SERVICE AGREEMENT

THIS SERVICE AGREEMENT IS ENTERED INTO BY AND BETWEEN, ON THE ONE HAND, A COMPANY CALLED CABORCA INDUSTRIAL S.A. DE C.V.,  REPRESENTED IN THIS ACT BY C.P.A. IGNACIO LIMON GONZALEZ, ACTING IN THE CAPACITY OF LEGAL REPRESENTATIVE, AND, ON THE OTHER HAND, MINERA SANTA RITA, S. DE R.L. DE C.V., REPRESENTED BY ENG. MARCO ANTONIO GALINDO RAMIREZ, ACTING IN THE CAPACITY OF LEGAL REPRESENTATIVE, AND BOTH PARTIES HEREINAFTER REFERRED TO AS THE SERVICE PROVIDER AND THE CLIENT, RESPECTIVELY, BY VIRTUE OF THE FOLLOWING RECITALS AND CLAUSES:

I.- BY THE SERVICE PROVIDER THROUGH ITS LEGAL REPRESENTATIVE:

I.1.- THE SERVICE PROVIDER STATED THAT THE PARTY HE REPRESENTS IS A STOCK CORPORATION OF VARIABLE CAPITAL DULY ORGANIZED UNDER THE LAWS OF THIS COUNTRY, AS EVIDENCED IN INSTRUMENT NUMBER 2,370 ,BOOK 1 (ONE), EXECUTED ON MARCH 23, TWO THOUSAND FIVE, BEFORE ATTY. SALOMON GRIEGO GARCIA, PUBLIC BROKER NUMBER 01, IN THE CITY OF HERMOSILLO, SONORA.

I.2.- THE SERVICE PROVIDER FURTHER STATED THAT THE ACTIVITIES OF THE PARTY HE REPRESENTS CONSIST OF THE FOLLOWING, AMONG OTHERS:

A).- TO PROVIDE ALL KINDS OF PERSONNEL OR WORKERS TO ALL KINDS OF COMPANIES, THE RENDERING OF PROFESSIONAL CONSULTANCY SERVICES IN AREAS SUCH AS TAX, LABOR, CIVIL, CRIMINAL AND CORPORATE LAW, AS WELL AS THE EXECUTION OF ADMINISTRATIVE, ECONOMIC AND ACCOUNTING STUDIES AND CONSULTANCY SERVICES IN GENERAL.

B).- THE SERVICE PROVIDER FURTHER STATED THAT THE CORPORATE PURPOSE IS THE CREATION OF SOURCES OF EMPLOYMENT BY RENDERING SPECIALIZED SERVICES AND, IN GENERAL, ANY TYPE OF SERVICES TO VARIOUS COMPANIES, ORGANIZATIONS OR INSTITUTIONS ESTABLISHED IN THE MARKET, AS WELL AS BY RENDERING ALL KINDS OF SERVICES INVOLVING COLLECTION, MANAGEMENT, COURIER, BOOKING, PARCEL AND SERVICES AS COMMISSION AGENT, MEDIATOR, REPRESENTATION, CONSULTANCY, MANAGEMENT, TOP MANAGEMENT, TRAINING, SURVEILLANCE, CONTROL, SUPERVISION AND TRAINING OF PERSONNEL AND, IN GENERAL, BY RENDERING ALL KINDS OF SERVICES, WHICH ARE REFERRED TO BY WAY OF ILLUSTRATION, BUT NOT LIMITATION, TO DOMESTIC AND FOREIGN INDIVIDUALS OR CORPORATIONS AND ENTITIES UNDER ANY ACTS, AGREEMENTS OR CONTRACTS THAT MAY BE REQUIRED FOR SUCH PURPOSE.

C).- THE MANAGEMENT AND SUPPLY OF MATERIAL, FINANCIAL AND HUMAN RESOURCES, INCLUDING MANAGEMENT OF PERSONNEL, INVESTMENT, ASSETS AND ANY OTHER TYPE OF RESOURCES THAT ALLOW FOR THE SOUND ECONOMIC DEVELOPMENT AND THE ATTAINMENT OF THE CORPORATE PURPOSE OF ANY INDIVIDUAL OR CORPORATION.

