial statements of the Company,

the Company has carried on its business, operations and affairs only in the ordinary and normal course

consistent with past practice.

SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER.

The Subscriber represents and warrants to the Company:

(a)

the SUBSCRIBER makes the Advances to the Company and shall acquire the Conversion Shares and

Conversion Right (both as defined herein) in reliance upon the Exemption from registration provided by

Section 4(2) of the Securities Act and Rule 903 of Regulation S of the Securities Act for the private

offering of securities;

(b)

the SUBSCRIBER is eligible to make Advances to the Company and acquire the Conversion Shares and

Conversion Right in the Company under Regulation S, and all statements set forth in the Declaration of

Regulation S Eligibility, attached hereto as Schedule B, are true and correct and may be relied upon by the

Company; further, all information, representations and warranties contained in this LOC, or that have

been otherwise given to the Company, are correct and complete as of the date hereof, and may be relied

upon by the Company;

(c)

the SUBSCRIBER is aware of the significant economic and other risks involved in making the Advances

to the Company and in acquiring the Conversion Shares and acquiring and/or exercising the Conversion

Right;

(d)

the SUBSCRIBER has consulted with its own securities advisor as to its eligibility to acquire the

Conversion Shares and acquire and/or exercise the Conversion Right under the laws of its home

jurisdiction and acknowledges that the Company has made no effort and takes no responsibility for the

consequences to the SUBSCRIBER as a non-U.S. investor acquiring the Shares and this Conversion Right

and, in particular, in purchasing U.S.-based securities upon exercise, if any, of the Conversion Right;

(e)

no federal or state agency has passed upon, or make any finding or determination as to the fairness of this

investment, and that there have been no federal or state agency recommendations or endorsements of the

investment made hereunder;

(f)

the SUBSCRIBER acknowledges that:

(i) there are substantial restrictions on the sale or transferability of any Conversion Shares acquired upon

exercise of the Conversion Right and understands that, although the Company is a reporting company, the

SUBSCRIBER is, upon acquiring the Conversion Shares upon exercising the Conversion Rights,

purchasing unregistered securities;

(ii) the SUBSCRIBER may not be able to liquidate this investment in the event of any financial emergency

and will be required to bear the economic risk of this investment for a lengthy or even indefinite period of

time;

(iii) the Company is not contractually obligated to register under the Securities Act any Conversion Shares

acquired upon an exercise of the Conversion Right; and

(iv) any Conversion Shares acquired by the SUBSCRIBER upon exercise of the Conversion Right may never

be sold or otherwise transferred without registration under the Securities Act, unless an exemption from

registration is available;

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(g)

the SUBSCRIBER, alone or with its advisor, has enough knowledge and experience in financial and

business matters to make it capable of evaluating the merits and risks of investing in the Company;

(h)

the SUBSCRIBER makes Advances to the Company and acquires the Conversion Shares and the

Conversion Right as principal for its own account and not for the benefit of any other person; and

(i)

the SUBSCRIBER understands that any certificates representing any Conversion Shares acquired by the

SUBSCRIBER upon exercise of the Conversion Right will have a resale legend on them that will read

substantially as follows:

THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933, AS AMENDED (“ACT”). THE SECURITIES REPRESENTED

BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT, AND NOT WITH

A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISPOSITION THEREOF, AND

MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE

ACCOUNT OR THE BENEFIT OF U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION

AT ANY TIME OR (ii) OTHERWISE UNTIL ONE YEAR AFTER THE LATER OF THE

COMMENCEMENT OF THE OFFERING OF SUCH SECURITIES OR THE CLOSING

DATE OF THE SALE AND TRANSFER THEREOF, EXCEPT IN EITHER CASE IN

ACCORDANCE WITH REGULATION S (OR RULE 144A, IF AVAILABLE) UNDER THE

ACT. TERMS USED ABOVE HAVE THE MEANING GIVEN TO THEM BY REGULATION

ARTICLE 4 - COVENANTS OF THE COMPANY

SECTION 4.1. AFFIRMATIVE COVENANTS.

