CONTRACT ON A SINO-FOREIGN EQUITY JOINT VENTURE SICHUAN JIHAI LITHIUM LTD. THIS CONTRACT IS ENTERED INTO

Exhibit 10.1

CONTRACT ON A SINO-FOREIGN EQUITY JOINT VENTURE

SICHUAN JIHAI LITHIUM LTD.

THIS CONTRACT IS ENTERED INTO

BETWEEN

Micro Express Ltd.
A corporate entity incorporated and validly existing under the laws of the British Virgin Islands, holding a business license with a registration number 124770

(Hereinafter referred to as “ Micro ”)

Address: Suite 900-789 West Pender Street, Vancouver,
British Columbia, Canada V6C 1H2
Telephone: 1-604-893-8891
Facsimile: 1-604-408-8515
Legal representative: Raoul Tsakok
Nationality: Canadian

AND

Sichuan Province Mining Ltd.
A corporate entity incorporated and validly existing under the laws of the People’s Republic of China (“ China ”), holding a business license with a registration number 5100001814790

(Hereinafter referred to as “ SPM ”)

Address: 11 ^th Floor, Dikuang Building, Section 1, 25
Renmin Road North, Chengdu, Sichuan Province, China
610081
Telephone: 86-28-8322-9993
Facsimile: 86-28-8322-8887
Legal representative: Yunxin Liu
Nationality: Chinese

(Each of SPM and Micro a " Party " and collectively the " Parties ")

WHEREAS:

Now therefore, the Parties have agreed to enter into this Contract on the terms and conditions contained hereunder:

Article 1
Establishment of the Company

1.1 Formation . In accordance with the Law of China on Chinese-foreign Equity Joint Ventures (the “ Joint Venture Law ”), its Implementing Regulations and other relevant laws, regulations and provisions applicable hereto, the Parties agree to form and incorporate a limited liability company in Kangding District, Sichuan Province, China on terms and conditions contained herein.

1.2 Name of the Company . The English name of the Company shall be: Sichuan

Jihai Lithium Ltd., and the Chinese name of the Company shall be:  四川省集海锂业有限公司.

1.3 Legal Address . The legal address of the Company shall be .

1.4 Fiscal Year . The fiscal year of the Company shall be from January 1 to December 31 (the “ Fiscal Year ”).

1.5 Articles of Association . The Parties agree to complete the Articles of Association of the Company based on the provisions contained herein.

1.6 Limited Liability . The Company shall be a limited liability company with a separate legal personality, for the purposes of the laws and regulations of China. The liabilities of the Company shall be limited to its total assets. The liabilities of each Party

shall be limited to its respective contribution to the registered capital of the Company only.

1.7 Profit Distribution . The profits generated by the Company shall be distributed in accordance with the Interest of each Party as defined in section 3.3 hereunder.

Article 2
Purpose and Business Scope

2.1 Purpose and Business Scope . The Company shall develop lithium and other mineral deposits, extract and process commercially valuable mineral products therefrom, in Sichuan, China, using internationally advanced technologies.

2.2 Principal Business and products . The principal business of the Company shall be the extraction, processing, manufacturing, marketing and sales of commercially valuable mineral products including spodumene, tantalum, niobium, and beryllium concentrate, and such other related products.

2.3 Production Scale . The Company shall develop a production facility, which, when fully completed, shall have an annual production capacity of Nine Hundred Thousand (900,000) tons (the “ Project ”). The Project will be developed in two stages. In stage I of the Project the facility will be developed initially to be able process Two Hundred Forty Thousand (240,000) tons of spodumene rock per annum. Stage I shall commence on or before May 24, 2005 (“Initiation Date”). Within 3 months after major engineering of stage I starts, the Company shall start preparation work for Stage II. Stage II shall starts after Stage I has finished. Stage I and II shall be fully completed within twenty eight months after the Initiation Date. If for any reason, the business license is not issued to the Company on or before the Initiation Date, then the Parties shall still conduct such necessary work and file such documents so that Stage I shall commence for all practical purposes and shall be deemed initiated.

Article 3
Total Investment and Registered Capital

3.1 Total Investment . The total amount of investment of the Company shall be Ninety-six Million Eight Hundred Eight-five Thousand Yuan (RMB ¥96,885,000).

3.2 Registered Capital . The registered capital of the Company shall be Fifty-six Million Yuan (RMB ¥56,000,000).

3.3 Interest of the Parties . The Parties agree that their respective Interest in the registered capital of the Company shall be as follows:

3.3.1 Micro’s Interest shall be Seventy Five Percent 75%, with its contribution to the registered capital of the Company being foreign exchange equivalent of Forty-two Million Yuan (RMB ¥42,000,000).

