JOINT VENTURE AGREEMENT

Exhibit 10.8

This JOINT VENTURE AGREEMENT (this "Agreement") dated April 17, 2011 is entered into by and among:

1. Canaan Mining Ca., Ltd., a limited liability company organized under the laws of Hong Kong (the "Canaan");

2. Geo IS Tech Group - under the laws of USA (the "Geotech"); and

3. Xxxx Xxxxxx Xxxxxxx Xxxxxxx an individual holding Mexico Passport ("Xxxx").

RECITALS:

WHEREAS, the parties have completed preliminary geological studies and made a Decision to Mine and intend to produce Products from the Mining Area;

WHEREAS, the Joint Venturers have agreed to enter into this agreement in place of the Contract of Mercantile Association in Participation to undertake the Development and Mining of the Deposit and the Treatment of the Products on the terms and conditions set out in this agreement;

WHEREAS, Canaan has agreed to name Xxxxxxx X. Xxxx as the first manager of the Joint Venture in accordance with this agreement; and

WHEREAS, the parties hereto intend to further set forth their right obligations with respect to the Joint Venture.

AGREEMENT:

NOW THEREFORE, in consideration of the mutual representations, warranties, and covenants contained herein and for other good and valuable consideration (the sufficiency of which is hereby acknowledged) and intending to be legally bound hereby, the parties hereto agree as follows:

SECTION 1.

DEFINITIONS AND INTERPRETATIONS

1.1 Definitions. Unless the context otherwise requires, the following expressions have the respective meanings in this agreement (including the Recitals):

Abandon means to intentionaJly and permanently give up, surrender, leave and relinquish all, substantially all, or a severable part, of the Joint Venture Activities or Joint Venture Property, and Abandonment has the equivalent meaning.

Accounting Procedure means the accounting procedure set out in Schedule 3. Agreed Interest Rate means the rate of interest which is the average coupon rate for the 30- Year U.S. Treasury Bonds plus 2 percent calculated on a daily basis and compounded with monthly rests.

Approved Program and Budget means a Program and budget relating to Joint Venture Activities for a particular period, which has been approved or deemed to have been approved by the Management Committee.

TSX means Toronto Stock Exchange.

Auditor means a registered company auditor under the Federal Law appointed by the Management Committee at the cost of the Joint Venture to conduct an audit each Year of the accounts of the Joint Venture.

Authorization is any consent, authorization, registration, filing, lodgement, notification, agreement, certificate, commission, lease, license, permit, approval or exemption from, by or with an Authority (including the Tenements).

Authorized Officer means the person nominated by a party in its Particulars, or any person replacing the nominated person as its authorized officer by notice given in accordance with this agreement.

Authority is any government department, local government council, government or statutory authority or any other party under a Law which has a right to impose a requirement or whose consent is required with respect to Joint Venture Activities.

Breach Default Event is the happening of an Insolvency Event in relation to a Joint Venturer or a Joint Venturer committing a material breach of any of its material obligations under this agreement (other than an Unpaid Monies Default Event), including where an Encumbrance (other than an Encumbrance approved by the Joint Venturers under this agreement) is created over or attached to the Joint Venture Interest of a Joint Venturer.

CalJed Sum means the Percentage Share of funds required to be paid by a Joint

Venturer in accordance with this agreement to finance Joint Venture Expenditure.

Capital Works means capital works and services, either associated with a Development described in a Feasibility Studyor to further support, expand, suspend, Rehabilitate or Abandon Mining and Treatment, as approved by the Management Committee.

Change of Control means, in relation to a Joint Venturer, that it ceases to be a Subsidiary (as defined in the Federal Law on Commercial Companies of Mexico) of its Ultimate Holding Company, except where the shares of that Joint Venturer or any of its holding companies are or become listed by TSX or other recognised stock exchange and such Joint Venturer ceases to be a Subsidiary of its Ultimate Holding Company by reason of the allotment or transfer of, or any other dealing in, those shares.

Commencement Date means the date on which the last of the Conditions Precedent have been satisfied or waived in accordance with this agreement or, if there are no Conditions Precedent, then the date of this agreement

Conditions Precedent means the conditions set out in Schedule 1, which are required to be satisfied or waived for this agreement to be effective.

Cross Charge means a deed of cross charge in substantially the same form as the pro forma deed of cross charge set out in Schedule 4.

Decision to Mine means a decision made by the Management Committee to proceed to Development and Mining of a Deposit located within the Tenements.

Deed of Covenant means a deed of covenant in substantially the same form as the pro forma permitted chargee's deed of covenant set out in Schedule 5.

Deemed Sale Offer means an offer required to be made under this agreement by a Joint Venturer to sell all of its Joint Venture Interest to the other Joint Venturers, free from Encumbrances, at a Transfer Price.

Default Event means a Breach Default Event or an Unpaid Monies Default Event

Defaulting Joint Venturer means a Joint Venturer which has committed a breach of this agreement, whether as an Unpaid Monies Default Event or a Breach Default Event or to which (or to a Related Body Corporate of which) a Breach Default Event relates, which breach has not been remedied by the Joint Venturer.

Deposit means a body of Ore located within the Tenements which has been the subject of a Feasibility Studyand which the Joint Venturers have determined is economically feasible to be subject to Development, Mining, Treatment, Rehabilitation and Mine Closure.

Development means the construction, supply, completion and commissioning of a commercial Mining and Treatment operation for extraction and processing of Products, including the construction or supply of Mining Plant and a Treatment Plant, an Ore pad and associated crushing systems, separators, conveyors, stockpiles, loading systems, utilities, vehicles, offices, workshops, and all other facilities, systems, plant, equipment and personnel required for the safe and efficient development, operation and rehabilitation of the Mine in accordance with the Mine Plans, but does not include Mining or Treatment

Due Date means the date on which a payment is due under this agreement.

Emergency means a situation involving actual or reasonably apprehended substantial damage to or loss of Joint Venture Property or Joint Venture Activities or serious injury to persons or loss of Life.

Encumbrance means any mortgage, pledge, lien, charge, title retention arrangement, trust or power, or other form of security or interest having effect as a security for the payment of any monetary obligation or the observance of any other obligation whether existing or agreed to be granted or created.

Expert means a person independent of the parties who is suitably qualified and capable of making an expert determination under this agreement.

Exploration means searching for, discovery and delineation of commercial Ore deposits in the Mining Area and the evaluation of such deposits, including prospecting, surface mapping, sampling, aerial mapping and reconnaissance, drilling, trenching and related field work, geophysical and geochemical testing, core sampling, assaying, exploration declines, test mining, analysis and evaluation of activities undertaken and resuJts obtained, conducting preliminary feasibility studies, preparing feasibility study reports, and planning, supervising and administrating all activities undertaken, but does not include Development, Mining or Treatment.

Feasibility Study means a technical report commissioned to determine if Development and Mining should be carried out on the Joint Venture Property or any portion thereof, which report will be prepared by or on behalf of the Manager, based upon the results ofExpJoration and the Pre-Feasibility Study performed prior to the date of such report. All cost estimates in the Feasibility Study should be at a precision level of plus or minus 10%.

The Feasibility Study should address, among other things, the following matters:

(a) the general results of the Pre-Feasibility Study and other Exploration, including:

(i) an analysis of a proposal for waste treatment and handling;

(ii) a detailed analysis of estimated recoverable reserves and the estimated mineral composition and content thereof;

(iii) a general conceptual analysis of the permitting and environmental liability implications of the proposal;

(iv) appropriate metallurgical tests to project the efficiency of proposed extraction, recovery and, if applicable, processing techniques; and

(v) such other analyses deemed appropriate by the Manager;

(b) a reasonable estimate of the cost of Developrnent Work and the start-up of Production and Decommissioning including, if proposed, the cost of a mill and other processing and ancillary facilities, which estimate must include:

(i) a reasonable estimate of material expenditures required to purchase, construct, and install all material machinery, equipment and other facilities and infrastructure (including contingencies) required to begin commercial Mining;

(ii) reasonable estimates of material expenditures required to perform all other related work required to begin commercial Mining;

(iii) a projected schedule of the timing of the estimated material capital requirements to begin commercial Mining; and

(iv) a reasonable estimate of Mine Closure and Abandonment expenses.

(c) a reasonable estimate of the annual operating expenditures required for the first year of commercial Mining, and for subsequent years of commercial Mining, including estimates of annual Products, administrative, operating, and maintenance expenditures, taxes (other than income taxes), working capital funding requirements, royalties, material equipment leasing or material supply contract expenditures, expansion or modification capitaJ requirements, work commitments, and all other anticipated material costs of Mining operations;

(d) a review of the nature, extent, and rated capacity of the mining equipment and a proposed Products production schedule;

(e) such financial information and technical standards as are sufficient to enable major financial institutional lenders experienced in mining financings to make a decision whether to provide financing for Development;

(f) confirmation that the Mining Tenements are sufficient and remaining in good standing;

(g) a detailed environmental management plan which identifies and quantifies all material issues relating to environmental issues in relation to the Joint Venture including the impact of such issues on the Joint Venture;

(h) a project execution plan in sufficient detail so as to be able to proceed into engineering procurement and construction management in relation to the Joint Venture;

(i) an assessment of material risks associated with any of the foregoing including, where applicable, any factors to mitigating such risks; and

(j) such other information as the Manager deems appropriate for the purpose of making its own internal determination with respect to proceeding to a development decision.

Federal Law means the Federal Law on Commercial Companies of Mexico.

Good Mexican Mining Practice means recognized mining methods, procedures and practices, together with the exercise of that degree of skill, diligence, prudence and foresight that reasonably would be expected from an experienced and competent contractor in Mexico under conditions comparable to those applicable to the relevant activity in the light of known facts, or facts which should reasonably have been known at the time, and consistent with applicable Laws and Authorizations and having regard to the need for:

(a) suitable and experienced personnel and adequate materials;

(b) ongoing monitoring and testing of plant and equipment performance, safe operating procedures and appropriate maintenance procedures;

(d) in the case of design, engineering and construction, internationally accepted design, engineering and construction practices that reasonably would be expected from recognized designers, engineers and constructors of comparable plant, equipment and facilities in Mexico.

Gross Negligence means such wanton and reckless conduct as constitutes an utter disregard for the harmful, foreseeable and avoidable consequences, which result from

that conduct.

Initial Capital Contribution means the funds or assets required to be contributed by a Joint Venturer, on or prior to the commencement date as set out in Schedule 1.

Insolvency Event means the happening of any of the following events in relation to a body corporate:

(a) it is unable to pay all its debts as and when they become due and payable or it has failed to comply with a statutory demand as provided in the Federal Law;

(b) a resolution is validly passed to wind up the body corporate voluntarily or to appoint an administrator;

(c) it, or any other person, makes an application to a court for its winding up, being an application that is not stayed, withdrawn or dismissed within 7 days;

(d) an order is made for it to be wound up;

(e) the appointment ofa controller as defined in the Federal Law of any of its assets;

(f) it proposes to enter into or enters into any form of arrangement (formal or informal) with its creditors or any of them, including a deed of company arrangement; or

(g) it becomes an insolvent under administration as defined in the Federal Law.

Joint Venture means the unincorporated joint venture established by and under this agreement to be known by the name set out in the Particulars.

Joint Venture Accounts means the accounts denominated in US Dollars or Mexican currency on an accrual basis maintained by the Manager on behalf of the Joint Venturers in accordance with this agreement, including the Accounting Procedure, and containing a record of all charges and credits that are attributable to the Joint Venture consistent with standard accounting procedures, expenditure classifications and reporting formats as accepted by the Management Committee.

Joint Venture Activities means all Exploration, Development, Mining, Treatment, Rehabilitation and Mine Closure activities involved in the acquisition, use, development, operation and maintenance of Joint Venture Property and all other activities, undertakings, and operations undertaken by the Joint Venturers pursuant to this agreement, but does not include the marketing or sale of Products.

Joint Venture Asset Register means the register of assets owned by the Joint Venturers and maintained by the Manager for the purposes of the Joint Venture.

Joint Venture Expenditure means all costs reasonably and properly incurred by the Manager, in accordance with the Accounting Procedure, on behalf of the Joint Venturers in connection with Joint Venture Activities pursuant to an Approved Program and Budget or incurred in an Emergency or as a permitted cost overrun or otherwise approved by the Management Committee, and includes all the items which may be charged to the Joint Venture Accounts as set out in the Accounting Procedure.

Joint Venture Intellectual Property means all business names, trademarks, copyright, patents, patent applications,. discoveries,. inventions, and similar rights developed by the Manager pursuant to an Approved Program and Budget in the course of Joint Venture Activities.

Joint Venture Interest means the following rights, liabilities and obligations of a Joint Venturer determined under this agreement:

(a) the obligation, subject to the terms of this agreement, to contribute its Percentage Share of all Joint Venture Expenditure;

(b) the ownership of and the right to receive in kind and to dispose of for its own account its Percentage Share of Products produced under this agreement;

(c) the beneficial ownership as a tenant in cornmon of an undivided share in its Percentage Share of Joint Venture Property; and

(d) all other rights, liabilities and obligations accruing to or incurred by the Joint Venturers in or arising out of this agreement in its Percentage Share.

Joint Venture Property means all rights, titles, interest, claims, benefits and all other property of whatever kind, real or personal, from time to time owned by any Joint Venturer for the purposes of the Joint Venture, and includes the Tenements, Joint Venture Account, Mining Plant, Treatment Plant, Joint Venture Intellectual Property and all items listed in the Joint Venture Asset Register.

Joint Venturer means a party which holds a Joint Venture Interest, but does not include a party in its capacity as Manager.

Law means Federal and State legislation including regulations, by-laws, and other subordinate legislation, the requirements and guidelines of any Authority, including the Listing Rules, with which a party is legally required to comply, and cornmon law and equity.