I.3.- THE LEGAL REPRESENTATIVE OF THE SERVICE PROVIDER STATED THAT THE POWERS AND AUTHORITY CONFERRED UPON HIM BY THE PARTY HE REPRESENTS HAVE NOT BEEN REVOKED EITHER IN WHOLE OR IN PART AS OF THE DATE OF EXECUTION HEREOF.

I.4.- THE SERVICE PROVIDER STATED THAT THE DOMICILE OF CHOICE FOR PURPOSES HEREOF IS LOCATED AT CALLE LAMBERTO HERNANDEZ No. 73 ORIENTE, COLONIA CENTRO, IN THE CITY OF CABORCA SONORA.

I.5.- LASTLY, THE SERVICE PROVIDER STATED THAT IT IS IN ITS BEST INTEREST TO UNDERSIGN THIS SERVICE AGREEMENT WITH THE CLIENT.

II. BY THE CLIENT THROUGH ITS LEGAL REPRESENTATIVE.

II.1.- THE CLIENT STATED THAT HE IS AWARE OF THE PENALTIES APPLICABLE TO THOSE WHO RENDER FALSE STATEMENTS, THAT THE PARTY HE REPRESENT IS A CORPORATION ORGANIZED IN ACCORDANCE WITH THE MEXICAN LAW AND PROVIDED PROOF OF THE EXISTENCE OF SAID COMPANY IN THE FORM OF A COPY OF THE ARTICLES OF INCORPORATION CONTAINED IN INSTRUMENT NUMBER 2,129, VOLUME 67, UNDERSIGNED ON MAY 07, 2001, EXECUTED BEFORE ATTY. MARIA LUISA LIZARRAGA GARCIA, WHO IS IN CHARGE OF NOTARY’S PUBLIC OFFICE NUMBER 35, IN THE CITY OF HERMOSILLO, SONORA. FURTHERMORE, THE CLIENT STATED THAT HE HAS SUFFICIENT POWERS AND AUTHORITY TO BIND THE PARTY HE REPRESENTS TO THE TERMS OF THIS AGREEMENT.

II.2.- FURTHERMORE, HE STATED THAT THE ACTIVITIES OF THE PARTY HE REPRESENTS PERTAIN TO THE MINING AND METALLURGIC INDUSTRY IN GENERAL AND, THEREFORE, THEY INCLUDE THE EXECUTION OF ANY AGREEMENT OR CONTRACT THAT MAY BE NECESSARY FOR, RESULT FROM OR BE ASSOCIATED WITH SAID INDUSTRY.

II.3.- THE CLIENT STATED THAT THE DOMICILE OF CHOICE IS LOCATED AT CALLE LAMBERTO HERNANDEZ No. 73 ORIENTE, COLONIA CENTRO, IN THE CITY OF CABORCA SONORA.

 II.4.- LASTLY, THE CLIENT STATED THAT IT IS IN ITS BEST INTEREST TO UNDERSIGN THIS SERVICE AGREEMENT WITH THE SERVICE PROVIDER.

III.1.- THE PARTIES THAT UNDERSIGNED THIS AGREEMENT STATED THAT THEY MUTUALLY ACKNOWLEDGE THE LEGAL CAPACITY WITH WHICH THEY APPEAR TO EXECUTE THE SAME, THEREBY WAIVING ANY LEGAL ACTION, MEAN OR REMEDY TO NULLIFY THIS AGREEMENT.

III.2.- BOTH PARTIES FURTHER STATED THAT, IN THE EXECUTION HEREOF, THERE IS NO WILFUL INTENT, VIOLENCE AND/OR ANY DEFECT AFFECTING THE WILL OR CONSENT THAT WOULD IN TURN INVALIDATE THIS AGREEMENT; SAID PARTIES STATED THAT THEY MUTUALLY AGREE TO UNDERSIGN THIS AGREEMENT.