3.3.2 SPM’s Interest shall be Twenty Five Percent (25%), with its contribution to the registered capital of the Company being Fourteen Million Yuan (RMB ¥14,000,000). SPM’s contribution shall be in the form of all prior work done, all technical data and information in relation to the Business, and all existing permits, licenses and approvals (together the “SPM Contribution ”). For greater clarity, it is agreed that the total deemed value of SPM Contribution is Twenty One Million Yuan (RMB ¥21,000,000).

3.4 Construction Capital Requirement . Additional construction funds required for the operation of the Business over the registered capital shall be financed by Micro as debt of the Company..

3.5 Contribution of Capital . The Parties agree to contribute to the registered capital of the Company in the following manner:

3.5.1 . On April 15 ^th 2005, Micro shall contribute 5 million Yuan. By the end of July 2005, Micro shall contribute another 10 million Yuan. After Stage I construction finishes, Micro shall contribute another 7 million Yuan to pay SPM’s over contribution – 7 million Yuan according to section 3.3.2. The balance 20 million Yuan shall be contributed within two years from the date of the issuance of the business license to the Company into the Company’s account. Micro shall ensure that the Company shall have sufficient funds in place for the operation of the Business and the Company including Stage I and Stage II. Micro’s contribution may include all expenses it has incurred for the purpose of this Contract and for the incorporation of the Company, including any funds advanced or expended for the purposes specified in section 2.3 hereunder. The early contributions of Micro shall be determined by the independent appraisal report recognized by both parties. Before the Company has its account after obtaining business license, Micro shall put its contributions into an account monitored by both parties.

SPM shall transfer the mining permit to the Company after the business license of the Company is issued and within three months. Due to delay of approval authorities, the transferring time can be extended. SPM shall guarantee the resources requirements for the operation with capacity of 900,000 tons per year.

3.5.2 SPM recognizes the importance of expeditious transfer of the Mining Permit to the Company for the commencement of Stage I of the Project and will take such steps necessary to cause the early transfer of the Mining Permit immediately after the business license is issued to the Company.

3.5.3 The date for contribution to the registered capital by the Parties may be reasonably extended should there be any delay in the approval process or any occurrence of event beyond the control of the Parties, subject to necessary approval by the Ministry of Commerce.

3.5.4 For greater clarity, it is understood that, for the transfer and acquisition of the Mining Permit, SPM is obligated to pay Thirteen Million Nine Hundred Eighty Thousand Yuan (RMB ¥13,980,000) (the “ Permit Transfer Payment ”) to Sichuan Bureau of Land and Resources (“ SBLR ”) on or before September 28, 2006 (the “ Date of Full Payment ”), under an agreement between SPM and SBLR dated March 29, 2004 and RMB4,190,000 of the Permit Transfer Payment has already been paid by SPM to SBLR. It is expressly agreed that full payment of the Permit Transfer Payment is the sole obligation of SPM. If, for any reason, SPM is unable or unwilling to pay the balance of Permit Transfer Payment or any portion thereof, then SPM shall deliver a written notice to Micro no less than six months before the Full Payment Date, and upon receipt of the notice Micro may elect to make such payment (the “ Optional Payment ”) and the Optional Payment shall be credited as Micro’s additional contribution to the registered capital of the Company, and the amount equal to the Optional Payment shall be deducted from SPM’s contribution to the registered capital of the Company. The Parties’ Interest in the Company shall then be adjusted pursuant to the formula set forth in section 4.5.1 below, to reflect the changes in their respective contribution to the registered capital of the Company, and the Parties shall cause such adjustment in Interest to be properly filed and registered.

3.6 Use of Funds . The Parties agree that all investment and contribution made under this Contract shall be directed solely to the development of the Business of the Company.

3.7 Verification Report . An investment verification report shall be obtained from a registered accountant licensed in China, based on which the Company shall issue the investment certificates to the Parties.

Article 4
Alteration of Capital and Transfer of Interest

4.1 Transfer Permitted . The Parties agree, subject only to such restrictions as may be imposed by Chinese law from time to time and the terms and conditions hereunder, that either Party may transfer any or all of its Interest to the other Party or to a third party. Before finishing contributing registered capital, any party shall not transfer its Interest to the other Party.

4.2 Transfer to Either Party . Either Party may transfer to the other Party any or all of its Interest, provided that such transfer is effected in a written transfer agreement between the Parties, to be effective upon approval by the approval authorities.

