GROSS ROYALTY AGREEMENT

Exhibit 10.6

GROSS ROYALTY AGREEMENT

THIS AGREEMENT made as of the 1st day of October 2007.

BETWEEN:

XXXXX X. XXXXXXX of Elephant Butte, New Mexico (hereinafter referred to as the “Royaltyholder”)

- and -

BE RESOURCES INC., a company incorporated under the laws of Colorado (hereinafter referred to as the “Royaltypayor”)

WHEREAS the Royaltypayor has on this day acquired a 100% interest in the Property;

AND WHEREAS part of the compensation of the Royaltyholder, for his services, is the grant of the royalty provided for in this agreement (the “Royalty”);

AND WHEREAS capitalized words and expressions shall have the meanings set forth in Article 3 of this agreement;

THIS AGREEMENT WITNESSES THAT, in consideration of the premises and the respective covenants and agreements hereinafter set forth in this agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties do covenant and agree with one another as follows:

ARTICLE 1  OBLIGATION

1.1 If the Royaltyholder becomes entitled to any payments under this agreement, the Royaltypayor shall calculate, as at the end of each calendar quarter subsequent to the Completion Date, the Gross Profits in accordance with generally accepted accounting principles consistently applied in the United States.

1.2 Subsequent to the Completion Date, the Royaltypayor shall within 60 days of the end of each calendar quarter in which the Royaltypayor is in receipt of any Gross Receipts:

(a) deliver to the Royaltyholder a statement indicating:

(i) the Gross Receipts during the calendar quarter;

(ii) the deductions therefrom made in the order itemized in §2.1 of this agreement;

(iii) the amount of Gross Profits remaining, if any; and

(iv) the amount of those Gross Profits, if any, to which the Royaltyholder is entitled; and

(b) pay or cause to be paid to the Royaltyholder that amount equal to 1% of the Gross Profits, if any.

1.3 If at any time after the date of this agreement any party or an affiliate of any party (the “Acquiring Party”) stakes or otherwise acquires, directly or indirectly, any right to or interest in any mining claim, licence, lease, grant, concession, permit, patent, or other mineral property (the “Acquired Properties”) located wholly within three miles of the boundary of each mining lease and claim comprising the Property (the “Area of Interest”), the Acquired Properties shall be subject to the Royalty and, notwithstanding any other provisions of this agreement, all amounts to be calculated under this agreement shall relate to the Property and Acquired Properties, and Exploration Costs shall include the costs of acquisition of the Acquired Properties. Notwithstanding the foregoing, a particular Acquired Property shall not be subject to the Royalty if the Acquired Property was acquired from a third party (and not through staking) and the Acquired Property is already subject to a royalty interest other than to a government entity.

1.4 The parties intend that the Royalty, to the extent permissible under applicable laws, constitutes an interest in the Property and, accordingly agree that the Royalty will run with and be binding upon title to the Property and binding upon the successor in title to the Property. Nothing herein is to be construed however to limit or restrict the ability of the Royaltypayor to sell the Property or any portion thereof at any time and in its complete discretion.

ARTICLE 2  GROSS PROFITS DEFINED

2.1 “Gross Profits” means the Gross Receipts minus deductions therefrom, to the extent of but not exceeding the amount of those Gross Receipts, of the then net unrecovered amounts of Costs, with Costs to be deducted in the following order:

(a) Marketing Costs;

(b) Distribution Costs; and

(c) Taxes and Royalties.

2.2 For greater certainty, in calculating Gross Profits at any time, each of the classes of Costs shall constitute a separate pool from which all Costs deducted on any previous quarterly calculation shall be removed and to which Costs of those classes recorded since the date of this agreement (in the case of the first quarterly calculation) or since the date of the last quarterly calculation (in the case of any calculation subsequent to the first quarterly calculation) shall be added.

2.3 If the application of credits to a pool of Costs results in a negative balance in that pool of Costs, the amount of any negative balance from a Cost pool shall be applied to reduce the balances then remaining in pools itemized in §2.1 of this agreement in the order itemized.