Listing Rules means the TSX Listing Rules or, to the extent that a party or its Related Body Corporate is bound thereby, the listing rules of another recognized stock exchange.

Majority Vote means a resolution voted in favor by representatives entitled to vote and be present at the meeting that satisfies the Passmark, excluding for this purpose the votes held by a Defaulting Joint Venturer.

Management Committee means the committee of representatives of the Joint Venturers established under this agreement to supervise the management of the Joint Venture.

Management Fee means the remuneration payable by the Joint Venturers to the Manager under this agreement as set out in Schedule I.

Manager means the person or entity named as Manager in Schedule I or such other person or entity as may be engaged or appointed by the Management Committee as Manager from time to time under this agreement.

Mine is the mine, the name and place of which is set out in Schedule I, for the Mining and Treatment of Products that the Joint Venturers have decided to develop and operate in the Mining Area, and any other mine the Joint Venturers decide to develop in any part of the Mining Area.

Mine Closure means all or any action or conduct by the Manager for the purpose of suspending or Abandoning all, or a severable part of, the Joint Venture Activities or Joint Venture Property under this agreement whether by way of demolition, removal, destruction, conversion, placement on permanent care and maintenance or other basis, or any similar action or conduct, and all other action or conduct as the Manager considers necessary to comply with all applicable Laws" the requirements of an Authority or Good Mexican Mining Practice in relation to such Mine Closure.

Mine Closure Obligations means the obligations of the Joint Venturers under the Mining Act, all Tenements and Authorizations, and all applicable statutory and contractual obligations on and following Mine Closure.

Mine Plans means the long term life of mine plan, and shorter term mining plans of various terms, as amended from time to time, which describe the sequencing of mining Ore, overburden and waste from the Mine, and which incorporate the key parameters for mining, including mining sequence plans, landform designs, access and haulage roads, and which provide schedules for the volumes of Ore, overburden and waste to be mined, stored, processed or disposed of, and the production of Products within the range and periods required by the Management Committee from time to time.

Minimum Interest means the Percentage Share of Joint Venture Interest specified in Schedule 1.

Mining means all operations associated with the extraction of Ore from the Mining Area, and haulage and delivery to the Treatment Plant, including pre-stripping, and the removal and disposal of overburden and waste, but does not include Exploration, Development, Treatment, Rehabilitation or Mine Closure.

Mining Act means the mining legislation described in Schedule 1.

Mining Area means the whole of the area within the Tenements set out in Schedule 2 depicted on the plan annexed as Exhibit A, and any other additional Tenements or areas of land applied for or acquired for the purposes of this agreement.

Mining Information means all information, data and records relating to the Tenements and Joint Venture Activities including all surveys, maps, aerial photographs, electronically stored data, sketches, drawings, memoranda, drill cores, logs of those drill cores, geophysical, geological or drill maps, sampling and assay reports and notes.

Mining Plant means all Capital Works, plant, equipment, machinery, facilities and other infrastructure required to carry out Mining operations.

Nominated State is the State or Territory of Mexico set out in Schedule 1.

Non-Defaulting Joint Venturer means a Joint Venturer which is not a Defaulting Joint Venturer and is not a Related Body Corporate of a Defaulting Joint Venturer.

Ore means any mineral or mixture of minerals of intrinsic economic interest located in or on the Earth's crust at a concentration above background level.

Particulars means the particulars of a party and the Joint Venture given on page 1 of this agreement, or any particular amended by the party by notice given in accordance with this agreement.

Passmark means the requirements needed to be satisfied as set out in Schedule I to pass a resolution of the Management Committee by a Majority Vote.

Paying Joint Venturer means a Joint Venturer, not being a Defaulting Joint Venturer, which makes a payment of Unpaid Monies on behalf of Defaulting Joint Venturer in order to remedy an Unpaid Monies Default Event.

Percentage Share means the percentage Joint Venture Interest which a Joint Venturer has in the Joint Venture in accordance with this agreement

Products mean al1 mineral or metal1ic Ores, concentrates, metals and other mineralized products described in Schedule 1, and any other mineral resources, processed, smelted or refined from Ores extracted from the Mining Area under this agreement which are capable of being sold.

Proposed Program and Budget means a work Program and budget for a given Year, or other relevant period, in relation to the conduct of Joint Venture Activities proposed in accordance with this agreement

Rehabilitation means all undertakings, works and efforts for the reclamation, re vegetation, decontamination and cleaning up of the Mining Area and Joint Venture Property associated with, or preparing for, the suspension or final physical shutdown of al1 or part of Mining or Treatment, or as otherwise determined by the Management Committee, in a safe and workmanlike manner including, without limitation, the payment of al1 Shutdown Costs in accordance with al1 applicable Laws, and Authorizations granted to the Joint Venturers, including al1 applicable rehabilitation objectives, indicators, compliance criteria, and "Rehabilitate" has an equivalent meaning.

Rehabilitation Fund means the fund or other investments, sureties or securities established by the Manager on the Commencement Date, or such other date approved by the Management Committee, for the purpose of satisfying the Rehabilitation Obligations.

Rehabilitation Obligations means the obligations of the Joint Venturers under the Act, all Tenements and Authorizations, and aJl applicable statutory and contractual obligations relating to Rehabilitation during and following completion of Joint Venture Activities.

Related Body Corporate means a related body corporate as defined in the Federal Law.

Shutdown Costs means all costs associated with shutting down or suspending Joint Venture Activities within the Mining Area including the costs associated with satisfaction of Rehabilitation Obligations and Mine Closure Obligations, and any redundancy or termination benefits or payments to any consultant or contractor or employee who is engaged by the Manager in the conduct of Joint Venture Activities, but only to the extent of the period for which an employee was engaged in Joint Venture Activities.

Tenement means a mining tenement listed in Schedule 2 and includes any lease, license, claim or permit issued or to be issued under the Mining Act to the Joint Venturers for the purposes of the Joint Venture which confers or may confer a right to prospect, explore for or mine any mineral in the Mining Area, or which may facilitate the enjoyment of such right, and includes any application for, and any extension, renewal, conversion or substitution of, any of those tenements.

Third Party means a person not a party, or the Related Body Corporate of a party, to this agreement.

Transfer Price means a fair market price for a Joint Venture Interest as at the date of a Deemed Sale Offer on terms and conditions to be negotiated and agreed in good faith by the Joint Venturers or, in defauJt of agreement, as determined by an Expert appointed under this agreement, less all amounts due by the transferring Joint Venturer to the Manager or the other Joint Venturers under this agreement, including interest, and the amount of all liability of the transferring Joint Venturer to meet existing Rehabilitation Obligations and Mine Closure Obligations as determined by the Manager as at the date of payment.

Treatment means the processing, smelting, and refining of Ore, overburden and waste up to and including producing Products, and includes crushing, weighing, sampling, assaying, refining, treatment, transportation, handling, storage, loading and delivery of the Products, but does not include Mining or Development.

Treatment Plant means all Capital Works, buildings, plant, facilities and other infrastructure established for Treatment, including the Ore pad and associated crushing systems, conveyors, stockpiles, loading systems, offices, workshops and recovery areas.

Ultimate Holding Company means an ultimate holding company as defined in the Federal Law.

Unanimous Vote means a resolution voted in favor by all representatives entitled to vote and be present at the meeting in respect of the matters set out in Schedule 1, excluding for this purpose the votes held by a Defaulting Joint Venturer.

Unpaid Monies are monies due for payment under this agreement, and include monetary compensation and damages payable by a Defaulting Joint Venturer which is agreed, awarded or determined following an unremedied Breach Default Event for so long as it is unpaid, and interest and costs payable or reimbursable in accordance with this agreement.

Unpaid Monies Default Event is the failure by a Joint Venturer to pay Unpaid Monies on or before the Due Date.

Willful Misconduct means an act or omission that is a reckless and intentional disregard of:

(a) any provision of this agreement;

(b) any Approved Program or Budget, except in the case of an Emergency;

(d) the terms or conditions of a Tenement,

but does not include any error of judgment or mistake made by the Manager or any of its directors, employees, agents or contractors in the exercise, in good faith, of any function, authority or discretion conferred upon the Manager.

Year means a year commencing on and including the first day onul)l and ending on and including the following thirtieth day of wh".

1.2 Interpretation. Unless the context otherwise requires, any noun or pronoun utilized in this Agreement is deemed to include the plural as well as the singular and to cover all genders. Unless otherwise specified, references to the word "including" shall be deemed to be followed by words "without limitation," "but not limited to" or words of similar import as applicable.

SECTION 2.

CONDITIONS PRECEDENT

2.1 Coming ioto effect of agreement. This clause 2 and clauses I (definitions), 15 (confidentiality), 20 (notices) and 21 (ancillary) come into effect immediately. The remainder of this agreement comes into effect on the Commencement Date.

2.2 Satisfaction of Conditions Precedent.

(a) Each party must use all reasonable endeavors (other than waiver) at its cost to ensure that the Conditions Precedent are satisfied on conditions acceptable to it within the time set out in Schedule 1 (Approvals Period).

(b) Each party must keep each other informed of its progress in obtaining satisfaction of any Condition Precedent it is required to obtain and any circumstance that may result in any of those conditions not being satisfied in accordance with its terms.

(c) Each party must give the other parties notice within 7 days after receiving notice of the conditions whether the conditions for the satisfaction of a Condition Precedent (if any) are acceptable, or unacceptable, to it.

2.3 Failure to satisfy Conditions Precedent. If all Conditions Precedent are not satisfied, or otherwise waived, within the Approvals Period, or if a party gives notice to the other parties within the Approvals Period that the conditions of satisfaction of a Condition Precedent imposed by a Third Party are unacceptable to it, any party may terminate this agreement by notice to the others.

2.4 Consequence of failure to satisfy Conditions Precedent. If a party terminates this agreement by notice for failure to obtain satisfaction of a Condition Precedent for any reason, then each party is released from all further obligations under this agreement and no party has any claim against another party as a consequence of the termination.

SECTION 3.

JOINT VENTURE OBJECTIVES AND RELATIONSHIPS

3.1 Joint Venture agreement. With effect from the Commencement Date:

(a) this agreement governs Joint Venture Activities associated with the Mining Area in place of the Contract of Mercanule Association in Participation; and

(b) the Contract of Mercantile Association in Participation is terminated with respect to the Mining Area without prejudice to any rights, obligations and liabilities of any of Joint Venturers which accrue before the Commencement Date.

3.2 Objects and scope of the Joint Venture. The objects of the Joint Venture are to undertake Joint Venture Activities associated with the Mining Area and, in particular, to:

(a) design, construct, develop and operate the Mine and associated works and services in accordance with the Feasibility Study, as amended or supplemented from time to time;

(b) mine and, as appropriate, crush, screen, beneficiate, process, convey, handle, store and stockpile Ore, overburden and waste extracted from the Mine, and produce Products;

(d) decommission any Joint Venture Property no longer required for Mining and Treatment and Rehabilitate any areas within the Mining Area where the Joint Venture has ceased Mining;

(e) maintain the Tenements and further explore and evaluate the Mining Area for reserves of Ore;

(f) if Exploration indicates the probable existence of a further commercially minable mineral resource in any part of the Mining Area, carry out a Feasibility Study, including the construction and operation of a pilot plant (if required) to test the feasibility of further Development;

(g) do all things incidental to any of the objects as resolved by the Management Committee; and

(h) undertake such other activities as the parties agree from time to time upon the terms and conditions set out in this agreement.

3.3 Further Development and Mining. At any time after the initial Decision to Mine is made, the Manager or a Joint Venturer may propose to the Management Committee that a further Decision to Mine be made and that further Development, Mining and Treatment be undertaken, which proposal must include a further Feasibility Study which must:

(a) specify the parts of the Mining Area required for new Development, Mining and Treatment and specify the location and delineation of the Ore body;

(b) describe in reasonable detail the nature and extent of the proposed Development, Mining and Treatment together with estimates of the capital and likely operating expenditure required for the establishment and conduct of the proposed Development, Mining, Treatment, Rehabilitation and Mine Closure; and

3.4 Rights, obligations and liabilities of Joint Venturers.

(a) The rights, duties, obligations and liabilities of the Joint Venturers arising out of this agreement are several in proportion to their respective Percentage Shares and are neither joint nor joint and several.

(b) Each Joint Venturer is severally liable, in proportion to its Percentage Share, for all obligations and liabilities incurred in the course of carrying out Joint Venture Activities.

(c) Nothing in this agreement is to be construed or interpreted as constituting a partnership between the parties or making any Joint Venturer the agent or representative of any other Joint Venturer, except for the Manager when acting as manager, and not, if applicable, as a Joint Venturer.

(d) Each Joint Venturer must indemnify and hold harmless each other Joint Venturer from and against all damage, loss, expense or liability of any nature (other than consequential, economic or indirect losses, including any lost production or loss of profits) suffered or incurred by the other Joint Venturers caused by the Joint Venturer's breach of this agreement or its negligent act or omission in the course of Joint Venture Activities.

3.5 Joint Venturer covenants. Each Joint Venturer covenants separately with each other Joint Venturer:

(a) to perform every obligation and commitment which it has in relation to the Mining Area under the Mining Act or other applicable Law;

(b) to perform its obligations under or relating to the fulfillment of any contract which relates to the Joint Venture or Joint Venture Activities;

(c) not to do or cause to be done any act matter or thing whereby the continued enjoyment of the Tenements by any Joint Venturer might be jeopardized;

(d) to act co-operatively, honestly and reasonably in all its dealings with each other and the Manager concerning the Joint Venture provided that, except as expressly provided by this agreement, no Joint Venturer is under any fiduciary duty to the other Joint Venturers or the Manager;

(e) not to engage either alone or in association with another or others or through a Related Body Corporate in any activity over the Mining Area except as provided or authorized by or under this agreement;

(f) that each Joint Venturer has the unrestricted right to engage in and receive the full benefit of any competing activities outside the Mining Area; and

(g) subject to the confidentiality provisions of this agreement, each Joint Venturer is entitled to use and apply Mining Information outside the Mining Area, provided that such activities are carried out in a manner which does not prejudice, impair or impede Joint Venture Activities.