4.3 Transfer to a Third Party . Where either Party (the “ Transferring Party ”) intends to transfer part or all its Interest to a third party, the other Party shall have a right of first refusal to acquire the Interest or any part thereof on terms and conditions identical to that offered by the Transferring Party to the third party, provided that such right of first refusal shall be exercised within 45 days of the date of a detailed written offer (the “ Offer ”) from the Transferring Party.

4.4 Deemed Consent . If the right of first refusal is not exercised within 45 days as provided for in section 4.3 above, the transfer to a third party under section 4.3 above shall be deemed to be accepted by the Parties and the terms of such transfer shall be as contained in the Offer. Such third party, or the Transferring Party acting for such third party, shall have the right to apply for approval by the approval authorities in relation to the transfer. Once approval is granted by the approval authorities, the transfer shall be effective and the transfer shall be considered to be in conformity with the provisions of this Contract and the laws and regulations applicable thereto.

4.5 Interest Adjustment . A Party’s Interest in the Company may be adjusted if its contribution to the registered capital of the Company is changed pursuant to the terms hereunder.

4.5.1 The Parties may decide at any time during the term, to increase the registered capital of the Company, and if so decided and approved by the approval authority, each Party shall contribute its share of the increased registered capital of the Company pro rata to its Interest in accordance with such payment schedule as the Parties may agree. If either Party (the “ Non-Participating Party ”) is unwilling or unable to make any or all of its contribution of the increased registered capital pursuant to the schedule agreed, the Non-Participating Party’s Interest may be adjusted downward pursuant to the following formula:

Cumulative contributions in the registered capital by the Non-Participating Party
------------------------------------------------------------------------------------------- X 100%
Cumulative contributions in the registered capital by both Parties

      The Participating Party’s Interest shall therefore be: 100% – Non-Participating Party’s Interest.

      The adjusted Interest shall be accepted by the Parties and filed and registered with the approval authorities.

Article 5
Profits and Losses

5.1 Profits Distribution . The Board shall in its discretion and in the best interest of the Company decide on the distribution of profits of the Company. For greater clarity, “profits” shall mean the net profits generated from the operations of the Company after deduction of all applicable funds, taxes and levies, and all such costs and expenses as may be deductible under the laws and accounting practice of China, as may be applicable to the Company.

5.2 Percentage . Profits from the operations of the Company shall be distributed to the Parties pro rata to their respective Interest. Profits to be distributed to Micro shall be

converted to US dollars or such other convertible currency for remittance to Micro, subject to applicable Chinese foreign exchange regulations.

Article 6
Board of Directors

6.1 Highest Authority . The Board of Directors (the “ Board ”) shall be the highest authority of the Company. It shall have the power to make decisions on all major operational and administration matters of the Company, in compliance with the relevant laws and regulations of China, and subject to this Contract and the Articles of Association of the Company.

6.2 Composition of Board . The Board of the Company shall be composed of seven (7) directors, with five (5) directors to be nominated by Micro and two (2) directors to be nominated by SPM. The Chairman of the Board shall be nominated by Micro, and the Vice Chairman shall be nominated by SPM.

6.3 Term of Office . The term of office of a director shall generally be three (3) years and directors may be re-elected if so nominated by the respective Parties.

6.4 Removal of Director . Any director may be removed by the Party that has nominated such director, or jointly by the Parties at any time during the term of this Contract.

6.5 Disqualification . No person who is a minor, has been convicted of any fraud or an offence under the criminal code of the jurisdiction of either Party, or is bankrupt shall qualify as a director of the Company.

6.6 Resignation . A resignation by a director appointed shall be effective one it is submitted to the Board and the Party by which the director is appointed.

6.7 Vacancy . A vacancy created by the removal, disqualification, resignation or death of a director may be filled only by nominee of the Party by which the director was appointed. The Party appointing a new director to fill the vacancy shall notify in writing the other Party and all directors of the Board. The appointment shall become effective upon delivery of such notice.

6.8 Unanimous Approval . Unanimous consent of all the directors shall be required for the following matters:

6.9 Other Decisions . Decisions involving all other matters than those listed in section 6.8 shall be adopted at any Board meeting by a simple majority of votes of those directors present, in person or by proxy, and eligible to vote at that meeting. If voting on a matter is tied, the Chairman shall have the deciding vote.

6.10 Chairman of the Board . The Chairman of the Board shall be the legal representative of the Company. Whenever the Chairman’s position is vacated by the retirement, removal, resignation or death of the Chairman, the Party which has appointed the Chairman shall name a new appointee to assume the position of Chairman for the remainder of the term. Whenever the Chairman is temporarily unable to perform his responsibilities due to illness or disability, the Vice-Chairman shall temporarily assume his responsibilities, until such time as a new Chairman is appointed or the Chairman is again able to resume his duties.

6.11 Meetings of the