ARTICLE 3  DEFINITIONS

3.1 In this agreement, including the recitals hereof, the following words and expressions shall have the following meanings, except where the context otherwise necessarily requires:

(a) “Completion Date” means the date on which the Royaltypayor determines that the project of preparing and equipping a Mine for commercial production is complete;

(b) “Costs” means the following items of outlay and expenses, with respect to the Property or any Mine recorded by the Royaltypayor in accordance with its accounting practices applicable from time to time:

(i) “Distribution Costs” which means all Costs of

(1) transporting Products from a Mine or a concentrating plant to a smelter, refinery or other place of delivery designated by the purchaser and, in the case of concentrates tolled, of transporting the metal from a smelter to the place of delivery designated by the purchaser; and

(2) handling, warehousing and insuring the Products; and

(3) in the case of concentrates tolled, of smelting and refining, including any penalties thereon or in connection therewith;

(ii) “Marketing Costs” which means such reasonable charge for marketing of ores and concentrates sold or of concentrates tolled as is consistent with generally accepted industry marketing practices;

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(iii) “Taxes and Royalties” which means all taxes (other than income taxes), royalties (other than the Net Profit Royalty) or other charges or imposts provided for pursuant to any law or legal obligation imposed by any government if paid by the Royaltypayor;

(c) “Gross Receipts” means the aggregate of all receipts, recoveries or amounts received by or credited to the Royaltypayor in connection with this agreement including, without limiting the generality of the foregoing, all the receipts from the sale of the Royaltypayor’s proportionate share of Products produced from the Mine;

(d) “Mine” means the workings established and assets acquired in order to bring the Property or a portion thereof into commercial production, including, without limiting the generality of the foregoing, development headings, plant and concentrator installations and all infrastructure, plant, housing, airport, roads and other facilities;

(e) “Net Profit Royalty” means that royalty of 20% of net profits payable to Great Western Exploration, LLC, South West Exploration, LLC, Xxxxxxx Resources, LLC and Xxxxxxx Xxxxxxx pursuant to the NPR Royalty Agreements dated October 1, 2007, between BE Resources Inc., on the one hand, and Great Western Exploration, LLC, South West Exploration, LLC, Xxxxxxx Resources, LLC and Xxxxxxx Xxxxxxx, on the other;

(f) “Products” shall mean ores, concentrates and minerals mined from the Property, or solutions, concentrates or cathodes retrieved through leaching or solution mining or solution extraction/electrowinning or other processing of mineralized material mined from the Property;

(g) “Property” shall mean mining leases and claims in Xxxxxxx County and Sierra County, New Mexico set forth in Schedule A and any of the Acquired Properties; and

(h) “Trading Activities” shall have the meaning set out in §6 of this agreement.

ARTICLE 4  ROYALTYPAYOR TO DETERMINE OPERATIONS

4.1 The Royaltypayor will have complete discretion concerning the nature, timing and extent of all exploration, development, mining and other operations conducted on or for the benefit of the Property and may suspend operations and production on the Property at any time it considers prudent or appropriate to do so. The Royaltypayor will owe the Royaltyholder no duty to explore, develop or mine the Property or to do so at any rate or in any manner other than that which the Royaltypayor may determine in its sole and unfettered discretion. The Royaltypayor may, but will not be obligated to treat, mill, heap xxxxx, sort, concentrate, refine, smelt or otherwise process, beneficiate or upgrade the ores, concentrates and other products at sites located on or off the Property, prior to sale, transfer or conveyance to a purchaser, user or consumer. The Royaltypayor will not be liable for mineral values lost in processing under sound practices and procedures, and no royalty will be due on any such lost mineral values.