3.6 Party warranties. Each party warrants for the benefit of each other party that:

(a) (Incorporation) it is validly incorporated, organized and subsisting in accordance with the laws of its place of incorporation;

(b) (Power and capacity) it has full power and capacity to enter into and perform its obligations under this agreement;

(c) (Corporate authorizations) all necessary authorizations for the execution, delivery and performance by it of this agreement in accordance with its terms have been obtained;

(d) (No legal impediment) its execution, delivery and performance of this agreement complies with its constitution and does not constitute a breach of any law or obligation, or cause a default under any agreement by which it is bound; and

(e) (No trust) it enters into and performs this agreement on its own account and not as trustee for or nominee of any other person.

3.7 Initial Capital Contributions. On or prior to the Commencement Date the Joing Venturers shall contribute to the Joint Venture all of its right, title, and interest in and to the assets identified on Schedule 1.

SECTION 4.

JOINT VENTURE PROPERTY

4.1 Joint Venture Interest. The Joint Venture interests of the Joint Venturers at the Commencement Date are:

Joint Venturer	Joint Venture Interest
	Percentage Share
CANAAN	34%
GEOTECII	33%
XXXX	33%
	100.00 %

4.2 Use and ownership of Joint Venture Property.

(a) All Joint Venture Property is owned by the Joint Venturers severally as tenants in common in the proportions of their respective Percentage Shares from time to time.

(b) Each Joint Venturer must ensure that its Percentage Share of all Joint Venture Property that it controls is available for the purpose of Joint Venture Activities for the duration of the Joint Venture.

(c) To the extent that ownership of any Joint Venture Property is not registered or recorded in the names of the individual Joint Venturers pro rata in proportion to their respective Percentage Shares, then the person registered or recorded as owner holds the property on trust for all the Joint Venturers pro rata in proportion to their respective Percentage Shares.

4.3 Delivery and sale of Products.

(a) The Joint Venturers agree to allow the Manager to sell those Products as agent for the Joint Venturer at not less than the available arms length market price (as determined by the Manager acting reasonably) for those Products. The Manager must account to the Joint Venturer for the proceeds of any such sale after first deducting its reasonable expenses and additional storage and transportation costs incurred in the sale.

(b) Nothing in this agreement provides for any joint or cooperative marketing or selling of Products by the Joint Venturers or, except with the prior unanimous approval of the parties, the processing of minerals owned by any Third Party at any Treatment Plant established under this agreement.

(c) Any Joint Venturer may mine Products produced from sources outside the Mining Area and market those Products in competition with Products produced from within the Mining Area and in competition with any other Joint Venturer.

4.4 Joint Venture Intellectual Property. Each Joint Venturer and its Related Bodies Corporate are entitled to use, on a non- exclusive world-wide royalty-free basis, Joint Venture Intellectual Property, including any modifications and enhancements, outside the Mining Area in activities other than Joint Venture Activities provided that the intended use of such Joint Venture Intellectual Property is first disclosed to each of the other Joint Venturers and is subject to the obligations of confidentiality contained in this agreement.

4.5 No partition of Joint Venture Property.

(a) Subject to any Law or contrary provision of this agreement, each Joint Venturer waives any right it may have to partition or divide Joint Venture Property, whether by way of physical partition, judicial sale or otherwise.

(b) Nothing in this clause affects a Joint Venturer's right and obligation to take separately its Percentage Share of any Products or to make an assignment or disposal as permitted by this agreement.

4.6 Perpetuity period. If the vesting of any interest of any Joint Venturer in any Joint Venture Property would, but for this clause, be void under the rule against perpetuities at common law or under any statute imposing perpetuity periods, then that interest terminates within the maximum time from the Commencement Date permitted by the law of the Nominated State for that interest to be valid.

4.7 Disposal of Joint Venture Property.

(a) The Manager may, with the approval of the Management Committee and in accordance with the Accounting Procedure, dispose of any item of Joint Venture Property it considers is no longer needed or suitable for Joint Venture Activities as economically and reasonably as possible, in accordance with the Accounting Procedure.

(b) The proceeds of recovery and disposal of Joint Venture Property, net of selling and disposal costs, must be credited to the Joint Venturers pro rata in proportion to their respective Percentage Shares.

4.8 Rehabilitation of Joint Venture Property.

(a) As soon as possible after the Commencement Date, the Manager must formuJate and present to the Management Committee for its approval, a Proposed Program and Budget for Rehabilitation designed to enable the Rehabilitation Obligations to be performed and discharged, including the proposed or forecast timing of any Mine Closure and the value of any performance bonds provided in connection with the Rehabilitation.

(b) Unless the Management Committee otherwise determines, any Approved Program and Budget for Rehabilitation must be carried out by the Manager, and must be reviewed annually and updated by the Manager and the Management Committee.

(c) From the Commencement Date, or such other date determined by the Management Committee, the Manager must establish and invest as trustee for the Joint Venturers a reserve of funds which with all interest earned (Rehabilitation Fund) must be deposited with a prime bank, or as required by Law, and applied by the Manager to meet Rehabilitation Obligations.

(d) The amounts to be paid into the Rehabilitation Fund from time to time must be determined by the Management Committee in an Approved Program and Budget for Rehabilitation.

(e) The Manager must apply the Rehabilitation Fund in the performance and discharge of the Rehabilitation Obligations in accordance with the Approved Program and Budget for Rehabilitation.

(f) Each Joint Venturer must comply with and discharge the Rehabilitation Obligations, and bear all costs, expenses, obligations and liabilities, to the extent of its Percentage Share, related to the Rehabilitation Obligations and the payments required to be made into the Rehabilitation Fund.

(g) If and when considered desirable, the Management Committee may employ an independent expert to review and report on any Program and Budget for Rehabilitation including the likely cost of proposed Rehabilitation, the value of any performance bonds lodged from time to time and whether there are any surplus funds in the RehabiJitation Fund. If the independent expert determines that there are surplus funds in the Rehabilitation Fund, such surplus must be returned to the Joint Venturers pro rata in proportion to their respective Percentage Shares.

(h) The Management Committee may determine that all or part of the Rehabilitation Fund be applied in performing and discharging obligations under an Approved Program and Budget for Mine Closure.

4.9 Mine Closure and Abandonment

(a) If the Management Committee decides to undertake Mine Closure or Abandon any Joint Venture Property, the Manager must formulate and present to the Management Committee for its approval, a Proposed Program and Budget designed to satisfy the obligations of the Joint Venturers in respect of the Mine Closure or the Joint Venture Property proposed to be Abandoned.

(b) Unless the Management Committee otherwise determines, any Approved Program and Budget for Mine Closure or Abandonment must be carried out by the Manager.

(c) For the avoidance of doubt, each Joint Venturer must comply With, and bear its Percentage Share of aU costs, expenses and liabilities relating to, Mine Closure Obligations or Abandonment, which obligations survive termination of this agreement.

SECTIONS.

MANAGEMENT COMMlTEE

S.1 Establishment of Managemeot Committee.

(a) A Management Committee is established on the Commencement Date. Each Joint Venturer must appoint a representative to the Management Committee in writing.

(b) The role of the Management Committee is to supervise the Manager in the management of the Joint Venture and to make, subject to this agreement, all strategic decisions relating to the conduct of Joint Venture Activities, including the consideration and approval of any Proposed Program and Budget, Mine Plans, and other management plans and any amendments to any Approved Program and Budget, approved Mine Plans and approved management plans.

(c) Unless the Joint Venturers otherwise unanimously agree, the Joint Venturer with the largest individual Joint Venture Interest must appoint (and may dismiss) its representative to be chair of the Management Committee. The Joint Venturer appointing the chair must cause the chair to preside at all meetings of the Management Committee.

(d) The Manager must appoint (and may dismiss) a person, who may be one of its employees, to be secretary of the Management Committee. The Manager must cause the secretary to prepare agendas for meetings, keep proper minutes of all meetings and coordinate communications among the Joint Venturers regarding meetings of the Management Committee.

(e) For any meeting of the Management Committee, a Joint Venturer may in writing appoint a person as an alternate representative for its representative and may remove any person so appointed.

(f) At meetings of the Management Committee each representative present must act solely as representative of the Joint Venturer which appointed him or her but a representative may also represent the Manager at Management Committee meetings.

(g) Each representative has full power and authority to represent and bind the Joint Venturer which appointed him or her in all matters decided by the Management Committee, and the Joint Venturer is bound by all votes cast by its representative.

(h) Any decision made by the Management Committee under this agreement is deemed to be a decision of all the loint Venturers, and each Joint Venturer is bound as if that decision was an agreement entered into by them.

5.2 Functions of Management Committee Except as otherwise provided in this agreement, the Management Committee may decide all matters relating to the conduct of Joint Venture Activities, including (but not limited to):

(a) establishing policies from time to time covering Joint Venture Activities;

(b) approving cost overruns by the Manager under any Approved Program and Budget; and

5.3 Meetings of the Management Committee

(a) All meetings of the Management Committee must be held in the capital city of the Nominated State, unless otherwise agreed by the Joint Venturers and, in default of agreement, at the office of the Manager.

(b) The Manager shall ensure that a meeting of the Management Committee is convened at least once each Year to approve a Proposed Program and Budget for the next period and at least 1 additional meeting must be called by the Manager or a Joint Venturer in each Year.

(c) The Manager shall ensure that the secretary calls meetings and gives at least 15 days prior written notice to the Manager and aU Joint Venturers entitled to be present specifying the nature of the business to be discussed and including all documentation required to be considered at the meeting. Meetings may be held on less than 15 days notice if agreed in writing by all loint Venturers entitled to be present.

(d) Meetings may be convened in person, or by video meeting or conference telephone call at which all representatives of all Joint Venturers have the opportunity to be present. All persons participating in the video meeting or conference telephone call must be able to hear each of the others.

(e) If the existing chair of the Management Committee is not present within 15 minutes after the time appointed for holding the meeting, the representatives present must elect one of themselves to be chair of the meeting.

(f) Each Joint Venturer must bear all expenses incurred by its representatives in attending meetings of the Management Committee.

(g) A representative of the Manager must attend every meeting of the Management Committee at the cost of the Joint Venturers, unless the Management Committee otherwise decides for a particular meeting or for a particular subject matter at any meeting.

5.4 Quorum

(a) A quorum for any meeting of the Management Committee is present if the representative of each Non-Defaulting Joint Venturer is in attendance at such meeting.

(b) If a quorum is not present within 30 minutes from the time appointed for the meeting, the meeting must be adjourned to the same place, day and time in the next week.

(c) If a quorum is not present at a reconvened meeting then, provided the reconvened meeting is conducted as a personal meeting (not by video or telephone meeting) and all Joint Venturers were given at least 6 days notice of the reconvened meeting, the representative(s) present at the reconvened meeting are deemed to constitute a quorum for the purposes of the business before that meeting.

5.5 Voting and decision making

(a) On any resolution or at any meeting of the Management Committee, a Joint Venturer (other than a Defaulting Joint Venturer) may cast, through its representative, the number of votes equal to its Percentage Share.

(b) At meetings of the Management Committee, the Manager or its representative is not entitled to vote, and the chair does not have a second or casting vote.

(c) Unless otherwise specified in this agreement or in Schedule l, all decisions of the Management Committee must be determined by Majority Vote. A decision specified in Schedule 1 must be made by Unanimous Vote.

(d) A resolution in writing (which may consist of one or several documents in the same terms) signed by at least one representative of each of the Non- Defaulting Joint Venturers or approved by facsimile or by authenticated email transmitted by at least one representative of each Non-Defaulting Joint Venturer and subsequently confirmed in writing is as valid and effectual as if it had been passed at a duly convened meeting of the Management Committee.

5.6 Min utes. A copy of the mi nutes of each Management Committee meeting must be given to each Joint Venturer as soon as practicable, but no later than 14 days, after each meeting. The minutes of a meeting must be submitted for approval at the next meeting held after that 14 day period and. if approved. must be signed by the chair of the later meeting and when signed are evidence of the proceedings and the decisions of the meeting to which they relate. The Manager may act on any matter approved by the Management Committee notwithstanding that the minutes have not been approved.

5.7 Sub-committees The Management Committee may from time to time create sub-committees (comprising such persons as the Management Committee thinks fit) to consider and report back to the Management Committee on any particular issues relating to Joint Venture Activities.

5.8 Loss of rights of participation and voting. Unless otherwise agreed by all Non-Defaulting Joint Venturers. a Defaulting loint Venturer (through its representative and alternate) is not entitled to attend or to vote at any meeting of the Management Committee or any subcommittee formed under this agreement or join in passing a resolution. nor will the presence of the representative of any such Joint Venturer be necessary to form a quorum at any meeting, until the relevant Default Event has been remedied.

SECTION 6.

MANAGER

6.1 Appointment of Manager. The Joint Venturers severally appoint the Manager to be manager of the Joint Venture and agent of the Joint Venturers for the purposes of this agreement from the Commencement Date, and the Manager accepts that appointment, on and subject to the provisions of this agreement.

6.2 Term of appointment of Manager. The appointment of the Manager continues:

(a) until this agreement is terminated for any reason; or

(b) until the Manager resigns, having givcn at least 180 days notice to the Joint Venturers of its intention to resign as Manager; or

(d) until the Manager suffers an Insolvency Event or commits a material breach or default in the performance of a material obligation under this agreement and fails to remedy the default within 60 days of receipt of a written notice of default served by a Joint Venturer.

