EXHIBIT 10.8 JOINT VENTURE AGREEMENT

 

                                                                 EXHIBIT 10.8

 

 

                             JOINT VENTURE AGREEMENT

 

      THIS   AGREEMENT   mired into this the 11th day of May, 2004, by and between

U.S. Canadian Minerals, Inc. ("U.S.   Canadian"),   of Las Vegas, state of Nevada,

and El Capitan   Precious   Metals,   Inc. (El   Capitan),   of   Englewood,   state of

Nevada.

 

      WITNESSETH:

 

      WHEREAS, (U.S. Canadian) is in the business of

 

      Acquiring and Funding Mining Property                              , and

 

      WHEREAS, (El Capitan) is in the business of:

 

      Operating Mining Property                                         , and

 

      WHEREAS, both parties desire to work together for the purpose of

 

      Developing the COD Mining Claim

 

      NOW THEREFORE,,   for good and valuable consideration,   receipt of which is

hereby   acknowledged,   and the mutual promises and benefits to be derived by the

parties, they do hereby agree to the following terms and conditions:

 

                                    ARTICLE I

 

                                   FORMATION

 

SECTION 1.1     Formation and Name.

 

        1.1.1   FORMATION. The Joint Venturers hereby confirm that they have

formed a Joint Venture for the purposes and scope set forth in this agreement.

 

        1.1.2   NAME. The name of the Joint   Venture is and shall   continue to be

CanEll   ("CanEl").   The   business   and   affairs   of the Joint   Venture   shall be

conducted   solely under that name and under no other unless   modified in writing

by addendum to this agreement:

 

SECTION 1.2     PURPOSES and Scope of the Joint Venture.

 

        The purpose of the Joint Venture is to:

 

        Explore, operate and otherwise utilize the COD Mining Claim.

 

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SECTION 1.3     PRINCIPAL Place of Business.

 

         The principal place of business of the Joint Venture shall be Initially

located at:

 

4955 S. Durango, #216, Las Vegas, NV 89113.

 

SECTION 1.4     TERM.

 

         The term of the Joint Venture shall commence on the first above written

day, and shall   continue,   unless sooner   terminated   in   accordance   with other

provisions of this Agreement, until May 11, 2020.

 

SECTION 1.5     No Partition.

 

         No Joint Venturer   shall have the right and each Joint Venturer   hereby

agrees   not to   withdraw   from the Joint   Venture   nor to   dissolve,   terminate,

partition,    or   liquidate,    or   to   petition   a   court   for   the   dissolution,

termination,   partition,   or   liquidation   of the Joint   Venture or its   assets,

except as   provided   for in this   Agreement,   and no Joint   Venturer at any time

shall have the right to petition or to take any action to subject the   operation

of the   Project   or any part   thereof   or the Joint   Venture   assets or any part

thereof to the authority of any court of bankruptcy,   insolvency,   receivership,

or similar proceeding.

 

                                   ARTICLE II

 

                    CAPITAL CONTRIBUTIONS, RESERVES, VOTING,

                          FINANCING, AND DISTRIBUTIONS

 

SECTION 2.1     Joint VENTURE Percentage Interest.

 

U.S.   Canadian shall receive 80% of the interest in the mining claims designated

as the   COD   Mining   Claim,   currently   owned   by El   Capitan   and   whose   legal

description is attached as Exhibit A in exchange for 720,000 newly issued shares

of U.S.   Canadian.   The items in this   paragraph are property of the parties and

not the joint   venture   and are not   subject to   termination   or sale to satisfy

liabilities of the Joint Venture.

 

El Capitan   shall   operate the   operations   as they relate to the   tailings   and

settlement pond and contribute the equipment   needed for such   operations.   U.S.

Canadian shall   contribute to the operating   capital for 90 days which shall not

exceed the wages for 3 or 4 workers,   fuel and equipment repair and maintenance,

and necessary equipment for operation approved by J.V. Partners.   The net profit

from the tailings and settlement pond operations   shall be split 50-50 among the

parties.

 

SECTION 2.2     ADJUSTMENTS and Interest.

 

         Unless otherwise approved by the Joint Venturers,   no adjustment to the

Percentage   Interest of any Joint   Venturer   shall be made   except as   otherwise

provided herein or as a result of a transfer of a Joint Venturer's Joint Venture

interest or a portion thereof.

 

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SECTION 2.3     CAPITAL Accounts.

 

2.3.1   GENERAL.   As used   herein,   the term Capital   Account   shall refer to the

capital   account   of each   Joint   Venturer   reflecting   the value of each   Joint

Venturer's   relative   interest   in the capital of the Joint   Venture.   A Capital

Account,   as defined   herein,   shall be maintained   for each Joint   Venturer and

shall be subject to adjustment as provided in subsection 2.3.3.