ARTICLE 5  COMMINGLING

5.1 Ores, concentrates and derivatives mined or retrieved from the Property may be commingled with ores, concentrates or derivatives mined or retrieved from other properties. All determinations required for calculation of Gross Profits, including without limitation the amount of the metals contained in or recovered from ores, solutions, concentrates or derivatives mined or retrieved from the Property, the amount of the metals contained in or recovered from commingled ores, solutions, concentrates or derivatives, gross revenues from the sale of Products, and costs and expenses allocated to the Property or Products shall be made in accordance with prudent weighing, sampling, assaying, engineering, metallurgical and cost accounting practices.

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ARTICLE 6  TRADING ACTIVITIES

6.1 The Royaltypayor may, but need not, engage in forward sales, futures trading or commodity options trading, and other price hedging, price protection and speculative arrangements (“Trading Activities”) which may involve the possible delivery of base or precious metals produced from the Property. The parties acknowledge and agree that the Royaltyholder shall not be entitled to participate in the proceeds or be obligated to share in any losses generated by the Trading Activities.

6.2 The Royaltypayor may retain any base or precious metals produced from the Property in which case the value of such retained metals shall be added to the Gross Receipts. The value of such metals shall be determined, in the case of gold or silver, by taking the average London Bullion Brokers PM fixing price for the calendar quarter of production or for other metals the average spot price of the New York Commodities Exchange final daily spot price for the applicable metal for the calendar quarter of production for the applicable metal.

ARTICLE 7  ADJUSTMENTS AND VERIFICATION

7.1 Payment of any Gross Profits by the Royaltypayor shall not prejudice the right of the Royaltypayor to adjust the statement supporting the payment; provided, however, that all statements presented to the Royaltyholder by the Royaltypayor for any quarter shall conclusively be presumed to be true and correct upon the expiration of 12 months following the end of the quarter to which the statement relates, unless within that 12 month period the Royaltypayor gives notice to the Royaltyholder making claim on the Royaltyholder for an adjustment to the statement which will be reflected in subsequent payment of Gross Profits as settled.

7.2 The Royaltypayor shall not adjust any statement in favour of itself after the expiration of 12 months following the end of the quarter to which the statement relates.

7.3 The Royaltyholder may from time to time request reasonable supporting documentation for statements that are within the period contemplated in §7.1 and the Royaltypayor, acting in good faith, shall provide the same promptly to the Royaltyholder.

7.4 If the supporting documentation and any discussion with the Royaltypayor do not resolve the Royaltyholder’s concerns, the Royaltyholder shall be entitled upon notice to the Royaltypayor to request from the Royaltypayor that mutually acceptable auditors be requested to provide the Royaltyholder with their opinion that any statement delivered pursuant to §1.2 of this agreement in respect of any quarterly period falling within the 12 month period immediately preceding the date of the Royaltyholder’s notice has been prepared in accordance with this agreement. When giving any notice aforesaid, the Royaltyholder will articulate the matter or matters of concern to it. Within 45 days from the date the auditors are provided with the Royaltyholder’s notice, the auditors shall provide a written statement to the parties setting forth the auditors’ opinion with respect the matter or matters of concern as described in the Royaltyholder’s notice. The audit opinion provided by the auditors shall be conclusive and legally binding upon the parties.

7.5 The time required for giving the audit opinion contemplated in §7.4 of this agreement shall not extend the time for the taking of exception to and making claim on the Royaltyholder for adjustment as provided in §7.1 of this agreement.

7.6 The cost of the audit opinion requested pursuant to §7.4 of this agreement shall be solely for the account of the Royaltyholder unless the audit opinion reveals an error which is adverse to the Royaltyholder of greater than 3% in which case the cost of the audit opinion shall be solely for the account of the Royaltypayor.

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7.7 The provisions of §7.4 are intended to provide an effective mechanism for the Royaltyholder to resolve its unresolved concerns regarding Gross Profits accounting and not to effect a regular audit of the Gross Profits calculation.