6.3 Remuneration of the Manager.

(a) In consideration of the performance by the Manager of its obligations under this agreement, each Joint Venturer must pay the Manager its Percentage Share of the Management Fee as part of a Called Sum.

(b) The Management Fee may be varied by the Management Committee by Unanimous Vote.

(c) As soon as reasonably practicable after the conclusion of each month the Manager must send to each Joint Venturer a statement specifying the amount payable by that Joint Venturer on account of the Management Fee as assessed in relation to that month. The amount specified in that statement is due and payable by that Joint Venturer to the Manager within 7 days from the commencement of the next month.

6.4 Appointment of new Manager.

(a) Upon the termination of the appointment of the Manager, the Joint Venturers must promptly appoint a new Manager under the terms of this agreement, if this agreement is not otherwise terminated. The Joint Venturers must not reappoint a Manager removed for default or due to an Insolvency Event.

(b) If a new Manager cannot be appointed and act immediately, the Joint Venturer holding the largest Joint Venture Interest must act as interim manager until the new Manager is appointed and commences its duties.

(c) Upon the new or interim Manager commencing its duties, the previous Manager must immediately deliver to the new or interim Manager all Joint Venture Property and all documents, books, records and accounts relating to the Joint Venture held by it or under its control.

(d) If title to any Joint Venture Property is held in the name of the previous Manager, it must promptly transfer such title to the new or interim Manager at the cost of the Joint Venture.

6.5 Liability of Manager. Except as a Joint Venturer to the extent of its Percentage Share, the Manager is not liable to the Joint Venturers for losses sustained or liabilities incurred in connection with the Joint Venture, even if arising from the negligence of the Manager or any person for whom the Manager may be vicariously liable, except where, in the circumstances of the particular case, the Manager (or that person) has committed fraud or Gross NegJigence or WiJJfuJ Misconduct.

6.6 Full indemnity of Manager by Joint Venturers. Each Joint Venturer severally, to the extent of its Percentage Share, must indemnify and hold harmless the Manager, its directors, employees, agents and contractors (Indemnified Persons) from and against all damage, loss, expense or liability of any nature suffered or incurred by the Indemnified Persons (including any claims made by Third Parties) in connection with Joint Venture Activities, including any personal injury, disease, illness or death, or physical loss of or damage to property, of the Indemnified Persons or any Third Party, except, in respect of an Indemnified Person, where that Indemnified Person has committed fraud or Gross Negligence or Willful Misconduct.

6.7 Limited indemnity by Manager of Joint Venturers. The Manager must indemnify and hold harmless the Joint Venturers, its and their respective directors, employees, agents and contractors (N Indemnified Persons) from and against all damage, loss, expense or liability of any nature suffered or incurred by the JV Indemnified Persons (including any claims made by Third Parties) in connection with its management of Joint Venture Activities while it is the Manager, including any personal injury, disease, illness or death, or physical loss of or damage to property, of the IV lndemnified Persons or any Third Party, caused by the fraud or Gross Negligence or Willful Misconduct of the Manager, its directors, employees, agents and contractors.

SECTION 7.

FUNCTIONS, POWERS, AND DUTIES OF MANAGER

7.1 Functions of the Manager. The Manager reports to the Management Committee and must:

(a) by itself or through its employees, agents or contractors manage, direct and control Joint Venture Activities as agent for and on behalf oftbe Joint Venturers;

(b) exercise and discharge its powers and duties under this agreement in accordance with Approved Programs and Budgets and decisions made by the Management Committee;

(c) conduct Joint Venture Activities in a good, workmanlike and commercially reasonable manner in accordance with Good Mexican Mining Practice;

(d) report to the Management Committee at the places and times determined by the Management Committee; and (e) act in utmost good faith in all its dealings, as Manager, with each Joint Venturer.

7.2 Rights, powers and duties of Manager. In the course of managing, supervising and conducting Joint Venture Activities, the Manager is entitled to have possession and control of all Joint Venture Property and must, either itself or through such third parties as it may engage:

(a) (Mine Plans and other management plans) prepare and submit to the Management Committee for approvaJ Mine Plans and other management plans required by the Management Committee for the life of the Mine and such shorter periods as the Management Committee determines;

(b) (Proposed Programs and Budgets) prepare and submit to the Management Committee for approval all Proposed Programs and Budgets required to implement any approved Development, Capital Works, Mine Plans, Mine Closure and other management plans so as to comply with all applicable Laws and Authorizations, and all amendments and variations to any Approved Program and Budget;

(c) (Approved Programs and Budgets) carry out effectively and efficiently the work required to implement all Approved Programs and Budgets;

(d) (Capital Works) by itself and through contractors carry out the work required to implement the Approved Program and Budget for Capital Works so as to establish as soon as possible the approved rate and level of production of Products set out in the Mine Plans and other management plans, or to suspend, Abandon or Rehabilitate Mining and Treatment;

(e) (tenders and contracts) obtain, evaluate and accept quotes and tenders (within the limits determined by the Management Committee), and enter into, administer and enforce, as agent of the Joint Venturers, all contracts required for the performance of works and services necessary to perform this agreement and undertake Joint Venture Activities;

(f) (personnel) engage, dismiss, supervise and control all management, technical and labor personnel necessary for performance of its obligations under this agreement including determining the terms and conditions of such engagement and conducting all industrial relations;

(g) (payment and bank accounts) pay on behalf of the Joint Venturers out of funds provided by the Joint Venturers all costs and expenses incurred by the Manager in the conduct of Joint Venture Activities and for such purpose open, maintain and operate one or more separate bank accounts (within which its own funds are not commingled) on behalf of the Joint Venturers for the purposes of the Joint Venture;

(h) (overdraft) borrow on overdraft on behalf of the Joint Venturers, severally in proportion to their respective Percentage Shares, such amounts as may be approved by the Management Committee by Unanimous Vote from time to time;

(i) (foreign currency) with the prior unanimous approval of the Joint Venturers, take forward cover for any obligations in foreign currencies or pre-payor take any other appropriate action to avoid currency losses, but in no circumstances is the Manager responsible for or entitled to any currency gains and losses, such losses and gains being borne by or credited to the Joint Venturers pro rata in proportion to their respective Percentage Shares;

(j) (Laws and Authorizations) comply with all Laws and Authorizations applicable to the conduct of Joint Venture Activities, including those relating to health, safety and environmental protection, and ensure that all Authorizations required to conduct Joint Venture Activities are applied for, obtained and maintained;

(k) (Tenements) keep and renew those Tenements in good standing (including paying all rents, taxes, expenditures and other outgoings by the Due Date), and manage, administer, protect and enforce the rights and obligations of the holders under the Tenements;

(I) (Security Bonds) provide such security deposits, performance bonds and guarantees and other instruments for the performance of the Joint Venturers' obligations under any leases, contracts, service agreements or any other agreement which the Management Committee has authorised;

(m) (statutory reports) prepare, file and lodge al1 statutory reports as and when required under the Mining Act and any other applicable Laws in respect of the Mining Area (other than reports required to be submitted by the Joint Venturers in their individual capacities as Joint Venturers);

(n) (rehabilitation) formulate a rehabilitation management plan, establish a Rehabilitation Fund for approval by the Management Committee, and carry out the Rehabilitation Obligations;

(0) (insurances) effect and maintain all insurances appropriate in relation to Joint Venture Property and Joint Venture Activities, or as required by Law, and any additional insurances which the Management Committee requires to be effected, provided that the Manager must wherever possible procure that all such insurances include a provision that the insurer has no right of subrogation against any Joint Venturer or the Manager and that the Joint Venturers and Manager are to be named, to the extent of their interests, on each policy of insurance;

(p) (insurance certificates) if requested, provide full details to a Joint Venturer of all insurances effected by the Manager under this agreement, including certificates of currency;

(q) (no Encumbrances) keep the Joint Venture Property free and clear of all Encumbrances, except for those Encumbrances specifically permitted under this agreement or existing at the time of, or created concurrent with, the acquisition of such Joint Venture Property, or liens arising in the ordinary course of business which the Manager must arrange to be released or discharged in a diligent manner;

(r) (disposal of surplus equipment) dispose of by sale, assignment, abandonment or other transfer Joint Venture Property which the Manager classifies as surplus and is no longer needed for Joint Venture Activities and which the Management Committee approves tor disposal;

(s) (litigation) institute, defend, compromise or settle any court or arbitration proceedings or insurance claims commenced or threatened by or against the Manager or a Joint Venturer affecting or relating to Joint Venture Activities or Joint Venture Property, provided that:

(i) unless otherwise instructed by a Joint Venturer, the Manager may conduct such proceedings or claims for and on behalf of and in the name of each Joint Venturer;

(ii) the Manager must regularly report to the Joint Venturers the conduct of such commenced or threatened proceedings and claims, including any proceedings and claims related to environmental impacts, and keep the Joint Venturers informed of the progress of such proceedings and claims; and

(iii) the Manager may not institute, compromise or settle any court or arbitration proceedings or insurance claims exceeding an amount determined by the Management Committee without the prior approval of the Management Committee;

(t) (emergencies) take such action as the Manager may consider necessary or advisable to prevent or respond to an Emergency;

(u) (other incidental) do all other acts and things that arc reasonably necessary or desirable to fulfill its functions or are incidental to its powers and duties.

7.3 Maintenance of the Joint Venture Accounts.

(a) The Manager must maintain the Joint Venture Accounts and the Joint Venture Asset Register in accordance with the Accounting Procedure on behalf of the Joint Venturers in their Joint Venture Interests.

(b) The Manager must make available to any Joint Venturer on request copies of the Accounting Procedure, expenditure classifications and reporting formats underlying the Joint Venture Accounts.

(c) The Manager must retain all receipts, vouchers and other documents relating to Joint Venture Expenditure until directed otherwise by the Management Committee.

7.4 Limitations on Manager's obligations.

(a) Notwithstanding anything to the contrary elsewhere in this agreement, the performance by the Manager of its obligations under this agreement is subject to the Manager being provided with sufficient funds by the Joint Venturers to enable the Manager to perform those obligations.

(b) The rights and obligations of the Manager under this agreement do not extend outside the scope of the Joint Venture, unless the parties and the Manager otherwise agree.

7.5 Manager may delegate. The Manager may delegate any of its rights, remedies, powers, discretions and obligations, provided that:

(a) the Manager may only delegate the whole of its rights, remedies, powers, discretions and obligations with the approval of the Management Committee;

(b) any delegation does Dot relieve the Manager of any of its obligations or responsibilities under this agreement;

(c) the Manager informs the Management Committee at its next meeting of the identity of the delegate and the matter which has been delegated; and

(d) the delegation is at no additional cost to the Joint Venturers.

7.6 Agreement with a Related Body Corporate. The Manager may not enter into an agreement with a Joint Venturer or a Related Body Corporate of a Joint Venturer or the Manager for the supply of goods or services or both under this agreement unless the proposed agreement is on terms and conditions which are no less favourable to the Joint Venturers than an arm's length commercial agreement with a Third Party supplier which is not a Related Body Corporate of the Manager or the Joint Venturer, and the proposed agreement is approved by the Management Committee.

7.7 Litigation. A Joint Venturer has the right to participate, at its own expense, in litigation or administrative proceedings initiated by the Manager on behalf of the Joint Venturers.

SECTION 8.

PROGRAMS, BUDGETS, AND CALLED SUMS

8.1 Proposed Programs and Budgets.

(a) By no later than lst May in each Year or such other date as the Management Committee may agree, the Manager must provide the Joint Venturers with a Proposed Program and Budget prepared in accordance with the Accounting Procedure which must include:

(i) details of the Program of Joint Venture Activities proposed for the next Year, or for the period of any proposed Capital Works;

(ii) an itemized budget specifying all estimated Joint Venture Expenditure proposed to be called by the Manager on a monthly basis under this agreement; and

(iii) all available proposed major contracts and supporting documentation. (b) Each Proposed Program and Budget must include expenditure on the Tenements sufficient to comply with minimum expenditure obligations under the Mining Act and the Tenements during that period.

8.2 Approved Program and Budget.

(a) Not less than 14 days after provision ofa Proposed Program and Budget, and by no later than the end of June in each Year or such other month as the Management Committee may determine, the Management Committee must meet (as many times as necessary) and discuss the Proposed Program and Budget for the next Year, or appropriate period and adopt, with or without amendment, an Approved Program and Budget for that Year or period.

(b) Subject to the prior approval by the Management Committee to the awarding of all contracts to a value of more than the Contract Limit set out in Schedule 1, once the Proposed Program and Budget is approved by the Management Committee, the Manager must implement the Approved Program and Budget, and give a copy to each Joint Venturer.

(d) If the Management Committee fOJ any reason fails to approve a Proposed Program and Budget, prior to the commencement of the Year to which it relates, the Management Committee must continue to meet and use all reasonable efforts to reach agreement. In the meantime, the Manager must, subject to any contrary direction of the Management Committee and receipt of necessary funds, continue to:

(i) do (or, as appropriate, refrain from doing) whatever is necessary to maintain the Tenements in good standing; and

(ii) perform and discharge all its existing obligations as Manager under this agreement, the Mining Act, the Tenements or to Third Parties or otherwise; and all costs and expenses incurred by the Manager in maintaining the Tenements and performing and discharging all its existing obligations is Joint Venture Expenditure and each Joint Venturer must pay its Percentage Share of those costs and expenses as a Called Sum when due under a billing statement rendered by the Manager.

8.3 Joint Venture Expenditure not covered by Program and Budget.

(a) The Manager must not undertake any Joint Venture Activities which are not substantialJy in accordance with an Approved Program and Budget except:

(i) in case of an Emergency, the Manager may make such immediate expenditure as the Manager deems necessary for the protection of life or property including the Joint Venture Property, in which case the Manager must promptly notify the Joint Venturers of such expenditure; or

(ii) if the Manager expects there will be a cost overrun in carrying out an Approved Program which cannot be avoided by Good Mexican Mining Practice, the Manager may exceed a current Approved Budget by not more than 10%; or

(iii) if otherwise permitted by this agreement or by the Management Committee.