Until the Completion Date, the Company shall:

(a)

COMPLIANCE WITH LAWS, ETC. Comply with all applicable laws, non-compliance with which could

have a material adverse effect on the Company;

(b)

PAYMENT OF TAXES AND CLAIMS. Pay and discharge before the same shall become delinquent: (i)

all taxes and assessments; and (ii) all lawful claims which, if unpaid, might become a lien upon or in

respect of the Company's assets or properties;

(c)

MAINTAIN TITLE. Maintain and, as soon as reasonably practicable, defend and take, all action

necessary or advisable at any time, and from time to time, to maintain, defend, exercise or renew its right,

title and interest in and to all of its property and assets;

(d)

PAY OBLIGATIONS TO SUBSCRIBER AND PERFORM OTHER COVENANTS. Make full and timely

payment of its obligations hereunder and duly comply with the terms and covenants contained in this

LOC, all at the times and places and in the manner set forth therein;

(e)

FURTHER ASSURANCES. At its cost and expense, upon request by the Subscriber, duly execute and

deliver, or cause to be duly executed and delivered, to the Subscriber, such further instruments and do and

cause to be done such other acts as may be necessary or proper in the reasonable opinion of the Subscriber

to carry out more effectually the provisions and purposes of this LOC.

ARTICLE 5 – PATRIOT ACT DISCLOSURE

NOTICE TO NON-UNITED STATES RESIDENTS:

IT IS THE RESPONSIBILITY OF ANY ENTITIES WISHING TO PURCHASE THE LOAN OR UNITS

PURSUANT TO THIS LOC TO SATISFY THEMSELVES AS TO FULL OBSERVANCE OF THE LAWS OF

ANY RELEVANT TERRITORY OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY SUCH

PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR

OBSERVING ANY OTHER APPLICABLE FORMALITIES.

PATRIOT ACT RIDER

THE SUBSCRIBER HEREBY REPRESENTS AND WARRANTS THAT THE SUBSCRIBER IS NOT, NOR IS

IT ACTING AS AN AGENT, REPRESENTATIVE, INTERMEDIARY OR NOMINEE FOR, A PERSON

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IDENTIFIED ON THE LIST OF BLOCKED PERSONS MAINTAINED BY THE OFFICE OF FOREIGN

ASSETS CONTROL, U.S. DEPARTMENT OF TREASURY. IN ADDITION, THE SUBSCRIBER HAS

COMPLIED WITH ALL APPLICABLE U.S. LAWS, REGULATIONS, DIRECTIVES, AND EXECUTIVE

ORDERS RELATING TO ANTI-MONEY LAUNDERING , INCLUDING BUT NOT LIMITED TO THE

FOLLOWING LAWS: (1) THE UNITING AND STRENGTHENING AMERICA BY PROVIDING

APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND OBSTRUCT TERRORISM ACT OF 2001,

PUBLIC LAW 107-56, AND (2) EXECUTIVE ORDER 13224 (BLOCKING PROPERTY AND PROHIBITING

TRANSACTIONS WITH PERSONS WHO COMMIT, THREATEN TO COMMIT, OR SUPPORT

TERRORISM) OF SEPTEMBER 23, 2001.

ARTICLE 6 - MISCELLANEOUS

SECTION 6.1. NOTICES, ETC.

Except as otherwise expressly provided herein, all notices, requests, demands, directions and communications by

one party to the other shall be sent by hand delivery or registered mail or fax, and shall be effective when hand

delivered or when delivered by the relevant postal service or when faxed and confirmed, as the case may be. All

such notices shall be addressed to the Chief Executive Officer and copies to the Chief Financial Officer for the

Company, of the notified party at its address given on the signature page of this LOC, or in accordance with any

unrevoked written direction from such party to the other party.

SECTION 6.2. NO WAIVER; REMEDIES.

No failure on the part of the Subscriber or the Company to exercise, and no delay in exercising, any right under

this LOC shall operate as a waiver thereof. The remedies herein provided are cumulative and not exclusive of any

remedies provided by Law.

SECTION 6.3. JURISDICTION.

(1) Each of the parties hereby irrevocably attorns to the non-exclusive jurisdiction of the Courts of the State of

Nevada in any action or proceeding arising out of or relating to this LOC. The Company agrees that a final

judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit

on the judgment or in any other manner provided by Law; and (2) nothing in this Section 6.3 shall affect the right

of the Subscriber to serve legal process in any other manner permitted by Law or affect the right of the Subscriber

to bring any action or proceeding against the Company or its property in the courts of other jurisdictions.

SECTION 6.4. SUCCESSORS AND ASSIGNS.