ARTICLE 8  BUYDOWN AND RIGHT OF FIRST REFUSAL

8.1 The Royaltypayor shall have the right at any time by providing written notice to the Royaltyholder to purchase up to one-half or some other lesser fraction of the Royalty at the fair market value thereof (as of the last day of the last calendar quarter prior to the date on which the written notice is sent by the Royaltyholder) as determined by an independent business valuator retained by the Royaltypayor. The purchase and sale of the Royalty interest under this section shall be completed on that date which is 90 days following the date on which notice is sent by the Royaltypayor.

8.2 The Royaltypayor shall have a right of first refusal to acquire the Royalty. If the Royaltyholder wishes to dispose of the Royalty or any portion thereof, the Royaltyholder must first offer to sell it to the Royaltypayor for a price and on terms which the Royaltyholder establishes including the financial value of any non cash consideration specified. The Royaltyholder will provide the Royaltypayor with a written notice setting out the terms of the proposed sale (the “Notice”) and the Royaltypayor will have 90 days following receipt of the Notice to advise the Royaltyholder if the Royaltypayor wishes to acquire the offered interest. If the Royaltypayor does not exercise its right of first refusal, the Royaltyholder shall then have 180 days to dispose of the Royalty or the specified portion thereof to a third party for the same or greater price and on the same term or terms no more favourable to the third party. The right of first refusal shall not apply to a transfer by the Royaltyholder to affiliated corporations provided such a corporation remains so for at least three years.

ARTICLE 9  GENERAL

9.1 This agreement shall be governed by and construed in accordance with the laws of the State of New Mexico, and each of the parties submits to the jurisdiction of the courts of the State of New Mexico for the resolution of any dispute or controversy arising in connection herewith.

9.2 Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be: (i) delivered by courier, or (ii) sent by registered mail (postage prepaid), unless there is a postal strike then in progress; or (iii) transmitted by facsimile transmission (but only if a fax number is provided below for the party in question), addressed or sent as follows:

(i) if to the Royaltyholder:

000 Xxxxxxx Xxxxxx

Xxx 000

Xxxxxxxx Xxxxx, XX

00000

Facsimile: 000-000-0000

(ii) if to the Royaltypayor:

000 Xxxxxxx Xxxxxx

Xxx 000

Xxxxxxxx Xxxxx, XX

00000

Attention: Xxxxx X. Xxxxxxx

Facsimile: 000-000-0000

(a) any such notice or other communication shall be deemed to have been given and received: (i) if delivered by courier, on the day on which it is so delivered; (ii) if sent by registered mail, on the

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10th day after posting, but if there shall be any intervening postal strike, then on the 10th day after the end of such postal strike; and (iii) if transmitted by facsimile transmission, on the next business day (in the city where the recipient of the facsimile transmission resides) after the day of successful transmission.

(b) any party may at any time change its address for service from time to time by giving notice to the other parties in accordance with this Section.

9.3 Except as expressly provided in this agreement, this agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior agreements, understandings, negotiations and discussions, whether written or oral. There are no warranties, conditions or representations (including any that may be implied by statute) and there is no agreement in connection with such subject matter, except as specifically set forth or referred to in this agreement.

9.4 No amendment, modification or waiver of any provision of this agreement shall be binding on any party unless consented to in writing by such party. No waiver of any provision of this agreement shall constitute a waiver of any other provision, nor shall any waiver constitute a continuing waiver unless otherwise expressly provided.

9.5 Time shall be of the essence of this agreement.

9.6 If any provision of this agreement is determined to be invalid or unenforceable by an arbitrator or a court of competent jurisdiction from which no further appeal lies or is taken, that provision shall be deemed to be severed, and the remaining provisions of this agreement shall not be affected thereby and shall remain valid and enforceable.

9.7 The Royaltyholder acknowledges that it has had the opportunity to obtain legal representation in connection with this agreement. Any rule of construction to the effect that any ambiguity is to be resolved against the drafting party shall not be applicable in the interpretation of this agreement. The parties further acknowledge to each other that they have each entered into the transactions herein contemplated voluntarily, and without duress or undue pressure from any other party.