(b) The Manager must report to the Joint Venturers as soon as reasonably practicable any unbudgeted expenditure incurred by the Manager for whatever reason.

8.4 Costs borne in proportion to Percentage Shares. All Joint Venture Expenditure incurred in accordance with an Approved Program and Budget or as permitted by this agreement must be borne and paid by the Joint Venturers severally in proportion to their respective Percentage Shares.

8.5 Billing statements for Called Sums.

(a) On or before the lOth day of each month (or such other date or period as the Management Committee directs), the Manager must submit to each Joint Venturer a billing statement of proposed Joint Venture Expenditure prepared in accordance with the Accounting Procedure specifying:

(i) the Called Sum to be paid by that Joint Venturer to finance Joint Venture Activities set out in an Approved Program and Budget during the next month (or such other period as the Management Committee directs) including all existing and reasonably expected liabilities of the Joint Venture, less any amount standing to the credit of the Joint Venturer in the Joint Venture Accounts; and

(ii) the amount paid cumulatively to date for the current Year.

(b) The billing statement for Called Sums rendered by the Manager must be accompanied by statements reflecting all existing and expected charges and credits to the Joint Venture Accounts, summarized by appropriate classifications indicative of the nature thereof.

(c) All billing statements rendered by the Manager during any Year are presumed conclusively to be true and correct, except and only to the extent a Joint Venturer makes written objection thereto within 12 months after the date of such statement specifying the items excepted and the grounds for such exception, and makes claim for adjustment.

8.6 Payment of Called Sums.

(a) A Joint Venturer must pay each Called Sum to the Manager within 14 days of receipt ofa billing statement.

(b) All payments must be in US Dollars and made to a bank account in Mexico nominated by the Manager.

SECTION 9.

ACCOUNTS, REPORTS, AUDIT AND ACCESS

9.1 Joint Venture Accounting.

(a) The Manager must maintain separate books, accounts and records for the Joint Venture of Joint Venture Expenditure in accordance with the Accounting Procedure and generally accepted accounting principles adopted from time to time by the Institute of Chartered Accountants in Mexico, consistently applied.

(b) The Manager must develop and provide to the Joint Venturers standard accounting procedures, expenditure classifications and reporting formats in accordance with the Accounting Procedure as appropriate to the Joint Venture to satisfy the requirements of the Management Committee and the Auditor.

9.2 Reports to Joint Venturers. The Manager must keep the Joint Venturers informed of all Joint Venture Activities by submitting in writing to the Joint Venturers:

(a) within one month of the end of each quarter, quarterly progress reports which include statements of Joint Venture Expenditure and comparisons of such expenditures to the Approved Program and Budget, including quarterly summaries of data acquired;

(b) within one month of the end of each Year or other relevant period, a detailed final report after completion of each Approved Program and Budget, which must include comparisons between actual and budgeted Joint Venture Expenditure;

(i) which the Manager considers is likely materially to affect the interests of any of the Joint Venturers or the value or worth of any Joint Venturer Property of the Tenements; or

(ii) that would be required to be disclosed to the market by a Joint Venturer (or by a Related Body Corporate of a Joint Venturer) pursuant to the Listing Rules provided that, in respect of a foreign stock exchange, the Joint Venturer has previously informed the Manager of the disclosure requirements applying to the stock exchange on which its, or one of its Related Bodies Corporate's, securities are listed;

(d) within one month in each case of its completion, a copy of any material report concerning Joint Venture Activities produced by the Manager; and

(e) such other reports as the Management Committee may direct.

9.3 Joint Venture Accounts and audit.

(a) The Manager must prepare accounts for the Joint Venture reflecting the results for each Year of all transactions connected with Joint Venture Activities as disclosed by the records and accounts kept by the Manager and reflecting the Joint Venture Property in the possession or control of the Manager as at the end of such Year in accordance with this agreement (Annual Accounts) which Annual Accounts must be completed, audited by the Auditor and provided to the Joint Venturers (together with the Auditor's report) no later than 3 months after the end of the Year.

(b) Any Joint Venturer which requires any particular audit requirements to be satisfied by the Auditor may make known to the Manager in writing its additional particular requirements before the audit is completed. The Manager must provide the particular audit requirements to the Auditor forthwith and the additional cost of conducting any additional audit must be paid by that Joint Venturer.

(c) The Manager must rectify any issues or qualifications raised by the Auditor concerning the Joint Venture Accounts or Joint Venture Activities as soon as is reasonably practicable.

9.4 Individual Joint Venturer recording responsibilities.

(a) Each Joint Venturer is responsible, in respect of its Joint Venture Interest, for all financial and accounting records required by Law or to support its income tax returns or any other reports required by any Authority.

(b) The Manager must provide to each Joint Venturer such Joint Venture information prepared by the Manager in accordance with this agreement, as the Joint Venturer may reasonably require to prepare its financial and accounting records.

9.5 Joint Venturer access. A Joint Venturer is entitled during working hours at reasonable intervals, and the Manager must give, on reasonable notice at the Joint Venturer's expense and risk, access to, and the right to inspect any Joint Venture Property, including all books and records maintained by the Manager, provided that the Joint Venturer ensures that there is no interference with Joint Venture Activities.

SECTION 10.

CROSS CHARGE AND DEED OF COVENANT

10.1 Cross Charge.

(a) For the purpose of better securing:

(i) the payment of all Called Sums; and

(ii) payment to each of the Joint Venturers of any amount due and payable to it pursuant to this agreement each Joint Venturer must, as a condition precedent to entering into this agreement, or upon becoming a Joint Venturer under this agreement, execute and deliver to the other Joint Venturers a Cross Charge.

(b) Each Joint Venturer creating a Cross Charge must at its cost obtain all Authorizations in relation to the Cross Charge and duly register or lodge the same for recording in every jurisdiction and registry where registration, lodgment or recording is required or permitted to perfect the Cross Charge.

10.2 No Encumbrances without consent.

(a) Except for entry into a Cross Charge, a Joint Venturer must not create an Encumbrance over its Joint Venture Interest unless:

(i) the Encumbrance is over the whole (but not part) of its Joint Venture Interest;

(ii) the rights of the Encumbrancees and any person claiming through or under any of them (each of whom is a Chargee) must be expressly subject to this agreement, the Cross Charge created by the Joint Venturer in accordance with this agreement, and the Deed of Covenant applicable to the Encumbrance;

(iii) the Encumbrance must be limited to a floating charge (except that, in respect of the Joint Venture Interest of the Joint Venturer in any present or future freehold or leasehold land included in the Joint Venture Property or the Tenements, the charge may be fixed), and must be postponed to and ranks as a security after the Cross Charge created by the Joint Venturer in accordance with this agreement;

(iv) all funds to be made available by the proposed Chargee to the Joint Venturer and secured by the Encumbrance are, and must be applied, solely for either or both ofthe following purposes:

(A) financing a Development or other Joint Venture Activities; or

(B) purchasing all or any part of its Joint Venture Interest; and

(v) before creating the Encumbrance the Joint Venturer first:

(A) gives to the other Joint Venturers at least 14 days notice of its intention to create an Encumbrance giving particulars of its compliance with the whole of this clause; and

(B) causes all of the proposed Chargees to execute and deliver to the other Joint Venturers a Deed of Covenant.

(b) On receipt of a Deed of Covenant (in a form and content reasonably satisfactory to all the Joint Venturers) duly executed by all the proposed Chargees, the Joint Venturers must execute and deliver the Deed of Covenant to the Chargees.

(c) The Joint Venturer creating the Encumbrance must at its cost obtain all Authorizations in relation to the Deed of Covenant and duly register or lodge the same for recording in every jurisdiction and registry where registration, lodgment or recording is required or permitted to perfect the Deed of Covenant.

SECTION 11

ASSIGNMENT

11.1 Restriction on assignment.

(a) A Joint Venturer may not assign, transfer, sub-lease or otherwise deal with the whole or any part of its Joint Venture Interest otherwise than:

(i) as permitted by this agreement; or

(ii) with the consent of all the other Joint Venturers, which they may give or refuse in their absolute discretion.

(b) Except as otherwise provided in this agreement, a Defaulting Joint Venturer may not assign, transfer, sub-lease or otherwise deal with the whole or any part of its Joint Venture Interest.

11.2 Assignment to Related Body Corporate. A Joint Venturer which is not a Defaulting Joint Venturer may at any time without obtaining the prior consent of the other Joint Venturers assign the whole (but not part) of its Joint Venture Interest to a Related Body Corporate. If a Joint Venturer assigns the whole of its Joint Venture Interest to a Related Body Corporate, then that Joint Venturer:

(a) must, within 14 days following the date of the assignment, notify all of the other Joint Venturers of the identity of the assignee and its relationship to the Joint Venturer;

(b) continues to be bound by this agreement and is not released from any of its obligations or discharged from any of its liabilities under this agreement, unless all the other Joint Venturers agree; and

(c) must, by the time that the Related Body Corporate to which the whole of its Joint Venture Interest has been assigned ceases to be a Related Body Corporate of the Ultimate Holding Company of the Joint Venturer, ensure that all the rights assigned to that Related Body Corporate have been re-assigned to that Joint Venturer or assigned to another Related Body Corporate of that Joint Venturer.

An assignment under this clause is free of any rights of pre-emption set out in this agreement.

11.3 Permitted right of pre-emption.

(a) A Joint Venturer has the right of pre-emption on the terms and conditions set out in this clause in respect of a sale of the whole or part of the Joint Venture Interest by another Joint Venturer.

(b) Where a Joint Venturer receives a bona fide offer to purchase or farm-in to, or intends to make an offer to sell or farm-out, for a consideration involving payment of cash to the Joint Venture or a Joint Venturer in whatever form and over any period (including immediate cash, deferred cash, royalty, net smelter return, net profit interest and the like, and including payment of Joint Venture Expenditure), the whole or part of its Joint Venture Interest which it is willing to accept and dispose of or sell or farm-out, the Joint Venturer (Selling Joint Venturer) must promptly send written notice to the other Joint Venturers of the offer to purchase, or farm-in, or sell or farm-out making the same offer to the other Joint Venturers (Offer).

(i) set out all the details of the offer to purchase, farm-in, sell or farm-out that the Selling Joint Venturer has received, including the identity of the proposed acquirer (if then known), to enable an assessment of the acquirer's financial standing including, where applicable, details of the financial standing of the acquirer's Ultimate Holding Company and any proposed parent company guarantees; and

(ii) attach a copy of all of the Offer documents.

(d) Each other Joint Venturer (Non-Selling Joint Venturer) has the right for a period of 45 days following receipt of an Offer (Option Period) to accept the Offer in full.

(e) To accept the Offer a Non-Selling Joint Venturer which wishes to accept the Offer must give written notice of acceptance to the Selling Joint Venturer during the Option Period.

(f) Where more than one Non-Selling Joint Venturer accept the Offer from the Selling Joint Venturer the accepting Non-Selling Joint Venturers are deemed to have accepted the Offer pro rata in proportion to their respective Percentage Shares, unJess otherwise mutually agreed between them.

11.4 Selling Joint Venturer free to sell or assign. If none of the Non-Selling Joint Venturers accept the Offer then, following the Option Period, the Selling Joint Venturer is free within 6 months from the date of the Offer, and subject to subsequent completion and delivery of the required assignment documentation specified in this agreement, to dispose of, sell or farm out its Joint Venture Interest the subject of the Offer to the prospective acquirer at a price and subject to tbe terms and conditions which are no Jess favorable to the Selling Joint Venturer than the price, terms and conditions set out in the Offer.

11.5 Requirements of assignee. A sale, disposal, farm-in or farm-out of part or all of a Joint Venture Interest is not effective unless and until the assignee:

(a) obtains all relevant Authorizations; and

(b) executes and delivers to each Joint Venturer a form of assumption deed approved by the Joint Venturers (which approval must not be unreasonably withheld) under which the assignee agrees to assume the obligations of the assignor under, and be bound by the terms and conditions of, this agreement, including the obligations of the assignor under any Cross Charge granted to the assignor by the other Joint Venturers and any Deed of Covenant entered into by any Third Party with the assignor, to the extent of the Joint Venture Interest assigned or upon the Joint Venture Interest being earned under the terms of the sale, assignment, farm-in or farm-out;

(c) executes and delivers to each of the Joint Venturers a Cross Charge and Deed of Covenant, to the extent required under this agreement; and

(d) receives from the assignor an executed assignment of the benetit of any Cross Charge granted to the assignor by the other Joint Venturers and any Deed of Covenant entered into by any Third Party with the assignor.

11.6 Assignment on Change of Control or less than Minimum Interest.

(a) If a Change of Control occurs in respect of a Joint Venturer (Changed Joint Venturer), any other Joint Venturer may, by notice given to all the Joint Venturers and the Manager, cause the Changed Joint Venturer to make a Deemed Sale Offer to the other Joint Venturers.

(b) If the Joint Venture Interest of a Joint Venturer reduces to below the Minimum Interest, whether by sale, or other disposition or dilution as permitted under this agreement, any other Joint Venturer may, by notice given to all the Joint Venturers and the Manager, cause that Joint Venturer to make a Deemed Sale OtTer to the other Joint Venturers.

(c) If, within 30 days after notice of the Deemed Sale OITer is given, the Joint Venturers have not agreed on the Transfer Price an Expert must determine the Transfer Price.

(d) On agreement or determination of the Transfer Price, the Deemed Sale Offer is open for acceptance by all the other Joint Venturers pro rata in proportion to their respective Percentage Shares or such other proportions as they may agree and is irrevocable for a period of 60 days.