HAVING STATED THE FOREGOING, THE PARTIES HERETO HAVE AGREED HERETO AND THEREFORE, THEY AGREE TO THE FOLLOWING:

THE SUBJECT-MATTER OF THIS AGREEMENT IS TO RENDER PROFESSIONAL LEGAL AND ACCOUNTING SERVICES; FURTHERMORE, THE SERVICE PROVIDER AGREES TO RENDER AND PROVIDE TO THE CLIENT THE ELEMENTS REQUIRED SO THAT THE CLIENT CAN ATTAIN THE CORPORATE PURPOSE; THE FOREGOING INCLUDES PROVIDING ANY SKILLED PERSONNEL REQUIRED THAT IS ESSENTIAL FOR PURPOSES OF ENSURING THE CLIENT’S EFFICIENT ACTIVITIES, WITHOUT THEREBY CREATING A LABOR OR SUBORDINATE RELATIONSHIP BETWEEN THE CLIENT AND ANY INDIVIDUAL PROVIDED BY THE SERVICE PROVIDER SO THAT THE CLIENT EFFICIENTLY CONDUCTS ITS REGULAR ACTIVITIES.

THE TERM OF THIS AGREEMENT SHALL BE FIVE YEARS FOLLOWING THE DATE OF EXECUTION HEREOF.

FOR THE AFORESAID SERVICES, THE CLIENT SHALL PAY A SUM WHICH SHALL BE VARIABLE AS TO THE AMOUNT AND TIME OF PAYMENT. SAID AMOUNT AND TIME OF PAYMENT SHALL BE AGREED UPON BY BOTH PARTIES PRIOR TO THE RENDERING OF SERVICES. IN ANY CASE, SAID AMOUNT SHALL BE DETERMINED PURSUANT TO THE COSTS INCURRED BY THE SERVICE PROVIDER WHILE RENDERING THE SERVICES. FURTHERMORE, SAID AMOUNT SHALL BE CALCULATED BASED ON THE QUANTITY AND QUALITY OF THE SERVICES RENDERED BY THE SERVICE PROVIDER AND REQUIRED BY THE CLIENT.

IN ALL INSTANCES, ANY COSTS INCURRED BY THE SERVICE PROVIDER TO PROVIDE HUMAN RESOURCES TO THE CLIENT HEREUNDER SHALL BE TAKEN INTO ACCOUNT TO DETERMINE THE TOTAL SUM TO BE PAID FOR SAID SERVICES, NOTWITHSTANDING SAID HUMAN RESOURCES ARE PROVIDED ON A WEEKLY, TEN-DAY, FIFTEEN-DAY OR MONTHLY BASIS. FURTHERMORE, TO THE COST INCURRED BY THE SERVICE PROVIDER TO PROVIDE THE PERSONNEL THROUGH WHICH THE SERVICES ARE RENDERED PLUS ANY ADDITIONAL COSTS RESULTING FROM THE OPERATION, EXCLUSIVE OF A SENIORITY BONUS PROVISION, A 5% PLUS THE VALUE-ADDED TAX MUST BE ADDED TO SAID COSTS IN ORDER TO CALCULATE THE TOTAL SUM TO BE PAID AS CONSIDERATION.

SAID PAYMENT SHALL BE MADE ON BUSINESS DAYS AND TWENTY-FOUR HOURS PRIOR TO THE DATE OF PAYMENT BY MEANS OF A DEPOSIT MADE PRIOR TO 13:00 HOURS.

FOR PURPOSES HEREOF, BUSINESS DAYS SHALL BE ANY MONDAY, TUESDAY, WEDNESDAY, THURSDAY AND FRIDAY ON WHICH BANK INSTITUTIONS ARE OPEN TO THE GENERAL PUBLIC AND ON WHICH TRANSACTIONS BY CORPORATIONS ARE PERMITTED.