The Company shall not have the right to assign its rights hereunder or any interest herein without the prior written

consent of the Subscriber, which consent may be arbitrarily withheld.

SECTION 6.5. SEVERABILITY.

If one or more provisions of this LOC be or become invalid, or unenforceable in whole or in part in any

jurisdiction, the validity of the remaining provisions of this LOC shall not be affected. The parties hereto

undertake to replace any such invalid provision without delay with a valid provision which as nearly as possible

duplicates the economic intent of the invalid provision.

SECTION 6.6. COUNTERPARTS.

This LOC may be executed in counterparts and by different parties in separate counterparts, each of which when

so executed shall be deemed an original and all of which, taken together, shall constitute one and the same

instrument.

SECTION 6.7. SYNDICATION/PARTICIPATION.

The Subscriber may not sell, transfer, assign, participate, syndicate or negotiate to one or more third parties, in

whole or in part, the Commitment and its rights under this LOC, without the prior written consent of the

Company, which consent may not be arbitrarily withheld.

IN WITNESS WHEREOF the parties hereto have caused this LOC to be executed by their respective officers

thereunto duly authorized, as of the date first above written.

THEMIS PARTNERS LTD.

U.S. Tungsten, Inc.

By:

By: /s/ Xxxxx Xxxxxxxxxx

-----------------------------

Sir Sami Vaskola

Xxxxx Xxxxxxxxxx

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Notice Address: ____________

Notice Address: 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx #000,

Xxxxxxxxx, Xxxxxx 00000.

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SCHEDULE A

NOTICE

To: THEMIS PARTNERS LTD. (the "Subscriber")

The undersigned, U. S. Tungsten, Inc. (the "Company") hereby requests an advance of $______250,000_______ ,

in accordance with the terms and conditions set forth in the LOC dated 18^th January, 2013, between the

Subscriber and the Company and as of the Date of Notice written below.

DATE OF NOTICE:

-------------- 18 January 2013 ---------------

Remaining amount to be advanced under

The LOC Issuance:

----------- $750,000 ------------------

U.S. Tungsten, Inc.

Per: /s/ Xxxxx Xxxxxxxxxx

--------------------------------------------

Authorized Signatory

The Subscriber hereby acknowledges receipt of this Notice and agrees with the amounts set out above as of this

Notice.

Per:

--------------------------------------------

Authorized Signatory

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SCHEDULE B

DECLARATION OF REGULATION S ELIGIBILITY

Regulation S of the Securities Act is available for the use of non-U.S. Persons only. This Declaration must be

answered fully and returned to U.S. Tungsten Inc.. with the LOC to ensure the Company is in compliance with

the Securities Act. All information will be held in the strictest confidence and used only to determine investor

status. No information will be disclosed other than as required by law or regulation, other demand by proper legal

process or in litigation involving the company or its affiliates, controlling persons, officers, directors, partners,

employees, attorneys or agents.

I, Xxxx Xxxxxxxx Vaskola, HEREBY AFFIRM AND DECLARE THAT:

I am not a resident of the United States of America.

I am not purchasing securities for the benefit of a resident of the United States of America.

I am not purchasing securities in the name of a company incorporated in the United States of America or

for the benefit of a company incorporated in the United States of America.

I am not purchasing securities in my capacity as Trustee for a U.S.-based Trust.

I am not purchasing securities in my capacity as the Executor or Administrator of the Estate of a U.S.

resident.

I am not a U.S. resident purchasing securities through a brokerage account located outside of the United

States of America, nor am I using a non-U.S. brokerage account to purchase securities for the benefit of

individuals or corporate entities resident within the United States of America.

I am not purchasing the securities in an attempt to create or manipulate a U.S. market.

I am purchasing the securities as an investment and not with a view towards resale.

I will only resell the securities to other non-U.S. residents in accordance with Rule 905 of Regulation S, or

to U.S. residents in accordance with the provisions of Rule 144 following the expiration of one year from

the date of acquiring the securities.

10.

I am permitted to purchase the securities under the laws of my home jurisdiction.

11.

I understand that if I knowingly and willingly make false statements as to my eligibility to purchase or

resell securities under Regulation S, I may become subject to civil and criminal proceedings being taken

against me by the United States Securities and Exchange Commission.

DATED: _______________________, 20____

__________________________________

Signature

Xxxx Xxxxxxxx Vaskola

Print Name

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LETTER OF CREDIT

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