(e) A Deemed Sale Offer by a Changed Joint Venturer may be accepted by one or more of the other Joint Venturers. A Deemed Sale Offer of a less than Minimal Interest must be accepted by all of the other Joint Venturers.

(f) Upon a Deemed Sale Offer being accepted:

(i) the transferring Joint Venturer must sell, and the accepting Joint Venturers must purchase, the whole of its Joint Venturer Interest on the terms of the Deemed Sale Offer, subject only to obtaining all relevant Authorizations; and

(ii) completion of the transfer of the Joint Venture Interest must occur within 60 days after acceptance at which time the transferring Joint Venturer must complete and deliver all required assignment documentation, including a discharge of all Encumbrances, to the accepting Joint Venturers and the accepting Joint Venturers must pay the Transfer Price to the transferring Joint Venturer in immediately available funds subject to the relevant Authorizations being obtained.

(g) If the Deemed Sale Offer made as a result of the Change of Control is not accepted by any Joint Venturer in accordance with this clause, the Changed Joint Venturer is not liable to transfer its Joint Venturer Interest as a result of such Change of Control.

(h) If the Deemed Sale Offer of a less than Minimal Interest is not accepted by all of the other Joint Venturers in accordance with this clause, the Joint Venturer holding less than a Minimal Interest is not liable to transfer its Joint Venture Interest.

11.7 Joint Venturer ceasing to be a Joint Venturer.

(a) If a sale or assignment of the whole or part of a Joint Venture Interest is made in accordance with this agreement (other than an assignment to a Related Body Corporate) the assignor is released from obligations under this agreement arising after the sale or assignment to the extent of the Joint Venture Interest sold or assigned, other than the obligations of confidentiality contained in this agreement.

(b) If a person ceases to be a Joint Venturer, that person is not relieved of any liability under this agreement which was incurred or arose on or before the date when it ceased to be a Joint Venturer, unless this agreement otherwise provides.

SECTION 12.

DEFAULT

12.1 Breach Default Event to be remedied.

(a) The Manager or any Non-Defaulting Joint Venturer may at any time after a Breach Default Event occurs serve a written notice on the Defaulting Joint Venturer specifying the nature of the Breach Default Event and requiring it to be remedied. The Defaulting Joint Venturer must then:

(i) if the Breach Default Event is capable of being remedied, remedy the default within 14 days of its receipt of the notice of default; or

(ii) if the Breach Default Event is not remedied within 14 days or is not capable of being remedied, pay adequate monetary compensation to the Non-Defaulting Joint Venturers such payment to be made within 7 days of receipt of notification of the amount of compensation payable as determined under this agreement.

(b) The Joint Venturers must agree in writing the amount of adequate monetary compensation to be paid by the Defaulting Joint Venturer under this clause. If the Joint Venturers have not reached agreement within 14 days after the date on which notice of default is given, that amount must be determined by an Expert appointed under this agreement, who must make such determination within 30 days of his or her appointment.

(c) On agreement or determination of the amount of adequate monetary compensation under this clause, that amount, and any interest and costs payable or reimbursable under this agreement, becomes Unpaid Monies due under this agreement.

12.2 Unpaid Monies Default Event to be remedied.

(a) If an Unpaid Monies Default Event occurs, the Manager must promptly give to the Defaulting Joint Venturer a notice to pay all Unpaid Monies within 7 days after the Due Date (Non-payment Notice).

(b) If the Defaulting Joint Venturer fails to comply with the Non-payment Notice, the Manager must promptly give notice of such failure to all of the other Joint Venturers together with the amount of Unpaid Monies due but not paid (Unpaid Monies Default Notice).

(c) Each Joint Venturer receiving an Unpaid Monies Default Notice has the right (but not the obligation) after 7 days from receipt of the notice to pay to the Manager all or part of Unpaid Monies referred to in the Unpaid Monies Default Notice on behalf of the Defaulting Joint Venturer. A Joint Venturer which makes a payment of Unpaid Monies on behalf of the Defaulting Joint Venturer becomes a Paying Joint Venturer.

(d) All monies paid by the Manager or a Paying Joint Venturer on behalf of a Defaulting Joint Venturer to remedy an Unpaid Monies Default Event constitute a debt due by the Defaulting Joint Venturer and are included in indebtedness secured under the Cross Charge granted by the Defaulting Joint Venturer to the Manager or the Paying Joint Venturer, as applicable. The rights of the Manager or a Paying Joint Venturer against a Defaulting Joint Venturer under this sub-clause are in addition to any other rights or remedies available to them.

(e) Upon payment of all Unpaid Monies including all interest and costs payable or reimbursable in respect of the Default Event, the Defaulting Joint Venturer is released from liability to pay the Called Sum on which it defaulted, but otherwise remains liable to indemnify each other Joint Venturer and the Manager as provided in this agreement.

12.3 Interest and costs.

(a) Interest is payable on all Unpaid Monies not paid on or before the Due Date, from but excluding the Due Date up to and including the date upon which the moneys are paid.

(b) All interest paid on Unpaid Monies by the Manager, a Paying Joint Venturer or a Non-Defaulting Joint Venturer directly attributable to a Default Event become Unpaid Monies due for payment by the Defaulting Joint Venturer to the payer on demand.

(c) A Defaulting Joint Venturer must payor reimburse all reasonable costs and expenses (including legal costs and expenses on a full indemnity basis) incurred by the Manager, a Paying Joint Venturer or a Non-Defaulting Joint Venturer consequent upon, or which are directly attributable to remedying, a Default Event. All reasonable costs and expenses so paid become Unpaid Monies due for payment by the Defaulting Joint Venturer to the payer on demand.

(d) If the Manager or one or more Paying Joint Venturer pays Unpaid Monies on behalf of the Defaulting Joint Venturer, interest at the Agreed Interest Rate must be credited in the Joint Venture Accounts to the Manager or the Paying Joint Venturers pro rata in proportion to their respective Percentage Shares, and the Defaulting Joint Venturer must pay to the Manager on demand the aggregate of the sums so credited.

12.4 Period of Unpaid Monies Default. An Unpaid Monies Default Event must not be treated as having been remedied for the purposes of this agreement until:

(a) the Defaulting Joint Venturer has paid, or caused to be paid, all Unpaid Monies due to the Manager, the Paying Joint Venturers or the Non- Defaulting Joint Venturers (as the case may be); or

(b) the whole of the Defaulting Joint Venturer's Joint Venture Interest is acquired pursuant to this agreement by a Non-Defaulting Joint Venturer or a Third Party.

12.5 Buy-Out Election following an Unpaid Monies Default Event.

(a) If an Unpaid Monies Default Event is not remedied within 14 days from the Due Date, anyone or more Non-Defaulting Joint Venturers may (but are not obliged to) give notice to the other Joint Venturers (including the Defaulting Joint Venturer) and the Manager stating that it wishes, or they wish, to acquire the whole (but not part) of the Defaulting Joint Venturer's Joint Venture Interest pursuant to this agreement (Buy-Out Election).

(b) Where more than one Non-Defaulting Joint Venturer wishes to enforce a Buy Out Election, those Non-Defaulting Joint Venturers must do so, unless otherwise mutually agreed between them, severally in the proportion to their respective Percentage Shares.

(c) Where a Buy Out Election has been made, the Non-Defaulting Joint Venturers may not enforce their Cross Charges unless the Defaulting Joint Venturer suffers an Insolvency Event.

12.6 Preservation of other rights. Nothing in this agreement affects the right of a party to:

(a) subject to observance of the Dispute resolution provisions of this agreement, commence litigation in respect of a Default Event; or

(b) exercise any other rights or remedies available to the party under this agreement or at law or in equity.

SECTION 13.

ENFORCEMENT OF BUY-OUT ELECTION

13.1 Effect of Buy-Out Election. Upon a Buy-Out Election being made, the Non-Defaulting Joint Venturers which have agreed or elected to pursue the Buy-Out Election (Enforcing Joint Venturers) must, within 28 days from the Buy-Out Election coming into effect, subject to the agreement or determination and acceptance of the fair market value and the date for completion (Completion Date), acquire the whole (but not part) of the Defaulting Joint Venturer's Joint Venture Interest, provided that if the relevant Unpaid Monies Default Event is remedied in full in accordance with this agreement before the Completion Date, the Buy-Out Election under this agreement lapses.

13.2 Determination of fair market value and Completion Date.

(a) The Defaulting Joint Venturer and the Enforcing Joint Venturers must use their best endeavors to agree on the fair market value of the Defaulting Joint Venturer's Joint Venture Interest as at the date of the relevant Default Event, and the Completion Date.

(b) If the parties cannot agree on the fair market value and the Completion Date within 14 days of the Buy-Out Election coming into effect, then:

(i) those matters may be determined by an Expert appointed under this agreement, who must make a determination within 30 days of appointment;

(ii) the Expert may determine that the Defaulting Joint Venturer's Joint Venture Interest has nil or a negative value; and

(iii) no payment is due if the amount of consideration payable to the Defaulting Joint Venturer is determined to be negative.

(c) Upon the fair market value and the Completion Date being determined by the expert, cach Enforcing Joint Venturer must within 7 days of receiving the expert's determination advise the Defaulting Joint Venturer whether it accepts or rejects the expert's determination and whether or not it agrees to pay the fair market value of the Defaulting Joint Venturer's Joint Venture Interest on the Completion Date as determined by the expert.

(d) Where more than one Enforcing Joint Venturer agrees to pay the fair market value for the Defaulting Joint Venturer's Joint Venture Interest on the Completion Date as agreed or determined by the expert, the Enforcing Joint Venturers must do so, unless otherwise mutuaJly agreed between them, severally in proportion to their respective Percentage Shares.

(e) If no Enforcing Joint Venturer agrees to pay the fair market value for the Defaulting Joint Venturer's Joint Venture lnterest on the Completion Date as agreed or determined by the expert, anyone or more of the Enforcing Joint Venturers may enforce the Cross Charge.

13.3 Consequence of Buy-Out Election. On the agreement, or determination and acceptance, of the fair market value of the Defaulting Joint Venturer's Joint Venture Interest and the Completion Date, the Defaulting Joint Venturer must on or before the Completion Date:

(a) transfer the whole of its Joint Venture Interest to the Enforcing Joint Venturers by executing and delivering all deeds and documents necessary for, and complete (and register, if required by the law of the Nominated State), the assignment of its Joint Venture Interest to the Enforcing Joint Venturers; and

(b) pay all stamp duty and other transfer costs which become payable upon the Enforcing Joint Venturers acquiring its Joint Venture Interest, and, in exchange for the assignment and transfer of the Joint Venture lnterest, the Enforcing Joint Venturers must severally in proportion to their respective Percentage Shares, or in such other proportions they agree:

(d) assume all future obligations and liabilities in respect of the whole of the Defaulting Joint Venturer's Joint Venture Interest;

(e) pay the amount of consideration to the Defaulting Joint Venturer being the fair market value agreed or determined and accepted for the Joint Venture Interest being acquired by the Enforcing Joint Venturers less:

(i) all amounts due from the Defaulting Joint Venturer to any party or Third Party under or pursuant to this agreement;

(ii) all amounts paid by the Non-Defaulting Joint Venturers or the Manager to cure any relevant Default Event of the Defaulting Joint Venturer, including interest and costs payable under this agreement; and

(iii) the amount of all liability of the Defaulting Joint Venturer to meet existing Rehabilitation Obligations and Mine Closure Obligations as determined by the Manager as at the date of payment.

(f) pay any amounts deducted by them from the fair market value for payment to any party or Third Party, to that party or Third Party as soon as reasonably possible; and

(g) release the Defaulting Joint Venturer from aJl claims the Enforcing Joint Venturers have against the Defaulting Joint Venturer in connection with the relevant Default Event.

13.4 Release of Defaulting Joint Venturer. Upon completion (and registration, if required) of the assignment of its Joint Venture Interest to the Enforcing Joint Venturers, including the payment of all transfer costs, the Defaulting Joint Venturer is released from its obligations under this agreement arising after completion of the assignment, other than the obligations of confidentiality set out in this agreement.

13.5 Attorney. For so long as it is in default, each Defaulting Joint Venturer irrevocably appoints the Enforcing Joint Venturers jointly and severally as its lawful attorney to act for it in its name or otherwise as the Manager (acting reasonably) deems fit for the purposes of:

(a) doing all such acts and executing all such documents as may appear to the Enforcing Joint Venturers (acting reasonably) to be necessary or desirable to comply with the obligations and, to the extent necessary to perform obligations, to exercise the rights of the Defaulting Joint Venturer under this agreement; and

(b) with the agreement of all other Non-Defaulting Joint Venturers (if any), terminating the Joint Venture and doing all things reasonably necessary or desirable for completion and winding up of Joint Venture Activities The Defaulting Joint Venturer is bound by all acts of the Enforcing Joint Venturers as attorney pursuant to this clause.

SECTION 14.

TERM, SUSPENSION AND TERMINATION OF JOINT VENTURE

14.1 Term of agreement. This agreement commences on the date of this agreement and continues until the earliest to OCCUI of any of the fol1owing Termination Events:

(a) all Non-Defaulting Joint Venturers (for themselves and as attorney for each Defaulting Joint Venturer) agree in writing to terminate the Joint Venture;

(b) the Management Committee determines unanimously that aU economically recoverable reserves of Products in the Mining Area have been recovered;

(c) the Management Committee determines unanimously that Joint Venture Activities should cease due to a failure to obtain approval under the Act for any required proposals for the extension of Mining into any undeveloped deposits within the Mining Area upon terms and conditions acceptable to all the Joint Venturers; or

(d) the Joint Venturers cease to hold any interest in any Tenement and further until completion of the winding up of aJl Joint Venture Activities.