9.8 This agreement shall enure to the benefit of and shall be binding on and enforceable by the parties and, where the context so permits, their respective successors and permitted assigns. This agreement may not be assigned by the Royaltyholder without (a) the prior written consent of the Royaltypayor, and (b) the execution by the assignee of an agreement agreeing to be bound by and subject to the terms set forth in this agreement.

9.9 If any day on or before which any action is required to be taken under this agreement is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day. “Business Day” means any day except Saturday, Sunday or a statutory holiday in the State of Colorado.

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IN WITNESS WHEREOF the parties have duly executed and delivered this agreement effective as of the date first above written.

	ROYALTYHOLDER:
	/s/ XXXXX X. XXXXXXX
	XXXXX X. XXXXXXX
	ROYALTYPAYOR:
	BE RESOURCES INC.
	Per:	/s/ XX XXXXX
		Authorized Signatory

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SCHEDULE A

MINERAL INTERESTS

The mining leases include:

State of New Mexico lease number HG 0059, HG 0060 and HG 0061

Mining lease dated January 2, 2004 between Xxxxx X. Xxxxxxx as leasee, and Xxxxxxx Xxxx Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx as lessor, as assigned by Xxxxx X. Xxxxxxx to Great Western Exploration, LLC on February 3, 2004 (the “Xxxxxxxx Lease”)

The mining claims include:

The following mining claims located in Sections 3, 27 and 34, Township 10 South, Range 0 Xxxx, X.X.X.X, Xxxxxx Xxxxxx Xxx Xxxxxx:

Claim Name		NMMC		Book		Page
Bertrandite #34		170506		100		2116
Bertrandite #35		170507		100		2117
Bertrandite #54		170602		100		3317
Bertrandite #65		170792		101		625
Bertrandite #66		170793		101		626
Bertrandite #67		170794		101		627

Claim Name		NMMC		Book		Page
Berts Clay #92		173538		105		45
Berts Clay #93		173539		105		44

AND

The following mining claims located in Sections 6, 13, 14, 15, 20, 21, 22, 24, 26, 27, 28, 33 and 34, Township 9 South, Range 8 West, N.M.P.M., Xxxxxxx County, New Mexico:

Claim Name		NMMC		Book		Page		Claim Name		NMMC		Book		Page
Xxxx #1		171160		511		783		Xxxx #2		171161		511		784
Xxxx #3		171162		511		785		Xxxx #4		171163		511		786
Xxxx #5		171164		511		787		Xxxx #6		171165		511		788
Xxxx #7		171166		511		789		Xxxx #8		171167		511		790
Xxxx #9		171168		511		791		Xxxx #10		171169		511		792
Xxxx #11		171170		511		793		Xxxx #12		171171		511		794

Claim Name		NMMC		Book		Page		Claim Name		NMMC		Book		Page
Special Clay #100		171152		511		1938		Special Clay #101		171153		511		1939
Special Clay #102		171154		511		1940		Special Clay #103		171155		511		1941
Special Clay #104		171156		511		1942		Special Clay #105		171157		511		1943
Special Clay #106		171158		511		1944		Special Clay #107		171159		511		1945