 

2.3.2 INITIAL CAPITAL   CONTRIBUTION AND INITIAL   CAPITAL.   Upon the execution of

this Agreement,   the parties shall make contributions as stated in paragraph 2.1

of this Agreement.

 

SECTION 2.4     Allocations of Profits and Losses to Joint Venturers.

 

         All profits shall be retailed by U. S, Canadian other than as disclosed

in 2.1.

 

SECTION 2.5     Time LIMIT for Approval

 

         Where an issue arises   needing a vote,   such vote shall be given within

five (5)   calendar   days of a written   request   by the   other   party for a vote.

Should a response not be returned   within the stated period,   then the vote will

be considered in the affirmative.

 

                                  ARTICLE III

 

                                   MANAGEMENT

 

SECTION 3.1     JOINT Venture Manger.

 

U.S.   Canadian   is hereby   appointed   Manager   or   Venture   Manager of the Joint

Venture and shall be responsible for the internal operation of the venture.   Any

direct cost incurred shall be paid out of Joint Venture funds.

 

SECTION 3.2     Other BUSINESS Activities.

 

         Nothing   herein is to be   construed   as giving any party an interest in

other   business of the   parties   except   those   construed   specifically   by this

Agreement or incorporated by an amendment hereto.

 

         The parties   mutually   acknowledge   that each is involved in additional

businesses   and are not   restricted to   participating   with each other except as

stated in the first right of refusal for additional projects.

 

                                   ARTICLE IV

 

                                   ACCOUNTING

 

SECTION 4.1     Books, RECORDS, and Fiscal Year.

 

4.1.1   GENERAL.   The   Joint   Ventures   books and   records   of   account   shall be

maintained   in   accordance   with   generally    accepted    accounting    principles

consistently   applied on the cash   basis and shall be   adequate   to provide   any

 

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Joint   Venturer   with all   financial   information   as may be needed by any Joint

Venturer or any Affiliate of any Joint   Venturer for purposes of satisfying   the

financial   reporting   obligations of any Joint Venturer or his or its respective

affiliate   or   affiliates.   The fiscal   year of the Joint   Venture   shall end on

December 31 of each year. The books and records shall be maintained at the Joint

Ventures' principal place of business.

 

SECTION 4.2     Other ACCOUNTING Decisions.

 

         All accounting decisions and tax elections for the Joint Venture (other

than those specifically   provided for in other Sections of this Agreement) shall

be made from time to time as required and approved by the Venture Manager.

 

                                    ARTICLE V

 

                           SALE, TRANSFER, OR MORTGAGE

 

SECTION 5.1     GENERAL.

 

         Except as expressly   permitted   herein,   no Joint   Venturer shall sell,

sign, transfer,   mortgage,   charge, or otherwise encumber,   or permit any of the

foregoing,   whether   voluntarily   or   by   operation   of   law   (herein   sometimes

collectively   called a   transfer),   any part or all of his or its Joint   Venture

interest without the prior written   approval of the other Joint   Venturers,   and

any attempt to do so shall be void.

 

5.1.1    PERMITTED TRANSFERS

 

        (a) Any Joint Venturer may transfer or assign his or its interest in the

Joint Venture to any   corporation or general   partnership   that is controlled by

such Joint Venturer,   or to any limited   partnership in which the Joint Venturer

would be the general   partner,   and such transfers or   assignments   shall not be

subject to this SUBSECTION,,   but the transferee thereof shall be subject to all

the terms and conditions of this Agreement,   including   without   limitation this

subsection,   and as a condition precedent to any such transfer,   such transferee

shall enter into a written agreement agreeing to be bound by the terms hereof.

 

SECTION 5.2     CLOSINGS.

 

        5.2.1   TERMINATION   OF   OBLIGATIONS.   As of the   effective   date   of any

transfer not prohibited   hereunder by a Joint Venturer of its entire interest in

the Joint   Venture,   such   Venturers'   rights and   obligations   hereunder   shall

terminate   except   as to items   accrued   as of such   date and   except   as to any

indemnity   obligations   of such Joint   Venturer   attributable   to acts or events

occurring   prior to such date.   Thereupon,   except as   limited by the   preceding

sentence,   this Agreement shall terminate as to the transferring   Joint Venturer

but shall   remain in effect as to the other Joint   Venturers.   In the event of a

transfer of its or his entire   Joint   Venture,   interest by a Joint   Venturer to

another Joint Venturer,   the Joi