14.2 Suspension of Joint Venture Activities or Mine Closure.

(a) The Manager may, at any time subsequent to 12 months from the Commencement Date, submit to the Management Committee a Proposed Program and Budget for the temporary suspension or permanent Mine Closure of all or any part of Joint Venture Activities.

(b) The Manager must implement any Approved Program and Budget for the suspension of Joint Venture Activities or Mine Closure, together with any other directions that the Management Committee may give to the Manager in respect of that Approved Program and Budget.

(c) If Joint Venture Activities are suspended under an Approved Program and Budget, then the Management Committee may at any subsequent time direct that those Joint Venture Activities resume.

14.3 Winding up of Joint Venture.

(a) Immediately following the occurrence of a Termination Event, the Manager must commence winding up Joint Venture Activities including:

(i) arranging for an evaluation of the Shutdown Costs as at the date of the termination of the Joint Venture" including the cost of satisfying the Rehabilitation Obligations and the Mine Closure Obligations;

(ii) taking such steps to dispose of Joint Venture Property as it is directed to take by the Management Committee;

(iii) satisfying all Rehabilitation Obligations and Mine Closure Obligations;

(iv) to the extent reasonably possible, meeting the Shutdown Costs from the proceeds of realization of Joint Venture Property;

(v) after paying the Shutdown Costs distributing any net amount remaining from the proceeds of realization of Joint Venture Property among the Joint Venturers pro rata in proportion to their respective Percentage Shares; and

(vi) requiring payment of a Called Sum from each Joint Venturer to the extent that the proceeds of realization of Joint Venture Property are insufficient to meet the Shutdown Costs.

(b) If a Joint Venturer fails to pay any Called Sum to meet the Shutdown Costs, the Non-Defaulting Joint Venturers are obliged, severally in proportion to their respective Percentage Shares, to contribute any amount unpaid by the Defaulting Joint Venturer and the Defaulting Joint Venturer is liable to repay all amounts paid by the Non-Defaulting Joint Venturers, together with interest payable under this agreement. The amount paid by the Non- Defaulting Joint Venturers is a debt payable by the Defaulting Joint Venturers to the Non-Defaulting Joint Venturers on demand.

14.4 Certain obligations continue beyond termination. Upon termination of this agreement for any reason, all rights and obligations of the Joint Venturers to each other in their capacity as Joint Venturers cease, other than:

(a) the obligations of confidentiality set out in this agreement; and

(b) the obligation to pay any actual or contingent liabilities relating to Joint Venture Activities, including the cost of all Rehabilitation Obligations and Mine Closure Obligations and any severance, sickness and other employee benefit costs incurred or imposed in connection with Joint Venture Activities, or otherwise arising from this agreement, that have not been discharged as at the date of termination.

14.5 Extension of term. The Joint Venturers may at any time consult with each other for the purpose of determining whether the term of this agreement should be extended beyond the period it would otherwise expire. A failure by any Joint Venturer to agree to such extension may not be referred to any dispute resolution procedure.

SECTION 15.

CONFIDENTIALITY

15.1 Agreement is confidential. The terms and conditions of this agreement and all information flowing to any Joint Venturer from Joint Venture Activities, or in relation to Joint Venture Activities, other than information which is already within the public domain independently of any breach by a party of this agreement (Confidential Information), are confidential.

15.2 No disclosure except as permitted. Except as permitted by this agreement, each Joint Venturer and the Manager undertakes that it will keep confidential all Confidential Information received by it and that neither it nor its employees will, without the consent of each of the other Joint Venturers, disclose any Confidential Information to any Third Party.

15.3 Permitted disclosure. A Joint Venturer may disclose Confidential Information

(a) to the professional advisers or agents of that Joint Venturer;

(b) to a Related Body Corporate ofthat Joint Venturer;

(c) as required by Law or by any competent Authority, whether the obligation arises as a consequence of the act of the Joint Venturer or otherwise;

(d) to any stock exchange pursuant to Listing Rules which require disclosure;

(e) where reasonably necessary for the purposes of any arbitration or administrative or legal proceedings involving only the Joint Venturers; or

(f) to a Third Party, and its advisers, bona fide tendering for or negotiating the purchase of all or part oftbe interest of that Joint Venturer in the Joint Venture or for the provision of finance to that Joint Venturer but only if the Third Party and its advisers first covenant in writing to the disclosing Joint Venturer to preserve confidentiality of information disclosed in the same terms as this clause. A Joint Venturer making a permitted disclosure under this clause must take all reasonable steps to ensure that the person to whom disclosure is made keeps confidential all Confidential Information disclosed.

15.4 Confidential lnformation disclosed only as necessary.

(a) Each Joint Venturer and the Manager must take all steps reasonably necessary to ensure that the Confidential Information obtained is disclosed to and known by only those persons who need to acquire that knowledge in the course of their duties.

(b) Each Joint Venturer, but not the Manager, may use for its own internal purposes not related to Joint Venture Activities any geological, geophysical, geochemical, metallurgical or operational concept, model or principle of any kind, even if derived from the Confidential Information.

15.5 Publicity and disclosure.

(a) Except for an announcement or other disclosure required by Law or permitted by this agreement, no public announcement naming a Joint Venturer or other public disclosure may be made in relation to Joint Venture Activities or Joint Venture Property unless the text of the announcement or disclosure has been approved by the other Joint Venturers.

(b) To the extent that an announcement or other disclosure is required by Law, the Joint Venturers must use all reasonable endeavors to agree, as soon as reasonably practicable, the wording of such announcement or disclosure before it is made.

15.6 Obligations exist beyond termination. The obligations in relation to Confidential Information imposed by this agreement continue until all the Confidential Information ceases to be confidential despite the termination of this agreement for any reason.

SECTION 16.

DISPUTE RESOLUTION

16.1 Limitation on proceedings. The parties agree that it is a condition precedent to the commencement of any litigation proceedings by a party in respect of a dispute under, or in relation to, this agreement (Dispute) that the party has complied fully with the agreed process for resolving a Dispute (Dispute Resolution Process) under this clause (regardless of the level or levels on which the Dispute has previously been considered) except:

(a) where the Dispute concerns the non-payment of monies due, the quantum of which is certain; or

(b) if the party seeks urgent interlocutory, injunctive or declaratory relief; or

(c) if the other party has failed to observe the requirements of this clause and the party seeks to enforce compliance with the Dispute Resolution Process in respect of the Dispute.

16.2 Dispute Resolution Process.

(a) Where a Dispute arises between the parties, a party may give notice to the other parties initiating a Dispute Resolution Process in respect of the Dispute (Dispute Notice) which Dispute Notice must:

(i) state that the notice is given under this subclause;

(ii) describe the nature of the Dispute; and

(iii) nominate a representative of the party who is authorized to negotiate and settle the Dispute on the party's behalf.

(b) Each other party must withi n 7 days after receipt of a Dispute Notice nominate in writing to the other parties a representative authorized to negotiate and settle the Dispute on its behalf

(c) The parties' representatives must negotiate in good faith with a view to resolving the Dispute within 21 days after the receipt of the Dispute Notice, (or such longer period as those representatives agree), failing which the Dispute must be immediately referred to the Chief Executive Officers of the parties.

(d) The Chief Executive Officers must negotiate in good faith with a view to resolving the Dispute within 14 days of the Dispute being referred to them (or such longer period as the Chief Executive Officers agree) failing which, the Dispute may be immediately referred by any party by notice to mediation or Expert determination under this agreement.

16.3 Mediation. Mediation of a Dispute must:

(a) be conducted in the Nominated State by the person or body agreed to by the parties or, failing agreement within 35 days after receipt of the Dispute Notice, as nominated by the President for the time being of the Law Society of the Nominated State on request by either party;

(b) be conducted in accordance with such rules as may be agreed by the parties or, failing agreement within 35 days after receipt of the Dispute Notice, in accordance with the rules nominated by the person or body agreed or nominated to conduct the mediation;

(c) be at the cost and expense of the parties equally (except that each party must pay its own advisers, consultants and legal fees and expenses) unless the parties otherwise agree; and

(d) ifnot earlier resolved, be continued for a period expiring on the date being 14 days after the nomination of the mediator (or such other period as the parties may agree) after which any party may at any time after that date seek Expert determination in accordance with this agreement or commence litigation proceedings in respect of the Dispute.

16.4 Dispute Resolution Process Dot to interrupt Joint Venture Activities. The parties must ensure that neither the commencement nor conduct of any Dispute Resolution Process, including mediation or Expert determination, causes any interruption to Joint Venture Activities or to the performance by the parties of their respective obligations under this agreement, nor will it affect any of the time limits fixed in this agreement unless the performance of Joint Venture Activities or a party under this agreement is materially affected by the submission of the matter in dispute to arbitration, litigation or by the result of the litigation or arbitration.

16.5 Clause does not apply to matters where consent required. If this agreement refers to the parties reaching agreement on a matter or the consent of any party being given then, except where this agreement requires that consent or agreement is not to be unreasonably withheld, the Dispute Resolution Process cannot be used to resolve a dispute between the parties in relation to the reaching of that agreement or the giving of that consent.

SECTION 17.

EXPERT DETERMINATION

17.1 Expert determination. Where a matter is permitted or required by this agreement to be determined by an Expert or if the parties otherwise agree, any party may refer the matter to the expert determination of an Expert and the following provisions apply:

(a) subject to any other determination by the Expert, the costs of obtaining the determination must be at the cost and expense of the parties equally (except that each party must pay its own advisers, consultants and legal fees and expenses) unless the parties otherwise agree;

(b) the Expert determination must be conducted by a person or body agreed to by the parties or, failing agreement within l4 days after a party proposes a person or body, by the person or body nominated by the Institute of Arbitrators & Mediators Mexico; and

(i) the Expert must act in that capacity and not as an arbitrator;

(ii) the Expert's finding is final and binding upon the parties In the absence of manifest error;

(iii) the Expert must determine which party or parties should bear the costs of any such determination and in what proportion. In making this decision, the Expert must consider the degree to which he or she considers such party was unreasonable in failing to agree to the matter; and

(iv) the Expert may employ consultants to assist the Expert to carry out his or her duties.

SECTION 18.

FORCE MAJEURE

18.1 Meaning of force xxxxxx. Where The term "Force Majeure" as used in this agreement means any cause which is not reasonably within the control of the Joint Venturer or the Manager claiming relief by reason of Force Majeure, which cause may include:

(a) an act of God;

(b) strike, lockout, stoppage, ban or other types of labour difficulty whether at the Mining Area, railway or port or otherwise;

(c) war (whether declared or undeclared), blockade, act of the public enemy, act of terrorism, revolution, insurrection, riot or civil commotion;

(d) earthquake, lightning, fire, flood, storm, cyclone, explosion or epidemic;

(e) embargoes or restraint by an Authority (including heritage related restraints);

(f) unavailability of equipment or transport, or inability to access the Tenements or any relevant portion of them; and any other cause whether of the kind specifically listed above or otherwise which is not reasonably within the control of the Joint Venturer or Manager claiming Force Majeure.

18.2 Relief. If, as a direct result of Force Majeure, a Joint Venturer or the Manager becomes unable, wholly or in part, to perform an obligation (other than an obligation to pay money) under this agreement:

(a) that Joint Venturer or the Manager may give the other Joint Venturers notice of the Force Majeure with reasonably full particulars and, insofar as is known to it, the probable extent to which it will be unable to perform, or be delayed in performing its obligation;

(b) on giving the notice of the Force Majeure, that obligation is suspended but only to the extent that and for so long as it is affected by the Force Majeure;

(c) the Joint Venturer or Manager affected by Force Majeure must use all reasonable diligence to overcome or remove the effect of the Force Majeure as quickly as possible;

(d) if the Force Majeure cannot be removed, overcome or abated to an extent that allows resumption of performance within 6 months (or such other period as the Joint Venturers agree) from the date the Joint Venturers first became so affected, the Joint Venturers must consider and determine whether this agreement must be modified or terminated; and

(e) notwithstanding the Force Majeure, the Joint Venturers must continue to pay the Manager such monies as are necessary to maintain the Joint Venture Property in good condition.

18.3 Labor disputes. The obligation to use all reasonable diligence to overcome or remove the effect of the Force Majeure does not require the affected Joint Venturer or Manager to:

(a) settle any strike, or other labor dispute; or

(b) contest the validity or enforceability of any law, regulation or legally enforceable order by way of legal proceedings.

18.4 Resumption. The affected Joint Venturer or Manager must resume performance of its obligations as soon as, and to the extent that, it is no longer affected by the Force Majeure.

SECTION 19.

NOTICES

19.1 Form of Notice. Unless expressly stated otherwise in this agreement, any notice, certificate, consent, approval, waiver or other communication in connection with this agreement (Notice) must be in writing or given by electronic transmission, signed by the sender (if an individual) or an Authorized Officer of the sender and marked for the attention of the person identified in the Particulars or, if the recipient has notified otherwise, then marked for attention in the last way notified.

19.2 When Notices are taken to have been given and received.

(a) A Notice is regarded as given and received:

(i) if delivered by hand, when left at the address given in the Particulars;

(ii) ifsent by pre-paid post, on the 3rd day following the date of postage;

(iii) if given by fax, on production of a transmission report by the machine from which the fax was sent which indicates that the fax was sent in its entirety to the recipient's fax number, unless the recipient informs the sender that the Notice is illegible or incomplete within 4 hours of it being transmitted; and

(iv) if sent by email, at the time shown in the delivery confirmation report generated by the sender's email system which indicates that the email was sent to the recipient's email address.

(b) A Notice delivered or received other than on a day on which trading banks are open for business in the capital city of the Nominated State (Business Day) or after 5.00pm (recipient's time) is regarded as received at 9.00am on the following Business Day. A Notice delivered or received before 9.00am (recipient's time) is regarded as received at 9.00am.

SECTION 20.