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Claim Name		NMMC		Instrument #		Claim Name		NMMC		Instrument #
Berts Clay #1		173447		200576333		Berts Clay #2		173448		200576333
Berts Clay #3		173449		200576333		Berts Clay #4		173450		200576333
Berts Clay #5		173451		200576333		Berts Clay #6		173452		200576333
Berts Clay #7		173453		200576333		Berts Clay #8		173454		200576333
Berts Clay #9		173455		200576333		Berts Clay #10		173456		200576333
Berts Clay #11		173457		200576333		Berts Clay #13		173459		200576333
Berts Clay #14		173460		200576333		Berts Clay #15		173461		200576333
Berts Clay #16		173462		200576333		Berts Clay #17		173463		200576333
Berts Clay #18		173464		200576333		Berts Clay #19		173465		200576333
Berts Clay #21		173467		200576333		Berts Clay #22		173468		200576333
Berts Clay #23		173469		200576333		Berts Clay #24		173470		200576333
Berts Clay #25		173471		200576333		Berts Clay #26		173472		200576333
Berts Clay #27		173473		200576333		Berts Clay #28		173474		200576333
Berts Clay #29		173475		200576333		Berts Clay #30		173476		200576333
Berts Clay #31		173477		200576333		Berts Clay #33		173479		200576333
Berts Clay #34		173480		200576333		Berts Clay #35		173481		200576333
Berts Clay #36		173482		200576333		Berts Clay #37		173483		200576333
Berts Clay #38		173484		200576333		Berts Clay #39		173485		200576333
Berts Clay #40		173486		200576333		Berts Clay #42		173488		200576333
Berts Clay #43		173489		200576333		Berts Clay #44		173490		200576333
Berts Clay #45		173491		200576333		Berts Clay #46		173492		200576333
Berts Clay #47		173493		200576333		Berts Clay #48		173494		200576333
Berts Clay #49		173495		200576333		Berts Clay #50		173496		200576333
Claim Name		NMMC		Instrument #		Claim Name		NMMC		Instrument #
Berts Clay #51		173497		200576333		Berts Clay #52		173498		200576333
Berts Clay #53		173499		200576333		Berts Clay #54		173500		200576333
Berts Clay #55		173501		200576333		Berts Clay #56		173502		200576333
Berts Clay #57		173503		200576333		Berts Clay #58		173504		200576333
Berts Clay #59		173505		200576333		Berts Clay #60		173506		200576333
Berts Clay #61		173507		200576333		Berts Clay #62		173508		200576333
Berts Clay #63		173509		200576333		Berts Clay #64		173510		200576333
Berts Clay #65		173511		200576333		Berts Clay #66		173512		200576333
Berts Clay #67		173513		200576333		Berts Clay #68		173514		200576333
Berts Clay #69		173515		200576333		Berts Clay #70		173516		200576333
Berts Clay #71		173517		200576333		Berts Clay #72		173518		200576333
Berts Clay #73		173519		200576333		Berts Clay #74		173520		200576333
Berts Clay #75		173521		200576333		Berts Clay #76		173522		200576333
Berts Clay #77		173523		200576333		Berts Clay #78		173524		200576333
Berts Clay #79		173525		200576333		Berts Clay #80		173526		200576333
Berts Clay #81		173527		200576333		Berts Clay #82		173528		200576333
Berts Clay #83		173529		200576333		Berts Clay #84		173530		200576333
Berts Clay #85		173531		200576333		Berts Clay #86		173532		200576333
Berts Clay #87		173533		200576333		Berts Clay #88		173534		200576333
Berts Clay #89		173535		200576333		Berts Clay #90		173536		200576333
Berts Clay #91		173537		200576333

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Claim Name		NMMC		Book		Page		Claim Name		NMMC		Book		Page
Bertrandite #9		170487		508		1583		Bertrandite #30		170468		508		1580
Bertrandite #10		170486		508		1584		Bertrandite #31		170467		508		1581
Bertrandite #11		170485		508		1585		Bertrandite #39		170511		508		5046
Bertrandite #12		170484		508		1586		Bertrandite #41		170513		508		5048
Bertrandite #15		170481		508		1567		Bertrandite #45		170515		508		5050
Bertrandite #18		170478		508		1570		Bertrandite #56		170598		509		1692
Bertrandite #21		169878		504		1845		Bertrandite #57		170597		509		1691
Bertrandite #22		170475		508		1573		Bertrandite #58		170596		509		1690
Bertrandite #25		170472		508		1576		Bertrandite #59		170595		509		1689
Bertrandite #26		170471		508		1577		Bertrandite #64		170590		509		1684
Bertrandite #29		170608		509		2469

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