ANCILLARY PROVISIONS

20.1 Entire agreement This agreement contains everything the parties have agreed and overrides and supersedes all earlier agreements in relation to the Joint Venture.

20.2 Enurement. The provisions of this agreement enure for the benefit of and are binding on each party and their respective successors and permitted assigns.

20.3 No third party reliance or inducement. Each party warrants and agrees that when entering into this agreement it relied exclusively on the terms expressly contained in this agreement and on:

(a) its own inspections, investigations, skill and judgment; and

(b) opinions and advice obtained by it and did not rely on any statements, inducements, undertakings, representations or advice given or made, whether orally or in writing, by or on behalf of any other party, including without limitation by any officer, employee or agent of any party.

20.4 Amendment. No modification, variation or amendment of this agreement is of any force unless it is in writing and has been signed by each of the parties.

20.5 Severability. If any provision of this agreement is void, illegal or unenforceable, it may be severed without affecting the enforceability of other provisions in this agreement.

20.6 Waiver. A waiver of any right, power or remedy under this agreement must be in writing signed by the party granting it. A waiver is only effective in relation to the particular right, power or remedy in respect of which it is given. It is not to be taken as an implied waiver of any other right, power or remedy or as an implied waiver of that right, power or remedy in relation to any other occasion.

20.7 Applicable law.

(a) This agreement is governed by and must be construed in accordance with the laws of the Nominated State.

(b) The parties submit irrevocably to the non-exclusive jurisdiction of the Courts of the Nominated State and all Courts competent to hear appeals from those Courts.

20.8 Fees and charges.

(a) Each party must bear its own costs for the preparation, execution, delivery and performance of this agreement.

(b) Unless otherwise agreed, all stamp duties and registration fees paid relating to the registration and performance of this agreement, and of all other documents arising out of this agreement, are Joint Venture Expenditure.

20.9 Counterparts. This agreement may be executed in any number of counterparts and by different parties in separate counterparts. Each counterpart when so executed is deemed an original but all of which together constitute one and the same instrument.

{REMAINDER OF PAGE INTENTIONAllY LEFT BLANK}

IN WITNESS WHEREOF, the parties hereto have executed this agreement on the date first above written.

CANAAN:

BY CANAAN MINING CO., LTD

/s/ Xxxxxxx Xxxx

---------------------~------------------------
and acting by Xxxxxxx Xxxx

GEOTECH

BY GEO JS TECH GROUP

/s/ Xxxxx Xxx

---------------------~------------------------

and acting by Xxxxx Xxx

LIUS

/s/ Xxxx Xxxxxx Xxxxxxx Xxxxxxx

---------------------~------------------------
By Xxxx Xxxxxx Xxxxxxx Xxxxxxx

MODIIFICATION AGREEMENT FOR JOINT VENTURE

CANAAN MINING CO., LTD. Represented by:

Xx. Xxxxxxx X. Xxxx, Authorized Representative

And

GEO JS TECH GROUP (Geotech) Represented by:

Mr. Xxxxx Xxx, Chief Financial Officer

And

XXXX XXXXXX XXXXXXX XXXXXXX

have had discussions about a proposed joint venture for development and production of the iron ore mine lmo (San Simon) in Baja California, Mexico, and have agreed on the following points at the end of their discussions held during the meeting on July 19, 20 II:

1. Xxxx and Geotech will continue their existing Contract of Mercantile Association in Participation.

2. Xxxx, Geotech, and Canaan Mining will form a joint venture company with an agreed paid-up capital.

3. Canaan Mining or an affiliate company, shall participate in the new joint venture by contributing no less than $3.5M USD but no more than $5M USD in the form of equipment or working capital.

4. Xxxx, shall participate in the new joint venture by contributing the mineral rights / concession to Imo (San Simon). Xxxx represents that there are 23MM tons of measured reserves on the concession.

5. Geotech, shall participate in the new joint venture by providing mining services as described in a Mining Service Agreement. The services shall include the complete documentation required to ensure commercial production of the iron sands, including technical data, technology, engineering, design, and layout of the mine. These mining services will be provided at cost and are currently estimated to be - $60 USD per ton.

6. Canaan Mining shall own 50% and Geotech own 50% of the equity in the joint venture. Xxxx will receive lump sum of $200,000 USD for given up 33.33% of the equity in the joint venture. Geotech and Xxxxxx Mining shall responsible $100,000 each for this consideration. Xxxx Xxxxxx Xxxxxxx Xxxxxxx will be compensating with $12.00 royalty for each MTS delivery to China or any place in the world from EI Xxxx Mine (IMO).

7. Geotech will help the joint venture in the selection of the machinery required and the materials to be used in production.

8. If Geotech decides to withdraw its service participation or cannot perform its obligations under the Mining Service Agreement, Geotech's equity shares of the joint venture shall be offered to Canaan Mining or its affiJiates at a rate to be fixed by the auditors of the joint venture company.

9. Xxxx, Geotech, and Canaan Mining, or its affiliates, affirm that they shall implement the project in good faith and shall take all necessary steps to see the project through expeditiously. They shall not negotiate with any other parties for a similar project, and the negotiations in progress, if any, shall be terminated forthwith.

This Modification of Joint Venture shall be valid up as of July 19, 2011, and ALL parties hereto shall be binding thereafter from their obligations herein written.

FOR

CANAAN MINING CO, LTD.

/s/ Xxxxxxx Xxxx

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

XXXXXXX XXXX

FOR

XXXX XXXXXX XXXXXXX XXXXXXX

/s/ Xxxx Xxxxxx Xxxxxxx Xxxxxxx

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

XXXX XXXXXX XXXXXXX XXXXXXX

FOR

GEO JS TECH GROUP

/s/ Xxxxx Xxx

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

Xxxxx Xxx

SCHEDULE 1

Basic Particulars

Approvals Period (Clause 2.2): 90 days from the date of this agreement, or such longer period as the parties may agree.

Conditions Precedent (Clause 2.3):

1. The obtaining, by each Joint Venturer, of all Authorizations required by it under the Mining Act. This Condition Precedent 1 is not capable of waiver.

2. The execution and delivery of a Cross Charge by each Joint Venturer to each other Joint Venturer. This Condition Precedent 2 is not capable of waiver.

3. The execution and delivery of the Mining Service Agreement by Geotech and the Joint Venture.

4. The obtaining of a Representation and Warrantee, from Xxxx, that the Mine contains 23M tons of measured reserves at Fe 63% grade.

Contract Limit (Clause 8.2(b)): US$100,000

Manager (Clause 1.1): Xxxxxxx X. Xxxx, residing at 188 Ming Xxx Xx, #00-000, Xxx Xxxx, Xxxxxxxx, Xxxxx.

Management Fee (Clauses 1.1 and 6.3): US$5,000 per month being an amount which is intended to reimburse the Manager for its indirect or overhead costs which it, or its Related Bodies Corporate, incur in providing corporate, administration and other services for the Joint Venture and which are not otherwise chargeable as Joint Venture Expenditure under the Accounting Procedure.

Mine (Clause 1.1) : Imo (San Simon) Project in San Xxxxxxx, Baja, Mexico, inclusive of the following tenements:

IMO FRACC.I - Latitude: 30° 26' 22.894" N, Longitude: 115° 53' 46.085" W

IMO FRACC.II - Latitude: 30° 30' 17.821" N, Longitude: 115° 48' 44.150" W

IMO FRACC.III - Latitude: 30° 28' 29.328" N, Longitude: 115° 49' 23.457" W

IMO FRACC.IV - Latitude: 30° 26' 22.894" N, Longitude: 115° 53' 46.085" W

IMO FRACC.V - Latitude: 30° 26' 5.693" N, Longitude: 115° 53' 40.206" W

Minimum Interest (Clause 1.1): 10% Joint Venture Interest.

Mining Act (Clause 1.1): The Mining Act refers to the federal statute that governs the grant, use, cancellation and expiration of mining concessions in Mexico. The Law was originally published in the Federal Official Gazette (“FOG”) on June 26, 1992, and then further amended on December 24, 1996, April 28, 2005, and on June 26, 2006.

Nominated State (Clause 1.1): Baja California, Mexico.

Passmark (Clause 1.1): 51% Percentage Share of Joint Venturers entitled to vote plus at least 2 Joint Venturers voting in favor.

Products (Clause 1.1) : Iron Ore Magnetic Concentrate or Pelletized Iron Ore.

Matters requiring a Unanimous Vote (Clauses 1.1 and 5.5(c)):

1. Approval of the terms and conditions of all contracts between the Manager and a related body of the Manager, or a Joint Venturer with a value above US$25,000.

2. Creation of any Encumbrance, other than a Cross Charge, over the whole or any part of the Joint Venture Interest of a Joint Venturer, unless such Encumbrance arises by operation of Law.

3. Use by an individual Joint Venturer of any asset of the Joint Venture.

4. Sale or disposition of any item of Joint Venture Property which exceeds $10,000 and which is material to the operation of the Joint Venture.

5. Surrender of the whole or any part of the Mining Area except as required for minor boundary adjustments, or under the Mining Act.

6. Suspension, closure, termination or Abandonment of all or any material part of Joint Venture Activities for any reason, including extended Force Majeure.

7. Adjustment, after commencement, of production capacity by more than ± 10% of the previously accepted nameplate capacity.

8. Third Party use or toll processing of Third Party Ore in the Treatment Plant.

9. Variation of the Management Fee payable to the Manager.

10. Number, duration, charge and terms of secondees to Manager by Joint Venturers which are not the Manager.

11. Suspension of Mining for 3 months or more, other than through Force Majeure.

12. Borrow on behalf of the Joint Venturers.

13. Take forward cover for, or hedge, foreign currencies obligations or pre-pay or take any other appropriate action to avoid currency losses.

14. A change to the Accounting Procedure for the time being of the Joint Venture including the appointment and removal of auditors; and

15. Removal of the Manager and the appointment of another person as manager;

16. Determination of, or any amendment to, or waiver of any condition or provision of any of this agreement;

17. Approval of the terms and conditions of all contracts between the Manager and a Related Body Corporate of the Manager;

19. Adoption of a Sole Risk Proposal as a Joint Venture Activity;

20. Use by an individual Joint Venturer of any asset of the Joint Venture;

21. Creation of any Encumbrance over the whole or any part of the Joint Venture Interest of a Joint Venturer;

22. Determination of the amounts to be paid by Joint Venturers into the Rehabilitation Fund to meet the Rehabilitation Obligations;

23. Approval of all Proposed Programs and Budgets;

24. Material revision of an Approved Program or of an Approved Budget

25. Any expenditure or commitment to expenditure (whether capital or operating) by an amount in excess of [10%] of the total expenditure provided for in an Approved Budget;

26. The incurring of a debt on behalf of the Joint Venturers as obligors to any Joint Venturer or a Related Body Corporate of a Joint Venturer in any amount or to any other person in an amount in excess of [$250,000] outstanding at any one time (otherwise than under an Approved Budget);

27. The giving by the Joint Venturers jointly of any guarantee (whether direct or indirect) to secure the obligation of any person arising under this agreement or otherwise in relation to Joint Venture Property;

28. The institution, defense, compromise or settlement of any court or arbitration proceedings involving the Joint Venture involving an amount in excess of $100,000;

29. The compromise or settlement of any insurance claim involving an amount in excess of $100,000;

30. Except as expressly provided otherwise in the agreement, any decision to commence or prepare a Feasibility Study;

31. Any decision to establish a Mining operation;

32. Any decision to suspend or defer Joint Venture Activities or place any Mining operation on a care and maintenance basis or to commence or recommence operations at a Mining operation;

33. Entry into or the termination of any contract or subcontract relating to the Joint Venture involving a commitment to expenditure, whether capital or operating, in excess of $25,000;

34. Approving all exploration, mining, milling, financial and other reports relating to the Mining activities;

35. Any decision to abandon or surrender Joint Venture Property;

36. Any decision to abandon or surrender, or any amendment to or waiver in respect of, any Tenement;

37. Whether or not expressly contemplated in an Approved Program or Approved Budget, approval of the sale or disposal of any Joint Venture Property having a market value in excess of $25,000;

38. Whether or not expressly contemplated in an Approved Program or Approved Budget, approval of any purchase of any item of property (whether real or personal, tangible or intangible), having a value in excess of [$25,000];

39. Any decision to terminate, remove, appoint or replace a Manager or to enforce any of the provisions of the agreement against the Manager;

40. Where the Joint Venture is conducted by a Manager, the appointment and removal of the senior officers of the Manager including the chief executive officer, chief financial officer, chief operations officer and any resident or mine manager;

41. The making of a contract between the Manager and a Related Body Corporate of a Party;

42. The appointment of a resident manager of any Mining operation conducted by the Joint Venture;

SCHEDULE 2

List of Tenements as of the Commencement Date

Exhibit A

No.	Name	Status	Area	Grant Date	Expiry Date
1	IMO FRACC I	Exploitation Permit	340.7652	June 10, 2009	June 9, 2059
2	IMO FRACC II	Exploitation Permit	101.4737	June 10, 2009	June 9, 2059
3	IMO FRACC III	Exploitation Permit	50.2226	June 10, 2009	June 9, 2059
4	IMO FRACC IV	Exploitation Permit	149.8983	June 10, 2009	June 9, 2059
5	IMO FRACC V	Exploitation Permit	132.4321	June 10, 2009	June 9, 2059

SCHEDULE 3

Accounting procedures will be according to United States Generally Accepted Accounting Principles (GAAP).

SCHEDULE 4

Cross charge will be set by Manager and have to unanimous approval by the Broad of Directors.

SCHEDULE 5

Xxxx Xxxxxx Xxxxxxx pledged the deed of IMO to the joint venture interest under the Mexico Federal Law on Commercial Companies. (Refer to Schedule 2 properties).

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JOINT VENTURE AGREEMENT

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